The revisions in this proposed rule are part of Commerce's retrospective plan under EO 13563 completed in August 2011.

Elsewhere in this issue of the Federal Register , BIS publishes an advanced notice of proposed rulemaking, Feasibility of Enumerating “Specially Designed” Components, requesting comments on the feasibility of positively identifying “specially designed” components on the CCL. That proposal is a part of a longer term project the U.S. Government intends to undertake with the multilateral export control regimes.

On July 15, 2011, BIS proposed a single definition of the term “specially designed” as it would be used in the proposed “600 series” and the rest of the Commerce Control List (CCL) (the “July 15 proposed rule”) (76 FR 41958). This action would revise that proposed definition. Additionally, the State Department is concurrently publishing a proposed rule to create, to the extent possible, a common definition of “specially designed” in the International Traffic in Arms Regulations (ITAR). After reviewing comments received in response to both proposed rules, the Departments of Commerce and State plan to publish final rules amending the Export Administration Regulations (EAR) and ITAR so that they have, to the extent possible, common definitions of the term. The revisions in this rule are part of Commerce's retrospective plan under EO 13563 completed in August 2011. Commerce's full plan can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules .

All references to the United States Munitions List (USML) in this rule are to the list of defense articles that are controlled for purposes of export pursuant to the ITAR, 22 CFR Parts 120 et seq., and not to the list of defense articles on the United States Munitions Import List (USMIL) controlled by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) for purposes of import, under its regulations at 27 CFR Part 447. Pursuant to section 38(a)(1) of the Arms Export Control Act (AECA), all defense articles controlled for export or import are part of the USML under the AECA, but, for the sake of clarity, the list of defense articles controlled by ATF for purposes of import are on the USMIL. The transfer of defense articles from the ITAR's USML to the EAR's CCL for purposes of export controls does not affect the list of defense articles controlled on the USMIL under the AECA for purposes of import controls.

A common definition of the term “specially designed” that is as clear and objective as possible is vital to the Administration's ECR Initiative. Many of the controls in the CCL use the term. Most of the new “600 series” ECCNs that have been proposed to control items the President determines no longer warrant control under the ITAR pursuant to AECA section 38(f) use the term. Several of the USML categories the State Department proposes to revise use the term as well.

The State Department has decided to revise the USML to make it more “positive.” A “positive” list uses more objective parameters to describe the items controlled. As described in the ANPR referenced in the summary of this rule, BIS plans to continue the process of revising the CCL so that it is more “positive” as well.

BIS cannot, however, immediately remove all references to the term in the CCL and replace them with lists of specific items that warrant control because the lists of items controlled by the multilateral export control regimes rely on the term extensively. Most of the CCL is based on and implements these regime lists. Moreover, BIS has not developed lists of which specific items would be “specially designed.” Such an effort would take many years to complete and would require BIS to prepare and submit proposals to the regimes and then receive approval of those proposals to change the relevant control text.

In addition, the new “600 series” ECCNs that have been proposed to control items that the President determines no longer warrant control on the USML must use a catch-all “specially designed” term to avoid inadvertently de-controlling items other than common, single unassembled parts that are now ITAR-controlled as “specifically designed, modified or configured” for a military application. As the State Department has described in its previous ANPR and proposed rules, much of the ITAR now relies upon catch-all controls. For example, the control for military electronic components, parts, components, accessories, and associated equipment is in USML Category XI(c), which controls “[c]omponents, parts, accessories, attachments, and associated equipment specifically designed or modified for use with equipment in paragraphs (a) and (b) of this category, except for such items as are in normal commercial use.” No other detail is provided. USML (22 CFR Part 121) Category XI(a) similarly uses a broad catch-all control phrase to control “[e]lectronic equipment not included in Category XII of the [USML] which is specifically designed, modified or configured for military applications.” The examples provided in the rule are not an exhaustive list of controlled items. USML Category VIII(h) similarly controls all “[c]omponents, parts, accessories, attachments and associated equipment (including ground support equipment) specifically designed or modified for the articles in paragraphs (a) through (d) of [Category VIII], excluding aircraft tires and propellers used with reciprocating engines,” other than the parts and components that are standard equipment in civil aircraft as described in the “Note” to USML Category VIII. Similarly, USML Category XII(e) controls “[c]omponents, parts, accessories, attachments and associated equipment specifically designed or modified for the [fire control, range finding, optical, night vision and other articles enumerated in] paragraphs (a) through (d) of this category, except for such items as are in normal commercial use.”

The “specially designed” definition proposed here would capture the items currently captured under the ITAR “specifically designed, modified or configured” for a military application catch-all. BIS understands that the issues associated with catch-all control text would largely be transferred from one set of regulations to another. However, the Administration believes that industry and government would benefit from adopting this new definition because doing so would confine the term's use to a single set of regulations for a large volume of parts, components, and other items that do not warrant the worldwide and collateral controls of the ITAR. Moreover, this action would objectively define the catch-all term “specially designed” for such items, consistently apply the “normal commercial use” carve-outs described above, and also implement the statement of policy in ITAR section 120.3, consistent with the AECA. Under that policy, the ITAR, and by implication, the new “600 series” ECCNs, should not control items that (a) have predominant civil applications and performance equivalents to those used for civil applications and (b) do not have significant military or intelligence applicability such that control under the ITAR (or a new “600 series” ECCN) is warranted.

This proposed definition would also provide the public with an as objective as possible basis for determining whether any other item on the CCL is “specially designed,” thus responding to a common industry suggestion for improving the CCL. In addition, the proposed definition responds to a common industry request to clarify that “specially designed” does not mean merely “capable of use in” or “capable of use for” another item. For example, non-application specific general purpose integrated circuits that are not designed for a particular application would not be “specially designed” items, even if they are used in controlled end items. Rather, the extent of the controls on such circuits would be described by the technical and other parameters in Category 3 of the CCL.

Although BIS does not propose to remove references to “specially designed” that are part of multilateral control texts, it does have the discretion to define the term so long as the definition is not inconsistent with how the regimes define the term. The Missile Technology Control Regime (MTCR) is the only one of the four multilateral export control regimes to define the term. BIS believes that the proposed definition is not inconsistent with the MTCR definition, which is in EAR § 772.1. BIS asks the public to comment in particular on whether this proposed definition would result in specific items that are not now controlled for Missile Technology (MT) reasons on the CCL to become controlled for MT reasons. We also ask for public comments on whether this definition would remove from control items that are now controlled for MT reasons on the CCL as a result of the application of the MTCR definition. Additionally, as in the July 15 proposed rule, BIS asks the public to test this proposed definition to determine its ease of use, whether it meets the nine objectives identified for the term, and how it corresponds to what the public considers “specially designed” items.

The July 15 proposed rule included nine objectives for the revised “specially designed” definition. These objectives have not changed. The U.S. Government is committed to adopting a “specially designed” definition under the EAR and ITAR that would achieve these objectives. The nine objectives are to:

(i) Preclude multiple or overlapping controls of similar items within and across the two control lists;

(ii) Be easily understood and applied by exporters, prosecutors, juries, and the U.S. Government— e.g., by using objective, knowable, and clear requirements that do not rely upon a need to investigate and divine the intentions of the original designer of a part or the predominant market applications for such items;

(iii) Be consistent with definitions used by the multilateral export control regimes;

(iv) Not include any item specifically enumerated on either the USML or the CCL and, in order to avoid a definitional loop, do not use “specially designed” as a control criterion;

(v) Be capable of excluding from control simple or multi-use parts such as springs, bolts, and rivets, and other types of items the U.S. Government determines do not warrant significant export controls;

(vi) Apply to both descriptions of end items that are “specially designed” to have particular characteristics and to parts and components that were “specially designed” for particular end items;

(vii) Apply to materials and software because they are “specially designed” to have a particular characteristic or for a particular type of end item;

(viii) Not increase the current control level to “600 series” control or other higher end controls of items ( i.e., not move items currently subject to a lower control status to a higher level control status), particularly current EAR99 items, which are now controlled at lower levels; and

(ix) Not, merely as a result of the definition, cause historically EAR-controlled items to become ITAR controlled.

BIS believes that this proposed definition, and its counterpart published by the State Department, achieves these nine objectives. However, we invite public comments and ideas for how to define the term to meet or exceed all these objectives, and to provide additional objectives for such a term.

BIS received many responses to the proposed “specially designed” definition in the July 15 proposed rule. The comments, along with the additional review of this issue the U.S. Government conducted in conjunction with BIS's Technical Advisory Committees (TACs) and State's Defense Trade Advisory Group (DTAG), identified additional changes necessary to achieve the nine objectives for “specially designed.” This rule proposes a revised definition of “specially designed” to allow this term to play the key role envisioned for it under the ECR Initiative.

Similar to the July 15 proposed definition, this proposed definition adopts a “catch and release” approach. Paragraph (a) of the definition contains broad bases for items to be “specially designed”—the “catch”—and paragraph (b) contains various exceptions to an item's being “specially designed”—the “release.” BIS believes that this structure creates an objective and common definition for both the EAR and ITAR, which nonetheless can be tailored and refined over time as necessary. This definition also simultaneously meets the nine objectives defined above while, with respect to the “600 series” items, also remains consistent with the policy standards set out in ITAR section 120.3 and the carve-outs in various USML categories that do not control items “in normal commercial use.” BIS believes that this approach more readily lends itself to analysis in a decision tree format, i.e., with a series of “yes” and “no” questions leading to a conclusion about whether an item is “specially designed.” BIS further believes that this format will contribute to a more orderly and efficient determination about whether an item is “specially designed.” This change would, then, eventually facilitate enhanced public understanding of the definition of the term.

Generally, public comments on the July 15 proposed rule supported the overall ECR Initiative and the proposed rule. In particular, commenters supported creating the “600 series,” which most commenters characterized as a sensible approach to addressing a fairly complicated problem. However, most commenters expressed concerns about the proposed “specially designed” definition, along with transition-related concerns that are being addressed in a separate proposed rule to be published in the Federal Register . For example, commenters felt that the new definition was difficult to understand and would capture items that should not be considered “specially designed.” The comments are discussed in greater detail below in regards to the specific concerns with the July 15 proposed rule. The comments can be reviewed at: http://efoia.bis.doc.gov/pubcomm/records-of-comments/record_of_comments_usml.pdf .

BIS took into account the comments from the July 15 proposed rule when developing the revised definition of “specially designed” proposed here. BIS intends this revised definition to be evaluated on its own merits, and the public need not review the July 15 proposed rule to understand this action. Once the public comments on this rule are reviewed and responded to, BIS intends to publish a final “specially designed” definition.

However, a general summary of the July 15 definition and the responses to it provides context for this proposed definition. In the July 15 proposed rule, BIS suggested defining “specially designed” in four paragraphs. Paragraph (a) would have identified what items would be “specially designed” except for “parts” and “components.” Paragraph (b) would have identified which “parts” and “components” would be “specially designed.” The paragraph (c) and (d) exclusion paragraphs would have identified certain items that would not be “specially designed.” Most commenters supported paragraph (a) of the proposed definition. The majority of commenters suggested also adopting paragraph (a) for “parts” and “components.” Additionally, the majority of comments received indicated the public could understand and apply the paragraph (a) criteria, so BIS decided to include the same type of criteria as part of the proposed paragraph (a)(1) criteria included in this rule's proposed definition of “specially designed.” However, a small number of commenters indicated that the proposed paragraph (a) could result in confusion over whether an item was “specially designed,” because the definition still relied on design intent. This proposed “specially designed” definition addresses that concern by adopting a single paragraph (a) for determining what items are “specially designed.” Under the proposed structure, an item meeting one of the three listed criteria would be considered “specially designed.”

Most of the concerns with the definition related to paragraphs (b), (c), and (d), which defined non-specific “parts” or “components” could be considered “specially designed.” Of the commenters criticizing these paragraphs, most believed the exclusions in paragraphs (c) and (d) were difficult to understand and, once understood, would have resulted in items that they had not historically considered to be “specially designed” to become controlled as a result of the definition. In particular, the definition would have caused non-specific “parts” and “components” designed for controlled and uncontrolled applications or no particular application to become “specially designed,” and therefore subject to control. Thus, the definition would have resulted in some items' control status being undefined until the items first were used in a controlled, or uncontrolled item. BIS believes the paragraphs (b)(4) and (b)(5) proposed here address those concerns.

The definition begins with introductory text to provide guidance on the proper steps for analyzing the definiton. This brief introductory text would assist the public in understanding that they must follow the sequential analysis set forth below. Specifically, the public is to begin with paragraph (a)(1) and proceed through each subsequent paragraph. This introductory text would also specify that commodities subject to the EAR described in any paragraph (b) subparagraph are not “specially designed” under this definition.

Paragraph (a) begins with the phrase “Except for items described in (b), an `item' is `specially designed' if, as a result of `development,' it [is within the scope of any one of three subparagraphs discussed below].” It is the beginning of the “catch” in the “catch and release” structure of the definition. With respect to ECCNs containing the term “specially designed,” an item is “caught” as “specially designed” if any of the three elements of paragraph (a) apply and none of the elements of paragraph (b) apply. The word “items” refers to how the term is defined in the EAR, i.e., any “commodity,” “software,” or “technology.”

Paragraph (a) is limited by the phrase “if, as a result of `development.'” The EAR defines “development” as “related to all stages prior to serial production, such as: design, design research, design analyses, design concepts, assembly and testing of prototypes, pilot production schemes, design data, process of transforming design data into a product, configuration design, integration design, layouts.” Determining whether an item is “a result of development” is a threshold question for whether an item is “specially designed;” an item is considered to be “specially designed” under this paragraph only if someone engaged in any of these “development” activities with respect to that item.

Thus, there are three questions an exporter, reexporter or transferor must ask to determine if an item is within the scope of paragraph (a):

1. Does the item, as a result of “development,” have properties “peculiarly responsible for” achieving or exceeding the performance levels, characteristics, or functions described in the relevant ECCN or USML paragraph?

2. If the item is a part or component, is it, as a result of “development,” necessary for an enumerated or referenced commodity or defense article to function as designed?

3. If the item is an accessory or attachment, is it, as a result of “development,” used with an enumerated or referenced commodity or defense article to enhance its usefulness or effectiveness?

If the answer to all three questions is “no,” then the item is not “specially designed” and no further analysis of paragraph (b) is necessary. If the answer to any one of the questions is “yes,” then the exporter, reexporter or transferor must determine whether any one of the five paragraph (b) exclusions applies. If any one of the five paragraph (b) exclusions apply, then the item is not “specially designed.” If none do, then the item is “specially designed.”

Paragraph (a)(1). Paragraph (a)(1) would capture an item if, as a result of “development,” it “has properties peculiarly responsible for achieving or exceeding the performance levels, characteristics, or functions described in the relevant ECCN or U.S. Munitions List (USML) paragraph.” This criterion is essentially the same as the one that was proposed in the July 15 rule. Based on the comments, the public found this part of the definition clear. The positive response was, perhaps, due to the fact that it is taken from the EAR's current definition of “required” at § 772.1. Although that definition, by its terms, applies only to technology and software, BIS believes that the principle of that definition—which is that items are not controlled merely because they are somehow capable of use with a controlled item—equally applies to commodities for purposes of the proposed definition. Therefore, even if something is capable of being used with a controlled item, it is not captured by this part of paragraph (a) unless someone did something during the item's development so that it would achieve or exceed the performance levels, characteristics, or functions described in a referenced ECCN or USML paragraph.

Paragraph (a)(2) . Paragraph (a) would capture a part or component if, as a result of “development,” it “is necessary for an enumerated or referenced commodity or defense article to function as designed.” This element is similar to (a)(1), but it must be listed separately because not all descriptions of commodities on the USML and the CCL include performance levels, characteristics, or functions as a basis for control. Paragraph (a)(2) would capture parts and components that are necessary for another item on the CCL or the USML to function “as designed.” If an item would function “as designed” without the part or component at issue, then that part or component is not captured by paragraph (a)(2).

BIS has deliberately separated the terms `enumerated' and `referenced' in paragraph (a)(2), which are unique to the EAR's definition of the term. As described below, an `enumerated' item is one that is controlled on the USML or the CCL (except for AT-only items) for reasons other than being “specially designed.” The CCL, however, contains notes that exclude from control parts and components “specially designed” for uncontrolled items. Such uncontrolled items are merely `referenced' but not `enumerated.' Note 2 to ECCN 1A002 provides an example of items excluded from control based on being “specially designed” for a referenced item. Under Note 2 to 1A002, if the semi-finished item was “specially designed” for a referenced sporting goods item, such as a golf club designated as EAR99, such a semi-finished item is excluded from 1A002.

Paragraph (a)(3). Paragraph (a)(3) would capture an accessory or attachment if, as a result of “development,” it “is used with an enumerated or referenced commodity or defense article to enhance its usefulness or effectiveness.” BIS takes this phrase from the ITAR's current and the EAR's proposed definition of “accessory” and “attachment.”

This ANPRM requests comments on a longer-term project involving minimizing the use of the term “specially designed” on the current Commerce Control List (CCL) by specifically identifying “components.” Specifically listing “components,” with multilateral agreement where appropriate, would make the CCL a more positive list.

As part of the implementation of the Export Control Reform (ECR) Initiative, the Departments of Commerce and State published rules that proposed, as much as possible, a common definition of the term “specially designed.” A common definition of “specially designed” would protect and enhance U.S. national security interests because the term “specially designed” would be used in the “600 series” that would be created to control United States Munitions List (USML) items moved to the CCL. In addition, the term “specially designed” is used widely on the current CCL.

The request for comments in this ANPRM is part of Commerce's retrospective plan under EO 13563 completed in August 2011. Commerce's full plan can be accessed at: http://open.commerce.gov/news/2011/08/23/commerce-plan-retrospective-analysis-existing-rules.

This ANPRM requests comments on the use of the term “specially designed” when applied to “components” outside of the “600 series” on the CCL. Specifically, the Bureau of Industry and Security is evaluating whether it is feasible to create exhaustive lists of the “specially designed” “components” in certain Export Control Classification Numbers on the CCL that currently use “specially designed” catch-all paragraphs. BIS does not believe a similar approach is needed for “parts” controlled on the CCL, but BIS also requests public comments regarding whether a similar approach should also be evaluated for “parts” controlled on the CCL.

Ultimately, any changes to multilaterally-controlled CCL entries would be made in cooperation with the multilateral export control regimes. This longer-term project may result eventually in a reduction in the use of the term “specially designed” outside of the “600 series” on the CCL if exhaustive lists of such “components” can be identified and specified. To assist the public, BIS has identified the set of ECCN entries that are the best candidates for taking this approach.

Most of the public comments and concerns about the July 15 proposed “specially designed” definition included in the rule, Proposed Revisions to the Export Administration Regulations (EAR): Control of Items the President Determines No Longer Warrant Control Under the United States Munitions List (USML) (76 FR 41958) revolved around references in the application of the definition to existing CCL controls on “components” “specially designed” for a particular “end item” or purpose. Minimizing use of the term “specially designed” by specifically listing controlled “components” may address some of these concerns.

As described below, BIS parsed the CCL and removed all text that does not directly describe controls on “components” “specially designed” for an end item or purpose. To make the analysis easier and more relevant to the proposed definition of “specially designed,” BIS has not included in this ANPRM references to such controls in ECCNs that are controlled for only anti-terrorism reasons, because the number of circumstances where a licensing determination would be affected by whether a component is EAR99 or AT-only controlled is relatively small.

BIS has also not included in this ANPRM the ECCNs where a component is solely or primarily controlled for Missile Technology (MT) reasons or where the MT controls overlap other controls, such as National Security (NS) controls. Because the EAR has adopted the Missile Technology Control Regime's definition of the term for such controls, BIS needs to further evaluate whether those ECCNs controlled for MT reasons would also be good candidates for specifically identifying “components.” In responding to this ANPRM, the public may also submit comments regarding whether they believe a similar approach would also be feasible for items controlled for MT reasons, which BIS will factor into the evaluation for the scope of this review project going forward.

Unlike the USML, the CCL does not contain a broad catch-all control on essentially all “components” “specially designed” for any other item identified on the CCL. You must carefully read each heading and each subparagraph. Some catch-all controls are in the heading and apply by reference to all items described in the subparagraphs, such as in ECCN 3B001. Other headings merely refer to the fact that some of the subparagraphs contain catch-all controls “as follows,” such as ECCN 2B001 where only its subparagraph “f” contains controls on “specially designed” “components.” (The fact that a “specially designed” “component” control exists in some of an ECCN's subparagraphs means, by negative implication, that such controls do not exist in the other subparagraphs in the same ECCN.) Some ECCN headings do not refer to catch-all controls but individual subparagraphs do, such as in ECCN 8A002.a. Some ECCNs refer to specific types of “components” “specially designed” for other items in that ECCN, such as 2B005, which limits its “component” controls to “specially designed automated handling, positioning, manipulation and control components.”

Finally, a few ECCNs, such as 3A292, contain a specific, positive list of the types of components that are within the scope of that ECCN's controls on “specially designed” “components.” Specifically, 3A292 contains a “note” stating that “[s]pecially designed components controlled by this item are the following, for analog oscilloscopes: 1. Plug-in units; 2. External amplifiers; 3. Pre-amplifiers; 4. Sampling devices; 5. Cathode ray tubes.” Thus, only those particularly identified components are controlled in that ECCN. Another example is ECCN 6A002. ECCN 6A002.a.2 controls “components” “specially designed” for “image intensifier tubes” described in ECCN 6A002.a.2.a. These components are described in three subparagraphs that specify the specially designed components under paragraph a.2.b, as follows: 1. Microchannel plates having a hole pitch (center-to-center spacing) of 12 µm or less; 2. GaAs or GaInAs photocathodes; and 3. Other III-V compound semiconductor photocathodes. To further refine what are considered specially designed components, a “note” specifies that “6A002.a.2.b.3 does not control compound semiconductor photocathodes with a maximum radiant sensitivity of 10 mA/W or less.”

BIS seeks the advice and suggestions of the public regarding whether identifying the specific types of “components” controlled by the ECCNs identified below would be of assistance to exporters. If so, BIS requests public comment regarding the “components” that should be identified in a positive list within the scope of the “specially designed” controls of the ECCNs identified below. In addition to the ECCNs identified below, the public may also submit public comments on other “specially designed” “component” references on the CCL where the public believes a similar approach of identifying the specific types of “components” would be feasible. If a list of such components could be created, the United States could consider developing proposals for the relevant multilateral export control regimes to control only those “components” within the scope of the relevant ECCNs. BIS does not believe a similar approach is needed for “parts” controlled on the CCL, but BIS also requests public comments regarding whether a similar approach should also be evaluated for “parts” controlled on the CCL.

BIS is particularly interested in comments from those with technical expertise related to or experience with classifying items identified below to provide advice on those items. The identified “components” should be those that have specific performance parameters or functions which make them particularly suitable for use in the controlled items. They should also include those “components” that are the essence of the controlled end item.

In the following list, BIS identifies ECCNs containing a control on a generic “component” “specially designed” for another item. The list does not include any references to any explanatory notes that may be germane to classifying an item against the ECCN. Thus, when preparing your suggested positive list of components for BIS to consider inserting into the ECCN, please read the whole ECCN for context.

For purposes of this ANPRM, BIS is using the definition of “ component ” from the July 15 proposed rule, as follows:

“ Component. ” This is an item that is useful only when used in conjunction with an “ end item. ” Components are also commonly referred to as assemblies. For purposes of this definition an assembly and a component are the same. There are two types of “ components ”: “ Major components ” and “ minor components. ” A “ major component ” includes any assembled element which forms a portion of an “ end item ” without which the end item is inoperable. For example, for an automobile, components will include the engine, transmission, and battery. If you do not have all those items, the automobile will not function, or function as effectively. A “ minor component ” includes any assembled element of a “ major component. ” “ Components ” consist of `parts. ' ” References in the CCL to “ components ” include both “ major components ” and “ minor components. ”

1. ECCN 1A004.a controls “components” “specially designed” for “gas masks, filter canisters and decontamination equipment therefor, designed or modified for defense against” (1) “biological agents `adapted for use in war;' ” (2) “radioactive materials `adapted for use in war;' ” (3) “chemical warfare (CW) agents;” or (4) specific “riot control agents” listed in ECCN 1A004.a.4.

2. ECCN 1A004.c controls “components” “specially designed” for “[d]etection systems, specially designed or modified for detection or identification of” (1) “[b]iological agents `adapted for use in war;' ” (2) “[r]adioactive materials `adapted for use in war;' ” or (3) “[c]hemical warfare (CW) agents.”

3. ECCN 1A006 controls “components” “specially designed” for “remotely operated vehicles” and “disruptors” “specially designed or modified for the disposal of improvised explosive devices.”

4. ECCN 1A008.b controls “components” “specially designed” for “linear shaped cutting charges” that have “an explosive load greater than 40 g/m” and “a width of 10 mm or more.”

5. ECCN 1B001.e controls “components” “specially designed” for “[e]quipment for producing prepregs controlled by 1C010.e by the hot melt method.”

6. ECCN 1B001.f controls “components” “specially designed” for “[n]on-destructive inspection equipment specially designed for `composite' materials” as described in ECCN 1B001.f.1 and f.2.

7. ECCN 1B003.c controls “components” “specially designed” for “[t]ools, dies, molds or fixtures, for `superplastic forming' or `diffusion bonding' titanium, aluminum or their alloys, specially designed for the manufacture of” “airframe or aerospace structures” or “aerospace engines.”

8. ECCN 2B003 controls “components” “specially designed” for ‘ “[n]umerically controlled' or manual machine tools * * * specially designed for the shaving, finishing, grinding or honing of hardened (R c = 40 or more) spur, helical and double-helical gears with a pitch diameter exceeding 1,250 mm and a face width of 15% of pitch diameter or larger finished to a quality of AGMA 14 or better (equivalent to ISO 1328 class 3).”

9. ECCN 3A001.c controls “components” “specially designed” for “[a]coustic wave devices” that have any of the characteristics described in 3A001.c.1.a., c.1.b., c.1.c, c.2 or c.3.

10. ECCN 3A003 controls “components” “specially designed” for “[s]pray cooling thermal management systems employing closed loop fluid handling and reconditioning equipment in a sealed enclosure where a dielectric fluid is sprayed onto electronic components using specially designed spray nozzles that are designed to maintain electronic components within their operating temperature range.”

11. ECCN 3A292.d controls “components” “specially designed” for “[d]igital oscilloscopes and transient recorders, using analog-to-digital conversion techniques, capable of storing transients by sequentially sampling single-shot inputs at successive intervals of less than 1 ns (greater than 1 giga-sample per second), digitizing to 8 bits or greater resolution and storing 256 or more samples.”

12. ECCN 3B001.a controls “components” “specially designed” for “equipment designed for epitaxial growth as follows:” (1) “[e]quipment capable of producing a layer of any material other than silicon with a thickness uniform to less than ±2.5% across a distance of 75 mm or more;” (2) “Metal Organic Chemical Vapor Deposition (MOCVD) reactors specially designed for compound semiconductor crystal growth by the chemical reaction between materials controlled by 3C003 or 3C004;” or (3) “[m]olecular beam epitaxial growth equipment using gas or solid sources.”

13. ECCN 3B001.b. controls “components” “specially designed” for “[e]quipment designed for ion implantation and having any of the following:” (1) “[a] beam energy (accelerating voltage) exceeding 1MeV;” (2) “[b]eing specially designed and optimized to operate at a beam energy (accelerating voltage) of less than 2 keV;” (3) “[d]irect write capability;” or (4) “beam energy of 65 keV or more and a beam current of 45 mA or more for high energy oxygen implant into a heated semiconductor material `substrate.' ”

14. ECCN 3B001.c. controls “components” “specially designed” for “[a]nisotropic plasma dry etching equipment” having all the following: (1) “[d]esigned or optimized to produce critical dimensions of 65 nm or less;” and (2) “[w]ithin wafer non-uniformity equal to or less than 10% 3σ measured with an edge exclusion of 2 mm or less.”

15. ECCN 3B001.e controls “components” “specially designed” for “[a]utomatic loading multi-chamber central wafer handling systems” having (1) “[i]nterfaces for wafer input and output, to which more than two functionally different `semiconductor process tools' controlled by 3B001.a, 3B001.b, 3B001.c or 3B001.d are designed to be connected;” and (2) “[d]esigned to form an integrated system in a vacuum environment for `sequential multiple wafer processing.' ”

16. ECCN 3B001.f.1 controls “components” “specially designed” for “[l]ithography equipment” that “[a]lign[s] and expose[s] step and repeat (direct step on wafer) or step and scan (scanner) equipment for wafer processing using photo-optical or X-ray methods and having” any of the following (a) “light source wavelength shorter than 245 nm;” or (b) “[c]apable of producing a pattern with a `Minimum Resolvable Feature size' (MRF) of 95 nm or less.”

17. ECCN 3B001.f.2 controls “components” “specially designed” for “[i]mprint lithography equipment capable of production features of 95 nm or less” described in ECCN 3B001.f.2.

18. ECCN 3B001.f.3 controls “components” “specially designed” for “[e]quipment specially designed for mask making or semiconductor device processing using direct writing methods, having” all the characteristics described in ECCN 3B001.f.3.a. and any of the characteristics described in .b.

19. ECCN 3B002 controls “components” “specially designed” for “[t]est equipment specially designed for testing finished or unfinished semiconductor devices as follows * * *” (1) “[f]or testing S-parameters of transistor devices at frequencies exceeding 31.8 GHz;” or (2) “[f]or testing microwave integrated circuits controlled by 3A001.b.2.”

20. ECCN 4A003.c controls “ `[e]lectronic assemblies' specially designed or modified to be capable of enhancing performance by aggregation of processors so that the `APP' of the aggregation exceeds the limit in 4A003.b.”

21. ECCN 4A003.e controls “components” “specially designed” for “[e]quipment performing analog-to-digital conversions exceeding the limits in 3A001.a.5.”

22. ECCN 4A003.g controls “components” “specially designed” for “[e]quipment specially designed for aggregating the performance of `digital computers' by providing external interconnections which allow communications at unidirectonal data rates exceeding 2.0 Gbyte/s per link.”

23. ECCN 4A004 controls “components” “specially designed” for (a) “[s]ystolic array computers;” (b) “[n]eural computers;” and (c) “[o]ptical computers.”

24. ECCN 5A001.b controls “components” “specially designed” for “telecommunication systems and equipment, having any of “characteristics, functions or features” described in ECCN 5A001.b.1, b.2, b.3, b.4, b.5, or b.6.

25. ECCN 5A001.e controls “components” “specially designed” for radio direction finding equipment operating at frequencies above 30 MHz and having (1) “ `instantaneous bandwidth' of 10 MHz or more;” and (2) “capable of finding a Line Of Bearing (LOB) to non-cooperating radio transmitters with a signal duration of less than 1 ms.”

26. ECCN 5A001.f controls “components” “specially designed” for “[j]amming equipment specially designed or modified to intentionally and selectively interfere with, deny, inhibit, degrade or seduce mobile telecommunication services and” (1) “simulate the functions of Radio Access Network (RAN) equipment;” (2) “detect and exploit specific characteristics of the mobile telecommunications protocol employed (e.g., GSM);” or (3) “exploit specific characteristics of the mobile telecommunications protocol employed (e.g., GSM).”

27. ECCN 5B001.a controls “components” “specially designed” for “equipment * * * specially designed for the `development', `production' or `use' of equipment, functions or features, controlled by 5A001.”

28. ECCN 5B001.b controls “components” “specially designed” for “equipment * * * specially designed for the `development' of any of the following telecommunication transmission or switching equipment” “employing a ‘laser' ” and (a) having “a transmission wavelength exceeding 1750 nm;” (b) “performing `optical amplification' using Praseodymium-Doped Fluoride Fiber Amplifiers (PDFFA);” (c) “employing coherent optical transmission or coherent optical detection techniques (also called optical heterodyne or homodyne techniques);” or (d) “employing analog techniques and having a bandwidth exceeding 2.5 GHz.”

29. ECCN 5B001.b also controls “components” “specially designed” for “equipment * * * specially designed for the `development' of any of the following telecommunication transmission or switching equipment” (a) “radio equipment employing Quadrature-Amplitude-Modulation (QAM) techniques above level 256;” or (b) “equipment employing ‘common channel signaling’ operating in non-associated mode of operation.”

30. ECCN 5A002.a controls “components” “specially designed” for “systems, equipment, application specific `electronic assemblies', modules and integrated circuits for `information security' ” if they were also “specially designed for `information security.' ”

31. ECCN 6A001.a.1 controls “components” “specially designed” for “marine acoustic systems” that are within the scope of ECCN 6A001.a.1.a, a.1.b, a.1.c., a.1.d, or a.1.e.

32. ECCN 6A001.a.2 controls “components” “specially designed” for “passive systems” described in 6A001.a.2.a, a.2.b, a.2.c., a.2.d, a.2.e, or a.2.f.

33. ECCN 6A004.a.1 controls “components” “ `specially designed' for `deformable mirrors' having either continuous or multi-element surfaces * * * capable of dynamically repositioning portions of the surface of the mirror at rates exceeding 100 Hz.”

34. ECCN 6A005.e.2. controls “components” (optical mirrors, transmissive or partially transmissive optical or electro-optical components) “specially designed” for use with controlled lasers.

35. ECCN 6A203.a controls “components” “specially designed” for “mechanical rotating mirror cameras” that are (1) “framing cameras with recording rates greater than 225,000 frames per second;” or (2) “streak cameras with writing speeds greater than 0.5 mm per microsecond.”

36. ECCN 6A998.a controls “components” “specially designed” for “airborne radar equipment, n.e.s.”

37. ECCN 6A998.b controls “components” “specially designed for “ `space-qualified' `laser' radar or Light Detection and Ranging (LIDAR) equipment specially designed for surveying or for meteorological observation.”

38. ECCN 7A008 controls “components” “specially designed” for “underwater sonar navigation systems using Doppler velocity or correlation velocity logs integrated with a heading source and having a positioning accuracy of equal to or less (better) than 3% of distance traveled `Circular Error Probable' (`CEP').”

39. ECCN 8A002.a controls “components” “specially designed” for “submersible vehicles and designed to operate at depths exceeding 1,000 m” that have (1) “pressure housings or pressure hulls with a maximum inside chamber diameter exceeding 1.5 m,” (2) “direct current propulsion motors or thrusters,” (3) “umbilical cables, and connectors therefor, using optical fiber and having synthetic strength members,” and (4) “components manufactured from material specified by ECCN 8C001.”

40. ECCN 9A002 controls “components” “specially designed” for “ `marine gas turbine engines' with an ISO standard continuous power rating of 24,245 kW or more and a specific fuel consumption not exceeding 0.219 kg/kWh in the power range from 35 to 100%.”

41. ECCN 9A003.a controls “components” and “assemblies” that “incorporat[e] any of the `technologies' controlled by 9E003.a, 9E003.h or 9E003.i” and were “specially designed” for gas turbine engines “controlled by ECCN 9A001.”

42. ECCN 9A003.b controls “components” and “assemblies” that “incorporat[e] any of the `technologies' controlled by 9E003.a, 9E003.h or 9E003.i” and “whose design or production origins are either countries in Country Group D:1 or unknown to the manufacturer.”

Comments should be submitted to BIS as described in the ADDRESSES section of this notice by September 17, 2012.

I. Background

The Energy Policy Act of 1992 (“EPAct 92” or “Act”)  1 established federal programs that encourage the development of alternative fuels and alternative fueled vehicles (AFVs). Section 406(a) of the Act directed the Commission to establish uniform labeling requirements for alternative fuels and AFVs. Under the Act, such labels must provide “appropriate information with respect to costs and benefits [of alternative fuels and AFVs], so as to reasonably enable the consumer to make choices and comparisons.” In addition, the required labels must be “simple and, where appropriate, consolidated with other labels providing information to the consumer.”  2

In response to EPAct 92, the Commission published the Alternative Fuels Rule in 1995. 3 The Rule requires labels on new and used AFVs that run on liquid and non-liquid fuels, such as ethanol and other alcohols including E85 ethanol-gasoline mixtures, natural gas, liquefied petroleum gas, hydrogen, coal-derived liquid fuels, fuels derived from biological materials ( e.g., 100% biodiesel), and electricity. The labels for new AFVs disclose the vehicle's estimated cruising range ( i.e., the travel distance on a single charge or tank of fuel), general factors consumers should consider before buying an AFV, and toll free telephone numbers and Web sites for additional information from the Department of Energy (DOE) and NHTSA. 4 Labels for used AFVs contain only the general buying factors and DOE/NHTSA contact information. 5

The Rule also requires labels on fuel dispensers for non-liquid alternative fuels, such as electricity, compressed natural gas, and hydrogen. 6 The labels for electricity provide the dispensing system's kilowatt capacity, voltage, and other related information. The labels for other non-liquid fuels disclose the fuel's commonly used name and principal component (expressed as a percentage). 7

In a June 1, 2011, Advance Notice of Proposed Rulemaking (ANPR), 8 the Commission initiated its regulatory review of the Rule to ensure that FTC-required vehicle labels and EPA fuel economy labeling requirements are consistent. 9 In doing so, the Commission sought comment about the Rule's costs, benefits, and regulatory impact. In addition, the Commission raised three specific issues for comment: (1) The consolidation of the FTC label with EPA's fuel economy label; (2) the inclusion of new definitions for AFVs contained in recent legislation; and (3) the retention of labeling requirements for used AFVs.

The Commission received nine comments. 10 Seven urged the Commission to consolidate its AFV labeling requirements with EPA's fuel economy labels (including those for newly defined AFVs). 11 No comments opposed consolidation. In addition, three comments supported elimination of FTC labels for used AFVs while one supported their continuation. 12 Two comments also recommended that the Commission retain existing FTC requirements for labeling non-liquid alternative fuels. 13

In response, the Commission proposes to consolidate FTC labels with EPA fuel economy labels for all AFVs, including those identified in recent legislation, and eliminate FTC labeling requirements for used AFVs. However, the Commission does not propose changes to existing alternative fuel rating requirements. For each of these issues, the following sections provide background on alternative fuel requirements, discuss the comments received, and explain the proposed amendments.

Background: The Commission requested comment on whether it should consolidate its AFV labels with fuel economy labels recently issued by EPA to provide a uniform label for consumers. 14 The new EPA labels apply to both conventional vehicles and AFVs, including AFVs subject to the FTC's labeling requirements. 15 The EPA label differs depending on the type of AFV. For electric and compressed natural gas vehicles, the labels disclose information about fuel economy, greenhouse gases (and other emissions), cruising (driving) range, and estimated annual fuel cost. For ethanol-fueled vehicles, including flexible fuel vehicles (FFVs) ( i.e., dual fueled vehicles) that operate on a combination of gasoline and ethanol, the labels disclose the fuel economy, fuel cost, and emissions based on gasoline operation and allow, but do not require, a driving range for gasoline or alternative fuel operation. All the EPA labels reference www.fueleconomy.gov, which provides comprehensive consumer information about fuel economy and alternative fuels. Given this content, the ANPR requested comment on whether the EPA label accomplishes the EPAct 92's goal of providing “appropriate information with respect to costs and benefits [of alternative fuels and AFVs], so as to reasonably enable the consumer to make choices and comparisons.”  16

The ANPR also sought comment on whether to allow the use of the EPA label, in lieu of the FTC label, on three categories of vehicles (hydrogen fuel cell, advanced lean burn, and hybrid motor vehicles) that were added to the definition of “alternative fuel vehicle” by the National Defense Authorization Act for Fiscal Year 2008. 17 The Commission noted that, because these vehicles are already covered under existing labeling programs, additional labeling requirements appear unnecessary. 18

Comments: Seven comments supported consolidating the FTC and new fuel economy labels explaining that a single label would reduce consumer confusion and industry burden. 19 No comments opposed such a change. 20 These comments noted that the EPA fuel economy labels offer as much or more information than the FTC labels with one exception. Finally, they noted that EPA labels cover the three vehicle types added by recent legislation.

Commenters explained that the FTC labeling requirements duplicate the new fuel economy labels mandated by the EPA and NHTSA, create potential confusion, and provide little, if any, benefit for consumers. 21 For instance, the Alliance of Automobile Manufacturers (Alliance) argued such duplication creates potential consumer confusion by presenting the same or similar information on differently formatted labels and imposes costs on manufacturers with no significant consumer benefit. General Motors (GM) also explained that the overlapping labels have led to inconsistencies between the driving range numbers on FTC and EPA labels. 22 The Alliance and the Association of Global Automakers (Global Automakers) noted that, over the past several years, industry members have urged state and federal agencies to develop a single national vehicle label. 23 No commenters disagreed with these views.

Five comments suggested that elimination of the FTC labels would not harm consumers because the EPA fuel economy labels provide more vehicle-specific information than the FTC label. 24 Specifically, Global Automakers explained the EPA labeling program provides comprehensive fuel economy information by requiring labels that disclose the most important vehicle information and offers a Web site, www.fueleconomy.gov, with more detailed information, including data on older vehicles. 25 According to the Alliance, the new EPA fuel economy label, like the current FTC label, requires driving range information for most AFVs, including electric vehicles (EVs), plug-in hybrid electric vehicles (PHEVs), hydrogen fuel cell vehicles (FCVs), and compressed natural gas (CNG-fueled) vehicles. At the same time, the EPA label provides additional information not found on the FTC label including fuel costs, smog ratings, and greenhouse gas information. 26 Two comments, GM and the Alliance, noted that, unlike the FTC label for FFVs, the EPA rules do not require driving range information but instead provide manufacturers the option to include the range for gasoline and alternative fuel ( e.g., E85) operation. The Alliance recommended that the FTC provide the same flexibility. No comments identified harm to consumers from consolidation.

Finally, three comments recommended that the FTC allow manufacturers to use the EPA fuel economy label for vehicle categories added to the definition of AFV by recent legislation ( i.e., lean burn, hybrid, and fuel cell vehicles). No comments opposed this approach. Edison Electric Institute (EEI) argued that the federal requirements should be the same for all types of vehicles to minimize industry costs and ensure consumers can make “apples to apples” vehicle comparisons. The Alliance agreed, noting that EPA labeling rules already cover these vehicles. GM also explained that FTC labels for these vehicles would not provide any significant additional consumer benefit and could increase the opportunity for errors.

Discussion: Consistent with the comments, the Commission proposes to require manufacturers to use EPA's fuel economy label for alternative fuel vehicles, including the vehicle categories added by recent legislation, in lieu of existing FTC requirements. 27 The Commission agrees with commenters that consolidating the FTC and EPA labels will benefit consumers and industry by eliminating potential confusion caused by overlapping or inconsistent labels, and by reducing the burden on manufacturers to create and post two labels. 28 Generally, the EPA labels are likely to be more helpful to consumers in making choices and comparisons because they contain more vehicle-specific information than the current FTC labels. The fuel economy labels also link consumers to www.fueleconomy.gov, which provides comprehensive comparative information for conventional vehicles and AFVs. 29

Unlike the FTC labels, the EPA labels for FFVs allow, but do not require, driving range disclosures. In support of making driving range disclosures optional, EPA has indicated that nearly all FFV owners (99%) use only regular gasoline, limiting the practical value of driving range disclosures. 30 EPA's conventional gasoline label does not disclose driving range. Also, the inclusion of driving range on the FFV label alters the location of the “gallons per 100 miles” disclosure. 31 Other factors, however, may support a mandatory driving range disclosure for these vehicles. First, the difference between driving range performance for alternative fuel and conventional gasoline operation can be significant. 32 Second, the use of alternative fuels may increase in the future. Therefore, to ensure the label provides vehicle buyers with comparative driving range performance for both alternative fuel and conventional gasoline, the Commission proposes to require use of the EPA FFV label that contains the vehicle's alternative fuel and gasoline driving range. This proposal would effectively eliminate use of the EPA FFV label that does not disclose driving range.

The Commission seeks comment on all aspects of this proposal. In particular, comments should indicate whether driving range information on FFV labels is necessary given the few consumers that appear to use alternative fuel in such vehicles. Comments should also address whether the elimination of FFV label that does not disclose driving range would have any negative impacts on consumers' efforts to compare vehicles. The Commission also seeks comment on whether there are any types of AFVs on the market that are not covered by the EPA label, and, if so, whether the Commission should retain its current labeling requirements for such vehicles.

Background: In the ANPR, the Commission sought comment on whether to change the Rule's labeling requirements for used AFVs. 33 Under the current Rule, used AFV dealers must post labels with general tips and references to government telephone numbers and Web sites that provide additional information. 34 However, these labels do not contain vehicle-specific information, such as cruising range. Because these labels provide limited information and are likely to impose increasing burdens on used car dealers as the AFV market expands, the Commission asked whether it should retain the requirement and, if so, whether to change the label's content.

Comments: Three comments urged the Commission to eliminate the FTC labeling requirement for used vehicles, while two suggested alternative approaches to the existing label. The Alliance, the National Automobile Dealers Association (NADA), and GM recommended elimination because the used vehicle label does not provide consumers with significant benefit and places unnecessary burden on used automobile dealers. NADA also argued that the rule, which does not apply to private used vehicle sellers, poses unfair burdens on dealers who account for only about half of all used vehicle transactions. In lieu of the current label which only provides general tips, these three comments suggested that consumers use www.fueleconomy.gov to locate specific vehicle information.

Although NADA recommended elimination of the used label altogether, it also suggested alternatively that the Commission insert an AFV disclosure into the FTC's current used vehicle Buyers Guide (16 CFR Part 455). NADA suggested that the FTC used vehicle Buyers Guide could state: “For more information on the fuel economy and fuel type for this vehicle, consult www.fueleconomy.gov. ”  35 In addition, EEI, the only comment that supported keeping the used vehicle label, urged the Commission to simplify the requirements by only requiring a link to the www.fueleconomy.gov Web site on the existing label.

Discussion: The Commission proposes to eliminate the requirement for a separate AFV label for used vehicles. Unlike in 1995, when the Commission originally issued its Alternative Fuels Rule, consumers can now access detailed used AFV information online at www.fueleconomy.gov, including vehicle-specific fuel economy, energy consumption, and environmental impact data. Given the extensive information at www.fueleconomy.gov, the benefits of a separate used vehicle label that contains only generic tips for consumers seem small compared to the costs of posting such labels. Accordingly, the used label does not appear necessary to “reasonably enable the consumer to make choices and comparisons” as contemplated by the statute. 36 The Commission seeks comment on this proposal, including whether the Commission should consider including a link to www.fueleconomy.gov on the FTC's used vehicle Buyers Guide.

The Commission proposes no change to non-liquid alternative fuel requirements because two comments indicated that existing alternative fuel labeling helps consumers and no comment proposed changes. 37 EEI, for example, urged the Commission to retain existing requirements because fuel dispenser labels help ensure consumers choose fuels that match the needs of their vehicle's energy system. 38

The current Rule contains recordkeeping, disclosure, testing, and reporting requirements that constitute “information collection requirements” as defined by 5 CFR 1320.3(c) under the OMB regulations that implement the Paperwork Reduction Act (PRA). 39 OMB has approved the Rule's existing information collection requirements through April 30, 2013 (OMB Control No. 3084-0094). The proposed amendments would reduce the burdens associated with the Rule by eliminating FTC labeling requirements for vehicles subject to EPA's fuel economy labeling requirements.

In past PRA analyses, FTC staff has estimated the Rule applies to 1,121,153 alternative fuel vehicles, which mostly include flex-fuel vehicles. The staff estimated a two-minute average time to comply with the posting requirements for each of the approximately 1,121,153 new and used AFVs manufactured each year, for a total of 37,371 hours. 40 The staff also estimated that the Rule's vehicle labeling requirements apply to an estimated 1,121,153 new and used AFVs each year at 38 cents (per industry sources) for each label, the annual AFV labeling cost is estimated to be $426,038 ($0.38 × 1,121,153). The Commission believes that the proposed rule would eliminate the Rule's burden for all these vehicles. Accordingly, FTC staff is submitting a related clearance request to OMB to adjust these previously submitted burden totals.

The Commission invites comments on: (1) Whether the proposed modifications to the current labeling requirements are necessary and/or will be practically useful; (2) the accuracy of the associated burden estimates; (3) how to improve the quality, utility, and clarity of the labels; and (4) how to minimize further the burden of the collections of information.

Your responses to the points above additionally should be sent to OMB. If sent by U.S. mail, they should be addressed to Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for the Federal Trade Commission, New Executive Office Building, Docket Library, Room 10102, 725 17th Street NW., Washington, DC 20503. Comments sent to OMB by U.S. postal mail, however, are subject to delays due to heightened security precautions. Thus, comments should instead be sent by facsimile to (202) 395-5167.

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, requires that the Commission provide an Initial Regulatory Flexibility Analysis (IRFA) with a Proposed Rule and a Final Regulatory Flexibility Analysis (FRFA), with the final Rule, if any, unless the Commission certifies that the Rule will not have a significant economic impact on a substantial number of small entities. 41

The Commission does not anticipate that the Proposed Rule will have a significant economic impact on a substantial number of small entities. The Commission recognizes that some affected entities may qualify as small businesses under the relevant thresholds. Because the Proposed Rule would reduce burdens, however, the Commission does not expect that the economic impact of the Rule will be significant.

Accordingly, this document serves as notice to the Small Business Administration of the FTC's certification of no effect. To ensure the accuracy of this certification, however, the Commission requests comment on whether the Proposed Rule will have a significant impact on a substantial number of small entities, including specific information on the number of entities that would be covered by the Proposed Rule, the number of these companies that are “small entities,” and the average annual burden for each entity. Although the Commission certifies under the RFA that the Rule proposed in this Notice would not, if promulgated, have a significant impact on a substantial number of small entities, the Commission has determined, nonetheless, that it is appropriate to publish an IRFA in order to inquire into the impact of the Proposed Rule on small entities. Therefore, the Commission has prepared the following analysis:

To provide clear disclosures to consumers and reduce labeling burden, the Commission proposes to direct manufacturers to use EPA fuel economy labels in lieu of the existing FTC label.

Section 406(a) of EPAct 92 directed the Commission to establish uniform labeling requirements, to the greatest extent practicable, for alternative fuels and AFVs. 42

Under the Small Business Size Standards issued by the Small Business Administration, automobile manufacturers qualify as small businesses if they have fewer than 1,000 employees. The Commission estimates that approximately six vehicle manufacturers or commercial importers subject to the Proposed Rule qualify as small businesses. The Commission seeks comment and information with regard to the estimated number and nature of small business entities for which the Proposed Rule would have a significant economic impact.

The Proposed Rule does not impose any additional reporting, recordkeeping, or compliance requirements. Rather, the Proposed Rule would eliminate FTC labeling requirements for certain vehicles. The classes of small entities affected by the Rule include fuel distributors, vehicle manufacturers, and fuel retailers.

The Commission has not identified any other federal statutes, rules, or policies that would duplicate, overlap, or conflict with the Proposed Rule. Indeed, the Proposed Rule would harmonize labeling requirements for new AFVs by consolidating the FTC's AFV labels with fuel economy labels required by EPA and NHTSA. The Commission invites comment and information on this issue.

The Commission seeks comment and information on the need, if any, for alternative compliance methods that would reduce the economic impact of the Rule on such small entities. If the comments filed in response to this Notice identify small entities that would be affected by the Rule, as well as alternative methods of compliance that would reduce the economic impact of the Rule on such entities, the Commission will consider the feasibility of such alternatives and determine whether they should be incorporated into the final rule.

The Commission invites affected industries, consumer organizations, federal and state agencies, and other interested persons to submit written comments on any issue of fact, law, or policy that may bear upon the proposals under consideration. Please include explanations for any answers provided, as well as supporting evidence where appropriate. After examining the comments, the Commission will determine whether to issue specific amendments.

You can file a comment online or on paper. For the Commission to consider your comment, we must receive it on or before August 17, 2012. Write “Alternative Fuels Labeling (16 CFR Part 309) (Matter No. R311002)” on your comment. Your comment—including your name and your state—will be placed on the public record of this proceeding, including, to the extent practicable, on the public Commission Web site, at http://www.ftc.gov/os/publiccomments.shtm. As a matter of discretion, the Commission tries to remove individuals' home contact information from comments before placing them on the Commission Web site.

Because your comment will be made public, you are solely responsible for making sure that your comment does not include any sensitive personal information, such as anyone's Social Security number, date of birth, driver's license number or other state identification number or foreign country equivalent, passport number, financial account number, or credit or debit card number. You are also solely responsible for making sure that your comment does not include any sensitive health information, like medical records or other individually identifiable health information. In addition, do not include any “[t]rade secret or any commercial or financial information which is obtained from any person and which is privileged or confidential * * *,” as provided in Section 6(f) of the FTC Act, 15 U.S.C. 46(f), and FTC Rule 4.10(a)(2), 16 CFR 4.10(a)(2). If you want the Commission to give your comment confidential treatment, you must file it in paper form, with a request for confidential treatment, and you have to follow the procedure explained in FTC Rule 4.9(c), 16 CFR 4.9(c). 43 Your comment will be kept confidential only if the FTC General Counsel, in his or her sole discretion, grants your request in accordance with the law and the public interest.

Postal mail addressed to the Commission is subject to delay due to heightened security screening. As a result, we encourage you to submit your comments online, or to send them to the Commission by courier or overnight service. To make sure that the Commission considers your online comment, you must file it at https://ftcpublic.commentworks.com/ftc/altfuelslabelingnprm by following the instructions on the web-based form. If this Notice appears at http:// www.regulations.gov/#!home, you also may file a comment through that Web site.

If you file your comment on paper, write “Proposed Amendments to the Alternative Fuels Rule, (16 CFR part 309) (Matter No. R311002)” on your comment and on the envelope, and mail or deliver it to the following address: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex N), 600 Pennsylvania Avenue NW., Washington, DC 20580. If possible, submit your paper comment to the Commission by courier or overnight service.

Visit the Commission Web site at http://www.ftc.gov to read this Notice and the news release describing it. The FTC Act and other laws that the Commission administers permit the collection of public comments to consider and use in this proceeding as appropriate. The Commission will consider all timely and responsive public comments that it receives on or before August 17, 2012. You can find more information, including routine uses permitted by the Privacy Act, in the Commission's privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

The Commission proposes to amend 16 CFR part 309 as follows:

The Directorate of Defense Trade Controls (DDTC), U.S. Department of State, administers the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130). The items subject to the jurisdiction of the ITAR, i.e., “defense articles,” are identified on the ITAR's U.S. Munitions List (USML) (22 CFR 121.1). With few exceptions, items not subject to the export control jurisdiction of the ITAR are subject to the jurisdiction of the Export Administration Regulations (“EAR,” 15 CFR parts 730-774, which includes the Commerce Control List (CCL) in Supplement No. 1 to Part 774), administered by the Bureau of Industry and Security (BIS), U.S. Department of Commerce. Both the ITAR and the EAR impose license requirements on exports and reexports. Items not subject to the ITAR or to the exclusive licensing jurisdiction of any other set of regulations are subject to the EAR.

The Departments of State and Commerce described in their respective Advanced Notices of Proposed Rulemaking (ANPRM) in December 2010 the Administration's plan to make the USML and the CCL positive, tiered, and aligned so that eventually they can be combined into a single control list ( see “Commerce Control List: Revising Descriptions of Items and Foreign Availability,” 75 FR 76664 (December 9, 2010) and “Revisions to the United States Munitions List,” 75 FR 76935 (December 10, 2010)). The notices also called for the establishment of a “bright line” between the USML and the CCL to reduce government and industry uncertainty regarding export jurisdiction by clarifying whether particular items are subject to the jurisdiction of the ITAR or the EAR. While these remain the Administration's ultimate Export Control Reform objectives, their concurrent implementation would be problematic in the near term. In order to more quickly reach the national security objectives of greater interoperability with U.S. allies, enhancing the defense industrial base, and permitting the U.S. Government to focus its resources on controlling and monitoring the export and reexport of more significant items to destinations, end-uses, and end-users of greater concern than NATO allies and other multi-regime partners, the Administration has decided, as an interim step, to propose and implement revisions to both the USML and the CCL that are more positive, but not yet tiered.

Specifically, based in part on a review of the comments received in response to the December 2010 notices, the Administration has determined that fundamentally altering the structure of the USML by tiering and aligning it on a category-by-category basis would significantly disrupt the export control compliance systems and procedures of exporters and reexporters. For example, until the entire USML was revised and became final, some USML categories would follow the legacy numbering and control structures while the newly revised categories would follow a completely different numbering structure. In order to allow for the national security benefits to flow from re-aligning the jurisdictional status of defense articles that no longer warrant control on the USML on a category-by-category basis while minimizing the impact on exporters' internal control and jurisdictional and classification marking systems, the Administration plans to proceed with building positive lists now and afterward return to structural changes.

Although one of the goals of the ECR Initiative is to describe USML controls without using design intent criteria, a few of the controls in the proposed revision nonetheless use the term “specially designed.” It is, therefore, necessary for the Department to define the term. Two proposed definitions have been published to date.

The Department first provided a draft definition for “specially designed” in the December 2010 ANPRM (75 FR 76935) and noted the term would be used minimally in the USML, and then only to remain consistent with the Wassenaar Arrangement or other multilateral regime obligations or when no other reasonable option exists to describe the control without using the term. The definition provided at that time is as follows: “For the purposes of this Subchapter, the term `specially designed' means that the end-item, equipment, accessory, attachment, system, component, or part ( see ITAR § 121.8) has properties that (i) distinguish it for certain predetermined purposes, (ii) are directly related to the functioning of a defense article, and (iii) are used exclusively or predominantly in or with a defense article identified on the USML.”

The Department of Commerce subsequently published on July 15, 2011, for public comment, ( see “Proposed Revisions to the Export Administration Regulations (EAR): Control of Items the President Determines No Longer Warrant Control under the United States Munitions List (USML),” 76 FR 41958), the Administration's proposed definition of “specially designed” that would be common to the CCL and the USML. The public provided more than 40 comments on that proposed definition on or before the September 13, 2011, submission deadline. The Departments of State, Commerce, and Defense have reviewed those comments and related issues. The Department of State's Defense Trade Advisory Group and the Department of Commerce's Technical Advisory Committees participated in the review. The revised definition provided in this proposed rule is, but for a few modifications, identical to the definition published separately by the Department of Commerce ( see elsewhere in this issue of the Federal Register ). The overall goal of the definition is to differentiate between those articles “enumerated” on the USML and those articles not enumerated but captured in “catch-all” paragraphs.

The July 15 rule referenced above identified nine objectives for the revised “specially designed” definition. These objectives have not changed and the U.S. Government is committed to adopting a “specially designed” definition under the ITAR and EAR that would achieve these nine objectives. The nine objectives are to:

(1) Preclude multiple or overlapping controls of similar items within and across the two control lists;

(2) Be easily understood and applied by exporters, prosecutors, juries, and the U.S. Government— e.g., by using objective, knowable, and clear requirements that do not rely upon a need to investigate and divine the intentions of the original designer of a part or the predominant market applications for such items;

(3) Be consistent with definitions used by the international export control regimes;

(4) Not include any item specifically enumerated on either the USML or the CCL and, in order to avoid a definitional loop, do not use “specially designed” as a control criterion;

(5) Be capable of excluding from control simple or multi-use parts such as springs, bolts, and rivets, and other types of items the U.S. Government determines do not warrant significant export controls;

(6) Apply to both descriptions of end items that are “specially designed” to have particular characteristics and to parts and components that were “specially designed” for particular end items;

(7) Apply to materials and software because they are “specially designed” to have a particular characteristic or for a particular type of end item;

(8) Not increase the current control level to “600 series” control or other higher end controls of items ( i.e., not moving items currently subject to a lower control status to a higher level control status), particularly current EAR99 items, that are now controlled at lower levels; and

(9) Not, merely as a result of the definition, cause historically EAR controlled items to become ITAR controlled.

The revised “specially designed” definition provided in this notice proposes a simplified two paragraph structure. Paragraph (a) is to identify what commodities, as a result of development, are “specially designed,” and paragraph (b) is to identify what parts, components, accessories, and attachments are excluded from “specially designed.”

Paragraph (a) begins with the phrase, “Except for commodities described in (b), a commodity is `specially designed' if, as a result of development, it [is within the scope of any one of three subparagraphs discussed below].” It is the beginning of the “catch” in the “catch and release” structure of the definition. For U.S. Munitions List paragraphs containing the term “specially designed,” a defense article is “caught”—it is “specially designed”—if any of the three elements of paragraph (a) apply and none of the elements of paragraph (b) apply.

Paragraph (a) is limited by the phrase, “if, as a result of development.” The definition would also include a note to paragraph (b)(3) that contains the following definition of development for purposes of the proposed “specially designed” definition: “`Development' is related to all stages prior to serial production, such as: design, design research, design analyses, design concepts, assembly and testing of prototypes, pilot production schemes, design data, process of transforming design data into a product, configuration design, integration design, layouts.” Thus, a defense article is caught by the threshold requirement of paragraph (a) only if someone is engaged in any of these “development” activities with respect to the article at issue. Three questions one may ask to determine if a defense article is within the scope of paragraph (a) are as follows: (1) Does the commodity, as a result of development, have properties peculiarly responsible for achieving or exceeding the controlled performance levels, characteristics, or functions described in the relevant USML paragraph?; (2) Is the part or component, as a result of development, necessary for an enumerated defense article to function as designed?; and (3) Is the accessory or attachment, as a result of development, used with an enumerated defense article to enhance its usefulness or effectiveness? If the answer to all three questions is “no,” then the commodity is not “specially designed” and further analysis pursuant to paragraph (b) is not necessary. If the answer to any one of the questions is “yes,” then the exporter or reexporter must determine whether any one of the five parts of paragraph (b) of the definition applies. If any one of the five paragraph (b) exclusions apply, then the commodity is not “specially designed.” If none do, then the commodity is “specially designed.”

Paragraph (a)(1) would capture a commodity if it, as a result of “development,” “has properties peculiarly responsible for achieving or exceeding the controlled performance levels, characteristics, or functions described in the relevant U.S. Munitions List paragraph.” This criterion is essentially the same as was proposed in the July 15 proposed definition. Based on the comments, the public found this part of the definition clear. As an example, even if a commodity is capable of use with a controlled defense article, it is not captured by this part of paragraph (a) unless someone did something during the commodity's development so that it would achieve or exceed the performance levels, characteristics, or functions described in a referenced USML paragraph.

Paragraph (a)(2) would capture a part or component if it, as a result of “development,” “is necessary for an enumerated defense article to function as designed.” The Department realizes that this element is similar to paragraph (a)(1), but believes that it needs to be listed separately because not all descriptions of parts and components on the USML include performance levels, characteristics, or functions as a basis for control. Paragraph (a)(2) thus will capture parts and components that are necessary for another article on the USML to function “as designed.” If an article will function “as designed” without the part or component at issue, then that part or component is not captured by paragraph (a)(2).

Paragraph (a)(3) would capture an accessory or attachment if it, as a result of “development,” “is used with an enumerated defense article to enhance its usefulness or effectiveness.” This phrase is from the ITAR's current and the EAR's proposed definitions of “accessory,” “attachment,” and “equipment.”

The July 15 proposed “specially designed” definition included two exclusion paragraphs (paragraphs (c) and (d)) that identified what items would not be “specially designed.” Many commenting parties requested the July 15 definition be simplified and shortened, including the exclusion paragraphs. The Department has addressed these concerns by adopting a simplified structure for the exclusion paragraph (b) included in this proposed rule. Specifically, any part, component, accessory, or attachment that is described in an exclusion paragraph under (b)(1), (b)(2), (b)(3), (b)(4), or (b)(5), would not be controlled by a USML “catch-all” paragraph.

These five exclusions under paragraph (b) would play an important role in this proposed “specially designed” definition. Paragraphs (a)(2) and (a)(3) are broad enough to capture all the defense articles that would be potentially “specially designed,” but in practice would capture a larger set of parts, components, accessories, and attachments than is intended. Paragraph (b) would work to release from inclusion under “specially designed” specific and non-specific parts, components, accessories, and attachments, consistent with existing U.S. export control and international commitments. The exclusions under paragraph (b) as proposed in this rule would refine the set of parts, components, accessories, and attachments that would be subject to the “catch-all” controls on the USML. In this way, paragraphs (a) and (b) are inextricably linked and are intended to work together to identify the parts, components, accessories, and attachments that need to be treated as “specially designed” for purposes of the “catch-all” provisions on the USML.

Paragraph (b) codifies the principle in ITAR § 120.3 that, in general, a commodity should not be ITAR controlled if has a predominant civil application or has performance equivalent (defined by form, fit, and function) to a commodity used for civil applications. If such a commodity warrants control under the ITAR because it provides the United States with a critical military or intelligence advantage or for another reason, then it is or should be enumerated on the USML, as described in the “bright line,” “positive list” objectives in the December 2010 ANPRM (75 FR 76935).

An example of an article that would not be “specially designed” as a result of proposed paragraph (b)(4) is one that was or is being developed to be interchangeable between an aircraft enumerated in USML Category VIII and also an aircraft controlled by ECCN 9A610.a. Such a conclusion for a particular article does not necessarily mean that the article is not subject to export controls. The article may, for example, be enumerated on the USML and, thus, ITAR controlled. In addition, if it is not enumerated on the USML, it might fall with the scope of the controls at ECCN 9A610.x. The jurisdiction of an article must be determined on a case-by-case basis. Proposed paragraph (b)(4) merely states that such an article would not be within the scope of a “catch-all” paragraph of the USML in light of its commonality with non-ITAR controlled articles.

Paragraph (a) would create more objective tests for what defense articles, as a result of development, would be “specially designed” based on the criteria identified in (a)(1), (a)(2), or (a)(3). Paragraph (b) would create more objective tests for what parts, components, accessories, and attachments are excluded from “specially designed” under the exclusion criteria identified in (b)(1), (b)(2), (b)(3) , (b)(4) or (b)(5). The objective criteria identified in paragraph (a) working with the objective exclusion criteria identified in paragraph (b) would allow this proposed “specially designed” definition to achieve the nine stated objectives identified above for the definition.

As the U.S. Government works through the proposed revisions to the USML, some solutions have been adopted that were determined to be the best of available options. With the thought that multiple perspectives would be beneficial to the USML revision process, the Department welcomes the assistance of users of the lists and requests input on the following:

(1) The key goal of this rulemaking is to establish a definition of “specially designed” that provides a “bright line” between the commodities controlled by the USML and the CCL. The public is asked to provide comment on the clarity and understanding of the proposed definition.

(2) The key goal of this rulemaking is to establish a definition of “specially designed” that is applicable to all USML categories. The public is asked to provide comments on the use of “specially designed” in proposed rules for USML revision where the comment period has already closed, as well those proposed rules with open comment periods.

The Department of State is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules implementing this function are exempt from sections 553 (Rulemaking) and 554 (Adjudications) of the Administrative Procedure Act (APA). Although the Department is of the opinion that this rule is exempt from the rulemaking provisions of the APA, the Department is publishing this rule with a 45-day provision for public comment and without prejudice to its determination that controlling the import and export of defense services is a foreign affairs function. As noted above, and also without prejudice to the Department position that this proposed rulemaking is not subject to the APA, the Department previously published a related Advance Notice of Proposed Rulemaking (RIN 1400-AC78) on December 10, 2010 (75 FR 76935), and accepted comments for 60 days.

Since the Department is of the opinion that this proposed rule is exempt from the rulemaking provisions of 5 U.S.C. 553, it does not require analysis under the Regulatory Flexibility Act.

This proposed amendment does not involve a mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This proposed amendment has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996.

This proposed amendment 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. Therefore, in accordance with Executive Order 13132, it is determined that this proposed amendment does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this proposed amendment.

Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributed impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget (OMB).

The Department of State has reviewed the proposed amendment in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

The Department of State has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not preempt tribal law. Accordingly, Executive Order 13175 does not apply to this rulemaking.

Notwithstanding any other provision of law, no person is required to respond to, nor is subject to a penalty for failure to comply with, a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid OMB control number. This proposed rule would affect the following approved collections: (1) Statement of Registration, DS-2032, OMB No. 1405-0002; (2) Application/License for Permanent Export of Unclassified Defense Articles and Related Unclassified Technical Data, DSP-5, OMB No. 1405-0003; (3) Application/License for Temporary Import of Unclassified Defense Articles, DSP-61, OMB No. 1405-0013; (4) Nontransfer and Use Certificate, DSP-83, OMB No. 1405-0021; (5) Application/License for Permanent/Temporary Export or Temporary Import of Classified Defense Articles and Classified Technical Data, DSP-85, OMB No. 1405-0022; (6) Application/License for Temporary Export of Unclassified Defense Articles, DSP-73, OMB No. 1405-0023; (7) Statement of Political Contributions, Fees, or Commissions in Connection with the Sale of Defense Articles or Services, OMB No. 1405-0025; (8) Authority to Export Defense Articles and Services Sold Under the Foreign Military Sales (FMS) Program, DSP-94, OMB No. 1405-0051; (9) Application for Amendment to License for Export or Import of Classified or Unclassified Defense Articles and Related Technical Data, DSP-6, -62, -74, -119, OMB No. 1405-0092; (10) Request for Approval of Manufacturing License Agreements, Technical Assistance Agreements, and Other Agreements, DSP-5, OMB No. 1405-0093; (11) Maintenance of Records by Registrants, OMB No. 1405-0111; (12) Annual Brokering Report, DS-4142, OMB No. 1405-0141; (13) Brokering Prior Approval (License), DS-4143, OMB No. 1405-0142; (14) Projected Sale of Major Weapons in Support of Section 25(a)(1) of the Arms Export Control Act, DS-4048, OMB No. 1405-0156; (15) Export Declaration of Defense Technical Data or Services, DS-4071, OMB No. 1405-0157; (16) Request for Commodity Jurisdiction Determination, DS-4076, OMB No. 1405-0163; (17) Request to Change End-User, End-Use, and/or Destination of Hardware, DS-6004, OMB No. 1405-0173; (18) Request for Advisory Opinion, DS-6001, OMB No. 1405-0174; (19) Voluntary Disclosure, OMB No. 1405-0179; and (20) Technology Security/Clearance Plans, Screening Records, and Non-Disclosure Agreements Pursuant to 22 CFR 126.18, OMB No. 1405-0195. The Department of State believes there will be minimal changes to these collections. The Department of State believes the combined effect of all rules to be published moving commodities from the USML to the EAR as part of the Administration's Export Control Reform would decrease the number of license applications by approximately 30,000 annually. The Department of State is looking for comments on the potential reduction in burden.

Accordingly, for the reasons set forth above, Title 22, Chapter I, Subchapter M, part 120 is proposed to be amended as follows:

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. The FAA Act provides that these regulations should, among other things, prohibit consumer deception and the use of misleading statements on labels, and ensure that labels provide the consumer with adequate information as to the identity and quality of the product. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the FAA Act pursuant to section 1111(d) of the Homeland Security Act of 2002, codified at 6 U.S.C. 531(d). The Secretary has delegated various authorities through Treasury Department Order 120-01 (Revised), dated January 21, 2003, to the TTB Administrator to perform the functions and duties in the administration and enforcement of this law.

Part 4 of the TTB regulations (27 CFR part 4) allows the establishment of definitive viticultural areas and the use of their names as appellations of origin on wine labels and in wine advertisements. Part 9 of the TTB regulations (27 CFR part 9) contains the list of approved American viticultural areas.

Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) defines a viticultural area for American wine as a delimited grape-growing region having distinguishing features as described in part 9 of the regulations and a name and a delineated boundary as established in part 9 of the regulations. These designations allow vintners and consumers to attribute a given quality, reputation, or other characteristic of a wine made from grapes grown in an area to its geographic origin. The establishment of viticultural areas allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of a viticultural area is neither an approval nor an endorsement by TTB of the wine produced in that area.

Section 4.25(e)(2) of the TTB regulations outlines the procedure for proposing an American viticultural area and provides that any interested party may petition TTB to establish a grape-growing region as a viticultural area. Section 9.12 of the TTB regulations (27 CFR 9.12) prescribes standards for petitions for the establishment or modification of American viticultural areas. Such petitions must include the following—

• Evidence that the area within the proposed viticultural area boundary is locally or nationally known by the viticultural area name specified in the petition;

• An explanation of the basis for defining the boundary of the proposed viticultural area;

• A narrative description of the features of the proposed viticultural area that affect viticulture, such as climate, geology, soil, physical features, and elevation, that make the proposed viticultural area distinctive and distinguish it from adjacent areas outside the proposed viticultural area boundary;

• A copy of the appropriate United States Geological Survey (USGS) map(s) showing the location of the proposed viticultural area, with the boundary of the proposed viticultural area clearly drawn thereon; and

• A detailed narrative description of the proposed viticultural area boundary based on USGS map markings.

TTB received a petition from Michael Landt, on behalf of himself and the owners of seven other Elkton area vineyards, proposing the establishment of the “Elkton Oregon” American viticultural area in Douglas County in southwestern Oregon. The proposed viticultural area encompasses approximately 74,900 acres, with 12 commercially-producing vineyards covering 96.5 acres, according to the petition. The petition also included a map indicating that the vineyards are disbursed throughout the proposed viticultural area.

The proposed Elkton Oregon viticultural area is located entirely within the larger Umpqua Valley viticultural area (27 CFR 9.89), which, in turn, is located entirely within the Southern Oregon viticultural area (27 CFR 9.179). The proposed viticultural area covers approximately 11 percent of the 689,904-acre Umpqua Valley viticultural area and 0.04 percent of the much larger 1,977,298-acre Southern Oregon viticultural area. The proposed Elkton Oregon viticultural area lies to the northwest of, but does not share any boundary with, the Red Hills Douglas County viticultural area (27 CFR 9.190), which also is entirely within the Umpqua Valley viticultural area, and it is southwest of the Willamette Valley viticultural area (27 CFR 9.90). The petition states that the marine influence from the Pacific Ocean distinguishes the proposed viticultural area from the larger Umpqua Valley.

TTB notes that the boundaries and name usage of the Umpqua Valley and Southern Oregon viticultural areas would not be affected by the establishment of the proposed Elkton Oregon viticultural area. TTB also notes that, except for its location within the existing Umpqua Valley and Southern Oregon viticultural areas, the proposed viticultural area does not overlap any other existing or proposed viticultural areas. Unless otherwise noted, all information and data contained in the below sections are from the petition for the proposed viticultural area and its supporting exhibits.

The proposed Elkton Oregon viticultural area surrounds the small, incorporated town of Elkton, Oregon, which is located at the confluence of Elk Creek and the Umpqua River in northern Douglas County. The town is shown on the USGS topographical “Elkton Oregon” quadrangle map, and it is listed as a populated place in the USGS's Geographical Names Information System (GNIS; http://geonames.usgs.gov/index.html ). A search of GNIS shows the name “Elkton” used 11 times for places, sites, or buildings in Oregon, all of which are in Douglas County, with 9 of those names appearing on the Elkton quadrangle map and the remaining 2 names appearing on maps of adjoining quadrangles.

The town of Elkton also is shown on commercially-produced road maps. For example, the American Automobile Association (AAA) map, Oregon Washington State series, published February, 2008, shows the town of Elkton in western Oregon on State Route 38 between Interstate 5 and the Pacific Ocean.

The City of Elkton Web site ( http://www.elkton-oregon.com ) lists information about the city and its elected officials. The Elkton School District Web site ( http://www.elkton.k12.or.us/ ) includes information on the Elkton Grade School and Elkton High School. Other places located within the proposed viticultural area include the Elkton Baptist Church, Elkton Christian Church, Elkton Lions Club, Elkton RV Park, Elkton Cash Market, and Elkton Bait and Tackle, according to the Elkton Business Directory Web page ( http://www.elkton-oregon.com/businessdirectory ).

According to a search of the GNIS system, the Elkton name is also used for at least 123 towns and sites in 16 States. Given that the name “Elkton” is used for various locations throughout the United States, the petitioners included “Oregon” as part of the proposed viticultural area name to more specifically describe the location of the proposed viticultural area.

The proposed Elkton Oregon viticultural area is nestled in the northwest portion of the Umpqua Valley viticultural area, which is, in turn, within the larger, multi-county Southern Oregon viticultural area. The northern portion of the boundary line and part of the western portion of the boundary line for the proposed Elkton Oregon viticultural area coincides with portions of the boundary line for the Umpqua Valley and Southern Oregon viticultural areas. The proposed viticultural area does not include the northwestern-most part of the Umpqua and Southern Oregon viticultural areas because of that area's more extreme marine influence, which is inconsistent with the distinguishing features of the proposed viticultural area.

The northern portion of the boundary line for the proposed Elkton Oregon viticultural area follows the 1,000-foot elevation line that separates the higher, more rugged mountain terrain outside the proposed viticultural area from the lower elevations within the proposed viticultural area that descend to the Umpqua River.

The proposed eastern portion of the boundary line incorporates 1,000-foot elevation lines, several connecting straight lines between marked points on USGS maps, and a portion of Elk Creek to separate the lower elevated foothills and river bottom within the proposed viticultural area from the higher mountain elevations to the east.

The proposed southern portion of the boundary line follows a 1,000-foot elevation line and then a straight line to the southwest corner of the proposed viticultural area, separating the lower elevated wide terraces along the Umpqua River from the higher elevated rugged mountain terrain to the south.

The proposed southwestern and western portions of the boundary line are connected straight lines between marked points on USGS maps that are based on the western extent of viticulture in the Elkton area, separating the proposed viticultural area from heavily timbered and remote areas to the west. The southwestern and western portions of the proposed Elkton Oregon viticultural area boundary line also coincide with the northwest portion of the boundary lines for both the Southern Oregon and Umpqua Valley viticultural areas.

The distinguishing features of the proposed Elkton Oregon viticultural area include climate and topography.

The marine influence from the Pacific Ocean moderates temperatures and creates a unique micro-climate within the proposed Elkton Oregon viticultural area. The proximity to the Pacific Ocean, geographical location along the Umpqua River, and low elevation combine to influence the Elkton area growing season climate. The coastal marine influence brings cooling breezes, fog, and moist air inland from the Pacific coastline along the Umpqua River and into the proposed viticultural area, resulting in a milder and longer growing season with more rainfall than in the surrounding areas. The cooler temperatures make the proposed viticultural area suitable for growing cool climate varieties of grapes, such as pinot noir, that do not grow and mature as reliably in the warmer climates of the region farther to the south within the Umpqua Valley and Southern Oregon viticultural areas.

Climate data from within the proposed Elkton Oregon viticultural area and from areas to the east and south was obtained from the Western Regional Climate Center (WRCC) Web site, which collects data from various federal, state, and local agencies. All data is from the 1971-2000 climate normals for each station and is summarized in the table below. The five weather stations from which the data was collected are located in Elkton and in Drain, Riddle, Roseburg, and Winchester, four communities within the larger Umpqua Valley and Southern Oregon viticultural areas. 1

The table shows that the climates of the areas to the east and south differ from the climate within the Elkton Oregon proposed viticultural area. The community to the east of the proposed viticultural area (Drain) receives less precipitation and has cooler temperatures, as shown by the shorter frost-free period and fewer growing degree day (GDD) units. Drain also has a shorter growing season than the proposed viticultural area, as indicated by a later date of last spring frost and earlier date of first fall frost.

The communities located in the region to the south of the proposed viticultural area (Riddle, Roseburg, and Winchester) are generally warmer and drier than the proposed viticultural area. The three communities all receive significantly less precipitation, with annual totals of between 31 and 35 inches. All three communities also have higher totals of GDD units, indicating a warmer climate than within the proposed viticultural area. The warmer temperatures allow grapes to ripen earlier and harvest to take place in September, whereas grapes within the cooler proposed viticultural area are frequently not ripe enough to harvest until October, according to the petitioner.

The petitioner attributes the cooler climate of the proposed Elkton Oregon viticultural area to its proximity to the Pacific Ocean. During the summer, frequent breezes travel inland from the Pacific Ocean along the Umpqua River and into the proposed viticultural area. The breezes begin in the late afternoon and contribute to lower nighttime temperatures. To offset the cooling effect of the breezes and ensure the greatest chance for grapes to ripen fully, most vineyards within the proposed viticultural area are planted at lower elevations, where temperatures are warmer than on the higher slopes. The cool nighttime temperatures resulting from the breezes also promote morning fog. Because the fog persists until late morning, vineyards do not receive much sunlight until the afternoon. As a result, vineyards within the proposed viticultural area are commonly planted on the west side of slopes, where they can benefit most from the afternoon sun. The cool, moist air from the Pacific diminishes as it travels south along the Umpqua River, resulting in little fog and few cool breezes reaching the communities south of the proposed viticultural area.

The marine influence of the Pacific Ocean also contributes to the high precipitation levels within the proposed viticultural area. Moist air traveling east from the Pacific Ocean is blocked by the mountains to the west of the proposed viticultural area and the Umpqua Valley and Southern Oregon viticultural areas and only enters these areas through gaps in the mountains created by creeks and rivers, particularly the Umpqua River. The proposed viticultural area receives more of this moist air than other regions within the larger Umpqua Valley viticultural area because the Pacific air diminishes the farther it travels from the ocean and has less moisture by the time it reaches the communities farther upstream. The amount of annual rainfall within the proposed viticultural area makes irrigation unnecessary, unlike in the areas farther to the east and south within the Umpqua Valley (“Explore Wine Regions in Oregon: Umpqua Valley,” from the Oregon Wine Board Web site, www.oregonwine.org ).

TTB notes that the proposed Elkton Oregon viticultural area can be described as a steep-sided basin, consisting of low-lying, relatively flat river bottom lands that quickly rise to steep slopes. The Umpqua River enters from the south, through a gap in the mountain range near the town of Kellogg, and exits through a similar gap in the northwest corner of the proposed viticultural area. The terrain of the proposed viticultural area is most notably marked by the broad turns of the Umpqua River. Along these river bends are river terraces and foothills with lower elevations and gentle slopes with grades of 2 to 12 percent, in addition to wide swaths of relatively flat river bottom land. Elk Creek, which is also bordered by river terraces and river bottom land, flows from east to west through the northeastern portion of the proposed viticultural area, joining with the Umpqua River near the town of Elkton.

The flat river bottom land and gentle river terraces of the Umpqua River and Elk Creek form the bottom of the basin. Above the river terraces and river bottom lands, the terrain quickly rises to steep, rugged hills with higher elevations, forming the sides of the basin, with the 1,000-foot elevation contour forming the rim. The 1,000-foot elevation contour was chosen to form most of the boundary line for the proposed viticultural area because above 1,000 feet the land becomes too steep and rugged for vineyards. Elevations within the proposed Elkton Oregon viticultural area vary from approximately 122 feet in elevation along the Umpqua River to a peak at the 1,754-foot elevation in the southwestern portion of the proposed viticultural area near Heddin Creek.

The basin-like shape of the proposed viticultural area, along with the Umpqua River, contributes to the distinctive climate of the proposed viticultural area. Cool, moist air travels east from the Pacific Ocean along the Umpqua River and into the Elkton area, bringing mild growing season temperatures, summer breezes, and rain. The steep slopes to the north, east, and south of the proposed Elkton Oregon viticultural area trap most of the cool air and precipitation within the lower elevations of the basin, preventing much of the marine influence from travelling farther into the Umpqua Valley viticultural area. As a result, the remainder of the Umpqua Valley viticultural area is warmer and drier than the proposed Elkton viticultural area.

All of the vineyards within the proposed Elkton Oregon viticultural area are located on the gentle river terraces and foothills along the Umpqua River and Elk Creek, at elevations of 140 to 1,000 feet. In discussions with TTB, the petitioner stated that river terraces and foothills are preferable to river bottom lands because the river bottom lands have thick layers of topsoil which allows vines to grow too vigorously, requiring special cultivation techniques in order to create a favorable foliage-to-fruit ratio. The terraces and foothills, by contrast, are less fertile, with a thinner layer of topsoil over gravel. As a result, the vines require less extensive pruning to produce the desired foliage-to-fruit ratio.

The area to the west of the proposed Elkton Oregon viticultural area is desolate, heavily forested, and rugged. In this region, the Umpqua River is closely bound by the rugged terrain, with little to none of the open river bottom land or gentle river terraces and foothills found within the proposed viticultural area, until the river reaches the ocean, according to USGS maps. Elevations to the west rise to 1,410 feet along ridge lines and dip to 40 feet along the Umpqua River as it flows toward the Pacific Ocean.

To the north of the proposed viticultural area, the elevation rises rapidly to 1,871 feet at Devil Peak in the region marked on USGS maps as Devils Graveyard. TTB notes that the only lower elevation areas in this area are along the small canyon creeks that feed into the Umpqua River and Elk Creek. However, according to the USGS maps, even these small creeks are closely bound by steep hillsides and lack the gently-sloped river terraces and foothills suitable for viticulture, which are characteristic of the proposed viticultural area.

Elevations east of the proposed viticultural area range from 200 feet along Elk Creek and Big Tom Folley Creek to the 2,456-foot peak of Yellow Butte. There is very little open land east of the proposed viticultural area until Putnam Valley near the town of Drain, 14 miles from Elkton. Although numerous creeks flow through the region to the east of the proposed viticultural area, they are closely bound by steep hillsides and lack gentle slopes suitable for viticulture.

To the immediate south of the proposed viticultural area, the Umpqua River flows along a more constricted course, with sharper turns, narrower river bottom lands, and steeper slopes along its banks. Elevations are generally similar to those found within the proposed viticultural area, but the lack of open terrain and gentle slopes, particularly along the Umpqua River, distinguishes this region from the proposed viticultural area. Farther south, near the town of Roseburg (approximately 35 miles away from the proposed viticultural area), the land along the Umpqua River opens and becomes suitable for viticulture. However, in discussions with TTB, the petitioner noted that the majority of vineyards in the southern region of the Umpqua Valley viticultural area are located on river bottom land due to the steeply graded slopes and higher elevations beyond the river bottom land. By comparison, all of the vineyards within the proposed Elkton Oregon viticultural area are planted on the gentle slopes of the river terraces and foothills.

The Umpqua Valley viticultural area was established by T.D. ATF-170, which published in the Federal Register on March 29, 1984 (49 FR 12246).

According to T.D. ATF-170, the Umpqua Valley viticultural area is a lowland section of the Umpqua basin bounded on the west and north by the Coast Range, to the south by the Klamath Mountains, and on the east by the Cascade Range. The terrain of the surrounding area is generally steep and rugged. The 1,000-foot elevation line is the basic boundary line and a reliable indicator of suitability for cultivation in the region. Above the 1,000-foot elevation line, the terrain becomes steep and less hospitable to agriculture, and noticeable differences occur in climate, soils, topography, and vegetation.

The proposed Elkton Oregon viticultural area, similar to the Umpqua Valley viticultural area, also has low elevations with a boundary line that rises to 1,000 feet in elevation to exclude areas without viticultural potential. However, due to its smaller size, the proposed Elkton Oregon viticultural area has a less varied topography that consists primarily of river bottom lands and gently-sloping river terraces at lower elevations than much of the rest of the Umpqua Valley.

The Umpqua Valley viticultural area has cool winters and warm summers. The Coast Range Mountains to the west block most of the marine influence moving inland from the Pacific Ocean, making this viticultural area warmer and less foggy than the coastal region. The cool marine air that does enter along the Umpqua River diminishes the farther upstream it travels, so that very little reaches the southernmost portion of this viticultural area.

The Coast Range Mountains also shield the proposed Elkton Oregon viticultural area and make the proposed viticultural area warmer and drier than the region along the Pacific coast. However, because of its downstream location along the Umpqua River, the proposed viticultural area receives more cool breezes and moisture from the Pacific Ocean than areas farther upstream. As a result, the proposed viticultural area has lower temperatures and more fog than locations farther south within the Umpqua Valley viticultural area.

The Umpqua Valley viticultural area is also described as having high annual rainfall amounts, but also a notable lack of rainfall during the summer months. By contrast, annual rainfall amounts are higher within the proposed Elkton Oregon viticultural area due to moist air from the Pacific Ocean. Rainfall also occurs more frequently during the growing season within the proposed Elkton Oregon viticultural area than in the Umpqua Valley viticultural area, making vineyard irrigation unnecessary.

The large 1,977,298-acre Southern Oregon viticultural area was established by T.D. TTB-19, which published in the Federal Register on December 8, 2004 (69 FR 70889). The Southern Oregon viticultural area boundary encompasses the established Umpqua Valley and Rogue Valley viticultural areas, as well as the Applegate Valley viticultural area, which is totally within the larger Rogue Valley viticultural area. Between the Rogue Valley and Umpqua Valley viticultural areas is a connecting valley corridor with viticultural potential that is part of the Southern Oregon viticultural area.

T.D. TTB-19 describes the Southern Oregon viticultural area as a series of high intermountain valleys that share a warm, sunny, arid climate and contain old, complex soils derived from bedrock. To the west, the Coast Range casts a rain shadow on the south and east parts of the Southern Oregon viticultural area that reduces precipitation and buffers the cooling marine air from moving inland to the grape-growing regions. As a result, the Southern Oregon viticultural area has the warmest grape-growing conditions in Oregon and moderated precipitation.

Vineyards in the Southern Oregon viticultural area are typically situated in high mountain valleys. Vineyard elevations range from below 1,000 feet along the Umpqua River, in the northern portion of the Southern Oregon viticultural area, to 2,000 feet in the Rogue Valley viticultural area at the southern end of the Southern Oregon viticultural area. Both warm and cool wine grape varieties grow successfully in different parts of the Southern Oregon viticultural area.

The proposed Elkton Oregon viticultural area is one of the high mountain valleys within the Southern Oregon viticultural area. The proposed viticultural area, as with the Umpqua Valley viticultural area in which it would be located, broadly shares some characteristics of the larger Southern Oregon viticultural area, such as vineyards below the 2,000-foot elevation line and lower precipitation and warmer temperatures than the coastal regions to the west. However, the proposed Elkton Oregon viticultural area has a distinctive microclimate due to its proximity to both the Pacific Ocean and the Umpqua River. The marine influence from the ocean brings cooling breezes and moist air up the Umpqua River and into the proposed viticultural area, resulting in high annual precipitation amounts and a mild growing season climate. As a result of the mild climate, the proposed viticultural area produces cooler climate varieties of grapes almost exclusively because they mature more reliably than warmer varieties of grapes.

TTB concludes that the petition to establish the 74,900-acre Elkton Oregon viticultural area merits consideration and public comment, as invited in this notice.

TTB notes that the name “Elkton OR” is an equivalent form of the petitioned-for name “Elkton Oregon.” Although the original petition only proposed the name “Elkton Oregon” in reference to the proposed viticultural area, TTB believes that also allowing the abbreviated “Elkton OR” as an alternative name is appropriate. TTB does not believe allowing the abbreviated form as an alternative viticultural area name would cause consumer confusion. Therefore, the part 9 regulatory text set forth in this proposed rule specifies both “Elkton Oregon” and “Elkton OR” as names for this proposed viticultural area.

See the narrative boundary description of the petitioned-for viticultural area in the proposed regulatory text published at the end of this notice.

The petitioner provided the required maps, and they are listed below in the proposed regulatory text.

Part 4 of the TTB regulations prohibits any reference on a wine label that indicates or implies an origin other than the wine's true place of origin. If TTB establishes this proposed viticultural area, its name, “Elkton Oregon,” and the alternative name “Elkton OR,” will both be recognized as terms of viticultural significance under 27 CFR 4.39(i)(3). The text of the proposed regulation clarifies this point.

On the other hand, TTB does not believe that any single part of the proposed viticultural area name standing alone, that is, “Elkton” or “Oregon,” would have viticultural significance in relation to this proposed viticultural area. The GNIS shows the name “Elkton” used in reference to 132 locations, including populated places in 16 states, so TTB believes that “Elkton,” standing alone, would not necessarily imply that a wine originated within the proposed viticultural area. Additionally, “Oregon,” standing alone, is locally and nationally known as referring to the State of Oregon, which is already a term of viticultural significance as a state-wide appellation of origin under 27 CFR 4.25(a)(1)(ii), and under 27 CFR 4.39(i)(3), which states that a term has viticultural significance when it is the name of a State. Therefore, the part 9 regulatory text set forth in this proposed rule specifies only “Elkton Oregon” and “Elkton OR” as terms of viticultural significance for purposes of part 4 of the TTB regulations.

If this proposed regulatory text is adopted as a final rule, wine bottlers using “Elkton Oregon” or “Elkton OR” in a brand name, including a trademark, or in another label reference as to the origin of the wine, would have to ensure that the product is eligible to use the viticultural area's full name or the alternative name of “Elkton OR” as an appellation of origin. The approval of the proposed Elkton Oregon viticultural area would not affect any existing viticultural area, and any bottlers using “Umpqua Valley” or “Southern Oregon” as an appellation of origin or in a brand name for wines made from grapes grown within the Umpqua Valley or Southern Oregon viticultural areas would not be affected by the establishment of this new viticultural area. The establishment of the Elkton Oregon viticultural area would allow vintners to use “Elkton Oregon,” “Elkton OR,” “Umpqua Valley,” and “Southern Oregon” as appellations of origin for wines made from grapes grown within the Elkton Oregon viticultural area if the wines meet the eligibility requirements for the appellation.

For a wine to be labeled with a viticultural area name or with a brand name that includes a viticultural area name or other term identified as being viticulturally significant in part 9 of the TTB regulations, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name or other term, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible for labeling with the viticultural area name or other viticulturally significant term and that name or term appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the viticultural area name or other viticulturally significant term appears in another reference on the label in a misleading manner, the bottler would have to obtain approval of a new label.

Different rules apply if a wine has a brand name containing a viticultural area name or other viticulturally significant term that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details.

TTB invites comments from interested members of the public on whether the agency should establish the proposed Elkton Oregon viticultural area. TTB is interested in receiving comments on the sufficiency and accuracy of the name, boundary, climate, soils, and other required information submitted in support of the petition. Please provide any available specific information in support of your comment. In addition, given the proposed Elkton Oregon viticultural area's location within both the existing Umpqua Valley and Southern Oregon viticultural areas, TTB is interested in comments on whether the evidence submitted in the petition regarding the distinguishing features of the proposed viticultural area sufficiently differentiates it from the existing Umpqua Valley and Southern Oregon viticultural areas. TTB is also interested in comments on whether the geographic features of the proposed viticultural area are so distinguishable from the surrounding Umpqua Valley and Southern Oregon viticultural areas that the proposed Elkton Oregon viticultural area should no longer be part of those viticultural areas. Please provide any available specific information in support of your comments.

Because of the potential impact of the establishment of the proposed Elkton Oregon viticultural area on wine labels that include the terms “Elkton Oregon” or “Elkton OR” as discussed above under Impact on Current Wine Labels, TTB is also interested in comments regarding whether there will be a conflict between the proposed area name and currently used brand names. If a commenter believes that a conflict will arise, the comment should describe the nature of that conflict, including any anticipated negative economic impact that approval of the proposed viticultural area will have on an existing viticultural enterprise. TTB is also interested in receiving suggestions for ways to avoid conflicts, for example, by adopting a modified or different name for the viticultural area.

You may submit comments on this notice by using one of the following three methods:

• Federal e-Rulemaking Portal: You may send comments via the online comment form posted with this notice within Docket No. TTB-2012-0005 on “Regulations.gov,” the Federal e-rulemaking portal, at http://www.regulations.gov. A direct link to that docket is available under Notice No. 130 on the TTB Web site at http://www.ttb.gov/wine/wine_rulemaking.shtml. Supplemental files may be attached to comments submitted via Regulations.gov. For complete instructions on how to use Regulations.gov, visit the site and click on the site's “Help” tab.

• U.S. Mail: You may send comments via postal mail to the Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044-4412.

• Hand Delivery/Courier: You may hand-carry your comments or have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Suite 200-E, Washington, DC 20005.

Please submit your comments by the closing date shown above in this notice. Your comments must reference Notice No. 130 and include your name and mailing address. Your comments also must be made in English, be legible, and be written in language acceptable for public disclosure. TTB does not acknowledge receipt of comments, and considers all comments as originals.

In your comment, please indicate if you are speaking on your own behalf or on behalf of an association, business, or other entity. If you are speaking on behalf of an entity, your comment must include the entity's name as well as your name and position title. If you comment via http://www.regulations.gov, please also enter the entity's name in the “Organization” blank of the online comment form. If you comment via postal mail or hand delivery/courier, please submit your entity's comment on letterhead.

You may also write to the Administrator before the comment closing date to ask for a public hearing. The Administrator reserves the right to determine whether to hold a public hearing.

All submitted comments and attachments are part of the public record and subject to disclosure. Do not include, attach, or enclose any material in or with your comments that you consider to be confidential or inappropriate for public disclosure.

On the Federal e-rulemaking portal, Regulations.gov, TTB will post, and you may view, copies of this notice, selected supporting materials, and any online or mailed comments TTB receives about this. A direct link to the Regulations.gov docket containing this notice and the posted comments received on it is available on the TTB Web site at http://www.ttb.gov/wine/wine-rulemaking.shtml under Notice No. 130. You may also reach the docket containing this notice and the posted comments received on it through the Regulations.gov search page at http://www.regulations.gov. For instructions on how to use Regulations.gov, visit the site and click on “User Guide” under “How to Use this Site.”

All posted comments will display the commenter's name, organization (if any), city, and State, and, in the case of mailed comments, all address information, including email addresses. TTB may omit voluminous attachments or material that TTB considers unsuitable for posting.

You may view copies of this notice, all related petitions, maps and other supporting materials, and any electronic or mailed comments TTB receives about this proposal by appointment at the TTB Information Resource Center, 1310 G Street NW., Washington, DC 20220. You may also obtain copies at 20 cents per 8.5- x 11-inch page. Contact the information specialist at the above address or by telephone at 202-453-2270 to schedule an appointment or to request copies of comments or other materials.

TTB certifies that this proposed regulation, if adopted, would not have a significant economic impact on a substantial number of small entities. The proposed regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name would be the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.

This proposed rule is not a significant regulatory action as defined by Executive Order 12866. Therefore, it requires no regulatory assessment.

Karen A. Thornton of the Regulations and Rulings Division drafted this notice.

For the reasons discussed in the preamble, TTB proposes to amend title 27, chapter I, part 9, Code of Federal Regulations, as follows:

Table of Acronyms DHS Department of Homeland Security FR  Federal Register NPRM Notice of Proposed Rulemaking A. Public Participation and Request for Comments

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

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

To submit your comment online, go to http://www.regulations.gov , type the docket number USCG-2012-0441 in the “SEARCH” box and click “SEARCH.” Click on “Submit a Comment” on the line associated with this rulemaking.

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

To view comments, as well as documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov , type the docket number USCG-2012-0441 in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rulemaking. You may also visit the Docket Management Facility in Room W12-140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

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

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

The City of Bullhead is sponsoring the Bullhead City Regatta, which is held on the navigable waters of the Colorado River in Bullhead City, AZ. The proposed temporary safety zone is necessary to provide for the safety of the participants, crew, spectators, sponsor vessels, and other vessels and users of the waterway. This event involves people floating down the river on inflatable rafts, inner tubes and floating platforms. The size of vessels used would vary in length from 3 feet to 100 feet. Approximately 30,000 to 40,000 people would be participating in this event. The sponsor would provide 50 patrol and rescue boats to help facilitate the event and ensure public safety.

The Coast Guard is proposing a temporary safety zone that would be enforced from 6 a.m. to 6 p.m. on August 11, 2012. This safety zone is necessary to provide for the safety of the crews, spectators, participants, and other vessels and users of the waterway. Persons and vessels would be prohibited from entering into, transiting through, or anchoring within this safety zone unless authorized by the Captain of the Port, or his designated representative. The proposed temporary safety zone would include the waters of the Colorado River between Davis Camp and Rotary Park in Bullhead City, AZ. Before the effective period, the Coast Guard will publish a Local Notice to Mariners (LNM).

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

This proposed rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, 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. This determination is based on the size and location of the safety zone. Although the safety zone would apply to the entire width of the river, traffic would be allowed to pass through the zone with the permission of the Captain of the Port. Additionally, before the effective period, the Coast Guard will publish a Local Notice to Mariners (LNM).

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered the impact of this proposed rule on small entities. The Coast Guard certifies under 5 U.S.C. 605(b) that this proposed rule will not have a significant economic impact on a substantial number of small entities. This proposed rule will affect the following entities, some of which might be small entities: the owners or operators of vessels intending to transit or anchor in a portion of the waters of the Colorado River between Davis Camp to Rotary Park in Bullhead City, AZ from 6 a.m. to 6 p.m. on August 11, 2012.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons. Although the safety zone would apply to the entire width of the river, traffic would be allowed to pass through the zone with the permission of the Coast Guard patrol commander. Before the effective period, the Coast Guard will publish a Local Notice to Mariners (LNM).

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

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. 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. The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

This proposed rule 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 proposed 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 Information 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 proposed rule would not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

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

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

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

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

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

We have analyzed this proposed rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This proposed rule involves establishing a temporary safety zone. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. A preliminary 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 proposed rule.

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

Throughout this document, whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

When submitting comments, remember to:

1. Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

2. Follow directions—EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

3. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

4. Describe any assumptions and provide any technical information and/or data that you used.

5. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

6. Provide specific examples to illustrate your concerns, and suggest alternatives.

7. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

8. Make sure to submit your comments by the comment period deadline identified.

On September 2, 2011, the Michigan Department of Environmental Quality (MDEQ) submitted to EPA for approval a revision to the Michigan SIP consisting of amendments to Michigan Air Pollution Control Rules, Part 18, PSD, and Part 19, PSD for major sources. Specifically, Michigan submitted a revision to modify Michigan Air Pollution Control Rule R. 336.2816 to make it consistent with the Federal requirements for PSD in Class I Areas. Additionally, Michigan submitted amendments to modify Michigan's Air Pollution Control Rules R. 336.2801 and R. 336.2910 to add a significance threshold of 10 tons per year for particulate matter less than 2.5 microns in size (PM 2.5 ). However, EPA is not proposing action on the particulate matter amendments in this rulemaking action; we will propose action at a later date, when Michigan submits additional rules pertaining to its definitions for PM 2.5 .

EPA is proposing to approve Michigan's request to revise its SIP to add rule R. 336.2816 to be consistent with Federal PSD regulations in 40 CFR 51.166(p), that require state PSD programs to have a mechanism in place to coordinate and consult with Federal land managers of Class I PSD Areas. On September 16, 2008, EPA proposed to disapprove R 336.2816 from Michigan's SIP submittal because it did not provide for such a mechanism. Michigan has now revised R. 336.2816 to be consistent with the Federal requirement. With this change, EPA is proposing to fully approve the revised R. 336.2816 for its PSD program. On March 25, 2010, EPA published a direct final approval to convert a conditional approval of the Michigan PSD SIP to full approval under section 110 of the CAA. In that notice, EPA stated that we would be taking a separate action on rule R. 336.2816(2) through (4)(requirements relating to Class I Areas).

EPA is not proposing to approve Michigan's request to revise its SIP by adding requirements for a significance level for PM 2.5 . EPA has established a significance threshold to limit the applicability of PSD regulations to sources with emissions above the significance level. To be consistent with the Federal requirements, Michigan amended R. 336.2801 and R. 336.2901 to add the significance threshold for PM 2.5 . Because Michigan is planning to submit additional state rules as revisions to its SIP for precursors of PM 2.5 , EPA will defer action on this matter.

EPA is also proposing to approve the removal of R. 336.2830 and R. 336.2910 from the Michigan SIP. Appeals of state permit actions will be handled through the state's appeal process.

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. 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.

In May 2011, EPA issued its policy on consultation and coordination with Indian tribes. EPA explained that its policy is to consult on a government to government basis with Federally recognized tribal governments when EPA actions and decisions may affect tribal interests. Accordingly, EPA sent an invitation to consult with potentially interested tribes, and subsequently engaged in consultation with representatives of the Forest County Potawatomi Community regarding the Michigan proposed SIP revisions.

Definitions

For the purpose of this document, we are giving meaning to certain words or initials as follows:

(i) The initials AQS mean or refer to Air Quality System.

(ii) The words or initials Act or CAA mean or refer to the Clean Air Act, unless the context indicates otherwise.

(iii) The words EPA, we, us or our mean or refer to the United States Environmental Protection Agency.

(iv) The initials NAAQS mean or refer to the National Ambient Air Quality Standards.

(v) The initials NO X mean or refer to nitrogen oxides.

(vi) The initials PM 2.5 mean or refer to particulate matter with an aerodynamic diameter of less than 2.5 micrometers (fine particulate matter).

(vii) The initials PSD mean or refer to prevention of significant deterioration.

(viii) The initials SIP mean or refer to State Implementation Plan.

(ix) The words Utah or State mean the State of Utah.

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

2. Tips for Preparing Your Comments. When submitting comments, remember to:

a. Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

b. Follow directions—The agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

c. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

d. Describe any assumptions and provide any technical information and/or data that you used.

e. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

f. Provide specific examples to illustrate your concerns, and suggest alternatives.

g. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

h. Make sure to submit your comments by the comment period deadline identified.

On December 10, 1999, the State of Utah submitted a SIP revision to Rule R307-202 Emission Standards: General Burning. This rule contains the following provisions: definitions and exclusions, community waste disposal, general prohibitions, permissible burning—without permit, permissible burning with permit, and special conditions.

The proposed revision is found within the `permissible burning with permit' in section R307-202-5(3)(e)(i). The revision extends the time period during which open burning could be authorized. The current burning period in the rule is from March 30 to May 30, the revision would extend the beginning of the burning period to March 1. This would allow an additional 30 days to the open burning period. The revision to the rule is based on a request from the Washington County Mayors Association to change the beginning date to accommodate areas of the State that were dry enough to burn earlier in the year.

Section 110(k) of the CAA addresses EPA's rulemaking action on SIP submissions by states. The CAA requires states to observe certain procedural requirements in developing SIP revisions for submittal to EPA. Section 110(a)(2) of the CAA requires that each SIP revision be adopted after reasonable notice and public hearing. This must occur prior to the revision being submitted by a state to EPA.

The State of Utah's Department of Environmental Quality, Air Quality Board held public hearings to amend Rule R307-202 Emission Standards: General Burning on June 3, 1999, and also on June 30, 1999, when the revision was adopted. On December 10, 1999, Utah submitted a SIP revision to R307-202-5 to extend the burning period.

EPA has reviewed the submittal from the State of Utah and has determined that the State met the requirements for reasonable notice and public hearing under section 110(a)(2) of the CAA. The SIP submittal from Utah became complete by operation of law six months after the submission date.

EPA is proposing to disapprove Utah's SIP revision submitted on December 10, 1999. Any submittal for a SIP revision must meet section 110(l) of the CAA. Section 110(l) of the Act states that EPA shall not approve a revision of a plan if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress (as defined in Section 171 of the CAA), or any other applicable requirement of the Act. An analysis should have been conducted by the State and included in the submittal showing what effect the relaxation would have on emissions of criteria pollutants. Since Utah did not provide a section 110(l) analysis, EPA lacks sufficient information to determine whether the proposed SIP relaxation would not interfere with any applicable requirement concerning attainment and maintenance of the National Ambient Air Quality Standards (NAAQS), Prevention of Significant Deterioration (PSD) increment, or any other requirement of the Act.

EPA reviewed data from the Air Quality System (AQS) Raw Data Reports for PM 2.5 violations in the entire State of Utah for the month of March from 1999 to present. These reports can be found in the docket as supporting and related materials. The PM 2.5 24-hour NAAQS is 35 μg/m 3 for which the counties of Salt Lake, Utah, Davis and parts of Box Elder, Weber, Tooele and Cache are designated nonattainment (74 FR 58688, November 13, 2009). Based on our review, Cache County, specifically the City of Logan, showed a total of fifteen violations of the PM 2.5 standard over the years: 2001, 2004, 2005, and 2007. The AQS site ID that showed the violations in the years above was 49-005-0004. For the year 2001, the PM 2.5 violation was recorded on March 2 with a concentration of 37.5 μg/m 3 . In 2004 there were five violations on March 8, 9, 10, 12, and 13, with concentrations of 35.5 μg/m 3 , 53.4 μg/m 3 , 52.9 μg/m 3 , 41.9 μg/m 3 , and 52.3 μg/m 3 , respectively. For the following year of 2005, there were seven violations on the dates of March 1, 2, 4, 7, 8, 10, and 11, with concentrations of 54.5 μg/m 3 , 36.6 μg/m 3 , 68.4 μg/m 3 , 49.6 μg/m 3 , 71.0 μg/m 3 , 62.0 μg/m 3 , and 44.6 μg/m 3 , respectively. The last year that this monitor showed violations was in 2007, on March 6 and 7, with concentrations of 46 μg/m 3 and 43 μg/m 3 , respectively. In Salt Lake County, the North Salt Lake City monitor also showed an exceedance in 2007, on March 6, with a concentration of 38 μg/m 3 . On March 30, 2010, there were ten exceedances that occurred in four counties: Davis, Salt Lake, Utah, and Tooele, which the State has flagged as exceptional events. The Bountiful monitor in Davis County and the Tooele City monitor in Tooele County recorded a concentration of 42 μg/m 3 and 57 μg/m 3 , respectively. Four monitors in Salt Lake County: Cottonwood, Magna, Hawthorne, and Rose Park, showed concentrations of: 56 μg/m 3 , 67 μg/m 3 , 50 μg/m 3 , and 65 μg/m 3 , respectively. Additionally, four monitors in Utah County: North Provo, Lindon, Highland, and Spanish Fork, showed concentrations of 53 μg/m 3 , 56 μg/m 3 , 61 μg/m 3 , and 48 μg/m 3 , respectively.

Based on our analysis of the AQS data above, EPA finds that the relaxation of the open burning rule could contribute to further degradation of air quality within the State of Utah and especially in the PM 2.5 nonattainment areas because violations of the PM 2.5 standard have been recorded during periods covered by the proposed extension of the open burning period. In the absence of a section 110(l) analysis or demonstration by the State of Utah showing that extending the burning period would not cause a PM 2.5 violation, EPA cannot determine that this revision would not interfere with attainment and maintenance of the NAAQS. Therefore, EPA is proposing to disapprove this revision to R307-202 Emission Standards: General Burning.

EPA is proposing to disapprove the SIP revision to R307-202 Emission Standards: General Burning submitted by the State on December 10, 1999. Without a section 110(l) analysis or demonstration, EPA finds that the revision relaxes the control on open burning and could potentially interfere with the attainment and maintenance of the NAAQS. EPA's review of the AQS data for Cache, Salt Lake, Davis, Utah, and Tooele Counties have shown violations of the PM 2.5 standard during the proposed extension of the open burning period.

Under the Clean Air Act, the Administrator is required to approve a SIP submission that complies with the provisions of the Act 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 or disapprove state choices, depending on whether they meet the criteria of the Clean Air Act. With this proposed action EPA is merely disapproving a state law as not meeting Federal requirements, and is not imposing additional requirements beyond those imposed by state law.

Because the proposed disapproval only applies to a date change for Utah's General Burning window, this proposed action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

This proposed 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). The proposed disapproval only applies to a date change for Utah's General Burning window.

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the 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 today's proposed rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. In determining whether a rule has a significant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the rule on small entities.” 5 U.S.C. 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.

EPA's proposal consists of a proposed disapproval of Utah's General Burning rule submission. The revision would extend the General Burning window an extra month, which requires a CAA section 110(l) analysis to show no relaxation of the rule. Since Utah did not submit a section 110(l) analysis for this revision EPA is proposing disapproval. The proposed disapproval of the SIP, if finalized, merely disapproves the state law as not meeting federal requirements and does not impose any additional requirements.

This action 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);

Under Title II of UMRA, EPA has determined that this proposed rule does not contain a federal mandate that may result in expenditures that exceed the inflation-adjusted UMRA threshold of $100 million by State, local, or Tribal governments or the private sector in any one year. In addition, this proposed rule does not contain a significant federal intergovernmental mandate as described by section 203 of UMRA nor does it contain any regulatory requirements that might significantly or uniquely affect small governments.

Federalism (64 FR 43255, August 10, 1999) revokes and replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing the Intergovernmental Partnership). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that 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.” Under Executive Order 13132, EPA may not issue a regulation that has federalism 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 State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

This rule will not have substantial direct effects on the State, on the relationship between the national government and the State, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely addresses the State not fully meeting its obligation under section 110(l) of the CAA. 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 solicits comment on this proposed rule from State and local officials.

Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This proposed rule does not have tribal implications, as specified in Executive Order 13175. It will not have substantial direct effects on tribal governments. Thus, Executive Order 13175 does not apply to this rule.

Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), applies to any rule that: (1) is determined to be economically significant as defined under Executive Order 12866; and (2) concerns an environmental health or safety risk that we have reason to believe may have a disproportionate effect on children. EPA interprets EO 13045 as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the EO has the potential to influence the regulation. This action is not subject to EO 13045 because it implements specific standards established by Congress in statutes. However, to the extent this proposed rule is disapproving a possible relaxation to Utah's General Burning rule, it will have a beneficial effect on children's health by not allowing additional air pollution.

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 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use of VCS.

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.

We have determined that this proposed rule, if finalized, will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it disapproves a possible relaxation of Utah's rule where increases in emissions are possible.

In addition, this proposed action does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP being disapproved would not apply in Indian country located in the state, and it would 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 Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by August 20, 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) of the CAA.)

ExxonMobil submitted a petition under 40 CFR 260.20 and 260.22(a). Section 260.20 allows any person to petition the EPA Administrator to modify or revoke any provision of parts 260 through 266, 268 and 273. Section 260.22(a) specifically provides generators the opportunity to petition the Administrator to exclude a waste on a “generator specific” basis from the hazardous waste lists.

EPA bases its proposed decision to grant the petition on an evaluation of waste-specific information provided by the petitioner. This decision, if finalized, would conditionally exclude the petitioned waste from the requirements of hazardous waste regulations under the Resource Conservation and Recovery Act (RCRA).

If finalized, EPA would conclude that ExxonMobil's petitioned waste is non-hazardous with respect to the original listing criteria. EPA would also conclude that ExxonMobil's process minimizes short-term and long-term threats from the petitioned waste to human health and the environment.

The information in this section is organized as follows:

EPA is proposing to approve the delisting petition submitted by ExxonMobil to have the underflow water excluded, or delisted from the definition of a hazardous waste upon issuance of notification to the Texas Commission of Environmental Quality (TCEQ) that ExxonMobil will initiate closure activities of the North Landfarm. The underflow water is an aqueous solution which seeps through the treatment zone (soils) of the North Landfarm, making it an F039 waste.

ExxonMobil's petition requests an exclusion from the F039 waste listings pursuant to 40 CFR 260.20 and 260.22. ExxonMobil does not believe that the petitioned waste meets the criteria for which EPA listed it. ExxonMobil also believes no additional constituents or factors could cause the waste to be hazardous. EPA's review of this petition included consideration of the original listing criteria and the additional factors required by the Hazardous and Solid Waste Amendments of 1984 (HSWA). See section 3001(f) of RCRA, 42 U.S.C. 6921(f), and 40 CFR 260.22 (d)(1)-(4) (hereinafter all sectional references are to 40 CFR unless otherwise indicated). In making the initial delisting determination, EPA evaluated the petitioned waste against the listing criteria and factors cited in §§ 261.11(a)(2) and (a)(3). Based on this review, EPA agrees with the petitioner that the waste is non-hazardous with respect to the original listing criteria. If EPA had found, based on this review, that the waste remained hazardous based on the factors for which the waste was originally listed, EPA would have proposed to deny the petition. EPA evaluated the waste with respect to other factors or criteria to assess whether there is a reasonable basis to believe that such additional factors could cause the waste to be hazardous. EPA considered whether the waste is acutely toxic, the concentration of the constituents in the waste, their tendency to migrate and to bioaccumulate, their persistence in the environment once released from the waste, plausible and specific types of management of the petitioned waste, the quantities of waste generated, and waste variability. EPA believes that the petitioned waste does not meet the listing criteria and thus should not be a listed waste. EPA's proposed decision to delist waste from ExxonMobil is based on the information submitted in support of this rule, including descriptions of the wastes and analytical data from the Baytown, Texas facility.

If the underflow water is delisted, ExxonMobil will either: (1) Continue to accumulate the underflow water in a holding tank, sample the water once each calendar year, analyze the annual sample for target constituents and submit the results to the EPA for review; or (2) route the underflow to the underflow collection system and then to the series of ditches to the underground Baytown Refinery East sewer. In the latter case, samples of the underflow water would be collected from the underflow sump once each calendar year, analyzed for target constituents and the results submitted to the EPA for review. Ultimately, the underflow will enter the waste water treatment system where it is commingled with other wastewaters from the Baytown Chemical Plant and Baytown Olefins Plant.

RCRA section 3001(f) specifically requires EPA to provide a notice and an opportunity for comment before granting or denying a final exclusion. Thus, EPA will not grant the exclusion until it addresses all timely public comments (including those at public hearings, if any) on this proposal.

RCRA section 3010(b)(1) at 42 U.S.C. 6930(b)(1), allows rules to become effective in less than six months when the regulated facility does not need the six-month period to come into compliance. That is the case here, because this rule, if finalized, would reduce the existing requirements for persons generating hazardous wastes.

EPA believes that this exclusion should be effective immediately upon final publication because a six-month deadline is not necessary to achieve the purpose of section 3010(b), and a later effective date would impose unnecessary hardship and expense on this petitioner. These reasons also provide good cause for making this rule effective immediately, upon final publication, under the Administrative Procedure Act, 5 U.S.C. 553(d).

Because EPA is issuing this exclusion under the Federal RCRA delisting program, only states subject to Federal RCRA delisting provisions would be affected. This would exclude states which have received authorization from EPA to make their own delisting decisions.

EPA allows states to impose their own non-RCRA regulatory requirements that are more stringent than EPA's, under section 3009 of RCRA, 42 U.S.C. 6929. These more stringent requirements may include a provision that prohibits a Federally issued exclusion from taking effect in the state. Because a dual system (that is, both Federal (RCRA) and state (non-RCRA) programs) may regulate a petitioner's waste, EPA urges petitioners to contact the state regulatory authority to establish the status of their wastes under the state law.

EPA has also authorized some states (for example, Louisiana, Oklahoma, Georgia, Illinois) to administer a RCRA delisting program in place of the Federal program, that is, to make state delisting decisions. Therefore, this exclusion does not apply in those authorized states unless that state makes the rule part of its authorized program. If ExxonMobil transports the petitioned waste to or manages the waste in any state with delisting authorization, ExxonMobil must obtain delisting authorization from that state before it can manage the waste as non-hazardous in the state.

EPA published an amended list of hazardous wastes from non-specific and specific sources on January 16, 1981, as part of its final and interim final regulations implementing section 3001 of RCRA. EPA has amended this list several times and published it in 40 CFR 261.31 and 261.32.

EPA lists these wastes as hazardous because: (1) The wastes typically and frequently exhibit one or more of the characteristics of hazardous wastes identified in Subpart C of Part 261 (that is, ignitability, corrosivity, reactivity, and toxicity), (2) the wastes meet the criteria for listing contained in § 261.11(a)(2) or (a)(3), or (3) the wastes are mixed with or derived from the treatment, storage or disposal of such characteristic and listed wastes and which therefore become hazardous under § 261.3(a)(2)(iv) or (c)(2)(i), known as the “mixture” or “derived-from” rules, respectively.

Individual waste streams may vary, however, depending on raw materials, industrial processes, and other factors. Thus, while a waste described in these regulations or resulting from the operation of the mixture or derived-from rules generally is hazardous, a specific waste from an individual facility may not be hazardous.

For this reason, 40 CFR 260.20 and 260.22 provide an exclusion procedure, called delisting, which allows persons to prove that EPA should not regulate a specific waste from a particular generating facility as a hazardous waste.

A delisting petition is a request from a facility to EPA or an authorized state to exclude wastes from the list of hazardous wastes. The facility petitions EPA because it does not consider the wastes hazardous under RCRA regulations.

In a delisting petition, the petitioner must show that wastes generated at a particular facility do not meet any of the criteria for which the waste was listed. The criteria for which EPA lists a waste are in part 261 and further explained in the background documents for the listed waste.

In addition, under 40 CFR 260.22, a petitioner must prove that the waste does not exhibit any of the hazardous waste characteristics (that is, ignitability, reactivity, corrosivity, and toxicity) and present sufficient information for EPA to decide whether factors other than those for which the waste was listed warrant retaining it as a hazardous waste. (See part 261 and the background documents for the listed waste.)

Generators remain obligated under RCRA to confirm whether their waste remains non-hazardous based on the hazardous waste characteristics even if EPA has “delisted” the waste.

Besides considering the criteria in 40 CFR 260.22(a) and § 3001(f) of RCRA, 42 U.S.C. 6921(f), and in the background documents for the listed wastes, EPA must consider any factors (including additional constituents) other than those for which EPA listed the waste, if a reasonable basis exists that these additional factors could cause the waste to be hazardous.

EPA must also consider as hazardous waste mixtures containing listed hazardous wastes and wastes derived from treating, storing, or disposing of listed hazardous waste. See § 261.3(a)(2)(iii and iv) and (c)(2)(i), called the “mixture” and “derived-from” rules, respectively. These wastes are also eligible for exclusion and remain hazardous wastes until excluded. See 66 FR 27266 (May 16, 2001).

In August 2010, ExxonMobil petitioned EPA to exclude from the lists of hazardous wastes contained in §§ 261.31 and 261.32, underflow water (F039) generated from its facility located in Baytown, Texas. The waste falls under the classification of listed waste pursuant to §§ 261.31 and 261.32. Specifically, in its petition, ExxonMobil requested that EPA grant a standard exclusion for 7,427 cubic yards (1,500,000 gallons) per year of the underflow water.

ExxonMobil Baytown Refinery processes crude oil in the production of a number of petroleum products, including fuels, solvents and chemical feedstocks. The petitioned waste is generated by downward vertical migration of liquid through the North Landfarm. The North Landfarm does not prepare or process materials. The underflow is transported by the collection system to the North Landfarm underflow sump which is the point of waste generation.

To support its petition, ExxonMobil submitted:

(1) Historical information on waste generation and management practices; and

(2) analytical results from five samples for total concentrations of compounds of concern (COC)s;

EPA believes that the descriptions of the ExxonMobil analytical characterization provide a reasonable basis to grant ExxonMobil's petition for an exclusion of the North Landfarm underflow water. EPA believes the data submitted in support of the petition show the North Landfarm underflow water is non-hazardous. Analytical data for the North Landfarm underflow water samples were used in the DRAS to develop delisting levels. The data summaries for COCs are presented in Table I. EPA has reviewed the sampling procedures used by ExxonMobil and has determined that it satisfies EPA criteria for collecting representative samples of the variations in constituent concentrations in the landfill underflow water. In addition, the data submitted in support of the petition show that constituents in ExxonMobil's waste are presently below health-based levels used in the delisting decision-making. EPA believes that ExxonMobil has successfully demonstrated that the landfill underflow water is non-hazardous.

Public Comments

We will accept written comments and information during this reopened comment period on our proposed designation of critical habitat for the coquí llanero (an endemic Puerto Rican tree frog) that was published in the Federal Register on October 12, 2011 (76 FR 63420), our evaluation of potential economic impacts of the proposed designation, and the amended required determinations provided in this document. We will consider information and recommendations from all interested parties. We are particularly interested in comments concerning:

(1) Additional information concerning the historical and current status, range, distribution, and population size of this species, including the locations of any additional populations of this species.

(2) Any information on the biological or ecological requirements of the species and ongoing conservation measures for the species and its habitat.

(3) Biological, commercial trade, or other relevant data concerning any threats (or lack thereof) to this species and regulations that may be addressing those threats.

(4) Current or planned activities in the areas occupied by the species and possible impacts of these activities on this species.

(5) The reasons why areas should or should not be designated as critical habitat as provided by section 4 of the Act (16 U.S.C. 1531 et seq. ), including the possible risks or benefits of designating critical habitat, including risks associated with publication of maps designating any area on which this species may be located, now or in the future, as critical habitat.

(6) Specific information on:

(a) The amount and distribution of habitat for the coquí llanero;

(b) What areas, which were occupied at the time of listing (or are currently occupied) and that contain the physical and biological features essential to the conservation of this species, should be included in a critical habitat designation and why;

(c) Special management considerations or protection that may be needed for the essential features in critical habitat areas, including managing for the potential effects of climate change; and

(d) What areas not occupied at the time of listing are essential for the conservation of this species and why.

(7) Information on the projected and reasonably likely impacts of changing environmental conditions resulting from climate change on the species and its habitat.

(8) Any probable economic, national security, or other relevant impacts of designating any area that may be included in the final designation; in particular, any impacts on small entities or families, and the benefits of including or excluding areas that exhibit these impacts.

(9) Information on the extent to which the description of probable economic impacts of the proposed critical habitat designation is complete and accurate.

(10) Information on whether the benefits of an exclusion of any particular area may outweigh the benefits of its inclusion under section 4(b)(2) of the Act.

(11) Whether our approach to designating critical habitat could be improved or modified in any way to provide for greater public participation and understanding, or to assist us in accommodating public concerns and comments.

If you submitted comments or information on the proposed rule (76 FR 63420) during the initial comment period from October 12, 2011, to December 12, 2011, please do not resubmit them. We have incorporated them into the public record, and we will fully consider them in the preparation of our final determination, which will take into consideration all written comments and any additional information we receive during both comment periods. On the basis of public comments, we may, during the development of our final determination, find that areas proposed are not essential, are appropriate for exclusion under section 4(b)(2) of the Act, or are not appropriate for exclusion.

You may submit your comments and materials by one of the methods listed in the ADDRESSES section. We request that you send comments only by the methods described in the ADDRESSES section.

If you submit a comment via http://www.regulations.gov, your entire comment—including any personal identifying information—will be posted on the Web site. We will post all hardcopy comments on http://www.regulations.gov as well. If you submit a hardcopy comment that includes personal identifying information, you may request at the top of your document that we withhold this information from public review. However, we cannot guarantee that we will be able to do so.

Comments and materials we receive, as well as supporting documentation we used in preparing the proposed rule and our evaluation of probable economic impacts of the proposed designation, will be available for public inspection on http://www.regulations.gov at Docket No. FWS-R4-ES-2009-0022, or by appointment, during normal business hours, at the U.S. Fish and Wildlife Service, Caribbean Ecological Services Field Office (see FOR FURTHER INFORMATION CONTACT ).

It is our intent to discuss only those topics directly relevant to the designation of critical habitat for the coquí llanero in this document. For more information on previous Federal actions concerning the coquí llanero, refer to the joint 12-month petition finding, proposed listing of the species as endangered, and the proposed designation of critical habitat published in the Federal Register on October 12, 2011 (76 FR 63420, which is available online at http://www.regulations.gov at Docket Number FWS-R4-ES-2009-0022) or from the Caribbean Ecological Services Field Office (see FOR FURTHER INFORMATION CONTACT ).

On October 12, 2011, we published a proposed rule to list the coquí llanero as endangered and to designate critical habitat (76 FR 63420). We proposed to designate approximately 615 acres (ac) (249 hectares (ha)) in one unit located in Sabana Seca Ward, Toa Baja, Puerto Rico, as critical habitat. That proposal had a 60-day comment period, ending December 12, 2011. We will submit for publication in the Federal Register a final critical habitat designation for the coquí llanero on or before October 12, 2012. We received no requests for a public hearing, and, therefore, we will not hold any public hearings as part of this rulemaking.

Section 3 of the Act defines critical habitat as the specific areas within the geographical area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features essential to the conservation of the species and that may require special management considerations or protection, and specific areas outside the geographical area occupied by a species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. If the proposed rule is made final, section 7 of the Act will prohibit destruction or adverse modification of critical habitat by any activity funded, authorized, or carried out by any Federal agency. Federal agencies proposing actions affecting critical habitat must consult with us on the effects of their proposed actions, under section 7(a)(2) of the Act.

Section 4(b)(2) of the Act requires that we designate or revise critical habitat based upon the best scientific data available, after taking into consideration the economic impact, impact on national security, or any other relevant impact of specifying any particular area as critical habitat. We may exclude an area from critical habitat if we determine that the benefits of excluding the area outweigh the benefits of including the area as critical habitat, provided such exclusion will not result in the extinction of the species.

When considering the benefits of inclusion for an area, we consider the additional regulatory benefits that area would receive from the protection from adverse modification or destruction of critical habitat as a result of actions with a Federal nexus (activities conducted, funded, permitted, or authorized by Federal agencies), the educational benefits of mapping areas containing essential features that aid in the recovery of the listed species, and any benefits that may result from designation due to State or Federal laws that may apply to critical habitat.

When considering the benefits of exclusion, we consider, among other things, whether exclusion of a specific area is likely to result in conservation; the continuation, strengthening, or encouragement of partnerships; or implementation of a management plan. In the case of the coquí llanero, the benefits of critical habitat include public awareness of the presence of the coquí llanero and the importance of habitat protection, and, where a Federal nexus exists, increased habitat protection for the coquí llanero due to protection from adverse modification or destruction of critical habitat. In practice, situations with a Federal nexus exist primarily on Federal lands or for projects undertaken by Federal agencies.

We have not proposed to exclude any areas from critical habitat. However, the final decision on whether to exclude any areas will be based on the best scientific data available at the time of the final designation, including information obtained during the comment period and information about the potential economic impact of designation. Accordingly, we have evaluated the potential economic impact of the proposed critical habitat designation. A discussion of the potential economic impacts follows.

Section 4(b)(2) of the Act and its implementing regulations require that we evaluate the probable economic impacts that may result from a designation of critical habitat, and to take into consideration these impacts when evaluating whether to exclude any particular area from a final critical habitat designation. To assess the potential economic impacts of a designation, we must first evaluate the impacts of restricting or modifying specific land uses or activities for the benefit of the species and its habitat within the proposed critical habitat area. We then identify which conservation efforts may be the result of the species being listed under the Act versus those attributed solely to the designation of critical habitat. The economic impact of a proposed critical habitat designation is analyzed by comparing scenarios both “with critical habitat” and “without critical habitat.” The “without critical habitat” scenario represents the baseline for the analysis, considering protections already in place for the species (e.g., under the Federal listing as well as other Federal, State, and local regulations). The baseline, therefore, represents the costs of all efforts to conserve the species and its habitat incurred regardless of whether critical habitat is designated. The “with critical habitat” scenario describes the incremental impacts associated specifically with the designation of critical habitat for the species. The incremental conservation efforts and associated impacts are those not expected to occur absent the designation of critical habitat for the species. In other words, the incremental costs are those attributable solely to the designation of critical habitat, above and beyond the baseline costs; these are the costs we may consider in the final designation of critical habitat when evaluating the benefits of excluding particular areas under section 4(b)(2) of the Act.

In our evaluation of the potential economic impacts that may result from the proposed designation of critical habitat for the coquí llanero, first we identified, in an Incremental Effects Memorandum dated October 12, 2011, potential incremental costs associated with the following categories of activity:

(1) Species and habitat management; (2) residential, commercial, or industrial development; (3) agriculture; (4) construction of new, or maintenance of, roads and highways; (5) maintenance (including vegetation removal or alteration) of drainage ditches; (6) construction or maintenance of recreational facilities; (7) construction and maintenance of telecommunication towers; (8) renewable wind power energy; (9) gas pipeline; (10) closure of landfill; and (11) transfer of Federal lands (Navy).

In this memorandum, the Service attempted to clarify the difference between the jeopardy and adverse modification standards for the coquí llanero critical habitat. Because the designation of critical habitat for coquí llanero is being proposed concurrently with the listing, it is more difficult to discern which conservation efforts are attributable to the species being listed and those which will result solely from the designation of critical habitat. However, the following specific circumstances in this case help to inform our evaluation: (1) The essential physical and biological features identified for critical habitat are the same features essential for the life requisites of the species, (2) the current range of the coquí llanero is limited to the specific area identified as critical habitat, and (3) any actions that may affect the species or its habitat would also affect designated critical habitat. The Incremental Effects Memorandum outlines our rationale concerning this limited distinction between baseline conservation efforts and incremental impacts of the designation of critical habitat for this species. This evaluation of the incremental effects has been used as the basis to evaluate the potential incremental economic impacts of this proposed designation of critical habitat.

On the basis of our evaluation of the potential incremental effects, we have determined that almost all conservation-related efforts and activities will result from the protections afforded the species through State and Federal law once the species is federally listed. In other words, specific actions or efforts, or project modifications that may be recommended to conserve the species or its habitat, would be recommended because the species is protected under both State and Federal law. While it has been suggested (Vermont Law School, 2012) that the proposed Via Verde pipeline would adversely affect the coquí llanero and its proposed critical habitat, at this time the proposed alignment is not anticipated to cross or affect the habitat of the coquí llanero. Only in those cases where an action may affect the designated critical habitat and there is a Federal nexus (i.e., a Federal agency that is authorizing, funding, or permitting the action) would there be the additional requirement that the Federal action agency evaluate whether the action may adversely modify the designated critical habitat. This additional analysis by the Federal action agency is considered to be an incremental effect of the designation. While this additional analysis will require time and resources by both the Federal action agency and the Service, it is believed that, in most circumstances, these costs would predominantly be administrative in nature and also would not be significant. Because, in this circumstance, we believe that the incremental impacts of the designation, and therefore the potential economic impacts, would be limited to these administrative actions, we have determined that this rule will not result in a significant economic impact in any given year or result in a disproportionate economic impact to any particular sector.

In our October 12, 2011, proposed rule (76 FR 63420), we indicated that we would defer our determination of compliance with several statutes and executive orders until we had evaluated the potential economic impacts of the designation and potential effects on landowners and stakeholders. Following our evaluation of the potential incremental economic impacts resulting from the designation of critical habitat for the coquí llanero, we have amended or affirmed our determinations below. Specifically, we affirm the information in our proposed rule concerning Executive Order (E.O.) 12866 (Regulatory Planning and Review), E.O. 13132 (Federalism), E.O. 12988 (Civil Justice Reform), E.O. 13211 (Energy, Supply, Distribution, and Use), the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq. ), the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), the National Environmental Policy Act (42 U.S.C. 4321 et seq. ), and the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951). However, based on our evaluation of the potential economic impacts of the proposed designation of critical habitat for coquí llanero, we are amending our required determination concerning the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

Under the Regulatory Flexibility Act (RFA; 5 U.S.C. 601 et seq. ), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA; 5 U.S.C. 801 et seq. ), whenever an agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effects of the rule on small entities (i.e., small businesses, small organizations, and small government jurisdictions). However, no regulatory flexibility analysis is required if the head of the agency certifies the rule will not have a significant economic impact on a substantial number of small entities. The SBREFA amended the RFA to require Federal agencies to provide a certification statement of the factual basis for certifying that the rule will not have a significant economic impact on a substantial number of small entities.

When evaluating the potential effects of a proposed rulemaking on small entities, the RFA only requires that the agency analyze the potential impacts to directly affected entities. However, where practicable, the RFA recommends also evaluating the potential impacts to indirectly affected entities as well. To determine if the proposed designation of critical habitat for the coquí llanero would affect a substantial number of small entities, we must first evaluate whether any small entities may be directly affected by the designation.

The designation of critical habitat for an endangered or threatened species only has a regulatory effect under section 7 of the Act where a Federal action agency is involved in a particular action that may affect the designated critical habitat. Under these circumstances, only the Federal action agency is directly affected by the designation, and, therefore, the requirements of the RFA allow for the Service to limit its evaluation of the potential impacts to only the Federal action agencies. There is no further requirement under the RFA to evaluate the potential impacts to indirectly affected entities, such as small businesses, organizations, or governments. As a consequence, we have determined that the proposed designation of critical habitat for the coquí llanero would not directly affect small entities.

Based on this determination, we certify that, if promulgated, the proposed critical habitat designation would not have a significant economic impact on a substantial number of small business entities. Therefore, an initial regulatory flexibility analysis is not required.

The primary authors of this notice are the staff members of the Caribbean Ecological Services Field Office, Southeast Region, U.S. Fish and Wildlife Service.

The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531 et seq. ).

Public Comments

We intend that any final action resulting from this proposal will be based on the best available scientific and commercial data and will be as accurate and as effective as possible. Therefore, we request data, comments, and new information from other concerned governmental agencies, the scientific community, Tribes, industry, or other interested parties concerning this proposed rule. The comments that will be most useful and likely to influence our decisions are those that are supported by data or peer-reviewed studies and those that include citations to, and analyses of, applicable laws and regulations. Please make your comments as specific as possible and explain the basis for them. In addition, please include sufficient information with your comments to allow us to authenticate any scientific or commercial data you reference or provide. In particular we seek comments concerning the following:

(1) Biological data regarding Magazine Mountain shagreen.

(2) Relevant data concerning any threats (or lack thereof) to Magazine Mountain shagreen, including but not limited to:

(a) Whether or not climate change is a threat to the species;

(b) What regional climate change models are available, and whether they are reliable and credible to use as step-down models for assessing the effect of climate change on the species and its habitat; and

(c) The extent of Federal and State protection and management that would be provided to Magazine Mountain shagreen as a delisted species.

(3) Additional information concerning the range, distribution, population size, and trends of Magazine Mountain shagreen, including the locations of any additional populations of this species.

(4) Current or planned activities within the geographic range of Magazine Mountain shagreen that may affect or benefit the species.

(5) The draft post-delisting monitoring plan.

Please note that submissions merely stating support for or opposition to the action under consideration without providing supporting information, although noted, will not be considered in making a determination, as section 4(b)(1)(A) of the Act (16 U.S.C. 1531 et seq. ) directs that a determination as to whether any species is an endangered or threatened species must be made “solely on the basis of the best scientific and commercial data available.”

Prior to issuing a final rule on this proposed action, we will take into consideration all comments and any additional information we receive. Such information may lead to a final rule that differs from this proposal. All comments and recommendations, including names and addresses, will become part of the administrative record.

You may submit your comments and materials concerning the proposed rule by one of the methods listed in the ADDRESSES section. Comments must be submitted to http://www.regulations.gov before 11:59 p.m. (Eastern Time) on the date specified in the DATES section. We may not consider hand-delivered comments that we do not receive, or mailed comments that are not postmarked, by the date specified in the DATES section.

We will post your entire comment—including your personal identifying information—on http://www.regulations.gov . If you provide personal identifying information in your comment, you may request at the top of your document that we withhold this information from public review. However, we cannot guarantee that we will be able to do so.

Comments and materials we receive, as well as supporting documentation we used in preparing this proposed rule, will be available for public inspection on http://www.regulations.gov, or by appointment, during normal business hours at the U.S. Fish and Wildlife Service, Arkansas Ecological Services Field Office (see FOR FURTHER INFORMATION CONTACT ).

Section 4(b)(5)(E) of the Act provides for one or more public hearings on this proposal, if requested. We must receive requests for public hearings, in writing, at the address shown in the FOR FURTHER INFORMATION CONTACT section within 45 days after the date of this Federal Register publication (see DATES ). We will schedule public hearings on this proposal, if any are requested, and announce the dates, times, and places of those hearings, as well as how to obtain reasonable accommodations, in the Federal Register at least 15 days before the first hearing.

On April 28, 1976, we published a proposed rule in the Federal Register (41 FR 17742) to list 32 snail species, including Magazine Mountain shagreen, as endangered or threatened under section 4 of the Act. However, the proposal was withdrawn in 1979 (44 FR 70796, December 10, 1979) for administrative reasons stemming from the new listing requirements of the 1978 amendments to the Act. On July 5, 1988, we published a second proposed rule in the Federal Register (53 FR 25179) to list Magazine Mountain shagreen as threatened. On April 17, 1989, we published a final rule in the Federal Register (54 FR 15206) listing Magazine Mountain shagreen as threatened. The final rule identified the following threats to Magazine Mountain shagreen: Loss of habitat due to a military proposal to conduct troop and heavy equipment movements and artillery operations on Magazine Mountain; loss of habitat due to development of a new State park on Magazine Mountain that would include construction of new buildings, roads, and trails; increased recreational use due to development of the State park; U.S. Department of Agriculture Forest Service (USFS) use of the land; and increased vulnerability to collecting and adverse habitat modification due to the species' restricted range. On February 1, 1994, we approved the Magazine Mountain Shagreen Recovery Plan (Service 1994, 12 pp.). On July 6, 2009, we initiated a 5-year status review of this species (74 FR 31972). This rule, if finalized, would complete the status review. For additional details on previous Federal actions, see discussion under the Recovery section below.

Magazine Mountain shagreen ( Inflectarius magazinensis ) is a medium-sized, dusky brown or buff-colored snail, measuring approximately 0.5 inches (in.; 13 millimeters (mm)) wide and 0.3 in. (7 mm) high. Magazine Mountain shagreen was originally described as a subspecies of Polygyra edentatus (Pilsbry and Ferriss 1907, p. 545). In 1940, Pilsbry (1940 in Service 1994, p. 1) placed the snail into the genus Mesodon and elevated it to the status of a species based on genitalia. In 1991, Emberton (1991, p. 90) showed there were internal genitalic differences among Mesodon species and placed Magazine Mountain shagreen in the genus Inflectarius, thereby removing it from Mesodon . The morphology of Magazine Mountain shagreen has been summarized by Caldwell et al. (2009, p. 2). While the taxonomic name has changed since it was listed in 1989, Magazine Mountain shagreen has not been split from or combined with any other land snail species or subspecies. The entity that is now called Inflectarius magazinensis is the same entity that was known as Mesodon magazinensis .

Magazine Mountain shagreen is historically known from only the north slope of Magazine Mountain, Logan County, Arkansas (Pilsbry and Ferriss 1907, p. 545; Caldwell et al. 2009, p. 4). The south slopes of Magazine Mountain were surveyed extensively by Caldwell (1986 in Service 1994, p. 3) and Caldwell et al. (2009, p. 4), but they did not find Magazine Mountain shagreen on the south slopes. Populations occur in the portion of talus (a sloping mass of loose rocks) covered by vegetation or leaf litter at an elevation of 2,200 feet (ft) (670.6 meters (m)) to 2,600 ft (792.5 m) in the Savanna Sandstone formation calved (broken off or splintered into pieces) due to weathering and erosion of interbedded shales (Caldwell et al. 2009, p. 4; Service 1994, p. 3). The majority of talus is above 2,200 ft (670.6 m) elevation on the north and west slopes, with Magazine Mountain shagreen populations occurring between 2,400 ft (731.5 m) and 2,600 ft (792.5 m). In the north slope of Bear Hollow, the talus begins at approximately 2,200 ft (670.6 m) and in some calved areas extends to near 2,265 ft (690.4 m) elevation. In Bear Hollow, Magazine Mountain shagreen is restricted to the upper vegetated elevation end of this talus range (Caldwell et al. 2009, pp. 4-5).

The rocky slopes formed by the removal of softer, more easily eroded shale on the steep slopes cause the more resistant sandstone capping Magazine Mountain to break off and accumulate along the flanks. This provides the ideal habitat for Magazine Mountain shagreen (Cohoon and Vere 1988 in Caldwell et al. 2009, p. 6). The total amount of available habitat for Magazine Mountain shagreen consists of approximately 21.6 acres (ac; 8.75 hectares (ha)) at 27 talus habitats on Magazine Mountain's west and north slopes (Caldwell et al. 2009, pp. 4-5).

The geology and forest community of Magazine Mountain were summarized by Caldwell et al. (2009, pp. 4-12). The average annual temperature is 5.9 degrees Fahrenheit (°F; 3.3 degrees Celsius (°C)) cooler on the summit than surrounding areas, and mid-summer temperatures are frequently 10 to 25 °F (5.6 to 13.9 °C) cooler. The mean annual precipitation at the summit of Magazine Mountain is 55 in. (139.7 centimeters (cm)), approximately 5 in. (12.7 cm) greater than the lower elevations. The USFS and Arkansas Department of Parks and Tourism (ADPT) own all lands on Magazine Mountain (Service 1994, p. 3).

Little information is available on land snail associations ( e.g., presence/absence of other land snails to predict habitat quality or occurrence of Magazine Mountain shagreen). Caldwell et al. (2009, pp. 13-14) determined the relative abundance (number of a particular species as a percentage of the total population of a given area) of species found with Magazine Mountain shagreen. Land snails such as the blade vertigo ( Vertigo milium ) and pale glyph ( Glyphyalinia lewisiana ) were found only on the south slope talus, while the oakwood liptooth ( Millerelix dorfeuilliana ) and immature Succineidae species were found on the north slope talus. Thus, presence of oakwood liptooth and immature Succineidae in habitats suitable for Magazine Mountain shagreen may predict its occurrence despite negative survey results.

Caldwell et al. (2009, pp. 15-16) presented the only information on life history and reproductive biology for Magazine Mountain shagreen (see Recovery section below). They also presented the first report on food habits for Magazine Mountain shagreen (Caldwell et al. 2009, p. 16). Magazine Mountain shagreen was found during night feeding on oak catkins (flowers), algae-covered rocks, and decaying white oak ( Quercus alba ) leaves. It has generalist feeding habits (able to utilize many food sources) similar to other land snails in the taxonomic family Polygyridae (Blinn 1963, pp. 501-502; Foster 1936, pp. 26-31; Dourson 2008, pp. 155-156; Caldwell et al. 2009, p. 16). Thus, food source probably is not a limiting factor for Magazine Mountain shagreen (Caldwell et al. 2009, p. 16).

Caldwell et al. (2009, p. 15) found no significant differences for ground, atmospheric, and rock crevice maximum temperatures between south and north slopes. They did, however, find significant differences for minimum temperatures. Ground, atmospheric, and rock crevice minimum temperatures were 5.6, 5.2, and 3.6 °F (3.1, 2.9 and 2.0 °C) cooler, respectively, on the north slopes than on the south slopes. Prolonged drought or concomitant warming of temperatures could adversely affect this species by compromising nesting sites, egg masses, and surface feeding (Caldwell et al. 2009, p. 15). However, there is no data to establish that such effects are reasonably certain to occur.

Section 4(f) of the Act directs us to develop and implement recovery plans for the conservation and survival of endangered and threatened species unless we determine that such a plan will not promote the conservation of the species.

Recovery plans are not regulatory documents and are instead intended to establish goals for long-term conservation of listed species, define criteria that are designed to indicate when the threats facing a species have been removed or reduced to such an extent that the species may no longer need the protections of the Act, and provide guidance to our Federal, State, other governmental and non-governmental partners on methods to minimize threats to listed species. There are many paths to accomplishing recovery of a species, and recovery may be achieved without all criteria being fully met. For example, one or more criteria may be exceeded while other criteria may not yet be accomplished. In that instance, we may determine that the threats are minimized sufficiently and the species is robust enough to delist. In other cases, recovery opportunities may be discovered that were not known when the recovery plan was finalized. These opportunities may be used instead of methods identified in the recovery plan. Likewise, information on the species may be learned that was not known at the time the recovery plan was finalized. The new information may change the extent that criteria need to be met for recognizing recovery of the species. Recovery of a species is a dynamic process requiring adaptive management that may, or may not, fully follow the guidance provided in a recovery plan.

The Magazine Mountain Shagreen Recovery Plan was approved by the Service on February 1, 1994 (Service 1994, 12 pp.). The recovery plan includes the following delisting criteria:

• Magazine Mountain shagreen will be considered recovered when long-term protection of its habitat is achieved; and

• It is determined from 10 years of data that the snail population is stable or increasing.

Long-term protection of habitat will be achieved when a memorandum of understanding (MOU) between the USFS and the Service is developed and implemented. The MOU must delineate measures protecting the species and its habitat, must be continuous in effect, and must require a minimum 2-year written notification prior to cancellation by either party. Criteria for determining what constitutes a stable population were to be determined through implementation of recovery actions (Service 1994, p. 6). Through implementation of these actions, the criteria chosen as the most appropriate for determining a stable population were persistence over time (shown by the number of Magazine Mountain shagreen individuals collected annually), annual catch per unit effort, and size, quality, and stability of habitat.

The recovery plan outlines six primary recovery actions to meet the recovery criteria described above and therefore address threats to the species. The six recovery actions for delisting Magazine Mountain shagreen have been met, as described below. Additionally, the level of protection currently afforded to the species and its habitat and the current status of threats are outlined in the Summary of Factors Affecting the Species section below.

To meet the recovery criterion to provide long-term habitat protection for Magazine Mountain shagreen, in 2005, the Service, USFS Ozark-St. Francis National Forest, and ADPT entered into a MOU that provides for long-term cooperation in the management and protection of the species and its habitat on Magazine Mountain. The MOU is a continuing agreement without a designated termination date. Additionally, the USFS designated Magazine Mountain as a Special Interest Area in the 2005 Revised Land Resource Management Plan (USFS 2005, p. 2-43). The Special Interest Area designation prohibits timber harvest, prescribed burning from leaf fall until the end of Magazine Mountain shagreen's reproductive period, application of aerial fire retardant, road construction, and recreational development on talus slopes. Therefore, through development and implementation of the MOU and Special Interest Area, we consider this action complete.

Surveys: In developing the monitor strategy for Magazine Mountain shagreen, 10 specific sampling stations were established in 1996; these sampling stations later served as the long-term monitoring locations for the USFS. Each station was marked with permanent markers so that later annual monitoring effort could be repeated at the exact location (Robison 1996, p. 6). The survey protocol uses visual encounter searches (VES) to determine, map, and monitor Magazine Mountain shagreen population parameters and habitat (Robison 1996, pp. 7-24). VES involves field personnel walking through an area or habitat for a prescribed time period systematically searching for animals and has been used effectively with amphibians in habitats that are widely spaced, such as the talus slopes that Magazine Mountain shagreen inhabits (Crump and Scott 1994 in Robison 1996, pp. 8-9). The assumption of VES is that the shorter duration in time to encounter an animal, the more common and abundant the animal is at any particular site (Robison 1997, p. 7).

Historic surveys for Magazine Mountain shagreen prior to development of the 1994 Recovery Plan were limited to two surveys: (1) A 1903 collection of 114 live specimens and one dead specimen from the north and south slopes of Magazine Mountain (Pilsbry and Ferriss 1906, p. 545), and (2) a comprehensive status review by Caldwell (1986). The specimen collected in 1903 on the south slope has never been verified as Magazine Mountain shagreen by other researchers (Robison 1996, p. 3). Neither survey reported population estimates nor catch per unit effort. Therefore, it is not possible to make a comparative analysis of these collections to subsequent collections that reported number of live and dead snails per search time (see discussion below).

In 1996, two surveys were conducted for Magazine Mountain shagreen at each of the 10 sampling stations (Table 1; Robison 1996, pp. 17-20). Using VES, live Magazine Mountain shagreen were found at four sampling stations on May 24-27, 1996, and four stations on June 6-8, 1996 (Table 1; Robison 1996, p. 19). At all sites, dead Magazine Mountain shagreen shells were encountered before live individuals were discovered (Table 1). Magazine Mountain shagreen shell size was comparable between 1986 and 1996: Mean height/width ratio was 0.55 (range 0.52-0.59, N = 18; Caldwell 1986) and 0.56 (range 0.50-0.61, N = 25; Robison 1996, p. 38), respectively.