This document provides a correcting amendment to Marketing Order 922, found at 7 CFR part 922, so that handlers of fresh apricots from Washington shall continue to adhere to the minimum grade requirements (Washington No. 1) of the Order.

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

This rulemaking is issued under the Federal Civil Penalties Inflation Adjustment Act of 1990, Public Law (Pub. L.) 101-410, as amended by the Debt Collection Improvement Act of 1996, Public Law 104-134, codified at 28 U.S.C. 2461 note. These laws authorize the FAA to adjust the minimum and maximum amounts of civil monetary penalties for violations of the statues it enforces to preserve their deterrent effect.

The FAA finds that good cause exists under 5 U.S.C. 553(b)(B) for adopting this final rule without notice and comment. This rule effectuates the intent of the Federal Civil Penalties Inflation Adjustment Act to allow for regular adjustment, for inflation, of civil monetary penalties to preserve the deterrent effect of civil monetary penalties and promote compliance with the law. The inflation adjustments to penalties under this rule apply a formula mandated by Congress. Thus, it is unnecessary to delay these adjustments to receive public comment. Such comments would not allow the FAA to develop any basis to change the method or application of the mandatory inflation adjustments.

Under the Debt Collection Improvement Act of 1996, the FAA must adjust all applicable civil monetary penalties at least once every 4 years. In doing so, the FAA must also apply a formula Congress included in the Debt Collection Improvement Act of 1996 to determine the amount of increase to each of its civil monetary penalties. Both of these requirements are included in 28 U.S.C. 2461 note.

In 1996 (61 FR 67445; December 20, 1996), we added subpart H, Civil Monetary Penalty Inflation Adjustment, to 14 CFR part 13. Subpart H implements the terms of 28 U.S.C. 2461 note. We also made our initial adjustment to the civil monetary penalties applicable to the FAA's enforcement program in that rulemaking. The current rulemaking is the FAA's third adjustment of its civil monetary penalties since the regulation was adopted. Previous adjustments were made in 2002 (Amendment No. 13-31; 67 FR 6364; February 11, 2002) and 2006 (Amendment No. 13-33; 71 FR 47 28518; May 16, 2006). The 2006 adjustment also incorporated in Subpart H several statutory changes to our authority to impose civil penalties.

In this rulemaking, we adjust the civil penalty amounts listed in Tables 2 and 3 of 14 CFR part 13, subpart H, for inflation in accordance with the formula set forth in Subpart H. Under subpart H, we determine the inflation adjustment for each applicable civil penalty by increasing the maximum civil penalty or the range of minimum and maximum civil penalties by the “cost-of-living adjustment” (COLA). The COLA is “the percentage (if any) for each civil monetary penalty by which the Consumer Price Index (CPI) for the month of June of the calendar year preceding the adjustment exceeds the CPI for the month of June of the calendar year in which the amount of such civil penalty was last set or adjusted pursuant to law.” Each increase is rounded off as described in 14 CFR 13.305(a) and the rounded-off increase is added to the existing civil penalty amount. For the initial adjustment of a civil penalty under Subpart H, the increase is limited to ten percent of the civil penalty amount, as stated in 14 CFR 13.305(c).

For this rulemaking, we looked at the increase of the CPI for June 2009 over the CPIs for the years in which each civil penalty amount was last set, reset, or adjusted. The words “set” and “reset” in this context indicate that Congress has added to or changed the FAA's statutory authority to impose civil monetary penalties. The word “adjusted” indicates a change we made under Subpart H.

The CPI for June 2009 was 215.693. The CPI for the month of June of the calendar years in which civil monetary penalty amounts were last set, reset, or adjusted are:

(1) 160.3 for June 1997;

(2) 183.7 for June 2003;

(3) 194.5 for June 2005; and

(4) 202.9 for June 2006.

(1) Multiple of $10, in the case of penalties less than or equal to $100;

(2) Multiple of $100, in the case of penalties greater than $100 but less than or equal to $1,000;

(3) Multiple of $1,000, in the case of penalties greater than $1,000 but less than or equal to $10,000;

(4) Multiple of $5,000, in the case of penalties greater than $10,000 but less than $100,000;

(5) Multiple of $10,000, in the case of penalties greater than $100,000 but less than or equal to $200,000;

(6) Multiple of $25,000, in the case of penalties greater than $200,000.

Using the methodology outlined in 28 U.S.C. 2461 note and implemented in 14 CFR part 13 subpart H, we have determined that several of our civil monetary penalties should be adjusted. The adjusted civil monetary penalty amounts are set forth in “Table of Minimum and Maximum Civil Monetary Penalty Amounts for Certain Violations Occurring on or After December 29, 2010”, which will be located in 14 CFR 13.305(d).

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. The FAA has determined that there is no new requirement for information collection associated with this final rule.

In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform to International Civil Aviation Organization (ICAO) Standards and Recommended Practices to the maximum extent practicable. The FAA has determined that there are no ICAO Standards and Recommended Practices that correspond to these regulations.

Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 directs that each Federal agency must propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) forbids agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, this Trade Act requires agencies to consider international standards and, where appropriate, that they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector, of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this final rule.

Department of Transportation Order DOT 2100.5 prescribes policies and procedures for simplification, analysis, and review of regulations. If the expected cost impact is so minimal that a proposed or final rule does not warrant a full evaluation, this order permits that a statement to that effect and the basis for it is included in the preamble if a full regulatory evaluation of the cost and benefits is not prepared. Such a determination has been made for this final rule. The reasoning for this determination follows:

This final rule simply identifies the civil monetary penalties for violations of the statutory and regulatory provisions we enforce. The penalty amounts are those specified by statute or called for under the inflation adjustment statutes, and the information in this rule is required by the Debt Collection Improvement Act of 1996. Its economic impact is minimal.

Also, we determined that this final rule is not a “significant regulatory action” as defined in section 3(f) of Executive Order 12866, and is not “significant” as defined in DOT's Regulatory Policies and Procedures.

The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide-range of small entities, including small businesses, not-for-profit organizations, and small governmental jurisdictions.

Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA.

However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.

This final rule simply identifies the civil monetary penalties for violations of the statutory and regulatory provisions we enforce. The penalty amounts are those specified by statute or called for under the inflation adjustment statutes, and the information in this rule is required by the Debt Collection Improvement Act of 1996. Its economic impact is minimal.

Therefore, as the FAA Administrator, I certify that this rule will not have a significant economic impact on a substantial number of small entities.

The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing any standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standards have a legitimate domestic objective, such as the protection of safety, and do not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards and, where appropriate, that they be the basis for U.S. standards.

This rule only summarizes civil monetary penalties, established by legislation, for violations of statutory and regulatory provisions that apply equally to domestic and foreign entities; therefore, we have determined that this rule will not result in an impact on international trade by companies doing business in or with the United States.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (adjusted annually for inflation with the base year 1995) in any one year by State, local, and Tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The level equivalent of $100 million in CY 1995, adjusted for inflation to CY 2007 levels by the Consumer Price Index for all Urban Consumers (CPI-U) as published by the Bureau of Labor Statistics, is $143.1 million.

This final rule does not contain such a mandate since it only identifies the increase in penalties as required by the Debt Collection Improvement Act of 1996. Therefore, the requirements of Title II of the Act do not apply.

The FAA has analyzed this final rule under the principles and criteria of Executive Order 13132, Federalism. We determined that this action will not have a substantial direct effect on the States, or the relationship between the national Government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, the FAA has determined that this final rule does not have federalism implications.

FAA Order 1050.1E identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act in the absence of extraordinary circumstances. The FAA has determined this rulemaking action qualifies for the categorical exclusion and involves no extraordinary circumstances.

The FAA analyzed this final rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). The agency has determined that it is not a “significant energy action” under the executive order and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

You can get an electronic copy using the Internet by:

(1) Searching the Federal eRulemaking Portal at http://www.regulations.gov;

(2) Visiting the FAA's Regulations and Policies Web page at http://www.faa.gov/regulations_policies/; or

(3) Accessing the Government Printing Office's Web page at http://www.gpoaccess.gov/fr/index.html.

You can also get a copy by sending a request to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue, SW., Washington, DC 20591, or by calling (202) 267-9680. Make sure to identify the amendment number or docket number of this rulemaking.

Anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act statement in the Federal Register published on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit http://www.regulations.gov.

The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. If you are a small entity and you have a question regarding this document, you may contact your local FAA official, or the person listed under the FOR FURTHER INFORMATION CONTACT heading at the beginning of the preamble. You can find out more about SBREFA on the Internet at http://www.faa.gov/regulations_policies/rulemaking/sbre_act/.

On September 3, 2010, the FAA published in the Federal Register a notice of proposed rulemaking to modify controlled airspace at Portland, OR (75 FR 54057). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Subsequent to publication, the FAA found the geographic coordinates for the airports and the Corvallis VOR/DME needed to be adjusted. This action makes the adjustment. With the exception of editorial changes, and the changes described above, this rule is the same as that proposed in the NPRM.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9U dated August 18, 2010, and effective September 15, 2010, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in that Order.

This action amends Title 14 Code of Federal Regulations (14 CFR) Part 71 by modifying Class E airspace extending upward from 700 feet above the surface, at Portland International Airport, to accommodate IFR aircraft executing the LOC/DME SIAPs at the airport. This action is necessary for the safety and management of IFR operations. The geographic coordinates for Portland International Airport and McMinnville Municipal Airport, as well as the Corvallis VOR/DME, will be adjusted to coincide with the FAA's National Aeronautical Navigation Services.

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

This rule amends Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (FDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference in the amendment under 5 U.S.C. 552(a), 1 CFR part 51, and § 97.20 of Title 14 of the Code of Federal Regulations.

The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in the Federal Register expensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained in FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAP and the corresponding effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP as modified by FDC/P-NOTAMs.

The SIAPs, as modified by FDC P-NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for all these SIAP amendments requires making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs and safety in air commerce, I find that notice and public procedure before adopting these SIAPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making these SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or revoking SIAPS, Takeoff Minimums and/or ODPS. The complete regulators description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA Forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A.

The large number of SIAPs, Takeoff Minimums and ODPs, in addition to their complex nature and the need for a special format make publication in the Federal Register expensive and impractical. Furthermore, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their depiction on charts printed by publishers of aeronautical materials. The advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA forms is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPs and the effective dates of the, associated Takeoff Minimums and ODPs. This amendment also identifies the airport and its location, the procedure, and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as contained in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPS and Takeoff Minimums and ODPS, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPS contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPS and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedures before adopting these SIAPS, Takeoff Minimums and ODPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule ” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26,1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Section 14(a)(3)(B)(vi) of the CPSA, as added by section 102(a)(2) of the Consumer Product Safety Improvement Act of 2008 (CPSIA), Public Law 110-314, directs the CPSC to publish a notice of requirements for accreditation of third party conformity assessment bodies to assess children's products for conformity with “other children's product safety rules.” Section 14(f)(1) of the CPSA defines “children's product safety rule” as “a consumer product safety rule under [the CPSA] or similar rule, regulation, standard, or ban under any other Act enforced by the Commission, including a rule declaring a consumer product to be a banned hazardous product or substance.” Under section 14(a)(3)(A) of the CPSA, each manufacturer (including the importer) or private labeler of products subject to those regulations must have products that are manufactured more than 90 days after the Commission has established and published notice of the requirements for accreditation tested by a third party conformity assessment body accredited to do so, and must issue a certificate of compliance with the applicable regulations based on that testing. Section 14(a)(2) of the CPSA, as added by section 102(a)(2) of the CPSIA, requires that certification be based on testing of sufficient samples of the product, or samples that are identical in all material respects to the product. The Commission also emphasizes that, irrespective of certification, the product in question must comply with applicable CPSC requirements ( see, e.g., section 14(h) of the CPSA, as added by section 102(b) of the CPSIA).

In the Federal Register of August 18, 2010 (75 FR 51020), we published a notice of requirements providing the criteria and process for Commission acceptance of accreditation of third party conformity assessment bodies for testing pursuant to 16 CFR parts 1632, “Standard for the Flammability of Mattresses and Mattress Pads (FF 4-72, amended),” and/or 1633, “Standard for the Flammability (Open Flame) of Mattress Sets,” which set minimum standards for flammability of mattresses, mattress pads, and/or mattress sets under the Flammable Fabrics Act (15 U.S.C. 1191 et seq. ) (FFA). The notice of requirements stated that the publication had the effect of lifting the stay of enforcement with regard to testing and certification of children's products under 16 CFR parts 1632 and/or 1633, such that each manufacturer of such a product must have any such product manufactured after November 16, 2010, tested by a third party conformity assessment body accredited to do so, and must issue a certificate of compliance based on that testing (75 FR at 51021 through 51022).

We addressed testing performed by a third party conformity assessment body prior to the Commission's acceptance of its accreditation, or “retrospective” testing, in section IV of the notice of requirements. We stated that we would accept a certificate of compliance with the standard included in 16 CFR parts 1632 and/or 1633, based on testing performed by an accredited third party conformity assessment body (including a government-owned or -controlled conformity assessment body, and a firewalled conformity assessment body), prior to the Commission's acceptance of its accreditation if:

75 FR at 51022.

In response to the notice of requirements, the International Sleep Products Association (ISPA) submitted a letter to the Commission arguing that the CPSIA's third party testing requirements do not apply to part 1632 or 1633. In the alternative, the ISPA urged that we adopt a longer implementation period for third party testing under 16 CFR part 1632, and to “grandfather in all previously conducted 1632 and 1633 testing performed by third party labs accredited by the CPSC, regardless of whether those tests occurred before or after August 18, 2010.” (The ISPA letter may be viewed at http://www.regulations.gov in the docket folder for docket number CPSC-2010-0085.) The ISPA met with individual Commissioners and CPSC staff to discuss the requests on September 15, October 22, October 26, and November 9, 2010. Summaries of those meetings may be found at: http://www.cpsc.gov/library/foia/meetings/meetings.html.

With regard to the request for a longer implementation period for third party testing for 16 CFR part 1632, the ISPA requested an additional year “[f]or those prototype and ticking substitutes that were not tested by a third party lab and that are being used in children's mattresses sold today * * * to allow manufacturers of children's mattresses 12 months to retest all of the applicable prototypes and ticking substitutes.” The ISPA presented two main arguments in support of this request. First, it noted that “using a third party to perform the required 1632 tests will involve substantial time and costs.” Second, it asserted that “changes in how 1632 tests are to be performed make it difficult to conduct those tests at this moment.” The standard for the flammability of mattresses and mattress pads at 16 CFR part 1632 sets forth a test to determine the ignition resistance of a mattress or mattress pad when exposed to a smoldering cigarette. Lighted cigarettes are placed at specified locations on the surface of a mattress (or mattress pad). The ignition source is specified in 16 CFR part 1632 by physical properties that were originally selected to represent an unfiltered Pall Mall cigarette, but those cigarettes are no longer available. ISPA stated a concern that there may be substantial confusion about what ignition source will be required for part 1632 tests “[f]or at least the short term.”

With regard to the request that we accept, for children's product certification purposes, all tests pursuant to 16 CFR parts 1632 and 1633 previously conducted by accredited third party laboratories, regardless of when the test occurred, the ISPA presented three main arguments, all of which focused on the testing conducted under 16 CFR part 1633. First, the ISPA noted that because the mattress flammability test required by 16 CFR part 1633 since 2007 is a complex, open-flame test that involves the destruction of a mattress, most manufacturers have been using third party laboratories for this testing. According to the ISPA, many of the laboratories that have done the testing since the standard was revised substantially in 2007 meet the baseline requirements for acceptance by the CPSC. Second, there have been no changes to the test method required under 16 CFR part 1633 since 2007. Third, the ISPA notes that testing under 16 CFR part 1633 is expensive and time-consuming. It argued that accepting only those third party tests of children's mattresses under 16 CFR part 1633 that have occurred since August 18, 2010, would be “arbitrary and wasteful” because requiring the mattress industry to retest all mattress prototypes used in making children's mattress sets “would take months to perform and cost the industry hundreds of thousands—if not millions—of dollars and would provide no discernable safety benefit.”

Similarly, on November 2, 2010, the Commission received a letter from the Springs Creative Products Group, LLC, claiming that the notice of requirements would “put an extreme burden on mattress manufacturers to complete additional and redundant testing by accredited labs * * * by November 16, 2010,” and asking that we:

• “Grandfather in all Part 1633 qualification and confirmation testing performed since 2006 by all test labs that are accredited by the CPSC;”

• “Grandfather in all Part 1632 tests performed by accredited labs since 2006;” and

• Grant a one year compliance period “for all Part 1632 prototypes and ticking substitutes that were not tested by accredited labs.”

Letter from Derick S. Close, CEO, Springs Creative Products Group, LLC, to Inez Tenenbaum, Chairman, Consumer Product Safety Commission (October 26, 2010). (The Springs Creative Products Group letter may be viewed at http://www.regulations.gov in the docket folder for docket number CPSC-2010-0085). The letter asserted that “[r]equiring manufacturers to have the same labs retest the same Part 1633 prototypes following the same exact test method as was done since 2006 would impose wasted costs on an industry recovering from the worst recession in 70 years” and that “the industry needs more time to retest materials [in] an orderly manner because the CPSC is in the midst of changing the cigarettes used for testing.” Id. at pages 1 through 2.

We have considered the requests and, through this notice, are revising our position regarding “Limited Acceptance of Children's Product Certifications Based on Third Party Conformity Assessment Body Testing Prior to the Commission's Acceptance of Accreditation.” To help interested parties understand our reasons for revising our position, we begin by explaining what prototype testing pursuant to 16 CFR parts 1632 and 1633 involves and the relevance of the letters' reference to cigarettes.

The Standard for the Flammability of Mattresses and Mattress Pads, 16 CFR part 1632, sets forth a test to determine the ignition resistance of a mattress or mattress pad when exposed to a lighted cigarette. In brief, the regulations require pre-market prototype testing for each new mattress design and also require prototype testing when there has been a change in materials of an existing prototype design that could influence cigarette ignition resistance. Six mattress surfaces must be tested for each prototype. Lighted cigarettes are placed at specified locations on the surface of a mattress (or mattress pad). The Standard establishes pass/fail criteria for the tests. Currently, the Standard specifies the ignition source for these tests by its physical properties. These properties originally were selected to represent an unfiltered Pall Mall cigarette, which was identified as the most severe smoldering ignition source. Recently, however, the Commission published a proposed rule (75 FR 67047 (Nov. 1, 2010)), to amend the mattress standard to require a standard reference material cigarette, which was developed by the National Institute of Standards and Technology, as the ignition source for testing to the mattress Standard.

The Standard for the Flammability (Open Flame) of Mattress Sets, 16 CFR part 1633, is intended to minimize or delay “flashover” when a mattress is ignited in a typical bedroom fire. (“Flashover” is the point at which the entire contents of a room are ignited simultaneously by radiant heat, making conditions in the room untenable and a safe exit from the room impossible. At flashover, room temperatures typically exceed 600-800 degrees Celsius (approximately 1100-1470 degrees Fahrenheit).) In general, the Standard requires manufacturers to test specimens of each of their mattress prototypes (designs) before mattresses of that prototype may be introduced into commerce. The specimen is to be no smaller than twin size, unless the largest size mattress or set produced of that type is smaller than twin size, in which case the largest size must be tested.

The Standard prescribes a full-scale test using a pair of T-shaped gas burners designed to represent burning bedclothes. The mattress set must not exceed a peak heat release rate of 200 kilowatts (kW) at any time during a 30 minute test, and the total heat release for the first 10 minutes of the test must not exceed 15 megajoules (“MJ”). Mattresses that meet the Standard's criteria will make only a limited contribution to a fire, especially in the fire's early stages. This will allow occupants more time to discover the fire and escape.

Thus, both 16 CFR parts 1632 and 1633 contemplate testing of prototypes rather than testing mattresses, mattress sets, or mattress pads that are already in production. The prototype itself does not have to be a children's mattress, mattress set, or mattress pad for purposes of section 14(a)(2) of the CPSA; however, to support the issuance of a certificate for a children's product, the prototype testing must be conducted by a CPSC-accepted third party conformity assessment body.

Given the nature of prototype testing under 16 CFR parts 1632 and 1633, we agree that revising our position on our “Limited Acceptance of Children's Product Certifications Based on Third Party Conformity Assessment Body Testing Prior to the Commission's Acceptance of Accreditation” is appropriate. The revised position will reduce further the need for redundant testing. We will accept children's product certifications based on third party conformity assessment body testing, prior to our acceptance of accreditation, under two different scenarios.

The notice of requirements that appeared in the Federal Register on August 18, 2010 described the circumstances under which the Commission would accept a certificate of compliance with the standard included in 16 CFR parts 1632 and/or 1633 based on testing performed by an accredited third party conformity assessment body (75 FR at 51023). Due to the nature of prototype testing under 16 CFR parts 1632 and 1633 and the date on which the requirements in 16 CFR part 1633 became effective, we are modifying section IV of the notice of requirements as follows:

• At the time of product testing, the product was tested by a third party conformity assessment body that was ISO/IEC 17025 accredited by an accreditation body that is a signatory to the ILAC-MRA;

• The third party conformity assessment body's application for testing using the test methods in 16 CFR part 1632 and/or 1633 is accepted by the CPSC on or before November 16, 2010;

• The product was tested under 16 CFR part 1632 and/or 1633 on or after July 1, 2007. The date on which the requirements in 16 CFR part 1633 became effective is July 1, 2007, and, in an “Interim Enforcement Policy for Mattresses Subject to 16 CFR Parts 1632 and 1633,” dated May 15, 2006, the CPSC anticipated that 16 CFR part 1633 could prompt manufacturers to redesign mattress prototypes and use new materials to meet the then-new flammability requirements in 16 CFR part 1633, and that the new prototypes also would have to be tested to demonstrate compliance with 16 CFR part 1632. Therefore, provided that the other conditions set forth in part III.B.1 of this document are met, we will accept testing that was done on or after July 1, 2007. We decline to accept results for tests conducted in 2006, because such tests were not equivalent to the tests required in 16 CFR part 1633;

• The accreditation scope in effect for the third party conformity assessment body at the time of testing expressly included testing to 16 CFR part 1632 and/or 1633;

• The test results show compliance with the applicable current standards and/or regulations; and

• The third party conformity assessment body's accreditation, including inclusion in its scope of 16 CFR part 1632 and/or 1633, remains in effect through the effective date for mandatory third party testing and manufacturer certification for conformity with 16 CFR parts 1632 and/or 1633.

In July 2007, CPSC staff conducted onsite reviews of the facilities that were performing testing to 16 CFR part 1633. During these reviews, we met with laboratory technical staff, toured the laboratory facilities, and observed the laboratory staff performing the test procedures. The purpose of the onsite reviews was to observe and gather information because the CPSC had concerns about test performance. The CPSC staff reviews examined:

• Laboratory staff qualifications;

• Test area and equipment;

• Calibration of equipment;

• Testing, data collection, and storage of samples; and

• Sample handling.

At the time that CPSC staff did the onsite reviews, there were 11 laboratories (nine within the United States and two in foreign countries) with the capability to perform the required test. (Resources limited the CPSC staff's ability to review the remaining foreign and domestic laboratories prior to the implementation of the Consumer Product Safety Improvement Act.) CSPC staff visited the following laboratories:

(1) Underwriters Laboratories (UL), in Northbrook, IL;

(2) Stork Twin City Testing Corporation, in St. Paul, MN;

(3) Govmark Organization, in Farmingdale, NY;

(4) SGS US Testing, in Tulsa, OK;

(5) Southwest Research Institute, in San Antonio, TX;

(6) Intertek, in Elmendorf, TX; and

(7) Chilworth, in Kelso, WA.

CPSC staff has confidence that these laboratories can conduct the tests required by the mattress Standard properly because of these field visits and also on the basis of our review of test results submitted to the CPSC since 2007, and, in some instances, verification of the test results by our own independent testing of mattresses built from prototypes tested by these laboratories. Therefore, we will accept children's product certifications based on third party conformity assessment body testing by any of the seven laboratories listed above provided that:

• The laboratory will be ISO/IEC 17025 accredited by an accreditation body that is a signatory to the ILAC-MRA, and the accreditation scope will expressly include testing to 16 CFR part 1632 and/or 1633 by November 16, 2010;

• Testing was conducted on or after July 1, 2007, but not later than November 16, 2010; and

• The test results show compliance with the applicable current standards and/or regulations.

Both the ISPA and the Springs Creative Products Group sought an additional one year for manufacturers to comply with the third party testing requirement. Both referred to costs and to the cigarettes to be used in the tests.

We decline to extend the time by which manufacturers must engage in third party testing. We believe that our revised position regarding our “Limited Acceptance of Children's Product Certifications Based on Third Party Conformity Assessment Body Testing Prior to the Commission's Acceptance of Accreditation” substantially reduces or eliminates the need to retest products. More importantly, however, we note that section 14(a)(3)(F) of the CPSA expressly declares that:

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its State program includes, among other things, “a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of the Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to the Act.” See 30 U.S.C. 1253(a)(1) and (7).

You can find background information on the Ohio program, including the Secretary's findings, the disposition of comments, and conditions of approval in the August 16, 1982, Federal Register (47 FR 34688). You can also find later actions concerning Ohio's program and program amendments at 30 CFR 935.11, 935.12, 935.15, and 935.16.

By letter dated January 22, 2009, and received on January 23, 2009, (Administrative Record No. OH-2188-01), Ohio sent us an amendment to its program under SMCRA (30 U.S.C. 1201 et seq. ). This amendment includes revisions to its regulations (Ohio Administrative Code).

Pursuant to Ohio Revised Code 119.032, all State agencies must review their internal and procedural rules every five years. In response to this requirement, the Ohio Reclamation Commission reviewed its procedural rules. The Commission's procedural rules are found at Ohio Administrative Code 1513-3-01 through 1513-3-22. This amendment contains the changes made to the Ohio Administrative Code as a result of this review. Changes relate to practice and procedures before the reclamation commission, including definitions; commission meetings; appearance and practice before the commission; appeals to the reclamation commission; filing and service of papers; temporary relief; responsive pleadings; discovery; motions; pre-hearing procedures; notice of hearings and continuance of hearings; site views and location of hearings; conduct of evidentiary hearings; reports and recommendations of the hearing officer; and decisions of the commission. These changes are identified below, with additions italicized and deletions bracketed:

1513-3-01: Definitions.

(N) “Regular business hours” for the reclamation commission means 10:00 a.m. to 6:00 p.m. Monday through Friday, except for State holidays or other days in which offices of the government of the State of Ohio are permitted to close due to weather, safety or other unforeseeable events which present a risk to the public or to the commission employees. In the event of the absence of the office staff, contact information for the chairman and vice-chairman of the commission will be prominently posted at the commission offices.

[(N)] (O) “Rules of the reclamation commission” means rules 1513-3-01 to 1513-3-22 of the Administrative code and shall apply to appeals filed under both Chapters 1513 and 1514. of the Revised code, unless specifically provided otherwise.

1513-3-02: Internal regulations.

(B) Four members constitute a quorum, and no action of the commission shall be valid unless it has the concurrence of at least four members. Where, in rendering a decision, a concurrence of at least four commission members is not obtained, the existing record of proceedings may be submitted to any absent commission member, who will be permitted to participate in the rendering of the decision. [at a subsequent commission meeting.]

1513-3-02: Internal regulations.

(D) Pursuant to section 1513.05 of the Revised code, the reclamation commission shall elect [may appoint] a secretary, who shall perform such duties as the commission prescribes, including:

1513-3-02: Internal regulations.

(D)(4) Providing notice of all public meetings [hearings] of the reclamation commission in accordance with the following procedures:

(a) Any person may determine the time and place of regularly-scheduled public meetings [hearings or the time and place of any temporary relief hearings] by contacting the office of the reclamation commission during regular business hours;

(b) Upon request, any person may obtain advance notice of all regularly-scheduled public meetings [hearings] by supplying the office of the reclamation commission with stamped, self-addressed envelopes. The office will mail to such person a notice of the time and place of meetings [hearings] at least four calendar days before the meeting [hearing] is scheduled ; [unless the hearing is a temporary relief hearing;]

(c) The reclamation commission shall provide the office of the reclamation commission with the time and place of meetings [hearings] requiring public notice under the provisions of this rule within sufficient time to enable the office to comply with the provisions of this rule.

(d) The time and location for commission meetings shall be announced in the Hannah Report published by Rotunda, Inc.

1513-3-02: Internal regulations.

(H) Any [The] transcript [or recording] of a [any] proceeding before the commission, if filed with the commission [shall be the property of the commission and] shall be made available for reproduction upon application to the commission and payment of reproduction costs.

(I) Issuance of subpoenas.

(1) Upon request of a party, or at the initiative of the commission, the commission shall issue subpoenas ad testificandum or duces tecum.

1513-3-03: Appearance and practice before the commission.

(C) Except as prohibited by section 4705.01 of the Revised code, any party may appear on his own behalf or may be represented by an attorney at law admitted to practice before the Supreme Court of Ohio, or by an attorney admitted to practice by the commission pursuant to a motion to appear pro hac vice. [In the absence of an attorney, a party may represent itself, a partnership may be represented by any of its members, a corporation or association may be represented by any of its officers and any governmental unit may be represented by an employee offering proof of authority.]

1513-3-04: Appeals to the reclamation commission.

(B) A notice of appeal must:

(7) Pursuant to section 1513.13 of the Revised Code, identify [Identify] the grounds upon which review is being sought, the manner in which appellant is aggrieved or adversely affected by the action of the chief of the division of mineral resources management and the relief sought on appeal;

1513-3-05: Filing and service of papers.

(H) If papers filed with the commission cite case law as authority in support of argument, the filing must include a copy of the case law cited and must refer to the page number or paragraph on which the relevant language is found.

1513-3-08: Temporary Relief.

(F) The decision of the chairman of the reclamation commission to grant or deny temporary relief may be appealed to the [full] commission, including the chairman who decided temporary relief, within thirty days after the chairman's issuance of the decision in accordance with the provisions of section 1513.13 of the Revised Code. The [full]-commission may confine its review to the record developed at the temporary relief hearing conducted by the chairman. The [full] commission shall affirm the decision of the chairman, unless it determines that the chairman's decision is arbitrary, capricious, or otherwise inconsistent with law.

1513-3-09: Responsive pleadings.

(B) Unless the commission orders otherwise, the party ordered to file a response pursuant to this rule shall have ten days from the issuance of the commission's order to make such filing.

[(B] (C) Failure to respond when ordered may be treated as a failure to appear at hearing.

1513-3-10: Discovery.

(C) Discovery shall be conducted in accordance with the procedural provisions of the “Ohio Rules of Civil Procedure.” Discovery may include oral depositions, written interrogatories to parties, inspection of premises, requests for admission, and inspection of documents. [not privileged.]

1513-3-11: Motions.

(A) Except for oral motions which must be made in proceedings on the record, or where the commission otherwise directs, any motion made to the reclamation commission shall:

(4) Be filed with the commission and served upon all parties to the proceeding at least ten [five] days in advance of the hearing, unless the movant demonstrates that unusual circumstances exist justifying an exception to this rule.

1513-3-11: Motions.

(C) Motions for reconsideration of any decision of the commission shall be made in writing within ten [fourteen] days after the issuance of the commission's decision. A motion for reconsideration shall state with particularity the grounds on which it is based. The filing of a motion for reconsideration does not extend the time for filing a notice of appeal in the appellate court.

1513-3-11: Motions.

(E) In compliance with the requirements of 1513-3-13(C)(2), motions for continuance of a hearing must be filed with the reclamation commission and served upon all parties to a proceeding at least fourteen days in advance of a hearing.

[(E)] (F) Unless the commission orders otherwise, any party to a proceeding shall have ten days from service of the motion or until hearing, whichever is earlier, to file a response to a motion.

[(F)] (G) Failure to make a timely motion or to file a statement in response to a motion may be construed as a waiver of objection.

1513-3-12: Pre-hearing procedures.

(A) The reclamation commission, or its hearing officer, may schedule and hold pre-hearing conferences for settlement or simplification of the issues in any appeal.

(B) Whenever a pre-hearing conference is held, the commission, or its hearing officer, may issue an order which recites the matters discussed, the agreements reached, and the rulings made at the pre-hearing conference.

(C) The commission, or its hearing officer, may require the filing of a pre-hearing statement by the parties to an appeal.

1513-3-13: Notice of hearings and continuance of hearings.

(C) Continuance of scheduled hearings.

(2) Motions for continuance of a hearing must be filed with the reclamation commission and served upon all parties to a proceeding at least fourteen [five] days in advance of a hearing.

(3) Motions for continuance made less than fourteen [five] days before hearing or at hearing shall be granted only upon demonstration that an extraordinary situation exists which could not have been anticipated and which would justify the granting of a continuance.

1513-3-14: Site views and location of hearings.

(A) Site views.

(2) Subject to any applicable safety requirements, the [The] commission may, upon reasonable notice and at reasonable times, inspect any site or other premises when the commission is of the opinion that such a viewing would have a beneficial value in any matter pending before the commission.

(3) [Unless the right to a site view is statutorily prescribed, a] A quorum of commission members need not attend a site view.

(4) All parties shall have prior notice of a site view and shall have the right to be present. Parties shall be informed of any safety requirements prior to the site view. The commission may limit the number of persons, which may accompany a party at a site view.

1513-3-16: Conduct of evidentiary hearings.

(E) Written testimony.

(2) The use of a deposition in lieu of the [dependent's] deponent's oral testimony at hearing shall be allowed under the same provisions as are articulated in rule 32 of the “Ohio Rules of Civil Procedure.” A party desiring to use a deposition, or any designated part thereof, at hearing shall file the deposition with the commission and serve written notice to every other party at least five days prior to hearing.

(F) Witnesses.

(2) The commission may require each party in an appeal to identify prior to the commencement of a hearing each person who is or may be present and [in] his interest or who will or may be a witness for his cause in the appeal.

(G) If the appellant fails to appear personally or by counsel or other authorized representative at a hearing scheduled after being duly notified of the hearing by the mailing of a notice of hearing to such party's last known address, and if good cause for such failure to appear [appeal] is not shown, the commission shall dismiss the appeal.

(I) The reclamation commission may order the parties to a proceeding to submit post-hearing briefs or proposed findings of fact and conclusions of law at a time designated by the commission, on issues raised on the appeal or upon possible errors or omissions in the record or on any issues as the commission in its discretion shall determine. The commission may also order the parties to submit written closing arguments or proposed findings of fact and conclusions of law at the conclusion of hearing.

1513-3-18: Reports and recommendations of the hearing officer.

(F) Any party to a proceeding may have [seven] fourteen days from service of the objections to the report and recommendation of the hearing officer to file a response.

1513-3-19: Decisions of the commission.

(A) All decisions of the commission shall [incorporate] set forth:

(1) Findings of fact;

(2) Conclusions of law; and

(3) An order granting or denying relief.

1513-3-19: Decisions of the commission.

(F) Remission of prepaid civil penalty assessments.

(1) If a review of a civil penalty assessment results in an order reducing or eliminating a civil penalty, the reclamation commission shall remit the funds to the appellant in accordance with division [(F)] (E) of section 1513.02 of the Revised Code.

We are approving the amendment request under SMCRA and the Federal regulations at 30 CFR 732.15 and 732.17. Changes for which no findings are made below involve clarifications and non-substantive corrections of punctuation, typos, and errors in references.

1513-3-01: Definitions. These changes involve the addition of a description of regular business hours for the reclamation commission and subsequent paragraph renumbering. While this provision has no Federal counterpart, we find that it is not inconsistent with the Federal regulations at 43 CFR part 4, pertaining to the Office of Hearings and Appeals, and is therefore approved.

1513-3-02: Internal regulations. The changes to 1513-3-02(B) and (D) pertain to the Commission's procedural rules regarding quorums and the election of the secretary. While these provisions have no Federal counterpart, we find that they are not inconsistent with the Federal regulations at 43 CFR part 4, and are therefore approved.

1513-3-02: Internal regulations. The changes to 1513-3-02(D)(4) pertain to the notice of public meetings of the reclamation commission. These section changes replace references to public “hearings” to public “meetings” to reflect the same language that is included under Ohio's Sunshine Law. They clarify that a person may obtain advance notice of “regularly” scheduled public meetings, and provide the medium in which the time and location of such meetings are made available. Ohio explained that adjudicatory “hearings” are a subset of the term “meetings” (Administrative Record No. OH-2188-05). While these provisions have no Federal counterpart, we find that they are not inconsistent with the Federal regulations at 43 CFR part 4, and are therefore approved.

1513-3-02: Internal regulations. The change to 1513-3-02(H) regarding the availability of transcripts of commission proceedings is consistent with 43 CFR 4.23, Transcript of hearings, and is therefore approved.

1513-3-02: Internal regulations. The change to 1513-3-02(I) regarding the issuance of subpoenas is consistent with 43 CFR 4.26, Subpoena power and witness provisions generally, and is therefore approved.

1513-3-03: Appearance and practice before the commission. The changes to 1513-3-03(C) regarding representation when appearing before the commission are not inconsistent with 43 CFR 4.3, Representation before appeals boards, and are therefore approved.

1513-3-04: Appeals to the reclamation commission. The changes to 1513-3-04(B)(7) involve referencing pertinent regulations of the Revised Code and clarifying who may appeal. These changes are consistent with 43 CFR 4.1281, Who may appeal, and 43 CFR 4.1282, Appeals; how taken, and are therefore approved.

1513-3-05: Filing and service of papers. The change to 1513-3-05(H) involves the documentation required for a filing of an appeal. This change is not inconsistent with 43 CFR 4.1107, Filing of documents, and is therefore approved.

1513-3-08: Temporary Relief. The change to 1513-3-08(F) provides that the chairman who decided temporary relief will be involved in the final decision of the full commission with respect to an appeal of the temporary relief ruling. This change is not inconsistent with 43 CFR 4.1267, Appeals (of decisions on temporary relief) and 4.1367(f), Request for temporary relief, and is therefore approved.

1513-3-09: Responsive pleadings. The change to 1513-3-09(B) adds a time frame for responding to the commission. While this provision has no direct Federal counterpart, we find that it is not inconsistent with the Federal regulations at 43 CFR part 4, and is therefore approved.

1513-3-10: Discovery. The change to 1513-3-10(C) deletes the phrase “not privileged.” Read by itself, this amendment could be construed to allow discovery of privileged information, without the permission of the person or agency in possession of the information. However, existing language also states that “[d]iscovery shall be conducted in accordance with the procedural provisions of the `Ohio Rules of Civil Procedure.'” Rule 26 of Ohio's Rules of Civil Procedure provides “[p]arties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action. Therefore, the change proposed here is non-substantive, does not render the State provision inconsistent with 43 CFR 4.1130 and 4.1132(a), and is approved.

1513-3-11: Motions. The changes to 1513-3-11(A)(4); 1513-3-11(C) and (E) amend the deadlines for filing responses to written motions, for filing motions for reconsideration, and for filing motions for continuance before the reclamation commission. Other changes in this section involve paragraph renumbering. While these amended time limitations have no direct Federal counterparts, we find that they are not inconsistent with 43 CFR 4.22(d) and 43 CFR 4.1112, and they are therefore approved.

1513-3-12: Pre-hearing procedures. The changes to 1513-3-12(A) through (C) provide that a hearings officer may schedule and hold pre-hearing conferences, issue orders involving such conferences, and require filing of pre-hearing statements. Under the current program, only the full reclamation commission may take these actions. While these changes have no Federal counterparts, we find that they are not inconsistent with 43 CFR 4.1121(b), and are therefore approved.

1513-3-13: Notice of hearings and continuance of hearings. Changes to 1513-3-13(C) require that motions be filed at least fourteen days prior to the hearing. Motions for continuance made after this deadline will be granted only upon a demonstration of a need based upon an extraordinary situation. Under the current regulation, such a motion could be filed as late as five days prior to the hearing and granted without a demonstration that an extraordinary situation exists. While this provision has no Federal counterpart, we find that it is not inconsistent with the Federal regulations at 43 CFR part 4, and is therefore approved.

1513-3-14: Site views and location of hearings. The changes to 1513-3-14(A) involving site inspections require that safety requirements be met; clarify that a quorum of commission members need not attend a site view; and add that the commission may limit the number of individuals that may accompany a party to a site view. While these provisions have no Federal counterpart, we find that they are not inconsistent with the Federal regulations at 43 CFR part 4, and are therefore approved.

1513-3-16: Conduct of evidentiary hearings. The change to 1513-16(I) allows the commission to order the parties to file proposed findings of fact and conclusions of law at the conclusion of a hearing. We find that this change is consistent with 43 CFR 4.1126, Proposed findings of fact and conclusions of law, and is therefore approved.

1513-3-18: Reports and recommendations of the hearing officer. The change to 1513-3-18(F) increases the time in which a party may file a response to objections to a hearing officer's report and recommendations from seven to fourteen days. While this provision has no Federal counterpart, we find that it is not inconsistent with the Federal regulations at 43 CFR part 4, and is therefore approved.

We asked for public comments on the amendment (Administrative Record No. OH-2188-04) 74 FR 17802. We did not receive any public comments or a request to hold a public meeting.

Under Federal regulations at 30 CFR 732.17(h)(11)(i) and section 503(b) of SMCRA, we requested comments on the amendment from various Federal agencies with an actual or potential interest in the Ohio program (Administrative Record No. OH-2188-02). The Mine Safety and Health Administration (MSHA), District 1, responded (Administrative Record No. OH-2188-03) that it did not find any changes or issues that would impact upon coal miners' health and safety.

Under Federal regulations at 30 CFR 732.17(h)(11)(ii), we are required to get a written concurrence from EPA for those provisions of the program amendment that relate to air or water quality standards issued under the authority of the Clean Water Act (33 U.S.C. 1251 et seq. ) or the Clean Air Act (42 U.S.C. 7401 et seq. ).

None of the revisions that Ohio proposed to make in this amendment pertain to air or water quality standards. Therefore, we did not ask EPA to concur on the amendment.

Based on the above findings, we approve the amendment Ohio sent to us on January 22, 2009, pertaining to Ohio's Administrative code.

This rule does not have takings implications. This determination is based on the analysis performed for the counterpart Federal regulations.

This rule is exempted from review by the Office of Management and Budget under Executive Order 12866.

The Department of the Interior has conducted the reviews required by Section 3 of Executive Order 12988 and has determined that, to the extent allowable by law, this rule meets the applicable standards of Subsections (a) and (b) of that Section. However, these standards are not applicable to the actual language of State regulatory programs and program amendments because each program is drafted and promulgated by a specific State, not by OSM. Under Sections 503 and 505 of SMCRA (30 U.S.C. 1253 and 1255) and the Federal regulations at 30 CFR 730.11, 732.15, and 732.17(h)(10), decisions on proposed State regulatory programs and program amendments submitted by the States must be based solely on a determination of whether the submittal is consistent with SMCRA and its implementing Federal regulations and whether the other requirements of 30 CFR parts 730, 731, and 732 have been met.

This rule does not have Federalism implications. SMCRA delineates the roles of the Federal and State governments with regard to the regulation of surface coal mining and reclamation operations. One of the purposes of SMCRA is to “establish a nationwide program to protect society and the environment from the adverse effects of surface coal mining operations.” Section 503(a)(1) of SMCRA requires that State laws regulating surface coal mining and reclamation operations be “in accordance with” the requirements of SMCRA, and Section 503(a)(7) requires that State programs contain rules and regulations “consistent with” regulations issued by the Secretary pursuant to SMCRA.

In accordance with Executive Order 13175, we have evaluated the potential effects of this rule on Federally-recognized Indian Tribes and have determined that the rule does not have substantial direct effects on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes. The basis for this determination is that our decision is on a State regulatory program and does not involve a Federal program involving Indian lands.

On May 18, 2001, the President issued Executive Order 13211 which requires agencies to prepare a Statement of Energy Effects for a rule that is (1) considered significant under Executive Order 12866, and (2) likely to have a significant adverse effect on the supply, distribution, or use of energy. Because this rule is exempt from review under Executive Order 12866 and is not expected to have a significant adverse effect on the supply, distribution, or use of energy, a Statement of Energy Effects is not required.

This rule does not require an environmental impact statement because Section 702(d) of SMCRA (30 U.S.C. 1292(d)) provides that agency decisions on proposed State regulatory program provisions do not constitute major Federal actions within the meaning of Section 102(2)(C) of the National Environmental Policy Act (NEPA) (42 U.S.C. 4332(2)(C)).

This rule does not contain information collection requirements that require approval by OMB under the Paperwork Reduction Act (44 U.S.C. 3507 et seq. ).

The Department of the Interior certifies that this rule will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). The State submittal, which is the subject of this rule, is based upon Federal regulations for which an economic analysis was prepared and certification made that such regulations would not have a significant economic effect upon a substantial number of small entities. In making the determination as to whether this rule would have a significant economic impact, the Department relied upon data and assumptions for the Federal regulations.

This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule: (a) Does not have an annual effect on the economy of $100 million; (b) Will not cause a major increase in costs or prices for consumers, individual industries, geographic regions, or Federal, State, or local government agencies; and (c) Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises. This determination is based upon the fact that the State submittal, which is the subject of this rule, is based upon Federal regulations for which an analysis was prepared and a determination made that the Federal regulation was not considered a major rule.

This rule will not impose an unfunded mandate on State, local, or Tribal governments or the private sector of $100 million or more in any given year. This determination is based upon the fact that the State submittal, which is the subject of this rule, is based upon Federal regulations for which an analysis was prepared and a determination made that the Federal regulation did not impose an unfunded mandate.

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because publishing an NPRM would be impracticable, as immediate action is needed to protect the general public, vessel and tows from a sunken vessel and associated hazards in position 29°48.77′ N 091°33.02′ W, in the Charenton Drainage and Navigation Canal.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Publishing an NPRM and delaying its effective date would be contrary to public interest since immediate action is needed to protect the general public, vessel and tows from destruction, loss or injury due to sunken vessel and associated hazards in position 29°48.77′ N 091°33.02′ W.

A Mobile Inshore Drilling Rig (Hercules Rig 61) scheduled for scrap sank in the Charenton Navigation and Drainage Canal. The Charenton Navigation and Drainage Canal will be closed to all marine traffic within a 1000-yard radius of position 29°48.77′ N 091°33, from 20 OCT, 2010 through 31 DEC, 2010. This Safety Zone is needed to protect the general public, vessels and tows from destruction, loss or injury from a sunken vessel and associated hazards.

The Coast Guard is establishing a temporary Safety Zone in a 1000-yard radius of position 29°48.77′ N 091°33.02′ W within the Charenton Drainage and Navigation Canal. The temporary Safety Zone will continue from October 20, 2010 through December 31, 2010. Vessels and tows may not enter this zone unless authorized by the Captain of the Port Morgan City.

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

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

This rule will only be in effect for a short period of time and notifications to the marine community will be made through broadcast notice to mariners and Local Notice to Mariners. The impacts on routine navigation are expected to be minimal.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit through the Safety Zone from October 20, 2010 through December 31, 2010. This Safety Zone will not have a significant economic impact on a substantial number of small entities because this rule will be in effect for only a short period of time.

If you are a small business entity and are significantly affected by this regulation, please contact LT Russel Pickering, Marine Safety Unit Morgan City, at 985-380-5320.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process.

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

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism

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

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

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

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

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

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

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves an emergency situation and will be in effect for over one week, but is not expected to result in any significant adverse environmental impact as described in NEPA.

An environmental analysis checklist and a categorical exclusion determination will be provided and made available at the docket as indicated in the ADDRESSES section.

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

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

In this rulemaking EPA is fully approving Indiana's CAIR SIP, including the State's June 29, 2009, submittal. This will allow a transition from an abbreviated SIP with limited approval to a full SIP with full approval under which the various CAIR implementation provisions would be governed by State rules rather than FIP rules. This action causes the CAIR FIPs concerning SO 2 , NO X annual, and NO X ozone season emissions by Indiana sources to be automatically withdrawn.

EPA published CAIR on May 12, 2005 (70 FR 25162). In that rule, EPA determined that 28 States and the District of Columbia contribute significantly to nonattainment and interfere with maintenance of the National Ambient Air Quality Standards (NAAQS) for fine particles (PM 2.5 ) and/or 8-hour ozone in downwind States in the eastern part of the country. As a result, EPA required those upwind States to revise their SIPs to include control measures that reduce emissions of SO 2 , which is a precursor to PM 2.5 formation, and/or NO X , which is a precursor to both ozone and PM 2.5 formation. For jurisdictions that contribute significantly to downwind PM 2.5 nonattainment, CAIR sets annual State-wide emission reduction requirements ( i.e., budgets) for SO 2 and NO X . Similarly, for jurisdictions that contribute significantly to 8-hour ozone nonattainment, CAIR sets State-wide emission budgets for NO X for the ozone season (May 1st to September 30th). Under CAIR, States may implement these reduction requirements by participating in the EPA-administered cap-and-trade programs or by adopting any other control measures.

CAIR establishes requirements that must be included in SIPs to address the requirements of section 110(a)(2)(D) of the CAA with regard to interstate transport for ozone and PM 2.5 . On April 25, 2005 (70 FR 21147), EPA made national findings that the States had failed to submit SIPs meeting the requirements of section 110(a)(2)(D). The SIPs were due in July 2000, 3 years after the promulgation of the 8-hour ozone and PM 2.5 NAAQS. These findings started a 2-year clock for EPA to promulgate a FIP to address the requirements of section 110(a)(2)(D). Under section 110(c)(1) of the CAA, EPA may issue a FIP anytime after such findings are made, and must do so within two years unless EPA has approved a SIP revision correcting the deficiency before the FIP is promulgated.

On April 28, 2006, EPA promulgated FIPs for all States covered by CAIR to ensure that the emissions reductions required by CAIR would be achieved on schedule. The CAIR FIPs required electric generating units (EGUs) to participate in the EPA-administered CAIR SO 2 , NO X annual, and NO X ozone season trading programs, as appropriate. The CAIR FIP trading programs impose essentially the same requirements as, and are integrated with, the respective CAIR SIP trading programs. The integration of the FIP and SIP trading programs was meant to create a single trading program for each regulated pollutant (SO 2 , NO X annual, and NO X ozone season) in all States covered by CAIR FIP or SIP trading programs for that pollutant. Further, as provided in a rule published by EPA on November 2, 2007 (72 FR 62338), a State's CAIR FIP is automatically withdrawn when EPA approves a SIP revision as fully meeting the requirements of CAIR. Where only portions of the SIP revision are approved, the corresponding portions of the FIPs are automatically withdrawn and the remaining portions of the FIP stay in place. Finally, the CAIR FIPs also allow States to submit abbreviated SIP revisions that, if approved by EPA, automatically replace or supplement certain CAIR FIP provisions ( e.g., the methodology for allocating NO X allowances to sources in the State), while the CAIR FIP remains in place for all other provisions. Therefore, because Indiana only had an abbreviated CAIR SIP in place prior to today's rulemaking, there were also elements of CAIR FIPs in effect.

On October 19, 2007 (72 FR 59190), EPA amended CAIR and CAIR FIPs to clarify the definition of “cogeneration unit” and, thus, the applicability of the CAIR trading program to cogeneration units.

EPA was sued by a number of parties on various aspects of CAIR, and on July 11, 2008, the U.S. Court of Appeals for the District of Columbia Circuit issued its decision to vacate and remand both CAIR and the associated CAIR FIPs in their entirety. North Carolina v. EPA, 531 F.3d 836 (DC Cir. 2008). However, in response to EPA's petition for rehearing, the Court issued an order remanding CAIR to EPA without vacating either CAIR or the CAIR FIPs. North Carolina v. EPA, 550 F.3d 1176 (DC Cir. 2008). The Court thereby left CAIR in place in order to “temporarily preserve the environmental values covered by CAIR” until EPA replaces it with a rule consistent with the Court's opinion. Id. at 1178. The Court directed EPA to “remedy CAIR's flaws” consistent with its July 11, 2008, opinion, but declined to impose a schedule on EPA for completing that action. Id.

CAIR, which establishes statewide emission budgets for SO 2 and NO X , is to be implemented in two phases. The first phase of NO X reductions starts in 2009 and continues through 2014, while the first phase of SO 2 reductions starts in 2010 and continues through 2014. The second phase of reductions for both NO X and SO 2 starts in 2015 and continues thereafter. CAIR requires States to implement the budgets by either: (1) Requiring EGUs to participate in the EPA-administered cap-and-trade programs; or (2) adopting other control measures of the States' choosing and demonstrating that such control measures will result in compliance with the applicable State SO 2 and NO X budgets. The May 12, 2005, and April 28, 2006, CAIR provides model rules that States must adopt (with certain limited changes, if desired) if they want to participate in the EPA-administered trading programs. With two exceptions, only States that choose to meet the requirements of CAIR through methods that exclusively regulate EGUs are allowed to participate in the EPA-administered trading programs. One exception is for States that adopt the opt-in provisions of the model rules to allow non-EGUs individually to opt into the EPA-administered trading programs. The other exception is for each State to include all non-EGUs from its respective NO X Budget Trading Program into its respective CAIR NO X Ozone Season Trading Program.

States have the flexibility to choose the type of control measures they will use to meet the requirements of CAIR. As EPA anticipated, most States have chosen to meet the CAIR requirements by selecting an option that requires EGUs to participate in the EPA-administered CAIR cap-and-trade programs. For such States, EPA has provided two approaches for submitting and obtaining approval for CAIR SIP revisions. States may submit full SIP revisions that adopt the model CAIR cap-and-trade rules. If approved, these SIP revisions will fully replace the CAIR FIPs. Alternatively, States may submit abbreviated SIP revisions. These SIP revisions will not replace the CAIR FIPs; however, the CAIR FIPs provide that, when approved, the provisions in these abbreviated SIP revisions will be used instead of or in conjunction with, as appropriate, the corresponding provisions of the CAIR FIPs ( e.g., the NO X allowance allocation methodology).

A State submitting a full SIP revision may either adopt regulations that are substantively identical to the model rules or incorporate by reference the model rules. CAIR provides that States may only make limited changes to the model rules if the States want to participate in the EPA-administered trading programs. A full SIP revision may change the model rules only by altering their applicability and allowance allocation provisions to:

1. Include all NO X Budget trading sources that are not EGUs under CAIR in the CAIR NO X Ozone Season Trading Program;

2. Provide for State allocation of NO X annual or ozone season allowances using a methodology chosen by the State;

3. Provide for State allocation of NO X annual allowances from the compliance supplement pool (CSP) using the State's choice of allowed, alternative methodologies; or

4. Allow units that are not otherwise CAIR units to opt individually into the CAIR SO 2 , NO X Annual, or NO X Ozone Season Trading Programs under the opt-in provisions in the model rules.

An approved CAIR SIP revision addressing EGUs' SO 2 , NO X annual, or NO X ozone season emissions will replace the CAIR FIP for that State for the respective EGU emissions. As discussed above, once EPA has approved a CAIR SIP submission in full, without any conditions, the CAIR FIP is automatically withdrawn. See 72 FR 62338.

IDEM submitted the State's rules to address CAIR requirements on February 28, 2007, for incorporation into the SIP. On September 20, 2007, Indiana submitted a letter to EPA requesting that EPA act only on a portion of the February 28, 2007 submittal. Consequently, on October 22, 2007 (72 FR 59480) EPA gave a limited approval to portions of the February 28, 2007 submittal as an abbreviated SIP revision which addressed the applicability provisions for the NO X ozone season trading program and supporting definitions and terms, the methodology to be used to allocate annual and ozone season NO X allowances and supporting definitions and terms, the CSP provisions for the NO X annual trading program, and provisions for SO 2 and NO X opt-in units, all under the CAIR FIP. EPA found several minor deficiencies in the February 28, 2007, submittal, as indentified in a technical support document that accompanied the October 22, 2007, limited approval. The State's June 29, 2009, submittal sufficiently addresses these deficiencies.

On October 19, 2007, EPA revised the definition of “cogeneration unit” (72 FR 59190). Particularly of note, the term “biomass” was added so that cogeneration units could exclude biomass energy input in efficiency calculations. IDEM has made corresponding and appropriate changes that adopt the Federal definition of “cogeneration unit” and “biomass” in its June 29, 2009, submittal. Indiana's budget and allowance allocation methodologies for CAIR trading programs were also included in the June 29, 2009, submittal. The amended rules became effective State-wide on June 11, 2009, and an in-depth analysis of the June 29, 2009, submittal follows below.

In today's action, EPA is reaffirming its approval of Indiana's SIP revision adopting the budgets established for the State (by EPA) in CAIR in its October 22, 2007 limited approval.

In North Carolina, the Court determined, among other things, that the State SO 2 and NO X budgets established in CAIR were arbitrary and capricious. 1 However, as discussed above, the Court also decided to remand CAIR but to leave the rule in place in order to “temporarily preserve the environmental values covered by CAIR” pending EPA's development and promulgation of a replacement rule that “remedies CAIR's flaws.” North Carolina, at 1178. EPA had indicated to the Court that development and promulgation of a replacement rule would take about two years. Reply in Support of Petition for Rehearing or Rehearing en Banc at 5 (filed Nov. 17, 2008 in North Carolina v. EPA, Case No. 05-1224, DC Cir.). On August 2, 2010 (75 FR 45210), EPA proposed FIPs to Reduce Interstate Transport of Fine Particulate Matter and Ozone to replace CAIR; however, that rule is not yet final. In the meantime, consistent with the Court's orders, EPA is implementing CAIR by approving State SIP revisions that are consistent with CAIR (such as the provisions setting State SO 2 and NO X budgets for the CAIR trading programs) in order to “temporarily preserve” the environmental benefits achievable under the CAIR trading programs.

The CAIR NO X annual and ozone season model trading rules both largely mirror the structure of the NO X Budget model trading rule in 40 CFR Part 96, subparts A through I. While the provisions of the NO X annual and ozone season model rules are similar, there are some differences. For example, the NO X annual model rule (but not the NO X ozone season model rule) provides for a CSP, which is discussed below and under which allowances may be awarded for early reductions of NO X annual emissions. As a further example, the NO X ozone season model rule reflects the fact that the CAIR NO X Ozone Season Trading Program replaces the NO X Budget Trading Program after the 2008 ozone season and is coordinated with the NO X SIP Call program. The NO X ozone season model rule provides incentives for early emissions reductions by allowing banked, pre-2009 NO X Budget Trading Program allowances to be used for compliance in the CAIR NO X ozone season trading program. In addition, States have the option of continuing to meet their NO X SIP Call requirements by participating in the CAIR NO X Ozone Season Trading Program and including all their NO X Budget trading sources in that program.

The provisions of the CAIR SO 2 model rule are also similar to the provisions of the NO X annual and ozone season model rules. However, since CAA title IV establishes an ongoing Acid Rain cap-and-trade program for SO 2 and not for NOx, the model rule for SO 2 must additionally be coordinated with the Acid Rain Program. The SO 2 model rule uses the title IV allowances for compliance, with each allowance allocated for 2010-2014 authorizing only 0.50 ton of emissions and each allowance allocated for 2015 and thereafter authorizing only 0.35 ton of emissions. Banked title IV allowances allocated for years before 2010 can be used at any time in the CAIR SO 2 cap-and-trade program, with each such allowance authorizing one ton of emissions. Title IV allowances are to be freely transferable among sources covered by the Acid Rain Program and sources covered by the CAIR SO 2 cap-and-trade program.

EPA used the CAIR model trading rules as the basis for the trading programs in the CAIR FIPs. The CAIR FIP trading rules are virtually identical to the CAIR model trading rules, with changes made to account for Federal rather than State implementation. The CAIR model SO 2 , NO X annual, and NO X ozone season trading rules and the respective CAIR FIP trading rules are designed to work together as integrated SO 2 , NO X annual, and NO X ozone season trading programs.

In the SIP revision EPA is approving, Indiana has chosen to implement its CAIR budgets by requiring EGUs to participate in EPA-administered cap-and-trade programs for SO 2 , NO X annual, and NO X ozone season emissions. Indiana has adopted State rules for a full SIP revision that adopts, with certain allowed changes discussed below, the CAIR model cap-and-trade rules for SO 2 , NO X annual, and NO X ozone season emissions. Finally, Indiana's rules provide that non-EGUs that were required to participate in the NO X Budget Trading Program must participate in the CAIR NO X Ozone Season Trading Program.

In general, the CAIR model trading rules apply to any stationary, fossil-fuel-fired boiler or stationary, fossil-fuel-fired combustion turbine serving at any time, since the later of November 15, 1990, or the start-up of the unit's combustion chamber, a generator with nameplate capacity of more than 25 megawatts producing electricity for sale.

States have the option of bringing in, for the CAIR NO X Ozone Season Trading Program only, those units in the State's NO X Budget Trading Program that are not EGUs as defined under CAIR. EPA advises States exercising this option to add the applicability provisions in the State's NO X Budget trading rule for non-EGUs to the applicability provisions in 40 CFR 96.304 in order to include in the CAIR NO X Ozone Season Trading Program all units required to be in the State's NO X Budget Trading Program that are not already included under 40 CFR 96.304. Under this option, the CAIR NO X Ozone Season Trading Program must cover all large industrial boilers and combustion turbines, as well as any small EGUs ( i.e., units serving a generator with a nameplate capacity of 25 megawatts or less) that the State previously required to be in the NO X Budget Trading Program. Indiana has chosen to expand the applicability provisions of the CAIR NO X Ozone Season Trading Program to include all non-EGUs that were subject to the State's NO X Budget Trading Program. Indiana's February 28, 2007, abbreviated SIP submittal did not include (or modify) certain definitions that are necessary in order to expand the CAIR NO X Ozone applicability to all NO X Budget Trading units. Indiana's June 29, 2009, submittal includes these definitions and modifications. These definitions are part of today's approval and are discussed in more detail under Section H. (Deficiencies in the State's submittal and the State's subsequent responses).

The opt-in provisions of the CAIR SIP model trading rules allow certain non-EGUs ( i.e., boilers, combustion turbines, and other stationary fossil-fuel-fired devices) that do not meet the applicability criteria for a CAIR trading program to participate voluntarily in ( i.e., opt into) the CAIR trading program. A non-EGU may opt into one or more of the CAIR trading programs. In order to qualify to opt into a CAIR trading program, a unit must vent all emissions through a stack and be able to meet monitoring, recordkeeping, and recording requirements of 40 CFR part 75. The owners and operators seeking to include such a unit in a CAIR trading program must apply for a CAIR opt-in permit. If the unit is issued a CAIR opt-in permit, the unit becomes a CAIR unit, is allocated allowances, and must meet the same allowance-holding and emissions monitoring and reporting requirements as other units subject to the CAIR trading program. The opt-in provisions provide for two methodologies for allocating allowances for opt-in units, one methodology that applies to opt-in units in general and a second methodology that allocates allowances only to opt-in units that the owners and operators intend to repower before January 1, 2015.

States have several options concerning the opt-in provisions. States may adopt the CAIR opt-in provisions entirely or may adopt them but exclude one of the methodologies for allocating allowances. States may also decline to adopt the opt-in provisions at all.

Consistent with this flexibility, Indiana has chosen to allow non-EGUs meeting certain requirements to participate in the CAIR NO X Annual Trading Program, the CAIR NO X Ozone Season Trading Program, and the CAIR SO 2 Trading Program. EPA approved Indiana's earlier version of rules authorizing these opt-ins (72 FR 59480). The complete set of rules governing CAIR NO X annual, CAIR SO 2 , and CAIR NO X ozone season opt-in units in Indiana are contained in 326 IAC 24-1-12, 326 IAC 24-2-11, and 326 IAC 24-3-12, respectively. Indiana's June 29, 2009, submittal includes some modifications to these parts. These modifications are part of today's approval.

EPA found several deficiencies in Indiana's February 28, 2007, submittal and communicated these deficiencies to IDEM staff in August and September of 2007. The deficiencies and the State's subsequent responses to correct them are discussed in detail below. All responses to the deficiencies were provided in the State's June 29, 2009, submittal.

EPA found that Indiana needed to revise 326 IAC 24-3-1 in the following manner:

Indiana has made these changes verbatim; therefore, these deficiencies have been addressed and EPA concludes that the revisions to 326 IAC 24-3-1 are approvable.

EPA also found that Indiana needed to amend 326 IAC 24-3-2 by revising the definitions of “commence operation,” “fossil-fuel-fired,” and “unit.”

IDEM addressed all of the deficiencies that EPA identified regarding the terms “commence operation,” “fossil-fuel-fired,” and “unit” at 326 IAC 24-3-2 (33), (44), and (80). EPA finds these revisions approvable.

EPA found that Indiana needed to add the definition of “electricity for firm sale to the electric grid,” to read as follows:

The State has added the following definition at 326 IAC 24-3-2 (38):

EPA asked IDEM for clarification concerning the phrase “for sale under a firm contract” as opposed to the model language “for firm sale.” On September 25, 2009, IDEM responded that the language originated in Indiana's NO X SIP Call; therefore, all sources subject to the applicability of the NO X Budget Trading Program would also be subject to the applicability of the CAIR NO X Ozone Season Trading Program. Because there is no applicability gap for affected sources, IDEM has addressed this deficiency. EPA therefore finds that the addition of the term “electricity for sale under a firm contract to the electric grid” to 326 IAC 24-3-2 is approvable.

EPA found that Indiana needed to revise the definition of “large affected unit” to add, after clause (B):

IDEM has made all the appropriate changes at 326 IAC 24-3-2 (51) with minor wording changes, which include the clarification of the phrase, “(C) For units other than cogeneration units that are not already subject to this rule under section 1(a)(1) or 1(a)(3) of this rule commencing operation * * *.” and a phrase at the end of the rule that reads, “The term does not include a unit subject to 326 IAC 10-3.” At 326 IAC 24-3-2 (51)(C)(iii), Indiana's rule ends with, “for sale under a firm contract to the electric grid,” which differs from the model rule which ends with, “for sale.” EPA asked for clarification of the phrase, “for sale under a firm contract to the electric grid.” On September 25, 2009, IDEM stated that, although the language differs slightly, all sources subject to the NO X Budget Trading Program would also be subject to the CAIR NO X Ozone season Trading Program. Because there is no applicability gap for affected sources, and because other revisions Indiana has made serve to clarify the existing rule, EPA finds that the revision of the term, “large affected unit” in 326 IAC 24-3-2 is approvable.

EPA changed the definition of “cogeneration unit” as it applies to CAIR, CAIR FIPs, and the CAIR model cap-and-trade rules in 72 FR 59190. Specifically, EPA revised the calculation methodology for the efficiency standard in the cogeneration unit definition to exclude energy input from biomass. At 326 IAC 24-1-2 (8), 326 IAC 24-2-2 (8), and 326 IAC 24-3-2 (8), Indiana has made this change verbatim. EPA finds the addition of the term “biomass” to the SIP approvable.

As discussed previously, EPA granted a limited approval to Indiana's abbreviated SIP on October 22, 2007. This action was a result of the State's request on September 20, 2007, that EPA act on a portion of its February 28, 2007, submittal. Consequently, EPA approved an abbreviated SIP revision for Indiana which addressed the applicability provisions for the NO X ozone season trading programs and supporting definitions of terms, the methodology to be used to allocate NO X annual and ozone season NO X allowances and supporting definitions of terms, the CSP provisions for the NO X annual trading program, and provisions for SO 2 and NO X opt-in units, all under the CAIR FIP.

The State's June 29, 2009, submittal was intended to satisfy requirements that would allow us to approve Indiana's CAIR regulations so as to transition from an abbreviated SIP with limited approval to a full SIP with full approval. Indiana addressed the deficiencies that EPA found with its existing CAIR regulations and also adopted the Federal definition of “biomass” as it pertains to “cogeneration unit.”

However, it was not clear in the June 29, 2009, submittal that IDEM was requesting full approval of the CAIR rules contained in 326 IAC 24-1, 326 IAC 24-2, and 326 IAC 24-3. On December 9, 2009, IDEM sent a letter to EPA clarifying that such was its intent. Therefore, inasmuch as the State has cured the identified deficiencies and as such is the State's intent, we are approving Indiana's CAIR regulations in their entirety for incorporation into the SIP.

On February 28, 2007, Indiana also submitted minor revisions to 326 IAC 10-3, “NO X Reduction Program for Specific Source Categories.” Namely, the revisions pertain to the “Applicability” portion of this rule. The revisions refer to 326 IAC 24 and 326 IAC 24-3. The reference to 326 IAC 24-3 clarifies that 326 IAC 10-3-1 applies to any other blast furnace gas fired boilers with a heat input greater than 250,000,000 Btu per hour that is not subject to 326 IAC 10-4 or 326 IAC 24-3. As this revision ensures that all applicable sources are covered, EPA finds it approvable. The reference to 326 IAC 24 clarifies that the monitoring, recordkeeping, and reporting requirements under section 4 and 5 of 326 IAC 10-3-1 does not apply to a unit that opts into the NO X Budget Trading Program under 326 IAC 10-4 or 326 IAC 24. As the State's CAIR has its own set of monitoring, recordkeeping, and reporting requirements, EPA finds this revision to be approvable.

EPA did not act on 326 IAC 10-4-16, “Sunset,” when Indiana submitted the rule as part of its original CAIR package on February 28, 2007. We are approving this rule into the Indiana SIP today, and it reads:

Approval of the termination of the NO X Budget Trading Program provision ensures that there are no conflicts between allocations made under the NO X Budget Trading Program and allocations made under the CAIR NO X Ozone Season Trading Program. The NO X SIP Call requirements will now be met through the implementation of CAIR.

EPA is approving revisions to Indiana's CAIR, which the State submitted on June 29, 2009. The rules supplement the State's original CAIR, for which EPA promulgated limited approval on October 22, 2007 (72 FR 59480). The State has corrected deficiencies in its original CAIR submittal, and has made appropriate revisions that align State and Federal definitions for “cogeneration unit” and “biomass,” as contained in 72 FR 59190. In addition, EPA is approving into the Indiana SIP the remainder of Indiana's CAIR regulations upon which we did not previously act. EPA is also approving the applicability provisions of Indiana's NO X Reduction Program for Specific Source Categories, as well as the sunset provision from Indiana's NO X Budget Trading Program. Lastly, EPA is approving minor wording, formatting, and typographical changes contained in the State's submittal; since these changes serve to clarify the existing rules or to correct minor errors, EPA finds them approvable. With this approval, Indiana has transitioned from an abbreviated CAIR SIP with limited approval to a full SIP with full approval. After the effective date of this direct final rule, Indiana will no longer be subject to elements of CAIR FIPs. This action causes the CAIR FIPs with regard to sulfur dioxide (SO 2 ), NO X annual, and NO X ozone season emissions by Indiana sources to be automatically withdrawn.

Specifically, EPA is approving the following rules, which were submitted on June 29, 2009: 326 IAC 24-1-2, 326 IAC 24-1-7, 326 IAC 24-1-8, 326 IAC 24-1-9, 326 IAC 24-1-12, 326 IAC 24-2-2, 326 IAC 24-2-7, IAC 24-2-8, IAC 24-2-11, IAC 24-3-1, IAC 24-3-2, IAC 24-3-7, IAC 24-3-8, IAC 24-3-9, IAC 24-3-12. The rules became effective State-wide on June 11, 2009.

EPA is also approving the remainder of the State's CAIR regulations, which were submitted on February 28, 2007. These rules include: 326 IAC 24-1-1, 326 IAC 24-1-3, 326 IAC 24-1-4, 326 IAC 24-1-5, 326 IAC 24-1-6, 326 IAC 24-1-10, 326 IAC 24-1-11, 326 IAC 24-2-1, 326 IAC 24-2-3, 326 IAC 24-2-4, 326 IAC 24-2-5, 326 IAC 24-2-6, 326 IAC 24-2-9, 326 IAC 24-2-10, 326 IAC 24-3-3, 326 IAC 24-3-4, 326 IAC 24-3-5, 326 IAC 24-3-6, 326 IAC 24-3-10, and 326 IAC 24-3-11. These rules became effective State-wide on February 25, 2007.

As previously mentioned, EPA is further approving revisions submitted on February 28, 2007, pertaining to the State's Nitrogen Oxide Reduction Program for Specific Source Categories, Applicability provisions as contained in 326 IAC 10-3-1. This revision was effective State-wide on February 25, 2007. Lastly, EPA is approving the sunset provision in their NO X Budget Trading Program; this specific provision is contained in 326 IAC 10-4-16. This rule was submitted on February 28, 2007, and became effective State-wide on February 25, 2007.

We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the Proposed Rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the State plan if relevant adverse written comments are filed. This rule will be effective January 28, 2011 without further notice unless we receive relevant adverse written comments by December 29, 2010. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. The EPA will not institute a second comment period; therefore, any parties interested in commenting on this action should do so at this time. If we do not receive any comments, this action will be effective January 28, 2011.

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

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 28, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the Proposed Rules section of today's Federal Register , rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

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

EPA's August 19, 2010, proposed action at 75 FR 51188 provided a 30-day public comment period. We did not receive any comments on the proposed action.

EPA is disapproving IDEM's request for an amendment to the Indiana SIP for incentives for regulatory flexibility for its ESP and CLEAN Community Challenge Program. EPA is disapproving the incorporation by reference of Federal incentives for NEPT members because EPA has discontinued its NEPT program. EPA is disapproving monthly averaging of VOC coating limits because this would constitute a relaxation that could exacerbate high ozone levels and contribute to violations of the ozone standard. EPA is disapproving the third incentive, which affects public notice requirements for pollution prevention projects, because it relaxes the existing SIP-approved public notice requirements and is inconsistent with EPA minor new source rule requirements.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and, therefore, is not subject to review by the Office of Management and Budget.

Because it is not a “significant regulatory action” under Executive Order 12866 or a “significant energy action,” this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001).

This action merely approves State law as meeting Federal requirements and imposes no additional requirements beyond those imposed by State law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

Because this rule approves pre-existing requirements under State law and does not impose any additional enforceable duty beyond that required by State law, it does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4).

This rule also does not have Tribal implications because it will not have a substantial direct effect on one or more Indian Tribes, on the relationship between the Federal Government and Indian Tribes, or on the distribution of power and responsibilities between the Federal Government and Indian Tribes, as specified by Executive Order 13175 (59 FR 22951, November 9, 2000).

This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a State rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act (CAA).

This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a State rule implementing a Federal Standard.

In reviewing State submissions, EPA's role is to approve State choices, provided that they meet the criteria of the CAA. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a State submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a State submission, to use VCS in place of a State submission that otherwise satisfies the provisions of the CAA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply.

This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by January 28, 2011. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. ( See section 307(b)(2).)

Pursuant to 5 U.S.C. 5704(c), the Administrator of General Services has the responsibility to establish a mileage reimbursement rate based on the cost of travel by a Government vehicle when an employee on official business for the Government chooses to use a privately owned vehicle when a Government vehicle is authorized. This amendment, therefore, revises the reimbursement amount when travelers who are authorized to use a GOA choose to use their POA instead. This amendment also serves as notification to the public that all POV rates will be removed from the FTR and periodically published in FTR Bulletins; updates the definition of “official station”; clarifies what baggage expenses an agency may pay; clarifies that the employee is responsible for all additional expenses “that exceed the cost of the authorized method of transportation” when the employee chooses to travel via a different method of transportation than that which is authorized; requires agencies to establish policies regarding Seating Upgrade Programs in coach-class; and corrects grammatical errors.

Accordingly, this final rule amends the FTR by:

1. Section 300-3.1 —Revising the term “official station”.

2. Section 301-10.6 —Clarifying that the employee will be responsible for all additional expenses that exceed the cost of the authorized method of transportation when the employee chooses to travel by a method of transportation other than that authorized by the agency.

3. Section 301-10.124 —Correcting a grammatical error by removing the comma after “seat choice fee” in the last sentence and adding a regulatory citation.

4. Section 301-10.301 —Clarifying how to compute mileage reimbursement.

5. Section 301-10.303 —Revising the information pertaining to mileage reimbursement when the use of POV is determined to be advantageous to the Government.

6. Section 301-10.304 —Revising the information in the heading pertaining to allowable expenses.

7. Section 301-10.309 —Removing the reference to another chapter in this section.

8. Section 301-10.310 —Revising the information pertaining to reimbursement for the use of a POA when a GOA is authorized and by removing all language pertaining to being committed to using a GOA.

9. Section 301-12.1 —Revising reference to “official duty station” to read “official station.”

10. Section 301-12.2 —Revising subparagraph (d) in regard to checked baggage fee reimbursement.

11. Section 301-30.5 —Revising reference to “official duty station” to read “official station.”

12. Section 301-70.102 —Adding paragraph (k) requiring agencies to establish policies regarding Seating Upgrade Programs in coach-class.

13. Section 301-70.200 —Removing paragraph (g) requiring agencies to develop policy in regard to defining a broader radius than the official station in which per diem or actual expenses will not be authorized.

14. Section 301-70.502 —Revising reference to “official duty station” to read “official station.”

15. Appendix C to Chapter 301 —Revising reference to “official duty station” to read “official station,” and updating the definition of official station.

16. Appendix E to Chapter 301, Sections 302-1.1, 302-2.2, 302-2.6, 302-3.312, 302-7.1, 302-11.1, and 303-70.300 —Revising references to “official duty station” to read “official station.”

This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This final rule is not a major rule under 5 U.S.C. 804.

This final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq. This final rule is also exempt from the Regulatory Flexibility Act per 5 U.S.C. 553 (a)(2) because it applies to agency management. However, this final rule is being published to provide transparency in the promulgation of Federal policies.

The Paperwork Reduction Act does not apply because the changes to the FTR do not impose recordkeeping or information collection requirements, or the collection of information from offerors, contractors, or members of the public that require the approval of the Office of Management and Budget (OMB) under 44 U.S.C. 3501, et seq.

This final rule is also exempt from congressional review prescribed under 5 U.S.C. 801 since it relates solely to agency management and personnel.

This is a summary of the Commission's Report and Order and Order on Reconsideration (Order), FCC 10-193, adopted on Nov. 22, 2010, and released on Nov. 23, 2010. The full text of this document is available electronically via ECFS at http://fjallfoss.fcc.gov/ecfs/ or may be downloaded at http://hraunfoss.fcc.gov/edocs-public/attachmatch/FCC-10-130.pdf . (Documents will be available electronically in ASCII, Word 97, and/or Adobe Acrobat.) This document is also available for public inspection and copying during regular business hours in the FCC Reference Center, Federal Communications Commission, 445 12th Street, SW., CY-A257, Washington, DC 20554. The complete text may be purchased from the Commission's copy contractor, 445 12th Street, SW., Room CY-B402, Washington, DC 20554. Alternative formats are available for people with disabilities (Braille, large print, electronic files, audio format), by sending an e-mail to fcc504@fcc.gov or calling the Commission's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

1. With this Report and Order (“R&O” ), we modify our satellite television “significantly viewed” rules to implement Section 203 of the Satellite Television Extension and Localism Act of 2010 (STELA). 1 Section 203 of the STELA amends Section 340 of the Communications Act of 1934 (“Communications Act” or “Act”), which gives satellite carriers the authority to offer out-of-market but “significantly viewed” broadcast television stations as part of their local service to subscribers. 2 We initiated this proceeding on July 23, 2010 by issuing a Notice of Proposed Rulemaking (“ NPRM” ). 3 We received 20 comments and reply comments (from 17 parties) in response to our NPRM. 4 With this R&O, we satisfy the STELA's mandate that the Commission promulgate final rules in this proceeding on or before November 24, 2010. 5 In addition, in this Order on Reconsideration, we dispose of the pending petition for reconsideration of the 2005 SHVERA Significantly Viewed Report and Order. 6

2. Significantly viewed (“SV”) stations are television broadcast stations that the Commission has determined have sufficient over-the-air ( i.e., non-cable or non-satellite) viewing  7 to be considered local for certain purposes and so are not constrained by the boundary of the stations' local market or Designated Market Area (“DMA”). 8 The individual TV station, or cable operator or satellite carrier that seeks to carry the station, may petition the Commission to obtain “significantly viewed” status for the station, 9 and placement on the SV List. 10 The designation of “significantly viewed” status allows a station assigned to one market to be treated as a “local” station with respect to a particular cable or satellite community  11 in another market, and, thus, enables it to be carried by cable or satellite in that community in the other market. 12 In general, SV status applies to only some communities or counties in a DMA and does not apply throughout an entire DMA. In contrast, the “local” station designation based on Nielsen's assignment to a particular DMA applies to the entire market. 13 Whereas cable operators have had carriage rights for SV stations since 1972, 14 satellite carriers have had such authority only since 2004 15 and may only retransmit SV network stations to “eligible” satellite subscribers. 16 These satellite subscriber eligibility restrictions are intended to prevent satellite carriers from favoring an SV network station over the in-market (local) station affiliated with the same network. 17

3. Section 203 of the STELA changes the restrictions on subscriber eligibility to receive SV network stations from satellite carriers. 18 To implement the STELA, we revise our satellite subscriber eligibility rules as follows:

• We find that the local service requirement in amended Section 340(b)(1) requires only that a satellite subscriber receive local-into-local satellite service as a precondition for that subscriber to receive SV stations. We find that the statute no longer requires a satellite subscriber to receive the specific local network station as a precondition for that subscriber to receive an SV station affiliated with the same network.

• We find that amended Section 340(b)(2) no longer requires that a satellite carrier offer “equivalent bandwidth” to the local and SV network station pair and instead imposes an “HD format” requirement. We find that the HD format requirement in amended Section 340(b)(2) requires that, in order to carry an SV station in high definition (HD) format, a satellite carrier must carry the local station affiliated with the same network in HD whenever such format is available from the local station.

 ○ The HD format requirement applies only where a satellite carrier retransmits to a subscriber the SV station in HD format. This requirement does not restrict a satellite carrier from retransmitting to a subscriber the SV station in standard definition (SD) format.

 ○ For purposes of the HD format requirement, the corresponding local (in-market) station will be considered “available” to the satellite carrier when the station: (1) Elects mandatory carriage or grants retransmission consent; (2) provides a good quality signal to the satellite carrier as required by Section 76.66(g) of the rules; and (3) is otherwise in compliance with the “good faith negotiation” and carriage provisions set forth in Sections 76.65 and 76.66 of the rules. However, the HD signal of the corresponding local station will be deemed “available” despite failure to reach agreement on the terms of retransmission if the satellite carrier is not in compliance with Section 76.65.

 ○ The HD format requirement requires satellite carriage of a secondary HD stream of a local station's multicast signal if that stream is affiliated with the same network as an SV station retransmitted in HD to satellite subscribers in the local market.

• We modify the Commission's 2005 interpretation of the Section 340(b)(3) exception, which is unchanged by the STELA, and find that, in the context of the newly revised statute, this exception permits a satellite carrier to offer an SV network station to a subscriber when there is no local affiliate of the same network present in the local market, even if the subscriber does not receive local-into-local service.

4. In May 2010, Congress passed and the President signed the STELA, which amends the 1988 copyright laws  19 and the Communications Act of 1934  20 to “modernize, improve and simplify the compulsory copyright licenses governing the retransmission of distant and local television signals by cable and satellite television operators.”  21 Congress intended for the STELA to increase competition between cable and satellite providers, increase service to satellite subscribers, and update the law to reflect the completion of the digital television (DTV) transition. 22 Notably, the STELA reauthorizes the statutory copyright license for satellite carriage of SV stations and moves that license from the distant signal statutory copyright license provisions to the local signal statutory copyright license provisions. 23

5. The STELA is the fourth in a series of statutes that address satellite carriage of television broadcast stations. In the 1988 Satellite Home Viewer Act (“1988 SHVA”), Congress established a statutory copyright license to enable satellite carriers to offer subscribers who could not receive the over-the-air signal of a broadcast station access to broadcast programming via satellite. 24 The 1988 SHVA was intended to protect the role of local broadcasters in providing over-the-air television by limiting satellite delivery of network broadcast programming to subscribers who were “unserved” by over-the-air signals. The 1988 SHVA also permitted satellite carriers to offer distant “superstations” to subscribers. 25

6. In the 1999 Satellite Home Viewer Improvement Act (“SHVIA”), Congress expanded satellite carriers' ability to retransmit local broadcast television signals directly to subscribers. 26 A key element of the SHVIA was the grant to satellite carriers of a statutory copyright license to retransmit local broadcast programming, or “local-into-local” service, to subscribers. A satellite carrier provides “local-into-local” service when it retransmits a local television signal back into the local market of that television station for reception by subscribers. 27 Generally, a television station's “local market” is the DMA in which it is located. 28 Each satellite carrier providing local-into-local service pursuant to the statutory copyright license is generally obligated to carry any qualified local television station in the particular DMA that requests carriage and complies with Commission rules, unless the station's programming is duplicative of the programming of another station carried by the carrier in the DMA or the station does not provide a good quality signal to the carrier's local receive facility. 29 This is commonly referred to as the “carry one, carry all” requirement. The Commission implemented the SHVIA by adopting rules for satellite carriers with regard to carriage of broadcast signals, retransmission consent, and program exclusivity that generally paralleled the requirements for cable service. 30

7. In the 2004 Satellite Home Viewer Extension and Reauthorization Act (SHVERA), Congress established the framework for satellite carriage of “significantly viewed” stations. 31 Specifically, the SHVERA expanded the statutory copyright license to allow satellite carriers to retransmit an out-of-market network station as part of their local service to subscribers where the Commission determined that distant station to be “significantly viewed” (based on over-the-air viewing). 32 In providing this authority to satellite carriers, Congress sought to create parity with cable operators, who had already had such authority to offer SV stations to subscribers for more than 38 years. 33 The Commission implemented the SHVERA's significantly viewed provisions by publishing a list of SV stations  34 and adopting rules in the satellite context for stations to attain eligibility for significantly viewed status and for subscribers to receive SV stations from satellite carriers. 35 The SHVERA mandated that the Commission apply the same station eligibility requirements ( i.e., rules and procedures for parties to show that a station qualifies for significantly viewed status) to satellite carriers that already applied to cable operators. 36 However, to prevent a satellite carrier from favoring SV stations over traditional local market stations, the SHVERA also imposed subscriber eligibility requirements that applied only to satellite carriers. 37

8. The SHVERA limited subscribers' eligibility to receive SV digital television stations from satellite carriers in two key ways. First, the SHVERA allowed a satellite carrier to offer SV stations only to subscribers that received the carrier's “local-into-local” service (the “local service” requirement). 38 The Commission interpreted this local service requirement to further require that the subscriber receive the local station affiliated with a particular network (as part of the carrier's “local-into-local” service) in order for that subscriber to also receive an SV station affiliated with the same network (the “same network affiliate” requirement). 39 Second, the SHVERA allowed a satellite carrier to offer an SV digital station to a subscriber only if the carrier also provided to that subscriber the local station affiliated with the same network in a format that used either (1) an “equivalent” amount of bandwidth for the local and SV network station pair, or (2) the “entire” bandwidth of the local station (the “equivalent or entire bandwidth” requirement). 40 The Commission interpreted this provision to require an objective comparison of each station's use of its bandwidth in terms of megabits per second (mbps) or bit rate. 41 The SHVERA provided for two exceptions to the local service limitations, contained in 47 U.S.C. 340(b)(3) and (b)(4). Section 340(b)(3) allows satellite carriage of an SV network station to a subscriber when there is no local station affiliated with the same television network as the SV station present in the local market. Section 340(b)(4) allows a satellite carrier to negotiate privately with the local network station to obtain a waiver of the subscriber eligibility restrictions in Sections 340(b)(1) and 340(b)(2).

9. We adopt rules in this R&O to implement the STELA's amendments to Section 340(b) of the Communications Act. Our discussion below addresses the two substantive changes to Section 340(b)(1) and (b)(2), as well as how these amended provisions will work with the existing statutory exceptions in Section 340(b)(3) and (b)(4). We decline to address here the merits of Dish's petition for further rulemaking filed with its comments, as those issues are beyond the scope of this proceeding. 42 Finally, we adopt some non-substantive, “housecleaning” rule changes.

10. The STELA amended Section 340(b) to read as follows:  43

(1) Service Limited to Subscribers Taking Local-Into-Local Service.—This section shall apply only to retransmissions to subscribers of a satellite carrier who receive retransmissions of a signal from that satellite carrier pursuant to section 338.

(2) Service Limitations.—A satellite carrier may retransmit to a subscriber in high definition format the signal of a station determined by the Commission to be significantly viewed under subsection (a) only if such carrier also retransmits in high definition format the signal of a station located in the local market of such subscriber and affiliated with the same network whenever such format is available from such station.

(3) The limitations in paragraphs (1) and (2) shall not prohibit a retransmission under this section to a subscriber located in a local market in which there are no network stations affiliated with the same television network as the station whose signal is being retransmitted pursuant to this section.

(4) Paragraphs (1) and (2) shall not prohibit a retransmission of a network station to a subscriber if and to the extent that the network station in the local market in which the subscriber is located, and that is affiliated with the same television network, has privately negotiated and affirmatively granted a waiver from the requirements of paragraph (1) and (2) to such satellite carrier with respect to retransmission of the significantly viewed station to such subscriber.

11. These amendments simplify the significantly viewed provisions in Section 340(b) of the Communications Act to make it easier for satellite carriers to offer SV stations to subscribers. 44 Specifically, the STELA made two key changes to Section 340(b). 45 First, the STELA eliminated the language in Section 340(b)(2)(A) that had required that subscribers receive the same local network affiliate and, instead, retains only the language requiring that the subscriber receive local-into-local satellite service in order to be eligible to receive SV stations. 46 Second, the STELA replaces the “equivalent or entire bandwidth” requirement applicable to digital service, which was previously contained in Section 340(b)(2)(B), with an “HD format” requirement. The STELA did not amend the statutory exceptions in Sections 340(b)(3) and (b)(4) to the subscriber eligibility restrictions in Sections 340(b)(1) and (2).

12. We find that, in the STELA, Congress intended that the Commission create a workable framework for the satellite carriage of SV stations. 47 Congress intended the 2004 SHVERA to promote parity with cable, 48 while protecting localism by preventing satellite carriers from favoring an SV network station over the local in-market station affiliated with the same TV network. 49 However, very few SV stations made their way into the living rooms of satellite TV consumers. 50 The Satellite Carriers attribute this to the Commission's “restrictive” interpretation of Section 340(b) in the 2005 SHVERA Significantly Viewed Report and Order, 51 which they maintain made satellite carriage of SV stations impractical or technically infeasible. 52

13. Congress seemed to agree. As stated in one House Report:

The Commission's implementation of section 340, including its interpretation of the “equivalent bandwidth” requirement, has generally served to discourage satellite carriers from using section 340 to provide significantly viewed signals to qualified households. 53

To achieve more widespread carriage of SV stations, the STELA amends Sections 340(b). As discussed below, Congress eliminated both the former Section 340(b)(2)(A), which required that digital local service subscribers receive the same network affiliate, and the former Section 340(b)(2)(B), which contained the “equivalent or entire bandwidth” requirement. 54 Based on these changes to the statutory text, Congress intended more than merely to fix a technical implementation issue with the equivalent bandwidth requirement, as the Broadcaster Associations contend, 55 but rather sought to simplify the law and increase service to satellite subscribers by encouraging SV carriage. 56 In reauthorizing the SHVERA and mostly retaining its framework for the carriage of SV stations, the STELA also retains the key goals of its predecessor statute -to foster localism and promote parity between cable and satellite service. 57

14. The STELA's relocation of the statutory copyright license for SV stations into the “local” license provisions of the Copyright Act indicates that Congress considered the SV compulsory license to be more like the local license than like the distant signal license, recognizing that the SV station is “local” to the community in which it is significantly viewed. 58 SV stations have SV status because they have been viewed over-the-air by a sufficient number of households in the community in the relevant market. The Senate Report notes that the SV provision “relates to the ability to receive locally-oriented programming.”  59 Furthermore, satellite TV consumers deserve access to the same locally-oriented programming—including SV stations—as their cable-subscribing neighbors. 60 Moreover, providing satellite carriers parity with cable was a core goal of the SHVERA in 2004 and it remains one today in the STELA. 61 Therefore, our implementation of the statutory changes to Section 340(b) focuses on enabling satellite TV consumers to receive both the local in-market and SV stations from their carriers, as is the plain intent of Section 340. 62 To achieve this objective, our interpretation of the statute reflects the practical realities of satellite local carriage, in accordance with Congress's intent to remove barriers to SV carriage. 63

15. In the STELA, Congress directs us to implement Section 340 in a practical way that will better enable satellite carriers to offer SV stations to their subscribers. We find that carriage of both the SV and local in-market stations will best foster localism and promote parity with cable, and so, in implementing the law we must balance protection of local in-market stations against the cost of making SV carriage technically infeasible or impractical.

16. We adopt our proposal to eliminate the requirement that a subscriber receive the local station affiliated with a specific network in order for that subscriber to also receive an SV station affiliated with the same network, and require instead that the subscriber receive local-into-local satellite service. 64 We clarify, however, that a satellite carrier must comply with Section 76.65 of our rules, which codifies the requirement for good faith in retransmission consent negotiations, in order for it to carry an SV station. In the record, the Satellite Carriers support our proposal, while the Broadcaster Associations oppose it. 65

17. In the 2004 SHVERA, Congress authorized satellite carriers to offer SV stations to subscribers, but crafted Sections 340(b)(1) and 340(b)(2)(A) of the Act to protect localism by requiring that these subscribers also receive the local network affiliate (called the “local service” requirement). 66 These two provisions, however, contained different language. Whereas the analog local service requirement in Section 340(b)(1)  67 required only that the subscriber receive local service “pursuant to Section 338”—referring to the “carry one, carry all” carriage requirements that pertain to local stations, 68 the digital local service requirement in Section 340(b)(2)(A)  69 contained additional language that expressly required the subscriber to receive the local digital station that was “affiliated with the same television network” as the SV station (hereinafter referred to as the “same network affiliate” language). Thus, while each of these provisions explicitly required a subscriber to at least receive the satellite carrier's local-into-local service before that subscriber could receive an SV station, it was unclear (when considering the two provisions together) whether Section 340(b)(1) also required a subscriber to receive the specific local analog network station before that subscriber could receive the SV station affiliated with the same network. 70 For example, it was unclear how the statute applied where there was a local network analog station, but such station failed to request local carriage, refused to grant retransmission consent, or was otherwise ineligible for local carriage. 71

18. In the 2005 SHVERA Significantly Viewed Report and Order, the Commission interpreted former Sections 340(b)(1) and 340(b)(2)(A) to require that the subscriber receive the specific local station that is affiliated with the same network as the SV station, whether the station's signal was analog or digital. 72 Although former Section 340(b)(1) lacked the express “same network affiliate” language as that contained in its digital counterpart, the Commission interpreted the two provisions together and read the “same network affiliate” requirement into former Section 340(b)(1), based largely on the concept that Congress intended the two provisions to achieve similar ends. 73 Accordingly, the Commission adopted Section 76.54(g) of the rules, based on the “same network affiliate” language in former Section 340(b)(2)(A). 74

19. As we tentatively concluded in the NPRM, new Section 340(b)(1) requires only that the subscriber receive local-into-local satellite service and no longer requires carriage of the local affiliate of the same network. 75 New Section 340(b)(1) applies “only to retransmissions to subscribers of a satellite carrier who receive retransmissions of a signal from that satellite carrier pursuant to Section 338.”  76 By providing simply that a subscriber must receive “a” signal from the satellite carrier pursuant to Section 338 before receiving a SV signal, the statute removes any precondition that a subscriber receive “the” local affiliate of the same network as the SV station. In drafting new Section 340(b)(1) for the STELA, Congress eliminated the “same network affiliate” language that appeared in the provision enacted as part of the SHVERA in 2004. 77 Our interpretation that the new Section 340(b)(1) requires only that the subscriber receive local-into-local service is also consistent with the provision's heading: “Service Limited To Subscribers Taking Local-Into-Local Service,” as well as with the statutory copyright license for SV stations, which allows a satellite carrier to retransmit SV stations to subscribers that receive signals pursuant to the statutory copyright license for local signals but says nothing about the subscriber having to receive the signal of the local affiliate of the same network. 78

20. Based on the language of the amended text, Congress' purposes of facilitating SV carriage and achieving closer parity between cable and satellite providers, and the shift of the SV copyright license from the distant license to the local license, 79 we conclude that the best interpretation of new Section 340(b)(1) is that the subscriber need only receive a local station pursuant to Section 338 in order to be eligible to receive SV stations, and that it need not receive the network affiliate affiliated with the same network as the SV station. 80 The Broadcaster Associations disagree with the NPRM's interpretation of new Section 340(b)(1) and argue that the Commission should retain the interpretation it applied to the SHVERA, notwithstanding the change in the statutory language as enacted in the STELA. 81 They note that, in implementing the SHVERA in 2005, the Commission interpreted the former analog local service provision in former Section 340(b)(1) and the former digital local service provision in former Section 340(b)(2)(A) to require that a satellite subscriber must receive the local affiliate of a specific network in order to be eligible to receive the SV station affiliated with the same network. 82 The SHVERA, in contrast to the STELA, included language expressly requiring receipt of the “same network affiliate” in the provision applying to eligibility for a digital SV station. 83 The Commission, relying on the language in the former digital provision, applied the requirement to subscriber eligibility for both analog and digital SV stations. 84 The Broadcaster Associations contend that we should retain the former interpretation and apply it to the new STELA provision despite the removal of the old language. 85 They argue that nothing has materially changed with respect to the local service requirement, other than the completion of the DTV transition and, therefore, that the Commission's prior interpretation of Section 340(b)(1) should not change. 86 They argue that Congress “re-enacted” the Commission's 2005 interpretation of former Section 340(b)(1) because it did not substantively change that provision, thereby giving its “implicit approval” of that interpretation. 87 We reject these arguments as they ignore that the STELA does, in fact, materially change the SHVERA's local service requirements. 88

21. The Broadcaster Associations assert that we must presume that Congress was aware of the Commission's prior interpretation of the local service provision. 89 By the same reasoning, however, we must also presume that Congress was aware of the basis for that interpretation: Namely, the “same network affiliate” language in the former digital local service requirement in former Section 340(b)(2)(A). Congress intentionally removed that requirement when it chose to strike that language in favor of the former analog local service limitation language. As we said in the NPRM, Congress chose to discard the “same network affiliate” language in the former digital local service requirement in Section 340(b)(2)(A), which the Commission had relied upon for its more restrictive interpretation of the former analog local service requirement in Section 340(b)(1). 90 As Dish notes: “Congress' eraser is no less dispositive than its pen.”  91 Moreover, our interpretation is consistent with Congress' intent to facilitate carriage and availability of SV stations for more satellite subscribers, and, thereby, to achieve closer parity with cable carriage of SV stations.

22. The Broadcaster Associations also argue that because both the former and new Section 340(b)(2) contain the “same network affiliate” language, the need to reconcile these two provisions remains. 92 Moreover, they argue that because three out of four of the Section 340(b) provisions contain the “same network affiliate” language, we should read that language into the one that does not: The new local service requirement. 93 We reject both claims. New Section 340(b)(2) is a different requirement from the other provisions of Section 340(b), and addresses only when a satellite carrier may provide the HD signal of an SV station. 94 Moreover, contrary to the Broadcaster Associations' assertion, we find that Congress's inclusion of the “same network affiliate” language in three out of four of the Section 340(b) provisions and not in the amended digital local service provision indicates that such exclusion was intentional. 95

23. We recognize that there may be tension in some circumstances between the goals of protecting localism, on the one hand, and achieving closer parity between pay television providers and increasing SV carriage, on the other. Specifically, our interpretation below of the STELA's amendments to Sections 340(b)(1) and (b)(2) makes it possible for a satellite carrier to carry an SV network station, even in HD format, without also carrying the corresponding local in-market affiliate if that local station has not granted retransmission consent. The Broadcaster Associations argue that this undermines local service. 96 However, because SV status generally applies to only some areas in a DMA and not throughout an entire DMA, we find it unlikely that an SV station could permanently substitute for a local in-market station, even in the provision of network programming to the market. 97 Moreover, because most viewers want to watch their local stations, we do not think that carriage of only SV stations would satisfy most subscribers for an extended time. Furthermore, as the Broadcaster Associations have noted in a different proceeding, retransmission consent impasses resulting in loss of a local station are relatively rare  98 and, when they do occur, they are usually short-lived. Although the Broadcaster Associations do provide a few examples of markets where they have concerns that satellite carriers could rely on carriage of an SV station to the exclusion of the local in-market station, the record does not reflect instances in which an SV station has supplanted an in-market station in the cable or satellite context. 99 Therefore, we will monitor how the rules adopted in this order are working to determine if there are abuses, unintended consequences, or misuse of the rules that might lead to violations of the good faith requirements associated with retransmission consent negotiations. 100 Now that we have established a practical framework for satellite carriage of SV stations, we expect Satellite Carriers to offer SV stations to consumers wherever possible. However, if our implementation of Section 340(b) results in satellite carriers using SV stations to supplant, rather than supplement, their carriage of local in-market stations, we will reexamine our rules and our statutory analysis here in light of Congress' goals. In light of our conclusion that the new language in the STELA no longer requires subscriber receipt of a specific local station, we revise Section 76.54(g). 101 The amended rule requires that a subscriber receive the satellite carrier's local-into-local service as a precondition for the subscriber to receive SV stations.

24. We adopt our proposal to eliminate the “equivalent or entire bandwidth” requirement and to provide, in its place, that a satellite carrier may retransmit the HD signal of an SV station to a subscriber only if such carrier also retransmits the HD signal of the local station affiliated with the same network whenever that signal is available in HD format. Both the Broadcaster Associations and Satellite Carriers agree with this conclusion. The commenters disagree, however, how to interpret and implement the new “HD format” requirement.

25. In the 2004 SHVERA, Congress enacted the “equivalent or entire” bandwidth requirement to prevent a satellite carrier from using technological means to discriminate against a local network station in favor of the SV network affiliate. 102 The Commission codified these requirements in Section 76.54(h) of the rules, which tracks the language of SHVERA. 103 In implementing that provision, the Commission strictly interpreted the statutory requirement for “equivalent bandwidth.” As a result, satellite carriers have been required to ensure equality between the satellite bandwidth allocated to carriage of the local station and the SV stations on virtually a minute-by-minute basis, making carriage of SV stations so burdensome that they are rarely carried. 104

26. The STELA eliminated the “equivalent or entire bandwidth” requirement from the statute, 105 and replaced it with “HD format.”  106 In doing so, Congress intended to facilitate satellite carriage of SV stations, which Congress thought was thwarted by the Commission's implementation of the predecessor provision. 107 The legislative history also shows that Congress wanted to simplify the law and increase service to satellite consumers. 108 Congress' principal concern was simply to clarify that a satellite carrier may provide an SV station in HD format as long as the carrier also carries the corresponding local network affiliate in HD format if it is available in HD format. 109

27. Accordingly, we revise Section 76.54(h) to eliminate the “equivalent or entire bandwidth” requirement and to provide that a satellite carrier may retransmit the HD signal of an SV station to a subscriber only if such carrier also retransmits the HD signal of the local station affiliated with the same network whenever that signal is available in HD format. 110 This part of the rule tracks the amended statutory language. 111 In addition, as discussed below, we adopt additional rules to interpret and implement the new “HD format” requirement.

28. We adopt our tentative conclusion in the NPRM that the “HD format” requirement in Section 340(b)(2) applies only where a satellite carrier retransmits the SV station in HD format and does not restrict satellite carriage of the SV station in SD format. 112 The Satellite Carriers support this conclusion, while the Broadcaster Associations oppose it. 113

29. The Broadcaster Associations object to the additional language in our proposed Section 76.54(g)(2) clarifying that the “HD format” requirement does not apply to satellite carriage of an SV station in SD format. 114 They argue that the statute requires satellite carriage of a local station in SD format if the satellite carrier retransmits the SV station in SD format. We disagree. As discussed above, the amended local service requirement in Section 340(b)(1) now requires only that a satellite subscriber receive the satellite carrier's local-into-local service as a precondition for the subscriber to receive SV stations. 115 Moreover, the express language of the HD format requirement in Section 340(b)(2) applies only when a satellite carrier transmits an SV station in HD format. Therefore, in order for a satellite carrier to retransmit to a subscriber an SV station in SD format, the statute does not require satellite carriage of the local station affiliated with the same network in SD format.

30. Accordingly, we adopt our tentative conclusion that Section 340(b)(2) only limits satellite carriage of an SV station in HD format and does not apply if the satellite carrier only carries the SV station in SD format, and we adopt this requirement in new Section 76.54(g)(2). 116 We also adopt our proposal that, for purposes of this provision, “HD format” refers to a picture quality resolution of 720p, 1080i, or higher. 117 We received no opposition to this proposal.

31. We conclude that, for a local (in-market) station to be “available” for purposes of the “HD format” requirement in Section 340(b)(2), the local station must: (1) Timely request carriage ( i.e., elect mandatory carriage or grant retransmission consent); (2) provide a good quality HD signal to the satellite carrier's local receive facility (LRF) in accordance with Section 76.66(g) of the Commission's rules; and (3) otherwise comply with Sections 76.65 and 76.66. 118 We believe that the statute's use of the term “available,” instead of “broadcast” or “transmitted,” signifies that Congress did not intend a narrow technical meaning and affords us discretion to create a workable framework for satellite carriage of SV stations. Our conclusion is supported by Dish and DIRECTV, 119 while the Broadcaster Associations oppose it. 120

32. The STELA establishes the new “HD format” requirement in Section 340(b)(2) to permit a satellite carrier to retransmit an SV network station in HD “only if such carrier also retransmits in high definition format the signal of a station located in the local market of such subscriber and affiliated with the same network whenever such format is available from such station.”  121 In the NPRM, we sought comment on the significance of this language. We also sought comment on whether satellite carriers would face any technical problems in complying with our proposed rules.

33. The STELA does not define the term “available” for purposes of Section 340. 122 The legislative history likewise does not explain the meaning of the term. The Satellite Carriers and Broadcaster Associations offer competing interpretations as to what “available” should mean in this context. Dish argues that we should interpret this language to mean that, “if the local station has not elected must carry and has not signed a retransmission consent agreement, or fails to provide a good quality signal in accordance with [Section] 76.66(g), then the signal should be deemed not available for purposes of the [“HD format” requirement], and the satellite carrier should be able to supply the SV station in HD.”  123 Dish argues that this interpretation is necessary to prevent a local station from depriving satellite subscribers of both the local and the SV station in the event of an impasse in retransmission negotiations, which they assert would be “a result directly at odds with Congress' express intent to make SV stations more available to satellite subscribers.”  124 The Broadcaster Associations oppose Dish's proposal, asserting that the Satellite Carriers' interpretations of the new “HD format” requirement “are motivated by a desire to affect retransmission consent negotiations.”  125

34. The Broadcaster Associations argue that the term “available” should mean “whenever the television station is transmitting or broadcasting the relevant channel in HD format.”  126 They argue that this interpretation is most consistent with other parts of the statute, such as Sections 339  127 and 342  128 of the Act. 129 We disagree. The Sections cited by the Broadcaster Associations pertain to a different use of the term “available” in different contexts and are expressly limited to those contexts. Moreover, even if we were to rely on the definition of “available” in Section 339 or the reference to “availability” in Section 342, the term “available” in the context of SV carriage would remain ambiguous. Section 339 relates to whether a satellite carrier's local-into-local package is “available” to a subscriber. If so, the subscriber is not eligible for distant signals ( i.e., “no distant, where local”). In the context of HD signal availability in Section 340, ascribing this meaning to the term “available” could support either the Satellite Carriers' interpretation that the HD signal is not available if the local station does not grant consent for retransmission or the Broadcaster Associations' interpretation that the HD signal is available if broadcast. 130 Similarly, Section 342 refers to the “availability level” of a satellite signal as a means of defining “good quality satellite signal” for purposes of a satellite carrier's eligibility for certification as a “qualified carrier.”  131 We do not see the relevance of satellite signal coverage in the context of Section 342 to the interpretation of Section 340. Moreover, here again, even by strained analogy, signal availability could mean the physical presence of the signal, as the Broadcaster Associations argue, or the ability to receive and use the signal, as the satellite carriers contend.

35. In contrast to the Broadcaster Associations' attempt to import uses of the word from other contexts, the Satellite Carriers describe the circumstances in which the HD format requirement is intended to apply: When the satellite carrier receives a station's HD signal and the permission to retransmit it but chooses not to retransmit the HD version and instead converts the HD signal to a standard definition (“SD”) signal. 132 We believe that this interpretation is most consistent with common usage of the term “available.” In contrast, we think it strains the common meaning of the term to consider “available” a signal that the satellite carrier is legally barred from carrying.

36. The Satellite Carriers also address the practical impact of defining the term “available” as suggested by the Broadcaster Associations. They explain that they offer local service in some markets only in HD. 133 Therefore, an SV station originating from such a market would have one HD feed covering both the station's local market and SV area and there would be no technical way for the satellite carrier to down-convert the HD feed signal to SD only in the SV area. Moreover, a satellite carrier would likely not have the capacity on its spot beam to add a duplicative, SD version of the station. 134 Therefore, if a local station withholds retransmission consent, the Satellite Carriers would have to either down-convert the SV station from HD to SD in its own local market or not carry it as an SV station, frustrating the intent of the statute. 135

37. The question then is whether an HD signal is “available” for purposes of the statute any time a broadcaster is transmitting an HD signal, or whether the term “available” takes into account practical and legal considerations, such as whether the broadcaster is delivering a “good quality signal” to the satellite carrier  136 and the satellite carrier is legally permitted to carry it ( i.e., the broadcaster has elected mandatory carriage or granted retransmission consent). 137 We believe the term is ambiguous  138 and thus should be defined in a manner that best effectuates the text, history and purposes of the statute. 139 As discussed above, we believe the overriding goal of the legislative changes made in Section 340 is to facilitate satellite carriage of SV stations and remove the obstacles to carriage created by our interpretation of SHVERA. 140 With this goal in mind, we find that the term “available” within the context of Section 340(b)(2) is best interpreted by taking into account whether the satellite carrier has the legal authority to transmit the local broadcaster's signal and has been provided a “good quality” signal, and we believe that this interpretation is most consistent with common usage of the term.

38. We agree with the Broadcaster Associations that our rules must protect localism, 141 but disagree that we must protect the in-market station at the cost of making satellite carriage of the SV station impractical. 142 The Broadcaster Associations' argument fails to take into account that the SV station is generally not significantly viewed throughout an entire market. Indeed, the Satellite Carriers contend that stations that are significantly viewed outside of their own markets are generally significantly viewed only in small portions of neighboring markets, making it unlikely that satellite carriers could use SV stations to replace local stations in other markets. 143 As noted above, we also find it unlikely that an SV station could permanently substitute for a local in-market station to the satisfaction of subscribers throughout the market. 144

39. We are persuaded that, if we were to adopt the Broadcaster Associations' interpretation that a station's HD signal is “available” even when it has not granted retransmission consent or is not providing a “good quality” signal, the satellite carrier in many cases will have to downconvert the SV station or not carry the SV station at all due to limited satellite capacity, 145 and Congressional intent will, again, be thwarted. If, on the other hand, we were to conclude that a station's HD signal is not “available” unless the carrier has the legal right to carry the station and a “good quality” signal is being provided, the satellite carrier will be able to carry an SV station and, in the overwhelming majority of cases, will continue to have the incentive to reach a retransmission consent agreement with the local station. Thus, this interpretation will likely result in carriage of both the SV and local stations. We acknowledge that this interpretation may affect retransmission consent negotiations in some situations by giving a satellite carrier the opportunity to provide network programming to some subscribers through the SV station. This interpretation may also affect the local station's leverage in negotiations because in certain areas of the DMA it would no longer be the only source of programming from that network to some satellite subscribers. We conclude, however, that this is the best interpretation of the statutory language because it ensures that the overall intent of the statutory provisions to promote SV carriage is carried out. 146

40. Therefore, we find that Section 340(b)(2) is best interpreted to enable satellite TV consumers to receive both the SV and in-market stations as part of their carrier's local service package. 147 Accordingly, we amend Section 76.54(g)(2). 148 We note, however, that our interpretation here assumes that both parties are negotiating in good faith in compliance with our rules. 149 If the local station is willing to grant consent and make its HD signal available, but the satellite carrier is not negotiating for retransmission consent in good faith, as required by Section 76.65, then the local station's HD signal will be deemed available. The amended Section 76.54(g)(2) includes this condition. 150

41. We find that the “HD format” requirement is best interpreted to require carriage of any HD signal of a local station affiliated with the same network as the SV station, regardless of whether the local station broadcasts the HD signal as a primary or as a secondary multicast stream. 151 The Broadcaster Associations and Dish debate whether the statute's use of the term “signal” includes a multicast stream, with the Broadcaster Associations arguing it does and Dish arguing it does not.

42. In the NPRM, we sought comment on how the “HD format” requirement in Section 340(b)(2) should apply in the event a satellite carrier wants to retransmit an SV network affiliate in HD and there is an in-market (local) station that is broadcasting multiple streams of programming (“multicasting”) and more than one of the streams is in HD format and affiliated with a network. We asked whether the satellite carrier is required to carry the secondary stream in HD in order to be permitted to retransmit an SV station affiliated with the same network in HD, notwithstanding that the in-market station's primary stream is affiliated with a different network. In other words, would a satellite carrier be required to carry more than one HD programming stream of an in-market station if the in-market station is multicasting HD streams that are affiliated with different networks in order for the satellite carrier to carry an SV station affiliated with each network in HD? We also considered whether we could address this situation on a case-by-case basis. In their comments, both the Broadcaster Associations and the Satellite Carriers seek a Commission decision on the multicast question. 152

43. We conclude that the statute's use of the term “signal” in this context does not differentiate between streams that are primary or secondary. 153 For purposes of carriage of SV signals in HD, the question is whether there is an in-market station affiliated with the same network as the SV station that makes its HD signal available to the satellite carrier. If so, the satellite carrier may not carry the SV station in HD format unless it carries the local station affiliated with the same network in HD format. Dish argues that Section 340(b)(2) does not expressly use the term “multicast stream,” but, as noted by the Broadcaster Associations, this section also does not expressly use the term “primary stream.”  154 Dish notes that, for purposes of the broadcast carriage requirements, a satellite carrier is generally only required to carry the stream that a station deems its “primary” stream if the station elects mandatory carriage. 155 That carriage requirement, however, is not determinative of which signal a satellite carrier is required to carry in order to carry a particular SV station in HD format under Section 340(b)(2). As stated above, when an SV station is carried in HD, we interpret Section 340(b)(2) as requiring carriage of any available HD signal of a local station affiliated with the same network as the SV station. We amend Section 76.54(g)(2) accordingly. 156

44. Though appearing to acknowledge that the “HD format” requirement applies to multicast channels, DIRECTV expresses concern that applying the HD format requirement to multicast streams would make carriage of SV stations technically problematic because of what it calls the “mushroom” problem; that is, “if a new, [HD] network affiliate suddenly appeared on the multicast stream of an existing station, [DIRECTV] would have to drop or downrez the [SV] station until [DIRECTV] could negotiate carriage and make room for the `new' local station.”  157 We believe our definition of “available” in the HD format requirement may alleviate this “mushroom” problem in many cases because a new HD multicast stream would not be available to the satellite carrier until the station grants retransmission consent for that stream. Additionally, if the new HD multicast stream is a new station, our existing satellite carriage rules already recognize that satellite carriers may face technical issues associated with commencing carriage of new broadcast signals in a local market. 158 We recognize, however, that a satellite carrier may nonetheless face a “mushroom” problem where a new HD multicast stream is introduced by an existing station in the local market and such station has previously granted carriage consent. Furthermore, the satellite carrier may not be able to accommodate the new HD multicast stream in the market on its spot beam. Therefore, to minimize consumer disruption, we recognize that satellite carriers may need additional time to come into compliance with the HD format rule without having to drop an existing SV station while they make the technical adjustments necessary to carry a new HD format network stream. 159 We will consider special circumstances on a case-by-case basis, considering when the satellite carrier was informed of the introduction of a multicast stream containing HD signals in relation to the existing HD carriage of an SV station affiliated with the same network, as well as the carrier's compliance with its notice requirements with respect to carriage of SV signals. 160

45. While the STELA revises the subscriber eligibility limitations on receipt of SV service in Sections 340(b)(1) and 340(b)(2), it does not amend the statutory exceptions to those limitations in Sections 340(b)(3) and 340(b)(4). 161 As noted above, the Section 340(b)(3) exception permits a satellite carrier to offer an SV network station to a subscriber when there is no local network affiliate present in the local market, 162 and the Section 340(b)(4) exception permits a satellite carrier to privately negotiate with the local network station to obtain a waiver of the eligibility restrictions. 163 The Broadcaster Associations argue that if Section 340(b)(1) were construed simply to require receipt of some local-into-local service, rather than local-into-local carriage of the local affiliate of the same network as the SV station, that reading would render superfluous the exceptions to Section 340(b)(1) contained in Sections 340(b)(3) and (b)(4). 164 To support their argument, the Broadcaster Associations rely on the Commission's 2005 decision that the “best reading” of the SHVERA version of Section 340(b)(1) required receipt of the local affiliate of the same network because, under any other reading, “there would be no need” for the Section 340(b)(3) or (b)(4) exceptions to Section 340(b)(1). 165 We reject the Broadcaster Associations' argument and find that our 2005 interpretation was not necessary to give effect to the Section 340(b)(3) and (b)(4) exceptions. 166 Giving effect to the most natural reading of Section 340(b)(1)—which lacks the “same network affiliate” language found elsewhere in Section 340 and simply requires receipt of some local-into-local service as a condition of retransmitting SV stations—does not render either Section 340(b)(3) or Section 340(b)(4) superfluous. For example, in a situation where a satellite carrier does not offer a local-into-local package and thus Section 340(b)(1) would otherwise prohibit retransmission of any SV network station, Section 340(b)(3) would allow retransmission of an SV station to subscribers where there is no local station affiliated with the same television network as the SV station in the market ( e.g., an SV station that is an ABC affiliate could be retransmitted if there is no local ABC affiliate). Likewise, if a subscriber does not receive the local-into-local package, thereby failing to meet the requirements of Section 340(b)(1), retransmission of an SV station to that subscriber would nonetheless be permissible under Section (b)(4) if the local station affiliated with the same network as the SV station grants a waiver from the requirements of Section 340(b)(1) ( e.g., the local ABC affiliate permits the satellite carrier to retransmit an SV station that is an ABC affiliate). These examples show that the exceptions of (b)(3) and (b)(4) have meaning even when we read (b)(1) simply to require receipt of some local-into-local service as a condition of retransmitting SV stations. Further, we reject the Broadcaster Associations' argument that because Congress did not amend Sections 340(b)(3) and (b)(4) when it adopted the STELA in 2010, the Commission may not depart from its 2005 interpretation of Section 340(b)(1). 167 This argument ignores that an agency is free within the limits of reasoned interpretation to change course so long as it adequately justifies the change. 168 In 2005, the Commission construed what it found to be an ambiguous provision in Section 340(b)(1) by adopting a reading that the Commission believed would best harmonize Section 340(b)(1) with Sections 340(b)(2), (b)(3) and (b)(4). 169 Given the modifications to Sections 340(b)(1) and (b)(2) enacted in STELA and Congress's intent to ease carriage of SV stations, nothing in that legislation suggests that Congress intended to lock in the Commission's 2005 interpretation of Section 340(b)(1) or restrict the Commission's discretion to interpret the revised eligibility requirements. As explained above, we now conclude that our earlier reading was not in fact necessary to harmonize the various provisions of Section 340(b). Moreover, our reading of Section 340(b)(1) here better serves the STELA's goals of improving service options for satellite subscribers by allowing SV carriage in additional situations.

46. In the 2005 SHVERA Significantly Viewed Report and Order, the Commission interpreted the Section 340(b)(3) exception to allow a satellite carrier to retransmit an SV station to a subscriber when there is no local affiliate of the same network present in that market, provided that the subscriber subscribes to and receives the carrier's local-into-local service. 170 Under our new interpretation of the subscriber eligibility limitations in Section 340(b)(1) and (2), the Section 340(b)(3) exception permits a subscriber to receive an SV network affiliate, even if he or she does not subscribe to local-into-local service, if there is no affiliate of that network in his or her local market. 171 In other words, Section 340(b)(3) operates as an exception to any limitations on subscriber eligibility to receive a SV station if there is no affiliate of the same network as the SV station in the local market. Because it gives effect to the language of Section 340(b)(3), as well as the amended language of the statute's subscriber eligibility limitations, and will serve the STELA's overarching goal of fostering SV carriage while protecting localism, we conclude that our new interpretation represents the best reading of Section 340(b)(3) in the context of the statute as a whole.

47. In this respect, we modify the Commission's 2005 interpretation of Section 340 and decline to adopt our tentative conclusion in the NPRM that the statutory exceptions should continue to apply as before. Section 340(b)(3) allows a satellite subscriber to receive an SV station notwithstanding the restrictions imposed by Sections 340(b)(1) and (b)(2) if there are no network stations affiliated with the same network as the SV station. Thus, even if the subscriber does not subscribe to local-into-local service, as would otherwise be required by Section 340(b)(1), the subscriber can receive an SV station if there is no local station affiliated with the same network as that SV station. We recognize that the compulsory copyright license, now in 17 U.S.C. 122(a)(2), limits SV service to markets in which local-into-local service is offered. However, we disagree that this requires us to read a requirement into the Communications Act that is not there. The compulsory copyright license in 17 U.S.C. 122(a)(2) permits waivers and automatically grants them if the in-market station affiliated with the same network as the out-of-market SV station does not respond to the satellite carrier's waiver request. 172 As a practical matter, if there is no affiliate in the market, then there is no affiliate who can respond to a waiver request or grant a waiver under Section 122(a)(2). Thus, the satellite carrier could ultimately offer the SV station because the waiver request would, inevitably, go unanswered. 173 Accordingly, we interpret the Section 340(b)(3) in accordance with its express language. We find it unnecessary to change the text of the rule that corresponds to the Section 340(b)(3) exception because the rule uses the statutory language and is consistent with the interpretation adopted here. 174

48. We decline to consider here Dish's petition for further rulemaking (filed with its comments in this docket) as it is not within the scope of this proceeding. 175 The Dish petition seeks two changes to the Commission's rules. 176 First, Dish asks the Commission to adopt a rule “that tying retransmission consent to restrictions on SV station carriage” violates the requirement that parties negotiate retransmission consent in good faith. 177 Dish's first proposal to change the retransmission consent rules could have been filed in our open proceeding on retransmission consent issues in MB Docket No. 10-71. 178 Second, Dish seeks to amend the Commission's rules for determining when a station qualifies for “significantly viewed” status in order to address the “orphan county” problem, which refers to the situation in which a county in one State is assigned to a neighboring State's DMA and there are few, if any, stations assigned to that DMA which are licensed to communities located in the State in which the county is located. 179 This proposal is better addressed in our proceeding to implement Section 304 of the STELA. 180 We also note, as the Broadcaster Associations point out, 181 that any changes to the Commission's existing rules for determining significantly viewed status would be inconsistent with the statute's requirement that we use the same rules for making significantly viewed determinations that were in effect for cable operators as of April 15, 1976. 182

49. In this section, we make non-substantive changes to update our significantly viewed rules. In the NPRM, we sought comment on these rule changes. The Broadcaster Associations and Satellite Carriers support these changes. Accordingly, we adopt the NPRM's proposed housecleaning rule changes.

50. Section 76.5(i). We amend Section 76.5(i) of the rules to replace its references to the term “non-cable” with the term “over-the-air.”  183 In the 2005 SHVERA Significantly Viewed Report and Order, the Commission made this change to Section 76.54 to reflect the rule's true meaning, that being to indicate over-the-air viewing. 184 The Commission explained that, in the 1972 Order, the concept of significant viewing was adopted to apply to over-the-air households, which at the time essentially meant households without cable ( i.e., non-cable households). 185 Thus, amending Section 76.5(i) to change “non-cable” to “over-the-air” reflects the true intent of the rule as it was in 1976, and is more consistent with the STELA's intent to establish parity between cable and satellite.

51. Section 76.54(c). We amend Section 76.54(c) of the rules to strike the outdated reference to the analog Grade B contour. 186 In the 2004 SHVERA Significantly Viewed Report and Order, the Commission revised this rule to add the appropriate service contour relevant for a station's digital signal—that being the noise limited service contour (“NLSC”). 187 With the completion of the transition, we now can eliminate the reference to the Grade B contour.

The Secretary of Transportation's (Secretary) general jurisdiction to establish regulations concerning the procurement by property brokers of for-hire transportation in interstate or foreign commerce is found at 49 U.S.C. 13501. Brokers of household goods are a subset of all property brokers and specifically register with FMCSA as household goods brokers as required by 49 U.S.C. 13901 and 13904. This rulemaking applies only to household goods brokers that procure for-hire transportation in interstate or foreign commerce.

The Secretary is authorized to collect from household goods brokers “information the Secretary decides is necessary” to ensure a transportation system that meets the needs of the United States (49 U.S.C. 13101 and 13301). The Secretary also has authority to adopt regulations applicable to registered household goods brokers which “shall provide for the protection of shippers by motor vehicle” (49 U.S.C. 13904(c)). The Secretary's authority to inspect and copy household goods broker records is found at 49 U.S.C. 14122. The Secretary has delegated these various authorities to the FMCSA Administrator (49 CFR 1.73(a)).

This rulemaking is based on the statutory provisions cited above and on the Household Goods Mover Oversight Enforcement and Reform Act of 2005, Title IV, Subtitle B of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L. 109-59). This rulemaking focuses on the business practices of household goods brokers engaged in interstate or foreign commerce. Household goods brokers arrange, but do not perform, the transportation of household goods shipments.

Section 4212 of SAFETEA-LU directs the Secretary to require a household goods broker to provide shippers with the following information whenever the broker has contact with a shipper or a potential shipper:

1. The broker's U.S. DOT number.

2. The FMCSA pamphlet titled, “Your Rights and Responsibilities When You Move.”

3. A list of all motor carriers providing transportation of household goods used by the broker and a statement that the broker is not a motor carrier providing transportation of household goods.

Section 4209 of SAFETEA-LU adds new civil penalties for unlawful broker estimating practices and increases existing civil penalties for providing household goods motor carrier or broker services subject to FMCSA jurisdiction without being registered with FMCSA.

The Secretary's general jurisdiction at 49 U.S.C. 13501 authorizes FMCSA to establish shipment estimating and other requirements not specifically mandated by SAFETEA-LU in this final rule.

Household goods brokers have been regulated by FMCSA and its predecessor agencies for many years and a number of regulations apply to them, including registration requirements (49 CFR part 365), process agent requirements (49 CFR part 366), and financial responsibility  1 requirements (49 CFR part 387). Section 387.307 requires property brokers, including household goods brokers, to maintain a surety bond or trust fund agreement in the amount of at least $10,000 to provide for payments to motor carriers or shippers, if the broker fails to carry out its agreement to supply transportation by authorized motor carriers.

Part 371 of FMCSA's regulations specifies general property broker transaction record requirements, prohibits misrepresentation of the broker's name or non-carrier status, and prohibits certain rebating and compensation practices. Part 379 specifies general recordkeeping retention periods.

FMCSA may also issue orders to compel compliance, impose civil monetary penalties, revoke the broker's license, or seek Federal court orders to stop statutory and/or regulatory violations. Because household goods brokers do not provide the actual transportation, they are not subject to FMCSA's safety jurisdiction.

On March 6, 2003, the American Moving and Storage Association (AMSA) petitioned FMCSA to initiate a rulemaking to amend 49 CFR part 371, “Brokers of Property,” to impose specific additional requirements on household goods brokers. A copy of AMSA's petition is in docket FMCSA-2004-17008. AMSA's main argument for additional rulemaking was its assertion that there were an increasing number of moving-related Web sites hosted by household goods brokers engaging in unfair business practices.

FMCSA granted AMSA's petition and issued an Advance Notice of Proposed Rulemaking (ANPRM) in 2004 (69 FR 76664, December 22, 2004). In the ANPRM, FMCSA sought answers to 36 questions related to household goods broker issues. By posing these questions, the Agency sought to determine the extent to which the public believes a problem exists with household goods brokers and, if so, whether regulatory or non-regulatory solutions would better solve the problem.

Also in the ANPRM, FMCSA discussed how it became responsible for household goods broker regulatory oversight through the Interstate Commerce Commission Termination Act of 1995 (ICCTA) (Pub. L. 104-88, December 29, 1995, 109 Stat. 803) and the Motor Carrier Safety Improvement Act of 1999 (MCSIA) (Pub. L. 106-159, December 9, 1999, 113 Stat. 1748). The ICCTA gave the Secretary of Transportation jurisdiction over the procurement of interstate motor carrier transportation (49 U.S.C. 13501). The MCSIA, in establishing FMCSA, granted to the Agency regulatory oversight of the property broker regulations. The former Interstate Commerce Commission (ICC) decided on May 16, 1949 (Ex Parte MC-39 “Practices of Property Brokers,” 49 M.C.C. 277, at 286) (14 FR 2833, May 28, 1949) that it was necessary to regulate all property brokers, including household goods brokers, in interstate or foreign commerce. In that proceeding, the ICC decided it was unnecessary to regulate household goods brokers separately from general freight brokers.

Generally, the commenters to the ANPRM did not express support for rulemaking action or address many of the specific questions raised in the ANPRM. For example, none of the commenters submitted specific information related to the questions about the estimated number of household goods brokers, or questions about details of the household goods broker business. Commenters did, however, offer useful information and suggestions in other areas to assist FMCSA in developing a rulemaking proposal.

The Notice of Proposed Rulemaking (NPRM) (72 FR 5947, February 8, 2007), addressed the problems and recommendations identified by AMSA in its petition, incorporated requirements mandated by SAFETEA-LU, and adopted some of the recommendations made by commenters to the ANPRM. FMCSA proposed to amend the current broker regulations in part 371 by adding a new subpart B specifically for household goods brokers; amend appendix B of part 386 to incorporate the civil penalties applicable to household goods brokers added by SAFETEA-LU; and amend part 387 to increase the amount of the surety bond or trust fund currently required for household goods brokers.

The proposed rule consisted of five basic elements that are being made final in this rule:

• It would require household goods brokers to disclose to individual shippers critical information designed to educate the shipper and facilitate a satisfactory moving experience.

• It would require household goods brokers to use only household goods motor carriers that are properly licensed and insured.

• It would impose requirements governing estimates, consistent with those statutorily imposed on household goods motor carriers.

• It would incorporate new statutory penalties for providing estimates without an agreement with a household goods motor carrier and for operating without being registered with FMCSA.

• It would adjust for inflation the current minimum level of financial responsibility required of household goods brokers.

FMCSA received 11 comments on the notice of proposed rulemaking (NPRM) (72 FR 5947, February 8, 2007). Several commenters expressed general support for the requirements imposed on household goods brokers. The following sections discuss comments on specific issues and FMCSA's responses to those comments.

Proposed § 371.101 would require household goods brokers that operate in interstate or foreign commerce to comply with all of the provisions of subpart B. AMSA recommends adding a phrase to state that the rule applies to a broker offering services “to individual shippers.”

FMCSA response. FMCSA agrees with AMSA. The subpart's scope should be limited to only household goods brokers offering services to individual shippers. It should not include commercial and government shippers that are generally more knowledgeable of brokerage transactions. FMCSA will change the rule to the following. “Yes, you must comply with all regulations in this subpart when you operate as a household goods broker offering services to individual shippers in interstate or foreign commerce. The regulations in this subpart do not apply to a household goods broker when providing services to commercial or government shippers in interstate or foreign commerce.”

Proposed § 371.103 would define terms used in subpart B. FMCSA proposed definitions for the terms “household goods,” “household goods broker,” and “individual shipper.” The acronym “FMCSA” was used numerous times in the proposed rule, but the Agency does not show a definition of the term in part 371.The Agency will add the acronym “FMCSA” in the final rule and define it to mean “Federal Motor Carrier Safety Administration.”

Proposed § 371.105 would make it clear that a household goods broker may only act as a household goods broker for a household goods motor carrier that has a valid, active U.S. DOT number and valid, active operating authority issued by FMCSA. This requirement was requested by AMSA in its Petition for Rulemaking and was suggested by some of the commenters to the ANPRM. The use of FMCSA-registered household goods motor carriers to provide the transportation will provide a greater level of assurance that the household goods motor carrier will comply with applicable FMCSA regulations. The Public Utilities Commission of Ohio (PUCO) believes it would be useful to keep a database of consumer complaints against each carrier so that potential shippers could identify potentially troublesome movers.

FMCSA response. FMCSA maintains a consumer complaint database and allows public access to consumer complaint information regarding household goods carriers and brokers. This database can be accessed on the Internet by going to http://www.protectyourmove.gov and selecting the hyperlink “Search for Moving Companies and View Complaint History” which will lead to http://ai.volpe.dot.gov/hhg/search.asp. In a separate rulemaking (73 FR 9266, February 20, 2008), FMCSA proposed that each household goods carrier must submit a statutorily-mandated quarterly report about consumer complaints it receives, which should assist individual shippers in evaluating their transportation options.

FMCSA proposed (§ 371.107) implementing section 4212 of SAFETEA-LU by requiring that household goods brokers disclose to potential shippers their Department of Transportation registration number and that they are not motor carriers providing transportation of household goods. FMCSA also proposed that household goods brokers disclose certain information not required by SAFETEA-LU, but which FMCSA believes is necessary to assist individual shippers. The Agency proposed that household goods brokers prominently display in their advertisements and on their Web sites the following:

1. The physical location of the business.

2. Its “MC” operating authority number and U.S. DOT registration number. 2

3. Its status as a household goods broker that does not transport household goods but that arranges for such transportation.

AMSA urges FMCSA to monitor brokers' Web sites to ensure that unscrupulous brokers are not providing misleading information. The commenter also recommends an additional subparagraph in the rule to prohibit the broker from including the names or logos of motor carriers unless they are FMCSA-authorized household goods motor carriers with which the broker has a written agreement, as specified in § 371.115.

FMCSA response. As a part of its enforcement program, FMCSA already monitors the Web sites of household goods brokers and carriers to determine if they are providing misleading information on the Internet. We conduct compliance reviews and initiate enforcement action when appropriate.

We add a subparagraph in the final rule to provide more information to individual shippers receiving estimates prepared by brokers pursuant to § 371.113(b). A household goods broker that provides an estimate on behalf of a motor carrier must state on the broker's Web site that any estimate must be based on the carrier's tariff and that the carrier is required to make the tariff available for public inspection upon a reasonable request. We add this requirement to better ensure that individual shippers understand their rights with respect to broker-prepared estimates.

We have adopted AMSA's suggestion to add a subparagraph in the final rule to prohibit household goods brokers from including the names or logos of motor carriers unless they are FMCSA-authorized household goods motor carriers with which the broker has a written agreement, as required by § 371.115. We agree that brokers should not misrepresent to shippers that their shipments will be moved by specific moving companies, when the broker does not have agreements with those companies. The provision is intended to further full and honest disclosure to the shipper.

FMCSA proposed (§ 371.109) that a household goods broker must provide to each potential individual shipper who has contact with the household goods broker a list of all household goods motor carriers used by the broker, to implement sec. 4212(3) of SAFETEA-LU. National Relocation Services and Pro Movers Network believe that the requirement is burdensome on the broker and does not serve a consumer protection purpose for the shipper.

FMCSA response. Notwithstanding the commenters' concerns about burden, the carrier list requirement is mandated by SAFETEA-LU. To address concerns regarding potential burdens on household goods brokers, FMCSA revises its proposal to allow household goods brokers to provide the information required by § 371.109 electronically either through a Web site or by electronic messaging (e-mail), as an alternative to a paper-based communication.

FMCSA proposed (§ 371.111) requiring that each household goods broker provide potential shippers with one copy of each of the two FMCSA consumer pamphlets: “Your Rights and Responsibilities When You Move,” and “Ready to Move?—Tips for a Successful Interstate Move.” Section 4205 of SAFETEA-LU requires household goods motor carriers to distribute both pamphlets and the proposal would impose the same requirement on household goods brokers. Proposed paragraph (a) permitted the household goods broker to make the information available through its Web site or by distribution of paper copies to each potential shipper. PUCO supports the proposed requirement. AMSA suggests FMCSA's requirements for household goods motor carriers in part 375 should allow use of a hyperlink on the carrier's Web site to provide the required consumer protection information.

FMCSA response. To better verify that shippers have been fully informed of their opportunity to access the consumer protection information via the broker's Web site, FMCSA has added a new paragraph (b) to § 371.111 to provide that the broker must state on any written estimate provided pursuant to § 371.113 that the individual shipper has expressly agreed to accept access to the information via the Web site in lieu of paper copies. FMCSA has also revised § 371.111 paragraph (c) to require written or electronic verification of the shipper's agreement to access the Federal consumer protection information via the Internet, instead of receiving the booklet copies in paper form.

AMSA's suggested revision of part 375 has merit and FMCSA will make the change it requested. This change will allow household goods motor carriers also to use a hyperlink on the carrier's Web site to provide the required consumer protection information. FMCSA believes it is in the best interests of shippers, brokers, and carriers for the consumer protection information to be distributed electronically if consumers choose to receive the information in that format. A shipper's ability to receive consumer protection information in his/her preferred medium should not depend on whether he/she arranges for transportation through a broker or directly with a motor carrier.

Proposed § 371.113(a) would require that, if the household goods broker provides an estimate, it must be in writing and must be based on a physical survey of the shipper's household goods, if the household goods are located within a 50 air-mile radius of the broker or its estimating agent. The Owner Operator Independent Drivers Association (OOIDA) believes the household goods broker should be required to conduct a physical survey regardless of the distance from the broker's place of business, unless the shipper can provide the broker a weight by which to determine an estimate of charges.

AMSA argues that proposed § 371.113(a) does not adequately address the inaccurate, “lowball” broker estimating problems experienced by consumers who receive estimates over the telephone or Internet without a physical survey because, in most cases, brokers are not located anywhere near shipping sites. Accordingly, AMSA recommends that the Agency revise its proposal by requiring that estimates be based on a physical survey conducted by the authorized motor carrier on whose behalf the estimate is provided, if the goods are located within a 50-mile radius of the motor carrier or its agent. AMSA also proposes that 49 CFR 375.409(a) be revised to require that all estimates provided by the broker be based on physical surveys conducted by the motor carrier transporting the shipment.

Pro Movers Network opposes the requirement for an in-home survey, because the provision is especially burdensome for consumers who are shipping a very small amount of goods. Pro Movers Network believes that if the list of goods provided by the shipper is complete, an accurate non-binding estimate based on weight does not require an in-home estimate. Also, Pro Movers Network commented that requiring in-home surveys limits a consumer's choices and the ability to receive a moving estimate remotely via the Internet.

FMCSA response. In the NPRM, FMCSA expressly invited comment on the impact to shippers, brokers, and motor carriers of applying or removing the 50-mile requirement for household goods broker estimates based on physical surveys, and invited comments on alternatives to this requirement. The Agency agrees with AMSA that because household goods brokers are rarely located within 50 miles of the shippers to whom they provide estimates, it is likely that the 50-mile radius exception, if implemented as proposed, would become the standard practice. As a result, FMCSA revised § 371.113(a) to require brokers to conduct or arrange for someone to conduct physical surveys of goods that are located within 50 miles of either the broker or the carrier on whose behalf the broker submits an estimate. As we stated in the NPRM, FMCSA recognizes that SAFETEA-LU did not prescribe estimating requirements for household goods brokers as it did for household goods motor carriers. Nevertheless, 49 U.S.C. 13904(c) grants FMCSA the authority to promulgate this requirement. The Agency believes that an individual shipper's protection against unreliable estimates should not depend upon whether the shipper uses a broker or carrier to provide the estimate. We believe AMSA's suggested revision to proposed § 371.113(a) accomplishes the goal more effectively than FMCSA's original proposal and we adopt that revision in the final rule, with a minor modification as described below.

We decline to adopt AMSA's proposed revision to 49 CFR 375.409(a) requiring that all estimates be based on physical surveys conducted by motor carriers because it would essentially prevent household goods brokers from making estimates under any circumstances. Such a prohibition is inconsistent with section 4209 of SAFETEA-LU, which prohibits household good brokers from making estimates before entering into an agreement with a carrier to provide the transportation. Section 4209, therefore, implicitly recognizes that brokers are permitted to make estimates after entering into agreements with carriers, and not simply to provide shippers with estimates prepared by motor carriers or their agents. However, we have revised § 375.409(a) to make it consistent with revised § 371.113(a).

We also decline to adopt OOIDA's suggestion to require household goods brokers to perform a physical survey regardless of the distance from the broker's place of business. We do not require household goods motor carriers or their agents to perform a physical survey regardless of the distance from the motor carrier's or agent's place of business. We do not believe it would be appropriate to place this burden on brokers when we do not place it on motor carriers.

FMCSA does not agree with the suggestion of Pro Movers Network that the requirement for a physical survey should be eliminated because it limits a consumer's choice to receive a remote estimate. Section 371.113(c) expressly permits the individual shipper to waive the physical survey requirement.

PUCO states that estimates are most frequently a disputed issue and it is important that the broker be required to provide estimates in writing based on a survey of the property to be shipped. It believes the option of waiving the physical survey should be explained and should be printed in a required font size in a required location on a standard document to ensure that the shippers are fully informed.

FMCSA response. We agree with PUCO that waiving the physical survey requirement, where it would otherwise apply, should be explained, printed on a standard document and printed with a minimum font size and font typeface. We have adopted PUCO's suggestion for the final rule. FMCSA will adopt in today's final rule the minimum font size and font typeface following the General Services Administration (GSA) guidelines in the “Standard and Optional Forms Procedural Handbook.” The GSA handbook requires the font typeface Universe and minimum font size of 7 points for all standard Federal forms and documents.

FMCSA proposed (§ 371.113(b)) requiring household goods brokers to base their estimates upon the published tariffs (as defined in § 375.103) of the authorized household goods motor carriers they use. Nationwide Relocation Services believes the rule should require any motor carrier accepting jobs from a broker to adopt the broker's tariff as its own for all jobs secured from the broker. AMSA suggests that the rule should require the broker's fee or service charge to be separately stated in the estimate and not included in the motor carrier's estimate of transportation charges.

FMCSA response. Household goods motor carriers are required to maintain tariffs under 49 U.S.C. 13702 and must charge individual shippers in accordance with those tariffs. Implementing regulations of the Surface Transportation Board (STB) governing household goods carrier tariffs, at 49 CFR 1310.3(a), require such tariffs to provide “the specific applicable rates, charges and service terms; and must be arranged in a way that allows for the determination of the exact rate, charges and service terms applicable to any given shipment.” Section 1310.3(b) permits use of multiple tariffs to determine applicable rates and charges, provided “the tariff containing the rates must make specific reference to all other tariffs required to determine applicable rates, charges and service terms. The carrier(s) party to the rate(s) must participate in all of the tariffs so linked * * *”. A “carrier party to the rate” means more than one carrier can use the same rates. A broker's rate schedule is not a tariff subject to 49 U.S.C. 13702 and the STB regulations. There is no regulatory requirement that brokers adhere to such rate schedules, as there is for household goods motor carriers to adhere to the terms of their tariffs. FMCSA believes Nationwide Relocation Services' suggestion would be inconsistent with 49 CFR 1310.3 and therefore, FMCSA will not adopt it.

At this time, the Agency does not adopt AMSA's suggestion that the broker's fee or service charge be separately stated in the estimate. The Agency does not have sufficient information about how different brokers charge their fees and what affect this change would have.

Proposed § 371.115(a) would require household goods brokers to maintain written agreements with authorized household goods motor carriers before providing estimates and lists the items that must be included in these agreements. Nationwide Relocation Services suggests all agreements should be submitted and filed with FMCSA. Paragraph (a)(6) would require the signatures on the agreement to be notarized. Pro Movers Network believes the requirement for a notarized agreement is unrealistic and would almost certainly be impossible to execute successfully. Because household goods carriers typically have working agreements with between 5 and 15 brokers, the commenter asserts, the notary requirement would have to be repeated many times for each carrier. The commenter believes the rule would ultimately be too stressful to the broker-carrier business relationships and transactions. The commenter argues that the potential of lost opportunity costs caused by strained business relationships between household goods brokers and carriers is a distinct possibility and FMCSA's cost and risk assessments did not take these lost opportunity costs into account.

We also proposed changing § 375.409 to state that the written agreement between the household goods broker and the household goods motor carrier must contain all of the items required in proposed § 371.115. AMSA recommends adding a sentence stating that the estimate is based on a physical survey of the goods conducted by the motor carrier.

FMCSA response. We believe the filing requirement suggested by Nationwide Relocation Services would create an unnecessary burden for FMCSA, carriers, and brokers that would have little usefulness in protecting individual shippers. Based on comments received, we agree that the notarization requirement will be unduly burdensome and is unnecessary. We have removed the requirement that the agreements be notarized.

We have also revised § 375.409 to reflect the changes to § 371.113(a) discussed above (requiring a physical survey if the carrier on whose behalf the broker makes an estimate is within 50 miles of the household goods). However, as discussed earlier in this preamble, we are not adopting AMSA's suggested change to require that all estimates be based on physical surveys of the property conducted by household goods motor carriers, because it would prohibit anyone other than the authorized motor carrier from performing the estimate. As such, it would be inconsistent with SAFETEA-LU and would limit the flexibility FMCSA intends to afford household goods brokers and carriers to provide services to their individual shippers. Motor carriers can certainly provide additional restrictions in their agreements with household goods brokers beyond FMCSA's minimum requirements.

As proposed, § 371.119 would have required that each household goods broker “inspect, verify, and document” the validity of the U.S. DOT registration and MC operating authority for each household goods motor carrier with which it arranges transportation each month. The household goods broker would comply with this requirement by using FMCSA's Web site ( http://www.protectyourmove.gov ) to check whether the motor carrier has active for-hire authority to transport household goods and evidence of the necessary financial responsibility on file with FMCSA. Nationwide Relocation Services suggests that monitoring the authority and licensing status of motor carriers is a role best suited for FMCSA, and a private broker should not be required to undertake the regulatory duty of FMCSA in policing the authority status of motor carriers. Pro Movers Network believes FMCSA should devise an e-mail notification system to register a broker's carriers and automatically e-mail the broker when one of its carrier's authorities is suspended or revoked. Manual checks by the broker of its entire network of carriers would be time- and resource-intensive, the commenter asserts, and a once per month check by the broker is not a fool-proof method of verification. The commenter believes the broker should only have to confirm whether the carrier is in “Active” or “NonActive” status in FMCSA's Safety and Fitness Electronic Records (SAFER) database. The commenter also states that it is not the broker's obligation and responsibility to report carrier non-compliance to FMCSA.

FMCSA response. In response to comments and after further consideration, FMCSA has decided to eliminate proposed § 371.119 from the final rule. The intent of proposed § 371.119 was to provide additional protection to shippers by requiring brokers to verify the validity of carriers' registration and operating authority on a monthly basis. However, proposed § 371.105 independently prohibits anyone from acting as a household goods broker for household goods motor carriers that do not have valid U.S. DOT numbers and valid operating authority from FMCSA. Regardless of whether a broker complies with the monthly verification and recordkeeping requirements, it would nonetheless be bound by § 371.105 and subject to penalties for arranging moves with unregistered or unauthorized carriers. Considering this redundancy, it is unclear what additional protections § 371.119 would provide to shippers. Because brokers would be required to comply with § 371.105 under threat of penalty with or without § 371.119, the Agency does not believe that eliminating § 371.119 would diminish brokers' incentives to avoid doing business with unregistered or unauthorized carriers. Thus, the Agency believes that eliminating § 371.119 would leave shippers with the same level of protection against unregistered or unauthorized carriers, while reducing the administrative burden on brokers. Furthermore, striking this provision would eliminate any confusion over whether compliance with § 371.119 excuses or provides mitigating circumstances for failure to comply with § 371.105. FMCSA is concerned that proposed § 371.119, as written, could be interpreted as a safe haven for brokers who comply with the verification and recordkeeping requirements, but nonetheless arrange a move with an unregistered or unauthorized carrier. FMCSA never intended for proposed § 371.119 to be interpreted this way. As a result, FMCSA leaves it to the household goods brokers to determine the most effective and efficient manner in which to ensure compliance with § 371.105.

FMCSA proposed to add specific language to § 387.307(a) to require household goods brokers to have a surety bond or trust fund in effect for $25,000, based on adjustments for inflation. The former ICC increased the financial responsibility requirement for brokers in 1979 from $5,000 to $10,000. 3   See 44 FR 70167, December 6, 1979. The NPRM proposed adjusting the $10,000 minimum figure for inflation as measured by the Consumer Price Index, which resulted in purchasing power of $24,490.29 in 2006. Because a final rule based on the NPRM would not be in effect until after the 2007's NPRM, FMCSA found it reasonable to round the minimum requirement up to $25,000. The requirement was raised to $10,000 to ensure shippers or motor carriers would be paid if the broker failed to carry out its contracts, agreements, or arrangements for the supplying of transportation by authorized motor carriers. Sandra Irwin supports raising the amount of the surety bond or trust fund, and AMSA, PUCO, and OOIDA believe an increase to $25,000 is inadequate. According to OOIDA, surety companies have reported an aggregate amount of outstanding claims against broker bonds of between $300,000 and $500,000 in response to OOIDA's efforts to submit claims by its members against broker bonds. Nationwide Relocation Services believes the amount of the surety bond or trust fund should be $50,000, and David Marsh suggests $100,000. Sandra Irwin, David Marsh, and the Transportation Intermediaries Association suggest the increase in the surety bond or trust fund should apply to all property brokers, not just household goods brokers.

On the other hand, Pro Movers Network points out that household goods brokers may incur a high cost of doing business, such as increased costs of advertising, and increasing the surety bond or trust fund requirement to $25,000 represents an unnecessary financial burden.

FMCSA response. Commenters that favored increasing the amount of the surety bond or trust fund did not provide adequate justification for an increase above $25,000, especially in light of the number of small business household goods brokers and the potential impact of significantly increasing the amount of financial responsibility beyond a level adjusted for inflation. Inasmuch as OOIDA did not provide specific information regarding the number and amount of outstanding claims per broker, its argument that an aggregate amount of $300,000 to $500,000 in outstanding claims warrants an increase in the amount of the bond to that level is not justifiable.

The surety bond and trust fund provisions apply only to household goods transportation. FMCSA may consider applying the increased surety bond and trust fund provisions to general freight brokers in the future. Finally, FMCSA acknowledges Pro Movers Network's comment about high costs of doing business, however, it did not provide sufficiently specific information to justify changing FMCSA's proposal to something other than an adjustment for inflation.

FMCSA did not propose how the Agency would implement the additional $15,000 increase in the amount of the surety bond or trust fund agreement. FMCSA believes it is necessary to provide household goods brokers a sufficient amount of time to acquire the additional $15,000 for surety bonds and trust funds. The Agency will set one year from the date of the final rule as the date when all brokers of household goods must have filed new BMC-84s or BMC-85s, as appropriate, to prove they have the minimum $25,000 in effect. This should give sufficient time to household goods brokers, especially small entities, to find sureties willing to write $25,000 surety bonds to replace their $10,000 bonds. Likewise, for those household goods brokers using trust fund agreements, this should give sufficient time for these entities to raise the additional $15,000 of capital to place in escrow with their trust fund managers.

FMCSA adopts the proposed rule as final with minor changes in response to the comments. First, as discussed in the section on the “Scope of part 371, subpart B,” at the suggestion of AMSA, we are limiting the scope of part 371, subpart B to only household goods brokers offering services to individual shippers. We have made the appropriate changes to § 371.101 to limit the scope to individual shippers. Second, as discussed in the section of the “Definitions,” the Agency is adding the acronym “FMCSA” and the definition that it means the Federal Motor Carrier Safety Administration, an agency within the U.S. Department of Transportation. Third, as discussed in the section on “information in advertisements and Internet Web homepages,” we are adding § 371.107(d) to require household goods brokers who provide estimates on behalf of household goods motor carriers, to state prominently on their Web site(s) that the estimates must be based on the carrier's tariff and that the carrier is required to make the tariff available for public inspection upon a reasonable request. Fourth, also as discussed in the section on “information in advertisements and Internet Web homepages,” at the suggestion of AMSA, we are adding § 371.107(e) to prohibit the broker from including the names or logos of motor carriers unless they are FMCSA-authorized household goods motor carriers with which the broker has a written agreement as specified in § 371.115. Fourth, as discussed in the section “list of motor carriers,” FMCSA will allow household goods brokers to provide the information required by § 371.109 electronically as an alternative to a paper-based communication.

Fifth, as discussed in the section “consumer protection information,” FMCSA is adding § 371.111(b) to require that, if a shipper elects to access the statutorily-mandated consumer information via the household goods broker's Web site, then the broker must state on the written estimate described in § 371.113 that the individual shipper expressly agreed to access the consumer protection information via the Internet in lieu of a paper copy.

Sixth, as discussed further in the section “consumer protection information,” FMCSA has also revised § 371.111 paragraph (c) to require written or electronic verification of the shipper's agreement to access the Federal consumer protection information on the Internet, instead of receiving the booklet copies in paper form.

Seventh, as discussed in the section “Written estimate based on a physical survey,” we are adopting one of AMSA's two suggestions to require in § 371.113(a) that a physical survey of the household goods must be conducted by the authorized motor carrier on whose behalf the estimate is provided, if the shipment is located within a 50-mile radius of the carrier's “household goods agent preparing the estimate,” unless the physical survey requirement is waived by the shipper.

Eighth, for § 371.113(c)(2), as discussed in the section on “Explanation of waiving the physical survey,” we are adopting PUCO's suggestion that the final rule require brokers to explain the physical survey and waiver requirement to individual shippers, print the waiver agreement on the written estimate, and print the agreement with a minimum font size and font typeface. Ninth, as discussed in the section “verifying the motor carrier's authority,” FMCSA is eliminating proposed § 371.119 from the final rule. Tenth, as discussed in the sections on “Written estimate based on a physical survey” and “Estimates provided by household goods brokers,” we have revised the household goods motor carrier requirements applicable to household goods broker estimates in § 375.409(a) to make them consistent with our revised written estimate revisions in § 371.113(a). Finally, we are adding a 1-year compliance date in § 387.307(a)(2) for household goods brokers to obtain the additional $15,000 of financial responsibility over the current $10,000 requirement, and to file with FMCSA the required proof (Forms BMC-84 or BMC-85, as appropriate) of the total $25,000 minimum financial responsibility required by the 1-year compliance date.

FMCSA has determined that this action is a not a significant regulatory action within the meaning of Executive Order 12866 and the U.S. Department of Transportation regulatory policies and procedures (44 FR 11034, February 26, 1979). The Agency received only 11 comments and the costs are minimal.

The total cost of the final rule is approximately $5.543 million in the first year with annual, recurring costs of $1.776 million thereafter. As such, the costs of this final rule do not exceed the $100 million annual threshold as defined in Executive Order 12866. The ten-year costs and benefits of the final rule are shown in Table 1:

FMCSA's full Final Regulatory Evaluation is in the docket for this rule. It explains in detail how we estimated cost impacts for the final rule.

This rule establishes additional consumer protection regulations specifically for household goods brokers to supplement the regulations at 49 CFR part 375, which apply to motor carriers transporting household goods by commercial motor vehicle in interstate and foreign commerce.

FMCSA estimates these regulatory changes will produce three primary cost impacts on household goods brokers: (1) Costs of training certain employees on the proper application of the regulatory changes; (2) costs to revise broker marketing materials, forms, and orders for service, including technical writing, Web site editing, and printing costs associated with incorporating mandated consumer information; and (3) additional information collection burdens associated with the new regulations, including traveling to and performing on-site physical surveys for written estimates; making written agreements with household goods motor carriers, stating on the written estimate that the individual shipper expressly agreed to access the consumer protection information on the Internet; obtaining written or electronic verification of the shipper's agreement to access the Federal consumer protection information on the Internet; explaining the physical survey and waiver requirement to individual shippers; printing the waiver agreement on the written estimate; printing the agreement with a minimum font size and font typeface; and, finally, requiring household goods brokers to have their sureties or trust fund managers file proof of their $25,000 minimum financial responsibility on the Forms BMC-84 or BMC-85, as appropriate.

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121, 110 Stat. 857), requires Federal agencies, as a part of each rulemaking, to consider regulatory alternatives that minimize the impact on small entities while achieving the objectives of the rulemaking. The Agency's Initial Regulatory Flexibility Analysis is available in docket FMCSA-2004-17008 at item 0018. FMCSA received no specific comments about its Initial Regulatory Flexibility Analysis. The Agency's Final Regulatory Flexibility Analysis (FRFA) for this final rule is discussed below.

(1) A description of the reasons why action by the agency is being considered.

The American Moving and Storage Association (AMSA) petitioned the DOT for a rulemaking in March 2003 that would amend the property broker regulations in part 371 to require brokers that arrange for household goods transportation by motor carrier (household goods brokers) to provide consumer information that only household-goods motor-carriers must now provide, as well as establish additional consumer protection requirements. Many of AMSA's concerns were addressed in the Safe Accountable, Flexible, Efficient Transportation Equity Act: A Legacy For Users (SAFETEA-LU), Public Law 109-59, which was enacted into law on August 10, 2005. Specifically, section 4212 of SAFETEA-LU directs FMCSA to issue regulations requiring household goods brokers to provide this information to consumers.

(2) Objectives of, and legal basis for, the final rule .

This rulemaking is mandated by section 4212 of SAFETEA-LU. FMCSA's general authority to enact consumer protection regulations governing broker operations is contained in 49 U.S.C. 13904(c). The objective of this rule is to ensure that individual shippers of household goods that arrange for transportation through household goods brokers (rather than directly through motor carriers) receive necessary information regarding the parties with which they are dealing and their rights and responsibilities in connection with interstate household goods moves. It also is intended to ensure that household goods brokers deal only with properly registered and insured motor carriers and that estimates provided by household goods brokers be provided under specific circumstances designed to protect the shipper against abuse. Finally, it increases the level of financial responsibility required to ensure that household goods brokers perform their transportation contracts.

(3) Significant issues raised by small entities' comments.

A summary of the significant issues raised by the public in response to the NPRM and the assessment of each significant issue are discussed earlier in this final rule under the heading “Discussion of Comments on the Proposed Rule.”

FMCSA is adopting the proposed rule as final with the minor changes discussed above under the heading The Final Rule, based mainly on comments to the NPRM. FMCSA believes most household goods brokers that commented to the NPRM would meet the definition of a small business entity.

(4) Description and estimate of the number of small entities to which the final rule will apply.

There are currently 615 active, registered household goods brokers and another 394 registered household goods brokers that are inactive. 4 We do not know the number of unregistered household goods brokers, but we suspect that there are many. For the purposes of our analysis, we assume the number is 75—which would put the percentage of unregistered brokers at just over ten percent (75 is 10.87% of (615 + 75)). The figure is based on conversations with industry experts and information from broker Web sites. We use 690, then, as the estimate of total active brokers—registered and (now) unregistered. Almost all are small entities according to the definition in Small Business Administration (SBA) regulations (13 CFR part 121) which defines a “small entity” in the North American Industrial Classification System (NAICS) Code 488510 “Freight Transportation Arrangement” industry by average annual receipts, which are currently set at $7 million per firm. The motor carriers with whom household goods brokers deal may also be indirectly affected.

(5) Description of the projected reporting, record-keeping and other compliance requirements for small entities .

The final rule requires additional record-keeping on the part of household goods brokers to demonstrate compliance. The cost to the household goods broker industry of this additional record-keeping ($5.543 million in the first year and $1.776 million annually to inform, display, and disclose information to shippers and maintain the files for three years) is reflected in our cost estimates. Additionally, the aggregate cost to the household goods broker industry of raising the financial responsibility requirement to $25,000 from $10,000 (approximately $50,000 annually) is also reflected in our cost estimates. The total cost has a present value of approximately $17.11 million over ten years when discounted at 7 percent, and does not require any special skills that would be available to large entities any more than to small entities.

(6) Duplication with other Federal rules.

FMCSA is unaware of any other Federal rules which will duplicate, overlap, or conflict with this proposed rule except for the household goods carriers rule published on July 12, 2005. 5 Because these rules apply only to household goods motor carriers, it was necessary to establish separate rules applicable to household goods brokers, even though they contain certain similarities. For example, SAFETEA-LU requires every shipper to receive the pamphlet “Your Rights and Responsibilities When You Move.” Household goods carriers are already required to make this pamphlet available to every shipper. This rule requires household goods brokers to make the same pamphlet available to shippers. There is no practical way around the duplication because some shippers do not use a household goods broker and those who do often do not have any direct contact with a household goods carrier early enough in the process to make effective use of the information contained in the pamphlet.

(7) Description of any significant alternatives to the final rule.

FMCSA believes that there are no significant alternatives to the final rule which would accomplish the stated objectives of the Household Goods Mover Oversight Enforcement and Reform Act of 2005, otherwise known as Title IV, Subtitle B of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) (Pub. L.109-59) and which would minimize any significant economic impact of the final rule on small entities.

The Agency did consider ways in which it could assist small household goods broker entities to mitigate the impact of increasing the trust fund resources to the new minimum requirement of $25,000. The Agency decided it could extend the compliance date regarding the financial responsibility requirement so that brokers will have a full year after publication of the final rule to come into compliance with the $25,000 requirement, increasing trust funds from the minimum of $10,000 to the final rule's minimum requirement of $25,000.

Therefore, FMCSA is mitigating the impact of obtaining the additional $15,000 of financial responsibility over the current $10,000 requirement by adding a 1-year compliance date in § 387.307(a)(2). Thus, all household goods brokers will have one year from the date of publication of this final rule to obtain the additional $15,000 of financial responsibility over the current $10,000 requirement, and to have their sureties and trust fund managers file with FMCSA the required proof (Forms BMC-84 or BMC-85, as appropriate) of the total $25,000 minimum financial responsibility required by the compliance date for § 387.307(a)(2).

As we stated above, almost all of the 690 household goods brokers subject to this final rule meet the definition of a small business entity under the RFA. We have estimated this final rule will cause the average household goods broker to incur an estimated, additional $8,030 in the first year of implementation and annual recurring costs of about $2,575. The Administrator of the FMCSA believes this final rule will have a significant economic impact on a substantial number of small entities (SEISONOSE).

This rule does not impose a Federal mandate resulting in the expenditure by State, local, or Tribal governments, in the aggregate, or by the private sector, of $140.3 million or more in any one year (2 U.S.C. 1531 et seq. ). The present value of the final rule is about $17.11 million.

The Agency analyzed this rule for the purpose of the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq. ) and determined under our environmental procedures Order 5610.1 published March 1, 2004 (69 FR 9680), that this action is categorically excluded under Appendix 2, paragraphs 6.d, 6.m, and 6.q of the Order from further environmental documentation. These categorical exclusions relate to rulemaking actions affecting household goods brokers. In addition, the Agency believes that the action includes no extraordinary circumstances that would have any effect on the quality of the environment. Thus, the action does not require an environmental assessment or an environmental impact statement.

We have also analyzed this rule under the Clean Air Act, as amended (CAA) section 176(c), (42 U.S.C. 7401 et seq. ) and implementing regulations promulgated by the Environmental Protection Agency. Approval of this action is exempt from the CAA's general conformity requirement since it involves rulemaking and policy development and issuance. See 40 CFR 93.153(c)(2). It will not result in any emissions increase nor will it have any potential to result in emissions that are above the general conformity rule's de minimis emission threshold levels. Moreover, it is reasonably foreseeable that the rule will not increase total CMV mileage, or change the routing of CMVs, how CMVs operate, or the CMV fleet-mix of motor carriers. This action merely establishes regulations applicable to the business practices of household goods brokers, which do not operate CMVs. FMCSA received no comments to its NEPA and Clean Air Act analyses.

FMCSA conducted a privacy impact assessment of this rule as required by section 522(a)(5) of the FY 2005 Omnibus Appropriations Act, Public Law 108-447, 118 Stat. 3268 (Dec. 8, 2004) [set out as a note to 5 U.S.C. 552a]. The assessment considers any impacts of the rule on the privacy of information in an identifiable form and related matters. FMCSA has determined this rule imposes no privacy impacts.

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), a Federal agency must obtain approval from the Office of Management and Budget (OMB) for each collection of information it conducts, sponsors, or requires through regulations. FMCSA seeks approval of the information collection requirements in a new information collection to be entitled “Practices of Household Goods Brokers.”

The collected information encompasses that which is generated, maintained, retained, disclosed, and provided to, or for, the agency under 49 CFR part 371. It will assist shippers in their commercial dealings with interstate household goods brokers. The collection of information will be used by prospective shippers to make informed decisions about contracts and services to be ordered, executed, and settled within the interstate household goods motor carrier industry. Some of these information collection items were required by regulations issued by the former ICC; however, that agency was not required to comply with the PRA. When these items transferred from the ICC to the Federal Highway Administration, and ultimately to FMCSA, no OMB control number was assigned to cover this information collection transfer. It was therefore necessary to calculate the old information collection burden hours for these items approved under the ICC rules and to add the new burden that will be generated by this final rule.

Assumptions used for calculation of the information collection burden include the following: (1) There are currently approximately 690 active household goods brokers; (2) on average, each household goods broker will enter into written agreements to estimate shipment costs with about 31 motor carriers, (3) household goods brokers will eventually sever some of these written agreements and make agreements with new household goods motor carriers. We assume that an average agreement lasts for about six years, meaning that brokers will enter into about five new agreements each year, and (4) FMCSA estimates household goods brokers handle about 100,000 moves each year. The first two items result in 24,390 respondents subject to the information collection (690 × 31 = 24,390). The third item results in an additional 3,450 respondents subject to the information collection (690 × 5 = 3,450). Together with the fourth item, a total of about 127,900 respondents (24,390 + 3,450 + 100,000) would be subject to the information collection.

The PRA regulations at 5 CFR 1320.3(b)(2) allow FMCSA to calculate no burden when the agency demonstrates to OMB that the activity needed to comply with the specific regulation is usual and customary. FMCSA sought comment in the NPRM on whether setting up the first accounting system for a new business is a usual and customary business practice. FMCSA received no comments from the public about this accounting system issue. Thus, FMCSA concludes the public believes it is a usual and customary practice when starting a new business.

Table 2 summarizes the information collection burden hours by the actions being taken in the final rule. See attachment S of the supporting statement for the Paperwork Reduction Act Submission in docket FMCSA-2004-17008 for the detailed FMCSA analysis.

We have rounded the estimates and have asked OMB for approval for first-year burden-hours of 175,500, and subsequent-year burden-hours of 89,600. We particularly request your comments on whether the collection of information is necessary for FMCSA to meet the goal of 49 CFR part 371 to protect consumers and household goods motor carriers, including: (1) Whether the information is useful to this goal; (2) the accuracy of the estimate of the burden of the information collection; (3) ways to enhance the quality, utility and clarity of the information collected; and (4) ways to minimize the burden of the collection of information on respondents, including the use of automated collection techniques or other forms of information technology.

You must submit comments on the information collection burden addressed by this final rule to the Office of Management and Budget (OMB). The deadline for such submissions is December 29, 2010. Interested persons are invited to submit written comments on the proposed information collection to the Office of Information and Regulatory Affairs, Office of Management and Budget. Comments should be addressed to the attention of the Desk Officer, Department of Transportation/Federal Motor Carrier Safety Administration, and sent via electronic mail to oira_submission@omb.eop.gov, or faxed to (202) 395-6974, or mailed to the Office of Information and Regulatory Affairs, Office of Management and Budget, Docket Library, Room 10102, 725 17th Street, NW., Washington, DC 20503.

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

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

This action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132. The FMCSA has determined that this rulemaking would not have a substantial direct effect on States, nor would it limit the policy-making discretion of the States.

FMCSA has analyzed this action under Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.” The Agency has determined that it is not a “significant energy action” under that order because it does not appear to be economically significant ( i.e., imposing a cost of more than $100 million in a single year) based upon analyses performed at this stage of the rulemaking process, and is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this program.