Title VIII of FDASIA (Pub. L. 112-144), the GAIN title, is intended to encourage development of new antibacterial and antifungal drugs for the treatment of serious or life-threatening infections. Among other things, it requires that the Secretary of the Department of Health and Human Services (and thus FDA, by delegation): (1) Establish and maintain a list of “qualifying pathogens” that have “the potential to pose a serious threat to public health” and (2) make public the methodology for developing the list (see section 505E(f) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended) (21 U.S.C. 355E(f)). In establishing and maintaining the list of “qualifying pathogens,” FDA must consider: The impact on the public health due to drug-resistant organisms in humans; the rate of growth of drug-resistant organisms in humans; the increase in resistance rates in humans; and the morbidity and mortality in humans. FDA also is required to consult with infectious disease and antibiotic resistance experts, including those in the medical and clinical research communities, along with the Centers for Disease Control and Prevention (CDC). FDA is issuing this proposed rule to fulfill these requirements.

After holding a public meeting and consulting with CDC and the National Institutes of Health (NIH), and considering the factors specified in section 505E(f)(2)(B)(i) of the FD&C Act, as amended, FDA is proposing that the following pathogens comprise the list of “qualifying pathogens:” Acinetobacter species, Aspergillus species, Burkholderia cepacia complex, Campylobacter species, Candida species, Clostridium difficile, Enterobacteriaceae (e.g., Klebsiella pneumoniae), Enterococcus species, Mycobacterium tuberculosis complex, Neisseria gonorrhoeae, N. meningitidis, Non-tuberculous mycobacteria species, Pseudomonas species, Staphylococcus aureus, Streptococcus agalactiae, S. pneumoniae, S. pyogenes, and Vibrio cholerae. The preamble to the proposed rule describes the factors FDA considered and the methodology FDA used to develop this list of qualifying pathogens.

The Agency has determined that this proposed rule is not a significant regulatory action as defined by Executive Order 12866.

Title VIII of FDASIA (Pub. L. 112-144), entitled Generating Antibiotic Incentives Now, amended the FD&C Act to add section 505E (21 U.S.C. 355E), among other things. This new section of the FD&C Act is intended to encourage development of treatments for serious or life-threatening infections caused by bacteria or fungi. For certain drugs that are designated as “qualified infectious disease products” (QIDPs) under new section 505E(d) of the FD&C Act, new section 505E(a) provides an additional 5 years of exclusivity to be added to the exclusivity periods provided by sections 505(c)(3)(E)(ii) to (c)(3)(E)(iv) (21 U.S.C. 355(c)(3)(E)(ii) to (c)(3)(E)(iv)), 505(j)(5)(F)(ii) to (j)(5)(F)(iv) (21 U.S.C. 355(j)(5)(F)(ii) to (j)(5)(F)(iv)), and 527 (21 U.S.C. 360cc) of the FD&C Act. In addition, an application for a drug designated as a QIDP is eligible for priority review and designation as a fast track product (sections 524A and 506(a)(1) of the FD&C Act, respectively).

The term “qualified infectious disease product” or “QIDP” refers to an antibacterial or antifungal human drug that is intended to treat serious or life-threatening infections (section 505E(g) of the FD&C Act). It includes treatments for diseases caused by antibacterial- or antifungal-resistant pathogens (including new or emerging pathogens), or diseases caused by “qualifying pathogens.”

The GAIN title of FDASIA requires that the Secretary of the Department of Health and Human Services (and thus FDA, by designation) establish and maintain a list of such “qualifying pathogens,” and make public the methodology for the developing the list. According to the statute, the term ‘qualifying pathogen' means a pathogen identified and listed by the Secretary * * * that has the potential to pose a serious threat to public health, such as[:] (A) resistant gram positive pathogens, including methicillin-resistant Staphylococcus aureus, vancomycin-resistant Staphylococcus aureus, and vancomycin-resistant [E]nterococcus; (B) multi-drug resistant gram[-]negative bacteria, including Acinetobacter, Klebsiella, Pseudomonas, and E. coli species; (C) multi-drug resistant tuberculosis; and (D) Clostridium difficile (section 505E(f)(1) of the FD&C Act, as amended by FDASIA). FDA is required under the law to consider four factors in establishing and maintaining the list of qualifying pathogens:

• The impact on the public health due to drug-resistant organisms in humans;

• The rate of growth of drug-resistant organisms in humans;

• The increase in resistance rates in humans; and

• The morbidity and mortality in humans (section 505E(f)(2)(B)(i), as amended by FDASIA).

Furthermore, in determining which pathogens should be listed, FDA is required to consult with infectious disease and antibiotic resistance experts, including those in the medical and clinical research communities, along with CDC (section 505E(f)(2)(B)(ii) of the FD&C Act, as amended by FDASIA). As discussed in the paragraphs that follow, FDA has met this requirement by convening a public hearing, and opening an associated public docket, to solicit input regarding the list of qualifying pathogens, as well as by consulting with infectious disease and antibiotic resistance experts at CDC and NIH during the development of this proposed rule.

Significantly, the statutory standard for inclusion on FDA's list of qualifying pathogens is different from the statutory standard for QIDP designation. QIDP designation, by definition, requires that the drug in question be an “antibacterial or antifungal drug for human use intended to treat serious or life-threatening infections” (section 505E(g) of the FD&C Act, as amended by FDASIA). “Qualifying pathogens” are defined according to a different statutory standard; the term “means a pathogen identified and listed by the Secretary . . . that has the potential to pose a serious threat to public health” (section 505E(f) of the FD&C Act, as amended by FDASIA) (emphasis added). That is, a drug intended to treat a serious or life-threatening bacterial or fungal infection caused by a pathogen that is not included on the list of “qualifying pathogens” may be eligible for designation as a QIDP, while a drug that is intended to treat an infection caused by a pathogen on the list may not always be eligible for QIDP designation.

FDA intends the list of qualifying pathogens to reflect the pathogens that, as determined by the Agency, after consulting with other experts and considering the factors set forth in FDASIA (see section 505E(f)(2)(B)(i) of the FD&C Act, as amended by FDASIA), have the “potential to pose a serious threat to public health” (section 505E(f)(1) of the FD&C Act, as amended by FDASIA). FDA does not intend for this list to be used for other purposes, such as the following: (1) Allocation of research funding for bacterial or fungal pathogens; (2) setting of priorities in research in a particular area pertaining to bacterial or fungal pathogens; or (3) direction of epidemiological resources to a particular area of research on bacterial or fungal pathogens. Furthermore, as section 505E of the FD&C Act makes clear, the list of qualifying pathogens includes only bacteria or fungi that have the potential to pose a serious threat to public health. Viral pathogens or parasites, therefore, were not considered for inclusion and are not included as part of this list.

GAIN requires FDA to consult with infectious disease and antibiotic resistance experts, including those in the medical and clinical research communities, along with the CDC, in determining which pathogens should be included on the list of “qualifying pathogens” (section 505E(f)(2)(B)(ii) of the FD&C Act, as amended by FDASIA). In order to fulfill this statutory obligation, on December 18, 2012, FDA convened a public hearing, at which the Agency solicited input regarding the following topics: (1) How FDA should interpret and apply the four factors FDASIA requires FDA to “consider” in establishing and maintaining the list of qualifying pathogens, (2) whether there are any other factors FDA should consider when establishing and maintaining the list of qualifying pathogens, and (3) which specific pathogens FDA should list as qualifying pathogens. The transcript of this hearing, as well as comments submitted to the hearing docket, are available at www.regulations.gov, docket number FDA-2012-N-1037. FDA has considered carefully the input presented at this hearing, as well as the comments submitted to the docket, in creating this proposed list of qualifying pathogens.1 In addition, FDA consulted with experts in infectious disease and antibiotic resistance at CDC and NIH during the development of this proposed rule.

As stated previously, section 505E(f)(2)(B)(i) of the FD&C Act (as amended by FDASIA) requires FDA to consider the following factors in establishing and maintaining the list of qualifying pathogens:

• The impact on the public health due to drug-resistant organisms in humans;

• The rate of growth of drug-resistant organisms in humans;

• The increase in resistance rates in humans; and

• The morbidity and mortality in humans.

The Agency recognizes it is important to take a long-term view of the drug resistance problem. For some pathogens, particularly those for which increased resistance is newly emerging, FDA recognizes that there may be gaps in the available data or evidence pertaining to one or more of the four factors described in section 505E(f)(2)(B)(i) of the FD&C Act. Thus, consistent with GAIN's purpose of encouraging the development of treatments for serious or life-threatening infections caused by bacteria or fungi, the Agency intends to consider the totality of available evidence for a particular pathogen to determine whether that pathogen should be included on the list of qualifying pathogens. Therefore, if, after considering the four factors identified in section 505E(f)(2)(B)(i) of the FD&C Act, FDA determines that the totality of available evidence demonstrates that a pathogen “has the potential to pose a serious threat to public health,” the Agency may designate the pathogen in question as a “qualifying pathogen.” More detailed explanations of each factor identified in section 505E(f)(2)(B)(i) are set forth in the paragraphs that follow.

This first factor that section 505E(f)(2)(B)(i) requires FDA to consider is also the broadest. Many factors associated with infectious diseases affect public health directly, such as a pathogen's ease of transmission, the length and severity of the illness it causes, the risk of mortality associated with its infection, and the number of approved products available to treat illnesses it causes. Additionally, although the Agency did not consider financial costs in its analyses for this proposed list of qualifying pathogens, we note that the published literature supports the conclusion that antimicrobial-resistant infections are associated with higher healthcare costs (see, e.g., Refs. 1 and 2; Ref. 3 at pp. 807, 810, 812).

In considering a proposed pathogen's impact on the public health due to drug-resistant organisms in humans, FDA will assess such evidence as: (1) The transmissibility of the pathogen and (2) the availability of effective therapies for treatment of infections caused by the pathogen, including the feasibility of treatment administration and associated adverse effects. However, FDA may also assess other public health-related evidence, including evidence that may indicate a highly prevalent pathogen's “potential to pose a serious threat to public health” due to the development of drug-resistance in that pathogen, even if most documented infections are currently drug-susceptible.

The second and third factors that FDA must consider overlap substantially with one another, and for the most part are assessed using the same trends and information. Therefore, the Agency will analyze these factors together.

In considering these factors with respect to a proposed pathogen, FDA will assess such evidence as: (1) The proportion of patients whose illness is caused by a drug-resistant isolate of a pathogen (compared with those whose illness is caused by more widely drug-susceptible pathogens); (2) number of resistant clinical isolates of a particular pathogen (e.g., the known incidence or prevalence of infection with a particular resistant pathogen); and (3) the ease and frequency with which a proposed pathogen can transfer and receive resistance-conferring elements (e.g., plasmids encoding relevant enzymes, etc.). Given the temporal limitations on infectious disease data, FDA also will consider evidence that a given pathogen currently has a strong potential for a meaningful increase in resistance rates. Evidence of the potential for increased resistance may include, for example, projected (rather than observed) rates of drug resistance for a given pathogen, and current and projected geographic distribution of a drug-resistant pathogen. Furthermore, in acknowledgement of the growing problem of drug resistance, FDA may also assess other available evidence demonstrating either existing or potential increases in drug resistance rates.

Patients infected with drug-resistant pathogens are inherently more challenging to treat than those infected with drug-susceptible pathogens. For example, in some cases, a patient infected with a drug-resistant pathogen may have a delay in the initiation of effective drug therapy that can result in poor outcomes for such patients. Consequently, in determining whether a pathogen should be included in the list, FDA will consider the rates of mortality and morbidity (the latter as measured by, e.g., duration of illness, severity of illness, and risk and extent of sequelae from infections caused by the pathogen, and risk associated with existing treatments for such infections) associated with infection by that pathogen generally—and particularly by drug-resistant strains of that pathogen.

Setting quantitative thresholds for inclusion on the list based on any pre-specified endpoint would be inconsistent with FDA's approach of considering a totality of the evidence related to a given pathogen, as well as infeasible given the variety of pathogens under consideration. Instead, in considering whether this factor weighs in favor of including a given pathogen, the Agency will look for evidence of a meaningful increase in morbidity and mortality rates when infection with a drug-resistant strain of a pathogen is compared to infection with a more drug-susceptible strain of that pathogen. The Agency may also assess other evidence, such as overall morbidity and mortality rates for infection with either resistant or susceptible strains of a pathogen to determine whether that pathogen has the potential to pose a serious threat to public health, in particular if drug-resistant isolates of the pathogen were to become more prevalent in the future.

FDA is proposing to include the following pathogens in its list of qualifying pathogens based on the data described in the paragraphs that follow. FDA expects that the inclusion of any additional pathogens in the list would be supported by similar data.

Members of the genus Acinetobacter are gram-negative bacteria that can cause hospital-acquired infections such as pneumonia, bacteremia (i.e., bloodstream infections), meningitis, genitourinary infections, or soft tissue infections (e.g., cellulitis) (Ref. 4 at pp. 2881-2883 (internal citation omitted)). A total of 1,490 healthcare-associated infections with Acinetobacter species, the majority of which were resistant to at least one class of antibacterial drugs, were reported to CDC's National Healthcare Safety Network (NHSN) in 2009-2010 (Ref. 132, Table 7). Thus, Acinetobacter resistance is a well-recognized and growing problem (see generally, e.g., Ref. 5), and most hospital-acquired A. baumannii are now resistant to multiple classes of antibacterial agents (Ref. 4 at p. 2884 (internal citation omitted)). Indeed, in recognition of this problem, in 2008, the Infectious Diseases Society of America (IDSA) designated Acinetobacter species to be among six highly problematic drug-resistant organisms identified as the so-called “ESKAPE” pathogens, which “currently cause the majority of U.S. hospital infections and effectively ‘escape' the effects of antibacterial drugs.” 2 (Refs. 5 and 6). Acinetobacter species can survive for prolonged periods in the environment and on the hands of healthcare workers, and as such are well-recognized as transmissible nosocomial pathogens (see, e.g., Ref. 7). Several independent resistance mechanisms, such as those mediated by cephalosporinases, beta-lactamases, or carbapenemases, have been identified in Acinetobacter species, and some resistance mechanisms (e.g., genes encoding resistance-mediating enzymes) can be readily transferred from one bacteria to another on highly ambulatory genetic cassettes (Ref. 9). In addition, the pool of available effective treatments for Acinetobacter infections is shrinking (see, e.g., Ref. 5 at p. 7; Ref. 6).

Patients who acquire a drug-resistant Acinetobacter bloodstream infection appear more likely than those with drug-susceptible infections to suffer deleterious effects from the illness. For example, in a study of patients with A. baumannii bloodstream infections in European intensive care units (ICUs), 74 percent of A. baumannii bloodstream infections were resistant to a commonly used antibacterial drug (Ref. 10 at p. 33, Table 3).3 Patients with resistant A. baumannii bloodstream infections became infected sooner after admission than patients with drug-susceptible A. baumannii (9 days vs. 19 days) (Ref. 10 at p. 33, Table 3). For those who survived, patients infected with resistant bacteria remained in the hospital longer than those infected with susceptible bacteria (20 days vs. 9 days), and, for those who died,4 patients infected with resistant bacteria died sooner after infection than those with susceptible bacteria (5 days vs. 16 days) (Ref. 10 at p. 33, Table 3). In addition, “recent studies of patients in the [ICU] who had [bloodstream infection] and burn infection due to [drug]-resistant Acinetobacter species demonstrate an increased mortality (crude mortality, 26 to 68 percent), as well as increased morbidity and length of stay in the [ICU]” (Ref. 5 at p. 7). Similar trends have been seen for A. baumannii pneumonia in terms of: Prevalence of drug-resistant infection; time from admission to infection; and time from infection to death (Ref. 10).5 In one study of Pakistani newborns with infections caused by Acinetobacter species, 57 of 122 Acinetobacter-positive cultures (from 78 newborns) showed infection in the bloodstream (Ref. 133). Approximately 71 percent of all Acinetobacter infections in the study were susceptible to only one antibacterial drug (polymyxin), and were labeled as a “pan-resistant” (i.e., resistant to many drugs) Acinetobacter; 47 percent of the newborns in the study with Acinetobacter infections died (Ref. 133).

For the reasons described previously, FDA believes that Acinetobacter species have the potential to pose a serious threat to the public health, particularly for hospitalized patients and, FDA is proposing to include Acinetobacter species in its list of qualifying pathogens.

Members of the Aspergillus genus are fungi (specifically, hyaline molds) that have potential to cause serious infections, typically in immunocompromised people. Aspergillus can cause invasive infections of the lungs, skin, sinuses, bone, or brain, or be disseminated throughout the body. It frequently colonizes airway passages, creating the potential for invasive disease among patients who become immunocompromised, such as patients who receive lung transplantation (Ref. 11). In one center, for example, Aspergillus infection (i.e., colonization or evidence of invasive disease) was reported in approximately 30 percent of patients who received lung transplantation (Ref. 11). These fungi also may cause an allergic reaction, which may result in allergic bronchopulmonary aspergillosis, particularly in those with cystic fibrosis (CF) (Ref. 4 at pp. 3241, 3244-3249).

Invasive aspergillosis often responds poorly to antifungal therapy, even when Aspergillus infections are susceptible to antifungal drugs (Ref. 4 at p. 3250). Therefore, the existence throughout the world of azole-resistant A. fumigatus (i.e., A. fumigatus isolates resistant to the class of drugs comprising several different antifungal drugs in the family of “azole antifungal drugs”), and reports that azole resistant A. fumigatus may be spreading in the environment (see Ref. 12 at pp. 1635-1636) is of great concern—as are the reports of multiple-drug resistant A. fumigatus in Europe (Refs. 12 and 13). The predominant resistance mechanism in A. fumigatus is thought to be a chromosomally encoded mutation in the target enzyme, although alternative resistance mechanisms have been observed (see, e.g., Ref. 13). In some cases antifungal drugs are recommended as chemical prophylaxis to prevent invasive infections in high-risk patients (Ref. 4 at p. 3253), including some asthmatics (see Ref. 13). However, the use of prophylactic antifungal drugs creates selective pressure on these organisms, thus increasing the risk of drug-resistant Aspergillus colonization and infection. Moreover, European studies have found that many patients who had not received antifungal therapy nevertheless were colonized with resistant strains of A. fumigatus (Ref. 13 (internal citations omitted)).

Many patients with Aspergillus infections are vulnerable already, due to concomitant conditions such as cystic fibrosis or some level of immunodeficiency. Should Aspergillus resistance further diminish the already low efficacy of existing treatments and prophylaxis, patient outcomes would, similarly, be expected to worsen. For the reasons described above, FDA believes that Aspergillus species have the potential to pose a serious threat to the public health, and FDA is proposing to include Aspergillus species in its list of qualifying pathogens.

The Burkholderia cepacia complex (Bcc) comprises about 10 species of gram-negative bacteria (Ref. 4 at p. 2861). The Burkholderia genus was established relatively recently, however, and species are being identified and added to the Bcc on an ongoing basis (Ref. 4 at p. 2861). Bcc can cause pneumonia, particularly in patients with CF and patients with chronic granulomatous disease (Ref. 4 at pp. 2862, 2865 (internal citation omitted)). Bcc can also cause life-threatening bacteremia among hospitalized patients who are immunocompromised, resulting in a mortality rate of 33 percent of hematology patients with Bcc bacteremia in one academic medical center (Ref. 14). Other outbreaks of serious bacterial infections caused by Bcc have been documented due to nosocomial transmission, indicating the potential for an ease of transmissibility in the hospital setting in patients without CF (see, e.g., Ref. 15).

Bcc infections cause noteworthy levels of morbidity and mortality, particularly in patients with CF (see, e.g., Ref. 14), although outbreaks among patients without CF also have been reported (see, e.g., Ref. 16). “Increased mortality has been observed in CF patients after colonization with Bcc,” (Ref. 4 at p. 2865 (internal citations omitted); Ref. 17) and, in one study, survival rates for patients with CF who were infected with B. cenocepacia (a Bcc species) were markedly worse than rates for patients with CF who were infected with P. aeruginosa (not a Bcc species) (Ref. 150; see also Ref. 4 at p. 2862, Fig. 220-1 (internal citation omitted)). Because patients with CF often require repeated or chronic administration of antibacterial drugs, antibacterial drug resistance among Bcc isolates can develop through these selective pressures (see Ref. 18 (noting that an increase in antibacterial resistance was observed among patients with CF who received a chronically inhaled antibacterial drug)). In fact, a pan-resistant isolate of Bcc already has been documented in patients with CF (Ref. 19). Although there appear to be limited data on the exact incidence and prevalence of Bcc infection in the CF population, because the average life-span for patients with CF has been steadily increasing over the past few decades (Ref. 20 at p. 789, Fig. 1), it stands to reason that Bcc colonization and infection in patients with CF likely will increase. Furthermore, although data comparing outcomes of drug-resistant infections with outcomes of drug-susceptible infections also are limited, it stands to reason that decreasing susceptibility and resistance patterns in Bcc likely will be observed during the life span of a patient with CF based on selective pressures caused by appropriate use of antibacterial drugs.

For the reasons described previously, FDA believes that these pathogens have the potential to pose a serious threat to the public health—particularly for patients with CF—and FDA is proposing to include Bcc species in its list of qualifying pathogens.

The Campylobacter genus comprises several species of gram-negative bacteria, some of which are causative agents of diarrheal and systemic diseases in humans (Ref. 4 at pp. 2793-2796). These are common infections: Campylobacter is estimated to cause over 1.3 million cases of enteric infection in the United States each year (Ref. 42). It is believed that most human infections are caused by consuming contaminated food (e.g., meat) or water (Ref. 4 at p. 2794), though person to person transmission of C. jejuni has been reported to occur through the fecal-oral route, and other routes (Ref. 4 at p. 2795). Transmissibility is readily apparent, with clinical disease that can be caused by just 500 Campylobacter organisms (Ref. 4 at p. 2795), so, for example, “[e]ven one drop of juice from raw chicken meat can infect a person” (Ref. 21).

The following indicates the potential for Campylobacter infections to result in enhanced morbidity and mortality, regardless of whether the bacterium is fully susceptible or is resistant to antibacterial drugs: C. jejuni infections have been linked to reactive arthritis in a certain subset of patients (Ref. 4 at p. 2797), C. jejuni infections are a major cause of Guillain-Barré syndrome (1 case per 2,000 C. jejuni infections, accounting for 20 to50 percent of all cases of Guillain-Barré syndrome (id.)), and C. fetus infections “may be lethal to patients with chronic compensated diseases such as cirrhosis or diabetes mellitus or may hasten the demise of seriously compromised patients” (Ref. 4 at p. 2799). Although many people recover from enteric Campylobacter infections without the need for drug treatment, a variety of antibacterial drugs, including azithromycin, erythromycin, or ciprofloxacin, may be prescribed to treat severe Campylobacter infections (Ref. 21; Ref. 4 at p. 2799).

Drug resistance in Campylobacter species, particularly resistance to fluoroquinolones, has been increasing rapidly (Ref. 4 at p. 2799 (internal citation omitted); see Ref. 22; see also Ref. 134). Indeed, in human Campylobacter infections, resistance has been observed to many different classes of antibacterial drugs (see, e.g., Ref. 22 (internal citations omitted); Ref. 23), and resistance mechanisms can be readily transferred from bacteria to bacteria (Ref. 22). “Infection with C. jejuni strains resistant to erythromycin or fluoroquinolones is more likely to result in prolonged or invasive illness or death” (Ref. 4 at p. 2799), and it stands to reason that drug-resistant strains of other pathogenic Campylobacter species are likely to be similarly problematic. One survey of Campylobacter isolates indicated increasing and high levels of resistance to antibacterial drugs in several classes, with some of the resistance encoded on transferable plasmids (Ref. 24). Because Campylobacter infections are common, any increase in resistance rates may translate quickly into a threat to the public health.

For the foregoing reasons, FDA believes that Campylobacter species have the potential to pose a serious threat to public health, and FDA is proposing to include bacteria from the genus Campylobacter in the list of qualifying pathogens.

Candida species are fungi (specifically, yeast) that are part of the normal human flora, and thus Candida species can easily be transmitted and can cause invasive disease, particularly among immunocompromised patients (see, e.g., Ref. 4 at pp. 3225-3226; Ref. 25). Candida can infect almost any part of the body to which they are introduced (so-called invasive candidiasis), including the central nervous system, respiratory tract, urinary tract, gastro-intestinal tract, or heart (see Ref. 4 at pp. 3227-3235).

Those who are already fragile are at higher risk of invasive disease (e.g., between 5 percent and 20 percent of neonates weighing less than 2.2 pounds will develop some form of invasive candidiasis (Ref. 26)), and the risk is particularly high in those who are immunocompromised. For example, before the availability of highly-active antiretroviral therapy for the treatment of human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS), invasive candidiasis (such as esophageal candidiasis) was a common infection in this patient population, with a well-documented increase in the rates of antifungal resistance (Ref. 27). Many patients with HIV/AIDS did not respond to standard antifungal therapy and required administration of parenteral antifungal drugs, which limited therapeutic options and was directly associated with the development of resistance (Ref. 27). Today, infections caused by Candida species rank as the fourth most common bloodstream infection in the United States (Ref. 25). Candida bloodstream infections are associated with high mortality rates, with approximately 35 to 40 percent of infected patients dying of Candida infections in a study involving patients in one tertiary-care center (Ref. 28).

Although the problem of invasive candidiasis has diminished in the population of patients with HIV/AIDS due to advances in antiretroviral therapy, the number of patients receiving solid organ transplants, and therefore on immunosuppressive therapy, is increasing (Ref. 29). Experts are now concerned about antifungal-resistant invasive candidiasis in this patient population, echoing the concerns previously borne out in the population of patients with HIV/AIDS (see, e.g., Refs. 27 and 30). Transplant patients often take prophylactic antifungal drugs, which exert selective pressure on the Candida organisms and make it more likely that these patients will be colonized by, or develop infections with, drug-resistant fungi. Indeed, it has been noted that Candida species with antifungal resistance patterns are emerging as a common fungal infection in this population (Refs. 28 and 30).

Resistance genes in Candida species tend to proliferate in localized populations, though they occasionally may be transferred through mating (Ref. 31). Some reports have documented continued selective pressures of oral antifungal drugs administered as prophylaxis in certain populations, resulting in an increasing rate of infection caused by Candida species resistant to “azole antifungal drugs” (e.g., Candida glabrata and Candida krusei) (see, e.g., Refs. 32 and 33). Selective pressures from the use of oral azole antifungal drugs can shift infections from C. albicans to certain other Candida species, such as Candida glabrata and Candida krusei, which both have intrinsic resistance to azole antifungal drugs and eliminates any possibility of treatment with an oral azole antifungal drug. Thus, some patients with invasive candidiasis already have treatment options limited to only intravenously-administered antifungal drugs (Ref. 34).

For the foregoing reasons, FDA believes that Candida species have the potential to pose a serious threat to the public health, and FDA proposes that Candida species be included in the list of qualifying pathogens.

C. difficile is a toxin-producing gram-positive bacterium (Ref. 35) that can cause serious, sometimes fatal, gastrointestinal disease (e.g., toxic megacolon) (see, e.g., Ref. 4 at p. 3104 (internal citation omitted)). The spores of the C. difficile bacteria (see Ref. 36) are difficult to eliminate from the environment, even after disinfection by hand-washing or cleansing, and individuals can acquire the pathogen via contact with either contaminated surfaces or other individuals (see, e.g., Ref. 4 at p. 3104 (internal citation omitted)). CDC estimates that the vast majority of patients with C. difficile infection have had recent contact with healthcare providers, either in an inpatient or outpatient setting (Ref. 37). Because spores of the bacteria are difficult to eliminate from the environment, it is not surprising that transmission of C. difficile infection in the hospital environment has been noted (Ref. 37).

Risk of infection with C. difficile increases with both a patient's age and recent antibacterial drug use (Ref. 37). Incidence of C. difficile-associated illness has increased significantly over the past several years. For example, “[t]here was an 117% increase in the listing of [C. difficile-associated disease] on hospital discharges in the Healthcare Costs and Utilization Project Net Web site from 2000 to 2005” (Ref. 4 at p. 3106 (internal citation omitted)), and currently, “C. difficile infections are at an all-time high” (Ref. 37). Mortality has been increasing along with infection incidence. One study showed that from 1999 to 2004 in the United States (Ref. 63) there was a 35 percent increase in mortality for which C. difficile infection was listed as a contributing factor. CDC has estimated a 400 percent increase in deaths between 2000 and 2007 in which C. difficile was a contributing factor (Ref. 37). Currently, based on a review of death certificates, about 14,000 American deaths each year list C. difficile infection as a contributing factor; the majority of deaths occur in patients over 65 years of age (Ref. 135).

The use of antibacterial drugs in hospitals has been identified as an important risk factor for C. difficile infections because C. difficile is naturally resistant to many commonly used antibacterial drugs. However, the prevalence of C. difficile infections is increasing and that has been associated with an increased prevalence of strains with new resistance to fluoroquinolones (see, e.g., Ref. 38). North American epidemiological data have shown the emergence of high levels of resistance to fluoroquinolone antibacterial drugs—and this resistance emerged quickly (see, e.g., Ref. 39). As noted by CDC, “even a modest decrease in [drug] susceptibility might be clinically relevant” to the epidemiology of C. difficile infections (Ref. 38 at p. 446). Newly acquired resistance by C. difficile to commonly used antibacterials, as in the case of the fluoroquinolones, facilitates the emergence of hyper-virulent strains that increase the burden of infections and deaths caused by C. difficile (Refs. 39 and 156).

C. difficile causes serious infections but there are a limited number of effective antibacterial drugs used to treat C. difficile infection, and treatment often lasts for an extended period of time (Ref. 38). Furthermore, relapse or recurrence of C. difficile is common, and often necessitates re-treatment with antibacterial drugs (Ref. 38). In light of these considerations, the increased prevalence of C. difficile infections constitutes a serious threat to the public health (Ref. 39).

Thus, FDA believes that C. difficile has the potential to pose a serious threat to public health. For the reasons described previously—particularly the high prevalence of C. difficile infections, the fact that acquired resistance leads to increased infections and deaths via the emergence of hypervirulent strains, and the very limited treatment options—FDA is proposing to include C. difficile in its list of qualifying pathogens.

The Enterobacteriaceae are a family of gram-negative bacteria and include species in the genera Escherichia (e.g., E. coli), Klebsiella, Enterobacter, Shigella, and Salmonella (see Ref. 4 at pp. 2815-2816). Most Enterobacteriaceae are toxin-secreting, and they can cause a variety of serious and life-threatening bacterial diseases (see Ref. 4 at pp. 2819-2829). For example, bloodstream infections, urinary tract infections, pneumonia, and complicated intra-abdominal infections are commonly caused by Enterobacteriaceae, and increasingly these infections are resistant to antibacterial drugs (see, e.g., Refs. 40 and 41). In the United States, there were 1.2 million cases of Salmonella infection each year (Ref. 42). In addition, the rate of hospitalization due to bloodstream infections—many of which are caused by Enterobacteriaceae—doubled from the years 2000 to 2008 (Ref. 43).

Antimicrobial resistance is already a problem for many genera in this family. For example, enteropathic E. coli strains “are often resistant to multiple antibiotics” (Ref. 4 at p. 2824 (internal citation omitted)) and “resistant mutants are already present in most patients with Enterobacter infections before initiation of therapy” (Ref. 4 at p. 2827). Increased resistance in Shigella strains has been documented in the United States (Refs. 45 and 154) and abroad (Ref. 44), as has increased resistance in Salmonella (Refs. 42 and 155). “In addition, nosocomial isolates [of Klebsiella pneumoniae] are frequently resistant to numerous `antibacterial drugs' as a result of the acquisition of multidrug-resistant plasmids. For example, K. pneumoniae is one of the most common organisms to carry plasmids encoding extended-spectrum [beta]-lactamases, and bacteremia with such strains is associated with higher rates of treatment failure and death” (Ref. 4 at p. 2826 (internal citation omitted)).

Enterobacteriaceae resistance to beta-lactam drugs, including, for example, cephalosporins, is well-recognized (see generally, e.g., Refs. 46 and 47), and several resistant strains exist (see, e.g., Ref. 47). Extended-spectrum beta-lactamase (EBSL) enzymes may be found in several Enterobacteriaceae members, and these enzymes “confer resistance against all [beta]-lactam antibiotics except carbapenems and cephamycins” (Ref. 47 at p. 682 (internal citation omitted)).

Additionally, Enterobacteriaceae members can become—and, particularly in the case of K. pneumoniae and E. coli, commonly have become—resistant to carbapenems (carbapenem-resistant Enterobacteriaceae or CRE) (see, e.g., Ref. 48), which are beta-lactam antibiotics that “often are the last line of defense against [g]ram-negative infections that are resistant to other antibiotics” (Ref. 49). Recently, New Delhi metallo-beta-lactamase (NDM), a plasmid-encoded enzyme that permits bacterial resistance to broad-spectrum beta-lactam drugs, including carbapenems, has been reported in cases of Enterobacteriaceae infection in the United States (Refs. 50 and 51). “CRE containing New Delhi metallo-beta-lactamase (NDM), first reported in a patient who had been hospitalized in New Delhi, India, in 2007, are of particular concern because these enzymes usually are encoded on plasmids that harbor multiple resistance determinants and are transmitted easily to other Enterobacteriaceae and other genera of bacteria” (Ref. 50 (internal citations omitted); see also, e.g., Ref. 4 at p. 2820). A total of 6,470 healthcare-associated infections with Klebsiella species were reported to CDC's NHSN in 2009-2010; on average, approximately 11 percent were resistant to carbapenems and approximately 24 percent were non-susceptible to extended-spectrum cephalosporins. Among 9,351 E. coli infections reported to NHSN in 2009-2010, approximately 2 percent were resistant to carbapenems and approximately 12 percent were non-susceptible to extended-spectrum cephalosporins (Ref. 132, table 7).

Although NDM-related resistance is only one example, drug-resistance genes in Enterobacteriaceae “may be present on transposons, allowing them to jump to other plasmids or chromosomes, or they may be found on integrons, which have loci downstream of strong promoters at which resistance genes may insert by site-specific recombination to be expressed at high levels” (Ref. 4 at p. 2820; Ref. 52). It is largely for this reason that FDA is proposing to include the entire Enterobacteriaceae family in the list of qualifying pathogens: With each increase in resistance rates seen in one genus or species, increases in antimicrobial resistance may also occur in other pathogens in the family. It is unsurprising, then, that the proportion of drug-resistant, versus drug-susceptible, Enterobacteriaceae infections has increased in the past several years (see, e.g., Refs. 53 and 54). For example, a March 2013 CDC Vital Signs report documented an increase in the percentage of Enterobacteriaceae that were non-susceptible to carbapenems, from one to four percent in the past decade (Ref. 136).

Infections with drug-resistant strains of Enterobacteriaceae also result in increased rates of morbidity and mortality when compared with drug-susceptible strains of the same pathogens. In one study, the mortality rate for patients with carbapenem-resistant K. pneumoniae infections was 48 percent—nearly double the 26 percent mortality rate for patients with carbapenem-susceptible K. pneumoniae infections (Ref. 55). These differential outcomes are of particular concern, because the proportion of patients with drug-resistant versus drug-susceptible Enterobacteriaceae infections has increased over the past several years (see, e.g., Refs. 5 and 54).

There are a limited number of drugs with antibacterial activity for infections with multiple-drug-resistant Enterobacteriaceae. This means that clinicians may not always be successful in selecting an appropriate initial antibacterial drug for treatment before the availability of the results of in vitro antibacterial drug susceptibility testing (Ref. 55 at pp. 1104-1105 (“Our study suggests that [polymyxins, tigecycline, and aminoglycosides], alone or in combination, may not be reliably effective in the treatment of carbapenem-resistant K. pneumoniae infection and that newer antimicrobial agents with improved clinical activity against carbapenem-resistant K. pneumoniae are needed.”)). Furthermore, some last-line therapies come with different and potentially more severe adverse effects (e.g., renal toxicity) than the drugs to which many Enterobacteriaceae have become resistant (see, e.g., Ref. 56).

For the reasons described previously, FDA believes that Enterobacteriaceae has the potential to pose a serious threat to the public health, and FDA is proposing to include the Enterobacteriaceae family in its list of qualifying pathogens.

Species in the genus Enterococcus are gram-positive bacteria that normally colonize the human gastrointestinal tract (Ref. 4 at p. 2643). Enterococci can cause serious disease, including bacteremia or endocarditis; E. faecalis and E. faecium are most commonly responsible for enterococcal infections and E. gallinarum also has been identified as an infective agent (see Ref. 4 at pp. 2643-2647). Enterococci have been designated by the Infectious Disease Society of America as one of six highly problematic drug-resistant organisms (the so-called “ESKAPE” pathogens), which “currently cause the majority of US hospital infections and effectively 'escape' the effects of antibacterial drugs.” (Refs. 5 and 6). Although some enterococcal isolates have intrinsic resistance, other isolates have acquired resistance either from selective antibacterial pressures or from transfer of genetic resistance mechanisms from one bacterium to another, including from non-Enterococcus species (see, e.g., Ref. 4 at pp. 2647-2651; see also Ref. 57).

Enterococcus infections have been reported as the second most common cause of hospital-acquired infection in the United States from 1986 to 1989 (Ref. 58). Among 5,484 E. faecium infections associated with healthcare reported to CDC's NHSN between 2009 and 2011, approximately 80 percent were resistant to vancomycin; in this same report among 3,314 E. faecalis healthcare-associated infections, approximately 9 percent were resistant to vancomycin (Ref. 132, Table 7).

Enterococci infections, including infections caused by enterococci that are drug-resistant (e.g., vancomycin-resistant enterococci or VRE), are often nosocomial infections. Enterococci isolates can be resistant to multiple antibacterial drugs; in fact, Enterococcus faecium resistant to linezolid and resistant to vancomycin have been isolated from patients (Ref. 59), and isolates resistant to multiple antibacterial drugs were identified in a global surveillance program (see, e.g., Ref. 60). Patients with bacteremia due to VRE had an increased mortality when compared to patients who had drug-susceptible enterococcal bacteremia (Refs. 61 and 62).

In sum, for the reasons described previously—and particularly because of the increasing threat that drug-resistant enterococci pose to the public health—FDA believes that Enterococcus species have the potential to pose a serious threat to public health, and FDA is proposing to include Enterococcus species in its list of qualifying pathogens.

M. tuberculosis, the bacterium that causes tuberculosis (TB), is a major global public health burden (see generally, Ref. 64). M. tuberculosis usually affects the lungs (pulmonary TB), but M. tuberculosis can affect any part of the body such as the kidney, spine, or brain (extrapulmonary TB) (Ref. 65). If TB is not properly treated, it can be fatal (see generally, Ref. 64 and Ref. 65). M. tuberculosis is expelled into the air when a person with TB of the lungs or throat coughs, sneezes, speaks, or sings (Ref. 65). People nearby may breathe in the organisms and become infected. M. tuberculosis can remain in the air for several hours, depending on the environment (Ref. 65). Factors essential for the spread of the organism are proximity and duration of contact and infectiousness of the source patient (Ref. 4 at pp. 3132, 3134). There are at least 7 species of the genus Mycobacterium that also cause disease similar to pulmonary tuberculosis, for example, M. bovis, M. africanum, and M. microti, among other species (Ref. 137).

Latent M. tuberculosis is found in one-third of the world's population (Ref. 66). In 2011, there were an estimated 8.7 million new cases and 1.4 million deaths associated with TB (Ref. 64). More than 10,000 new cases of TB were reported in 2011 in the United States (Ref. 67). Mortality figures from CDC reveal that 529 persons died in the United States from tuberculosis in 2009 (Ref. 67).

For M. tuberculosis, the primary mechanism of drug resistance is spontaneous chromosomal mutations, which can be amplified in the setting of inappropriate or interrupted therapy (monotherapy and combination therapy) or poor patient adherence to therapy (Ref. 68 at p. 1321). Subsequent transmission of drug-resistant M. tuberculosis will exacerbate the public health problem (Ref. 68). Mobile genetic elements, such as plasmids or transposons, do not appear to mediate drug resistance in M. tuberculosis (Ref. 68 at p. 1321). Thus, the increase in drug-resistant tuberculosis that is seen globally (see generally, Ref. 64) is a public health problem driven by inappropriate, interrupted, or poor adherence to therapy among persons being treated for TB (primary resistance), and subsequent transmission of drug-resistant M. tuberculosis from person to person (secondary resistance) (Ref. 68).

Isolates of M. tuberculosis resistant to isoniazid and rifampin, the two most important first-line antibacterial drugs used in the treatment of active TB disease, are referred to as multi-drug resistant (MDR) strains (Ref. 65). Extensively drug resistant (XDR) TB is resistant to isoniazid and rifampin, as well as two second-line drug classes (injectable agents and fluoroquinolones) (Ref. 65). Results from a multinational survey showed that 20 percent of M. tuberculosis isolates were MDR, and 2 percent were also XDR (Ref. 69). Resistance mechanisms are well-established for most drugs used to treat tuberculosis (Ref. 70), and drug resistant strains of tuberculosis can be transmitted from person to person, as evidenced in a 1991-1992 outbreak investigation in New York City (Ref. 71).

An epidemiological evaluation by CDC of pulmonary tuberculosis among patients in the United States found that mortality rates were higher for patients with XDR tuberculosis compared with those with MDR tuberculosis (35 percent vs. 24 percent, respectively), with the lowest mortality (10 percent) observed in patients with drug-susceptible tuberculosis (Ref. 72 at p. 2157). The authors of this report concluded that, “[t]he emergence of XDR [tuberculosis] globally has raised concern about a return to the pre-antibiotic era in [tuberculosis] control, since XDR [tuberculosis] cases face limited therapeutic options and consequently have poor treatment outcomes and high mortality,” (Ref. 72 at p. 2158).

For the reasons stated previously, FDA believes that M. tuberculosis complex has the potential to pose a serious threat to public health, and FDA is proposing to include M. tuberculosis complex in the list of qualifying pathogens.

N. gonorrhoeae is a nonmotile, gram-negative bacterium that can infect the mucous membrane of the urethra and cervix, as well as the rectum, oropharynx, and conjunctivae (Ref. 4 at p. 2753). The pathogen can be transmitted sexually (Ref. 73), as well as vertically from mother to newborn during delivery (Ref. 74). Gonococcal infections can cause complications, such as pelvic inflammatory disease, ectopic pregnancy, epididymitis, ophthalmitis, and endocarditis (Ref. 4 at p. 2753). Gonorrhea is the second most commonly reported notifiable disease in the United States: Over 300,000 cases of gonorrhea are reported annually (Ref. 73). However, many infections are probably undetected and unreported: CDC estimates that more than 800,000 new gonococcal infections occur annually in the United States (Ref. 75). Although the gonorrhea rate is low compared with historical trends, the rate increased during 2009-2011 (Ref. 73).

N. gonorrhoeae can acquire antibacterial drug resistance by spontaneous chromosomal mutations arising from endogenous flora, or resistance can be acquired by transfer of genetic information from other bacteria by, for example, a plasmid-mediated resistance mechanism (Ref. 76). The Gonococcal Isolate Surveillance Project (GISP) monitors trends in antimicrobial susceptibilities of N. gonorrhoeae strains in the United States (Ref. 73).6 In 2011, 30.4 percent of isolates collected in the GISP were resistant to penicillin, tetracycline, ciprofloxacin, or a combination thereof (Ref. 73).

Since 2007, the cephalosporins have been the only antibacterial drug class recommended by CDC for the first line treatment of gonorrhea (Ref. 77). On the basis of ongoing surveillance, in 2012, CDC changed its treatment guidelines to recommend dual therapy with intramuscular ceftriaxone (instead of the previously-recommended orally-administered antibacterial drug), with either azithromycin or doxycycline added not only for treatment of coinfection with Chlamydia trachomatis, but also to “potentially delay emergence and spread of resistance to cephalosporins” in N. gonorrhoeae (Ref. 77). This is the only remaining recommended first-line treatment regimen (Ref. 77). Reduced susceptibility of gonococcal strains to ceftriaxone has also been observed (Ref. 73). Indeed, there is a growing concern that N. gonorrhoeae may become resistant to all available antibacterial drugs (Ref. 78). Significantly, “[u]nsuccessful treatment of gonorrhea with oral cephalosporins, such as cefixime, has been identified in East Asia, beginning in the early 2000s, and in Europe within the past few years. Ceftriaxone-resistant isolates have been identified in Japan (2009), France (2010), and Spain (2011)” (Ref. 153, internal references omitted). The GISP reported that cephalosporin-resistance may now be emerging in the United States (Ref. 153).

For the reasons stated previously—particularly the increase in antibiotic resistant strains of gonorrhea together with the limited number of effective antibiotics for treatment of N. gonorrhoeae—FDA believes that N. gonorrhoeae has the potential to pose a serious threat to public health, and FDA is proposing to include N. gonorrhoeae on the list of qualifying pathogens.

N. meningitidis is an aerobic, gram-negative, fastidious diplococcus that is a leading cause of bacterial meningitis and sepsis, and can cause other serious infectious diseases, such as pneumonia, arthritis, otitis media, and epiglottitis (Ref. 79). N. meningitidis can be readily transmitted directly from person to person through close or prolonged contact via respiratory or throat droplets (e.g., kissing, sneezing, coughing, or living in close quarters) (Ref. 80).

Meningococcal disease is a global public health concern that remains endemic in the United States, with large epidemics of invasive disease occurring in Africa, New Zealand, and Singapore (Ref. 4 at p. 2740). Nasopharyngeal carriage of N. meningitidis is a precursor to disease (Ref. 4 at p. 2740), and while the majority of carriers do not develop disease, the World Health Organization estimates that, at any given time, 10 to 20 percent of the population carries N. meningitidis in their nasopharynx (Ref. 80). In the United States, the incidence rate is 0.15 to 0.5 per 100,000 persons (see Refs. 81 and 82). Mortality rates vary by the type of infectious disease caused by N. meningitidis, with a 40 percent mortality rate among patients with meningococcemia (Ref. 79), and a 13 percent mortality rate among children and adolescents with bacterial meningitis (Ref. 4 at p. 2741). Morbidity following infection with N. meningitidis can be substantial, including hearing loss, neurologic sequelae, and loss of limbs from amputation (Ref. 83 at p. 773).

N. meningitidis is believed to acquire resistance from the wider gene pool of other Neisseria species (Ref. 84 at p. 890) and through point mutations. Antibacterial drug resistance was identified as a concern in N. meningitidis almost 2 decades ago, with a demonstration that resistance to commonly-used antibacterial drugs were increasing in incidence, and the identification of some isolates with beta-lactamase production (i.e., the production of enzymes that cause bacteria to be resistant to beta-lactam antibacterial drugs), with the author concluding that “this finding is of great concern,” (Ref. 85 at p. S98). Invasive meningococcal diseases caused by isolates with reduced susceptibility to penicillin were first reported in the 1980s in the United Kingdom, Spain, and South Africa, and are now identified worldwide (Ref. 139 at p. 1016). Some countries have reported a rise in the prevalence of meningococci with reduced susceptibility to penicillin (see, e.g., Refs. 85 and 141). Case reports and studies suggest that reduced susceptibility to common antibacterial treatments used for meningococcal infection results in poorer health outcomes (Ref. 83 at p. 776). For example, a Spanish study of isolates from 1988 to 1992 found that patients with strains that had decreased drug susceptibility had higher rates of morbidity and mortality (Ref. 83 at p. 776; Ref. 149 at p. 28). Other sporadic cases of invasive N. meningitidis with reduced susceptibility to antibacterial drugs have been reported worldwide (see, e.g., Refs. 142 and 143). The identification of N. meningitidis isolates that display elevated mutability suggests an increased capacity to develop resistance, in addition to possible enhancement of transmission (see, e.g., Ref. 144).

The detection of N. meningitidis with reduced susceptibility or resistance to antibacterial drugs has broad and serious implications for public health, not only for treatment of patients with invasive disease, but also when considering the use of chemoprophylaxis in order to prevent cases of invasive meningococcal disease among close contacts (see, e.g., Refs. 139,142, and 143). In sum, for the reasons described previously—particularly because of the potential for higher morbidity and mortality associated with drug-resistant meningococcal infections—FDA believes that N. meningitidis has the potential to pose a serious threat to public health, and FDA is proposing to include N. meningitidis in the list of qualifying pathogens.

Non-tuberculous mycobacterium (NTM) comprises several species of bacterium, including Mycobacterium avium complex, M. kansasii, and M. abscessus (Ref. 4 at p. 3191; Ref. 86). Other species known to cause disease include M. fortuitum, M. chelonae, M. marinum, and M. ulcerans (Ref. 4 at p. 3191). NTM are widely distributed in the environment and can be found in soil, water, plants, and animals (Ref. 4 at p. 3191). Transmission is not communicable, and it appears to occur from environmental exposure to or inhalation of the pathogen (Ref. 87 at p. 370). NTM causes many serious and life-threatening diseases, including pulmonary disease, catheter-related infections, lymphadenitis, skin and soft tissue disease, joint infections, and, in immunocompromised individuals, disseminated infection (Ref. 4 at p. 3192).

NTM infections appear to be increasing in the United States (see, e.g., Refs. 88 and 89). A recently published study of Medicare patients showed an increasing prevalence of pulmonary NTM across all regions in the United States (Ref. 89 at p. 882). The authors concluded that the annual prevalence significantly increased from 1997 to 2007 from 20 to 47 cases per 100,000 persons, respectively, or an 8.2 percent per year increase in prevalence among the Medicare population. Similarly, a population-based study in Ontario, Canada suggests an increase in the frequency of NTM infections from 9.1 per 100,000 persons in 1997 to 14.1 per 100,000 persons in 2003, resulting in an average annual increase of 8.4 percent (Ref. 90).

Antibacterial drug resistance in these organisms is “the result of a highly complex interplay between natural resistance, inducible resistance and mutational resistance acquired during suboptimal drug exposure and selection,” (Ref. 91 at p. 150). Treatment for NTM lung infections requires long courses of therapy, often 18 to 24 months or longer (Ref. 92 at p. 123). Because NTM is resistant to many antibacterial drugs currently available, infections caused by NTM can be difficult to treat. While there are no data from NTM isolates that indicate increasing antibacterial drug resistance, the incidence of NTM infections with intrinsic antibacterial resistance is increasing (Ref. 91). This observation raises concerns that resistant NTM may be responsible for a disproportionate share of clinical infection.

For the reasons stated previously, FDA believes that non-tuberculous mycobacteria species has the potential to pose a serious threat to public health and, FDA is proposing to include non-tuberculous mycobacteria species on the list of qualifying pathogens.

Species of the Pseudomonas genus are gram-negative bacteria that can cause serious infections (Ref. 4 at p. 3025). This is particularly true of P. aeruginosa, which “accounted for 18.1% of hospital-acquired pneumonias and a significant percentage of urinary tract infections (16.3%), surgical site infections (9.5%), and bloodstream infections (3.4%)” in the United States. ICUs in 2003 (Ref. 4 at p. 2837 (citing Ref. 151)). P. aeruginosa is “among the top five causes of nosocomial bacteremia, and severe infection can lead to sepsis” (Ref. 4 at p. 2847). It can grow in many environments (e.g., soil, water, and plants) (Ref. 4 at p. 2835) including moist hospital environments (e.g., showers, ventilators, mop water), and some healthy people have P. aeruginosa as a colonizing bacterium in their skin, throat, nose, or stool (Ref. 4 at p. 2836). P. aeruginosa is among the so-called “ESKAPE” pathogens, which “currently cause the majority of US hospital infections and effectively 'escape' the effects of antibacterial drugs.” (Refs. 5 and 6). P. aeruginosa pulmonary infection among patients with CF is associated with a more rapid decline in lung function (Ref. 18 (internal citation omitted)).

“P. aeruginosa now carries multiple genetically-based resistance determinants, which may act independently or in concert with others” (Ref. 4 at p. 2856 (citing Ref. 152)). Furthermore, P. aeruginosa is known for its ability to “acquire” resistance mechanisms (see, e.g., Ref. 9). P. aeruginosa has been noted to develop resistance during antibacterial drug therapy even when the results of in vitro susceptibility show that the bacterium is fully susceptible when initially exposed to the antibacterial drug. (see, e.g., Ref. 93 (internal citations omitted); see also, e.g., Ref. 4 at p. 2855 (noting that in patients with P. aeruginosa endocarditis there is a “likelihood of the patient's becoming resistant to therapy even if there is initially bloodstream sterilization”)). Resistant P. aeruginosa strains may be transmitted from person to person, or via contamination in the environment (see, e.g., Ref. 94). In a recent report from CDC's NHSN, approximately 8 percent of all healthcare-associated infections were caused by P. aeruginosa; among the 6,111 P. aeruginosa infections that were reported, approximately 25 percent were resistant to carbapenems and approximately 15 percent showed resistance in at least 3 different classes of antibacterial drugs (i.e., “multi-drug resistant”) (Ref. 132 at Table 7).

Morbidity and mortality rates for P. aeruginosa infection are generally recognized as being high (see, e.g., Ref. 93 (internal citations omitted)), and infection with drug-resistant strains may have a negative effect on clinical outcomes, including an association with higher mortality (Ref. 93). Pneumonia and bloodstream infections due to drug-resistant P. aeruginosa have been associated with higher mortality rates in comparison to the same infections due to drug-susceptible P. aeruginosa (Ref. 10 at pp. 32-33, Tables 2 and 3). Although Pseudomonas non-aeruginosa infections are rare, pathogenic members of the Pseudomonas genus can cause serious infections and can show resistance to multiple antibacterial drugs (Ref. 95).

For the reasons described previously—including the prevalence of Pseudomonas infections (particularly P. aeruginosa), the associated high morbidity and mortality rates, the increasing antibacterial drug resistance, and the fact that the last-line antibacterial drug treatments (required to treat Pseudomonas infections because of its resistance to multiple classes of antibacterial drugs) often have different or more serious adverse effects—FDA believes that Pseudomonas has the potential to pose a serious threat to public health, and FDA is proposing to include Pseudomonas species in its list of qualifying pathogens.

Staphylococcus aureus is a gram-positive bacterium that causes a variety of serious infectious diseases (Ref. 4 at p. 2543). S. aureus infections commonly result in skin or soft tissue infections (see, e.g., Ref. 4 at pp. 2543, 2559), and may result in more life-threatening infections (e.g., pneumonia, bloodstream), often due to infection via catheters, ventilators, or other medical devices or procedures (Ref. 96). S. aureus is one of the most common bacterial pathogens in hospital-acquired infections, and resistance rates for S. aureus have been increasing (see, e.g., Refs. 3 and 97). In addition, in the first decade of the 21st century, resistant strains of S. aureus (e.g., methicillin-resistant S. aureus or MRSA) that emerged in the community and in some hospitals are now responsible for the majority of S. aureus infections among outpatients (Ref. 98). In the United States in 2005, the rate of invasive MRSA infections was approximately 31.8 infections per 100,000 people (Ref. 99). S. aureus is also a member of the so-called “ESKAPE” pathogens, which “currently cause the majority of U.S. hospital infections and effectively ‘escape’ the effects of antibacterial drugs.” (Refs. 5 and 6). Reports of rapid increases in the proportion of patients hospitalized due to infections caused by MRSA were largely due to increases in skin and soft tissue infections caused by MRSA acquired in the community setting (Ref. 145). The national burden of disease due to MRSA on an outpatient basis is substantial in the United States, with an estimated 51,290 infections reported in 2010 (Ref. 146).

“S. aureus has developed resistance to virtually all antibiotic classes available for clinical use,” as demonstrated by a combination of in vivo and in vitro data (Ref. 4 at p. 2558). In fact, numerous antibacterial resistance mechanisms have been documented in S. aureus, including the transmission of resistance that can occur via plasmids shared between bacteria, or even transfer of resistance mechanisms from different genera of bacteria (see Ref. 100).

Patients with drug-resistant S. aureus infections appear to have higher mortality when compared to patients with drug-susceptible S. aureus infection (Ref. 10, Table 3 (showing a case fatality rate for patients with susceptible S. aureus bloodstream infections of 74/284 (26 percent) and a case fatality rate for patients with resistant S. aureus bloodstream infections of 65/171 (38 percent)). Although infections caused by vancomycin-resistant S. aureus (VRSA) have been very rare (see, e.g., Ref. 101), the fact that VRSA has been observed at all underscores that antibacterial drug use can exert selective pressures on S. aureus, effectively creating antibacterial drug resistance. When patients have infection with drug-resistant S. aureus, the limited options for therapy may result in concerns about the feasibility of certain therapies (e.g., some treatments involve intravenous administration, which might require hospital admission) or different adverse effect profiles that may negatively affect patients' lives (Ref. 102). It is clear, then, that drug-resistant S. aureus poses an increasingly serious threat to public health.

Therefore, for the reasons described previously, FDA believes that S. aureus has the potential to pose a serious threat to public health, and FDA is proposing to include S. aureus in its list of qualifying pathogens.

Infections caused by S. agalactiae (Group B streptococcus or GBS) are considered a major public health concern, particularly because the organism causes meningitis and sepsis in newborns due to transmission from the mother during labor and delivery (see generally, Refs. 103, 104, and 105). Maternal intrapartum antibacterial prophylaxis is recommended for pregnant women colonized with GBS, and resistance to antibacterial drugs commonly prescribed for prophylaxis is increasing (Ref. 103), thus having the potential to limit options for prophylaxis in this population. The most common diseases caused by GBS in adults are bloodstream infections, pneumonia, endocarditis, skin and soft-tissue infections, and bone and joint infections (see generally, Ref. 4 at pp. 2655-2661; Ref. 104). GBS infections can also result in other public health concerns, such as miscarriages, stillbirths, and preterm deliveries (Ref. 105).

Over the past two decades, the incidence rates of GBS have increased twofold to fourfold in nonpregnant adults, “most of whom have underlying medical conditions or are 65 years of age or older,” (Ref. 4 at p. 2655). The rate of invasive disease is approximately 7 per 100,000 nonpregnant adults, with the highest rate in adults aged 65 years and older at 20-25 per 100,000 persons (Ref. 106). Case-fatality rates range from 5 to 25 percent in nonpregnant adults (Ref. 4 at p. 2659).

Resistance to antibacterial drugs has emerged in GBS, with most mechanisms believed to be an inducible chromosomally-mediated resistance that can occur due to selective pressures of antibacterial drugs (Ref. 103). Recent epidemiological surveillance shows that resistance to beta-lactam antibacterial drugs, the mainstay of treatment and prevention of GBS infections, has not been identified in the United States (Ref. 107). However, there is the potential in GBS of chromosomally-mediated mechanisms conferring decreased susceptibility to beta-lactam antibacterial drugs (Ref. 108). In addition, the potential for the spread of beta-lactamases via plasmid or other genetic transfer mechanisms (see Ref. 109) to GBS will continue to be a grave concern for public health, given the pivotal role of beta-lactam antibacterial drugs for treatment and prevention of GBS infections.

CDC and researchers from other countries have described patterns of reduced susceptibility and resistance of GBS strains to common antibacterial drugs, including penicillin, macrolides, and clindamycin (see, e.g., Refs. 110 and 111). Because GBS is a common infectious disease and resistance to antibacterial drugs has been observed, it stands to reason that resistance may increase in the future.

For the foregoing reasons, FDA believes that S. agalactiae has the potential to pose a serious threat to public health, and FDA is proposing to include S. agalactiae in the list of qualifying pathogens.

S. pneumoniae is a gram-positive bacterium that causes bacterial meningitis, bacteremia, respiratory tract infections including pneumonia, and otitis media (see, e.g., Refs. 112 and 113). S. pneumoniae can colonize the nasopharynx region, and transmission from person to person, via close contact by respiratory droplets, is thought to be common (Ref. 112). Although not all persons with S. pneumoniae colonization go on to develop invasive disease, colonization is a risk factor for disease.

Outbreaks of invasive pneumococcal disease are known to occur in closed populations, such as nursing homes, childcare institutions, prisons, or other institutions (Ref. 112). Invasive disease from S. pneumoniae is a major cause of illness and death in the United States, with an estimated 43,500 cases and 5,000 deaths in 2009 (Ref. 114). In the United States, among elderly adults hospitalized with invasive pneumonia, the mortality rate is approximately 14 percent (Ref. 115). Resistance to commonly used antibacterial drugs for treatment of S. pneumoniae has been observed: Surveillance studies conducted in the United States between 1994 and 2007 showed that 9 to 24 percent of pneumococci were resistant to at least 3 classes of antibiotics (Ref. 113).

High rates of antibacterial drug resistance in S. pneumoniae have been documented worldwide. For example, S. pneumoniae resistance to commonly-used antibacterial drugs has been established for several decades, with incidence of resistance to penicillin in the United States approaching 40 percent in the late 1990s (Ref. 116). In China, approximately 96 percent of all recent S. pneumoniae isolates were resistant to erythromycin, and multidrug resistance was prevalent in many Asian countries (Ref. 117). In certain European countries, the proportion of isolates with resistance to multiple antibacterial drugs increased from 2006 to 2009 (e.g., in Bulgaria, resistance to penicillin increased from approximately 7 percent of isolates in 2006 to approximately 37 percent of isolates in 2009) (Ref. 118 at pp. 20, 23). In the United States, some children with middle ear infection had strains of S. pneumoniae that were resistant to all antibacterial drugs that have an FDA-approved label for treatment of acute bacterial otitis media in children (Ref. 147). Development of resistance by S. pneumoniae strains to macrolide antibacterial drugs and the closely-related azolide drugs, which has been increasing in incidence, can be due to efflux-mediated mechanisms or target modifications caused by a ribosomal methylase (Ref. 148). It is speculated that increased use of macrolide antibacterial drugs may have exerted pressures in which resistance mechanisms spontaneously occurred (Ref. 148).

For the reasons described previously, including that current strains of pneumococcal disease are associated with increased resistance to commonly used antibacterial drugs, FDA believes that S. pneumoniae has the potential to pose a serious threat to public health, and FDA is proposing to include S. pneumoniae in the list of qualifying pathogens.

S. pyogenes (group A streptococcus or GAS) is a gram-positive bacterium that causes acute pharyngitis, in addition to other serious infectious diseases, such as necrotizing fasciitis and toxic shock syndrome (see generally, Ref. 4 at pp. 2593-2596). GAS is likely transmitted from person to person via respiratory droplets. Close personal contact, such as in schools, appears to favor spread of the organism (Ref. 4 at p. 2595).

A study published in 2003 found that approximately 1.8 million people in the United States are diagnosed with streptococcal pharyngitis annually (Refs. 119 and 120). Although streptococcal pharyngitis is typically a mild disease, in rare cases, it can result in severe post-infectious complications (see generally, Ref. 121). Though the annual incidence of invasive GAS disease is estimated to be approximately 4.3 per 100,000 persons per year, the rate of mortality associated with invasive GAS infections is high, with an estimate of 0.5 per 100,000 persons per year (Ref. 122). This means that in the United States, each year over 13,000 people are estimated to acquire an invasive GAS infection annually, and over 1,500 people are estimated to die from an invasive GAS infection (Ref. 122).

For over 80 years, GAS isolates have remained susceptible to penicillin, though reports of resistance to other antibacterial drugs have emerged in GAS, primarily by chromosomally mediated mechanisms (see generally, Refs. 123 and 124). However, recently identified genes in GAS encode for several penicillin-binding proteins, but a reason for why these genes are not expressed has yet to be determined (Ref. 123). In addition, there is an ongoing concern that transfer of antibacterial resistance to GAS by plasmid or other genetic transfer might occur at some point in the future (Ref. 109). Indeed, microbiology laboratories are encouraged to continue to perform in vitro susceptibility testing on all GAS isolates in order to monitor for the possibility of resistance (Ref. 123). Thus, given the pivotal role of the beta-lactam antibiotic penicillin in the treatment of GAS, any resistance that would occur in the future would be of great concern for public health. Antibacterial resistance in S. pyogenes to commonly used drugs has been reported in many countries, including the United States (Ref. 4 at p. 2599). Resistance to macrolide antibiotics and the closely related azolide group is common and poses a threat because these drugs are often used in penicillin-allergic patients (see Ref. 157). Resistance to clindamycin, a drug used for treatment of patients with necrotizing fasciitis, has also emerged (see Ref. 157).

For the reasons described previously, including the high morbidity and mortality associated with invasive infections, the frequency of less severe infections, the existing resistance to some commonly used agents and the possibility for an increase in resistant strains, GAS infections have the potential to pose a serious threat to public health and, FDA is proposing to include S. pyogenes in the list of qualifying pathogens.

Vibrio cholerae is a gram-negative bacterium (Ref. 4 at p. 2777) that can cause cholera, an acute diarrheal illness that can lead to severe dehydration (Ref. 125). Although cholera is found mainly in developing countries with poor sanitation and unsafe water supplies, in the United States, disease may occur in travelers returning from such countries or, more rarely, in those who have eaten contaminated food (see, e.g., Refs. 125 and 126). V. cholerae has the potential to cause pandemics and “the ability to remain endemic in all affected areas” (Ref. 4 at p. 2778 (internal citation omitted)), possibly due to the fact that infected people may shed the bacteria for several months after infection (Ref. 4 at p. 2779).

Antibacterial drug resistance in cholera-causing strains of V. cholerae has increased between 1990 and 2000 in U.S. patients with both domestically- and internationally-acquired infections (Ref. 126), and antibacterial drug resistance in V. cholerae is still increasing generally (Refs. 126, 127, 128, and 129). “Antimicrobial drug resistance in Vibrio [species] can develop through mutation or through acquisition of resistance genes on mobile genetic elements, such as plasmids, transposons, integrons, and integrating conjugative elements,” or ICEs (Ref. 127). ICEs in particular “commonly carry several antimicrobial drug resistance genes and play a major role in the spread of antimicrobial drug resistance in V. cholerae” (Ref. 127 at p. 2151; Ref. 130).

Cholera-causing strains of V. cholerae may not cause disease in all people (Ref. 131). However, an estimated 10 percent of those infected with the O1 serogroup will develop a severe enough form of the illness that they need treatment (Ref. 131). Rehydration therapy is the most critical component of cholera treatment (see, e.g., Ref. 140). Approximately 25 to 50 percent of untreated cholera cases may prove fatal (Ref. 125). Antibiotic therapy is recommended for severely ill patients. It stands to reason that the risk of mortality in particular is likely to increase for drug-resistant V. cholerae infections among patients with limited treatment options.

For the reasons described previously, including the epidemic potential of toxigenic V. cholerae strains, as well as the ease with which this pathogen may be transmitted, this bacterium has the potential to pose a serious threat to public health, and, FDA is proposing to include V. cholerae in the list of qualifying pathogens.

The Agency has determined under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

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

The Regulatory Flexibility Act requires agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the proposed rule would not impose direct costs on any entity, regardless of size, but rather would clarify certain types of pathogens for which the development of approved treatments might result in the awarding of QIDP designation and exclusivity to sponsoring firms, FDA proposes to certify that the final rule would not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $139 million, using the most current (2011) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this proposed rule to result in any 1-year expenditure that would meet or exceed this amount.

Antibacterial research and development has reportedly declined in recent years. A decrease in the number of new antibacterial products reaching the market in recent years has led to concerns that the current drug pipeline for antibacterial drugs may not be adequate to address the growing public health needs arising from the increase in antibiotic resistance. A number of reasons have been cited as barriers to robust antibacterial drug development including smaller profits for short-course administration of antibacterial drugs compared with long-term use drugs to treat chronic illnesses, challenges in conducting informative clinical trials demonstrating efficacy in treating bacterial infections, and growing pressure to develop appropriate limits on antibacterial drug use.

One mechanism that has been used to encourage the development of new drugs is exclusivity provisions which provide for a defined period during which an approved drug is protected from submission or approval of certain potential competitor applications. By securing additional guaranteed periods of exclusive marketing, during which a drug sponsor would be expected to benefit from associated higher profits, drugs that might not otherwise be developed due to unfavorable economic factors may become commercially attractive to drug developers.

In recognition of the need to stimulate investments in new antibiotic drugs, Congress enacted the GAIN title of FDASIA to create an incentive system. The primary framework for encouraging antibiotic development became effective on July 9, 2012, through a self-implementing provision that authorizes FDA to designate human antibiotic or antifungal drugs that treat “serious or life-threatening infections” as QIDPs. With certain limitations set forth in the statute, a sponsor of an application for an antibiotic or antifungal drug that receives a QIDP designation gains an additional 5 years of exclusivity to be added to certain exclusivity periods for that product. Drugs that receive a QIDP designation are also eligible for designation as a fast-track product and an application for such a drug is eligible for priority review.

Between July 9, 2012, when the GAIN title of FDASIA went into effect, and January 31, 2013, FDA granted 11 QIDP designations. As explained previously, the statutory provision that authorizes FDA to designate certain drugs as QIDPs is self-implementing, and inclusion of a pathogen on the list of “qualifying pathogens” does not determine whether a drug proposed to treat an infection caused by that pathogen will be given QIDP designation. However, section 505E(f) of the FD&C Act, added by the GAIN title of FDASIA, requires that FDA establish a list of “qualifying pathogens.” This proposed rule is intended to satisfy that obligation, as well as the statute's directive to make public the methodology for developing such a list of “qualifying pathogens.” The proposed rule identifies 18 “qualifying pathogens,” including those provided as examples in the statute, which FDA has concluded have “the potential to pose a serious threat to public health” and proposes to include on the list of “qualifying pathogens.”

As previously stated, this proposed rule would not change the criteria or process for awarding QIDP designation, or for awarding extensions of exclusivity periods. That is, the development of a treatment for an infection caused by a pathogen included in the list of “qualifying pathogens” is neither a necessary nor a sufficient condition for obtaining QIDP designation, and, as stated in section 505E(c) of the FD&C Act, not all applications for a QIDP are eligible for an extension of exclusivity. Relative to the baseline in which the exclusivity program under GAIN is in effect, we anticipate that the incremental effect of this rule would be negligible.

To the extent that this rule causes research and development to shift toward treatments for infections caused by pathogens on the list and away from treatments for infections caused by other pathogens, the opportunity costs of this rule would include the forgone net benefits of products that treat or prevent pathogens not included in the list, while recipients of products to treat infections caused by pathogens on the list would receive benefits in the form of reduced morbidity and premature mortality. Sponsoring firms would experience both the cost of product development and the economic benefit of an extension of exclusivity and of potentially accelerating the drug development and review process with fast-track status and priority review. If this rule induces greater interest in seeking QIDP designation than would otherwise occur, FDA would also incur additional costs of reviewing applications for newly-developed antibacterial or antifungal drug products under a more expedited schedule.

Given that the methodology for including a pathogen in the list of “qualifying pathogens” was developed with broad input, including input from industry stakeholders and the scientific and medical community involved in anti-infective research, we expect that the pathogens listed in this proposed rule reflect not only current thinking regarding the types of pathogens which have the potential to pose serious threat to the public health, but also current thinking regarding the types of pathogens that cause infections for which treatments might be eligible for QIDP designation. To the extent that there is overlap between drugs designated as QIDPs and drugs developed to treat serious or life-threatening infections caused by pathogens listed in this proposed rule, this proposed rule would have a minimal impact in terms of influencing the volume or composition of applications seeking QIDP designation, compared to what would otherwise occur in the absence of this rule.

FDA concludes that this proposed rule does not contain a “collection of information” that is subject to review by the Office of Management and Budget under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520). This proposed rule interprets some of the terms used in section 505E of the FD&C Act and proposes “qualifying pathogen” candidates. Inclusion of a pathogen on the list of “qualifying pathogens” does not confer any information collection requirement upon any party, particularly because inclusion of a pathogen on the list of “qualifying pathogens,” and the QIDP designation process, are distinct processes with differing standards.

The QIDP designation process will be addressed separately by the Agency at a later date. Accordingly, the Agency will analyze any collection of information or additional PRA-related burdens associated with the QIDP designation process separately.

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

Interested persons may submit either electronic comments regarding this document to http://www.regulations.gov or written comments to the Division of Dockets Management (see ADDRESSES). It is only necessary to send one set of comments. Identify comments with the docket number found in brackets in the heading of this document. Received comments may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

The following references have been placed on display in the Division of Dockets Management (see ADDRESSES) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday, and are available electronically at http://www.regulations.gov. (FDA has verified the Web site addresses in this reference section, but we are not responsible for any subsequent changes to Web sites after this document publishes in the Federal Register.)

Therefore, under the Federal Food, Drug, and Cosmetic Act, and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 317 is proposed to be added to read as follows:

The Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the Medical Device Amendments of 1976 (the 1976 amendments) (Pub. L. 94-295), the Safe Medical Devices Act of 1990 (Pub. L. 101-629), the Food and Drug Administration Modernization Act of 1997 (FDAMA) (Pub. L. 105-115), the Medical Device User Fee and Modernization Act of 2002 (Pub. L. 107-250), the Medical Devices Technical Corrections Act (Pub. L. 108-214), the Food and Drug Administration Amendments Act of 2007 (Pub. L. 110-85), and the Food and Drug Administration Safety and Innovation Act (FDASIA) (Pub. L. 112-144), among other amendments, established a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the FD&C Act (21 U.S.C. 360c) established three categories (classes) of devices, reflecting the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three categories of devices are class I (general controls), class II (special controls), and class III (premarket approval).

Under section 513(d) of the FD&C Act, devices that were in commercial distribution before the enactment of the 1976 amendments, May 28, 1976 (generally referred to as preamendments devices), are classified after FDA has: (1) Received a recommendation from a device classification panel (an FDA advisory committee); (2) published the panel's recommendation for comment, along with a proposed regulation classifying the device; and (3) published a final regulation classifying the device. FDA has classified most preamendments devices under these procedures.

A preamendments device that has been classified into class III may be marketed by means of premarket notification procedures (510(k) process) without submission of a premarket approval application (PMA) until FDA issues a final regulation under section 515(b) of the FD&C Act (21 U.S.C. 360e(b)) requiring premarket approval.

Devices that were not in commercial distribution prior to May 28, 1976, (generally referred to as postamendments devices) are automatically classified by section 513(f) of the FD&C Act into class III without any FDA rulemaking process. Those devices remain in class III and require premarket approval unless, and until, the device is reclassified into class I or II or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a predicate device that does not require premarket approval. The Agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807).

The Safe Medical Devices Act of 1990 (Pub. L. 101-629) changed the definition of class II devices from those for which a performance standard is necessary to provide reasonable assurance of safety and effectiveness to those for which there is sufficient information to establish special controls to provide such assurance. Special controls include performance standards.

On July 9, 2012, FDASIA was enacted. Section 608(a) of FDASIA (126 Stat. 1056) amended the device reclassification procedures under section 513(e) of the FD&C Act, changing the process from rulemaking to an administrative order. Prior to the issuance of a final order reclassifying a device, the following must occur: (1) Publication of a proposed order in the Federal Register; (2) a meeting of a device classification panel described in section 513(b) of the FD&C Act; and (3) consideration of comments to a public docket. The proposed reclassification order must set forth the proposed reclassification and a substantive summary of the valid scientific evidence concerning the proposed reclassification, including the public health benefits of the use of the device, and the nature and incidence (if known) of the risk of the device. (See section 513(e)(1)(A)(i) of the FD&C Act.) As required by section 513(b) of the FD&C Act, FDA intends to schedule a panel meeting to discuss the proposed reclassification prior to issuing a final order.

Section 513(e) of the FD&C Act provides that FDA may, by administrative order, reclassify a device based upon “new information.” FDA can initiate a reclassification under section 513(e) or an interested person may petition FDA. The term “new information,” as used in section 513(e) of the FD&C Act, includes information developed as a result of a reevaluation of the data before the Agency when the device was originally classified, as well as information not presented, not available, or not developed at that time. (See, e.g., Holland-Rantos Co. v. United States Dep't of Health, Educ., & Welfare, 587 F.2d 1173, 1174 n.1 (D.C. Cir. 1978); Upjohn v. Finch, 422 F.2d 944 (6th Cir. 1970); Bell v. Goddard, 366 F.2d 177 (7th Cir. 1966).)

Reevaluation of the data previously before the Agency is an appropriate basis for subsequent action where the reevaluation is made in light of newly available authority (see Bell, 366 F.2d at 181; Ethicon, Inc. v. FDA, 762 F.Supp. 382, 388-391 (D.D.C. 1991)), or in light of changes in “medical science” (Upjohn v. Finch, 422 F.2d at 951). Whether data before the Agency are old or new data, the “new information” to support reclassification under section 513(e) must be “valid scientific evidence,” as defined in section 513(a)(3) of the FD&C Act and § 860.7(c)(2) (21 CFR 860.7(c)(2)). (See, e.g., General Medical Co. v. FDA, 770 F.2d 214 (D.C. Cir. 1985); Contact Lens Association v. FDA, 766 F.2d 592 (D.C. Cir. 1985), cert. denied, 474 U.S. 1062 (1985).)

FDA relies upon “valid scientific evidence” in the classification process to determine the level of regulation for devices. To be considered in the reclassification process, the valid scientific evidence upon which the Agency relies must be publicly available. Publicly available information excludes trade secret and/or confidential commercial information, e.g., the contents of a pending PMA. (See section 520(c) of the FD&C Act (21 U.S.C. 360j(c)).) Section 520(h)(4) of the FD&C Act, added by FDAMA, provides that FDA may use, for reclassification of a device, certain information in a PMA 6 years after the application has been approved. This can include information from clinical and preclinical tests or studies that demonstrate the safety or effectiveness of the device but does not include descriptions of methods of manufacture or product composition and other trade secrets.

FDAMA added section 510(m) to the FD&C Act (21 U.S.C. 360(m)). Section 510(m) of the FD&C Act provides that a class II device may be exempted from the premarket notification requirements under section 510(k) of the FD&C Act, if the Agency determines that premarket notification is not necessary to assure the safety and effectiveness of the device.

On August 28, 1979 (44 FR 50497), FDA published a document proposing to classify stair-climbing wheelchair devices as class III requiring premarket approval. The Physical Medicine Device Classification Panel (Panel) recommended class III because the Panel believed that satisfactory performance of this device had not been demonstrated and, therefore, that it was not possible to establish an adequate performance standard for the device. The Panel said the design of the device was experimental and data to support its safe and effective use was not available. The Panel said the device should, therefore, be subject to premarket approval to assure that manufacturers demonstrate satisfactory performance of the device and thus assure its safety and effectiveness. No comments were received on the proposed rule. On November 23, 1983 (48 FR 53032), FDA published a document classifying stair-climbing wheelchairs as class III devices. On May 11, 1987 (52 FR 17732 at 17741), FDA published a document amending the codified language for stair-climbing wheelchairs to clarify that no effective date had been established for the requirement for premarket approval.

On August 18, 1998 (63 FR 44177), FDA published a document proposing to require the filing of a PMA or a notice of competition of a product development protocol (PDP) for stair-climbing wheelchair devices under section 515(b) of the FD&C Act. FDA received no comments on the document but received one citizen petition requesting a change in the classification of the stair-climbing wheelchair from class III to class II. FDA reviewed the petition and determined that there was not sufficient information to establish special controls to reasonably assure the safety and effectiveness of the device. FDA informed the petitioner in a letter dated May 10, 1999, that if additional information was submitted under section 513(e) of the FD&C Act within 30 days to support the reclassification of the device, FDA would review the information. FDA also stated that if the petitioner did not submit additional information within 30 days to show that sufficient information was available to establish special controls to reasonably assure the safety and effectiveness of the device, FDA would deem the reclassification petition withdrawn. FDA did not receive any new information from the petitioner and deemed the reclassification petition withdrawn. On April 13, 2000 (65 FR 19833), FDA published a document that retained in class III stair-climbing wheelchair devices and that required the filing of PMAs or PDPs on or before July 12, 2000.

On November 20, 2012, a reclassification petition was filed with FDA, requesting FDA to reclassify stair-climbing wheelchairs from class III to class II. In accordance with section 513(e) of the FD&C Act and § 860.130(b)(3), based on new information regarding the device, FDA is now proposing to reclassify the stair-climbing wheelchair device from class III to class II.

A stair-climbing wheelchair is a device with wheels that is intended for medical purposes to provide mobility to persons restricted to a sitting position and is intended to climb stairs while the patient remains in the chair. Characteristics of the device enabling this capability may include two endless belt tracks that adjust to the angle of the stairs. This may also include a balancing mechanism to steady the chair as it ascends/descends the staircase.

FDA is proposing in this order to slightly modify the identification language from how it is presently written in § 890.3890(a) (21 CFR 890.3890(a)) for a more accurate description of devices in this classification.

FDA is proposing that stair-climbing wheelchairs be reclassified from class III to class II. In this proposed order, the Agency has identified special controls under section 513(a)(1)(B) of the FD&C Act that, together with general controls (including prescription use restrictions) applicable to the devices, would provide reasonable assurance of their safety and effectiveness. FDA believes that the identified special controls in this proposed order, if finalized, together with general controls applicable to the device, would provide reasonable assurance of safety and effectiveness. Absent the special controls identified in this proposed order, general controls applicable to the device are insufficient to provide reasonable assurance of the safety and effectiveness of the device.

Therefore, in accordance with sections 513(e) of the FD&C Act and § 860.130, based on new information with respect to the devices and taking into account the public health benefit of the use of the device and the nature and known incidence of the risk of the device, FDA is proposing to reclassify this preamendments class III device into class II. FDA believes that this new information is sufficient to demonstrate that the proposed special controls can effectively mitigate the risks to health identified in section V, and that these special controls, together with general controls, will provide a reasonable assurance of safety and effectiveness for stair-climbing wheelchairs.

Section 510(m) of the FD&C Act authorizes the Agency to exempt class II devices from premarket notification (510(k)) submission. FDA has considered stair-climbing wheelchairs in accordance with the reserved criteria set forth in section 513(a) of the FD&C Act and determined that these devices require premarket notification. Therefore, the Agency does not intend to exempt this proposed class II device from premarket notification (section 510(k) of the FD&C Act) submission as provided for under section 510(m) of the FD&C Act.

After considering the information from the reports and recommendations of the Panel for the classification of these devices, along with information in the petition submitted under section 513(e) of the FD&C Act and any additional information that FDA has at its disposal, FDA has identified and evaluated the risks to health associated with the use of stair-climbing wheelchairs. The petition dated October 22, 2012 (Ref. 1), identified risks to health for all stair-climbing wheelchairs; FDA found these risks to be applicable and identified additional risks to health that apply to stair-climbing wheelchair devices:

• Instability: Instability of the device could result in the device tipping over, slipping off an edge (e.g., curb or stair), or sliding down stairs, or use in certain environmental conditions that minimizes frictional coefficient, may result in injury to the user.

• Entrapment: The device may entrap a user or a body part if it moves unintentionally, shifts the user into a position from which they are unable to extricate themselves, or pinches a body part against a solid object.

• Use Error: A stair-climbing wheelchair may be misused if the user is not properly secured within the seat or if the device is used outside of certain environmental conditions or prescribed step dimensions, structural characteristics.

• Falls/Fractures: The device is physically heavy and if the device falls or rolls over a body part of the user or another individual (e.g., caregiver), it can result in serious injury, including fracture.

• Battery/electrical/mechanical failure: The device may fail and place the user in an unsafe position (e.g., middle of a street intersection, on stairs). This may result from failure of device critical device components (electronics, battery, brakes) or the device changing operational modes unexpectedly.

• Pressure sores: Pressure sores or bruising may result from the user experiencing jarring forces when transitioning over different surfaces or from colliding with solid objects.

• Burns: As a result of battery overheating, electrical failure, or ignition of flammable materials, the user may sustain burns.

• Electric shock: The user may experience electric shock as a result of battery or electrical failure.

• Electromagnetic interference: The device may interfere with the operation of other electrical devices or be susceptible to interference from other electrical devices.

If properly manufactured and used, FDA believes that these devices can be utilized to provide mobility over a variety of terrains and obstacles encountered in everyday life, specifically climbing stairs. Many of these environments would not be accessible and many tasks could not be completed without the availability of a stair-climbing wheelchair. FDA believes that stair-climbing wheelchairs should be reclassified from class III to class II because special controls, in addition to general controls, can be established to provide reasonable assurance of the safety and effectiveness of the devices, and because general controls themselves are insufficient to provide reasonable assurance of its safety and effectiveness. In addition, there is now adequate information sufficient to establish special controls to provide such assurance.

FDA believes that the identified special controls, in addition to general controls, are necessary to provide reasonable assurance of safety and effectiveness of these devices. Therefore, in accordance with section 513(e) of the FD&C Act and § 860.130, based on new information with respect to the device, FDA, in response to the petition dated October 22, 2012, and submitted under section 513(e), is proposing to reclassify this preamendments class III device into class II. Since the time of the original panel recommendation and device classification, sufficient evidence has been developed to support a reclassification of stair-climbing wheelchairs from class III to class II with special controls. The petitioner cites the petitioner's own history of use, the petitioner's own preclinical testing, and the development of relevant consensus standards that provide sufficient evidence that stair-climbing wheelchairs can be effective for providing mobility over a variety of terrains and obstacles that are encountered in everyday life. Specifically, the petitioner notes that these devices need to comply with the following consensus standards:

• “American National Standards Institute (ANSI)/Rehabilitative Engineering & Assistive Technology Society (RESNA) American National Standard for Wheelchairs—Volume 1: Requirements and Test Methods for Wheelchairs (including Scooters),” sections 1, 5, 7, 8, 11, 13, 15, 16, 22, and 26. These are consensus standards applicable to both powered and mechanical wheelchairs to ensure proper performance regarding static stability, endurance/fatigue testing, and flammability as well as characterization of measurements and dimensions.

• “ANSI/RESNA American National Standard for Wheelchairs—Volume 2: Additional Requirements for Wheelchairs (including Scooters) with Electrical Systems,” sections 2, 3, 4, 6, 9, 10, 14, and 21. These are consensus standards applicable to powered wheelchairs to ensure proper performance regarding dynamic stability, brake effectiveness, curb climbing ability, electrical safety testing and electromagnetic compatibility testing as well as characterization of speed/acceleration, battery longevity, and environmental testing.

• “International Standards Organization (ISO) 7176 Wheelchairs,” parts 1 to 6, 9 to 11, 13 to 16, and 21. These consensus standards address the same testing and attributes noted in the previously noted volumes of the ANSI/RESNA standards.

FDA believes that this information constitutes sufficient evidence to demonstrate that the proposed special controls can effectively mitigate the risks to health identified in section V of this document, and that these special controls in addition to the general controls will provide a reasonable assurance of safety and effectiveness for stair-climbing wheelchairs.

FDA believes that the following special controls, together with general controls (including applicable prescription-use restrictions), are sufficient to mitigate the risks to health described in section V of this document:

• The design characteristics of the device must ensure that the geometry and material composition are consistent with the intended use.

• Performance testing must demonstrate adequate mechanical performance under simulated use conditions and environments. Performance testing must include the following:

○ Fatigue testing;

○ Endurance testing;

○ Resistance to dynamic loads (impact testing);

○ Effective use of the braking mechanism and how the device stops in case of an electrical brake failure;

○ Demonstration of adequate stability of the device on inclined planes (forward, backward, and lateral);

○ Demonstration of the ability of the device to safely ascend and descend obstacles (e.g., stairs, curb); and

○ Demonstration of ability to effectively use the device during adverse temperatures and following storage in adverse temperatures and humidity conditions.

• The skin-contacting components of the device must be demonstrated to be biocompatible.

• Software design, verification, and validation must demonstrate that the device controls, alarms, and user interfaces function as intended.

• Appropriate analysis and performance testing must be conducted to verify electrical safety and electromagnetic compatibility of the device.

• Performance testing must demonstrate battery safety and evaluate longevity.

• Performance testing must evaluate the flammability of device components.

• Patient labeling must bear all information required for the safe and effective use of the device, specifically including the following:

○ A clear description of the technological features of the device and the principles of how the device works;

○ A clear description of the appropriate use environments/conditions, including prohibited environments;

○ Preventive maintenance recommendations;

○ Operating specifications for proper use of the device such as patient weight limitations, device width, and clearance for maneuverability; and

○ A detailed summary of the device-related adverse events and how to report any complications.

• Clinician labeling must include all the information in the patient labeling noted previously but must also include the following:

○ Identification of patients who can effectively operate the device; and

○ Instructions how to fit, modify, or calibrate the device.

• Usability studies of the device must demonstrate that the device can be used by the patient in the intended use environment with the instructions for use and user training.

Stair-climbing wheelchairs are prescription devices restricted to patient use only upon the authorization of a practitioner licensed by law to administer or use the device. (Proposed § 890.3890(a) (21 CFR 870.3890(a)); see section 520(e) of the FD&C Act and 21 CFR 801.109 (Prescription devices)). Prescription-use requirements are a type of general control authorized under section 520(e) of the FD&C Act and defined as a general control in section 513(a)(1)(A)(i) of the FD&C Act; and under § 807.81, the device would continue to be subject to 510(k) notification requirements.

The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This proposed order refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 812 have been approved under OMB control number 0910-0078; the collections of information in part 807, subpart E, have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 814, subpart B, have been approved under OMB control number 0910-0231; and the collections of information under 21 CFR part 801 have been approved under OMB control number 0910-0485.

The following reference has been placed on display in the Division of Dockets Management (see ADDRESSES) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday, and is available electronically at http://www.regulations.gov.

FDA is proposing that any final order based on this proposed order become effective on the date of its publication in the Federal Register or at a later date if stated in the final order.

Interested persons may submit either electronic comments regarding this document or the associated petition to http://www.regulations.gov or written comments to the Division of Dockets Management (see ADDRESSES). It is only necessary to send one set of comments. Identify comments with the docket number found in brackets in the heading of this document. Received comments may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

Prior to the amendments by FDASIA, section 513(e) provided for FDA to issue regulations to reclassify devices. Although section 513(e) as amended requires FDA to issue final orders rather than regulations, FDASIA also provides for FDA to revoke previously issued regulations by order. FDA will continue to codify classifications and reclassifications in the Code of Federal Regulations (CFR). Changes resulting from final orders will appear in the CFR as changes to codified classification determinations or as newly codified orders. Therefore, under section 513(e)(1)(A)(i), as amended by FDASIA, in this proposed order, we are proposing to revoke the requirements in § 890.3890 related to the classification of stair-climbing wheelchairs as class III devices and to codify the reclassification of stair-climbing wheelchairs into class II.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 890 be amended as follows:

The Native American Housing Assistance and Self-Determination Act of 1996 (25 U.S.C. 4101 et seq.) (NAHASDA) changed the way that housing assistance is provided to Native Americans. NAHASDA eliminated several separate assistance programs and replaced them with a single block grant program, known as the Indian Housing Block Grant (IHBG) program. In addition, title VI of NAHASDA authorizes federal guarantees for financing of certain tribal activities (Title VI Loan Guarantee program). The regulations governing the IHBG and Title VI Loan Guarantee programs are located in part 1000 of HUD's regulations in title 24 of the Code of Federal Regulations. In accordance with section 106 of NAHASDA, HUD developed the regulations with active tribal participation, using the procedures of the Negotiated Rulemaking Act of 1996 (5 U.S.C. 561-570).

Under the IHBG program, HUD makes assistance available to eligible Indian tribes for affordable housing activities. The amount of assistance made available to each Indian tribe is determined using a formula that was developed as part of a prior NAHASDA negotiated rulemaking process. A regulatory description of the allocation formula under the IHBG program is located in Subpart D of 24 CFR part 1000. In general, the amount of funding for a tribe is the sum of the formula's need component and the Formula Current Assisted Stock (FCAS) component, subject to a minimum funding amount authorized under the regulations. Based on the amount of funding appropriated annually for the IHBG program, HUD calculates the annual grant for each Indian tribe, and provides this information to the Indian tribes. An Indian Housing Plan for the Indian tribe is then submitted to HUD. If the Indian Housing Plan is found to be in compliance with statutory and regulatory requirements, the grant is made.

This notice announces the proposed membership of the negotiated rulemaking committee. In making its proposed selections for membership on the negotiated rulemaking committee, HUD's goal was to establish a committee whose membership reflects a balanced representation of Indian tribes. Selections were based on those nominees who met the eligibility criteria for membership contained in the September 18, 2012, Federal Register notice (77 FR 57544). HUD is satisfied that the proposed membership reflects a geographically diverse cross-section of small, medium, and large Indian tribes. In addition to the tribal members of the committee, there will be one or more HUD representatives on the negotiated rulemaking committee. After careful consideration of the public comments received on this proposed list of committee members, HUD will announce the final composition of the negotiated rulemaking committee in a subsequent Federal Register notice.

HUD proposes to make the following (23) selections for tribal membership on the negotiated rulemaking committee:

Persons may submit comments on HUD's establishment of the formula negotiating rulemaking committee and may submit additional nominations for committee membership in accordance with the ADDRESSES section above. Nominations for membership on the Committee must include:

1. The name of your nominee and a description of the interests the nominee would represent;

2. Evidence that your nominee is authorized to represent a tribal government, which may include the tribally designated housing entity of a tribe, with the interests the nominee would represent, so long as the tribe provides evidence that it authorizes such representation;

3. A written commitment that the nominee will actively participate in good faith in the development of the rule; and

4. The reasons that the persons proposed above do not adequately represent the interests of the person submitting the nomination.

At this time, HUD has not finalized the schedule and agenda for the committee meetings. HUD will provide administrative support to the committee. Notice of committee meetings will be published in the Federal Register. Meetings of the negotiated rulemaking committee will be open to the public without advance registration. Public attendance may be limited to the space available. Members of the public will be provided with an opportunity to make statements during the meeting, to the extent that time permits, and to file written statements with the committee for its consideration. In the event that the logistics of the committee meetings are changed, HUD will advise the public through Federal Register notice.

On May 1, 2012, we published a notice in the Federal Register (77 FR 25658) announcing our intent to establish a negotiated rulemaking committee under section 492 of the HEA to develop proposed regulations designed to prevent fraud and otherwise ensure proper use of title IV Federal Student Aid program funds, especially within the context of current technologies. In particular, we announced our intent to propose regulations to address the use of debit cards and other banking mechanisms for disbursing title IV Federal Student Aid program funds, and to improve and streamline the campus-based Federal Student Aid programs. We also announced two public hearings at which interested parties could comment on the topics suggested by the Department and suggest additional topics for consideration for action by the negotiated rulemaking committee. Those hearings were held on May 23, 2012, in Phoenix, Arizona, and on May 31, 2012, in Washington, DC. We invited parties to comment and submit topics for consideration in writing as well.

On April 16, 2013, we published a notice in the Federal Register (78 FR 2247), as corrected at 78 FR 25235, announcing additional topics for consideration for action by the negotiated rulemaking committee. The additional topics for consideration are: cash management of funds provided under the title IV Federal Student Aid programs; State authorization for programs offered through distance education or correspondence education; State authorization for foreign locations of institutions located in a State; clock to credit hour conversion; gainful employment; changes made by the Violence Against Women Reauthorization Act of 2013, Public Law 113-4, to the campus safety and security reporting requirements in the HEA; and the definition of “adverse credit” for borrowers in the Federal Direct PLUS Loan Program. We announced three public hearings at which interested parties could comment on the new topics suggested by the Department and suggest additional topics for consideration for action by the negotiating committee. On May 13, 2013, we announced in the Federal Register (78 FR 27880) the addition of a fourth hearing. The hearings were held on May 21, 2013, in Washington, DC; May 23, 2013, in Minneapolis, Minnesota; May 30, 2013, in San Francisco, California; and June 4, 2013, in Atlanta, Georgia. We also invited parties unable to attend a public hearing to submit written comments on the additional topics and to submit other topics for consideration. Transcripts from all six public hearings will be found once they are available at http://www2.ed.gov/policy/highered/reg/hearulemaking/2012/index.html. Written comments submitted in response to the May 1, 2012, and April 16, 2013, notices may be viewed through the Federal eRulemaking Portal at www.regulations.gov. Instructions for finding comments are available on the site under “How to Use Regulations.gov” in the Help section. Individuals can enter docket ID ED-2012-OPE-0008 in the search box to locate the appropriate docket.

Regulatory Issues: After consideration of the information received at the regional hearings and the submitted written comments, we have decided to establish, at this time, one negotiating committee to prepare proposed regulations for the title IV Federal Student Aid programs establishing standards for programs that prepare students for gainful employment in a recognized occupation.

We intend to select negotiators for the committee who represent the interests significantly affected by the establishment of standards for programs that prepare students for gainful employment in a recognized occupation. In so doing, we will follow the requirement in section 492(b)(1) of the HEA that the individuals selected must have demonstrated expertise or experience in the relevant subject under negotiation. We will also select individual negotiators who reflect the diversity among program participants, in accordance with section 492(b)(1) of the HEA. Our goal is to establish a committee that will allow significantly affected parties to be represented while keeping the committee size manageable.

The committee may create subgroups on particular aspects of this topic that may involve additional individuals who are not members of the committee. Such individuals who are not selected as members of the committee will be able to attend the meetings, have access to the individuals representing their constituencies, and participate in informal working groups on various issues between the meetings. The committee meetings will be open to the public.

Through the publication of future Federal Register notices in the coming months, we intend to establish committees to address other rulemaking issues.

Constituencies: We have identified the following constituencies as having interests that are significantly affected by the topic proposed for negotiations. The Department plans to seat as negotiators individuals from organizations or groups representing these constituencies:

• Students.

• Legal assistance organizations that represent students.

• Consumer advocacy organizations.

• Financial aid administrators at postsecondary institutions.

• State higher education executive officers.

• State attorneys general and other appropriate State officials.

• Business and industry.

• Institutions of higher education eligible to receive Federal assistance under title III, Parts A, B, and F and title V of the HEA, which include Historically Black Colleges and Universities, Hispanic-Serving Institutions, American Indian Tribally Controlled Colleges and Universities, Alaska Native and Native Hawaiian-Serving Institutions, Predominantly Black Institutions, and other institutions with a substantial enrollment of needy students as defined in title III of the HEA.

• Two-year public institutions of higher education.

• Four-year public institutions of higher education.

• Private, non-profit institutions of higher education.

• Private, for-profit institutions of higher education.

• Regional accrediting agencies.

• National accrediting agencies.

• Specialized accrediting agencies.

The goal of the committee is to develop proposed regulations that reflect a final consensus of the committee. Consensus means that there is no dissent by any member of the negotiating committee, including the committee member representing the Department. An individual selected as a negotiator will be expected to represent the interests of his or her organization or group, and participate in the negotiations in a manner consistent with the goal of developing proposed regulations on which the committee will reach consensus. If consensus is reached, all members of the organization or group represented by a negotiator are bound by the consensus and are prohibited from commenting negatively on the resulting proposed regulations. The Department will not consider any such negative comments that are submitted by members of such an organization or group.

Nominations: Nominations should include:

• The name of the nominee, the organization or group the nominee represents, and a description of the interests that the nominee represents.

• Evidence of the nominee's expertise or experience in the subject to be negotiated.

• Evidence of support from individuals or groups within the constituency that the nominee will represent.

• The nominee's commitment that he or she will actively participate in good faith in the development of the proposed regulations.

• The nominee's contact information, including address, phone number, fax number, and email address.

For a better understanding of the negotiated rulemaking process, nominees should review The Negotiated Rulemaking Process for Title IV Regulations, Frequently Asked Questions at http://www.ed.gov/policy/highered/reg/hearulemaking/hea08/neg-reg-faq.html prior to committing to serve as a negotiator.

Nominees will be notified whether or not they have been selected as negotiators as soon as the Department's review process is completed.

Schedule for Negotiations: The committee will meet for two sessions on the following dates:

Session 1: September 9-11, 2013.

Session 2: October 21-23, 2013.

Sessions will run from 9:00 a.m. to 5:00 p.m. on the first two days, and 9:00 a.m. to 12:00 p.m. on the last day.

The meetings will be held at the U.S. Department of Education at: 1990 K Street NW., Eighth Floor Conference Center, Washington, DC 20006.

Electronic Access to This Document: The official version of this document is the document published in the Federal Register. Free Internet access to the official edition of the Federal Register and the Code of Federal Regulations is available via the Federal Digital System at: www.gpo.gov/fdsys. At this site you can view this document, as well as all other documents of the Department published in the Federal Register, in text or Adobe Portable Document Format (PDF). To use PDF you must have Adobe Acrobat Reader, which is available free at the site. You may also access documents of the Department published in the Federal Register by using the article search feature at: www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

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

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

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

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

(iv) The words State or Utah mean the State of Utah, unless the context indicates otherwise.

(v) The initials NSR mean or refer to New Source Review.

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

(vii) The initials UAC mean or refer to the Utah Administrative Code.

1. Submitting CBI. Do not submit this information to EPA through www.regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to 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.

Several revisions to Utah's minor source permitting program were originally submitted to EPA on October 9, 1998. The SIP revisions covered the following three areas of the State's rules: (1) R307-1-1 (Forward and Definitions); (2) R307-1-3 (Control of Installations); and R307-15-6(5) (Permit Content).1 On September 20, 1999, Utah submitted a revision that renumbered the regulatory provisions in the October 9, 1998 submittal. On September 15, 2006, Utah submitted additional revisions to the minor source permitting program and some of the rules were renumbered a second time.

A cross-walk table comparing the provisions from the October 9, 1998, September 20, 1999, and September 15, 2006 submittals is included in the docket for this action. The September 15, 2006 submittal supersedes and replaces the October 9, 1998 submittal in its entirety and partially supersedes and replaces the September 20, 1999 submittal, as outlined in the cross-walk table. As explained below, we approved a subsequent revision of the regulations contained in Definitions Section, and therefore we are not taking action on R307-1-1 in this action. See 73 FR 51222 (September 2, 2008).

Utah's September 15, 2006, submittal covers four groups of rules: (1) Revised R307-101-2 (Definitions), which we previously acted on in 73 FR 51222; (2) added a new section R307-401 (Notice of Intent and Approval Order); 2 (3) added a new section R307-410 (Permits: Emission Impact Analysis); 3 and (4) renumbered rules in State rule section R307-413 (Permit: Exemptions and Special Provisions) to R307-401. The permit exemptions in Utah's October 9, 1998, submittal (R307-1-3.1.7) were renumbered by the State to R307-413 in Utah's September 20, 1999, submittal. In the September 15, 2006 submittal, some of the rules which were renumbered to R307-413 were then renumbered a second time by the State to R307-401. The purpose of the State's SIP actions in the September 15, 2006 submittal was to separate minor source permitting and modeling requirements in Title R307 from major source permitting and modeling requirements in Title R307. The September 15, 2006, submittal supersedes and replaces Utah's October 9, 1998, submittal; thus, by acting on the September 15, 2006, submittal we are also concurrently acting on the October 9, 1998 submittal.

The rules outlined below represent the rules submitted by Utah on September 15, 2006. These rules supersede and replace corresponding citations from Utah's September 20, 1999 and October 9, 1998 submittals (See Table 1—Rulemaking Crosswalk in docket).

In Utah's October 9, 1998 submittal, the State requested the addition of the definitions “Air Quality Related Values” and “Carcinogen” in R307-1-1 (Forward and Definitions) to the SIP. In Utah's September 20, 1999 submittal, R307-1-1 was renumbered to R307-101-2. The September 15, 2006, submittal requested the deletion of two definitions in R307-101-2 (“Air Quality Related Values” and “Significant”. In 73 FR 51222 (September 2, 2008), EPA incorporated by reference UAC R307-101-2 as adopted by the Utah Air Quality Board on February 6, 2008, effective on February 8, 2008. Therefore, our 73 FR 51222 action superseded and replaced R307-1-1, as submitted on October 9, 1998, and R307-101-2, as submitted on September 15, 2006. We approved the 2008 version of the rule into Utah's SIP on September 2, 2008 and incorporated it by reference into the Code of Federal Regulations. See 73 FR 51222.” Thus, in this proposal, we do not need to act on the September 15, 2006 version of R307-101-2. (see Table 1—Rulemaking cross-walk in docket).

We are proposing to approve new rule R307-401-1 (Purpose). This rule explains that the R307-401 rules establish the application and permit requirements for new and modified sources. R307-401-1 states there are additional permitting requirements for larger sources or sources located in nonattainment or maintenance areas. The rule also states the exemptions listed in R307-401 do not affect the applicability of other permitting rules in the SIP.

We are proposing to approve R307-401-2 (Definitions). We are proposing to approve these definitions because they are consistent with applicable federal rules, as described in Table 2—Definitions Cross-walk. Additionally, the definitions have either been renumbered from prior State rules or contain approvable changes to the definition. (see Table 2—Definitions Crosswalk in docket).

We are proposing to approve R307-401-3 (Applicability). This rule outlines: (1) what type of activities are applicable to the requirements in R307-401; (2) other sections in R307 which may establish additional permitting requirements; (3) how exemptions in R307-401 affect applicability of other requirements in R307; and (4) how exemptions in other sections in R307 affect applicability of requirements in R307-401. R307-401-3 (2)(a) and (b) contains specific safeguards that clarify that sources may also have additional permitting requirements in other permitting rules in the SIP. This rule is particularly significant because it clarifies that sources which are exempt in sections R307-401-9 through R307-401-17 cannot circumvent major NSR requirements.

We are proposing to approve R307-401-4 (General Requirements). R307-401-4 applies to all new and modified sources, including sources that are exempt from the requirements to obtain an approval order. This rule requires: (1) control apparatus installed at the source shall be adequately and properly maintained; (2) under certain circumstances, the executive secretary may require an exempted source to submit a notice of intent and obtain an approval order in accordance with R307-401-5 through R307-401-8; and (3) with certain exceptions, fuel combustion devices shall be replaced with low oxide of nitrogen burners. We are proposing to approve R307-401-4(1) and (3) because they comply with 40 CFR 51.160(a) and (b). Additionally, R307-401-4(2) complies with 40 CFR 51.160(b) because it provides a means by which the State or local agency can prevent an otherwise exempted source from violating applicable portions of the control strategy or interfering with attainment or maintenance of the National Ambient Air Quality Standards (NAAQS).

We are proposing to approve R307-401-5 (Notice of Intent). The requirements in R307-401-5 contain a list of information that shall be included with a notice of intent submitted by any person to the State. The rule clarifies that the notice of intent requirements do not apply to R307-401-9 through R307-401-17. The notice of Intent requirements outlined in R307-401-5(1) and (2)(a)-(k) meet the requirements of 40 CFR 51. 160(a), (c) and (e) because (1) the procedures allow the State or a local agency to determine whether the project will result in a violation of applicable portions of the control strategy or interfere with attainment or maintenance of the NAAQS; (2) the procedures provide for the submission to include: information on the nature and amounts of emissions to be emitted; the location, design, construction and operation of the facility, building, structure, or installation necessary for the State or a local agency to make a determination whether the project will result in a violation of applicable portions of the control strategy or interfere with attainment or maintenance of the NAAQS; and (3) the procedures provide that the owner must identify the types and sizes of facilities, buildings, structures, or installations which will be subject to review.

We are proposing to approve R307-401-6 (Review Period). R307-401-6 contains the deadlines and procedures applicable to the State in processing a notice of intent. R307-401-6(2)(b) meets the requirement of 40 CFR 51.160(a) because the rule provides the State or a local agency the opportunity to determine whether the project will result in a violation of applicable portions of the control strategy or interfere with attainment or maintenance of the NAAQS. R307-401-6(2)(b) also meets the requirement of 40 CFR 51. 160(b), because the rule provides a means for the State or a local agency can prevent an exempted source from violating applicable portions of the control strategy or interfering with attainment or maintenance of the NAAQS.

We are proposing to disapprove R307-401-7 (Public Notice). R307-401-7 revised Utah's public notice procedures to allow for a 10-day public comment period for an approval or disapproval order issued under R307-401-8. The rule allows for the public comment period to be increased to 30 days under certain conditions. We note that the public comment period for an approval or disapproval order currently in Utah's federally approved SIP is 30 days. (See R307-1-3.1.3) Federal regulations for Public Availability of Information found at 40 CFR 51.161(b)(2) require at a minimum a 30-day public comment period for the permitting of a source, including minor source permits. In addition, the 30-day comment period is important to allow adequate opportunity for comment by other affected states, federal agencies, and the public.

We are proposing to approve R307-401-8 (Approval Order). This rule describes the conditions that must be met before the State will issue and approval order. R307-401-8 is consistent with the Federal requirements located in 40 CFR 51.160(a) because the rule provides the State or a local agency the opportunity to determine whether the project will result in a violation of applicable portions of the control strategy or interfere with attainment or maintenance of the NAAQS. The rule is also consistent with 40 CFR 51.160(b) because the rule provides a means for the State or a local agency can prevent an otherwise exempted source from violating applicable portions of the control strategy or interfering with attainment or maintenance of the NAAQS. In addition, R307-401-8 lists additional safeguards to clarify that sources may also have additional permitting requirements in other State regulations. R307-401-8(b)(i) and (ii) is particularly significant because they prohibit sources from circumventing major NSR requirements.

We are proposing to partially approve and partially disapprove R307-401-9 (Small Source Exemptions). R307-401-9 creates a de minimis exemption threshold from the requirement to submit a notice of intent and apply for an approval order prior to initiation of construction, modification, or relocation. There currently is no de minimis exemption threshold from notice of intent and approval order requirements approved into the Utah SIP. Section 110(l) of the CAA states that EPA cannot approve a SIP revision that would interfere with any applicable requirement concerning attainment or reasonable further progress (RFP), as defined in section 171 of the CAA, or any other applicable requirement of the CAA. The State submitted a CAA 110(l) demonstration of noninterference (see docket).

R307-401-9 provides that a stationary source is exempt from the requirement to obtain an approval order in R307-401-5 through 8 if the following conditions are met: (1) Actual emissions are less than five tons per year of any criteria pollutant; (2) actual emissions are less than 500 pounds per year of any hazardous air pollutant (HAP) or less than 2000 pounds per year of any combination of HAPs; and (3) actual emissions are less than 500 pounds per year of air contaminant not included above and are less than 2000 pounds per year of any combination of air contaminant not included in above.

We are proposing to approve all of R307-401-9, except for paragraph (b) and the portions of paragraph (c) that reference paragraph (b). We are proposing to disapprove R307-401-9(b) and the phrase “or (b)” in paragraph (c) because EPA lacks authority in an action on a SIP revision under CAA section 110 to approve provisions addressing hazardous air pollutants. Thus we are proposing to disapprove these specific provisions. We are proposing to approve all of R307-401-9, except for paragraph (b) and the portions of paragraph (c) that reference paragraph (b) because:

R307-401-9 contains a safeguard that a source shall no longer be exempt and is required to submit a notice of intent if its actual emissions exceed the thresholds listed in R307-401-9(1)(a). In addition, sources receiving an exemption under R307-401-9 are still subject to the requirements located in: (1) R307-401(2)(a), which prevents exempt sources from circumventing major NSR requirements; (2) R307-401-4, which contains the general permitting requirements; (3) State permitting area source regulations under R307-201 through 207; and (4) R307 section 300 that contains the State permitting nonattainment and maintenance area regulations (see docket, 110(l) demonstration of noninterference). The exemption thresholds and the additional safeguards just described ensure NAAQS protection and thus meet the requirements of CAA 110(a)(2)(C) and 40 CFR 51.160.

EPA's regulations at 40 CFR 51.160 do not require the issuance of a permit for the construction or modification of minor sources, but only that the SIP include a procedure to prevent the construction of a source or modification that would violate the SIP control strategy or interfere with attainment or maintenance of the NAAQS.

EPA recognizes that, under the applicable federal regulations, states have broad discretion to determine the scope of their minor NSR programs as needed to attain and maintain the NAAQS. A state may tailor its minor NSR requirements as long as they are consistent with the requirements of CAA 110(a)(2)(C) and 40 CFR part 51.160—164. States may also provide a rationale for why the rules are at least as stringent as the 40 CFR part 51 requirements where the revisions are different from those in 40 CFR part 51.

The State has shown through their CAA 110(l) demonstration that while sources below the de minimis exemption permit thresholds in R307-401-9 are no longer required to undergo a case-by-case review and receive an approval order, they are still regulated by other rules within R307-401 and underlying statewide area source rules in Title R307.

In addition, the de minimis level permit threshold in R307-401-9, which has been implemented as a state-approved rule since 1996, is comparable to the de minimis level threshold in many of the federally enforceable minor NSR programs in surrounding states such as Idaho, Montana, and North Dakota, and for sources covered by EPA's tribal NSR rule for sources located in Indian Country.

EPA notes that we have approved several similar de minimis exemption provisions in other states as follows:

a. On January 16, 2003, EPA approved a minor NSR program for the State of Idaho (68 FR 2217). This rule allows changes to be considered exempt from permitting if the source's uncontrolled potential emissions are less than ten percent (10%) of the NSR significant emissions rate. For example: 1.5 tons per year for PM10, 4 tons per year for volatile organic compounds (VOCs), nitrogen dioxide (NO2), and sulfur dioxide (SO2), and 10 tons per year for carbon monoxide (CO). EPA determined in this instance that states may exempt from minor NSR certain categories of changes based on de minimis or administrative necessity grounds in accordance with the criteria set out in Alabama Power Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1979). De minimis sources are presumed to not have an impact and the state has determined that their emissions would not prevent or interfere with attainment of the NAAQS, even within nonattainment areas.

b. On February 13, 2012, EPA approved a five tons per year potential emissions level as a de minimis threshold to be exempt from permitting requirements in the State of Montana (77 FR 7531). In this final rulemaking, EPA determined this de minimis threshold met the requirements of CAA section 110(a)(2)(C), 40 CFR part 51.160 and CAA section 110(l).

c. On July 1, 2011, EPA finalized the tribal NSR rule (76 FR 38748). In this rulemaking, EPA established de minimis thresholds at which sources are to be exempt from permitting requirements for each regulated NSR pollutant (see 40 CFR 49.153—Table 1) utilizing an allowable-to-allowable applicability test. EPA stated in this rulemaking that these threshold levels represent a reasonable balance between environmental protection and economic growth (76 FR 38758). EPA further recognized in designing the tribal NSR rule, that the overarching requirement is ensuring NAAQS protection (76 FR 38756) as described in CAA section 110(a)(2)(C). In order to determine that the sources below minor NSR permit thresholds in 40 CFR 49.153—Table 1 would be inconsequential to attainment or maintenance of the NAAQS, EPA performed a national source distribution analysis (see 71 FR 48702). In this analysis, EPA looked at size distribution of existing sources across the country. Using the National Emissions Inventory (NEI), which includes the most comprehensive inventory of existing U.S. stationary point sources that is available, EPA determined how many of these sources fall below the proposed minor NSR thresholds (see 71 FR 48702, Table 2). For each pollutant, EPA found that only around 1 percent (or less) of total emissions would be exempt from review under the minor NSR program. At the same time, the thresholds would promote an effective balance between environmental protection and source burden because anywhere from 42 percent to 76 percent of sources (depending on the pollutant) would be too small to be subject to preconstruction review (76 FR 38758). Utah, which contains areas of Indian country that are subject to the permitting thresholds in the tribal NSR rule, has established generally lower exemption levels than those in the tribal NSR rule. In addition, as EPA explained in the tribal NSR rule, this will “allow us to begin leveling the playing field with the surrounding state programs and will result in a more cost-effective program by reducing the burden on sources and reviewing authorities.” (see 76 FR 38758).

d. On May 27, 2008, EPA approved a 25 tons per year actual emissions level as a de minimis threshold for fossil fuel burning equipment to be exempt from permitting requirements in the State of North Dakota, and a 5 ton per year actual emissions level as a de minimis threshold for any internal combustion engine, or multiple engines to be exempt from permitting requirements (73 FR 30308). EPA determined the revision will not adversely impact the NAAQS or PSD increments (73 FR 30308).

e. On February 1, 2006, EPA approved a 5 tons per year actual emissions level as a de minimis threshold to be exempt from permitting requirements in the State of North Carolina (see 61 FR 3584).

We are proposing to approve R307-401-9 because: (1) R307-401-9 has safeguards which prevent circumvention of NSR requirements; (2) the State's 110(l) demonstration shows sources are still regulated by other rules within R307-401 and underlying statewide area source rules in Title R307; (3) R307-401-9 is similar to the de minimis level threshold in many of the federally enforceable minor NSR programs in surrounding states and around the country; and (4) Utah, which contains areas of Indian country that are subject to the permitting thresholds in the tribal NSR rule, has established generally lower exemption levels than those in the tribal NSR rule.

We are proposing to approve R307-401-10 (Source Category Exemptions). R307-401-10, as submitted on September 20, 1999, was originally titled “Low Oxides of Nitrogen Burner Technology”. In Utah's September 15, 2006 submittal, this was deleted and moved to R307-325; R307-401-10 was then replaced with “Source Category Exemptions” (see Table 1—Rulemaking Crosswalk).

Sources receiving an exemption under R307-401-10 are still subject to the requirements located in: (1) R307-401(2)(a), which prevents exempt sources from circumventing major NSR requirements; (2) R307-401-4, which contains the general permitting requirements; (3) R307-201 through 207, which contains the State permitting area source regulations; and (4) R307 section 300, which contains the State permitting nonattainment and maintenance area regulations (see docket, 110(l) demonstration of noninterference). The exemption thresholds and the additional regulatory safeguards just described ensure NAAQS protection and thus meet the requirements of 110(a)(2)(C) and 40 CFR 51.160.

We are proposing to approve R307-401-11 (Replacement-in-Kind Equipment). This rule applies to existing process equipment or pollution control equipment covered by an existing approval order or SIP requirement. Before equipment may be replaced using the procedures in this rule and in lieu of filing a notice of intent, R307-401-11(2)(a) requires the owner or operator of a stationary source to submit written notification to the executive secretary. This notification contains a description of the replacement-in-kind equipment including the control capability of any control apparatus and demonstrations that the conditions in R307-401-11(1) are met. One of these conditions is R307-401-11(1)(h), which requires the source to demonstrate that the replacement of the control apparatus or process equipment does not violate any provisions of Title R307, including: R307-403 (New and Modified Sources in Nonattainment and Maintenance Areas) and R307-405 (PSD). This is further clarified in R307-401-3(2)(a), which states, “Exemptions contained in R307-401 do not affect applicability or other requirements under R307-403, R307-405 or R307-406.” In addition, R307-401-3 indicates that the rules contained in R307-401 are limited to the State's minor source permitting program and are separate from major source regulations. These rules satisfy the requirements of 40 CFR 51.160(a) because R307-401-11(2)(a) provides the State or a local agency the opportunity to determine whether the project will result in a violation of applicable portions of the control strategy or interfere with attainment or maintenance of the NAAQS and 40 CFR 51.160(b) because R307-401-11(1)(h) provides a means for the State or a local agency can prevent an exempted source from violating applicable portions of the control strategy or interfering with attainment or maintenance of the NAAQS. These provisions provide important safeguards that prevent any increase that could occur as a result of replacement-in-kind from circumventing review under any other provision of the NSR program.

R307-401-11(2)(b) states that public review is not required for the update of an approval order. Since replacement-in-kind under R307-401-11 is exempt from filing a notice of intent under R307-401-5, public notice requirements under R307-401-7 do not apply.

We are proposing to disapprove R307-401-12 (Reduction in Air Contaminants). R307-401-12(1) provides that an owner or operator of a stationary source of air contaminants that reduces or eliminates air contaminants is exempt from the approval order requirements in R307-401-5 through R307-401-8 if the project does not increase the potential to emit of any air contaminant or cause emissions of any new air contaminant. However, the rule states in R307-401-12(1)(b) that the reduction in air contaminants is made enforceable through an approval order in accordance with R307-401-12(2). R307-401-12(2) states that the executive secretary will update the sources approval order or issue a new approval order to include the project and to make the emissions reductions enforceable.

R307-401-12 does not meet the requirements of CAA 110(a)(2)(C) and 40 CFR 51.160(a). 40 CFR 51.160(a) requires that a state or local agency must provide for enforceable procedures that enable it to determine whether a construction or modification project would result in a violation of the control strategy or interfere with attainment or maintenance of the NAAQS. As outlined above, the rules within R307-401-12 require clarification. It is not clear to the source or to the public what projects under R307-401-12 would trigger approval order requirements in R307-401-5 through R307-401-8.

We are proposing to approve R307-401-13 (Plantwide Applicability Limits). R307-401-13 provides that a plantwide applicability limit under R307-405-21 does not exempt a stationary source from the requirements in R307-401. This rule is approvable because it specifies that major PSD sources are not exempt from the requirements of R307-401.

R307-401-14 (Used Oil Fuel Burned for Energy Recovery), R307-401-15 (Air Strippers and Soil Venting Projects) and R307-401-16 (De minimis Emissions From Soil Aeration Projects) were previously proposed for approval (see 77 FR 37859 (June 25, 2012)). Therefore, we do not need to act on these rules in this notice.

We are proposing to approve R307-401-17 (Temporary Relocation). R307-401-17 allows temporary relocation of a stationary source for up to 180 days without submitting the proposal for public comment prior to approval or disapproval. R307-401-17 requires: (1) The executive secretary to “evaluate the expected emissions impact at the site and (evaluate) compliance with applicable Title R307 rules as a basis for determining if approval for temporary relocation may be granted” and (2) the owner to keep records at the site and submit the records to the executive secretary at the end of 180 calendar days, and provide that the records are made available for review. We are proposing to approve this rule because it meets the requirement of 40 CFR 51.160(a) because the rule provides the State or a local agency the opportunity to determine whether the project will result in a violation of applicable portions of the control strategy or interfere with attainment or maintenance of the NAAQS.

We are proposing to approve R307-401-18 (Eighteen Month Review). This rule provides that approval orders issued with the provisions of R307-401 will be reviewed eighteen months after the date of issuance to determine the status of the project. If the project is not proceeding, the approval order may be revoked. This rule is consistent with 40 CFR 51.160(a) because the rule provides the State or a local agency the opportunity to determine whether the project will result in a violation of applicable portions of the control strategy or interfere with attainment or maintenance of the NAAQS.

We are proposing to approve R307-401-19 (Analysis of Alternatives). R307-401-19 requires an owner or operator of a major new source or major modification that is located in a nonattainment or maintenance area or which could impact a nonattainment or maintenance area must, in addition to the requirements in R307-401, submit with the notice of intent an adequate analysis as outlined in this rule. This rule meets the requirements of 40 CFR 51.160(a) and (b) because R307-401-19 provides that an analysis, as described in this provision, must be submitted along with the notice of intent; the source must comply with all requirements in R307-401; the executive secretary shall review the analysis; and the analysis and the executive secretary's comments shall be subject to public comment as required by R307-401-7. This provision provides important safeguards that prevent any increase that could affect maintenance of the NAAQS.

We are proposing to approve R307-401-20 (Relaxation of Limitations). R307-401-20 specifies that the relaxation of limitations provision only applies to a source or modification to be located in a nonattainment or maintenance area. This rule has been previously approved in 71 FR 7679 on February 14, 2006, into R307-401-9. In this rulemaking, we are proposing to approve the renumbering of the rule “Relaxation of Limitations” from R307-401-9 to R307-401-20.

EPA further notes that the comparable federal definition for relaxation of limitations which applies to PSD sources, located in 40 CFR 52.21(r)(4), was incorporated by reference into the Utah SIP on July 15, 2011 (76 FR 41712). This rule is located in the Utah SIP at R307-405-19.

We are proposing to partially approve and partially disapprove R307-401-10 (Permits: Emission Impact Analysis).

We are proposing to approve all of R307-410, except for R307-410-5 (Documentation of Ambient Air Impacts for Hazardous Air Pollutants); we are proposing to disapprove R307-410-5 because EPA lacks authority in an action on a SIP revision under CAA section 110 to approve provisions addressing hazardous air pollutants. Thus we are proposing to disapprove these specific provisions. We are also proposing to partially approve and partially disapprove R307-410-6, as explained below.

These rules (R307-410) establish modeling requirements to determine the impact of emissions from new or modified sources that require an approval order under R307-401. The rules are intended to ensure that the construction or modification project will not interfere with attainment or maintenance of any NAAQS as required by 40 CFR 51.160. These rules also establish the procedures and requirements for evaluating the emissions impact of hazardous air pollutants and procedures for establishing an emissions rate based on good engineering practice stack height as required by 40 CFR 51.118.

The modeling requirements for PSD permitting are incorporated by reference into R307-405; however, they appear in R307-410-3 and R307-410-4 and are not deleted from R307-410 because the same requirements still apply to smaller sources that are not subject to PSD rule requirements of R307-405. The definitions in R307-410 are deleted from R307-410-2 and incorporated by reference from 40 CFR 51.100 into R307-410-2(2). All of the definitions deleted in R307-410 are located in 40 CFR part 51.100(ff) through (kk) and (nn). The definitions of “Vertically Restricted Emissions Release” and “Vertically Unrestricted Emissions Release,” which we approved for deletion from section R307-101-2 in our prior action (73 FR 51222) have not changed; they are simply being renumbered to Rule R307-410-2 because the terms are not used in other rules. The incorporation by reference of the Federal Guidelines on Air Quality Models in R307-410-3 is updated to reflect the most current issue at the time the rules were adopted by the State. For ease of use, the modeling limit for carbon monoxide in R307-410-4, Table 1, is specified instead of referencing another rule.

The R307-410 provisions provide air impact analysis guidelines, which establish legally enforceable procedures enabling state and local agencies to determine whether construction or modification of a facility will violate applicable portions of the control strategy or interfere with attainment or maintenance of the NAAQS, which meets the requirement of 40 CFR 51.160(a).

The R307-410-6 provisions provide that the degree of emission limitation required of any source for control of any air contaminant to include determinations made under R307-401, R307-403 and R307-405, must not be affected by so much of any source's stack height that exceeds good engineering practice or by any other dispersion technique. The rule also outlines who the provisions apply to. While the rule is generally consistent with the requirements in 40 CFR 51.164 (Stack Height Procedures), similar to the disapproval discussed elsewhere in this notice regarding the 10-day public comment period, R307-410-6 is missing the required public notice elements found in 40 CFR 51.164. Specifically, R307-410-6 is missing the requirement that “[s]uch procedures must provide that before a State issues a permit to a source based on a good engineering practice stack height that exceeds the height allowed by § 51.100(ii) (1) or (2), the State must notify the public of the availability of the demonstration study and must provide opportunity for public hearing on it”. Therefore, we are proposing to partially approve and partially disapprove this particular rule since the State rule omits the requirements for the State to notify the public of the availability of documentation of a study where a source exceeds the height allowed and provide an opportunity for public hearing.

In determining whether SIP revisions submitted by the State of Utah on October 15, 2006, are approvable or not approvable, EPA applies the following authorities.

The CAA at section 110(a)(2)(C) requires states to include a minor NSR program in their SIP to regulate modifications and new construction of stationary sources within the area as necessary to assure the NAAQS are achieved. EPA's implementing regulations at 40 CFR 51.160-164 are intended to ensure that new source growth is consistent with maintenance of the NAAQS and 40 CFR 51.160(e) requires states to identify types and sizes of facilities which will be subject to review under their minor NSR program. For sources identified under 40 CFR 51.160(e), 40 CFR 51.160(a) requires that the SIP include legally enforceable procedures that enable a state or local agency to determine whether construction or modification of a facility, building, structure or installation, or combination of these will result in a violation of applicable portions of the control strategy or interference with attainment or maintenance of a national standard in the state in which the proposed source (or modification) is located or in a neighboring state. 40 CFR 51.160(b) requires these procedures must include a means by which the state or local agency can prevent a construction or modification if the construction or modification will result in a violation of applicable portions of the control strategy or interference with attainment or maintenance of a national standard.

Section 110(i) of the CAA specifically precludes states from changing the requirements of the SIP except through SIP revisions approved by EPA. SIP revisions will be approved by EPA only if they meet all requirements of section 110 of the CAA and the implementing regulations at 40 CFR part 51. See CAA section 110(l); and 40 CFR 51.104.

EPA recognizes that, under the applicable federal regulations, states have broad discretion to determine the scope of their minor NSR programs as needed to attain and maintain the NAAQS. The states have significant discretion to tailor minor NSR requirements that are consistent with the requirements of 40 CFR part 51.160. States may also provide a rationale for why their rules are at least as stringent as the 40 CFR part 51 requirements where their rules are different from those in 40 CFR part 51. For example, states may exempt from minor NSR certain categories of changes based on de minimis or administrative necessity grounds in accordance with the criteria set out in Alabama Power Co. v. Costle, 636 F.2d 323, 360-361 (D.C. Cir. 1979). De minimis sources are presumed not to have an impact and their emissions would not prevent or interfere with attainment of the NAAQS, even within nonattainment areas.

Section 110(l) of the CAA states: “Each revision to an implementation plan submitted by a State under this Act shall be adopted by such State after reasonable notice and public hearing. The Administrator shall not approve a revision to a plan if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress (as defined in section 171), or any other applicable requirement of this chapter.”

The states' obligation to comply with each of the NAAQS is considered as “any applicable requirement(s) concerning attainment.” A demonstration of noninterference is necessary to show that this revision will not interfere with attainment or maintenance of the NAAQS, including those for ozone, particulate matter, carbon monoxide (CO), sulfur dioxide (SO2), lead, nitrogen oxides (NOX) or any other requirement of the Act. EPA has determined that a 110(l) demonstration of noninterference is applicable to R307-401-9. Utah has submitted this demonstration (see docket).

Since there are no ambient air quality standards for hazardous air pollutants, the area's compliance with any applicable maximum achievable control technology (MACT) standards, as well as any federal mobile source control requirements under CAA sections 112 or 202(l) would constitute an acceptable demonstration of noninterference for hazardous air pollutants.

Section 110(l) does not require a demonstration of noninterference for changes to federal requirements that are not included in the SIP. A revision to the SIP, however, cannot interfere with any federally mandated program such as a MACT standard (or related section 112 requirements).

In this proposed rulemaking, we are proposing to approve the new and revised rules and renumbering of rules as outlined in section III above and as described in Table 1—Rulemaking Crosswalk and Table 2—Definitions Crosswalk, located in the docket for R307-101-2, R307-401 and R307-410. We are proposing approval based on the authorities as outlined in section IV of this rulemaking. As explained in this rulemaking, the rules we are proposing to approve meet the statutory requirements of CAA section 110(a)(2)(C) and the regulatory requirements of 40 CFR 51.160.

We also evaluated the new rule R307-401-9 using CAA section 110(l). Section 110(l) provides that EPA cannot approve a SIP revision if the revision would interfere with any applicable requirement concerning attainment and RFP, or any other applicable requirement of the CAA. Therefore, EPA will approve a SIP revision only after a state has demonstrated that such a revision will not interfere (“noninterference”) with attainment of the NAAQS, RFP or any other applicable requirement of the CAA.

EPA retains the discretion to adopt approaches on a case-by-case basis to determine what the appropriate demonstration of noninterference with attainment of the NAAQS, rate of progress, RFP or any other applicable requirement of the CAA should entail. In this instance, EPA asked the State to submit an analysis showing that the approval of new section R307-401-9 would not violate section 110(l) of the CAA (see docket); this is also referred to as a “demonstration of noninterference” with attainment and maintenance under CAA section 110(l). Based on the state's demonstration and analysis in this notice, we are proposing to approve portions of new rule R307-401-9, as outlined in Section III above.

We are proposing to disapprove R307-401-7 (Public Notice). This rule, which generally allows for a 10-day comment period, is inconsistent with federal regulations for Public Availability of Information found at 40 CFR 51.161(b)(2), which require at a minimum a 30-day public comment period for the permitting of a source, including minor source permits. In addition, the 30-day comment period is important to allow adequate opportunity for comment by other affected states, federal agencies, and the public.

We are proposing to disapprove R307-401-9 (Small Source Exemption) paragraph (b) and the phrase “or (b)” in paragraph (c). EPA lacks authority in an action on a SIP revision under CAA section 110 to approve provisions addressing hazardous air pollutants. Thus we are proposing to disapprove these specific provisions. If the State requests to withdraw these specific provisions prior to the time we take final action, we would not be obligated to take final action because these provisions would no longer be pending before the Agency as a SIP revision.

We are proposing to disapprove R307-401-12 (Reduction in Air Contaminants). As explained in this rulemaking, R307-401-12 does not meet the requirements of CAA 110(a)(2)(C) and 40 CFR 51.160(a). 40 CFR 51.160(a) requires that a state or local agency must be able to determine whether a construction or modification project would result in a violation of the control strategy or interfere with attainment or maintenance of the NAAQS. As outlined above, the rules within R307-401-12 require clarification. It is not clear to the source or to the public what projects under R307-401-12 would trigger approval order requirements in R307-401-5 through R307-401-8.

We are proposing to disapprove R307-410-5 (Documentation of Ambient Air Impacts for Hazardous Air Pollutants). EPA lacks authority in an action on a SIP revision under CAA section 110 to approve provisions addressing hazardous air pollutants. Thus we are proposing to disapprove these specific provisions. If the State requests to withdraw these specific provisions prior to the time we take final action, we would not be obligated to take final action because these provisions would no longer be pending before the Agency as a SIP revision.

We are proposing to partially approve and partially disapprove R307-410-6 (Stack Heights and Dispersion Techniques). While the rule is generally consistent with the requirements in 40 CFR 51.164 (Stack Height Procedures), similar to the disapproval discussed elsewhere in this notice regarding the 10-day public comment period, R307-410-6 is missing the required public notice elements found in 40 CFR 51.164. Specifically, R307-410-6 is missing the requirement that “[s]uch procedures must provide that before a State issues a permit to a source based on a good engineering practice stack height that exceeds the height allowed by § 51.100(ii) (1) or (2), the State must notify the public of the availability of the demonstration study and must provide opportunity for public hearing on it”. Therefore, we are proposing to partially approve and partially disapprove this particular rule since the State rule omits the requirements for the State to notify the public of the availability of documentation of a study where a source exceeds the height allowed and provide an opportunity for public hearing.

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 state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this proposed 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.

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

1. Submitting CBI. Do not submit this information to EPA through 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:

i. Identify the document by docket ID number and other identifying information (subject heading, Federal Register date and page number).

ii. 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.

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

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

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

vi. Provide specific examples to illustrate your concerns and suggest alternatives.

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

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

A detailed summary of the background related to EPA's extension of the time-limited interim tolerances for the combined residues of the insecticide tetrachlorvinphos, including its metabolites, in or on multiple commodities can be found in the Federal Register documents of August 14, 2002 (67 FR 52985) (FRL-7192-4); February 6, 2008 (73 FR 6867) (FRL-8345-2); September 17, 2008 (73 FR 53732) (FRL-8375-2); June 8, 2011 (76 FR 33184) (FRL-8874-7); September 16, 2011 (76 FR 57657) (FRL-8887-5); March 6, 2013 (78 FR 14487) (FRL-9380-8); and March 13, 2013 (78 FR 15880) (FRL-9380-9). The referenced documents in this unit are available in the docket for this proposed rule under docket ID number EPA-HQ-OPP-2011-0360 at http://www.regulations.gov.

EPA, on its own initiative, under FFDCA section 408(e), 21 U.S.C. 346a(e), is proposing to amend the existing time-limited interim tolerances by converting them to permanent tolerances for the combined residues of the insecticide tetrachlorvinphos, including its metabolites, in or on cattle, fat (of which no more than 0.1 parts per million (ppm) is tetrachlorvinphos per se) at 0.2 ppm; cattle, kidney (of which no more than 0.05 ppm is tetrachlorvinphos per se) at 1.0 ppm; cattle, liver (of which no more than 0.05 ppm is tetrachlorvinphos per se) at 0.5 ppm; cattle, meat (of which no more than 2.0 ppm is tetrachlorvinphos per se) at 2.0 ppm; cattle, meat byproducts, except kidney and liver at 1.0 ppm; egg (of which no more than 0.05 ppm is tetrachlorvinphos per se) at 0.2 ppm; hog, fat (of which no more than 0.1 ppm is tetrachlorvinphos per se) at 0.2 ppm; hog, kidney (of which no more than 0.05 ppm is tetrachlorvinphos per se) at 1.0 ppm; hog, liver (of which no more than 0.05 ppm is tetrachlorvinphos per se) at 0.5 ppm; hog, meat (of which no more than 2.0 ppm is tetrachlorvinphos per se) at 2.0 ppm; hog, meat byproducts, except kidney and liver at 1.0 ppm; milk, fat (reflecting negligible residues in whole milk and of which no more than 0.05 ppm is tetrachlorvinphos per se) at 0.05 ppm; poultry, fat (of which no more than 7.0 ppm is tetrachlorvinphos per se) at 7.0 ppm; poultry, liver (of which no more than 0.05 ppm is tetrachlorvinphos per se) at 2.0 ppm; poultry, meat (of which no more than 3.0 ppm is tetrachlorvinphos per se) at 3.0 ppm; and poultry, meat byproducts, except liver at 2.0 ppm. The existing time-limited interim tolerances in 40 CFR 180.252 expire on August 18, 2013.

As discussed in the previous rulemakings, these time-limited interim tolerances for tetrachlorvinphos, and its metabolites, have been determined to be safe based on previously submitted magnitude of residue data. (See Unit II. for citations to previously published documents concerning magnitude of residue data.) In order to support making these tolerances permanent, EPA required the submission of new magnitude of residue data. The registrant submitted livestock magnitude of residue data, storage stability data to support previously submitted magnitude of residue data in poultry and cattle, and a waiver request for the swine magnitude of residue data. Based on that data, EPA has concluded that the data confirm previous findings made by the Agency with regard to the level of residues of tetrachlorvinphos in livestock commodities and consequently, the safety finding for these tolerances.

Therefore, EPA concludes that the submitted data supports the Agency's current proposal to amend these existing time-limited tolerances to be permanent tolerances.

This proposed rule proposes to amend tolerances under FFDCA section 408(e). The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this proposed rule has been exempted from review under Executive Order 12866 due to its lack of significance, this proposed rule is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This proposed rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1501 et seq.). Nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994); or OMB review or any Agency action under Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA) (15 U.S.C. 272 note).

Pursuant to the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), the Agency previously assessed whether establishment of tolerances, exemptions from tolerances, raising of tolerance levels, expansion of exemptions, or revocations might significantly impact a substantial number of small entities and concluded that, as a general matter, these actions do not impose a significant economic impact on a substantial number of small entities. These analyses for tolerance establishments and modifications, and for tolerance revocations were published on May 4, 1981 (46 FR 24950) and on December 17, 1997 (62 FR 66020) (FRL-5753-1), respectively, and were provided to the Chief Counsel for Advocacy of the Small Business Administration. Taking into account this analysis, and available information concerning the pesticides listed in this proposed rule, the Agency hereby certifies that this proposed action will not have significant negative economic impact on a substantial number of small entities. In fact, this proposed rule will have no impact because it merely maintains the status quo by amending the existing time-limited interim tolerances by converting them to permanent tolerances. Any comments about the Agency's determination should be submitted to EPA along with comments on the proposed rule, and will be addressed prior to issuing a final rule.

In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999). 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.” This proposed rule directly regulates growers, food processors, food handlers, and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). For these same reasons, the Agency has determined that this proposed rule does not have any “tribal implications” as described in Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000). Executive Order 13175, 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.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This proposed rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this proposed rule.

Therefore, it is proposed that 40 CFR chapter I be amended as follows:

This is a summary of the Commission's Second Notice of Proposed Rulemaking (Second FNPRM) in CC Docket No. 00-175, released on May 17, 2013. The full text of this document, which is part of the Commission's Memorandum Opinion and Order and Report and Order and Further Notice of Proposed Rulemaking and Second Further Notice of Proposed Rulemaking, is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 12th Street SW., Washington, DC 20554, and may also be purchased from the Commission's copy contractor, BCPI, Inc., Portals II, 445 Twelfth Street SW., Room CY-B402, Washington, DC 20554. Customers may contact BCPI, Inc. via their Web site, http://www.bcpi.com, or call 1-800-378-3160. This document is available in alternative formats (computer diskette, large print, audio record, and Braille). Persons with disabilities who need documents in these formats may contact the FCC by email: FCC504@fcc.gov or phone: 202-418-0530 or TTY: 202-418-0432. Pursuant to sections 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. All pleadings are to reference CC Docket No. 00-175. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).

• Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.

• Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

• Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

• All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St., SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.

• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington DC 20554.

• People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to fcc504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

1. In furtherance of our commitment to revisit rules that may be outmoded, ineffective, insufficient, or excessively burdensome, while continuing to promote competition and consumer protection consistent with the Act, we evaluate in this Second FNPRM the structural separation requirements of section 64.1903 of the Commission's rules, as they apply to rate-of-return carriers providing facilities-based in-region, interexchange, interstate long distance services (in-region long distance services). Through this proceeding, we intend to modernize our rules to reflect the competitive and marketplace realities for long distance service—at one time an expensive service, today one frequently offered on an unlimited basis by numerous facilities-based providers.

2. Section 64.1903, as written, requires independent ILECs providing long distance services using their own facilities to do so through a separate corporate subsidiary that does not jointly own transmission or switching equipment with the local exchange company. The Commission promulgated section 64.1903 against a regulatory backdrop in which local telephone service, interstate long distance, and intrastate long distance were distinct services, for which consumers often chose separate providers. Since the codification of section 64.1903 more than fifteen years ago, we have seen transformative marketplace and regulatory changes, calling into question whether the current rule is the least burdensome way to ensure that our goals of competition and consumer protection are met. The Commission has acknowledged these changes, and in 2007 granted relief to the Bell Operating Companies (BOCs) from a regulatory framework with similar structural separation requirements as section 64.1903.

3. Today, the Commission adopts the USTelecom Forbearance Order, which, among other things, grants the request of the United States Telecom Association (USTelecom) for forbearance from section 64.1903 as it applies to price cap carriers that comply with certain conditions. Based on the record in that proceeding, however, the USTelecom Forbearance Order denies similar relief to independent ILECs subject to rate-of-return regulation “due to the continuing potential for cost misallocation.” In this Second FNPRM, we take the next steps toward modernizing our rules for the non-BOC ILECs. Considering developments in today's marketplace, we seek comment on the costs and benefits of continuing to apply section 64.1903 to rate-of-return carriers, and whether such carriers continue to have the ability and incentive to engage in anticompetitive behavior.

4. The Commission adopted section 64.1903 based on the findings in the LEC Classification Order emphasizing the need to protect against the exercise of exclusionary market power by independent ILECs—the ability to raise rivals' costs of providing competitive services, including the misallocation of costs (for example misallocating costs from nonregulated to regulated services), non-price discrimination (for example, lower quality wholesale services provided to a competitor), and a price squeeze based on inputs that long distance competitors need, such as access services (for example, raising prices for access services, including both switched and special access, or reducing prices for retail services). In light of the market changes described above, we consider whether the rule continues to offer benefits and whether the benefits justify the regulatory burdens and costs of compliance for rate-of-return ILECs. We also recognize that market conditions alone might justify eliminating the separate affiliate requirement, at least for some independent ILECs subject to rate-of-return regulation, and seek comment on the relevant market characteristics and how they should affect our evaluation of the continued need for the separate affiliate rule.

5. Analyzing Potential for Cost Miscalculation. The USTelecom Forbearance Order granted forbearance from section 64.1903 to independent ILECs subject to price cap regulation but denied this relief to such carriers subject to rate-of-return regulation, including both independent ILECs subject to average schedules and cost companies. Rate-of-return regulation, which preceded price cap regulation, focuses on an ILEC's costs and fixes the profits an ILEC may earn based on those costs. A rate-of-return ILEC may recover only its costs plus a prescribed return on investment. Unlike price cap carriers, rate-of-return carriers are typically small, rural telephone companies concentrated in one area. Also unlike price cap carriers, non-average schedule rate-of-return independent ILEC has the ability and incentive to over allocate costs to common line and special access services because its interstate compensation for those services remains based directly on company-specific costs. We seek comment on this view. The Commission's 2011 reforms to intercarrier compensation rules cap and/or reduce interstate switched access charges, but allow increases in common line and special access rates. Thus, we believe that these changes in the access charge rules reduce, but may not eliminate, incentives for cost misallocation and potential access charge rate increases. We seek comment on this view and on the interplay between section 64.1903 and our intercarrier compensation and universal service reforms. We seek comment on whether we could address concerns about cost misallocation equally well, and in a less burdensome manner, in ways other than requiring that service be provided through a separate affiliate.

6. The Commission has previously recognized that concerns about cost misallocation are strongest when carriers provide long distance services in whole or in part through their own switching or transmission facilities. When these carriers provide long distance service exclusively through resale, the risk of cost misallocation is reduced, and they operate pursuant to a lesser safeguard—a separate corporate division rather than a separate subsidiary. We seek comment on the extent to which rate-of-return independent ILECs provide long distance service using their own facilities. Could we deter and detect cost misallocation by requiring that independent ILECs offering long distance over their own facilities provide those services through a separate corporate division?

7. We also seek comment on whether we can reduce the burdens on average schedule carriers. Average schedule carriers are a subset of rate-of-return carriers that receive access compensation and universal service support through the use of “average schedules” to avoid the difficulties and expenses involved with conducting company-specific cost studies. Average schedule companies appear to have limited incentives to misallocate costs as long as they continue to use the average schedules for access compensation. However, these companies are permitted to convert to cost-based regulation without Commission approval. Thus, an average schedule company could, in theory, provide in-region long distance service without a separate affiliate, and then convert to cost-based regulation. We seek comment on how we could grant relief from the separate affiliate requirement for average schedule companies and also prevent them from misallocating costs in the future. We could condition relief from section 64.1903 on a commitment not to convert to rate-of-return regulation, or require them to reinstitute a separate affiliate if they do so. We seek comment on these and alternative suggestions. How should the Commission treat cost companies participating in NECA pools? Do these companies possess the ability and incentive to misallocate costs because disbursements from the NECA pools are based on participating companies' costs? In the USTelecom Forbearance Order, we grant relief to price cap carriers if they: (1) submit and obtain Bureau approval of special access performance metrics, and (2) satisfy imputation requirements, including the submission of an imputation plan for review and approval from the Bureau. Will such nonstructural safeguards obviate the need for section 64.1903, while imposing fewer costs and burdens, for rate-of-return carriers? How should our analysis for rate-of-return carriers differ, if any, from our analysis for price cap carriers?

8. Analyzing Potential for Unlawful Non-Price Discrimination and Price Squeezes. Section 64.1903 was intended to prevent unlawful non-price discrimination and price squeezes. Do these concerns remain relevant in light of changes in the market, including the prevalence of bundled local, intrastate long distance, and interstate long distance services? Is the separate affiliate requirement an effective, cost-effective way to prevent these anticompetitive practices? Could the Commission effectively address these concerns through ex-post facto investigations, such as under a section 208 complaint process? Are existing statutory and regulatory safeguards sufficient to deter these anticompetitive practices?

9. Costs and Benefits of the Separate Affiliate Requirements of Section 64.1903. How many independent ILECs use separate affiliates pursuant to section 64.1903? What costs, if any, would be saved if we eliminate section 64.1903 for independent ILECs subject to rate-of-return regulation? Would the same savings be realized if the independent ILEC were required instead to provide long distance services through a separate division? For example, what incremental costs does an independent ILEC incur in maintaining separate books of account for its long distance services, as opposed to including those costs and revenues in the accounts for its LEC operations? How does that differ depending on whether the separate books of account are for a separate division versus a separate corporation? We particularly seek empirical data on costs and burdens from independent ILECs that have experience providing long distance service through a separate corporate affiliate or a separate division so that we can analyze the differences between these structures.

10. What effect, if any, does the prohibition against joint ownership of switching and transmission equipment have on an independent ILEC's operational efficiency and ability to offer innovative services? Does that prohibition significantly limit the independent ILEC's opportunities to take advantage of economies of scope and scale associated with integrated operations? Does the prohibition make it more difficult for an independent ILEC to transform its network from a traditional Time-Division Multiplexing (TDM) network to an all-Internet Protocol (all IP) network? If so, how? Does section 64.1903 reduce independent ILECs' ability to increase telephone subscribership or extend broadband services to additional areas? If ILECs transition to offering only VoIP services, should section 64.1903 continue to apply? Finally, we seek comment on whether complying with nonstructural safeguards such as special access performance metrics and imputation requirements adequately address issues of non-price discrimination and/or price squeezes. We ask commenters to provide detailed information on the overall costs and burdens of the section 64.1903 requirements on independent ILECs and their customers.

11. This NPRM seeks comment on a potential new or revised information collection requirement. If the Commission adopts any new or revised information collection requirement, the Commission will publish a separate notice in the Federal Register inviting the public to comment on the requirement, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3501-3520). In addition, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4), the Commission seeks specific comment on how it might “further reduce the information collection burden for small business concerns with fewer than 25 employees.”

12. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission has prepared this Supplemental Initial Regulatory Flexibility Analysis (Supplemental IRFA) of the possible significant economic impact on a substantial number of small entities by the policies proposed in this Second NPRM. Written comments are requested on this Supplemental IRFA. Comments must be identified as responses to the Supplemental IRFA and must be filed by the deadlines for comments on the Second FNPRM. The Commission will send a copy of the Second FNPRM, including this Supplemental IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). In addition, the Second FNPRM and Supplemental IRFA (or summaries thereof) will be published in the Federal Register.

13. Purpose of the Proposed Rules. In the Second FNPRM, we explore the costs and benefits of continuing to apply the structural separation requirements contained in section 64.1903 of the Commission's rules, 47 CFR 64.1903, to independent incumbent local exchange carriers (ILECs) subject to rate-of-return regulation and providing in-region, interexchange, interstate long distance services (in-region long distance services) in today's marketplace.

14. In the Second FNPRM, we seek comments addressing marketplace changes such as the decline of stand-alone long distance services, the rise of facilities-based “all-distance services” competition from cable and wireless, and the role of bundles in today's long distance market. We therefore seek comment addressing whether incentives for anticompetitive behavior exist for independent ILECs subject to rate-of-return regulation, and whether granting relief from section 64.1903 is appropriate.

15. Legal Basis. The legal basis for any action that may be taken pursuant to the Second FNPRM is contained in sections 4(i), 4(j), 10, 201 through 204, 214, 220(a), and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 154(j), 160, 201 through 204, 214, 220(a), and 303(r).

16. Description and Estimate of the Number of Small Entities to Which the Proposed Rules Will Apply. RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small-business concern” under the Small Business Act. A small-business concern” is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

17. Small Businesses. Nationwide, there are a total of approximately 27.5 million small businesses, according to the SBA.

18. Wired Telecommunications Carriers. The SBA has developed a small business size standard for Wired Telecommunications Carriers, which consists of all such companies having 1,500 or fewer employees. According to Census Bureau data for 2007, there were 3,188 firms in this category, total, that operated for the entire year. Of this total, 3144 firms had employment of 999 or fewer employees, and 44 firms had employment of 1000 employees or more. Thus, under this size standard, the majority of firms can be considered small.

19. Incumbent Local Exchange Carriers (ILECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to incumbent local exchange services. The closest applicable size standard under SBA rules is for Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 1,307 carriers reported that they were incumbent local exchange service providers. Of these 1,307 carriers, an estimated 1,006 have 1,500 or fewer employees and 301 have more than 1,500 employees. Consequently, the Commission estimates that most providers of incumbent local exchange service are small businesses that may be affected by rules adopted pursuant to the Second FNPRM.

20. We have included small incumbent LECs in this present RFA analysis. As noted above, a “small business” under the RFA is one that, inter alia, meets the pertinent small business size standard (e.g., a telephone communications business having 1,500 or fewer employees), and “is not dominant in its field of operation.” The SBA's Office of Advocacy contends that, for RFA purposes, small incumbent LECs are not dominant in their field of operation because any such dominance is not “national” in scope. We have therefore included small incumbent LECs in this RFA analysis, although we emphasize that this RFA action has no effect on Commission analyses and determinations in other, non-RFA contexts.

21. Interexchange Carriers (IXCs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to interexchange services. The closest applicable size standard under SBA rules is for Wired Telecommunications Carriers. Under that size standard, such a business is small if it has 1,500 or fewer employees. According to Commission data, 359 companies reported that their primary telecommunications service activity was the provision of interexchange services. Of these 359 companies, an estimated 317 have 1,500 or fewer employees and 42 have more than 1,500 employees. Consequently, the Commission estimates that the majority of interexchange service providers are small entities that may be affected by rules adopted pursuant to the Order.

22. Description of Projected Reporting, Recordkeeping, and Other Compliance Requirements for Small Entities. In this Second FNPRM, the Commission proposes additional or modified information collections that would impose reporting and recordkeeping on current independent ILECs subject to rate-of-return regulation, including small entities. Specifically, the Second FNPRM invites comment on whether the Commission should replace its legacy framework for the provision of in-region, interstate long distance services provided by independent ILECs subject to rate-of-return regulation with a framework more closely tailored to the needs of consumers and competitors in today's marketplace. The central feature of this proposal is to amend or eliminate the application of section 64.1903 to independent ILECs subject to rate-of-return regulation.

23. Based on these questions, the Commission anticipates that a record will be developed concerning actual burdens and alternative ways in which the Commission could lessen the burdens on small entities subject to these requirements throughout the nation.

24. Steps Taken to Minimize the Significant Economic Impact on Small Entities, and Significant Alternatives Considered. The RFA requires an agency to describe any significant, specifically small business, alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): “(1) the establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance and reporting requirements under the rules for such small entities; (3) the use of performance rather than design standards; and (4) an exemption from coverage of the rule, or any part thereof, for such small entities.”

25. The overall objective of this proceeding is to reduce regulatory burdens on independent ILECs to the extent consistent with the public interest, and is part of the Commission's ongoing efforts under Executive Order 13,579 to revisit “rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” The Second FNPRM seeks specific proposals as to which existing regulations might be removed or streamlined in their application to provision of in-region, interstate and international interexchange services by independent ILECs subject to rate-of-return regulation absent current safeguards, and asks parties to comment on whether such independent ILECs should continue to be classified as nondominant in the provision of such services if section 64.1903 is repealed. The Second FNPRM also asks parties to discuss whether, and to what extent, dominant carrier regulation is aptly suited to achieving the Commission's objectives to promote competition and to deter anticompetitive behavior by independent ILECs subject to rate-of-return regulation. The Second FNPRM seeks comment on these matters, especially as they might affect small entities subject to the rules.

26. Federal Rules that May Duplicate, Overlap, or Conflict with the Proposed Rules. None.

27. This proceeding shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission's ex parte rules. Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter's written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with section 1.1206(b). In proceedings governed by section 1.49(f) or for which the Commission has made available a method of electronic filing, written ex parte presentations and memoranda summarizing oral ex parte presentations, and all attachments thereto, must be filed through the electronic comment filing system available for that proceeding, and must be filed in their native format (e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this proceeding should familiarize themselves with the Commission's ex parte rules.

28. Accordingly, it is ordered that, pursuant to Sections 1, 2, 4(i), 4(j), 201 through 205, 220(a), 251, 272, and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(j), 201 through 205, 220(a), 251, 272, and 303(r) this Second Further Notice of Proposed of Rulemaking in CC Docket No. 00-175 is adopted.

29. It is further ordered that the Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Second Further Notice of Proposed Rulemaking in CC Docket No. 00-175, including the Initial Regulatory Flexibility Certifications, to the Chief Counsel for Advocacy of the Small Business Administration.

The purpose of this rulemaking is to add new DEAR subparts 925.71 and 970.2571 to set forth requirements concerning compliance with export control laws, regulations and directives applicable to the performance of DOE contracts.

Export control laws, regulations and directives that may apply to a contract in effect on the date of the contract award and as amended subsequently include, but are not limited to: the Atomic Energy Act of 1954, as amended; the Arms Export Control Act (22 U.S.C. 2751 et seq.); the Export Administration Act of 1979 (50 U.S.C. app. 2401 et seq.), as continued under the International Emergency Economic Powers Act (Title II of Pub. L. 95-223, 91 Stat. 1626, October 28, 1977); Trading with the Enemy Act (50 U.S.C. App. 5(b) as amended by the Foreign Assistance Act of 1961); Assistance to Foreign Atomic Energy Activities (10 Code of Federal Regulations (CFR) part 810); Export Administration Regulations (15 CFR parts 730 through 774); International Traffic in Arms Regulations (22 CFR parts 120 through 130); Export and Import of Nuclear Equipment and Material (10 CFR part 110); regulations administered by the Office of Foreign Assets Control (31 CFR Subtitle B Chapter V); the Espionage Act (37 U.S.C. 791 et seq.); DOE Order 142.3A, Unclassified Foreign Visits and Assignments Program; DOE Order 551.1D, Official Foreign Travel; and DOE Order 580.1A, Department of Energy Personal Property Management Program.

The list of laws and regulations is the same as that in the Export Restriction Notice in 41 CFR 109-1.5303(b)(6), with updated citations for revised versions, as appropriate. The Export Restriction Notice is required by 41 CFR part 109 for all transfers, sales or other offerings of High Risk Personal Property (HRPP), which includes all export-controlled items. The DOE directives in the list are the three DOE orders that refer to export compliance when performing Contractor activities. DOE solicits comment on whether additional export control laws, regulations or directives should be added to this list. Descriptions of these laws, regulations and directives are provided in section II.

DOE proposes to amend the DEAR as follows, for consistency with a 2010 amendment to the Department of Defense Acquisition Regulations (DFARS) (DFARS Case 2004-D010, 75 FR 18030, Apr. 8, 2010):

Part 925 is amended by adding new section 925.71 to set forth requirements for contractors concerning the export control of items, including but not limited to unclassified information, materials, technology, equipment or software.

More information on what constitutes an “item”, as well as export control requirements generally, can be found at the following Department of Commerce (DOC) Web site: http://www.bis.doc.gov/licensing/exportingbasics.htm. Points of contact for DOC are also provided at this Web site. Points of contact and additional information for the Department of State can be found at http://www.pmddtc.state.gov/about/key_personnel.html and http://www.pmddtc.state.gov/documents/ddtc_getting_started.pdf. Points of contact and additional information for the Department of Treasury can be found at http://www.treasury.gov/services/Pages/Foreign-Transaction-Licensing-and-Reporting.aspx. Points of contact and additional information for the Nuclear Regulatory Commission can be found at http://www.nrc.gov/about-nrc/ip/export-import.html. The point of contact for the Department of Energy is the Office of Nonproliferation and International Security in the National Nuclear Security Administration at http://nnsa.energy.gov/aboutus/ourprograms/nonproliferation/programoffices/officenonproliferationinternationalsecurity.

DOE contractors are responsible for complying with export control requirements applicable to their contracts. DOE requirements for contractors will be set forth in a new DEAR Export Clause. It is the contractor's responsibility to comply with all applicable laws and regulations regarding export-controlled items. This responsibility exists independent of, and is not established, or limited by, this DEAR rulemaking.

Part 952 is amended by adding new clause 952.225-XX to set forth requirements for DOE contractors concerning compliance with applicable export control laws, regulations and directives, including a requirement for DOE contractors to obtain the necessary licenses, approvals and relevant documentation to comply with these applicable laws, regulations and directives.

Subpart 970.25 is amended by adding new section 970.2571 to set forth requirements for management and operating contractors concerning export control of items, including but not limited to unclassified information, materials, technology, equipment or software.

As noted above, more information on what constitutes an “item”, as well as export control requirements generally, can be found at the following DOC Web site: http://www.bis.doc.gov/licensing/exportingbasics.htm. Points of contact for DOC are also provided at this Web site. Points of contact and additional information for the Department of State can be found at http://www.pmddtc.state.gov/about/key_personnel.html and http://www.pmddtc.state.gov/documents/ddtc_getting_started.pdf. Points of contact and additional information for the Department of Treasury can be found at http://www.treasury.gov/services/Pages/Foreign-Transaction-Licensing-and-Reporting.aspx. Points of contact and additional information for the Nuclear Regulatory Commission can be found at http://www.nrc.gov/about-nrc/ip/export-import.html. The point of contact for the Department of Energy is the Office of Nonproliferation and International Security in the National Nuclear Security Administration at http://nnsa.energy.gov/aboutus/ourprograms/nonproliferation/programoffices/officenonproliferationinternationalsecurity. DOE management and operating contractors are responsible for complying with export control requirements applicable to their contracts. DOE requirements for management and operating contractors will be set forth in a new DEAR Export Clause. It is the contractor's responsibility to comply with all applicable laws and regulations regarding export-controlled items. This responsibility exists independent of, and is not established, or limited by, this DEAR rulemaking.

Subpart 970.52 is amended by adding new clause 970.5225-1 to set forth requirements for management and operating contractors concerning compliance with export control laws, regulations and directives, including a requirement for DOE management and operating contractors to obtain the necessary licenses, approvals and relevant documentation to comply with applicable laws, regulations and directives.

Brief summaries of each of these authorities—which are independent of, and not limited by, any DEAR policy or clause—are set forth below:

The AEA empowers DOE to authorize persons subject to the jurisdiction of the United States to engage directly or indirectly in the production of special nuclear material outside of the United States.

Provides the authority to control the export of defense articles and services, and charges the President to exercise this authority. Executive Order 11958, as amended, delegated this statutory authority to the Secretary of State.

Provides legal authority to the President to control, for reasons of national security, foreign policy and/or short supply, the export and reexport of items that are subject to the Export Administration Regulations (EAR) (see below). The EAA has expired but has been continued under the International Emergency Economic Powers Act.

Authorizes the President to regulate commerce after declaring a national emergency in response to any unusual and extraordinary threat to the United States which has a foreign source.

Restricts trade with countries hostile to the United States. The law gives the President the power to oversee or restrict any and all trade between the U.S. and its enemies in times of war. The scope of the TWEA was expanded by the Foreign Assistance Act of 1961.

Restricts assistance to any government which engages in a consistent pattern of gross violations of internationally recognized human rights.

The DOE has jurisdictional authority over exports of unclassified nuclear technology under section 57 b.(2) of the Atomic Energy Act of 1954, as amended.

The Nuclear Regulatory Commission (NRC) has jurisdictional authority for exports for peaceful nuclear purposes of nuclear reactors, nuclear enrichment and reprocessing facilities, heavy water production facilities, related proprietary operation and maintenance manuals, and related equipment. The NRC also has jurisdictional authority for exports of special nuclear material, source material, byproduct material, deuterium, and nuclear grade graphite for nuclear end use.

The Department of Commerce (DOC) has jurisdictional authority over a broad range of dual-use commodities (items that have both commercial and potentially military applications), and items that are not controlled by other export regimes. Items that are subject to the EAR include items found on the Commerce Control List (CCL), where they are grouped into ten categories. These include, among other things, certain electronics, computers, sensors and lasers, and microorganisms and toxins. Items on the CCL are classified based upon their physical characteristics and their potential uses. Items not listed on the CCL may nevertheless be subject to the EAR. Such items are designated “EAR99.” An export license may be required for an item subject to the EAR if the export of the item could impact U.S. national security or foreign policy objectives.

The Arms Export Control Act is implemented through the ITAR. The Department of State (State) has jurisdictional authority over munitions items, including military systems, equipment, components, and services, and space-related systems, equipment, components, services and items.

The Trading with the Enemy Act is implemented through the Foreign Asset Control Regulations. The Treasury Office of Foreign Asset Control (OFAC) has jurisdictional authority over all financial and tangible items having a destination to embargoed and terrorist sponsoring states.

Defines a program for unclassified foreign national access to DOE sites, information, and technologies by establishing review, approval, documenting and tracking requirements.

Establishes DOE and National Nuclear Security Administration (NNSA) requirements and responsibilities governing official foreign travel by Federal and contractor employees.

Sets forth (a) requirements that implement and supplement Public Laws, Executive Orders, Office of Management and Budget directives, and any other agency issuances affecting the DOE's personal property management program; (b) requirements that reflect the accountability perspective of property management; (c) policy that assists DOE property managers, contracting and financial managers, and other DOE officials in understanding their property management roles and responsibilities; and (d) standards, practices, and performance expectations for property management.

This rulemaking, which would add new requirements to DEAR part 925 and subpart 970.25, and create new clauses in part 952 and subpart 970.52, addresses concerns raised in DOE Inspector General (IG) Reports issued in 2004 and 2007. In the 2004 report, the DOE IG determined that the two DOE contractors it reviewed were not properly applying export control procedures. The DOE IG further stated that DOE must ensure that export control guidance, including deemed export guidance, is disseminated and consistently implemented throughout the DOE complex. In the 2007 report, the DOE IG recommended expedited actions to ensure compliance with export control requirements throughout the DOE complex. This rule also addresses a 2011 Government Accountability Office (GAO) report in which the GAO identified weaknesses in government-wide export controls.

Today's regulatory action has been determined to be a “significant regulatory action” under Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993). Accordingly, this proposed rule was reviewed by the Office of Information and Regulatory Affairs within the Office of Management and Budget.

DOE has also reviewed this regulation pursuant to Executive Order 13563, issued on January 18, 2011 (76 FR 3281 (Jan. 21, 2011)). Executive Order 13563 is supplemental to and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, agencies are required by Executive Order 13563 to: (1) Propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs (recognizing that some benefits and costs are difficult to quantify); (2) tailor regulations to impose the least burden on society, consistent with obtaining regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; (3) select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity); (4) to the extent feasible, specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and (5) identify and assess available alternatives to direct regulation, including providing economic incentives to encourage the desired behavior, such as user fees or marketable permits, or providing information upon which choices can be made by the public.

DOE emphasizes as well that Executive Order 13563 requires agencies to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible. In its guidance, the Office of Information and Regulatory Affairs has emphasized that such techniques may include identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes. DOE believes that today's NOPR is consistent with these principles, including the requirement that, to the extent permitted by law, agencies adopt a regulation only upon a reasoned determination that its benefits justify its costs and, in choosing among alternative regulatory approaches, those approaches maximize net benefits.

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Executive agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; and (3) provide a clear legal standard for affected conduct rather than a general standard and promote simplification and burden reduction.

With regard to the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in section 3(a) and section 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, these proposed regulations meet the relevant standards of Executive Order 12988.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires preparation of an initial regulatory flexibility analysis for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. Neither 5 U.S.C. 553 nor 41 U.S.C. 418(b) requires that today's proposed rule be proposed for public comment. No regulatory flexibility analysis has been prepared.

This proposed rule does not impose a collection of information requirement subject to the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.

DOE has concluded that promulgation of this proposed rule falls into a class of actions which would not individually or cumulatively have significant impact on the human environment, as determined by DOE's regulations (10 CFR part 1021, subpart D) implementing the National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.). Specifically, this proposed rule is categorically excluded from NEPA review because the amendments to the DEAR are strictly procedural (categorical exclusion A6). Therefore, this proposed rule does not require an environmental impact statement or environmental assessment pursuant to NEPA.

Executive Order 13132, 64 FR 43255 (August 4, 1999), imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have federalism implications. Agencies are required to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and carefully assess the necessity for such actions. DOE has examined today's rule and has determined that it does not preempt State law and does not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. No further action is required by Executive Order 13132.

The Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) generally requires a Federal agency to perform a detailed assessment of costs and benefits of any rule imposing a Federal Mandate with costs to State, local or tribal governments, or to the private sector, of $100 million or more. This rulemaking does not impose a Federal mandate on State, local or tribal governments or on the private sector.

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a Family Policymaking Assessment for any rule or policy that may affect family well being. This rule will have no impact on family well-being. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use”, 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to the Office of Information and Regulatory Affairs (OIRA), Office of Management and Budget, a Statement of Energy Effects for any significant energy action. A “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy, or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution and use. Today's rule is not a significant energy action. Accordingly, DOE has not prepared a Statement of Energy Effects.

The Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516, note) provides for agencies to review most disseminations of information to the public under implementing guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (February 22, 2002), and DOE's guidelines were published at 67 FR 62446 (October 7, 2002). DOE has reviewed today's notice under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

Executive Order 13609 of May 1, 2012, “Promoting International Regulatory Cooperation,” requires that, to the extent permitted by law and consistent with the principles and requirements of Executive Order 13563 and Executive Order 12866, each Federal agency shall:

(a) If required to submit a Regulatory Plan pursuant to Executive Order 12866, include in that plan a summary of its international regulatory cooperation activities that are reasonably anticipated to lead to significant regulations, with an explanation of how these activities advance the purposes of Executive Order 13563 and this order;

(b) Ensure that significant regulations that the agency identifies as having significant international impacts are designated as such in the Unified Agenda of Federal Regulatory and Deregulatory Actions, on RegInfo.gov, and on Regulations.gov;

(c) In selecting which regulations to include in its retrospective review plan, as required by Executive Order 13563, consider:

(i) Reforms to existing significant regulations that address unnecessary differences in regulatory requirements between the United States and its major trading partners, consistent with section 1 of this order, when stakeholders provide adequate information to the agency establishing that the differences are unnecessary; and

(ii) Such reforms in other circumstances as the agency deems appropriate; and

(d) For significant regulations that the agency identifies as having significant international impacts, consider, to the extent feasible, appropriate, and consistent with law, any regulatory approaches by a foreign government that the United States has agreed to consider under a regulatory cooperation council work plan.

DOE has reviewed this proposed rule under the provisions of Executive Order 13609 and determined that the rule complies with all requirements set forth in the order.

The Office of the Secretary of Energy has approved issuance of this proposed rule.

For reasons set out in the preamble, the DOE is proposing to amend Chapter 9 of Title 48 of the Code of Federal Regulations as set forth below.

We are proposing to list all chimpanzees, whether in the wild or in captivity, as endangered under the Endangered Species Act of 1973, as amended (Act). We have determined that the Act does not allow for captive-held animals to be assigned separate legal status from their wild counterparts on the basis of their captive state, including through designation as a separate distinct population segment (DPS). It is also not possible to separate out captive-held specimens for different legal status under the Act by other approaches. Therefore, we are proposing to eliminate the separate classification of chimpanzees held in captivity and list the entire species, wherever found, as endangered under the Act.

If adopted as proposed, this action will eliminate separate classifications for wild and captive chimpanzees under the Act. All chimpanzees, whether in the wild or in captivity, will be listed as one entity that is endangered in the List of Endangered and Threatened Wildlife at 50 CFR 17.11(h). This action will also remove the chimpanzee and paragraph (c)(3) from the special rule for primates, found at 50 CFR 17.40(c), extending the Act's protections to all chimpanzees.

Section 4(b)(3)(B) of the Endangered Species Act (Act) (16 U.S.C. 1531 et seq.) requires that, for any petition to revise the Federal Lists of Endangered and Threatened Wildlife and Plants that contains substantial scientific or commercial information that listing the species may be warranted, we make a finding within 12 months of the date of receipt of the petition (“12-month finding”). In this finding, we determine whether the petitioned action is: (a) Not warranted, (b) warranted, or (c) warranted, but immediate proposal of a regulation implementing the petitioned action is precluded by other pending proposals to determine whether species are endangered or threatened, and expeditious progress is being made to add or remove qualified species from the Federal Lists of Endangered and Threatened Wildlife and Plants. We must publish these 12-month findings in the Federal Register.

In this document, we announce that listing all chimpanzees, whether in the wild or in captivity, as endangered is warranted, and are proposing to revise the entry of this species in the Federal List of Endangered and Threatened Wildlife. Additionally, this action, if finalized as proposed, will eliminate a special rule under section 4(d) of the Act that exempts captive chimpanzees in the United States from the general prohibitions of the Act.

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 of commenters, will become part of the administrative record.

On March 16, 2010, we received a petition dated the same day, from Meyer Glitzenstein & Crystal on behalf of The Humane Society of the United States, the American Association of Zoological Parks and Aquariums, the Jane Goodall Institute, the Wildlife Conservation Society, the Pan African Sanctuary Alliance, the Fund for Animals, Humane Society International, and the New England Anti-Vivisection Society (hereafter referred to as “petitioners”) requesting that captive chimpanzees (Pan troglodytes) be reclassified as endangered under the Act. The petition clearly identified itself as such and included the requisite identification information for the petitioners, as required by 50 CFR 424.14(a). The petition contained information on what the petitioners reported as potential threats to the species from habitat loss, poaching and trafficking, disease, and inadequate regulatory mechanisms. In a September 15, 2010, letter to Katherine Meyer, we responded that we were required to complete a significant number of listing and critical habitat actions, including complying with court orders and court-approved settlement agreements, that required nearly all of our listing and critical habitat funding for fiscal year 2010. We also stated that we anticipated making an initial finding during fiscal year 2011, as to whether the petition contained substantial information indicating that the action may be warranted.

On October 12, 2010, we received a letter from Anna Frostic, Staff Attorney with the Humane Society of the United States, on behalf of the petitioners clarifying that the March 16, 2010, petition was a petition to list the entire species (Pan troglodytes) as endangered, whether in the wild or in captivity, pursuant to the Act. We acknowledged receipt of this letter in a letter to Ms. Frostic dated October 15, 2010.

On October 19, 1976, we published in the Federal Register a rule listing the chimpanzee and 25 other species of primates under the Act (41 FR 45990); the chimpanzee and 13 of the other primate species were listed as threatened. The chimpanzee was found to be threatened based on (1) Commercial logging and clearing of forests for agriculture and the use of arboricides; (2) capture and exportation for use in research labs and zoos; (3) diseases, such as malaria, hepatitis, and tuberculosis contracted from humans; and (4) ineffectiveness of existing regulatory mechanisms. We simultaneously issued a special rule that the general prohibitions provided to the threatened species would apply except for live animals of these species held in captivity in the United States on the effective date of the rulemaking, progeny of such animals, or the progeny of animals legally imported into the United States after the effective date of the rulemaking.

On November 4, 1987, we received a petition from the Humane Society of the United States, World Wildlife Fund, and Jane Goodall Institute, requesting that the chimpanzee be reclassified from threatened to endangered. On March 23, 1988 (53 FR 9460), we published in the Federal Register a finding, in accordance with section 4(b)(3)(A) of the Act, that the petition had presented substantial information indicating that the requested reclassification may be warranted and initiated a status review. We opened a comment period, which closed July 21, 1988, to allow all interested parties to submit comments and information.

On December 28, 1988 (53 FR 52452), we published in the Federal Register a finding that the requested reclassification was warranted with respect to chimpanzees in the wild. This decision was based on the petition and subsequent supporting comments that dealt primarily with the status of the species in the wild and not with the viability of captive populations. We did not propose reclassification of captive chimpanzees. We found that the special rule exempting captive chimpanzees in the United States from the general prohibitions may encourage propagation, providing surplus animals and reducing the incentive to remove animals from the wild. On February 24, 1989 (54 FR 8152), we published in the Federal Register a proposed rule to implement such reclassification. Following publication of the proposed rule, we opened a 60-day comment period to allow all interested parties to submit comments and information.

On March 12, 1990, we published in the Federal Register (55 FR 9129) a final rule reclassifying the wild populations of the chimpanzees as endangered. The captive chimpanzees remained classified as threatened, and those within the United States continued to be covered by the special rule allowing activities otherwise prohibited.

On September 1, 2011, we published in the Federal Register a finding that the March 16, 2010, petition (discussed above under “Petition History”) presented substantial scientific or commercial information indicating that the requested action may be warranted, and we initiated a status review (76 FR 54423).

On November 1, 2011, we published in the Federal Register a notice correcting an incorrect Docket Number given under the ADDRESSES section of the September 1, 2011, petition finding. We also gave notice that we were making the large volume of supporting documents submitted with the petition available to the public. To allow the public adequate time to review the supporting documents, we extended the period of time for submitting information to January 30, 2012 (74 FR 67401).

Section 4(c)(2)(A) of the Act requires that we conduct a review of listed species at least once every 5 years. A 5-year review is conducted to ensure that the classification of a listed species is appropriate. Section 4(c)(2)(B) requires that we determine on the basis of this review: (1) Whether a species no longer meets the definition of endangered or threatened and should be removed from the List (delisted); (2) whether a species more properly meets the definition of threatened and should be reclassified from endangered to threatened; or (3) whether a species more properly meets the definition of endangered and should be reclassified from threatened to endangered. This 12-month finding serves as our 5-year review of this species.

We intend that any final action resulting from this proposed rule be based on the best scientific and commercial data available. Therefore, we seek comments and information on this proposed rule, particularly but not limited to:

(1) Information on taxonomy, distribution, habitat selection, diet, and population abundance and trends of this species.

(2) Information on the effects of habitat loss and changing land uses on the distribution and abundance of this species and its principal food sources over the short and long term.

(3) Information on whether changing climatic conditions are affecting the species, its habitat, or its prey base.

(4) Information on the effects of other potential threat factors, including live capture and collection, domestic and international trade, predation by other animals, and diseases of this species.

(5) Information on management programs for chimpanzee conservation, including mitigation measures related to conservation programs, and any other private or governmental conservation programs that benefit this species.

(6) Information relevant to whether any populations of this species may qualify as distinct population segments.

(7) Information on captive breeding and domestic trade of this species in the United States.

(8) The factors that are the basis for making a listing determination for a species under section 4(a) of the Endangered Species Act of 1973, as amended (Act) (16 U.S.C. 1531 et seq.), which are:

(a) The present or threatened destruction, modification, or curtailment of its habitat or range;

(b) Overutilization for commercial, recreational, scientific, or educational purposes;

(c) Disease or predation;

(d) The inadequacy of existing regulatory mechanisms; or

(e) Other natural or manmade factors affecting its continued existence.

Please include sufficient information with your submission (such as full references) to allow us to verify the information you provide. 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. Section 4(b)(1)(A) of the Act directs that determinations 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.”

You may submit your information concerning this proposed rule by one of the methods listed in ADDRESSES. If you submit information via http://www.regulations.gov, your entire submission—including any personal identifying information—will be posted on the Web site. If your submission is made via hardcopy that includes personal identifying information, you may request at the top of your document that we withhold this personal identifying information from public review. However, we cannot guarantee that we will be able to do so. We will post all hardcopy submissions on http://www.regulations.gov.

At this time, we do not have a public hearing scheduled for this proposed rule. The main purpose of most public hearings is to obtain public testimony or comment. In most cases, it is sufficient to submit comments through the Federal eRulemaking Portal, described above in the ADDRESSES section. If you would like to request a public hearing for this proposed rule, you must submit your request, in writing, to the person listed in FOR FURTHER INFORMATION CONTACT by the date specified above in DATES.

Under section 3(16) of the Act, we may consider for listing any species, which includes subspecies of fish, wildlife, and plants, or any distinct population segment (DPS) of vertebrate fish or wildlife that interbreeds when mature (16 U.S.C. 1532(16)). Such entities are considered eligible for separate listing status under the Act (and, therefore, referred to as listable entities) should we determine that they meet the definition of an endangered species or threatened species.

The Service was petitioned to list all chimpanzees, whether in the wild or in captivity, as endangered. Essentially, this request is to eliminate the separate classification of captive chimpanzees from chimpanzees located in the wild. This petition raised questions regarding whether the Service has any discretion to differentiate the listing status of specimens in captivity from those in the wild.

The Service has not had an absolute policy or practice with respect to this issue, but generally has included wild and captive animals together when it has listed species. The example set by the separate chimpanzee listings was used as support for two petitions the Service received in 2010 to delist U.S. captive and U.S. captive-bred members of three antelope species in the United States. In the 2005 listing determination for the scimitar-horned oryx (Oryx dammah), dama gazelle (Gazella dama), and addax (Addax nasomaculatus) (70 FR 52310, September 2, 2005), the Service found that a differentiation in the listing status of captive specimens of these antelopes in the United States was not appropriate. The petitioners, Exotic Wildlife Association, Safari Club International, and Safari Club International Foundation, asserted that the treatment by the Service of chimpanzees in 1990 warrants similar treatment now for these antelope species. Because the Service has not formally stated whether the current statute, regulations, and applicable policies provide any discretion to differentiate the listing status of specimens in captivity from those in the wild, we reviewed the issues raised by these petitions to ensure the Act is implemented appropriately.

As discussed below, we find that the Act does not allow for captive‐held animals to be assigned separate legal status from their wild counterparts on the basis of their captive state, including through designation as a separate distinct population segment (DPS).1 It is also not possible to separate out captive-held specimens for different legal status under the Act by other approaches (see Other Potential Approaches for Separate Legal Status).

The legal mandate of section 4(a)(1) is to determine “whether any species is an endangered species or threatened species. . . .” (emphasis added). In the Act, a “species” is defined to include any subspecies and any DPS of a vertebrate animal, as well as taxonomic species. Other than a taxonomic species or subspecies, captive-held specimens (of a vertebrate animal species) would have to qualify as a “distinct population segment . . . which interbreeds when mature” to qualify as a separate DPS.2 Nothing in the plain language of the definitions of “endangered species,” “threatened species,” or “species” expressly indicates that captive-held animals can or cannot have separate status under the Act on the basis of their state of captivity. However, certain language in the Act is inconsistent with a determination of separate legal status for captive-held animals.

Under section 4(c)(1), the agency is to specify for each species listed “over what portion of its range” it is endangered or threatened.3 “Range,” while not defined in the Act, consistently has been interpreted as that general geographical area where the species is found in the wild. Thus, a group of animals held solely in captivity and analyzed as a separate listable entity has no “range” separate from that of the species to which it belongs, at least as that term has been applied under the Act. The Service has consistently interpreted “range” in the Act as a geographical area where the species is found in the wild.

As demonstrated in various species' listings at 50 CFR 17.11 and 17.12, information in the “Historic Range” column is the range of the species in the wild. For none of these species does the “range” information include countries or geographic areas on the basis of where specimens are held in captivity, even though the Service knows that specimens of many of these species have long been held in facilities outside their native range, including in the United States.

Also, in analyzing the “present or threatened destruction, modification, or curtailment of [a species'] habitat or range” (emphasis added) (see section 4(a)(1)(A) of the Act), the Service has traditionally analyzed habitat threats in the native range of wild specimens and not included other geographic areas where specimens have been moved to and are being held in captivity. We are not aware of any Service listing decision where analysis of threats to the “range” has included geographic areas outside the native range where specimens are held in captivity.

In analyzing other threats to a species (see sections 4(a)(1)(B), 4(a)(1)(C), 4(a)(1)(D), and 4(a)(1)(E) of the Act), the Service has also limited its analysis to threats acting upon wild specimens within the native range of the species, and has not included analysis of “threats” to animals held in captivity except as those threats impact the potential for the captive population to contribute to recovery of the species in the geographic area where wild specimens are native.

Finally, the Service's 2011 draft policy on the meaning of the phrase “significant portion of its range” (SPR) (76 FR 76987; December 9, 2011) defines “range” as the “general geographic area within which that species can be found at the time the Service or National Marine Fisheries Service (NMFS) makes any particular status determination. This range includes those areas used throughout all or part of the species' life cycle, even if they are not used regularly (e.g., seasonal habitat). Lost historical range in relevant to the analysis of the status of the species, but it cannot consitutute a significant portion of a species' range. The “general geographic area within which the species can be found” is broad enough to include geographic areas where animals have been moved by humans and are being held in captivity. However, the Service has not applied the definition in this manner in the past and does not intend to do so in the future. SPR analyses have been and will be limited to geographic areas where specimens are found in the wild.

In addition to the use of “range” in sections 4(a)(1) and 4(c)(1), the definitions of “endangered species” and “threatened species,” found in section 3 of the Act, also discuss the role of the species range in listing determinations. The Act defines an endangered species as “any species which is in danger of extinction throughout all or a significant portion of its range,” and a threatened species as “any species which is likely to become an endangered species . . . throughout all or a significant portion of its range.” As noted above, “range” has consistently been interpreted by the Service as being the natural range of the species in the wild. 4 For all the reasons discussed above, a group of animals held in captivity could not have separate legal status under the Act because they have no “range,” that is separate from the range of the species in the wild to which they belong as that term is used in the Act.

Certain provisions in sections 9 and 10 of the Act show that what Congress intended was that captive-held animals would generally have the same legal status as their wild counterparts by providing certain exceptions for animals held in captivity. Section 9(b)(1) of the Act provides an exemption from certain section 9(a)(1) prohibitions for listed animals held in captivity or in a controlled environment as of the date of the species listing (or enactment of the Act), provided the holding in captivity and any subsequent use is not in the course of a commercial activity. Section 9(b)(2) of the Act provides an exemption from all section 9(a)(1) prohibitions for raptors held in captivity or in a controlled environment as of 1978 and their progeny. Section 10(a)(1)(A) of the Act allows permits to “enhance the propagation or survival” of the species (emphasis added). This demonstrates that Congress recognized the value of captive-holding and propagation of listed specimens held in captivity, but intended that such specimens would be protected under the Act, with these activities generally regulated by permit.5 If captive-held specimens could simply be excluded through the listing process, none of these exceptions and permits would have been needed.

The full purposes of the Act, stated in section 2(b), are “to provide a means whereby the ecosystems upon which endangered species and threatened species depend may be conserved [hereafter referred to as the first purpose], to provide a program for the conservation of such endangered species and threatened species [hereafter referred to as the second purpose], and to take such steps as may be appropriate to achieve the purposes of the treaties and conventions set forth in subsection (a) of this section [hereafter referred to as the third purpose]”. It has been stated, without explanation, that the language of section 2(b) of the Act supports protecting only specimens that occur in the wild. However, the purposes listed in section 2(b) indicate that the three provisions are intended to have independent meaning, with little to indicate that Congress' intent was to protect only specimens of endangered or threatened species found in the wild. The treaties and conventions under the third purpose are expressly those listed in section 2(a)(4) of the Act, all of which are for the protection of wildlife and plants, and none of which are limited to protection of endangered or threatened specimens in the wild.6 The first purpose calls for conservation of ecosystems, independent of conservation of species themselves (which is separately listed as the second purpose). This does focus on protection of native habitats (those inhabited by the species in the wild in its native range), as it is generally the ecosystems or habitats within which a species has evolved that are those upon which it “depends.” However, the phrase “upon which endangered species and threatened species depend” indicates only that ecosystem (i.e., habitat) protection should be focused on that used by endangered and threatened species, and does not indicate that the sole focus of the Act is conservation of species within their native ecosystems. Several provisions in the Act provide authority to protect habitat, independent of authorities applicable to protection and regulation of specimens of listed species themselves. See, for example, section 5 (Land Acquisition), section 6 (Cooperation With the States), section 7 (Interagency Cooperation), and section 8 (International Cooperation).

It is the second purpose under section 2(b) of the Act that speaks to the conservation of species themselves that are endangered or threatened. However, nothing in the language of the second purpose indicates that conservation programs should be limited to specimens located in the wild. The plain language of section 2(b) refers to “species,” with no distinction between wild specimens of the species as compared to captive-held specimens of the species. Thus, nothing in the plain language indicates that captive-held specimens should be excluded from the Act's processes and protections that would contribute to recovery (i.e., “conservation”) of the entire taxonomic species. It is true that the phrasing of the second purpose (“to provide a program for the conservation of such endangered species and threatened species” (emphasis added)) links the second purpose of species recovery to the first purpose of ecosystem (i.e., native habitat) protection, thus making the goal of the statute recovery of endangered and threatened species in their natural ecosystems. But there is nothing in the phrasing to indicate that the specific provisions of the statute for meeting this goal should be limited to specimens of the species located within the ecosystems upon which they depend.

The potential consequences of captive-held specimens being given separate legal status under the Act on the basis of their captive state, particularly where captive-held specimens would have no legal protection while wild specimens are listed as endangered or threatened,7 indicate that such separate legal status is not consistent with the section 2(b) purpose of conserving endangered and threatened species. Congress specifically recognized “overutilization for commercial, recreational, scientific, or educational purposes” as a potential threat that contributes to the risk of extinction for many species. If captive-held specimens could have separate legal status under the Act, the threat of overutilization would likely increase. For example, the taxonomic species would potentially be subject to increased take and trade in “laundered” wild-caught specimens to feed U.S. or foreign market demand because protected wild specimens would be generally indistinguishable from unprotected captive-held specimens. Because there would be no restriction or regulation on the taking, sale, import, export, or transport in the course of commercial activities in interstate or foreign commerce of captive specimens by persons subject to U.S. jurisdiction, there would be a potential legal U.S. market in captive-held endangered or threatened specimens and their progeny operating parallel to any illegal U.S. market (or U.S. citizen participation in illegal foreign markets) in wild specimens. With the difficulty of distinguishing captive-held from wild specimens, especially when they are broken down into their parts and products, illegal wild specimens of commercial value could likely easily be passed off as legal captive specimens and thus be traded as legal specimens.

If captive-held specimens could have separate legal status under the Act, the taxonomic species would potentially be subject to increased take of animals from the wild and illegal transfer of wild specimens into captivity. The United States is one of the world's largest markets for wildlife and wildlife products.8 Poachers and smugglers would have increased incentive to remove animals from the wild and smuggle them into captive-holding facilities in the United States for captive propagation or subsequent commercial use of either live or dead specimens, because once in captivity there would be no Act restrictions on use of the captive-held specimens or their offspring. This would be a particular issue for foreign species where States regulate native wildlife (and therefore captive-held domestic endangered or threatened specimens would continue to be regulated under State law), but often do not regulate use of nonnative wildlife. This could be a particularly lucrative trade for poachers and smugglers because many endangered and threatened species (particularly foreign species) are at risk of extinction because of their high commercial value in trade (as trophies or pets, or for their furs, horns, ivory, shells, or medicinal or decorative use).

Congress included the similarity-of-appearance provision in section 4(e) to allow the Service to regulate species under the Act where one species so closely resembles an endangered or threatened species that enforcement cannot distinguish between the protected and unprotected species and this difficulty is a threat to the species. The Service's only option in the cases of “take” described above would be to complete separate similarity-of-appearance listings for captive-held animals. A similarity-of-appearance listing under the Act for captive-held specimens would make captive specimens subject to the same restrictions as listed wild specimens.

As described in the following subsections, operation of key provisions in sections 4 and 7 of the Act also indicate that it would not be consistent with Congressional intent or the purpose of the Act to treat groups of captive-held specimens as separate listable entities on the basis of their captive state.

The section 4 listing process is not well suited to analyzing threats to an entirely captive-held group of specimens that are maintained under controlled, artificial conditions.

If wild populations and captive-held specimens could qualify as separate listable entities, and it was determined that captive-held specimens do not qualify as endangered or threatened, captive-held specimens would receive no assistance or protection under the Act even in cases where wild populations continue to decline, even to the point of the species being extirpated in the wild, with the specimens in captivity being the only remaining members of the species and survival of the species being dependent on the survival of the captive-held specimens. This would not be consistent with the purposes of the Act.

Groupings of captive-held specimens might not meet the definition of endangered or threatened under the statutory factors because the scope of the section 4 analysis for a captive-specimen listing would be the conditions under which the captive-held specimen exists, not the conditions of the members of the species in the wild, as the captive-held members of the species and wild members of the species would be under separate consideration for listing under the Act and therefore under separate 5-factor analyses. Groupings of solely captive-held specimens might not meet the definition of endangered (in danger of extinction throughout all or a significant portion of their range) or threatened (likely to become endangered within the foreseeable future) when the conditions for individual specimens' survival are carefully controlled under human management, especially for species that readily breed in captivity, where breeding has resulted in large numbers of genetically diverse specimens, or where there are no known uncontrollable threats such as disease.

The majority of the section 4(a)(1) factors would be difficult to apply to captive-held specimens with a range independent of wild specimens because they are not readily suited to evaluating specimens held in captivity or might contribute to a determination that the entity under consideration (separate groupings of captive-held specimens) does not qualify as endangered or threatened. There may be situations where only disease threats (factor C) and other natural or manmade factors (factor E) would be applicable to consideration of purely captive-held groups of specimens. The present or threatened destruction, modification, or curtailment of habitat or range (factor A) may not be a threat for a listable entity consisting solely of captive-held specimens, because the physical environment under which captive specimens are held is generally readily controllable and, in many cases, optimized to ensure the physical health of the animal. Overutilization (factor B) is unlikely to be a factor threatening the continued existence of groups of captive-held specimens where both breeding and culling are managed to ensure the continuation of stock at a desired level based on ownership interest and market demand. Predation (factor C) may rarely be a factor for captive-held specimens because predators may be more readily controlled. Human management may provide for all essential life functions, thereby eliminating selection or competition for mates, food, water resources, and shelter.

It is unclear how the “inadequacy of existing regulatory mechanisms” (factor D) would apply to captive-held specimens with a range independent of wild specimens because this factor generally applies in relationship to threats identified under the other factors. Regulatory mechanisms applicable to wild specimens usually include measures to protect natural habitat and laws that regulate activities such as take, sale, and import and export. However, there might be no regulatory mechanisms applicable when the group of specimens under consideration is in captivity (except perhaps general humane treatment or animal health laws).

That the section 4 process is not well suited to listings of entirely captive specimens is demonstrated by the previous listing action for the chimpanzee. The chimpanzee was originally listed in its entirety as a threatened species (41 FR 45990; Oct. 19, 1976). On March 12, 1990 (55 FR 9129), the Service reclassified wild populations of chimpanzees as a separate endangered species, noting that wild populations had declined due to massive habitat destruction, excessive hunting and capture by people, and lack of effective national and international controls. But the final reclassification rule never analyzed whether the newly designated DPS consisting of chimpanzees “wherever found in captivity” separately met the definition of a threatened species based on the five factors found in section 4(a)(1) of the Act. Instead, the rule discussed estimated numbers of animals in captivity and known captive-breeding programs, stating in response to a comment that some chimpanzee breeding groups were being managed in the United States with the objective of achieving self-sustainability. The five-factor analysis in both the proposed and final listing rules considered only information applicable to wild populations and within the taxanomic species' native range.

If wild populations and groups of captive-held specimens could qualify as separate listable entities, and because groupings of captive-held specimens may not meet the definitions of endangered or threatened under the statutory factors (as discussed above), captive-held specimens currently listed as endangered or threatened (because they were originally listed along with wild specimens as a single listed entity) could be petitioned for, and might qualify for, delisting. These specimens would therefore lose any legal protections of the Act, even as wild populations continue to decline, including to the point of extirpation in the wild. This likewise would not be consistent with the purpose of the Act.

If wild specimen populations and groups of captive-held specimens could qualify as separate listable entities, and because the analysis for determining legal status of wild populations would be separate from the analysis for determining legal status of captive specimens, the wild population would likely qualify for delisting in the event that all specimens are lost from the wild (in other words, if they became extinct in the wild), thereby removing both incentives and protections for conservation of the species in the wild and the conservation of its ecosystem.

Under the Service's standard section 4 process, both captive-held and wild specimens of the species are members of the listed entity and have legal status as endangered or threatened. In situations where all specimens in the wild are gone, either because they are extirpated due to threats or because, as a last conservation resort, the remaining wild specimens are captured and moved into captivity, the species remains listed until specimens from captivity can be reintroduced to the wild and wild populations are recovered. However, if captive specimens and wild populations could have separate legal status, once all members of the wild population were gone from the wild, the wild population could be petitioned for and would likely qualify for delisting under 50 CFR 424.11(d)(1) as a “species” that is now extinct. As shown above, the separate captive-held members of the taxonomic species might not qualify for legal status as endangered or threatened, due to the lack of “threats” that create a risk of extinction to the viability of a sustainable, well-managed pool of captive animals. With no listed entities and therefore no authority to use funding or other provisions of the Act for the species, the Service would lose valuable tools for recovery of the species to the wild. This would clearly not be consistent with the purpose of the Act.

All Federal agencies have a legal obligation to ensure that their actions are not likely to jeopardize the continued existence of endangered and threatened species. This means that for separately listed captive-held endangered or threatened specimens, any Federal agency that is taking an action within the United States or on the high seas that may affect the captive-held listed species arguably would have a legal duty to consult with the Service. However, the section 7 consultation process is not well suited to analysis of adverse impacts posed to a purely captive-held group of specimens given that such specimens are maintained under controlled, artificial conditions.

For any listed entity located within the United States or on the high seas, we have a section 4 duty to designate critical habitat unless such habitat is not prudent.9 Although it is appropriate not to designate critical habitat for foreign species or to limit a critical habitat designation to natural habitats for U.S. species when a listing is focused on the species in the wild (even when some members of the species may be held in captivity within the United States), it is not clear how the Service would support not designating critical habitat when the listed entity would consist entirely of captive-held specimens (when the focus of captivity is within the United States). As with the consultation process, the critical habitat designation duty is not well suited for listings that consist entirely of captive-held specimens, especially given the anomaly of identifying the physical and biological features that would be essential to the conservation of a species consisting entirely of captive animals in an artificial environment. These complexities related to section 7 consultations and designation of critical habitat indicate that Congress did not intend the Service to treat groups of captive-held specimens as separate listable entities on the basis of their captive state.

Legislative history surrounding the 1978 amendment of the definition of “species” in the Act indicates that Congress intended designation of a DPS to be used for wild vertebrate populations, not separation of captive-held specimens from wild members of the same taxonomic species. The original (1973) definition of species was “any subspecies . . . and any other group of fish or wildlife of the same species or smaller taxa in common spatial arrangement that interbreed when mature” (Pub. L. 93-205). In 1978, Congress amended the Act to the Act's current definition of species, substituting “distinct population segment” for “any other group” and “common spatial distribution” following testimony on the inadequacy of the original definition, such as the exclusion of one category of populations commonly recognized by biologists: disjunct allopatric populations that are separated by geographic barriers from other populations of the same species and are consequently reproductively isolated from them physically (See Endangered Species Act Oversight: Hearing Before Senate Subcommittee on Resource Protection, Senate Committee on Environment and Public Works, 95th Cong. 50 (July 7, 1977) (here after 1977 Oversight Hearing) (letter from Tom Cade, Program Director, The Peregrine Fund, to Director of the Service). Although there was discussion regarding population stocks and reproductive isolation generally, particularly in association with development of the 1973 definition,10 discussions that provide additional context on the scope of the definition of “species” show that Congress thought of the population-based listing authority as appropriate for populations that are distinct for natural and evolutionary reasons. For example, one witness discussed “species” as associated with the concept of geographic reproductive isolation and including characteristics of a population's ability or inability to freely exchange genes in nature (See 1977 Oversight Hearing at 50 (Cade letter)). There is no evidence that Congress intended for the agency to use the authority to separately list groups of animals that have been artificially separated from other members of the species through human removal from the wild and maintenance in a controlled environment. Examples in testimony for which population-based listing authority would be appropriately used were all for wild populations (See 1973 Hearing on H.R. 37 and others at 307 (statement of Stephen Seater, Defenders of Wildlife); Endangered Species Act of 1973: Hearings on S. 1592 and S. 1983 Before the Senate Subcomm. on Environment, Senate Comm. on Commerce, 93d Cong. 98 (1973) (statement of John Grandy, National Parks and Conservation Assoc.); Endangered Species Authorization: Hearings on H.R. 10883 Before the House Subcomm. on Fisheries and Wildlife Conservation and the Environment, House Comm. on Merchant Marine and Fisheries, 95th Cong. 560 (1978) (statement of Michael Bean, Environmental Defense Fund)). No examples were given suggesting designation of captive-held vertebrates as a DPS.

In addition to separate designation as “species,” there are two other approaches under which it could be argued that captive-held specimens could be given separate legal status from their wild counterparts: (1) Simply excluding captive-held members of the taxonomic species, subspecies, or DPS from the Act's protections, or (2) designating only wild members of the taxonomic species as a DPS, with captive-held specimens not included in the DPS. However, neither approach would be consistent with Congress' intent for the Act.

One court already determined that captive-held specimens of a listable entity cannot simply be excluded when they are members of the listable entity and the Service agrees with the court's reasoning in this case. The Service cannot exclude captive-held animals from a listing once these animals are determined to be part of the species. This case—Alsea Valley Alliance v. Evans—involved the listing of coho salmon by the NMFS. NMFS's 1993 Hatchery Policy (58 FR 17573; April 5, 1993) stated that hatchery populations could be included in the listing of wild members of the same evolutionary significant unit (equivalent to a DPS), but only if the hatchery fish were “essential to recovery.” In 1998, NMFS listed only “naturally spawned” specimens when it listed an evolutionary significant unit (ESU) of coho salmon (63 FR 42587; August 10, 1998). This decision was challenged in court, and the Court found NMFS's listing decision invalid because it excluded hatchery populations (which are fish held in captivity) even though they were part of the same DPS (or ESU) Alsea Valley Alliance v. Evans, 161 F. Supp. 2d 1154 (D. Or. 2001). The Court held that “Congress expressly limited the Secretary's ability to make listing distinctions below that of subspecies or a DPS of a species,” which was the practical result of excluding all hatchery specimens. NMFS subsequently changed its Hatchery Policy in 2005, stating that all hatchery fish that qualify as members of the ESU would be considered part of the ESU, would be considered in determining whether the ESU should be listed as endangered or threatened, and would be included in any listing under the Act (70 FR 37204; June 28, 2005). NMFS's 2005 Hatchery Policy was upheld by the Ninth Circuit Court in Trout Unlimited v. Lohn, 559 F. 3d 946 (2009).

For the same reasons as discussed earlier in this document, the Service also cannot simply designate wild members of the taxonomic species as a DPS, leaving all captive‐held animals unlisted. Although this would avoid designating captive‐held animals as a separate DPS and would not technically be excluding animals that otherwise have been found to be members of a DPS (and thereby avoid the error the court found in the Alsea Valley Alliance v. Evans decision), the result would be separate legal status and no legal protections for captive-held specimens, and many of the same legal and conservation consequences discussed above would occur. For these reasons, we also find this outcome to be inconsistent with Congress' intent for the Act, primarily as inconsistent with the purposes of the Act.

Now that we have determined that all chimpanzees, including captive and wild animals, should be considered as a single listable entity under the Act, we will next assess the status of the species and determine if the species meets the definition of endangered or threatened under the Act. In 1990, we determined that chimpanzees in the wild are endangered. This analysis considers new information in light of that previous determination and includes the extent to which captive-held chimpanzees create or contribute to threats to the species or remove or reduce threats to the species by contributing to the conservation of the species.

In 1990, when the wild populations of chimpanzees were reclassified to endangered, only three subspecies were recognized. Since that time, the correct taxonomic labeling for chimpanzees has been debated and includes the use of a two-subspecies system, a four-subspecies system, and the use of the species level without subspecific designations (Carlsen et al. 2012, p. 5; Morgan et al. 2011, p. 7; Plumptre et al. 2010, p. 2; Ghobrial et al. 2010, p. 2; Oates et al. 2008, unpaginated). Today, four subspecies are commonly recognized and include the Central African chimpanzee (Pan troglodytes troglodytes), East African chimpanzee (P. t. schweinfurthii), West African chimpanzee (P. t. verus), and Nigeria-Cameroon chimpanzee (P. t. ellioti) (Morgan et al. 2011, p. 7; Oates et al. 2008, unpaginated).

Characteristics of the chimpanzee include an opposable thumb and prominent mouth. The skin on a chimpanzee's face, ears, palms, and soles of the feet are bare, whereas the rest of the body is covered with brown to black hair. Arms extend beyond the knees. This species walks “on all four” but are able to walk on just their legs for more than a kilometer (0.6 miles (mi)) (WWF n.d., unpaginated). The male stands over 1.2 meters (m) (4 feet (ft)) tall and weighs 59 kilograms (kg) (130 pounds (lb)); the female is closer to 0.9 m (3 ft) tall and weighs under 45 kg (100 lb) (AZA 2000, p. 1).

Chimpanzees live in social communities that range from 5 to 150 individuals (Oates et al. 2008, unpaginated). A male dominance hierarchy forms the core of the community. Males work together to defend a home range and will occasionally attack and kill individuals from another community (Lonsdorf 2007, pp. 72, 74). These communities do not move around in a group like gorillas or monkeys, but rather spend most of their time in subgroups called parties (Pusey et al. 2007, p. 626; Plumptre et al. 2003, p. 9). Members of a community may join, or leave, at any time and parties may change frequently in size and composition depending on presence of receptive females, food availability, and activity of the party (Lonsdorf 2007, p. 72; Lehmann and Boesch 2004, p. 207; Humle 2003, p. 17; Plumptre et al. 2003, p. 9).

Males remain in the community in which they were born; however, once females become sexually mature, between the ages of 9 and 13, they leave the community to join a new one (Humle 2003, p. 16). Chimpanzees are slow breeders; females do not give birth until they are 12 years of age or older and only have one infant every five or six years. Infants are weaned around four years old, and stay with their mothers until they are about eight to ten years old (Lonsdorf 2007, p. 72; Kormos 2003, p. 1; Plumptre et al. 2003, pp. 8, 10, 13). The relationship between the mother and her offspring is critical; young may not survive being orphaned, even after they are weaned (Lonsdorf 2007, p. 72).

The chimpanzee lives in a variety of moist and dry forest habitats including savanna woodlands, mosaic grassland forests, and tropical moist forests (Oates et al. 2008, unpaginated; Pusey et al. 2007, p. 626; GRASP 2005a, p. 6; Butynski 2003, p. 6). In general, chimpanzees need large areas to provide sufficient resources for feeding, nesting, and shelter (Carter 2003b, p. 158). However, home ranges may vary depending on the quality of habitat and community size; competition for food and predation risk may also play a role. Home ranges average 12.5 km2 (8 mi2), but can range from 5-400 km2 (3-249 mi2) (Oates et al. 2008, unpaginated; Humle 2003, pp. 17-18).

Chimpanzees are omnivores; half their diet is ripe fruit, but they also feed on leaves, bark, stems, insects, and mammals, including red colobus (Procolobus spp.), black-and-white colobus (Colobus guereza) and red-tailed guenons (Cephalophus monticola). Diets vary seasonally and between populations, depending on food availability and habitat type (Oates et al. 2008, unpaginated; Pusey et al. 2007, p. 626; Humle 2003, pp. 13-14; Watts and Mitani 2002, p. 7).

Chimpanzees build arboreal nests in which they sleep at night and may rest during the day (Plumptre et al. 2003, p. 10; Humle 2003, p. 15). Nests are constructed by preparing a foundation of solid side branches, bending, breaking, and interweaving side branches crosswise, then bending smaller twigs in a circle around the rim. Chimpanzees exhibit strong preferences for certain tree species for nesting, independent of their availability in the habitat. Choice of nesting sites is variable across populations and communities of chimpanzees and is dependent on habitat structure, resource distribution, predation levels, and human disturbance. Chimps can be deterred from nesting in certain areas where human habitation is concentrated. As a result, human presence influences nesting behavior and can put chimpanzees at risk of predators, since habitats where they relocate nests to avoid humans may not provide sufficient protection (Humle 2003, pp. 15-16).

Historically, this species may have spanned most of Equatorial Africa, from Senegal to southwest Tanzania, ranging over 25 countries (Butynski 2003, p. 6). Today, the chimpanzee has been lost from Benin, Togo, and Burkina Faso. The species now occurs in a wide but discontinuous distribution over 22 countries in an area approximately 2,342,000 square kilometers (km2) (904,000 square miles (mi2)) (Carlsen et al. 2012, p. 5; Oates et al. 2008, unpaginated; Kormos and Boesch 2003, p. 1; Butynski 2003, p. 6).

Chimpanzees are thought to have numbered in the millions at the beginning of the 20th Century, although there are no hard data to support this. Chimpanzee populations are believed to have declined by 66 percent, from 600,000 to 200,000 individuals before the 1980s (Kormos and Boesch 2003, p. 1). Since the 1980s, estimates for the chimpanzee have varied, but in general have increased over the past three decades (See Table 1) (Oates 2006, pp. 102-104; Butynski 2003, p. 10). Using the latest population estimates for each subspecies, the chimpanzee, today, totals between 294,800 and 431,100 individuals; although we note that this estimate does not factor in a recent 90 percent decline in the chimpanzee population of Côte d'Ivoire (see below). The range countries and most recent population estimates for each subspecies are outlined in Table 2.

The increase in the chimpanzee population estimates is believed to be a result of the difficulty in producing accurate estimates and the availability of new information, rather than an actual increase in chimpanzee numbers (Oates 2006, p. 104). Accurate data is lacking for most of the chimpanzee populations. Few areas have been adequately surveyed; some chimpanzee populations survive at densities too low for accurate detection; survey methods lack precision to enable extrapolation to large areas of potential habitat; some surveys are outdated; and in many cases estimates are simply best guesses (Morgan et al. 2011, p. 9; Plumptre et al. 2010, pp. 5, 7, 9, 31, 41; Campbell et al. 2008, p. 904; Oates 2006, p. 102; Tutin et al. 2005, p. 6; GRASP 2005a, p. 7; Butynski 2003, p. 5; Kormos and Bakarr 2003, p. 29;).

Despite the appearance of an increase in chimpanzee numbers, experts agree that chimpanzee populations are declining (Plumptre et al. 2010, p. 1; Greengrass 2009, pp. 77, 80-82; Kabasawa 2009, p. 37; Campbell et al. 2008, pp. 903-904; Oates et al. 2008, unpaginated; Oates 2006, p. 110; Tutin 2005, p. 2; GRASP 2005a, p. 3; Kormos and Boesch 2003, p. 2; Butynski 2003, p. 11; Nishida et al. 2001, pp. 45-46). Data to support a declining trend comes from nationwide surveys of Gabon, Côte d'Ivoire, and Tanzania, data from long-term chimpanzee research sites, a questionnaire survey of great ape field researchers, and the expansion and increasing intensity of threats (Junker et al. 2012, p. 3; Plumptre et al. 2010, p. 8; Oates 2006, pp. 105-106; Nishida et al. 2001, p. 45; Campbell et al. 2008, pp. 903-904; Tutin et al. 2005, p. 32). One of the greatest documented losses of chimpanzees comes from a 2007 survey of Côte d'Ivoire which found a 90 percent decline in chimpanzees since the last survey conducted in 1989-1990, indicating a significant loss of chimpanzees from a country once thought to be one of the final strongholds of the western chimpanzee (Campbell et al. 2008, p. 903). Many remaining populations are now small, isolated, and face serious threats (Oates 2006, pp. 104, 110). Furthermore, the chimpanzee has already been extirpated from three countries. Due to the high risk of extinction for populations under 600 individuals (Oates 2006, p. 108), the chimpanzee could be extirpated from an additional four countries: Nigeria, Senegal, Ghana, and Guinea-Bissau (Carlsen et al. 2012, p. 5; Butynski 2003, p. 11; Kormos and Boesch 2003, p. 3).

In addition to wild populations, chimpanzees are held in captivity in several countries around the world, including African countries and the United States. We do not have detailed information on the number, subspecies, or the location of captive chimpanzees. However, we did find information indicating that 70 chimpanzees are living in sanctuaries in Cameroon and Nigeria (Morgan et al. 2011, p. 9). Approximately 171 chimpanzees are living in sanctuaries throughout West Africa; another 478 chimpanzees in the region are known to be held outside of sanctuaries (e.g., homes or hotels) (Kormos and Boesch 2003, p. 4). Within the United States, approximately 2,000 chimpanzees are in captivity (ChimpCare 2013, unpaginated; Ross et al. 2008, p. 1,487).

Threats to the chimpanzee have intensified and expanded since 1990, when wild populations of the chimpanzee were listed as endangered. Across its range, high deforestation rates are destroying, degrading, and fragmenting forests the chimpanzee needs to support viable populations and provide food and shelter. Widespread poaching, capture for the pet trade, and outbreaks of disease are removing individuals needed to sustain viable populations; recovery from the loss of individuals is more difficult given the slow reproductive rates of chimpanzees. These actions are exacerbated by an increasing human population, the expansion of settlements, and increasing pressure on natural resources to meet the needs of the growing population (Morgan et al. 2011, p. 10; Plumptre et al. 2010, p. 2; Kabasawa 2009, p. 37; Campbell et al. 2008, p. 903; Lonsdorf 2007, p. 72; Unti 2007a, p. 4; Unti 2007b, p. 5; Bennett 2006, p. 885; Tutin et al. 2005, p. 1; GRASP 2005a, p. 3; Kormos 2003, pp. ix, 1; Kormos and Boesch 2003, p. 4; Nisbett et al. 2003, p. 97; Walsh et al. 2003, pp. 611-612; Carter et al. 2003, p. 38).

Deforestation, with consequent access and disturbance by humans, remains a major factor in the decline of chimpanzee populations across their range. Although some large forest blocks remain, commercial logging and the conversion of forests to agricultural land continue to severely reduce and fragment chimpanzee habitat (Morgan et al. 2011, pp. 12, 18, 19, 26, 31; Plumptre et al. 2010, p. 2; Oates et al. 2008, unpaginated; Unti 2007a, p. 4; Unti 2007b, p. 5; CBFP 2006, p. 16; Fa et al. 2006, p. 498; Tutin et al. 2005, pp. 1, 2, 10, 12, 14-17, 21-23; Humle 2003, p. 150; Carter et al. 2003, p. 38; Duvall et al. 2003, p. 47; Gippoliti et al. 2003, p. 57; Hanson-Alp et al. 2003, p. 83; Herbinger et al. 2003, pp. 106, 109; Kormos et al. 2003b, p. 71; Kormos et al. 2003c, p. 151; Magnuson et al. 2003, p. 113; Nisbett et al. 2003, pp. 95, 97; Oates et al. 2003, p. 129; Walsh et al. 2003, p. 613; Parren and Byler 2003, p. 135). As the human population and economic development have increased, pressure on forest resources has also increased. This increasing pressure has led to uncontrolled legal and illegal forest conversion within and outside of protected areas (e.g., national parks and forest reserves), leaving them destroyed and fragmented (Greengrass 2009, pp. 77, 80; Campbell et al. 2008, p. 903; CBFP 2006, pp. 16, 33; Nasi et al. 2006, p. 14; Carter et al. 2003, p. 38; Duvall et al. 2003, p. 47; Herbinger et al. 2003, p. 109; Magnuson et al. 2003, p. 113; Oates et al. 2003, p. 129; Parren and Byler 2003, pp. 135, 137).

The natural protection once afforded to chimpanzees by large blocks of suitable habitat, isolated from human activities, is disappearing due to logging activity. Much of the chimpanzee's range is already allocated to logging concessions, and logging operations, both legal and illegal, are expanding (Morgan et al. 2011, pp. 12, 26; Laporte et al. 2007, p. 1451; Morgan and Sanz 2007, pp. 3, 5; CBFP 2006, p. 29; Hewitt 2006, p. 43; Nasi et al. 2006, p. 14; Tutin 2005, pp. 2, 4, 12, 30, 32; Kormos et al. 2003a, p. 29). Heavy pressures on timber resources have led to cutting cycles that occur too frequently in an area to allow for proper regrowth, resulting in rapid degradation of forests (Parren and Byler 2003, p. 135). In addition to clearing forests, logging operations often create a network of roads for transporting timber. These roads provide greater access to forests that were once inaccessible, facilitate the establishment of human settlements, and are accompanied by further deforestation from the conversion of forests to agriculture (Junker et al. 2012, p. 7; Morgan et al., 2011, p. 12; Plumptre et al. 2010, p. 2; Greengrass 2009, p. 80; Laporte et al. 2007, p. 1451; Hewitt 2006, p. 44; Duvall 2003, p. 143; Oates et al. 2003, p. 129; Parren and Byler 2003, pp. 133, 137-138).

Human population growth and agricultural expansion have destroyed and fragmented forests across the range of the chimpanzee and are two of the greatest threats to chimpanzee survival. Plantations and farms have been established in suitable chimpanzee habitat, including within protected areas (Plumptre et al. 2010, p. 9; Greengrass 2009, p. 80; Unti 2007a, p. 4; Unti 2007b, p. 5; Tutin et al. 2005, p. 20; Duvall 2003, p. 143; Gippoliti et al. 2003, pp. 55, 57; Hanson-Alp et al. 2003, p. 83; Humle 2003, p. 147; Kormos et al. 2003b, p. 63; Magnuson et al. 2003, p. 113; Parren and Byler 2003, p. 138). In West Africa, most unreserved forests have been converted to cultivation (Parren and Byler 2003, p. 138). Agricultural practices are largely unsustainable and are encroaching into additional forested areas (Parren and Byler 2003, p. 133).

Chimpanzees are highly adaptive and occur in a variety of habitats, including primary, secondary, and regenerating forests, logged forests, and plantations; they have even been found living in close proximity to humans. However, the loss, or even the degradation, of the chimpanzee's traditional habitat can affect their survival by impacting its food resources, behavior, susceptibility to disease, and abundance and distribution, (Morgan and Sanz 2007, p. 1; Carter et al. 2003, p. 36; Hanson-Alp et al. 2003, p. 83; Kormos and Boesch 2003, p. 18; Nisbett et al. 2003, p. 97; Parren and Byler 2003, p. 137).

Although chimpanzees feed on a wide variety of foods, their energy requirements, as large primates with large home ranges, predispose them to a reliance on high-energy fruits (Greengrass 2009, p. 81). Removal, or lowering the quality, of habitat through logging activity or establishment of agricultural lands destroys the structure and composition of the forest, eliminating essential food sources, which can affect sociability, condition of individuals, and female reproductive success, and increase vulnerability to diseases or parasites and infant and juvenile mortality (Greengrass 2009, pp. 81-82). Even in areas with lower levels of logging where essential food sources were unaffected, chimpanzee densities have declined significantly and remained low for years. Clear-cutting results in total habitat loss, and because of severe soil erosion, the potential for future forest regeneration is also lost (Parren and Byler 2003, pp. 137-138).

The loss or reduction of food sources and the noise and disturbance from logging activity can cause chimpanzee communities to abandon their home range to find a new home range with sufficient resources and less human activity. These chimpanzees may enter another community's territory which can lead to further competition for resources and conflict that can lead to death. As habitat is lost or fragmented and chimpanzee populations are forced into smaller forest fragments, lethal interactions with other chimpanzees may increase. Furthermore, chimpanzees may be cautious about reinhabiting previous home ranges where they were displaced by humans (Morgan et al. 2011, p. 12; Lonsdorf 2007, p. 74; Carter et al. 2003, p. 36; Parren and Byler 2003, pp. 137-138). If the displacement of chimpanzees forces them into suboptimal habitat, they may not have sufficient protection from predators, especially at night (Humle 2003, pp. 15-16).

The loss or reduction of food sources due to expanding logging, agriculture, and human settlements into chimpanzee habitat has also resulted in increased conflicts between humans and chimpanzees (Tacugama Sanctuary 2013, unpaginated; Unti 2007b, p. 5; Tweheyo et al. 2005, pp. 237-238, 244; Herbinger et al. 2003, p. 106; Humle 2003, p. 147; Kormos et al. 2003b, p. 71; Naughton-Treves et al. 1998, pp. 597, 600). Lack of sufficient wild food and an increase in farming and human presence have increased the occurrence of crop raiding to supplement their diet. Crop raiding can cause substantial losses to farmers, reduce the tolerance of humans to chimpanzee presence, and increase killing chimpanzees to protect valuable crops or in retaliation for the destruction of crops (Tacugama Chimpanzee Sanctuary 2013, unpaginated; Oates et al. 2008, unpaginated; Bennett et al. 2006, p. 885; Tweheyo et al. 2005, p. 245; Duvall 2003, p. 144; Carter et al. 2003, p. 36; Gippoliti et al. 2003, p. 57; Humle 2003, pp. 147, 150; Parren and Byler 2003, p. 138; Naughton-Treves 1998, p. 597).

Unsustainable hunting for the bushmeat trade is one of the major causes of the decline in chimpanzees, and continues to be a major threat to the survival of chimpanzees in protected and unprotected areas (Ghobrial et al. 2011, pp. 1, 2, 11; Morgan et al. 2011, p. 10; Hicks et al. 2010, pp. 1, 3, 6, 11; Plumptre et al. 2010, p. 2; Kabasawa 2009, p. 37; Campbell et al. 2008, p. 903; Oates et al. 2008, unpaginated; Lonsdorf 2007, p. 74; Unti 2007b, p. 5; Tutin et al. 2005, pp. 1, 10-23, 27-28; Herbinger et al. 2003, p. 109; Humle 2003, p. 17; Kormos and Boesch 2003, pp. 2, 14, 16, 19; Kormos et al. 2003b, p. 63; Kormos et al. 2003c, p. 151; Magnuson et al. 2003, pp. 111, 113; Nisbett et al. 2003, p. 95; Oates et al. 2003, pp. 123, 129; Nishida et al. 2001, p. 47; Bowen-Jones 1998, p. 12). Growth in the human population in Africa has increased the demand for wild animal meat, or bushmeat. Expansion of logging activities, including the construction of logging roads, has facilitated a significant market, much of it illegal, for commercial bushmeat to meet this demand (Amati et al. 2009, p. 6; Kabasawa 2009, pp. 50-51; AV Oates et al. 2008, unpaginated; Fa et al. 2006, pp. 503, 506; Magazine 2003, p. 7; Kormos et al. 2003c, p. 151; Walsh et al. 2003, p. 613; Nishida et al. 2001, p. 47; Bowen-Jones 1998, pp. 1, 11). Logging roads and vehicles provide access to the forests and a means to export meat to markets and cities. Logging operations are accompanied by an onslaught of workers who are encouraged to hunt to provide for their own needs and commercial hunters who operate in forests to supply the needs of forestry workers and to trade outside of the forested areas (Plumptre et al. 2010, p. 2; Kormos et al. 2003c, p. 151; Nisbett et al. 2003, p. 95; Walsh et al. 2003, p. 613; Nishida et al. 2001, p. 47; Bowen-Jones 1998, p. 1). Furthermore, bushmeat trade is also an important livelihood and the primary source of protein for humans in much of the chimpanzee's range (Abwe and Morgan 2008, p. 26; Fa et al. 2006, p. 507; Bennett et al. 2006, p. 885; Kormos et al. 2003c, p. 155; Wilkie and Carpenter 1999, p. 927).

The intensity of hunting chimpanzees varies by country and region (Kormos et al. 2003c, pp. 151-152). Religious, traditional, and familial taboos against the killing of chimpanzees and the consumption of their meat exist in many areas (Hicks et al. 2010, p. 9; Plumptre et al. 2010, p. 2; Greengrass 2009, p. 81; Kabasawa 2009, p. 51; Unti 2007a, p. 4; Carter et al. 2003, pp. 31, 38; Duvall et al. 2003, p. 47; Gippoliti et al. 2003, pp. 55, 57; Humle 2003, p. 18; Kormos and Boesch 2003, pp. 10, 13; Kormos et al. 2003b, pp. 63, 71; Kormos et al. 2003c, pp. 152, 154; Nisbett et al. 2003, p. 95; Oates et al. 2003, p. 129; Waller and Reynolds 2001, p. 135; Bowen-Jones 1998, pp. 19, 27). However, these areas may be hunted by people from surrounding areas where there is demand for chimpanzee meat (Kormos et al. 2003b, p. 72). Furthermore, these traditions and beliefs are not necessarily being passed down to younger generations and cannot be relied on to protect chimpanzees in the future (Hicks et al. 2010, p. 9; Unti 2007a, p. 4; Oates et al. 2003, p. 129).

Despite the high demand for bushmeat, primates do not represent the majority of animals killed for the bushmeat trade (AV Magazine 2003, p. 7; Magnuson et al. 2003, p. 113; Walsh et al. 2003, p. 613; Nishida et al. 2001, p. 47; Bowen-Jones 1998, p. 1). In fact, studies have found that chimpanzee meat makes up only a small fraction of the meat found in markets; estimates from different regions have ranged from 0.01 to 3 percent (Kabasawa 2009, p. 38; Fa et al. 2006, p. 502; Herbinger et al. 2003, p. 106; Kormos and Boesch 2003, p. 2; Kormos et al. 2003c, pp. 151-152). However, because the sale of ape meat is often hidden and the meat may be eaten in villages and never make it to markets, the proportion of chimpanzee meat in bushmeat markets could be greater than reported (Kabasawa 2009, p. 38; Kormos et al. 2003c, pp. 151-152; Bowen-Jones 1998, pp. 21-11). Hunting pressure even at a low level is enough to result in the local extirpation of large chimpanzee populations. Low population densities and slow reproductive rates prevent chimpanzees from recovering easily from the loss of several individuals (Oates et al. 2008, unpaginated; Fa et al. 2006, p. 503; AV Magazine 2003, p. 7; Duvall et al. 2003, p. 47; Herbinger et al. 2003, p. 106; Kormos and Boesch 2003, p. 2; Kormos et al. 2003c, pp. 151, 153; Nisbett et al. 2003, p. 95; Magnuson et al. 2003, p. 113; Bowen-Jones 1998, p. 13).

Threats to the chimpanzee from habitat loss and commercial hunting have been exacerbated by civil unrest that has occurred in several chimpanzee range countries (Plumptre et al. 2010, pp. 4-5; Campbell et al. 2008, p. 903; CBFP 2006, p. 16; Hanson-Alp et al. 2003, p. 85; Nisbett et al. 2003, pp. 89, 95; Draulans and Van Krunkelsven 2002, pp. 35-36). During civil conflict, many people, including refugees, military groups, and rebels take shelter in interior forests and protected areas (Plumptre et al. 2010, p. 4; CBFP 2006, p. 16). The presence of soldiers and displaced refugees increases the number of people that rely on bushmeat for protein. Not only do soldiers hunt, but they also supply locals with weapons and ammunition to hunt them (Plumptre et al. 2010, p. 5; Hanson-Alp et al. 2003, p. 85; Draulans and Van Krunkelsven 2002, pp. 35-36;). Civil unrest has contributed to a significant loss of wildlife, including chimpanzees (Campbell et al. 2008, p. 903; Hanson-Alp et al. 2003, p. 85).

Capture of live chimpanzees for the international pet trade has been one of the major causes of the decline in chimpanzees. Today, illegal capture and smuggling of chimpanzees continue for the pet trade across Africa and, to some extent, the international market (Ghobrial et al. 2010, pp. 1, 2, 11; Kabasawa 2009, pp. 37, 48-49; Oates et al. 2008, unpaginated; Carter 2003b, p. 157; Kormos and Boesch 2003, p. 4; Nisbett et al. 2003, p. 95). A recent increase in orphaned chimpanzees has been attributed to the growing bushmeat crisis. Killing a mother with an infant earns twice the income for the hunter; the mother's body is sold in the bushmeat trade while the infant enters the pet trade (Kabasawa 2009, p. 50; Carter 2003b, p. 157). Furthermore, hunters have found a lucrative market for pet chimpanzees with military personnel, police, government officials, and traditional chiefs (Hicks et al. 2010, p. 8; Draulans and Van Krunkelsven 2002, pp. 35-36). The intensity of trade differs among countries, but is reportedly a substantial problem in The Democratic Republic of the Congo, Côte d'Ivoire, Sierra Leone, Ghana, and Guinea (Hicks et al. 2010, pp. 3, 6, 11; Plumptre et al. 2010, p. 2; Unit 2007, p. 5; Unti 2007a, p. 4; Hanson-Alp et al. 2003, p. 84; Herbinger et al. 2003, p. 106; Kormos et al. 2003b, p. 72; Magnuson et al. 2003, p. 113). It is not possible to determine how many wild chimpanzees are captured for the pet trade, but the number of chimpanzees in sanctuaries indicates it is a significant problem. Since 2000, the number of chimpanzees in African sanctuaries has increased 59 percent (Kabasawa 2009, pp. 37, 50).

The petitioners assert that the exploitation of chimpanzees in the United States' entertainment and pet industries is seen around the world and misleads the public into believing chimpanzees are well protected in the wild and make good pets, further fueling the demand for chimpanzees. Studies suggest a link between seeing chimpanzees portrayed in the media and misperceptions about the species' status in the wild. This misperception may also affect conservation efforts (Ross et al. 2011, pp. 1, 4-5; Schroepfer et al. 2011, pp. 6-7; Ross 2008a, pp. 25-26; Ross et al. 2008b, p. 1487). However, we did not find evidence that this situation was a significant driver in the status of the species.

The effects of the pet trade are particularly devastating to wild populations because the mother and other family members may be killed to capture an infant. Researchers estimate that as many as 10 chimpanzees may be killed for every infant that enters the pet trade. Furthermore, the infant is likely to die of malnutrition, disease, or injury (Hicks et al. 2010, p. 8; Kabasawa 2009, p. 49; Lonsdorf 2007, p. 74; Carter 2003b, p. 157; Hanson-Alp et al. 2003, p. 84; Kormos and Boesch 2003, p. 4). The loss of even just a few individuals from a population can have devastating effects due to the slow reproductive rate of chimpanzees. Because so many chimpanzees may be killed to secure an infant, the pet trade has a significant draining effect on remaining populations, and threatens the survival of wild chimpanzees (Kabasawa 2009, p. 49; Carter 2003b, p. 157; Magnuson et al. 2003, p. 113).

Historically, wild chimpanzees were captured and exported to meet a significant demand for chimpanzees in biomedical research in countries around the world, significantly impacting chimpanzee distribution and abundance (Unti 2007a, p. 4; Unti 2007b, p. 5; Kormos et al. 2003b, p. 72). A substantial number of countries do not permit or conduct research on chimpanzees and the international research community is no longer seeking access to wild chimpanzees (Hicks 2011, pers. comm.; Unti 2007a, p. 4; Unti 2007b, p. 5). Although some biomedical research on captive chimpanzees continues in the United States and Gabon, in the United States, there is a decreasing scientific need for chimpanzee studies due to the emergence of non-chimpanzee models and technologies (Institute of Medicine 2011, pp. 5, 66-67).

As previously stated, chimpanzees are held in captivity in several countries around the world, including African countries and the United States. Chimpanzees in captivity are bred and sold as pets, used in the entertainment industry (e.g., movies, television, and advertisements), exhibited in hotels and roadside shows, used as party entertainment or animal encounters, displayed in zoos, and used for biomedical research. It is thought that self-sustaining breeding groups of captive chimpanzees provide surplus animals for research and other purposes, thereby reducing the demand for wild individuals. Given that threats to the chimpanzee have expanded and intensified, and capture for the illegal pet trade continues to be a major threat to remaining chimpanzee populations, it does not appear that the availability of captive chimpanzees has reduced any threats to the species.

National laws exist within all range countries to protect chimpanzees. In general, hunting, capture, possession, and commercial trade of chimpanzees are prohibited. Laws also protect chimpanzee habitat, including the establishment of protected areas, in many of the range countries. However, as evidenced by the continuing and increasing habitat destruction and hunting and trading of this species, even within protected areas, these laws are not often enforced. A lack of resources, limited training, limited personnel, lack of basic logistical support, corrupt officials, and weak legislation prevent government agencies charged with the protection of wildlife and forest management from providing effective protection. Furthermore, penalties for violations are not adequate to serve as a deterrent (Ghobrial et al. 2010, pp. 1, 2, 11; Hicks et al. 2010, pp. 8-9; Kabsawa 2009, p. 39; Laporte et al. 2009, p. 1451; Unti 2007a, pp. 4, 6, 8, 10-11; Unti 2007b, pp. 6-10; Bennett et al. 2006, p. 885; AV Magazine 2003, p. 7; Carter 2003a, p. 52; Carter 2003b, p. 157; Carter et al. 2003, pp. 31, 32, 38; Duvall et al. 2003, p. 47; Hanson-Alp et al. 2003, p. 79, 87; Herbinger et al. 2003, pp. 100, 106; Kormos and Boesch 2003, p. 6; Kormos et al. 2003b, p. 64; Kormos et al. 2003c, p. 155; Magnuson et al. 2003, p. 112; Nisbett et al. 2003, pp. 90, 95; Oates et al. 2003, pp. 123, 125).

The chimpanzee is also protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), an international agreement between governments to ensure that the international trade of CITES-listed plant and animal species does not threaten species' survival in the wild. Under this treaty, CITES Parties (member countries or signatories) regulate the import, export, and reexport of specimens, parts, and products of CITES-listed plant and animal species. Trade must be authorized through a system of permits and certificates that are provided by the designated CITES Management Authority of each CITES Party. With the exception of Angola, all chimpanzee range countries are Parties to CITES.

The chimpanzee is listed in Appendix I of CITES. An Appendix-I listing includes species threatened with extinction whose trade is permitted only under exceptional circumstances, which generally precludes commercial trade. The import of an Appendix-I species generally requires the issuance of both an import and export permit. Import permits for Appendix-I species are issued only if findings are made that the import would be for purposes that are not detrimental to the survival of the species and that the specimen will not be used for primarily commercial purposes (CITES Article III(3)). Export permits for Appendix-I species are issued only if findings are made that the specimen was legally acquired and trade is not detrimental to the survival of the species, and if the issuing authority is satisfied that an import permit has been granted for the specimen (CITES Article III(2)).

Based on CITES trade data from 1990-2011, obtained from United Nations Environment Programme-World Conservation Monitoring Center (UNEP-WCMC) CITES Trade Database, there has been significant legal trade of chimpanzees and their parts, and products worldwide. However, legal trade in wild specimens, including live animals, bones, scientific specimens, and hair has been limited. Trade of these wild specimens for commercial purposes was reported for 14 live specimens, 121 scientific specimens, and 10 skulls. From 2002-2011, exports and re-exports of wild specimens from the United States have numbered 8 scientific specimens for scientific purposes. Imports of wild specimens into the United States have been limited and have included hairs, scientific specimens, a skull, and one unspecified specimen for personal, scientific, educational, and medical purposes.

As human settlements expand and populations of chimpanzees and their habitat are reduced, interactions between chimpanzees and humans or human waste increases, leading to greater risks of disease transmission. A close genetic relationship allows for easy transmission of infectious diseases between chimpanzees and humans (Plumptre et al. 2010, p. 2; Oates et al. 2008, unpaginated; Lonsdorf 2007, p. 73; Tutin et al. 2005, p. 29; Formenty et al. 2003, p. 169; Huijbregts et al. 2003, p. 437). Rural communities that share the same habitat as chimpanzees have no access to health care and are not vaccinated against diseases that can spread through ape populations and result in high mortality rates. Additionally, exposure to humans through conservation and research activities, such as habituation, ecotourism, and reintroductions can also increase the risk of disease transmission (Plumptre et al. 2010, p. 2; Köndgen et al. 2008, p. 260; Oates et al. 2008, unpaginated; Tutin et al. 2005, p. 29; Huijbregts et al. 2003, p. 437; Nishida et al. 2001, p. 48).

Disease transmission is a major threat to remaining populations of the central and eastern chimpanzees (Morgan et al. 2011, p. 10; Plumptre et al. 2010, p. 2; GRASP 2005a, p. 7; Tutin et al. 2005, p. 2; Leendertz et al. 2004, p. 451; Walsh et al. 2003, p. 612). Repeated epidemics of Ebola virus have resulted in dramatic declines in ape populations in Côte d'Ivoire, Gabon, Democratic Republic of the Congo, and the Republic of Congo (Plumptre et al. 2010, p. 2; Köndgen et al. 2008, p. 261; Oates et al. 2008, unpaginated; Tutin et al. 2005, p. 29; Leendertz et al. 2004, p. 451; Huijbregts et al. 2003, pp. 437, 441; Walsh et al. 2003, pp. 612-613; Formenty et al. 2003, pp. 169-172). Other infectious diseases have resulted in the death of chimpanzees at Gombe, Mahale, and Taï national parks (Rudicell et al. 2010, pp. 1, 10; Oates et al. 2008, unpaginated; Köndgen et al. 2008, pp. 260-262; Williams et al. 2008, pp. 766, 768-770; Leendertz et al. 2004, pp. 451-452; Nishida et al. 2001, p. 48).

Once a chimpanzee population has been reduced, whether by hunting, capture for the pet trade, or disease, its ability to recover is limited due to very slow reproductive rates and complex social behavior (Plumptre et al. 2010, p. 1; Kabasawa 2009, p. 49; Bennett et al. 2006, p. 885; Tutin et al. 2005, p. 32; Kormos et al. 2003c, pp. 151, 155; Wilkie and Carpenter 1999, p. 927;). Even low levels of hunting can have a devastating effect on the population. The loss of reproductive-age female chimpanzees can be particularly devastating, further reducing the population's ability to recover from the loss (Carter 2003b, p. 157; Kormos et al. 2003b, p. 72). The occurrence of chimpanzees at low densities coupled with slow reproductive rates can lead to the rapid extinction of even large populations (Oates et al. 2008, unpaginated; Kormos and Boesch 2003, p. 2).

The current threats to the chimpanzee, as described above, are not likely to improve in the future, resulting in a continuing decline of chimpanzee populations. Threats to this species are driven by the needs of an expanding human population. Within the range countries of the chimpanzee, the human population is expected to continue to increase and will inevitably increase the pressures on natural resources. Therefore, impacts to remaining populations of chimpanzees, as described above, from deforestation, hunting, commercial trade, and disease are likely to continue or even intensify (Morgan et al. 2011, p. 10 Plumptre et al. 2010, pp. 50, 71; Fitzherbert et al. 2008, pp. 538-539, 544; Oates et al. 2008, unpaginated; CBFP 2006, p. 33; Fa et al. 2006, p. 506; Hewitt 2006, pp. 44, 48-49; Nasi et al. 2006, p. 14; Carter et al. 2003, p. 38; Duvall 2003, p. 145; Parren and Byler 2003, p. 137; Nishida et al. 2001, p. 45; Wilkie and Carpenter 1999, pp. 927-928).

Continuing threats acting on chimpanzee populations, coupled with the species' inability to recover from population reductions, will likely lead to the loss of additional populations. Chimpanzees could be lost from an additional three countries due to threats acting on populations that fall below what is considered the minimum for a viable population (Carlsen et al. 2012, p. 5; Butynski 2003, p. 11; Kormos and Boesch 2003, p. 3). Many remaining populations are small and isolated, putting them at an increased risk of extinction (Morgan et al. 2011, p. 12).

Many management plans have been developed to conserve the chimpanzee (e.g., Morgan et al. 2011; Plumptre et al. 2010; GRASP 2005a; GRASP 2005b; Tutin et al. 2005; Kormos and Boesch 2003; Kormos et al. 2003). These plans lay out goals and research needs to address the threats faced by chimpanzees. Development of forest management plans with the goal of sustainable forestry practices has increased (Hewitt 2006, p. 43; Nasi et al. 2006, pp. 17-19). However, implementation of these management plans faces challenges, and the effect of these plans has yet to be determined. There is no evidence that management plans have reduced threats to the species. Chimpanzees are found in numerous protected areas. In some cases, these areas provide adequate protection and support substantial populations of chimpanzees. Unfortunately, many protected areas have weak or nonexistent management with poor law enforcement and are illegally logged, converted to agricultural lands, and hunted (Campbell et al. 2011, p. 1). Furthermore, we have no evidence that enforcement of legislation to protect chimpanzees and their habitat, including protected areas, will improve.

Section 4 of the Act (16 U.S.C. 1533) and implementing regulations (50 CFR part 424) set forth procedures for adding species to, removing species from, or reclassifying species on the Federal Lists of Endangered and Threatened Wildlife and Plants. Under section 4(a)(1) of the Act, a species may be determined to be endangered or threatened based on any of the following five factors:

(A) The present or threatened destruction, modification, or curtailment of its habitat or range;

(B) Overutilization for commercial, recreational, scientific, or educational purposes;

(C) Disease or predation;

(D) The inadequacy of existing regulatory mechanisms; or

(E) Other natural or manmade factors affecting its continued existence.

In considering whether a species may warrant listing under any of the five factors, we look beyond the species' exposure to a potential threat or aggregation of threats under any of the factors, and evaluate whether the species responds to those potential threats in a way that causes actual impact to the species. The identification of threats that might impact a species negatively may not be sufficient to compel a finding that the species warrants listing. The information must include evidence indicating that the threats are operative and, either singly or in aggregation, affect the status of the species. Threats are significant if they drive, or contribute to, the risk of extinction of the species, such that the species warrants listing as endangered or threatened, as those terms are defined in the Act.

As required by the Act, we conducted a review of the status of the species and considered the five factors in assessing whether the chimpanzee is in danger of extinction throughout all or a significant portion of its range or likely to become endangered within the foreseeable future throughout all or a significant portion of its range. We examined the best scientific and commercial information available regarding the past, present, and future threats faced by the chimpanzee. We reviewed the petition, information available in our files, and other available published and unpublished information. We find that the chimpanzee is endangered by all five factors.

In 1990, wild chimpanzees were listed as endangered due to habitat loss, excessive hunting, capture for the pet trade, disease, and lack of effective national and international laws. Since then, threats to the chimpanzee have only expanded and intensified. Habitat that is needed to support viable populations is being lost to logging operations and conversion to agriculture. Individuals needed to maintain viable populations are being lost to hunting for the bushmeat trade, trade in pet chimpanzees, disease, and conflicts with humans.

Chimpanzees need large areas to provide sufficient resources for feeding, nesting, and shelter. Although some large forest blocks remain, logging and agricultural expansion have destroyed and fragmented much of the chimpanzee's habitat. The loss of suitable habitat is driving chimpanzees into smaller fragments of habitat closer to human settlements and creating competition for resources, increasing conflicts with humans, and increasing the risk of disease transmission. Human population growth and expansion of human activities have created a lucrative market for bushmeat and trade in live chimpanzees. Although chimpanzee meat constitutes only a small fraction of bushmeat found in markets, and the exact number of chimpanzees captured for the trade is unknown, these actions have drained chimpanzee populations. They are especially devastating because chimpanzees have slow reproductive rates and cannot easily recover from the loss of individuals. Laws exist throughout the range countries and internationally to protect the chimpanzee, but enforcement of national laws is lacking. Many populations are now small and isolated, putting them at a greater risk of extinction. Impacts to the chimpanzee are expected to continue into the future as the human population continues to expand and pressures on natural resources to meet the demands of the human population increase.

The status of the chimpanzee has not improved since the wild population of the species was reclassified from threatened to endangered in 1990. Threats to the species have intensified and expanded across its range. Therefore, we find that endangered is the correct status for the chimpanzee throughout its range. We also examined the chimpanzee to analyze if any other listable entity under the definition of “species,” such as subspecies or distinct population segments, may qualify for a different status. However, because of the magnitude and uniformity of the threats throughout its range, we find that there are no other listable entities that may warrant a different determination of status. Since threats extend throughout the entire range, it is unnecessary to determine if the chimpanzee is in danger of extinction throughout a significant portion of its range. Therefore, on the basis of the best available scientific and commercial information, we have determined that the chimpanzee meets the definition of an endangered species under the Act. Consequently, we propose to revise the listing of chimpanzees under the Act so that all chimpanzees, wherever found, are listed as endangered.

For threatened species, section 4(d) of the Act gives the Service discretion to specify the prohibitions and any exceptions to those prohibitions that are appropriate for the species, as well as include provisions that are necessary and advisable to provide for the conservation of the species. A special rule allows us to develop regulatory provisions that are tailored to the specific conservation needs of the threatened species and which may be more or less restrictive than the general provisions for threatened species at 50 CFR 17.31.

Currently, the captive chimpanzees in the United States, classified as threatened, are exempt from the general prohibitions for threatened species at 50 CFR 17.31 under a special rule for primates found at 50 CFR 17.40(c). Because special rules can be applied only to threatened species, the special rule for captive chimpanzees will no longer be available if the proposed revision to the classification of all chimpanzees to endangered is finalized. Therefore, we also propose to remove the chimpanzee, including a provision specific to the chimpanzee, from the special rule.

Conservation measures provided to species listed as endangered or threatened under the Act include recognition, requirements for Federal protection, and prohibitions against certain practices. Recognition through listing results in public awareness, and encourages and results in conservation actions by Federal and state governments, private agencies and groups, and individuals.

Section 7(a) of the Act, as amended, and as implemented by regulations at 50 CFR part 402, requires Federal agencies to evaluate their actions within the United States or on the high seas with respect to any species that is proposed or listed as endangered or threatened and with respect to its critical habitat, if any is being designated. However, given that the chimpanzee is not native to the United States, we are not designating critical habitat for this species under section 4 of the Act.

Section 8(a) of the Act authorizes the provision of limited financial assistance for the development and management of programs that the Secretary of the Interior determines to be necessary or useful for the conservation of endangered and threatened species in foreign countries. Sections 8(b) and 8(c) of the Act authorize the Secretary to encourage conservation programs for foreign endangered species and to provide assistance for such programs in the form of personnel and the training of personnel.

In 2000, the United States Congress passed the Great Ape Conservation Act to protect and conserve the great ape species, including the chimpanzee, listed under both the Endangered Species Act and CITES. The Great Ape Conservation Act granted the Service the authority to establish the Great Ape Conservation Fund to provide funding for projects that aim to conserve great apes through law enforcement training, community initiatives, and other conservation efforts. The Service's Wildlife Without Borders program, through the Great Ape Conservation Fund, is supporting efforts to fight poaching and trafficking in great apes; to increase habitat protection by creating national parks and protected areas; and to engage the community through local initiatives to conserve the most threatened great ape species.

The Endangered Species Act and its implementing regulations set forth a series of general prohibitions and exceptions that apply to all endangered and threatened wildlife. These prohibitions, at 50 CFR 17.21 and 17.31, in part, make it illegal for any person subject to the jurisdiction of the United States to “take” (take includes harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, collect, or to attempt any of these) within the United States or upon the high seas; import or export; deliver, receive, carry, transport, or ship in interstate or foreign commerce in the course of commercial activity; or sell or offer for sale in interstate or foreign commerce any endangered or threatened wildlife species. To possess, sell, deliver, carry, transport, or ship any such wildlife that has been taken in violation of the Act is also illegal. Certain exceptions apply to agents of the Service and State conservation agencies.

Permits may be issued to carry out otherwise prohibited activities involving endangered and threatened wildlife species under certain circumstances. Regulations governing permits are codified at 50 CFR 17.22 for endangered species and 17.32 for threatened species. For endangered wildlife, a permit may be issued for scientific purposes, to enhance the propagation or survival of the species, and for incidental take in connection with otherwise lawful activities. For threatened species, a permit may be issued for the same activities, as well as zoological exhibition, education, and special purposes consistent with the Act.

In accordance with our policy, “Notice of Interagency Cooperative Policy for Peer Review in Endangered Species Act Activities,” that was published on July 1, 1994 (59 FR 34270), we will seek the expert opinion of at least three appropriate independent specialists regarding this proposed rule. The purpose of such review is to ensure listing decisions are based on scientifically sound data, assumptions, and analysis. We will send copies of this proposed rule to the peer reviewers immediately following publication in the Federal Register. We will invite these peer reviewers to comment, during the public comment period, on the specific assumptions and the data that are the basis for our conclusions regarding the proposal to list all chimpanzees as endangered under the Act.

We will consider all comments and information we receive during the comment period on this proposed rule during preparation of a final rulemaking. Accordingly, our final decision may differ from this proposal.

We are required by Executive Orders 12866 and 12988 and by the Presidential Memorandum of June 1, 1998, to write all rules in plain language. This means that each rule we publish must:

(a) Be logically organized;

(b) Use the active voice to address readers directly;

(c) Use clear language rather than jargon;

(d) Be divided into short sections and sentences; and

(e) Use lists and tables wherever possible.

If you feel that we have not met these requirements, send us comments by one of the methods listed in ADDRESSES. To better help us revise the rule, your comments should be as specific as possible. For example, you should tell us the names of the sections or paragraphs that are unclearly written, which sections or sentences are too long, the sections where you feel lists or tables would be useful, etc.

We have determined that we do not need to prepare an environmental assessment, as defined under the authority of the National Environmental Policy Act of 1969, in connection with regulations adopted under section 4(a) of the Act for the listing, delisting, or reclassification of species. We published a notice outlining our reasons for this determination in the Federal Register on October 25, 1983 (48 FR 49244).

This rule does not contain any new information collections or recordkeeping requirements for which Office of Management and Budget (OMB) approval is required under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). We may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

A list of all references cited in this document is available at http://www.regulations.gov at Docket No. FWS-R9-ES-2010-0086, or upon request from the U.S. Fish and Wildlife Service, Endangered Species Program, Branch of Foreign Species (see FOR FURTHER INFORMATION CONTACT).

The primary authors of this proposed rule are staff members of the Branch of Foreign Species, Endangered Species Program, U.S. Fish and Wildlife Service.

Accordingly, we propose to amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:

The revision reads as follows:

The revision reads as follows:

These proposed regulations would modify Federal lobster fishery management measures in the Exclusive Economic Zone (EEZ) under the authority of section 803(b) of the Atlantic Coastal Fisheries Cooperative Management Act (Atlantic Coastal Act) 16 U.S.C 5101 et seq., which states that in the absence of an approved and implemented Fishery Management Plan under the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) (16 U.S.C. 1801 et seq.) and after consultation with the appropriate Fishery Management Council(s), the Secretary of Commerce may implement regulations to govern fishing in the EEZ, i.e., from 3 to 200 nautical miles (nm) offshore. The regulations must be (1) compatible with the effective implementation of an Interstate Fishery Management Plan (ISFMP) developed by the Atlantic States Marine Fisheries Commission (Commission) and (2) consistent with the national standards set forth in section 301 of the Magnuson-Stevens Act.

The purpose of these proposed measures is to manage the American lobster fishery in a manner that maximizes resource sustainability, recognizing that Federal management occurs in consort with state management. To achieve this purpose, NMFS must act in response to the Commission's recommendations in several addenda to the Commission's ISFMP for American Lobster (Plan, Lobster Plan) to control lobster trap fishing effort in a manner consistent with effort control measures already implemented by the states. The proposed measures seek to (1) promote economic efficiency within the fishery while maintaining existing social and cultural features of the industry where possible, and (2) realize conservation benefits that will contribute to the prevention of overfishing of American lobster stocks.

The American lobster resource and fishery is managed by the states and Federal government within the framework of the Commission. The role of the Commission is to facilitate cooperative management of interjurisdictional fish stocks, such as American lobster. The Commission does this by creating an ISFMP for each managed species or species complex. These plans set forth the management strategy for the fishery and are based upon the best available information from the scientists, managers, and industry. The plans are created and adopted at the Commission Management Board level—e.g., the Commission's Lobster Board created the Commission's Lobster Plan— and provide recommendations to the states and Federal government that, in theory, allow all jurisdictions to independently respond to fishery conditions in a unified, coordinated way. NMFS is not a member of the Commission, although it is a voting member of the Commission's species management boards. The Atlantic Coastal Act, however, requires the Federal government to support the Commission's management efforts. In the lobster fishery, NMFS has historically satisfied this legal mandate by following the Commission's Lobster Board recommendations to the extent possible and appropriate.

The Commission has recommended that trap fishery access be limited in all Lobster Conservation Management Areas (LCMAs or Areas). The recommendations are based in large part on Commission stock assessments that find high lobster fishing effort as a potential threat to the lobster stocks. Each time the Commission limits access to an area, it recommends that NMFS similarly restrict access to the Federal portion of the area. NMFS received its first limited access recommendation in August 1999 when the Commission limited access to Areas 3, 4, and 5 in Addendum I. NMFS received its last limited access recommendation in November 2009, when the Commission limited access to Area 1 in Addendum XV. NMFS has already completed rules that limit access to Areas 1, 3, 4, and 5. This proposed rule responds to the Commission's limited access recommendations for Area 2 and the Outer Cape Area. It also responds to the Commission's recommendation to implement a trap transferability program in Areas 2 and 3 and the Outer Cape Area. The specific Commission recommendations, and NMFS's response to those recommendations, are the subject of this proposed rule and are discussed below.

In 2002, the Commission recommended that the states and NMFS limit entry into the Outer Cape Area based upon certain criteria developed by the Commission. The Commission adjusted the specifics of those criteria in 2008, and those adjusted criteria remain in place today. Specifically, the Commission recommended that the states and NMFS limit Outer Cape Area access to those permit holders who could demonstrate a prior fishing history (1999-2001) within the area. Further, the Commission recommended that the states and NMFS allocate traps to the qualifiers based upon “effective traps fished” during the years 2000-2002. In short, “effective traps fished” was to be the lower value of the maximum number of traps reported fished for a given year compared to the number of traps predicted to catch the reported poundage of lobsters for those years based upon a scientifically reviewed regression formula. The specific recommendations are contained in Commission Addendum III (February 2002) and Addendum XIII (May 2008).

The Commission's Outer Cape Area recommendations were the product of significant public debate and discussion. The Commission initiated discussion of Addendum III in July 2001 and sent a draft addendum to the various Area Lobster Conservation Management Teams (LCMTs) for discussion and refinement. An LCMT is a team of industry representatives—each Lobster Management Area has one LCMT—who provide industry expertise and perspective on potential management measures. The addendum was approved in draft form in October 2001 and presented in Commission public hearings in November 2001 before the Commission ultimately approved it at a public meeting in February 2002. Addendum XIII went through a similar public process before the Commission adopted it in May 2008.

NMFS responded to the Commission's Outer Cape recommendations with a public process of its own. Ever since the transfer of lobster management to the Commission, NMFS has notified Federal permit holders that regulatory actions in the lobster fishery could potentially involve limiting access to Federal Lobster Conservation Management Areas (64 FR 47756, September 1, 1999). Moreover, NMFS published an Advanced Notice of Proposed Rulemaking seeking comment on the issue on September 5, 2002 (67 FR 56800). When the Commission added effort control as a component of the Area 2 plan, NMFS published further Advanced Notices of Proposed Rulemaking documenting the agency's decision to combine the Outer Cape Cod and Area 2 limited entry program rulemakings and to separate the effort control rulemakings from lobster brood stock protection rulemakings (70 FR 24495, May 10 2005, and 70 FR 73717, December 13, 2005). Further, NMFS analyzed the Commission's recommendations in a DEIS made available to the public on May 3, 2010 (75 FR 23245). NMFS also presented its analysis at a series of DEIS public hearings from Maine to New Jersey, at which it received numerous comments. Those comments and NMFS' responses are set forth in this proposed rule.

NMFS proposes to limit access into the Outer Cape Area in a manner consistent with the Commission's recommendations. NMFS intends to qualify individuals for access into the Outer Cape Area based upon verifiable landings of lobster caught by traps from the Outer Cape Area in any 1 year from 1999-2001. Doing so will satisfy the Outer Cape Area Plan's purpose, as stated by the Commission in February 2002 (when the Commission approved the Outer Cape Area amendment) to “. . . control the expansion of fishing effort in the Outer Cape Area and to establish Outer Cape trap levels at a targeted level (approximately 33,000 traps).”

The choice of 2001 as a cut-off year is reasonable for many reasons. First, Commission lobster limited access plans typically use a cut-off date after which access is restricted to avoid speculators from declaring into an area after-the-fact in an effort to gain access to an area that they typically did not fish. Second, area individuals knew or should have known about the potential date because the Commission's intentions were known at the time: Addendum III was drafted, debated, and the subject of public hearings in 2001. Third, and most importantly, the involved states have already used that same date as the cut-off for state lobster licenses, and NMFS' choice of that date will allow for better alignment between the states and Federal Government. The Commission Plan added qualifying years before the cut-off date (i.e., 1999 and 2000) to provide the fishing industry flexibility without subverting the plan's desire to cap current effort. That is, in any given year, lobster fishers may have altered their fishing effort in response to external issues (e.g., health, family, and/or other personal reasons). An additional 2 qualifying years helps mitigate the potential for an allocation to be based upon an aberrant year's fishing history.

NMFS also proposes to allocate Outer Cape Area traps according to a Commission regression analysis formula that calculates effective trap fishing effort based upon verifiable landings of lobster caught by traps from the Outer Cape Area in any one year from 2000-2002. The Commission recommended using a different 3-year period at the request of Massachusetts' Director of Marine Fisheries, who at public hearings learned that use of the 2000-2002 data would better reflect existing effort and obviate the need for a hardship appeal process. The Commission's use of the regression formula in Addendum III and XIII to establish effective traps fished is also reasonable. In the absence of reliable trap effort data, state scientists sought to develop an effective method to predict the maximum number of traps fished. Since annual audits had shown that, on average, lobstermen more accurately reported their total lobster landings on their state data collection forms (1-2 percent variance), when compared to their reported maximum number of traps fished, a regression analysis was developed based on total reported lobster landings. The use of the regression formula removes the possibility that someone will benefit from simply reporting more traps than were actually fished. The Commission's Technical Committee peer reviewed the regression analysis, and although they noted the formula tended to favor full-time fishermen, the Technical Committee confirmed its validity. NMFS analyzed the formula and its rationale in the DEIS and concluded that the formula and its rationale were scientifically sound. NMFS also notes the importance of consistency in the state and Federal limited access programs, and that the potential for regulatory disconnects would be increased were the states and Federal government to allocate traps according to different criteria and formulas.

NMFS proposes two types of appeals to its Outer Cape Area Limited Access Program. The first appeal is a Clerical Appeal. The second is a Director's Appeal.

The Clerical Appeal would allow NMFS to correct clerical and mathematical errors that sometimes inadvertently occur when applications are processed. It is not an appeal on the merits and would involve no analysis of the decision maker's judgment. Accordingly, the appeal would not involve excessive agency resources to process. NMFS used an identical appeal with identical criteria to great success in its Area 3, 4, and 5 Limited Access Program.

The Director's Appeal would allow states to petition NMFS for comparable trap allocations on behalf of Outer Cape Cod applicants denied by NMFS. The appeal would only be available to Outer Cape Cod applicants for whom a state has already granted access. The state would be required to explain how NMFS's approval of the appeal would advance the interests of the Commission's Lobster Plan. The rationale for this appeal is grounded in the desire to remedy regulatory disconnects. NMFS knows that states have already made multiple separate decisions on qualification, allocation, and at least in some instances, trap transfers for the state portion of dually permitted fishers. NMFS is, therefore, faced with the task of making these same decisions and reaching identical results based upon Federal criteria that attempts to mirror the state criteria, which themselves might contain slight differences. As noted throughout the DEIS, the potential for regulatory disconnects is significant. While NMFS expects to achieve identical results for the vast majority of dually permitted fishers, it would be unreasonable to expect perfect matching in such circumstances. The Director's Appeal will help prevent the potential damage that such a mismatch could create.

The Director's Appeal would allow more effort to qualify and enter the fishery than would otherwise occur. NMFS, however, does not expect that this potential additional effort would negatively impact the fishery. First, the number of appeals is capped by the number of individuals who have already qualified under their state permit. These individuals, therefore, are already exerting fishing pressure on the lobster stock, albeit limited to state waters. Second, the DEIS analysis suggests good correlation between state qualifiers and potential Federal qualifiers. In other words, although some disconnects will likely occur, the DEIS predicts that the number will be relatively low. Finally, even if NMFS encounters a greater than predicted number of Director's Appeals, NMFS asserts that synchronicity is so crucial as to be the overriding factor in proposing the appeal.

The proposed rule also adopts the Commission's 2-month winter trap haul-out recommendation. The exact dates of the 2-month closure are less important than making sure that the Federal Outer Cape Area closure corresponds with the state Outer Cape Area closure. That is, so long as the state and Federal closures correspond, it matters less whether those dates are January 1st through February 28th, February 1st through March 31st, or some other 2-month combination. Here, NMFS follows the Commission's Addendum XIII recommendation to require removal of all traps from Outer Cape Area waters from January 15 th to March 15th. NMFS notes that Massachusetts is proposing a law that would adjust those closure dates to February 1st through March 31st. If the Massachusetts law passes, then NMFS would consider adjusting this proposed closure to that same time in its final rule.

There are numerous benefits to the trap haul-out provision, including benefits to lobster and marine mammals if trap gear is limited, as well as enforcement benefits. These benefits are discussed in greater detail in the response to Comment 22 in the Comment and Responses Section later in this proposed rule. The choice of the dates is reasonable because fishing effort is typically minimal during that time period. Failure to implement a similar trap restriction in the Federal Outer Cape zone could have deleterious effects because the restriction already exists in state waters. Accordingly, there would be great incentive for state-Federal dually permitted fishers to transfer their traps into Federal Outer Cape Area waters during the restricted season, thus greatly increasing effort there, absent similar Federal restrictions. The closure would apply only to traps set in the Outer Cape Area; those authorized to set traps in other areas would not be affected.

NMFS recognizes that establishing qualification and allocation criteria and drawing lines creates the potential for somebody to be left out. However, including additional or different qualification and allocation criteria in the Commission's Outer Cape Plan would create problems. First, doing so would introduce new variables that would have the potential to skew the Plan's ability to achieve its goals. Second, it would introduce a significant mismatch between the state and Federal Outer Cape Area limited entry programs wherein the state and NMFS could reach different determinations on identical permit histories. NMFS examined this issue extensively in its DEIS and concluded that disparate treatment of like individuals had the potential to so complicate future management as to render present and future management measures (e.g., trap transferability) unworkable.

The NMFS DEIS predicts that approximately 26 Federal permits would qualify to receive an Outer Cape Cod Area trap allocation. This figure represents only 15 percent of the 170 permit holders who designated the Outer Cape Area as a potential fishing area on their permits in 2007. Of those 170 permit holders, however, only 38 purchased trap tags, which suggests that the vast majority (132 permits) designated the Outer Cape Area, but did not actively fish. Additionally, 12 of the 38 trap tag purchasers hailed from ports so distant from the Outer Cape Area that it seems unlikely that those 12 actively fished in the Outer Cape Area. The DEIS sets forth a detailed discussion on why an individual might designate an area without ever intending to fish there. Significantly, of the 26 individuals who designated the Outer Cape Area, ordered trap tags, and lived within steaming distance of the Area, the DEIS predicts that all 26 would qualify.

NMFS analyzed numerous alternatives to the Outer Cape Area proposed rule, including a “no action” alternative and qualifying lobster vessels but not allocating traps to them. Both were rejected as creating regulatory disconnects and potentially undermining the Commission's Lobster Plan. NMFS also considered but rejected qualifying SCUBA divers for trap allocations, in part because it would add new trap fishing effort from those (SCUBA divers) who did not fish with traps during the involved time period. A more detailed discussion of potential alternatives is identified in NMFS's DEIS [see ADDRESSES].

In November 2005, the Commission recommended that the states and NMFS limit access into Area 2 to those lobster fishers who could document past fishing history in the Area. Specifically, the Commission recommended qualifying permit holders into Area 2 if they could document Area 2 landings history from 2001 to 2003. This landings history would be fed into a scientifically-reviewed regression formula to determine the number of traps allocated to the individual. If an Area 2 fisher had been incapable of fishing during the 2001 to 2003 fishing years, then that individual could apply for a hardship consideration that would allow them to use landings from 1999 and 2000 as the basis for qualification. The specific recommendations are contained in Commission Addendum VII (November 2005).

The Commission's Area 2 recommendation was the product of significant public debate that was even more involved than the public process that went into the creation of the Outer Cape Area Plan. The Area 2 Plan originated in October 2002, when the Lobster Board's scientific Technical Committee reported the basis of what ultimately was considered to be a lobster crisis in Area 2. The Board became so concerned about the poor condition of the lobster stock that it took emergency action in February 2003 (a gauge increase) as an immediate stop-gap measure while it developed a more thorough plan to respond to the situation. For more than 7 years, the Lobster Board and its sub-committees publicly deliberated over its Area 2 plan. The Board adopted measures (Addendum IV), then re-thought its position, rescinded measures (Addendum VI), proposed new measures (Addendum VII), then later added detail to the measures (Addendum XII). Because NMFS's Area 2 rulemaking is being done at the same time as its Outer Cape Area rulemaking, the Federal public process for the Area 2 plan is the same as was previously discussed for the Outer Cape Area.

NMFS proposes to limit access into the Area 2 in a manner consistent with the Commission's recommendations. NMFS intends to qualify individuals for access into Area 2 based upon verifiable landings of lobster caught by traps from Area 2 from 2001-2003. The choice of the 2001-2003 time period reflects an effort to cap fishing effort in Area 2 as it existed while the Commission was developing its Area 2 Limited Access Plan. The dates also reflect an attempt to capture the attrition that occurred in the fishery during the downturn years in 2001-2003. Consequently, NMFS's Area 2 rationale is similar to the rationale it is employing in setting the access dates for the Outer Cape Area, by granting access to those with past trap fishing history, while excluding speculators and/or individuals who might have a history of Area 2 permit designations, but no actual fishing history in Area 2 during the qualification period.

NMFS also proposes to allocate traps according to a Commission formula that calculates effective trap fishing effort based upon landings during 2001, 2002, and 2003. The Commission chose landings as the appropriate metric because landings better reflected actual effort than the reported maximum number of traps fished. The Commission's Technical Committee peer-reviewed the regression analysis formula and, although they noted the formula tended to favor full-time fishermen, the Technical Committee confirmed its validity. NMFS analyzed the formula and its rationale in the DEIS and concluded that the formula and its rationale were scientifically sound.

NMFS proposes to adopt the Commission's recommendation to restrict allowable landings to those from ports in states that are either in or adjacent to Area 2, i.e., Massachusetts, Rhode Island, Connecticut, and New York. The Commission, in Addendum VII, found that the location of Area 2 prevented fishers from far away ports from actively fishing in Area 2. NMFS agrees with the Commission's conclusion.

NMFS proposes to adopt the Commission's recommended Hardship Appeal. Specifically, if an Area 2 fisher had been incapable of fishing during the 2001-2003 fishing years due to documented medical issues or military service, NMFS proposes to allow that individual to appeal the qualification decision on hardship grounds, allowing the individual to use landings from 1999 and 2000 as the basis for qualification. NMFS is also proposing a second appeal, the Director's Appeal, that would allow a state's marine fisheries director to petition for a trap allocation on behalf of a dual permit holder who was granted a state allocation but denied a similar Federal allocation. The Director's Appeal would be limited to those who qualified for a trap allocation under the state program, but who were denied that allocation under the Federal program. The third Area 2 appeal would be a clerical appeal. Both the Director's Appeal and Clerical Appeal are identical in form and rationale to the Director's Appeal and Clerical Appeal being proposed for the Outer Cape Area. NMFS acknowledges the potential for appeals to create unwieldy loopholes that undermine the rule, but the DEIS analysis suggests that few permit holders would need to avail themselves of such an appeal. Further, DEIS analysis suggests reasons for even greater concern should NMFS diverge from the states and not attempt to implement appellate criteria that would assist in state-federal compatibility.

NMFS's DEIS predicts that approximately 207 Federal permit holders will receive a Federal Area 2 allocation. This figure represents approximately 48 percent of the 431 permit holders who designated Area 2 on their permits in 2007. Of those 431 permit holders, however, only 182 purchased trap tags, which suggests that the majority (249 permits) designated Area 2 but did not actively fish there (or anywhere else). Even more significant is the DEIS finding that of the 182 Federal permit holders that both designated Area 2 and purchased trap tags in 2007, approximately 167 permit holders would qualify—a figure that suggests over 90 percent of the present Area 2 fishers fished during the qualification years and would still be allowed to fish Area 2 with traps in the future.

NMFS analyzed numerous alternatives to the Area 2 proposed rule, including a no-action alternative, and qualifying participants, but not assigning them individual trap allocations. Both of these alternatives were rejected as creating regulatory disconnects, and potentially undermining the Commission's Lobster Plan. NMFS's DEIS contains a more detailed discussion of potential alternatives.

NMFS also chooses to put off the Commission's recommended Area 2 ownership cap. This cap would limit the number of Federal lobster permits that an Area 2 participant could own at any one time. At this time the Commission does not appear to have reached a definitive policy on ownership caps. For example, ownership cap options were included in Commission draft Addendum XVIII, but were pulled out of the addendum before it was approved in August 2012. NMFS intends to participate in the Commission's dialog on this issue, but NMFS asserts it imprudent to implement such a cap before the Commission completes its deliberation.

In February 2002, the Commission recommended a first of its kind Trap Transferability Program in the Outer Cape Area. The initial recommendation was overly simplistic, which hampered its implementation. In short, the Commission sought to allow qualified Outer Cape permit holders to buy and sell their trap allocations during a designated time period up to certain trap cap.

The Commission followed its Outer Cape Transferability Plan with new trap transfer plans in two other areas: One for Area 3; another for Area 2. With each recommendation, the Commission's transferability plans became more detailed. All recommendations, however, contain the following three basic elements: (1) Individuals could buy and sell traps up to a set trap cap during a designated time period; (2) only individuals with qualified area allocations could sell traps; and (3) each trap transfer would be taxed by 10 percent, payable in traps.

The specific Outer Cape recommendations are set forth in Addendum III (February 2002) and XIV (May 2009). The Area 3 recommendations are contained in Addenda IV (January 2004), V (March 2004), and XIV (May 2009). The Area 2 recommendations are contained in Addendum VII (November 2005) and Addendum IX (October 2006).

Each area trap transfer plan was crafted after considerable public debate and comment. Industry-based Lobster Conservation Management Teams in Areas 2, 3, and Outer Cape Area were the original proponents and architects of their respective area plans. The plans were further refined in public meetings and hearings by the Lobster Board. Ultimately, after Board approval, the trap transfer plans were forwarded to NMFS, at which time additional public notice and hearing occurred. Because NMFS's Trap Transfer rulemaking is being done at the same time as its Area 2 and Outer Cape Area rulemaking, the Federal public process for the Trap Transfer Plan is the same as was previously discussed for the Area 2 and Outer Cape Area limited access plans.

NMFS proposes to implement trap transfer programs in Areas 2, 3, and the Outer Cape Area in a manner consistent with the Commission's recommendations. NMFS intends to offer an optional trap transfer program in Areas 2, 3, and the Outer Cape Area. The program would allow qualified permit holders to sell portions of their trap allocation to other Federal permit holders. Buyers could purchase traps up to the area's trap cap, with 10 percent of the transferred allocation debited and retired from the fishery as a conservation tax. NMFS asserts that a trap transfer program is reasonable and will help mitigate the economic impacts to individuals who do not qualify, or who qualify, but only for a small allocation. In other words, individuals could increase their allocation by purchasing additional traps through this program. As a result, the proposed trap transfer program will allow buyers and sellers to scale their businesses to optimum efficiency.

NMFS does not, however, view the trap transfer programs without concern. As a preliminary matter, trap transferability has the theoretical potential to increase actual trap effort. Specifically, qualified lobster fishers could maximize their income by transferring “latent” traps—the portion of their allocation that they might not be using—to other fishers who would use the allocation more actively, thereby increasing the overall level of fishing effort. This theoretical increase, however, will not likely be seen on the water (see responses to Comments 7, 13, and 14). Nevertheless, NMFS proposes to offset this potential impact by implementing a conservation tax on trap transfers to retire 10 percent of the traps included in the transfer. The DEIS examined this issue, as well as other potential counter measures. NMFS expects that, on balance, the proposed measures will afford appropriate balance against undue activation of latent effort.

The use of area trap caps is another measure that restricts the potential to increase effort through trap transfers. In short, this proposed rule would restrict transfers so that permit holders may not receive a trap allocation that would put their overall trap allocation above the area trap cap. The trap cap in Area 2 and the Outer Cape Area is 800 traps. Area 3 has numerous trap caps, depending upon the allocation bin into which the Area 3 permit holder initially qualified. The highest Area 3 trap cap is 1,945 traps. Commission Addendum XIV and Addendum XVIII, however, make it clear that the Commission intends to have a single universal trap cap in Area 3. NMFS, therefore, proposes to set the Area 3 trap cap at 1,945 traps. NMFS notes that the Commission and Area 3 LCMT are in discussions about either increasing or decreasing that trap cap. NMFS will consider modifying the Area 3 trap cap if and/or when the Commission and Area 3 LCMT have completed their discussions and recommend amendments to NMFS.

Yet another measure to offset effort expansion is NMFS's proposal to allow three-party transfers involving dual state and Federal permit holders. This proposal differs from the Commission's proposal to limit trap transfers to a bin system that restricts a dual state and Federal permit holder to transferring only with another dual permit holder of that same state. Under the Commission's system, permit holders from states with few qualifiers would find their participation options limited, and the economics skewed toward the few with allocations. NMFS's Trap Transfer Program, however, would allow a dual state and Federal permit holder to purchase Federal trap allocation from any other dual Federal Lobster permit holder. NMFS would still require that the transferring parties' state/Federal allocation be synchronized at the end of the transaction. Accordingly, a dual permit holder could purchase a Federal allocation from an individual in another state, as well as an equal state-only allocation from a third individual in his or her own state and the resulting allocation numbers for that dual permit holder would match. In such a scenario, there would be no added trap effort to the dual permit holder's state, but there would be a decrease of trap fishing effort in the state waters of the dual permit holder selling the original state/Federal trap allocation.

NMFS's greatest concern with a Trap Transfer Program is that it heightens the potential for regulatory disconnects. Regardless of which limited access option NMFS ultimately chooses, there will, undoubtedly, be a certain number of dually permitted lobster fishers—i.e., individuals fishing under both a state and a Federal permit—for whom the state and Federal decision-making will not align; they will either be qualified by one jurisdiction, but not another, or qualified by both, but allocated different numbers of traps. Although the DEIS confirms that the number of disconnects under the proposed rule will likely be small and of negligible impact to the overall limited access programs, creating additional layers of decision-making— i.e., trap transfers—has the potential to exacerbate disconnects with each successive transfer.

NMFS believes it can resolve the regulatory disconnect problem by requiring that potential participants agree to certain parameters before opting into the Trap Transfer Program. The Trap Transfer Program is not mandatory; rather, interested participants can choose to opt in. Any participants holding both state and Federal lobster permits (“dual permit holders”) with different trap allocations would have to agree to abide by the lower of the two trap allocations to take part in the program. In this way, permit holders would not be obliged to forfeit their higher trap allocation, but they would not be able to participate in the transferability program if they chose to retain it. This alternative would synchronize the dual permit holder's allocations at the initial opt in time, thus greatly facilitating the tracking of the transferred traps. Further, as trap allocations are transferred, a centralized trap transfer data base accessible by all jurisdictions will keep track of trap transfers, thus ensuring that all jurisdictions are operating with the same numbers at the beginning and end of every trap transfer period. The centralized trap transfer database is being created by the Atlantic Coastal Cooperative Statistics Program (ACCSP) and is a critical, foundational prerequisite to the Trap Transfer Program. As of the date of this proposed rule, the database has not been finalized and its progress bears watching. NMFS analyzed potential trap transfer programs in its DEIS and, assuming that the database is complete and functioning as designed, NMFS found the proposed Trap Transfer Program to be the most prudent of the alternatives.

Finally, the timing of the Trap Transfer Program is also of great concern. Industry and Commissioners are counting on trap transferability as a foundational element of their business and management plans and cannot move forward on these plans until NMFS implements its Trap Transfer Program. Accordingly, they urge NMFS to start its Trap Transfer Program as soon as reasonably possible (see Comment 8 in comment/response section below). However, the details of how this program will operate are not yet completely known. First, the Commission's Trap Transfer Program is novel and will require intensive coordination at state and Federal levels. Such coordination would involve, at a minimum, a trap tracking system, i.e., the ACCSP's centralized trap transfer data base, that has been tested and upon which state and Federal managers have been trained. As discussed above, however, the centralized trap transfer data base remains under development and, therefore, the state-Federal coordination protocols are, as yet, unwritten. Second, before traps can be transferred, they must first be allocated, yet doing so will take time. NMFS expects that it will be able to qualify and allocate traps for the majority of Area 2 and Outer Cape Area trap fishers quickly, but future developments could easily delay the qualification and allocation process. NMFS is concerned that beginning the Trap Transfer Program without having first processed a majority of its qualification applications will complicate the trap transfer market and create derby-style pressures in the qualification/allocation process. It might also cause NMFS to have to siphon off resources from the qualification process to satisfy the transfer process, leaving neither process with sufficient resources. Ultimately, NMFS proposes to begin the first year of its Trap Transfer Program 120 days after the publication of its final rule, which NMFS expects is a sufficient amount of time for it to complete the majority of its qualification and allocation decisions. Whether the time period should be advanced (e.g., 90 days after the final rule) or delayed (e.g., 180 days after the final rule, or longer) will depend in large part on the development of the as yet incomplete infrastructure necessary to carry out the program. NMFS is greatly interested in any comments from the public, the states, and Commission on this timing issue.

At present, there are 3,152 Federal Lobster Permits. This proposed rule would allow any of these permit holder to purchase Area 2, 3, or the Outer Cape trap allocations through the Trap Transfer Program. Accordingly, any of the 3,152 individuals with a Federal Lobster Permit could opt into the proposed Trap Transfer Program and purchase qualified and allocated traps.

NMFS gave careful consideration to its proposal to allow all Federal Lobster Permit holders to purchase trap allocations. While there is some utility in limiting the number of participants fishing in an area, there exist numerous reasons to open the Trap Transfer Program to all Federal Lobster permit holders. First, a primary purpose in limiting fishery access is to limit trap fishing effort, which will have been done regardless of who is ultimately allowed to transfer traps. That is, if the total overall trap allocation for an LCMA is set, there is less biological importance to which, or how many, permit holders fish that allocation. Second, allowing all permit holders to purchase allocated traps helps to offset potential negative impacts to those individuals who did not initially qualify into the area. Third, allowing unqualified buyers to purchase allocated traps allows younger, newer lobster fishers to enter the fishery in a scaled fashion, which was a desire voiced to NMFS by the lobster industry during the DEIS public hearings. Fourth, the greater the number of potential buyers, the greater the market and potential transactions, and thus the greater the potential biological benefit through the 10 percent trap conservation tax.

Notably, the proposed rule restricts trap transfers for individuals that have also qualified into Area 1. Specifically, although Area 1 permit holders may opt into the Trap Transfer Program and transfer traps, doing so may result in a forfeit of that permit holder's ability to fish in Area 1 to the extent that person sells or transfers away part of his or her trap allocation. This prohibition originally involved Area 1 being the last open access lobster area at the time the Commission was developing its trap transfer recommendations (i.e., 2002-2010). At that time, there was concern that as other areas limited fishing access, displaced fishing effort would flood into Area 1 because Area 1 was open access; i.e., anybody with a Federal lobster permit could designate Area 1 on their Federal lobster permit and fish with 800 traps. The fear was that an individual would sell their entire Area 2, 3, or Outer Cape Area trap allocation and then move their business to Area 1 and start fishing with another 800 traps, effectively doubling effort. Since that time, however, Area 1 developed and implemented a limited access program in their area. As a result, Area 1 is no longer open access and Area 2, 3, and/or Outer Cape Area permit holders will not be able transfer traps and start fishing anew in Area 1. Accordingly, the concern is now largely moot. One problem, however, remains: Although the 800 trap limit applies to all Federal permit holders in Area 1, there is no individual permit-based Area 1 trap allocation. As such, there is no Area 1 allocation to debit should a multi-area qualifier (i.e., a person who has qualified into Area 1 as well as another area) sell allocated traps from that other area. Consequently, an Area 1 fisher who also qualified into other areas could transfer their Area 2, 3, and/or the Outer Cape Area allocation and still fish with 800 traps in Area 1. This would create an overall increase in trap fishing effort beyond what was historically fished. A simple regulatory fix—e.g., giving all Area 1 participants an individual 800 trap allocation—could resolve this issue, but the Commission has not, as yet, amended its earlier recommendation to NMFS. Accordingly, this proposed rule retains the Commission's original recommendation that Area 1 qualifiers be allowed to purchase transferable traps from Areas 2, 3, and the Outer Cape; however, by selling any of their transferable allocation, they would forfeit their eligibility for Area 1 trap fishing because the Area 1 allocation cannot be equally reduced along with the transferable allocation if transferable traps are sold.

NMFS analyzed numerous alternatives to the proposed Trap Transfer rule, including a no-action alternative, allowing the program only in Area 3, and implementing the Commission's Trap Transfer Program. The Commission's Trap Transfer Program is substantially identical to NMFS's proposed program, except that the Commission's program is immediately and automatically open to all participants. Accordingly, because permit holders can participate in the Commission's program without opting in, the Commission's program lacks the synchronizing mechanism that NMFS proposes. The other above-mentioned alternatives reduce the potential for regulatory disconnects, but offer none of the proposed program's mitigation benefits. A more detailed discussion of potential alternatives is identified in NMFS DEIS, section 4.4.

NMFS also rejected the Commission's proposal to tax full business transfers at 10 percent. As a preliminary matter, full business transfers have been happening for decades and are independent of trap transferability. Second, the greatest number of full business transfers occur, not surprisingly, in Area 1, which is the Lobster Management Area with the largest number of permit holders. As discussed above, however, Area 1 does not have a trap allocation from which to apply a 10 percent trap transfer retirement tax. Applying a tax, therefore, is not feasible under existing regulations. Further, NMFS notes that the Commission is continuing to deliberate upon what it considers to be a separate business entity for the purpose of determining ownership caps. NMFS will monitor these deliberations and as the issue evolves will consider additional recommendations on the matter should the Commission determine it necessary.

NMFS proposes to remove certain old, out-dated paragraphs of regulatory text from its Federal Lobster Regulations. Specifically, this action would remove the Area 3, 4, and 5 qualification and appeals criteria from § 697.4 and remove outdated sections of the trap cap regulations in § 697.19. The Area 3, 4, and 5 limited access program qualification and allocation process was completed many years ago (the last appeal being finalized in approximately 2006). The paragraphs to be removed from § 697.19 also relate to outdated trap cap provisions (e.g., trap caps before and after August 2003). In short, the principal measures in this proposed rule (i.e., limited access programs in Area 2 and the Outer Cape Area, as well as a Trap Transfer Program) caused NMFS to review § 697.4 and § 697.19 and identify paragraphs that are old, irrelevant, and that bog down the reader. Removing these paragraphs will keep the regulations fresh and assist the public's understanding of the section going forward.

The measures taken in the Lobster Plan are separate efforts that are designed to build off of one another so that the overall whole is greater than the sum of its parts. The Lobster Plan is also ever-changing, which as noted in the DEIS can present challenges to NMFS. Often, the Commission builds upon its Plan so quickly that its recommendations become bedrock Lobster Plan principles and the foundation of future measures that are often recommended before NMFS can complete its analysis of the initial recommendation. Such is the case here.

There are two general categories of measures that the Commission has or will likely recommend to NMFS for future rulemaking. This proposed rule would be consistent with both categories of measures. The first category relates to the Commission's response to the to the Southern New England stock recruitment failure. The Commission decided to address the recruitment failure in two phases: First, by reducing lobster exploitation by 10 percent; and, second, by reducing effort by 50 percent in Area 2 and 25 percent in Area 3, the principal southern New England Stock areas. The Commission's measures to reduce exploitation by 10 percent include changing the minimum and maximum size limits for harvestable lobster and/or implementation of closed seasons. The measures to reduce effort by 50 percent include an immediate 25 percent trap allocation reduction, for Area 2, followed by 5 years of trap allocation reductions at 5 percent reductions per year. For Area 3, traps will be reduced by 25 percent in total, with 5 percent reductions per year for 5 consecutive years. This proposed rule not only complements these other potential rulemakings, but failure to implement the proposed rule might actually undermine Commission efforts in these other matters. For example, the Commission's willingness to implement a 10 percent exploitation reduction largely depended on its willingness to implement subsequent trap cuts in Areas 2 and 3. The trap reductions depend on affected fishers being able to mitigate the impacts of such cuts by purchasing additional trap allocation through trap transfers, and in turn a trap transfer program depends on there being a limited access program in the involved lobster management areas.

The second category of potential recommendations involves measures to more finely tune the Trap Transfer Program. These measures could include capping the number of permits (i.e., determining what “ownership” means and then capping permit ownership levels), changing trap caps in Area 3, as well as creating a trap banking program, which would allow fishers to purchase trap allocations above their trap cap and place them in a bank where they would not be fishable unless their overall trap allocation number fell below the area trap cap. These potential measures are still being deliberated upon by the Commission, but largely depend on NMFS implementing a Trap Transfer Program as proposed in this rule.

Comment 1: One individual expressed their displeasure on the length of time it has taken to implement this rulemaking.

Response: NMFS understands and, to an extent, even shares in this frustration. It is important to understand, however, that lobster rules are not made in isolation. Changing circumstances in the fishery have necessitated a slower, more deliberate pace. For example, since receiving the Commission's first rulemaking recommendation, the Commission has declared an emergency on an area lobster stock (the Southern New England (SNE) lobster stock in 2003). Then, in 2010 the Commission declared a lobster recruitment crisis on that same lobster stock. The Commission and commentators alike urged NMFS to delay its rulemaking process until the crisis was better understood. Further, the Commission's rulemaking recommendations have themselves changed: The Outer Cape Plan, initially approved in Addendum III in 2002, was amended by Addendum XIII in 2008. The Area 2 Plan was approved in 2003 (Addendum IV), rescinded in 2006 (Addendum VI), and a new plan approved in later that year (Addendum VII). Important details to all plans (including transferability) were not added until 2009 (Addendum XII). Ultimately, given the ever-changing context, NMFS has been forced to proceed in a more cautious, deliberate fashion, which although perhaps frustrating in the time it takes, nevertheless appears to be the most prudent approach.

Comment 2: A number of commenters noted that NMFS was “several years behind” in implementing the Commission's Plan and urged that NMFS proceed with this rulemaking, as its measures were already being implemented in state waters and compatible measures are needed in Federal waters.

Response: NMFS understands that implementation delays by the states and NMFS can make it more difficult for the Commission to plan new measures to respond to new crises. Lobster management is not a static process; new issues are always arising. Often, by the time the Commission completes one part of its Lobster Plan, additions, edits, and amendments to that same part are already in development. In fact, the Commission's Lobster Plan sometimes builds upon itself so quickly that new Plan measures are sometimes adopted that depend on earlier Plan measures, which have not yet been analyzed, much less adopted, by NMFS. Nevertheless, a speedy response is not always the best response. A balance needs to be struck because hastily crafted plans can have unintended and unwelcome consequences. Quite often, in attempting to more speedily address lobster issues, the Commission's Lobster Board left out important plan details to be addressed at some later date. For example, although the Commission recommended the rudiments of its Outer Cape Area limited access program and trap transferability in 2002 and the Area 2 limited access program in 2004, critically important details were not added until later (see e.g.: Addendum V-2004; Addendum VII-2005, Addendum IX-2006, Addenda XII & XIV-2009). Fortunately, the later added details were within the scope of what had been originally proposed (limited access program based upon past participation in the fishery) and thus NMFS did not need to start the rulemaking over. Now that those added details are known, and now that the SNE stock crisis is better understood, NMFS is better able to proceed with this rulemaking.

Comment 3: In public meetings of the SNE stock crisis and Addendum XVII deliberations in 2010 and 2011, the Commission's Lobster Board noted that the SNE stock crisis introduced tremendous uncertainty into lobster management, which complicated and delayed complementary Federal rulemaking until the crisis was better understood and the potential Commission response became clearer.

Response: NMFS agrees and notes that the originally recommended Lobster Board response to the SNE crisis in 2010 suggested a 5-year moratorium on lobster fishing—an option some on the Board described as a “nuclear option” because of its potential to put many fishers out of business and radically change the character of the SNE fishery. To proceed with this rulemaking at such a time seemed counter-productive and ill-advised (e.g., would potentially qualified permit holders even bother to apply for entry into a fishery in the midst of a 5-year moratorium?). As such, NMFS felt it imprudent to proceed with this rulemaking in the face of such widely varied and uncertain responses. The Commission, however, now has a strategy to respond to the SNE lobster stock crisis and approved the first phase of that response in February 2012 (Addendum XVII). The second phase of the response is identified in draft Addendum XVIII. Accordingly, NMFS now has a better understanding of the state of the fishery—both biologically and managerially—and the agency is able to continue on with its rulemaking.

Comment 4: One industry representative indicated that concerns over the SNE lobster stock made it difficult to comment on “where transferability should be going or how it should end up.” They urged that NMFS proceed cautiously with this rulemaking.

Response: NMFS agrees and notes that the commenter's recommendation was repeated by members of the public during past Commission Lobster Board meetings. It was not possible to proceed more quickly given the number of additions that the Commission made to its plan and given the potential plan changes that the Commission were contemplating as recently as 2012. Nevertheless, delays are always a concern insofar as they have the potential to render a rulemaking stale and cause stakeholders to disengage from the process. NMFS, however, does not consider that to have happened here. Throughout this process, stakeholders have been continually reminded of the proposed measures, be it through the numerous agency Federal Register Notices, or reminders in permit holder letters, or through the agency's DEIS public hearings conducted in the Northeast in 2010. Additionally, the limited access and transferability plans have been reported steadily in the news media. The recent SNE stock recruitment failure generated tremendous interest in this rulemaking, not only from the lobster industry, but from their representatives in government, managers, non-governmental organizations, and the public in general. In addition, most of the affected Outer Cape Area and Area 2 Federal Lobster permit holders recently underwent a similar limited access program application process with their state permits. Accordingly, NMFS asserts that this rulemaking remains fresh and current with the stakeholders actively engaged. The delays, while frustrating, were unavoidable and necessary to draft a workable proposed rule.

Comment 5: Numerous commenters, both in writing and at the DEIS public hearings, supported the rule's proposed limited access measures, and further urged that NMFS enact rules that mirror the states' rules as closely as possible to avoid regulatory disconnects.

Response: NMFS's DEIS analysis supports such comments. NMFS believes that creating an Area 2 and Outer Cape Area limited entry program that is substantially identical and coordinated with the Commission's limited entry program offers the most prudent way forward for the lobster fishery in those areas. In fact, failing to do so would likely create a mismatched and disconnected management program that could undermine and even threaten fisheries management in those areas. Regardless, despite the greatest efforts of NMFS, the Commission, and the states to have identical programs, some differences and some discrepancies will undoubtedly occur. NMFS's analysis, however, suggests that the number of disconnects will be few and have negligible social and environmental impacts. Nevertheless, this proposed rule includes additional elements, such as a Director's Appeal and a voluntary Trap Transfer Program, which would allow NMFS and the states to further coordinate and reconcile irregularities should they occur on individual permits. These additional elements are discussed in greater detail in Comment 20.

Comment 6: One state agency wrote in support of NMFS's proposed Trap Transfer Program and explained that such a program was critical to the success of the overall limited access plan. The state indicated that effort control plans sometimes resulted in fishermen being allocated far fewer traps than they desired or needed. The “relief valve” to accommodate some individual fisherman's need to increase trap allocation was the Trap Transfer Program.

Response: NMFS analyzed this issue in detail in its DEIS and agrees that its proposed Trap Transfer Program would allow individual lobster businesses the flexibility to scale their business up or down according to individual business plans. Obviously, not all lobster businesses fish the same number of traps. Although an increase in the number of traps fished may increase the amount of lobster harvested, it will also increase fishing costs, including costs for bait, fuel, and time to tend the additional traps. Each fishing business calculates the benefits and costs of fishing at certain trap levels when deciding how many traps to fish. In this proposed rule, however, initial trap allocations will be based on levels of participation during a qualification period that occurred in the past. The qualification period does not factor into what the lobster fisher is fishing presently or what the fisher may want to fish in the future. As a result, some vessels may receive allocations that do not reflect their current business plan, with some receiving higher trap numbers and others receiving lower. Transferability will make it possible for trades to take place, thereby allowing lobster fishers a better chance to scale their businesses to their most appropriate and economically viable level.

Comment 7: Numerous lobster fishers and lobster businesses commented in favor of NMFS's proposed Trap Transfer Program. They point out that failure to implement a Federal Trap Transfer Program will have serious negative consequences for the inter-jurisdictional management of the fishery. The Trap Transfer Program increases flexibility for lobster businesses and that benefit far outweighs the biological negative of increased trap production by breaking large inefficient trap allocations and transferring them to businesses that will make them more productive.

Response: NMFS analyzed this issue in its DEIS and concluded that the proposed Trap Transfer Program makes good sense and will be an overall benefit to the fishery. Specifically, the Trap Transfer Program would likely improve the overall economic efficiency of the lobster industry by allowing businesses to scale up or down according to whatever trap number works best for their particular business. For example, some previously inactive traps, i.e., traps that were not being fished (“latent traps”), could be sold to individuals who would likely fish the traps more actively. Theoretically, doing so might increase effort in the area, although likely not on a scale that would produce negative impacts on the lobster population (see responses to Comments 13 and 14). NMFS's proposed rule, however, includes trap transfer taxes (which would retire 10 percent of the traps involved in any transfer) and trap caps on the number of traps a business could accumulate, to balance against the activation of latent effort. NMFS asserts that these protection measures mitigate the possibility for an increase in trap effort. NMFS further notes that Commission Addendum XVIII calls for further trap cuts in SNE, and provides an additional buffer against the possibility of increased effort due to the activation of previously latent traps.

Comment 8: Members of industry and the Commission asked that NMFS implement its Trap Transfer Program as soon as reasonably possible.

Response: NMFS considered many alternative start times before deciding that its preference is to start the program 120 days after the publication of the final rule. Many alternatives exist. On one extreme, NMFS could attempt to begin the Trap Transfer Program immediately in Area 3 (where trap allocations have already been decided), and then begin it in Area 2 and the Outer Cape Areas on a continuing, rolling basis as the permit holders are qualified. Such an alternative, while speedy, has significant down-sides. For example, were Area 3 to transfer traps before the other areas, it could create disconnect issues because many Area 3 traps will also likely be qualified into Area 2 and Outer Cape Area. Further, giving one group a head start over another group—especially allowing Area 2 and Outer Cape Area qualifiers to enter the program on a first come, first served basis—could create a race to transfer that might unduly advantage early qualifiers and skew market forces. At the other extreme is an alternative that delays the Trap Transfer Program until NMFS makes initial decisions on every Area 2 and Outer Cape Area application and/or appeal. Waiting would allow NMFS to start the Trap Transfer Program with all participants on equal terms, and would likely allow NMFS to proceed at a more deliberate, thoughtful, and less chaotic pace. However, NMFS's lobster limited access program experience in other areas (i.e., Areas 1, 3, 4, and 5) suggests that it often takes years to finish making decisions on all applications and all appeals. Delaying trap transfers until all limited access decisions are made would create unacceptable delays to permit holders relying on the Trap Transfer Program and to lobster managers who are waiting for the Trap Transfer Program so they can implement other lobster management measures.

Ultimately, NMFS proposes a middle ground alternative: Beginning the Trap Transfer Program in all three areas 120 days after the publication of the final rule. NMFS's lobster limited access program experience suggests that it will be able to process and complete the great majority of the applications in 120 days. This would allow the Trap Transfer Program to begin with a larger group of initial qualifiers and, thus, allow the program to proceed under more normal market conditions. Ultimately, however, the program's start time will be heavily dependent upon infrastructure being in place to properly account for and manage the transfers. At present, the ACCSP is in the process of developing a tracking system to account for all transfers. That system, however, has not yet been completed.

Comment 9: Numerous commenters were concerned about discrepancies between an individual's potential state and Federal trap allocations. These individuals supported NMFS's alternatives—such as the proposed voluntary Trap Transfer Program—that would synchronize state and Federal allocations. These commenters also uniformly agreed with the need for a centralized trap transfer data base so that all transfers could be catalogued and tracked by all relevant jurisdictions.

Response: NMFS agrees that it is critical to synchronize the state and Federal limited access and transferability programs to the greatest extent practicable. NMFS's DEIS analysis indicates that the threat presented by incongruent state and Federal regulatory programs is significant and real. This is, in fact, one of the many reasons in support of a Federal Trap Transfer Program—i.e., if the states allowed trap transfers (the states have already approved trap transferability programs of their own), but NMFS did not, then trying to follow and determine the number of traps on a state/Federal dually-permitted entity's allocation would quickly become an impossible task as that individual transferred his or her state allocation. NMFS's proposed Trap Transfer Program follows the trap transfer recommendations in the Commission addenda, including Addendum XII, and thus is substantially identical to the trap transfer programs of the states. To the extent that discrepancies occur, NMFS's Trap Transfer Program attempts to synchronize with the states by mandating that participants reconcile their state and Federal trap allocations before they are allowed to transfer traps. NMFS agrees that a centralized database is necessary to keep track of all transfers and the agency has actively advocated for such a database in Commission Lobster Board discussions.

Comment 10: Lobstermen at the DEIS public hearing in Narragansett, Rhode Island (June 2, 2010), expressed concern that management restrictions were going to cause this already aging industry to further lose its youth and vitality. As access to lobster permits and fishing areas becomes increasingly restricted (especially with that access being determined by fishing history that potentially occurred before younger fishers may have begun fishing in earnest), younger lobstermen have the potential to be squeezed out, both because they are newer and thus lack the history, and because they are younger and often lack the up-front capital to buy whole fishing operations.

Response: NMFS's proposed Trap Transfer Program should benefit young lobstermen such as those who commented at the DEIS public hearing in Narragansett, Rhode Island. The proposed Trap Transfer Program would allow participants to build up their businesses as time and capital allow (e.g., newer fishermen could start with smaller numbers of traps and build up) instead of having to incur the great expense of buying a whole, fully-established business all at once. In other words, any Federal lobster permit holder could buy into an area regardless of whether they initially qualified into that area (e.g., again, starting with a smaller, less expensive business plan that allows for expansion if necessary), which would allow younger individuals access to an area despite potentially lacking the requisite fishing history to initially qualify into that area.

Comment 11: Some people expressed concern at NMFS's DEIS public hearings that the proposed Trap Transfer Program might cause excessive consolidation of effort and allow monopolies to form. Individuals also commented that NMFS should only allow Federal permit holders who have already been qualified into an area to buy and sell traps in that area.

Response: Well over 80 percent of the United States' harvest of American lobster comes from lobster management areas lacking transferable trap programs, such as Area 1. As such, even in the unlikely event that trap effort becomes so consolidated in Areas 2, 3, and the Outer Cape that a few entities control all traps—an impossibility under the proposed plan—those entities would still not be able to so control the markets as to constitute a monopoly. Regardless, NMFS's proposed Trap Transfer Program would maintain current trap caps (800 traps in Area 2 and the Outer Cape Area and 1,945 in Area 3), to prevent excessive trap accumulation. In addition, the proposed rule would allow any Federal lobster permit holder, not just Federal lobster permit holders who qualify into the area, to buy allocated traps, thereby increasing the pool of potential buyers so that buying power would not be consolidated in a smaller number of area qualifiers.

Comment 12: One lobsterman stated at the DEIS public hearing in Chatham, Massachusetts, that he opposed allowing lobster management area non-qualifiers to gain access into a lobster management area by buying traps that were allocated to that management area. Other lobstermen, however, suggest that individuals not qualified into an area should be allowed to purchase area qualified traps.

Response: NMFS proposes to allow non-qualifiers to purchase qualified area lobster traps. Doing so will increase the pool of potential buyers and thus better facilitate the economic advantages to both buyer (e.g., access to fishing the area at a level appropriate to their business model) and seller (e.g., a larger pool of potential buyers). Allowing non-qualifiers to purchase qualified traps will also help younger entrants into the fishery participate at an economically-viable level (see response to Comment 10). Additionally, allowing non-qualifiers to purchase qualified traps will help offset impacts to individuals who might have fished the area in the past, but failed to qualify, or qualified at a lower trap allocation. The proposed rule would not go so far as to suggest that any individual—even those without federal lobster permits—could purchase qualified traps and fish in the area. Thus, the number of potential participants is greater than if limited solely to area qualifiers, but would be limited, nonetheless. Specifically, the total number of possible participants is limited to individuals with Federal lobster permits (there are presently about 3,152 Federal lobster permit holders). Additionally, geographical, economic, and regulatory considerations would prevent those participants from concentrating in one area. Requiring a purchaser to have a Federal lobster permit makes sense and provides some counter-balance: It restricts the number of purchasers to a finite pool and would allow NMFS to maintain management through its permits rather than shifting to a trap-based management paradigm. Further, limiting participation in the Trap Transfer Program to Federal lobster permit holders helps ensure the social and industry characteristics of the fishery insofar as purchasers would be existing lobster fishers rather than the general public, thereby ensuring that potential purchasers have at least some understanding of the fishery.

Comment 13: Some commenters expressed concern, both in writing and at NMFS's DEIS public hearings, that trap transferability programs sometimes allow latent effort to be activated.

Response: This proposed rule would not increase effort. Critical to understanding this point is using the current lobster fishery as a proper frame of reference. At present, any of the 3,152 existing Federal lobster permit holders can fish in Area 2, in the Outer Cape Area, or in both areas. Further, every one of those 3,152 permit holders could fish any number of traps up to the current trap cap of 800 traps. Under the proposed rule, however, the number of potential trap fishery participants is expected to drop from 3,152 to 207 in Area 2, and to 26 in the Outer Cape Area. NMFS knows that the number of permit holders actually fishing in Area 2 and the Outer Cape Area is far less than 3,152, but nevertheless, restricting access to approximately 233 permit holders (207 in Area 2 and 26 in the Outer Cape Area) based upon past fishing history represents a massive reduction in potential effort. Further, of the 233 permit holders expected to qualify, many, if not most, will be allocated less than the full 800-trap allocation, because many fishers did not fish with every possible trap during the qualifying years. Accordingly, not only will the number of Area 2 and Outer Cape Area fishers be reduced, but the number of traps that the area qualifiers can fish will also be reduced. Even those who receive the maximum 800-trap allocation will, at most, receive an allocation equal to, but not greater than, the number of traps currently allowed. In other words, whereas the present regulations allow anybody to fish up to 800 traps in these areas, the proposed regulations will allow only certain qualifiers to fish up to 800 traps, with many qualifiers allocated at trap levels below those allowed today. Again, this allocation would be tied to actual fishing history and, thus, result in a further reduction in potential effort.

Unfettered trap transferability, however, does have the theoretical potential to slightly increase actual effort as unused, latent traps in one business are sold to a different lobster business which could fish them more actively. But, that increase would only be relative to the administratively-created fishery occurring immediately after permit holders are qualified and allocated, not as compared to effort as it exists on the water today. Notably, the proposed rule's post-qualification/allocation characterization does not represent today's actual effort either: It represents actual effort as it existed in the early 2000's. Some of the qualifiers would receive an allocation greater than they now fish, others smaller than they now fish. When the parties transfer traps back and forth to get to their current-day business models, some presently latent traps might become active. But, many of these activated latent traps would be doing nothing more than replacing currently active traps that were not allocated during the allocation process—at most, a zero-sum gain. Nevertheless, the proposed rule offers a number of measures to balance against the activation of latent effort including: Permanently retiring 10 percent of all traps involved in transfers (sometimes referred to as a “transfer tax” or “conservation tax”); requiring dually-permitted entities (those with both a state and Federal lobster permit) to reconcile inconsistent allocations by choosing the more restrictive number; and retaining trap caps on individual allocations. Accordingly, NMFS does not expect a great amount of latent effort to be activated through transfers, and asserts that its mitigation measures will offset any potential activation of latent effort.

Comment 14: Members of the public commented at the DEIS public hearings and in writing that latent traps should not be allowed to be transferred.

Response: Latent effort is potential effort. In the lobster fishery, latent effort represents the number of traps that could be fished, but that are not actually being fished at a specific point in time. For the purposes of this proposed rule, the specific point of time is the qualification/allocation time period set forth in the Commission's Lobster Plan. The Commission's Lobster Plan calculates trap allocation based upon a scientific regression formula to ensure that trap allocation correlates with fishing activity. Accordingly, every trap initially allocated can be considered active—or at least was active during the qualifying years chosen in the Commission's Lobster Plan. If, however, the commenters are suggesting that NMFS further restrict transfers of traps that have become latent since the qualification/allocation time period, then NMFS must point out the many problems with such a suggestion. First, although the commenters generally speak about latency, they have not provided a specific time period within which to determine latency. Latency is not static. It changes year-to-year, month-to-month, and even day-to-day. Traps that are active one month might become inactive the next and then reactivated the third month. Without a temporal context, latency cannot be determined with any degree of specificity. Second, even if a time period was given, there is no mandatory record-keeping to easily determine which traps were active at any given time and which traps were not. In other words, because it is seldom possible to precisely determine whether a trap is active or latent (or partially active/partially latent) it is extraordinarily difficult to craft a management program that allows only the transfer of active traps while preventing transfers of latent traps. Third, even were NMFS to somehow determine a trap's activity level in recent seasons, restricting its transfer would result in disconnects with the states because there is no restriction on the transfer of latent traps in the Commission's Lobster Plan. Ultimately, NMFS concludes that the Commission's Lobster Plan does a good job of preventing latent traps from being activated. To the extent that latency nevertheless exists, NMFS asserts that mitigation measures such as the 10 percent retirement of trap transfers will compensate for potential latent trap activation (see response to Comment 13).

Comment 15: One Outer Cape Area trap fisherman commented in a DEIS public hearing that if non-qualifiers could buy traps in the Outer Cape Area, then non-qualified gill-netters would buy small amounts of traps just to enter the area, but fish for lobster with gillnets.

Response: An individual's ability to fish for lobster is derived from his or her permit, not from the traps. The proposed rule would not change this. As a result, anybody fishing for lobster in the Outer Cape Area still must possess a Federal lobster permit. Therefore, the commenter's scenario would not occur under this proposed rule. That is, a Federal lobster permit holder would not need to buy traps as a ruse to get into the area because that permit holder could fish for lobster in the area with gillnets without a trap allocation if they already had a Federal lobster permit. If a person does not have a Federal lobster permit, only then would he or she not be allowed to participate in the proposed Trap Transfer Program to buy Outer Cape Area traps.

Comment 16: One industry group suggested that only traps that fished within the SNE area be transferrable within the SNE area.

Response: Areas 2, 3, and the Outer Cape all overlap multiple lobster stock areas. To further divide those lobster management areas by stock area would be akin to creating new sub-management areas, which is something the Commission's Lobster Plan neither does nor contemplates. Additionally, existing documentation lacks sufficient clarity and precision to determine which stock area, within a given management area, a trap has been fished. Consequently, NMFS has determined that this suggestion cannot be implemented, and even if it were, it would likely result in inconsistencies with the Commission's Lobster Plan.

Comment 17: One organization representing Area 3 lobstermen recommended that Addendum XIII's 2,000-trap cap for Area 3 remain in place, although the commenters acknowledged that trap caps can and should be adjusted in later addenda. One lobsterman and his counsel opposed Addendum XIII's Area 3 2,000-trap cap as being too low and argued that upon allocating, and thus establishing, the total number of Area 3 traps in the qualification process, there is little reason to set individual trap caps on permits, especially a cap as low as 2,000 traps.

Response: At present, trap caps exist in every LCMA. In Area 2 and the Outer Cape Area, the cap is 800 traps. In Area 3, the highest trap cap is 1,945 traps. NMFS does not propose to change these limits in this proposed rule. First, most fishers have been fishing within the existing traps caps for over a decade. In May 2000, the Area 2 and Outer Cape Area trap caps were established at 800 traps and the Area 3 trap cap was set at 1,800 traps. After the initial Area 3 qualification and allocation process in 2003, the Area 3 trap cap jumped to 2,656 traps (very few permit holders qualified at that level), but was subject to a graduated yearly decrease so that no Area 3 fisher now deploys 2,000 traps, and most have an allocation far below that cap. Accordingly, failure to increase the cap in this rulemaking should not create any new impact on lobster businesses. Second, the mitigation provided by the Trap Transfer Program for lower allocations remains, regardless of the trap cap. Finally, and of great importance, the trap caps and their impacts on newer, more novel lobster management measures, such as controlled growth and banking, are being analyzed in great detail in draft addenda that have yet to be approved by the Commission's Lobster Board. Accordingly, it would be premature and imprudent to change trap caps in the Federal lobster regulations before having the opportunity to analyze and incorporate the proposals in the Commission's Addendum XVIII. NMFS intends to address the trap cap issue in a rulemaking that follows this present rulemaking.

Comment 18: One Area 2 lobsterman commented that he had a medical condition that drastically curtailed his lobster fishing activity during the qualifying years, and that he favored an appeal process that would allow him to qualify for access into Area 2, with a trap allocation reflecting his trap fishing history prior to his medical condition.

Response: NMFS's proposed rule contains provisions for hardship appeals in Area 2 based upon certain limited situations, such as situations in which medical incapacity or military service prevented a Federal lobster permit holder from fishing for lobster in 2001, 2002, and 2003. NMFS acknowledges the difficulties that such an appeal creates. Specifically, appeals based upon hardship can be extraordinarily subjective. What constitutes a hardship to one individual might not be so to another, and vice-versa. And short of hiring medical experts and cross-examination in a trial-type hearing—an expensive, resource intensive, and subjective process—it can be difficult to glean the applicant's state-of-mind to determine whether the matter truly prevented him or her from fishing. Accordingly, such appeals are difficult to manage by regulation and potentially introduce an exception that can threaten to engulf the rule. Lobster management, however, is a bottom to top process. In this case, the Area 2 lobster fishing industry, as well as the Commission's Lobster Board, decided after lengthy public input and debate that a limited medical hardship appeal was appropriate for Area 2. Further, Rhode Island allowed this type of appeal in its qualification process and found it manageable and just. In proposing a hardship appeal provision here, NMFS gives weight to the lobster management process, and the experience of the industry and Board in making the proposal and finds the rationale for their appeal to be reasonable.

Comment 19: An Area 2 commenter suggested that NMFS provide for a medical appeal that mirrored Rhode Island's medical appeal so that there would not be a discrepancy between his state and Federal trap allocation. He claimed that he fished state and Federal waters as a single entity and that a trap discrepancy between his state and Federal allocations would disrupt his business.

Response: Commission Addenda VII (2005) and XII (2009) both establish the premise that a single fishing operation will be considered to have developed a single indivisible fishing history even if that history was established under jointly held state and Federal fishing permits. NMFS's DEIS further acknowledged the importance of this premise and discussed the problems created by regulatory disconnects if a state and NMFS were to make inconsistent qualification and allocation decisions on that single fishing history. As a result, NMFS's proposed rule attempts to align itself with the regulatory processes already established by the states, including the appeals process set forth by Rhode Island, to the greatest extent practicable, acknowledging, of course, the difficulties in creating a Federal regulation that is consistent with state regulations that are themselves not always completely aligned.

Comment 20: Members of the public, lobstermen, the Massachusetts Lobstermen's Association, state and Federal legislators, as well as the Massachusetts Division of Marine Fisheries were concerned about unavoidable regulatory disconnects between NMFS and the states and urged NMFS to address these discrepancies in an appeals process or by grandfathering in earlier trap transfers.

Response: NMFS analyzed this issue in detail in the DEIS and shares these concerns. For this reason, NMFS introduces a Director's Appeal in this proposed rule. The Director's Appeal would allow states to petition NMFS for comparable trap allocations on behalf of Area 2 and Outer Cape Area applicants denied by NMFS. The appeal would be available only to Area 2 and Outer Cape Area participants for whom a state has already granted access. The Director's Appeal would allow more effort to qualify and enter the EEZ than would otherwise occur. NMFS, however, does not expect this potential additional effort to negatively impact the fishery. First, the number of appeals is limited to individuals who have already qualified under their state permit. These individuals, therefore, are already exerting fishing pressure on the lobster stock, albeit limited to state waters. Second, the DEIS analysis suggests strong correlation between state qualifiers and potential Federal qualifiers so, although some disconnects will likely occur, the DEIS predicts that the number will be relatively low. Finally, even if NMFS encounters a greater-than-predicted number of Director's Appeals, NMFS nevertheless concludes that synchronicity is so crucial as to be the overriding factor in proposing the appeal. To the extent that the extra qualified effort becomes a problem, which given the scale of the fishery seems unlikely, this effort can be further reduced in future Commission addenda rule recommendations.

Comment 21: Members of the public, lobstermen, the Massachusetts Lobstermen's Association, state and Federal legislators, as well as the Massachusetts Division of Marine Fisheries, all indicate that Massachusetts allowed permit holders to transfer traps in the Outer Cape Area. As a result, even if NMFS were to allocate traps consistent with a state's initial allocation, the initial Federal allocation might not match the current state trap allocation because of the state allocation transfers that have subsequently occurred. The commenters recommend that NMFS grandfather in transactions that have already occurred, or adopt some other process to ensure that businesses with state and Federal permits have consistent allocations.

Response: NMFS agrees that the potential for disparate allocations amongst dually-licensed permit holders exists in any dually-administered allocation program. As a result, this proposed rule offers numerous safeguards without having to grandfather in earlier transactions. First, as discussed in response to Comment 20, NMFS's DEIS analysis suggests that the number of disconnects will be low. More recent Massachusetts Division of Marine Fisheries information confirms the DEIS conclusion and indicates that Massachusetts only allowed a negligible number of dually-permitted trap transfers (less than 1,000 traps) before freezing further transactions. Accordingly, NMFS expects that its proposed Director's Appeal will resolve most, if not all, of the problems. Additionally, although individuals with inconsistent allocations will not be forced to relinquish a state or Federal allocation, they will not be allowed to exacerbate the inconsistency by participating in the Federal Trap Transfer Program and transferring portions of the disparate trap allocations.

Comment 22: Massachusetts Division of Marine Fisheries, the Commission and members of the fishing industry commented in support of the Outer Cape Area January 15th to March 15th area closure.

Response: NMFS proposes to adopt the Commission's recommended closure and prohibit lobster traps in the Federal waters of the Outer Cape Area from January 15th to March 15th of each fishing year. There are numerous benefits to such a closure. Not only would it provide the lobster resource with a 2-month respite from fishing pressure, but the closure would also provide a bright-line enforcement standard: A 2-month period where no lobster trap can be legally set in the area. Thus, any traps encountered in the area during this time period would be either illegal or abandoned, and, in either case, can be easily removed by law enforcement agents. Removing illegal gear is important because it removes excess gear, which benefits lobster by decreasing effort on the resource. It also makes cheating (fishing a number of traps in excess of the allowable trap limit) harder to do, which benefits the vast majority of lobster fishers who abide by the regulations, and lends credence to the overall management process. Removing abandoned gear (also called “ghost gear”) would benefit the lobster resource because abandoned gear still traps, and potentially kills, lobster. NMFS notes that Massachusetts currently is proposing to alter the dates of this 2-month winter closure to February 1st through March 31st. Ultimately, NMFS considers it more important that the involved state and Federal governments coordinate the dates of their 2-month Outer Cape Area closure, than for NMFS to stick to its presently proposed January 15th to March 15th timeframe. If Massachusetts implements this proposed law, then NMFS will consider altering its proposed 2-month closure to correspond with the state law.

Comment 23: The Marine Mammal Commission commented that NMFS needs to be mindful of its responsibilities to consult under section 7 of the Endangered Species Act.

Response: NMFS is aware of its responsibilities under the Endangered Species Act and is in the process of consulting with its Protected Resources Division on this matter.

Comment 24: The Marine Mammal Commission was concerned that the proposed measures could alter the level and distribution of effort, particularly in Cape Cod Bay and the Great South Channel, which could increase entanglement risks for whales.

Response: As a preliminary matter, the proposed measures are specific to Area 2, Area 3, and the Outer Cape Area. The measures are not expected to increase lobster fishing effort in Cape Cod Bay, which is in Area 1 and to which lobster fishing access was limited by a final rule dated June 1, 2012 (77 FR 32420). As for the Great South Channel, this proposed rule has the potential to decrease whale entanglement. First, the proposed rule should not expand effort, but decrease effort, because it would limit lobster fishing access in Area 2 and the Outer Cape Area to approximately 233 permit holders (207 in Area 2 and 26 in the Outer Cape Area), as opposed to all 3,152 Federal lobster permit holders who can currently fish in Area 2 and the Outer Cape Area—including portions of the Great South Channel. Thus, the proposed rule would restrict effort shift because traps would be restricted to being fished only in those areas in which they have fished in the past. Second, the proposed rule would allow for a more precise quantification of fishing effort as it would allocate a finite number of lobster traps, which would allow managers to better manage the lobster resource in each area. Third, although an unfettered trap transferability program might have the potential to increase effort to the extent latent traps become transferred and activated, the proposed rule offers measures to minimize this risk. For example, NMFS does not propose to give all qualifiers a flat 800-trap allocation (which is the number of traps permit holders can currently fish). Instead, NMFS would establish their initial allocation at the level of their demonstrated fishing history, thus decreasing the prospects that latent traps will become activated through the allocation process. In addition, the proposed Trap Transfer Program has set trap caps and a 10 percent conservation tax per trap transfer. Finally, NMFS proposes that all lobster traps be removed from the Outer Cape Area—including involved areas of the Great South Channel—for a 2-month period in late winter. NMFS discusses these issues in greater detail in the DEIS and further discusses latency issues in its responses to Comments 7, 13, and 14.

Comment 25: The Marine Mammal Commission recommended that NMFS require Federal lobster permit holders to provide data on their fishing practices to help evaluate the risk of interactions with whales and the effectiveness of related management actions.

Response: Although the nature of the request is vague, NMFS interprets the intent of the comment to suggest that additional data would help whale conservation and lobster resource management. NMFS generally agrees, but notes that the Commission's Lobster Board has struggled with this issue and has not yet reached consensus on how to best accomplish data needs in the fishery. The Board took an important step in Addendum X, which mandated lobster dealer reporting, and which NMFS implemented in 2009 (74 FR 37530). NMFS considers it important for the Lobster Board to provide direction so that all the managing states and Federal governments are operating in synergy. The Lobster Board did not recommend further lobster reporting in this action and, as a result, the request of the commenter is beyond the scope of this rulemaking. Nevertheless, better data and understanding of the fishery is expected to result from this action. Specifically, this action would allow Federal managers to more precisely know actual fishing effort in Area 2 and the Outer Cape Area, which should aid in both the management of lobster and conservation of whales. This action also requires the creation of a centralized lobster trap tracking system that might also provide better data and understanding of the fishery. The significance of the lobster trap tracking system is discussed in greater detail earlier in this proposed rule in the section entitled: ITT Program—NMFS's Response to Commission Recommendations and Proposed ITT Rule.

Comment 26: The Environmental Protection Agency noted that the DEIS discussed the significance of water temperature on lobster and suggested that the Final Environmental Impact Statement contain the most current science on how temperature affects lobster.

Response: NMFS intends for the Final Environmental Impact Statement to contain the best available scientific information.

Comment 27: One commentator suggested that leasing of traps be allowed in addition to being sold during the trap transferability process, because doing so would provide industry with greater flexibility.

Response: NMFS does not propose to add leasing traps to its Trap Transfer Program. The Commission did not recommend leasing when it proposed its trap transferability program and to do so without the Commission and states also doing so would increase the potential for disconnects amongst the states, Federal government, and industry.

This proposed rule has been determined to be not significant for the purposes of Executive Order (E.O.) 12866.

This proposed rule does not contain policies with federalism implications as defined in E.O. 13132. The proposed measures are based upon the Lobster ISFMP that was created by and is overseen by the states. The proposed measures are a result of multiple addenda, which were approved by the states, recommended by the states through the Commission for Federal adoption, and are in place at the state level. Consequently, NMFS has consulted with the states in the creation of the ISFMP, which makes recommendations for Federal action. Additionally, these proposed measures would not pre-empt state law and would do nothing to directly regulate the states.

This proposed rule contains a collection of information requirement subject to review and approval by the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). A PRA analysis, including a revised Form 83i and supporting statement, has been submitted to OMB for approval. The PRA analysis evaluates the burden on Federal lobster permit holders resulting from the application and appeals process, as well as the Trap Transfer Program.

Prior to the start of the eligibility and allocation application process, NMFS will contact all Federal lobster permit holders and inform them of whether or not the agency has information on hand to demonstrate that a permit meets the eligibility requirements based upon the review of data provided by the states.

There are five types of respondents characterized in the PRA analysis. Group 1 applicants are those for whom NMFS has data on hand to show that their permits meet the eligibility criteria for one or both of the Outer Cape Area and Area 2. These permit holders would still need to apply by submitting an application form to NMFS agreeing with the NMFS assessment of their eligibility based on the state data. Group 2 applicants are the subset of Group 1 pre-qualifiers who do not agree with the NMFS pre-determination of the areas they are eligible for and/or the corresponding trap allocations. These applicants would be required to submit the application form, but would also need to provide additional documentation to support their disagreement with NMFS's assessment of their permits' eligibility. Group 3 applicants are those Federal lobster permit holders for whom there are no state data available to show that their permits meet the eligibility criteria for either Area 2 or the Outer Cape Area and who, consequently, have no trap allocation for either areas based on NMFS's review of the state-supplied data. Permit holders in this group may still apply for eligibility, but must submit, along with their application forms, documentation to support their claim of eligibility and trap allocation for the relevant areas. Group 4 are those who apply for access to either Area 2 and/or the Outer Cape Area, are deemed ineligible (a subset of Groups 2 and 3), and appeal the decision based on a military, medical, or technical issue. Group 5 consists of those who fall under the Director's Appeal. The Director's Appeal process was established to address those Federal lobster permit holders who were qualified into either Area 2 and or the Outer Cape Area by their state, but their eligibility is not based on the qualification criteria set forth by the Commission's Lobster Plan. The Director's Appeal allows a state's fisheries director to appeal on behalf of such permit holders and advocate for their qualification to avoid disconnects that could occur if they were qualified by their state, but not by the Federal Government.

The PRA requires NMFS to estimate the individual and overall time and economic cost burdens to the affected public and the Federal Government. To apply, Group 1 applicants would need only to check off the area(s) they are seeking access to on an application form, sign the form, and submit it to NMFS for review. The burden for each applicant is estimated at 2 minutes. We expect about 202 applicants from this category, totaling 6.7 hours of burden for all Group 1 applicants combined. Each Group 1 application is expected to cost the applicant $0.95 for postage, paper, and envelopes, totaling about $192 for all 202 Group 1 applicants.

Because they are not pre-qualified, the application process for Group 2 and 3 applicants is expected to take 22 minutes: 2 minutes to complete and sign the application form; and 20 minutes to locate documentation to support the eligibility criteria. We expect about 31 Group 2 applicants and 79 Group 3 applicants. Consequently, the overall burden for all Group 2 and Group 3 applicants is estimated at 11.4 hours, and 29 hours, respectively. Group 2 and 3 applications are expected to cost each applicant about $1.75 for paper, postage, and envelopes, totaling about $193 for all 110 Group 2 and 3 applicants.

Group 4 applicants, those whose appeal a NMFS decision to deny their application, would require about 30 minutes to prepare and submit an appeal. Twenty-one appellants are expected from this group, totaling 11 hours of time for all 21 appellants to complete the appeal. The cost to each appellant to prepare and submit an appeal is $4.42, with a total of about $93 for all 21 Group 4 appeals.

Group 5 appellants, those who appeal under a Director's Appeal, would require 20 minutes of time to complete and file the appeal. With 40 expected appellants, the total burden for this group is estimated at 13 hours. Each Director's Appeal is estimated to cost each appellant about $1.90, totaling $76 for all 40 permit holders expected through the Director's Appeal.

Once the area eligibility decisions have been made and a specified majority of the Area 2 and Outer Cape Area permits have been qualified and allocated traps, a trap transferability program will begin, allowing all Federal lobster permit holders, regardless of whether their permit qualified for the Area 2, Area 3, or Outer Cape Area trap fisheries, to purchase lobster trap allocations and gain access to these exclusive areas. Permit holders whose permits qualified for these areas may sell all or some of their trap allocation to other Federal lobster permit holders, and also may buy additional traps for these areas, up to an area-specific trap limit. Trap transfers for all interested permit holders would be restricted to a specified period. For each transaction, a buyer and a seller must complete a trap transfer form indicating the number of traps to be transferred, the permit information for each affected vessel, the amount of traps to account for the conservation tax, and other information needed to fully process and account for the transaction.

Prior to the implementation of the trap transfer program, a joint state/Federal database is expected to be on line to allow state agencies and NMFS to track the transfers by their respective permit holders—this is especially critical for tracking transfers between dual permit holders (those holding both a state and Federal lobster permit), because all agencies must have current and consistent records of a permit holder's trap allocation for tracking and enforcement. NMFS anticipates that such a system would likely allow permit holders to transfer traps using a Web site, which would feed into the joint state/Federal database as well as the relevant in-house state and Federal permit databases to facilitate submission and tracking. Regardless of the on-line option, we may accept hard copy trap transfer forms, depending upon the operational status of the inter-agency centralized trap transfer data base at the time the transfer program commences.

We estimate that the time needed for a permit holder to submit a transfer transaction online is the same amount of time as filling out and submitting a hard copy, but the costs of an electronic submission could be $0.00, because those choosing that option may already have access to a computer and the Internet. Nevertheless, because this is a new program and we have no exact method for determining the percentage of permit holders who would conduct their trap transfer transactions on-line we will assume, for the purposes of public burden estimation, that all participants will conduct their transactions with hard-copy submissions. We estimate that it would take 10 minutes to complete a trap transfer request. We expect that each year, about 432 Federal lobster permit holders will apply to buy or sell traps. Each transfer transaction requires two permit holders: A buyer and a seller. Therefore, the number of expected participants is twice the number of expected transactions. Accordingly, about 216 trap transfer applications are expected, with a total permit holder burden of 36 hours. Costs for each transfer transaction are the combined costs of paper, envelopes, and postage, calculated at $5.62 per transfer application, totaling $1,214 for all 216 transfer requests.

Total cost to the affected permit holders for all applications, appeals, and the first year of the trap transfer program are the combined costs of all these categories, totaling about $1,768.

Public comment is sought regarding whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; the accuracy of the burden estimate; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information, including though the use of automated collection techniques or other forms of information technology. Send comments on these or any other aspects of the collection of information to the Sustainable Fisheries Division at the ADDRESSES above, and by email to OIRA_Submission@omb.eop.gov or fax to (202) 395-7285.

Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.

NMFS prepared an Initial Regulatory Flexibility Analysis (IRFA) as required by section 603 of the Regulatory Flexibility Act (RFA). The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. Such an analysis requires an initial finding that (1) small entities are involved; and (2) that economic impacts would result. Both factors occur here.

NMFS prepared this IRFA in tandem with the DEIS, which was made available in 2010. The DEIS and IRFA are based on 2007 data, which was the most recent and best available when these analyses were initiated. All lobster permit holders are being considered small business entities for the purposes of the analysis. The Small Business Administration's size standard for commercial fishing (NAICS 1141) is $4 million in gross sales. The proposed action would potentially affect any fishing vessel using trap gear that holds a Federal lobster permit. During 2007, a total of 3,287 Federal lobster permits were issued. Of these permits, 699 were issued only a non-trap gear permit, 2,168 were issued only a trap-gear permit, and 420 held both a trap and a non-trap gear permit. According to dealer records, no single lobster vessel exceeded $4 million in gross sales. Some individuals own multiple operating units, so it is possible that affiliated vessels would be classified as a large entity under the SBA size standard. However, the required ownership documentation submitted with the permit application is not adequate to reliably identify affiliated ownership. Therefore, all operating units in the commercial lobster fishery are considered small entities for purposes of analysis.

The second required finding—that economic impacts would result—also occurs here. In fact, a primary reason in proposing this rule is to have an economic impact, i.e., to establish regulations that “…promote economic efficiency within the fishery…” (see Supplementary Information— Purpose and Need for Management). The DEIS analysis of preferred and non-preferred alternatives and this proposed rule's discussion of proposed and rejected actions are largely an analysis of the economic impacts of the proposed measures and their alternatives on small business entities. This section is only a summary of the full impact analysis NMFS completed for this action. Although this section attempts to provide a broad sense of the IRFA, NMFS advises the public to review its DEIS as well as earlier sections of this proposed rule for a more detailed understanding of the economic impacts.

The economic impacts of the proposed limited entry program for the Outer Cape Area and Area 2 cannot be quantified with any meaningful precision. The economic viability of a lobster business is not simply dependent on the amount of lobster harvested, but is also dependent on the cost of resources expended to harvest lobster (such as fuel, bait, boat mortgages, etc.). Information about the costs is not collected and, therefore, is not available for this analysis. Even if the information were available, human factors, such as skill of the captain, decisions on when and where to fish, and when to bring the harvest to market so impact lobster economics that quantification would still not be possible. Nevertheless, a qualitative analysis of potential economic impacts is both possible and helpful to better understand the impacts of the proposed rule and its alternatives.

In the Outer Cape Area and Area 2, the proposed action would implement a limited access program with individual trap allocations. This action would mean that any Federal permit holder who did not qualify for limited access would not be able to set traps in either area now or in the future. Based on preliminary estimates, a total of 207 Federal lobster trap vessels would qualify for Area 2 and 26 Federal lobster trap vessels would qualify for limited access in the Outer Cape Area. Conceptually, then, more than 2,000 Federal lobster permit holders would not qualify. However, the majority of these non-qualifiers either do not currently participate in any lobster trap fishery, or they set traps in other LCMAs.

Past Federal lobster regulations allowed individuals to select any lobster management area on their annual permit renewal. For a variety of reasons, some vessel owners elect multiple areas, yet have no history or intent of actually setting traps in all of them. Election of an LCMA may be thought of as representing an option to set traps in an area, whereas the purchase of trap tags may reflect an indication of the intent to actually fish there. For example, during 2007, a total of 431 permit holders elected Area 2 on their permit application and 170 elected the Outer Cape Area. Only 38 of the 170 vessels electing the Outer Cape Area in 2007 purchased Outer Cape Area trap tags, while in Area 2, only 182 of 431 vessels purchased Area 2 trap tags. For purposes of further discussion, vessels that have elected to fish in either Area 2 or the Outer Cape Area will be considered participating vessels.

As noted above, in 2007, there were 182 participating businesses engaged in the Area 2 trap fishery, whereas the proposed action would qualify a total of 207 permitted vessels. Whether all of the participating vessels would be included in the 207 vessels that would qualify for limited access in Area 2 is uncertain. Nevertheless, the number of qualifying vessels under the proposed action would likely exceed the number of currently participating vessels. By contrast, the number of qualifying vessels in the Outer Cape Area would be less than the number of currently participating vessels. Specifically, participating vessels from both Rhode Island (nine) and New Jersey (three) might no longer be allowed to participate in the Outer Cape Area lobster trap fishery. Note that the actual level of participation by these non-qualified vessels is uncertain because, in the absence of mandatory reporting, we cannot verify whether or not any traps were actually fished in the area, which also means that the economic impacts on any non-qualified participating vessels cannot be reliably estimated.

In the absence of action (i.e., the no-action alternative identified in the DEIS) a shift in effort could likely occur into Area 2 and the Outer Cape Area because the two areas would be the only remaining open-access lobster management areas. In other words, under the no-action alternative, any Federal lobster permit holder could fish in those two areas, including permit holders who have no trap fishing history during the qualification period, and those excluded from fishing in nearby areas. In such a scenario, the most likely economic impact would be a dilution in profitability for current and future participants in the lobster fishery. Increasing the number of participating vessels and traps fished in either area may result in higher landings overall, but unless landings linearly increase with traps fished, landings, and average gross stock per vessel would be likely to go down. In effect, limited access would insulate the majority of current participating vessels from the external diseconomies that typify open access fisheries.

NMFS's proposed qualification process should aid small lobster businesses by streamlining what might otherwise be a cumbersome application process. NMFS proposes to allow applicants to provide their state qualification and allocation decision as proof of what their Federal allocation should be. In contrast, in its earlier limited access programs for Areas 3, 4, and 5, NMFS required that all applicants provide documentation, including an affidavit, which was a time-consuming and relatively burdensome, albeit necessary, process. Here, NMFS reviewed the applicable regulations for the involved states and determined that the state criteria was substantially identical to the proposed Federal criteria, which is not surprising because the Commission proposed that the states and NMFS implement compatible regulations based upon Commission recommended addenda. Thus, NMFS will accept state allocation information as the best evidence of its decision unless NMFS had reason to think the underlying state decision was incorrect.

NMFS proposes a limited number of appeals to its Area 2 and Outer Cape Area limited access programs. These appeals have economic benefit to small lobster businesses because they afford an opportunity for lobster businesses to qualify and receive a trap allocation they otherwise would be denied. NMFS considered the alternative of having no appeals. Having no appeals would likely result in a smaller number of qualifiers, which could result in some economic advantage to existing qualifiers in that they would receive a proportionately greater share of access to the resource. The DEIS, however, predicts that the number of appeals will be low, and as such, excluding appeals would likely result in little measurable economic advantage to the other qualifiers. In contrast, failure to include appeals could result in negative economic impacts. Certainly, denying access to a permit holder who might otherwise qualify through an appeal would have a direct negative impact to that permit holder. Further still, the states and Commission recommended that appeals be implemented in their addenda. NMFS's failure to similarly include appeals would result in regulatory disconnects. The DEIS discusses in further detail the negative impacts that a disjointed regulatory program would have on small businesses, government managers, and the lobster resource.

As noted previously, the proposed action would create individual trap allocations and would implement a transferable trap program. Conceptually, initial allocations would preserve the relative competitive position among qualifying lobster trap fishing businesses, but transferability would provide regulated lobster trap vessels with the flexibility to adjust trap allocations as economic conditions and business planning warrant. This program would be an overall economic benefit to lobster businesses. Failure to implement such a transferable trap program (e.g., by selecting the no-action alternative identified in the DEIS) would likely result in negative economic impacts. First, non-qualifiers would be excluded from future trap access into the areas, while qualifiers with low allocations might lack sufficient traps to operate profitably according to their selected business model. Second, qualifiers with sufficient allocation would lose the opportunity to derive profit from the incremental sale of traps as they scale down and retire their business. Third, failure to implement a transferable trap program would create regulatory disconnects between NMFS, the states, and Commission, given that some states have already implemented a trap transfer program, and because the Commission is relying on trap transferability as a foundational element to its effort reduction measures identified in Addendum XVIII.

The proposed Trap Transfer Program differs from that of the Commission's recommended alternative in that once initial qualifications for trap allocations have been made in each LCMA, the ability to purchase traps to fish in the area under the proposed Trap Transfer Program would not be limited to only individuals that qualified for limited entry. This program feature affords small lobster trap fishing businesses the flexibility to scale their businesses up or down, and acquire and set traps in any LCMA in which trap allocations have been established and trap transferability has been approved (presently, Areas 2, 3, and the Outer Cape Area). This feature has several economic advantages. Without this feature, under the no-action alternative, the only way a non-qualified Federal lobster permit holder could fish in Areas 2, 3, and/or the Outer Cape Area, would be by purchasing someone else's qualifying vessel and traps. The proposed action would, in effect, implement a single Trap Transfer Program for Areas 2, 3, and the Outer Cape Area. This feature would not only reduce the administrative costs of running the Trap Transfer Program, but would also simplify the Program for potential lobster trap fishery participants. However, while the purchase of less than a full complement of transferable traps would be allowed, the ability to fish traps would be impacted by enforcement of the Most Restrictive Rule set forth in § 697.3 and § 697.4. In cases where a trap allocation in a specific LCMA would be low, lobster fishing businesses electing to fish/utilize those traps in that area would be bound or capped to that low allocation of traps for all LCMAs they intend to fish in for the entire fishing year.

For the reasons set out in the preamble, 50 CFR part 697 is proposed to be amended as follows: