I. Background

The Healthy, Hunger-Free Kids Act of 2010 (Pub. L. 111-296) (the HHFKA), enacted December 13, 2010, made significant changes to the meal pattern and reimbursement requirements for school breakfasts and lunches served in accordance with the Richard B. Russell National School Lunch Act (NSLA) (42 U.S.C. 1751 et seq.).

Section 201 of the HHFKA amended section 4(b) of the NSLA, 42 U.S.C. 1753(b), by requiring the Secretary to update the meal patterns and nutrition standards for the NSLP and School Breakfast Program (SBP) and to issue regulations requiring all SFAs to comply with the updated meal patterns and nutrition standards. On January 26, 2012, the Department issued a final rule, titled Nutrition Standards in the National School Lunch and School Breakfast Programs (77 FR 4088). With some exceptions, the implementation date of that final rule was July 1, 2012.

Section 201 of the HHFKA also amended the NSLA to provide for additional payments in the form of performance-based reimbursement of 6 cents per lunch served beginning on October 1, 2012, in SFAs certified by the State agency to be in compliance with the updated meal patterns and nutrition standards.

In response to statutorily imposed effective dates established by section 201 of the HHFKA, the Department published an interim final rule on April 27, 2012 (77 FR 25024), which amended 7 CFR part 210 to include criteria for the certification and validation processes and require State agencies to begin certifying SFAs beginning October 1, 2012. The interim final rule invited public comment for a 90-day period, beginning April 27, 2012 and ending July 26, 2012. During the comment period, FNS received 173 comments on the interim final rule: 117 comments from SFAs, 45 comments from advocacy organizations, 6 from individuals and 5 from State agencies.

Following an analysis of comments, this rule adopts, as final, the provisions of the interim final rule, with revisions as described below. The finalized provisions include the procedures for performance-based certifications, required documentation and timeframes, validation reviews, compliance and administrative reviews, reporting and recordkeeping, and technical assistance.

The interim final rule established at 7 CFR 210.5, requirements for State agencies to submit a quarterly report, as specified by FNS, detailing the disbursement of performance-based reimbursements, including the total number of SFAs in the State, the names and locations of certified SFAs, and the total number of lunches earning the performance-based reimbursement for each month.

FNS received feedback from State agencies that some of this information would be particularly difficult and/or burdensome to report by SFAs. In an effort to reduce burden, FNS notified State agencies on January 22, 2013 in memorandum SP 31-2012 ( http://www.fns.usda.gov/cnd/governance/Policy-Memos/2012/SP31-2012osr3.pdf ), and later revisions, that FNS would collect on a quarterly basis, the total number of SFAs in the State and the names of certified SFAs.

Therefore, this rule finalizes this reporting change at 7 CFR 210.5(d)(2)(ii) to require that State agencies only include in this quarterly report the total number of SFAs in the State and the names of certified SFAs.

Additionally, FNS created the quarterly report as way to track the number of SFAs being certified throughout the country. FNS realizes that once all SFAs have been certified, the information reported on the quarterly report will become repetitive and will no longer be useful. Therefore, FNS will no longer require State agencies to submit the quarterly report once all SFAs in the State have been certified.

The interim final rule established at 7 CFR 210.7, criteria for State agencies and SFAs to follow during the certification process. These criteria include requiring SFAs to submit to their State agency documentation demonstrating that they are in compliance with the new meal pattern and nutrition requirements. State agencies are then required to determine if SFAs are in compliance with meal pattern and nutrition standard requirements, and if so, certify the SFA as eligible to receive the 6 cents performance-based cash assistance for each reimbursable lunch served (an additional 6 cents per lunch became available beginning October 1, 2012 and is adjusted annually thereafter). The interim final rule also required that State agencies disburse performance-based cash assistance to certified SFAs, and withhold the performance-based cash assistance from SFAs determined to be out of compliance with meal pattern or nutrition standards during subsequent administrative reviews.

Several commenters felt that the work required in the certification process was too burdensome for school food service directors. One common complaint was that SFAs that offer a wide variety of menu choices may be forced to limit their menus due to the difficulty with the certification process.

The certification process established in the interim final rule was intended to both meet the intent of the provision (that SFAs demonstrate compliance with the new meal pattern requirements) and impose a reasonable administrative burden on SFAs. FNS provided several training opportunities across the Nation to ensure that our State agency partners were well equipped to train local operators on the new certification process. Representatives from every State agency participated in at least one of these in-person trainings. In addition to in-person trainings, FNS conducted several webinars for both State agencies and SFAs on the certification process and on how to complete certification materials. Finally, FNS issued memoranda including a series of questions and answers related to the 6 cents certification process. Most recently, FNS issued SP 31-2012 (3rd Revision) on January 22, 2013, which included revised questions and answers on the certification process. The memorandum can be found at: http://www.fns.usda.gov/cnd/governance/Policy-Memos/2012/SP31-2012osr3.pdf . FNS plans to continue to update the memorandum as more questions from States and SFAs are received.

Based on program data and other information from State agencies, 86 percent of SFAs nationwide have submitted certification materials as of the end of October 2013. By the end of September 2013, 80 percent of SFAs had been certified.

FNS is encouraged by these numbers and feels it demonstrates that a majority of SFAs have an understanding of the certification process. FNS continues to encourage State agencies to provide technical assistance and guidance to those SFAs not engaged in the certification process. Therefore, FNS will not be making changes to the requirements for the certification process in this final rule.

As stated above, FNS established procedures for the certification process at 7 CFR 210.7. As part of the certification determination process, State agencies must evaluate whether documentation provided by SFAs (including menus, a menu worksheet measuring components and a nutrient analysis or assessment) is compliant with the updated meal pattern and nutrition requirements. This evaluation includes determining whether the SFA's menu meets the daily and weekly requirements for grains and meat/meat alternates.

Since implementation of the interim final rule, FNS has received feedback from both State agencies and SFAs about the certification process and the new meal pattern requirements in general. A frequent concern expressed by State and SFA partners was significant operational challenges in not exceeding the weekly maximum requirements for the grains and meats/meat alternate components, particularly for SFAs with schools with multiple menu offerings and multiple serving lines during meal service.

SFAs reported that for both grains and meat/meat alternates, some popular products are not yet readily available from suppliers in the wide ranges of serving sizes needed to meet the grain and meat/meat alternate weekly maximum requirements. Additionally, SFAs have reported that they are experiencing challenges with student acceptability of new items and smaller servings of items on their menus.

In response to concerns, FNS issued SP 11-2013 on December 20, 2012 ( http://www.fns.usda.gov/cnd/governance/Policy-Memos/2013/SP11-2013os.pdf ), providing local operators with flexibility in meeting the weekly maximums for grains and meat/meat alternates for compliance purposes in School Year (SY) 2012-2013. The memorandum stated that State agencies should consider any SFA compliant with the weekly ranges for these two components if the FNS-developed or FNS-approved Certification Tool and required supporting documentation indicate the menu is compliant with the daily and weekly minimums. SFAs are still expected to fall within the weekly minimum and maximum ranges for calories. These flexibilities were extended to School Year 2013-14 in SP 26-2013, which was issued on February 25, 2013 ( http://www.fns.usda.gov/cnd/governance/Policy-Memos/2013/SP11-2013os.pdf ).

Feedback on the memoranda concerning flexibility for weekly maximum grains and meat/meat alternates has been overwhelmingly positive, and there have been numerous requests to further extend this change. This new flexibility for measuring compliance has had a meaningful impact on the certification process by making it less complicated for SFAs to be certified as compliant with the new meal pattern. Allowing for more grain and meat/meat alternates has also increased student acceptability of the new meals they are being served.

Therefore, FNS is making this flexibility permanent by including it in this final rule at 7 CFR 210.7(d)(1). Because ongoing compliance with the meal patterns is assessed during administrative reviews, FNS is further extending this flexibility by including in the final rule at 7 CFR 210.18(g)(2)(vi). When conducting administrative reviews, State agencies should consider any SFA compliant with the weekly ranges for grains and meats if the weekly minimums are met. SFAs continue to be required to meet the weekly minimum and maximum range requirements for calories and the other dietary specifications.

In addition to concerns about the maximums for grains and meats, FNS received feedback from State and SFA partners concerning the requirement that frozen fruit served in the NSLP contain no added sugar.

Since 2009, USDA has reduced the amount of added sugars in frozen fruits offered to States; however most frozen strawberries, peaches and apricots offered by USDA currently contain added sugar. USDA has reached out to industry concerning reformulating these frozen fruits products to eliminate sugar completely, and industry has been working on this issue since publication of the meal pattern rule. Reformulating some products has been challenging because sugar acts as an important ingredient in maintaining fruit flavor, appearance, texture and storability of certain frozen fruits. In addition, research on substitute sweeteners has not been successful in maintaining the color, flavor or texture of the fruit being tested.

In response to these concerns, FNS issued SP 20-2012 on February 24, 2012 and a revised version on September 11, 2012 ( http://www.fns.usda.gov/cnd/governance/Policy-Memos/2012/SP20-2012osr.pdf ), providing SFAs the flexibility to continue to use frozen fruit products containing added sugar through SY 2013-14. This was later expanded in SP 49-2013 issued on June 25, 2013, to include both lunch and breakfast through SY 2014-15 ( http://www.fns.usda.gov/sites/default/files/SP49-2013os.pdf ). In an effort to ease burden on program operators, this flexibility was applicable to all frozen fruit products.

Feedback on the memoranda has been positive with numerous requests to extend the flexibility for frozen fruit with added sugar. Thus far, research performed by several different processors for development of an acceptable no-sugar frozen fruit has resulted in an unacceptable product. Processors do not believe a short term solution is feasible as their research requires long term studies because many of the problems with frozen fruit do not develop until the products have been in storage for a reasonable time.

In addition to the challenges associated with processing frozen fruit without sugar, allowing SFAs to use frozen fruit with added sugar will make it less complicated for SFAs to meet meal pattern requirements, and also expand the types of frozen fruit allowable in school meals. It is also consistent with canned fruits since some added sugar is allowed in canned products. Additionally, the calorie limits for meals help preserve the integrity of the updated nutrition standards, as schools have to plan menus and select products carefully, including frozen fruit with added sugar, in order to be in compliance with the standards.

For those reasons, FNS is making this flexibility permanent by including it in this final rule at 7 CFR 210.7(d)(1)(iii)(B). Because ongoing compliance with the meal patterns is assessed during administrative reviews, FNS is further extending this flexibility by including it in the final rule at 7 CFR 210.18(g)(2)(vi). When conducting administrative reviews, State agencies should consider any SFA compliant with the meal pattern requirements even if the SFA serves frozen fruit containing added sugar. This flexibility is also applicable to fruit offered in the School Breakfast Program.

Several comments from SFAs requested that FNS and State agencies provide training on the certification process, how to complete certification documentation, and allowable uses of administrative funds provided pursuant to amendments made by Section 201 of the HHFKA.

In recognition of the significance of changes necessitated by the new regulatory requirements, section 201 of the HHFKA amended section 4(b)(3)(F) of the NSLA authorizes the Secretary to provide up to $47 million to States for each of two years to assist in the implementation of the updated meal patterns, including training, technical assistance, and conducting performance-based certifications. States are using these funds to provide trainings and technical assistance to SFAs.

To address comments about the effective use of section 201 administrative funds, FNS issued two guidance memoranda to provide additional information on allowable uses of these administrative funds. Most recently, on December 6, 2012, FNS issued SP 13-2013 ( http://www.fns.usda.gov/cnd/governance/Policy-Memos/2013/SP13-2013os.pdf ) which provided several best practices State agencies may consider in using these administrative funds to help SFAs implement the new meal pattern.

To support State agency efforts to provide technical assistance and training, FNS offered States the option of postponing administrative reviews for School Year 2012-13. By providing this flexibility, FNS expected State agencies to use this time to certify SFAs and train SFAs that need assistance in becoming certified.

In addition, since the publication of the interim final rule, FNS has conducted several in-person trainings across the Nation. The webinars will help ensure both State agencies and SFAs understand the certification process and how to complete and evaluate certification materials.

FNS will continue to provide technical assistance and guidance, as needed, but no changes will be made in this final rule in regards to training.

Several comments related to parts of the regulation over which FNS does not have discretion. Specifically, many comments indicated that 6 cents per lunch is insufficient to cover the costs associated with the new meal pattern requirements. The 6 cents per meal performance-based reimbursement was specifically established in the HHFKA; and therefore, FNS does not have discretion to increase the reimbursement rate. However, commenters should be aware that the HHFKA provided for annual adjustment to reflect changes in the cost of operating the meal programs, as indicted by the change in the series for food away from home of the Consumer Price Index for all Urban Consumers, published by the Bureau of Labor Statistics of the Department of Labor.

Several commenters felt that breakfast should not be included as part of 6 cents certification. However, as indicated in the preamble of the interim final rule, the statutory authority for the performance-based reimbursement requires that breakfast must be evaluated as part of the certification process. Further discussion of this issue is found in the Federal Register at 77 FR 25025.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.

This final rule has been designated an “economically significant regulatory action,” under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.

This final rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Pursuant to that review, it has been determined that this rule will not have a significant impact on a substantial number of small entities.

While there may be some SFA burden associated with initial certification for the performance-based reimbursement in this rule, the burden will not be significant and will be outweighed by the benefits of increased Federal reimbursement for school lunches.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, the Department generally must prepare a written statement, including a cost/benefit analysis, for proposed and final rules with Federal mandates that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires the Department to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective or least burdensome alternative that achieves the objectives of the rule. This rule does not contain Federal mandates (under the regulatory provisions of Title II of the UMRA) that impose costs on State, local, or tribal governments or to the private sector of $100 million or more in any one year. This rule is, therefore, not subject to the requirements of sections 202 and 205 of the UMRA.

The National School Lunch Program and School Breakfast Program are listed in the Catalog of Federal Domestic Assistance under No. 10.555 and 10.553. For the reasons set forth in the final rule in 7 CFR part 3015, Subpart V and related notice (48 FR 29115, June 24, 1983), this program is included in the scope of Executive Order 12372, which requires intergovernmental consultation with State and local officials. In developing this rule, FNS gathered input from State and local program operators, and other stakeholders, via listening sessions held at the School Nutrition Association Legislative Action Conference in March 2012, and at the School Nutrition Association Annual National Conference in July 2012. Additionally, FNS held a State agency meeting to discuss issues pertaining to the new meal pattern and certification in December 2012.

Executive Order 13132 requires Federal agencies to consider the impact of their regulatory actions on State and local governments. Where such actions have federalism implications, agencies are directed to provide a statement for inclusion in the preamble to the regulations describing the agency's considerations in terms of the three categories called for under section (6)(b)(2)(B) of Executive Order 13132.

Prior Consultation with State Officials:

Prior to drafting this final rule, FNS staff received informal input from various stakeholders while participating in various State, regional, national, and professional conferences. The School Nutrition Association, the Center for Science in the Public Interest, and the American Dietetic Association shared their views about performance-based reimbursement. Numerous stakeholders, including State agencies and local program operators, also provided input at public meetings held by the School Nutrition Association.

Nature of Concerns and the Need to Issue this Rule:

State agencies and SFAs want to provide the best possible school meals through the NSLP and SBP but are concerned about the costs and administrative burden associated with increased program oversight. While FNS is aware of these concerns, Section 4(b)(3)(D) of the Richard B. Russell National School Lunch Act, 42 U.S.C. 1753(b)(3)(D), requires that State agencies certify whether SFAs are in compliance with meal pattern and nutrition standards, and disburse performance-based reimbursement to eligible SFAs.

Extent to Which We Meet Those Concerns:

FNS has considered the impact of this final rule on State and local program operators and has attempted to develop a rule that would implement the performance-based reimbursement in the most effective and least burdensome manner. FNS recognizes that implementing the new performance-based reimbursement certification process will require a significant effort on the part of State and local program operators. This final rule simplifies the certification process by allowing State agencies to consider any SFA compliant with the component requirements for grains and meat/meat alternates if the menu is compliant with the daily and weekly minimums for these components. Additionally, FNS has provided several trainings and guidance to ensure State agencies understand performance-based funding requirements and provide SFAs with the training and technical assistance needed to implement the improved school meal patterns. Finally, per the requirements of the HHFKA, FNS provided $47 million to State agencies in fiscal years 2012 and 2013 to assist with meal pattern implementation, training, technical assistance, and performance-based certification activities. These funds are available for obligation by State agencies through September 2015.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is intended to have preemptive effect with respect to any State or local laws, regulations or policies which conflict with its provisions or which would otherwise impede its full implementation. This rule is not intended to have retroactive effect unless specified in the DATES section of the final rule. Prior to any judicial challenge to the provisions of this rule or the application of its provisions, all applicable administrative procedures must be exhausted.

FNS has reviewed this rule in accordance with Departmental Regulations 4300-4, “Civil Rights Impact Analysis”, and 1512-1, “Regulatory Decision Making Requirements.” After a careful review of the rule's intent and provisions, FNS has determined that this rule is not intended to limit or reduce in any way the ability of protected classes of individuals to receive benefits on the basis of their race, color, national origin, sex, age or disability nor is it intended to have a differential impact on minority owned or operated business establishments, and woman-owned or operated business establishments that participate in the Child Nutrition Programs.

FNS reduced the data required for the quarterly report associated with this final rule. In the interim rule, FNS required State agencies to submit a quarterly report detailing the disbursement of performance-based reimbursement, including the total number of SFAs in the State, the names and locations of certified SFAs, and the total number of lunches earning the performance-based reimbursement for each month. The burden estimate for this quarterly report was one hour. FNS received comments from State agencies that some of this information would be particularly difficult and/or burdensome to report by SFAs.

In an effort to reduce burden, this rule finalizes a reporting change at 7 CFR 210.5(d)(2)(ii) to require that State agencies only include in this quarterly report the total number of SFAs in the State and the names of certified SFAs. This reduces the estimated burden for State agencies from one hour per quarterly report to 15 minutes per quarterly report.

In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. Chapter 35), the information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0584-0567, Certification of Compliance with Meal Requirements for the National School Lunch Program Under the Healthy, Hunger-Free Kids Act of 2010.

The Food and Nutrition Service is committed to complying with the E-Government Act, 2002 to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

Executive Order 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or distribution of power and responsibilities between the Federal government and Indian tribes.

FNS provides regularly scheduled quarterly consultation sessions as a venue for collaborative conversations with Tribal officials or their designees. The most recent Quarterly Consultation Conference Calls were coordinated by FNS and held on the following dates: November 2, 2011; February 29, 2012; May 2, 2012; August 29, 2012; February 13, 2013.

There were no comments about this regulation received during any of the aforementioned Tribal Consultation sessions. Reports from these consultations are part of the USDA annual reporting on Tribal consultation and collaboration. FNS will respond in a timely and meaningful manner to Tribal government requests for consultation concerning this rule.

As required for all rules that have been designated significant by the Office of Management and Budget, a Regulatory Impact Analysis (RIA) was developed for this final rule. The following is a summary of the RIA. The full RIA is included as an Appendix to this rule.

Section 201 of the Healthy Hunger-Free Kids Act of 2010 provides for a 6 cent per lunch performance-based reimbursement to SFAs that comply with the National School Lunch program (NSLP) and School breakfast Program (SBP) meal standards that took effect on July 1, 2012. This rule finalizes the interim rule's regulatory framework for establishing initial school food authority (SFA) compliance with the new meal standards and for monitoring ongoing compliance. In addition, the final rule makes minor changes to the interim rule that are intended to facilitate the certification of SFA compliance with the meal patterns.

The impact analysis for the interim rule estimated that full compliance with the new meal patterns would increase SFA revenues by more than $300 million per year in the aggregate. The changes contained in the final rule are expected to facilitate compliance with the meal patterns, allowing SFAs to take full advantage of the additional revenue. Granting some flexibility on meat, grains, and frozen fruit is an effort by USDA to work with schools that are making serious efforts to comply with the rule's standards but are having some difficulty finding products that have been resized or reformulated specifically to meet the requirements of the rule. To the extent that a little flexibility at the margins encourages schools to plan menus that meet the new standards, students benefit from receiving meals that comply with the new standards rather than receiving meals that do not comply with the new standards.

Even with the added flexibility, schools have to meet all of the meal patterns' minimum food group requirements and stay within its calorie maximums. The benefits to children who consume school meals that follow DGA recommendations are detailed in the impact analysis prepared for the final meal patterns rule. 1 As discussed in that document, the 2010 Dietary Guidelines Advisory Committee emphasizes the importance of a diet consistent with DGA recommendations as a contributing factor to overall health and a reduced risk of chronic disease. 2 The new meal patterns are intended not only to improve the quality of meals consumed at school, but to encourage healthy eating habits generally. Those goals of the meal patterns rule are furthered to the extent that this rule contributes to full compliance with the meal patters by all SFAs.

Further, the changes adopted in the final rule are intended to facilitate SFA compliance with the meal pattern requirements and reduce State agency reporting and recordkeeping burden. By making permanent the flexibility on weekly maximum servings of grains and meat/meat alternates, and by allowing frozen fruit with added sugar to credit toward the meal pattern requirement for fruit, the final rule will make it easier for some SFAs to plan menus that comply with the meal pattern requirements. The effect of these provisions is to reduce the costs of compliance for the small minority of SFAs that would otherwise not have been certified eligible to receive the performance-based 6 cent reimbursement by the end of SY 2013-2014, though we do not estimate those potential cost savings in this analysis. 3 The savings generated by reducing State agency reporting and recordkeeping burden is minimal. 4

These provisions will likely result in a small increase in cost to the Federal Government (as a result of a small number of schools receiving the performance-based reimbursement that might have otherwise not received it), though we expect this potential increase to fall within the cost range estimated for the interim final rule. 5

Accordingly, the interim final rule published at 77 FR 25024 on April 27, 2012, is adopted as final with the following changes:

On June 5, 2013, the Board sought comment on an interim final rule that addressed the application of section 716 of the Dodd-Frank Act (“section 716”) to swaps entities that are uninsured U.S. branches or agencies of foreign banks and established the process by which a state member bank and an uninsured state branch or agency of a foreign bank may request transition period relief in order to conform its swaps activities to the requirements of section 716 (“interim final rule”).

Section 716 generally prohibits the provision of “Federal assistance” to any “swaps entity” with regard to any swap, security-based swap, or other activity of the swaps entity. 1 “Federal assistance” is defined by section 716 to include “advances from any Federal Reserve credit facility or discount window that is not part of a program or facility with broad-based eligibility under section 13(3)(A) of the Federal Reserve Act” and Federal Deposit Insurance Corporation (“FDIC”) insurance or guarantees. 2 For purposes of section 716, the term “swaps entity” generally includes any swap dealer, security-based swap dealer, major swap participant, or major security-based swap participant that is registered under the Commodity Exchange Act or the Securities Exchange Act of 1934, as applicable. 3

Section 716 includes several provisions applicable to insured depository institutions. It provides a specific exclusion from the definition of “swaps entity” for any insured depository institution that is a major swap participant or major security-based swap participant, 4 and provides that the prohibition on Federal assistance does not apply to an insured depository institution that limits its swaps activities to certain specified activities. 5 Section 716 provides insured depository institutions with a transition period to facilitate compliance with the requirements of the section. By its terms, section 716 applies to insured depository institutions only with respect to swaps and security-based swaps entered into after the expiration of the transition period.

The provisions of section 716 became effective on July 16, 2013. 6

As discussed in the interim final rule, the structure, language, and purpose of section 716 create an ambiguity as to whether the term “insured depository institution” includes uninsured U.S. branches and agencies of foreign banks for purposes of the various provisions of section 716. The term “insured depository institution” is not defined for purposes of these provisions. Section 2 of the Dodd-Frank Act provides that “except as the context otherwise requires. . .,” 7 the definition of “insured depository institution” has the same meaning as in the Federal Deposit Insurance Act. “Insured depository institution” is defined by section 3(c)(2) of the Federal Deposit Insurance Act to mean a bank or savings association the deposits of which are insured by the FDIC, and, for some purposes under section 3(c)(3), an uninsured U.S. branch or agency of a foreign bank. 8

The interim final rule resolved this ambiguity by providing that the term “insured depository institution” included uninsured U.S. branches and agencies of foreign banks for purposes of section 716. 9 Accordingly, uninsured branches and agencies of foreign banks are provided the same exceptions and transition period relief as provided to insured depository institutions.

The Board received four comments in response to its invitation for public comment on the interim final rule. Two of these comment letters were from industry groups, one letter was from a public interest group, and one letter was from an individual. Three of the four commenters expressed strong support for the approach taken in the interim final rule. These commenters agreed that section 716 is predicated on the treatment of uninsured U.S. branches and agencies of foreign banks as insured depository institutions for purposes of qualifying for Federal assistance and that similar treatment for purposes of section 716 is consistent with Congressional intent. One of these commenters expressed the view that the treatment in the interim final rule was necessary to secure equal treatment between U.S. banks and uninsured U.S. branches and agencies of foreign banks under the provisions of section 716.

One commenter disagreed with the Board's analysis and argued that U.S. branches and agencies of foreign banks should not be treated as “insured depository institutions” for purposes of section 716. The commenter expressed the view that the purpose of section 716 is to reduce systemic risk. The commenter argued that treating U.S. branches and agencies of foreign banks as insured depository institutions does not achieve that purpose because U.S. branches and agencies are subject to a safety and soundness regime that the commenter asserted is less rigorous than the regime applicable to insured depository institutions. The commenter also argued that U.S. branches and agencies of foreign banks have volatile liability structures and relatively weak capital requirements. For these reasons, the commenter concluded that U.S. branches and agencies of foreign banks should not be treated in the same manner as insured depository institutions and should not be allowed to continue swaps activities pursuant to the same exceptions.

As discussed in the preamble to the interim final rule, the interim final rule's definition of “insured depository institution” is premised on the fact that, by statute, both uninsured and insured U.S. branches and agencies of foreign banks may receive Federal Reserve advances on the same terms and conditions that apply to domestic insured member banks. 10 Federal Reserve advances are the only type of Federal assistance that causes uninsured U.S. branches and agencies of foreign banks to be affected by section 716.

Congress generally requires the Board to regulate foreign banking organizations in accordance with the principle of national treatment, which means that foreign banking organizations operating in the United States are generally treated no less favorably than similarly-situated U.S. banking organizations, and are generally subject to the same restrictions and obligations in the United States that apply to the domestic operations of U.S. banking organizations. 11 Congress provided U.S. uninsured branches and agencies of foreign banks with access to Federal Reserve advances on the same terms as insured depository institutions, and has permitted uninsured U.S. branches and agencies to engage in the same activities as insured depository institutions, in furtherance of this principle. 12 Congress did not express an indication to deviate from this principle in the Dodd-Frank Act. Instead, the interim final rule is consistent with Congress's intent to treat U.S. branches and agencies of foreign banks like insured depository institutions for purposes of section 716. 13

Regarding the commenter's views on the safety and soundness regime applicable to U.S. uninsured branches and agencies of foreign banks, all U.S. branches and agencies are subject to prudential supervision and regulation and must conduct swaps activities in a safe and sound manner. To the extent the safety and soundness regime applicable to uninsured branches and agencies of foreign banks differs from the regime applicable to insured depository institutions, these differences reflect the structural differences between an uninsured branch or agency and an insured depository institution.

Furthermore, the commenter's assertions referred to practices in existence before the Dodd-Frank Act. The Dodd-Frank Act directed the Board to establish enhanced prudential standards, including enhanced liquidity requirements, in order to prevent or mitigate risks to U.S. financial stability that could arise from the material financial distress or failure, or ongoing activities of foreign banking organizations with total consolidated assets of $50 billion or more. The Board has issued a proposal to implement those requirements, which included liquidity requirements meant to address risks associated with the funding vulnerabilities the commenter cited. 14 In addition, the Board notes that uninsured branches and agencies of foreign banks are not insured by, and therefore do not pose a threat to, the FDIC's deposit insurance fund.

As such, for purposes of section 716, the Board believes that treating uninsured branches and agencies of foreign banks as insured depository institutions is appropriate. The final rule adopts the interim final rule's definition of insured depository institution without change.

Section 716 provides insured depository institutions with a transition period to conform their activities. 15 Under section 716(f), the appropriate Federal banking agency for an insured depository institution, in consultation with the SEC and CFTC, as appropriate, is required to establish the length of the transition period for conformance with the requirements of section 716. That transition period may be up to 24 months and may be extended for a period of up to one additional year.

In establishing the length of the transition period for an insured depository institution, the Board is required by statute to take into account and make written findings regarding the potential impact of divestiture or cessation of swap or security-based swaps activities on the insured depository institution's: (i) Mortgage lending; (ii) small business lending; (iii) job creation; (iv) capital formation versus the potential negative impact on insured depositors and the Deposit Insurance Fund of the FDIC; and (v) any other factor that the Board believes appropriate to consider.

The interim final rule provided that a state member bank and an uninsured state branch and agency of foreign bank may seek a transition period of up to 24 months from July 16, 2013 (for an entity that is a swaps entity as of July 16, 2013), or from the date on which the entity becomes a swaps entity (if that date occurs after July 16, 2013), by submitting a written request to the Board. The request must include: (i) The length of the transition period requested; (ii) a description of the quantitative and qualitative impacts of immediate divestiture or cessation of swap or security-based swaps activities on the institution, including regarding the potential impact of divestiture or cessation of swap or security-based swaps activities on the institution's mortgage lending, small business lending, job creation, capital formation versus the potential negative impact on insured depositors and the Deposit Insurance Fund of the FDIC; and (iii) a description of the insured institution's plan for conforming its activities to the requirements of section 716.

The interim final rule indicated that the Board may also request additional information that it believes is necessary in order to act on a request for a transition period. The Board will seek to act on a request for a transition period expeditiously after the receipt of a complete request. The final rule allows the Board to impose conditions on any transition period granted if the Board determines such conditions are necessary and appropriate. Consistent with section 716(f), the final rule also permits the Board, in consultation with the SEC and CFTC, as appropriate, to extend the transition period for up to one additional year. To request an extension of the transition period, an insured depository institution must submit a written request no later than 60 days before the end of the transition period.

Two commenters expressed support regarding the Board's expeditious action on transition period requests submitted in advance of section 716's July 16, 2013, effective date. The commenter indicated that factors governing transition period request determinations prescribed in Regulation KK are appropriate and provide the Board sufficient flexibility to address the particular circumstances presented by individual requests.

The Board is finalizing these transition period procedures as proposed.

Section 722 of the Gramm-Leach-Bliley Act required the Federal banking agencies to use plain language in all proposed and final rules published after January 1, 2000. The Board sought to present the interim final rule in a simple and straightforward manner and did not receive any comments on the use of plain language.

In accordance with section 3512 of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) (PRA), the Board may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OMB control number for this information collection will be assigned. The Board reviewed the final rule under the authority delegated to the Board by OMB. The Board received no comments on the PRA.

The final rule contains requirements subject to the PRA. The reporting requirements are found in sections 237.22(a)(1) and 237.22(e). This information collection requirement would implement section 716 of the Dodd-Frank Act.

Title of Information Collection: Reporting Requirements Associated with Regulation KK.

Frequency of Response: On occasion.

Affected Public: Businesses or other for-profit.

Respondents: Uninsured U.S. branches or agencies of a foreign bank and state member banks.

Abstract: The final rule would treat an uninsured U.S. branch or agency of a foreign bank as an insured depository institution and establish a process by which a state member bank and uninsured branch or agency of a foreign bank may request a transition period to conform its swaps activities to the requirements of section 716 of the Dodd-Frank Act (15 U.S.C. 8305).

Section 237.22(a)(1) provides that an insured depository institution for which the Board is the appropriate Federal banking agency may request a transition period of up to 24 months from the later of July 16, 2013, or the date on which it becomes a swaps entity, to conform its swaps activities to the requirements of section 716 of the Dodd-Frank Act by submitting a request in writing to the Board. Any request submitted must, at a minimum, include the following information: (1) The length of the transition period requested; (2) a description of the quantitative and qualitative impacts of divestiture or cessation of swap or security-based swaps activities on the insured depository institution, including information that addresses the factors in section 237.22(c); and (3) a detailed explanation of the insured depository institution's plan for conforming its activities to the requirements of section 716 of the Dodd-Frank Act.

Section 237.22(e) would allow the Board to extend a transition period for a period of up to one additional year. To request an extension of the transition period, an insured depository institution must submit a written request containing the information set forth in section 237.22(a) no later than 60 days before the end of the transition period.

Number of Respondents: 2 (12 initial submissions for transition period relief).

Estimated Average Hours per Response: 7 hours.

Total Estimated Annual Burden: 14 hours (84 hours for initial submissions for transition period relief).

The Board has a continuing interest in the public's opinions of collections of information. At any time, comments regarding the burden estimate, or any other aspect of this collection of information, including suggestions for reducing the burden, may be sent to: Secretary, Board of Governors of the Federal Reserve System, 20th and C Streets NW., Washington, DC 20551; and to the Office of Management and Budget, Paperwork Reduction Project, Washington, DC 20503.

For the reasons stated in the Supplementary Information, the interim rule adding part 237 to 12 CFR Chapter II and published at 78 FR 34545 on June 10, 2013, is adopted as final with the following changes:

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2010-19-01, Amendment 39-16429 (75 FR 57660, September 22, 2010), (“AD 2010-19-01”). AD 2010-19-01 applied to the specified products. The NPRM published in the Federal Register on August 8, 2013 (78 FR 48339). The NPRM proposed to clarify the AE 3007A turbofan engine model applicability, further reduce the approved life limits of affected HPT stage 2 wheels, and eliminate the inspections required by the existing AD.

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

One commenter indicated that the compliance section may lead the operator to remove all engines with HPT stage 2 wheels, part number (P/N) 23074462, while only a few engines are affected. He noted that compliance paragraphs in previous ADs on HPT stage 2 wheels used tables to identify affected and non-affected wheels.

We do not agree. The applicability section of this AD states that the AD applies to RRC AE 3007A, A1, A1/1, A1/2, A1/3, A1P, A1E, and A3 turbofan engines with an installed HPT stage 2 wheel, P/N 23084520 or P/N 23069438, 23069592, 23074462, 23074644, or 23075345, except for the HPT stage 2 wheel serial numbers listed in Table 2 through Table 5 of RRC Alert Service Bulletin (ASB) No. AE 3007A-A-72-414, Revision 1, dated December 5, 2012. Therefore, as noted in the AD, operators do not need to remove engines with HPT stage 2 wheels, P/N 23074462 with the serial numbers listed in Table 2 through Table 5 of this ASB. We did not change this AD.

One commenter indicated that eddy current inspections (ECIs) or surface wave ultrasonic test (SWUT) inspections of the HPT stage 2 wheels have proven satisfactory to this point as there have been no failures of engines in service worldwide. The commenter noted that reducing the life limit for these HPT stage 2 wheels is not justified.

We do not agree. Per FAA risk guidelines as published in Advisory Circular (AC) No. 39-8 “Continued Airworthiness Assessments Of Powerplant And Auxiliary Power Unit Installations Of Transport Category Airplanes,” dated September 8, 2003 (online at http://www.faa.gov/documentLibrary/media/Advisory_Circular/AC39-8.pdf ), we do not rely on recurring inspections to serve as a final corrective action unless there is no practicable alternative. In this case, analysis and testing performed on the affected wheels by RRC has shown that the life limit for the affected wheels must be reduced. We did not change this AD.

The same commenter noted that reduced life limits are already required based on an ASB published by RRC and incorporation of these life limits in the new RRC Engine Maintenance Manual (EMM), dated January 20, 2013. Operators have to consider these updates in their own maintenance programs. Therefore, an AD is not necessary.

We do not agree. Companies cannot mandate that operators follow new life limits. AD compliance is mandatory. We did not change this AD.

The same commenter requested that the FAA include the number of aircraft affected worldwide in its cost of compliance estimate. He also indicated that cost of compliance should include an estimated labor cost of $250 per engine for each HPT stage 2 wheel change.

We do not agree. First, our ADs apply only to U.S. registered or operated products, not to products registered elsewhere. Therefore, costs to operators registered elsewhere are speculative.

Second, our cost estimate in this AD is based on the pro-rated cost of the reduction in life to the wheel. The labor cost of replacing the wheel is the same as it would be if the life of the wheel had not been changed. We did not change this AD.

The same commenter suggested revising the compliance section of this AD by continuing with ECIs and/or SWUT inspections at the interval required by AD 2010-19-01 (75 FR 57660, September 22, 2010) or if the inspections are not performed at the required interval, then (1) the new life limit published in the RRC EMM, dated January 20, 2013, shall be considered; (2) at the next engine shop visit or when the life limit is reached, the affected parts will be changed; and (3) no engine can be released from an engine shop with life limits that exceed those published in the RRC EMM, dated January 20, 2013.

The commenter asked that if this change cannot be accepted, then RRC should be required to lend an engine to the operator free of charge and change the HPT wheels free of charge.

The commenter also indicated that providing a grace period of 15 cycles in service before removal of the engine for an issue that has been known and managed for the last 5 years without incident is not justified.

We do not agree. Repetitive inspection of the affected HPT wheels is not a replacement for reduction in their life limit. As stated above, based on FAA risk guidelines as published in AC 39-8, we do not rely on recurring inspections to serve as a final corrective action unless there is no practicable alternative. In the case of these affected wheels, analysis has shown that the life of these wheels must be reduced. Second, requests for warranty support, i.e., that RRC provide a free lease engine and free replacement HPT stage 2 wheel are economic issues between the operator and the original equipment manufacturer. Third, successful performance of a part has no effect on the need to remove that part once it has reached its life limit. However, we are providing a 15-cycle allowance to minimize disruptions to operators. This grace period is supported by our risk assessment. We did not change this AD.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD as proposed.

We estimate that this AD affects 18 engines installed on airplanes of U.S. registry. We also estimate that a replacement HPT stage 2 wheel costs about $145,524, and that it will be replaced during an engine shop visit at no additional labor cost. Based on these figures, we estimate the total cost of the AD to U.S. operators to be $2,619,432.

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

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

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

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

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

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

(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction, and

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

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

On April 8, 2013, the FAA published in the Federal Register a notice of proposed rulemaking to establish Class E airspace at Leesburg, VA (78 FR 20846) Docket No. FAA-2012-0033. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Subsequent to publication the FAA found that the geographic coordinates of the airport were transposed. This action makes the correction. Class E airspace designations are published in paragraph 6002 of FAA Order 7400.9X dated August 7, 2013, and effective September 15, 2013, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 establishes the Class E airspace extending upward from the surface within a 6-mile radius at Leesburg Executive Airport, providing the controlled airspace required to aid Potomac TRACON in the safe and orderly flow of air traffic at Leesburg, VA. Also, the geographic coordinates of the airport are adjusted to coincide with the FAA's aeronautical database.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore, (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it establishes controlled airspace at Leesburg Executive Airport, Leesburg, VA.

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

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

Executive Summary—Purpose of the Regulatory Action

This rulemaking is needed as part of a larger project to make PBGC's premium rules more effective and less burdensome. The rule contributes to the simplification and streamlining of due dates by making the flat-rate premium due date for large plans the same as the variable-rate premium due date for such plans.

PBGC's legal authority for this action comes from section 4002(b)(3) of the Employee Retirement Income Security Act of 1974 (ERISA), which authorizes PBGC to issue regulations to carry out the purposes of title IV of ERISA, and section 4007 of ERISA, which gives PBGC authority to set premium due dates and to assess late payment penalties.

In recent years, premium due dates have depended on size of plan and type of premium. Large plans have paid the flat-rate premium early in the premium payment year and the variable-rate premium later in the year. Mid-size plans have paid both the flat- and variable-rate premiums by that same later due date. Small plans have paid the flat- and variable-rate premiums in the following year. On July 23, 2013, PBGC proposed to simplify the due-date rules by providing that all annual premiums for plans of all sizes will be due on the same day in the premium payment year—the historical variable-rate premium due date. As part of that simplification process, this rule eliminates the separate due date for the flat-rate premiums of large plans beginning with the 2014 plan year.

PBGC administers the pension plan termination insurance program under title IV of the Employee Retirement Income Security Act of 1974 (ERISA). Under ERISA sections 4006 and 4007, plans covered by the program must pay premiums to PBGC. PBGC's premium regulations—on Premium Rates (29 CFR part 4006) and on Payment of Premiums (29 CFR part 4007)—implement ERISA sections 4006 and 4007.

There are two kinds of annual premiums. 1 The flat-rate premium is based on the number of plan participants, determined as of the participant count date. The participant count date is generally the last day of the plan year preceding the premium payment year; in some cases, however (such as for plans that are new or are involved in certain mergers or spinoffs), the participant count date is the first day of the premium payment year. The variable-rate premium (which applies only to single-employer plans) is based on a plan's unfunded vested benefits (UVBs)—the excess of its premium funding target over its assets.

Section 4007 of ERISA authorizes PBGC to set premium due dates and assess penalties for failure to pay premiums timely. Beginning in 1999, 2 PBGC set the variable-rate premium due date for plans of all sizes as 9 1/2 calendar months after the beginning of the premium payment year (October 15 for calendar-year plans). This was done so that the due date would correspond with the extended due date for the annual report for the prior year that is filed on Form 5500. Coordination of the premium and Form 5500 due dates promotes consistency and simplicity and avoids confusion and administrative burden. In 2008, however, to conform to changes made by the Pension Protection Act of 2006 (PPA 2006), small-plan due dates were extended to 16 months after the beginning of the premium payment year (April 30 of the following year for calendar-year plans).

Most plans' flat-rate premiums have been due at the same time as variable-rate premiums. However, flat-rate premiums for large plans (those with 500 or more participants) are due two calendar months after the beginning of the premium payment year (the end of February for calendar-year plans). 3 Because of the impracticality of counting participants so soon after the participant count date, the premium payment regulation provides an elaborate system of safe harbors from late-payment penalties for estimated large-plan flat-rate premiums, and the practice of most large plans has been to pay an estimate of the flat-rate premium at the early due date and “true up” when they pay the variable-rate premium later in the year.

On January 18, 2011, the President issued Executive Order 13563, “Improving Regulation and Regulatory Review,” to ensure that Federal regulations seek more affordable, less intrusive means to achieve policy goals, and that agencies give careful consideration to the benefits and costs of those regulations. In response to and in support of the Executive Order, PBGC on August 23, 2011, promulgated its Plan for Regulatory Review, 4 noting several regulatory areas—including premiums—for immediate review.

PBGC reviewed its premium regulations and identified a number of ways to simplify and clarify the regulations, reduce burden, provide penalty relief, and generally make the regulations work better. On July 23, 2013 (at 78 FR 44056), PBGC published a proposed rule to replace the system of three premium due dates (based on plan size and premium type) with a single due date corresponding to the Form 5500 extended due date, to coordinate the due date for terminating plans with the termination process, to make conforming and clarifying changes to the variable-rate premium rules, to provide for relief from penalties, and to make other changes. Under the proposal, large plans would no longer have to pay flat-rate premiums early and small plans would have the same due dates as other plans but get more time to value benefits.

PBGC received comments from six commenters—two employer associations, two associations of pension practitioners, an actuarial firm, and an individual actuary. All of the commenters approved of the proposal, and one specifically urged that it be made effective for 2014. The commenters also had suggestions for additional changes PBGC might make in its premium regulations or procedures. None of those suggestions dealt with the large-plan flat-rate premium due date.

The first large-plan flat-rate filing deadline for 2014 is February 28, 2014. Thus the provision of the proposed rule setting the flat-rate premium due date for large plans later in the year—on the same date as the variable-rate premium due date for such plans—is by far the most time-sensitive aspect of the proposal. For that reason, and in light of the fact that this provision generated only positive comments, PBGC is finalizing this one change separately and ahead of the other changes in the proposal.

PBGC expects to deal with all other aspects of the July 23 proposal in a separate final rule to be issued in time to provide all plans with adequate advance guidance for timely compliance with the new procedures in 2014. If the situation changes, PBGC will advise the public as appropriate.

This final rule makes the flat-rate premium due date for large plans the same as their variable-rate due date. For calendar-year plans, that due date will be October 15. 5

For many large plans, making the flat-rate premium due when the variable-rate premium is due will cut the number of premium transactions with PBGC by two, rather than just one. That is because underestimating the flat-rate premium has typically given rise not only to penalties (which are often waived) but also to interest charges (which cannot be waived). Thus, after paying an estimate of the flat-rate premium, and then paying the balance due, a large plan has usually had to make yet another payment, of the interest on the amount by which its initial estimated payment fell short of the correct amount. Eliminating the need for flat-rate premium estimates will eliminate interest payments on shortfalls in those estimates.

The due date change will mean that plan consultants can do all of a plan's premium filing work at one time, once a year. PBGC will receive one premium filing for each plan each year and will be able to process a plan's entire annual premium in a single operation. Reducing the number of due dates will be simpler for all concerned. Less complexity means less chance for mistakes and the time and expense of correcting them. Moving to a single due date will also simplify PBGC's premium processing systems and save PBGC money on future periodic changes to those systems (because it is less expensive to modify simpler systems).

In short, PBGC believes that this change in the large-plan flat-rate premium due date will produce a significant reduction in administrative burden for both plans and PBGC.

PBGC has determined, in consultation with the Office of Management and Budget, that this rulemaking is a “significant regulatory action” under Executive Order 12866. The Office of Management and Budget has therefore reviewed this rule under Executive Order 12866.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This final rule is associated with retrospective review and analysis in PBGC's Plan for Regulatory Review issued in accordance with Executive Order 13563.

Executive Orders 12866 and 13563 require that a comprehensive regulatory impact analysis be performed for any economically significant regulatory action, which, under Section 3(f)(1) of Executive Order 12866, is one that “is likely to result in a rule that may . . . [h]ave an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.”

PBGC premium payments are included as receipts in the Federal budget, and the large-plan flat-rate premium deferral will cause a one-time shift of about $1.5 billion (attributable primarily to calendar year plans) from one fiscal year to the next. Although no premium revenue will be lost, there will be the appearance of a one-time loss for the year when the due dates change, and PBGC has therefore determined that this final rule is economically significant under the criteria in Executive Order 12866.

The estimate of the amount of flat-rate premium shifted from one fiscal year to the next, and the estimate (below) of the amount of interest shifted from PBGC to plans, are revised from the estimates in the proposed rule to reflect projected 2014 per-participant flat premium rates ($49 (instead of $35) for single-employer plans and $12 (instead of $9) for multiemployer plans) and the following participant-count data for large plans for plan years beginning in 2012 (instead of 2010):

In accordance with OMB Circular A-4, PBGC has examined the economic and policy implications of this final rule and has concluded that the action's benefits justify its costs. That conclusion is based on the following analysis of the impact of the due date change.

The due date change will shift, from PBGC to plans, the earnings on premium payments by large plans for the 7½ months between the old and new due dates. PBGC estimates that the average gain per large plan will be about $11,300 per year. To put this figure in perspective, large plans pay over $1 billion in flat-rate premiums—about 95 percent of PBGC's flat-rate premium income.

Because earning rates differ between PBGC and plans, PBGC's loss will be about one-third as much as plans' gain. PBGC estimates its rate of return, from investment in U.S. Government securities, at about 2 percent. PBGC estimates plans' rate of return at 6 percent. The following table shows the estimated average interest earnings calculated with four rates: two percent (PBGC's best estimate for PBGC's rate of return), six percent (PBGC's best estimate for plans' rate of return), and three and seven percent (the discount rates recommended by OMB Circular A-4).

In addition, PBGC estimates that the reduction in large plans' administrative burden attributable to the change in their flat-rate premium due date will translate into average annual savings of 3 hours per plan. (PBGC arrived at this estimate on the basis of inquiries made to pension practitioners.) The dollar equivalent of this saving is about $1,050. 6

Accordingly, PBGC foresees an average net benefit (in dollar terms) from adoption of the new uniform due date of about $12,350 for each large plan (about $11,300 in saved interest plus about $1,050 in saved administrative expenses).

Pursuant to section 553(d)(3) of the Administrative Procedure Act (5 U.S.C. 551 et seq. ) and section 808(2) of the Congressional Review Act (5 U.S.C. 801 et seq. ), PBGC for good cause finds that notice and public procedure on this final rule are unnecessary and contrary to the public interest and that this final rule should be effective upon publication. The project as a whole, including the relief provided by this final rule, has received only positive comment from the public. This rule requires no affirmative action by the regulated community. On the contrary, it provides relief from the restrictive large-plan flat-rate early-filing requirement for PBGC premiums (see section 553(d)(1) of the Administrative Procedure Act). The first large-plan flat-rate filing deadline for 2014 is February 28, 2014. To ensure that all large plans will be able to rely on this final rule for the 2014 plan year, PBGC is making this rule effective upon publication.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) imposes certain requirements with respect to rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act. Unless an agency determines that a final rule is not likely to have a significant economic impact on a substantial number of small entities, section 604 of the Regulatory Flexibility Act requires that the agency present a final regulatory flexibility analysis at the time of the publication of the final rule describing the impact of the rule on small entities and steps taken to minimize the impact. Small entities include small businesses, organizations and governmental jurisdictions.

For purposes of the Regulatory Flexibility Act requirements with respect to this final rule, PBGC considers a small entity to be a plan with fewer than 100 participants. This is consistent with certain requirements in title I of ERISA  7 and the Internal Revenue Code, 8 as well as the definition of a small entity that the Department of Labor (DOL) has used for purposes of the Regulatory Flexibility Act. 9 Using this proposed definition, about 64 percent (16,500 of 25,600) of plans covered by title IV of ERISA in 2011 were small plans. 10

Further, while some large employers may have small plans, in general most small plans are maintained by small employers. Thus, PBGC believes that assessing the impact of the rule on small plans is an appropriate substitute for evaluating the effect on small entities. The definition of small entity considered appropriate for this purpose differs, however, from a definition of small business based on size standards promulgated by the Small Business Administration (13 CFR 121.201) pursuant to the Small Business Act. In its proposed rule, therefore, PBGC requested comments on the appropriateness of the size standard used in evaluating the impact of the proposed rule on small entities. No comments were received on this issue.

On the basis of its definition of small entity, PBGC certifies under section 605(b) of the Regulatory Flexibility Act that the amendments in this final rule will not have a significant economic impact on a substantial number of small entities. Accordingly, as provided in section 605 of the Regulatory Flexibility Act, sections 603 and 604 do not apply. This certification is based on the fact that the change in the large-plan flat-rate premium due date will have no impact on any small plans.

The information requirements under this final rule have been approved by the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ) (OMB control number 1212-0009; expires October 31, 2015). An agency 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.

The only changes PBGC is making in its premium information collection in connection with this final rule are that PBGC will give notice that estimated flat-rate filings are discontinued for plan years starting in 2014. (PBGC will also notify private-sector premium filing software developers of the change so that it can be reflected in their products.)  11

PBGC needs the information in a premium filing to identify the plan for which the premium is paid to PBGC, to verify the amount of the premium, to help PBGC determine the magnitude of its exposure in the event of plan termination, to help PBGC track the creation of new plans and the transfer of plan assets and liabilities among plans, and to keep PBGC's inventory of insured plans up to date. PBGC receives premium filings from about 25,700 respondents each year and estimates that the total annual burden of the collection of information will be about 8,900 hours and $59,250,000. 12

In consideration of the foregoing, PBGC amends 29 CFR part 4007 as follows:

A. Does this action apply to me?

This final rule applies to generators, transporters, and owners or operators of treatment, storage, and disposal facilities engaged in the management of carbon dioxide streams that would otherwise be regulated as hazardous wastes under the RCRA subtitle C hazardous waste regulations as part of geologic sequestration activities. This includes entities in the following industries: operators of carbon dioxide injection wells used for geologic sequestration; and certain industries identified by their North American Industry Classification System (NAICS) code: oil and gas extraction facilities (NAICS 211111); utilities (NAICS 22); transportation (NAICS 48-49); and manufacturing (NAICS 31-33). More detailed information on the potentially affected entities is presented in Section VI of this preamble. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding FOR FURTHER INFORMATION CONTACT section.

These regulations are promulgated under the authority of sections 2002, 3001-3009 and 3013 of the Solid Waste Disposal Act (SWDA) of 1970, as amended by the Resource Conservation and Recovery Act (RCRA) of 1976, and the Hazardous and Solid Waste Amendments of 1984 (HSWA), 42 U.S.C. 6912, 6921-6929, 6934.

On August 8, 2011, EPA published a proposed rule that would conditionally exclude from the definition of hazardous waste certain carbon dioxide (CO 2 ) streams that are to be injected into Underground Injection Control (UIC) Class VI wells for purposes of geologic sequestration (GS). 76 FR 48073. The proposed rule was based upon EPA's determination that the management of these CO 2 streams in accordance with the proposed conditions would provide no reduced protection to human health and the environment, and, therefore, additional regulation pursuant to the Resource Conservation and Recovery Act's (RCRA) hazardous waste regulations would be unnecessary.

Specifically, EPA proposed to amend 40 CFR 261.4 by adding an exclusion from the definition of hazardous waste for CO 2 streams that would otherwise be regulated as hazardous waste under RCRA subtitle C that met all of the following conditions: (1) Transportation of the CO 2 stream must be in compliance with applicable Department of Transportation (DOT) requirements; (2) injection of the CO 2 stream must be in compliance with the applicable requirements for UIC Class VI wells; (3) no other hazardous wastes may be mixed with, or otherwise co-injected with, the CO 2 stream; and (4) generators and UIC Class VI well owners or operators claiming the exclusion must sign a certification statement that the conditions of the exclusion were met. The proposed rule also would have required retention of the signed certification on-site for no less than three years, and required the certification be made available within 72 hours of request by the Regional Administrator (or state Director, if located in an authorized state).

EPA proposed this rule because the Agency expected that this amendment to the RCRA hazardous waste rules would substantially reduce the uncertainty associated with defining and managing these CO 2 streams under RCRA subtitle C and also would facilitate the deployment of GS by providing additional regulatory certainty.

Several other Agency activities are related to carbon capture and storage (CCS), including an EPA final rule that created a new class of injection wells (Class VI) for GS of CO 2 under the Safe Drinking Water Act (SDWA) UIC Program. December 10, 2010 (75 FR 77230). During the development of that UIC Class VI final rule, EPA was made aware that the participants in the CCS industry were asking for clarification on how the RCRA hazardous waste requirements apply to CO 2 streams that are geologically sequestered.

In addition, in February 2010, President Obama created the Interagency Task Force on Carbon Capture and Storage to develop a comprehensive and coordinated federal strategy to speed the commercial development and deployment of clean coal technologies. The task force consisted of 14 executive departments and federal agencies, and it was co-chaired by EPA and the U.S. Department of Energy. On August 12, 2010, the task force delivered a series of recommendations to the President on overcoming the barriers to the widespread, cost-effective deployment of CCS within 10 years. One of those recommendations was that EPA address RCRA applicability to CO 2 that is captured from an emission source for purposes of sequestration. 1

GS is the process of injecting CO 2 captured from an emission source (e.g., a power plant or industrial facility) into deep subsurface rock formations in order to isolate the CO 2 permanently. GS is a key component of CCS, which is a set of climate change mitigation technologies. CCS can be described as a three-step process, beginning with the capture and compression of the CO 2 stream from fossil-fuel power plants or other industrial sources, after which the CO 2 stream is transported (usually in pipelines as a supercritical fluid  2 ) to an on-site or off-site location, where it is then injected underground for purposes of sequestration. 3 Additional background information on the GS of CO 2 streams can be found in the August 8, 2011 proposed rule, as well as in the UIC Class VI final rule and record for that rule published on December 10, 2010 (75 FR 77230).

In developing the August 8, 2011 proposed rule, EPA looked at how CO 2 is captured, transported, and injected in CCS activities. For CO 2 capture, transport, and injection, EPA reviewed and compared regulations and requirements from other statutes and programs (e.g., DOT, SDWA) which might apply to each of these activities if the CO 2 stream is also regulated as hazardous waste. The Agency considered how these existing regulations and requirements control releases of hazardous constituents that might be present in the CO 2 streams.

First, regarding the generator requirements, EPA reviewed the subtitle C regulatory requirements applicable to RCRA generators, including requirements for tanks and containers and recordkeeping and reporting, among others. EPA also reviewed the available information on CO 2 capture processes and estimates of CO 2 capture rates. EPA concluded that, because of the large volumes of CO 2 projected to be captured, on-site storage of CO 2 in pressure vessels was unlikely. Rather, EPA stated its expectation that the process of capturing and compressing CO 2 prior to delivery to a UIC Class VI facility, which would likely occur via a pipeline will not involve storage at the generator facility (i.e., at the CO 2 source), but rather will occur in a continuous fashion (capture process → compression/dehydration → pipeline insertion). Because there would not be any substantive  4 RCRA subtitle C generator requirements applicable to such a continuous delivery scenario, the regulation of the movement of captured CO 2 streams from the point of capture to either an on-site UIC Class VI well or to an off-site DOT-regulated pipeline, would not be significantly different under the presence or absence of the conditional exclusion. EPA also stated its view that other programs provided equivalent notice and reporting requirements to the RCRA requirements. Thus, EPA concluded that additional regulation pursuant to RCRA subtitle C would not provide additional protections over existing regulatory requirements for generators of CO 2 streams.

Second, with respect to transportation, EPA examined existing requirements for pipeline and non-pipeline transportation. In the preamble to the proposed rule, EPA specifically discussed the DOT's Pipeline and Hazardous Materials Safety Administration (PHMSA) requirements in 49 CFR Part 195, which apply to pipeline facilities used for transporting hazardous liquids or supercritical CO 2 . EPA's review indicated that DOT's regulations addressed risks posed by pipelines in a way that is consistent with RCRA's goal of preventing releases in order to protect human health and the environment. EPA concluded that applicable DOT requirements (which apply to supercritical CO 2 streams regardless of whether or not these materials meet the definition of hazardous waste) will ensure that CO 2 streams are managed in a manner that addresses the potential risks to human health and the environment that these materials may pose, prior to arrival at a Class VI injection well facility. Therefore, EPA concluded that RCRA offers no additional protection, and did not propose any specific conditions beyond that of compliance with applicable DOT regulations. EPA assessed the DOT hazardous materials regulations applicable to non-pipeline transportation and reached similar conclusions. EPA also addressed issues surrounding on-site pipelines that may not be regulated by DOT pipelines and the lack of a manifest under the proposed conditional exclusion. See 76 FR 48083, August 8, 2011.

Third, EPA discussed the UIC Class VI injection well requirements, which are specifically designed to ensure that the CO 2 (and any incidental associated substances derived from the source materials and the capture process) will be isolated within the injection zone. EPA concluded that the elimination of exposure routes through these requirements, which are implemented through a SDWA UIC permit, will ensure protection of human health and the environment such that RCRA subtitle C regulation would be duplicative and unnecessary.

In addition, to further ensure protection of human health and the environment, EPA proposed to limit the scope of the exclusion by including a condition that no other hazardous waste can be mixed with, or otherwise co-injected with, the CO 2 streams. Thus, if hazardous waste is mixed with the CO 2 stream, that stream would not be eligible for the conditional exclusion under the proposed rule. Rather, that stream would need to be managed as a RCRA hazardous waste, and, if well injection is selected as the means of disposal, injected into a UIC Class I hazardous well.

As explained in the proposed rule, RCRA provides EPA with authority to issue conditional exclusions from the hazardous waste regulations. EPA has previously interpreted RCRA section 3001(a) to authorize the issuance of “conditional exemptions” from the requirements of subtitle C, where it determines that “a waste might pose a hazard only under limited management scenarios, and other regulatory programs already address such scenarios.” 62 FR at 6636 (February 12, 1997); 66 FR at 27222-27223 (May 16, 2001). The final rule takes a similar approach to those earlier rules.

Section 3001(a) provides the Agency with flexibility to consider the need for regulation in deciding whether to list or identify a waste as hazardous. Specifically, RCRA section 3001(a) requires that EPA, in determining whether to list a waste as a hazardous waste, or to otherwise identify a waste as a hazardous waste, decide whether a waste “should be subject to” the requirements of subtitle C. Hence, RCRA section 3001 authorizes EPA to determine when subtitle C regulation is appropriate. EPA has consistently interpreted section 3001 of RCRA to give it broad flexibility in fashioning criteria for hazardous wastes to enter or exit the subtitle C regulatory system. EPA's longstanding regulatory criteria for determining whether wastes pose hazards that require regulatory control incorporate the idea that a waste that is otherwise hazardous may not present a hazard if already subject to adequate regulation. (See, e.g., 40 CFR 261.11(a)(3)(x), which requires EPA to consider action taken by other governmental agencies or regulatory programs based on the health or environmental hazard posed by the waste.)

EPA's interpretation is further supported by the text of RCRA sections 1004(5), and 3002-3004, and RCRA's legislative history. This interpretation has also been upheld upon judicial review. See, e.g., Military Toxics Project v. EPA, 146 F.3d 948 (D.C. Cir. 1998) (upholding conditional exemption for storage of military munitions, based on EPA determination that such wastes are subject to binding standards that meet or exceed RCRA standards, in addition to an institutional oversight process).

The statutory definition of hazardous waste, section 1004(5)(B), informs EPA's interpretation that EPA may consider good management practices in determining the need to regulate waste as hazardous under RCRA. That section defines a “hazardous waste” as “a solid waste, or combination of solid wastes, which because of its quantity, concentration, or physical, chemical or infectious characteristics may * * * (B) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed. ” (Emphasis added.) EPA has interpreted the statutory definition as incorporating the idea that a waste that is otherwise hazardous does not require regulation under RCRA so long as it is properly managed. For example, EPA's standards for listing hazardous wastes require consideration of a waste's potential for mismanagement. See 40 CFR 261.11(a)(3)(vii) (incorporating the language of RCRA section 1004(5)(B) and requiring EPA to consider “plausible types of improper management”).

The statute also directs EPA to regulate hazardous waste generators (RCRA § 3002(a)), transporters (RCRA § 3003(a)) and treatment, storage and disposal facilities (RCRA § 3004(a)) “as may be necessary to protect human health and the environment.” By extension, the decision of when a waste should be subject to the regulatory requirements of subtitle C is a question of whether such regulatory controls are necessary to protect human health and the environment.

Thus, where a waste might pose a hazard only under limited management scenarios, and other regulatory programs already address such scenarios, EPA is not required to classify a waste as hazardous waste subject to regulation under subtitle C. At least three decisions by the U.S. Court of Appeals for the D.C. Circuit provide support for this approach to regulating wastes as hazardous waste only where necessary to protect human health and the environment. In Military Toxics Project v. EPA, 146 F.3d 948 (D.C. Cir. 1998), the court upheld a conditional exemption whereby the storage and transportation of certain military munitions are not considered hazardous waste subject to regulation under RCRA subtitle C, provided the munitions are stored and transported in compliance with regulations issued by the Department of Defense and the Department of Transportation, respectively. See 40 CFR 266.203, 266.205. The court ruled that EPA's interpretation of RCRA as authorizing a conditional exemption is “a permissible construction of the statute.” 146 F.3d at 958. The court cited its own precedent as recognizing “ `that Congress intended the agency to have substantial room to exercise its expertise in determining the appropriate grounds for listing,' ” id. (citing NRDC v. EPA, 25 F.3d 1063, 1070 (D.C. Cir. 1994)), and concluded that, although the military munitions rule “does not involve the listing regulations at issue in NRDC v. EPA, we think the principle at work there also supports the conditional exemption at issue here.” Id.

In NRDC v. EPA, the court held that EPA appropriately used its discretion in relying on several existing regulatory frameworks governing used oil in determining not to list certain used oils as a hazardous waste. NRDC, 25 F.3d at 1071. Similarly, in Edison Electric Institute v. EPA, 2 F.3d 438 (D.C. Cir. 1993), the court upheld a temporary exemption from subtitle C for petroleum-contaminated media based on the fact that the potential hazards of such materials are already controlled under the underground storage tank regulations under RCRA subtitle I. In reaching its decision, the court considered the fact that the subtitle I standards could prevent threats to human health and the environment to be an important factor supporting the exemption. Id. at 453.

The legislative history of RCRA subtitle C also supports this interpretation, stating that “the basic thrust of this hazardous waste title is to identify what wastes are hazardous in what quantities, qualities, and concentrations, and the methods of disposal which may make such wastes hazardous.” H. Rep. No. 94-1491, 94th Cong., 2d Sess. 6 (1976), reprinted in A Legislative History of the Solid Waste Disposal Act, as Amended, Congressional Research Service, Vol.1, 567 (1991) (emphasis added). Finally, as discussed above, in finalizing this conditional exemption from RCRA, EPA is in part relying on the regulatory controls for Class VI wells, under the UIC program of the SDWA, 42 U.S.C. 300f et seq. EPA notes that such reliance is also consistent with the direction provided in section 1006(b) of RCRA, which directs EPA to integrate the provisions of RCRA, for purposes of administration and enforcement and to avoid duplication, to the maximum extent practicable, with those of certain other statutes, including the SDWA, to the extent that it can be done in a manner that is consistent with the goals and policies of both RCRA and the other relevant statute(s).

EPA is finalizing the conditional exclusion largely as proposed on August 8, 2011, with some revisions. The following is a summary of the changes to the proposed rule.

EPA slightly modified the regulatory language for the condition that the CO 2 stream be transported in compliance with applicable DOT requirements (see § 261.4(h)(1) in today's final rule), by adding reference to state pipeline regulations that may be applicable (in lieu of the DOT regulations) in certain situations. Several commenters had noted that in cases where CO 2 pipelines start and stop within the same state (i.e., intrastate pipelines), these pipelines would be regulated by the state rather than by DOT. EPA consulted with DOT and confirmed that with respect to the DOT regulations in 49 CFR part 195 (which apply to pipeline facilities used in the transportation of hazardous liquids or supercritical CO 2 ), while some states have adopted regulations that apply to the transportation of supercritical CO 2 and are certified by DOT to directly regulate these intrastate pipelines, many states do not have such a certification, and DOT remains the direct regulator of both interstate and intrastate pipelines in those states. EPA notes that state pipeline regulations are required to be at least as stringent as the federal DOT requirements; therefore, compliance with either the applicable DOT regulations or the applicable certified state regulations has the same effect under the proposed conditional exclusion. Because the proposed condition at § 261.4(h)(1) only referred to compliance with applicable DOT regulations, EPA decided to modify the wording of the condition to add language that also refers to compliance with “pipeline safety regulations adopted and administered by a state authority pursuant to a certification under 49 U.S.C. § 60105” to reflect situations where a pipeline facility must comply with state, rather than federal, regulation. Again, EPA is making this change in order to more accurately describe how pipeline facilities are already regulated under applicable pipeline regulations (be they State or Federal). EPA also made a conforming change to the related certification language so as to mirror the revised condition in § 261.4(h)(1).

The proposed exclusion required generators and UIC Class VI well owners or operators who claim the conditional exclusion to sign a certification statement that the conditions of the exclusion were met. EPA had proposed specific language for the certification statement. In today's final rule, the certification statement has been revised so that there are now two separate certification statements—one for CO 2 stream generators and another for UIC Class VI well owners or operators. This change was in response to commenters who were concerned about persons certifying to circumstances outside of their control. Under the final rule, the certification statement that the generator would sign is specific to the activities within the generator's control; likewise, the certification statement that the UIC Class VI well owner or operator would sign is specific to the activities within the owner or operator's control.

These revisions do not change how the conditional exclusion is implemented under today's final rule. A CO 2 stream must meet all the conditions to qualify for and maintain the exclusion from the hazardous waste regulations, and a violation of a condition at any point in the management of a CO 2 stream (that is otherwise hazardous) would result in that CO 2 stream being subject to all applicable subtitle C regulatory requirements, from the point of generation.

Furthermore, the final rule now requires that the signed certification statement must be readily accessible on the facility's publicly-available Web site, if such Web site exists, to serve as a public notification, in addition to being kept on-site for no less than three years. For further discussion on the changes to the certification statement, see section V.D. of this preamble.

In response to the proposed rule, EPA received 29 distinct comments. The commenters represented a variety of organizations, including electric utilities, energy companies, the oil and gas industry, environmental groups, two states, and the public.

Nearly all commenters supported EPA's decision to clarify the regulatory scheme applicable to CO 2 management for CCS. Many commenters generally supported EPA's proposed conditional exclusion. Other commenters stated that a conditional exclusion is not necessary because the CO 2 streams are not subject to RCRA regulation, but suggested certain changes be made should EPA proceed with a conditional exclusion. Below is a detailed discussion of the major comments received, as well as EPA's response to those comments. EPA also notes that a more comprehensive response to comment document was prepared and placed in the docket associated with today's final rule.

In the proposed rule, EPA stated that a supercritical CO 2 stream injected into a permitted UIC Class VI well for purposes of GS is a RCRA solid waste, because it is a “discarded material” within the plain meaning of the term in RCRA § 1004(27). That is, a supercritical CO 2 stream is a solid waste when it is to be discarded through abandonment by disposing of the material in a UIC Class VI well (see 40 CFR 261.2(a)(2)(i) and (b)(1)). While some commenters agreed that EPA correctly identified supercritical CO 2 injected into a Class VI well for GS as a solid waste, a number of commenters disagreed, stating that supercritical CO 2 streams that are to be injected into a UIC Class VI well are not a solid waste, and therefore cannot be a hazardous waste. These commenters generally supported excluding supercritical CO 2 streams from RCRA regulation, but stated that these streams were already excluded. Commenters presented several reasons for this.

Some commenters argued that CO 2 is not a contained gas and, therefore, does not meet the RCRA statutory definition of solid waste. Some commenters also noted that CO 2 is a commodity that has commercial/beneficial uses, including use in enhanced oil or gas recovery (EOR/EGR) and manufacturing operations and, therefore, argued that it should not be classified as a waste. In fact, one commenter noted that storage (as in Carbon Capture and Storage ) implies possible future use. Still other commenters cited dictionary definitions of the terms used in EPA regulations, concluding that CO 2 sent to Class VI facilities is not discarded, abandoned, or recycled.

EPA disagrees that CO 2 streams sent to UIC Class VI wells for purposes of GS are not solid waste. As was stated in the preamble to the proposed rule, GS is an option to reduce CO 2 emissions to the atmosphere by injecting the CO 2 streams into deep subsurface geologic formations, with the express purpose of isolating the CO 2 so that it does not return to the atmosphere. August 8, 2011 (76 FR at 48075). Therefore, EPA views these CO 2 streams as “discarded material” within the plain meaning of the term in RCRA § 1004(27). The fact that the sequestration of CO 2 streams into deep geologic formations is at times labeled as “long-term containment” or “long-term storage” does not change this view.

In addition, several commenters pointed out that with the exception of demonstration and related projects, most if not all of the CO 2 that is geologically injected today is used for EOR/EGR, and in that application, it is purchased and transacted as a valuable commodity. EPA acknowledges that the underground injection of CO 2 has largely been (and continues to be) for the purpose of EOR/EGR, and does not disagree that CO 2 can and does have a variety of commercial and manufacturing uses, 5 but this does not affect the regulatory status of CO 2 streams when they are to be injected into UIC Class VI wells for the purpose of GS. As EPA noted in the preamble to the proposed rule, this conditional exclusion is not intended to affect the regulatory status of CO 2 streams that are injected into wells other than UIC Class VI wells. EPA reiterates that these issues are beyond the scope of this final rule, and EPA did not develop information for inclusion in the proposal on well classes other than UIC Class VI wells. However, in the interest of public transparency and in light of the several public comments on this issue, EPA does note that (based on the limited information provided in the public comments) should CO 2 be used for its intended purpose as it is injected into UIC Class II wells for the purpose of EOR/EGR, it is EPA's expectation that such an injection process would not generally be a waste management activity. EPA would encourage persons to consult with the appropriate regulatory authority to address any fact-specific questions they may have regarding the status of CO 2 in situations that are beyond the scope of this final rule.

As stated above, some commenters said that these CO 2 streams are not “contained gases” and therefore are not solid wastes under the RCRA statutory definition of solid waste. 6 More specifically, these commenters argued that these carbon dioxide streams are “uncontained gases” and as such were statutorily excluded from RCRA by Congress, while others said that Congress “never envisioned regulation” of a gas such as CO 2 under RCRA. As EPA noted in the proposed rule, the CO 2 streams are delivered by pipeline and injected into UIC Class VI wells for GS in a supercritical state, which EPA stated at proposal was “. . . rather unique in that it has properties intermediate between a liquid and a gas.” 76 FR at 48078. The scientific term used to describe or define this supercritical state (i.e., when a substance is at or above its critical temperature and critical pressure) is as a “supercritical fluid.”  7 8 The RCRA statutory definition of solid waste specifically refers to “ other discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities . . .” While EPA has indeed interpreted the meaning of specific terms listed, including “contained gaseous material,” the RCRA definition of solid waste encompasses “other discarded material” and does not speak to materials such as supercritical fluids. Like the listed “solid, liquid, semisolid, or contained gaseous material” specifically referenced, CO 2 streams sequestered for purposes of GS are “other discarded material” from industrial and commercial operations and, therefore, are of a similar kind to the other types of wastes specifically referenced by the definition. They are, therefore, RCRA statutory solid wastes.

Under EPA's existing RCRA subtitle C regulations, generators are required to determine whether a solid waste exhibits a RCRA characteristic by testing the waste or applying their knowledge of the hazard characteristic of a waste, in light of the materials or processes used. In the proposed rule, EPA discussed the applicability of the RCRA hazardous waste regulations to supercritical CO 2 streams. 76 FR at 48077-78. Specifically, EPA stated that because there are no hazardous waste listings that apply to the supercritical CO 2 streams being considered here, a CO 2 stream could only be defined as a hazardous waste if it exhibits one or more of the hazardous waste characteristics as defined in 40 CFR part 261, subpart C. EPA also discussed issues specifically related to applying the Toxicity Characteristic (TC) to supercritical CO 2 streams and requested comment on the RCRA characterization issue.

Some commenters responded and said that even if these supercritical CO 2 streams were RCRA solid wastes, it should not be assumed that they are a hazardous waste, and that the very consideration of a conditional exclusion unnecessarily suggests that these streams could be hazardous. Many commenters argued that EPA has not demonstrated that the supercritical CO 2 streams would exhibit any of the RCRA characteristics, and asserted that the supercritical CO 2 streams would not exhibit any of the RCRA hazardous waste characteristics, or that the RCRA characteristic regulations do not otherwise apply to supercritical CO 2 streams. With respect to the TC specifically, commenters said that there is no record evidence that sequestered CO 2 streams are managed in municipal solid waste landfills (the waste management scenario EPA originally considered when establishing the TC) and in fact the conditional exclusion is premised on the material being managed only in a UIC Class VI well. Therefore, these commenters argued there is no basis for applying the TC to sequestered CO 2 streams.

EPA appreciates these commenters' concerns regarding the application of the hazardous waste regulations to supercritical CO 2 streams being sequestered. EPA believes these concerns exist as a result of the unique circumstances associated with addressing the applicability of RCRA to CCS at such an early stage in the development of CCS. However, it is important to note that EPA did not set out in this rulemaking to conclude that those supercritical CO 2 streams that are solid wastes would, as a class, exhibit a RCRA characteristic. Indeed, EPA indicated in the proposed rule that it could not unequivocally conclude that supercritical CO 2 streams will never exhibit any RCRA hazardous waste characteristic and commenters provided no information to the contrary. Alternatively, EPA acknowledges that some RCRA hazardous characteristics are unlikely to apply to a waste composed of >90% CO 2, such as ignitability (i.e., RCRA Waste Code D001). Thus, in light of the early state of data development in this area, EPA intends to bring additional clarity to the regulatory regime through this rule, by establishing a conditional exclusion from the definition of hazardous waste that would apply in the event a generator determines that its CO 2 streams exhibit a RCRA hazardous characteristic.

EPA notes that it is not required to affirmatively demonstrate, as part of this rulemaking, that a particular CO 2 stream, or a portion of all CO 2 streams, necessarily qualifies as RCRA hazardous waste. Rather, under the conditional exclusion concept, EPA considers whether RCRA subtitle C regulation is necessary to protect human health and the environment. As explained in today's rule, after consideration of public comment, EPA has reached the conclusion that management of CO 2 streams under existing standards, including the UIC requirements for Class VI wells, as well as DOT standards, will protect human health and the environment from potential risks associated with CO 2 streams (including associated constituents that might be present). This conclusion is based on EPA's analysis of those other regulatory programs directly. EPA's analysis and conclusions are independent of, and thus unaffected by, the question of whether a stream is classified as a hazardous waste under EPA's RCRA regulations.

Finally, EPA notes that the conditional exclusion has a limited effect on the regulated community directly and the exclusion imposes no affirmative obligations upon them. Generators of non-hazardous waste CO 2 streams are not subject to the RCRA subtitle C regulations, and they are not obligated to make use of this conditional exclusion (although they still may choose to do so in situations where, for example, the generator may be uncertain regarding the hazardous waste status of the CO 2 stream). Moreover, because use of the conditional exclusion is voluntary, even those generators who characterize their streams as RCRA hazardous waste may continue to manage their streams as RCRA hazardous wastes from the point of generation. The only effect is upon those persons who choose to comply with the terms of the conditional exclusion.

In the proposed rule, EPA discussed at length the protections provided by the UIC Class VI well program and EPA's conclusion that regulation under RCRA would not provide additional protections to human health and the environment for CO 2 streams injected for purposes of GS. See 76 FR 48083-86. Two commenters claimed that EPA's conclusions in this respect were not adequately supported. The commenters stated that, by including a condition prohibiting the mixing or co-injection of hazardous waste into the CO 2 stream, EPA was implying that UIC Class I hazardous waste wells are more appropriate for hazardous wastes and therefore offer greater safeguards than UIC Class VI wells for hazardous CO 2 streams. These commenters also stated that EPA should offer an analysis on a point-by-point basis showing that the requirements for UIC Class VI wells are at least as protective as UIC Class I hazardous waste wells. Finally, the commenters said that EPA should not conditionally exclude CO 2 streams from subtitle C regulation without a better understanding of their composition, their potentially hazardous characteristics in all plausible environments, and without identifying allowable contaminants and setting limits for their concentration in these streams.

EPA does not agree that the hazardous waste mixing prohibition implies that UIC Class VI wells offer lesser safeguards than UIC Class I hazardous waste wells, for CO 2 streams that are the subject of this conditional exclusion. This conditional exclusion is limited to a specific, unique waste—CO 2 streams that are hazardous waste themselves (i.e., that exhibit a characteristic of hazardous waste due to the presence of impurities)—therefore, EPA needed to make clear that any other type of hazardous waste injection must continue to occur in UIC Class I hazardous waste wells.

EPA also disagrees that it needs to compare the UIC Class I hazardous waste and Class VI requirements point-by-point in order to demonstrate that the requirements for UIC Class VI wells are at least as protective as UIC Class I hazardous waste wells for CO 2 streams. As discussed in Section III.B in this preamble, determining whether a conditional exclusion is appropriate includes consideration of whether a waste may not present a hazard because it is already subject to adequate regulation. In determining whether existing regulation is adequate, EPA does not necessarily need to show that each existing requirement has a corresponding analogue in the RCRA subtitle C regulations. The UIC Class VI requirements are designed to ensure that the CO 2 streams (which may include low concentrations of hazardous constituents) remain isolated in the injection zone and confined by confining zones in an appropriate, well-characterized geologic setting that is continuously monitored to ensure that the CO 2 streams remain in the injection zone. EPA views the elimination of exposure routes through these requirements as determinative in its evaluation of whether the RCRA subtitle C regulatory requirements for hazardous waste disposal provide any substantial, additional protection for CO 2 streams which exhibit a characteristic of hazardous waste and are disposed in UIC Class VI wells. Moreover, in some instances, a point-by-point comparison may not even be appropriate. For example, the UIC Class VI requirements are designed for the unique characteristics of CO 2 , including its large volume and its buoyancy relative to other fluids in the subsurface, unlike the typical fluids injected into UIC Class I hazardous waste wells. Finally, EPA also notes that the commenters, despite their general criticism that EPA did not undertake a particular enough analysis of the respective regulatory regimes, did not actually reject EPA's ultimate conclusion that the UIC Class VI requirements are sufficiently protective, nor did they provide any evidence of gaps in protection or other deficiencies in the analysis that only a more particularized analysis would reveal.

Regarding the comment that EPA did not evaluate the “potentially hazardous characteristics” of CO 2 streams “in all plausible environments,” EPA notes that the commenters did not identify the plausible environments to which they were referring. EPA's response is that the scope of its evaluation of the adequacy of existing regulatory requirements (and therefore the scope of the conditional exclusion) is limited to the management of supercritical CO 2 streams from capture at a CO 2 source to injection into a UIC Class VI well.

EPA agrees with the commenter that obtaining more data on the composition of CO 2 streams that will be injected into UIC Class VI wells is important, but disagrees that the conditional exclusion should not be promulgated unless EPA identifies specific contaminants that may be injected and at what concentrations. As explained above, EPA has concluded that the injection of CO 2 streams, including incidental associated substances derived from the source materials and the capture process, 9 can be performed in a protective manner at a permitted UIC Class VI well. This is the case regardless of the precise contaminants, and their concentrations, because the UIC Class VI permitting requirements will take into account the physical and chemical characteristics of the CO 2 streams before any injection may occur, as part of establishing the appropriate conditions for the successful confinement of CO 2 in a manner that is protective of USDWs. EPA therefore has not altered its conclusion that the conditional exclusion is appropriate, and sees no need to delay further action on the conditional exemption to gather additional data.

Nevertheless, EPA emphasizes that the UIC Class VI regulations themselves require that the chemical composition and physical characteristics of the CO 2 streams be known as part of the initial permitting process, as well as during operation of the well, in order to ensure that these CO 2 streams can be injected in a manner that is protective of human health and the environment. EPA expects that this will provide a full understanding of the properties of the CO 2 streams being injected, including specific contaminants and their concentrations. As discussed in more detail below in Section V.G. of this preamble EPA intends to monitor any data on the chemical composition and physical characteristics of the CO 2 streams being injected by the UIC Class VI permitting program, and to use that information to determine whether changes to the conditional exclusion may be appropriate.

One of the conditions for the proposed exclusion was that generators and UIC Class VI well owners or operators who claim the exclusion must sign a certification statement that all of the conditions of the exclusion were met. EPA had proposed specific language for a certification statement, where the same language would be used for the generator and the UIC Class VI well owner or operator. EPA requested comment on the certification statement and, particularly, on whether it would appropriately ensure compliance with the conditional exclusion.

While the commenters did not generally have concerns with signing a certification statement, some commenters were concerned that the certification as proposed would require signatories to attest to certain activities that were outside of their control. For example, several commenters thought it inappropriate for the CO 2 generator to have to certify to the injection well's owner or operator's compliance with the UIC Class VI rules. EPA agrees, and, in today's final rule, the certification statement has been revised so that there are now two separate certification statements worded slightly differently—one for generators and another for UIC Class VI well owners or operators claiming this exclusion. As revised, the generator certification statement reads as set forth in 40 CFR 261.4(h)(4)(i), and the UIC Class VI well owner or operator certification reads as set forth in 40 CFR 261.4(h)(4)(ii).

EPA is making these revisions to better reflect actions over which each party has control. EPA emphasizes that these revisions do not change how the conditional exclusion is implemented—that a CO 2 stream that is hazardous must meet all the conditions in § 261.4(h)(1)-(4) to qualify for and maintain the exclusion from the hazardous waste regulations. Thus, as discussed in the proposed rule, a violation of a condition at any point in the management of a CO 2 stream (that is otherwise hazardous) would result in that CO 2 stream being subject to all applicable subtitle C regulatory requirements from the point of generation. See 76 FR at 48087.

One additional note regarding situations where both the capture and the injection of CO 2 streams is occurring at the same site, such that the CO 2 streams are not being sent off-site either in a pipeline or via transportation such as by truck. EPA clarifies that § 261.4(h)(1) requires compliance with DOT (and state analogue) requirements only as these requirements independently apply (i.e., “as applicable”). Thus, EPA would not consider this condition to have been violated merely because no pipeline or other transportation were used. Similarly, EPA does not intend for a generator in this situation to be prevented from signing the certification statement as drafted, because of the references to applicable DOT and state regulations.

As proposed, the certification statements would only be required of generators and UIC Class VI well owners or operators. EPA had requested comment on whether or not transporters or pipeline owners and operators also should sign a certification statement. One commenter stated that this certification would help ensure that pipeline owners and operators or other transporters do not purposefully mix hazardous wastes into the CO 2 stream. Several other commenters, however, asserted that this certification was unnecessary because transport through pipelines or by other means must meet applicable transport requirements for all materials moved, and therefore, certification that they meet these requirements only for a specific material (i.e., CO 2 to be sequestered) provides no additional protection and is unnecessary.

EPA agrees with those commenters who said that a certification by the transporter is not necessary. If EPA were to require such a certification, consistent with the approach described above, it would be limited to the conditions within the control of pipeline owners and operators or other transporters, which is compliance with applicable DOT requirements and to not mix hazardous waste into the CO 2 streams. Regarding compliance with DOT requirements, EPA agrees that if persons transporting supercritical CO 2 must comply with the applicable transportation requirements for all supercritical CO 2 being moved, it seems unnecessary to require that they certify compliance with DOT for a specific material (i.e., supercritical CO 2 streams to be sequestered). In addition, EPA does not have information, nor did commenters provide any new information, indicating that CO 2 pipeline owners and operators or other transporters would mix hazardous waste into CO 2 streams being delivered to UIC Class VI facilities.

One commenter pointed out that it is unlikely that these CO 2 streams will be transported other than by pipelines (except where small quantities are involved in some experimental wells, which are likely to be food grade CO 2 according to this commenter). As EPA discussed at proposal, PHMSA requires that pipeline owners and operators ensure that supercritical CO 2 streams be chemically compatible with the pipeline and any commodities in the pipeline and will not corrode the pipeline and pipeline system. 76 FR at 48087. EPA expects that pipeline owners and operators engaged in delivering supercritical CO 2 have strong disincentives to mix any hazardous waste into their pipeline system, both in order to honor their contractual arrangement with customers, and also to maintain their equipment. For these reasons, EPA does not see the need for a transporter certification, and is not changing its proposed approach and transporters and pipeline owners and operators will not be required to sign a certification statement as a condition of the exclusion. However, EPA will continue to monitor compliance issues going forward and may revisit this condition as appropriate as part of its adaptive approach (discussed in Section V.G. in this preamble).

Finally, EPA proposed that the signed certification statement must be kept on-site for no less than three years and be made available upon request within 72 hours of a written request from either EPA or the state. In the proposed rule, EPA discussed how the certification plays an important role in ensuring that the conditions in the exclusion are met and its desire to safeguard the efforts of facilities to comply with the rule by designing a regulatory scheme both enforceable and structured to ensure compliance. EPA specifically requested comment on whether any new monitoring, recordkeeping, or reporting requirements were necessary to ensure compliance with the proposed conditional exclusion.

EPA received a few diverse comments on this provision. One commenter stated that requiring the certification to be kept on-site is not sufficient, citing the fact that the RCRA Enhanced Public Participation Rule would not apply. 10 Instead, this commenter suggested that EPA require the certification to be submitted to the UIC Program Director and be made publicly available on the regulator's Web site. Another commenter stated that requiring production within 72 hours was too short and that the certification requirement should reflect “modern electronic filing systems where a paper copy may not be held in a file drawer. Making an electronic document available and submitting it electronically should both be allowed.”

In the final rule, EPA has kept the original proposed on-site retention time of no less than three years for the signed certification statement, but has added a provision for the statement to be posted prominently on the signatory's corporate Web site, if such Web site exists. As EPA made clear in the proposed rule, one of its key concerns with the certification statement was to ensure compliance with the terms of the conditional exclusion. Posting the signed certification statements on-line will promote compliance and accountability by providing efficient access by regulatory authorities and interested members of the public (consistent with the intent of the RCRA Enhanced Public Participation Rule cited by one commenter) to the exclusion certifications and the identities of the responsible officials. Moreover, EPA expects that posting the certifications on-line will simplify the reporting obligation for the regulated community because accessible internet posting obviates the need for a regulatory agency to request a hard copy.

EPA notes that it is not requiring the creation of any new corporate or other Web site. Entities without a Web site thus would not be required to post their certifications on-line. EPA expects, however, that most, if not all, affected entities already operate external Web sites to communicate to the public and, therefore, the posting requirement will be useful to regulators, the public, and the regulated community. The public disclosure of information is an increasingly common and important regulatory tool. 11 In 2010, the Office of Management and Budget (OMB) issued guidance with principles to assist agencies in using information disclosure to achieve regulatory objectives, 12 and EPA believes that regulatory information disclosure can cost-effectively improve compliance and accountability.

Finally, in today's final rule EPA is not requiring that the signed certification statement be submitted to the UIC Program Director as suggested by one commenter. EPA does not believe that an additional submission requirement will be necessary because the signed certification statement will in most circumstances be directly accessible on the injection facility's Web site. EPA also notes that as part of the process of obtaining a UIC Class VI permit, owners and operators who plan to claim the conditional exclusion may choose to submit the certification to the UIC Program Director to provide the necessary clarity on the status of the CO 2 streams under RCRA. 13

In the proposed rule, EPA stated that some pipelines used to transport CO 2 might not be subject to the DOT requirements and requested information on how these pipelines are currently regulated, including any design and operating standards that apply to such pipelines. EPA also assumed that, in the typical case, captured CO 2 will not be stored at the generator facility but would be transferred in a continuous manner either to an on-site or off-site UIC Class VI well. While EPA did not propose to apply RCRA subtitle C requirements to these pipelines as a condition of the proposed exclusion, it did request comment on the appropriateness of applying the RCRA subtitle C standards to these non-DOT regulated pipelines. Several commenters responded and said that EPA should not apply the subtitle C requirements to non-DOT regulated pipelines as a condition of this rule. These commenters referenced the Pressure Piping standards set by the American Society of Mechanical Engineers (ASME)  14 and noted that non-DOT regulated CO 2 pipelines on-site are designed, constructed and maintained in accordance with these standards.

According to ASME, such standards promote safety, reliability, productivity, and efficiency in industries that rely on engineering components or equipment. While EPA acknowledges that ASME standards are not by themselves regulatory requirements, 15 these standards (e.g., ASME B31) are designed to ensure that the piping and associated equipment meet certain quality and safety criteria. In addition, that these ASME B31 standards have been incorporated by reference in various federal and state regulatory programs illustrates the high degree of confidence and acceptance placed on these standards. Ultimately, EPA did not find a compelling reason to require RCRA subtitle C standards to on-site piping associated with supercritical CO 2 streams.

EPA proposed adding a definition for the term carbon dioxide stream to the hazardous waste regulations in 40 CFR 260.10. EPA is finalizing that definition without change: Carbon dioxide stream is defined as “carbon dioxide that has been captured from an emission source (e.g., a power plant), plus incidental associated substances derived from the source materials and the capture process, and any substances added to the stream to enable or improve the injection process.” EPA explained that the proposed definition was intended to work in concert with the definition of “carbon dioxide stream” in the UIC Class VI regulations at 40 CFR 146.81(d). EPA also requested comment on the types and characteristics of substances that are added to CO 2 streams to enable or improve the injection process.

Most commenters agreed with the proposed definition. One commenter stated the definition as written is critical to ensure that the conditional exclusion is practicable, as any captured CO 2 stream will contain some substances from the source materials and the capture process. One commenter asked EPA to confirm that “incidental associated substances” means other substances captured together with the CO 2 from a gas stream and that the numerical values provided in the proposed rule preamble (as estimates of possible hazardous constituent concentrations in CO 2 streams) were not intended to establish any numerical threshold of “incidental associated substances.” EPA confirms that “incidental associated substances derived from the source materials and the capture process” is intended to refer to those substances that are captured together with the CO 2 . EPA also confirms that it did not intend that the numerical concentrations of hazardous constituents described in the proposal's discussion of RCRA characterization issues 16 define what constitutes “incidental associated substances” in the proposed rule or in today's final conditional exclusion.

One commenter requested that EPA revise the term “emission source” to make it plural (“sources”) in order to recognize that CO 2 streams can come from more than one source, otherwise the definition “. . . could be interpreted as requiring the CO 2 stream to come from a single source to qualify for the exemption.” EPA never intended to limit the conditional exclusion to CO 2 streams from a single source but rather believes the existing language also would include CO 2 streams generated from two or more independently-produced CO 2 streams, provided that the conditions of the exclusion are met for all streams for which it is being claimed. Thus, we are not making this change.

This same commenter also requested that EPA delete the term “incidental” from the proposed definition, arguing that if a substance qualifies as an “associated substance derived from the source materials and the capture process,” then it should be eligible for the exclusion regardless of the quantity in which it exists in the stream. The commenter stated that the word “incidental” connotes a volume limitation, and its use in the definition suggests that if such “associated substances” are present at sufficient volume, then they will no longer qualify as being “incidental,” resulting in elimination of the exclusion.

EPA disagrees with the suggestion that “incidental” be deleted. In order to provide the regulatory clarity sought through this rule, it is critical that there be a consistent definition of carbon dioxide stream in both today's final rule and the UIC Class VI final rule. This consistent definition is important because the applicability of the UIC Class VI requirements and the applicability of the conditional exclusion are linked in instances where the exclusion is being claimed. EPA is concerned that employing different definitions will result in confusion as to which streams are subject to both rules. In any event, EPA finds it unlikely that the applicability of the conditional exclusion will turn on how `incidental' is interpreted; that is, in any instance where it has been determined that a “ carbon dioxide stream” (as defined in either rule) can be safely and legally injected into a UIC Class VI well, the conditional exclusion is applicable, provided the other specified conditions are met.

EPA also requested comment on the types and characteristics of substances that are added to CO 2 streams to enable or improve the injection process. One commenter stated that, at their GS injection site, they do not add any substances to improve the injectivity of the CO 2 stream. Another commenter said that it may be necessary to add substances to the CO 2 streams to improve injectivity, including substances to reduce viscosity, inhibit reactions with brine or formation rocks, or otherwise improve permeability. While this commenter did not provide information on what these substances might include, EPA emphasizes that any addition of substances to CO 2 streams to enable or improve the injection process would be occurring as part of the UIC Class VI permitted activity (subject to that program's oversight) and thus ultimately implemented in a manner to prevent the endangerment of Underground Sources of Drinking Water.

EPA did not receive any significant comments on the adaptive approach, and no commenters disagreed with this approach; however, we believe it is important to reiterate what was presented in the preamble to the proposed rule, which was that after the conditional exclusion is promulgated any new information would be reviewed and used to inform whether changes should be made to the conditional exclusion, which could require additional rulemaking. August 8, 2011 (76 FR at 48088). This approach is consistent with the approach EPA described for considering changes to the UIC Class VI final rule, in order to incorporate new research, data, and information about GS and associated technologies. See December 10, 2010 Federal Register (75 FR at 77240-41, 77243, and 77257).

One example of where EPA has acknowledged it plans to consider new information that may have relevance to the overall protectiveness and/or implementation of this conditional exclusion is related to the composition of CO 2 streams. As described in Section V.C. of this preamble, one commenter cited EPA's lack of information on the nature of CO 2 streams as a concern, and EPA has stated that it intends to look at data generated on the chemical and physical characteristics of the CO 2 streams that are to be injected into UIC Class VI wells, to inform its consideration of whether changes should be made to the conditional exclusion.

Another commenter expressed concern that the conditional exclusion may actually create uncertainty, rather than reduce it, and that any exclusion “. . . needs to address carbon dioxide streams for the full range of scenarios under which the uses of captured anthropogenic carbon dioxide streams are likely to occur.” This commenter stated that EPA should not assume that the producer of CO 2 streams will always send their CO 2 streams through a dedicated pipeline to a single UIC Class VI well for geologic sequestration, and requested that EPA explain how the conditional exclusion would be implemented under a variety of hypothetical situations, involving CO 2 streams from anthropogenic and natural sources that may be co-mingled in the same CO 2 pipeline, for delivery either to one or more UIC Class II wells (for EOR), UIC Class VI wells (for GS), or to both types of wells.

EPA appreciates the commenter's request, and notes that currently there is a lack of sufficient information to inform the agency on how to best address the “full range of scenarios” presented by the commenter because many of such scenarios are still under development. EPA notes that the purpose of developing this final rule was to provide for the option of a conditional hazardous waste exclusion that could be used, where necessary, 17 to provide clarity as to the applicability of RCRA subtitle C, and in particular with respect to removing barriers to initiating near-term CCS projects. 18

These examples illustrate why EPA is committed to an adaptive approach on CCS generally, so that the Agency may identify and address additional information and respond, including via rulemaking, should that be necessary. EPA emphasizes that the adaptive approach is not limited to the examples cited above, and where additional information may increase protectiveness, streamline implementation, or otherwise inform the requirements for GS injection of CO 2 , EPA may need to evaluate whether changes are necessary. Thus, the Agency commits to reviewing, in a manner similar to the adaptive approach planned for the UIC Class VI rule, new research, data, and information related to today's conditional exclusion.

Under Section 3006 of RCRA, EPA may authorize qualified states to administer their own hazardous waste programs in lieu of the federal program within the state. Following authorization, EPA retains enforcement authority under Sections 3008, 3013, and 7003 of RCRA, although authorized states have primary enforcement responsibility. The standards and requirements for state authorization are found at 40 CFR Part 271.

Prior to enactment of the Hazardous and Solid Waste Amendments of 1984 (HSWA), a state with final RCRA authorization administered its hazardous waste program entirely in lieu of EPA administering the federal program in that state. The federal requirements no longer applied in the authorized state, and EPA could not issue permits for any facilities in that state, since only the state was authorized to issue RCRA permits. When new, more stringent federal requirements were promulgated, the state was obligated to enact equivalent authorities within specified time frames. However, the new federal requirements did not take effect in an authorized state until the state adopted the federal requirements as state law.

In contrast, under RCRA Section 3006(g) (42 U.S.C. 6926(g)), which was added by HSWA, new requirements and prohibitions imposed under HSWA authority take effect in authorized states at the same time that they take effect in unauthorized states. EPA is directed by the statute to implement these requirements and prohibitions in authorized states, including the issuance of permits, until the state is granted authorization to do so. While states must still adopt HSWA related provisions as state law to retain final authorization, EPA implements the HSWA provisions in authorized states until the states do so.

Authorized states are required to modify their programs only when EPA enacts federal requirements that are more stringent or broader in scope than existing federal requirements. RCRA Section 3009 allows states to impose standards more stringent than those in the federal program (see also 40 CFR 271.1). Therefore, authorized states may, but are not required to, adopt federal regulations that are considered less stringent than previous federal regulations.

The provisions in today's notice are promulgated pursuant to non-HSWA authority, and would eliminate the hazardous waste requirements for those CO 2 streams that would otherwise meet the RCRA definition of hazardous waste, when these streams are managed in accordance with certain conditions. Therefore, this exclusion is less stringent than the federal program, and states are not required to adopt this provision. 19 Nevertheless, while states do not have to adopt this provision, EPA strongly encourages them to do so, because this amendment will substantially reduce the uncertainty associated with defining and managing these CO 2 streams under RCRA subtitle C, which will remove the uncertainty regarding the type of permit needed for the GS of CO 2 streams.

EPA notes that in situations involving the interstate transportation of conditionally-excluded waste, the exclusion must be authorized in the state where the waste is generated, any states through which the waste passes, and the state where the UIC Class VI injection well is located, in order for that conditionally-excluded waste to be managed as excluded from subtitle C from point of generation to injection in a UIC Class VI well. A state that has not adopted the conditional exclusion may impose state requirements, including the uniform hazardous waste manifest requirement (where applicable)  20 if characteristically-hazardous CO 2 streams are being transported through that state. EPA recommends in situations where the conditional exclusion is being asserted, involving one or more states that have not yet adopted this rule, that persons engaged in the transaction consult with these states to ensure no additional requirements apply.

Throughout this document, “we,” “us,” and “our” refer to EPA.

Table 1 lists the rules we are approving and rescinding with the dates that they were adopted or rescinded by the local air agencies and submitted by the California Air Resources Board.

On April 9, 2013, EPA determined that the submittal for MDAQMD Rule 1113 and SCAQMD Rule 1177 met the completeness criteria in 40 CFR Part 51 Appendix V, which must be met before formal EPA review. On June 26, 2013, EPA determined that the submittal for MBUAPCD Rule 426 and AVAQMD Rule 1174 met the completeness criteria in 40 CFR Part 51 Appendix V, which must be met before formal EPA review.

There are no previous versions of SCAQMD Rule 1177 in the SIP. We approved an earlier version of AVAQMD Rule 1174 into the SIP on October 4, 1994 (59 FR 50498). Limited approvals of MDAQMD Rule 1113 and MBUAPCD Rule 426 were published on January 1, 2004 (69 FR 34) for inclusion in the SIP. The MDAQMD and MBUAPCD adopted revisions to the SIP-approved versions on April 23, 2012 and August 15, 2012 and CARB submitted them to us on February 6, 2013, and April 22, 2013.

VOCs help produce ground-level ozone and smog, which harm human health and the environment. Section 110(a) of the CAA requires States to submit regulations that control VOC emissions. MDAQMD Rule 1113 and MBUAPCD Rule 426 lower VOC content limits of various architectural coatings and SCAQMD Rule 117 limits VOC emissions from liquefied petroleum gas transfer. AVAQMD Rule 1174 controlled VOC emissions from ignition of barbecue charcoal, but is being rescinded because EPA and CARB have adopted redundant regulations. EPA's technical support documents (TSD) have more information about these rules.

Generally, SIP rules must be enforceable (see section 110(a) of the Act), must require Reasonably Available Control Technology (RACT) for each category of sources covered by a Control Techniques Guidelines (CTG) document as well as each NO X or VOC major source in ozone nonattainment areas classified as moderate or above (see sections 182(b)(2) and 182(f)), and must not relax existing requirements (see sections 110(l) and 193). SCAQMD regulates an ozone nonattainment area classified as extreme for the 8-hour ozone NAAQS (see 40 CFR Part 81.305), so Rule 1177 must fulfill RACT. The MBUAPCD and MDAQMD rules regulate an area source and are not required to fulfill RACT, though we have evaluated them for enforceability, stringency, and backsliding. The rescission of the AVAQMD rule must not relax existing requirements (see sections 110(l) and 193 of the CAA).

Guidance and policy documents that we use to evaluate enforceability and RACT requirements consistently include the following:

1. “State Implementation Plans; General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990,” 57 FR 13498 (April 16, 1992); 57 FR 18070 (April 28, 1992).

2. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook).

3. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).

4. “Suggested Control Measure for Architectural Coatings,” CARB, October 2007.

We believe these rules are consistent with the relevant policy and guidance regarding enforceability, RACT, and SIP relaxations. The AVAQMD is requesting rescission of rule 1174 because EPA and CARB have adopted similar regulations and we believe the rule rescission is consistent with policy and guidance. The TSDs have more information on our evaluation.

The TSDs describe additional rule revisions that we recommend for the next time the local agencies modify the rules.

As authorized in section 110(k)(3) of the Act, EPA is fully approving the submitted rules and rule rescission because we believe they fulfill all relevant requirements. We do not think anyone will object to this approval, so we are finalizing it without proposing it in advance. However, in the Proposed Rules section of this Federal Register , we are simultaneously proposing approval of the same submitted rules and rule rescission. If we receive adverse comments by February 3, 2014, we will publish a timely withdrawal in the Federal Register to notify the public that the direct final approval will not take effect and we will address the comments in a subsequent final action based on the proposal. If we do not receive timely adverse comments, the direct final approval will be effective without further notice on March 4, 2014. This will incorporate the three rules into and remove the one rule from the federally enforceable SIP.

Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

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 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 disproportionate human health or environmental effects with practical, appropriate, and legally permissible methods under Executive Order 12898 (59 FR 7629, February 16, 1994).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 4, 2014. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the Proposed Rules section of today's Federal Register , rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:

Organization of this Document. The following outline is provided to aid in locating information in the preamble.

On January 5, 2012 (77 FR 556), EPA published final amendments to the National Emissions Standards for Hazardous Air Pollutants (NESHAP) From Secondary Lead Smelting. The EPA has subsequently determined, following discussions with affected parties, that the final rule warrants clarification in four areas.

The EPA inadvertently removed from 40 CFR part 63, subpart X the requirement for facilities constructed or reconstructed on or before May 19, 2011, to comply with the previous version of the NESHAP between promulgation of the January 5, 2012, amendments and the subsequent compliance date for existing sources, which is January 6, 2014. Since existing sources remain subject to the pre-existing standards until the compliance date for the January 2012 standards, the EPA is amending the rule to restore the deleted language.

The EPA received petitions for reconsideration of the final rule from the secondary lead smelting industry. One issue raised in the petitions relates to the table of dioxin and furan congeners contained in the regulatory text (Table 3 to Subpart X of Part 63—Toxic Equivalency Factors). This table included incorrect values for some dioxin toxic equivalency factors (TEF) and omitted some congeners. The EPA intended to use the 2005 World Health Organization (WHO) TEF in Table 3 to subpart X of part 63. See 76 FR 29051, “The TEQ emissions will be calculated using the toxic equivalency factors (TEF) outlined by the World Health Organization (WHO) in 2005 (available at Web site: http://www.epa.gov/raf/hhtefguidance/ ).”

Industry petitioners expressed concern that the agency changed one aspect of the emission standard for total hydrocarbons (THC) between proposing and finalizing the risk and technology review amendments for secondary lead smelters. In the 2011 proposed rule, the total hydrocarbon standard for furnace charging process fugitive emissions that are not combined with furnace process emissions did not require correction to 4-percent carbon dioxide (CO 2 ). See the Federal Register at 76 FR 29072, May 19, 2011. In the 2012 final rule, this standard inadvertently included correction to 4-percent CO 2 . See the Federal Register at 77 FR 582, January 5, 2012.

Finally, petitioners asked the EPA to clarify several monitoring provisions for total enclosures. Industry requested flexibility in defining the term “windward wall” when a total enclosure is not impacted by ambient wind. The regulatory text was unclear where to place monitors when ambient wind does not affect the total enclosure. Petitioners requested clarification in how to monitor enclosures that are divided into multiple areas all under negative pressure. Petitioners also asked the EPA to clarify that data from differential pressure monitors should be used to calculate 15-minute averages. Petitioners also stated that the EPA should clarify the meaning of “accuracy” in 40 CFR 63.548(k)(3).

The EPA is issuing the amendments as a direct final rule, without a prior proposal, because we view the revisions as noncontroversial and anticipate no adverse comment. The EPA never intended to remove the pre-January 2012 NESHAP from the Code of Federal Regulations (CFR), and no commenters suggested such an action. Additionally, the errors in Table 3 to subpart X of part 63 and the THC correction for furnace charging process fugitive emissions are simply typographical errors. The differential pressure monitoring clarifications do not alter the impacts of the 2012 final rule and simply clarify requirements from that rulemaking. The monitoring clarifications include the following: Clarifying the definition of windward wall; clarifying how to monitor pressure in situations where smaller enclosures are located within larger full enclosures; clarifying the averaging time for the monitoring; and clarifying the calibration requirements for the monitoring equipment. However, in the Proposed Rules section of this Federal Register issue, the EPA is also publishing a separate document that will serve as the proposal to amend the Secondary Lead Smelting NESHAP with the same amendments contained in this direct final action if significant adverse comments are submitted. The EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. The EPA will address all public comments in any subsequent final rule based on the proposed rule. We will address other issues for which we have received requests for reconsideration in a separate proposal that will be published at a later date.

We are clarifying compliance requirements for existing sources for the period beginning January 5, 2012, and ending on the compliance date for existing sources established in the final rule published in the Federal Register at 77 FR 584, January 5, 2012. See 40 CFR 63.546(a). When the final rule was published in the Federal Register , the subpart was reprinted in its entirety to aid the public in locating and understanding the requirements for secondary lead smelters. This inadvertently removed the earlier version of 40 CFR part 63, subpart X from the CFR. This direct final rule clarifies that secondary lead smelters that commenced construction or reconstruction before May 19, 2011 (i.e., all sources existing as of that time, which includes sources classified as both existing and new under the previous rule), are still subject to the requirements of subpart X for new and existing sources that were effective prior to the January 5, 2012, amendments, and remain subject to those provisions until the compliance date for the January 5, 2012, amendments. Specifically, sources that were classified as new under the previous rule, (i.e., those which commenced construction after June 9, 1994) are subject to the previous rule's new source standards (codified at former 40 CFR 63.543 through 63.545). Existing sources under the previous rule are subject to the previous rule's existing source standards (codified at former 40 CFR 63.543 through 63.545). We have added paragraph (c) to 40 CFR 63.546 to correct this inadvertent error.

The EPA is also correcting typographical errors in Table 3 to subpart X of part 63. The table did not include all of the 2005 WHO TEF and had incorrect TEF values for some of the congeners included in the table. The EPA is not changing the emission standards for dioxins and furans from the 2012 final rule or using different congeners than we intended to include in the 2011 proposed rule or 2012 final rule. See 76 FR 29051, “The TEQ emissions will be calculated using the toxic equivalency factors (TEF) outlined by the World Health Organization (WHO) in 2005 (available at Web site: http://www.epa.gov/raf/hhtefguidance/ )”.

We are removing the CO 2 correction requirement that we inadvertently added to 40 CFR 63.543(f) in the final rule. We did not intend to make this change between the proposed and final rules, did not receive comments on this issue, and did not discuss it in the preamble to the final rule or supporting documents. The hoods that capture furnace charging process fugitive emissions draw a large amount of excess ambient air with very low concentrations of CO 2 . Measured concentrations of THC would be inappropriately multiplied by 10 if CO 2 corrections were required for these sources. This amendment will not change the impacts of the 2012 final rule since we did not intend to make this change between the proposed and final rules.

We are also clarifying five parts of the rule establishing differential pressure monitoring requirements for negative pressure enclosures. These corrections are intended to clarify existing requirements and do not change the impacts of the final rule.

Industry petitioners requested that the EPA clarify how differential pressure monitors should be arranged within total enclosures when those enclosures exist within or as part of a larger structure. The EPA granted reconsideration in order to provide needed clarifications. In the 2012 final rule, differential pressure monitors are required on walls within a total enclosure to ensure negative pressure is maintained within the enclosure. See 40 CFR 63.548(k). The EPA included definitions for “windward” and “leeward” walls to determine which walls within a total enclosure should have differential pressure monitors. Windward and leeward walls were defined using prevailing ambient wind directions. See 40 CFR 63.542. Industry petitioners stated that some total enclosures are within larger structures that shield the total enclosure from impacts of ambient wind. Furthermore, we have determined there are significant technical difficulties associated with monitoring negative pressure in areas that open into other areas that are also under negative pressure. Therefore, as explained in more detail under item number 5 below, in situations where smaller enclosures are contained within larger total enclosed structures, we are clarifying that facilities only need to monitor pressure differential for the larger total enclosure. Furthermore, in this action, we are clarifying that in such situations, owners or operators may choose which wall to define as the “windward wall” for placing differential pressure monitors. We are also adding regulatory text that allows a permit authority to approve an alternative location for the third monitor placed between the windward and leeward wall monitors. Industry commenters stated that irregularly shaped enclosures would make it difficult to determine where to place the monitor under the current requirements. This clarification will not adversely affect the quality or frequency of data collection from differential pressure monitors.

The 2012 final rule for secondary lead smelters requires differential pressure monitors in order to demonstrate continuous compliance with the requirements of 40 CFR 63.544(c)(1). Industry petitioners stated that the 2012 final rule creates uncertainty about how to handle data collected from differential pressure monitors. The 2012 final rule did not explicitly state how to use the data collected from the monitors, although the rule did incorporate 40 CFR 63.10(b)(2)(vii), which requires records of 15-minute averages of data collected from continuous monitoring systems. In this action, we are clarifying that the data collected from the continuous pressure monitors must be used to calculate 15-minute averages that are used to demonstrate compliance. This amendment does not alter the impacts of the 2012 final rule. Rather, it simply clarifies the existing requirements already included in the 2012 rule by explicitly stating the requirements previously referenced in the general provisions.

The 2012 final rule included a requirement for differential pressure monitors with “minimum accuracy of plus or minus 0.001 millimeters of mercury (0.0005 inches of water).” See 40 CFR 63.548(k)(3). Industry has expressed concerns that there are not monitors available with certified accuracy at the levels prescribed in the 2012 final rule. We included the accuracy requirement in the 2012 final rule to ensure that the differential pressure monitors display and record data with sufficient sensitivity to demonstrate compliance with the standard. Our goal was to require monitors that display and record data with sufficient significant figures, rather than a specific certified accuracy level. We are clarifying this requirement in the regulatory text. We are changing the sensitivity requirement from 0.0005 inches of water to 0.001 inches of water. Industry commenters noted difficulty finding monitors with sufficient sensitivity to meet the original requirement. Monitors capable of recording data in increments of 0.001 inches of water are sufficient to determine compliance with the standard. This clarification will not have any impact on the cost or environmental impacts of the 2012 final rule or impact the quality or frequency of differential pressure data collection.

We are amending the regulatory text to simplify requirements for calibrating differential pressure monitors. See 40 CFR 63.548(k)(5). We have changed the regulatory text to require calibration per manufacturer's specifications rather than on a prescribed schedule. It has come to our attention that some manufacturers of differential pressure monitors do not require or recommend calibration as frequently as once per year. The amended requirements will ensure that monitors are calibrated properly without requiring adjustments more frequently than manufacturers recommend.

We are adding regulatory text to address how negative pressure within total enclosures must be monitored when those enclosures only open into other totally enclosed process areas. If a source, or group of sources, is in a totally enclosed part of a building that only opens into other areas that are also totally enclosed under negative pressure, the source only needs to monitor differential pressure on the outermost walls of the enclosure that opens to areas that are not enclosed under negative pressure. This change ensures that facilities maintain negative pressure in structures housing process areas without unnecessary monitoring requirements. It is redundant to monitor negative pressure in process areas that open into other totally enclosed process areas under negative pressure. Additionally, it has come to our attention that there are technical difficulties associated with monitoring negative pressure in areas that open into other areas also under negative pressure. The modified regulatory text will ensure that monitors are able to function properly by specifying that monitors are not to be placed on walls with no exposure to ambient pressure on either side of the wall.

We have not made any other changes to the final rule in this direct final action. We note that we are not re-proposing, reconsidering, or in any other way re-opening any other aspects of the final rule for comment through this direct final action.

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

This action does not impose any new information collection burden. This action adds clarifications and corrections to the final standards. However, OMB has previously approved the information collection requirements contained in the existing regulation (40 CFR part 63, subpart X) under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501, et seq., and has assigned OMB control number 2060-0296. The OMB control numbers for EPA's regulations in 40 CFR are listed in 40 CFR part 9.

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

For purposes of assessing the impact of this rule on small entities, small entity is defined as: (1) A small business as defined by Small Business Administration (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impact of this direct final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This final rule will not impose any requirements on small entities because it does not add any additional regulatory requirements and only clarifies the existing compliance requirements.

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

This action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments because it contains no requirements that apply to such governments nor does it impose obligations upon them.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This direct final rule primarily affects private industry, and does not impose significant economic costs on state or local governments. Thus, Executive Order 13132 does not apply to this action.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have substantial direct effect 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 action.

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

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

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

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

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

EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. This action merely corrects and clarifies existing requirements, it does not change any regulatory requirements.

The Congressional Review Act, 5 U.S.C. 801, et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that, before a rule may take effect, the agency promulgating the rule must submit a rule report which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this final rule and other required information to the United States Senate, the United States House of Representatives and the Comptroller General of the United States prior to publication of the direct final rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). The final rule will be effective on March 4, 2014.

For the reasons stated in the preamble, part 63 of title 40, chapter I, of the Code of Federal Regulations is amended as follows:

Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.