I. Background

EPCA establishes energy efficiency standards and test procedures for certain commercial and industrial equipment, including electric motors, 42 U.S.C. 6291 et seq., and states in relevant part that, “the Secretary [of Energy] shall require manufacturers to certify” that each electric motor meets the applicable energy efficiency standards. (42 U.S.C. 6316(c)) To achieve this end, EPCA authorizes the Secretary to issue the necessary rules requiring each manufacturer or private labeler of covered electric motors to submit information and reports to ensure compliance. (42 U.S.C. 6316(a)) This directive is carried out under Section 431.36 of Title 10 of the Code of Federal Regulations (CFR), which requires that each manufacturer or private labeler, before distributing in commerce any basic model of an electric motor subject to the applicable energy conservation standard, certify by means of a Compliance Certification that each basic model(s) meets the applicable energy conservation standard.

Section 313(b)(1)(B) of EISA 2007 amended EPCA to require each National Electrical Manufacturers Association (NEMA) Design B, general purpose electric motor with a power rating of more than 200 horsepower, but not greater than 500 horsepower, manufactured (alone or as a component of another piece of equipment) after December 19, 2010, to have a nominal full load efficiency that is not less than the values in NEMA Standard MG-1 (2006) Table 12-11. (42 U.S.C. 6313(b)(2)(D)) DOE codified this requirement at 10 CFR 431.25(f). 74 FR 12058 (March 23, 2009). Appendix C to Subpart B of 10 CFR Part 431 provides a format for a manufacturer or private labeler to report the energy efficiency of its basic models of electric motors according to rated horsepower or kilowatts, number of poles, and open or enclosed construction.

DOE establishes that Compliance Certification information for electric motors may be submitted to DOE through either of the following means: 1. Compliance and Certification Management System (CCMS)—via the Web portal: https://www.regulations.doe.gov/ccms. Follow the instructions on the CCMS Web site for submitting compliance statements and certification reports. The CCMS is a tool for certification of compliance with applicable energy conservation standards. Submission of Compliance Certification information via the CCMS is strongly encouraged and will satisfy DOE's compliance and certification reporting requirements for electric motors. 2. Certified Mail—send to: Certification and Compliance Reports, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Program, EE-2J, Forrestal Building, 1000 Independence Avenue, SW., Washington, DC 20585-0121.

Initially, the CCMS database will be used only as an alternative method for the submission of Compliance Certification information for electric motors, in addition to the current certified mail option. In a future rulemaking, DOE anticipates proposing to remove the certified mail option to make electronic submissions of Compliance Certification information through the CCMS the sole method of submission for electric motors. Such a requirement would be consistent with DOE's March 7, 2011 final rule titled “Certification, Compliance and Enforcement for Consumer Products and Commercial and Industrial Equipment.” 76 FR 12422. In that final rule, DOE noted its intent, where possible, to harmonize the certification provisions for electric motors with the requirements for covered products and equipment under Part 429 of the CFR, which includes mandatory electronic submission. 76 FR 12447.

In order to provide clarity to manufacturers, DOE is correcting the sample Compliance Certification form currently located in Appendix C to Subpart B of 10 CFR part 431 to be consistent with the EISA 2007 energy conservation standards. DOE's regulations, under 10 CFR 431.36(b), require manufacturers of electric motors to use the format in Appendix C to subpart B of 10 CFR part 431 for submitting Compliance Certification reports. As published, this Compliance Certification form does not allow manufacturers to identify the correct motor subtype and product class information that would allow DOE to determine whether a basic model is in compliance with the EISA 2007 standards. Consequently, today's final rule conforms the sample Compliance Certification form and table with the efficiency levels resulting from EISA 2007 by replacing the table with a revised table showing the additional subtypes and product classes of electric motors subject to the EISA 2007 standards.

Today's regulatory action is not a “significant regulatory action” under section 3(f) of Executive Order 12866, “Regulatory Planning and Review,” 58 FR 51735 (October 4, 1993). Accordingly, this action was not subject to review under that Executive Order by the Office of Information and Regulatory Affairs (OIRA) of the Office of Management and Budget (OMB).

The Department finds good cause to waive notice and comment on these regulations pursuant to 5 U.S.C. 553(b)(3)(B), and the 30-day delay in effective date pursuant to 5 U.S.C. 553(d). Notice and comment are unnecessary and contrary to the public interest because this final rule does not require any new actions on the part of manufacturers, private labelers, or third-party representatives; rather it simply allows an alternative option for submission of information which is already required, and is otherwise technical in nature. A delay in effective date is unnecessary and contrary to the public interest for these same reasons. Therefore, these regulations are being published as final regulations and are effective immediately.

DOE has determined that this rule falls into a class of actions that are categorically excluded from further review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq. ) and DOE's implementing regulations at 10 CFR part 1021. This rule amends an existing rule without changing its environmental effect, and, therefore, is covered by the Categorical Exclusion A5 found in appendix A to subpart D, 10 CFR part 1021. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires preparation of an initial regulatory flexibility analysis for any rule that must be proposed for public comment, unless the agency certifies that the rule will have no significant economic impact on a substantial number of small entities. As required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel's Web site at http://www.gc.doe.gov. Because a notice of proposed rulemaking is not required under the Administrative Procedure Act or other applicable law, the Regulatory Flexibility Act does not require certification or the conduct of a regulatory flexibility analysis for this rule.

Manufacturers of electric motors must certify to DOE that their products comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their products according to the DOE test procedures for electric motors, including any amendments adopted for those test procedures. DOE has established regulations for the certification and recordkeeping requirements for electric motors. 10 CFR 431.36. The collection-of-information requirement for the certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (PRA). This requirement has been approved by OMB under OMB control number 1910-1400. Public reporting burden for the certification is estimated to average 20 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. For proposed regulatory actions likely to result in a rule that may cause expenditures by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish estimates of the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate.” UMRA also requires an agency plan for giving notice and opportunity for timely input to small governments that may be affected before establishing a requirement that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA (62 FR 12820) (also available at http://www.gc.doe.gov ). Today's final rule contains neither an intergovernmental mandate nor a mandate that may result in the expenditure of $100 million or more in any year, so these requirements do not apply.

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. Today's rule would have no impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is unnecessary to prepare a Family Policymaking Assessment.

Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The executive order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. DOE has examined this final rule and determined that it would not preempt State law and would have no substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Executive Order 13132 requires no further action.

With respect to the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (February 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity, (2) write regulations to minimize litigation, (3) provide a clear legal standard for affected conduct rather than a general standard, and (4) promote simplification and burden reduction. Regarding the review required by section 3(a), section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation (1) clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in sections 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this rule meets the relevant standards of Executive Order 12988.

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

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

Pursuant to Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights,” 53 FR 8859 (March 15, 1988), DOE has determined that this rule would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.

Under section 301 of the Department of Energy Organization Act (Pub. L. 95-91), the Department of Energy must comply with section 32 of the Federal Energy Administration Act of 1974 (Pub. L. 93-275), as amended by the Federal Energy Administration Authorization Act of 1977 (Pub. L. 95-70). (15 U.S.C. 788) Section 32 provides that where a proposed rule authorizes or requires use of commercial standards, the notice of proposed rulemaking must inform the public of the use and background of such standards. In addition, section 32(c) requires DOE to consult with the Department of Justice (DOJ) and the Federal Trade Commission (FTC) concerning the impact of the commercial or industry standards on competition. This final rule to provide for use of the CCMS system for the submission of Compliance Certification information and correct the sample Compliance Certification form does not require the use of any commercial standards. Therefore, no consultation with either DOJ or FTC is required.

As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of today's rule before its effective date. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 804(2).

The Secretary of Energy has approved publication of this final rule.

For the reasons set forth in the preamble, chapter II of title 10, Code of Federal Regulations, part 431 is amended to read as set forth below.

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on June 29, 2011 (76 FR 38069). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (76 FR 38069, June 29, 2011) or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed.

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

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

We estimate that this AD will affect 215 products of U.S. registry. We also estimate that it will take about 4 work- hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of the AD on U.S. operators to be $73,100, or $340 per product.

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

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

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

For the reasons discussed above, I certify this AD:

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

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

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

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

You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM (76 FR 38069, June 29, 2011), the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM was published in the Federal Register on June 22, 2011 (76 FR 36398). That NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (76 FR 36398, June 22, 2011) or on the determination of the cost to the public.

We reviewed the available data and determined that air safety and the public interest require adopting the AD as proposed.

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

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

We estimate that this AD will affect about 1 product of U.S. registry. We also estimate that it will take about 2 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD to the U.S. operators to be $170 per product.

In addition, we estimate that any necessary follow-on actions would take about 2 work-hours and require parts costing $14,000, for a cost of $14,170 per product.

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

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

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

For the reasons discussed above, I certify this AD:

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

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

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

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

You may examine the AD docket on the Internet at http://www.regulations.gov; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains the NPRM (76 FR 36398, June 22, 2011), the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone (800) 647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

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

Airworthiness Directive 2011-08-07, Amendment 39-16657 (76 FR 24798, May 3, 2011), currently requires initial and repetitive ultrasonic inspections of the affected low-pressure compressor blades, identified by serial number.

As published, paragraph (e)(3) in the regulatory section inadvertently referenced RR Alert Service Bulletin (SB) No. RB.211-72-AG244, Revision 1, dated January 26, 2010, for performing the ultrasonic inspections of blades, without differentiating between blades removed or blades installed. Also as published, paragraph (e)(5) in the regulatory section inadvertently left out that it applies only to blades that were removed. This document corrects those errors.

No other part of the preamble or regulatory information has been changed; therefore, only the changed portion of the final rule is being published in the Federal Register .

The effective date of this AD remains June 7, 2011.

History

On July 1, 2011, the FAA published in the Federal Register a notice of proposed rulemaking to amend Class E airspace at Burlington, VT (76 FR 38584) Docket No. FAA-2011-0243. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Subsequent to publication, the FAA found that the Burlington VORTAC is now recognized as the Burlington VOR/DME. This rule notes the change. Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9V dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR part 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 amends the Class E airspace areas at Burlington, VT, to support new Standard Instrument Approach Procedures at Burlington International Airport. The existing Class E surface area airspace and Class E airspace designated as an extension are being modified for the safety and management of IFR operations at the airport. The geographic coordinates for Burlington International Airport in all Class E airspace areas are being adjusted to be in concert with the FAAs aeronautical database. This action also changes the name of the navigation aid from Burlington VORTAC to Burlington VOR/DME. This action enhances the safety and management of IFR operations at the airport.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current, is non-controversial and unlikely to result in adverse or negative comments. It, therefore, (1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a Regulatory Evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that 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 United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in subtitle VII, part A, subpart I, section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace at Burlington International Airport, Burlington, VT.

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

The Standard for the Flammability of Mattresses and Mattress Pads (“the Standard”), 16 CFR part 1632, was initially issued by the U.S. Department of Commerce in 1972 under the authority of the Flammable Fabrics Act (“FFA”), 15 U.S.C. 1191 et seq. When the Consumer Product Safety Act (“CPSA”) created the Consumer Product Safety Commission, it transferred to the Commission the authority to issue flammability standards under the FFA.

The Standard sets forth a test to determine the ignition resistance of a mattress or mattress pad when exposed to a lighted cigarette. 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 were originally selected to represent an unfiltered Pall Mall cigarette, which was identified as the most severe smoldering ignition source.

In January 2008, we learned that the R.J. Reynolds Tobacco Company planned to stop producing unfiltered Pall Mall cigarettes (although it would continue to make a reduced ignition propensity or “RIP” version). CPSC staff, mattress manufacturers, and testing organizations were concerned about testing to the Standard if the specified ignition source cigarettes were unavailable. Under an Interagency Agreement (“IAG”) with the CPSC, the National Institute of Standards and Technology (“NIST”) developed a standard reference material (“SRM”) cigarette that could be used as the ignition source in the Standard.

Currently, the Standard requires that the ignition source for testing mattresses “shall be cigarettes without filter tips made from natural tobacco, 85 ± 2 mm long with a tobacco packing density of 0.270 ± 0.02 g/cm 3 and a total weight of 1.1 ± 0.1 g.” 16 CFR 1632.4(a)(2). This specification was intended to describe a conventional unfiltered Pall Mall cigarette that was available when the Standard was developed. According to research conducted by NIST's predecessor, the National Bureau of Standards, in the 1970s, this specification was chosen in order to replicate the most severe smoldering ignition source for testing mattresses and mattress pads. ( See Loftus, Joseph J., “Results of Temperature Measurements Made on Burning Cigarettes and Their Use as a Standard Ignition Source for Mattress Testing,” NBS Memo Report, National Bureau of Standards, June 18, 1971: and Loftus, Joseph J., “Back-Up Report for the Proposed Standard for the Flammability (Cigarette Ignition Resistance) of Upholstered Furniture,” PFF 6-76, NBSIR 78-1438, National Bureau of Standards, Gaithersburg, MD, June 1978.)

In January 2008, when we learned that R.J. Reynolds intended to stop producing the unfiltered Pall Mall cigarettes, we sought an alternate ignition source that would have the same burning characteristics as the ignition source specified in the Standard. Our intention has been to find a replacement ignition source that would replicate the level of safety of the ignition source specified in the Standard and would provide consistency in testing. Under this approach, the Standard would maintain the same level of safety, neither more nor less stringent. In August 2008, we entered into an IAG with NIST to develop a new cigarette ignition source SRM that would fit these parameters.

There are no cigarette ignition test data to characterize the ignition propensity of cigarettes from 1972, when the Standard was promulgated. In the absence of such data, and consistent with the intent of the original Standard, NIST sought to identify the highest ignition strength cigarette. NIST evaluated Pall Mall cigarettes of different vintages (1992 through 2008) to determine the ignition strengths of the cigarettes that had been used to test soft furnishings, such as mattresses. The NIST research strongly indicated that the SRM is equivalent in ignition strength to the previous highest known strength unfiltered Pall Mall cigarette.

In June 2009, NIST provided us with a report on its research, “ NIST Technical Note 1627: Modification of ASTM E 2187 for Measuring the Ignition Propensity of Conventional Cigarettes” (Ref. 1). We used NIST's research as the basis to establish specific parameters for a new ignition source to be specified in the Standard.

After developing a standard procedure for determining the ignition strength of cigarettes and assessing different vintage cigarettes, NIST recommended that the new SRM cigarette meet the following specification:

• Nominal length: 83 mm ± 2mm;

• Tobacco packing density: 0.270 g/cm 3 ± 0.020g/cm 3 ;

• Mass: 1.1 g ± 0.1 g;

• Ignition Strength: 70 Percent Full Length Burn (PFLB) to 95 PFLB using ASTM E 2187, as modified in Section 4.2 of NIST Technical Note 1627; and

• Non-“Fire-Safe Cigarette” (FSC)

The first three descriptors are consistent with the physical requirements listed in the Standard for the ignition source. The recommended ignition strength range reflects the three oldest vintages of the Pall Mall cigarette tested by NIST. These vintages reflect the intent of the Standard to represent a worst-case ignition source.

The FFA sets forth the process by which we can issue or amend a flammability standard. In accordance with those provisions, we are revising the ignition source specification in the Standard to require that the SRM cigarette developed by NIST be used as the ignition source for testing under the Standard. As required by the FFA, we published a proposed rule containing the text of the ignition source revision, alternatives considered, and a preliminary regulatory analysis. 15 U.S.C. 1193(i). 75 FR 67047 (Nov. 1, 2010). To issue a final rule, the Commission must prepare a final regulatory analysis and make certain findings concerning any relevant voluntary standard, the relationship of costs and benefits of the rule (in this case, the ignition source revision), and the burden imposed by the rule. Id. 1193(j). In addition, the Commission must find that the rule: (1) Is needed to adequately protect the public against the risk of the occurrence of fire leading to death, injury, or significant property damage; (2) is reasonable, technologically practicable, and appropriate; (3) is limited to fabrics, related materials, or products which present unreasonable risks; and (4) is stated in objective terms. Id. 1193(b).

The Commission also must provide an opportunity for interested persons to make an oral presentation concerning the rulemaking before the Commission may issue a final rule. Id. 1193(d). In the preamble to the proposed rule (75 FR at 67048), we requested that anyone who wanted to make an oral presentation concerning this rulemaking contact the Commission's Office of the Secretary within 45 days of publication of this notice. We did not receive any requests to make an oral presentation.

We published a notice of proposed rulemaking in the Federal Register on November 1, 2010. 75 FR 67047. We received five comments in response to the proposal. Two comments were from industry trade associations: the International Sleep Products Association (“ISPA”) and the National Textile Association (“NTA”). Two comments were from individuals, and one comment was from the National Association of State Fire Marshals (“NASFM”).

A summary of each of the commenter's topics is presented, and each topic is followed by our response. For ease of reading, each topic will be prefaced with a numbered “Comment”; and each response will be prefaced by a corresponding numbered “Response.” Each “Comment” is numbered to help distinguish between different topics. The number assigned to each comment is for organizational purposes only and does not signify the comment's value or importance or the order in which it was received. Comments on similar topics are grouped together.

(Comment 1) One commenter agreed that we should specify SRM 1196 and maintain the level of safety established by the original Standard, noting that “lowering the strength of the ignition source would be tantamount to a policy decision by CPSC to make the standard less effective, as it would reduce the level of resistance to smoldering ignition sources currently required of mattresses and mattress pads.”

(Response 1) We agree that it is appropriate to specify SRM 1196 as the new ignition source for 16 CFR part 1632. Incorporation of this SRM would be “safety-neutral” and would not affect the stringency of the Standard.

(Comment 2) Two commenters stated that we should consider the 2007-08 non-RIP Pall Mall as the target for a “safety neutral” SRM cigarette because in NIST testing, it exhibited a 30 percent to 50 percent full-length burn (PFLB). They argued that we are effectively increasing the stringency of the Standard by using an SRM cigarette with a 90 percent PFLB.

(Response 2) The use of SRM 1196, which mimics the highest PFLB measured by NIST among commercial cigarettes (the 1992 Pall Mall), does not alter the intent of the Standard; rather, SRM usage ensures continuity of a reliably high PFLB with low variability in the ignition source. This approach is consistent with the intent of the Standard, and it means that the level of safety that the Standard has provided over the years will remain the same.

The consistently high PFLB of SRM 1196 (70 percent to 90 percent PFLB) is key to successful completion of the test to determine compliance with the Standard. To test the smoldering ignition of mattresses and mattress pads under 16 CFR part 1632, cigarettes are expected to burn their entire length. If a cigarette self-extinguishes during testing, it must be replaced with a cigarette in another location of the same type of construction feature. Tests using lower PFLB cigarettes would yield misleading results that do not reflect the performance of the mattress being tested. Further, using an SRM cigarette with a lower PFLB, such as the 2007-08 non-RIP Pall Mall, to meet the testing requirements of 16 CFR part 1632, would require using more cigarettes to complete the test, to the extent that self-extinguishing cigarettes would need to be replaced during the test. In some cases, it may be impossible to complete a test if the cigarettes self-extinguish consistently.

(Comment 3) Three commenters stated that we should allow unfiltered RIP Pall Malls or other lower heat- producing cigarettes that are commercially available on the market to be used for testing to 16 CFR part 1632.

(Response 3) The Standard does not require that a commercial cigarette be used; however, cigarettes that burn their full length are needed to complete the test. In 1972, the unfiltered, 85 mm Pall Mall was identified as the most severe ignition source among commercial cigarettes. SRM cigarettes, which are designed to exhibit consistent burning behavior, did not exist at that time. NIST's research demonstrates that the PFLB performance of commercial cigarettes is subject to significant variability that can lead to inconsistent test results. The use of SRM 1196, which mimics the highest PFLB measured by NIST among commercial cigarettes (the 1992 Pall Mall), does not alter the intent of the Standard; rather, SRM usage ensures continuity of a reliable ignition source with a high enough PFLB to allow for completion of the test.

(Comment 4) One commenter suggested that we had insufficient information to reject another existing SRM cigarette—NIST SRM 1082— (which is a RIP cigarette) as the ignition source in the Standard. The commenter argued that we should allow NIST SRM 1082 to be used in 16 CFR part 1632 instead of SRM 1196.

(Response 4) The purpose of specifying an SRM cigarette, which has been certified by NIST to meet specifications, is to enhance repeatability of smoldering ignition test results without changing the level of fire safety provided by the Standard.

State laws requiring “fire safe” cigarettes stipulate that such cigarettes meet an established cigarette fire safety performance standard, based on ASTM E2187, Standard Test Method for Measuring the Ignition Strength of Cigarettes. NIST SRM 1082 has a 12.6 ± 3.3 percent PFLB and is intended for use by test laboratories to assess and control their test method and apparatus to evaluate cigarette ignition propensity of RIP cigarettes in accordance with ASTM E2187.

A cigarette with a low PFLB, like SRM 1082, would yield fewer successfully completed tests for purposes of part 1632, resulting in the use of more cigarettes to complete the test to determine compliance with the Standard. In addition, use of SRM 1082 would not represent a severe cigarette ignition source, and as such, would not be consistent with the original Standard.

(Comment 5) One commenter suggested that we move ahead with development of a surrogate smoldering ignition source that is not a cigarette.

(Response 5) SRM 1196 is a short-term solution to a longer-term issue. Anticipating the need for a longer-term solution, we have entered into a new Interagency Agreement with NIST to develop a surrogate ignition source. This project began in FY 2010.

(Comment 6) One commenter stated that SRM 1196 is an inappropriate ignition source for upholstery fabric.

(Response 6) This regulatory proceeding pertains only to 16 CFR part 1632, Standard for the Flammability of Mattresses and Mattress Pads. It does not apply to the Commission's upholstered furniture rulemaking (73 FR 11702 (March 4, 2008)).

(Comment 7) Two commenters asserted that we did not properly consider the potential of RIP cigarettes in reducing cigarette-ignited fires.

(Response 7) We are very interested in evaluating the potential of RIP cigarettes to reduce cigarette-ignited fires when mattresses and mattress pads are the first item ignited. In FY 2007, we began work on a Cigarette Ignition Risk (CIR) project. The goal of the CIR project is to evaluate the change in the cigarette-ignited fire hazard presented by RIP cigarettes. This project was deferred in FY 2009 and FY 2010, due to resource constraints. We resumed the study in FY 2011. Results from the CIR study may inform the agency's development of a surrogate ignition source.

Although RIP cigarettes are designed to self-extinguish if left unattended, claims that RIP cigarettes actually reduce cigarette-ignited fires have not been substantiated by empirical state or national data. We have begun investigating the effect of RIP cigarettes but have no test data or epidemiological evidence demonstrating that RIP cigarettes decrease the number of reported incidences of smoldering ignitions of mattresses or mattress pads. We are not aware of any published studies on the effectiveness of RIP cigarettes that included testing of RIP and non-RIP cigarettes on commercially available mattresses, mattress pads, or mattress mock-ups. If the mattress industry has sufficient test data to support the hypothesis that RIP cigarettes consistently self-extinguish on 16 CFR part 1632- and part 1633-compliant mattresses, we would welcome the opportunity to review that information.

All 50 states and Canada have adopted pass/fail criteria that will allow no more than 25 percent of 40 tested cigarettes to burn their full length when tested in accordance with ASTM E2187; this means that 10 out of every 40 tested RIP cigarettes are allowed to burn their full length ( i.e., not self-extinguish). Although this does not mean that 25 percent of commercial RIP cigarettes would be expected to fail the test, it suggests that zero PFLB is unlikely. The “worst-case” RIP cigarette would be one that burns its full length exactly like a non-RIP cigarette. Further, commercial RIP cigarettes could exhibit the same variability as observed among non-RIP cigarettes, thereby reducing reliability of test results.

(Comment 8) One commenter noted that the report from the National Fire Protection Association (“NFPA”), “The Smoking Material Fire Problem” (Hall, J.R. The Smoking Material Fire Problem, National Fire Protection Association. Sept. 2010. http://www.nfpa.org ) stated that RIP cigarettes have the potential to reduce deaths and injuries from cigarette-caused fires by 56 to 77 percent, compared to 2003 levels. The commenter noted that this was not accounted for in the proposed rule.

(Response 8) The NFPA estimate is preliminary and will likely change when 2010 data are available. The NFPA report cited estimates that when fully effective, the RIP cigarette laws should result in a 56 percent to 77 percent reduction in smoking material fire deaths relative to 2003. NFPA produced this estimated range by comparing the National Fire Incident Reporting System (“NFIR”) smoking material fire deaths estimate from 2003 (the last full year before the first state implemented a RIP cigarette law), to the estimate for 2008 (which is the most recent year for which it has estimates). NFPA's estimate incorporates a factor to adjust for the fact that only an estimated 21 percent to 29 percent of the population was under the RIP cigarette law in 2008. This method adjustment adds uncertainty to the estimate. Measuring the reduction in fire losses from 2003 to 2010 is more appropriate because in 2010, virtually 100 percent of the population was effectively covered by the law, and no mathematical projection would be necessary. Commission staff will use the 2010 estimate when it becomes available.

(Comment 9) Two commenters stated that specifying SRM 1196 as the new ignition source is not a modest change, and it may result in significant substantive changes to 16 CFR part 1632 that could impose major new costs on mattress manufacturers.

(Response 9) The purpose of SRM 1196 is to enhance repeatability and reproducibility of test results, without changing the level of fire safety. Since the time we issued the proposal, NIST has reduced the price of SRM 1196 from $239 for one carton to $239 for two cartons, and this price reduction should help alleviate some cost concerns. The total estimated annual cost of the technical amendment is approximately $24,000, or less than one cent per mattress produced under those tests. This does not represent a significant new cost to manufacturers. A discussion of the costs and benefits is found in the Directorate for Economic Analysis Report: Final Regulatory Analysis: Smoldering Ignition Source Draft Proposed Technical Amendment to the Flammability Standard for Mattresses and Mattress Pads (16 CFR part 1632).

(Comment 10) One commenter noted that the testing and certification requirements of the Consumer Product Safety Improvement Act (CPSIA) would impose additional testing cost burdens on mattress manufacturers and that these additional CPSIA burdens would compound any cost increase related to revising the ignition source provision in the Standard.

(Response 10) Although the CPSIA may impose testing and certification costs on industry, both related and unrelated to the Standard, the revision to the ignition source provision would have a negligible effect on such costs. The revision will increase aggregate estimated testing costs by about 3.5 percent, or about $24,000 per year; average increased testing costs for individual firms would range from about $45 to $162 per year. This assumes that testing would be performed largely by third party laboratories, as required under the CPSIA for regulated children's products only.

(Comment 11) Three commenters expressed concern that mattress manufacturers would incur unwarranted or excessive production costs. One commenter indicated that revising the ignition source provision could impose “major new costs” on firms whose products previously complied but had to be redesigned to pass the Standard when tested with SRM 1196.

(Response 11) Because the revision to the ignition source provision is intended to be “safety neutral,” it would likely have no effect on the pass/fail performance of articles subject to the Standard. Design and production costs would increase only if mattresses previously thought to comply failed the test with SRM cigarettes. There is no evidence from CPSC experience or data provided by industry that this would result, so long as the tests were conducted correctly with cigarettes that burn their full length. The approximately $24,000 aggregate annual testing cost of the SRM cigarettes represents a small increase in total testing costs, ranging from about one-third to one cent per mattress produced under those tests.

(Comment 12) One commenter suggested that under a 90 PFLB SRM, manufacturers would incur costs in order to produce mattresses that complied with tests using 100 PFLB cigarettes, so that the finished products would incorporate a reasonable “margin of safety” beyond the minimum requirements of the Standard. The commenter stated that this was analogous to doubling the flame exposure time in the 16 CFR part 1633 open-flame test from 30 to 60 minutes.

(Response 12) Specifying SRM 1196 as the ignition source would more likely have the opposite result; that is, a more repeatable ignition source in the test should improve the reliability of the test results and lessen the need for manufacturers to build in a “margin of safety” to account for test variability. The commenter may be confusing the relationship between test material specifications and the stringency of the Standard itself. The “margin of safety” built into the production of mattresses ordinarily would be related to the performance requirements prescribed in the Standard for tested mattress samples. If, however, test results were unreliable due to the variability of the test cigarettes, manufacturers might build mattresses that, for example, pass the test in more than the minimum number of locations or that exhibit shorter-than-required char length results. The SRM cigarette ignition source increases the likelihood of a successful test and enhances the repeatability of test results, and it decreases the number of retests necessary to determine compliance. A test cigarette that burns its full length would be acceptable for the test, whether it was a 90 PFLB SRM or a 50 PFLB SRM cigarette. Differences in the PFLB of test cigarettes are independent of the performance requirements of either of the two mattress standards.

(Comment 13) One commenter argued that we failed to meet requirements of the FFA in proposing this amendment to 16 CFR part 1632. The commenter stated that section 4 of the FFA requires us to base our decision to amend our regulations on research and investigation, and the commenter felt that the proposal had failed to do this.

(Response 13) The proposed amendment is based on substantial research and investigation conducted by NIST. In August 2008, we entered into an IAG with NIST to develop a new cigarette smoldering ignition source. In June 2009, NIST provided a report on its research, “ NIST Technical Note 1627: Modification of ASTM E 2187 for Measuring the Ignition Propensity of Conventional Cigarettes.” The research described in this report was used to help develop SRM 1196. In July 2009, we posted NIST Technical Note 1627 on our Web site to keep stakeholders informed of the progress of this research and invite comments. We addressed the comments received on NIST Technical Note 1627 in CPSC staff's October 13, 2010, NPR Briefing Package, and the preamble to the proposed rule also discussed the comments (75 FR at 67049). In addition, the staff prepared initial and final regulatory analyses as required by section 4 of the FFA.

(Comment 14) The same commenter argued that we failed to consider all regulatory alternatives and other standards relevant to amending 16 CFR part 1632. Specifically, the commenter argued that we did not consider the extent to which 16 CFR part 1633 renders part 1632 redundant, despite the fact that we have issued an Advance Notice of Proposed Rulemaking (ANPR) to consider whether to revoke 1632 for this reason.

(Response 14) We have a separate proceeding (70 FR 36357 (June 23, 2005)) to consider whether to revoke 16 CFR part 1632. Issues related to the need for 16 CFR part 1632, in light of the existence of a separate mattress standard (16 CFR part 1633), are appropriate for that proceeding and therefore, are outside the scope of this rulemaking. This rulemaking is limited to revising the provision in 16 CFR part 1632 specifying the ignition source for the flammability test required in the Standard.

The Standard requiring mattresses to be resistant to cigarette ignition, 16 CFR part 1632, took effect in 1973. Although smoldering ignition of mattresses ( i.e., ignition from cigarettes) has declined since that time, mattress fires ignited by small open flames (such as lighters and candles) have continued to cause a significant number of deaths and injuries. In 2006, we published a flammability standard directed at the hazard of open-flame ignition of mattresses, 16 CFR part 1633, which took effect on July 1, 2007. In the course of the rulemaking to develop 16 CFR part 1633, industry questioned whether there would be overlap between the two mattress flammability standards, making continuation of 16 CFR part 1632 unnecessary. To examine the issue of possible overlap between the two standards, we published an ANPR for the possible revocation or amendment of 16 CFR part 1632, Standard for the Flammability of Mattresses and Mattress Pads in June 2005, and invited public comments (70 FR 36357 (June 23, 2005)). Some commenters supported revoking the Standard, while others recommended careful review of the risks, incident data, and benefits of the Standard before revocation is considered.

On October 20, 2005, the Sleep Product Safety Council (“SPSC”), which is a safety division of the ISPA, met with CPSC staff to discuss issues associated with the possible revocation or amendment of the Standard. At that meeting, ISPA/SPSC told us of its plans to work with NIST on a research project to determine whether 16 CFR part 1632 was needed once 16 CFR part 1633 became effective. In addition, ISPA and the SPSC discussed plans for a research project with NIST to develop a predictive, small-scale test for 1632. (The meeting log is at http://www.cpsc.gov/library/foia/meetings/mtg06/MattressOct20.pdf ). In 2009, ISPA ended the research project at NIST due to problems with controlling standard test materials; the research was not completed, and no data were provided to CPSC from this project. At this time, we are not aware of data indicating that 16 CFR part 1633 eliminates or sufficiently reduces the risk of injury from cigarette ignition of mattresses, such that we could revoke 16 CFR part 1632.

(Comment 15) One commenter asserted that we misunderstand the purpose of 16 CFR part 1632 and that the rule should provide for an ignition source that represents cigarettes that are commercially available today.

(Response 15) The commenter misunderstands the limited nature of this rulemaking. Although we have authority to conduct the rulemaking that the commenter suggests, the FFA does not require it, and it would be a different proceeding altogether. In essence, the commenter wants us to reopen and reexamine the entire purpose of the Standard to see whether a different Standard or different level of protection should be in place than was established when the Standard was created in 1972. This approach would require reevaluation of the level of risk that exists from cigarette ignition of mattresses.

In this proceeding, we are simply specifying a substitute ignition source for the one that currently is specified but is no longer available; we are not changing the level of protection or reevaluating the current level of risk. As discussed in the previous response, the larger questions of the need for 16 CFR part 1632 and evaluation of the current level of risk posed by cigarette ignition of mattresses are outside the scope of this rulemaking.

(Comment 16) The same commenter suggested that we halt this proceeding and act on industry's request to revoke part 1632, issuing an interim rule to suspend part 1632.

(Response 16) The question of revocation or revision of 16 CFR part 1632 in light of 16 CFR part 1633 is the subject of a different rulemaking proceeding, and these issues are outside of the scope of this rulemaking. If commenters have any data relevant to that issue, they should provide it in connection with that rulemaking. In the meantime, 16 CFR part 1632 continues to be in effect. The ignition source specified in the Standard is no longer available. The purpose of this proceeding is to amend the Standard to specify a comparable ignition source so that reliable and representative testing can continue under the current Standard.

(Comment 17) One commenter stated that we did not consider the potential impact of our pending ANPR regarding the flammability of bedclothes.

(Response 17) On January 13, 2005, we published an ANPR (70 FR 2514) for a possible standard to address open-flame ignition of bedclothes. Because only an ANPR exists, there is no CPSC standard for the flammability of bedclothes. Therefore, there is no basis for us to consider the impact that such a standard might have on this rule.

We are revising the ignition source provision in the Standard, 16 CFR 1632.4(a)(2), to specify a standard reference material based on research conducted by NIST. The new SRM cigarette is designated SRM 1196. As discussed in section A.2 of this preamble, based on NIST's research, the new SRM cigarette meets the following specification:

• Nominal length: 83 mm ± 2mm;

• Tobacco packing density: 0.270 g/cm 3 ± 0.020g/cm 3 ;

• Mass: 1.1 g ± 0.1 g;

• Ignition Strength: 70 Percent Full Length Burn (PFLB) to 95 PFLB, using ASTM E 2187, as modified in Section 4.2 of NIST Technical Note 1627; and

• Non-“Fire-Safe Cigarette” (FSC).

Section 1632.4(a)(2) states that SRM 1196 is available for purchase from the National Institute of Standards and Technology, 100 Bureau Drive, Gaithersburg, MD 20899.

Section 4(j) of the FFA requires that the Commission prepare a final regulatory analysis when it issues a regulation under section 4 of the FFA and that the analysis be published with the rule. 15 U.S.C. 1193(j). The following discussion extracted from the staff's memorandum titled, “Final Regulatory Analysis: Smoldering Ignition Source Technical Amendment to the Flammability Standard for Mattresses and Mattress Pads (16 CFR part 1632)” (Ref. 2), addresses this requirement.

Available U.S. Economic Census data in recent years show an estimated total value of shipments of about $5 billion of mattresses and related sleep products ( e.g., mattress pads, box springs, innerspring cushions, and air-flotation sleep systems). Domestic employment for this category is estimated at about 20,000 workers. Industry estimates indicate that the number of mattresses (including unconventional items, such as futons, crib and juvenile mattresses, and sleep sofa inserts) shipped in the United States residential market is roughly 25 million units annually. About 5 to 10 percent of this total is comprised of imported products, including some imports marketed by the domestic manufacturers. The proportion of imports for mattress pads is higher.

An estimated 150 to 200 domestic firms produce new mattresses or mattress pads in manufacturing facilities in the United States. An unknown, but potentially similar, number of firms in the United States sell renovated mattresses, which may account for 2.5 million to 5 million units, or between 10 and 20 percent of mattresses sold. Thus, there may be as many as approximately 400 manufacturing firms subject to 16 CFR part 1632. These firms comprise more than 600 production establishments. Larger manufacturers may offer dozens of models, not counting different size designations ( e.g., twin, full, queen, king) at any given time; new models may be introduced once or twice per year. Many smaller firms market only a few models and make few, if any, construction changes in a year.

The SRM cigarette described in the revised ignition source provision would have approximately the same ignition strength characteristics as originally intended by the Standard. The use of SRM cigarettes would not alter the stringency of the flammability performance tests in the Standard, so the revised provision will not alter the test method itself.

Because the revised ignition source provision is “safety-neutral,” mattresses that pass or fail under the existing Standard would be expected to generate similar results when the NIST-developed SRM is used. The level of protection provided by the Standard would neither increase nor decrease as a result. Thus, there would be no impact on the level or value of fire safety benefits derived from the 16 CFR part 1632 Standard.

However, there would be potential benefits that are not readily quantifiable. Currently, manufacturers and testing laboratories do not have access to continued supplies of test cigarettes other than RIP Pall Mall cigarettes. Existing inventories of conventional Pall Mall cigarettes have been depleted or exhausted. Many industry representatives have requested guidance on the issue of which cigarette to use in testing.

Even if continuing supplies of conventional test cigarettes were available, the variability in cigarette performance described in the NIST research may lead to an unacceptably low level of test outcome reproducibility. This is causing uncertainty among testing firms, and among manufacturers and importers certifying compliance with the Standard. These firms have expressed concern that tests conducted by the CPSC and by industry may not be comparable. This inconsistency could lead to unnecessary additional testing. Specifying the SRM cigarette would reduce inconsistency and uncertainty for industry, testing laboratories, and the CPSC.

Currently, manufacturers incur testing costs related to 16 CFR part 1632 whenever new mattress models are introduced that either: (1) Are of new construction, or (2) have new tickings that may influence cigarette ignition resistance. Larger manufacturers may introduce 20 or more new constructions or ticking substitutions each year. Smaller producers and renovators probably introduce fewer items or rely on prototype developers for multiple models. Assuming that qualified prototypes are developed for all new constructions and ticking substitutions to demonstrate compliance, a range of estimates for annual prototypes and ticking substitutions can be used to project potential costs associated with the proposed amendment to incorporate SRM cigarettes into the Standard.

Pre-Amendment Testing Costs. For most mattress models that require some kind of testing, the testing cost per model to manufacturers is comprised chiefly of: (1) The resource costs of producing the mattresses used for destructive testing, including shipping to a test laboratory; and (2) the laboratory's fee for the testing service, which includes photographic and other records prepared by the test laboratory, as well as the cigarettes consumed in testing.

The cost of mattresses consumed in prototype testing may amount to approximately $400 for a typical two-mattress test series (although the range can go much higher, to more than $1,000 per mattress for low-volume, specialty items). Prototype test charges reported by third party testing laboratories can vary widely, especially by location. For example, charges for tests performed in China tend to be significantly lower than charges for tests performed in the United States. Overall, these charges, which include the cost of the test cigarettes, may average about $250 per prototype (labor and material costs for manufacturers to perform their own tests may be similar). Thus, the current average total cost per mattress prototype may be roughly $400 + $250 = $650. A ticking substitution test is simpler and much less expensive, requiring only small samples of ticking material, a reusable small-scale test apparatus, and a smaller number of cigarettes; the average total cost may be around $50.

Testing costs incurred for prototypes and ticking substitutions can be allocated over a production run of mattresses. The cost per unit may vary with production volume, the mix of tests performed, and other factors. The examples below incorporate assumptions based on discussions with industry representatives. These examples illustrate some possible baseline cost differences for larger versus smaller firms:

Typical example for a medium-to-large producer:

These examples reflect the likely average annual testing costs to industry, assuming reasonably full compliance with 16 CFR part 1632. Thus, approximate baseline testing costs for the largest 50 mattress manufacturers combined would be about 50 × $4,000 = $200,000 annually; testing costs for the remaining 350 firms would be about 350 × $1,450 = $507,500. Thus, total estimated baseline testing costs may be about $200,000 + $507,500 = $707,500 per year.

Costs per Firm Associated with the Revised Ignition Source Provision. The only cost increase associated with revising the ignition source provision to specify SRM 1196 is related to the SRM cigarettes. The list price of SRM cigarettes from NIST is $239 for a two-carton minimum order, or about $120 per carton, plus shipping. A carton contains 200 cigarettes, or 10 packs of 20. Shipping charges range from $10 to $55 per order, or about $1 to $5 per carton for a typical 10-carton order. Thus, the estimated total average cost of the SRM cigarettes would be up to about $125 per carton. After we proposed the amendment to the Standard, NIST reduced the price of SRM 1196 by about half, to reduce the potential cost burden on industry. Testing laboratories and others can obtain (RIP) Pall Mall cigarettes currently on the market for regionally varying prices of $60 to $100 per carton. Thus, the cost of cigarettes to parties performing tests may rise from a level of approximately $6 to $10 per pack, to approximately $12.50 per pack, representing an increase of about $2.50 to $6.50 per pack.

Under the protocol in 16 CFR part 1632, new packs of cigarettes are opened for each test sequence. A new prototype or confirmatory test consumes about two packs, and a ticking substitution test consumes about one pack. Assuming an increased cost per pack of $12.50−6 = $6.50, the average cost of performing the tests could increase by 2 × $6.50 = $13 per prototype and $6.50 per ticking substitution. This represents a 2 percent increase ($13/$650) in average total resource costs per prototype, and a 12 percent increase ($6.50/$50) in average resource costs per ticking substitution.

In the above “typical producer” examples, the larger firm with 20 new models would incur increased prototype costs of 5 × $13 = $65, plus increased ticking substitution costs of 15 × $6.50 = $97.50, for a total annual increase of $65 + $97.50 = $162.50 (about 4 percent of the firm's overall $4,000 annual testing cost). Over a 50,000 unit production run, the cost would be $0.003 ( i.e., about one-third of one cent) per unit. The smaller firm with five new models would incur increased prototype costs of 2 × $13 = $26 and increased ticking substitution costs of 3 × $6.50 = $19.50, for a total annual increase of $26 + $19.50 = $45.50 (about 3 percent of the firm's overall $1,450 annual testing cost). Over a 5,000 unit production run, the increased testing cost would be $0.009 ( i.e., about one cent) per mattress.

In summary, the expected additional cost of testing related to the revised ignition source provision may range from about $45.50 to $162.50 per firm. The cost over a production run could range from about one-third to one cent per mattress produced under those tests. The distribution of this projected cost among manufacturers and testing laboratories is uncertain because some test laboratories may choose to pass on their increased costs—in the form of higher test fees—to manufacturers, while others may not. Even if all such costs were passed on to manufacturers, it is unlikely that there would be a noticeable effect on wholesale or retail mattress prices.

Aggregate Costs Associated with Revising the Ignition Source Provision. There may be as many as 200 new product manufacturers and 200 renovators, for a total of about 400 firms. The largest 50 firms are assumed to have 20 new models (50 × 20 = 1,000 models to be tested), and the remaining 350 firms to have five new models (350 × 5 = 1,750 models to be tested), for a total of 1,000 + 1,750 = 2,750 models to be tested. The aggregate annual cost of specifying SRM 1196 as the ignition source in the Standard will vary with the number of new prototypes and ticking substitutions. A point estimate can be developed using the pre-amendment baseline examples above and the best available information on these variables.

Using the baseline assumptions for new prototypes versus ticking substitutions, the 50 largest firms would have an average of five prototypes each (for a total of 5 × 50 = 250) and the remaining 350 smaller firms would have two prototypes each (for a total of 2 × 350 = 700); thus, the overall number of prototypes to be performed would be 250 + 700 = 950. The number of ticking substitutions would be 15 each for the larger firms (for a total of 15 × 50 = 750) and three each for the smaller firms (for a total of 3 × 350 = 1,050); the overall number of ticking substitutions would be 750 + 1,050 = 1,800.

At two packs of cigarettes per prototype and one pack per ticking substitution, the estimated quantity consumed in testing would be 2 × 950 = 1,900 for prototypes and 1,800 for ticking substitutions, for a total of 1,900 + 1,800 = 3,700 packs. At an increase of $6.50 per pack, the estimated total resource cost would be 3,700 × $6.50 = $24,050. This point estimate represents an unweighted average increase of about 3.5 percent of the estimated $707,500 aggregate annual industry testing costs related to 16 CFR part 1632. For annual production of about 25 million mattresses sold in the U.S., the estimated overall average cost is less than one-tenth of one cent per production unit. The recent reduction in the price of SRM 1196 cigarettes by about half reduces the estimated total cost from what was calculated for the proposed amendment by about two-thirds.

In addition to the projected costs to industry, the CPSC and other government agencies ( e.g., the California Bureau of Home Furnishings & Thermal Insulation and the Canadian Ministry of Health) would likely purchase small quantities of SRM cigarettes from NIST for compliance testing and related research. Thus, these Federal and other government agencies may incur minor costs, depending on the numbers of tests these organizations may perform in any given year.

The effective date of the rule is one year from the date of publication in the Federal Register . Typically, new mattress models are introduced once or twice per year. The effective date would allow this product cycle to proceed without potential disruption or additional testing costs.

In summary, revising the ignition source provision in the Standard to specify the SRM cigarette is not expected to have a significant impact on expected benefits or costs of the Standard in 16 CFR part 1632. Resource costs may amount to roughly $24,000 per year. The revision would, however, reduce test variability and uncertainty among manufacturers subject to the Standard and among testing organizations. Both the expected benefits and likely economic costs are small, and the likely effect on testing costs per new prototype mattress or ticking substitution would be minor, especially when the projected cost is allocated over a production run of complying mattresses.

The Commission considered two basic alternatives: (1) Specify a different SRM cigarette, with the approximate lower ignition strength of an RIP cigarette; or (2) take no action on the smoldering ignition source issue.

Neither of these two alternatives would likely have a substantial economic impact. There would, however, be some relative differences in terms of resource costs and potential effects on the level of benefits the Standard affords. The advantages and disadvantages of these two basic alternatives are discussed immediately below.

Under this first alternative, the Commission could amend the Standard to specify a different, lower ignition propensity SRM cigarette. Such an SRM would presumably be closer in ignition strength to the “worst-case” RIP cigarettes currently on the market.

There are three possible advantages to specifying an alternative SRM: (1) The problem of test repeatability and reproducibility would be addressed, as it is by specifying SRM 1196; (2) an alternative SRM might better approximate average ignition propensity of commercial cigarettes; and (3) currently, there is a low-ignition propensity SRM (SRM 1082) developed by NIST for use by state regulators in assessing the compliance of RIP cigarettes.

There are three possible disadvantages to specifying an alternative SRM. First, there are no data to establish that a low-ignition propensity SRM would be equivalent or “safety neutral.” Moreover, the reliability of mattress test results may not be improved if, for example, only 50 percent of SRM cigarettes burned their full length. It is unknown whether more mattress construction prototypes would pass the test using a lower ignition propensity SRM than they do now with commercial cigarettes. Thus, the impact on mattress production costs is uncertain.

The second possible disadvantage is that the two known technical approaches to developing a lower ignition propensity SRM appear to be incompatible with the test in 16 CFR part 1632. Under existing state regulations, all known commercial RIP cigarettes incorporate banded paper that is designed to impede full-length burns. The test in 16 CFR part 1632 measures mattress ignitions resulting from full-length cigarette burns and allows up to three relights per cigarette to achieve a full length burn. It is likely that either: (1) Many low-ignition propensity cigarettes would be wasted in completing the test; or (2) the test could not be reliably completed using banded-paper, self-extinguishing cigarettes. Additionally, although the existing SRM 1082 (which represents a RIP cigarette) does not use banded-paper technology, it would have the same impracticalities as the banded-paper cigarette under the current Standard. The low ignition propensity design of the existing SRM 1082 is intended to yield a 12 to 15 percent full length burn rate ( i.e., the cigarettes are made to self-extinguish 85 to 88 percent of the time). Because this SRM is intended to be used as a calibration tool for cigarette manufacturers subject to state regulations, it is purposely designed to represent a minimal-ignition propensity target, rather than a typical or representative RIP-ignition propensity. Clearly, it would not represent a “worst-case” RIP cigarette. Further, SRM 1082 does not meet the specified physical criteria for cigarette length and density; so these cigarettes are physically unlike the current test cigarette or current RIP cigarettes.

The third possible disadvantage is that the properties of a new SRM that would mimic the ignition behavior of “worst case” RIP cigarettes have not been characterized. The “worst case” RIP cigarette would be one that burns its full length and may, therefore, be similar to its non-RIP counterpart. Insufficient research exists to support a new and different, low-ignition propensity SRM; and a variety of as-yet-unknown modifications to the test method in 16 CFR part 1632 would likely be needed to incorporate such an SRM. The time and cost to develop a new SRM is undetermined, but the existing concern about the short-term availability of a consistent ignition source would not be resolved.

Thus, while a lower ignition strength SRM cigarette may be technically feasible, there is no readily available SRM alternative that would address the need for a consistent, “safety-neutral” ignition source.

Under the second alternative, the ignition source specifications in the Standard would remain unchanged. Manufacturers and testers would remain free to conduct tests with any available cigarettes, including RIP Pall Malls, which meet the existing physical parameters.

The possible advantage of the Commission taking no action is that the projected minor increase in resource costs of testing would not be incurred.

The possible disadvantage of the Commission taking no action would be that the basic issue of test result variability due to differences in cigarettes would not be addressed, and the uncertainty and confusion surrounding the reliability of tests for compliance with 16 CFR part 1632 would not be reduced. Manufacturers and testing firms may continue to conduct tests that are either wasteful (in terms of extra RIP cigarettes required to complete a test) or have irreproducible results.

In summary, there are no readily available, and/or technically feasible, alternatives that would have lower estimated costs and still address the need for a consistent ignition source that retains the “safety-neutral” approach of the proposed amendment.

Under the Regulatory Flexibility Act (“RFA”), 5 U.S.C. 601 et seq., an agency that engages in rulemaking generally must prepare initial and final regulatory flexibility analyses describing the impact of the rule on small businesses and other small entities. Section 605 of the RFA provides that an agency is not required to prepare a regulatory flexibility analysis if the head of an agency certifies that the rule will not have a significant economic impact on a substantial number of small entities.

As discussed in the preamble to the proposed rule (75 FR at 67052-53), the Commission determined that, although almost all mattress manufacturers would be considered small firms under the U.S. Small Business Administration's fewer-than-500-employees definition, the proposal would have little or no effect on small producers. The design and construction of existing, compliant mattress products would remain unchanged, and the resource cost increase of using SRM cigarettes would represent a minimal increase in total testing costs. On this basis, the Commission preliminarily concluded that the proposed rule would not have a significant impact on a substantial number of small businesses or other small entities. We received no comments concerning the impact of the proposal on small entities, and we are not aware of any other information that would change the conclusion that the rule will not have a significant impact on a substantial number of small businesses or other small entities. In fact, after we published the proposed rule, NIST lowered the cost of SRM 1196.

This revision of the ignition source provision in the Standard would keep the current mattress test procedure in place but would require that entities performing cigarette ignition tests purchase and use SRM cigarettes at a higher cost than commercial, non-SRM cigarettes. No additional actions would be required of small entities. As discussed in the cost analysis section above, the costs would be borne by mattress manufacturers and importers that perform (or pay fees for) compliance testing. The estimated average increase in testing and certification costs is about $63 per small firm, or less than one cent per production unit. This represents less than one-hundredth of one percent of small firms' average gross revenues. Thus, while almost all mattress manufacturers would be considered small firms, the ignition source revision would not have significant impacts on small firms.

As noted in the preamble to the proposed rule (75 FR at 67053), the Commission's regulations state that amendments to rules providing performance requirements for consumer products normally have little or no potential for affecting the human environment. 16 CFR 1021.5(c)(1). Nothing in this rule alters that expectation. Therefore, because the rule would have no adverse effect on the environment, neither an environmental assessment nor an environmental impact statement is required.

According to Executive Order 12988 (February 5, 1996), agencies must state in clear language the preemptive effect, if any, of new regulations. The rule will revise one provision of a flammability standard issued under the FFA. With certain exceptions that are not applicable in this instance, no state or political subdivision of a state may enact or continue in effect “a flammability standard or other regulation” applicable to the same fabric or product covered by an FFA standard if the state or local flammability standard or other regulations is “designed to protect against the same risk of the occurrence of fire,” unless the state or local flammability standard or regulation “is identical” to the FFA standard. See 15 U.S.C. 1476(a). The rule would not alter the preemptive effect of the existing mattress standard.

Thus, the rule would preempt nonidentical state or local flammability standards for mattresses or mattress pads designed to protect against the same risk of the occurrence of fire.

Section 4(b) of the FFA (15 U.S.C. 1193(b)) provides that an amendment of a flammability standard shall become effective one year from the date it is promulgated, unless the Commission finds for good cause that an earlier or later effective date is in the public interest, and the Commission publishes the reason for that finding. Section 4(b) of the FFA also requires that an amendment of a flammability standard shall exempt products “in inventory or with the trade” on the date the amendment becomes effective, unless the Commission limits or withdraws that exemption because those products are so highly flammable that they are dangerous when used by consumers for the purpose for which they are intended. We conclude that a one-year effective date is appropriate to ensure ample time for the product cycle and continuing availability of SRM cigarettes from NIST. Therefore, the revised ignition source provision of the Standard will become effective one year after publication in the Federal Register .

Section 4(a), (b) and (j)(2) of the FFA require the Commission to make certain findings when it issues or amends a flammability standard. The Commission must find that the standard or amendment: (1) Is needed to adequately protect the public against the risk of the occurrence of fire leading to death, injury, or significant property damage; (2) is reasonable, technologically practicable, and appropriate; (3) is limited to fabrics, related materials, or products which present unreasonable risks; and (4) is stated in objective terms. 15 U.S.C. 1193(b). In addition, the Commission must find that: (1) If an applicable voluntary standard has been adopted and implemented, that compliance with the voluntary standard is not likely to adequately reduce the risk of injury, or compliance with the voluntary standard is not likely to be substantial; (2) that benefits expected from the regulation bear a reasonable relationship to its costs; and (3) that the regulation imposes the least burdensome alternative that would adequately reduce the risk of injury.

The scope of this rulemaking is limited to revising the ignition source provision in the Standard. The Commission is not making any other changes to the Standard. Therefore, the findings relate only to that revision and not to the entire Standard. These findings are discussed below.

The amendment to the Standard is needed to adequately protect the public against unreasonable risk of the occurrence of fire. The current Standard specifies as the ignition source cigarettes that are no longer being produced. In order for the Standard to continue to be effective (and for labs to test mattresses and mattress pads to determine whether they comply with the Standard), it is necessary to change the ignition source specification. The revision of this provision is necessary to ensure that testing is reliable and that results will not vary from one lab or manufacturer to another. Such variation would be likely if labs or manufacturers were able to use different ignition sources that have similar physical properties but different burning characteristics.

The amendment to the Standard is reasonable, technologically practicable, and appropriate. The revision to the ignition source provision is based on technical research conducted by NIST, which established that the SRM cigarette is capable of providing reliable and reproducible results in flammability testing of mattresses and mattress pads. SRM 1196 represents an equivalent, safety-neutral ignition source for use in testing to establish compliance with the Standard.

The amendment to the Standard is limited to fabrics, related materials, and products that present an unreasonable risk. The revision of the ignition source provision will not make any changes to the products to which the Standard applies.

Voluntary standards. There is no applicable voluntary standard for mattresses. We are amending an existing federal mandatory standard.

Relationship of benefits to costs. Revising the ignition source provision in the Standard to specify SRM 1196 will allow testing to the Standard to continue without interruption, will maintain the effectiveness of the Standard, and will not significantly increase testing costs to manufacturers and importers of mattresses and mattress pads. Thus, there is a reasonable relationship between benefits and costs of the amendment. Both expected benefits and costs are likely to be small. The likely effect on testing costs would be minor, approximately one-third to one cent per mattress produced under those tests.

Least burdensome requirement. No other alternative would allow the Standard's level of safety and effectiveness to continue. Thus, the revision to the ignition source provision specifying SRM 1196 imposes the least burdensome requirement that would adequately reduce the risk of injury.

For the reasons discussed above, the Commission finds that revising the ignition source provision in the Standard (16 CFR part 1632) to specify SRM 1196 as the ignition source is needed to adequately protect the public against the unreasonable risk of the occurrence of fire leading to death, injury, and significant property damage. The Commission also finds that the amendment to the Standard is reasonable, technologically practicable, and appropriate. The Commission further finds that the amendment is limited to the fabrics, related materials, and products that present such unreasonable risks.

For the reasons given above, the Commission amends 16 CFR part 1632 as follows:

Cross Vetpharm Group, Ltd., Broomhill Rd., Tallaght, Dublin 24, Ireland, filed ANADA 200-455 for use of TYLOMED-WS (tylosin tartrate), a water soluble powder, in chickens, turkeys, swine, and honey bees. The abbreviated application is approved as of July 5, 2011, and the regulations are amended in 21 CFR 520.2640 to reflect the approval and to make minor revisions that will improve accuracy of the regulations.

A summary of safety and effectiveness data and information submitted to support approval of this application may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday.

The Agency has determined under 21 CFR 25.33 that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

This rule does not meet the definition of “rule” in 5 U.S.C. 804(3)(A) because it is a rule of “particular applicability.” Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801-808.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR part 520 is amended as follows:

We issued a Notice of Proposed Rulemaking (NPRM) on May 14, 2010, requesting comment on a number of proposed amendments to title 31 CFR part 210 (Part 210). 75 FR 27239. Part 210 governs the use of the ACH Network by Federal agencies. The ACH Network is a nationwide electronic fund transfer (EFT) system that provides for the inter-bank clearing of electronic credit and debit transactions and for the exchange of payment-related information among participating financial institutions. Part 210 incorporates the ACH Rules adopted by NACHA, with certain exceptions. From time to time we amend Part 210 in order to address changes that NACHA periodically makes to the ACH Rules or to revise the regulation as otherwise appropriate.

In the NPRM, we proposed to incorporate in Part 210 some, but not all, of the changes that NACHA adopted in 2007 and 2008, as reflected in the 2009 ACH Rules book. Those changes include requirements to identify all international payment transactions using a new Standard Entry Class Code and to include in the ACH record certain information sufficient to allow the receiving financial institution to identify the parties to the transaction and the path of the transaction. Effective September 18, 2009, the ACH Rules required Originating Depository Financial Institutions (ODFIs) and Gateway Operators to identify all international payment transactions transmitted via the ACH Network for any portion of the money trail with a new Standard Entry Class Code for International ACH Transactions (IAT). IAT transactions must include the specific data elements defined within the Bank Secrecy Act's (BSA) “Travel Rule” so that all parties to the transaction have the information necessary to comply with U.S. law, including the laws administered by OFAC.

Previously, many payments that are international in nature were being introduced as domestic transactions into the U.S. ACH Network through correspondent banking relationships, making it difficult for processing depository financial institutions to identify them for purposes of complying with U.S. law. NACHA's IAT Standard Entry Class Code classifies international payments based on the geographical location of the financial institutions or money transmitting businesses involved in the transaction, instead of the location of the originator or receiver. As defined in the 2009 ACH Rules, an International ACH Transaction (IAT) entry is:

In the NPRM, we proposed to accept the IAT rule for Federal payments. For Federal benefit payments delivered to overseas recipients in Mexico, Canada and Panama through the FedGlobal ACH Payment Services, we have already implemented the requirements of the IAT rule. For other payments, however, we proposed an effective date of January 1, 2012 in order to allow for the system and operational changes necessary to implement the IAT requirements. We further indicated that we planned to phase in IAT requirements in stages, based on the type of payment and the agency issuing the payment, as expediently as operationally possible. The January 1, 2012 effective date does not affect agencies' obligation to comply to the full extent of their authority with OFAC-administered sanctions programs when certifying payments to Treasury for disbursement.

Lastly, we stated that in implementing the IAT requirements, we anticipated that some agencies will format as an IAT entry any payment to an individual or entity with an address outside the territorial jurisdiction of the U.S. This may result in the identification of some transactions as IATs even though funds do not ultimately leave the United States. However, taking an “over-inclusive” approach to implementing IAT greatly eases the administrative burden that Federal agencies would otherwise face. We requested comment from agencies and financial institutions on this over-inclusive approach.

Effective December 21, 2007, NACHA modified its rules to broaden the scope of Appendix Eleven (The National System of Fines). The Appendix was revised to (1) Allow NACHA to request data from ODFIs for an Originator or Third-Party Sender that appears to exceed a rate of one percent for debit entries returned as unauthorized; and (2) define the circumstances under which NACHA may submit violations related to the ODFI reporting requirement to the National System of Fines. Several other provisions of the National System of Fines were also modified.

Part 210 currently does not incorporate Appendix 11 of the NACHA Rules. See 31 CFR 210.2(d)(3). The Federal government is constrained from entering into arrangements that may result in unfunded liabilities. Moreover, we do not believe that subjecting Federal agencies to the System of Fines is necessary or appropriate in light of its underlying purpose. Accordingly, we proposed not to adopt the modifications to Appendix 11. In the event that a Federal agency were to experience a high rate of debit entries returned as unauthorized, we would work with the agency and coordinate with NACHA to address the situation.

Effective March 20, 2009, NACHA amended its rules to incorporate new reporting requirements for ODFIs within Article Two (Origination of Entries). These reporting requirements require ODFIs to provide, when requested by NACHA, certain information about specific Originators or Third-Party Senders believed to have a return rate for unauthorized debit entries in excess of 1 percent. The rule also requires ODFIs to reduce the return rate for any such Originator or Third-Party Sender to a rate below 1% within 60 days. The amendment replaced a reporting requirement for Telephone-Initiated (TEL) entries that was previously in the ACH Rules.

We proposed not to adopt these reporting requirements. When NACHA adopted the TEL reporting requirement in 2003, we did not adopt it, in part because we did not believe that agencies were likely to experience excessive rates of returned entries, which has proved to be true. Similarly, we do not believe that it is necessary or appropriate to subject Federal agencies to a formal reporting process for unauthorized entries.

In addition to addressing ACH Rule changes, we proposed to amend Part 210 to streamline the reclamation process for post-death benefit payments. We requested comment on a proposal to replace the current manual, paper-based reclamation process with a process in which Treasury would proceed with an automatic debit to the financial institution's reserve account in cases where a reclamation is limited to payments received within 45 days after the recipient's death. In the current reclamation process, Treasury sends out a paper Notice of Reclamation to the financial institution. The financial institution must complete, certify and return the paper Notice of Reclamation to Treasury. We requested comment on an approach in which Treasury would proceed with an automatic debit to the financial institution's reserve account, following advance notice to the financial institution of the debit with a right to challenge. We proposed that the automated process apply to situations in which a notice of reclamation is limited to payments received within 45 days after the recipient's death, which constitutes 85% of all reclamations.

We proposed in the NPRM to require financial institutions to provide certain withdrawer information for all types of benefit payments being reclaimed. Prior to the enactment of the Payment Transactions Integrity Act of 2008, account-related information could be shared only for certain types of benefit payments. Accordingly, Part 210 currently requires banks to provide only the name and address (not the phone number) of account owners and withdrawers, and only in connection with the reclamation of Social Security Federal Old-Age, survivors, and Disability Insurance benefit payments or benefit payments certified by the Railroad Retirement Board or the Department of Veterans' Affairs. We proposed to require Receiving Depository Financial Institutions (RDFIs) to provide the name and last-known address and phone number for account owners and others who have withdrawn, or were authorized to withdraw, funds subject to a reclamation.

Finally, we proposed to add three exceptions to our long-standing requirement in Part 210 that non-vendor payments be delivered to a deposit account at a financial institution in the name of the recipient. Specifically, we proposed to allow the delivery of Federal payments to resident trust or patient fund accounts held by nursing homes; to accounts held by religious orders for members who have taken a vow of poverty; and to prepaid and stored value card accounts provided that the cardholder's balance is FDIC insured and covered by the consumer protections of the Federal Reserve's Regulation E. This final rule does not address the proposal relating to prepaid cards. We have addressed that proposal in a separate rulemaking published on December 22, 2010. 1 See 75 FR 80335.

Title 31 CFR 210.5(a) provides that, notwithstanding ACH rules 2.1.2, 4.1.3, and Appendix Two, section 2.2 (listing general ledger and loan accounts as permissible transaction codes), an ACH credit entry representing a Federal payment other than a vendor payment shall be deposited into a deposit account at a financial institution. For all payments other than vendor payments, the account at the financial institution must be in the name of the recipient, subject to certain exceptions. Our long-standing interpretation of the words “in the name of the recipient,” has been that the payment recipient's name must appear in the account title. See, e.g., 64 FR 17480, referring to discussion at 63 FR 51490, 51499. The requirement is not met if the recipient has an ownership interest in a pooled account and that individual's interest is reflected only in a subacccount record. The “in the name of the recipient” requirement is, in essence, a consumer protection policy designed to ensure that a payment reaches the intended recipient. See discussion at 63 FR 51490, 51499. We have had concerns in the past that a Federal benefit payment recipient could enter into, or otherwise be subject to, a master/sub account relationship in which the intended recipient has little control (if any) over the account to which their benefit payments is directed.

On April 21, 2008, the Social Security Administration (SSA) published a Federal Register notice requesting comments on arrangements in which Social Security benefit payments are deposited into a third-party's “master” account when the third party maintains separate “sub” accounts for individual beneficiaries. See 73 FR 21403. SSA specifically asked if nursing homes would be able to receive and manage benefits for their residents without the use of master/sub accounts. The comments received by SSA indicated that the use of master/sub account arrangements by residents of nursing facilities is widespread, and that these arrangements are beneficial for recipients. Based on the comments received, SSA's view is that master/sub accounts held by nursing facilities serve useful purposes and do not present concerns. After consulting with SSA and upon review of the comments submitted to SSA, we proposed in the NPRM an exception to the “in the name of the recipient” requirement which would allow payments to be deposited to pooled accounts held by nursing homes.

In the NPRM, we described the specific requirements to which resident trust or patient fund accounts held by nursing facilities are subject under Federal statute and regulation, including the Federal Nursing Home Reform Act. For example, upon written authorization of a resident, facilities must “hold, safeguard, manage and account for” the personal funds of the resident deposited with the facility. 42 U.S.C. 1396r(c)(1)(B); 42 CFR 483.10(c)(2). The statute requires that residents be provided a written description of their legal rights that includes a description of the protection of personal funds and a statement that a resident may file a complaint with a state survey and certification agency respecting resident abuse and neglect and misappropriation of resident property in the facility. 42 U.S.C. 1396r(c)(1)(B); 42 CFR 483.10(b)(7)(i). Other statutory provisions address the management of personal funds, including requirements for maintaining separate accounts, the provision of a complete separate accounting of each resident's personal funds, and the maintenance of a written record of all financial transactions involving the personal funds of a resident deposited with the facility. 42 U.S.C. 1396r(c)(6)(B)(i); 42 U.S.C. 1396r(c)(6)(B)(ii). To protect personal funds of residents deposited with a nursing facility, the nursing facility must purchase a security bond to assure the security of all personal funds. 42 U.S.C. 1396r(c)(6)(C). Lastly, nursing facilities may not charge anything for these services. A facility may not impose a charge against the personal funds of a resident for any item or service for which payment is made under Medicare or Medicaid. 42 U.S.C. 1396r(c)(6)(D).

In light of the extensive protections provided to residents of nursing facilities whose funds are maintained in resident trust or patient fund accounts, we proposed to establish an exception to the “in the name of the recipient” requirement in order to permit payments to be deposited into resident trust or patient fund accounts established by nursing facilities.

We also proposed in the NPRM to allow payments disbursed to a member of a religious order who has taken a vow of poverty to be deposited to an account established by the religious order. SSA's Federal Register notice regarding master/sub accounts specifically requested comment on accounts established by religious orders for members of such orders who have taken vows of poverty. The comments received did not indicate that there are any problems associated with these accounts, and commenters recommended that they be permitted.

For purposes of defining who is a “member of a religious order who has taken a vow of poverty,” we proposed to utilize existing guidance issued by the Internal Revenue Service (IRS). The treatment for Federal tax purposes of services performed by a member of a religious order who has taken a vow of poverty is addressed in IRS Publication 517 (2008). We requested comment on whether it is appropriate to define the phrase “member of a religious order who has taken a vow of poverty” in the same way that the phrase would be defined by IRS for Federal tax purposes.

We received 12 comments in response to the NPRM. The commenters represented a variety of perspectives. Comments were submitted by financial institutions, consumer advocacy groups, industry associations, the Senate Committee on Finance, and the House Committee on Ways and Means.

Several entities commented upon the proposal to amend Part 210 to accept NACHA's international ACH transaction (IAT) rule for Federal payments. Most of the commenters supported the application of the IAT rule to Federal payments, including the proposed effective date of January 1, 2012. However, the commenters generally opposed the use by Federal agencies of an “over-inclusive” approach to compliance with the IAT requirements in which, as discussed above, Federal agencies would use the IAT Standard Entry Class Code for all payments to individuals or entities with an address outside the territorial jurisdiction of the U.S. Commenters stated that Federal agencies should be expected to comply with the IAT rules in the same manner as the private sector. One commenter stated that the use of an over-inclusive approach “would result in a shift of the government's compliance costs to receiving depository financial institutions (RDFIs), which would be overly burdensome on and unfair to RDFIs.”

Commenters indicated that IAT transactions are typically viewed as riskier than other transactions and are therefore subject to additional scrutiny, which may increase the time, effort and cost of processing the payments, and potentially may delay the delivery of funds to the recipient. Commenters argued that by overclassifying payments as IATs, the Federal government would be increasing the volume of IAT transactions that financial institutions must handle, which would result in needlessly excessive OFAC screening and other processing costs for financial institutions. Commenters also stated that the overclassification of payments as IATs may result in the delay of delivery of funds to the recipients in some cases, due to the time required to investigate and clear any payments that potentially match the OFAC Specially Designated Nationals (SDN) List.

In view of commenters' concerns regarding the burdens to financial institutions that would result from agencies' use of an overinclusive approach, we have conducted research to quantify the anticipated burden. Based on our research, the burden to financial institutions appears to be minimal. SSA, which is the primary agency interested in pursuing an overinclusive approach, has identified approximately 170,000 benefit payments for recipients with a foreign address that are sent each month to domestic correspondent banks. We believe that most of these 170,000 would be properly classified as IAT entries if SSA undertook to query each payment recipient regarding the ultimate destination of the funds. The payments are generally being delivered to retirees who reside overseas and who, like other retirees, presumably use these benefits for their daily living expenses. SSA and FMS believe that many of these payments are likely to be further credited by U.S. financial institutions to accounts outside the U.S. through correspondent relationships. Therefore, it appears reasonable to assume that many of these 170,000 payments would be properly classified as IAT entries, meaning that the actual number of payments that are improperly classified -and that thus present an unnecessary processing burden for banks—is likely to be relatively insignificant.

Moreover, these 170,000 monthly payments are delivered to over 4,600 domestic financial institutions. Over 3,800 financial institutions receive fewer than 10 of these payments per month, which is a relatively inconsequential number for any particular financial institution. Only thirteen very large financial institutions receive more than 1,000 of these foreign benefit payments monthly. Accordingly, the potential burden to the vast majority of potentially affected financial institutions does not appear to be significant.

Finally, it's important to note that FMS will conduct OFAC screening of all 170,000 payments prior to their origination into the ACH network. FMS's service provider that conducts the OFAC screening will have information that may be used to assist financial institutions that are seeking to clear any of the payments that match the OFAC list. For these reasons, we believe that it is reasonable for agencies to classify payments made to individuals with foreign addresses as IAT entries.

In the NPRM, we discussed the IAT requirements from the perspective of payments made by the Federal government. The IAT requirements also affect collections made by the Federal government, including systems by which individuals or entities authorize the government to originate ACH debits to their domestic accounts for the collection amounts owed. After the effective date of the NACHA IAT rule changes, FMS learned that a few entries were being returned by domestic financial institutions based upon customer instructions to fund a Federal ACH collection debit from a foreign source of funds.

Generally, the IAT requirements will impact two collection systems operated by FMS: Pay.gov, which both originates ACH WEB entries online and ACH PPD, TEL and CCD entries received individually or in files from agencies; and FMS's Debit Gateway, through which ACH debit entries are presented and settled. We have determined that it will take a significant effort over an extended period to implement the changes necessary to process IAT entries. This effort will require that FMS coordinate with affected agencies and reallocate resources. Accordingly, we are establishing a new date of June 30, 2013, as of which the IAT requirements will be implemented into Pay.gov and the Debit Gateway. After June 30, 2013, FMS will work with agencies to transition them into compliance based upon the readiness of the systems involved and the business need of the agency. In an effort to continue progressing forward with implementing the IAT requirements, we expect to implement a limited IAT pilot in Pay.Gov and the Debit Gateway in late 2012.

Finally, we are exempting entries representing Federal tax payments made to the IRS from the IAT classification requirements due to their extremely low risk, and the need for taxpayers to receive timely credit for their payments made as a result of tax liabilities. IRS rules require receipt of funds on exact tax due dates, with substantial penalties and interest charged to individuals and corporations for late payments received. Millions of taxpayers authorize payment entries for tax payments using FMS's Electronic Federal Tax Payment System (EFTPS) with an enrollment process through which the taxpayer can authorize the origination of a debit entry to his or her bank account. The accounts from which EFTPS transactions are funded are accounts confirmed to be at domestic depository institutions as determined by the bank's routing number, and these accounts are monitored for OFAC compliance by the account-holding financial institutions. In light of these facts and the unique nature of tax payments, as opposed to transactions involving the purchase of goods or services or other government fees, we believe the risk associated with tax payments processed through EFTPS is very low. We have consulted with OFAC staff regarding this matter and they have concurred that our approach toward tax payments is reasonable from a risk-based compliance perspective.

In the NPRM FMS proposed to adopt the IAT rule for Federal benefit payments delivered to Mexico, Canada and Panama through the FedGlobal ACH Payment Service, effective immediately. For all other Federal payments, we proposed an effective date of January 1, 2012. We are finalizing this proposal for ACH credit entries originated by Federal agencies. For ACH debit entries originated by Federal agencies, we are establishing a later effective date of June 30, 2013.

Two commenters provided comments regarding the proposed continued exclusion from NACHA's national system of fines. One commenter expressed a preference that the Federal government be subject to the NACHA National System of Fines (Appendix Eleven of the NACHA Operating Rules). The other commenter recognized that FMS has consistently excluded the Federal government from the national system of fines because the Federal government is prohibited from entering into agreements for contingent liabilities that might result in unfunded liabilities. The commenters did not identify any problems that have resulted from FMS's prior decisions to exempt the Federal government from Appendix Eleven.

We believe that modifying Part 210 to subject the Federal government to Appendix Eleven could contravene the government's obligation to avoid unfunded liabilities. Moreover, none of the commenters indicated that this position has caused undue hardship in the past. If an agency experiences a high rate of debit entries that are returned as unauthorized, or if an agency or FMS identifies an ACH rule issue, FMS remains willing to coordinate with NACHA and the agency to address the issue. Therefore, we are adopting this proposal without modification.

Two commenters provided comments regarding FMS's proposal not to adopt NACHA's new reporting requirements for ODFIs when certain Originators or Third-Party Senders are believed to have a return rate for unauthorized debit entries in excess of one percent. One commenter expressed a preference that the Federal government be subject to the reporting requirements, whereas the other commenter recognized that FMS has consistently excluded the Federal government from the reporting requirements when those requirements may unduly burden the Federal government without yielding countervailing benefits. Neither commenter identified specific problems that would result from continuing to exempt the Federal government from these reporting requirements.

We are adopting this proposal without modification. We remain willing to coordinate with NACHA to address issues that may arise if an agency experiences an excessive unauthorized return rate.

Several commenters submitted comments regarding our proposal for automating reclamations. Commenters were generally supportive of the objectives of achieving cost savings and efficiencies in the reclamations process. Some commenters acknowledged that the current paper-based process can be burdensome for FMS and financial institutions, and that an updated process could benefit both parties. However, commenters generally expressed significant concerns that the proposed process was not sufficiently developed or clear, would be burdensome for financial institutions and would add complexity to the current reclamation procedures, thereby negating efforts to streamline the process and reduce the amount of paper produced. Several commenters suggested that FMS work with affected financial institutions to further refine and test any proposed process before final implementation.

In light of commenters' concerns, which we agree are generally valid, and our desire to identify the most effective solution to respond to the issues identified by commenters, we are not finalizing the proposal to automate the reclamations process at this time. Instead, we will work to develop an approach that addresses the concerns raised by commenters, which we may publish for comment in a future notice of proposed rulemaking. During this period of further study, we plan to continue to expand and refine the use of the Centralized Reclamation Application currently in use.

Several commenters provided input on FMS's proposal to require RDFIs to provide the name, last-known address and phone number for account owners and others who have withdrawn, or were authorized to withdraw, funds subject to reclamation. The commenters stated that financial institutions may not have telephone numbers for all deposit account owners and authorized signers, or that financial institutions may not have accurate or current information. The commenters expressed concern that financial institutions would be held accountable for the accuracy of the information in their records or might even be required to obtain that information.

We are finalizing the requirement to provide the proposed information. To clarify that a financial institution is only required to provide information in its records, and would have no liability for the accuracy of that information, we have modified the wording of the regulation text to state that the RDFI must provide the name, last known address and phone number “as reflected on the RDFI's records.”

The comments we received generally supported the proposed exception, which would allow a Federal payment that is disbursed to a resident of a qualifying nursing facility to be deposited into a resident trust or patient fund account established by the nursing facility. One commenter stated its belief that this change will assist nursing home residents. Another commenter suggested that the final rule further clarify that eligible nursing homes should be subject to certain types of oversight. Some financial institutions that commented expressed some concern that financial institutions could be held liable if funds are misapplied and suggested that the final rule either: (1) Specify that the payment be deposited into an account that is designated as a resident trust or patient fund account; or (2) allow the payment to be deposited into a deposit account established by the nursing facility.

We are finalizing the exception for accounts held by nursing facilities as proposed, with one change. We have revised the wording of the exception to provide that where a Federal payment is disbursed to a resident of a nursing facility, as defined in 42 U.S.C. 1396r, the payment may be deposited into a resident trust or patient fund account established by the nursing facility “pursuant to requirements under Federal law relating to the protection of such funds.” We believe that this wording addresses commenters' concerns by making clear that an eligible account is restricted to “a resident trust or patient fund account” established by “a nursing facility as defined in 42 U.S.C. 1396r” and that the account is subject to all of the requirements governing the protection of funds held in resident trust or patient fund accounts.

Commenters generally supported this proposal and none of the commenters criticized or voiced concerns regarding this proposal. In light of the comments and the reasons discussed above, we are finalizing this exception as proposed.

In the final rule, we are adopting all of the proposed amendments to Part 210 set forth in the NPRM, except as follows:

1. International ACH Transactions: We are finalizing the effective date of the IAT rule as proposed in the NPRM for credit entries originated by Federal agencies. We are extending the effective date for the application of the IAT rule to debit entries originated by Federal agencies in Pay.gov and the Debit Gateway until June 30, 2013. We plan to implement a limited IAT pilot in late 2012, and then transition agencies into compliance after June 30, 2013, based upon the readiness of the systems involved and the business need of the agency.

2. Automated Reclamations Process: We are not finalizing the proposal to automate the reclamations process at this time. FMS plans to expand the use of the Centralized Reclamation Application to additional financial institutions and work with the financial industry to further streamline the reclamation process. We will continue to evaluate solutions to respond to commenters' concerns about automating the reclamation process. If we decide to pursue changes to the reclamation process that require an amendment to Part 210, we will publish a new notice of proposed rulemaking with request for comment.

3. Payment Transactions Integrity Act of 2008 Changes: We are finalizing the requirement that RDFIs provide certain information in connection with a reclamation, but have added language to make it clear that the financial institution's obligation to provide the information is limited to information contained in its records and that the financial institution is not liable if that information is inaccurate.

4. Prepaid Card Exception: The final rule does not address the proposed exception to the “in the name of the recipient” requirement for prepaid cards. That proposal was addressed in a separate rulemaking published on December 22, 2010. See 75 FR 80335.

In order to incorporate in Part 210 the ACH rule changes that we are accepting, we are replacing references to the 2007 ACH Rules book with references to the 2009 ACH Rules book. No change to Part 210 is necessary in order to exclude the amendments to the rules enforcement provisions, since Part 210 already provides that the rules enforcement provisions of Appendix 11 of the ACH Rules do not apply to Federal agency ACH transactions. See § 210.2(d).

The definition of applicable ACH Rules at § 210.2(d) is amended to refer to the rules published in NACHA's 2009 Rules book. Section 210.2(d)(6) is revised to reflect a numbering change to the ACH Rules pursuant to which former ACH Rule 2.11.2.3 is now ACH Rule 2.12.2.3. Section 210.2(d)(7) is revised to remove a reference to former ACH Rule 2.13.3, which required reporting regarding unauthorized Telephone-Initiated entries. NACHA has replaced that reporting requirement with a broader reporting requirement (ACH Rule 2.18). Section § 210.2(d)(7) sets forth the broader reporting requirement, which we are not adopting.

Section 210.2(d)(8) has been added in order to exclude debit entries originated by agencies from ACH Rule 2.11 (International ACH Transactions) until June 30, 2013. Credit entries originated by agencies, other than Federal benefit payments delivered to Mexico, Canada and Panama through the FedGlobal(SM) ACH Payment Service, are excluded from ACH Rule 2.11 until January 1, 2012. In addition, entries representing the payment of a Federal tax obligation are entirely excluded from ACH Rule 2.11.

We are amending § 210.3(b) by replacing the references to the ACH Rules as published in the 2007 Rules book with references to the ACH Rules as published in the 2009 Rules book.

New paragraphs (b)(6) and (b)(7) create additional exceptions to the requirement in paragraph (a) that all payments other than vendor payments be delivered to an account in the name of the recipient. Paragraph (b)(6) allows payments disbursed to a resident of a nursing facility, as defined in 42 U.S.C. 1396r, to be deposited into a resident trust or patient fund account established by the nursing facility. Paragraph (b)(7) allows payments disbursed to a member of a religious order who has taken a vow of poverty, as defined for purposes of IRS regulations, to be deposited to an account established by the religious order.

Section 210.11(b)(3)(i) requires RDFIs to provide the name, last-known address and phone number for account owners and others who have withdrawn, or were authorized to withdraw, funds from the account, as permitted by the Payment Transactions Integrity Act of 2008. The RDFI is only obligated to provide information shown on its records, and is not liable to the government if the information is inaccurate.

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

It is hereby certified that the rule will not have a significant economic impact on a substantial number of small entities. We believe the rule will affect only a limited number of small entities and that any economic impact will be minimal. The rule requires financial institutions that hold accounts to which post-death benefit payments have been delivered to provide the government with the name, address and phone number for account owners and others who have withdrawn funds. Financial institutions are already required to provide detailed information to the government in connection with such accounts by completing and returning Form FMS-133. In most cases financial institutions are already required to provide names and addresses on Form FMS-133 and the only additional information required will be a phone number. Financial institutions that commented on the rule did not indicate that the requirement would be burdensome or have any economic effect if they are only required to provide information contained in their records, which the final rule expressly provides. The Burden Estimate Statement on FMS-133 states that the estimated average time associated with filling out the form is 12 minutes. FMS does not believe that the requirement to provide a phone number or, in limited cases, the name and address of a withdrawer, will affect the 12 minute estimate.

The final rule will allow, but not require, the delivery of Federal non-vendor payments to certain types of pooled accounts held by nursing homes and religious orders, regardless of size. For nursing homes that do not wish to receive Federal payments on behalf of residents, there will be no economic impact. For nursing homes that wish to receive Federal payments to established patient funds accounts, there should be no economic impact because there is no cost to receive a direct deposit payment. For nursing homes that wish to receive Federal payments for patients but that have not already established patient fund accounts for the management of other patient funds, the costs would include the fees, if any, charged by a financial institution to maintain the account and the cost of obtaining a surety bond. The average monthly payment amount for a Supplemental Security Income (SSI) check recipient is $545 and the average monthly payment amount for a Social Security (SSA) check recipient ranges from $808-$915. For small nursing homes that have, by definition, a small number of residents, the cost of a bond to insure against defalcation of these modest monthly payments should be insignificant. Any economic impact for these entities therefore is not expected to be significant. Accordingly, a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) is not required.

Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532 (Unfunded Mandates Act), requires that the agency prepare a budgetary impact statement before promulgating any rule likely to result in a Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires the agency to identify and consider a reasonable number of regulatory alternatives before promulgating the rule. We have determined that the rule will not result in expenditures by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. Accordingly, we have not prepared a budgetary impact statement or specifically addressed any regulatory alternatives.

For the reasons set forth in the preamble, 31 CFR part 210 is amended as follows:

Consistent with Executive Order 13526, the CIA has undertaken and completed a review of its public Classification Challenge regulations. As a result of this review, the Agency has revised its Classification Challenge regulations to more clearly reflect the current CIA organizational structure, record system configuration, and policies and practices and to eliminate ambiguous, redundant and obsolete regulatory provisions. This rule is being issued as a final rule without prior notice of proposed rulemaking as allowed by the Administrative Procedures Act, 5 U.S.C. 553(b)(3)(A) for rules of agency procedure and interpretation and Section 6 of the CIA Act, as amended, 50 U.S.C. 403g.

Accordingly, the CIA is amending 32 CFR part 1907 as follows:

Consistent with Executive Order 13526, the Central Intelligence Agency (CIA) has undertaken and completed a review of its public Mandatory Declassification Review (MDR) regulations that govern certain aspects of its processing of MDR requests. As a result of this review, the Agency has revised its MDR regulations to more clearly reflect the current CIA organizational structure and policies and practices, and to eliminate ambiguous, redundant and obsolete regulatory provisions. This rule is being issued as a final rule without prior notice of proposed rulemaking as allowed by the Administrative Procedure Act, 5 U.S.C. 553(b)(3)(A) for rules of agency procedure and interpretation.

Accordingly, the CIA is amending 32 CFR part 1908 as follows:

Consistent with Executive Order 13526, the CIA has undertaken and completed a review of its public regulations on access by historical researchers and certain former government personnel. As a result of this review, the Agency has revised its access regulations to more clearly reflect the current CIA organizational structure and policies and practices, and to eliminate ambiguous, redundant and obsolete regulatory provisions. This rule is being issued as a final rule without prior notice of proposed rulemaking as allowed by the Administrative Procedure Act, 5 U.S.C. 553(b)(3)(A) for rules of agency procedure and interpretation.

Accordingly, the CIA is amending 32 CFR part 1909 as follows:

The Amtrak Pelham Bay Railroad Bridge, across the Hutchinson River at mile 0.5, at the Bronx, New York, has a vertical clearance in the closed position of 8 feet at mean high water and 15 feet at mean low water. The drawbridge operation regulations are listed at 33 CFR 117.793.

The waterway users are mostly commercial operators.

The owner of the bridge, National Railroad Passenger Company (Amtrak), requested a temporary deviation from the regulations to facilitate scheduled maintenance, replace track ties, at bridge.

Under this temporary deviation the Amtrak Pelham Bay Railroad Bridge may remain in the closed position between September 6, 2011 and September 8, 2011, and from September 9, 2011 through September 29, 2011, a two hour advance notice shall be required for bridge openings. Vessels that can pass under the bridge in the closed position may do so at any time.

The commercial users were notified. No objections were received.

In accordance with 33 CFR 117.35(e), the bridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

Invitation to Comment: We invite you to submit comments regarding this interim final requirement to assist us in complying with the specific requirements of Executive Order 12866 and Executive Order 13563 and their overall requirement of reducing regulatory burden that might result from this interim final requirement.

During and after the comment period, you may inspect all public comments about this regulatory action by accessing Regulations.gov. You may also inspect the public comments in person in room 7E214, 400 Maryland Avenue, SW., Washington, DC, between the hours of 8:30 a.m. and 4:00 p.m., Washington, DC time, Monday through Friday of each week except Federal holidays.

Assistance to Individuals with Disabilities in Reviewing the Rulemaking Record: On request, we will provide an appropriate accommodation or auxiliary aid to an individual with a disability who needs assistance to review the comments or other documents in the public rulemaking record for this notice. If you want to schedule an appointment for this type of accommodation or auxiliary aid, please contact the person listed under FOR FURTHER INFORMATION CONTACT .

Section 14005(d) of Division A of the American Recovery and Reinvestment Act of 2009 (ARRA) requires a State receiving funds under the SFSF program to provide assurances in four key areas of education reform:

(1) Achieving equity in teacher distribution, (2) improving collection and use of data, (3) standards and assessments, and (4) supporting struggling schools. In the November 2009 Notice (74 FR 58436), we established specific data and information requirements (assurance indicators and descriptors) that a State must meet with respect to the statutory assurances. We also established specific requirements for the plans that a State had to submit as part of its application for the second phase of funding under the SFSF program, describing the steps it would take to collect and report the required data and other information. In addition, we established September 30, 2011 as the deadline by which States must meet the requirements of these indicators and descriptors.

States are facing many challenges and competing priorities in trying to meet the requirements of some of the SFSF indicators by the September 30, 2011 deadline. For example, during the Department's ongoing program monitoring, States are expressing concerns about their ability to fully develop and implement a statewide longitudinal data system (SLDS) under Indicator (b)(1) by this deadline. Specifically, during its spring 2011 review of each State's Amended Application for Funding Under the State Fiscal Stabilization Fund Program, the Department found that many States still have not fully incorporated the following elements into their SLDS: (1) Student-level transcript information, including data on courses completed and grades earned (Element 9); (2) information regarding the extent to which students transition successfully from secondary school to postsecondary education, including whether students enroll in remedial coursework (Element 11); and (3) other information determined necessary to address alignment and adequate preparation for success in postsecondary education (Element 12). A number of States also are raising concerns about the challenges in collecting and publicly reporting student enrollment data for Indicator (c)(11). In its recent review of the SFSF amended applications, the Department found that 43 States indicated that they did not have the capacity to collect and publicly report those data. Further, most States reported in their amended SFSF application that they do not yet have the capacity to collect and publicly report the course completion data required under Indicator (c)(12). Therefore, the Department is extending to January 31, 2012 the deadline by which a State must comply with the requirements under any of the SFSF indicators and descriptors. The extension of the deadline to January 31, 2012 is automatic, and a State does not have to submit a request to receive this extension.

In a notice of proposed revisions to certain data collection and reporting requirements, and proposed priority published elsewhere in this issue of the Federal Register , the Department is proposing to further extend, to December 31, 2012, the deadline by which a State must comply with the requirements of Indicators (b)(1), (c)(11), and (c)(12) because the requirements under these indicators are particularly challenging. To receive an extension to December 31, 2012 for these specific indicators, the Department is proposing that the State submit a request that includes the information proposed in notice of proposed revisions to certain data collection and reporting requirements, and proposed priority.

Under the Administrative Procedure Act (APA) (5 U.S.C. 553), the Department is generally required to publish a notice of proposed rulemaking and provide the public with an opportunity to comment on proposed regulations prior to establishing a final rule. However, we are waiving the notice-and-comment rulemaking requirements under the APA. Section 553(b) of the APA provides that an agency is not required to conduct notice-and-comment rulemaking when the agency for good cause finds that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. Although these requirements are subject to the APA's notice-and-comment requirements, the Secretary has determined that it would be impracticable and contrary to the public interest to conduct notice-and-comment rulemaking.

As discussed under the heading “Background,” States are facing many challenges and competing priorities in trying to meet some of the SFSF collection and public reporting requirements by the September 30, 2011 deadline. As a result, the Department has concluded that it is appropriate to extend the deadline for the SFSF indicators and descriptors to January 31, 2012. It is impracticable and contrary to the public interest to extend the September 30, 2011 deadline through notice-and-comment rulemaking given the limited amount of time remaining before this deadline. This interim final requirement will provide those States desiring additional time to meet the requirements with an extension of the deadline. Absent the interim final requirement, a number of States will be unable to comply fully with the SFSF requirements. The Department believes that giving the States additional time to meet these requirements will not compromise their purpose, which is to provide transparency on the extent to which a State is implementing reform actions for which it has provided assurances.

Although the Department is adopting this extension on an interim final basis, the Department requests public comments on the extension. After consideration of public comments, the Secretary will publish a notice of final requirement concerning the deadline for compliance with the SFSF indicators and descriptors.

The APA also requires that a substantive rule be published at least 30 days before its effective date, unless the rule grants or recognizes an exemption or relieves a restriction. (5 U.S.C. 553(d)(1)). Because we are granting States an extension of the September 30, 2011 deadline, the 30-day delayed effective date is not required. Accordingly, this interim final requirement is effective on the day it is published.

For the reasons discussed previously, the Secretary amends the requirements established in the November 2009 Notice by extending the deadline by which a State must collect and publicly report data and other information on the SFSF indicators and descriptors from September 30, 2011 to January 31, 2012.

Under Executive Order 12866, the Secretary must determine whether this regulatory action is significant and, therefore, subject to the requirements of the Executive order and review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines “significant regulatory action” as an action likely to result in a rule that may (1) have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or Tribal governments or communities in a material way (also referred to as an economically significant rule); (2) create serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles stated in the Executive Order.

It has been determined that this regulatory action is significant under section 3(f)(4) of the Executive order.

Under Executive Order 12866, we have assessed the potential costs and benefits of the regulatory action to extend the current deadline by which a State must meet the requirements of the SFSF indicators and descriptors and have determined that the interim final requirement will not impose additional costs to grantees or the Federal government. Additionally, the Department has determined that this requirement does not unduly interfere with State, local, and Tribal governments in the exercise of their governmental functions.

The Department is reinstating to December 15, 2011, the information collection under OMB Control Number 1810-0695 requiring States to collect and publicly report data and other information annually. The Department has analyzed the costs of complying with these requirements. Some of the costs will be minimal and others more significant. As an example of a requirement that results in minimal burden and cost, States are currently required to report annually, through ED Facts (the Department's centralized data collection and warehousing system), for the State as a whole and for each LEA, the number and percentage of core academic courses taught, in the highest-poverty and lowest-poverty schools, by teachers who are highly qualified. Indicator (a)(1) requires that they confirm the data they have reported, which should not be a time-consuming responsibility. As a second example, the requirement to confirm the approval status of the State's assessment system under section 1111(b)(3) of the ESEA, as determined by the Department, should also require minimal effort.

Other requirements impose significant new costs. We strongly believe that the benefits to the public of these requirements outweigh the State and local implementation costs. Specifically, the major benefit of these requirements, taken in their totality, is better and more publicly available information on the status of activities related to the reform areas identified in the authorizing statute for the SFSF program. As described in detail later in this section, research indicates or suggests that progress on each of the reforms will contribute to improved student outcomes. The provision of better information (on teacher qualifications, teacher and principal evaluation systems, State student longitudinal data systems, State standards and assessment systems, student success in high-school and postsecondary education, efforts to turn around persistently lowest-achieving schools, and charter school reforms) to policymakers, educators, parents, and other stakeholders will assist in their efforts to further the reforms. In addition, State reporting of these data will help the Department determine the impact of the unprecedented level of funding made available by the ARRA. Further, the data and plans that States submit will inform Federal education policy, including the upcoming reauthorization of the ESEA.

The following is a detailed analysis of the estimated costs of implementing the specific final requirements, followed by a discussion of the anticipated benefits. The costs of implementing specific paperwork-related requirements are also shown in the tables in the Paperwork Reduction Act of 1995 section of this notice.

Section 14005(d)(2) of the ARRA requires a State receiving funds under the SFSF program to assure, in the SFSF program application, that it will address inequities in the distribution of highly qualified teachers. In response to this requirement, the Department is requiring States to confirm, for the State and for each LEA in the State, the number and percentage of core academic courses taught, in the highest-poverty and lowest-poverty schools, by teachers who are highly qualified. Because States will have previously submitted this information to the Department through the ED Facts system, we anticipate that the costs of complying with this requirement would be minimal. A State likely would need only to ensure that it had correctly aggregated and reported data received from its LEAs. The Department expects that each State would require one hour of staff time to complete this effort, at a cost of $30 per hour. For the 50 States, the District of Columbia, and Puerto Rico, the total estimated level of effort would be 52 hours at a cost of $1,560. In addition, the final requirements provide for States to indicate whether the State's Teacher Equity Plan (a part of the State's Highly Qualified Teacher Plan) has been updated to fully reflect the steps the State is currently taking to ensure that students from low-income families and minority students are not taught at higher rates than other students by inexperienced, unqualified, or out-of-field teachers. The Department expects that this will require an hour of effort, for a total estimated burden of 52 hours at a cost of $1,560.

Section 14005(d)(2) also requires States to take actions to improve teacher effectiveness. To accomplish that goal, States must first have a means of assessing teacher success. A limited number of States have implemented statewide teacher and principal evaluation systems, while in the other States the responsibility for evaluating teachers and principals rests with the LEAs or schools. Little is known about the design of these systems across the Nation, but the collection and reporting of additional information would create a resource that additional States and LEAs can draw on in building their own systems. The Department, therefore, is requiring States to collect and publicly report information about these evaluation systems.

Specifically, the Department is requiring that States describe, for each LEA in the State, the systems used to evaluate the performance of teachers and principals. Further, the Department requires States to indicate, for each LEA in the State, whether the systems used to evaluate the performance of teachers and principals include student achievement outcomes or student growth data as an evaluation criterion.

The level of effort required to respond to these requirements would likely vary depending on the types of teacher and principal evaluation systems in place in a given State or LEA. The Department believes that, if a system is in place at the State level, the response burden would be low, because the State will have the required information readily available. According to the National Council on Teacher Quality, 12 States require LEAs to use a State-developed instrument to evaluate teachers or to develop an equivalent instrument that must be approved by the State. 1 For these 12 States, the Department estimates that a total of 72 hours (6 hours per State) would be required to respond to these requirements, for a total cost, at $30 per hour, of $2,160. The 2,487 LEAs located in these States would not be involved in the response to these requirements.

In the 40 States that do not have statewide teacher and principal evaluation systems in place, the level of effort required would likely be significantly higher. Approximately half of these States have either already reported this information once or have completed more than half of the effort involved with reporting. The Department believes that these States would require significantly less effort than States that have completed less than half of the work involved with meeting these requirements. The Department estimates that each State that has completed more than half of the work associated with these requirements would need 120 hours to meet the requirements, and each State that has completed less than half of the work would require 360 hours to meet the requirements. Thus, the Department estimates that, on average, 240 hours would be required at the State level to develop and administer a survey of LEAs (including designing the survey instrument, disseminating it, providing training or other technical assistance to LEAs on completing the survey, collecting the data and other information, checking accuracy, and public reporting), which would amount to a total of 9,600 hours and a total estimated State cost of $288,000 (assuming, again, a cost per hour of $30). The 12,737 LEAs located in these States would bear the cost of collecting and reporting the data to their States.

For the purpose of the burden estimates in this section, the Department estimates that 75 percent of these LEAs (9,553) have centralized teacher and principal evaluation systems in place. For those LEAs, we estimate that 3 hours would be required to respond to these requirements. For the estimated 3,184 LEAs that do not have a centralized evaluation system in place, we estimate that 2 hours would be required because we expect that these systems are less complex than centralized systems. The Department, thus, estimates that LEAs would need to spend a total of 35,027 hours to respond to these proposed requirements at a total cost of $875,675, assuming a cost per hour of $25.

The Department is also requiring States to provide, for each LEA in the State whose teachers and principals receive performance ratings or levels through an evaluation system, the number and percentage of teachers and principals rated at each performance rating or level, as well as a description of how each LEA uses results from those systems in decisions regarding teacher and principal development, compensation, promotion, retention, and removal. Finally, the Department is requiring States to indicate, for each LEA in the State whose teachers receive performance ratings or levels through an evaluation system, whether the number and percentage of teachers rated at each performance rating or level are publicly reported for each school in the LEA. The Department expects that many LEAs that make this information publicly available will choose to do so on their pre-existing Web site; if any LEAs currently do not have Web sites, they may create a Web site or may publicly report this information in another easily accessible format.

We were unable to find nationally representative information on whether LEAs will have information on their teacher and principal evaluation systems readily available in a centralized database. The New Teacher Project (NTP), 2 which analyzed the teacher evaluation systems of a sample of 12 LEAs, found that of those 12 LEAs, only 4 tracked teacher evaluation results electronically. Although the NTP report examined only a small number of LEAs, which were not nationally representative, and the report was published in 2009, we base our cost estimates on this finding, as it is the only source of information available. Thus, we assume that 33 percent of LEAs will have information on the teacher and principal evaluation results in a central database. 3 Applying this percentage to the estimated 12,040 LEAs that have in place a centralized system to evaluate teacher and principal performance (which includes the 2,487 LEAs in States with statewide systems, as well as the estimated 9,553 LEAs in other States that have their own local systems), the Department estimates that 3,973 LEAs would need to spend 3 hours each to respond to these requirements for a total burden of 11,919 hours and $297,975.

We estimate that each of the other 8,067 LEAs will require significantly more time to respond. According to the Digest of Education Statistics, there are approximately 3.2 million teachers and 90,470 principals in public elementary and secondary schools. 4 5 Based on this figure, we estimate that an average LEA employs 210 teachers and 6 principals. Applying this number of teachers and principals to the estimated 8,067 LEAs nationwide that do not have this information electronically in a central system, we estimate that these LEAs will need to enter data for 1,694,070 teachers and 48,402 principals into their existing personnel systems. We estimate that LEAs could enter information for 6 individuals per hour, thus we estimate that these LEAs would have a combined burden of 290,412 hours at a cost of $7,260,300.

We further estimate that all 15,224 LEAs would each require 1 hour to describe how they use results from teacher and principal evaluation systems in decisions regarding teacher and principal development, compensation, promotion, retention, and removal.

The Department, therefore, estimates the total LEA burden for these requirements to be 317,555 hours across the Nation at an estimated total cost of $7,938,875 (assuming a cost per hour of $25).

States would then need to collect these data, most likely by including these items in the survey instrument that they will develop to respond to the other requirements in this section, and will then need to aggregate and publicly report the data on their Web site. Considering progress that States have made to date, we estimate that these activities will require 4 hours of effort per State, for a total burden of 208 hours at a cost of $6,240.

For more detailed estimates of costs for these requirements, please see the tables in the Paperwork Reduction Act of 1995 section of this notice.

Section 14005(d)(3) requires States to assure that they will establish a longitudinal data system that includes the elements described in section 6401(e)(2)(D) of the America COMPETES Act. To track State progress in this reform area, the Department requires each State to indicate which of the 12 elements are included in the State's statewide longitudinal data system. The costs of reporting this information should be minimal. Moreover, most States are already reporting information on ten of the 12 elements to the Data Quality Campaign, a national effort to encourage State policymakers to use high-quality education data to improve student achievement, and to the Department as part of reporting for this program to date. The Department expects that States will be able to readily provide information on whether the two remaining elements are included in their data systems and that it should take little time for the States that have not been reporting to the Data Quality Campaign to provide information on their data systems. We, therefore, estimate that States would need only 2 hours to respond to this requirement, for a total level of effort of 104 hours at an estimated cost of $3,120.

The Department is also requiring that States report whether the State provides student growth data on their current students and the students they taught in the previous year to, at a minimum, teachers of reading/language arts and mathematics in grades in which the State administers assessments in those subjects in a manner that is timely and informs instructional programs. The Department believes that making such information available would help improve the quality of instruction and the quality of teacher evaluation and compensation systems. Under the State Plan section, we discuss the costs of developing systems for the provision of student growth data in all States. We are also requiring States to indicate whether the State provides teachers of reading/language arts and mathematics in grades in which the State administers assessments in those subjects with reports of individual teacher impact on student achievement on those assessments. The costs of merely publicly reporting on whether a State currently provides this information to teachers should be minimal. We estimate that each State would spend one hour to publicly report this information, for a total level of effort of 52 hours at a cost of $1,560.

In response to the requirement in section 14005(d)(4)(A) of the ARRA that States enhance the quality of their student assessments, the Department requires that the States confirm certain existing data and other information and submit some new information about their assessment systems. Specifically, the Department requires each State to confirm the approval status, as determined by the Department, of the State's assessment system (with respect to reading/language arts, mathematics, and science assessments). In addition, States will confirm that their annual State Report Card (issued pursuant to the requirements of section 1111(h) of the ESEA) contains the most recent available State reading and mathematics NAEP results. The Department estimates that each State would require two hours to respond to these requirements, for a total cost of $3,120.

Section 14005(d)(4)(B) requires States to assure that they will administer valid and reliable assessments for children with disabilities and limited English proficient students. To measure State progress on this assurance, the Department requires States to: confirm whether the State has developed and implemented valid and reliable alternate assessments for students with disabilities that have been approved by the Department; confirm whether the State's alternative assessments for students with disabilities, if approved by the Department, are based on grade-level, modified, or alternate academic achievement standards; indicate whether the State has completed, within the last two years, an analysis of the appropriateness and effectiveness of the accommodations it provides students with disabilities to ensure their meaningful participation in State assessments; indicate whether the State has completed, within the last two years, an analysis of the appropriateness and effectiveness of the accommodations it provides limited English proficient students to ensure their meaningful participation in State assessments; and confirm whether the State provides native language versions of State assessments for limited English proficient students. To respond to these five indicators, the Department estimates that the 50 States, the District of Columbia, and Puerto Rico would each require five hours, for a total cost of $7,800.

In addition, the Department requires that States confirm the number and percentage of students with disabilities and limited English proficient students who are included in State reading/language arts and mathematics assessments. The Department expects that each State would, on average, require one hour of staff time to complete this effort, at a cost of $30 per hour. The burden estimated for this requirement is minimal because the States will have already submitted this information to the Department through the ED Facts system. For the 50 States, the District of Columbia, and Puerto Rico, the total estimated level of effort would be 52 hours at a cost of $1,560.

Section 14005(d)(4)(C) of the ARRA requires States to assure that they take steps to improve their State academic content standards and student academic achievement standards consistent with section 6401(e)(1)(A)(ii) of the COMPETES Act, which calls for States to identify and make any necessary changes to their secondary school graduation requirements, academic content standards, academic achievement standards, and the assessments students take preceding graduation from secondary school in order to align those requirements, standards, and assessments with the knowledge and skills necessary for success in academic credit-bearing coursework in postsecondary education, in the 21st century workforce, and in the Armed Forces without the need for remediation. Several of the indicators and descriptors with which a State must comply are aligned with this provision of the America COMPETES Act.

First, the Department requires each State to publicly report, for the State and each LEA and high school in the State and, at each of these levels, by student subgroup, 6 the number and percentage of students who graduate from high school as determined using the four-year adjusted cohort graduation rate. State efforts to comply with the Department's October 29, 2008 regulation requiring the use of a four-year adjusted cohort graduation rate in the determination of adequate yearly progress under Title I of the ESEA are now underway (see 34 CFR 200.19(b)(1)(i)). Some additional effort would be required to collect and report these data for all schools as the current regulations apply only to Title I schools.

Based on the Data Quality Campaign's 2010 survey of the 50 States and the District of Columbia, which found that all States have the capacity to calculate the National Governors Association longitudinal graduation rate, 7 the Department believes that most States are well-situated to collect and publicly report these data. In fulfillment of the requirement, the Department estimates that States would need to distribute to non-Title I LEAs the survey instrument they are using to collect this information from Title I LEAs and to input the data from these surveys. The Department believes the 25 States that have already met this requirement once and the 20 more that have reported completing more than half of the effort involved would require less effort than States that have completed less than half of the work involved with meeting this requirement. The Department estimates that each State that has completed more than half of the work associated with these requirements would need 2 hours to meet the requirements, and each State that has completed less than half of the work would require 8 hours to meet the requirements. Thus, the Department estimates that this would require an estimated average of approximately 3 hours per State. The new LEA burden to respond to this indicator would be limited to the approximately 1,053 LEAs that do not receive Title I funds. 8 The Department estimates that these LEAs would spend an average of 40 hours to respond to this indicator for a total LEA effort of 42,120 hours. The total estimated cost for LEAs is, therefore, $1,053,000.

In addition, the Department is requiring States to publicly report, for the State, for each LEA in the State, for each high school in the State and, at each of these levels, by student subgroup, the number and percentage of students who graduate from high school consistent with 34 CFR 200.19(b)(1)(i) who enroll in an IHE within 16 months of receiving a regular high school diploma and, of those students who enroll in a public IHE within the State, the number and percentage who complete at least one year's worth of college credit (applicable to a degree) within two years of enrollment in the IHE. The requirements would entail considerable coordination among high schools, LEAs, SEAs, and IHEs. The Department expects that SEAs would have to develop a system to make this data collection and sharing possible, which they could at least partially achieve by establishing a longitudinal data system that includes the elements described in section 6401(e)(2)(D) of the COMPETES Act. As discussed earlier, section 14005(d)(3) of the ARRA requires States to assure, in their SFSF application, that they will establish such a data system.

With respect to the requirement on publicly reporting postsecondary enrollment, the Department expects that LEAs will need to enter, into their State's statewide longitudinal data system, data on each high school graduate's plans after high school, including the IHE where the student intends to enroll, if applicable. Based on data from the Digest of Education Statistics, the Department estimates that approximately 2,820,000 students who graduated from public high schools enrolled in IHEs as first-time freshmen in fall 2007. 9 Holding that number constant, the Department estimates that LEAs will be able to enter data for these students at a pace of 20 students per hour which will result in a total level of LEA effort of 141,000 hours at a cost of $3,525,000.

The State will then likely need to request that each IHE in the State confirm a student's enrollment, using the statewide longitudinal data system to obtain data on students who intended to enroll within the State. Based on data from the 2008 Integrated Postsecondary Education Data System (IPEDS), Spring 2009, 10 the Department estimates that 2,284,200 first-time freshmen (81 percent of the estimated number of all first-time freshmen who graduate from public high schools) enroll in degree-granting IHEs in their home State. The Department estimates that IHEs will be able to confirm enrollment for 20 students per hour, for a total of 114,210 hours of IHE effort at a total cost of $2,855,250 (assuming a cost of $25 per hour). 11

States will also likely need to request that IHEs outside the State confirm the enrollment of students who indicated that they would enroll in those institutions. Again, based on data from the 2008 IPEDS, Spring 2009, the Department estimates that 535,800 students who graduate from public high schools each year enroll in IHEs in States outside their home State. The Department estimates that it will take States 30 minutes per student to complete this process, including contacting out-of-State IHEs, obtaining the necessary information from them, and including data on those students in their public reports. This element of the requirement, therefore, will result in a national total of 267,900 hours of State effort at a total cost of $8,037,000. As with students who enroll in IHEs in their home State, the Department estimates that IHEs will be able to confirm enrollment for 20 students per hour, for a total of 26,790 hours of IHE effort at a total cost of $669,750.

Finally, to meet the requirement that they publicly report the number of students who enroll in IHEs, States will need to aggregate the data received from all IHEs and will then need to run analyses and publicly report the data for the State, for each LEA, for each high school and, at each of these levels, by student subgroup. The Department estimates that each State will need 40 hours to conduct these analyses and publicly report these data, for a total State burden of 2,080 hours at a cost of $62,400.

The requirement that States publicly report the number of students enrolling in a public, in-State IHE who complete at least one year's worth of college credit applicable toward a degree within two years of enrollment at the IHE will also entail a collaborative process between SEAs and IHEs. Again, based on data from the Digest of Education Statistics, the Department estimates that 1,691,678 first-time freshmen enroll in public, degree-granting IHEs in their home State. 12 Further, the Department estimates that, once a State has established a system for the collection and reporting of these data, IHEs will be able to enter data for 20 students an hour; thus, the total estimated level of effort to respond to this requirement will be approximately 84,584 hours of IHE effort at an estimated cost of $2,114,600, assuming a cost of $25 per hour.

Finally, as with the previous indicator, States will need to aggregate the data received from all IHEs and will then need to run analyses and publicly report the data for the State, LEA, and school levels and at each of these levels, by student subgroup. The Department estimates that each State will need 40 hours to conduct these analyses and publicly report these data, for a total State burden of 2,080 hours at a cost of $62,400.

A key goal of the ARRA is to ensure that States and LEAs provide targeted, intensive support and effective interventions to turn around the persistently lowest-achieving schools in the State. Section 14005(d)(5) requires States to ensure compliance with the Title I requirements in this area. To track State progress, the Department is requiring States to provide, for each LEA in the State and aggregated at the State level, the number and percentage of schools in improvement, corrective action, or restructuring that have made progress on State assessments in reading/language arts and mathematics in the last year, and, for the State, in the “all students” category and for each student subgroup (as under section 1111(b)(2)(C)(v) of the ESEA), and, of the Title I schools in improvement, corrective action, or restructuring, the number and identity of the persistently lowest-achieving schools as defined by the State. The State is also required to provide the definition that it uses to identify its “persistently lowest-achieving schools.” States are also required to publicly report the number and identity of their Title I schools in improvement, corrective action, or restructuring that are identified as persistently lowest-achieving and, of those schools, the number and identity of schools that have been turned around, restarted, closed, or transformed in the last year.

The Department believes that States will already have available the data needed to report on the indicators related to the total number and percentage of schools in improvement, corrective action, or restructuring that have made progress on State assessments, although they might need to run new analyses of the data. However, the Department expects that States will have to collect new data on the schools in improvement, corrective action, or restructuring (in general and in the persistently lowest-achieving schools) that have been turned around, restarted, closed, or transformed. (In addition, the State will need to define the term “persistently lowest-achieving schools.”) We estimate that this data collection will entail two hours of effort in each of the 4,729 LEAs (the number of LEAs that, according to data reported to ED Facts, had at least one school in improvement, corrective action, or restructuring in the 2010-11 school year). As a result, the Department estimates that the total LEA burden for this requirement will be 9,458 hours at a cost of $236,450. States will then need to aggregate these data, in addition to the effort they will spend responding to the other indicators that relate to struggling schools. Approximately 40 States have either already submitted this information once or have completed more than 50 percent of the effort to meet the requirement. As a result, the Department estimates that these States will require less effort than the other 12 to meet this reporting requirement. The Department estimates that, on average, each State will require 14 hours of effort to respond to these requirements, for a total cost of $21,840.

In addition, the Department is requiring States to provide, for the State, the number and identity of the secondary schools that are eligible for, but do not receive, Title I funds, that are identified as persistently lowest-achieving schools, and, of these schools, the number and identity of schools that have been turned around, restarted, closed, or transformed in the last year. The Department expects that some, but not all, States have the data required to determine the identity of secondary schools that are eligible for, but do not receive, Title I funds, but that they may have to run new analyses of the data to determine which of these schools have been turned around, restarted, closed, or transformed in the last year. Other States may have to include an item in the LEA survey that they will be distributing to respond to several of these requirements. Based on State efforts to report on these two indicators to date, the Department estimates that each State will require an average of 8 hours of effort to respond to these two requirements, for a total cost of $12,480. We further estimate that the 4,729 affected LEAs will need a total of 4 hours to respond to these two survey items.

The Department believes that the creation and maintenance of high-quality charter schools is a key strategy for promoting successful models of school reform. To determine the level of State effort in this area, the Department is requiring States to provide, at the State level and, if applicable, for each LEA in the State, the number of charter schools that are currently permitted to operate under State law and the number that are currently operating. We expect that this information will be readily available and that States will need only a total of one hour to respond to these two requirements.

In addition, the Department will require States to provide, for the State and for each LEA in the State that operates charter schools, the number and percentage (including numerator and denominator) of charter schools that have made progress on State assessments in reading/language arts and mathematics in the last year. Finally, the Department is requiring States to provide, for the State and for each LEA in the State that operates charter schools, the number and identity of charter schools that have closed (including schools that were not reauthorized to operate) within each of the last five years and to indicate, for each such school, whether the closure was for financial, enrollment, academic, or other reasons. The Department believes that SEAs will likely also have this information readily available (although some may need to obtain additional information from their LEAs) and will need eight hours to publicly report it. The Department assumes that the effort to respond to these requirements will be limited to the 42 States (including the District of Columbia and Puerto Rico) that allow charter schools. The Department thus estimates that the State effort required to respond to these indicators will total 336 hours at a cost of $10,080.

The Department estimates that the total burden of responding to these requirements will be 287,424 hours and $8,622,720 for SEAs, 564,076 hours and $14,101,900 for LEAs, and 225,584 hours and $5,639,600 for IHEs, for a total burden of 1,077,084 hours at a cost of $28,364,220.

The principal benefits of the requirements are those resulting from the reporting and public availability of information on each State's progress in the four reform areas described in the ARRA. The Department believes that the information gathered and reported as a result of these requirements will improve public accountability for performance, help States, LEAs, and schools learn from one another and make improvements in what they are doing, and inform the ESEA reauthorization process.

A second major benefit is that better public information on State and local progress in the four reform areas will likely spur more rapid progress on those reforms, because States and LEAs that appear to be lagging in one or more areas may see a need to redouble their efforts. The Department believes that more rapid progress on the essential educational reforms will have major benefits nationally, and that these reforms have the potential to drive dramatic improvements in student outcomes.

For example, statewide longitudinal data systems are essential tools in advancing education reform. With these systems in place, States can use this data to evaluate the effectiveness of specific interventions, schools, principals, and teachers by tracking individual student achievement, high school graduation, and postsecondary enrollment and credit. They can, for example, track the academic achievement of individual students over time, even if those students change schools within the State during the course of their education. By analyzing this information, decision-makers can determine if a student's “achievement trajectory” will result in his or her being college- or career-ready and can better target services based on the student's academic needs. 13

The Department also believes that States' implementation of these requirements will lead to more widespread development and implementation of better teacher and principal evaluation systems. In particular, the availability of accurate, complete, and valid achievement data is essential to implementing better systems of teacher and principal evaluation. Value-added models, for example, can provide an objective estimate of the impact of teachers on student learning and achievement. 14 Further, they can be used by schools, LEAs, or States to reward excellence in teaching or school leadership, as a component of performance-based compensation systems, or to identify schools in need of improvement or teachers who may require additional training or professional development. 15

The Department believes that the requirements will have additional benefits to the extent that they provide States with incentives to address inequities in the distribution of effective teachers, improve the quality of State assessments, and undergo intensive efforts to improve struggling schools. Numerous studies document the substantial impact of improved teaching on educational outcomes and the need to take action to turn around the lowest-performing schools, including high schools (and their feeder middle schools) that enroll a disproportionate number of the students who fail to complete a high school education and receive a regular high school diploma. The Department believes that more widespread adoption of these reforms would have a significant, positive impact on student achievement.

Although these benefits are not easily quantified, the Department believes they will exceed the projected costs.

As part of its continuing effort to reduce paperwork and respondent burden, the Department conducts a preclearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)). This helps ensure that: The public understands the Department's collection instructions; respondents can provide the requested data in the desired format; reporting burden (time and financial resources) is minimized; collection instruments are clearly understood; and the Department can properly assess the impact of collection requirements on respondents.

This Interim Final Requirement contains an information collection requirement previously approved under OMB control number 1810-0695. Under the PRA the Department has submitted a copy of this section to OMB for its review.

A Federal agency cannot conduct or sponsor a collection of information unless OMB approves the collection under the PRA and the corresponding information collection instrument displays a currently valid OMB control number. Notwithstanding any other provision of law, no person is required to comply with, or is subject to penalty for failure to comply with, a collection of information if the collection instrument does not display a currently valid OMB control number.

In the final requirement we will display the control number assigned by OMB to any information collection requirement in this IFR and adopted in the final requirement.

In the SFSF Phase 2 application, the Department established indicators and descriptors that required States to collect and publicly report data and other information annually. The Office of Management and Budget approved that information collection under an emergency review (OMB Control Number 1810-0695). The Department's authority under that information collection has expired. Therefore, the Department is reinstating to December 15, 2011 the information collection under OMB Control Number 1810-0695.

A description of the specific information collection requirements is provided in the following tables along with estimates of the annual recordkeeping burden for these requirements. Included in an estimate is the time for collecting and tracking data, maintaining records, calculations, and reporting. The first table presents the estimated indicators burden for SEAs, the second table presents the estimated indicators burden for LEAs, and the third table presents the estimated indicators burden for IHEs.

If you want to comment on the information collection requirements, please send your comments to the Office of Information and Regulatory Affairs, OMB, Attention: Desk Officer for U.S. Department of Education. Send these comments by e-mail to OIRA_DOCKET@omb.eop.gov or by fax to (202) 395-6974. You may also send a copy of these comments to the Department contact named in the ADDRESSES section of this preamble.

We have prepared an Information Collection Request (ICR) for this collection. In preparing your comments you may want to review the ICR, which we maintain in the Education Department Information Collection System (EDICS) at http://edicsweb.ed.gov. Click on Browse Pending Collections. This proposed collection is identified as proposed collection 1810-0695.

We consider your comments on this collection of information in—

• Deciding whether the collection is necessary for the proper performance of our functions, including whether the information will have practical use;

• Evaluating the accuracy of our estimate of the burden of the collection, including the validity of our methodology and assumptions;

• Enhancing the quality, usefulness, and clarity of the information we collect; and

• Minimizing the burden on those who must respond. This includes exploring the use of appropriate automated, electronic, mechanical, or other technological collection techniques.

OMB is required to make a decision concerning the collection of information contained in this interim final requirement between 30 and 60 days after publication of this document in the Federal Register . Therefore, to ensure that OMB gives your comments full consideration, it is important that OMB receives your comments on the proposed collection within 30 days after publication. This does not affect the deadline for your comments to us on the interim final requirement.

The Secretary certifies that this regulatory action will not have a significant economic impact on a substantial number of small entities. The small entities that this regulatory action will affect are small LEAs receiving funds under this program and small IHEs.

This regulatory action will not have a significant economic impact on small LEAs because they will be able to meet the costs of compliance with this regulatory action using the funds provided under this program.

With respect to small IHEs, the U.S. Small Business Administration Size Standards define these institutions as “small entities” if they are for-profit or nonprofit institutions with total annual revenue below $5,000,000 or if they are institutions controlled by small governmental jurisdictions, which are comprised of cities, counties, towns, townships, villages, school districts, or special districts, with a population of less than 50,000. Based on data from the Department's Integrated Postsecondary Education Data System (IPEDS), up to 427 small IHEs with revenues of less than $5 million may be affected by these requirements; only 33 of these IHEs are public. These small IHEs represent only 13 percent of degree-granting IHEs. In addition, only 98,032 students (0.5 percent) enrolled in degree-granting IHEs in fall 2007 attended these small institutions; just 11,830 of these students are enrolled in small, degree-granting public IHEs. As the burden for indicators (c)(11) and (c)(12) is driven by the number of students for whom IHEs would be required to submit data, small IHEs will require significantly less effort to adhere to these requirements than will be the case for larger IHEs. Based on IPEDS data, the Department estimates that 1,873 of these students are first-time freshmen. As stated earlier in the Summary of Costs and Benefits section of this notice, the Department estimates that, as required by indicator (c)(11), IHEs will be able to confirm the enrollment of 20 first-time freshmen per hour. Applying this estimate to the estimated number of first-time freshmen at small IHEs, the Department estimates that these IHEs will need to spend 94 hours to respond to this requirement at a total cost of $2,350 (assuming a cost of $25 per hour).

The effort involved in reporting the number of students enrolling in a public IHE in their home State who complete at least one year's worth of college credit applicable toward a degree within two years as required by indicator (c)(12) will also apply to small IHEs, but will be limited to students who enroll in public IHEs in their home State. As discussed earlier in the Summary of Costs and Benefits section of this notice, the Department estimates that 81 percent of first-time freshmen who graduate from public high schools enroll in degree-granting IHEs in their home State. Applying this percentage to the estimated number of first-time freshmen enrolled in small public IHEs (1,873), the Department estimates that small IHEs will be required to report credit completion data for a total of 1,517 students. For this requirement, the Department also estimates that IHEs will be able to report the credit completion status of 20 first-time freshmen per hour. Again, applying this data entry rate to the estimated number of first-time freshmen at small public IHEs in their home State, the Department estimates that these IHEs will need to spend 76 hours to respond to this requirement at a total cost of $1,900. The total cost of these requirements for small IHEs is, therefore, $4,250; $2,068 of this cost will be borne by small private IHEs, and $2,182 of the cost will be borne by small public IHEs. Based on the total number of small IHEs across the Nation, the estimated cost per small private IHE is approximately $10, and the estimated cost per small public IHE is $66. The Department has, therefore, determined that the requirements will not represent a significant burden on small not-for-profit IHEs. It is also important to note that States may use their Government Services Fund allocations to help small IHEs meet the costs of complying with the requirements that affect them, and public IHEs may use Education Stabilization Fund dollars they receive for that purpose.

In addition, the Department believes the benefits provided under this regulatory action will outweigh the burdens on these institutions of complying with the requirements. One of these benefits will be the provision of better information on student success in postsecondary education to policymakers, educators, parents, and other stakeholders. The Department believes that the information gathered and reported as a result of these requirements will improve public accountability for performance; help States, LEAs, and schools learn from one another and improve their decision-making; and inform Federal policymaking.

A second major benefit is that better public information on State and local progress in the four reform areas will likely spur more rapid progress on those reforms, because States and LEAs that appear to be lagging in one area or another may see a need to redouble their efforts. The Department believes that more rapid progress on the essential educational reforms will have major benefits nationally, and that these reforms have the potential to drive dramatic improvements in student outcomes. The requirements that apply to IHEs should, in particular, spur more rapid implementation of pre-K-16 State longitudinal data systems.

Accessible Format: Individuals with disabilities can obtain this document in an accessible format ( e.g., braille, large print, audiotape, or compact disc) on request to the program contact person listed under FOR FURTHER INFORMATION CONTACT .

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

You may also access documents of the Department published in the Federal Register by using the article search feature at: http://www.federalregister.gov. Specifically, through the advanced search feature at this site, you can limit your search to documents published by the Department.

In June 2010, the Office requested comments from the public on a proposal to provide applicants with greater control over when their original utility or plant applications are examined and promote work sharing between intellectual property offices (3-Track). See Enhanced Examination Timing Control Initiative; Notice of Public Meeting, 75 FR 31763 (June 4, 2010). Specifically, the Office proposed to implement procedures under which an applicant would be able to: (1) Request prioritized examination of an original utility or plant nonprovisional application (Track I); (2) request a delay in docketing the application for examination, for an original utility or plant application filed under 35 U.S.C. 111(a), by filing a request for delay in payment of the search fee, the examination fee, the claims fees, and the surcharge (if appropriate) for a maximum period not to exceed thirty months (Track III); or (3) obtain processing under the current examination procedure (Track II) by not requesting either Track I or Track III processing.

In February 2011, the Office published a notice of proposed rule making to set forth the proposed procedure for prioritized examination and to seek public comments on the proposed procedure. See Changes to Implement the Prioritized Examination Track (Track I) of the Enhanced Examination Timing Control Procedures, 76 FR 6369 (Feb. 4, 2011). Since the majority of the public comments supported the optional prioritized examination procedure, on April 4, 2011, the Office published a final rule that revised the rules of practice in patent cases to implement a procedure under which applicants may request prioritized examination at the time of filing of an application upon payment of appropriate fees and compliance with certain requirements (Track I final rule). See Changes to Implement the Prioritized Examination Track (Track I) of the Enhanced Examination Timing Control Procedures, 76 FR 18399 (Apr. 4, 2011). The Office set a goal for the prioritized examination procedure of providing a final disposition within twelve months of prioritized status being granted. See Changes to Implement the Prioritized Examination Track (Track I) of the Enhanced Examination Timing Control Procedures, 76 FR at 18401.

The Office, however, found it necessary to revise its patent examiner hiring plan for the remainder of fiscal year 2011 due to funding limitations. The revised hiring plan for fiscal year 2011 did not permit the Office to hire a sufficient number of new examiners for the Office to be able to meet the twelve-month pendency goal in prioritized examination applications without impacting the examination of non-prioritized applications. Therefore, the Office published a subsequent final rule delaying the effective date of the Track I final rule until further notice. See Changes to Implement the Prioritized Examination Track (Track I) of the Enhanced Examination Timing Control Procedures, 76 FR 23876 (Apr. 29, 2011).

After the Office published the final rule delaying the effective date of Track I, the Leahy-Smith America Invents Act was enacted into law. The Leahy-Smith America Invents Act includes provisions for prioritized examination that emulate the requirements of the Office's Track I final rule, with revised fee amounts for prioritized examination (including a small entity discount). Specifically, section 11(h) of the Leahy-Smith America Invents Act provides that a fee of $4,800 shall be established for filing a request for prioritized examination of a nonprovisional application for an original utility or plant patent; that this fee is in addition to the filing, search, examination, processing, and publication fees, as well as any applicable excess claims or application size fees; and that this $4,800 fee is reduced by fifty percent for small entities under 35 U.S.C. 41(h)(1). Section 11(h) of the Leahy-Smith America Invents Act also provides that the USPTO may by regulation prescribe conditions for acceptance of a request for prioritized examination, as well as limit the number of filings for prioritized examination that may be accepted. Section 11(h) of the Leahy-Smith America Invents Act further provides that until such regulations are prescribed, no application for which prioritized examination is requested may contain or be amended to contain more than four independent claims or more than thirty total claims, and that the Office may not accept in any fiscal year more than 10,000 requests for prioritized examination. Finally, Section 11(h) provides that the prioritized examination provisions are effective ten days after enactment of the Leahy-Smith America Invents Act ( i.e., on September 26, 2011). This final rule implements the prioritized examination provisions of section 11(h) of the Leahy-Smith America Invents Act.

Under prioritized examination, an application will be accorded special status and placed on the examiner's special docket throughout its entire course of prosecution before the examiner until a final disposition is reached in the application. The goal for handling applications under prioritized examination is to on average provide a final disposition within twelve months of prioritized status being granted. The final disposition for the twelve-month goal means that within twelve months from the date prioritized status has been granted that one of the following occur: (1) Mailing of a notice of allowance; (2) mailing of a final Office action; (3) filing of a notice of appeal; (4) completion of examination as defined in 37 CFR 41.102; (5) filing of a request for continued examination; or (6) abandonment of the application. An application under prioritized examination, however, would not be accorded special status throughout its entire course of appeal or interference before the BPAI, or after the filing of a request for continued examination.

The time periods set for reply in Office actions for applications in Track I will be the same as set forth in section 710.02(b) of the Manual of Patent Examining Procedure (MPEP) (8th ed. 2001) (Rev. 8, July 2010). This is a distinction between Track I and the Accelerated Examination program, where the time period for reply to Office actions is one month (or at least thirty days) with no extensions under 37 CFR 1.136(a) being permitted. Where, however, an applicant files a petition for an extension of time to file a reply or a request for a suspension of action, the prioritized examination of the application will be terminated. In addition, filing an amendment to the application which results in more than four independent claims, more than thirty total claims, or a multiple dependent claim will terminate the prioritized examination. Upon termination of prioritized examination, the application will be removed from the examiner's special docket and placed on the examiner's regular docket in accordance with its stage of prosecution. As the termination of prioritized examination does not cause the prioritized examination fee to have been paid by mistake or in an amount in excess of that required, the termination of prioritized examination will not entitle the applicant to a refund of the prioritized examination fee. See 35 U.S.C. 42(d) and § 1.26(a) (permits refunds only for fees “paid by mistake or any amount paid in excess of that required”).

As discussed previously, the submission of an amendment resulting in more than four independent claims or more than thirty total claims is not prohibited, but simply terminates the prioritized examination. Thus, upon mailing of a final rejection (at which point prioritized examination is terminated), applicants may amend the claims to place them in independent form where dependent claims were found allowable, or add new claims, subject only to the limitations applicable to any application under final rejection. See § 1.116. Similarly, upon mailing of a notice of allowance, applicants may submit amendments to the claims, again subject only to the limitations applicable to any application that has been allowed. See § 1.312.

To maximize the benefit of prioritized examination, applicants should consider one or more of the following: (1) Acquiring a good knowledge of the state of the prior art to be able to file the application with a clear specification having a complete schedule of claims from the broadest to which the applicant believes he is entitled in view of the prior art to the narrowest which the applicant is willing to accept; (2) submitting an application in condition for examination; (3) filing replies that are completely responsive to an Office action and within the shortened statutory period for reply set in the Office action; and (4) being prepared to conduct interviews with the examiner. The phrase “in condition for examination” in this context means the same as it does with respect to the current Accelerated Examination program, which is discussed at MPEP § 708.02(a) (subsection VIII.C).

The Office intends to monitor the prioritized examination program carefully. As the Office gains experience with prioritized examination as a result of the initial implementation, it may reevaluate the annual numerical cap of 10,000 prioritized examination applications. Due to the need to limit the number of applications in the prioritized examination program in its initial stages, applications entering the national stage under 35 U.S.C. 371 are not eligible. However, an applicant who has filed an international application may participate in the prioritized examination program by filing a by-pass continuation under 35 U.S.C. 111(a) rather than entering the national stage under 35 U.S.C. 371. The Office may reconsider the exclusion of applications entering the national stage under 35 U.S.C. 371 at a future date. The Office may also consider whether there is a need to limit the number of requests for prioritized examination that may be filed in each Technology Center or by any given applicant. Statistical findings about prioritized examination, including statistics concerning the Office's ability to meet its stated goals for the program, will be made available to the public on the Office's Internet Web site.

The requirements for requesting prioritized examination are summarized below. A patent application may be granted prioritized examination status under the following conditions:

(1) The application must be an original utility or plant nonprovisional application filed under 35 U.S.C. 111(a) on or after September 26, 2011, the new effective date of the Track I final rule. The procedure for prioritized examination does not apply to international applications, design applications, reissue applications, provisional applications, and reexamination proceedings. Applicants may request prioritized examination for a continuing application ( e.g., a continuation or divisional application). However, a continuing application will not automatically be given prioritized examination status based on the request filed in the parent application. Each application (including each continuing application) must, on its own, meet all requirements for prioritized examination under 37 CFR 1.102(e).

(2) The application must be complete under 37 CFR 1.51(b) with any excess claims fees paid on filing, and the application must be filed via the Office's electronic filing system (EFS-Web) if it is a utility application. Thus, the application must be filed with an oath or declaration under 37 CFR 1.63, the basic filing fee, the search fee, the examination fee, any excess claims fees, and any application size fee.

(3) The application must contain no more than four independent claims and no more than thirty total claims. In addition, the application must not contain any multiple dependent claims. While it is possible to file a preliminary amendment on filing of an application to reduce the number of claims to no more than four independent claims and thirty total claims, and to eliminate any multiple dependent claims, the Office strongly encourages applicants to file applications without any preliminary amendments. If an amendment is filed in an application that has been granted prioritized examination that results in more than four independent claims or thirty total claims, or a multiple dependent claim, then prioritized examination will be terminated.

(4) The request for prioritized examination must be filed with the application in compliance with 37 CFR 1.102(e), accompanied by the prioritized examination fee set forth in 37 CFR 1.17(c), the processing fee set forth in 37 CFR 1.17(i), and the publication fee set forth in 37 CFR 1.18(d). Applicants are advised to use the certification and request form PTO/SB/424 which is available on EFS-Web.

(5) The request for prioritized examination may be accepted if the requirements under 37 CFR 1.102(e) are satisfied and the limit for the number of requests for the year has not been reached. The Office is limiting requests for prioritized examination under 37 CFR 1.102(e) to a maximum of 10,000 applications during fiscal year 2011. The Office will revisit this limit at the end of fiscal year 2011 to evaluate what the appropriate maximum should be, if any.

Title 37 of the Code of Federal Regulations, Part 1, is proposed to be amended as follows:

Section 1.17: The Office is implementing a procedure for prioritized examination (Track I) under the Leahy-Smith America Invents Act upon applicant's request and payment of a fee at the time of filing of the application.

Section 1.17(c) is amended to set the fee for filing a request for prioritized examination under § 1.102(e) at $4,800.00 ($2,400.00 for small entities). See § 1.102(e). Thus, as of September 26, 2011, the total fee due on filing a utility application for which prioritized examination is being sought (not including any applicable excess claims and application size fees) is $6,480 ($3,360 for a small entity). The total fee due on filing for a utility application is calculated as follows: (1) The $1,250 ($530 small entity) in filing fees which includes the $380 ($95 small entity filing by EFS-Web) filing fee, the $620 ($310 small entity) search fee, and the $250 ($125 small entity) examination fee; (2) the $4,800 ($2,400 small entity) prioritized examination fee; (3) the $130 processing fee; and (4) the $300 publication fee.

Section 1.17(i) is amended to add a reference for requesting prioritized examination of an application under § 1.102(e).

Section 1.102: Section 1.102 is revised to provide for the Track I procedure in which applicant has the option to request prioritized examination on the date the application is filed. Particularly, § 1.102(a) is revised by adding a reference to paragraph (e) so that applications may be advanced out of turn for examination or for further action upon filing a request under § 1.102(e). Section 1.102(e) is added to set forth the requirements for filing a request for prioritized examination, which provides that a request for prioritized examination will not be granted unless: (1) the application is an original utility or plant nonprovisional application filed under 35 U.S.C. 111(a) that is complete as defined by § 1.51(b), with any fees due under § 1.16 (the filing fee, search fee, examination fee, any applicable excess claims fee, and any applicable application size fee) paid on filing; (2) the application is filed via the Office's electronic filing system (EFS-Web) if it is a utility application (the Office will accept a request for prioritized examination in paper when it accompanies the filing of a plant application, because plant applications may not be filed via EFS-Web); (3) the request for prioritized examination, including the prioritized examination fee set forth in § 1.17(c), the processing fee set forth in § 1.17(i), and the publication fee set forth in § 1.18(d) are present upon filing; and (4) the application contains no more than four independent claims, no more than thirty total claims, and no multiple dependent claims. Section 1.102(e) finally provides that prioritized examination under this paragraph will not be accorded international applications, design applications, reissue applications, provisional applications, or reexamination proceedings.

The Leahy-Smith America Invents Act currently limits the number of requests for prioritized examination under § 1.102(e) that the Office may accept in each fiscal year to a maximum of 10,000. A request for prioritized examination may be accepted if the requirements under § 1.102(e) are satisfied and the limit for the number of requests has not been reached.

A. Administrative Procedure Act: This final rule implements the prioritized examination provisions of section 11(h) of the Leahy-Smith America Invents Act. The changes in this final rule that implement the fee for prioritized examination and requirements specified in section 11(h) of the Leahy-Smith America Invents Act are merely interpretative. See Gray Panthers Advocacy Comm. v. Sullivan, 936 F.2d 1284, 1291-1292 (DC Cir. 1991) (regulation that reiterates statutory language does not require notice and comment procedures); See Nat'l Org. of Veterans' Advocates v. Sec'y of Veterans Affairs, 260 F.3d 1365, 1375 (Fed. Cir. 2001). The additional requirements ( e.g., filing via the Office's electronic filing system (EFS-Web)) merely specify the procedures that apply to applications for which an applicant has requested prioritized examination and are thus procedural and not substantive. See JEM Broad. Co. v. FCC, 22 F.3d 320, 326 (DC Cir. 1994) (“[T]he critical feature of the procedural exception [in 5 U.S.C. 553(b)(A)] is that it covers agency actions that do not themselves alter the rights or interests of parties, although [they] may alter the manner in which the parties present themselves or their viewpoints to the agency”) (quoting Batterton v. Marshall, 648 F.2d 694, 707 (DC Cir. 1980)).

Accordingly, prior notice and an opportunity for public comment are not required pursuant to 5 U.S.C. 553(b)(A) or any other law. See Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1336-37 (Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35 U.S.C. 2(b)(2)(B), do not require notice and comment rule making for “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice.”) (quoting 5 U.S.C. 553(b)(A)). Nevertheless, the changes being adopted in this final rule were proposed for comment in February of 2011, and those comments have been considered by the Office. See Changes to Implement the Prioritized Examination Track (Track I) of the Enhanced Examination Timing Control Procedures, 76 FR at 18402-06. In addition, thirty-day advance publication is not required pursuant to 5 U.S.C. 553(d) or any other law. See 5 U.S.C. 553(d) (requiring thirty-day advance publication for substantive rules).

B. Regulatory Flexibility Act: As prior notice and an opportunity for public comment are not required pursuant to 5 U.S.C. 553 or any other law, neither a regulatory flexibility analysis nor a certification under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) is required. See 5 U.S.C. 603.

C. Executive Order 12866 (Regulatory Planning and Review): This rule making has been determined to be significant for purposes of Executive Order 12866 (Sept. 30, 1993).

D. Executive Order 13563 (Improving Regulation and Regulatory Review): The Office has complied with Executive Order 13563. Specifically, the Office has: (1) Used the best available techniques to quantify costs and benefits, and has considered values such as equity, fairness, and distributive impacts; (2) provided the public with a meaningful opportunity to participate in the regulatory process, including soliciting the views of those likely affected prior to issuing a notice of proposed rule making, and provided on-line access to the rule making docket; (3) attempted to promote coordination, simplification, and harmonization across government agencies and identified goals designed to promote innovation; (4) considered approaches that reduce burdens and maintain flexibility and freedom of choice for the public; and (5) ensured the objectivity of scientific and technological information and processes, to the extent applicable.

E. Executive Order 13132 (Federalism): This rule making does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).

F. Executive Order 13175 (Tribal Consultation): This rule making will not: (1) Have substantial direct effects on one or more Indian Tribes; (2) impose substantial direct compliance costs on Indian Tribal governments; or (3) preempt Tribal law. Therefore, a Tribal summary impact statement is not required under Executive Order 13175 (Nov. 6, 2000).

G. Executive Order 13211 (Energy Effects): This rule making is not a significant energy action under Executive Order 13211 because this rule making is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required under Executive Order 13211 (May 18, 2001).

H. Executive Order 12988 (Civil Justice Reform): This rule making meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden as set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Feb. 5, 1996).

I. Executive Order 13045 (Protection of Children): This rule making does not concern an environmental risk to health or safety that may disproportionately affect children under Executive Order 13045 (Apr. 21, 1997).

J. Executive Order 12630 (Taking of Private Property): This rule making will not effect a taking of private property or otherwise have taking implications under Executive Order 12630 (Mar. 15, 1988).

K. Congressional Review Act: Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq. ), prior to issuing any final rule, the United States Patent and Trademark Office will submit a report containing the final rule and other required information to the United States Senate, the United States House of Representatives, and the Comptroller General of the Government Accountability Office. The changes in this notice are not expected to result in an annual effect on the economy of 100 million dollars or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, this notice is not expected to result in a “major rule” as defined in 5 U.S.C. 804(2).

L. Unfunded Mandates Reform Act of 1995: The changes set forth in this notice do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and Tribal governments, in the aggregate, of 100 million dollars (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of 100 million dollars (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.

M. National Environmental Policy Act: This rule making will not have any effect on the quality of the environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969. See 42 U.S.C. 4321 et seq.

N. National Technology Transfer and Advancement Act: The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because this rule making does not contain provisions which involve the use of technical standards.

O. Paperwork Reduction Act: This rule making implements a prioritized examination process. The primary impact on the public of this change is that applicants will have the option to request prioritized examination by paying appropriate fees, filing a complete application via the Office's electronic filing system (EFS-Web) with any filing and excess claims fees due paid on filing, and limiting their applications to four independent claims and thirty total claims with no multiple dependent claims.

An applicant who wishes to participate in the program must submit a certification and request to participate in the prioritized examination program, preferably by using Form PTO/SB/424. The Office of Management and Budget (OMB) has determined that, under 5 CFR 1320.3(h), Form PTO/SB/424 does not collect “information” within the meaning of the Paperwork Reduction Act of 1995. Therefore, this rule making does not impose additional collection requirements under the Paperwork Reduction Act which are subject to further review by OMB.

Notwithstanding any other provision of law, no person is required to respond to, nor shall a person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.

For the reasons set forth in the preamble, the final rule amending 37 CFR part 1 that was published at 76 FR 18399-18407 on April 4, 2011, and whose effective date was delayed until further notice at 76 FR 23876 on April 29, 2011, is withdrawn, and 37 CFR part 1 is amended as follows:

Section 6(a) of the Leahy-Smith America Invents Act replaces the inter partes reexamination process that was established by the American Inventors Protection Act of 1999 (AIPA) (Pub. L. 106-113, 113 Stat. 1501, 1501A-552 through 1501A-591 (1999)) with a new inter partes review process. The replacement of inter partes reexamination with inter partes review is effective on September 16, 2012.

Section 6(c)(3)(A) of the Leahy-Smith America Invents Act provides a transition provision under which a request for inter partes reexamination will not be granted unless the information presented in the request shows that there is a reasonable likelihood that the requester will prevail with respect to at least one of the claims challenged in the request.

The Office is revising the rules of practice to (1) conform the standard for granting an inter partes reexamination to the one specified in section 6(c)(3)(A) of the Leahy-Smith America Invents Act, and (2) provide for termination of inter partes reexamination on September 16, 2012, as set forth in section 6(c)(3) of the Leahy-Smith America Invents Act.

The Leahy-Smith America Invents Act also creates a new inter partes review process to replace inter partes reexamination. The Office will implement the new inter partes review proceedings in a separate rule making.

Prior to the enactment of the Leahy-Smith America Invents Act, 35 U.S.C. 312(a) provided, as to the standard for granting an inter partes reexamination request, that “the Director shall determine whether a substantial new question of patentability affecting any claim of the patent concerned is raised by the request, with or without consideration of other patents or printed publications * * *.” The Office has referred to this standard as “SNQ.” The SNQ standard for granting an inter partes reexamination request was enacted in the AIPA.

Section 6(c)(3)(A) of the Leahy-Smith America Invents Act amended 35 U.S.C. 312 and 313 to delete any reference to the SNQ standard, and provide, in place of each deletion, language requiring the information presented in a request for inter partes reexamination (filed pursuant to 35 U.S.C. 311) to show that there is a reasonable likelihood that the requester will prevail with respect to at least one of the claims challenged in the request.

With respect to the reasonable likelihood standard, House Rep. 112-98 (Part 1), 112th Cong., 1st Sess., provides, in connection with inter partes review, the following:

The Office is revising the rules of practice for inter partes reexamination in title 37 of the Code of Federal Regulations (CFR) by amending §§ 1.915, 1.923, 1.927, and 1.931 to delete any reference to the SNQ standard for granting reexamination, and insert in its place reference to the newly enacted “reasonable likelihood” standard.

The SNQ standard for granting ex parte reexamination has not been revised by the Leahy-Smith America Invents Act, and accordingly, the rules of practice for ex parte reexamination are not being revised.

When the standards for Office jurisdiction over the proceeding are effective: Section 6(c)(3)(B) of the Leahy-Smith America Invents Act provides that this transition provision applies to any request for inter partes reexamination filed on or after the date of enactment of the Leahy-Smith America Invents Act ( i.e., September 16, 2011), but before the effective date of the inter partes review provisions of the Leahy-Smith America Invents Act ( i.e., September 16, 2012). Section 6(c)(3)(C) of the Leahy-Smith America Invents Act provides that the inter partes reexamination provisions of 35 U.S.C. chapter 31, as amended by section 6(c)(3) of the Leahy-Smith America Invents Act, shall apply to requests for inter partes reexamination filed before September 16, 2012. Accordingly, for inter partes reexamination, the following applies:

1. Inter partes reexamination requests filed prior to September 16, 2011: With respect to any inter partes reexamination proceeding for which a request has been filed prior to September 16, 2011, the SNQ standard is applicable in determining whether the request for inter partes reexamination will be granted. If reexamination is ordered based on the SNQ standard, then the SNQ standard will apply throughout the reexamination proceeding, even after September 16, 2011, or September 16, 2012.

2. Inter partes reexamination requests filed on or after September 16, 2011, but before September 16, 2012: With respect to any inter partes reexamination proceeding for which a request is filed on or after September 16, 2011, the “reasonable likelihood” standard is applicable in determining whether the request for inter partes reexamination will be granted. If reexamination is ordered based on the “reasonable likelihood” standard, then the “reasonable likelihood” standard will apply throughout the reexamination proceeding, even after September 16, 2012. In addition, the inter partes reexamination provisions of 35 U.S.C. chapter 31, as amended by section 6(c)(3) of the Leahy-Smith America Invents Act, and §§ 1.902-1.997 and 41.60-41.81 of title 37 CFR, effective on September 16, 2011, will apply throughout the reexamination, even after September 16, 2012.

3. Inter partes reexamination requests filed on or after September 16, 2012: With respect to any inter partes reexamination proceeding for which a request is submitted on or after September 16, 2012, the Office cannot grant, or even accord a filing date to, the request. The inter partes reexamination provisions of 35 U.S.C. chapter 31 are not available for any request for inter partes reexamination submitted on or after September 16, 2012. In other words, the Office will no longer entertain original requests for inter partes reexamination on or after September 16, 2012, but instead will accept petitions to conduct inter partes review.

Title 37 of the Code of Federal Regulations, Part 1, Subpart H, is amended as follows:

Section 1.913: The title of § 1.913 is revised to add “, and time for filing, a” before “request for inter partes reexamination.” The sole existing paragraph of § 1.913 is revised to add “(a)” before the paragraph, and to add after “Except as provided for in § 1.907 and in paragraph (b) of this section.” New paragraph (b) is added to explicitly provide that any request for an inter partes reexamination that is submitted on or after September 16, 2012, will not be accorded a filing date and that any such request will not be granted.

Section 1.915: Section 1.915 is amended by revising paragraph (b)(2) to replace the SNQ standard for granting reexamination with the “reasonable likelihood” standard. After “citation of the patents and printed publications which are presented to provide,” the language “a showing that there is a reasonable likelihood that the requester will prevail with respect to at least one of the claims challenged in the request” is added in place of “a substantial new question of patentability.”

Section 1.915 is additionally amended by revising paragraph (b)(3) to replace the SNQ standard for granting reexamination with the “reasonable likelihood” standard:

The amended language replaces the prior language:

Section 1.923: The first sentence of § 1.923 is amended to replace the SNQ standard for granting reexamination with the “reasonable likelihood” standard:

The amended language replaces the prior language:

The last sentence of § 1.923 is amended to replace the SNQ standard for granting reexamination with the “reasonable likelihood” standard:

The amended language replaces the prior language:

Section 1.927: The last sentence of § 1.927 is amended by deleting “no substantial new question of patentability has been raised” after “[i]f no petition is timely filed or if the decision on petition affirms that.” The language “a reasonable likelihood that the requester will prevail with respect to at least one of the claims challenged in the request has not been established” is added in its place.

Section 1.931: Section 1.931 is amended by revising paragraph (a) to replace the SNQ standard for granting reexamination with the “reasonable likelihood” standard:

The amended language replaces the prior language:

A. Administrative Procedure Act (APA): This final rule merely revises the rules governing inter partes reexamination to implement the provisions in section 6(c)(3) of the Leahy-Smith America Invents Act, which include: (1) A change to the standard for granting a request for inter partes reexamination; and (2) the termination of inter partes reexamination on September 16, 2012. Therefore, the changes in this final rule are merely interpretative. See Nat'l Org. of Veterans' Advocates v. Sec'y of Veterans Affairs, 260 F.3d 1365, 1375 (Fed. Cir. 2001). Accordingly, prior notice and opportunity for public comment are not required pursuant to 5 U.S.C. 553(b) or (c) (or any other law), and thirty-day advance publication is not required pursuant to 5 U.S.C. 553(d) or any other law. See Cooper Techs. Co. v. Dudas, 536 F.3d 1330, 1336-37 (Fed. Cir. 2008) (stating that 5 U.S.C. 553, and thus 35 U.S.C. 2(b)(2)(B), does not require notice and comment rule making for “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice.”) (quoting 5 U.S.C. 553(b)(A)).

B. Regulatory Flexibility Act: As prior notice and an opportunity for public comment are not required pursuant to 5 U.S.C. 553 or any other law, neither a regulatory flexibility analysis nor a certification under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) is required. See 5 U.S.C. 603.

C. Executive Order 13132 (Federalism): This rule making does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).

D. Executive Order 12866 (Regulatory Planning and Review): This rule making has been determined not to be significant for purposes of Executive Order 12866 (Sept. 30, 1993), as amended by Executive Order 13258 (Feb. 26, 2002) and Executive Order 13422 (Jan. 18, 2007).

E. Executive Order 13175 (Tribal Consultation): This rule making will not: (1) Have substantial direct effects on one or more Indian tribes; (2) impose substantial direct compliance costs on Indian tribal government; or (3) preempt tribal law. Therefore, a tribal summary impact statement is not required under Executive Order 13175 (Nov. 6, 2000).

F. Executive Order 13211 (Energy Effect): This rule making is not a significant energy action under Executive Order 13211 because this rule making is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required under Executive Order 13211 (May 18, 2001).

G. Executive Order 12988 (Civil Justice Reform): This rule making meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden as set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Feb. 5, 1996).

H. Executive Order 13045 (Protection of Children): This rule making is not an economically significant rule and does not concern an environmental risk to health or safety that may disproportionately affect children under Executive Order 13045 (Apr. 21, 1997).

I. Executive Order 12630 (Taking of Private Property): This rule making will not effect a taking of private property or otherwise have taking implications under Executive Order 12630 (Mar. 15, 1988).

J. Congressional Review Act: Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801 et seq. ), prior to issuing any final rule, the United States Patent and Trademark Office will submit a report containing the final rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the Government Accountability Office. This final rule merely revises the rules governing inter partes reexamination to conform them to the change to the standard for granting a request for inter partes reexamination set forth in section 6(c)(3) of the Leahy-Smith America Invents Act, and the September 16, 2012 date of termination of inter partes reexamination provided for in section 6(c)(3) of the Leahy-Smith America Invents Act. The change in this rule making is not expected to result in an annual effect on the economy of 100 million dollars or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, this rule making is not expected to result in a “major rule” as defined in 5 U.S.C. 804(2).

K. Unfunded Mandates Reform Act of 1995: The changes in this rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of 100 million dollars or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995. See 2 U.S.C. 1501 et seq.

L. National Environmental Policy Act: The rule making will not have any effect on the quality of the environment and is thus categorically excluded from review under the National Environmental Policy Act of 1968. See 42 U.S.C. 4321 et seq.

M. National Technology Transfer and Advancement Act: The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are inapplicable, because this rule making does not involve the use of technical standards.

N. Paperwork Reduction Act: This rule making involves information collection requirements which are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). The collection of information involved in this rule making has been reviewed and previously approved by OMB under OMB control number 0651-0064. This final rule merely revises the rules governing inter partes reexamination to conform them to the change to the standard for granting a request for inter partes reexamination set forth in the transition provisions of section 6(c)(3) of the Leahy-Smith America Invents Act, and the September 16, 2012 date of termination of inter partes reexamination provided for in section 6(c)(3) of the Leahy-Smith America Invents Act. This rule making does not impose additional collection requirements under the Paperwork Reduction Act. Therefore, the United States Patent and Trademark Office is not submitting an information collection package to OMB for its review and approval because the changes in this rule making will not affect the information collection requirements associated with the information collection under OMB control number 0651-0064.

For the reasons set forth in the preamble, 37 CFR part 1 is amended as follows:

The BLM has specific authority to charge fees for processing applications and other documents relating to public lands under Section 304 of the Federal Land Policy and Management Act of 1976 (FLPMA), 43 U.S.C. 1734. In 2005, the BLM published a final cost recovery rule (70 FR 58854) establishing or revising certain fees and service charges, and establishing the method it would use to adjust those fees and service charges on an annual basis.

At 43 CFR 3000.12(a), the regulations provide that the BLM will annually adjust fees established in Subchapter C according to changes in the Implicit Price Deflator for Gross Domestic Product (IPD-GDP), which is published quarterly by the U.S. Department of Commerce. See also 43 CFR 3000.10. This final rule will allow the BLM to update these fees and service charges by October 1 of this year, as required by the 2005 regulation. The fee recalculations are based on a mathematical formula. The public had an opportunity to comment on this procedure during the comment period on the original cost recovery rule, and this new rule simply administers the procedure set forth in those regulations. Therefore, the BLM has changed the fees in this final rule without providing opportunity for additional notice and comment. The Department of the Interior, therefore, for good cause finds under 5 U.S.C. 553(b)(B) and (d)(3) that notice and public comment procedures are unnecessary and that the rule may be effective less than 30 days after publication.

The BLM publishes a fee update rule each year, which becomes effective on October 1 of that year. The fee updates are based on the change in the IPD-GDP from the 4th Quarter of one calendar year to the 4th Quarter of the following calendar year. This fee update rule is based on the change in the IPD-GDP from the 4th Quarter of 2009 to the 4th Quarter of 2010, thus reflecting the rate of inflation over four calendar quarters.

The fee is calculated by applying the IPD-GDP to the base value from the previous year's rule, also known as the “existing value”. This calculation results in an updated base value. The updated base value is then rounded to the closest multiple of $5, or to the nearest cent for fees under $1, to establish the new fee.

Under this rule, 27 fees will remain the same and 21 fees will increase. Nineteen of the fee increases will amount to $5 each. The largest increase, $35, will be applied to the fee for adjudicating a mineral patent application containing more than 10 claims, which will increase from $2,840 to $2,875. The fee for adjudicating a patent application containing 10 or fewer claims will increase by $20—from $1,420 to $1,440.

The calculations that resulted in the new fees are included in the table below:

Each year, the figures in the Existing Value column in the table above (not those in the Existing Fee column) are used as the basis for calculating the adjustment to these fees. The Existing Value is the figure from the New Value column in the previous year's rule. In the case of fees that were not in the table the previous year, or that had no figure in the New Value column the previous year, the Existing Value is the same as the Existing Fee. Because the new fees are derived from the new values—rounded to the nearest $5 or the nearest penny for fees under $1—adjustments based on the figures in the Existing Fee column would lead to significantly over-or-under-valued fees over time. Accordingly, fee adjustments are made by multiplying the annual change in the IPD-GDP by the figure in the Existing Value column. This calculation defines the New Value for this year, which is then rounded to the nearest $5 or the nearest penny for fees under $1, to establish the New Fee.

This document is not a significant rule and the Office of Management and Budget has not reviewed this rule under Executive Order 12866.

The BLM has determined that the rule will not have an annual effect on the economy of $100 million or more. It will not adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local, or Tribal governments or communities. The changes in today's rule are much smaller than those in the 2005 final rule, which did not approach the threshold in Executive Order 12866. For instructions on how to view a copy of the analysis prepared in conjunction with the 2005 final rule, please contact one of the persons listed in the FOR FURTHER INFORMATION CONTACT section above.

This rule will not create inconsistencies or otherwise interfere with an action taken or planned by another agency. This rule does not change the relationships of the onshore minerals programs with other agencies' actions. These relationships are included in agreements and memoranda of understanding that would not change with this rule.

In addition, this final rule does not materially affect the budgetary impact of entitlements, grants, or loan programs, or the rights and obligations of their recipients. This rule does apply an inflation factor that increases some existing user fees for processing documents associated with the onshore minerals programs. However, most of these fee increases are less than 3 percent and none of the increases materially affect the budgetary impact of user fees.

Finally, this rule will not raise novel legal issues. As explained above, this rule simply implements an annual process to account for inflation that was adopted by and explained in the 2005 cost recovery rule.

This final rule will not have a significant economic effect on a substantial number of small entities as defined under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ). A Regulatory Flexibility Analysis is not required. Accordingly, a Small Entity Compliance Guide is not required. For the purposes of this section, a small entity is defined by the Small Business Administration (SBA) for mining (broadly inclusive of metal mining, coal mining, oil and gas extraction, and the mining and quarrying of nonmetallic minerals) as an individual, limited partnership, or small company considered to be at arm's length from the control of any parent companies, with fewer than 500 employees. The SBA defines a small entity differently, however, for leasing Federal land for coal mining. A coal lessee is a small entity if it employs not more than 250 people, including people working for its affiliates.

The SBA would consider many, if not most, of the operators the BLM works with in the onshore minerals programs to be small entities. The BLM notes that this final rule does not affect service industries, for which the SBA has a different definition of “small entity.”

The final rule may affect a large number of small entities since 21 fees for activities on public lands will be increased. However, the BLM has concluded that the effects will not be significant. Most of the fixed fee increases will be less than 3 percent as a result of this final rule. The adjustments result in no increase in the fee for the processing of 27 documents relating to the BLM's minerals programs. The highest adjustment, in dollar terms, is for adjudications of mineral patent applications involving more than 10 mining claims, which will be increased by $35. For the 2005 final rule, the BLM completed a threshold analysis, which is available for public review in the administrative record for that rule. For instructions on how to view a copy of that analysis, please contact one of the persons listed in the FOR FURTHER INFORMATION CONTACT section above. The analysis for the 2005 rule concluded that the fees would not have a significant economic effect on a substantial number of small entities. The fee increases implemented in today's rule are substantially smaller than those provided for in the 2005 rule.

This final rule is not a “major rule” as defined at 5 U.S.C. 804(2). The final rule will not have an annual effect on the economy greater than $100 million; it will not result in major cost or price increases for consumers, industries, government agencies, or regions; and it will 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. For the 2005 final rule, which established the fee adjustment procedure that this rule implements, the BLM completed a threshold analysis, which is available for public review in the administrative record for that rule. The fee increases implemented in today's rule are substantially smaller than those provided for in the 2005 rule.

This final rule will not have a substantial direct effect on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. In accordance with Executive Order 13132, therefore, we find that the final rule does not have significant federalism effects. A federalism assessment is not required.

These regulations contain information collection requirements. As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), the BLM submitted a copy of the proposed information collection requirements to the Office of Management and Budget (OMB) for review. The OMB approved the information collection requirements under the following Control Numbers:

(1) 1004-0034 which expires July 31, 2012;

(2) 1004-0137 which expires September 30, 2011, renewal pending;

(3) 1004-0162 which expires May 31, 2012;

(4) 1004-0185 which expires November 30, 2012;

(5) 1004-0132 which expires December 31, 2013;

(6) 1004-0073 which expires June 30, 2013;

(7) 1004-0025 which expires March 31, 2013;

(8) 1004-0114 which expires August 31, 2013; and

(9) 1004-0121 which expires February 28, 2013.

As required by Executive Order 12630, the BLM has determined that this rule will not cause a taking of private property. No private property rights will be affected by a rule that merely updates fees. The BLM therefore certifies that this final rule does not represent a governmental action capable of interference with constitutionally protected property rights.

In accordance with Executive Order 12988, the BLM finds that this final rule will not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Executive Order.

The BLM has determined that this final rule is administrative and involves only procedural changes addressing fee requirements. In promulgating this rule, the government is conducting routine and continuing government business of an administrative nature having limited context and intensity. Therefore, it is categorically excluded from environmental review under section 102(2)(C) of NEPA, pursuant to 43 CFR 46.205 and 46.210(c) and (i). The final rule does not meet any of the 12 criteria for exceptions to categorical exclusions listed at 43 CFR 46.215.

Pursuant to Council on Environmental Quality (CEQ) regulation and the environmental policies and procedures of the Department of the Interior, the term “categorical exclusions” means categories of actions “which do not individually or cumulatively have a significant effect on the human environment and which have been found to have no such effect in procedures adopted by a Federal agency in implementation of [CEQ] regulations (§ 1507.3) and for which, therefore, neither an environmental assessment nor an environmental impact statement is required.” 40 CFR 1508.4; see also BLM National Environmental Policy Act Handbook H-1790-1, Ch. 4, at 17 (Jan. 2008).

The BLM has determined that this final rule is not significant under the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1501 et seq., because it will not result in state, local, private sector, or Tribal government expenditures of $100 million or more in any one year, 2 U.S.C. 1532. This rule will not significantly or uniquely affect small governments. Therefore, the BLM is not required to prepare a statement containing the information required by the Unfunded Mandates Reform Act.

In accordance with Executive Order 13175, the BLM has determined that this final rule does not include policies that have Tribal implications. A key factor is whether the rule would have substantial direct effects on one or more Indian Tribes. The BLM has not found any substantial direct effects. Consequently, the BLM did not utilize the consultation process set forth in Section 5 of the Executive Order.

In developing this rule, the BLM did not conduct or use a study, experiment, or survey requiring peer review under the Information Quality Act (Pub. L. 106-554).

In accordance with Executive Order 13211, the BLM has determined that this final rule is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The distribution of or use of energy would not be unduly affected by this final rule. It merely adjusts certain administrative cost recovery fees to account for inflation.

The principal author of this rule is Faith Bremner of the Division of Regulatory Affairs, Bureau of Land Management.

For reasons stated in the preamble, the Bureau of Land Management amends 43 CFR chapter II as follows:

The snapper-grouper fishery of the South Atlantic is managed under the Fishery Management Plan for the Snapper-Grouper Fishery of the South Atlantic Region (FMP). The FMP was prepared by the South Atlantic Fishery Management Council and is implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act by regulations at 50 CFR part 622.

The commercial quota for vermilion snapper in the South Atlantic is 302,523 lb (137,222 kg) for the current fishing period, July 1 through December 31, 2011, as specified in 50 CFR 622.42(e)(4)(ii). On June 15, 2011, NMFS published a final rule implementing a commercial trip limit for vermilion snapper of 1,500 lb (680 kg) per day, which was effective on July 15, 2011 (76 FR 34892). This trip limit, specified in 50 CFR 622.44(c)(6), remains in effect until the commercial quota for vermillion snapper is reached.

Under 50 CFR 622.43(a), NMFS is required to close the commercial sector for vermilion snapper when its quota has been reached, or is projected to be reached, by filing a notification to that effect with the Office of the Federal Register. NMFS has determined that the commercial quota for South Atlantic vermilion snapper will have been reached by September 30, 2011. Accordingly, the commercial sector for South Atlantic vermilion snapper is closed effective 12:01 a.m., local time, September 30, 2011, until 12:01 a.m., local time, January 1, 2012.

The operator of a vessel with a valid commercial vessel permit for South Atlantic snapper-grouper having vermilion snapper onboard must have landed and bartered, traded, or sold such vermilion snapper prior to 12:01 a.m., local time, September 30, 2011. During the closure, the bag limit and possession limits specified in 50 CFR 622.39(d)(1)(v) and (d)(2), respectively, apply to all harvest or possession of vermilion snapper in or from the South Atlantic EEZ, and the sale or purchase of vermilion snapper taken from the EEZ is prohibited. The prohibition on sale or purchase does not apply to the sale or purchase of vermilion snapper that were harvested, landed ashore, and sold prior to 12:01 a.m., local time, September 30, 2011, and were held in cold storage by a dealer or processor. For a person on board a vessel for which a Federal commercial permit for the South Atlantic snapper-grouper fishery has been issued, the sale and purchase provisions of the commercial closure for vermilion snapper would apply regardless of whether the fish are harvested in state or Federal waters, as specified in 50 CFR 622.43(a)(5)(ii).

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA), finds that the need to immediately implement this action to close the commercial sector for vermilion snapper constitutes good cause to waive the requirements to provide prior notice and opportunity for public comment pursuant to the authority set forth in 5 U.S.C. 553(b)(B), as such procedures would be unnecessary and contrary to the public interest. Such procedures would be unnecessary because the rule itself has been subject to notice and comment, and all that remains is to notify the public of the closure.

Allowing prior notice and opportunity for public comment is contrary to the public interest because of the need to immediately implement this action to protect the fishery since the capacity of the fishing fleet allows for rapid harvest of the quota. Prior notice and opportunity for public comment would require time and would potentially result in a harvest well in excess of the established quota.

For the aforementioned reasons, the AA also finds good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).

This action is taken under 50 CFR 622.43(a) and is exempt from review under Executive Order 12866.

The stone crab fishery of the Gulf of Mexico (Gulf) is managed under the FMP. The FMP was prepared by the Council and implemented through regulations at 50 CFR part 654 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act).

On July 20, 2011, NMFS published a proposed rule to repeal the Federal stone crab FMP and requested public comment (76 FR 43250). The proposed rule and the environmental assessment outline the rationale for the measures contained in this final rule. This final rule will repeal the Federal stone crab FMP and its implementing regulations. The FWC has already voted to extend its authority to regulate stone crab in Federal waters. The intended effect of this rule is to eliminate duplication of management efforts, reduce costs, and enhance regulatory efficiency of the stone crab resource.

NMFS received two comments on the proposed rule, one from a Federal agency that was non-substantive and one from an individual that expressed general support for the rule. Neither submission expressed substantive comments on the proposed rule and, therefore, are not repeated here.

The Regional Administrator, Southeast Region, NMFS, has determined that this final rule is necessary to more efficiently manage the stone crab resource, and is consistent with the Magnuson-Stevens Act and other applicable laws.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.

For the reasons set out in the preamble, under the authority of 16 U.S.C. 1801 et seq., part 654 is removed.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

NMFS closed directed fishing for shallow-water species by vessels using trawl gear in the GOA under § 679.21(d)(7)(i) on September 3, 2011 (76 FR 55726, September 7, 2011) and subsequent reopener from September 14, 2011 to September 16, 2011 (76 FR 57679, September 16, 2011).

As of September 19, 2011, NMFS has determined that approximately 481 metric tons remain in the fourth seasonal apportionment of the 2011 Pacific halibut bycatch allowance specified for the trawl shallow-water species fishery in the GOA. Therefore, in accordance with § 679.25(a)(1)(i), (a)(2)(i)(C) and (a)(2)(iii)(D), and to fully utilize the fourth seasonal apportionment of the 2011 Pacific halibut bycatch allowance specified for the trawl shallow-water species fishery in the GOA, NMFS is terminating the previous closure and is opening directed fishing for shallow-water species by vessels using trawl gear in the GOA. This will enhance the socioeconomic well-being of harvesters dependent upon shallow-water species in this area. The Administrator, Alaska Region (Regional Administrator) considered the following factors in reaching this decision: (1) The current catch of halibut by trawl vessels participating in the shallow-water species fisheries and, (2) the harvest capacity and stated intent on future harvesting patterns of vessels participating in this fishery.

The species and species groups that comprise the shallow-water species fishery are pollock, Pacific cod, shallow-water flatfish, flathead sole, Atka mackerel, skates, sharks, sculpins, and octopus.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the opening of directed fishing for shallow-water species by vessels using trawl gear in the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent and relevant data only became available as of September 19, 2011.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

Without this inseason adjustment, NMFS could not allow the fishery for shallow-water species by vessels using trawl gear in the GOA to be harvested in an expedient manner and in accordance with the regulatory schedule. Under § 679.25(c)(2), interested persons are invited to submit written comments on this action to the above address until October 5, 2011.

This action is required by § 679.20 and § 679.25 and is exempt from review under Executive Order 12866.