Background

On July 13, 2012, CBP published in the Federal Register (77 FR 41266), as CBP Decision Number 12-13, a final rule reflecting an extension of import restrictions on certain archaeological and ethnological materials from Cyprus and announcing that the Designated List of materials covered by the restrictions (also published with CBP Dec. 12-13) has been revised to reflect that the ethnological articles previously covered under the list through the Byzantine period (through approximately the 15th century A.D.) are also covered if dating through the Post-Byzantine period (to 1850 A.D.). The Designated List contains a list of certain archaeological materials and a list of certain ethnological materials. The revisions were limited to the list of ethnological materials.

The rule also announced an amendment to the list of ethnological materials to clarify that certain mosaics of stone and wall paintings (referred to as “wall hangings” in CBP Dec. 12-13) include those depicting images of Saints along with those depicting images of Christ, Archangels, and the Apostles. The restrictions were extended for a five-year period (through July 16, 2017) pursuant to determinations of the State Department under the terms of the Convention on Cultural Property Implementation Act in accordance with the United Nations Educational, Scientific and Cultural Organization (UNESCO) Convention on the Means of Prohibiting and Preventing the Illicit Import, Export and Transfer of Ownership of Cultural Property.

In CBP Dec. 12-13, the title of the Designated List was erroneously abbreviated where the Department of State Web site is listed. This document corrects the omission and clarifies that the covered ecclesiastical and ritual ethnological materials are those dating to the Byzantine and Post-Byzantine periods. In the list of ethnological materials, CBP inadvertently retained references to the Byzantine period. As the list was revised to cover listed ethnological materials if dating to the Post-Byzantine period as well, references to the Byzantine period in the list are inconsistent and misleading. This document corrects the oversight and removes all references to the Byzantine period in the list. In addition, this document corrects the language in Amendatory Instruction number 2 of CBP Dec. 12-13 which imprecisely set forth in the amended regulation the end point of the time period applicable to the ethnological materials covered by the restrictions. This correction remedies an inconsistency with the time period which was correctly reflected in the heading of the list of ethnological materials found on page 41269 of the published document (in the first column).

Accordingly, the publication on July 13, 2012 of the final regulation (CBP Dec. 12-13), which was the subject of FR Doc. 2012-16989, is corrected as follows:

Preamble:

1. In the first column on page 41267, in the last paragraph that extends into the second column, first sentence, remove the words “and Ecclesiastical and Ritual Ethnological Materials” and add in their place the words “and Byzantine and Post-Byzantine Period Ecclesiastical and Ritual Ethnological Materials”;

2. In the first column on page 41269:

a. Under the heading “B. Lead,” remove the words “date to the Byzantine period and”, and

b. Under the heading “II. Wood,” in the first sentence, remove the words “during the Byzantine period”;

3. In the second column on page 41269:

a. Under the heading “V. Textiles—Ritual Garments,” in the first sentence, remove the words “from the Byzantine period”,

b. Under the heading “A. Wall Mosaics,” in the first sentence, remove the words “Dating to the Byzantine period, wall mosaics” and add in their place the words “Wall mosaics”, and

c. Under the heading “VII. Frescoes/Wall Paintings,” in the first sentence, remove the words “the Byzantine period”.

Correcting amendment:

Background

This document contains final amendments to the Income Tax Regulations, 26 CFR part 1, relating to the disallowance under section 274 of the Internal Revenue Code (Code) of deductions for the use of business aircraft for entertainment.

On June 15, 2007, a notice of proposed rulemaking (REG-147171-05) regarding the use of business aircraft for entertainment was published in the Federal Register (72 FR 33169). Written and electronic comments responding to the notice of proposed rulemaking were received. A public hearing on the proposed regulations was held on October 25, 2007. After consideration of all the comments, the proposed regulations are adopted as amended by this Treasury decision. The comments and revisions are discussed in the preamble.

The proposed regulations provide that expenses subject to disallowance under section 274(a) include variable costs such as fuel and landing fees, and fixed costs such as depreciation, hangar fees, pilot salaries, and other items not directly related to an individual flight. Commentators suggested that the final regulations should limit expenses subject to disallowance to the direct or variable costs of a flight and exclude fixed costs. The final regulations do not adopt this comment because section 274(e)(2) does not explicitly differentiate between fixed and variable expenses and because such an interpretation is contrary to Congressional intent.

The proposed regulations requested comments on whether, as an alternative to determining actual expenses, the final regulations should allow taxpayers to determine the amount of expenses paid or incurred for entertainment flights by reference to charter rates. The proposed regulations asked for specific comments on the availability of substantiated actual, published, undiscounted charter rates charged to the general public by companies that meet certain requirements.

Commentators generally endorsed the inclusion of a charter rate safe harbor in the final regulations. They suggested that the IRS establish rates either by conducting a survey of average charter rates by region or by authorizing representatives of the industry to create a charter rate reporting system. One commentator suggested that if the IRS does not establish charter rates, individual taxpayers should be allowed to determine charter rates. Commentators also stated that a charter rate safe harbor should include rates for rentals of small piston aircraft, which taxpayers use extensively for business but normally are not chartered.

The difficulty of determining accurate and reliable charter rates continues to be an impediment to establishing a charter rate safe harbor. Accordingly, the final regulations do not include these rules. However, the final regulations authorize the IRS to adopt charter rate or other safe harbors in future published guidance, see § 601.601(d).

The proposed regulations permit a taxpayer to elect to compute depreciation expenses on a straight-line basis for all of the taxpayer's aircraft and all taxable years for purposes of calculating expenses subject to disallowance, even if the taxpayer uses another method to compute depreciation for other purposes. The proposed regulations provide a transition rule for applying the straight-line election to aircraft placed in service in taxable years preceding the election, which requires the taxpayer to apply the straight-line method as if it had been applied from the year the aircraft was placed in service.

A commentator requested that the final regulations allow a separate election for each aircraft. The final regulations do not allow an aircraft-by-aircraft election. Requiring taxpayers to make the election for all aircraft appropriately balances the policies of promoting business investment through the allowance of additional first-year depreciation and denying a tax benefit for entertainment use of business aircraft.

The commentator also suggested that changing depreciation methods under the transition rule may result in disallowing more than 100 percent of the cost of the aircraft. In response to the comment, the final regulations clarify that, in any taxable year, the depreciation disallowance does not exceed the amount of otherwise allowable depreciation. Thus, the sum of the allowable depreciation and the depreciation disallowed will not exceed 100 percent of basis, regardless of the taxable year a taxpayer makes the straight-line election.

The final regulations provide examples illustrating how taxpayers determine depreciation and basis under the election.

A commentator asked for clarification on whether interest is an expense that is subject to disallowance. In response to this comment, the final regulations clarify that interest is subject to disallowance if the underlying debt is secured by or properly allocable to an aircraft used for entertainment.

The proposed regulations provide that a taxpayer may aggregate expenses for aircraft of similar cost profiles to calculate expenses subject to disallowance. The proposed regulations require that aircraft have the same engine type and number and suggest other factors relevant to whether aircraft are of a similar cost profile.

A commentator requested that the final regulations make the aircraft aggregation rules less restrictive. The commentator opined that taxpayers should be allowed to aggregate the expenses of all aircraft to alleviate the administrative burden of computing and allocating expenses to entertainment use of the aircraft. The commentator stated that, alternatively, the rules inappropriately require similar cost profiles to include the same number of engines and require an unduly detailed analysis of the aircraft characteristics.

The final regulations retain the aircraft aggregation rules. Aggregating the expenses of all aircraft regardless of cost characteristics would create unacceptable distortions in the amount of expenses allocated to the use of each aircraft. The rules are sufficiently broad and flexible for taxpayers to easily apply them.

The proposed regulations provide two alternative methods for allocating the costs associated with the use of an aircraft to provide entertainment to specified individuals. The occupied seat hours or miles allocation method divides the total expenses for the year by the number of occupied seat hours or occupied seat miles to determine a per seat or per mile rate, and it applies the rate to the number of hours or miles of entertainment use. The flight-by-flight method allocates expenses to a flight and then to the passengers on the flight according to the entertainment or nonentertainment character of the travel.

Commentators suggested that the final regulations adopt a primary purpose test for identifying disallowed expenses. Under a primary purpose test, the primary purpose of a flight would determine whether any costs associated with specified individuals traveling for entertainment on that flight are disallowed. Generally, if the primary purpose of a flight is business, no more than the additional or incidental costs associated with specified individuals traveling for entertainment aboard that flight would be disallowed. Some commentators suggested that if the primary purpose of a flight is business, no costs should be allocated to entertainment. One commentator advocated that the final regulations include a primary purpose test as a safe harbor for smaller aircraft.

The final regulations do not adopt a primary purpose test. Section 274(e)(2) applies if a taxpayer provides entertainment, amusement, or recreation to a specified individual and does not depend on either the reason the taxpayer provides the entertainment or the overall use of the aircraft. Disregarding entertainment use by a specified individual is contrary to Congressional intent in amending section 274(e)(2) to disallow expenses allocable to entertainment use of aircraft by specified individuals.

Commentators suggested the passenger-by-passenger allocation of costs in the proposed regulations imposes an undue administrative burden on taxpayers. One commentator stated that the regulations result in excess disallowance and are unworkable due to their inconsistency with the primary purpose test. Another commentator said that determination of the character of each passenger's use could be difficult and asked for more examples illustrating when a use is entertainment.

The final regulations retain the occupied seat hours or miles and flight-by-flight allocation rules. Before the amendment of section 274(e)(2), taxpayers were required to maintain records of the character of the use of aircraft by employees to comply with the income inclusion rules of section 61 and § 1.61-21. Any additional administrative burden resulting from the requirement to identify, and allocate expenses to, entertainment use of aircraft is limited and is inherent in the statutory requirement to allocate expenses to entertainment use. The final regulations do not include additional examples of entertainment use because entertainment use is defined for purposes of section 274 in § 1.274-2(b)(1) and is therefore beyond the scope of this regulation.

The proposed regulations provide that the disallowance provisions are applied on a pro rata basis to all disallowed expenses. A commentator requested clarification of how an amount that is treated as compensation to or reimbursed by a specified individual is allocated to disallowed expenses. The commentator noted that it is necessary to determine the amount of disallowed expenses that represents depreciation to properly adjust an aircraft's basis.

In response to this comment, the final regulations clarify that any amounts disallowed and any amounts reimbursed or treated as compensation are applied to total expenses subject to disallowance on a pro rata basis. The final regulations include an example illustrating this rule.

The proposed regulations do not exempt expenses for entertainment travel from disallowance under section 274 when there is a business need to use the aircraft to provide security pursuant to § 1.132-5(m). A commentator argued that the final regulations should provide that the excess cost of using a private aircraft for bona fide security concerns should not be subject to disallowance. Section 1.132-5(m) reduces the amount of income inclusion for the fringe benefit under circumstances in which a bona fide security concern exists, but does not convert an entertainment flight into a business flight. Because section 274(e) does not provide an exception to disallowance for expenses related to the use of a private aircraft for bona fide security concerns, the final regulations do not adopt this comment.

The proposed regulations do not address the use of aircraft as entertainment facilities, but requested comments on whether additional guidance on this question should be issued. Commentators suggested that the same rules in the proposed regulations should apply to the use of aircraft as entertainment facilities and requested that the final regulations clarify when and how the rules apply to entertainment facilities.

These regulations interpret section 274(e)(2). Section 274(e)(2) is an exception to the disallowance provisions of section 274(a). Expenses for entertainment facilities are disallowed under section 274(a)(1)(B). Therefore, the final regulations clarify that section 274(e)(2) and the associated regulations apply to expenses for entertainment facilities as well as entertainment activities. However, the final regulations do not include specific rules for the use of aircraft as entertainment facilities, which are addressed elsewhere in the section 274 regulations.

The proposed regulations provide that an aircraft flying without passengers en route to pick up, or after having discharged, passengers (deadhead flight) is generally treated as having the same number and character of passengers as the leg of the trip on which passengers are on board. A commentator suggested that the final regulations allow any reasonable method to determine expenses related to deadhead flights. The final regulations do not adopt this rule because it would be difficult to administer.

Another commentator asked that the final regulations provide examples including mathematical computations for expenses for deadhead flights. In response to this comment, the final regulations include examples illustrating the computation of expenses for a deadhead flight.

The proposed regulations provide that expenses allocable to a lease or charter of an aircraft to an unrelated third party in a bona-fide business transaction for the charter period are not subject to the expense disallowance. A commentator suggested that the rules for leases and charters to third parties should clarify that “charter period” includes “lease period,” that not only expenses but also flight hours or miles attributable to a charter period are removed from the seat/hour or seat/mile calculation, and that a taxpayer may use any reasonable method to allocate expenses to a charter period.

The seat hour or seat mile calculation is a method of allocating expenses to entertainment use. If expenses are not subject to the expense disallowance, then no allocation is required, and seat hours or miles attributable to a charter period are not included in that calculation. The final regulations change the term charter period to the term lease or charter period. The final regulations also clarify that whether a third party is unrelated to the taxpayer is determined under section 267(b) or 707(b).

A commentator asked for clarification on whether the proposed regulations modify the section 274(e)(8) exception for “entertainment sold to customers.” Another commentator asked for clarification on what constitutes “adequate and full consideration” for purposes of the section 274(e)(8) exception.

The proposed and final regulations, which provide guidance on the section 274(e)(2) exception, state that the section 274(a) disallowance for the use of a taxpayer-provided aircraft for entertainment does not apply to expenses that meet the exceptions of section 274(e). As stated in § 1.274-2(f)(2)(ix), section 274(e)(8) applies only to taxpayers that are in the trade or business of providing entertainment to customers, and only to entertainment sold to customers. However, the final regulations do not provide additional rules on the section 274(e)(8) exception, which is outside the scope of the regulations.

A commentator requested that the final regulations include an exception for entertainment flights by employees of commercial passenger or cargo airlines on flights operated by their employers. The commentator also noted that identifying entertainment use by specified individuals on these flights and allocating expenses to this use would be extremely burdensome. While the final regulations do not provide a general exception to the disallowance rules for taxpayers that are commercial passenger or cargo airlines because a general exception is not supported by the statute, the final regulations provide a special rule for specified individuals on regularly scheduled flights of taxpayers that are commercial passenger airlines. This rule treats expenses of entertainment flights by specified individuals in the same manner as expenses of entertainment flights by non-specified individuals under certain circumstances.

A commentator suggested that the final regulations should include rules on charitable contribution deductions for the fixed costs of using aircraft for charitable purposes. These rules are outside the scope of the regulations; therefore, the final regulations do not adopt this comment.

Section 274(e)(2) and the proposed regulations provide, in general, that expenses are not disallowed to the extent of the amount a taxpayer treats as compensation to, or includes in the income of, a specified individual. A commentator requested that the final regulations include a “safe harbor deduction” of the amount of compensation claimed for the specified individual. The final regulations do not adopt this comment because section 274(e)(2) already operates as a safe harbor deduction to the extent of amounts treated as compensation and income, up to the amount of expenses properly allocable to that entertainment use.

The proposed regulations additionally provide, in effect, that expenses are not disallowed to the extent of the amount a specified individual reimburses the taxpayer. A commentator asked that the final regulations include examples of how these rules apply when an employee pays for a flight and that the regulations specify that the taxpayer has income in that circumstance. The final regulations retain examples from the proposed regulations that illustrate the amount of expenses disallowed when amounts are treated as compensation or when an employee reimburses the taxpayer. The circumstances under which the taxpayer has income from reimbursements is beyond the scope of these regulations.

The final regulations apply to taxable years beginning after August 1, 2012.

Notice 2005-45 (2005-1 CB 1228) is obsoleted as of August 1, 2012.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. Section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. Because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking that preceded these final regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business, and no comments were received.

The principal authors of these regulations are Michael Nixon of the Office of Associate Chief Counsel (Income Tax and Accounting) and Lynne A. Camillo of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However, other personnel from the IRS and Treasury Department participated in their development.

Accordingly, 26 CFR part 1 is amended as follows:

On June 15, 2012 a Notice of Proposed Rule Making (NPRM) was published in 77 FR 35898. We received no comments on the proposed rule. No public meeting was requested, and none was held.

North Carolina Department of Transportation has awarded a contract to T.A. Loving Company of Goldsboro, NC to perform bridge maintenance on the NC 210 Fixed Bridge crossing the Atlantic Intracoastal Waterway, mile 252.3, at North Topsail Beach, North Carolina. The contract provides for replacing the fender system to commence on September 12, 2012 with a completion date of December 12, 2012. The contractor will utilize a 115 foot deck barge with a 30 foot beam as a work platform and for equipment staging. This safety zone will provide a safety buffer to transiting vessels as bridge repairs present potential hazards to mariners and property due to reduction of horizontal clearance. During this period the Coast Guard will require a one hour notification to the work supervisor at the NC 210 Fixed Bridge at the Atlantic Intracoastal Waterway crossing, mile 252.3, North Topsail Beach, North Carolina. The notification requirement will be applicable during the maintenance period for vessels requiring a horizontal clearance of greater than 50 feet.

We received no comments on the proposed rule. No public meeting was requested, and none was held.

The temporary safety zone will encompass the waters directly under the NC 210 Fixed Bridge crossing the Atlantic Intracoastal Waterway, mile 252.3, at North Topsail Beach, North Carolina (34°30′01″ N/077°25′47″ W). All vessels transiting this section of the waterway requiring a horizontal clearance of greater than 50 feet will be required to make a one hour advanced notification to the work supervisor at the NC 210 Fixed Bridge while the safety zone is in effect. This zone will be in effect and enforced from 8 a.m. September 1, 2012 through 8 p.m. December 12, 2012.

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

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. This rule does restrict traffic from transiting a portion of the Atlantic Intracoastal Waterway; it imposes a one hour notification to ensure the waterway is clear of impediment to allow passage to vessels requiring a horizontal clearance of greater than 50 feet.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The Coast Guard received no comments from the Small Business Administration on this rule. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule would affect the following entities, some of which may be small entities: the owners or operators of commercial tug and barge companies, recreational and commercial fishing vessels intending to transit the specified portion of Atlantic Intracoastal Waterway from 8 a.m. September 1, 2012 through 8 p.m. December 12, 2012.

This safety zone would not have a significant economic impact on a substantial number of small entities for the following reasons. Although the safety zone will apply to this section of the Atlantic Intracoastal Waterway, vessel traffic will be able to request passage by providing a one hour advanced notification. Before the effective period, the Coast Guard will issue maritime advisories widely available to the users of the waterway.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT , above.

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

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on 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. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INTFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places, or vessels.

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

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

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

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

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

This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a temporary safety zone. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES . We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the final details for this event were not known to the Coast Guard until there was insufficient time remaining before the event to publish an NPRM. Thus, delaying the effective date of this rule to wait for a comment period to run would be both impracticable and contrary to the public interest because it would inhibit the Coast Guard's ability to protect vessels from the hazards associated with recovery of possible munitions waste, which are discussed further below.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . For the same reasons discussed in the preceding paragraph, waiting for a 30 day notice period to run would also be impracticable and contrary to the public interest.

From July 30, 2012 to August 20, 2012, the Tug Champion (O.N. 55 6Z93)/Barge Kokosing (O.N. 1144055) will recover and test barrels suspected to contain munitions waste materials dumped offshore in a portion of Lake Superior approximately 50 years ago.

The following area is a temporary safety zone: All waters within a 700 foot radius of the Tug Champion (O.N. 55 6Z93)/Barge Kokosing (O.N. 1144055)as it conducts recovery and testing of barrels suspected of containing munitions waste materials in the area between Stoney Point and Brighton Beach, up to approximately 4 miles offshore on Lake Superior, Duluth, MN. This safety zone will be in effect and enforced 24 hours a day from on or around July 30, 2012 to August 20, 2012.

This rule is deemed necessary in order to protect vessels transiting Lake Superior in close proximity to the Tug Champion (O.N. 55 6Z93)/Barge Kokosing (O.N. 1144055) from exposure to possible unknown hazards as it conducts recovery and testing of barrels containing munitions parts and product line debris. This zone does not have specific coordinates because the Tug Champion (O.N. 55 6Z93)/Barge Kokosing (O.N. 1144055)will be recovering barrels in several locations over the course of the effective period and a safety zone encompassing the entire recovery area would have a negative impact on recreational vessel traffic.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 14 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. This rule will have minimal impact on economic interests due to the safety zone being outside commercial shipping lanes, having little impact on recreational vessel traffic and being in effect for a limited period of time.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

(1) This rule would affect the following entities, some of which might be small entities: the owners or operators of recreational vessels intending to transit or anchor in a portion of Lake Superior between Stoney Point and Brighton Beach from July 20, 2012 to August 30, 2012.

(2) This safety zone would not have a significant economic impact on a substantial number of small entities for the following reasons. This safety zone would be activated, and thus subject to enforcement, in areas where vessel traffic is low and not subject to commercial traffic. Recreational vessel traffic could pass safely around the safety zone due to its relatively small size. This safety zone will be announced in the Local Notice to Mariners and via Broadcast Notice to Mariners before activation of the zone and throughout the enforcement period.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section, above.

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

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on 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. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section so that the Coast Guard may consider the degree to which it may accommodate such activities while also providing for the safety and security of people, places and vessels.

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

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

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

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

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

This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishing a safety zone surrounding Tug Champion (O.N. 55 6Z93)/Barge Kokosing (O.N. 1144055) as it conducts recovery and testing of barrels containing munitions parts and product line debris. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES . We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

Upon promulgation of a new or revised NAAQS, sections 110(a)(1) and (2) of the CAA require states to address basic SIP requirements, including emissions inventories, monitoring, and modeling to assure attainment and maintenance for that new NAAQS. On July 18, 1997 (62 FR 36852), EPA promulgated a new annual PM 2.5 NAAQS and on October 17, 2006 (71 FR 61144), EPA promulgated a new 24-hour NAAQS. On June 6, 2012, EPA proposed in two separate actions to approve South Carolina's March 14, 2008, September 18, 2009, and April 3, 2012, infrastructure submissions for the 1997 annual and 2006 24-hour PM 2.5 NAAQS. See 77 FR 33372 and 77 FR 33380. The March 14, 2008 and September 18, 2009, infrastructure submission for the 1997 annual and 2006 24-hour PM 2.5 NAAQS addressed elements 110(a)(2)(A)-(H), (J)-(M), except for sections 110(a)(2)(C)—the nonattainment area requirements; 110(a)(2)(D)(i)—the interstate transport requirements; 110(a)(2)(E)(ii)—board requirements;  1 and 110(a)(2)(G)— emergency powers. See EPA's June 6, 2012, proposed rulemakings at 77 FR 33372 for more detail. The April 3, 2012, SIP revision addressed elements 110(a)(2)(E)(ii) and 110(a)(2)(G). See EPA's June 6, 2012, proposed rulemakings at 77 FR 33380 for more detail. A summary of the background for today's final action is provided below.

Section 110(a) of the CAA requires states to submit SIPs to provide for the implementation, maintenance, and enforcement of a new or revised NAAQS within three years following the promulgation of such NAAQS, or within such shorter period as EPA may prescribe. Section 110(a) imposes the obligation upon states to make a SIP submission to EPA for a new or revised NAAQS, but the contents of that submission may vary depending upon the facts and circumstances. The data and analytical tools available at the time the state develops and submits the SIP for a new or revised NAAQS affects the content of the submission. The contents of such SIP submissions may also vary depending upon what provisions the state's existing SIP already contains. In the case of the 1997 annual and 2006 24-hour PM 2.5 NAAQS, states typically have met the basic program elements required in section 110(a)(2) through earlier SIP submissions in connection with previous PM NAAQS.

More specifically, section 110(a)(1) provides the procedural and timing requirements for SIPs. Section 110(a)(2) lists specific elements that states must meet for “infrastructure” SIP requirements related to a newly established or revised NAAQS. As already mentioned, these requirements include SIP infrastructure elements such as modeling, monitoring, and emissions inventories that are designed to assure attainment and maintenance of the NAAQS. The requirements that are the subject of this final rulemaking are listed below  2 and in EPA's October 2, 2007, memorandum entitled “Guidance on SIP Elements Required Under Section 110(a)(1) and (2) for the 1997 8-Hour Ozone and PM 2.5 National Ambient Air Quality Standards.”

• 110(a)(2)(A): Emission limits and other control measures.

• 110(a)(2)(B): Ambient air quality monitoring/data system.

• 110(a)(2)(C): Program for enforcement of control measures. 3

• 110(a)(2)(D): Interstate transport. 4

• 110(a)(2)(E): Adequate resources.

• 110(a)(2)(F): Stationary source monitoring system.

• 110(a)(2)(G): Emergency power.

• 110(a)(2)(H): Future SIP revisions.

• 110(a)(2)(I): Areas designated nonattainment and meet the applicable requirements of part D. 5

• 110(a)(2)(J): Consultation with government officials; public notification; and PSD and visibility protection.

• 110(a)(2)(K): Air quality modeling/data.

• 110(a)(2)(L): Permitting fees.

• 110(a)(2)(M): Consultation/participation by affected local entities.

EPA is taking final action to approve South Carolina's infrastructure submissions as demonstrating that the State meets the applicable requirements of sections 110(a)(1) and (2) of the CAA for the 1997 annual and 2006 24-hour PM 2.5 NAAQS. Section 110(a) of the CAA requires that each state adopt and submit a SIP for the implementation, maintenance, and enforcement of each NAAQS promulgated by the EPA, which is commonly referred to as an “infrastructure” SIP. South Carolina certified that the South Carolina SIP contains provisions that ensure the 1997 annual and 2006 24-hour PM 2.5 NAAQS are implemented, enforced, and maintained in South Carolina.

EPA received no adverse comments on its June 6, 2012, proposed approval of South Carolina's March 14, 2008, September 18, 2009, and April 3, 2012, infrastructure submissions. Additionally, on June 23, 2012, EPA published a final rulemaking action approving revisions to South Carolina's New Source Review (NSR) requirements relating to the PM 2.5 standard. See 76 FR 36875. EPA is not taking action today on South Carolina's NSR program, as these requirements are already approved in South Carolina's SIP.

South Carolina's infrastructure submissions, provided to EPA on March 14, 2008, and September 18, 2009, as certification submissions (as clarified in a letter on November 9, 2009), and the State's April 3, 2012, SIP revision addressed all the required infrastructure elements for the 1997 annual and 2006 24-hour PM 2.5 NAAQS. EPA has determined that South Carolina's March 14, 2008, September 18, 2009, and April 3, 2012, submissions are consistent with section 110 of the CAA.

As already described, SC DHEC has addressed the elements of the CAA 110(a)(1) and (2) SIP requirements pursuant to EPA's October 2, 2007, guidance to ensure that 1997 annual and 2006 24-hour PM 2.5 NAAQS are implemented, enforced, and maintained in the State. EPA is taking final action to approve South Carolina's March 14, 2008, September 18, 2009, and April 3, 2012, submissions for 1997 annual and 2006 24-hour PM 2.5 NAAQS because these submissions are consistent with section 110 of the CAA. Today's action is not approving any specific rule, but rather making a determination that South Carolina's already approved SIP meets certain CAA requirements.

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

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

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

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

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

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

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

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

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

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

EPA has determined that this final rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because there are no “substantial direct effects” on an Indian Tribe as a result of this action. The Catawba Indian Nation Reservation is located within the South Carolina portion of the bi-state Charlotte nonattainment area. Pursuant to the Catawba Indian Claims Settlement Act, S.C. Code Ann. 27-16-120, “all state and local environmental laws and regulations apply to the Catawba Indian Nation and Reservation and are fully enforceable by all relevant state and local agencies and authorities.” Thus, the South Carolina SIP applies to the Catawba Reservation. EPA has also preliminarily determined that these revisions will not impose any substantial direct costs on tribal governments or preempt tribal law.

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by October 1, 2012. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

Therefore, 40 CFR part 52 is amended as follows:

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

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. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2012-0031 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before October 1, 2012. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit a copy of your non-CBI objection or hearing request, identified by docket ID number EPA-HQ-OPP-2012-0031, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), Mail Code: 28221T, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.htm.

Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets .

In the Federal Register of May 2, 2012 (77 FR 25954) (FRL-9346-1), EPA issued a notice pursuant to FFDCA section 408, 21 U.S.C. 346a, announcing the filing of a pesticide petition (PP 1E7946) by Lyondell Chemical Company, 1221 McKinney Street, Houston, Texas 77010. The petition requested that 40 CFR 180.940(a) be amended by establishing an exemption from the requirement of a tolerance for residues of 2-methyl-1,3-propanediol (CAS Reg. No. 2163-42-0) when used as a component of food contact sanitizing solutions applied to all food contact surfaces in public eating places, dairy-processing equipment, and food-processing equipment and utensils. That notice referenced a summary of the petition prepared by Lyondell Chemical Company, the petitioner, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Inert ingredients are all ingredients that are not active ingredients as defined in 40 CFR 153.125 and include, but are not limited to, the following types of ingredients (except when they have a pesticidal efficacy of their own): Solvents such as alcohols and hydrocarbons; surfactants such as polyoxyethylene polymers and fatty acids; carriers such as clay and diatomaceous earth; thickeners such as carrageenan and modified cellulose; wetting, spreading, and dispersing agents; propellants in aerosol dispensers; microencapsulating agents; and emulsifiers. The term “inert” is not intended to imply nontoxicity; the ingredient may or may not be chemically active. Generally, EPA has exempted inert ingredients from the requirement of a tolerance based on the low toxicity of the individual inert ingredients.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue.* * *”

EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be clearly demonstrated that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.

Consistent with FFDCA section 408(c)(2)(A), and the factors specified in FFDCA section 408(c)(2)(B), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for 2-methyl-1,3-propanediol including exposure resulting from the exemption established by this action. EPA's assessment of exposures and risks associated with 2-methyl-1,3-propanediol follows.

EPA has evaluated the available toxicity data and considered their validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the adverse effects caused by 2-methyl-1,3-propanediol as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are discussed in the final rule published in the Federal Register of August 20, 2010 (75 FR 51388) (FRL-8838-3).

There was no hazard identified in repeat dose toxicity and reproductive/developmental studies with 2-methyl-1,3-propanediol at the limit dose of 1,000 milligram/kilogram/day (mg/kg/day) to either parental animals or their offspring. Thus, due to its low potential hazard and lack of a hazard endpoint, the Agency has determined that a quantitative risk assessment using safety factors applied to a point of departure protective of an identified hazard endpoint is not appropriate for 2-methyl-1,3-propanediol.

2-Methyl-1,3-propanediol was not mutagenic in an in vitro chromosome aberration test, bacterial gene mutation test, and mammalian cell gene mutation assay and based on the available information, it is not anticipated to be carcinogenic. Specific information on the studies received and the nature of the adverse effects caused by 2-methyl-1,3-propanediol are discussed in the final rule published in the Federal Register of August 20, 2010 (75 FR 51388) and can be found at http://www.regulations.gov in the document “Decision Document for Petition Number 2E6484; 2-methyl-1,3-propanediol [CAS Reg No. 2163-42-0], requesting the establishment of an inert ingredient exemption from the requirement of a tolerance” in docket ID number EPA-HQ-OPP-2002-0185.

No hazard endpoint of concern was identified for the acute and chronic dietary assessment (food and drinking water), or for the short, intermediate, and long term residential assessments (via all exposure routes), therefore, acute and chronic dietary and short-, intermediate-, and long-term residential exposure assessments were not performed.

Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found 2-methyl-1,3-propanediol to share a common mechanism of toxicity with any other substances, and 2-methyl-1,3-propanediol does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that 2-methyl-1,3-propanediol does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act Safety Factor (FQPA SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

The toxicity database for 2-methyl-1,3-propanediol is adequate for FQPA assessment and the potential exposure is adequately characterized given the low toxicity of the chemical. No hazard was identified and there is no residual uncertainty regarding prenatal and/or postnatal toxicity. No acute or subchronic neurotoxicity studies are available, but there were no clinical signs of neurotoxicity or any systemic toxicity observed in the available database at doses up to 1,000 mg/kg/day. No developmental or reproductive effects were seen in the available studies at doses up to and including 1,000 mg/kg/day.

Based on this information, there is no concern, at this time, for increased sensitivity to infants and children to 2-methyl-1,3-propanediol when used as a component of food contact sanitizing solutions applied to all food contact surfaces and a safety factor analysis has not been used to assess risk. For the same reason, EPA has determined that an additional safety factor is not needed to protect the safety of infants and children.

Given the lack of concern for hazard posed by 2-methyl-1,3-propanediol, EPA concludes that there are no dietary or aggregate dietary/non-dietary risks of concern as a result of exposure to 2-methyl-1,3-propnaediol in food and water or from residential exposure. Residues of concern are not anticipated for dietary exposure (food and drinking water) or for residential exposure from the use of 2-methyl-1,3-propanediol as an inert ingredient in pesticide products. As discussed in this unit, EPA expects aggregate exposure to 2-methyl-1,3-propanediol to pose no appreciable dietary risk given that the data show a lack of any systemic toxicity or adverse developmental/reproductive effects at doses up to 1,000 mg/kg/day.

Taking into consideration all available information on 2-methyl-1,3-propanediol, EPA has determined that there is a reasonable certainty that no harm to any population subgroup will result from aggregate exposure to 2-methyl-1,3-propanediol under reasonable foreseeable circumstances. Therefore, the establishment of an exemption from tolerance under 40 CFR 180.940(a) for residues of 2-methyl-1,3-propanediol when used as a component of food contact sanitizing solutions applied to all food contact surface in public eating places, dairy-processing equipment, and food-processing equipment and utensils, is safe under FFDCA section 408.

An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation.

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 Nation 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 2-methyl-1,3-propanediol.

Therefore, an exemption from the requirement of a tolerance is established under 40 CFR 180.940(a) for residues of 2-methyl-1,3-propanediol (CAS Reg. No. 2163-42-0) when used as a component of food contact sanitizing solutions applied to all food contact surfaces in public eating places, dairy-processing equipment, and food-processing equipment and utensils.

This final rule establishes a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this final rule has been exempted from review under Executive Order 12866, this final 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) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply.

This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this final rule. In addition, this final rule does not 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).

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).

The Congressional Review Act, 5 U.S.C. 801 et seq., generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the Federal Register . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

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

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 those engaged in the following activities:

• 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 to provide 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. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT .

You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl .

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2011-0477 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before October 1, 2012. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing that does not contain any CBI for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit a copy of your non-CBI objection or hearing request, identified by docket ID number EPA-HQ-OPP-2011-0477, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov . Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), Mail Code: 28221T, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.htm .

In the Federal Register of July 20, 2011 (76 FR 43231) (FRL-8880-1), EPA issued a notice pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 1E7861) by IR-4,500 College Road East, Suite 201W, Princeton, NJ 08540. The petition requested that 40 CFR 180.518 be amended by establishing tolerances for residues of the fungicide pyrimethanil (4,6-dimethyl-N-phenyl-2-pyrimidinamine) in or on the raw agricultural commodities onion, bulb, subgroup 03-07A at 0.1 parts per million (ppm), onion, green, subgroup 03-07B at 2.0 ppm, berry and small fruit, small fruit vine climbing subgroup, except fuzzy kiwifruit 13-07F at 5.0 ppm, berry and small fruit, low growing berry subgroup 13-07G at 3.0 ppm and ginseng at 2.5 ppm. That notice referenced a summary of the petition prepared by Bayer CropScience, the registrant, which is available in the docket, http://www.regulations.gov . There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA has modified the levels at which tolerances are being established for some of the commodities. The reason for this change is explained in Unit IV.C.

Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. * * *”

Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for pyrimethanil including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with pyrimethanil follows.

EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

Pyrimethanil is of low acute lethality by the oral, dermal, and inhalation routes. It is a slight eye irritant, is not irritating to the skin, and it is not a dermal sensitizer. A single oral dose of 1,000 milligrams/kilogram (mg/kg) produced a number of acute signs of neurotoxicity, including ataxia, dilated pupils, and decreases in motor activity, hind limb grip strength, and body temperature. However, there was no evidence of neurotoxicity with repeated dosing in a subchronic neurotoxicity study in rats. Exposure to pyrimethanil in oral toxicity studies primarily resulted in decreased body weights and body-weight gain, often accompanied by decreases in food consumption. The major target organs of repeated oral exposure were the liver and the thyroid. No reproductive toxicity was observed, and developmental effects (e.g., decreased fetal weight, retarded ossification, extra ribs) were observed only at maternally toxic doses. Special short-term exposure studies demonstrated increased liver uridine diphosphate glucuronosyl transferase (UDPGT) activity leading to decreases in thyroid hormones (T3, T4) and compensatory increases in thyroid stimulating hormone (TSH) in adult rats. Thyroid adenomas were seen in rats following long-term exposure, and it was concluded that they were mediated via disruption of the thyroid/pituitary axis. There were no concerns for mutagenicity.

The EPA has classified pyrimethanil as “Not Likely To Be Carcinogenic To Humans At Doses That Do Not Alter Rat Thyroid Hormone Homeostasis.” This decision was based on the following:

1. There were treatment-related increases in thyroid follicular cell tumors in male and female Sprague-Dawley rats at doses which were considered adequate to assess carcinogenicity.

2. There were no treatment-related tumors were seen in male or female CD-1 mice at doses which were considered adequate to assess carcinogenicity.

3. There is no mutagenicity concern and there is no evidence for thyroid carcinogenesis mediated through a mutagenic mode of action.

4. The non-neoplastic toxicological evidence (i.e., thyroid growth, thyroid hormonal changes) indicated that pyrimethanil was inducing a disruption in the thyroid-pituitary hormonal status. The overall weight-of-evidence was considered sufficient to indicate that Pyrimethanil induced thyroid follicular tumors through an antithyroid mode of action.

5. Rats are substantially more sensitive than humans to the development of thyroid follicular cell tumors in response to thyroid hormone imbalance. EPA determined that quantification of carcinogenic risk is not required since the thyroid tumors arise through a non-linear mode of action and the no observed adverse effect level (NOAEL) (17 mg/kg/day) established for deriving the chronic reference dose (cRfD) is not expected to alter thyroid hormone homeostasis nor result in thyroid tumor formation.

Specific information on the studies received and the nature of the adverse effects caused by pyrimethanil as well as the NOAEL and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document titled “Pyrimethanil Human-Health Risk Assessment for Proposed Uses on Ginseng, Bulb Onion Subgroups 3-07A and B, and Small Berry Subgroups 13-07F and G,” pp. 32-34 in docket ID number EPA-HQ-OPP-2011-0477.

Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm .

A summary of the toxicological endpoints for pyrimethanil used for human risk assessment is shown in the Table of this unit.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to pyrimethanil, EPA considered exposure under the petitioned-for tolerances as well as all existing pyrimethanil tolerances in 40 CFR 180.518. EPA assessed dietary exposures from pyrimethanil in food as follows:

i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

Such effects were identified for pyrimethanil. In estimating acute dietary exposure, EPA used food consumption information from the United States Department of Agriculture (USDA) 1994-1996 and 1998 Nationwide Continuing Surveys of Food Intake by Individuals (CSFII). As to residue levels in food, EPA assumed default processing factors (as necessary), empirical processing factors for orange and apple juice, tolerance level residues and 100 percent crop treated (PCT) for all commodities.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA 1994-1996 and 1998 CSFII. As to residue levels in food, EPA assumed default processing factors (as necessary), empirical processing factors for orange and apple juice, tolerance level residues and 100 PCT for all commodities.

iii. Cancer. EPA determines whether quantitative cancer exposure and risk assessments are appropriate for a food-use pesticide based on the weight of the evidence from cancer studies and other relevant data. Cancer risk is quantified using a linear or nonlinear approach. If sufficient information on the carcinogenic mode of action is available, a threshold or nonlinear approach is used and a cancer RfD is calculated based on an earlier noncancer key event. If carcinogenic mode of action data are not available, or if the mode of action data determines a mutagenic mode of action, a default linear cancer slope factor approach is utilized. Based on the data summarized in Unit III.A., EPA has concluded that a nonlinear RfD approach is appropriate for assessing cancer risk to pyrimethanil. Cancer risk was assessed using the same exposure estimates as discussed in Unit III.C.1.ii.

iv. Anticipated residue and PCT information. EPA did not use anticipated residue and/or PCT information in the dietary assessment for pyrimethanil. Tolerance-level residues and 100 PCT were assumed for all food commodities.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for pyrimethanil in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of pyrimethanil. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm.

Based on the Pesticide Root Zone Model/Exposure Analysis Modeling System (PRZM/EXAMS) and Screening Concentration in Ground Water (SCI-GROW) models the estimated drinking water concentrations (EDWCs) of pyrimethanil for acute exposures are estimated to be 86.5 parts per billion (ppb) for surface water and 4.8 ppb for ground water. For chronic exposures for non-cancer assessments, they are estimated to be 29.4 ppb for surface water and 4.8 ppb for ground water.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model.

For acute dietary risk assessment, the water concentration value of 86.5 ppb was used to assess the contribution to drinking water.

For chronic dietary risk assessment, the water concentration of value 29.4 ppb was used to assess the contribution to drinking water.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

Pyrimethanil is not registered for any specific use patterns that would result in residential exposure.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found pyrimethanil to share a common mechanism of toxicity with any other substances, and pyrimethanil does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that pyrimethanil does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

2. Prenatal and postnatal sensitivity. The prenatal and postnatal toxicology database for pyrimethanil includes rat and rabbit developmental toxicity studies and a 2-generation reproduction toxicity study in rats. As discussed in Unit III. A., there was no evidence of increased quantitative or qualitative susceptibility of fetuses or offspring following exposure to pyrimethanil in these studies.

3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1X. That decision is based on the following findings:

i. The toxicology database for pyrimethanil is complete.

ii A guideline immunotoxicity study has been submitted, and there is no evidence for immunotoxicity due to pyrimethanil treatment. Evidence of neurotoxicity was observed at a very high dose (the limit dose) in the acute neurotoxicity study in rats. However, the study has a clear NOAEL, which is being utilized as the POD for the acute dietary exposure scenario, and there was no evidence of neurotoxicity observed in the subchronic neurotoxicity study in rats up to the highest dose tested in that study (430 mg/k/day). A developmental neurotoxicity (DNT) study is not required.

iii. There is no evidence that pyrimethanil results in increased susceptibility in in utero rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study.

iv. Thyroid has been shown to be one of the target organs in adult animals for pyrimethanil-induced toxicity thus raising a potential concern for thyroid toxicity in the young. EPA, however, concluded that there is no concern for thyroid toxicity in the young based on the following weight of evidence considerations: the effects seen on the thyroid and the liver in the database, while treatment-related, are not severe in nature; and in each of the studies that show an effect on thyroid hormone levels, as well as in all studies chosen for PODs selection, there is a wide dose spread (~10-fold difference between NOAELs and LOAELs) which provides a measure of protection for any potential effects linked to decreased thyroid hormone levels in offspring.

v. There are no residual uncertainties with respect to exposure data. The dietary food exposure assessment utilizes tolerance-level residues (established or recommended) and 100 PCT for all proposed/established commodities. By using these assumptions, the acute and chronic exposures/risks will not be underestimated. The dietary drinking water assessment utilizes water concentration values generated by models and associated modeling parameters that are designed to provide conservative, health-protective, high-end estimates of water concentrations that will not likely be exceeded. These assessments will not underestimate the exposure and risks posed by pyrimethanil.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute population adjusted dose (aPAD) and chronic population adjusted dose (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to pyrimethanil will occupy 35% of the aPAD for all infants <1 year old, the population group receiving the greatest exposure.

2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to pyrimethanil from food and water will utilize 64% of the cPAD for children 1-2 years old, the population group receiving the greatest exposure. There are no residential uses for pyrimethanil.

3. Short-and intermediate-term risk. Short-term and intermediate-term aggregate exposure takes into account short-and intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). A short-and intermediate-term adverse effect was identified; however, pyrimethanil is not registered for any use patterns that would result in short- and/or intermediate-term residential exposure. Short-and intermediate-term risk is assessed based on short-and intermediate-term residential exposure plus chronic dietary exposure. Because there is no short-and intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess short-and intermediate-term risk), no further assessment of short-and intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating short-and intermediate-term risk for pyrimethanil.

4. Aggregate cancer risk for U.S. population. The Agency determined that the thyroid tumors seen in rat studies arise through a non-linear mode of action and the NOAEL (17 mg/kg/day) established for deriving the cRfD is not expected to alter thyroid hormone homeostasis nor result in thyroid tumor formation. Thus, the chronic risk assessment addresses any cancer risk.

5. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population or to infants and children from aggregate exposure to pyrimethanil residues.

Adequate enforcement methodology high-performance liquid chromatography (HPLC) is available to enforce the tolerance expression. The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: residuemethods@epa.gov.

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 established MRLs for pyrimethanil in or on strawberry at 3 ppm, bulb onions at 0.2 ppm, and spring onion at 3 ppm. These MRLs are the same as the tolerances established by this rule for pyrimethanil on the low growing berry subgroup 13-07G, the bulb onion subgroup 3-07A, and the green onion subgroup 3-07B in the United States.

The Codex has established an MRL for pyrimethanil in or on grapes at 4 ppm which is less than tolerance of 5.0 ppm set on the small vine climbing fruit subgroup 13-07F of which grape is a member. The reason for this is due to the fact that the European PHI is 21 days and the U.S. PHI is 7 days. Residues are thus higher in U.S. residue trials, necessitating a higher tolerance.

Using the Organization for Economic Co-operation and Development (OECD) tolerance calculation procedures for the residue data set indicates that the requested tolerance of 2.5 ppm for residues of pyrimethanil in/on ginseng is too high and that a tolerance of 1.5 ppm is appropriate. Also, the tolerance levels for the bulb onion subgroup 3-07A and green onion subgroup 3-07B were modified to harmonize with existing Codex Maximum Residue Levels (MRLs). Lastly, EPA has revised the tolerance expressions to clarify:

1. That, as provided in FFDCA section 408(a)(3), the tolerance covers metabolites and degradates of pyrimethanil not specifically mentioned; and

2. That compliance with the specified tolerance levels is to be determined by measuring only the specific compounds mentioned in the tolerance expression.

Therefore, tolerances are established for residues of pyrimethanil (4,6-dimethyl- N -phenyl-2-pyrimidinamine) in or on onion, bulb, subgroup 03-07A at 0.20 ppm; onion, green, subgroup 03-07B at 3.0 ppm; fruit, small, vine climbing subgroup 13-07F, except fuzzy kiwifruit 13-07F at 5.0 ppm; berry, low growing, subgroup 13-07G at 3.0 ppm and ginseng at 1.5 ppm.

Also, due to the tolerances established in this unit by this document, the following existing tolerances are removed as unnecessary; strawberry; grape; onion, bulb; and onion, green.

This final rule establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this final rule has been exempted from review under Executive Order 12866, this final 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) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501 et seq., nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ) do not apply.

This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this final rule. In addition, this final rule does not 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).

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).

The Congressional Review Act, 5 U.S.C. 801 et seq. , generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in the Federal Register . This final rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

This is a summary of the Commission's Fourth Report and Order in WP Docket No. 07-100; PS Docket No. 06-229; WT Docket No. 06-150; adopted and released on June 13, 2012. The complete text of this document is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. This document may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., in person at 445 12th Street SW., Room CY-B402, Washington, DC 20554, via telephone at (202) 488-5300, via facsimile at (202) 488-5563, or via email at FCC@BCPIWEB.com. Alternative formats (computer diskette, large print, audio cassette, and Braille) are available to persons with disabilities or by sending an email to FCC504@fcc.gov or calling the Consumer and Governmental Affairs Bureau at (202) 418-0530, TTY (202) 418-0432. This document is also available on the Commission's Web site at http://www.fcc.gov.

In this Fourth Report and Order and Fifth Further Notice of Proposed Rulemaking ( Fourth Report and Order and Fifth Further Notice, respectively), we adopt rule changes to Part 90 of the Commission's rules pertaining to public safety operations in the 4940-4990 MHz (4.9 GHz) band to clarify, as well as correct certain provisions in the technical rules and several entries in the Public Safety Pool Frequency Table and associated list of limitations. In April 2009, the Commission released the Report and Order and Further Notice of Proposed Rulemaking ( Report and Order and Further Notice, respectively) to “encourag[e] public safety users to more fully utilize the 4.9 GHz band” for broadband communications. In the Report and Order, the Commission amended part 90 of the Commission's rules to permit licensing in the 4.9 GHz band, on a primary basis, of permanent fixed links used to deliver broadband services. In the Further Notice, the Commission proposed (1) to reinstate a provision that had previously exempted 4.9 GHz band applicants from certified frequency coordination, (2) to require instead that applicants for 4.9 GHz primary permanent fixed stations complete the formalized licensee-to-licensee coordination process established in part 101 for fixed microwave stations, (3) to correct an error in the band plan for the 4.9 GHz band and clarify how channels may be aggregated, and (4) to correct additional errors in the Public Safety Pool Frequency Table and associated list of limitations.

The Commission received five comments and two reply comments in response to the Further Notice. None of the commenters raised any question about these proposals, with the exception of the proposed licensee-to-licensee coordination process, for which a majority of commenters proposed database and registration approaches as alternatives. By this Fourth Report and Order, we adopt the proposals from the Further Notice except for the licensee-to-licensee coordination process. In order to permit further comment on proposals for coordination, we further explore 4.9 GHz coordination in the Fifth Further Notice.

In this Fourth Report and Order, we adopt rule changes to three aspects of the technical provisions of part 90 of the Commission's rules pertaining to public safety operations. All of these changes are designed to correct typographical or other ministerial errors in these provisions. First, we reinstate a rule provision, formerly codified at § 90.175(j)(17) of the Commission's rules but inadvertently deleted in 2004, that exempted 4.9 GHz band applicants from certified frequency coordination. Next, we correct the bandwidth of Channel 14 in the 4.9 GHz band plan from five megahertz to one megahertz, and amend the band plan to list the center frequencies for each channel aggregation permitted in the rules. Finally, we correct minor errors in the Public Safety Pool Frequency Table and associated list of limitations. These changes will improve spectrum efficiency and clarify provisions of the rules so as to encourage greater use of the 4.9 GHz band. Their costs are negligible, because they would impose no apparent investment or expenditure requirements on any affected entities to achieve compliance.

In the Further Notice, the Commission sought comment on its proposal to amend § 90.175(j) of the Commission's rules to restore an exemption for applications for 4.9 GHz band frequencies from certified frequency coordination requirements. The rationale for this exemption had been that all of these frequencies are subject to shared use and thus already require cooperation and coordination under the Commission's rules. The Commission tentatively concluded that an unrelated rulemaking had overwritten this exemption in 2004 by ministerial error.

Harris Corporation (Harris) and the National Public Safety Telecommunications Council (NPSTC) filed comments in support of restoring the exemption. Harris states that “[c]ertification of coordination is unnecessary given local government's interest in maximizing use and avoiding interference among its various public safety agencies.” Harris further notes that “as more public safety communications planning (particularly with regard to interoperable communications like that envisioned for the 4.9 GHz band) is done at the state level, there is inherently more state and local-government coordination amongst public safety agencies.” As the Commission observed in the Further Notice, the omission has been in effect for a substantial period of time, and some entities may be operating under the assumption that formal coordination from a certified frequency coordinator is required for 4.9 GHz applications. Given the inadvertent nature of the deletion of this provision from the rules, and the lack of comments objecting to its reinstatement, we reinstate the provision exempting 4.9 GHz band applicants from certified frequency coordination requirements. For the reasons identified by Harris, clarifying our existing rule has clear benefits, and we do not currently believe that the benefits associated with unintended certified frequency coordination procedures outweigh their costs to public safety entities. Notwithstanding the exemption from certified frequency coordination requirements, however, we continue to believe, as we noted in the Further Notice, that “additional measures are required to minimize the potential for interference.” Accordingly, we explore possible additional coordination requirements in the Fifth Further Notice, including those advanced by commenters in response to the Further Notice.

The Commission also sought comment on a proposal to correct the bandwidth for channel number 14 in § 90.1213 of the Commission's rules from five megahertz to one megahertz. The original designation of five megahertz bandwidth to channel 14 in the Commission's rules appears to have been a ministerial error, as it renders the band plan assymetrical and is the only channel in the band plan that has bandwidth overlap with the adjacent channels. In the Further Notice, the Commission noted that this correction would eliminate bandwidth overlap with adjacent channels, improve spectrum efficiency, restore symmetry to the band plan, and reflect the correct allocation between one-megahertz and five-megahertz channels that the Commission had actually specified in the 4.9 GHz Third Report and Order. The Commission further proposed to grandfather existing licensees to minimize the effect of this clarification on existing operations. Also, for the purpose of clarifying channel centers for various channel aggregations, the Commission sought comment on a proposal to amend the table in § 90.1213 to list the center frequencies that should be requested on applications, for every possible channel aggregation permitted in the rules. NPSTC expressed support for this proposal, and no parties opposed it.

Because the Commission's proposed clarification for § 90.1213 would correct a discrepancy in the codification of the rule, and the amended table will help 4.9 GHz applicants specify on their applications the correct center frequency for any given channel aggregation as permitted in the rules, we adopt these two changes to the 4.9 GHz band plan. We grandfather any existing licensees that are authorized for greater than one megahertz bandwidth on channel 14 or for non-standard center frequencies. This will relieve existing licensees from burdens and costs that would be required to comply with these changes. Since the 4.9 GHz band is lightly used today relative to other public safety bands, we do not believe that grandfathering will cause significant problems, which could include cases of mutual bandwidth overlap interference between existing licensees on channel 14 with five megahertz bandwidth and licensees on adjacent channels.

The Commission also sought comment on a proposal to implement three amendments to correct ministerial errors in the Public Safety Pool Frequency Table and associated list of limitations, each of which would clarify our rules and eliminate the potential for confusion. As none of these three amendments was opposed, we thus adopt each of them. None of the changes will restrict or limit licensee operation beyond what is currently authorized by our rules, and thus we find no need to grandfather incumbent licensees from the effect of any of them.

First, in the § 90.20(d)(66)(i) table of frequency pairs, the Commission proposed to correct the mobile-only frequency for Channel MED-4 from 463.075 MHz to 468.075 MHz. We confirm our tentative conclusion that the current rule reflects a typographical error. The error is evidenced by the absence of any rule change to explain it and the fact that all other mobile only frequencies in this table are in the 468 MHz range while the listed frequency at issue here (463.075 MHz) already appears in the “Frequencies base and mobile (megahertz)” column of the table.

Second, in the § 90.20(c)(3) table of Public Safety Pool frequencies, the Commission proposed to replace limitation 38 with limitation 10 on nine medical service frequencies. In 2005, the Commission issued an order that, inter alia, replaced limitation 38 with limitation 10 in the Public Safety Pool Frequency Table because the two limitations were identical. Today, limitation 38 is “reserved” and thus devoid of any actual regulation, but the Commission never has completed the limitation replacement in the table of frequencies. Today's action will correct this oversight.

Third, the Commission proposed to amend § 90.20(c)(3) by replacing the text in the limitation column “O='xl'≤72” for the 1427 to 1432 MHz band with the numeral “72.” As explained in the Further Notice, this correction will clarify our intention to apply limitation 72 to this band.

After further scrutiny of the Public Safety Pool Frequency Table, we identified another typographical error in the table not previously identified in the Further Notice. In the original 2007 Notice of Proposed Rulemaking and Order in WP Docket No. 07-100, the Commission made “certain minor editorial amendments to part 90 to correct errors or omissions of publication, eliminate duplicative language, or conform language among rule sections.” Among these changes, the Commission deleted “obsolete references to § 90.20(d)(60) and (61).” However, when the Commission deleted limitations 60 and 61 for frequencies 453.03125 and 453.04375 MHz in the Public Safety Pool Frequency Table, the Commission also changed limitation number 59 to 49 on these frequencies without explanation. These additional changes were the result of typographical errors. Limitation 49 states that “[t]his frequency may be assigned only for forest firefighting and conservation activities in accordance with the provisions of § 90.265,” but frequencies 453.03125 and 453.04375 MHz do not appear in that section. In contrast, limitation 59 states that “[t]he continuous carrier mode of operation may be used for telemetry transmission on this frequency.” The telemetry focus of limitation 59 is consistent with limitation 62, which also applies to these frequencies. We take this opportunity to correct these errors and change limitation number 49 back to 59 on these frequencies. Because we are merely correcting a typographical error to restore the original language of the rule, we find for good cause that prior notice and comment on the correction are unnecessary.

As required by the Regulatory Flexibility Act of 1980, see 5 U.S.C. 603, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) and Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities of the policies and rules addressed in this document. The FRFA is set forth in Appendix C and the IRFA is set forth in Appendix E of the Fourth Report and Order and Fifth Further Notice of Proposed Rulemaking. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, will send a copy of the Fourth Report and Order and Fifth Further Notice of Proposed Rulemaking, including this FRFA and IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA). See 5 U.S.C. 603(a).

This Fourth Report and Order does not contain new or modified information collection requirements subject to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. In addition, therefore, the Fourth Report and Order does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).

The Commission will send a copy of the Fourth Report and Order and Fifth Further Notice of Proposed Rulemaking to Congress and the Government Accountability Office pursuant to the Congressional Review Act (“CRA”), see 5 U.S.C. 801(a)(1)(A).

Accordingly, we order, pursuant to sections 1, 4(i), 301, 302, 303, 316, and 403 of the Communications Act of 1934, 47 U.S.C. 151, 154(i), 301, 302, 303, 316, and 403, that this Fourth Report and Order and Fifth Further Notice of Proposed Rulemaking is hereby adopted.

We further order and amend part 90 of the Commission's rules as specified in Appendix B, effective thirty days after publication of the Fourth Report and Order and Fifth Further Notice of Proposed Rulemaking in the Federal Register .

We further order that the Commission's Consumer and Governmental Affairs Bureau, Reference Center, shall send a copy of this Fourth Report and Order and Fifth Further Notice of Proposed Rulemaking, including the Final and Initial Regulatory Flexibility Analyses, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 90 as follows:

This final rule delays or revises several provisions of the Pacific coast trawl rationalization program, based on decisions issued by the U.S. District Court for the Northern District of California in the case Pacific Dawn v. Bryson, No. C10-4829 TEH (2012), requiring NMFS and the Council to reconsider the initial allocation of Pacific whiting. Background on this rule was provided in the proposed rule, published on May 21, 2012 (77 FR 29955), and is not repeated here. This action:

(1) Delays the ability to transfer QS and IBQ between QS accounts in the shorebased IFQ fishery in order to avoid complications that would occur if QS permit owners in the shorebased IFQ fishery were allowed to transfer QS percentages prior to completion of the whiting allocation reconsideration;

(2) Delays the requirement to divest excess quota share amounts for the shorebased IFQ fishery and the at-sea mothership fishery so that QS permit owners will have sufficient time to plan and arrange sales of excess QS, as originally recommended by the Council for this provision of the trawl rationalization program;

(3) Delays the ability to change MS/CV endorsement and catch history assignments from one limited entry trawl permit to another in order to avoid complications if permit owners are allowed to transfer ownership of catch history assignments before completion of the reconsideration takes place; and

(4) Modifies the issuance provisions for quota pounds (QP) for the beginning of fishing year 2013 to preserve NMFS' ability to deposit the appropriate final amounts into IFQ accounts based on any recalculation of QS allocations. In the meantime, NMFS will deposit into accounts an interim amount of QP based on the shorebased trawl allocation, as reduced by the amount of QP for whiting trips for whiting, and for species caught incidentally in the whiting fishery (including lingcod, Pacific cod, canary, bocaccio, cowcod, yelloweye, Pacific ocean perch, widow, English sole, darkblotched, sablefish N. of 36°N lat., yellowtail N. of 40°10′ N. lat., shortspine N. of 34°27′ N. lat., minor slope rockfish N. of 40°10′ N. lat., minor slope rockfish S. of 40°10′ N. lat., minor shelf rockfish N. of 40°10′ N. lat., minor shelf rockfish S. of 40°10′ N. lat., and other flatfish). The remainder of the interim QP will be deposited in accounts at the start of the whiting primary season.

NMFS is also advising the at-sea mothership fishery that the response to the court order may impact processor obligations and cooperative (coop) formation if whiting catch history assignments are recalculated, and announces further details on the process for the affected public to review and correct, if necessary, their landings and delivery data through 2010, since this data may be used for reallocation.

NMFS will announce any changes to the amount of catch history assignments associated with MS/CV-endorsed limited entry trawl permits by April 1, 2013. The mothership sector has until March 31, 2013, to submit their coop permit applications to NMFS for that fishing year. The coop permit application includes a list of the catch history amounts associated with specific MS/CV-endorsed limited entry permits and which MS permit those amounts are obligated to. In addition, MS/CV-endorsed permit owners must obligate their associated catch history assignment to an MS permit by September 1 of the prior year. Because both of these requirements may happen before NMFS makes its determination on the 2013 catch history assignments associated with MS/CV-endorsed permits, participants in the mothership fishery should be aware that this proposal may potentially impact their processor obligations, coop formation, and coop permit application. NMFS does not anticipate a need for regulatory changes to address these potential impacts, and will work with any MS coop permit applicants if there are changes in catch history assignments from that noted in the 2013 coop permit application. For example, in the initial administrative determination for any 2013 MS coop permit application, NMFS will notify the coop manager of any changes in catch history assignments for MS/CV-endorsed permits associated with that coop.

In the proposed rule, NMFS laid out a detailed process for reviewing and correcting landings data. Since publishing the proposed rule, several confidentiality issues have arisen with regard to state landings data. When NMFS resolves these issues, we will notify the public of the process for reviewing and correcting all landings data.

NMFS also considered whether to allow limited entry permit transfers (i.e., changes in permit ownership) for all limited entry trawl endorsed permits, except for those with a catcher/processor endorsement, for a period of time during the reconsideration. This allowance would simplify reissuance of QS permits in the shorebased IFQ fishery, or of catch history assignments on MS/CV-endorsed limited entry trawl permits in the at-sea mothership fishery. After assessing this step, NMFS has determined that it is not necessary because the reallocation rule likely will have no planned application process. The initial allocation had a lengthy application process that necessitated not allowing limited entry permit (LEP) transfers while NMFS reviewed applications. For any revised reallocation, NMFS likely will issue an initial administrative determination (IAD), but not an application; these details will be developed as part of the reallocation rulemaking. Accordingly, there is no need to freeze LEP transfers. If NMFS reissues QS permits and/or catch history assignments on MS/CV-endorsed limited entry trawl permits, NMFS likely will issue those permits or catch history assignments to the QS account owner of record with NMFS at the time of reissuance. However, these details will be developed as part of the reallocation rulemaking.

NMFS solicited public comment on the proposed rule (77 FR 29955, May 21, 2012). The comment period for these notices ended June 29, 2012. NMFS received two letters of comments on the proposed rule, only one of which was substantive. The comment period was open during the June 2012 Council meeting. Comments presented to the Council are part of the record and were considered by the Council during its deliberation. In reviewing the proposed rule, NMFS considered the record as a whole.

Comment 1. NMFS received one comment from the Pacific Fishery Management Council concurring with the primary issues covered in the proposed rule. They also requested that the moratorium on the transfer of widow rockfish QS be extended to December 31, 2014, or the date when the Council completes its consideration (including resolution of appeals) and NMFS implements changes to the widow rockfish QS allocations.

Response: NMFS acknowledges this comment; however, NMFS cannot extend the moratorium on the transfer of widow rockfish QS beyond the 365 days allowed by the statute for this emergency action. Extending that moratorium needs to be done in a separate rulemaking.

Pursuant to section 305(c)(1) of the MSA, the NMFS Assistant Administrator has determined that this final rule is consistent with the Pacific Coast Groundfish FMP, other provisions of the MSA, and other applicable law, subject to further consideration after public comment. As stated in the proposed rule, NMFS is using its emergency action authority under MSA 305(c)(1) for this rule. NMFS finds that an emergency exists that can only be addressed through this emergency action. Due to the court's order in Pacific Dawn, several existing provisions of trawl regulations must be delayed while NMFS and the Council reconsider the initial allocation of Pacific whiting. However, there is insufficient time to go through the standard FMP Council process prior to the required effective date of this rule. If NMFS does not take this action, then NMFS will not be able to implement the following rulemaking (RAW 2) that is required by the court's order. Accordingly, NMFS finds an emergency exists that can only be remedied through this emergency action.

The Council prepared a final environmental impact statement (EIS) for Amendment 20 and Amendment 21 to the Pacific Coast Groundfish FMP; a notice of availability for each of these final EISs was published on June 25, 2010 (75 FR 36386). The Amendment 20 and 21 EISs and the draft EA are available on the Council's Web site at http://www.pcouncil.org/ or on NMFS' Web site at http://www.nwr.noaa.gov/Groundfish-Halibut/Groundfish-Fishery-Management/Trawl-Program/index.cfm. The regulatory changes in this final rule were categorically excluded from the requirement to prepare a NEPA analysis.

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

When an agency proposes regulations, the Regulatory Flexibility Act (RFA) requires the agency to prepare and make available for public comment an Initial Regulatory Flexibility Analysis (IRFA) that describes the impact on small businesses, non-profit enterprises, local governments, and other small entities. The IRFA is to aid the agency in considering all reasonable regulatory alternatives that would minimize the economic impact on affected small entities. After the public comment period, the agency prepares a Final Regulatory Flexibility Analysis (FRFA) that takes into consideration any new information and public comments. This FRFA incorporates the IRFA, a summary of the significant issues raised by the public comments, NMFS' responses to those comments, and a summary of the analyses completed to support the action.

NMFS published the proposed rule on May, 21, 2012 (78 FR 2995), with a comment period through June 29, 2012. An IRFA was prepared and summarized in the “Classification” section of the preamble to the proposed rule. Analytical requirements for the FRFA are described in Regulatory Flexibility Act, section 304(a)(1) through (5), and summarized below. The FRFA must contain: (1) A succinct statement of the need for, and objectives of, the rule; (2) a summary of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a summary of the assessment of the agency of such issues, and a statement of any changes made in the proposed rule as a result of such comments; (3) a description and an estimate of the number of small entities to which the rule will apply, or an explanation of why no such estimate is available; (4) a description of the projected reporting, recordkeeping and other compliance requirements of the rule, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record; and (5) a description of the steps the agency has taken to minimize the significant economic impact on small entities consistent with the stated objectives of applicable statutes, including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.

NMFS is postponing the ability of QS permit owners to trade QS, as well as ability of MS/CV to trade their endorsements and catch history assignments separately from their limited entry permits. This postponement of QS trading is necessary because for many affected parties, their QS allocations (especially for bycatch species) are composed of whiting-trip calculations and non-whiting trip calculations, which NMFS and the Council are currently reconsidering. QS and IBQ trading has been prohibited for all species/species categories until January 1, 2013. By postponing these activities while NMFS and the Council reconsider the initial whiting allocations and implement any changes that result, NMFS seeks to minimize confusion and disruption in the fishery from trading quota shares that have not yet been firmly established by regulation. For example, as discussed above, if QS trading is not delayed, QS permit owners would be transferring QS amounts that potentially could change (increase or decrease) after the reconsideration. This situation would undermine business relationships and create confusion among buyers and sellers. As discussed above, RAW 2 will implement any revised allocations of QS and MS/CV history assignments. RAW 2 is expected to be effective by April 1, 2013 in time for the first whiting season opener off California, and before the major June 15 coastwide season opener. Similarly, NMFS is also delaying MS/CV's ability to transfer endorsement and associated catch history assignments from one limited entry trawl permit to another. However, the MS/CVs retain the ability to sell or trade a limited entry permit with the endorsement and catch history. All other MS/CV regulations remain unchanged. NMFS intends to announce any changes to the amount of catch history assignments associated with MS/CV-endorsed limited entry trawl permits by April 1, 2013, prior to the May 15 start date for the whiting mothership fishery.

Note that NMFS is not postponing fishing. To accommodate non-whiting fisheries that begin at the beginning of the year, NMFS will provide QP to QS holders, but hold back sufficient QPs for whiting and all other incidentally caught species from the annual allocation of QPs to QS accounts made on or about January 1, 2013 to allocate the appropriate final amounts based on any recalculation of the whiting QS allocations. The process of “holding” back sufficient QP is similar to the current process of starting the year with an interim low estimate of the annual whiting trawl allocation and then in the spring of each year adjusting the QP in the QS accounts with any additional QP, based on the final whiting trawl allocation. The final whiting trawl allocation is typically not established until early May, to incorporate the latest stock assessment information, review tribal allocation requests, and receive Council recommendations. In 2012, this process was modified to include the processes of the U.S-Canada Pacific Whiting Treaty.

The Small Business Administration has established size criteria to define small entities under the RFA for all major industry sectors in the US, including fish harvesting and fish processing businesses. Under these criteria, a business involved in fish harvesting is a small entity if it is independently owned and operated and not dominant in its field of operation (including its affiliates), and if it has combined annual receipts not in excess of $4.0 million for all its affiliated operations worldwide. A seafood processor is a small entity if it is independently owned and operated, not dominant in its field of operation, and employs 500 or fewer persons on a full time, part time, temporary, or other basis, at all its affiliated operations worldwide. A business involved in both the harvesting and processing of seafood products is a small entity if it meets the $4.0 million criterion for fish harvesting operations. A wholesale business servicing the fishing industry is a small entity if it employs 100 or fewer persons on a full time, part time, temporary, or other basis, at all its affiliated operations worldwide. For marinas and charter/party boats, a small entity is one with annual receipts not in excess of $7.0 million.

These regulations directly affect holders of QS and CHA, which include both large and small entities. Quota shares were initially allocated to 166 limited entry trawl permit holders (permits held by catcher processors did not receive QS, while one limited entry trawl permit did not apply to receive QS) and to 10 whiting processors. Thirty-six limited entry permits also have MS/CV endorsements and catch history assignments. Because many of these permits were owned by the same entity, these initial allocations were consolidated into 138 quota share permits/accounts. Of the 166 limited entry permits, 25 limited entry trawl permits are either owned or closely associated with a “large” shorebased processing company or with a non-profit organization who considers itself a ”large” organization. Nine other permit owners indicated that they were “large” companies. Almost all of these large companies are associated with the shorebased and mothership whiting fisheries. The remaining 133 limited entry trawl permits are likely held by “small” companies. Of the 10 shorebased processing companies (whiting first receivers/processors) that received whiting QS, three are “small” entities. NMFS does not expect this rule to have any significant impacts on large or small entities.

There were no significant issues raised by the public comments in response to the IRFA.

There are no reporting or recordkeeping requirements with this final rule, but as described above, there is a process for fishermen and processors to review, and if necessary, correct the data that is used for future allocations of Pacific whiting.

There are no significant alternatives to this final rule that accomplish the stated objectives of applicable statutes and that minimize any of the significant economic impact of the proposed rule on small entities. These delays will be temporary in nature and will benefit both small and large entities. These delays will help smooth the transition to any changes in Pacific whiting allocations, and to reduce uncertainty for existing and potential new holders of these allocations.

No Federal rules have been identified that duplicate, overlap, or conflict with the alternatives. Public comment is hereby solicited, identifying such rules. A copy of this analysis is available from NMFS (see ADDRESSES ).

NMFS issued Biological Opinions under the Endangered Species Act (ESA) on August 10, 1990, November 26, 1991, August 28, 1992, September 27, 1993, May 14, 1996, and December 15, 1999, pertaining to the effects of the Pacific Coast groundfish FMP fisheries on Chinook salmon (Puget Sound, Snake River spring/summer, Snake River fall, upper Columbia River spring, lower Columbia River, upper Willamette River, Sacramento River winter, Central Valley spring, California coastal), coho salmon (Central California coastal, southern Oregon/northern California coastal), chum salmon (Hood Canal summer, Columbia River), sockeye salmon (Snake River, Ozette Lake), and steelhead (upper, middle and lower Columbia River, Snake River Basin, upper Willamette River, central California coast, California Central Valley, south/central California, northern California, southern California). These biological opinions have concluded that implementing the FMP for the Pacific Coast groundfish fishery is not expected to jeopardize the continued existence of any endangered or threatened species under the jurisdiction of NMFS, or result in the destruction or adverse modification of critical habitat.

NMFS issued a Supplemental Biological Opinion on March 11, 2006, concluding that neither the higher observed bycatch of Chinook in the 2005 whiting fishery nor new data regarding salmon bycatch in the groundfish bottom trawl fishery required a reconsideration of its prior “no jeopardy” conclusion. NMFS also reaffirmed its prior determination that implementation of the Pacific Coast Groundfish Fishery Management Plan (PCGFMP) is not likely to jeopardize the continued existence of any of the affected ESUs. Lower Columbia River coho (70 FR 37160, June 28, 2005) and Oregon Coastal coho (73 FR 7816, February 11, 2008) were recently relisted as threatened under the ESA. The 1999 biological opinion concluded that the bycatch of salmonids in the Pacific whiting fishery were almost entirely Chinook salmon, with little or no bycatch of coho, chum, sockeye, and steelhead.

On February 9, 2012, NMFS' Protected Resources Division issued a Biological Opinion (BO) pursuant to section 7(a)(2) of the Endangered Species Act (ESA) on the effects of the operation of the Pacific coast groundfish fishery in 2012. In this Opinion, NMFS concluded that the operation of the groundfish fishery is not likely to jeopardize the continued existence of green sturgeon (Acipenser medirostris), eulachon (Thaleichthys pacificus), humpback whales (Megaptera novaeangliae), Steller sea lions (Eumetopias jubatus), and leatherback sea turtles (Dennochelys coriacea). NMFS also concluded that the operation of the groundfish fishery is not likely to destroy or adversely modify designated critical habitat of green sturgeon or leatherback sea turtles. Furthermore, NMFS concluded that the operation of the groundfish fishery may affect, but is not likely to adversely affect the following species and designated critical habitat: Sei whales (Balaenoptera borealis); North Pacific Right whales (Eubalaena japonica); Blue whales (Balaenoptera musculus); Fin whales (Balaenoptera physalus); Sperm whales (Physter macrocephalus); Southern Resident killer whales (Orcinus orca); Guadalupe fur seals (Arctocephalus townsendi); Green sea turtles (Chelonia mydas); Olive ridley sea turtles (Lepidochelys olivacea); Loggerhead sea turtles (Carretta carretta); critical habitat of Southern Resident killer whales; and critical habitat of Steller sea lions. This rule does not modify any activities that would affect listed species; and thus the February 9, 2012, BO conclusions are applicable.

On August 25, 2011, NMFS' Sustainable Fisheries Division initiated consultation with U.S. Fish and Wildlife Service (USFWS) pursuant to section 7(a)(2) of the Endangered Species Act (ESA) on the effects of the operation of the Pacific coast groundfish fishery. The Biological Assessment (BA) on the effects of the groundfish fishery on endangered species was revised and re-submitted to USFWS on January 17, 2012. The BA concludes that the continued operation of the Pacific Coast Groundfish Fishery is likely to adversely affect short-tailed albatross; however, the level of take is not expected to reduce appreciably the likelihood of survival or significantly affect recovery of the species. The BA preliminarily concludes that continued operation of the Pacific Coast Groundfish Fishery is not likely to adversely affect California least terns, marbled murrelets, bull trout, and Northern or Southern sea otters. USFWS formally responded with a letter dated March 29, 2012 and advised NMFS that formal consultation has been initiated. Marine Mammal Protection Act (MMPA) impacts resulting from fishing activities in this final rule are discussed in the FEIS for the 2011-12 groundfish fishery specifications and management measures. As discussed above, NMFS issued a BO addressing impacts to ESA listed marine mammals. NMFS is currently working on the process leading to any necessary authorization of incidental taking under MMPA section 101(a)(5)(E).

For the reasons stated in the preamble, 50 CFR part 660 is amended as follows: