The proposed rule has been determined to be not significant under E.O. 12866 and has been reviewed by the Office of Management and Budget.

The Regulatory Flexibility Act ensures that regulatory and information requirements are tailored to the size and nature of small businesses, small organizations, and small governmental jurisdictions. This proposed rule will not have a significant economic impact on small businesses participating in the program.

This proposed rule has been reviewed under Executive Order 12988. The provisions of this proposed rule would not have a preemptive effect with respect to any State or local laws, regulations, or policies which conflict with such provision or which otherwise impede their full implementation. The proposed rule would not have a retroactive effect. Before any judicial action may be brought forward regarding this proposed rule, all administrative remedies must be exhausted.

The Administrator has determined that this action will not have a significant effect on the quality of the human environment. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is necessary for this proposed rule.

Public Law 104-4 requires consultation with state and local officials and Indian tribal governments. This proposed rule does not impose an unfunded mandate or any other requirement on state, local, or tribal governments. Accordingly, these programs are not subject to the provisions of the Unfunded Mandates Reform Act.

This Order requires careful evaluation of governmental actions that interfere with constitutionally protected property rights. This proposed rule would not interfere with any property rights and, therefore, does not need to be evaluated on the basis of the criteria outlined in Executive Order 12630.

Foreign Agricultural Service (FAS) is committed to compliance with the Government Paperwork Elimination Act, which requires Government agencies, in general, to provide the public the option of submitting information or transacting business electronically to the maximum extent possible.

The proposed rule at 7 CFR part 6 would revise the Dairy Tariff-Rate Import Quota Licensing regulation by suspending, for a period of 5 years, the provisions with respect to the reduction of historical licenses based on surrenders of unused amounts. Import licensing is one of the tools the U.S. Department of Agriculture (USDA) uses to administer the tariff-rate quota (TRQ) system for U.S. imports of dairy products. TRQs replaced strictly quantitative import quotas for dairy products on January 1, 1995, as a result of the Uruguay Round Agreement on Agriculture and the Uruguay Round Agreements Act. Under these TRQs, a low-tariff rate, called the in-quota rate, applies to imports up to a specified quantity. A higher tariff rate, called the over-quota rate, applies to any imports in excess of that amount. TRQ rates and quantities vary by product.

For dairy products subject to TRQs, a license issued by the FAS is generally required to import products at the in-quota rate. No license is required to import products at the over-quota rate.

Under the historical license reductions provisions, the amount of the license issued by FAS is reduced if the importer surrenders more than 50 percent of the license at least 3 out of 5 consecutive years. Section 6.25(b)(1)(i) provides that beginning with the quota year 2011, if a licensee surrenders more than 50 percent of a historical license in at least 3 out of the 5 prior years, that license will be permanently reduced to the average amount entered during those 5 years. These provisions are intended to provide a strong incentive for companies with historical licenses to utilize their licenses.

In 2008, the regulations were revised to suspend these provisions for the 2009 and 2010 quota years, thereby delaying their implementation until 2011. The following background statement was included: “Market conditions are always subject to fluctuation and change, and it is incumbent upon all license holders to adjust to these changing conditions. Nonetheless, to allow additional time to adjust to changes in EU's supply and demand, due to its long-term dairy policy changes, the Department will temporarily suspend the historical license reduction provisions for a period of 2 years, commencing in 2009. Historical license reductions will again be implemented beginning 2011, rather than in 2012 or 2014, as in the proposed rule.”

As the circumstances that prompted the previous suspension continue, an additional temporary suspension is proposed to improve program administration and reflect ongoing changes in the markets for cheese and other dairy products subject to import licensing requirements. The historical licenses provide for orderly importation of a wide variety of cheeses and permit companies to invest in market development with some assurance of future ability to provide specific types of cheese.

For the reasons described in the preamble, 7 CFR part 6 is proposed to be amended as follows:

The five draft guidance documents announced through this notice were selected in response to the USDA Office of Inspector General's (OIG) March 2010 Audit Report 01601-03-Hy: Oversight of the National Organic Program. The OIG findings identified specific areas of the NOP regulations where OIG recommended guidance be issued to strengthen oversight by ACAs and improve consistency and overall administration of the NOP. The NOP specifically developed Commingling and Contamination Prevention in Organic Production and Handling (NOP 5025) and Outdoor Access for Organic Poultry (NOP 5024) draft guidance in response to the OIG report. The OIG also identified the need for the NOP to act upon recommendations issued by the National Organic Standards Board (NOSB) from 2001 to 2010. The NOP developed The Use of Chlorine Materials in Organic Production and Handling (NOP 5026) and Compost and Vermicompost in Organic Crop Production (NOP 5021) in response to outstanding NOSB recommendations. The NOP also identified a need to develop guidance to address requests by ACAs and certified operations for clarifications on particular issues. Wild Crop Harvesting (NOP 5022) is an example of guidance being issued in response to these requests.

These draft guidance documents are being issued in accordance with the Office of Management and Budget (OMB) Bulletin on Agency Good Guidance Practices (GGPs) (January 25, 2007, 72 FR 3432-3440).

The purpose of GGPs is to ensure that program guidance documents are developed with adequate public participation, are readily available to the public, and are not applied as binding requirements. The draft guidance, when finalized, will represent the NOP's current thinking on these topics. It does not create or confer any rights for, or on, any person and does not operate to bind the NOP or the public. Guidance documents are intended to provide a uniform method for operations to comply that can reduce the burden of developing their own methods and simplify audits and inspections. Alternative approaches that can demonstrate compliance with the Organic Foods Production Act (OFPA), as amended (7 U.S.C. 6501-6522), and its implementing regulations are also acceptable. The NOP strongly encourages industry to discuss alternative approaches with the NOP before implementing them to avoid unnecessary or wasteful expenditures of resources and to ensure the proposed alternative approach complies with the Act and its implementing regulations.

Persons with access to Internet may obtain the draft guidance at either NOP's Web site at http://www.ams.usda.gov/nop or http://www.regulations.gov.

Comments submitted in writing or in electronic form will be posted on the NRC Web site and on the Federal rulemaking Web site http://www.regulations.gov. Because your comments will not be edited to remove any identifying or contact information, the NRC cautions you against including any information in your submission that you do not want to be publicly disclosed. The NRC requests that any party soliciting or aggregating comments received from other persons for submission to the NRC inform those persons that the NRC will not edit their comments to remove any identifying or contact information, and therefore, they should not include any information in their comments that they do not want publicly disclosed.

You can access publicly available documents related to this document using the following methods:

NRC's Public Document Room (PDR): The public may examine and have copied for a fee publicly available documents at the NRC's PDR, Room O-1F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland.

NRC's Agencywide Documents Access and Management System (ADAMS): Publicly available documents created or received at the NRC are available electronically at the NRC's Electronic Reading Room at http://www.nrc.gov/reading-rm/adams.html. From this page, the public can gain entry into ADAMS, which provides text and image files of NRC's public documents. If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the NRC's PDR reference staff at 1-800-397-4209, or 301-415-4737, or by e-mail to PDR.Resource@nrc.gov. The draft Part 37 implementation guidance is available electronically under ADAMS Accession Number ML101470684.

Federal Rulemaking Web site: Public comments and supporting materials related to the implementation guidance, including the draft implementation guidance, can be found at http://www.regulations.gov by searching on Docket ID NRC-2010-0194. Documents related to the proposed rule can be found by searching on Docket ID NRC 2008-0120.

The NRC published a proposed rule that would place the security requirements for use of Category 1 and Category 2 quantities of radioactive material into a new Part 37 of Title 10 of the Code of Federal Regulations. The proposed rule was published on June 15, 2010 (75 FR 33902) and the public comment period runs through October 13, 2010. The public comment period for the proposed rule is being extended to January 18, 2011, by separate notice. Documents related to the proposed rule can be found at http://www.regulations.gov by searching on Docket ID NRC 2008-0120.

In conjunction with the proposed rule, the NRC has developed implementation guidance. The implementation document provides guidance to a licensee or applicant for implementation of proposed 10 CFR Part 37, “Physical Protection of Byproduct Material,” specifically Category 1 and Category 2 quantities of radioactive material. It is intended for use by applicants, licensees, Agreement States, and NRC staff. The document describes methods acceptable to the NRC staff for implementing proposed 10 CFR Part 37. The approaches and methods described in the document are provided for information only. Methods and solutions different from those described in the document are acceptable if they meet the requirements in proposed 10 CFR Part 37. The guidance is provided in the form of questions and answers on the provisions of the proposed rule. The draft implementation guidance document for proposed 10 CFR Part 37 is available electronically under ADAMS Accession Number ML101470684, and can also be found at http://www.regulations.gov by searching on Docket ID: NRC-2010-0194.

On July 14, 2010 (75 FR 40756), the NRC noticed the availability of the implementation guidance for public comment. The public comment period for this guidance was to have expired on November 12, 2010. The NRC received several requests to extend the comment period to January 15, 2011. Due to the size and complexity of the draft implementation guidance and the associated proposed rule, the NRC has decided to extend the comment period until January 18, 2011.

Comments submitted in writing or in electronic form will be posted on the NRC Web site and on the Federal rulemaking Web site http://www.regulations.gov. Because your comments will not be edited to remove any identifying or contact information, the NRC cautions you against including any information in your submission that you do not want to be publicly disclosed. The NRC requests that any party soliciting or aggregating comments received from other persons for submission to the NRC inform those persons that the NRC will not edit their comments to remove any identifying or contact information, and therefore, they should not include any information in their comments that they do not want publicly disclosed.

You can access publicly available documents related to this document using the following methods:

NRC's Public Document Room (PDR): The public may examine and have copied for a fee publicly available documents at the NRC's PDR, Room O-1 F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland.

NRC's Agencywide Document Access and Management System (ADAMS): Publicly available documents created or received at NRC are available electronically at the NRC's Electronic Reading Room at http://www.nrc.gov/reading-rm/adams.html. From this page, the public can gain entry into ADAMS, which provides text and image files of the NRC's public documents. If you do not have access to ADAMS or if there are problems in accessing the documents located in ADAMS, contact the NRC's PDR reference staff at 1-800-397-4209, or 301-415-4737, or by e-mail to PDR Resource.

Federal Rulemaking Web site: Public comments and supporting materials related to this proposed rule can be found at http://www.regulations.gov by searching on Docket ID: NRC-2009-0163.

On June 15, 1979 (44 FR 34466), NRC published an interim final rule in the Federal Register that established its first requirements for the physical protection of spent nuclear fuel in transit. The interim final rule added 10 CFR 73.37, “Requirements for Physical Protection of Irradiated Reactor Fuel in Transit” to 10 CFR part 73. After considering public comments, the Commission affirmed the interim final rule on June 3, 1980 (45 FR 37399).

The current § 73.37 has changed little since its promulgation in 1980. These regulations require licensees to establish a physical protection system for spent nuclear fuel shipments that meets the following objectives: (1) Minimize the possibilities for radiological sabotage of spent nuclear fuel shipments, especially within heavily populated areas, and (2) facilitate the location and recovery of spent nuclear fuel shipments that may have come under the control of unauthorized persons. The regulation also provides for: (1) The early detection and assessment of attempts to gain unauthorized access to or control over spent nuclear fuel shipments, (2) the notification to the appropriate response forces of any sabotage events, and (3) the impeding of attempts at radiological sabotage of spent nuclear fuel shipments in heavily populated areas or attempts to illicitly move such shipments into heavily populated areas.

Other NRC regulations support the protection of spent nuclear fuel in transit. The regulations in § 73.72, “Requirement for Advance Notice of Shipment of Formula Quantities of Strategic Special Nuclear Material, Special Nuclear Material of Moderate Strategic Significance, or Irradiated Reactor Fuel” require licensees to notify NRC in advance about shipments of spent nuclear fuel. The regulations in 10 CFR part 71, “Packaging and Transportation of Radioactive Material,” establish requirements for packages used to transport spent nuclear fuel.

This proposed rule would consider and address, in part, a petition for rulemaking submitted by the State of Nevada. By a letter dated June 22, 1999, the State of Nevada submitted a petition for rulemaking requesting that NRC strengthen its regulations governing the security of spent nuclear fuel shipments against malevolent acts. The NRC docketed the petition on July 13, 1999, as Docket No. PRM-73-10 (PRM-73-10). The NRC published a notice of receipt of petition and a request for public comment on September 13, 1999 (64 FR 49410). The Commission review of this petition was tabled following the terrorist attacks of September 11, 2001. The petition was denied, in part, by the NRC on December 7, 2009 (74 FR 64012). This proposed rulemaking would consider and address the remaining requests for the NRC rulemaking made in PRM-73-10.

Although the current § 73.37 has changed little since its promulgation in 1980, there have been significant changes in the threat environment. The terrorist attacks of September 11, 2001, heightened concerns about the use of risk-significant radioactive materials in a malevolent act. After the terrorist attacks of September 11, 2001, the NRC issued a series of security-related orders to specific licensees. In the area of spent nuclear fuel transit security, the orders were issued to licensees who shipped or received, or were planning to ship or receive, spent nuclear fuel. The orders were issued as immediately effective under the NRC's authority to protect the common defense and security under the Atomic Energy Act of 1954, as amended (AEA). The requirements established by the orders supplement the existing regulatory requirements. These additional security requirements are primarily intended to ensure that spent nuclear fuel is shipped in a manner that protects the common defense and security, and the public health and safety.

About two thousand NRC regulated shipments of spent nuclear fuel have been made throughout the United States since the 1970s. The primary objective of these shipments has been to move spent nuclear fuel to interim storage. These spent fuel shipments are generally divided into two categories: commercial shipments or DOE managed spent nuclear fuel shipments. Commercial spent nuclear fuel shipments are from the NRC-licensed facilities such as commercial nuclear power reactors, research and test reactors, and facilities for non-destructive testing and analysis of spent nuclear fuel. The DOE-managed shipments involve shipments to DOE owned interim spent nuclear fuel storage facilities.

The safe and secure shipment of spent nuclear fuel requires coordination and collaboration between various Federal, State, Tribal and local government agencies. These organizations work together to create an orderly pattern for shipments of spent nuclear fuel.

1. What is the role of NRC in spent nuclear fuel transit? Generally, the NRC regulates the design and construction of spent nuclear fuel shipping containers for domestic and foreign packages used to transport spent nuclear fuel solely within the United States. Although DOT is the lead government agency responsible for the approval of export and import packages, it relies on the NRC's evaluation as the basis for approval of these packages. In addition, NRC regulates the physical protection of commercial spent nuclear fuel in transit against sabotage or other malicious acts, which is recognized in the DOT routing regulations in 49 CFR 397.101. The NRC requirements in 10 CFR Part 73 are applied to shipments of spent nuclear fuel from the NRC licensees.

2. What is the role of DOT in spent nuclear fuel transit? The DOT regulates the transportation of hazardous materials, including spent nuclear fuel in interstate and intrastate commerce. Generally, DOT regulates in consultation with NRC the carriers of spent nuclear fuel and the conditions of transport, such as routing, handling and storage incident to transport, and vehicle and driver requirements. The DOT also regulates the labeling, classification, and marking of all spent nuclear fuel packages and transport vehicles.

3. What is the role of DOE? For over 50 years, DOE has transported spent nuclear fuel to interim storage facilities. These spent nuclear fuel shipments have originated from the following: (1) Foreign research reactors; (2) DOE-owned research and defense reactors, and (3) nuclear powered U.S. Navy ships. In addition, on a few rare occasions, the DOE has accepted some spent nuclear fuel from commercial nuclear power plants, e.g., Three Mile Island Unit 2, for storage at its facilities.

The DOE managed shipments of spent nuclear fuel, unless designated as a national security shipment, are conducted under requirements equivalent to those of DOT and NRC. The DOE complies with the DOT highway section criteria and carrier safety provisions. The DOE spent nuclear fuel packages are required to meet the NRC design and performance criteria in 10 CFR part 71, which is also stated in the DOT regulations in 49 CFR 173.7(d). Spent nuclear fuel shipments made by DOE or the DOE contractors are not subject to the NRC physical protection requirements because DOE is not a NRC licensee. DOE's policy, however, is that DOE managed spent nuclear fuel shipments meet or exceed NRC physical protection requirements.

4. What is the role of State, local, and Tribal governments? State, local and Tribal governments play an important role in the safe and secure transport of spent nuclear fuel. They assist in route planning and, for many shipments, provide armed escorts. They enforce the DOT highway safety regulations, including the performance of shipment inspections. State, local, and Tribal governments are also responsible for providing the first line of government response to accidents and incidents within their jurisdiction.

The NRC is proposing amendments to its regulations to enhance the security requirements that apply to the transportation of spent nuclear fuel. This proposed rulemaking would establish generically applicable security requirements similar to those previously imposed by Commission orders issued after the terrorist attacks of September 11, 2001. The proposed rulemaking would also add several new requirements not derived directly from the security order requirements, but developed as a result of insights gained by performing security assessments of potential security vulnerabilities associated with spent nuclear fuel in transit. Also, the proposed rulemaking would address, in part, the requests for the NRC rulemaking raised by PRM-73-10.

The proposed requirements would establish acceptable performance objectives for the protection of spent nuclear fuel in transit from sabotage, theft, or diversion for malevolent use. These requirements would ensure that spent nuclear fuel is shipped in a manner that protects the common defense and security, and public health and safety.

After the attacks of September 11, 2001, NRC re-evaluated its security requirements for spent nuclear fuel in transit. From this effort, additional measures were identified that would improve security. The additional security measures deemed immediately necessary were issued as orders and supplemented existing regulations. The orders are not publically available, because they contain detailed security requirements that are designated as Safeguards Information (SGI). The proposed revisions are based on the NRC efforts undertaken since the events of September 11, 2001, including issuance of additional security requirements by orders, insights gained from implementation of the orders, and insights gained by performing security assessments of potential security vulnerabilities associated with spent nuclear fuel transportation. The proposed revisions also reflect portions of the State of Nevada's Petition for Rulemaking (PRM-73-10). The NRC intends to rescind the security orders provided the final rule adequately addresses the security requirements set forth in those orders. Rescission will be addressed in the notice of final rulemaking.

By a letter dated June 22, 1999, the State of Nevada submitted a rulemaking petition (docketed as PRM-73-10) requesting that NRC initiates rulemaking to strengthen its regulations for the physical protection of spent nuclear fuel shipments against radiological sabotage and terrorist acts. The NRC published a notice of receipt of petition and a request for public comment on September 13, 1999 (64 FR 49410). The Commission review of this petition was tabled following the terrorist attacks of September 11, 2001.

In PRM-73-10, Nevada requested that NRC: (1) Clarify the meaning of the term “hand-carried equipment” in 10 CFR 73.1(a)(1)(i)(D); (2) clarify the definition of the term “radiological sabotage” in 10 CFR 73.2 to include actions against spent nuclear fuel shipments which are intended to cause a loss of shielding, release of radioactive materials or cause economic damage or social disruption, regardless of the success or failure of the action; (3) amend the advance route approval requirements in 10 CFR 73.37(b)(1)(vi) to require shippers and carriers of spent nuclear fuel to identify primary and alternative routes which avoid heavily populated areas; (4) require armed escorts along the entire road shipment route by eliminating the differential based on population in 10 CFR 73.37(c); (5) require armed escorts along the entire rail shipment route by eliminating the differential based on population in 10 CFR 73.37(d); (6) amend 10 CFR 73.37(b) by adopting additional planning and scheduling requirements for spent nuclear fuel shipments that are the same as those required for formula quantities of special nuclear material by 10 CFR 73.26(b); (7) amend 10 CFR 73.37(d) to require that rail shipments of spent nuclear fuel be made in dedicated trains; and (8) conduct a comprehensive assessment of the consequences of terrorist attacks that have the capability of radiological sabotage.

In this proposed rulemaking, the NRC will consider the above items raised in PRM-73-10, except for the first and eighth items, namely, clarification of the meaning of the term “hand-carried equipment” and the conducting of a comprehensive assessment of the consequences of terrorist attacks that have the capability of radiological sabotage. Rulemaking on the first and eighth items of PRM-73-10 was denied by the NRC on December 7, 2009 (74 FR 64012). The remaining items are addressed below:

PRM-73-10, Item 2: Clarify the definition of the term “radiological sabotage” in § 73.2, “Definitions,” and amend it to expressly include “deliberate actions which cause, or are intended to cause economic damage or social disruption regardless of the extent to which public health and safety are actually endangered by exposure to radiation.”

The NRC considers that the existing definition already encompasses actions of the type described by the Petitioner. However, NRC agrees that clarification may be useful. The NRC is addressing this petition item by clarifying the definition of radiological sabotage in the supporting guidance document associated with the proposed rule.

PRM-73-10, Item 3: Amend the advance route approval requirements in 10 CFR 73.37(b)(7) to “specifically require shippers and carriers to identify primary and alternative routes which minimize highway and rail shipments through heavily populated areas.” Also, as part of this request, PRM-73-10 stated that NRC should consider adopting the route selection criteria in NUREG-0561, Physical Protection of Shipments of Irradiated Reactor Fuel in Transit, as part of the regulations, and specifically require shippers and carriers to minimize use of routes which fail to comply with the route selection criteria.

The NRC considered incorporating the route selection criteria of NUREG-0561 into the proposed rule, but determined that implementing such criteria may cause conflicts with the DOT requirements. Sections D through F below provide additional information about the differences between DOT and NRC routing criteria. The PRM-73-10 request for the adoption of routing criteria from NUREG-0561 was considered by the NRC and determined to be not appropriate.

The PRM-73-10 also requested that NRC amend its regulations to minimize highway and rail shipments through heavily populated areas. The NRC is addressing the goal of minimizing spent nuclear fuel shipments through heavily populated areas in the proposed rulemaking. The proposed revisions to 10 CFR 73.37 would require licensees to preplan and coordinate their shipments with the affected States. This issue is discussed below under “Why Require Shipment Preplanning and Coordination with States?” Combining the NRC proposed requirements, which include State involvement in licensees' planning activities, with the requirements of DOT is expected to minimize movement of spent nuclear fuel through heavily populated areas.

PRM-73-10, Items 4 and 5: The current regulations, § 73.37(c) and (d), for road and rail shipments, respectively, require armed escorts in heavily populated areas, but not in other areas along the route. PRM-73-10 requested that NRC eliminate these differential armed escort requirements based upon population for both road and rail spent nuclear fuel shipments.

Proposed §§ 73.37(c) and (d) include these PRM-73-10 requests. The differentiation of security requirements based upon population causes potential areas of vulnerability along the shipment route for theft, diversion, or radiological sabotage. The proposed rule would require that the same security requirements for heavily populated areas apply along the entire route for road and rail shipments, and at any U.S. ports where vessels carrying spent fuel shipments are scheduled to stop.

PRM-73-10, Item 6: Amend § 73.37(b) by adopting additional planning and scheduling requirements for spent nuclear fuel shipments that are the same as those required for formula quantities of special nuclear material by § 73.26(b). The regulations in § 73.26(b) require that shipments be scheduled to avoid delays and stops, and to ensure timely delivery of the shipment.

The NRC agrees that improvements are needed in the planning and coordination of shipments and has addressed this concern in the proposed amendment. This issue is discussed below under “Why Require Shipment Preplanning and Coordination with States?”

PRM-73-10, Item 7: Amend § 73.37(d) to require that all spent nuclear fuel rail shipments be made in dedicated trains.

The same NRC security requirements would apply to a spent nuclear fuel rail shipment, regardless of whether the shipment was made using a dedicated train or a mixed-use train. In either case, the licensee making the shipment would be required to ensure that the security protection measures (both hardware and personnel) required by the NRC's regulations would be present to provide the requisite high assurance of protection of public health and safety and the common defense and security during the entire duration of the shipment. The NRC considers the same level of security will be obtained regardless of whether the shipment is made in a dedicated train or mixed-use train. Thus, this item is not addressed as a part of the proposed rule.

The NRC invites comments on its proposed disposition of items 2 through 7 of PRM-73-10 as part of its consideration of this proposed rule. Comments should be sent to the address listed under the ADDRESSES heading of this document. The PRM-73-10 is available at ADAMS Accession Number: ML092540603 and the NRC's September 13, 1999, notice of receipt of petition and request for public comments (64 FR 49410) is available on the Federal Register 's Web site, http://www.gpoaccess.gov/fr/index.html.

The DOT has various terms to define and categorize radioactive material within the Title 49 of the Code of Federal Regulations. Within their definitions, DOT includes a category for highway route controlled quantity (HRCQ) which is defined as a quantity of radioactive material within a single package that exceeds: (a) 3,000 times the A 1 value of the radionuclides for special form material or 3,000 times the A 2 values of the radionuclides for normal form material; or (b) 1,000 TBq (27,000 curies), whichever is less. The HRCQ shipments can be made by all modes of transport. Spent nuclear fuel shipments fall under the DOT's definition of HRCQ.

For shipments by road, the DOT requirements for routing radioactive material are found in 49 CFR Parts 172 (Subpart I—Safety and Security Plans) and 397 (Subpart D—Routing of Class 7 (Radioactive) Materials). The DOT highway routing requires carriers to (1) Ensure routes are chosen based on minimizing radiological risk; (2) consider available information on accident rates, transit time, population density and activities, and the time of the day and the day of the week during which transportation will occur to determine the level of radiological risk; and (3) instruct the driver about the route and the hazards of the shipment. Furthermore, under the DOT requirements, HRCQ are transported only over preferred routes ( i.e., the Interstate Highway System, an alternative route designated by a State routing agency, or both), or an Interstate Highway System bypass or beltway around a city when available, unless a State routing agency has designated an alternative route. Routes can only be designated after substantive consultation with affected local jurisdictions and with any other affected States to ensure consideration of all impacts and continuity of affected routes. A written route plan is to be prepared by the carrier and provided to drivers and shippers.

The DOT allows motor carriers and drivers some deviation from the preferred route when picking up or delivering material, making necessary rest, fuel or motor vehicle repair stops, or because emergency conditions make continued use of the preferred route unsafe or impossible. In addition, a person may transport irradiated reactor fuel only in compliance with a plan that will ensure the physical security of the material. The DOT permits variation for security purposes from the routing requirements of 49 CFR 397.101 only so far as necessary to meet the requirements imposed under such a plan, or otherwise imposed by NRC in 10 CFR Part 73.

For shipments by rail, the DOT requirements for routing radioactive material are found within 49 CFR parts 172, 174 and 209. The DOT requires rail carriers to compile annual data on certain shipments of hazardous materials, including HRCQ. The data is used to analyze safety and security risks along rail routes where those materials are transported; assess alternative routing options; and make routing decisions based on those assessments. Rail carriers must assess the available routes ensuring, at a minimum, that 27 specific factors are considered. These 27 factors include, but are not limited to, consideration of rail traffic density, transit times, number and types of grade crossings, proximity to iconic targets, population densities and venues along the route.

Rail carriers must also seek relevant information from State, local, and Tribal officials, as appropriate, regarding security risks to high-consequence targets along or in proximity to a route used by a rail carrier to transport security-sensitive materials. Oversight is provided by the DOT Federal Railroad Administration (FRA), which includes review and inspection of rail carrier's risk analyses and route selection, but FRA does not pre-approve rail routes. If FRA determines that a carrier's route selection documentation and underlying analyses are deficient, the carrier may be required to revise the analyses or make changes in the route selection. In addition, if it is determined by DOT that a particular route chosen by the railroad is not the safest and most secure practicable route available, FRA can require the use of an alternative route until such time as the identified deficiencies for the originally chosen route are corrected by the railroad.

For spent fuel in quantities greater than 100 grams and exceeding 1 Sv (100 rems) per hour at a distance of 0.91 meters (3 feet) from any accessible surface without intervening shielding, licensees are required to transport such spent nuclear fuel along routes that have been pre-approved by NRC. Furthermore, the proposed rule text of § 73.37(b)(1) requires licensees to preplan and coordinate their routes with the States, including identification of safe havens.

The proposed rule does not include specific routing criteria for licensees to use when developing routes. However, the objective of § 73.37 is to minimize the potential for theft, diversion, or radiological sabotage for shipments of spent nuclear fuel. Licenses are expected to develop routes by considering criteria including, but not limited to: the DOT routing criteria, minimizing transit time, likelihood of swift response by local law enforcement, availability of safe havens (for road shipments), avoidance of tactically disadvantageous positions, availability of appropriate rest and refueling stops (for road shipments), and availability of good transportation safety features. When selecting a route by road, licensees are also expected to conduct surveys of the proposed route. The objective of these surveys is to locate safe havens, evaluate communications capability along the route, develop local law enforcement contacts, identify food and fuel stops for the carrier, and identify potential driving problems along the route.

Once a spent nuclear fuel shipment route request is received, the NRC reviews it closely. The NRC conducts a detailed review, considering route length and minimizing transit time, local law enforcement and emergency response contact information, adequacy of safe haven locations, and communications capability along the route. NUREG-0561, “Physical Protection of Shipments of Irradiated Reactor Fuel” provides guidance to licensees seeking the NRC-approval of a spent nuclear fuel shipping route.

The objective of § 73.37 is to minimize the potential for theft, diversion or radiological sabotage of spent nuclear fuel shipments; facilitate the location and recovery of spent fuel shipments that may have come under the control of unauthorized persons; and delay and impede attempts at theft, diversion or radiological sabotage of spent nuclear fuel shipments until response forces arrive. With this in mind, NRC expects licensees to route shipments according to the DOT requirements, and to consider the adequacy of the route to meet the objectives of § 73.37. This includes considering the availability and adequacy of safe havens along the route and the communications capabilities among the transport vehicle, escort vehicle, communications center, and local law enforcement agencies (LLEAs) for the entire route.

The DOT HRCQ routing regulations for road shipments are based on minimizing radiological risk to the public (49 CFR 397). The HRCQ are to be transported over preferred routes which are described in more detail in question D above. Carriers are permitted to deviate from preferred routes for certain conditions including, but not limited to: security reasons ( e.g., as imposed by NRC in 10 CFR Part 73) and emergencies. The DOT rail routing requirements for HRCQ require carriers to consider both safety and security of the public when selecting a route (49 CFR 172 and 209). The DOT requires rail carriers to select routes based on the criteria described above in question D. Rail carriers must assess the available routes using, at a minimum, 27 factors that address both safety and security of the transport.

As long as there is coordination among the licensee, the commercial carrier and the States of passage, NRC determined that spent nuclear fuel shipment primary and alternate routes for highway and rail can be developed that satisfy both the DOT and NRC requirements and guidelines. The NRC invites comments on the challenges of selecting routes for spent nuclear fuel that meets both the DOT and NRC requirements and guidance.

The proposed §§ 73.37(b)(3)(v) and (b)(4) would expressly require that licensees shipping spent nuclear fuel develop normal and contingency procedures. These procedures would cover notifications; communication protocols; loss of communication; and responses to actual, attempted, or suspicious activities. The proposed revisions would also require drivers, accompanying personnel, railroad personnel, and other movement control personnel to be adequately trained in normal and contingency procedures. These proposed requirements would ensure that all personnel associated with the shipment are prepared to prevent the theft, diversion, or radiological sabotage of spent nuclear fuel shipments. The proposed revisions would address, in part, PRM-73-10 items (3) and (6).

The current rule, at § 73.37(b)(4), requires that the licensee's physical protection plan include a communications center, which will be staffed continuously by at least one individual who will monitor the progress of the spent fuel shipment. The proposed rule would reflect the availability of new technology and as such, the ability to have more active control over the shipment by the licensee. The proposed § 73.37(b)(3)(i) would replace the term “communications center” with the term “movement control center.” The proposed § 73.37(b)(3)(ii) would also require that the movement control center be staffed continuously by at least one individual, who will actively monitor the progress of the spent nuclear fuel shipment and who has the authority to direct the physical protection activities. The proposed § 73.37(b)(3)(iii) would specify that the movement control center must monitor the shipment continuously, i.e., from the time of delivery of the shipment to the carrier for transport until safe delivery of the shipment at its final destination, and must immediately notify the appropriate agencies in the event of a safeguards event under the provisions of § 10 CFR 73.71.

In addition, the proposed §§ 73.37(c)(5) and 73.37(d)(4), for road and rail shipments respectively, would require movement control centers to use a telemetric position monitoring system or an alternative tracking system to monitor the location and status of shipments at all times, which would provide a real time indication of any potential threats. A telemetric position monitoring system is a data transfer system that captures information by instrumentation and/or measuring devices about the location and status of a transport vehicle or package between the departure and destination locations. The gathering of this information permits remote monitoring and reporting of the location of a transport vehicle or package. Global positioning systems (GPS) and radiofrequency identification (RFID) are examples of telemetric position monitoring systems. Since the movement control center is required to respond to any actual, attempted, or suspicious activities, the proposed requirements would mitigate the likelihood of theft, diversion, or radiological sabotage of spent nuclear fuel shipments.

The current regulations require limited shipment preplanning and coordination with NRC, States, and LLEAs. For example, the current § 73.37(f) regulation requires an advance notification to the Governor (or designee) by mail to be postmarked at least 7 days before transport of a shipment within or through the State; and require a messenger-delivered notification to reach the Office of the Governor (or designee) at least 4 days before transport of a shipment within or through the State. Some States have indicated that the current notification requirements are insufficient to adequately plan for a spent nuclear fuel shipment. In addition, the current § 73.37(b)(7) regulation requires licensees to obtain the advance NRC approval of the routes used for road and rail shipments of spent nuclear fuel, but does not require prior State coordination of the route. The proposed amendments would ensure that the affected States have early and substantial involvement in the management of spent nuclear fuel shipments by participating in the initial stages of the planning, coordination, and implementation of the shipment.

Proposed § 73.37(b)(1)(iv) would require licensees to preplan and coordinate spent nuclear fuel shipment information with the Governors of the States which the shipment will transit across in order to: (1) Ensure minimal shipment delays; (2) arrange for State law enforcement escorts; (3) coordinate movement control information, as needed; (4) coordinate safe haven locations; and (5) coordinate the shipping route. The proposed requirements would ensure that no unusual event associated with the shipment goes unnoticed or unreported. These proposed revisions mitigate the risk of theft, diversion, or radiological sabotage of a spent nuclear fuel shipment. These proposed revisions would address, in part, PRM-73-10 items 3 and 6.

Existing § 73.37(b)(9) requires constant visual surveillance by an escort when a shipment is stopped. It does not specify whether the escort should be armed. Proposed § 73.37(b)(3)(vii)(C) would ensure that when a shipment is stopped, at least one armed escort maintains constant visual surveillance. The constant surveillance by an armed escort while a shipment is stopped provides assurance that attempts by an adversary to either perform radiological sabotage in place, or to gain control of the transport to move it to another location are impeded or stopped. The requirements of proposed § 73.37(b)(3)(vii)(C) would address parked or stopped road shipments, rail shipment stops in marshaling areas, and docked sea shipments. It would also require periodic reports of shipment status to the movement control center by the armed escort. The proposed § 73.37(b)(3)(vii)(C) would provide adequate assurance that spent nuclear fuel shipments are protected from theft, diversion, or radiological sabotage when stopped.

The regulations in the current §§ 73.37(c), 73.37(d), and 73.37(e) provide for redundant communication capabilities; however, the requirements are specific, i.e., use of citizens band radio and radiotelephone. In view of the continued advancements in technology, these methods of communication could become obsolete in the near future. Instead of specifying an acceptable communications technology, the proposed revisions describe the performance characteristics of the communications capabilities.

Proposed §§ 73.37(c)(3), 73.37(d)(3) and 73.37(e)(4) would require the establishment of two-way communication capabilities for the transport vehicle and escorts to ensure contact between the movement control center and LLEAs at all times. The revisions would also require the establishment of alternate capabilities for the transport vehicle and escorts to contact the movement control center. The alternate communications cannot be subject to the same interference factors. The same interference factors are defined as any two systems that rely on the same hardware or software to transmit their signal (e.g., cell tower, proprietary network). These requirements would provide the capability for continued communication between movement control personnel, which would ensure the prompt reporting of any incident that could lead to theft, diversion, or radiological sabotage.

The proposed rule would add a new § 73.38 that would require licensees to conduct background investigations of those individuals being considered for unescorted access or access authorization relative to spent nuclear fuel in transit. The main objective of the background investigations is to ensure that those individuals who have unescorted access to spent nuclear fuel in transit and those individuals who have access to safeguards information relative to the spent nuclear fuel shipment, including but not limited to armed escorts, drivers, and movement control personnel are trustworthy and reliable and do not constitute an unreasonable risk to the public health and safety or common defense and security. These background investigations are similar to those already in place for unescorted access to a commercial nuclear power reactor in § 73.56(d), Background Investigation.

Section 149 of AEA requires that any person who is permitted unescorted access to radioactive materials subject to regulation by the Commission be fingerprinted for FBI identification and criminal history records check. However, Section 149 also requires that the Commission make a determination that such radioactive material is of such significance to the public health and safety or the common defense and security as to warrant fingerprinting and background checks before the Commission can exercise the authority provided by Section 149.

Pursuant to Section 149, the Commission has determined that the transportation of irradiated fuel (spent nuclear fuel) is of such significance to the public health and safety or the common defense and security as to warrant fingerprinting and background checks for those individuals who have such access to the materials in transit. Persons who have “unescorted access” to this material for purposes of Section 149, are persons accompanying the shipment of spent nuclear fuel during transit who have direct access and maintain control over the spent nuclear fuel. These persons may include, but are not limited to, the driver armed escorts and movement control center personnel.

Therefore, under the authority granted by Section 149, this rule would impose a requirement for fingerprinting as a prerequisite to granting unescorted access to spent nuclear fuel in transit. The criminal history records check obtained as a result of that fingerprinting would be used by licensees as part of the overall background investigation to determine the trustworthiness and reliability of these individuals prior to permitting unescorted access.

Proposed § 73.38(d) lists the requirements for a background investigation, including: informed consent, fingerprinting for an FBI identification and criminal history records check; verification of true identity; employment history evaluation; verification of education and military history; credit history evaluation; local criminal history review; and character and reputation determination.

Under proposed § 73.38(e), it is the licensee's responsibility to make a trustworthiness and reliability determination of an individual who has unescorted access or access authorization relative to a spent nuclear fuel shipment. It is expected that licensees will use their best efforts to obtain the information required to conduct a background investigation to determine the individuals' trustworthiness and reliability.

The full credit history evaluation requirement, in proposed § 73.38(d)(6), reflects the NRC's intent that all financial information available through credit reporting agencies is to be obtained and evaluated because it has the potential to provide highly pertinent information. The NRC recognizes that some countries may not have routinely accepted credit reporting mechanisms, and therefore, the NRC allows multiple sources of credit history that could potentially provide information about a foreign national's financial record and responsibility.

Fingerprinting an individual for an FBI criminal history records check, as would be required by the proposed § 73.38(d)(3), is an important element of the background investigation for determining the trustworthiness and reliability of an individual. It can provide comprehensive information regarding an individual's recorded criminal activities within the U.S. and its territories and the individual's known affiliations with violent gangs or terrorist organizations. In addition, the local criminal history review, which would be required by the proposed § 73.38(d)(7) provides the licensee with a record of local criminal activity that may adversely impact an individual's trustworthiness and reliability.

It is noted that the proposed § 73.38(d)(5)(iv) would require licensees to document any refusals by outside entities to provide information on an individual. If local law enforcement, a previous employer, an educational institution, or any other entity with which the individual claims to have been engaged fails to provide information or indicates an inability or unwillingness to provide information in a timely manner, the licensee would be required to document the refusal, unwillingness, or inability to respond in the record of investigation. The licensee would then need to obtain confirmation from at least one alternate source that has not been previously used. An alternate source could be another person associated with the entity or institution. For example, if the human resources department of a company will not verify the employment history of the individual, an alternate source could be the individual's supervisor during the claimed period. The proposed § 73.38(d)(10) is patterned after the requirements of § 73.56(d)(4)(iv).

The licensee would use all of the information gathered during the background investigation, including the information received from the FBI, in making a determination that an individual is trustworthy and reliable. The licensee may not determine that an individual is trustworthy and reliable and grant them unescorted access to spent nuclear fuel in transit until all of the information for the background investigation has been obtained and evaluated. The licensee may deny an individual unescorted access based on any information obtained at any time during the background investigation. The proposed § 73.38(e) includes a provision for licensees to document their determinations of trustworthiness and reliability.

The proposed rule would include a provision, § 73.38(h), that would require a reinvestigation every 10 years to help maintain the integrity of the program. This reinvestigation requirement is necessary because an individual's financial situation or criminal history may change over time in a manner that can adversely affect his or her trustworthiness and reliability. The reinvestigation would include fingerprinting, FBI identification and criminal history records check, local criminal history review and credit history check. The reinvestigation would not include employment verification, education verification, military history verification, or the character and reputation determination for the reinvestigation.

Yes. The proposed §§ 73.38(f)(1)-(2) would require licensees to protect the information obtained during a background investigation. Licensees would only be permitted to disclose the information to the subject individual, the individual's representative, those who have a need-to-know to perform their assigned duties to grant or deny unescorted access, or an authorized representative of NRC. This proposed revision is consistent with the requirements of § 73.57(f).

Yes. The proposed § 73.38(f)(3) includes a provision that a licensee would be able to transfer background information on an individual to another licensee if the individual makes a written request to the licensee to transfer the information contained in his or her file.

The proposed § 73.38(f)(5) would require licensees to retain all fingerprint and criminal history records received from the FBI, or a copy if the individual's file has been transferred, for 5 years after the individual no longer requires unescorted access to spent nuclear fuel in transit.

The current regulations in § 73.72(a)(4) require an NRC notification, by phone, at least 2 days before the shipment commences. The proposed rule would revise § 73.72(a)(4) to require 2 additional notifications of NRC, one to be made 2 hours before the shipment commences, and the other to be made when the shipment reaches its final destination. These additional notifications allow NRC to monitor spent nuclear fuel shipments, and to maximize its readiness in case of a safeguards event. The notification of shipment completion allows NRC to resume normal operations.

To further enhance notification of NRC, the proposed revision would remove the § 73.72(b) exemption for shipments of spent nuclear fuel that are transported on public roads. Currently, the requirements of § 73.72(b) exempt licensees who make a road shipment or transfer with one-way transit times of one hour or less between installations of the licensee from providing advance notification of the shipment to NRC. The proposed revision would require that NRC be informed of any spent nuclear fuel shipment on a public road so that NRC is able to monitor spent nuclear fuel shipments and to maximize its readiness in case of a safeguards event. These proposed revisions mitigate the risk of theft, diversion, or radiological sabotage of a shipment.

The DOE spent nuclear fuel shipments generally fall into two categories: Classified and non-classified shipments of spent nuclear fuel. Classified shipments are those shipments which involve national security. Classified shipments of spent nuclear fuel typically consist of spent fuel from the U.S. Navy. The DOE has broad authority under the Atomic Energy Act of 1954, as amended (AEA), to regulate all aspects of activities involving radioactive materials that are undertaken by DOE or on its behalf, including the transportation of radioactive materials. The DOE conducts classified shipments of spent nuclear fuel using their Office of Secure Transport (OST). The OST shipments are escorted full-time by armed, specially trained (trained in communications, firearms, tactics, observation, and use of deadly force) active duty Navy personnel who maintain 24-hour surveillance. The OST Transportation Emergency Communications Center monitors, tracks, and provides communication with every shipment. The NRC does not regulate classified shipments of spent nuclear fuel.

Non-classified shipments of spent nuclear fuel typically consist of spent fuel from commercial nuclear power reactors and research and test reactors. The DOE policy for non-classified spent nuclear fuel shipments are found under the DOE Orders 460.1C, Packaging and Transportation Safety and 460.2A, Departmental Materials Transportation and Packaging Management. As a matter of policy, the DOE non-classified spent nuclear fuel shipments are conducted under the requirements and standards applicable to comparable commercial shipments, i.e., the NRC requirements, except if there is a determination that national security or another critical interest requires different action.

The DOE requirements are set forth in the DOE Manual 460.2-1A, Radioactive Material Transportation Practices Manual. In this manual, it states that “Security will be provided in compliance with the NRC requirements in 10 CFR Part 73 for shipments subject to a NRC license. Other DOE shipments will be undertaken in a manner that meets or exceeds the NRC security requirements.” The DOE organizations and contractors ensure that in-transit requirements are addressed, including developing security plans, implementing information and physical security access controls, training, escorts, inspections, tracking, communications, and employee background checks.

As stated in O above, given the DOE policy to “meet or exceed” the NRC security requirements, the NRC and DOE requirements are similar. Similar to the NRC requirements, the DOE program organizations are expected to liaison with Federal, State, local and Tribal law enforcement/security officials regarding such shipments. This liaison should include a determination as to whether the State, Tribal or local jurisdictions are planning to provide escorts for the shipment. The DOE also expects drivers and escorts to maintain constant surveillance of the shipment.

One major difference between the NRC and DOE requirements deals with the tracking and monitoring of spent nuclear fuel shipments. The DOE requires the use of their Transportation Tracking and Communications System (TRANSCOM). In the proposed rule, NRC requires continuous and active monitoring of spent nuclear fuel shipments, but, a particular tracking method is not specified. The NRC determined that providing the performance objectives for continuous and active monitoring, rather than specifying a particular system gives a licensee flexibility to choose a system that works with their shipping situation.

Another difference between the NRC and DOE requirements is the protection of information. For NRC, information associated with a spent fuel shipment (i.e., shipment schedules and security plans) are protected as safeguards information (SGI) as specified by the requirements of §§ 73.21 and 73.22. The DOE does not have a system of information protection comparable to SGI. Shipment information for the DOE non-classified spent nuclear fuel shipment is official use only, unless there is a reason to designate it as classified.

The proposed amendments affect all the NRC licensees that are authorized to possess and transport spent nuclear fuel. This includes, but is not limited to, licensees of commercial power reactors, research and test reactors, and independent spent fuel storage installations, who transport, or deliver to a carrier for transport, in a single shipment, a quantity of irradiated reactor fuel in excess of 100 grams (0.22 lbs) in net weight of irradiated fuel, exclusive of cladding or other structural or packaging material, which has a total external radiation dose rate in excess of 1 Sv (100 rems) per hour at a distance of .91 meters (3 feet) from any accessible surface without intervening shielding.

In conjunction with this the proposed rulemaking, NRC is revising NUREG-0561, “Physical Protection of Shipments of Irradiated Reactor Fuel in Transit,” which was published in June 1980, to address the new requirements in the proposed rule. NUREG-0561 provides general guidance to licensees concerning the establishment of an acceptable security program for spent nuclear fuel shipments.

Tips for preparing your comments: When submitting your comments, remember to:

i. Identify the rulemaking (Docket ID: NRC-2009-0163).

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

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

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

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

vi. Explain your views as clearly as possible.

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

viii. See Section VII of the preamble for the request for comments on the use of plain language and Section XII for the request for comments on the draft regulatory analysis.

The proposed rule would revise § 73.37(a)(1) to include the International System of Measurement (SI) accompanied by the equivalent English units in parentheses for the weight and dose rate measurements. This is under the NRC's metrication policy (57 FR 46202, October 7, 1992), and the Metric Conversion Act of 1975, 15 U.S.C. 205a et seq. The proposed rule would also add a footnote to clarify that the term “irradiated reactor fuel,” as used in 10 CFR 73.37 fn.1, means “spent nuclear fuel.”

The language in the current regulation solely addresses potential radiological sabotage of spent nuclear fuel shipments. The proposed rule would revise § 73.37(a)(1)(i) to clarify that any attempted theft or diversion of spent nuclear fuel shipments is also covered by this regulation.

The proposed rule would also revise §§ 73.37(a)(1)(i) and (a)(2)(iii) to remove the distinction between heavily populated areas and other areas through or across which a spent nuclear fuel shipment may pass. The differentiation of security requirements based upon population densities creates potential vulnerabilities in the physical security of the shipment. The proposed requirement of armed escorts throughout the shipment route minimizes the risk of theft, diversion, or radiological sabotage. The proposed revisions would also address items 4 and 5 of the PRM-73-10.

The proposed rule would revise § 73.37(a)(2) to insert “system” after the word phrase “physical protection” to read as “physical protection system.” This change provides consistency in the terminology used throughout 10 CFR Part 73.

The proposed revision would renumber the paragraphs in § 73.37(a)(2). The current § 73.37(a)(2)(ii) would become the proposed § 73.37(a)(2)(iii), and the current § 73.37(a)(2)(iii) would become the proposed § 73.37(a)(2)(ii). The proposed rule would revise the current § 73.37(a)(2)(iii) to clarify that the licensee should delay, as well as impede, any attempted theft, diversion, or radiological sabotage of spent nuclear fuel shipments.

This overall section is revised to provide a logical, step-by-step approach to the development of a physical protection system for spent nuclear fuel shipments that is more user-friendly.

The proposed rule would add a new section entitled, “ Preplan and Coordinate Spent Nuclear Fuel Shipments,” which is explained in further detail below. The proposed rule would move and incorporate the current § 73.37(b)(1) into a new § 73.37(b)(2).

The proposed rule would add a new § 73.37(b)(1)(i) which requires that licensees instruct armed escorts on the use of deadly force. The existing provisions of § 73.37 provide performance objectives to be achieved by the physical protection system for spent nuclear fuel shipments. These performance objectives are not specific about the degree of force an armed escort may use in protecting shipments.

Specifically, the licensee is to ensure that each non-LLEA armed escort delay or impede attempted acts of theft, diversion, or radiological sabotage by using force sufficient to counter the force directed at that person, including the use of deadly force when there is a reasonable belief that the use of deadly force is necessary in self-defense or in the defense of others, or any other circumstances as authorized by applicable Federal or State law. The requirements for use of deadly force are established under applicable Federal and State laws (i.e., the States through which the shipment is passing). It should be noted that the proposed revision is not authorizing the use of deadly force, but instead is ensuring that the armed guards are knowledgeable of the Federal and State statutes that apply regarding the use of deadly force. The statutes regarding the use of deadly force may vary depending on the jurisdiction in which the shipment is located. Armed escorts are expected to carry out their assigned duties, including implementation of contingency procedures in case of attack, in a manner consistent with the legal requirements applicable to other private armed guards in a particular jurisdiction. The LLEA personnel escorts are exempt from this requirement since they are subject to, and should have received training on, State and Federal restrictions regarding the use of deadly force.

The proposed rule would add new §§ 73.37(b)(1)(ii) and 73.37(b)(1)(iii), which are accounting and control measures that ensure that only authorized individuals receive the shipment. The proposed requirements would reduce the risk of theft, diversion, or radiological sabotage of the spent nuclear fuel.

The proposed rule would re-designate § 73.37(b)(8) as § 73.37(b)(1)(iv) and revise it to include requirements for licensees to preplan and coordinate spent nuclear fuel shipments with States. The preplanning and coordination would include efforts to minimize intermediate stops and delays, arranging for State law enforcement escorts, the sharing of positional information and the development of route information, including the location of safe havens. The proposed amendments would ensure that States have early and substantial involvement in the management of spent nuclear fuel shipments by participating in the initial stages of the planning, coordination, and implementation of the shipment.

The proposed rule would re-designate § 73.37(b)(6) as § 73.37(b)(1)(v) and revise it to make minor editorial changes.

The proposed rule would re-designate § 73.37(b)(7) as § 73.37(b)(1)(vi) and revise it to expand the requirements for preplanning and coordination with NRC. The proposed § 73.37(b)(1)(vi) would require licensees to identify the locations of safe havens along road shipment routes, obtain the NRC route approval prior to the 10-day advance notice required by § 73.72(a)(2), and provide specific information to NRC, such as identification of the shipper, consignee, carriers, transfer points, modes of shipment, and a description of shipment security arrangements. In addition the proposed § 73.37(b)(1)(vi) reminds licensees that they must also comply with the applicable DOT routing requirements.

The proposed rule would add a new § 73.37(b)(1)(vii), which requires the documentation of preplanning and coordination activities.

The proposed rule would re-designate § 73.37(f), the advance notifications provision, as § 73.37(b)(2) and would revise it to include: (1) A reference to § 73.22 SGI protection requirements, (2) a reference to the NRC Web site listing contact information for State governors and governors' designees, (3) a requirement to include within the notification the license number of the shipper and receiver, and (4) a requirement to provide the estimated date and time of arrival of the shipment at the destination. The proposed § 73.37(b)(2) would also include new recordkeeping and shipment cancellation notification requirements.

The proposed rule would add a new § 73.37(b)(3) entitled, “ Transportation Physical Protection Program. ” The proposed § 73.37(b)(3) would both streamline and combine existing requirements in §§ 73.37(b)(3)-(5) and 73.37(b)(9)-(11).

Proposed § 73.37(b)(3)(i) would introduce the term “movement control center,” which replaces the term “communication center” used in the current regulation. The term “movement control center” is used for consistency with physical protection terminology and to better define the role and responsibilities of the facility. The movement control center is defined as an operations center which is remote from transport activity and which maintains periodic position information on the movement of the shipment, receives reports of attempted theft, diversion, or radiological sabotage, provides a means for reporting these and other problems to appropriate agencies, and can request and coordinate appropriate aid.

The proposed rule would re-designate § 73.37(b)(4) as § 73.37(b)(3)(ii) and revise it to reflect that the movement control center personnel will have the authority to direct physical protection activities. The proposed rule would also add a new § 73.37(b)(3)(iii), which will clarify the duties of the movement control center personnel.

The proposed rule would re-designate § 73.37(b)(5) as § 73.37(b)(3)(iv) and revise it to make minor editorial changes.

The proposed rule would add a new § 73.37(b)(3)(v), which requires licensees to develop, maintain, and implement written physical protection procedures to address access controls, duties of the movement control center personnel, drivers, armed escorts and other individuals responsible for the security of the shipment, reporting of safeguards events, communications protocols, and normal conditions operating procedures.

The proposed rule would add a new § 73.37(b)(3)(vi), which incorporates the recordkeeping requirements of the current §§ 73.37(b)(2) and (3).

The proposed rule would re-designate § 73.37(b)(10) as § 73.37(b)(3)(vii)(A) and revise it to include additional training requirements described in sections III and IV of Part 73, Appendix B. This revision is a clarification of the existing requirements in § 73.37. The current § 73.37(b)(10) refers to training requirements in 10 CFR part 73, Appendix D. Appendix D, in turn, refers to requirements in 10 CFR part 73, Appendix B, III and IV. For clarity, the proposed revision would add a direct reference to Appendix B.

The proposed rule would re-designate § 73.37(b)(11) as § 73.37(b)(3)(vii)(B) and revise it by changing the escort's requirement to contact the movement control center from “at least every 2 hours” to contacts at “random intervals, not to exceed 2 hours.” The proposed provision would also change “communications center” to “movement control center.”

The proposed rule would re-designate the current § 73.37(b)(9) as § 73.37(b)(3)(vii)(C) and would revise it by further clarifying the escort's responsibilities when the shipment vehicle is stopped, or the shipment vessel is docked. The proposed revisions would ensure that when a shipment is stationary at least one armed escort maintains constant visual surveillance. The proposed rule also would provide for periodic reports of shipment status to the movement control center by the armed escort.

The proposed rule would re-designate § 73.37(b)(2) as § 73.37(b)(4)(i)-(iii), “ Contingency and Response Procedures,” and would add additional requirements. The proposed rule would add new §§ 73.37(b)(4)(i) and 73.37(b)(4)(ii), which would require licensees to develop and implement contingency and response procedures, and would require licensees to train personnel in these procedures. The current requirements in § 73.37(b) do not specifically require personnel training, but only require escorts to receive instructions. The proposed rule would expressly require that written procedures are developed and that all personnel associated with the transport and security of the shipment are adequately trained to carry out their responsibilities. The proposed revisions provide reasonable assurance of a more timely and effective response to any attempted theft, diversion, or radiological sabotage. A response to an event must be initiated without delay in order to have a high probability of success. The response is more likely to be timely and effective if roles, responsibilities, and actions are clearly delineated and understood in advance.

The proposed rule would also add a new § 73.37(b)(4)(iii), which would incorporate the current § 73.37(b)(2) recordkeeping requirements.

The proposed rule would re-designate § 73.37(b)(3) as § 73.37(b)(4)(iv) and revise it to include the requirement that the contingency and response procedures direct the escort to take the necessary steps to delay or impede theft, diversion, or radiological sabotage of spent nuclear fuel in transit.

The proposed rule would revise § 73.37(c)(1) and delete § 73.37(c)(2) to eliminate the distinction between heavily populated areas and other areas through which a road shipment of spent nuclear fuel shipment may pass. Proposed § 73.37(c)(1) would require armed escorts for the entire shipment route. In addition, a new § 73.37(c)(1)(iii) would require non-LLEA armed escorts to have a minimum of two weapons. The NRC has determined that it is prudent to require a minimum of two weapons for each armed escort.

The proposed deletion of the current § 73.37(c)(2) would result in a renumbering of the section. The proposed rule would re-designate current § 73.37(c)(3) as § 73.37(c)(2) and revise it as described below. The requirements in the current § 73.37(c)(3) describe specific acceptable types of communication devices, i.e., use of citizens band radio, radiotelephone, which may become obsolete in the near future. Instead of specifying an acceptable communications technology, the proposed § 73.37(c)(2) revisions describe the performance characteristics of the communications capabilities.

The proposed rule would re-designate § 73.37(c)(4) as § 73.37(c)(3) and § 73.37(c)(5) as § 73.37(c)(4). The proposed rule would add a new § 73.37(c)(5), which would require continuous and active monitoring of the shipment by a telemetric position monitoring system or an alternative tracking system. The proposed revisions would ensure that shipments are continuously and actively monitored by a tracking system that communicates continuous position information to a movement control center. This requirement would allow the movement control center to receive positive confirmation of the location, status, and control of the shipment. These requirements would ensure immediate detection of any deviations from the authorized route, which will provide a prompt notification of any emergency or safeguards event. The proposed revisions would facilitate a more timely and effective response.

The proposed rule would revise § 73.37(d)(1) and delete § 73.37(d)(2) to eliminate the distinction between heavily populated areas and other areas through which a rail shipment of spent nuclear fuel may pass. The proposed § 73.37(d)(1) would require armed escorts for the entire shipment route. The proposed rule would add a new § 73.37(d)(2) to require a minimum of 2 weapons for non-LLEA armed escorts. The proposed rule would revise § 73.37(d)(3), which describes acceptable types of communication devices. The NRC recognizes that these devices may become obsolete in the near future. Instead of specifying acceptable communications technology, the proposed § 73.37(d)(3) describes the performance characteristics of the communication capabilities. The proposed rule would also add a new § 73.37(d)(4) which would address continuous and active monitoring of the shipment by a telemetric position monitoring system or an alternative tracking system.

The proposed rule would revise §§ 73.37(e)(1) and (e)(2) to eliminate the distinction between heavily populated areas and other areas for sea shipments of spent nuclear fuel. The proposed § 73.37(e)(1)(i) would require armed escorts at any U.S. port where vessels carrying spent nuclear fuel shipments are docked. Proposed § 73.37(e)(1)(i) would also require a minimum of two weapons for each non-LLEA escort. The proposed rule would revise § 73.37(e)(3) to eliminate the listing of communication devices. Instead of specifying acceptable communication technology, proposed § 73.37(e)(3) would describe the performance characteristics of the communication capabilities.

The proposed rule would re-designate the current § 73.37(f) as § 73.37(b)(2). A newly proposed § 73.37(f) would require an immediate investigation if a shipment is lost or unaccounted for after the designated no-later-than arrival time. This proposed requirement would facilitate the location and recovery of shipments that may have come under control of unauthorized persons.

The proposed rule would delete the reference to § 73.37(f)(3) and insert the reference to § 73.37(b)(2)(iii) to reflect the reorganization of § 73.37. It would also ensure that the final rule for the “Protection of Safeguards Information” (October 24, 2008, 73 FR 63546) is reflected in the proposed rulemaking. Under § 73.22(a), information to be protected as safeguards information in the proposed § 73.37 would include: (1) Schedules, itineraries, arrangements with LLEA, and locations of safe havens, which is the information described in § 73.37(b)(1), and §§ 73.37(b)(2)(iii)-(b)(2)(v); (2) the physical security plan, which is the information described in § 73.37(b)(3); (3) the procedures for response to security contingency events, and the tactics and capabilities required to defend against attempted theft, diversion, or sabotage, which is the information described in § 73.37(b)(4); and portions of inspection reports, evaluations, audits, or investigations that contain details of a licensee's or applicant's physical security system, which is the information described in § 73.37(f). In addition, according to § 73.22(a), vehicle immobilization features, intrusion alarm devices, and communications systems, including communication limitations, are also considered safeguards information.

Proposed § 73.38 would establish the personnel access authorization requirements for granting an individual unescorted access or access authorization relative to spent nuclear fuel in transit. Proposed § 73.38(a)(1) would specify the licensees subject to the requirements in the proposed section. Proposed § 73.38(a)(2) would provide that licensees are required to establish, implement, and maintain the overall effectiveness of the access authorization program. Proposed § 73.38(b) would establish the general performance objective to ensure that the individuals subject to the access authorization program are trustworthy and reliable. Proposed § 73.38(c)(1) would specify the individuals that would be subject to the access authorization program. Proposed § 73.38(c)(2) would indicate that individuals listed in § 73.59 are not subject to the investigative elements of the access authorization program.

Proposed § 73.38(d) would establish the background investigation requirements for individuals seeking unescorted access or access authorization relative to spent nuclear fuel in transit. For an individual seeking unescorted access or access authorization relative to spent nuclear fuel in transit, proposed §§ 73.38(d)(1)-(9) would require licensees to conduct fingerprinting and an FBI identification and criminal history records check; verification of true identity; employment history evaluation, verification of education; military history verification; credit history evaluation; criminal history review; character reputation and determination; and obtain independent information, respectively. Proposed § 73.38(d)(10) would allow a licensee to rely upon an alternate source that has not been previously used, if the licensee cannot obtain information on an individual from their previous employer, educational institution, or any other entity with which the individual claims to have been engaged. Proposed § 73.38(d)(10) is patterned after § 73.56(d)(4)(iv)(B).

Proposed § 73.38(e) would require licensees to make and document trustworthiness and reliability determinations after obtaining and evaluating the information required by §§ 73.38(d)(1)-(9). Licensees would be required to maintain records of trustworthiness and reliability for 5 years from the date the individual no longer requires unescorted access or access authorization relative to spent nuclear fuel shipments.

Proposed § 73.38(f) would require licenses to protect the information obtained from background investigations, while allowing licensees to transfer background information on an individual to another licensee if the individual makes a written request for such transfer. Proposed § 73.38(f) would allow a licensee to rely on the background information transferred from another licensee, provided that the receiving licensee verifies the name, date of birth, social security number, sex, and other applicable physical characteristics to ensure that the individual is the person whose file has been transferred.

A number of individuals who would be subject to the background investigation portion of this proposed rule may have recently satisfied similar requirements under the prior NRC orders. For such individuals, it would be an unnecessary use of resources to re-fingerprint them. Thus, proposed § 73.38(g) would permit persons to essentially re-use the results of a fingerprint check that has been created within 5 years of the effective date of the rule. This would not be “relieving” such individuals from the rule, but rather permitting them to satisfy the fingerprinting requirements by other means. It is important to emphasize, however, that a licensee's ability to use previous fingerprinting results is not a substitute for the licensee independently concluding that the person is suitable for unescorted access to spent nuclear fuel in transit, including subjecting the person to all other applicable requirements of the background investigation that would be required by § 73.38(d).

Proposed § 73.38(h) would establish the requirements for reinvestigation of individuals with unescorted access to spent nuclear fuel in transit. Proposed § 73.38(h) would establish completion of reinvestigations within 10 years of the last investigation. The scope of the investigation would be the past 10 years and would consist of fingerprinting and a FBI identification and criminal history records check; criminal history review; and credit history re-evaluation. Proposed § 73.38(i) would establish the requirements for individuals to self-report legal actions taken by a law enforcement authority or court of law to which the individual has been subject that could result in incarceration or a court order or that requires a court appearance. This paragraph requires the recipient of the report, if the recipient is not the reviewing official, to promptly convey the report to the reviewing official who will then evaluate the implications of those actions with respect to the individual's trustworthiness and reliability.

Proposed § 73.38(j) would establish the requirements that licensees would be required to develop, implement, and maintain written procedures for conducting the background investigations for persons applying for unescorted access or access authorization relative to spent nuclear fuel in transit. The procedures should address notification of individuals denied unescorted access or access authorization, including the basis for the denial or termination. The procedures should also provide for the review of the information by the affected individuals. It should also ensure that individuals who have been denied unescorted access or access authorization are not allowed unescorted access to spent nuclear fuel. These individuals could be escorted by an approved individual. These individuals should not receive access to safeguards information relative to spent nuclear fuel in transit.

Proposed § 73.38(k) would establish the requirements that an individual has the right to correct his or her criminal history records before any final adverse determination is made. If the individual believes that his or her criminal history records are incorrect or incomplete in any respect, he or she can initiate challenge procedures. These procedures would include direct application by the individual challenging the criminal history records to the law enforcement agency that contributed the questioned information. Proposed § 73.38(l) would establish the requirements that licensees retain documentation relative to the trustworthiness and reliability determination for 5 years after the individual no longer requires unescorted access or access authorization. The proposed rule would also require that corrected or new information be actively communicated by the recipient to other licensees.

The proposed rule would revise § 73.72(a)(4) to require 2 additional notifications of NRC, 1 to be made 2 hours before the commencement of the shipment and the other to be made when the shipment arrives at its final destination. The current requirements of § 73.72 require notification 2 days before the shipment commences, but not 2 hours before the shipment begins or when it ends.

The proposed rule would revise § 73.72(a)(5) to clarify the meaning of the language “greater than ±6 hours” that appears in the section. The proposed revision deletes “greater” and inserts “more,” and deletes the symbol “±.”

The current requirements in § 73.72(b) exempt licensees who make a road shipment or transfer with one-way transit times of one hour or less between installations of the licensee from providing advance notification of the shipment to NRC. The proposed amendment would remove this exemption from the regulations. This proposed revision would ensure that NRC is informed of any spent nuclear fuel shipment on a public road, even those of short duration, and NRC is prepared to respond to an emergency or safeguards event. It would mitigate the risk of theft, diversion, or radiological sabotage of a shipment.

For the purpose of Section 223 of the AEA, the NRC is proposing to amend 10 CFR Part 73 under one or more of Sections 161b, 161i, or 161o of the AEA. Willful violations of the rule would be subject to criminal enforcement.

Under the Policy Statement on Adequacy and Compatibility of Agreement State Programs approved by the Commission on June 30, 1997, and published in the Federal Register on September 3, 1997 (62 FR 46517), this rule is classified as a Compatibility Category NRC. The NRC analyzed the proposed rule under the procedure established within Part III, “Categorization Process for the NRC Program Elements,” of Directive Handbook 5.9, “Adequacy and Compatibility of Agreement State Programs” (a copy of which may be viewed at http://www.nrc.gov/reading-rm/doc-collections/management-directives/ ).

The NRC program elements in this category are those that relate directly to areas of regulation reserved to NRC by the AEA, or the provisions of 10 CFR. Although an Agreement State may not adopt program elements reserved to NRC, it may wish to inform its licensees of certain requirements via a mechanism that is consistent with the particular State's administrative procedure laws but does not confer regulatory authority on the State. The regulation of spent nuclear fuel is reserved to NRC and cannot be relinquished to an Agreement State. Thus, this rulemaking will have no impact on Agreement States' regulatory programs. Therefore, Agreement States will not need to make conforming changes to their regulations.

The Presidential Memorandum “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31885), directed that the Government's documents be written in clear and accessible language. The NRC requests comments on this proposed rule specifically with respect to the clarity and effectiveness of the language used. Comments should be sent to the address listed under the ADDRESSES heading of this document.

The National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113) requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless the use of such a standard is inconsistent with applicable law or otherwise impractical. The NRC is proposing to (1) Amend § 73.37, which contains the requirements for the physical protection of spent nuclear fuel in transit; (2) add a new § 73.38, which establishes the requirements for a background investigation of individuals applying for unescorted access to spent nuclear fuel shipments; and (3) amend § 73.72, which contains the requirements for the advance notification of NRC of spent nuclear fuel along with other special nuclear material. This action does not constitute the establishment of a standard that establishes generally applicable requirements.

Under the National Environmental Policy Act of 1969, as amended, and the NRC regulations in subpart A of 10 CFR part 51, NRC has determined that this proposed rule, if adopted, would not be a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement is not required for this rulemaking. The NRC has prepared an environmental assessment and, on the basis of this environmental assessment, has made a finding of no significant impact.

The implementation of the proposed rule's security requirements would not result in significant changes to the licensees' facilities, nor would such implementation result in any significant increase in effluents released to the environment. Similarly, the implementation of the proposed rule's security requirements would not affect occupational exposure requirements. No major construction or other earth disturbing activities, on the part of affected licensees, is anticipated in connection with licensees' implementation of the proposed rule's requirements. The NRC has determined that the implementation of this proposed rule would be procedural and administrative in nature.

The determination of this environmental assessment is that there will be no significant impact to the public from this action. However, the general public should note that NRC welcomes public participation. Comments on any aspect of the environmental assessment may be submitted to NRC as indicated under the ADDRESSES heading in this document.

The NRC will send a copy of the environmental assessment and this proposed rule to every State Liaison Officer, and will request their comments on the environmental assessment. The environmental assessment may be examined at the NRC Public Document Room, O-1 F21, 11555 Rockville Pike, Rockville, MD 20852.

This proposed rule contains new or amended information collection requirements that are subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). This rule has been submitted to the Office of Management and Budget for review and approval of the information collection requirements.

Type of submission, new or revision: Revision.

The title of the information collection: 10 CFR part 73, “Physical Protection of Plants and Materials,” The Proposed Rule.

The form number if applicable: NA.

How often the collection is required: On occasion.

Who will be required or asked to report: NRC licensees that are authorized to possess and transport spent nuclear fuel in excess of 100 grams (0.22 lbs) in net weight exclusive of cladding or other material, which has a total radiation level in excess of 1 Sv (100 rems) per hour at a distance of .91 meters (3 feet) from any accessible surface without regard to any intervening shielding.

An estimate of the number of annual responses: 360 (342 responses + 18 recordkeepers).

The estimated number of annual respondents: 18.

An estimate of the total number of hours needed annually to complete the requirement or request: 1,058 (59 hrs per respondent).

Abstract: The NRC is proposing to amend its regulations to enhance the requirements for the safety and security of spent nuclear fuel during transit and to make these applicable to all licensees by placing them in the 10 CFR. The proposed rulemaking would establish the minimum performance standards and objectives for the protection of spent nuclear fuel shipments from theft, diversion or radiological sabotage. The proposed amendments would affect licensees authorized to possess or transport spent nuclear fuel.

The NRC is seeking public comment on the potential impact of the information collections contained in this proposed rule and on the following issues:

1. Is the proposed information collection necessary for the proper performance of the functions of NRC, including whether the information will have practical utility?

2. Is the estimate of burden accurate?

3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?

4. How can the burden of the information collection be minimized, including the use of automated collection techniques?

A copy of the OMB clearance package may be viewed free of charge at the NRC Public Document Room, One White Flint North, 11555 Rockville Pike, Room O-1 F21, Rockville, MD 20852. The OMB clearance package and the proposed rule are available for 60 days after the signature date of this notice at the NRC worldwide Web site: http://www.nrc.gov/public-involve/doc-comment/omb/index.html .

Send comments on any aspect of these proposed regulations related to information collections, including suggestions for reducing the burden and on the above issues, by November 12, 2010 to the Records and FOIA/Privacy Services Branch (T-5 F52), U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, or by Internet electronic mail to Infocollects.Resource@NRC.gov and to the Desk Officer, Office of Information and Regulatory Affairs, NEOB-10202 (RIN-3150-AI64), Office of Management and Budget, Washington, DC 20503. Comments on the proposed information collections may also be submitted via the Federal eRulemaking Portal http://www.regulations.gov, Document ID: NRC-2009-0163. Comments received after this date will be considered if it is practical to do so, but assurance of consideration cannot be given to comments received after this date.

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

The NRC has prepared a draft regulatory analysis on this proposed regulation. The analysis examines the costs and benefits of the alternatives considered by the NRC.

The NRC requests public comment on the draft regulatory analysis. Comments on the draft analysis may be submitted to NRC as indicated under the ADDRESSES heading. The analysis is available for inspection in the NRC Public Document Room, 11555 Rockville Pike, Room 0-1 F21, Rockville, MD 20852.

Under the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)), the Commission certifies that this rule would not, if promulgated, have a significant economic impact on a substantial number of small entities. The companies that possess or transport spent nuclear fuel do not fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act or the size standards established by NRC (10 CFR 2.810).

The NRC has determined that the backfit rule (§§ 50.109, 70.76, 72.62, or 76.76) does not apply to this proposed rule because this amendment would not involve any provisions that would impose backfits as defined in 10 CFR Chapter I. Therefore, a backfit analysis is not required.

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

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2010-1021; Directorate Identifier 2010-CE-053-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

On February 4, 2004, we issued AD 2004-03-29, Amendment 39-13473 (69 FR 6553; February 11, 2004) and on June 30, 2008, we issued AD 2008-14-12, Amendment 39-15607 (73 FR 40951; July 17, 2008). Those ADs required actions intended to address an unsafe condition on the products listed above.

Since we issued AD 2008-14-12, Pacific Aerospace Limited has developed a new vertical stabilizer design to eliminate the cracking in the vertical stabilizer that occurred with the original design. The new vertical stabilizer design incorporates a forward spar and is a failsafe structure.

The Civil Aviation Authority (CAA), which is the aviation authority for New Zealand, has issued AD DCA/FU24/178, dated April 30, 2009 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

Pacific Aerospace Limited has issued Mandatory Service Bulletin PACSB/FU/094, Issue 1, dated August 14, 2008. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

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

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have proposed different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a Note within the proposed AD.

We estimate that this proposed AD will affect 3 products of U.S. registry. We also estimate that it would take about 1 work-hour per product to comply with the basic inspection requirements of this proposed AD. The average labor rate is $85 per work-hour.

Based on these figures, we estimate the inspection cost of the proposed AD on U.S. operators to be $255, or $85 per product.

We also estimate that it would take about 10.5 work-hours and require parts costing $14,375 to comply with the replacement requirements of this proposed AD.

Based on these figures, we estimate the replacement cost of the proposed AD on U.S. operators to be $45,802.50, or $15,267.50 per product.

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

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

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

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

1. Is not a “significant regulatory action” under Executive Order 12866;

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

3. 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.

We prepared a regulatory evaluation of the estimated costs to comply with this proposed AD and placed it in the AD docket.

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

We are proposing amendments to Items 1104 and 1121  2 of Regulation AB  3 (a subpart of Regulation S-K) under the Securities Act of 1933 (“Securities Act”). 4 We also are proposing to add Rules 15Ga-1  5 and 17g-7  6 and Form ABS-15G  7 under the Securities Exchange Act of 1934 (“Exchange Act”). 8

This release is one of several that the Commission is required to issue to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) related to asset-backed securities (“ABS”). In this release, we propose rules to implement Section 943 of the Act, which requires the Commission to prescribe regulations on the use of representations and warranties in the market for asset-backed securities:

(1) To require any securitizer to disclose fulfilled and unfulfilled repurchase requests across all trusts aggregated by securitizer, so that investors may identify asset originators with clear underwriting deficiencies; and

(2) To require each nationally recognized statistical rating organization (“NRSRO”) to include, in any report accompanying a credit rating for an asset-backed securities offering, a description of (A) the representations, warranties and enforcement mechanisms available to investors; and (B) how they differ from the representations, warranties and enforcement mechanisms in issuances of similar securities. 9

The Act requires us to adopt these rules within 180 days of enactment of the Act.

In April of 2010, we proposed rules that would revise the disclosure, reporting and offering process for asset-backed securities (the “2010 ABS Proposing Release”). 10 Among other things, the 2010 ABS Proposing Release proposed new disclosure requirements with respect to repurchase requests. Specifically, we proposed that issuers disclose in prospectuses the repurchase demand and repurchase and replacement activity for the last three years of sponsors of asset-backed transactions or originators of underlying pool assets if they are obligated to repurchase assets pursuant to the transaction agreements. 11 These disclosure requirements would apply to offerings of ABS registered under the Securities Act or ABS offered and sold without registration in reliance upon Securities Act rules, which includes both offerings eligible for Rule 144A resales and other offerings conducted in reliance on exemptions from registration. We also proposed that issuers disclose the repurchase demand and repurchase and replacement activity concerning the asset pool on an ongoing basis in periodic reports. 12 As described in Section II.B. below, we are re-proposing the disclosure requirements with respect to repurchase requests in Regulation AB in order to conform the disclosures to those required by Section 943 of the Act.

In the underlying transaction agreements for an asset securitization, sponsors or originators typically make representations and warranties relating to the pool assets and their origination, including about the quality of the pool assets. For instance, in the case of residential mortgage-backed securities, one typical representation and warranty is that each of the loans has complied with applicable federal, state and local laws, including truth-in-lending, consumer credit protection, predatory and abusive laws and disclosure laws. Another representation that may be included is that no fraud has taken place in connection with the origination of the assets on the part of the originator or any party involved in the origination of the assets. Upon discovery that a pool asset does not comply with the representation or warranty, under transaction covenants, an obligated party, typically the sponsor, must repurchase the asset or substitute a different asset that complies with the representations and warranties for the non-compliant asset. The effectiveness of the contractual provisions related to representations and warranties has been questioned and lack of responsiveness by sponsors to potential breaches of the representations and warranties relating to the pool assets has been the subject of investor complaint. 13

In reviewing Treasury regulations implementing the Privacy Act, the Department found that Executive Order 11652 listed in Section 1.26(g)(6)(ii)(A) has been superseded and needs to be updated. This section is being amended to reference Executive Orders 12958, 13526, or successor or prior Executive Orders as may be necessary.

Under 5 U.S.C. 552a(k)(1), the head of an agency may promulgate rules to exempt a system of records from certain provisions of 5 U.S.C. 552a if the system of records is subject to the provisions of 5 U.S.C. 552(b)(1), which regards matters specifically authorized under criteria established by an Executive Order to be kept secret in the interest of national defense or foreign policy and are in fact properly classified pursuant to such Executive Order.

To the extent that systems of records contain information subject to the provisions of 5 U.S.C. 552(b)(1), the Department of the Treasury proposes to exempt the systems of records from the following provisions of the Privacy Act pursuant to 5 U.S.C. 552a(k)(1):

The reason for invoking the exemption is to protect material authorized to be kept secret in the interest of national defense or foreign policy pursuant to Executive Orders 12958, 13526, or successor or prior Executive Orders.

This document also creates a new table in paragraph 31 CFR 1.36(e)(1) under the new heading designated as “(i) Departmental Offices:”. The system of records entitled “DO .120—Records Related to Office of Foreign Assets Control Economic Sanctions” will be added to the table under (i). The current heading “Financial Crimes Enforcement Network:” and the associated table is designated as “(ii).”

The Department of the Treasury has published separately in the Federal Register the notice of a consolidated system of records related to OFAC on October 6, 2010, at 75 FR 61853.

This proposed rule is not a “significant regulatory action” under Executive Order 12866.

Pursuant to the requirements of the Regulatory Flexibility Act (RFA), 5 U.S.C. 601-612, it is hereby certified that this rule will not have significant economic impact on a substantial number of small entities. The term “small entity” is defined to have the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction,” as defined in the RFA.

The proposed regulation, issued under section 522a(k) of the Privacy Act, is to exempt certain information in the above systems of records within the Department from certain provisions under the Privacy Act, including those regarding notification, access to a record, and amendment of a record by individuals who are citizens of the United States or an alien lawfully admitted for permanent residence. Inasmuch as the Privacy Act rights are personal and apply only to U.S. citizens or an alien lawfully admitted for permanent residence, small entities as defined in the RFA are not provided rights under the Privacy Act and are outside the scope of this regulation.

Part 1, subpart C of title 31 of the Code of Federal Regulations is proposed to be amended as follows:

This action is directed to the public in general. It simply announces the submission of a draft proposed rule to the U.S. Department of Agriculture (USDA) and does not otherwise affect any specific entities. This action may, however, be of particular interest to pesticide registrants (NAICS code 325320) who sponsor or conduct human research for pesticides, and to other entities that sponsor or conduct human research for pesticides (NAICS code 541710). Since other entities may also be interested, the Agency has not attempted to describe all the specific entities that may be interested in this action. If you have any questions regarding this action, consult the person listed under FOR FURTHER INFORMATION CONTACT.

Section 25(a)(2) of FIFRA requires the Administrator to provide the Secretary of Agriculture with a copy of any proposed regulation at least 60 days before signing it for publication in the Federal Register . The draft proposed rule is not available to the public until after it has been signed by EPA. If the Secretary comments in writing regarding the draft proposed rule within 30-days after receiving it, the Administrator shall include the comments of the Secretary and the Administrator's response to those comments in the proposed rule when it is published in the Federal Register . If the Secretary does not comment in writing within 30 days after receiving the draft proposed rule, the Administrator may sign the proposed regulation for publication in the Federal Register anytime after the 30-day period.

No. This document is not a proposed rule; it is merely a notification of submission to the Secretary of Agriculture. As such, none of the regulatory assessment requirements apply to this document.

NHTSA and EPA request comment on all aspects of this Notice and the accompanying Interim Joint Technical Assessment Report discussed below. This section describes how you can participate in this process.

For the convenience of all parties, comments submitted to the EPA docket will be considered comments submitted to the NHTSA docket, and vice versa. Therefore, the public only needs to submit comments to either one of the two agency dockets. Comments that are submitted for consideration by one agency should be identified as such, and comments that are submitted for consideration by both agencies should be identified as such.

Further instructions for submitting comments to either the EPA or NHTSA docket are described below.

EPA: Direct your comments to Docket ID No EPA-HQ-OAR-2010-0799. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at http://www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. 1 Do not submit information that you consider to be CBI or otherwise protected through http://www.regulations.gov or e-mail. The http://www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through http://www.regulations.gov your e-mail address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.

NHTSA: Your comments must be written and in English. To ensure that your comments are correctly filed in the Docket, please include the Docket number NHTSA-2010-0131 in your comments. Your comments must not be more than 15 pages long. NHTSA established this limit to encourage you to write your primary comments in a concise fashion. However, you may attach necessary additional documents to your comments. There is no limit on the length of the attachments. If you are submitting comments electronically as a PDF (Adobe) file, we ask that the documents submitted be scanned using the Optical Character Recognition (OCR) process, thus allowing the agencies to search and copy certain portions of your submissions. Please note that pursuant to the Data Quality Act, in order for the substantive data to be relied upon and used by the agencies, it must meet the information quality standards set forth in the OMB and Department of Transportation (DOT) Data Quality Act guidelines. Accordingly, we encourage you to consult the guidelines in preparing your comments. OMB's guidelines may be accessed at http://www.whitehouse.gov/omb/fedreg/reproducible.html. DOT's guidelines may be accessed at http://www.dot.gov/dataquality.htm.

When submitting comments, remember to:

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

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

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

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

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

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

NHTSA: If you submit your comments by mail and wish Docket Management to notify you upon its receipt of your comments, enclose a self-addressed, stamped postcard in the envelope containing your comments. Upon receiving your comments, Docket Management will return the postcard by mail.

Any confidential business information (CBI) submitted to one of the agencies will also be available to the other agency. However, as with all public comments, any CBI information only needs to be submitted to either one of the agencies' dockets and it will be available to the other. Following are specific instructions for submitting CBI to either agency.

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

NHTSA: If you wish to submit any information under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel, NHTSA, at the address given below under FOR FURTHER INFORMATION CONTACT . When you send a comment containing confidential business information, you should include a cover letter setting forth the information specified in our confidential business information regulation.

In addition, you should submit a copy from which you have deleted the claimed confidential business information to the Docket by one of the methods set forth above.

You may read the materials placed in the docket for this document ( e.g. , the comments submitted in response to this document by other interested persons) at any time by going to http://www.regulations.gov. Follow the online instructions for accessing the dockets. You may also read the materials at the EPA Docket Center or NHTSA Docket Management Facility by going to the street addresses given above under ADDRESSES .

This joint Notice announces plans by the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA), on behalf of the Department of Transportation, to propose stringent Federal greenhouse gas and fuel economy standards for light-duty vehicles for the 2017-2025 model years (MY) as part of a coordinated National Program. This rulemaking will build on the first phase of the National Program for fuel economy and greenhouse gas (GHG) emissions standards, for MY 2012-2016 vehicles, which was issued in April 2010. 2 This Notice of Intent does not propose specific standards, but along with the accompanying Interim Joint Technical Assessment Report (TAR) discussed later in this Notice, is an important step in the process that will lead to a formal proposal.

NHTSA and EPA welcome comment on all aspects of this Notice and the accompanying TAR. Although this Notice discusses important initial assessments performed by the agencies, it also discusses the significant additional work that must be done to provide the agencies with information to support a joint Notice of Proposed Rulemaking (NPRM). EPA and NHTSA will continue to seek input from a broad range of stakeholders over the coming months, and we will continue to work closely with the California Air Resources Board (CARB) in order to ensure the continuation of a National Program. In an effort to guide the eventual development of the NPRM, over the next two months, EPA and NHTSA, working closely with CARB, will continue to analyze potential GHG and fuel economy standards for MYs 2017-2025 by developing and reviewing additional technical data and information and by considering additional stakeholder input. Based on this additional work, EPA and NHTSA expect to issue, by November 30, 2010, a Supplemental Notice of Intent that will describe further design elements for the National Program and present an updated analysis of potential stringencies for model years 2017-2025 standards for GHGs and fuel economy. A principal goal of the Supplemental Notice will be to narrow the range of potential stringencies for the future proposed standards, as well as to reflect new technical data and information and, as appropriate, further analysis supplementing the Interim Joint TAR. While the agencies do not intend to issue another TAR we do plan to do additional analysis and make it available as a part of the Supplemental Notice of Intent. In recent months, the agencies have had important discussions with many individual automobile manufacturers and other stakeholders, and our intention is to continue such discussions. In order for comments to be most helpful to this ongoing process, the agencies encourage parties wishing to comment at this stage of the process to submit their comments by the end of October 2010. The May 21, 2010 Presidential Memorandum discussed below called for EPA and NHTSA to include in this Notice of Intent a “schedule for setting those standards as expeditiously as possible, consistent with providing sufficient leadtime to vehicle manufacturers.” The agencies plan to issue a joint Notice of Proposed Rulemaking (NPRM) by September 30, 2011 and a Final Rule by July 31, 2012.

As with any notice-and-comment rulemaking process, the agencies will provide full opportunity for the public to participate in the rulemaking process, consistent with the Administrative Procedure Act, other applicable law, and Administration policies on openness and transparency in government. 3 EPA and NHTSA have established dockets to receive such information: EPA's Docket is located at Docket ID No. EPA-HQ-OAR-2010-0799 and NHTSA's docket is located at Docket ID No. NHTSA-2010-0131. The ADDRESSES section at the beginning of this Notice provides several methods for submitting information into these dockets.

On May 21, 2010, President Obama issued a Presidential Memorandum requesting that the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA), on behalf of the Department of Transportation, take “* * * additional coordinated steps * * * to produce a new generation of clean vehicles.” He specifically requested that the agencies develop “, * * * a coordinated national program under the CAA [Clean Air Act] and the EISA [Energy Independence and Security Act of 2007] to improve fuel efficiency and to reduce greenhouse gas emissions of passenger cars and light-duty trucks of model years 2017-2025.”   4 The President recognized that by acting expeditiously, our country could take a leadership role in addressing the global challenges of improving energy security and reducing greenhouse gas pollution, stating that “America has the opportunity to lead the world in the development of a new generation of clean cars and trucks through innovative technologies and manufacturing that will spur economic growth and create high-quality domestic jobs, enhance our energy security, and improve our environment.”

As a first step in the process, the President requested EPA and NHTSA to “[t]ake all measures consistent with law to issue by September 30, 2010, a Notice of Intent to Issue a Proposed Rule that announces plans for setting stringent fuel economy and greenhouse gas emissions standards for light-duty vehicles of model year 2017 and beyond, including plans for initiating joint rulemaking and gathering any additional information needed to support regulatory action. The Notice should describe the key elements of the program that the EPA and the NHTSA intend jointly to propose, under their respective statutory authorities, including potential standards that could be practicably implemented nationally for the 2017-2025 model years and a schedule for setting those standards as expeditiously as possible, consistent with providing sufficient lead time to vehicle manufacturers.”

The Presidential Memorandum also called on the agencies, working with the State of California, to develop a technical assessment to inform a potential rulemaking. The EPA, NHTSA, and CARB have completed this assessment, which is discussed in Section I.E below.

On April 1, 2010, NHTSA and EPA issued joint final rules establishing standards for GHG emissions and fuel economy for MYs 2012-2016 passenger cars, light-duty-trucks, and medium-duty passenger vehicles (“light-duty vehicles”), collectively referred to as the National Program. 5 The agencies concluded that the automobile industry will achieve the substantial benefits of that first phase of the National Program based on technology that is already being commercially applied in many cases and that can be incorporated in these future model year vehicles at a reasonable expense and with benefits far in excess of costs. This initial phase of the National Program will result in large fuel savings and large reductions in GHG emissions and oil use, and thus in increased energy security and reductions in the rate of climate change. This joint rulemaking was consistent with the President's announcement on May 19, 2009 of a National Fuel Efficiency Policy for establishing consistent, harmonized, and streamlined requirements that would reduce GHG emissions and improve fuel economy for new cars and light trucks sold in the United States.

In this recent rulemaking, EPA and NHTSA established two separate but harmonized sets of standards, each under its respective statutory authorities. 6 The standards for both agencies begin with model year 2012, with standards increasing in stringency through model year 2016. EPA set national CO 2 emissions standards for light-duty vehicles under section 202(a) of the Clean Air Act (CAA), and NHTSA set corporate average fuel economy (CAFE) standards in accordance with the Energy Policy and Conservation Act (EPCA), as amended by the Energy Independence and Security Act of 2007 (EISA). The EPA standards will require light-duty vehicles to meet an estimated combined average emissions level of 250 grams/mile of CO 2 in model year 2016, equivalent to a fuel economy level of 35.5 miles per gallon if all the reductions were achieved through improvements in fuel economy. The CO 2 standards also allow manufacturers to earn credits for air conditioning system improvements that reduce GHGs other than CO 2 .

The NHTSA CAFE standards are only based on technologies that improve fuel economy and are not based on consideration of air conditioning improvements (which NHTSA cannot consider given that the federal test procedures used to calculate fuel economy for passenger cars may not include air conditioning usage). The maximum feasible CAFE standards should require manufacturers of passenger cars and light trucks to meet an estimated combined average fuel economy level of 34.1 mpg in model year 2016. These standards represent a harmonized approach that will allow industry to build a single national fleet that will satisfy both the GHG requirements under the CAA and CAFE requirements under EPCA/EISA.

The NHTSA and EPA standards were informed in part by state regulatory action. In 2004, the California Air Resources Board (CARB) adopted GHG standards for new light-duty vehicles covering MYs 2009-2016. Subsequently, thirteen states and the District of Columbia, comprising approximately 40 percent of the light-duty vehicle market, have adopted California's standards. On June 30, 2009, EPA granted California's request for a waiver of preemption under section 209(b) of the CAA. 7 The granting of the waiver allows California and the other states to proceed with implementing the California emission standards. To promote the National Program for MYs 2012-2016 vehicles, in April 2010 California revised its GHG emissions program for MYs 2012-2016 vehicles such that compliance with EPA's GHG standards will be deemed to be in compliance with California's GHG emission standards. 8 This action makes it possible for automakers to produce a single fleet of vehicles nationwide that meets all the requirements of the two federal programs as well as those of the California program.

As described in the recent final rule, EPA and NHTSA expect that automobile manufacturers will meet the MYs 2012-2016 CAFE and GHG standards primarily by using currently-available technologies, and simply incorporating these technologies more broadly across the light-duty vehicle fleet. These technologies include improvements to engines, transmissions, and vehicles, including increased use of start-stop technology, improvements in air conditioning systems, and increased use of hybrid and other advanced technologies. The program also provides incentives for the initial commercialization of electric vehicles and plug-in hybrids. NHTSA's and EPA's assessment of likely vehicle technologies that manufacturers could employ to meet the MYs 2012-2016 standards provides an important foundation for the agencies' consideration of potential 2017-2025 standards.

The MY 2012-2016 standards also provide a number of compliance flexibilities to manufacturers. These flexibilities are discussed further in Section III.B below. As noted above, the benefits of these standards far exceed the costs.

During the public comment period for the MY 2012-2016 proposed rulemaking, many stakeholders strongly encouraged EPA and NHTSA to begin working toward standards for MY 2017 and beyond that would maintain a single nationwide program. Following the President's May announcement, several major automobile manufacturers and the CARB sent letters to EPA and NHTSA in support of the 2017 to 2025 MY rulemaking initiative outlined in the President's Memorandum. 9

In addition to the President's request for EPA and NHTSA to issue this Notice announcing plans “for setting stringent fuel economy and greenhouse gas emissions standards for light-duty vehicles of model year 2017 and beyond,” the May 21, 2010 Presidential Memorandum also requested that the agencies work with the State of California to develop a technical assessment to inform the rulemaking process. The memorandum states that the report should reflect input from an array of stakeholders on relevant factors, including “viable technologies, costs, benefits, lead time to develop and deploy new and emerging technologies, incentives and other flexibilities to encourage development and deployment of new and emerging technologies, impacts on jobs and the automotive manufacturing base in the United States, and infrastructure for advanced vehicle technologies.”   10

EPA and NHTSA have worked collaboratively with CARB to develop this technical assessment based on currently available data, consistent with the President's request. The agencies are releasing an Interim Joint Technical Assessment Report (TAR) in conjunction with this Notice. 11 The TAR provides an initial technical assessment for this Notice and discusses the significant additional technical information and analysis that will be needed to support the rulemaking development process. While the TAR is an important step in a continuation of the National Program, significant work remains to be done to support a future federal rulemaking, as discussed below in Section I.E.4. The key elements and findings of the TAR are discussed further in this Notice.

During June through August 2010, EPA, NHTSA, and CARB held numerous meetings with a wide variety of stakeholders to gather input to consider in developing the TAR, and to ensure that the agencies had available to them the most recent technical information. These stakeholders included the automobile original equipment manufacturers (OEMs), automotive suppliers, non-governmental organizations, states and state organizations, infrastructure providers, and labor unions. The agencies sought these stakeholders' technical input and perspectives, consistent with the President's request, on the key issues that should be considered in assessing a continued National Program to reduce greenhouse gas emissions and improve fuel economy for light-duty vehicles in model years 2017-2025. The input from these stakeholders is discussed in detail in Chapter 2 of the TAR.

In response to the agencies' request, OEMs provided detailed and confidential input regarding several key areas including technology development, key regulatory design elements, infrastructure issues, perspective on the impacts on the U.S. manufacturing base and jobs, costs, and potential regulatory incentives and flexibilities. A common theme across the auto firms is that they are all heavily investing in advanced technologies including hybrids (HEVs), plug-in hybrid electric vehicles (PHEVs), electric vehicles (EVs), next generation internal combustion engines, and mass reduction technologies, and companies expect to increase their offerings and sales of these technologies significantly in the future. The companies generally stated, however, that the degree to which these advanced technologies will penetrate the U.S. market in the MYs 2017-2025 timeframe is dependent upon a number of challenges and factors, including future gasoline fuel prices, future decreases in battery costs, future regulatory fuel economy/GHG requirements, and government incentives for vehicle purchasers and owners such as the existing tax credits for EVs and PHEVs. EPA, NHTSA and CARB also met with a cross section of automotive suppliers as well as advanced technology infrastructure providers.

The agencies also requested input from numerous non-governmental organizations, including environmental organizations and labor organizations, and from state and local governments and their organizations. These stakeholders strongly supported the President's call for continuing the National Program approach and setting new fuel economy and greenhouse gas standards for light-duty vehicles for the 2017-2025 model years. Chapter 2 of the TAR provides an overview of the input we received during discussions with these organizations.

EPA and NHTSA, working with CARB, have conducted an initial assessment of the expected technology costs, effectiveness, and lead-time for potential MYs 2017-2025 GHG emission standards and the equivalent fuel economy. The agencies and CARB assessed over 30 vehicle technologies that manufacturers could use to improve the fuel economy and reduce the CO 2 emissions of their vehicles during MYs 2017-2025. The technologies considered fall into five broad categories: Engine technologies, transmission technologies, vehicle technologies (including mass reduction), electrification/accessory technologies, and hybrid/vehicle electrification technologies. The agencies and CARB considered not only technologies that are readily available today, but also other technologies that may not currently be in production but are beyond the research phase and under development, and which are expected to be in production in the MYs 2017-2025 timeframe. To be sure, the assessment of new technologies up to 15 years in the future has uncertainties. Nonetheless, the agencies and CARB have determined, on the basis of the initial analysis in the TAR, that automotive technologies are available, or are expected to be available, to support a reduction in greenhouse gas emissions and commensurate increase in fuel economy in 2017-2025 MY timeframe for the full range of scenarios examined in the TAR. The agencies have also determined, on the basis of the initial analysis, that increases come at increasing incremental cost. Of course the agencies must take into account the statutory obligations that have not been fully considered in this analysis.

Consistent with stakeholder input obtained over the summer, we believe that in addition to advanced gasoline and diesel vehicles, electric drive vehicles can be an important part of the vehicle mix that will likely be used to meet future fuel economy and GHG emission standards. Electric drive vehicles including HEVs, PHEVs, EVs, and hydrogen fuel cell vehicles (FCVs), can dramatically reduce petroleum consumption and tailpipe GHG emissions compared to conventional technologies.

The initial assessment by EPA, NHTSA, and CARB of technology costs, effectiveness and lead-time issues is presented in Chapter 3 of the TAR. The TAR introduces a number of new studies that are in progress and several that have been completed since the 2012-2016 MY light duty vehicle rule was issued. These studies have resulted in new estimates for costs and effectiveness for a number of technologies including engines, transmissions, batteries, and mass reduction. All of these are critical technologies in the 2017-2025 MY timeframe. The agencies and CARB expect to update these estimates going forward as more information becomes available from on-going studies of technology, effectiveness, and costs, as well as mass reduction and safety, as discussed in Section I.E.4 below.

Beyond the issues of the technology cost, effectiveness, and lead time for potential MYs 2017-2025 standards, the Presidential Memorandum requested that the technical assessment include input on some other areas, including impacts on jobs and the automotive manufacturing sector, and infrastructure for advanced vehicle technologies.

In the TAR, the agencies and CARB include a discussion of input from stakeholders, including the OEMs and labor unions, on the potential impacts of standards on jobs and the automotive sector. Several OEMs and the labor unions noted that Federal government Recovery Act investments, as well as incentives provided by some state and local governments, were an important factor in locating manufacturing operations for advanced battery, electric motor, and vehicle assembly plants in the U.S., and that continuation of this type of investment would be an important consideration in the decision whether to locate future facilities in the U.S. Chapter 7 of the TAR also includes a discussion of the key issues surrounding the potential employment impacts of more stringent light duty vehicle GHG and fuel economy standards. With the global drivers of competitiveness and increased importance of clean and efficient technologies, auto companies have already begun to invest in new technologies that can help meet future GHG/fuel economy standards. These investments will help the U.S. auto sector to stay on the cutting edge of auto technology. The agencies expect that the new standards will have effects on vehicle sales. For the forthcoming rulemaking, EPA and NHTSA will further investigate the impacts of the proposed standards on the auto industry, including employment.

The TAR also includes a discussion of the electric charging and infrastructure development needed to support successful deployment of certain types of advanced technology vehicles. In the case of EVs and PHEVs, electric charging systems are needed to facilitate market penetration of these vehicle technologies. On the basis of stakeholder input, the agencies expect that these charging systems will be located most often at homes. In addition, charging systems at workplaces and potentially also at public facilities such as parking lots or retail stores could become important enablers for significant market penetration of these vehicles. In the case of fuel cell vehicles, hydrogen fueling stations are needed to support commercialization. Chapter 4 of the TAR provides an assessment of current charging systems and infrastructure technologies and costs, prospects for technology improvement, infrastructure deployment programs underway, and further infrastructure needs. The agencies and CARB worked closely with the Department of Energy (DOE) in our assessment of infrastructure issues, as well as other aspects of the TAR.

The agencies also discuss the major relevant factors which can impact future automotive manufacturing jobs in the United States in Chapter 7 of the TAR. The TAR does not provide a quantitative assessment of these effects, rather, the agencies discuss the potential impacts of advanced technologies on the auto industry in general and employment in the auto sector. The automotive market is becoming increasingly global. The U.S. auto companies produce and sell automobiles around the world, and foreign auto companies produce and sell in the U.S. As a result, the industry has become increasingly competitive. Staying at the cutting edge of automotive technology, while maintaining profitability and consumer acceptance, has become increasingly important for the sustainability of auto companies. Trends in the world automotive market suggest that investments in improved fuel economy and advanced technology vehicles are a necessary component for maintaining competitiveness in coming years. As automakers seek greater commonality across the vehicles they produce for the domestic and foreign markets, improving fuel economy and reducing GHGs in U.S. vehicles should have spillovers to foreign production, and vice versa, thus yielding the ability to amortize investment in research and production over a broader product and geographic spectrum. The effects of the use of advanced technologies on U.S. auto sector employment depend on how the standards affect several factors: the number of vehicles produced, the labor intensity of vehicle production, potential changes in automotive sales, and any changes in market shares between domestically produced and imported vehicles and auto parts. With respect to this last factor, the location of production will depend on how domestic production costs, especially for advanced technologies, compare to foreign production costs, and on the cost of transporting vehicles and parts between the U.S. and other countries. Investments in advanced technology production facilities, such as battery manufacturing and vehicle electrification projects, supported by the Recovery Act (for example) reduce the need for importing these parts from overseas. 12 These investments by the Department of Energy have created immediate jobs in building this capacity, and they also help ensure that these components can be produced in the U.S. Tax breaks and other manufacturing incentives provided by a number of local and state governments for advanced vehicle technologies, such as in Michigan, have also contributed incentives for domestic production. For the forthcoming notice of proposed rulemaking for 2017-2025 GHG and CAFE standards, EPA and NHTSA will further investigate the impacts of the proposed standards on the auto industry and employment.

The TAR also includes an initial assessment of the costs, benefits, and technology that could be used to achieve a range of potential future stringencies, as discussed in section II.A below.

The two agencies have a number of significant, on-going projects that will inform the joint proposed rule for MYs 2017-2025 vehicles. These include new technical assessments of advanced gasoline, diesel, and hybrid vehicle technology effectiveness; several new projects to evaluate the cost, feasibility, and safety impacts of mass reduction from vehicles; and an ongoing project to improve our cost estimates for advanced technologies. 13 For the MYs 2017-2025 rulemaking, NHTSA and EPA will conduct an analysis of the effects of the proposed standards on vehicle safety, including societal effects. EPA and NHTSA are coordinating with CARB on their study of the safety effects of a future vehicle designed for high levels of mass reduction. In addition, EPA and NHTSA will continue to meet with and consider input from the full range of stakeholders as we develop the joint Federal rulemaking. All of this future information will enhance the accuracy of our technological assessment.

In the technical assessment, the agencies and CARB conducted an initial fleet-level analysis of improvements in overall average GHG emissions and fuel economy levels. We analyzed a range of potential stringencies for model years 2020 and 2025. Specifically, we analyzed four potential GHG targets, representing a 3, 4, 5, and 6 percent per year decrease in GHG levels from the MY 2016 fleet-wide average of 250 gram/mile (g/mi). Thus, the MY 2025 targets analyzed range from 190 g/mi (equivalent to 47 mpg) under the 3 percent per year reduction scenario to 143 g/mi (equivalent to 62 mpg) under the 6 percent per year scenario. 14 For purposes of an initial assessment, this range represents a reasonably broad range of stringency increases for potential future GHG emissions standards and is also consistent with the increases suggested by CARB in its letter of commitment in response to the President's memorandum.

The specific average required GHG and MPG equivalent levels analyzed are shown in Table 1:

For each of these levels of stringency, we also analyzed four “technological pathways” by which they could be met. We chose this “technological pathway” approach to capture both the diversity in strategies expressed by OEMs in this summer's stakeholder meetings, and uncertainties in forecasting 10-15 years into the future the potential costs and use of various advanced technologies in the light-duty vehicle fleet. We defined each of these technology pathways to emphasize a different mix of advanced technologies, by assuming various degrees of penetration of advanced gasoline technologies, mass reduction, hybrids, plug-in hybrids, and electric vehicles. For purposes of the assessment, the agencies denominated the pathways as Pathway A, Pathway B, Pathway C and Pathway D, respectively.

• Pathway A represents an approach where the industry focuses on HEVs, with less reliance on advanced gasoline vehicles and mass reduction, relative to Pathways B and C.

• Pathway C represents an approach where the industry focuses most on advanced gasoline vehicles and mass reduction, and to a lesser extent on HEVs.

• Pathway B represents an approach where the industry utilizes advanced gasoline vehicles and mass reduction at a more moderate level, higher than in Pathway A but less than in Pathway C.

• Pathway D represents an approach where the industry focuses on the use of PHEV, EV, and HEV technology, and relies less on advanced gasoline vehicles and mass reduction. 15

All four of these technology pathways include significant amounts of mass reduction, relative to 2008 model year vehicles, ranging from 15 to 30 percent in 2025. The ability of the industry to reduce mass at the higher end of this range, while not adversely affecting safety and other vehicle attributes, is an open technical issue which the agencies are carefully evaluating and will continue to as we move forward. The agencies and CARB note that these pathways are meant to represent ways that manufacturers could respond to eventual standards, and do not represent ways that they must or necessarily will respond to those standards. We further believe it is appropriate to consider more than one potential technology pathway, since NHTSA, EPA, and CARB have on-going technology cost, effectiveness, and safety work which has not been completed, as discussed further in Section I.E.4 above.

For this initial assessment, we analyzed the vehicle fleet as one single industry-wide fleet, irrespective of individual manufacturer differences. This analysis focuses on the technology itself, independent of the individual manufacturer, and produces results that indicate how the single fleet could hypothetically achieve greater GHG reductions and improved fuel economy in the most efficient manner. Treating the entire fleet as a single fleet assumes, for example, averaging GHG performance across all vehicle platforms is possible irrespective of who the individual manufacturer is for a particular vehicle platform. This can be thought of as analyzing the fleet as if there was a single large manufacturer, instead of multiple individual manufacturers. In addition, this analysis assumes there are no statutory or other limits on manufacturers' ability to transfer credits between passenger car and light truck fleets, no limits on the ability to trade credits between manufacturers, and that all manufacturers fully utilize such flexibilities with no transfer costs in doing so. This approach also allows an assessment to be performed without consideration of the particular shapes of the passenger car and light truck attribute-based curves. 16

These analyses build upon methods and information applied for the final rule for MY 2012-2016 vehicles, as well as updated forecasts of the future light-duty vehicle fleet, updated projections of technology costs and effectiveness, and updates to several key inputs such as fuel prices  17 and vehicle miles traveled projections. 18 We did not explicitly model any crediting schemes in this analysis. However the assumption of full car-truck credit transfer and inter-manufacturer trading is inherent in analyzing a single industry-wide fleet. Air conditioning emission reductions were also accounted for, as a fundamental component of EPA's MYs 2012-2016 program. The agencies used the OMEGA model, developed by EPA for the MY 2012-2016 light-duty vehicle rulemaking. 19 The key inputs for this analysis (e.g., the technology costs and effectiveness) are a result of the joint technical assessment of EPA, CARB, and NHTSA, as described in Chapter 3 of the TAR.

EPA and NHTSA believe that the approach used for these analyses permits an initial and approximate evaluation of the potential costs and benefits of the fleetwide stringency levels modeled. This approach incorporates significant simplifying assumptions that are useful for this initial assessment. However, the simplified analyses would not be appropriate in the context of the future joint federal rulemaking, taking into account each agency's respective statutory requirements. Consequently, in the full rulemaking analysis, both EPA and NHTSA will perform additional analyses before proposing standards. These simplifying assumptions and their relationship to the future federal rulemaking are discussed in detail in Section II.A.4 below and in Chapter 6 of the TAR.

The agencies and CARB assessed four scenarios for potential fleet-wide average GHG levels, with annual CO 2 reductions in the range of 3 to 6 percent per year, which would be equivalent to 47 to 62 mpg if all improvements were due to fuel-economy improving technologies, for MY 2025 light-duty vehicles, and four potential technology pathways, as described above, for each of these stringency levels. 20 We evaluated the costs and benefits of these scenarios based on five broad metrics: increased cost per vehicle, lifetime fuel reductions, lifetime greenhouse gas reductions, consumer net lifetime savings, and payback period.

The results presented in Tables 2 and 3 indicate that substantial reductions in fuel consumption and GHGs can be achieved with the use of advanced technologies. The preliminary estimated per-vehicle cost increases for a MY 2025 vehicle ranged from $770 to $3,500 across the range of stringency targets and technology pathways. Due to the fuel savings consumers experience by purchasing vehicles with improved fuel economy, the net lifetime owner savings would be $5,000 to $7,400, or a payback period of 1.4 to 4.2 years, for these same scenarios. 21 The aggregate fuel reductions achieved by these scenarios would range from 0.7 to 1.3 billion barrels over the lifetime of MY 2025 vehicles. 22 Total greenhouse gas reductions would range from 340 to 590 million metric tons (MMT) over the lifetime of MY 2025 vehicles, depending on the stringency target and technology pathway. 23 It is also important to recognize that the preliminary estimates in Tables 2 and 3 do not include all relevant costs, which will be analyzed in detail in connection with the rulemaking.

The results in Table 2 shows high positive net lifetime fuel savings are estimated to accrue to the vehicle owners, for each of the stringency scenario's examined and for each of the technology paths. Because these benefits will show up as direct savings to consumers who buy these vehicles, the question arises whether private markets will provide these benefits, or whether there may be unidentified additional costs associated with these technologies or other economic assumptions not included in the analysis. In the 2012-2016 light-duty GHG/CAFE rule, both EPA and NHTSA discussed these issues in detail, and the agencies will continue to evaluate this issue as we work towards the development of a joint NPRM. 24 The results presented for this initial assessment represent what the agencies expect a hypothetical full-line vehicle manufacturer could achieve, if the composition of the manufacturer's fleet has the same vehicle types and sales mix as the aggregate fleet and the availability, cost, and effectiveness of various technologies are the same as estimated in this assessment. Note that the results presented here assume trading between auto firms, which may or may not occur in the future. The results also assume that the transfer of credits between car and light truck fleets are unlimited, whereas there are statutory limits for CAFE. Among actual full-line vehicle manufacturers, we expect that a manufacturer-specific assessment based on footprint-attribute standard curves will result in costs which are in aggregate higher than those presented here and will be higher for some manufacturers and lower for others due to the differences among their offerings. 25 With respect to smaller volume manufacturers and very low volume manufacturers (many of whom only produce high-performance luxury vehicles), the agencies would expect that, in general, the level of technology they would require and the costs they would incur would generally be higher than for full line manufacturers.

In the full analysis for the rulemaking, as required by EPCA/EISA and as permitted by the CAA, the agencies will make more refined assessments, including separate analyses for car and light truck vehicle fleets, year-by-year attribute-based standards, and manufacturer-specific estimates of potential attribute-based standard targets and costs, and other statutory requirements. The agencies note that consideration of these statutory factors may affect the potential range of standards. NHTSA and EPA also will perform a more thorough assessment of the impacts of proposed standards, as was done for the MY 2012-2016 rulemaking, including analysis of improved energy security, monetized benefits of CO 2 reductions, co-pollutant impacts, an assessment of the societal costs and benefits of potential standards, an assessment of potential safety impacts, an assessment of impacts on automobile sales and related employment, and other relevant impacts.

As described above, the agencies and CARB analyzed four potential technology pathways to achieve more stringent targets, recognizing there are a wide range of pathways manufacturers could pursue. To illustrate several alternative ways that the industry as a whole could achieve a given level of stringency, each of these four technology pathways was applied to each of the four stringency targets. As noted above, Pathway A focuses on HEVs, Pathway C focuses most on advanced gasoline vehicles and mass reduction, Pathway B represents a more moderate level of advanced gasoline vehicles, between Pathway A and Pathway C, and Pathway D focuses most on PHEV, EV, and HEV technology. 26 The results of the assessment presented in the TAR are presented in Table 4.

The penetration of HEVs, EVs, and PHEV in MY 2025 varies considerably depending on the technology pathway and scenario, as can be seen in Table 4. As discussed in Chapter 6.3 of the TAR, Pathway A is intended to portray a technology path focused on HEV technology, with less reliance on advanced gasoline vehicles mass reduction, relative to Pathways B and C. Thus, in the 3%/year scenario, Pathway A results in 11% HEV penetration, and the most stringent 6% scenario increases HEV penetration to 68% for Path A, all with approximately a 15% reduction in mass for the new vehicle fleet. Pathway C represents an approach where the industry focuses most on advanced gasoline vehicles and mass reduction, and to a lesser extent on HEVs, resulting in a penetration of HEVs that ranges from 3% up to 44% of the new vehicle fleet. Given the approach that Pathway C represents, the penetration of gasoline and diesel vehicles for each of the stringency scenarios is highest for Pathway C, as is the degree of mass reduction. Pathway B represents an approach where advanced gasoline vehicles and mass reduction are utilized at a more moderate level, higher than for Pathway A but less than for Pathway C. Pathway D represents an approach focused on the use of PHEV, EV, and HEV technology, and less reliance on advanced gasoline vehicle and mass reduction.

The agencies emphasize that the analysis presented in this notice, while reasonable for conducting an initial assessment, is a first step. Much more work must be completed for the upcoming NPRM. As noted above, we expect to issue updated assessments by November 30 of this year. The upcoming rulemaking to develop the next phase of the National Program will be based on a full analysis that is consistent with both the statutory framework that NHTSA must account for, and the flexibilities that EPA may account for, just as the detailed analysis for the MYs 2012-2016 was conducted. 27 For purposes of this initial assessment, the agencies examined stringencies in the 3% to 6% per year range. However, the agencies have not reached any conclusions at this time regarding the appropriate level of stringency for MY 2017 and later, and the assessment presented in this Joint Notice does not preclude the agencies from considering standards outside of this range for the upcoming rulemaking. The future Joint NPRM will consider a number of alternative levels of stringency, including an alternative which is estimated to maximize net benefits. While the single fleet analysis approach simplifies some aspects of the analysis and offers some advantages, there are also important limitations which will be addressed during the rulemaking process.

For the same reasons discussed in detail in the MYs 2012-2016 rulemaking, NHTSA and EPA expect to develop new standards for CAFE and GHG emissions that are consistent with each other and can be met by each auto manufacturer through the production of one single fleet. NHTSA and EPA believe the TAR provides a useful means of comparing the scenarios discussed above.

As the agencies proceed to develop a joint proposed rulemaking for light-duty vehicle GHG emissions and fuel economy, we will continue technical and policy discussions with a broad range of stakeholders. We expect to gain information through these conversations, as well as from ongoing technical assessments by the agencies and other parties, that will build on the work presented in this Notice and the TAR as we continue to respond to the May 21, 2010 Presidential Memorandum.

EPA and NHTSA sought initial input about the appropriate design of a MYs 2017-2025 National Program from a range of stakeholders. Most of the program design input that we have received to date has come from OEMs, although many of their suggestions relate to specific potential compliance strategies that the companies consider confidential. However, there was consensus among stakeholders that a National Program should continue, and that the program's design should allow a single national fleet to comply with Federal GHG standards, Federal CAFE standards, and California GHG standards.

In the future rulemaking, the agencies plan to continue an attribute-based approach to setting the MYs 2017-2025 standards, as was done for the MYs 2012-2016 program and as required for CAFE standards per EPCA/EISA. In our outreach with stakeholders, we heard general support for continuing an attribute-based approach and for continuing to use vehicle footprint as the attribute. Under an attribute-based standard, each manufacturer has a required GHG and CAFE fleet average unique to its fleet, depending on the attributes and production levels of the vehicle models that a manufacturer produces. The MYs 2012-2016 rule was based on vehicle footprint, which is essentially the area enclosed by the points at which the four wheels meet the ground. In developing a proposed rule, we plan to consider continuing the footprint-based attribute, for which most stakeholders generally offered support.

A key consideration for the MYs 2017-2025 standards that has not yet been addressed will be development of the separate attribute-based standards, or “curves,” for passenger cars and light trucks. The attribute-based curves for passenger cars and light trucks essentially assign a GHG/fuel economy level or “target” to an individual vehicle's footprint value. For each manufacturer, the CO 2 /mpg values are then weighted, based on that manufacturer's production mix to determine that manufacturer's fleet average standard for its cars and trucks. Compliance is determined by comparing the actual CO 2 or mpg values for the vehicles, production-weighted, to this fleet average standard.

In developing the MYs 2012-2016 footprint-based curves, the agencies considered many key issues, including the steepness of the slopes of the curves and the difference between the car and truck curves for vehicles of the same footprint. We expect that these issues will again be key considerations in developing the methodology and the shape of the curves for the MYs 2017-2025 standards. Several OEMs expressed support for the continuation of separate attribute-based standards for cars and trucks, which is required for CAFE standards under EPCA/EISA and which the agencies will also evaluate further for the rulemaking.

During the agencies' outreach discussions with stakeholders, manufacturers provided early input that several of the flexibility provisions in place for MYs 2012-2016 should be retained for MY 2017 and later. Environmental groups also provided early input, as discussed below. As EPA and NHTSA develop the proposal for the MYs 2017-2025 program, the agencies will continue to consider the potential need for and benefits of incentives and flexibility provisions beyond those mandated by statute. The agencies will consider whether and how some of the flexibility provisions included in the MYs 2012-2016 program might be applied to the new program, consistent with each agency's statutory authority.

The EPCA/EISA statutory framework for the CAFE program includes a 5-year credit carry-forward provision and a 3-year credit carry-back provision. In the MYs 2012-2016 program, EPA chose to follow this approach to maintain consistency between the agencies' provisions. Most manufacturers support EPA's continuing to incorporate a 3-year credit carry-back provision to cover prior debits, a 5-year credit carry-forward provision, credit transfers between car and truck categories, and credit trading between manufacturers. For EPA's purposes, these kinds of provisions, collectively termed here as Averaging, Banking, and Trading (ABT), have been an important part of many mobile source programs under CAA Title II, both for fuels programs as well as for engine and vehicle programs. 28 Manufacturers have stated that ABT options are important to address many issues of technological feasibility and lead time, as well as considerations of cost. The agencies plan to propose to continue flexibility provisions in the MYs 2017-2025 program, since these types of compliance flexibilities will likely remain important as standards become more stringent.

Several smaller volume manufacturers have expressed continued concerns regarding lead-time, and support additional flexibility to address the unique needs of small volume manufacturers. EPA's GHG standards provided smaller volume manufacturers additional lead time to meet the GHG standards, recognizing their higher CO 2 baseline levels and more limited vehicle product lines across which to average compared to other manufacturers. The need for this type of flexibility for the standards will be tied closely to the level of stringency of those standards.

Several manufacturers also have expressed support for the continuation of air conditioning (A/C) system credits. EPA is strongly considering A/C credits for the MYs 2017-2025 program. EPA has included A/C reductions in the initial emissions modeling done to support the technical assessment. 29 EPA plans to evaluate further the methodology used to determine A/C-related reductions, including A/C-related test procedures.

Some manufacturers also have expressed support for the continuation of EPA's off-cycle credits program. 30 This program provides an option for manufacturers to generate credits for employing new and innovative technologies that achieve GHG reductions that are not reflected on current test procedures. Credits must be based on real additional reductions of CO 2 emissions and must be quantifiable and verifiable with a repeatable methodology. The off-cycle credits for new and innovative technologies are currently available only through MY 2016. Manufacturers have noted that as long as the credits represent real-world off-cycle emissions reductions, the credits should be able to be generated for innovations that are introduced after MY 2016, providing additional incentives for investment in innovation and research and development. EPA recognizes this perspective and will evaluate the off-cycle credits provisions in the context of the MYs 2017-2025 program.

Some manufacturers encouraged EPA to continue to offer flexible fuel vehicle (FFV) credits. EPA finalized provisions in the MYs 2012-2016 Final Rule to treat MY 2016 and later FFVs similarly to conventional fueled vehicles, in that FFV emissions would be based on actual CO 2 results from emissions testing on the fuels on which it operates. 31 In calculating the emissions performance of an FFV, manufacturers may base FFV emissions in part on vehicle emissions test results on the alternative fuel, if they can demonstrate that the alternative fuel is being used in the vehicles. EPA will consider whether it is appropriate to retain this approach in the MYs 2017-2025 rulemaking, or to consider other approaches. NHTSA will continue to provide incentives for dual fueled vehicles as defined in statute. 32 Under the statute, for all dual fueled vehicles such as FFVs, the maximum credit that a manufacturer can apply to CAFE compliance will be limited to 0.6 mpg in 2017, 0.4 mpg in 2018, 0.2 mpg in 2019, and zero in MY 2020 or after. Dual fueled electric vehicles, such as PHEVs, are not subject to this limitation.

For EVs and PHEVs, manufacturers have generally expressed strong support for a tailpipe-only CO 2 measurement approach in the form of a 0 g/mile compliance value for electric operation for the MY 2017-2025 program. Some manufacturers also expressed support for additional credits in the form of “bonus” credits or multipliers for EVs and PHEVs. EPA proposed a credit multiplier for MYs 2012-2016 electricity-based advanced technology vehicles but did not finalize it, for a number of reasons described in the preamble to the Final Rule. 33 Some environmental and public interest groups expressed concern that the0 g/mi value does not capture upstream emissions from the charging of electrified vehicles, and believe an upstream emissions factor should be included in the compliance calculation for electrified vehicles. The agencies understand that the treatment of upstream emissions generated in the production of electricity and other energy sources used to fuel vehicles in GHG compliance calculations is an important issue for the upcoming rulemaking. EPA will fully evaluate this issue for the MY 2017-2025 Joint NPRM based on the status of commercialization of EVs, PHEVs, and FCVs, the potential of these technologies to provide long-term GHG emissions savings, the status of and outlook for upstream GHG control programs, and other relevant factors. For CAFE, NHTSA will continue to follow EPCA/EISA statutory guidance to calculate fuel economy for EVs and PHEVs, and will continue to use a petroleum-equivalency factor (PEF) defined by the DOE to determine fuel economy for EVs and a PEF and incentives for dual fueled automobiles that are defined in 49 U.S.C. 32905(b) for PHEVs.

EPCA/EISA states that “The Secretary [of Transportation] shall * * * issue regulations under this title prescribing average fuel economy standards for at least 1, but not more than 5, model years.” NHTSA is assessing how rulemaking will be structured to support the MYs 2017-2025 National Program. In particular, we are examining how to ensure that CAFE standards for MY 2017-MY 2025, while harmonized with final EPA greenhouse gas emissions standards, would still meet the independent standards development framework of EPCA/EISA.

Many OEMs have stressed the importance of a mid-term technology review that would occur after the MYs 2017-2025 standards are promulgated. 34 Some OEMs believe the future standards, especially those for MY 2020 and beyond, should be reevaluated at some future point based on the actual progress of advanced vehicle technology development. Several environmental groups emphasized that a mid-term technology review, if conducted, should not undermine innovation, and may not be necessary if the MYs 2017-2025 standards can be achieved through multiple technology pathways. The agencies believe it is appropriate to consider a mid-term technology review. As we develop the proposed standards, the agencies will consider the potential form that such a review could take as well as other potential ways to address the issues of uncertainty in longer-term standards setting.

The agencies recognize that there are many non-regulatory approaches, outside of the scope of this rulemaking, that can help promote the successful commercialization of low-GHG light-duty vehicle technologies. Some automaker stakeholders told the agencies that federal and state income tax credits and grants, targeted at consumers who purchased new advanced technology vehicles, played an important role in sparking the initial market for conventional hybrid electric vehicles, and could play an even more important role in promoting future technologies such as plug-in hybrid electric and dedicated battery electric vehicles as well. Additional examples of non-regulatory approaches include federal research and development activities, federal financial assistance to the private sector to support research and development, vehicle and component manufacturing capacity, and infrastructure to support advanced technologies, and non-economic incentives such as use of high occupancy vehicle lanes and preferential parking, which are typically local decisions. While these are useful approaches for promoting low GHG technologies they cannot be accomplished by the agencies in the upcoming rulemaking.

In addition to addressing GHGs and fuel consumption, the May 21, 2010 Presidential Memorandum also requested that EPA examine its broader motor vehicle air pollution control program. In the Memorandum, the President requested that “[t]he Administrator of the EPA review for adequacy the current nongreenhouse gas emissions regulations for new motor vehicles, new motor vehicle engines, and motor vehicle fuels, including tailpipe emissions standards for nitrogen oxides and air toxics, and sulfur standards for gasoline. If the Administrator of the EPA finds that new emissions regulations are required, then I request that the Administrator of the EPA promulgate such regulations as part of a comprehensive approach toward regulating motorvehicles. * * *”

EPA is currently in the process of conducting an assessment of the potential need for additional controls on light-duty vehicles' non-greenhouse gas emissions and gasoline fuel quality. EPA will engage in technical conversations with the automobile industry, the oil industry, non-governmental organizations, the states, and other stakeholders on the potential need for new regulatory action, including the areas that are specifically mentioned in the Presidential Memorandum. EPA expects to coordinate the timing of any final action on new non-greenhouse gas emissions regulations for light-duty vehicles and gasoline with the final action on greenhouse gas emissions and CAFE regulations discussed in this Notice of Intent.

EPA and NHTSA believe that the recent final rule addressing MYs 2012-2016 light-duty vehicle GHG emissions and fuel economy provides an important starting point for developing a continued National Program for MY 2017 and later vehicles. The agencies have received important input from a range of stakeholders to inform the extension of the National Program to MYs 2017-2025. Auto manufacturers, states, environmental groups and the United Auto Workers have expressed support for a continuation of the National Program. All auto firms are seriously committed to developing advanced technologies which can reduce fuel consumption and GHGs significantly beyond the MYs 2012-2016 standards. Manufacturers are developing many technologies that would enable them to eventually achieve appreciable improvements in fuel economy levels, including advanced gasoline engines, hybrid electric vehicles, EVs, and PHEVs.

As discussed in Section III above, the agencies and CARB have performed an initial assessment of potential stringencies with annual reductions in the range of 3 to 6% per year, or 47 to 62 mpg-equivalent in 2025, which demonstrates that substantial reductions in fuel consumption and GHGs can be achieved with the use of advanced technologies. EPA and NHTSA emphasize that this is an initial assessment, and significant data and additional analysis will be done to support the future joint Federal rulemaking.

EPA and NHTSA will continue to meet with stakeholders and assess new technical information as we develop the new proposed program. Over the next two months, EPA and NHTSA will work to update our analysis of potential standards for 2017-2025. EPA and NHTSA will work closely with CARB in developing and reviewing additional technical data and information as part of conducting this more refined joint analysis. EPA and NHTSA expect to issue, by the end of November 2010, a Supplemental Notice of Intent that will outline additional details regarding the design of a National Program, including a more refined analysis of potential scenarios for MY 2017-2025 standards for GHGs and fuel economy. The agencies expect to issue a joint proposed rulemaking by September 30, 2011 and to issue a final rule by July 31, 2012.

In proposed rule document 2010-24144 beginning on page 59181 in the issue of Monday, September 27, 2010, make the following corrections:

In proposed rule document 2010-24370 beginning on page 60013 in the issue of Wednesday, September 28, 2010, make the following corrections:

The Federal Emergency Management Agency (FEMA) proposes to make determinations of BFEs and modified BFEs for each community listed below, in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR 67.4(a).

These proposed BFEs and modified BFEs, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities. These proposed elevations are used to meet the floodplain management requirements of the NFIP and also are used to calculate the appropriate flood insurance premium rates for new buildings built after these elevations are made final, and for the contents in those buildings.

Comments on any aspect of the Flood Insurance Study and FIRM, other than the proposed BFEs, will be considered. A letter acknowledging receipt of any comments will not be sent.

National Environmental Policy Act. This proposed rule is categorically excluded from the requirements of 44 CFR part 10, Environmental Consideration. An environmental impact assessment has not been prepared.

Regulatory Flexibility Act. As flood elevation determinations are not within the scope of the Regulatory Flexibility Act, 5 U.S.C. 601-612, a regulatory flexibility analysis is not required.

Executive Order 12866, Regulatory Planning and Review. This proposed rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866, as amended.

Executive Order 13132, Federalism. This proposed rule involves no policies that have federalism implications under Executive Order 13132.

Executive Order 12988, Civil Justice Reform. This proposed rule meets the applicable standards of Executive Order 12988.

Accordingly, 44 CFR part 67 is proposed to be amended as follows: