On March 12, 2012, the Department of Energy (DOE) issued a notice of proposed rulemaking to implement section 142 of the Energy Independence and Security Act of 2007 (EISA, Pub. L. 110-140), which amended the Energy Policy and Conservation Act of 1975 (Pub. L. 94-163) and directed the Secretary of Energy to issue implementing regulations for a statutorily-required reduction in petroleum consumption and increase in alternative fuel consumption for Federal fleets (77 FR 14,482 (Mar. 12, 2012)). For additional background on, and a discussion of the statutory authority for, the proposed rule, please refer to the discussion contained in the SUPPLEMENTARY INFORMATION of the proposed rule.

Section 142 of EISA provides that not later than October 1, 2015, and for each year thereafter, Federal fleets “shall achieve at least * * * a 10 percent increase in alternative fuel consumption, as calculated from the baseline established by the Secretary for fiscal year [(FY)] 2005.” Pursuant to section 438.102(b) of the proposed rule, the alternative fuel consumption baseline values would be the same as the values reported for Federal fleets through the Federal Automotive Statistical Tool Web-based reporting system (FAST) for FY 2005. Moreover, section 438.102(b) would require Federal fleets with extremely low alternative fuel use to be subject to a proposed minimum alternative fuel consumption baseline. The minimum baseline would be the greater of (1) the amount of alternative fuel consumed by that Federal fleet in FY 2005, expressed in gallon of gasoline equivalent (GGEs), as reflected in FY 2005 FAST data, or (2) the lesser of (a) five percent of total Federal fleet vehicle fuel (petroleum and alternative fuel) consumption and (b) 500,000 GGEs.

DOE notes that the wording of section 438.102(b) potentially could cause confusion as to whether the alternative fuel consumed by exempt vehicles and low-speed electric vehicles (LSEVs) would be required to be included in the calculation of the FY 2005 baseline. At first glance, the proposed regulatory text specifies how to calculate the FY 2005 baseline for each “Federal fleet.” As defined under section 438.2(l), the term “Federal fleet” as proposed would not include exempt vehicles and certain types of LSEVs; thus, section 438.102(b) would appear to exclude from the calculation of the FY 2005 alternative fuel consumption baseline the amount of alternative fuel consumed by exempt vehicles and LSEVs. This approach potentially would result in a less stringent mandate for increased alternative fuel consumption by allowing each Federal fleet to account for the alternative fuel consumed by two categories of motor vehicles in determining statutory compliance that would not be considered in the calculation of the FY 2005 baseline. 1

However, section 438.102(b) also provides detailed instruction on how to calculate the FY 2005 baseline with respect to annual “alternative fuel consumption.” As defined under section 438.2(d), the term “alternative fuel consumption” as proposed expressly includes the alternative fuel consumed in exempt vehicles and LSEVs; thus, section 438.102(b) could be interpreted to include the amount of alternative fuel consumed by exempt vehicles and LSEVs in calculating the FY 2005 alternative fuel consumption baseline. DOE further notes that the SUPPLEMENTARY INFORMATION of the proposed rule also suggests that the FY 2005 alternative fuel consumption baseline calculation could include the alternative fuel consumed by exempt vehicles and LSEVs. Specifically, the SUPPLEMENTARY INFORMATION provides that “a correction [of the FY 2005 alternative fuel consumption baseline] might be requested in the event that the Federal fleet's alternative fuel use value for FY 2005 submitted through FAST did not include the electricity used in the Federal fleet's LSEVs.” Moreover, the alternative fuel consumption baseline data set forth in Table III.1 of the proposed rule includes the alternative fuel consumed by exempt vehicles and LSEVs.

DOE notes that an approach that required the inclusion of alternative fuel consumed by exempt vehicles and LSEVs in the FY 2005 alternative fuel baseline would be consistent with the existing method for baseline calculation under the alternative fuel consumption requirements of Executive Order 13423. Moreover, such an approach could require each Federal fleet to consume greater amounts of alternative fuel to ensure compliance with the statutorily-required increase in alternative fuel consumption as compared to an approach that did not account for the alternative fuel consumed by exempt vehicles and LSEVs in its baseline calculation.

With this Request for Information, DOE requests public comment on the whether the FY 2005 alternative fuel consumption baseline should include the alternative fuel consumed by exempt vehicles and LSEVs. DOE also requests comment on other potential approaches to complying with the statutorily-required increase in alternative fuel consumption.

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2012-0327; Directorate Identifier 2011-NM-125-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

On December 17, 2009, we issued AD 2009-26-17, Amendment 39-16156 (74 FR 69268, December 31, 2009), for certain Boeing Model DC-10-10, DC- 10-10F, DC-10-15, DC-10-30, DC-10-30F (KC-10A and KDC-10), DC-10-40, DC-10-40F, MD-10-10F, and MD-10-30F airplanes. That AD requires installing or replacing with improved parts, as applicable, the bonding straps between the metallic frame of the fillet and the wing leading edge ribs, on both the left and right sides of the airplane. That AD also requires, for certain airplanes, repositioning or replacing two bonding straps, and doing a bonding-resistance check and an inspection to determine correct installation of certain bonding straps, and applicable corrective actions. That AD resulted from fuel system reviews conducted by the manufacturer. We issued that AD to reduce the potential of ignition sources inside fuel tanks in the event of a severe lightning strike, which, in combination with flammable fuel vapors, could result in fuel tank explosions and consequent loss of the airplane.

Since we issued AD 2009-26-17, Amendment 39-16156 (74 FR 69268, December 31, 2009), Boeing has issued new service information that specifies additional actions that are necessary to address the identified unsafe condition.

We reviewed Boeing Service Bulletin DC10-53-111, Revision 7, dated March 16, 2011, which makes minor corrections and adds part number substitutions.

We also reviewed Boeing Service Bulletin DC10-53-109, Revision 8, dated March 10, 2011. This service information reinstates airplanes inadvertently omitted from the prior revision of this service information, and describes new additional actions. This service information describes:

• New procedures for installing new braided bonding straps, depending on the airplane configuration.

• Inspecting to determine if a certain strap is installed, and replacing with or installing a braided bonding strap if necessary.

• Measuring the electrical resistance of the bonding straps.

• Verifying that brackets have an acceptable fillet seal.

• Corrective actions if necessary.

Corrective actions include cleaning braided bonding straps, and repairing damaged or missing fillet seals.

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

This proposed AD would retain all requirements of AD 2009-26-17, Amendment 39-16156 (74 FR 69268, December 31, 2009). This proposed AD would also require accomplishing the additional actions specified in the service information described previously.

Since AD 2009-26-17, Amendment 39-16156 (74 FR 69268, December 31, 2009), was issued, the AD format has been revised, and certain paragraphs have been rearranged. As a result, the service bulletins listed in Table 1 of AD 2009-26-17 are listed in paragraph (g)(2) of this proposed AD, and the service bulletins listed in Table 2 of AD 2009-26-17 are listed in paragraph (g)(1) of this proposed AD.

We also revised paragraph (h) of this proposed AD to describe the affected airplanes. Paragraph (h) of AD 2009-26-17, Amendment 39-16156 (74 FR 69268, December 31, 2009), specifies that it is “for airplanes with fuselage numbers not identified in Table 2 of this AD * * *.” Since this proposed AD adds airplanes, we have revised that sentence as follows: “For airplanes with fuselage numbers identified in the applicable service bulletin listed in paragraph (g)(2) of this AD that are not also identified in the applicable service bulletin listed in paragraph (g)(1) of this AD * * *.”

In addition, we have revised the wording of paragraph (k) of AD 2009-26-17, Amendment 39-16156 (74 FR 69268, December 31, 2009); however, the intent of that paragraph has not changed.

We estimate that this proposed AD affects 208 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

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

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

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

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

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

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

(3) Will not affect intrastate aviation in Alaska, and

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

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

The Section 202 and Section 811 programs were established to allow very low-income elderly persons and persons with disabilities the opportunity to live with dignity by providing affordable rental housing offering a range of supportive services to meet the needs of these populations. By providing capital advance and project rental assistance to nonprofit developers seeking to build and maintain supportive housing for very low-income elderly persons and persons with disabilities, the Section 202 and Section 811 programs have proven to be examples of effective partnerships between the Federal Government and nongovernmental entities to achieve a common mission.

The American Homeownership and Economic Opportunity Act of 2000 (Pub. L. 106-569, 114 Stat. 2944, approved December 27, 2000) (AHEO Act) amended the authorizing statutes for the Section 202 program (Section 202 of the Housing Act of 1959 (12 U.S.C. 1701q)) and the Section 811 program (Section 811 of the Cranston-Gonzalez National Affordable Housing Act of 1990 (42 U.S.C. 8013)) to allow for the participation of for-profit limited partnerships in the ownership of Section 202 and Section 811 supportive housing, which helped facilitate the use of low-income housing tax credits and mixed-finance methods to infuse private capital into Section 202 and Section 811 developments. An interim rule establishing the Section 202/811 mixed-finance program and implementing the AHEO Act, was published on December 1, 2003 (68 FR 67316). HUD followed publication of the interim rule with a final rule, published on September 13, 2005 (70 FR 54200), that took into account the comments received on the interim rule.

Current economic conditions have reduced the availability of private financing for the development of supportive housing. In order to attract needed private capital, HUD has determined that amendments to the regulations governing the Section 202 and Section 811 programs are needed to further streamline the mixed-finance development process for supportive housing for the elderly and persons with disabilities. While the existing regulations applicable to mixed-finance developments have facilitated the creation of approximately 1,017 mixed-finance units, they also, in certain circumstances, limit project sponsors from accessing private sector capital and expertise. The changes proposed in this rule will provide mixed-finance owners with more options, better facilitate the use of low-income housing tax credits, and attract other private funding. Moreover, the changes will promote the construction of supportive housing developments that include additional non-Section 202/811-supported units for the elderly and persons with disabilities.

The Section 202 Supportive Housing for the Elderly Act of 2010 (Pub. L. 111-372) (Section 202 Act of 2010) and the Frank Melville Supportive Housing Investment Act of 2010 (Pub. L. 111-374) (Melville Act) were both signed into law on January 4, 2011 (collectively, the Acts), and amended the authorizing statutes for Section 202 and Section 811, respectively. While additional regulatory changes will be necessary to implement these Acts, HUD is taking this opportunity to update the definitions of “private nonprofit organizations” to conform to the Acts, as these definitions directly impact the mixed-finance program. The Section 202 Act of 2010 and the Melville Act provide a much-needed foundation for practical improvements to the Section 202 and Section 811 programs. The regulatory amendments proposed in this rule build upon the Acts from the 111th Congress to further modernize the operation of Section 202 and Section 811 in the mixed-finance context.

This proposed rule would amend both the general section of HUD's regulations governing the Section 202 and Section 811 programs that are codified in 24 CFR part 891, and the sections in part 891 specifically governing the mixed-finance program. This rule would allow broader participation by the private development community in the financing of Section 202 and Section 811 mixed-finance developments. The proposed amendments to the regulations would also remove some of the financial restraints on developers in the mixed-finance context by allowing more flexibility in the drawdown of capital advance funds and noncapital advance funds. In addition, because mixed-finance developments have units that are funded via a capital advance by HUD and rental assistance through the Section 202 and Section 811 programs as well as units that are non-Section 202/811 supported, the changes would permit mixed-finance developers to have more flexibility in bringing in private capital by eliminating restrictions in regard to the non-capital advance units.

In terms of the regulations governing all Section 202 and Section 811 developments, regardless of the source of the financing, this rule would alter the definition sections to improve the clarity of the regulations, permit broader flexibility in the design of Section 202/811 units, extend the duration of the availability of capital advance funds, and make a technical correction.

This rule would also make conforming changes to the definition sections contained in part 891 to reflect the amendments to the Section 202 Act of 2010 and the Melville Act.

1. Private nonprofit organizations. The Section 202 Act of 2010 and the Melville Act altered the definition of “private nonprofit organization.” This rule would amend the regulations found at §§ 891.205, 891.305, and 891.805 in order to conform to the statutory changes. Among other changes, the Section 202 Act of 2010 gives HUD the authority, in the case of a nonprofit organization sponsoring multiple developments, to determine the criteria for transferring the responsibilities of a single-entity nonprofit owner of an individual development to the governing board of the sponsor that is the sponsoring organization of multiple developments. These changes will be codified in § 891.205.

An additional change made by the Section 202 Act of 2010 is that the definition will now include for-profit limited partnerships of which the sole general partner is a for-profit corporation or a limited liability company that is wholly owned and controlled by one or more nonprofit organizations. Prior to this amendment, the sole general partner could only be a nonprofit organization or a for-profit corporation wholly owned and controlled by a single nonprofit organization. The extension of the type of for-profit limited partnership that may participate in Section 202 developments will be codified in § 891.805.

In the case of Section 811, the Melville Act changes the heading of the definition of “nonprofit organization” to “private nonprofit organization.” This change in nomenclature will be codified in § 891.305. However, the substance of this definition in § 891.305 will not be changed, as the additional change made by the Melville Act to the definition of “private nonprofit organization” will be codified in § 891.805.

In addition, the Melville Act deleted the clause “wholly owned and” and simply requires that a corporation be “owned and controlled” by a nonprofit organization. However, the Melville Act does not extend the definition to include limited liability companies. This change will be codified in the definition of “Private nonprofit organization” in § 891.805.

2. Instrumentality of a public body. This rule also proposes amending the definitions of “owner” and “sponsor” in § 891.205 to permit an owner or sponsor of a section 202 development to be an “instrumentality of a public body.” A public body would still be prohibited from being an owner or sponsor, as a public body cannot, by definition, be considered a private nonprofit organization, but HUD has determined that, as long as an entity otherwise meets the criteria of ownership or sponsorship, the regulation is too prescriptive. By eliminating this restriction, HUD is expanding the number of private nonprofit organizations who will be able to participate in the development of section 202 projects.

3. Single-purpose/single-asset. In addition, the definitions of “owner” in §§ 891.205, 891.305, and 891.805, as well as the definition of “mixed-finance owner” will be amended to add the qualification that the owner be a single-asset entity. The definition currently requires the owner to be a single-purpose entity. HUD proposes to replace the term “single-purpose” with “single-asset.” The definitions of “owner” and “mixed-finance owner” already require that an owner's purpose must include the promotion of the elderly or persons with disabilities, as appropriate, and a strict interpretation of the term “single-purpose” limits the flexibility of owners, especially in the mixed-finance context. In the past, the terms “single-purpose” and “single-asset” have been used interchangeably; however, the proposed change in the regulations will more accurately reflect the type of ownership required for a Section 202 or Section 811 development. A single-asset entity will be defined in § 891.105 as an entity in which the mortgaged property is the only asset of the owner and that has no more than one owner. This definition will apply to the definitions of “owner” and “mixed-finance owner” in §§ 891.205, 891.305, and 891.805.

4. Repairs and rehabilitation. HUD proposes to add new definitions in § 891.105 in order to provide more targeted definitions based on the condition of the building being developed under Section 202 or Section 811. While the current regulation groups all types of rehabilitation into one category, HUD proposes to provide separate definitions for “repairs, renovations, and improvements” and “substantial rehabilitation.” “Substantial rehabilitation” will be defined as improvements to a property that is in a deteriorated or substandard condition that endangers the health, safety, or well-being of the residents. Substantial rehabilitation does not include cosmetic improvements and must meet one of the following criteria:

a. The cost of repairs, replacements, and improvements exceeds the greater of 15 percent of the estimated property replacement cost after completion of all repairs, replacements, and improvements, or $6,500 per unit in repairs, replacements, and improvements to rehabilitate the project to a useful life of 55 years, or

b. Two or more major building components are being substantially replaced. Additions are permitted in substantial rehabilitation projects, but the costs for the additions of new units (not building component additions) are not included in the eligibility test. “Repairs, replacements, and improvements” are basically anything other than substantial rehabilitation and may include cosmetic repairs. The amount of investment per unit must be below $6,500 per unit. HUD recognizes that factors such as the state of the housing market and inflation may require an alteration of this amount, and this proposed rule provides that the amount may be adjusted by HUD after advance notice and the opportunity for public comment.

Specific solicitation of comment. The minimum investment of $6,500 is a threshold amount used in almost all if not all of HUD's multifamily programs and is an amount familiar to participants in these programs. HUD recognizes that this dollar amount and the minimum useful life of 55 years have been in place for many years, and seeks public comment on whether these thresholds remain a reasonable minimum investment amount in today's housing market. Additionally, as provided in this rule and cognizant of the rapid changes that can occur in the housing market, HUD proposes for the rule to adjust this amount, but only after providing advance notice through Federal Register publication and the opportunity for comment.

1. Requirements applicable to all Section 202 and Section 811 developments. HUD proposes to make several changes to the regulations in § 891.120 governing project design and cost standards applicable to all Section 202 and Section 811 developments. These changes are intended to bring HUD's regulations up to date, as § 891.120 contains provisions that were held over from the predecessor direct loan program from the 1980s. The first change updates § 891.120(a), by providing a reference to the Minimum Property Standards as codified in regulation. The current regulation was promulgated before the codification of the current Minimum Property Standards in 24 CFR part 200 subpart S, and this rule proposes to cross-reference such subpart.

The second change updates § 891.120(c) to reflect the fact that many items formerly thought to be “excess amenities” are now standard requirements in today's housing market. The current regulation requires that Section 202 and Section 811 developments be of “modest design” and prohibits the use of capital advance or project rental assistance to pay for the installation and continued operation of atriums, bowling alleys, swimming pools, saunas, Jacuzzis, balconies, and decks on individual units, and dishwashers, trash compactors, and washers and dryers in individual units. HUD will retain the restriction on use of HUD funds for atriums, bowling alleys, swimming pools, saunas, and jacuzzis, while permitting the use of capital advance and project assistance funds for balconies and decks, dishwashers, trash compactors, and washers and dryers for individual units. Lifting these restrictions not only brings HUD in line with the standards of the housing market, since they are no longer seen as “excessive amenities,” but also recognizes that the quality of life can be increased by permitting such items.

Lastly, HUD proposes to amend § 891.120(d) regarding smoke detectors to bring the provision up to current standards, by requiring that smoke detectors and alarm devices be installed in accordance with standards and criteria acceptable to HUD for the protection of occupants in any dwelling or facility bedroom or other primary sleeping area.

2. Mixed-finance developments. Both § 891.813(c) (“Eligible uses for assistance provided under this subpart”) and § 891.848 (“Project design and cost standards”) provide that the restrictions contained in §§ 891.220 and 891.315 regarding prohibited facilities apply to mixed-finance developments. Under current regulations, § 891.220 prohibits the presence of facilities for infirmaries, nursing stations, or spaces for overnight care in Section 202 developments. Section 891.315 prohibits the presence of infirmaries, nursing stations, spaces for medical treatment or physical therapy, or padded rooms, even if paid by sources other than the HUD capital advance and project rental assistance contract for Section 811 developments.

HUD has determined that these restrictions of § 891.220 prevent the development of supportive housing for the elderly when the cost to develop and operate these types of facilities is being funded by other sources, and that restrictions on prohibited facilities in Section 202 mixed-finance developments should apply only to the capital advance-funded portion, and not to the entire development. The removal of these restrictions for Section 202 mixed-finance developments assures that HUD-financed developments are capable of having medical facilities and service spaces that may be necessary for ongoing occupancy of frail elderly. Inclusion of these Section 202 facilities will keep these projects competitive with those in the private sector, and assure continued building occupancy and the financial viability of these projects.

However, HUD recognizes the importance of maintaining the restrictions on prohibited facilities for Section 811 developments for both capital advance and non-capital advance portions of the project. HUD is committed to preventing the isolation of persons with disabilities that might occur should medical facilities be contained in Section 811 developments.

In order to provide owners with needed flexibility in the design of the non-capital advance portion of the mixed-finance Section 202 development, HUD proposes amending paragraph (b) of § 891.813, which currently applies only to amenities, to make the provisions of paragraph (b) of § 891.813 applicable to both amenities and “prohibited facilities” in Section 202 mixed-finance developments. This would permit otherwise prohibited Section 202 facilities, provided that: (1) The facilities are not financed with funds made available under Section 202; (2) the facilities are not maintained and operated with funds made available under Section 202; (3) the facilities are designed with appropriate safeguards for the residents' health and safety; and (4) the assisted residents are not required to use, participate in, or pay a fee for the use or maintenance of the facilities, although they are permitted to do so voluntarily. Any fee charged for the use of the facilities must be reasonable and affordable for all residents of the development. The exception on prohibited facilities in paragraph (b) of § 891.813 would not extend to Section 811 mixed-finance developments.

In addition, HUD proposes to amend paragraph (c) of § 891.813 by removing the references to Section 202 and the prohibited facilities provisions found in § 891.220, while maintaining the current applicability of § 891.315 to Section 811 mixed-finance developments.

Section 891.848 regarding project design and cost standards would be amended to reflect the changes being made to paragraphs (b) and (c) of § 891.813 by stating that the provisions regarding prohibited facilities contained in § 891.220 do not apply to mixed-finance developments, subject to the restrictions of paragraph (b) of § 891.813. The current statement in § 891.848 regarding the inclusion of prohibited facilities in Section 811 mixed-finance developments, as set forth in § 891.315, would remain the same. HUD proposes to amend § 891.848 further by stating that while mixed-finance developments must comply with the project design and cost standards contained in § 891.120, the requirements regarding amenities specified in paragraph (c) of § 891.120 do not apply, subject to the restrictions in paragraph (b) of § 891.813. This would not be a substantive change to current regulations. Paragraph (b) of § 891.813 already states that the restrictions on amenities in paragraph (c) of § 891.120 do not apply to mixed-finance developments, provided that certain conditions are met, and this proposed rule would make §§ 891.813(b) and 891.848 consistent.

HUD's regulations at 24 CFR 891.130 specify prohibited relationships in the provision of capital advances under the Section 202 and Section 811 programs. In general, officers and board members of either the owner or the sponsor of the development are prohibited from having any financial interest in a contract with the owner or any firm that has a contract with the owner, and which would create a conflict of interest. In addition, § 891.130 prohibits an identity of interest between the sponsor or owner and any development team member or between development team members, for 2 years after closing.

Management contracts, supportive services contracts, and developer or consultant contracts between the owner and sponsor or the sponsor's nonprofit affiliate are exempted from the conflict-of-interest provisions, provided that no more than two persons salaried by the sponsor or management affiliate serve as nonvoting directors on the owner's board of directors. In order to provide more flexibility in the financing of Section 202 and Section 811 developments, HUD proposes amending § 891.130(a)(2) to include an additional provision to the conflict-of-interest section that will exempt contracts for the sale of land between an owner and the sponsor or the sponsor's nonprofit affiliate.

In addition to broadening the exceptions to the conflict-of-interest rules, HUD proposes to amend § 891.832, which sets forth that mixed-finance projects are subject to the conflict-of-interest and identity-of-interest provisions, by stating that the requirements of paragraph (b) of § 891.130 regarding identity of interest do not apply in the mixed-finance context, while maintaining the applicability of the conflict-of-interest provisions in paragraph (a) of § 891.130. HUD has determined that the current identity-of-interest prohibitions limit the involvement of the private development community in the Section 202 and Section 811 mixed-finance program.

To correspond to the proposed amendment to § 891.832, HUD proposes removing paragraph (c) of § 891.130, which states that the provisions regarding prohibited relationships contained in § 891.130(a)-(b) apply to mixed-finance developments. Altering paragraph (c) of § 891.130 along with § 891.832 would make the regulations consistent.

Section 891.160 currently states that nonprofit organizations receiving assistance under the Section 202 and Section 811 programs are subject to the audit requirements in 24 CFR part 45. In 1996, HUD regulations were streamlined and some passages in the CFR, including 24 CFR part 45, were removed. Part 45 no longer exists, and HUD is correcting the citation in § 891.160 to refer to the correct portion of the CFR regarding audit requirements (24 CFR 5.107). This is a technical correction and will not alter the current audit requirements for nonprofit organizations receiving assistance under the Section 202 and Section 811 programs.

Section 891.165, governing the duration of the availability of capital advance funds, currently limits the duration of the fund reservations for the capital advances to 18 months from the date of issuance of the fund reservation award with limited exceptions of up to 24 months, as approved by HUD on a case-by-case basis. HUD proposes to extend the duration of availability to 24 months in all cases, with the option of extending this period to 36 months, at HUD's discretion. Currently, owners often request waivers of this provision, and by extending the fund reservation period, HUD will be reducing the burden placed on owners who must apply for an extension and support the review of the waiver. Rather than spending time on this administrative requirement, owners can focus on the projects to ensure that projects reach initial closing and start construction within 24 months. The intent is to also encourage participation in the mixed-finance program, which normally requires additional time to reach initial closing.

In mixed-finance transactions in which HUD is one of many sources of funding, questions have arisen regarding the extent of HUD's interest in the supportive housing project. To address these questions, this rule provides that HUD's requirements applicable to capital advance units are not applicable to non-202/811 supported units in the project. Section 891.170 states that the transfer of physical or financial assets of a Section 202 or Section 811 development is not permitted unless HUD determines that the transfer is part of a transaction that will ensure “the continued operation of the project” for at least 40 years in a manner that will provide low-income housing for the elderly or persons with disabilities. This proposed rule will change the phrase “the continued operation of the project” to “the continued operation of the capital advance units.” This will have the effect of clarifying that HUD's regulatory authority over Section 202 and Section 811 developments to ensure that the units will provide rental housing for very low-income elderly persons or persons with disabilities extends only to units funded through capital advances or assisted by funds made available under the Section 202 and Section 811 programs.

HUD does not require that the non-202/811 supported units in a mixed-finance Section 202 or Section 811 development be rented to very low-income elderly persons or persons with disabilities. Explicitly limiting the scope of HUD's regulatory oversight in mixed-finance developments to capital advance and supported units should eliminate any uncertainty among other lien holders with respect to the operation of non-202/811 supported units.

Section 891.830 describes the drawdown procedures for the capital advance and non-capital advance funds. In some instances, this regulatory section lacks needed flexibility. HUD has processed several waiver requests because the regulation does not include a procedure for the release of capital advance financing upon completion of a project. The proposed amendment will have the effect of permitting mixed-finance developers to use low-income housing tax credits more effectively. Following promulgation of a final rule after the notice and comment procedure for this proposed rule is completed, HUD will issue further processing instructions on the release of capital advance financing upon completion of a development as it relates to low-income housing tax credits.

Rather than grant additional regulatory waivers, HUD proposes to permit the release of capital advance funds upon completion of the project, by eliminating detailed requirements from the drawdown regulation. In particular, HUD proposes to amend § 891.830(b) to permit non-capital advance funds to be disbursed before the drawdown of capital advance funds to increase the developer's flexibility in financing the project, and this amendment would allow this flexibility to be worked out between the developer and HUD in formulating a drawdown schedule. Despite the changes to this section, developers will still be prohibited from using capital advance funds for ineligible costs, such as debt service on the financing.

Section 891.830(c)(4) currently prohibits the use of funds for paying off bridge or construction financing, or repaying or collateralizing bonds. HUD proposes to amend this provision by permitting the use of funds for these purposes, provided that the funds are used to pay off bridge or construction financing, or repaying or collateralizing bonds only for the portion of such financing or bonds that was used for capital advance units, permitting broader flexibility in a mixed-finance owner's use of financing and bonds. Many fixed transactions rely on 4 percent low-income housing tax credits paired with tax-exempt bonds. In these transactions, at least 51 percent of the qualified cost of construction must be bond-financed. Accordingly, the Section 202 funds cannot be used in lieu of the bonds and must instead be used as a “take-out source.”

Under Executive Order 12866 (Regulatory Planning and Review), a determination must be made whether a regulatory action is significant and, therefore, subject to review by the Office of Management and Budget (OMB) in accordance with the requirements of the order. Executive Order 13563 (Improving Regulations and Regulatory Review) directs executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” Executive Order 13563 also directs that, where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, agencies are to identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. This rule was determined to be a “significant regulatory action,” as defined in section 3(f) of the Executive Order (although not an economically significant regulatory action, as provided under section 3(f)(1) of the Order).

As noted earlier in this preamble, the Section 202 Act of 2010 and the Melville Act made several changes to the Sections 202 and 811 programs. The majority of the changes made by these two acts that require regulatory change will be implemented through separate rulemaking. However, this proposed rule begins the process of amending the Supportive Housing Program regulations to expand flexibility for owners and sponsors by, for example, broadening the definition of private nonprofit organizations, as well as the definition of eligible participants to include a broader range of nonprofit organizations.

Only one change proposed by this rule represents a new requirement for program participants. The proposed rule requires owners to provide a smoke detector and alarm in every bedroom or primary sleeping area that they own. Though this requirement is being added to the program regulations, it is already a requirement in most local codes and, therefore, does not reflect a significant cost that would result from this rulemaking.

The rule proposes to remove the existing prohibition on funding certain amenities and funding Section 202 and Section 811 developments that include health-care facilities. The removal of the prohibition on certain amenities allows for funding units that contain dishwashers, trash compactors, and washers and dryers, as well as units that have patios or balconies attached. With respect to health-care facilities, the existing regulations have a blanket prohibition against including health-care facilities within the developments as a safeguard against the institutionalization of the elderly and disabled residents. This rule does not propose to require program participants to include these amenities or health-care facilities in the developments. Rather, this rule proposes only to remove the prohibition for funding units that have these amenities or developments that have such facilities. The proposed rule does not allow for health-care facilities to be financed by HUD funds, and use of the facilities must be voluntary for the residents of the projects.

HUD funds can be used for units that contain or are attached to the previously prohibited amenities, but there is no requirement that units provide these amenities, and providing these amenities is unlikely to increase costs to the program. The amenities are fairly standard in today's apartments and will benefit the residents of program units and make these units more attractive and capable of attracting and retaining tenants. The wider range of allowable amenities is likely to also have the benefit of combating discrimination by reducing the potential for program units and their residents to be easily singled out within a mixed-finance development.

The voluntary nature of funding units with such amenities or developments that contain health-care facilities makes it difficult to predict the impact of these changes on future Section 202 and 811 units, since these two programs together produce only a few hundred developments a year (193 in 2008 and 170 in 2009). Consequently, the overall economic impact from these proposed limited changes in development and unit configuration is expected to be small.

The proposed rule also provides benefits from improving government processes. For example, extending the time of availability of capital advance funds from 18 to 24 months should limit the number of waivers that HUD traditionally processes for these programs as developers regularly exceed the 18 month time frame. The program regulations providing for the 18-month time frame were issued in 1996, and these regulations no longer reflect the additional time often needed by developers to obtain the requisite permits and approvals from local authorities. In Fiscal Year 2010, HUD processed 49 such waivers, and, in what has been described as a time-consuming, case-specific process, 33 percent of the waivers under the program were processed that year.

The remaining changes in the proposed rule are definitional and offer participants greater flexibility and clarity within the program at no obvious cost to the program or participants. Although this rule, as noted earlier, does not propose to implement the key changes from the Section 202 Act of 2010 and the Melville Act, the Congressional Budget Office (CBO) found no significant intergovernmental and private sector impacts in its analysis of the bills prior to enactment.

The docket file is available for public inspection in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the docket file by calling the Regulations Division at 202-708-3055 (this is not a toll-free number).

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. In the mixed-finance context, this proposed rule would amend HUD's Section 202 and 811 program regulations governing capital advances, for-profit limited partnerships, and mixed-finance development methods to facilitate the development and availability of housing for the elderly and persons with disabilities. The proposed regulatory amendments would not impose any additional regulatory burdens on entities participating in these programs. To the contrary and as more fully explained above in this preamble, the proposed amendments would streamline requirements, reduce requests for regulatory waivers, and increase flexibility in mixed-financed developments in order to attract private capital and expertise to the construction of supportive housing for the elderly and persons with disabilities. The proposed regulatory changes would also streamline the use of low-income tax credits, as well as the obtaining of funding from other sources. National, regional, and local developers utilize the mixed-finance program and will save time and gain efficiency from no longer having to request regulatory waivers.

In the context of the applicability of this rule to all Section 202 and 811 developments, this rule would reduce regulatory burden by extending the time period for the availability of capital advances and increase flexibility by permitting developers to utilize capital advance and project rental assistance funds to install and operate amenities that are now commonly found in market-rate units and that assist in improving the lives of the elderly and persons with disabilities. Accordingly, the undersigned certifies that this rule will not have a significant economic impact on a substantial number of small entities.

Notwithstanding HUD's determination that this rule will not have a significant effect on a substantial number of small entities, HUD specifically invites comments regarding any less burdensome alternatives to this rule that will meet HUD's objectives as described in this preamble.

A Finding of No Significant Impact with respect to the environment has been made, in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). That finding is available for public inspection between the hours of 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the finding by calling the Regulations Division at 202-708-3055 (this is not a toll-free number).

Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on state and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This rule will not have federalism implications and would not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and on the private sector. This proposed rule does not impose any federal mandates on any state, local, or tribal governments, or on the private sector, within the meaning of UMRA.

The Catalogue of Federal Domestic Assistance Number for the principal Federal Housing Authority single-family mortgage insurance program is 14.117.

Accordingly, for the reasons discussed in the preamble, HUD proposes to amend 24 CFR part 891 as follows:

I. Background

The HCV program is the Federal Government's largest program for assisting very low-income families, the elderly, and the disabled to afford decent, safe, and sanitary housing in the private market. The HCV program is authorized by section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1473f(o)) (1937 Act), and the HCV program regulations are found in 24 CFR part 982.

Housing choice vouchers are administered locally by PHAs. PHAs receive federal funds from HUD to administer the HCV program. A family that is issued a housing choice voucher is responsible for finding a suitable housing unit of the family's choice where the owner agrees to rent under the program. This unit may include the family's current residence. Rental units must meet minimum standards of health and safety, as determined by the PHA and must also meet a reasonable rent determination based on similar unassisted units. The maximum amount the PHA can pay toward a unit is determined by the payment standard set using the annual Fair Market Rents published by HUD. The PHA determines the family's annual income to determine the amount that the family will contribute toward rent, which is generally 30 percent of its adjusted annual income. A housing subsidy is paid to the landlord directly by the PHA on behalf of the participating family to pay the difference between the payment standard and the tenant rent contribution. A key feature of the HCV program is the mobility of the voucher assistance or “portability.” Section 8(r) of the 1937 Act provides that HCV participants may choose a unit that meets program requirements anywhere in the United States, provided that a PHA administering the tenant-based program has jurisdiction over the area in which the unit is located. The term “portability” refers to the process of leasing a dwelling unit with tenant-based housing voucher assistance outside of the jurisdiction of the PHA that initially issued the family its voucher (the initial PHA). Currently, program regulations, found at 24 CFR 982.353 through 982.355, detail where a family may move and the responsibilities of the initial PHA and the receiving PHA (the PHA with jurisdiction over the area to which the family desires to move). Situations have arisen during the time these regulations have been in place that have caused HUD to identify several issues with the potential to delay or impede the ability of families to relocate while retaining their voucher. One of the main purposes of this proposed rule is to make it easier for families with housing vouchers to relocate to areas that may offer greater opportunities.

On March 2 and 3, 2010, the Office of Public and Indian Housing convened a meeting among PHAs, representatives from PHA organizations such as the Public Housing Authorities Directors Association, the National Leased Housing Association, the National Association of Housing and Redevelopment Officials, and Council of Large Public Housing Authorities, along with HUD staff, to discuss portability. Representatives of PHAs and industry organizations raised such issues as: the difficulty in resolving payment issues between an initial PHA and a receiving PHA; the ability of PHAs to absorb a high number of families that seek to move to their jurisdiction; the coordination of reporting between an initial PHA and a receiving PHA; and different program requirements of PHAs in portability arrangements. 1 This rule addresses several of the issues raised at these meetings, as well as issues identified by HUD in its review of the voucher regulations. Through amendments to the HCV program regulations, this rule proposes to: (1) More clearly delineate the roles of initial and receiving PHAs, making the portability process more certain; (2) improve accountability in portability billing arrangements between PHAs; and (3) increase family choice and reduce burden in locating suitable housing.

After receiving a voucher, and particularly in the case of portability moves, a family has a limited window of time to locate suitable housing. After a family has located a unit, the family is required to submit a request for PHA approval of the tenancy. Currently, a PHA has a choice in adopting a policy that would allow for suspension of the voucher term when the family submits a request for tenancy approval. This proposed rule would revise the definition of “suspension” in § 982.4 to remove the phrase “for such period as determined by the PHA” from the definition and to replace it with the “stopping of the clock” from the date on which the family submits a request for PHA approval of the tenancy, until the date the PHA approves or denies the request. This change would require PHAs to stop the clock on the family's voucher in order to give the family the maximum time possible to locate a suitable unit and remove potential barriers to mobility.

This section of the proposed rule removes any reference to PHA discretion regarding “suspension” based on the revised definition of “suspension.”

Under the current regulation at § 982.303(c), a PHA may suspend the term of the voucher when a family submits a request for tenancy approval. The proposed rule would mandate suspension for all vouchers issued, and the suspension would last from the date the family submits the request for tenancy approval until the PHA approves or denies such request. Without this suspension, families may lose valuable time on their voucher while waiting for the PHA to complete the Housing Quality Standards (HQS) inspection requirements and to make a determination of approval or denial of the tenancy. This proposed change would give families the maximum time possible to locate a suitable unit and removes potential barriers to mobility.

The regulations currently allow a PHA to deny a family permission to move if the PHA does not have sufficient funding. In the proposed rule, HUD would require a PHA to provide written notification to the local HUD Field Office when the PHA determines it is necessary to deny moves based on a determination of insufficient funding. The additional notification required by this proposed rule would help ensure that a PHA has considered the circumstances of each move prior to determining that insufficient funding is available.

If a family chooses to exercise portability under the proposed rule, the initial PHA administering the family's voucher would be required to contact the receiving PHA to determine if the receiving PHA will bill or absorb the voucher. The proposed rule would require that the communication by both PHAs be by email or other confirmed delivery method. HUD encourages PHAs to communicate this information via email in order to expedite the processing of the families' request. The confirmed delivery method is important in documenting the communication between PHAs. HUD would not prescribe a specific form to be used for this communication. This communication and documentation requirement redistributes the administrative burden on the front-end of a family move and prevents future disputes between PHAs regarding the billing of individual families. Further, this requirement will prevent families from engaging in costly interjurisdictional moves prior to a final determination of receiving assistance in their new jurisdiction.

When a receiving PHA agrees to absorb a family, the initial PHA often relies on this agreement and plans its annual budget accordingly. When a receiving PHA reverses this decision later, the impact on the family can be devastating. When an initial PHA has insufficient funds to cover the cost of the voucher in the receiving PHA's jurisdiction, the family is required to relocate to the initial jurisdiction or relinquish assistance entirely. Under the proposed rule, if a receiving PHA decides to absorb the family, the receiving PHA cannot reverse its decision at a later date without consent of the initial PHA. This requirement will provide PHAs with stable, consistent information necessary to plan financially and to better serve families.

HUD also adds clarifying language to this section of the rule stating that a receiving PHA cannot refuse to assist incoming portable families as is currently required by § 982.355(a). HUD may determine in certain instances that a PHA is not required to accept incoming portable families, such as a PHA in a declared disaster area. However, the PHA must have approval in writing from HUD before refusing any incoming portable families. Although HUD anticipates that refusals and thus the need for prior approval will be uncommon, such prior approval helps HUD to monitor and ensure that any refusal by a PHA to accept incoming portable families is documented and approved.

HUD is proposing to add an additional 30 days to the term of the voucher for portability moves to accommodate the additional time that the portability process requires. For example, under the current regulations, the time period when the family is waiting to attend a briefing session at the receiving PHA is counting against the family's initial voucher expiration date, thus reducing the family's time to locate a unit.

Under current regulation, when a voucher is in a portability billing arrangement between the initial PHA and receiving PHA, the initial PHA must pay the receiving PHA 80 percent of its administrative fee for each month the family receives assistance at the receiving PHA. The proposed rule would set the maximum amount the initial PHA is required to pay at 100 percent of the receiving PHA's administrative fee rate. This change prevents a receiving PHA with a lower administrative fee from profiting from an initial PHA with a higher administrative fee. Under the proposed rule, a receiving PHA will be able to more fairly cover the costs of administering the voucher.

In order to help ensure that a PHA utilizes available budget authority to the maximum extent possible, and to reduce the number of portability billing arrangements between agencies, the proposed rule would require a PHA that: (1) Is utilizing less than 95 percent of its available budget authority, and (2) has a leasing rate of less than 95 percent, to absorb incoming portability families until the percentage of available budget authority used or the leasing rate is at least 95 percent. The available budget authority includes the available Housing Assistance Payment (HAP) Net Restrict Assets, or NRA.

While HUD solicits and welcomes comments on all aspects of this rule, HUD specifically seeks comment on the following:

1. Portability in the voucher program has been a subject of significant interest among PHAs, HUD, and others interested in effective administration of the voucher program and family mobility opportunities. HUD is aware of the additional administrative burden that portability billing arrangements place on PHAs, and HUD is interested in finding ways to reduce or eliminate portability billing arrangements between agencies. In the past, some PHAs suggested that HUD immediately transfer funds from the initial PHA consolidated Annual Contributions Contract (ACC) to the receiving PHA consolidated ACC, in order to instantly eliminate portability billing. Others suggested a sharing of costs by the initial and receiving PHA whereby the initial PHA would pay to the receiving PHA no more than the family's subsidy at the initial PHA location.

HUD specifically invites comments that offer proposals to design the portability feature of the HCV program that would eliminate or minimize the administrative burdens associated with the portability feature for PHAs and families.

2. Under the current portability regulations, a family that chooses to move using portability must pass the screening criteria at the receiving PHA, although the family may have been a voucher recipient at the initial PHA for years. This is a problem for families when the receiving PHA has more stringent criteria than the initial PHA. For example, a family that includes an individual with a criminal background, and is acceptable under the initial PHA's admission policies (e.g., the incident occurred more than 5 years ago), may decide to move using portability and request a voucher from the receiving PHA. Under that scenario, while the family is searching for new housing, the receiving PHA might notify the family that it did not pass the PHA's criminal background screening criteria. At that point, the family had already notified its landlord of its intent to vacate, and its unit was rented to another family. As a result, in order to keep its assistance, the family would have to move back to the initial PHA's jurisdiction and locate a different available unit in the initial PHA's jurisdiction.

HUD is seeking comments on ways to prevent this type of hardship on families and possible ways to address this issue such as prohibiting screening by the receiving PHA at the time of portability or standardizing policies for portability moves.

3. The regulations at § 982.301 require that the PHA provide a briefing to families upon selection to participate in the HCV program. Currently, § 982.301(b)(3) requires that the briefing to families living in high-poverty census tracts include an explanation of the advantages of moving to an area that does not have a high concentration of poor families. HUD is seeking comment on whether this information should be provided to all families selected to participate in the HCV program, and not just those families living in high-poverty census tracts.

Further, HUD seeks comments on whether the briefing should be revised to highlight the factors and trade-offs that a family should consider in terms of where they wish to lease a unit with voucher assistance. 1 These factors include but are not limited to: employment opportunities; safety, health and environmental amenities; public transportation; the quality of schools; access to social services; the quality of housing; and proximity to family and friends. HUD seeks comment on the content and emphases of the briefings.

4. The current regulations at 24 CFR 982.301(b)(11) require a PHA to provide families with a list of landlords or other parties known to the PHA who may be willing to lease a unit to the family or help the family find a unit. HUD is interested in learning if the list of landlords and other parties is helpful for families, or if HUD should remove this requirement in the revised rule. HUD is requesting comments regarding the focus of such information and whether additional information on areas of opportunity or neighborhoods would be more beneficial for families.

5. When a family requests to port and there is more than one PHA in the family's desired location, the current regulations at 24 CFR 982.355(b) require the initial PHA to select the receiving PHA. HUD is instead considering allowing the family to select the receiving PHA based on the PHA that best meets its needs. For example, some PHAs offer homeownership programs or Family Self Sufficiency (FSS) programs that a family may be interested in participating, or the family may want to select a PHA based on the scores of the schools in the PHA's jurisdiction. The initial PHA would be responsible for informing the family of the PHAs that serve the area and providing the contact information for those PHAs, but would not be responsible for determining what options or services each PHA offers.

6. In this proposed rule, HUD is proposing mandatory absorptions of portability vouchers when a PHA is utilizing less than 95 percent of its available budget authority and has a leasing rate of less than 95 percent. It is HUD's position that this approach would encourage PHAs to utilize their available budget authority while also reducing the number of portability billing arrangements. HUD is seeking comments as to whether 95 percent is an appropriate threshold for all PHAs or if HUD should consider an alternative scale based on the size of the PHA or other factors.

Under Executive Order 12866 (Regulatory Planning and Review), a determination must be made whether a regulatory action is significant and therefore, subject to review by the Office of Management and Budget (OMB) in accordance with the requirements of the order. Executive Order 13563 (Improving Regulations and Regulatory Review) directs executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” Executive Order 13563 also directs that, where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, agencies are to identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public. This rule was determined to be a “significant regulatory action” as defined in section 3(f) of Executive Order (although not an economically significant regulatory action, as provided under section 3(f)(1) of the Executive Order).

This proposed rule would amend HUD's regulations governing portability in the HCV program. The proposed regulatory changes would streamline the portability process and help enable initial and receiving PHAs to better serve families and expand housing opportunities. HUD's analysis indicates that these regulatory amendments will not have an economic effect of greater than $100 million and thus do not require a regulatory impact analysis. The proposed rule, however, would yield certain non-tangible benefits. The findings of HUD's analysis are summarized below:

1. Benefits of proposed rule. The HCV portability policy helps ensure that families have the opportunity to relocate in order to pursue increased or new employment opportunities or to gain access to higher-performing schools for their children. An efficient portability process also helps ensure that victims of domestic violence and stalking have access to the resources necessary to relocate to a safe, stable home away from an abuser.

Opportunity moves have important benefits to housing choice voucher families. Research from HUD's moving to opportunity (MTO) demonstration and from the Gautreaux desegregation program in Chicago has shown that families with children moving from communities of high-poverty concentration to low-poverty communities tend to perform better in school (e.g., dropout rates are lower, grades are better, college attendance rates are higher). In addition, families report benefiting greatly from reduced crime and greater employment opportunities. It is expected that the proposed rule will remove potential barriers to mobility. Some research indicates that families often use their vouchers to move to better opportunities, including employment opportunities.

2. Costs of proposed rule. HUD does not expect that the portability billing arrangements proposed by this rule will place any additional administrative burden on PHAs.

Portability may add to the cost of the HCV program. The fiscal year (FY) 2012 appropriations for the Department provide a set-aside of $103 million of HAP funds for additional renewal funding to be provided to PHAs under certain circumstances.

3. Transfers. While the fiscal impact of the proposed rule is marginal, it does have the potential to create substantial financial transfers among PHAs.

Mandatory absorptions. In this proposed rule, HUD is proposing mandatory absorptions of portability vouchers when a PHA is utilizing 95 percent or less of its available budget authority and has a leasing rate of less than 95 percent. It is HUD's position that this approach would help ensure that PHAs are utilizing their available budget authority to the maximum extent possible while also reducing the number of portability billing arrangements.

Administrative Fee. Under current regulation, when a voucher is in a portability billing arrangement between the initial PHA and receiving PHA, the initial PHA must pay the receiving PHA 80 percent of its administrative fee for each month that the family receives assistance at the receiving PHA. Removal of potential barriers to mobility is expected to increase the number of portability vouchers and thus increase the amount of administrative fees transfers between PHAs.

The proposed rule would set the maximum amount that the initial PHA is required to pay at 100 percent of the receiving PHA's administrative fee rate. In other words, the initial PHA would reimburse the receiving PHA for the lesser of: (1) 80 percent of the initial PHA's ongoing fee, or (2) the full amount of the receiving PHA's administrative fee. This change would eliminate the incentive for a receiving PHA with a lower administrative fee from billing an initial PHA with a higher administrative fee in order to receive a higher administrative fee than it would normally earn from HUD. This action should reduce portability billings for those PHAs for whom 80 percent of the initial PHA's fee is more than 100 percent of their own administrative fee. For illustration, assume that a receiving PHA's administrative fee is $60. Under current rules, if a family moves to the receiving PHA's jurisdiction from an initial PHA that receives $100 in administrative fees for a housing voucher, the receiving PHA may bill the initial PHA for $80, which is $20 more than the PHA would earn if it simply absorbed the voucher. Under the proposed rule, the receiving PHA will receive $60 regardless of whether the receiving PHA bills the initial PHA or absorbs the family into its own program.

The full economic analysis is available for review at www.regulations.gov. The docket file for this rule is available for public inspection in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the docket file by calling the Regulations Division at 202-402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number via TTY by calling the toll-free Federal Relay Service at 800-877-8339.

The information collection requirements contained in this proposed rule have been submitted to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). In accordance with the Paperwork Reduction Act, an agency may not conduct or sponsor, and a person is not required to respond to, a collection of information, unless the collection displays a currently valid OMB control number.

The burden of the information collections in this proposed rule is estimated as follows:

In accordance with 5 CFR 1320.8(d)(1), HUD is soliciting comments from members of the public and affected agencies concerning this collection of information to:

(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information;

(3) Enhance the quality, utility, and clarity of the information to be collected; and

(4) Minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology; e.g., permitting electronic submission of responses.

Interested persons are invited to submit comments regarding the information collection requirements in this rule. Comments must refer to the proposal by name and docket number (FR-5453) and be sent to:

Interested persons may submit comments regarding the information collection requirements electronically through the Federal eRulemaking Portal at http://www.regulations.gov. HUD strongly encourages commenters to submit comments electronically. Electronic submission of comments allows the commenter maximum time to prepare and submit comments, ensures their timely receipt by HUD, and enables HUD to make them immediately available to the public. Comments submitted electronically through the http://www.regulations.gov Web site can be viewed by other commenters and interested members of the public. Commenters should follow the instructions provided on that site to submit comments electronically.

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and the private sector. This proposed rule does not impose any federal mandates on any state, local, or tribal government, or the private sector within the meaning of UMRA.

Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on state and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This rule will not have federalism implications and would not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

The Regulatory Flexibility Act (5 U.S.C. 605(b)) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The proposed rule is solely concerned with the portability feature of the voucher program. There are currently approximately 2,800 small PHAs (i.e., PHAS with less than 250 public housing units or vouchers), all of which will be subject to the proposed rule. Although the proposed rule will impact these PHAs, the impact will not be significant. As stated previously in this preamble, through the amendments to the HCV regulations provided in this rule, HUD proposes to reduce the administrative burden of portability for both PHAs and families, reduce portability billing arrangements between PHAs, and ensure maximum family choice in locating suitable housing. Through this rule, HUD strives to reduce administrative burden for all PHAs large or small. As explained more fully above in the “Executive Order 12866” section of this preamble, the benefits of the proposed regulatory changes will largely outweigh the administrative and compliance costs to PHAs. Accordingly, the undersigned certifies that this rule will not have a significant economic impact on a substantial number of small entities.

Notwithstanding HUD's determination that this rule will not have a significant economic impact on a substantial number of small entities, HUD specifically invites comments regarding less burdensome alternatives to this rule that will meet HUD's objectives as described in this preamble.

This proposed rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern or regulate, real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction, or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Accordingly, HUD proposes to amend 24 CFR part 982, as follows:

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, “a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of this Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to this Act.” See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Texas program effective February 16, 1980. You can find background information on the Texas program, including the Secretary's findings, the disposition of comments, and the conditions of approval of the Texas program in the February 27, 1980, Federal Register (45 FR 12998). You can also find later actions concerning the Texas program and program amendments at 30 CFR 943.10, 943.15, and 943.16.

By letter dated February 9, 2012 (Administrative Record No. TX-700), Texas sent us an amendment to its program under SMCRA (30 U.S.C. 1201 et seq. ) at its own initiative. Below is a summary of the changes proposed by Texas. The full text of the program amendment is available for you to read at the locations listed above under ADDRESSES .

Texas proposes to revise its regulation at 16 Texas Administrative Code (TAC) section 12.108(b) regarding annual permit fees by:

(1) Increasing the amount of the fee for each acre of land within the permit area on which coal or lignite was actually removed during the calendar year,

(2) Increasing the amount of the fee for each acre of land within a permit area covered by a reclamation bond on December 31st of the year, and

(3) Increasing the amount of the fee for each permit in effect on December 31st of the year.

Texas fully funds its share of costs to regulate the coal mining industry with fees paid by the coal industry. Texas charges four fees to meet these costs, a permit application fee and three annual fees as mentioned above. The proposed fee revisions are intended to provide adequate funding to pay the State's cost of operating its regulatory program, and provide incentives for industry to accomplish reclamation and achieve bond release as quickly as possible.

Under the provisions of 30 CFR 732.17(h), we are seeking your comments on whether the amendment satisfies the applicable program approval criteria of 30 CFR 732.15. If we approve the amendment, it will become part of the State program.

If you submit written comments, they should be specific, confined to issues pertinent to the proposed regulations, and explain the reason for any recommended change(s). We appreciate any and all comments, but those most useful and likely to influence decisions on the final regulations will be those that either involve personal experience or include citations to and analyses of SMCRA, its legislative history, its implementing regulations, case law, other pertinent State or Federal laws or regulations, technical literature, or other relevant publications.

We cannot ensure that comments received after the close of the comment period (see DATES ) or sent to an address other than those listed (see ADDRESSES ) will be included in the docket for this rulemaking and considered.

Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.

If you wish to speak at the public hearing, contact the person listed under FOR FURTHER INFORMATION CONTACT by 4 p.m., c.d.t. on April 12, 2012. If you are disabled and need reasonable accommodations to attend a public hearing, contact the person listed under FOR FURTHER INFORMATION CONTACT . We will arrange the location and time of the hearing with those persons requesting the hearing. If no one requests an opportunity to speak, we will not hold a hearing.

To assist the transcriber and ensure an accurate record, we request, if possible, that each person who speaks at the public hearing provide us with a written copy of his or her comments. The public hearing will continue on the specified date until everyone scheduled to speak has been given an opportunity to be heard. If you are in the audience and have not been scheduled to speak and wish to do so, you will be allowed to speak after those who have been scheduled. We will end the hearing after everyone scheduled to speak and others present in the audience who wish to speak, have been heard.

If only one person requests an opportunity to speak, we may hold a public meeting rather than a public hearing. If you wish to meet with us to discuss the amendment, please request a meeting by contacting the person listed under FOR FURTHER INFORMATION CONTACT . All such meetings are open to the public and, if possible, we will post notices of meetings at the locations listed under ADDRESSES . We will make a written summary of each meeting a part of the administrative record.

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

When a State submits a program amendment to OSM for review, our regulations at 30 CFR 732.17(h) require us to publish a notice in the Federal Register indicating receipt of the proposed amendment, its text or a summary of its terms, and an opportunity for public comment. We conclude our review of the proposed amendment after the close of the public comment period and determine whether the amendment should be approved, approved in part, or not approved. At that time, we will also make the determinations and certifications required by the various laws and executive orders governing the rulemaking process and include them in the final rule.

The Copyright Act (the “Copyright Act” or “Act”) provides that the Register of Copyrights may, by regulation, adjust fees for certain, enumerated services based upon a study of costs incurred by the Copyright Office. The study must consider the timing of any adjustment as well as the authority to use such fees consistent with the budget. The Register's proposed changes are subject to review by Congress. However, the Register may implement the changes at the end of 120 days after submitting them to Congress in conjunction with an economic analysis unless, within that 120 day period, Congress enacts a law stating in substance that Congress does not approve the schedule. The Act further authorizes the Register to establish fees for services that are not enumerated in the statute, including, for example, the cost of preparing copies of Copyright Office records, based on the cost of providing the service. The Register is not required to submit these additional fees to Congress. See 17 U.S.C. 708(a)-(b).

Congress amended the Copyright Act in 1997 to allow the Register to set fees for Copyright Office services. Since this time, the Office has undertaken a fee study approximately every three years; the last one was undertaken in 2008 and implemented in 2009. See 74 FR 32805 (July 9, 2009). A new fee study was initiated on October 1, 2011 at the direction of the newly appointed Register of Copyrights. The study was identified in the Register's public report, “Priorities and Special Projects for the United States Copyright Office” as a key project for fiscal year 2012. See http://www.copyright.gov/docs/priorities.pdf. In executing the study, the Office is acutely aware of its fiscal responsibilities as an agency of the federal government, including the responsibility to set sound monetary policies and develop a budget derived primarily from fees for services. However, the Office is also deeply cognizant of its responsibility to authors and other copyright owners, and to users of copyrighted works, to price services in a manner that encourages participation in the Nation's registration and recordation systems and ensures a robust database of copyright information for purposes of commerce and the public good. Indeed, the Copyright Act requires that fees “shall be fair and equitable and give due consideration to the objectives of the copyright system.” 17 U.S.C. 708(b)(4).

The Register may not adjust fees more than that necessary to cover the reasonable costs incurred by the Copyright Office for its services plus a reasonable inflation adjustment to account for any estimated increase in costs. In fact, the Office's fees have not historically recovered full costs for all services. When fees were adjusted in 2009, the Office was recovering approximately 61.4% of its costs for services. In fiscal year 2011, fee receipts covered only 59.5% of the Office's costs, a recovery rate that is insufficient by any standard.

In the study at hand, the Office has calculated its true costs using a traditional methodology. The cost study uses an activity based costing methodology to calculate full costs of each Copyright Office service. The study includes a review of both direct and indirect costs associated with fee services in fiscal 2011. Most copyright activities are labor intensive and staff costs are tracked for each of the various fee services. The study requires directly assigning non-personnel costs that are associated with just one fee service. Once direct costs were applied, administrative and indirect costs related to fee services were allocated proportionately. The Office also considered statutory fee setting requirements, economic factors, and the objectives of the copyright system in arriving at the proposed fees.

The Office also sought comments from the public in a Notice of Inquiry published on January 24, 2012 on two specific issues: (1) Whether special consideration should be provided to individual author-claimants registering a single work, and (2) the identification of any special services and corresponding fees the Office should expand, improve or add to its offerings at this time, including, for example, additional expedited services and fee options. 77 FR 3506 (January 24, 2012). The proposed fee schedule published today reflects the public's comments on these issues.

The Office also acknowledges that commenters offered many additional interesting proposals that we appreciate but will not address today in the context of this fee study. Many of these proposals are not ready for action because the Office is considering them in the context of other major projects that are technical or legal in nature. Such proposals include, for example, the question of whether photographers may pay a flat fee for registration of photographs in the context of a business to business submission model; the question of whether copyright registration certificates and/or recorded documents can be made available online for free; and the question of whether the Office should accept deposits of works in electronic formats that may be insufficient for the Library's “best edition” requirement. The Office greatly appreciates these issues and suggestions and it will continue to consider them outside of this fee study.

The purpose of this Notice of Proposed Rulemaking is to offer the public an opportunity to comment on the Register's proposed fee adjustments, all of which would be implemented early in fiscal year 2013.

1. Basic registration. The Office will soon eliminate Form CO and will offer two options for filing basic registrations beginning this summer: online filings and the traditional paper application. See 76 FR 60774 (September 30, 2011). The Office receives approximately 87% of new copyright claims electronically through its online filing system. Such filings are far less costly to process. Nevertheless, the Office understands that some claimants have good reasons for preferring paper forms, despite the higher cost to the claimant, and the Office will continue to offer this option. However, the Office will continue to charge a higher fee for filing a claim using a paper application to encourage the use of the online filing option. Online filing is the option that is most efficient to the Office as well as the claimant. On average, a claimant who files an application online will receive a registration (or a denial of a registration) within 3 months, while a claimant filing with paper forms will wait about 10 months.

The Office is also proposing to offer a reduced fee to a single author who is also the claimant for the online filing of a claim in a single work that is not a work made for hire, for the policy reasons discussed below and after considering the comments received from the public in response to the January 24, 2012 Notice of Inquiry. The Copyright Office is committed to maintaining an affordable copyright registration system. No author or copyright owner should be deterred from registering a copyright because the cost of registration is too high, and the Office is mindful that there is not endless elasticity in pricing; pricing is a factor in whether one chooses to register. Many of the works that come from independent creators are critical to the Nation's economy and the Library of Congress' mint record and collection of American creativity. The copyright law itself is designed to promote and protect authorship and this includes facilitating registration for the establishment of a public record of copyright claims and to enable the copyright owner to seek all the remedies available in the Copyright Act. Similarly, users of copyrighted works rely on the Copyright Office registration records to identify copyright owners when they require licenses. If individual authors do not register and are therefore not part of the public database, they more than any other group of copyright owners may be difficult to find.

Commenters to the Notice of Inquiry support a separate and lower fee for single authors. They note, as did the Office, that such applications are easier to process; that registration provides important remedies for the author; and that registration benefits the public by creating a more robust public record.

The Office therefore sees a clear benefit to offering a lower fee to these claimants as an incentive to register their works. The details for filing such a claim will be fully set forth in a separate notice of proposed rulemaking later this year.

In setting the fees for basic registration, the Office closely examined its costs and recent success in recovering them. In fiscal year 2011, the Office recovered only 64% of its cost to process an online claim and only 58% of its cost to process paper applications. In light of these figures, the Office proposes increasing fees for both options for filing claims in order to recover a larger percentage of the Office's cost, but at levels that will still encourage copyright owners to register their works. As mentioned above, elasticity is an important consideration in setting fees. Copyright registration is a voluntary system, not required by law, and pricing that is unaffordable or which exceeds the reasonable expectation of a copyright owner will discourage or prevent participation in the system—to the public's detriment.

At this time, the Office proposes raising the fee for an online claim from $35 to $65 and the fee for filing a claim using a paper application from $65 to $100, but adopting a new fee of $45 for single authors filing an online claim for a single work that is not a work made for hire. As specified in the chart at the end of this document, the Office is also proposing to raise the registration fees for group registrations, mask works, and vessel hulls based upon the principles discussed above in order to recover a greater percentage of the basic costs for processing these claims.

2. Renewals. The Office is proposing a reduction in the fee for filing a renewal claim from $115 to $100. Renewal registration was required in the 28th year for works published or registered prior to 1978. The law no longer requires registration for the renewal term to vest. Renewal registration primarily serves those parties who need a certificate of registration for various commercial purposes. The cost study reveals that the actual cost of processing these claims is quite high. To set a fee to recover full cost would be prohibitive and negate the goals of the Office in encouraging registration of these older claims, many of which may still be commercially viable, and incorporating these claims into the public record. Similarly, the Office is proposing to reduce the fee for filing a Renewal Addendum, the necessary filing for renewal when basic registration for the work was not made during the original term, from $220 to $100 to avoid deterring these registrations.

3. Recordation. As outlined in the Register's Priorities and Special Projects document, the Office will reengineer the business processes for its recordation services, which allow copyright owners and other people to publicly record in the Copyright Office certain documents related to copyright interests, including, for example, assignments, licenses, mortgages and wills. There are some legal benefits to recording these documents but it is not required by law. The Office has begun discussions with stakeholders on topics including searchability and the feasibility of connecting to privately held records and databases, among others, and a plan will be finalized in the next 18 months. However, as of this writing, the Office is accepting paper submissions and, through a limited pilot, filings submitted on flashsticks. In either case, the basic cost of accepting, reviewing, indexing and recording a document, especially documents that are hundreds of pages long and have multiple titles, has not been recovered in recent years. For this reason, the Office is proposing an increase in the basic recordation fee from $105 to $120 and a slight increase in the fee for processing documents with multiple titles from $30 to $35 to approach full cost recovery.

4. Other related services. Other services including, for example, a receipt for a deposit under section 407 of the Act and certification of Copyright Office records, primarily benefit only the user of that service. In these instances, no overriding principles of public policy dictate the recovery of less than the direct cost of providing the service. This approach is supported by the Office of Management and Budget's guidance to Federal agencies on approaches to establishing fees for services, which states: “It is the objective of the United States government to * * * promote efficient allocation of the Nation's resources by establishing charges for special benefits provided to the recipient that are at least as great as costs to the Government of providing the special benefits.” See OMB Circular No. A-25 Revised at http://www.whitehouse.gov/omb/circulars_a025. The Office is therefore proposing to increase its fees for optional services and for services that are for personal or commercial purposes to recover fully its direct costs in most instances. One major exception is the fee for reference search reports, for which the Office proposes to increase fees but to recover only partial costs.

Historically, the fees for a reference search report have recovered only a small portion of the costs of the service. The Office concludes that it cannot set a fee at full cost recovery as a practical matter because the cost would be too high and it would be far out of the range of fees charged by private-sector providers of this service. A very high fee would prejudice requestors who, for legal reasons, need their searches prepared and certified by the Copyright Office. Therefore, the Office has adjusted its fees for reference search reports upward to recover more but not all of its direct costs for the service. The proposed fee is a $400 minimum with an additional fee of $200 for every hour after the first two hours.

The Copyright Office provides a number of services not enumerated in the Copyright Act and, as stated above, the Register has statutory authority to establish fees for such services. These include fees for expedited service (“special handling”), secure test processing, requests to reconsider rejections of claims, and fees for reproducing Copyright Office records, among others. The proposed fees reflect the costs of providing these services, Office-wide cost recovery, and policy considerations. Many cost adjustments reflect inflationary increases for the service. In other cases, the fees have not been adjusted, e.g., basic photocopying costs; or costs have decreased and the fees have been lowered, e.g., copying to CDs or DVDs. While this notice will not discuss proposed adjustments to fees that are set to recover costs or account for inflation, the Office believes further clarification is useful to understand the change in the fee schedule for the following services:

1. Expedited handling. The Office offers expedited services for processing claims; recording documents; searching, retrieving and copying Copyright Office records; and certifying registrations and other documents in an advanced timeframe. The proposed fees for these services will increase slightly to capture increased costs due to inflation. These fees continue to reflect the cost of the service, plus a premium payment that reflects the value of the expedited service to the customer and the disruption to the Office's regular statutory services.

In reviewing the fees for expedited services, the Office considered comments it received in response to the January 24, 2012 Notice of Inquiry as to whether the Office should offer additional services for expedited handling of claims that do not fit into the current categories for “Special Handling.” Historically Special Handling has been limited to cases where a compelling need for the service exists due to pending or prospective litigation, customs matters, or contracts or publishing deadlines that necessitate the expedited issuance of a certificate of registration. One suggestion was to drop the “compelling need” requirement for special handling and to offer a tiered fee schedule for special handling based on the turnaround time for processing the claim. The Office believes the concept of expedited services warrants further analysis and it will publish a separate public notice to address the issues fully. A decision on this issue, however, will not affect the fee for the service in the near future. The Office also considered the suggestion to adopt a tiered system for handling expedited claims, an option it will continue to consider but will not implement at this point in time, in part due to limited resources.

2. Secure test processing. The Office offers a special service for inspecting deposits of secure tests. The Office provides a private review of the full deposit of a secure test and compares it with the accompanying identifying material that does not disclose secret materials. The review process may include one or more staff depending on the number of claims being processed at any one time. For this reason, the proposed fee for this labor intensive service reflects an upward adjustment based on the processing cost to the Office and the number of staff doing the review; as such, the Office proposes a $250 fee per staff member per hour.

3. Requests for reconsideration of rejections of claims. A claimant whose work is rejected for registration may request reconsideration of its claim through a two-tiered administrative process. A staff attorney in the Registration Program who is not involved in the initial review of the claim handles the first request for reconsideration. If the work is not registered at this stage, the claimant may make a second request for reconsideration. Second requests are considered by the Review Board consisting of the Register of Copyrights, the General Counsel, and the Associate Register for the Registration Program or their qualified delegates. The fees for the first and second reconsideration of a single claim are not scheduled for change, in part because the Office recognizes that an increase in fees may prohibit a claimant from pursuing subsequent review. However, the Office is eliminating its practice of allowing the joinder of multiple related claims into a single request for reconsideration because there is no reduced cost in processing such claims, each of which must be analyzed separately. Instead, the fee for a request for reconsideration will cover only the works in a single original claim for registration.

The Licensing Division of the Copyright Office is responsible for administering various aspects of the statutory licenses set forth in sections 111-122 of the Copyright Act, including the processing of the statements of account filed along with royalties for use of the cable and satellite statutory licenses in accordance with sections 111 and 119, respectively. The Licensing Division also receives quarterly statements of account and royalties from companies that import and distribute or manufacture and distribute digital audio recording devices and media pursuant to Chapter 10 of the Act. In addition, this division accepts for recordation certain contracts and licensing agreements, notices of intent to use the statutory licenses in sections 112 and 114, and notices of intent to use musical works pursuant to the section 115 compulsory license, and it provides search and copying services to the public. Proposed fees are based either on a separate cost study related to the budget and expenditures of the Licensing Division or, in the case where the Licensing Division offers services that parallel other services in the Copyright Office, fees are based on the cost study covering the Copyright Office services. Fees which are being established for the first time are more fully explained below:

1. Filing fee for Cable and Satellite Statements of Account. In 2010, Congress enacted the Satellite Television Extension and Localism Act (“STELA”) which, for the first time, granted authority to the Office to set fees for filing cable and satellite statements of account. Prior to 2010, the cost of processing the statements was covered completely by the royalty fees collected under the statutory licenses for the benefit of the copyright owners. STELA allows the Office to apportion the cost of processing the statements of account equally between the copyright owners and the statutory licensees. According to section 708(a), fees “shall be reasonable and may not exceed one-half of the cost necessary to cover reasonable expenses incurred by the Copyright Office for the collection and administration of the statements of account and any royalty fees deposited with such statements.”

In conducting its cost study, the Office took into account the reengineering efforts of the Licensing Division (the purpose of which is to develop an online filing system) and the equities associated with apportioning costs fairly among the licensees. Consequently, the Office is proposing a three-tiered fee schedule that corresponds to the filing of the different types of cable statements of account. The fee for licensees who file a SA1 form and currently pay only $52 each accounting period is set at $15, the low end of the scale; whereas the fee for cable systems filing the SA2 form is set slightly higher at $20 because of the review of the basic calculation of the royalty fee for this group. Licensees who file the more complicated cable statements of account, the SA3 form, necessarily are expected to pay a correspondingly higher fee because of the time associated with reviewing the information on the forms, especially the classification of community groups and television stations. Thus, the proposed fee for filing the SA3 form is set at $500. Overall, these fees represent approximately one-half the cost on average of processing the current filings. The Office also recognizes that the proposed fees account for certain reengineering costs that may decline over time. Consequently, the Office anticipates initiating another targeted cost study after it has gained experience with the new electronic filing system.

The new fee schedule also includes a $75 filing fee for a satellite statement of account. In this case, there is a single statement of account applicable to all satellite carriers and a single fee for filing that statement. The filing fee of $75 is set at this level because the forms require some examination beyond that afforded to the SA1 and SA2 forms filed by cable operators, but they do not require the particularized examination that is afforded to the complex Form SA3 cable statement of account. As with the filing fees for the cable statements of account, the filing fee for the satellite statement of account represents no more than half the cost of processing this form.

2. Fee for filing Notices of Intention to Make and Distribute Phonorecords electronically. The Office accepts Notices of Intention to Obtain a Compulsory License for use of the statutory license to make and distribute phonorecords when the notice cannot be served on the copyright owner or when the Copyright Office records do not include the name and address of the copyright owner. Historically, this statutory license was used to obtain the rights to use a particular musical work to make a cover record, and the Office received very few such notices.

The advent of the digital age, however, changed the law and how businesses utilize the section 115 license. Today, the license is viewed as an acceptable way to license the reproduction and electronic distribution of the musical work embedded in a digital phonorecord. Consequently, the use of the license has expanded exponentially and the Office has responded by investing in the development of an online filing system. The Office is optimistic that the first iteration of the online filing system will be operational at the time the proposed fees become final. In anticipation of that day, the Office has undertaken a cost study to determine a basic filing fee and the costs for additional titles for an electronic notice which, based on recent experience and the comments to the Office's earlier Notice of Inquiry regarding additional services and fees, can include tens of thousands of titles. Based on this cost study, the Office is proposing to set the fee at $75 for each Notice with a single title. Notices with additional titles will incur an additional $20 fee per ten titles for a paper submission and an additional $10 fee per hundred titles for an online submission (which works out to $0.10 per additional title). In light of the low proposed fee for additional titles for filing a Notice online, the Office does not see a need to consider a cap on the total fees for any one Notice filed in this manner as suggested in a comment to the Office's January 24, 2012 Notice of Inquiry. As with the filing fees for the cable and satellite statements of account, the Office will reevaluate the fees for electronic filings in the future after gaining experience with the systems and the related costs.

The Copyright Office last adjusted its fees for services associated with the Freedom of Information Act in 1999. See 64 FR 29518 (June 1, 1999). Fees are set in accordance with the guidelines established by the Office of Management and Budget in accordance with the OMB Uniform Freedom of Information Act Fee Schedule and Guidelines. 52 FR 10,012 (March 27, 1987). Currently, the Office has an hourly search fee of $65 for entities other than educational institutions, non-commercial scientific institutions, and representatives of the news media which mirrored the fee for searching Copyright Office records in 1999 when the fee was revised. Today's proposed increase in the FOIA fee schedule brings this and other FOIA fees up to date.

The OMB guidelines allow agencies to recoup the full allowable direct costs they incur and provide that separate rates may be established for searching the records and reviewing responsive records to determine, e.g., the applicability of an exemption. In both cases, where a single class of reviewers is typically involved in providing the service, agencies may establish a reasonable agency-wide average fee. Accordingly, the Office proposes adoption of a two-tiered fee structure for searches to reflect the direct costs of the service depending upon the level of the personnel conducting the search. The proposed fee for a search based on a FOIA request is set at $15 for the first half hour and $7.50 for each additional 15 minutes if conducted by administrative staff, and $35 for the first half hour and $17.50 for each additional 15 minutes if conducted by professional staff. Similarly, the Office is proposing to adopt new fees for reviewing the documents at the same rates as those proposed for a FOIA search. However, the fees for reviewing the documents will be based on 15 minute units and without a minimum fee. In addition, the Office is proposing to remove the separate fee for a copy of a certificate of copyright registration and the separate fee for certification services, currently listed in §§ 203.6(b)(1) and (4), respectively. The OMB guidelines state that such services are not covered by FOIA or its fee structure and that an agency should recover the full costs of such services. Therefore, the Office proposes that the FOIA fees for these services should be the same as the Copyright Office fees for these same services listed in the proposed schedule.

The chart below sets forth the current and proposed fees for services related to Registration, Recordation; Special Services; the Licensing Division; and FOIA requests.

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. Potentially affected entities may include, but are not limited to:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The North American Industrial Classification System (NAICS) codes have been provided to assist you and others in determining whether this action might apply to certain entities. To determine whether you or your business may be affected by this action, you should carefully examine the applicability provisions in Unit II.A. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

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

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

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

ii. Follow directions. The Agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

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

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

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

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

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

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

This proposed rule provides a comment period of 60 days for any person to state an interest in retaining a tolerance proposed for revocation. If EPA receives a comment within the 60-day period to that effect, EPA will not proceed to revoke the tolerance immediately. However, EPA will take steps to ensure the submission of any needed supporting data and will issue an order in the Federal Register under the Federal Food, Drug, and Cosmetic Act (FFDCA) section 408(f), if needed. The order would specify data needed and the timeframes for its submission, and would require that within 90 days some person or persons notify EPA that they will submit the data. If the data are not submitted as required in the order, EPA will take appropriate action under FFDCA.

EPA issues a final rule after considering comments that are submitted in response to this proposed rule. In addition to submitting comments in response to this proposed rule, you may also submit an objection at the time of the final rule. If you fail to file an objection to the final rule within the time period specified, you will have waived the right to raise any issues resolved in the final rule. After the specified time, issues resolved in the final rule cannot be raised again in any subsequent proceedings.

EPA is proposing to revoke the potato tolerance for the fungicide dicloran and the apple, peach, and pear tolerances for the insecticide formetanate hydrochloride.

EPA is proposing the tolerance revocations in follow-up to the Agency's approval (as described in Unit II.A.) of voluntary requests from registrants to amend dicloran and formetanate product labels to delete uses for specific food commodities. Also, in accordance with current Agency practice, EPA is proposing to make minor revisions to the tolerance expression for dicloran and to specific tolerance nomenclatures for dicloran. In addition, in accordance with current Agency practice to describe more clearly the measurement and scope or coverage of the tolerances, including applicable metabolites and degradates, EPA is proposing minor revisions to the tolerance expression for formetanate hydrochloride. The revisions do not substantively change the tolerance or, in any way, modify the permissible level of residues permitted by the tolerance. It is EPA's general practice to propose revocation of those tolerances for residues of pesticide active ingredients on crop uses for which there are no active registrations under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), unless someone submits comments on the proposed rule indicating a need for the tolerance to cover residues in or on imported commodities or legally treated domestic commodities. The following discussion explains the specific changes and the reasons for the changes.

1. Dicloran. Because it is no longer Agency practice to distinguish between preharvest and postharvest applications in the tolerance expression, in 40 CFR 180.200, EPA is proposing to remove paragraph (a)(2), redesignate paragraph (a)(1) as paragraph (a), and revise the introductory text containing the tolerance expression in newly designated paragraph (a) by removing the reference concerning preharvest and postharvest applications, to read as set out in the proposed regulatory text at the end of this document.

Also, in the Federal Register of December 1, 2010 (75 FR 74714) (FRL-8854-3), EPA published a notice of receipt of requests to voluntarily amend certain dicloran (DCNA) registrations to delete the use for potato, and therefore terminate the last registrations for use of dicloran in or on potato. In the Federal Register of November 16, 2011 (76 FR 71022) (FRL-8883-8), EPA approved the cancellation order for amendments to terminate product uses and allowed registrants to sell and distribute existing stocks of the affected products until November 16, 2012. The Agency allowed persons other than the registrant to sell, distribute, or use existing stocks of the affected products until they are exhausted, provided that it complies with the EPA approved labeling. Recently, the registrant has been in further communication with the Agency, and based on the information provided, EPA believes that existing stocks are likely to be exhausted by December 31, 2014. Therefore, EPA is proposing to revoke the tolerance in newly designated 40 CFR 180.200(a) on potato with an expiration/revocation date of December 31, 2014.

In addition, because it is no longer Agency practice to distinguish between preharvest and postharvest applications in the tolerance definitions, EPA is proposing to revise the commodity terminology in newly designated 40 CFR 180.200(a) from “apricot, postharvest” to “apricot,” “carrot, roots, postharvest” to “carrot, roots,” “cherry, sweet, postharvest,” to “cherry, sweet,” “nectarine, postharvest” to “nectarine,” “peach, postharvest,” to “peach,” “plum, prune, fresh, postharvest” to “plum, prune, fresh,” and “sweet potato, postharvest,” to “sweet potato, roots.”

2. Formetanate hydrochloride. In the Federal Register of July 13, 2011 (76 FR 41250) (FRL-8879-7), EPA published a notice of receipt of requests to voluntarily amend certain formetanate registrations to delete uses for apple, peach, and pear, and therefore terminate the last registrations for use of formetanate hydrochloride in or on those commodities. In the Federal Register s of September 14, 2011 (76 FR 56753) (FRL-8888-2) and November 16, 2011 (76 FR 71021) (FRL-9327-1), EPA approved the cancellation order for amendments to terminate product uses and amended the order to allow registrants to sell and distribute existing stocks of the affected products until January 31, 2012 (which extended the deadline by 60 days beyond that previously allowed in the September 14, 2011 cancellation order). The Agency allowed persons other than the registrant to sell, distribute, or use existing stocks of the affected products until December 31, 2013. Therefore, EPA is proposing to revoke the tolerances in 40 CFR 180.276(a) on apple; apple, wet pomace; peach; and pear with expiration/revocation dates of December 31, 2013.

In order to describe more clearly the measurement and scope or coverage of the tolerances, EPA is proposing to revise the introductory text containing the tolerance expression in 40 CFR 180.276(a) to read as set out in the proposed regulatory text at the end of this document.

A “tolerance” represents the maximum level for residues of pesticide chemicals legally allowed in or on raw agricultural commodities and processed foods. Section 408 of FFDCA, 21 U.S.C. 346a, as amended by FQPA of 1996, Public Law 104-170, authorizes the establishment of tolerances, exemptions from tolerance requirements, modifications in tolerances, and revocation of tolerances for residues of pesticide chemicals in or on raw agricultural commodities and processed foods. Without a tolerance or exemption, food containing pesticide residues is considered to be unsafe and therefore “adulterated” under FFDCA section 402(a), 21 U.S.C. 342(a). Such food may not be distributed in interstate commerce (21 U.S.C. 331(a)). For a food-use pesticide to be sold and distributed, the pesticide must not only have appropriate tolerances under the FFDCA, but also must be registered under FIFRA (7 U.S.C. 136 et seq. ). Food-use pesticides not registered in the United States must have tolerances in order for commodities treated with those pesticides to be imported into the United States.

EPA's general practice is to propose revocation of tolerances for residues of pesticide active ingredients on crops for which FIFRA registrations no longer exist and on which the pesticide may therefore no longer be used in the United States. EPA has historically been concerned that retention of tolerances that are not necessary to cover residues in or on legally treated foods may encourage misuse of pesticides within the United States. Nonetheless, EPA will establish and maintain tolerances even when corresponding domestic uses are canceled if the tolerances, which EPA refers to as “import tolerances,” are necessary to allow importation into the United States of food containing such pesticide residues. However, where there are no imported commodities that require these import tolerances, the Agency believes it is appropriate to revoke tolerances for unregistered pesticides in order to prevent potential misuse.

Furthermore, as a general matter, the Agency believes that retention of import tolerances not needed to cover any imported food may result in unnecessary restriction on trade of pesticides and foods. Under FFDCA section 408, a tolerance may only be established or maintained if EPA determines that the tolerance is safe based on a number of factors, including an assessment of the aggregate exposure to the pesticide and an assessment of the cumulative effects of such pesticide and other substances that have a common mechanism of toxicity. In doing so, EPA must consider potential contributions to such exposure from all tolerances. If the cumulative risk is such that the tolerances in aggregate are not safe, then every one of these tolerances is potentially vulnerable to revocation. Furthermore, if unneeded tolerances are included in the aggregate and cumulative risk assessments, the estimated exposure to the pesticide would be inflated. Consequently, it may be more difficult for others to obtain needed tolerances or to register needed new uses. To avoid potential trade restrictions, the Agency is proposing to revoke tolerances for residues on crops for which FIFRA registrations no longer exist, unless someone expresses a need for such tolerances. Through this proposed rule, the Agency is inviting individuals who need these import tolerances to identify themselves and the tolerances that are needed to cover imported commodities.

Parties interested in retention of the tolerances should be aware that additional data may be needed to support retention. These parties should be aware that, under FFDCA section 408(f), if EPA determines that additional information is reasonably required to support the continuation of a tolerance, EPA may require that parties interested in maintaining the tolerances provide the necessary information. If the requisite information is not submitted, EPA may issue an order revoking the tolerance at issue.

EPA is proposing that the actions proposed in this document will become effective on the date of publication of the final rule in the Federal Register . EPA is proposing an expiration/revocation date of December 31, 2014 for revocation of the dicloran tolerance on potato and December 31, 2013 for revocation of the formetanate hydrochloride tolerances on apple; apple, wet pomace; peach; and pear. The Agency believes that these revocation dates allow users to exhaust stocks and allow sufficient time for passage of treated commodities through the channels of trade. However, if EPA is presented with information that existing stocks would still be available and that information is verified, the Agency will consider extending the expiration date of the tolerance. If you have comments regarding existing stocks and whether the effective date allows sufficient time for treated commodities to clear the channels of trade, please submit comments as described under SUPPLEMENTARY INFORMATION .

Any commodities listed in this proposed rule treated with the pesticides subject to this proposed rule, and in the channels of trade following the tolerance revocations, shall be subject to FFDCA section 408(1)(5), as established by FQPA. Under this unit, any residues of these pesticides in or on such food shall not render the food adulterated so long as it is shown to the satisfaction of the Food and Drug Administration that:

1. The residue is present as the result of an application or use of the pesticide at a time and in a manner that was lawful under FIFRA, and

2. The residue does not exceed the level that was authorized at the time of the application or use to be present on the food under a tolerance or exemption from tolerance. Evidence to show that food was lawfully treated may include records that verify the dates when the pesticide was applied to such food.

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

The Codex has not established a MRL for formetanate hydrochloride or MRL for dicloran in or on potatoes.

In this proposed rule, EPA is proposing to revoke specific tolerances established under FFDCA section 408. The Office of Management and Budget (OMB) has exempted this type of action (e.g., tolerance revocation for which extraordinary circumstances do not exist) from review under Executive Order 12866, entitled “ Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this proposed rule has been exempted from review under Executive Order 12866 due to its lack of significance, this proposed rule is not subject to Executive Order 13211, entitled “ Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This proposed rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., or impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4). Nor does it require any special considerations as required by Executive Order 12898, entitled “ Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994); or OMB review or any other Agency action under Executive Order 13045, entitled “ Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272 note). Pursuant to the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), the Agency previously assessed whether revocations of tolerances might significantly impact a substantial number of small entities and concluded that, as a general matter, these actions do not impose a significant economic impact on a substantial number of small entities. This analysis was published on December 17, 1997 (62 FR 66020) (FRL-5753-1), and was provided to the Chief Counsel for Advocacy of the Small Business Administration. Taking into account this analysis, and available information concerning the pesticides listed in this proposed rule, the Agency hereby certifies that this proposed rule will not have a significant negative economic impact on a substantial number of small entities. In a memorandum dated May 25, 2001, EPA determined that eight conditions must all be satisfied in order for an import tolerance or tolerance exemption revocation to adversely affect a significant number of small entity importers, and that there is a negligible joint probability of all eight conditions holding simultaneously with respect to any particular revocation. This Agency document is available in the docket of this proposed rule. Furthermore, for the pesticides named in this proposed rule, the Agency knows of no extraordinary circumstances that exist as to the present proposed rule that would change the EPA's previous analysis. Any comments about the Agency's determination should be submitted to the EPA along with comments on the proposed rule, and will be addressed prior to issuing a final rule. In addition, the Agency has determined that this action will not have a substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, entitled “ Federalism” (64 FR 43255, August 10, 1999). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” This proposed rule directly regulates growers, food processors, food handlers, and food retailers, not States. This action does not alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). For these same reasons, the Agency has determined that this proposed rule does not have any “tribal implications” as described in Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000). Executive Order 13175 requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and the Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.” This proposed rule will not have substantial direct effects on tribal governments, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this proposed rule.

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

I. General Information A. Does this action apply to me?

These three different SNURs may apply to different entities.

1. Benzidine-based chemical substances. You may be potentially affected by this action if you manufacture, import, or process, including as part of an article, any of the benzidine-based chemical substances listed in Tables 1. and 2. of the regulatory text in this document. Potentially affected entities may include, but are not limited to:

• Manufacturers, importers, or processors of one or more of the subject chemical substances.

• Entities which plan to use the listed chemical substances in conjunction with apparel and other finished products made from fabrics, leather, and similar materials.

• Entities which plan to use the listed chemical substances in conjunction with paper and allied products.

• Manufacturers, importers, or processors of the subject chemical substances in printing inks.

These entities may include those described by the North American Industrial Classification System (NAICS) codes 325-chemical manufacturing, 313-textile manufacturers, 316-leather and allied products manufacturers, 322-paper manufacturers, 4243-apparel, piece goods, and notions wholesalers, or 443-clothing and accessories stores.

2. DnPP. For DnPP, you may be potentially affected by this action if you manufacture (defined by statute to include import), or process DnPP. Potentially affected entities may include, but are not limited to: Chemical industry—plastic material & resins (NAICS code 325211).

3. Alkanes, C 12-13, chloro (CAS No. 71011-12-6) . You may be potentially affected by this action if you manufacture, import, or process the following short-chained chlorinated paraffin (SCCP): Alkanes, C 12-13 , chloro (CAS No. 71011-12-6). Potentially affected entities may include, but are not limited to: Manufacturers (defined by statute to include importers) of SCCPs (NAICS codes 325 and 325998), e.g., chemical manufacturing; including miscellaneous chemical product and preparation manufacturing; and processors of SCCPs (NAICS codes 324 and 324191), e.g., petroleum lubricating oil and grease manufacturing.

This listing is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. Other types of entities not listed in this unit could also be affected. The NAICS codes have been provided to assist you and others in determining whether this action might apply to certain entities. To determine whether you or your business may be affected by this action, you should carefully examine the applicability provisions in § 721.5 for SNUR-related obligations and with respect to benzidine-based chemical substances, the applicability provisions in Unit II.C. If you have any questions regarding the applicability of this action to a particular entity, consult the technical person listed under FOR FURTHER INFORMATION CONTACT .

This action may also affect certain entities through pre-existing import certification and export notification rules under TSCA. Persons who import any chemical substance governed by a final SNUR are subject to the TSCA section 13 (15 U.S.C. 2612) import certification requirements and the corresponding regulations at 19 CFR 12.118 through 12.127; see also 19 CFR 127.28. Those persons must certify that the shipment of the chemical substance complies with all applicable rules and orders under TSCA, including any SNUR requirements. The EPA policy in support of import certification appears at 40 CFR part 707, subpart B. In addition, any persons who export or intend to export a chemical substance that is the subject of a proposed or final SNUR are subject to the export notification provisions of TSCA section 12(b) (15 U.S.C. 2611(b)) (see § 721.20) and must comply with the export notification requirements in 40 CFR part 707, subpart D.

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

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

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

ii. Follow directions. The Agency may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

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

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

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

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

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

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

EPA is proposing to add nine chemical substances (see Table 1. in Unit III.A.) to the existing SNUR for certain benzidine-based chemical substances at § 721.1660. That regulation includes as significant new uses “any use other than as a reagent to test for hydrogen peroxide in milk; a reagent to test for hydrogen sulfate, hydrogen cyanide, and nicotine; a stain in microscopy; a reagent for detecting blood; an analytical standard; and also for Colour Index (C.I.) Direct Red 28 (Congo Red, CAS No. 573-58-0) as an indicator dye.” § 721.1660(a)(2). For the nine newly-proposed benzidine-based chemical substances, EPA is proposing to designate any use as a significant new use. EPA requests comment on whether there are any ongoing uses of these chemicals.

EPA is also proposing to amend the SNUR at § 721.1660 to make inapplicable the exemption at § 721.45(f) for persons that import or process benzidine-based chemical substances as part of an article.

Additionally, EPA is proposing a SNUR for DnPP that would designate, as a significant new use, any use of the substance other than as a chemical standard for laboratory use.

EPA is also proposing a SNUR for alkanes, C 12-13 , chloro (CAS No. 71011-12-6) that would designate any use of the substance as a significant new use. Because any use of alkanes, C 12-13 , chloro (CAS No. 71011-12-6) would be a new use, § 721.5(a)(2) would be inapplicable to alkanes, C 12-13 , chloro (CAS No. 71011-12-6). This provision addresses manufacturers, importers, and processors who are also distributors of a chemical substance subject to a SNUR. In certain cases, it requires these distributors to alert their customers that the SNUR exists. This requirement serves an important communication function when certain uses of a chemical, but not others, trigger Significant New Use Notice (SNUN) requirements. Where there are no ongoing, existing uses of a chemical substance and EPA determines by rule that all future uses trigger SNUNs requirement (as with alkanes, C 12-13 , chloro (CAS No. 71011-12-6)), EPA believes these alerts are not only unnecessary, but unlikely to ever occur.

These proposed SNURs would require persons that manufacture, import, or process any of the chemicals for a significant new use, consistent with the requirements at § 721.25, to notify EPA at least 90 days before commencing such manufacture, process, or import of the chemical substance for a significant new use. For the benzidine-based chemical substances, the proposed elimination of the article exemption at § 721.45(f) would also require persons to notify EPA at least 90 days before commencing processing or importing as part of an article any of the currently-listed or newly-proposed benzidine-based chemical substances. The objectives and rationale for this proposed SNUR are explained in Unit VI.

Section 5(a)(2) of TSCA (15 U.S.C. 2604(a)(2)) authorizes EPA to determine that a use of a chemical substance is a “significant new use.” EPA must make this determination by rule after considering all relevant factors, including those listed in TSCA section 5(a)(2). These factors include:

• The projected volume of manufacturing and processing of a chemical substance.

• The extent to which a use changes the type or form of exposure of human beings or the environment to a chemical substance.

• The extent to which a use increases the magnitude and duration of exposure of human beings or the environment to a chemical substance.

• The reasonably anticipated manner and methods of manufacturing, processing, distribution in commerce, and disposal of a chemical substance.

Once EPA determines that a use of a chemical substance is a significant new use, TSCA section 5(a)(1)(B) requires persons to submit a SNUN to EPA at least 90 days before they manufacture, import, or process the chemical substance for that use (15 U.S.C. 2604(a)(1)(B)). The general SNUR provisions are found at 40 CFR part 721, subpart A.

General provisions for SNURs appear under 40 CFR part 721, subpart A. These provisions describe persons subject to the rule, recordkeeping requirements, exemptions to reporting requirements, and applicability of the rule to uses occurring before the effective date of the final rule.

Provisions relating to user fees appear at 40 CFR part 700. According to § 721.1(c), persons subject to SNURs must comply with the same notice requirements and EPA regulatory procedures as submitters of Premanufacture Notices (PMNs) under TSCA section 5(a)(1)(A). In particular, these requirements include the information submissions requirements of TSCA section 5(b) and 5(d)(1), the exemptions authorized by TSCA section 5(h)(1), (h)(2), (h)(3), and (h)(5), and the regulations at 40 CFR part 720. Once EPA receives a SNUN, EPA may take regulatory action under TSCA section 5(e), 5(f), 6 or 7 to control the activities on which it has received the SNUN. If EPA does not take action, EPA is required under TSCA section 5(g) to explain in the Federal Register its reasons for not taking action.

However, § 721.45(f) (which generally exempts persons importing or processing a substance as part of an article) would not apply to benzidine-based chemical substances listed at 40 CFR 721.1660 and those added by this proposed rule. Therefore, a person who imports or processes as part of an article a benzidine-based chemical substance that is covered by this proposed rule would not be exempt from submitting a SNUN. With respect to articles, it is still relevant to the rulemaking whether a use was ongoing or not at time of proposal. It is not EPA's intent to subject ongoing uses of any chemical substances to the requirements of a SNUR. Thus, to the extent that additional ongoing uses of benzidine-based chemical substances are found in the course of rulemaking (whether or not they involve importing or processing as part of articles), EPA would exclude those uses from the final SNUR.

Persons who export or intend to export a chemical substance identified in a proposed or final SNUR are subject to the export notification provisions of TSCA section 12(b). The regulations that interpret TSCA section 12(b) appear at 40 CFR part 707, subpart D. Persons who import a chemical substance identified in a final SNUR are subject to the TSCA section 13 import certification requirements, codified at 19 CFR 12.118 through 12.127; see also 19 CFR 127.28. Those persons must certify that the shipment of the chemical substance complies with all applicable rules and orders under TSCA, including any SNUR requirements. The EPA policy in support of import certification appears at 40 CFR part 707, subpart B.

This proposed rule would add nine benzidine-based chemical substances to the list of twenty-four chemical substances currently regulated under § 721.1660. The nine benzidine-based chemical substances covered by this proposed SNUR are listed in Table 1. The chemicals listed in Table 1 are identified by Chemical Abstract Service Registry Numbers (CAS number) or if the chemical's CAS number is claimed CBI, the chemical is identified by an EPA accession number, along with its corresponding generic name. The accession numbers are EPA assigned numbers used to identify chemicals in place of confidential CAS numbers. Table 1 also indicates the availability of the Colour Index (C.I.) name and C.I. number, which is either not available or CBI for some of the chemicals subject to this proposed rule. Persons who are interested in determining the precise identity of the chemical designated by a certain accession number and a generic name should submit a bonafide request to EPA that complies with the information requirements stipulated in § 721.11(b).

In 1996, EPA promulgated a TSCA section 5(a)(2) SNUR for the benzidine-based chemical substances listed at § 721.1660 (61 FR 52287, October 7, 1996) (FRL-5396-6). That rule considered any use of the chemical substances except those listed in § 721.1660(a)(2) as a significant new use that requires a SNUN to be submitted to the Agency prior to manufacture, import, or processing of the listed chemical substances. Because they were identified as ongoing, the SNUR excluded as significant new uses the following uses: As a reagent to test for hydrogen peroxide in milk; a reagent to test for hydrogen sulfate, hydrogen cyanide, and nicotine; a stain in microscopy; as a reagent for detecting blood; and as an analytical standard. In addition, for Colour Index (C.I.) Direct Red 28 (Congo Red) (CAS No. 573-58-0), use as an indicator dye was excluded as a significant new use. The SNUR did not require a SNUN to be submitted by persons that import or process a listed substance as part of an article.

For the newly proposed nine benzidine-based chemical substances, data reported to EPA for the 2006, 2002, and 1998 reporting cycles, as required by the TSCA Inventory Update Reporting (IUR) rule, indicate no evidence of production (including import). The IUR regulation requires manufacturers and importers of certain chemical substances to report site and manufacturing information for chemicals manufactured (including imported) in amounts of 25,000 pounds or greater at a single site (prior to 2006, reporting was for 10,000 pounds at a site). A general market review on these chemical substances indicates no current manufacture (Ref. 1) within or outside the United States.

In addition, four of these benzidine-based chemicals were included in EPA's Benzidine-based Dyes Action Plan. The additional five chemicals were found in the confidential TSCA inventory. Designed as part of a comprehensive approach to enhancing EPA's Chemical Management Program, action plans summarize hazard, exposure, and use information; outline the potential risks that each chemical may pose; and identify the specific steps the Agency is considering to address those concerns (Ref. 2).

For the benzidine-based chemical substances currently listed at § 721.1660, data reported to EPA for the 2006, 2002, and 1998 reporting cycles, as required by the TSCA IUR rule, indicate no evidence of domestic production (including import) at IUR reportable levels. Further, EPA's general market review on the currently listed benzidine-based chemical substances suggests that the majority of these chemical substances are not currently being manufactured domestically or abroad (Ref. 1). Although some of these substances appear to be manufactured for allowable uses within the United States at a level below current IUR reporting thresholds, and some substances appear to be manufactured outside the United States generally and may therefore potentially be imported as part of an article, EPA does not have information to suggest that the substances are being imported, for use as part of articles. In fact, the market review did not find evidence of any import of articles containing benzidine-based chemical substances. As stated in Unit VIII, EPA welcomes comments on any aspect of this proposed SNUR. The Agency specifically invites comments on whether there is ongoing manufacture, import, or processing of these benzidine-based chemical substances, including in articles, other than as excepted at § 721.1660(a)(2).

Historically, the benzidine-based chemical substances currently listed at § 721.1660 were used as reagents, biological stains in laboratories, and in food industries. Note that TSCA section 3(2)(B)(vi) excludes foods, food additives, drugs, cosmetics or devices (as defined in the Federal Food, Drug, and Cosmetic Act) from the statutory definition of a “chemical substance” when such substances are manufactured, processed, or distributed in commerce for use as a food, food additive, drug, cosmetic, or device. Additionally, these previously listed bezidine-based substances are believed to have been historically used as dyes in the textile industry.

The nine newly-proposed benzidine-based chemical substances are believed to have been used in the past in the production of textiles, paints, printing inks paper, and pharmaceuticals. However, based on market information and the fact that the 2006 IUR had no production reports for any of the benzidine-based chemical substances, if these chemical substances are used at all, they are likely used in small volumes, making it difficult to access current production and use information.

The 1980 EPA Preliminary Risk Assessment on derivatives of benzidine established that the primary hazard concern was for the carcinogenic effects to humans from exposure to specific metabolites of the chemical substances (Ref. 3). There is potential for benzidine-based chemical substances to metabolize to the parent benzidine molecule, which is a known carcinogen (Refs. 4, 5, and 6). This metabolism occurs in humans by an enzyme-mediated reaction. These enzymes are found in the liver, in gut bacteria, and in skin bacteria. The result of this enzymatically-aided reduction is the release of the carcinogenic aromatic amine from the chemical substance. Studies have demonstrated that the reduction of benzidine-based chemical substances occurs in the human body as well as on the skin (Ref. 7). Therefore, the primary human health concern for consumers is exposure to the benzidine-based chemical substances through oral, dermal, or inhalation routes. Evidence from animal studies suggests that there is early life susceptibility to benzidine carcinogenesis (Ref. 8). Cancer potency for benzidine was substantially increased when the dose was given in early life as compared to adults (Ref. 8). For additional information see Benzidine-Based Chemical Substances; Significant New Uses of Certain Chemical Substances; Final Rule (61 FR 52287, October 7, 1996).

There are benzidine related exposure concerns as a result of the use of benzidine and benzidine-based chemical substances. In 1996, EPA identified inhalation, skin absorption, and ingestion as possible routes of exposure in a variety of settings where benzidine-based chemical substances are either manufactured or used (61 FR 52287, October 7, 1996). Although EPA estimated that the highest exposure would be to workers who were involved in dye manufacturing, EPA determined that it was necessary to apply the SNUR to any use of the listed benzidine-based chemical substances, with the exception of the limited uses mentioned in Unit II.A. EPA listed all the benzidine-based chemical substances that it was able to identify on the TSCA Inventory at that time. Since then, EPA has identified the nine additional benzidine-based chemical substances listed as part of Table 1 and has similar concerns about potential consumer and worker exposure to these substances.

Dermal exposure can occur from the leaching of the chemical substances by sweat in contact with the dyed textiles (Ref. 7). Dermal exposure is also a concern since many of these chemical substances can be directly absorbed by the skin to some extent. It is well established that the enzymatically-aided dye reduction to the carcinogenic benzidine unit occurs internally in the liver and the gut (Refs. 9 and 10). Studies have shown that some human skin bacteria possess azo-reductases, the enzymes necessary to break down the benzidine-based chemical substances to release the carcinogenic amines, which can be more readily absorbed (Ref. 11).

Consistent with the information on dermal absorption that EPA reviewed in developing its recent Benzidine-based Chemical Substances Action Plan (EPA-HQ-OPPT-2010-0570 at http://www.regulations.gov ), EPA identified the following main routes of consumer exposure to benzidine-based chemical substances that are of concern: (1) Dermal absorption, the primary route from wearing dyed clothing or footwear; (2) oral ingestion, an additional route for babies and young children who suck on clothing, blankets, and other non-food products which might contain any of the benzidine-base chemical substances; (3) inhalation exposure, a more prevalent route in occupational settings; however, it can also occur from the use of dyed inks during “air brushing” or from off-gassing from the dyed carpets to indoor air; and (4) contact with the benzidine-based chemical substances entering the environment, through the whole life cycle of benzidine-based chemical substances in textiles (Ref. 12).

This proposed SNUR would apply to DnPP (1,2-Benzenedicarboxylic acid, 1,2-dipentyl ester), CAS No. 131-18-0, an ortho-phthalate (or phthalate ester).

No IUR production volume data were reported for DnPP during the 2006, 2002, 1998, and 1994 reporting cycles (Ref. 13). The last reporting of DnPP production to the IUR occurred in 1990 and corresponds to the lowest reportable production volume range (10,000 to 500,000 pounds) (Ref. 13).

DnPP was included in EPA's Phthalates Action Plan, which was issued on December 30, 2009 (Ref. 14a). As stated in Unit III.C., the chemical action plans were designed as a part of a comprehensive approach to enhancing EPA's Chemical Management Program. These action plans summarize available hazard, exposure, and use information; outline the potential risks that each chemical may present; and identify the specific steps the Agency is considering to address those concerns. Please note that in response to a request for correction of the information provided in the 2009 Phthalate Action Plan that was filed under the Agency's Information Quality Guidelines by the American Chemistry Council, EPA issued a revised Phthalate Action Plan on March 14, 2012 (Ref. 14b). Copies of the request for correction and EPA's response to it are available at http://www.epa.gov/quality/informationguidelines/iqg-list.html. Internet queries performed by EPA identified several companies that either use or sell DnPP as a chemical standard for laboratory use. As a result, EPA is proposing a SNUR for DnPP, excluding use of the substance as a chemical standard for laboratory use.

DnPP belongs to a broad category of chemicals commonly referred to as phthalates. Although a number of phthalates are in common use, EPA believes the individual phthalate DnPP is not in general use in the United States, and only has a limited application as a chemical standard for laboratory use. As a chemical category, the major use of phthalates is as plasticizers (Refs. 15-23) especially in polyvinyl chloride (PVC) products, where they are added to impart flexibility and other desirable properties. Phthalate-containing PVC products include a variety of industrial and commercial products, as well as specialized medical and dental applications. The particular phthalate or combination of phthalates used in a specific product's formulation depends on the properties the phthalates impart, as well as their cost.

1. Human health effects. Exposures of some phthalates in animal studies resulted in phthalate syndrome effects, which consist of changes in the fetal development of the reproductive system (Refs. 15-22 and 24-35). The phthalates that are the most potent at causing phthalate syndrome effects are generally those with linear ester side chains having 4-6 carbons (Ref. 24). DnPP has a linear carbon chain length of 5 carbons. Of the phthalates studied, DnPP is the most potent in producing testicular toxicity in pubertal animals (Ref. 24).

Developmental oral exposures in rats to DnPP showed increased resorptions, increased fetal mortality, and decreased fetal testicular testosterone production (Refs. 36 and 37); and reduced anogenital distance in male rat offspring (Ref. 38). Effects noted in adult mice exposed to DnPP include decreased body weight; increased liver weights; decreased kidney weights; decreases in the weights of the epididymis, cauda epididymis, testes, and seminal vesicles; complete absence of detectable sperm; shorter average estrous cycle length in females; and decreased fertility (Refs. 39 and 40). Gross and microscopic evidence of degenerative changes have been observed in the testes and epididymis (including testicular atrophy, interstitial cell hyperplasia, degeneration of the seminiferous tubules, and accumulation of fluid and degenerated cells in the epididymis) of rodents (Refs. 39 and 40). There are no subchronic or chronic animal studies of DnPP exposure through any exposure route.

There are no known human studies of exposure to DnPP. However, due to the data discussed in this section, the data presented and discussed in Phthalates and Cumulative Risk Assessment: The Tasks Ahead, Committee on the Health Risks of Phthalates, National Research Council (2008) (Ref. 24) and DnPP's general structure and categorization as a phthalate, EPA notes that the human health effects of DnPP exposure may be similar to that observed for some other phthalates. Several human studies have reported associations of exposure of some other phthalates with adverse reproductive outcomes and developmental effects similar to those in the rat, although no causal link has been established (Refs. 24 and 41-50). The reproductive developmental effects of some phthalates observed in humans include shortened anogenital distance observed in newborn boys, shortened pregnancy, lower sex and thyroid hormones, and reduced sperm quality in adults; however, some studies failed to show these effects (Ref. 42). Since the pathway for sexual differentiation in the fetus is highly conserved in all mammals, the reproductive and developmental effects observed in the rat studies are potentially relevant to humans.

Studies in animals evaluating the cumulative effects of combinations of phthalates on testosterone fetal mortality, and male and female reproductive development later in life have demonstrated all mixtures were cumulative for all endpoints (Refs. 36-37 and 51-55). The reproductive effects of DnPP observed in animal studies, the reproductive effects of other phthalates observed in humans, and the data on the cumulative effects of mixtures of phthalates, support EPA's concern for potential human health hazards following exposure to DnPP.

2. Environmental effects. EPA does not know of any studies of the environmental effects of DnPP. Due to the general structure of DnPP, its behavior in an aquatic environment similar to the close analog mono 2-ethylhexyl phthalate, its log K ow, and water solubility measurements, and its categorization as a phthalate, EPA is concerned that the environmental effects of DnPP may be similar to those of other phthalates studied. Other phthalates studied have been shown to have biological effects in all studied animal groups and have been observed at environmentally relevant exposures in the nanogram/liter to microgram/liter range. The combination of the inherent toxicity, variable solubility, log of the octanol-water coefficient values, and bioconcentration factor (BCF) values among the studied phthalates elicit both acute and chronic toxicity to aquatic and terrestrial wildlife by targeting thyroid function, liver function, reproduction, and other physiological mechanisms (Refs. 31-35, 56 and 57).

1. Human exposure. Data from the National Health and Nutrition Examination Survey (NHANES) indicates widespread exposure of the general population to various phthalates (Ref. 58). Phthalates are used in a wide array of plastic products and may be released into the environment during use and disposal of these products (Ref. 58). Biomonitoring data from amniotic fluid and urine have demonstrated that humans are exposed to various phthalates in utero, as infants, during puberty, and in adult life; and that people are exposed to several phthalates at once. The urinary metabolites of DnPP were not specifically included in the 4th National Report on Human Exposure to Environmental Chemicals (2010), so EPA cannot draw conclusions as to the current exposure of the general population in the United States to DnPP.

2. Environmental exposure. Due to phthalates' pervasive use and release, as well as their propensity for global transport, various phthalates may be found in most environmental media, including ambient air, surface water, soil, and sediment (Refs. 25-32 and 34-35). Fish and other aquatic organisms, as well as terrestrial animals have evidenced exposure to a common phthalate: di-(2-ethylhexyl) phthalate (DEHP) (Refs. 34 and 57). EPA does not have available data on environmental exposures to DnPP.

This proposed SNUR would cover alkanes, C 12-13 , chloro (CAS No. 71011-12-6), one type of short-chain chlorinated paraffin (SCCP). This consists of C 12 and C 13 alkanes with varying degrees of chlorination.

No production volumes for alkanes, C 12-13 chloro (CAS No. 71011-12-6) were reported to the IUR during the 2006, 2002, 1998, and 1994 reporting cycles, and EPA found no additional evidence of any importation or manufacturing of the chemical.

Alkanes, C 12-13 , chloro (CAS No. 71011-12-6) was included in EPA's Short-Chain Chlorinated Paraffins (SCCPs) and Other Chlorinated Paraffins Action Plan (Ref. 59). As stated in Unit III.C., the chemical action plans were designed as a part of a comprehensive approach to enhancing EPA's Chemical Management Program. These action plans summarize available hazard, exposure, and use information; outline the potential risks that each chemical may present; and identify the specific steps the Agency is considering to address those concerns.

Alkanes, C 12-13 , chloro (CAS No. 71011-12-6) is an individual chemical substance that belongs to a category of chemicals referred to as SCCPs. There are many different chemical substances that are members of the SCCP category. Generally these SCCPs have between 10 and 13 carbon atoms and contain 40—70 percent chlorine by weight. Of the different SCCPs that are listed on the TSCA Inventory, EPA believes the SCCP named “Alkanes, C 12-13 , chloro (CAS No. 71011-12-6)” is not in use in the United States and EPA has found no information that indicates it has ever been used. All of the data discussed in this section associated with the SCCPs general category would pertain to any individual member of that category, including alkanes, C 12-13 , chloro (CAS No. 71011-12-6).

The primary concern for SCCPs is ecotoxicity. There are internationally accepted data specifically on the ecotoxicity of alkanes, C 12-13 , chloro (CAS No. 71011-12-6) (Ref. 60). Alkanes, C 12-13 , chloro (CAS No. 71011-12-6) are highly toxic to aquatic invertebrates following acute and chronic exposures. In fish, this high toxicity is associated with chronic exposures, but not for acute exposures. For aquatic plants, there is high toxicity associated with both acute and chronic exposures to SCCPs in general (Ref. 59-61).

Both Health Canada and Environment Canada have characterized all chlorinated paraffins (short chain chlorinated paraffins, medium chain chlorinated paraffins, and long chain chlorinated paraffins), which include the chemical substance covered by this proposed rule, as “toxic” under the Canadian Environmental Protection Act (CEPA) (Ref. 61). Their assessment found that these SCCPs have or may have an immediate or long term harmful effect on the environment or its biological diversity; and that they are persistent, bioaccumulative, inherently toxic and present in the environment primarily as a result of human activity (Ref. 61).

The mechanisms or pathways by which the SCCPs, including alkanes, C 12-13 , chloro (CAS No. 71011-12-6), move into and through the environment and humans are not fully understood, but are likely to include releases from manufacturing of the chemicals, manufacturing of products like plastics or textiles, aging and wear of products like sofas and electronics, and releases at the end of product life (e.g., disposal, recycling).

EPA has concerns regarding the environmental fate and the exposure pathways that lead to any SCCP presence, including C12 and C13 SCCPs (for example, Alkanes, C 12-13 , Chloro (CAS No. 71011-12-6)), in a variety of biota, including freshwater aquatic species, marine mammals, and avian and terrestrial wildlife (Ref. 60). In addition, SCCPs, including C12 and C13 SCCPs, have been detected in samples of human breast milk from Canada and the United Kingdom, as well as in a variety of food items from Japan and various regions of Europe (Ref. 62-63). SCCPs are routinely found in soil and sediment samples. EPA also has concerns about the persistence, bioaccumulation, and toxicity (PBT) of SCCPs (Ref. 60).

Consistent with EPA's past practice for issuing SNURs under TSCA section 5(a)(2), EPA's decision to propose a SNUR for a particular chemical use need not be based on an extensive evaluation of the hazard, exposure, or potential risk associated with that use. Rather, the Agency's action is based on EPA's determination that if the use begins or resumes, it may present a risk that EPA should evaluate under TSCA before the manufacturing or processing for that use begins. Since the new use does not currently exist, deferring a detailed consideration of potential risks or hazards related to that use is an effective use of resources. If a person decides to begin manufacturing or processing the chemical for the use, the notice to EPA allows EPA to evaluate the use according to the specific parameters and circumstances surrounding that intended use.

1. Benzidine-based chemical substances. As summarized in Unit III., EPA is concerned about potential carcinogenic effects on workers and consumers from the manufacture, processing, importing, or use of these substances. Consumers exposed via dermal exposure to consumer products containing the benzidine-based chemical substances are a particular concern because enzymes present in the human body and in bacteria on the skin aid in the reduction of these chemical substances to the benzidine unit, an established human carcinogen (Ref. 8). The main consumer products that could result in dermal exposure if containing these chemical substances include textiles and leather products because they are in prolonged contact with human skin.

During the review of information on benzidine-based chemical substances, EPA determined that the newly identified chemical substances covered by this proposed rule present the same concerns (Ref. 2) as those of the benzidine-based chemical substances currently listed under § 721.1660. However, based on a review of IUR data and a separate market review, EPA does not believe there is any current manufacture of these nine benzidine-based chemical substances within or outside the United States.

In addition, as discussed earlier, although some of the currently listed benzidine-based chemical substances may be manufactured or processed outside the United States, EPA does not have specific information that suggests they are entering into the United States in imported articles (Ref. 4). In fact, an analysis of the benzidine-based chemical substances market (Ref. 1) revealed no information indicating import of articles containing benzidine-based chemical substances for non-excluded purposes. Supporting a conclusion that there is no import of textile articles containing benzidine-based chemical substances, the American Apparel and Footwear Association, the national trade association representing apparel, footwear, and other sewn products companies and their suppliers, which compete in the global market, includes benzidine on its Restricted Substances List (RSL) (Ref. 64). The RSL is a compilation of chemicals, regulated or banned, that are used by apparel and footwear industries.

Although it appears there is no ongoing manufacture of the nine newly proposed benzidine-based chemical substances, or import for a non-excluded use of articles containing any benzidine-based chemical substances, the manufacture (including import) or processing of the nine newly proposed benzidine-based chemical substances and the import or processing of articles containing any benzidine-based chemical substances may begin at any time, without prior notice to EPA. Thus, EPA is concerned that commencement of the manufacture, import, or processing for any new uses, including resumption of past uses, of benzidine-based chemical substances could significantly increase the magnitude and duration of exposure to humans over that which would otherwise exist currently. EPA is concerned that such an increase should not occur without an opportunity to evaluate activities associated with a significant new use and an opportunity to protect against potential unreasonable risks, if any, from exposure to the chemical substance.

Therefore, EPA is proposing a SNUR for the nine benzidine-based chemical substances by adding them to those currently listed at § 721.1660, and to make inapplicable the article exemption at § 721.45(f) for those chemical substances newly proposed in this rulemaking as well as for those already listed at § 721.1660. If finalized, a person who intends to manufacture (including import) or process any of the benzidine-based chemical substances for a non-excluded use, or to import or process any listed benzidine-based chemical substance for a non-excluded use as part of an article, would be required to submit a SNUN.

2. DnPP. As summarized in Unit IV., EPA has concerns regarding potential adverse human health and environmental effects that may be caused by DnPP. EPA has direct information from animal studies that DnPP specifically can elicit developmental/reproductive effects that are relevant to human health and also indicate potential effects in wildlife. EPA also is concerned that due to its general structure and categorization as a phthalate that DnPP may elicit adverse environmental effects similar to those described for other phthalates. EPA is concerned that any manufacturing (including import) or processing of DnPP, beyond that for its limited ongoing use as a chemical standard for laboratory use, could significantly increase the magnitude and duration of exposure to humans over that which would otherwise exist currently. EPA is concerned that such an increase should not occur without an opportunity to evaluate activities associated with a significant new use and an opportunity to protect against potential unreasonable risks, if any, from exposure to the chemical substance. Therefore, EPA is proposing a SNUR for DnPP that would designate, as a significant new use, any use of the chemical substance other than as a chemical standard for laboratory use. If finalized, a person who intends to manufacture, import, or process DnPP for use other than as a chemical standard for laboratory use would be required to submit a SNUN.

3. Alkanes, C 12-13 , chloro (CAS No. 71011-12-6). The mechanisms or pathways by which the SCCPs, including alkanes, C 12-13 , chloro (CAS No. 71011-12-6), move into and through the environment and humans are not fully understood, but are likely to include releases from manufacturing of the chemicals, manufacturing of products like plastics or textiles, aging and wear of products like sofas and electronics, and releases at the end of product life (e.g., disposal, recycling).

EPA believes that all manufacture, processing, and import into the United States of alkanes, C 12-13 , chloro (CAS No. 71011-12-6) has ceased. Given EPA has no evidence to suggest that there is any manufacture, processing, or importation of this chemical substance in the United States, and taking into consideration the negative commercial and regulatory environment associated with this chemical internationally (including the EU and Canadian ban on marketing) and use of the alkanes, C 12-13 , chloro (CAS No. 71011-12-6) domestically, EPA does not expect to find such activity. However, EPA is concerned that commencement of the manufacture, import or processing for any new uses, including resumption of past uses, could significantly increase the magnitude and duration of exposure to humans over that which would otherwise exist. EPA is concerned that such an increase should not occur without an opportunity to evaluate activities associated with a significant new use and an opportunity to protect against potential unreasonable risks, if any, from exposure to the chemical substance. Therefore, EPA is proposing a SNUR for alkanes, C 12-13 , chloro (CAS No. 71011-12-6) that would designate as a significant new use any use of the chemical substance. If finalized, a person who intends to manufacture, import, or process alkanes, C 12-13 , chloro (CAS No. 71011-12-6) for any use would be required to submit a SNUN.

EPA is requesting comment on whether any of the significant new uses identified are currently ongoing. However, if EPA determines, based on comments on this proposed rule or on other information the Agency identifies, that any proposed significant new use of any of the chemical substances has been ongoing (including, in the case of benzidine-based chemical substances, that an article containing benzidine-based chemical substances was being imported or processed) prior to date of publication of the final rule, EPA would exclude such ongoing uses from the final SNUR and consider pursuing other regulatory action, as appropriate.

Based on the considerations in Unit VI.A.1-3, EPA wants to achieve the following objectives with regard to the significant new use(s) that are designated in this proposed rule:

1. EPA would receive notice of any person's intent to manufacture or process the specified chemicals for the described significant new uses before that activity begins;

2. EPA would have an opportunity to review and evaluate data submitted in a SNUN before the notice submitter begins manufacturing or processing of the specified chemicals for the described significant new use; and

3. EPA would be able to regulate prospective uses of the specified chemicals before the described significant new uses occur, provided that regulation is warranted pursuant to TSCA sections 5(e), 5(f), 6 or 7.

Section 5(a)(2) of TSCA states that EPA's determination that a use of a chemical substance is a significant new use must be made after consideration of all relevant factors including:

• The projected volume of manufacturing and processing of a chemical substance.

• The extent to which a use changes the type or form of exposure of human beings or the environment to a chemical substance.

• The extent to which a use increases the magnitude and duration of exposure of human beings or the environment to a chemical substance.

• The reasonably anticipated manner and methods of manufacturing, processing, distribution in commerce, and disposal of a chemical substance.

In addition to these factors enumerated in TSCA section 5(a)(2), the statute authorizes EPA to consider any other relevant factors.

To determine what would constitute a significant new use of the benzidine-based chemical substances subject to this proposed rule, DnPP and the alkanes, C 12-13 , chloro (CAS No. 71011-12-6), as discussed herein, EPA considered relevant information about the toxicity of these substances, likely human exposures and environmental releases associated with possible uses, and the four factors listed in section 5(a)(2) of TSCA. EPA has preliminarily determined that the manufacture, import, processing, or import or processing as part of an article of any of the benzidine-based chemical substances subject to this proposed rule, except ongoing uses specified in § 721.1660(a)(2)(i) of the regulatory text in this document, is a significant new use. EPA has also preliminarily determined that the manufacture, import, or processing of DnPP for any use other than as a chemical standard for laboratory use is a significant new use, and the manufacture, processing, or import of alkanes, C 12-13 , chloro (CAS No. 71011-12-6) for any use is a significant new use.

EPA welcomes comments on any aspect of this proposed SNUR. Information available about environmental effects, health effects, and exposure would be beneficial. EPA is also requesting public comment on whether there are any ongoing uses of any of these chemicals for the proposed significant new uses (including processing or import of benzidine-based chemical substances in articles) and would welcome specific information that documents such uses.

Before proposing these SNURs, EPA considered the following alternative regulatory actions:

Under a TSCA section 8(a) rule, EPA could, among other things, generally require persons to report information to the Agency when they intend to manufacture, import, or process a listed chemical for a specific use or any use. However, for the chemical substances subject to this proposed rule, the use of TSCA section 8(a) rather than SNUR authority would have several limitations. First, if EPA were to require reporting under TSCA section 8(a) instead of TSCA section 5(a), EPA would not have the opportunity to review human and environmental hazards and exposures associated with the proposed significant new use and, if necessary, take immediate follow-up regulatory action under TSCA sections 5(e) or 5(f) to prohibit or limit the activity before it begins. In addition, EPA may not receive important information from small businesses, because such firms generally are exempt from TSCA section 8(a) reporting requirements. In view of the level of health and environmental concerns about the chemicals subject to this proposed rule if used for the proposed significant new uses, EPA believes that a TSCA section 8(a) rule for this substance would not meet EPA's regulatory objectives.

EPA may regulate under TSCA section 6 if “the Administrator finds that there is a reasonable basis to conclude that the manufacture, processing, distribution in commerce, use or disposal of a chemical substance or mixture presents or will present an unreasonable risk of injury to health or the environment.” (TSCA section 6(a)). Given that the benzidine-based chemical substances subject to this proposed rule are no longer being used except as provided in the regulatory text of this document, DnPP is no longer being used except as a chemical standard for laboratory use, and alkanes, C 12-13 , chloro (CAS No. 71011-12-6) is no longer used in the United States, EPA concluded that risk management action under TSCA section 6 is not necessary at this time. This proposed SNUR would allow the Agency to address the potential risks associated with the proposed significant new uses. If EPA learns that these chemicals are in use, EPA may reconsider this decision and pursue additional regulatory action as appropriate.

As discussed in the Federal Register of April 24, 1990 (55 FR 17376), EPA has decided that the intent of section 5(a)(1)(B) of TSCA is best served by designating a use as a significant new use as of the date of publication of the proposed rule rather than as of the effective date of the final rule. If uses begun after publication of the proposed rule were considered ongoing rather than new, it would be difficult for EPA to establish SNUR notice requirements, because a person could defeat the SNUR by initiating the proposed significant new use before the rule became final, and then argue that the use was ongoing as of the effective date of the final rule. Thus, persons who begin the commercial manufacture, import, or processing of a covered substance as a significant new use have to cease any such activity as of the effective date of the rule if and when finalized. To resume their activities, these persons would have to comply with all applicable SNUR notice requirements and wait until the notice review period, including all extensions, expires. Uses arising after the publication of the proposed rule are distinguished from uses that exist at publication of the proposed rule. The former would be new uses, the latter ongoing uses. To the extent that additional ongoing uses are found in the course of rulemaking, EPA would exclude those uses from the final SNUR. EPA has promulgated provisions to allow persons to comply with this SNUR before the effective date. If a person were to meet the conditions of advance compliance under § 721.45(h), that person would be considered to have met the requirements of the final SNUR for those activities.

EPA recognizes that TSCA section 5 does not require developing any particular test data before submission of a SNUN. There are two exceptions: (1) Development of test data is required where the chemical substance subject to the SNUR is also subject to a test rule under TSCA section 4 (see TSCA section 5(b)(1)) and (2) development of test data may be necessary where the chemical substance has been listed under TSCA section 5(b)(4) (see TSCA section 5(b)(2)). In the absence of a section 4 test rule or a section 5(b)(4) listing covering the chemical substance, persons are required only to submit test data in their possession or control and to describe any other data known to or reasonably ascertainable by them (15 U.S.C. 2604(d); 721.25, and 720.50). However, as a general matter, EPA recommends that SNUN submitters include data that would permit a reasoned evaluation of risks posed by the chemical substance during its manufacture, import, processing, use, distribution in commerce, or disposal. EPA encourages persons to consult with the Agency before submitting a SNUN. As part of this optional pre-notice consultation, EPA would discuss specific data it believes may be useful in evaluating a significant new use. SNUNs submitted for significant new uses without any test data may increase the likelihood that EPA would take action under TSCA section 5(e) to prohibit or limit activities associated with this chemical.

SNUN submitters should be aware that EPA will be better able to evaluate SNUNs that provide detailed information on:

1. Human exposure and environmental releases that may result from the significant new uses of the chemical substance.

2. Potential benefits of the chemical substance.

3. Information on risks posed by the chemical substances compared to risks posed by potential substitutes.

According to 40 CFR 721.1(c), persons submitting a SNUN must comply with the same notice requirements and EPA regulatory procedures as persons submitting a PMN, including submission of test data on health and environmental effects as described in § 720.50. SNUNs must be on EPA Form No. 7710-25, generated using e-PMN software, and submitted to the Agency in accordance with the procedures set forth in §§ 721.25 and 720.40. E-PMN software is available electronically at http://www.epa.gov/opptintr/newchems.

EPA has evaluated the potential costs of establishing SNUR reporting requirements for potential manufacturers and processors of these chemicals and for articles containing any of the benzidine-based chemical substances included in this proposed rule. These economic analyses, which are briefly summarized here, are available in the docket for this proposed rule.

The costs of submission of a SNUN would be incurred when a company decides to pursue a significant new use of one of these chemicals. In the event that a SNUN is submitted, costs are estimated at approximately $8,112 per SNUN submission, and include the cost for preparing and submitting the SNUN, recordkeeping, and the payment of a user fee. Businesses that submit a SNUN are either subject to a $2,500 user fee required by § 700.45(b)(2)(iii), or, if they are a small business with annual sales of less than $40 million when combined with those of the parent company (if any), a reduced user fee of $100 (§ 700.45(b)(1)). In its evaluation of this proposed rule, EPA also considered the potential costs a company might incur by avoiding or delaying the significant new use in the future, but these costs have not been quantified.

EPA regulations under TSCA section 12(b) (15 U.S.C. 2611(b)) at 40 CFR part 707, subpart D require that, for chemicals subject to a proposed or final SNUR, a company notify EPA of the first export or intended export to a particular country of an affected chemical substance. EPA estimated that the one-time cost of preparing and submitting an export notification to be $78.54. The total costs of export notification would vary per chemical, depending on the number of required notifications (i.e., number of countries to which the chemical is exported).

As indicated under ADDRESSES , a docket has been established for this proposed rule under docket ID number EPA-HQ-OPPT-2010-0573. The following is a listing of the documents that have been placed in the docket for this proposed rule. The docket includes information considered by EPA in developing this proposed rule, including the documents listed in this unit, which are physically located in the docket. In addition, interested parties should consult documents that are referenced in the documents that EPA has placed in the docket, regardless of whether these referenced documents are physically located in the docket. For assistance in locating documents that are referenced in documents that EPA has placed in the docket, but that are not physically located in the docket, please consult the technical person listed under FOR FURTHER INFORMATION CONTACT . The docket is available for review as specified under ADDRESSES .

Under Executive Order 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993), the Office of Management and Budget (OMB) determined that this proposed SNUR is a “significant regulatory action” under section 3(f) of the Executive Order. Accordingly, EPA submitted this action to OMB for review under Executive Order 12866 and 13563, entitled Improving Regulation and Regulatory Review (76 FR 3821, January 21, 2011). EPA prepared an analysis of the potential costs and benefits associated with this action, which is summarized in Unit XIII.

Changes made in response to OMB recommendations have been documented in the docket for this rulemaking as required by section 6(a)(3)(E) of the Executive Order.

According to the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., an Agency may not conduct or sponsor, and a person is not required to respond to a collection of information that requires OMB approval under the PRA, unless it has been approved by OMB and displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in Title 40 of the CFR, after appearing in the Federal Register , are listed in 40 CFR part 9 and included on the related collection instrument, or form, if applicable.

The information collection requirements related to this action have already been approved by OMB pursuant to the PRA under OMB control number 2070-0038 (EPA ICR No. 1188). This action does not impose any burden requiring additional OMB approval. If an entity were to submit a SNUN to the Agency, the annual burden is estimated to average 97 hours per response. This burden estimate includes the time needed to review instructions, search existing data sources, gather and maintain the data needed, and complete, review, and submit the required SNUN.

Send any comments about the accuracy of the burden estimate, and any suggested methods for minimizing respondent burden, including through the use of automated collection techniques, to the Director, Collection Strategies Division, Office of Environmental Information (2822T), Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001. Please remember to include the OMB control number in any correspondence, but do not submit any completed forms to this address.

Pursuant to section 605(b) of the Regulatory Flexibility Act (RFA), 5 U.S.C. 601 et seq., the Agency hereby certifies that promulgation of this SNUR would not have a significant adverse economic impact on a substantial number of small entities. Under the RFA, small entities include small businesses, small organizations, and small governmental jurisdictions. Small entity is defined in accordance with section 601 of the RFA as: A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

For purposes of assessing the impacts of this proposed rule on small entities, EPA has determined that this proposed rule is not expected to impact any small not-for-profit organizations or small governmental jurisdictions. As such, the Agency estimated potential impacts on small business. A SNUR applies to any person (including small or large entities) who intends to engage in any activity described in the rule as a “significant new use.” By definition of the word “new” and based on all information currently available to EPA, it appears that no small or large entities presently engage in such activity. Since this action would require a person who intends to engage in such activity in the future to first notify EPA by submitting a SNUN, no economic impact would occur unless someone files a SNUN to pursue a significant new use in the future or forgoes profits by avoiding or delaying the significant new use. Although some small entities may decide to conduct such activities in the future, EPA cannot presently determine how many, if any, there may be.

EPA's experience to date is that, in response to the promulgation of over 1,000 SNURs, the Agency receives on average only five notices per year. Of those SNUNs submitted, only one appears to be from a small entity in response to any SNUR. Therefore, EPA believes that the potential economic impact of complying with this SNUR is not expected to be significant or adversely impact a substantial number of small entities. In a SNUR that published as a final rule on August 8, 1997 (62 FR 42690) (FRL-5735-4), the Agency presented its general determination that proposed and final SNURs are not expected to have a significant economic impact on a substantial number of small entities, which was provided to the Chief Counsel for Advocacy of the Small Business Administration.

In EPA's experience with proposing and finalizing SNURs since 1980, no state, local, or Tribal government has initiated the manufacture of a chemical for a new use. Furthermore, EPA does not have any reason to believe that any state, local, or tribal government would do so for the chemicals in this rulemaking. For that reason, EPA has determined that this action does not have federalism implications as specified in Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 1999), or tribal implications as specified in Executive Order 13175, entitled Consultation and Coordination with Indian Tribal Governments (65 FR 67249, November 9, 2000).

In addition, this action does not impose any enforceable duty or contain any unfunded mandate for State, local, or tribal governments under the provisions of Title II of the Unfunded Mandates Reform Act (UMRA), 2 U.S.C. 1531-1538. Nor does it otherwise have any effect on small governments, or estimated impacts on the private sector that might exceed $100 million in any year.

Thus, sections 202, 203, 204, or 205 of UMRA, Executive Order 13132, and Executive Order 13175 do not apply to this action.

This action is not subject to Executive Order 13045, entitled Protection of Children from Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 1997), because this action is not an economically significant regulatory action as defined by Executive Order 12866, and it is not intended to address environmental health or safety risks for children.

This action is not subject to Executive Order 13211, entitled Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use (66 FR 28355, May 22, 2001), because this action is not an economically significant regulatory action as defined by Executive Order 12866, and it is not expected to affect energy supply, distribution, or use.

Since this action does not involve any technical standards, section 12(d) of the National Technology Transfer and Advancement Act (NTTAA), 15 U.S.C. 272 note, does not apply to this action.

This action does not entail special considerations of environmental justice related issues as delineated by Executive Order 12898, entitled Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations (59 FR 7629, February 16, 1994).

Therefore, it is proposed that 40 CFR part 721 be amended as follows:

Boating is a national pastime recognized for decades as a recreational activity that also has a strong economic impact. According to the National Marine Manufacturer's Association Recreational Boating Statistical Abstract, 2009, boating contributes $30.8 billion in annual sales and services to the U.S. economy. Studies of recreational boaters have shown an increase in the number of boats at least 26 feet long that stay in the water for the entire season and travel throughout the country's waterways. These boaters contribute an estimated 16 percent of the overall boating impact to the economy, over $5 billion annually. The activities of transient recreational boats at least 26 feet long call for specific accommodations and services for protecting the environment and enjoyment by the public. The purpose of the Boating Infrastructure Grant Program (BIG) is to assist States in addressing the need for more and better facilities to accommodate these boaters. A recent economic study conducted by the U.S. Fish and Wildlife Service (Service) estimates the annual positive impact of the BIG Program in 2009 to be $34.28 million. This impact reflects the availability of the grants themselves as well as the jobs created to construct facilities, increased boater traffic, positive economic impact due to more and easily accessible facilities, overall improvement to the infrastructure of boating-access facilities, and connections to communities throughout the United States.

Testimony at a congressional hearing in February 1997 introduced awareness of the need for more and better boating access and facilities for recreational boats at least 26 feet long that owners put into the water for a season and travel from place to place. The testimony and further research indicated too few, inadequate, or poorly located facilities available to allow these boaters to travel the United States navigable waters and access amenities such as dock space, restrooms, showers, fuel, pumpouts, and harbors of safe refuge, and to link boaters to cultural, historic, scenic, and natural resources of the United States.

The Sportfishing and Boating Safety Act of 1998 (16 U.S.C. 777g-1) amended the Dingell-Johnson Sport Fish Restoration Act. This amendment established a Federal grant program to States for developing and maintaining facilities for transient nontrailerable recreational vessels at least 26 feet long. These vessels must be operated primarily for pleasure or leased, rented, or chartered to another for the latter's pleasure. The priorities in awarding grants are constructing, renovating, and maintaining facilities; providing for public and private partnership efforts to develop, maintain, and operate facilities; and including new and emerging techniques, ideas, products, and concepts to increase and improve facilities and services.

The Service's Wildlife and Sport Fish Restoration (WSFR) Program and the partnerships it has fostered manage multiple grant programs. Among them is BIG, which offers grants to States to build facilities for eligible transient recreational vessels that support boating, travel, local economies, and environmental improvement, and enhance awareness and public satisfaction.

The Service published the BIG final rule in the Federal Register [66 FR 5282] on January 18, 2001. The Catalog of Federal Domestic Assistance (CFDA) describes the program at 15.622.

In 2003, the Director of the Service asked the Sport Fishing and Boating Partnership Council (Council), an advisory group established according to the requirements of the Federal Advisory Committee Act (FACA), to undertake a review of BIG and offer recommendations for improvement. The Council issued its report in June 2005 and offered recommendations for improvement in program administration; project application, review and selection; awareness and participation; and project execution and reporting. We have considered the issues and recommendations identified in the Council report. This proposed rule includes changes based on our response to advice offered by the Council.

We propose to incorporate changes to the rule based on Service Manual chapter 522 FW 16, “Preagreement Costs,” Oct. 13, 2005. The chapter establishes conditions under which a grantee may incur costs before the grant start date. It incorporates recommendations of a joint task force of Federal and State officials.

We will make changes to the rule based on Public Law 111-274, “Plain Writing Act of 2010” (October 13, 2010). This Act requires that we use plain language in all proposed and final rulemaking documents published in the Federal Register .

The Sportfishing and Boating Safety Act of 1998 required the Service to develop a National Framework for States to collect information on existing facilities and the current state of boating that would allow the Service and States to develop a strategy to address areas of need. States were to complete a survey, based on the National Framework, and the Service would use the information to develop a Comprehensive National Assessment. The Secretary of the Interior adopted the National Framework for Survey of Boating Access Needs through a Federal Register notice [65 FR 58284] on September 28, 2000. The Service proposal to implement the survey allowed States to collect data through several methods and allowed States to choose the method they used. The Office of Management and Budget (OMB) rejected the proposal, citing concerns that the variety of data collection methods would result in the inability of the Service to compile all of the States' information consistently. Funding constraints have prevented the Service from developing standardized collection methods and reporting of this information for States. The current rule contains detailed information for implementing the survey and reporting. We propose to remove these sections from the proposed rule. We will give guidance for the National Framework, State survey, and Comprehensive National Assessment in the future should the Service receive the resources needed to pursue the project.

The current rule contains criteria allowing projects to receive points for completing a State survey based on the National Framework. As we propose to remove all references to the National Framework and State survey, we also propose to remove the criterion allowing projects to receive points for completing a survey. We propose other changes to the ranking criteria for competitive grants based on Service experience and recommendations from participants, interested parties, and Service staff.

We arrange the sections of the proposed rule into subparts of related subject matter. The gaps in section numbers between each subpart allow us to add new sections in the future. We summarize the changes in the proposed rule by section or by group of sections, and cross-reference proposed section numbers to the corresponding numbers in the current version of 50 CFR part 86 as published in the Federal Register [66 FR 5282] on January 18, 2001. We refer to the 2001 version of 50 CFR part 86 when we use the term “current” before a section number or before a reference to 50 CFR part 86. Where we change the format, wording, or both, of a section or topic, but do not change the content in a major way, we indicate that we make no significant changes.

We include new terms in the definitions to make the rule easier to read and understand. We change some definitions in the current rule to clarify the meanings. We divide the rule into more subparts and sections to clarify program details.

We remove all references to “framework,” “boat access survey,” “State plans,” or any other terms or activities found in the current “Subpart J—Service Completion of the National Framework,” “Subpart K—How States Will Complete Access Needs Surveys,” “Subpart L—Completing the Comprehensive National Assessment,” and “Subpart M—How States Will Complete the State Program Plans.” We do not have OMB approval or funding to implement the framework, surveys, assessment, or plans as published in the Federal Register [67 FR 744-755] on January 7, 2002. We will publish guidance on these topics when the Service has the resources and approval to implement.

This proposed section corresponds to the current § 86.10. We remove references to both the boat access survey and State plans. We introduce two new terms, “BIG Basic” to replace “Tier 1”, and “BIG Competitive” to replace “Tier 2” for identifying the available grant award types.

This proposed section corresponds to the current § 86.11. We make no significant changes.

This proposed section corresponds to the current § 86.12. We give definitions for terms as they apply to BIG that improve reader understanding of the program and our administration of it. The proposed section defines the following terms that are not in the corresponding “Definitions” section of 86.12: BIG-funded facility, Capital improvement, Director, Eligible user, Eligible vessel, Facility, Match, Real property, Regional Office, Scope, Service, and Useful life. We introduce the terms “BIG-funded facility” and “Facility” to differentiate between the components of a facility that receive BIG funding and to which this part applies, from the rest of the facility. We define “Capital improvement” and apply the term to explain useful life, the Federal interest in property, and information to include in the BIG grant application. We introduce the terms “Eligible vessel” and “Eligible user” so that we do not repeat the term “transient nontrailerable recreational vessel at least 26 feet long” throughout the rule. We use “Useful life” to tell applicants how to follow guidance in the rule that shows the responsibilities of grantees to maintain a BIG-funded facility.

We propose to move the section on “Boating infrastructure” from the current § 86.13 and include it as a term in this section. We expand the term “Construction” to include all applicable phases of construction.

We remove the terms: Proposal, Recreational waters, Survey instrument, and Tie-up facilities. We include the information for what is in a “Proposal” in the proposed § 86.41 “How do you apply for a grant?”. We do not need the terms “Recreational waters” and “Survey instrument” because we do not use them in the rule. We remove the term “tie-up facilities” because the term is too restrictive and does not reflect all the eligible activities in BIG.

This proposed subpart does not have a corresponding subpart in the current regulations. We use this subpart to tell grantees and the public what the basic program requirements are. This subpart lays a foundation for the subparts that follow. We indicate where we relocate current sections to this new subpart. We incorporate and expand the current § 86.15 throughout the subpart.

This proposed section corresponds to the current § 86.14. We make no significant changes.

This proposed section corresponds to the current § 86.20. The section lists only eligible activities. We discuss design features at § 86.13. We propose to add to the list of eligible activities those services, equipment, and structures that: (a) Support clean boating and good environmental practices and (b) make boating infrastructure more convenient for eligible users.

The Act requires that we consider as a priority those projects that propose “innovative ways to increase the availability of facilities.” We propose new language to allow flexibility so that we may approve other activities in the future that consider new ideas and technologies, promote environmental stewardship and awareness, and benefit the mission of BIG. We explain some eligible activities in general terms to allow for growth of the program based on our knowledge and judgment year to year.

This proposed section corresponds to the current § 86.13. We remove the term “Safe harbor” from this section and the rule as a whole. The public now commonly uses the term to define business or financial situations that have no connection to boating and are not applicable to the BIG rule. Where we refer to a place of safety for boaters in the proposed rule, we use the term “Harbor of safe refuge.”

We separate the design criteria from the current § 86.20 to clarify the differences between eligible activities and required design features. All eligible activities must include the required design features, but not all design features are eligible activities. BIG facilities cater to larger boats that contain Marine Sanitation Devices that may require a pumpout, so pumpout service is an integral part of a BIG-funded project. However, we will consider waiving the requirement for a pumpout if: (a) The BIG-funded facility is in an area that does not have existing utilities to operate a pumpout, (b) the applicant can demonstrate it is not feasible to install, or (c) there are legal restrictions that do not allow septic-waste collection facilities in an area. If we waive the requirement to provide a pumpout facility, we will require that the grantee post a sign telling boaters they must hold and dispose of waste properly and indicate where the nearest pumpout or pumpouts are located.

We add this new proposed section to tell applicants how they can receive BIG funds for maintenance. BIG Competitive grants are primarily for construction projects, and grantees must receive funds with the understanding that they are responsible for the continued maintenance of the BIG-funded facility for the useful life of the project. Grantees may propose to include maintenance activities during construction that support the eligible project, such as painting the existing transient docks, replacing worn planks, or overhauling the fuel dock. Applicants may request BIG Basic funding for eligible maintenance at any BIG-eligible facility any time in the life of the project.

We add this new proposed section to expand on how grantees may use BIG funding for dredging projects. The primary purpose of BIG is to construct, renovate, or maintain facilities for eligible users, but sometimes dredging is necessary to provide access to eligible users. We establish a funding limit for dredging of no more than 10 percent of the total BIG-funded project, which includes the Federal grant and match. This limit applies to all activities directly related to dredging. Grantees may pay for additional costs through other funding sources, but they may not use their excess contribution toward any other BIG matching requirements. We limit funding for dredging because it does not produce additional slips or amenities.

This proposed section corresponds to the current § 86.21. We list ineligible activities and we give other requirements at § 86.16(a)(9) and (b), without which we will consider a project or activity ineligible. We remove references to plans and surveys. We remove the 20-year useful-life requirement from the current section and discuss useful-life requirements at §§ 86.74 and 86.75. We designate as ineligible activities: acquiring land; constructing retail businesses, parking lots, or roads; administering or managing the facility; and purchasing or operating boats to transport boaters.

This proposed section does not have a corresponding section in the current regulations. We add it to emphasize the information in the current § 86.20 that allows projects on publicly or privately owned properties.

This proposed section does not have a corresponding section in the current regulations. We add this section to tell grantees that they must apply best standards when constructing a project and follow requirements to protect the State and Federal interest in the BIG-funded project.

We affirm the obligation of States to record, or ensure that subgrantees record, the Federal interest in a BIG project and require notice of certain changes that may occur at the project location during its useful life.

This proposed section corresponds to the current § 86.44(b). We tell a grantee how to assign costs to the BIG-funded project when components of the project may also include ineligible costs or benefits.

We remove references to specific-year funding and dates specific to the grant cycle. We will publish annual funding and date information in the annual Request for Applications (RFA).

We add this new section to inform the public of the source of funds for BIG and emphasize the participation of anglers and boaters in supporting the Sport Fish Restoration and Boating Trust Fund.

This proposed section replaces the current § 86.40 and § 86.41 in general terms. We discuss the process rather than specific amounts.

This proposed section corresponds to the current § 86.42. We add that grantees must not use land or any interest in land for match to emphasize that BIG grants are for boating infrastructure and not land acquisition. States have access to other Federal grants to buy land for boating access. We do not allow using the value of existing structures as match in a BIG project to avoid subsidizing existing facilities.

This proposed section does not have a corresponding section in the current regulations. We explain how grantees must show match and match commitments in an application. This will allow reviewers to evaluate the source and value of matching funds more consistently.

This proposed section does not have a corresponding section in the current regulations. Match is often associated with partnerships. We consider partnerships as part of the scoring criteria. We include this section to tell applicants how changes in contributions provided by a partner may affect their applications. We emphasize the responsibility of the grantee to provide the match should the providing partner not be able or willing to fulfill their commitment. This section also emphasizes the importance of making sure that partners' commitments are reliable.

We remove the current § 86.50 and § 86.51 that give dates and specific contacts for sending in grant applications. We will provide this information in the annual RFA.

This proposed section replaces the current § 86.53, replaces some of the information in the current § 86.54, and presents the information in table form. We introduce new funding limits. BIG Basic grants will have an annual minimum award of $100,000 per State, but the minimum award may increase depending on available annual funds. We will announce the maximum award in each RFA. We will limit BIG Competitive grants to $1.5 million to allow us to fund more projects. To date, less than 5 percent of the BIG Competitive projects have exceeded $1.5 million in Federal funds.

This proposed section includes topics discussed in the current § 86.51. We remove addresses for the Regional Offices and direct the public to http://www.grants.gov and the annual RFA for detailed contact information.

This proposed section corresponds to the current § 86.52. We include general information and refer applicants to http://www.grants.gov and the annual RFA for more guidance.

This proposed section does not have a corresponding section in the current regulations. We add this section to improve consistency of information included in applications, to enable the review and ranking of applications, and to clarify OMB Circular A-102, “Grants and Cooperative Agreements with State and Local Governments.”

We propose this new section to describe the need for BIG competitive grant applicants to address ranking criteria and provide maps and drawings to support the proposed project. The section also emphasizes the requirement at the proposed § 86.33 for commitment letters from partners providing match.

We propose this new section to inform applicants how to apply for funding if they plan a project that will require more than the $1.5 million Federal share and the required match to complete. We emphasize that each BIG Competitive grant application must be a discrete project that meets all grant criteria without considering any other BIG grant applications. All BIG Competitive grants will compete equally with all other grant applications, and we will not give preference to an application based on its connection to another application. If one project cannot be completed or be successful without the other, we will either reject it or assign it a low score. States may use BIG Basic funds to assist projects that have received BIG Competitive funds, or to complete portions of projects over several years.

We propose this new section to clarify that if you are unsuccessful in receiving a grant for a BIG grant one year, you may reapply in following years.

We propose this new section to emphasize the responsibility of the applicant to submit a complete application by the due date. We give details that set clear standards and help avoid any unfair interpretation in this national program.

This subpart corresponds to the current Subpart F—How the Service Selects Projects to Receive Grants.

We propose sections 86.52-86.58 to explain the criteria at section 86.51. This will help applicants and the public understand how we view each ranking criterion.

This proposed section corresponds to the current § 86.61 with no significant changes.

This proposed section corresponds to the current § 86.60. We change the scoring criteria to correspond to the three priorities Congress established in the original Act. We also change the scoring system to a sliding scale for each criterion. We base this change on experience administering BIG and advice from States, a Federal advisory committee, and boating-related organizations. The current rule does not consistently allow sliding scales, and reviewers often must score projects using set points that can negatively affect accurate assessment of projects. For one current criterion, applicants must receive at least 1 point even if the criterion does not apply to their project or they do not address it in the application. This change allows ranking committee members to consider the need, value, significance, and benefit when scoring the project. We adjust the criterion in the current rule that gives preference to projects at existing marinas to give projects at new locations the ability to rank well. We continue to emphasize partnerships but expand the criteria in response to recommendations that asked us to consider the nonmonetary value of a partner as well as the monetary contributions. The proposed criteria allow for partnerships in small communities to rank well even if they do not result in large financial contributions. We also set new standards for innovation. The intent is to allow reviewers the flexibility to judge applications based on new technologies and techniques each year, and to consider different standards for innovation year-to-year, based on knowledge and availability at the time of the review.

We propose to emphasize that projects must show a need for new or expanded facilities. We wish to avoid funding projects in areas that have sufficient capacity or where eligible boaters are unlikely to travel.

We propose to consider not only a destination that is likely to attract boaters, but also access from the BIG-funded facility and how long the attraction is available. We expand this section to include the need for services that help transient boaters. A significant destination, such as a national park or entertainment attraction, may entice boaters, but if they cannot refuel, stock up on provisions, and take care of basic needs, then it is unlikely they will go there.

We propose to expand on the current criterion (5) that requires a project to be cost-effective. The current criterion requires a cost-per-slip analysis that favors construction in an existing marina or area. We modify this criterion to allow reviewers to look at the cost of a project in relation to the benefit received. This will allow a project that costs more per slip because it is new, but is in an area of great need, to rank well against a project that costs less per slip, but offers less benefit.

We propose to show what applicants must include in their applications to receive points for partners. Applicants must verify the commitment of all partners, including subgrantees, by a signed letter that includes details of the partnership. States, as applicants, are not partners. Governmental entities are partners only if they contribute to the project more than required by legal mandate or administrative assignment. We will allow various types of partners and consider contributions other than monetary.

We propose to allow applicants to receive additional points if they or their partners contribute more than the minimum 25-percent matching share. This is similar to the current § 86.60(b)(4), but has a sliding scale instead of the set breakdown of points.

We propose this new criterion for projects that include components that improve the local environment or mitigate the impacts of the project. Examples are when applicants propose to:

1. Design or renovate docks to allow more sunlight to pass through, thus benefitting a local fish or plant habitat;

2. Include a structure in the dock system to nurture juvenile aquatic life to be released into the larger area; or

3. Renovate a fuel dock to prevent spills.

We propose this new criterion to encourage using new technologies and techniques, environmentally sound best-management practices, and education to produce a project that supports the overall mission of BIG and the Service.

This proposed section corresponds to the current § 86.62, but we give further detail on requirements to obligate funding promptly.

This proposed subpart corresponds to the current “Subpart G—How States Manage Grants.” We propose to include questions and answers to give grantees a better understanding of their responsibilities once they receive a BIG grant.

We propose minimum standards for construction and a requirement that a licensed engineer or architect design construction.

We propose to give a reasonable time frame to complete a BIG project with a baseline of 3 years from the beginning of the grant period. The intent of BIG is to award funds so that projects are completed and available for eligible boater use as soon as possible. However, sometimes there are delays beyond the control of the grantee, so we allow justified grant extensions. We include instructions for grant extensions at § 86.72.

We propose this new section to tell grantees how they may request an extension if their project is not completed during the 3-year grant period. The proposed process allows for two 1-year extensions if grantees can document progress. We have included a possibility for further extensions under extreme conditions. We propose this process to encourage grantees to complete projects promptly.

This proposed section corresponds to the current § 86.74. The current rule states that a grantee must compete in another grant cycle if it needs more funds. This suggests that an applicant does not have the responsibility to complete an awarded project as presented and could potentially set up a system where grantees might expect extra funding to finish projects they originally stated they could complete with requested funds. It also suggests that partial projects can successfully compete against full projects. BIG is a competitive program, and when we fund a project through BIG, we expect the grantee to complete the project as proposed. We reject applications that do not propose discrete projects. A grantee may not come back and request more BIG Competitive funds to complete the project. That would be unfair to applicants that competed unsuccessfully and unfair to grantees that completed their projects as proposed. Should the grantee need more money to complete the project, we expect the grantee to find another source of funding to complete the project. If that is not possible, the grantee may ask for a change in scope following our guidance.

This proposed section corresponds to the second sentence of the current § 86.20(a)(1) and § 86.70(b). We propose that grantees maintain the BIG project for the useful life specified in the grant agreement instead of the 20 years in the current rule. We address how a catastrophic incident may affect useful life.

This proposed section expands on the proposed § 86.74 and tells applicants what information to consider when they propose a useful life for their project in the grant application and how we will include the useful life in the grant agreement.

This proposed section corresponds to the current §§ 86.91 and 86.94. We added a graphic of the Sport Fish Restoration logo in the proposed rule. Since the current rule was published, the Division of Federal Aid was renamed the Division of Wildlife and Sport Fish Restoration. We change recommended crediting language to reflect Sport Fish Restoration and BIG. We require that you must credit BIG for the funding.

This proposed section corresponds to the current §§ 86.91-86.93. We indicate where grantees and subgrantees may use the Sport Fish Restoration logo. We also state the consequences of unauthorized use.

This proposed new section gives the circumstances where program income requirements would apply to a BIG grant.

This proposed new section clarifies the requirements for income earned after the grant period.

This subpart tells grantees, subgrantees, and operators how a BIG-funded facility must be operated and maintained.

This proposed section corresponds to the current § 86.31. According to OMB Circular A-102, “Grants and Cooperative Agreements with State and Local Governments,” grantees must not use grant-acquired assets to compete unfairly with the private sector. It is unacceptable for grantees to make money using grant funds by charging more than the local market. This section tells grantees: (a) How to propose reasonable fees for BIG-funded projects and (b) that they must include this information in the grant application.

This proposed new section does not correspond to a current section. It allows the operator of a BIG-funded project to increase or decrease fees after the grant period based on changes in the local market.

This proposed section corresponds to the current § 86.21(a) and § 86.30. We propose no significant changes to the public access requirements. We add a paragraph that allows an operator to limit access temporarily for emergency or other reasonable purposes.

This proposed section corresponds in part to the current §§ 86.13(b) and 86.20(a)(5)(ii), which discuss day docks as an eligible activity under BIG. This section allows BIG-funded facilities to be for day use only if proposed in the application.

This proposed section corresponds to the current § 86.90 with no significant changes.

We propose this new section to inform grantees of the conditions that apply to postaward changes of information in an application.

We propose this new section to supplement § 86.100.

This proposed section corresponds to the current § 86.63. There are no significant changes, but we include additional guidance.

This proposed section is new. It supports the authority of the Director to make exceptions to this rule.

This proposed section corresponds to the current § 86.52 and “Subpart H—Reporting Requirements for the States.” The proposed section is more general than the current section to allow this regulation to stay current if the frequency and level of reporting change.

You may submit your comments and materials concerning this proposed rule by one of the methods listed in ADDRESSES . We will not accept comments sent by email or fax or to an address not listed in ADDRESSES . Finally, we will not consider hand-delivered comments that we do not receive, or mailed comments that are not postmarked, by the date specified in DATES .

Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal information from public view, we cannot guarantee that we will be able to do so.

We are required by Executive Orders 12866 and 12988 and by Public Law 111-274, “Plain Writing Act of 2010” (October 13, 2010), to write all rules in plain language. This means that each rule we publish must:

a. Be logically organized;

b. Use the active voice to address readers directly;

c. Use clear language rather than jargon;

d. Be divided into short sections and sentences; and

e. Use lists and tables wherever possible.

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

OMB has determined that this rule is not significant and has not reviewed this rule under E.O. 12866. OMB bases its determination on the following four criteria:

a. Whether the rule will have an annual effect of $100 million or more on the economy or adversely affect an economic sector, productivity, jobs, the environment, or other units of the government.

b. Whether the rule will create inconsistencies with other Federal agencies' actions.

c. Whether the rule will materially affect entitlements, grants, user fees, loan programs, or the rights and obligations of recipients.

d. Whether the rule raises novel legal or policy issues.

The Regulatory Flexibility Act requires an agency to consider the impact of proposed rules on small entities, i.e., small businesses, small organizations, and small government jurisdictions. If there is a significant economic impact on a substantial number of small entities, the agency must perform a Regulatory Flexibility Analysis. This is not required if the head of an agency certifies the rule would not have a significant economic impact on a substantial number of small entities. The Small Business Regulatory Enforcement Fairness Act (SBREFA) amended the Regulatory Flexibility Act to require Federal agencies to state the factual basis for certifying that a rule would not have a significant economic impact on a substantial number of small entities.

We have examined this proposed rule's potential effects on small entities as required by the Regulatory Flexibility Act. We have determined that the proposed changes do not have a significant impact and do not require a Regulatory Flexibility Analysis because the changes:

a. Give information to State fish and wildlife agencies that allows them to apply for and administer grants more easily, more efficiently, and with greater flexibility. Only State fish and wildlife agencies may receive grants in BIG, but small entities sometimes voluntarily become subgrantees of agencies. Any impact on these subgrantees would be beneficial.

b. Address changes in law and regulation. This helps grant applicants and recipients by making the regulation consistent with current standards. Any impact on small entities that voluntarily become subgrantees of agencies would be beneficial.

c. Reword and reorganize the regulation to make it easier to understand. Any impact on the small entities that voluntarily become subgrantees of agencies would be beneficial.

The Service has determined that the changes primarily affect State governments. The small entities affected by the changes are primarily concessioners and subgrantees that voluntarily enter into mutually beneficial relationships with an agency. The impact on small entities would be very limited and beneficial in all cases.

Consequently, we certify that because this proposed rule would not have a significant economic effect on a substantial number of small entities, a Regulatory Flexibility Analysis is not required.

In addition, this proposed rule is not a major rule under SBREFA (5 U.S.C. 804(2)) and would not have a significant impact on a substantial number of small entities because it does not:

a. Have an annual effect on the economy of $100 million or more.

b. Cause a major increase in costs or prices for consumers; individual industries; Federal, State, or local government agencies; or geographic regions.

c. Have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. Ch. 25; Pub. L. 104-4) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. The Act requires each Federal agency, to the extent permitted by law, to prepare a written assessment of the effects of a proposed rule with Federal mandates that may result in the expenditure by State, local, and tribal governments, in aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any 1 year. We have determined the following under the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq. ):

a. As discussed in the determination for the Regulatory Flexibility Act, this proposed rule would not have a significant economic effect on a substantial number of small entities.

b. The regulation does not require a small government agency plan or any other requirement for expenditure of local funds.

c. The programs governed by the current regulations and enhanced by the proposed changes potentially assist small governments financially when they occasionally and voluntarily participate as subgrantees of an eligible agency.

d. The proposed rule clarifies and enhances the current regulations allowing State, local, and tribal governments and the private sector to receive the benefits of grant funding in a more flexible, efficient, and effective manner.

e. Any costs incurred by a State, local, or tribal government or the private sector are voluntary. There are no mandated costs associated with the proposed rule.

f. The benefits of grant funding outweigh the costs. The Federal Government provides up to 75 percent of the cost of each grant to the 50 States affected by the proposed rule. The Federal Government will also waive the first $200,000 of match for each grant to the Commonwealth of the Northern Mariana Islands and the territories of Guam, the U.S. Virgin Islands, and American Samoa. Of the 50 States and 6 other jurisdictions that voluntarily are eligible to apply for grants in these programs each year, 95 percent have participated. This is clear evidence that the benefits of this grant funding outweigh the costs.

g. This proposed rule would not produce a Federal mandate of $100 million or greater in any year, i.e., it is not a “significant regulatory action” under the Unfunded Mandates Reform Act.

This proposed rule would not have significant takings implications under E.O. 12630 because it would not have a provision for taking private property. Therefore, a takings implication assessment is not required.

This proposed rule would not have sufficient Federalism effects to warrant preparation of a Federalism assessment under E.O. 13132. It would not interfere with the States' ability to manage themselves or their funds. We work closely with the States in administration of these programs, and they helped us identify those sections of the current regulations in need of change and new issues in need of clarification through regulation. In drafting the proposed rule, we received comments from the Sport Fishing and Boating Partnership Council, a nongovernment committee established under FACA; the States Organization for Boating Access; the Joint Federal/State Task Force on Federal Assistance Policy; and individual States.

The Office of the Solicitor has determined under E.O. 12988 that the rule would not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order. The proposed rule will benefit grantees because it:

a. Updates the regulations to reflect changes in policy and practice and recommendations received during the past 10 years;

b. Makes the regulations easier to use and understand by improving the organization and using plain language;

c. Modifies the final rule to amend 50 CFR 86 published in the Federal Register at 66 FR 5282 on January 18, 2001, based on subsequent experience; and

d. Adopts recommendations on new issues received from State fish and wildlife agencies and the Sport Fishing and Boating Partnership Council since we published the current rule.

We examined the proposed rule under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ), and there are no new collections of information that require OMB approval. The proposed 50 CFR part 86 describes the Boating Infrastructure Grant Program, including application and reporting requirements.

OMB has approved Governmentwide standard forms for: (a) Grant applications (OMB Control No. 4040-0004); (b) certifications related to authority, capability, and legal compliance (OMB Control Numbers 4040-0007 and 4040-0009); (c) reports on the status of Federal grant funds and any program income earned (OMB Control Number 0348-0061); and (d) reports on real property status and requests for agency instructions on real property (OMB Control Number 3090-0296).

In addition to the above, OMB approved the following information collection requirements associated with the BIG Program: (a) Project statement in support of a grant application, (b) report on progress in completing a grant-funded project, and (c) request to approve an update or another change in information provided in a previously approved application (OMB Control Number 1018-0109).

We may not collect or sponsor and you are not required to respond to a collection of information unless it displays a current OMB control number.

We have analyzed this rule under the National Environmental Policy Act, 42 U.S.C. 4321 et seq. and part 516 of the Departmental Manual. This rule does not constitute a major Federal action significantly affecting the quality of the human environment. An environmental impact statement/assessment is not required due to the categorical exclusion for administrative changes provided at 516 DM 8.5A(3).

We have evaluated potential effects on federally recognized Indian tribes under the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951), E.O. 13175, and 512 DM 2. We have determined that there are no potential effects. This proposed rule would not interfere with the tribes' ability to manage themselves or their funds.

E.O. 13211 addresses regulations that significantly affect energy supply, distribution, and use, and requires agencies to prepare Statements of Energy Effects when undertaking certain actions. This rule is not a significant regulatory action under E.O. 12866 and does not affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action and no Statement of Energy Effects is required.

For the reasons discussed in the preamble, we propose to amend title 50 of the Code of Federal Regulations, chapter I, subchapter F, by revising part 86 to read as follows: