The rule will facilitate enforcement of the Animal Welfare Act regulations for traveling exhibitors and thereby help to ensure the humane handling, housing, treatment, and transportation of the animals in their care.

This rule will require the advance submission of itineraries by any person who is subject to the Animal Welfare Act regulations and who intends to exhibit any animal at any location other than the person's approved site when travel will extend overnight.

Costs of the rule for exhibitors are expected to be small. The estimated time needed to prepare and submit an itinerary once arrangements have been made is about 15 minutes. Many traveling animal exhibitors are already submitting itineraries in a timely manner in accordance with existing Agency policy when a regulated animal is exhibited away from its approved site for 4 days or more. This rule is expected to cost the estimated affected 425 exhibitors a total of about $15,375 per year to prepare and submit itineraries.

The rule is expected to eliminate costs APHIS incurs in attempting to inspect animals that are not at locations where APHIS expected them to be, and to reduce some costs associated with responding to inquiries and complaints about traveling exhibitors alleged to have violated Animal Welfare Act regulations and standards. Money saved on these activities can be put toward inspections and other activities that will benefit animal welfare.

The Animal Welfare Act (Act) (7 U.S.C. 2131-2159) authorizes the Secretary of Agriculture to promulgate rules and standards and other requirements governing the humane handling, housing, care, treatment, and transportation of certain animals by dealers, exhibitors, and other regulated entities. The Secretary of Agriculture has delegated the responsibility for enforcing the Act to the Administrator of the U.S. Department of Agriculture's Animal and Plant Health Inspection Service (APHIS). Regulations and standards established under the Act are contained in title 9 of the Code of Federal Regulations (CFR), parts 1, 2, and 3. The APHIS Animal Care (AC) program ensures compliance with the Act regulations and standards by conducting unannounced inspections of premises with regulated animals.

The regulations contained in 9 CFR part 2 establish certain responsibilities of regulated persons under the Act. These responsibilities include requirements for the licensing and registration of dealers, exhibitors, and research facilities, and standards for veterinary care, identification of animals, and recordkeeping.

On October 1, 2009, we published in the Federal Register (74 FR 50738-50740, Docket No. APHIS-2006-0023) a proposal  1 to amend the regulations to include more specific requirements in the regulations concerning the submission of itineraries by any person who is subject to the Act regulations and who intends to exhibit any animal at any location other than the person's approved site. We proposed to require that such itineraries be submitted to the AC Regional Director no fewer than 2 days in advance of any travel.

We proposed that the itinerary include:

• The name and license or registration number under the Act of the person who will exhibit the animals, and if any animals are leased, borrowed, loaned, or under some similar arrangement, the name of the person who owns the animals;

• The name, identification number or identifying characteristics, species (common or scientific name), sex and age of each animal; and

• The names, dates, and locations where the animals will travel, be housed, and be exhibited, including all anticipated dates and locations for any stops and layovers.

We proposed to require that the itinerary be revised as necessary and the AC Regional Director notified of any changes.

We explained that our reason for proposing to require such itineraries to be submitted no fewer than 2 days before the start of travel was to ensure that AC inspectors have advance notice of the locations where animals will be exhibited so that they can make unannounced inspections to ensure compliance with regulations and standards for animal welfare.

We solicited comments concerning our proposal for 60 days ending November 30, 2009. We received 790 comments by that date. They were from animal welfare organizations, exhibitor and trade associations, exhibitors, and private citizens. We have considered all issues raised by the commenters and discuss below those issues that were within the scope of the proposed rule.

A large number of commenters supported the proposed rule as written. Among the reasons provided for their support, commenters stated that the proposed provisions would make it easier for APHIS to monitor adherence to the regulations and that the rule would have little impact on the majority of exhibitors who already submit itineraries in a timely manner. One commenter expressed the hope that the proposed provisions would allow APHIS to ensure that animals are afforded the minimum space requirements for primary enclosures when not in actual transport and to better monitor the time animals spend in an exercise pen or its equivalent.

Issue: Some commenters stated that the proposed rule is unnecessary because exhibitors already submit itineraries in accordance with a policy that APHIS implemented in 1997, titled “Policy 2,” which states:

Response: Federal regulations are codified in the CFR and carry the force of law. The regulations that APHIS has promulgated in accordance with the Act are set forth in 9 CFR parts 1 through 4. Additionally, we sometimes issue policy statements to provide the guidance to the public regarding our interpretation of what is necessary for regulated entities to meet the requirements of the regulations. Policy 2 was issued for guidance regarding the requirements of the regulations in § 2.126, which specify that APHIS must have access to regulated facilities in order to conduct inspections that effectively enforce the Act. Although regulated entities are subject to the Act no matter where their animals might be located, the regulations in § 2.126 have not included specific provisions on what APHIS considers necessary for effective enforcement of the regulations when animals have temporarily been moved from an approved site. Although Policy 2 has been useful in conveying APHIS' intent and expectations in such situations, we consider it necessary to codify in § 2.126 more specific responsibilities of a regulated entity.

Issue: A number of commenters stated that if APHIS does replace Policy 2 with regulations in the CFR, the regulations should be consistent with Policy 2 in requiring itineraries to be submitted only if the animals are away from the approved site for 4 days or more. Commenters stated that exhibitors sometimes take animals offsite for several short engagements during the same week or even the same day. Commenters expressed concern that being required to submit an itinerary for every movement from the approved site would impose a large and unnecessary paperwork burden on both exhibitors and APHIS. One commenter recommended that if APHIS concludes there is a need for additional reporting of offsite engagements, the regulations require that all exhibitors who move animals offsite for more than 48 hours notify APHIS of their route, exhibit locations, and anticipated time of return. One commenter recommended that, instead of requiring reporting of all travel from an approved site, APHIS require that exhibitors have on file with APHIS current contact information for the person in charge of the traveling unit. Another commenter recommended that, instead of requiring that all travel from a home facility be reported, APHIS should require that regulated facilities keep in their own records information identifying the animals taken offsite, the location to which the animals have been taken, the date and time of travel, and the date and time when the animals were returned to the facility. The commenter stated that such information would enable APHIS inspectors to know the location of animals that are taken from the approved site for short periods of time.

Response: Based on our experience enforcing the regulations, we consider 4 days too long a time for APHIS to be unaware of the location of animals covered by the Act. As we stated in our October 2009 proposed rule, we need to ensure that AC inspectors have advance notice of the locations where animals will be exhibited so that they can make unannounced inspections to ensure compliance with regulations and standards for animal welfare. Knowing which exhibitor showed animals at a particular location on a particular date will also help AC inspectors follow up on complaints that APHIS receives about alleged violations of the regulations and standards by traveling exhibitors. Such complaints are often received after an exhibitor has left a location, and the person submitting the complaint often does not know the name of the exhibitor. However, based on the information supplied by commenters, we agree that the benefit of APHIS' knowing the location of animals that are taken offsite for exhibition for less than a day may not be commensurate with the reporting that would be required under the proposed provisions. Therefore, in this final rule, we are providing that the reporting requirement under new § 2.126(c) applies only if animals are absent from the approved site overnight.

Issue: One commenter stated that if a complaint were filed while an animal were offsite for less than 4 days, the animal would likely be returned to its approved site before an inspector could reach the offsite location.

Response: We are making no changes based on the comment. Complaints regarding potential violations of the Act are made at various times in relation to the incident or observation. Some are made several weeks or months later. In order for APHIS to effectively follow up on any information received, it is imperative that the Agency know the location of the licensee or registrant and animals at the time of the incident or observation that prompted the complaint.

Issue: As noted above, the proposed rule would have required that itineraries submitted by exhibitors be received by the AC Regional Director no fewer than 2 days in advance of any travel to another location for exhibition, regardless of the length of time. A number of commenters expressed concern that having to give such advance notice would prohibit some exhibitors from accepting certain engagements and requested that the regulations provide for situations where 2 days' notice is not practical. Commenters stated that many requests for animal exhibits, including those for educational purposes, occur within 2 days of the requested exhibit date and that some requests are received on the day of the requested exhibition. Conversely, one commenter recommended that the regulations require that a detailed itinerary be submitted to APHIS no less than 2 months before travel. Another commenter stated that engagements accepted with little advance notice may be subject to less careful planning than those scheduled ahead of time, making it more important for APHIS to ensure that the regulations and the standards of the Act are met.

Response: We expect that some of the concerns expressed by the commenters will be addressed by the change we are making to the proposed provisions that will exempt exhibitors from the submission requirement if the animals are taken offsite for exhibition and returned the same day. Movements of animals offsite for exhibition for longer periods of time requires preparation with regard to logistics such as housing, security, food, water, employees, and public barriers and perimeter fences. Such arrangements are typically made well in advance of travel. AC needs the itineraries before the travel begins to ensure that inspectors know where the animals will be on specific dates so that they can make unannounced inspections at the travel sites. Requiring itineraries to be submitted at least 48 hours in advance will give AC sufficient notice and will be close enough to the time of travel for travel plans and logistics to be firm in most instances. Nevertheless, we recognize the need for some flexibility regarding this requirement. If an exhibitor does accept an engagement for which travel will begin with less than 48 hours' notice, the exhibitor must contact the APHIS AC Regional Director immediately in writing with the information listed in § 2.126(c). Facsimiles or emails are acceptable. We expect such notifications on shortened notice to be infrequent, however, and exhibitors who repeatedly provide less than 48 hours' notice will be subject to increased scrutiny under the Act. We do not consider it practical to set a specific threshold for what constitutes “repeatedly,” due to the wide range of number of submissions by exhibitors. Whereas some exhibitors make only several submissions a year that cover multiple pre-scheduled exhibitions, others submit more numerous submissions on a job-by-job basis. If APHIS considers an exhibitor to be submitting itineraries with less than 48 hours' notice with a high frequency, we may monitor the exhibitor more closely.

Issue: Several commenters stated that the information on itineraries submitted in a timely fashion frequently becomes outdated by the time the animals actually begin their travel. Commenters stated that, due to factors such as illness, behavior, client requests, or shedding, animals listed on the itinerary sometimes cannot travel. Additionally, said some commenters, illness or scheduling conflicts may require that staff members other than those listed on the itinerary travel with the animals. The commenters expressed concern that having to report all such last-minute changes to APHIS would become unduly burdensome for exhibitors.

Response: Although exhibitors are free to submit itineraries well in advance of intended travel, this rule only requires submission of an itinerary no less than 2 days before the travel. Although we recognize that even during that amount of time, it may sometimes become necessary to change the plans indicated on the itinerary, based on our experience dealing with the regulated industry, we do not expect such changes to happen frequently enough that reporting them to APHIS will create an undue burden on exhibitors. Requirements for notifying APHIS of itinerary changes are discussed below.

Issue: Some commenters expressed concern that the proposed rule included a requirement that an itinerary include all anticipated dates and locations (with addresses) for any stops and layovers, and that the itinerary be promptly revised, as necessary, to account for any changes. Commenters stated that it would be unreasonably burdensome on the exhibitor and APHIS to require notification of every minor deviation from a previously filed itinerary. One commenter asked whether APHIS is contemplating requiring specific information regarding rest stops and meal breaks. Commenters stated that a variety of factors determine where and when exhibitors stop on the road for animal care checks and that events that delay or interrupt travel sometimes occur with little or no advance warning. The commenters gave as examples problems with weather, mechanical breakdowns, road conditions, uncooperative animals, and delays from a home facility or stop/layover. Other factors cited included access to water spigots and adequate parking. One commenter stated that train travel is sometimes interrupted due to track or equipment issues or for crew changes, the filling of water tanks, or to allow other traffic to proceed. During longer delays, stated the commenter, animals might be offloaded for exercise and cleaning of railcars.

Response: It is not the intent of this final rule, nor is it the intent of Policy 2 and § 2.126 of the regulations, to require that APHIS be advised regarding every minute of a journey. The required itinerary must indicate where the licensee or registrant and animals will be on which dates. If there is an anticipated layover of a length of time sufficient to allow/require removal of the animals from the transport enclosures, that layover should be indicated on the itinerary. Unanticipated delays of such length must be reported to the appropriate APHIS AC Regional Director the next APHIS business day. 2

Issue: As noted above, the proposed rule included the requirement that the information on a submitted itinerary be promptly revised to account for any changes. Several commenters asked what APHIS' intent is regarding the term “promptly,” whether APHIS personnel would be available to receive notification of changes that occur overnight, and what process APHIS had in mind for editing an itinerary.

Response: This final rule requires notification of itinerary changes in written form. Emails and facsimile notifications can be sent at any hour. We are providing in this final rule that, if initial notification in an emergency is made other than by email or facsimile, it must be followed up with written documentation at the earliest possible time. For changes that occur after normal business hours, the change must be conveyed to the appropriate APHIS AC Regional Director no later than the following APHIS business day. 3

Issue: A number of commenters expressed concern that if detailed information about their stops became public knowledge, it could compromise the safety of animals and caretakers. The commenters stated that such information could be used by special interest groups to plan disruptions or conduct acts of violence against exhibitors. Other commenters stated that having advance notice of an exhibitor's itinerary would give competitors an advantage in competing for business. The commenters stated that itineraries should be made available only to APHIS and its inspectors.

Response: We are cognizant of the concerns of persons subject to the Act regarding the release of itinerary information. We note, however, that the type of information required in this rule is already required in accordance with Policy 2 and § 2.126 of the regulations and we are not aware of any problems that have been caused by it to date. Further, a number of licensees and registrants already inform the public of their exhibit dates and locations through Web sites and other means. A person seeking information submitted to APHIS would need to request such information under the Freedom of Information Act, which exempts from release commercial or financial information that is privileged or confidential.

Issue: One commenter recommended that loans for a stated period of time between Association of Zoos and Aquariums (AZA) member zoos and aquariums for exhibit or breeding be exempt from the provisions of the proposal.

Response: We agree that movements of animals from one zoological facility to another for the purposes described by the commenter are of a different nature than the types of movement contemplated by § 2.126(c). Such transfers, which are generally made on a long-term basis, do not fall under the intent or requirements of this final rule. When one zoological facility loans an animal to another zoological facility for purposes such as exhibit or breeding, the facilities generally enter into a legal agreement that transfers responsibility for the animal to the recipient facility for the loan period. The recipient facility is responsibility for meeting the requirements of the Act with regard to that animal during the duration of the loan period.

Issue: One commenter stated that there is no need to apply the regulation as proposed to zoos. The commenter stated that the clear intent of Policy 2 and § 2.126 of the regulations is to ensure that true traveling exhibitors such as carnivals, circuses, animal acts, traveling educational exhibits, and petting zoos are available for inspection. The commenter stated that because zoos are not traveling exhibitors, there is no need to apply the proposed requirements to them.

Response: We agree that zoos are generally not considered traveling exhibitors. As indicated above, those licensees and registrants who take animals offsite and return them the same day will not need to submit an itinerary to APHIS for those movements. However, APHIS needs to know the location of animals moved from zoos overnight for exhibition, just as the Agency needs to know the whereabouts of animals taken offsite overnight for exhibition by other exhibitors. With the exception discussed above for loans between zoological facilities, the provisions of § 2.126(c) will apply to zoological facilities, just as Policy 2 has applied to permanent facilities such as zoos.

Issue: The proposed rule included the requirement that an itinerary contain the following information:

• The name(s) of the person(s) who intends to exhibit the animal(s) and transport the animal(s) for exhibition purposes, including any business name(s) and current Act license or registration number(s) and, in the event that any animal is leased, borrowed, loaned, or under some similar arrangement, the name of the person who owns such animal;

• The name, identification number or identifying characteristics, species (common or scientific name), sex and age of each animal; and

• The names, dates, and locations (with addresses) where the animals will travel, be housed, and be exhibited, including all anticipated dates and locations (with addresses) for any stops and layovers.

Several commenters stated the required information is duplicative of information the exhibitor is already required to file. Several commenters stated that all animals already must be accompanied by a valid, current health certification, which indicates the animal's age, sex, species, and identification number where applicable. One commenter stated that the proposed requirements would be duplicative of information the exhibitor already files each year as part of its license renewal. The commenter stated that the information already submitted includes a complete list of cities and precise engagement dates and venues.

Response: We are making no changes based on these comments. This rule requires information beyond that collected by other programs and agencies regarding the movement of animals. The information provided in a health certificate does not encompass all the information required under Policy 2 and the more specific requirements of § 2.126 of this rule. Additionally, it is important that this information be submitted and distributed to our field inspectors in a timely manner. Having to rely on incomplete information collected by other parties would not allow efficient and effective use of APHIS resources. We do not expect that there will be a significant increase in reporting requirements for exhibitors who already comply with the regulations and Policy 2. Exhibitors who submit a yearly itinerary that does not change would not need to submit further itineraries under this rule. However, any changes to that yearly submission would need to be reported to APHIS.

Issue: As part of the proposed rule, in accordance with the requirements of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ), APHIS provided an estimate of the public reporting burden for the collection of information that would occur under the provisions of the proposal. We estimated that the number of respondents who would provide information to APHIS if the proposed rule were made final would be 300, and that each respondent would provide an average of 8.66 responses per year, for a total of approximately 2,600 responses per year. We estimated that each response would take an average of 0.25 hours to complete.

One commenter, a representative of the AZA, estimated that because many AZA-accredited zoos and aquariums conduct offsite outreach programs at locations such as schools and nursing homes, the AZA's 221 accredited zoos and aquariums alone would make a total of at least 50,000 to 70,000 submissions annually. Another commenter stated that adjustments to itineraries would require more than 15 minutes each.

Response: Based on comments we received from the public and upon review of our estimate of potential reporting burden for this rule, we agree that submissions by permanently based zoological facilities were underrepresented in our estimate. However, we disagree with the commenter who estimated that AZA-accredited zoos and aquariums would submit at least 50,000 to 70,000 itineraries annually. To arrive at that total, each zoo would need to submit from 225 to 320 itineraries per year, which we consider unlikely, particularly in light of the change we are making in this rule that will not require submission of itineraries for trips that do not extend overnight.

We have revised our estimates of the number of exhibitors who will be affected by this rule. Our original estimate that 300 exhibitors would be affected by the rule was based on the number of active licensees that had inspections at traveling sites. We have increased that number by 125, based on our estimate that approximately 6 percent of nontraveling exhibitors may occasionally take animals away from their facility overnight for exhibition. We further estimate that those 425 exhibitors would provide a total of about 4,100 responses each year. We derived this number through discussion with AC regional offices and after looking at the size and histories of traveling exhibitors. For example, large circuses usually have itineraries planned a year or more in advance. Some smaller exhibitors may not know their schedules until a week before a performance. Thus, we estimated that about 100 of the affected exhibitors would submit itineraries about twice a year (200 submissions), and that the remainder would submit itineraries monthly (3,900 submissions). We continue to consider our estimate of 0.25 hours per response to be reasonable. In each case where animals are to be moved, the facility or promoter would already have arranged the necessary booking and trip logistics. The 0.25 hours represents the time needed to type or write out the itinerary and send it by email or facsimile to APHIS.

Issue: Several commenters stated that APHIS did not make clear in its proposal why the Agency considers the proposed regulations to be necessary. One commenter requested that APHIS indicate the types of problems its inspectors are experiencing. One commenter stated that, in place of the expanded requirements, APHIS should work with regulated entities to develop methods of ensuring that APHIS maintains reasonable access to facilities and animals. One commenter questioned why APHIS has decided to take on the extra burden of requiring itinerary submissions for all traveling exhibits.

Response: As we stated in our October 2009 proposed rule, AC inspectors need to know the location and dates of traveling exhibits in advance of the travel so that they can conduct unannounced inspections of the animals at those sites. Currently, if an exhibitor has not provided AC with an accurate itinerary in advance of travel, an inspector may arrive at a facility only to find that some or all of the animals are elsewhere. Additionally, if AC receives a complaint about an alleged violation of the regulations and standards by an exhibitor at a certain location on a certain date, having a record of the itineraries will enable us to determine which exhibitor and which animals were at the location on that date so that we can look into the complaint. Currently, if there is no itinerary on file for an exhibition at a location and date cited in a complaint, and the exhibitor is not identified, APHIS must conduct an investigation to try to determine which exhibitor was there, which can be difficult and time consuming, and sometimes unsuccessful. We anticipate that this rule will enable APHIS to make more efficient use of its personnel. While we welcome recommendations from regulated entities on how to ensure that APHIS has reasonable access, we consider this rule a reasonable way to achieve that end.

Issue: Several commenters stated that the administrative burden on APHIS could be reduced by applying the proposed provisions to those exhibitors who have shown a reason to be of concern to APHIS and waiving the requirements for exhibitors who have demonstrated to APHIS that they provide their animals with quality care. One commenter stated that perhaps APHIS should limit the itinerary requirements to offsite exhibit of big cats.

Response: We are making no changes based on the comments. We do not expect an undue administrative burden on APHIS due to this rule. The intent of this rule is to ensure that APHIS has access to all regulated animals for inspections and enforcement activities at all times. Application of the rule to selected licensees and registrants could be construed as arbitrary and capricious enforcement of the regulations.

Issue: Several commenters recommended that the proposal be changed to require automated delivery of itineraries to APHIS. One commenter stated that submission of an itinerary by email would take about 15 minutes and would address the problem of paper copies of itineraries becoming outdated before APHIS receives them.

Response: While we agree that there are advantages to submitting itineraries electronically, we are not requiring submission by that means. Some persons subject to the Act may not have access to that technology, especially while traveling. Because paper copies will need to arrive at APHIS no later than 2 days before the scheduled travel, in the great majority of cases we do not expect them to be out of date by the time the travel begins. As noted above, in those cases where changes need to be made to itineraries at the last minute, those changes will need to be submitted to APHIS in some expedited fashion (e.g., by phone, facsimile, or email), followed by a written submission if the change is not initially in writing.

Issue: One commenter asked how APHIS intends to inform newly affected parties of any updates to the regulations.

Response: Exhibitors will be notified of the regulatory changes in a variety of ways. All proposed and final rules are made available to the public in the Federal Register . Additionally, a press release will be issued when this rule is published and an announcement will be posted to APHIS' Web site. APHIS inspectors will also discuss the rule with licensees and registrants during inspections of regulated facilities.

Issue: One commenter asked what types of animals will be covered by this rule.

Response: This rule applies to all animals covered by the Act that are exhibited anywhere other than the person's approved site.

Issue: One commenter questioned whether the proposed provisions were within APHIS' authority.

Response: Section 2151 of the Act authorizes the Secretary to promulgate such rules, regulations, and orders as the Secretary may deem necessary to govern the humane handling, housing, care, treatment, and transportation of certain animals by dealers, exhibitors, and other regulated entities. Section 2146 of the Act provides that the Secretary shall, at all reasonable times, have access to the places of business and the facilities, animals, and those records required to be kept pursuant to the Act. The Secretary has delegated the responsibility for enforcing the Act to the APHIS Administrator. This final rule merely adds more specific requirements to § 2.126 of the Animal Welfare Act regulations.

In this final rule, we are making several nonsubstantive editorial changes to what appeared in the proposed rule. Instead of making joint references to the singular and plural as, e.g., “animal(s),” we are using the singular to signify also the plural. This is consistent with the style used in the definitions in § 1.1 of the regulations. In the regulatory text of this rule, when referring to the AC Regional Director, we use the term “AC Regional Director,” which is consistent with usage elsewhere in the regulations.

Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule, with the changes discussed in this document.

This final rule has been determined to be significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget.

We have prepared an economic analysis for this rule. The economic analysis provides a cost-benefit analysis, as required by Executive Orders 12866 and 13563, which direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The economic analysis also examines the potential economic effects of this rule on small entities, as required by the Regulatory Flexibility Act. The economic analysis is summarized below. Copies of the full analysis are available by contacting the person listed under FOR FURTHER INFORMATION CONTACT or on the Regulations.gov Web site (see ADDRESSES above for instructions for accessing Regulations.gov).

APHIS is amending the Animal Welfare Act (AWA) regulations to require a person who intends to exhibit regulated animals at any location other than the person's approved site to submit an itinerary at least 2 days in advance when travel extends overnight. In those instances when exhibitors are offered engagements with less than 2 days' notice, APHIS will accept itineraries less than 48 hours in advance of travel.

The rule will facilitate enforcement of the AWA regulations for traveling exhibitors, and thereby help to ensure the humane handling, housing, treatment, and transportation of the animals in their care.

Costs of the rule for exhibitors are expected to be small. The AC program has estimated that preparation and submission of an itinerary takes about 15 minutes. Many traveling animal exhibitors are already submitting itineraries in a timely manner in accordance with existing Agency policy when a regulated animal is exhibited away from its approved site for 4 days or more.

The time required to prepare the estimated 4,100 itineraries that will be required because of this rule is expected to cost the approximately 425 affected exhibitors a total of $15,375 per year.

Most of the traveling exhibitors affected by the rule are small entities. Regardless of size, we do not expect the exhibitors to be significantly affected.

The rule is expected eliminate costs APHIS incurs in attempting to inspect animals that are not at locations where APHIS expected them to be, and to reduce some costs associated with responding to inquiries and complaints about traveling exhibitors alleged to have violated Animal Welfare regulations and standards. Money saved on these activities can be put toward inspections and other activities that will benefit animal welfare.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. The Act does not provide administrative procedures which must be exhausted prior to a judicial challenge to the provisions of this rule.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), the information collection or recordkeeping requirements included in this rule have been approved by the Office of Management and Budget (OMB) under OMB control number 0579-0361.

The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 851-2908.

Accordingly, we are amending 9 CFR part 2 as follows:

Background

Under the Animal Welfare Act (AWA) (7 U.S.C. 2131 et seq. ), the Secretary of Agriculture is authorized to promulgate standards and other requirements governing the humane handling, care, treatment, and transportation of certain animals by dealers, research facilities, exhibitors, carriers, and intermediate handlers. Regulations established under the AWA are contained in the Code of Federal Regulations (CFR) in 9 CFR parts 1 and 2, and 9 CFR part 3 contains standards for the humane handling, care, treatment, and transportation of animals covered by the AWA. Currently, part 3 consists of subparts A through E, which contain specific standards for dogs and cats, guinea pigs and hamsters, rabbits, nonhuman primates, and marine mammals, respectively, and subpart F, which sets forth general standards for warmblooded animals not otherwise specified.

The only requirement for contingency planning by licensees and registrants in the regulations has been in § 3.101(b), which covers water and power supply requirements at facilities housing marine mammals. Specifically, this section requires such facilities to submit written contingency plans to the Deputy Administrator of Animal Care (AC) regarding emergency sources of water and electric power should primary sources fail. Among other things, the plans must include evacuation plans in the event of a disaster and a description of backup systems and/or arrangements for relocating marine mammals requiring artificially cooled or heated water.

Following the events experienced during the 2005 hurricane season, a Federal document, “The Federal Response to Katrina: Lessons Learned,” which can be found on the Internet at http://georgewbush-whitehouse.archives.gov/reports/katrina-lessons-learned/ , was published that highlighted the need for planning to minimize the impact of disasters. AC's experience indicates that, although contingency planning would benefit the health and welfare of animals covered by the AWA, at least some entities responsible for regulated animals have not undertaken such planning. We believe all licensees and registrants should be required to develop a contingency plan for all animals regulated under the AWA in an effort to better prepare for potential disasters. Therefore, on October 23, 2008, we published in the Federal Register (73 FR 63085-63090, Docket No. APHIS-2006-0159) a proposal  1 to amend the AWA regulations to add requirements for contingency planning and training of personnel by research facilities and by dealers, exhibitors, intermediate handlers, and carriers.

We solicited comments concerning our proposal for 60 days ending on December 22, 2008. On December 19, 2008, we published a notice in the Federal Register (73 FR 77554) that extended the comment period an additional 60 days until February 20, 2009. We received 997 comments by that date. They were from private citizens, breeders, dealers, animal welfare organizations, research facilities, Government agencies, pharmaceutical companies, universities and colleges, research associations, exhibitors, carriers, kennels, and medical associations. Fifty commenters supported the rule as it was proposed. The issues raised by the remaining commenters are discussed below by topic.

Many commenters had comments or questions that were not germane to the proposed rule, such as asking the Animal and Plant Health Inspection Service (APHIS) to end the trade of exotic animals. We are not addressing those comments in this final rule because they are outside of its scope.

Many commenters objected to APHIS mandating contingency plans. One commenter stated that, since no plan can be 100 percent successful, it does not make sense to mandate plans. One commenter stated that the AWA has language prohibiting prescribing methods of research and that the proposed rule violates this by prescribing emergency planning methods.

As stated in the proposed rule, the events experienced during the 2005 hurricane season highlighted the need for planning to minimize the impact of disasters on the health and welfare of all animals covered by the AWA. The intent of the proposed rule was to safeguard the health and welfare of animals in emergency situations. We understand that contingency plans may not be 100 percent successful. However, we do not agree that plans should not be mandated because, to promote animal welfare, entities should be able to demonstrate a reasonable effort to address emergency situations. The rule does not prescribe emergency planning methods. In addition, we do not consider a contingency plan to be a research method.

One commenter suggested that instead of mandated plans, APHIS should provide guidance materials, training videos, or classes, as it would be cheaper for both APHIS and the regulated entities.

APHIS plans to provide guidance materials, which may include videos and classes. However, this does not replace a need for contingency plans as contingency plans are more adaptable to the unique circumstances of each licensee and registrant and will determine what training is needed. In addition, as facilities have widely varying needs, allowing licensees and registrants to determine and implement their own unique training allows flexibility and will potentially keep training costs down. We have prepared guidance materials that are being made available concurrently with this final rule on our Web site  2 and will provide additional guidance to licensees and registrants for drafting appropriate contingency plans upon request.

Several commenters stated that they already had contingency plans in place or followed other accreditation standards (e.g., Association of Zoos and Aquariums standards), which they stated were sufficient to address the contingency plan components we proposed to require. Some of these commenters asked that they be exempt from the requirements of the rule because they already had plans in place or that APHIS work with other organizations that have accreditation standards to draft a standard document so that the regulations are not redundant. One commenter stated that APHIS should have done a better job of talking to facilities that already have contingency plans in place.

We recognize that many AWA licensees and registrants may already have contingency plans in place. Although many of these plans may be sufficient to satisfy the new contingency plan requirements in this final rule, exemption is not practical as those nongovernmental accreditation standards are not mandatory, nor are they linked by regulatory processes to the AWA. However, before developing the proposed rule, we gathered information on regulated entities that currently have contingency plans in place. This information was used as a basis for the proposed criteria for developing contingency plans.

Many commenters asked how APHIS will review the contingency plans, and in particular whether we will require submission of contingency plans to APHIS. Many commenters objected to submitting contingency plans because they were concerned that the plans would be subject to the Freedom of Information Act (FOIA) and that disclosure of contingency plans would put at risk the safety and security of facilities, employees, and animals by giving animal rights extremists important information. Many other commenters supported submitting contingency plans to APHIS or other agencies or making them available to the public or making relevant portions of plans available to local services identified by facilities as potentially important to the execution of their contingency plan. One commenter suggested posting contingency plans online while another suggested electronic submission. Several commenters stated that licenses should be revoked or not renewed if contingency plans are not submitted to APHIS or that plans that have been modified due to personnel changes or updates should be submitted to APHIS.

We do not intend to require submission of contingency plans. As stated in the analysis of significant alternatives to the rule in the proposed rule, there are over 10,000 licensees and registrants and requiring each of them to submit plans to APHIS for review would take an enormous amount of resources for the Agency to process, review, and store. Therefore, we proposed that each research facility, dealer, exhibitor, intermediate handler, or carrier will be required to review their contingency plan on at least an annual basis. We would expect that each licensee and registrant would maintain documentation of their annual reviews, including documenting any amendments or changes made to their plan since the previous year's review, such as changes made as a result of recently predicted, but historically unforeseen, circumstances (e.g., weather extremes). We are making this clarification in § 2.38(l)(2) and § 2.134(b). We are also clarifying that APHIS will have the opportunity to review annual review documentation and training records, as well as contingency plans, as a part of our routine inspection process. It is the regulated facility's decision whether or not to share its plan with outside entities. The AWA does not require licensees and registrants to disclose documentation to outside entities. However, if a contingency plan details coordination with other government entities, an inspector may check for evidence supporting this coordination.

Several commenters stated that there is no evidence that APHIS has more expertise in contingency planning than other organizations, such as universities. One commenter stated that APHIS should consult with other agencies such as the Federal Emergency Management Agency (FEMA) in the development of requirements for contingency plans or in the implementation of contingency plans.

APHIS already has the technical expertise to ensure that regulated entities protect the health and well-being of animals in accordance with the AWA. Further, in 2008, APHIS launched an Animal Care Emergency Programs unit, which is a full-time unit dedicated to collaborating with other organizations to support the safety and well-being of animals during emergencies and disasters. As required by the AWA, APHIS consults and cooperates with other Federal agencies concerned with the welfare of animals used for research, experimentation, or exhibition. APHIS also routinely works closely with FEMA and other organizations on animal welfare issues prior to and during disasters and emergencies.

Several commenters stated that the facility and not the Government should decide what should be in contingency plans.

As stated in the proposed rule, because we recognize that individual circumstances for regulated entities may be different, it is difficult to go into specific detail as to what elements must be included in all contingency plans. Therefore, we have not sought to develop a one-size-fits-all plan but have instead provided a framework of four criteria, in § 2.38(l)(1) for research facilities and § 2.134 for dealers, exhibitors, intermediate handlers, and carriers, that we believe are the minimum criteria necessary to ensure a successful contingency plan. We have largely left to the discretion of each regulated entity how best to develop contingency plans that:

• Identify common emergencies such as electrical outages, faulty HVAC systems, fires, animal escapes, and natural disasters the facility is most likely to experience.

• Outline specific tasks required to be carried out in response to the identified emergencies including, but not limited to, specific animal evacuation plans or shelter-in-place plans and provisions for providing backup sources of food and water as well as sanitation, ventilation, bedding, veterinary care, etc.

• Identify a chain of command and who (by name or by position title) will be responsible for fulfilling these tasks.

• Address how response and recovery will be handled in terms of materials, resources, and training needed.

We believe that fulfilling these criteria is essential to the success of a contingency plan. In addition, we believe that these criteria provide an adequate degree of flexibility to allow all regulated entities to comply with the provisions of this final rule. These criteria are essential because they form a framework of what potential events to address, who has responsibility, and how to mitigate the potential events. These criteria form the basis of FEMA's “Ready Business” campaign, which provides information to businesses on how to plan for emergencies. We have modified that information to address animal welfare concerns.

One commenter stated that the contingency plan should identify and evaluate the location of the facility and the probable specific emergency situations that location is likely to experience. The commenter further stated that any facility-specific vulnerability should be identified and addressed. One commenter stated that facility grounds should be in areas not prone to flooding or earthquakes and that it is preferable to provide onsite care during an emergency.

One of the proposed criteria for development of contingency plans is that the plan identify situations, such as emergencies and natural disasters, that a regulated entity is most likely to experience that would trigger the need for the measures identified in a contingency plan to be put into action. We expect that, if a facility-specific vulnerability would impact the humane handling and care of AWA-regulated animals during an emergency, the vulnerability would be addressed within the regulated entity's contingency plan. While we agree that ideally a regulated entity would not be located in an area prone to flooding or earthquakes, we realize that is not always feasible to ensure. As stated in the proposed rule, such disasters, if likely to be encountered by a particular regulated entity, would be expected to be addressed in that regulated entity's contingency plan.

Several commenters stated that euthanasia should be considered a viable option in the event of a disaster. Several commenters stated that marine mammals should be microchipped to facilitate recovery in the event they are released into the wild. One commenter stated that all tasks necessary for ensuring the welfare of animals should be itemized and the time required for each task estimated. Several commenters recommended providing criteria for development of contingency plans by animal group or by species and, for marine mammals, criteria by geographic location. Several commenters stated that agreements with alternative facilities for evacuation should be part of the contingency plan.

Since each regulated entity has different needs, we have largely left to the discretion of each regulated entity how best to fulfill the criteria of this final rule. Details about elements to include in a contingency plan, such as whether to use microchip identification methods or euthanasia or whether to itemize and time tasks, are to be decided upon by the regulated entity. In addition, as long as a regulated entity addresses each of the elements required for contingency plans, it may divide its plan according to criteria such as animal group, species, or geographic location. While we encourage regulated entities to explore cost-efficient options such as entering into mutual aid agreements with nearby similar entities, we are not requiring them to do so, as long as their contingency plans are adequate to protect the animals' welfare.

As noted previously, the only contingency planning currently required for licensees and registrants are those requirements in § 3.101(b) which cover water and power supply requirements for facilities housing marine mammals. One commenter suggested that the requirements in § 3.101(b) be revised to require that contingency plans submitted for marine mammals include the proposed criteria for contingency plans included in § 2.134.

The regulations added in this final rule in § 2.134 for developing contingency plans apply to all dealers, exhibitors, intermediate handlers, and carriers, including those that handle marine mammals. We are amending § 3.101(b) in this final rule to make it clear that facilities housing marine mammals must comply with the contingency planning requirements in § 2.134.

Several commenters stated that carriers and intermediate handlers should not have to develop contingency plans because it would be costly for them, because the number of animals lost or harmed in transit is miniscule, or because they have limited resources to respond to emergency situations. Given this, several commenters expressed concern that, if forced to comply with the proposed rule, carriers may not want to do business with research facilities.

We believe that all research facilities, dealers, exhibitors, intermediate handlers, and carriers should be required to develop a contingency plan for all animals regulated under the AWA. Although there may be costs associated with developing contingency plans, we expect such costs to be reasonable given that we have largely left it up to the discretion of regulated entities to determine the best way to fulfill the contingency plan criteria provided in this final rule for their own unique circumstances (i.e., size, type of entity, location, etc.). Therefore, we do not expect that developing contingency plans will cause a significant financial burden on carriers and intermediate handlers. At a minimum, we would expect that carriers, intermediate handlers, and traveling exhibitors would have provisions in place to respond to weather-related problems and animal escapes, as well as other problems, such as mechanical failures, most likely to be experienced during transit. We do not necessarily expect carriers and intermediate handlers to have backup sources of food and water on hand when traveling, but we would expect that their contingency plan would document how and where to get them if needed. In addition, we are clarifying in § 2.134(b) that all traveling entities must carry a copy of their contingency plan with them at all times and make it available for inspection while in travel status. Having a copy of their contingency plan on hand will allow regulated entities to refer directly to their plan in the event of an emergency while traveling. We believe this will result in preventing the loss or harm of regulated animals.

Several commenters stated that facilities should have backup carriers if their plans require evacuation. Also, the commenters stated that carriers should include in their plans which facility to service first in the event that a major disaster happens and multiple facilities are impacted.

While we do not require regulated entities to employ backup carriers, if a regulated entity's contingency plan includes a backup carrier, we expect that the regulated entity will ensure that the carrier is compliant with the elements of the contingency plan. In addition, we believe that carriers should coordinate with the facilities they serve.

Because we realize that some dealers, exhibitors, intermediate handlers, and carriers do not have stationary facilities, we are making a change to the requirements in § 2.134(a)(1) by removing the word “facility” and replacing it with the more inclusive words “licensees and registrants.” In addition, we are adding “mechanical breakdowns” to the list of likely emergencies that may be addressed in a contingency plan.

Several commenters stated that licensees who travel with animals should be required to submit contingency plans both for at home and on the road. Several commenters stated that travel as part of contingency plans for dangerous animals or for marine mammals should be prohibited unless necessary for the welfare of the animals because of the risks to public safety and animal welfare, particularly in emergency situations. One commenter asked how animals that cannot be evacuated will be cared for and stated that there needs to be a requirement for securing a facility in the event animals cannot be evacuated. One commenter stated that the contingency plan must document how and by whom animals would be moved and what efforts will be made to ensure the relocation of animals is done in the most humane or least stressful manner possible.

The intent of the proposed rule was to safeguard the welfare of animals in emergency situations. There is no requirement to travel with animals unless it is part of a facility's contingency plan. As stated in the proposed rule, the contingency plan would have to provide detailed instructions for evacuation or shelter-in-place. Therefore, if a contingency plan includes provisions for evacuation, we expect that the plan will also include details on how and by whom the animals would be moved in a way that would be as humane as possible given the disaster circumstances a facility may be facing.

One commenter asked whether an outside carrier's equipment, if called upon, would have to comply with AWA requirements.

Regulated entities are expected to ensure that their routine and back-up carriers are compliant with all AWA requirements.

Several commenters stated that detailed evacuation or shelter-in-place plans may be possible for emergencies, but are impractical for natural disasters because regulated entities rarely have advance notice of disasters and because there are so many variations in facilities and disasters that it does not make sense to have a one-size-fits-all plan. The commenters further stated that the rule should acknowledge this and allow for a “best efforts” approach when making contingency plans for unpredictable natural disasters. Several commenters expressed concern that the proposal seemed to require that all potential disasters be addressed no matter how likely they are to occur. However, one commenter stated that all potential disasters that might occur should be addressed in the contingency plan.

We recognize that it is not practical to prescribe detailed contingency plans for all situations. Therefore, we have not sought to develop a one-size-fits-all plan, but have largely left to the discretion of each regulated entity how best to fulfill the criteria described in the proposed rule. This rule intends to set the minimum criteria necessary to ensure a successful contingency plan. We believe this provides an adequate degree of flexibility to allow all regulated entities to comply with the provisions of the rule. As stated in the proposal, we would require that regulated entities address those emergencies and disasters most likely to occur, rather than requiring them to address all possible disasters and emergencies regardless of likelihood. We encourage regulated entities to consider all scales of emergencies, but recognize that highly localized events such as power disruptions and road closures (e.g., from a vehicular accident) are most likely. APHIS encourages the regulated communities to address these more routine events in their contingency plans, and to work with their local emergency management organization. APHIS understands that disaster and emergency events may be unpredictable and that it is impossible for every possible event to be addressed in a contingency plan.

One commenter stated that the contingency planning requirements are inconsistent with Homeland Security Presidential Directive 8: National Preparedness (HSPD-8) because terms used in the rule, such as “major disaster” and “emergency,” are not consistent with those used in the directive.

HSPD-8 establishes policy for dealing with terrorist attacks, major disasters, and other events of national scope. Section 2(e) of the directive states that the terms “major disaster” and “emergency” are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Under that Act, “emergency” is defined as any occasion or instance, as determined by the President, where Federal assistance is needed to save lives, protect property and public health and safety, or to lessen or avert a catastrophe. A “major disaster” is defined as any natural catastrophe, as determined by the President, which causes damage of sufficient severity and magnitude to warrant major disaster assistance in order to supplement the efforts and available resources of States, local governments, and disaster relief organizations in alleviating the damage, loss, hardship, or suffering caused by the catastrophe. The Stafford Act is largely a framework for Federal assistance to State and local governments for disaster relief, and these terms require Presidential involvement. The scope of this rule is broader, and thus we use the terms “disaster” and “emergency” in more general terms. This rule considers “disaster” and “emergency” to mean those events which disrupt the ability of a licensee or registrant to continue with normal business routine and which are expected to be detrimental to the good health and well-being of the animals in the licensee's or registrant's care. A core concept of emergency management is that emergencies are managed at the most local level possible. The National Incident Management System, December 2008, supports this in stating that “incidents typically begin and end locally, and are managed on a daily basis at the lowest possible geographical, organizational, and jurisdictional level.” The document is available from the FEMA Web site at http://www.fema.gov/pdf/emergency/nims/NIMS_core.pdf. While emergencies and disasters may be Statewide or even national in scope, we expect that most often they will be events that do not generally involve disaster declarations and that remain localized, such as power outages, facility fires, or ice storms.

One commenter stated that contingency plans should be integrated into the overall hazard response plan for facilities.

Although we do not require regulated entities to integrate animal contingency plans into their business continuity plans, we encourage them to do so. APHIS believes that having a business continuity plan supports animal health and welfare as well as overall good business practices.

The proposed requirements in §§ 2.38(l)(1)(ii) and 2.134(a)(2) stated that regulated entities must include in their contingency plans provisions for providing backup sources of food and water as well as sanitation, ventilation, bedding, veterinary care, etc. Several commenters recommended that we remove the words “backup sources of” from this provision and insert the words “as described in the contingency plan” after the phrase “as well as sanitation, ventilation, bedding, veterinary care, etc.” These commenters stated that it may not be possible to maintain all of the veterinary care provisions listed in § 2.33(b) during a disaster.

While it may not be possible to provide the same level of veterinary care during an emergency or disaster as during normal business operations, APHIS believes that the veterinary care requirements in § 2.33(b) are the minimum requirements necessary to ensure the health and welfare of regulated animals. As with the contingency plan criteria, these veterinary care requirements are general rather than specific to allow regulated entities the discretion to determine how best to fulfill the requirements based on their own unique situations. In addition, as backup veterinary care is an element that must be addressed within the contingency plan, APHIS will be able to assess the adequacy of the backup veterinary care as it assesses the adequacy of veterinary care overall during routine inspections.

Several commenters expressed concern regarding APHIS' ability to provide adequate inspection and review of plans, stating that the review of plans would present an excessive burden to APHIS. One commenter suggested that APHIS could reduce the inspection burden by reviewing a random sampling of plans. Two commenters suggested that, at a minimum, APHIS should review the contingency plans of facilities with dangerous animals such as elephants, nonhuman primates, or large carnivores. One commenter asked who APHIS would pay to obtain the extra staff to enforce the rule. One commenter suggested that licensing fees be increased to fund additional inspectors or that APHIS stop issuing licenses until numbers of facilities drop to a manageable level.

We do not believe that our review of contingency plans would present an excessive burden on APHIS. As noted above, we would review contingency plans as a part of the routine inspection process, similar to the process for our review of dog exercise and nonhuman primate environment enhancement plans. We believe in this way we will be able to provide adequate review of the contingency plans for all regulated entities. We do not anticipate that additional APHIS staff will need to be hired as a result of this rule. Neither do we anticipate needing to contract out to other organizations to obtain additional staff.

Many commenters were concerned that there were not enough specifics about what would make a contingency plan acceptable and that facilities could be cited for failing to include certain items in their plans or for not following their plans exactly. Several commenters suggested punishments for facilities that either do not submit their plans or whose plans are inadequate. One commenter asked whether the judgment of noncompliance will be affected by whether animals were harmed in any way.

We have issued a guidance document along with this final rule that will assist licensees and registrants in determining what elements to include in their contingency plans. The guidance document is intended only to provide suggestions for how regulated entities may satisfy the criteria in the regulations rather than to prescribe specific measures that must be undertaken or equipment that must be purchased. For example, a regulated entity has multiple options to mitigate the potential failure of an HVAC system besides purchasing a backup generator, some of which are no-cost solutions. These no-cost solutions might include the use of a borrowed generator, opening windows, using existing fans, and/or moving the animals to a cooler location. Any of these actions could be considered adequate ways of responding to the potential failure of an HVAC system and could therefore be included in a contingency plan as long as the action listed is actually feasible. For instance, if a regulated entity's contingency plan calls for opening windows, but the facility's windows are incapable of opening, opening windows would not be a valid mitigation measure. We wish to emphasize that compliance with this final rule will be achieved through the development of an appropriate contingency plan and the training of facility personnel with respect to that plan. Nothing in this rule should be construed as requiring affected entities to make capital expenditures—for example, purchasing backup generators or making structural changes to a facility—in order to comply with the rule. As we do currently when enforcing the regulations, APHIS will assess the adequacy of a regulated entity's contingency plan using the Animal Welfare Act and Animal Welfare Regulations. This may be demonstrated by the plan itself, training records, the presence of materials and resources mentioned in the plan, or a documented history of responses to similar situations. An adequate contingency plan is one in which the minimum criteria considered necessary for a successful contingency plan have been addressed. Enforcement action may be taken on a case-by-case basis.

One commenter asked if missing the training deadline by a few days would result in noncompliance with the training requirements in the regulations regarding the contingency plan.

All noncompliant items, including failure to train employees on the components of the contingency plan, found during inspection would be documented on the inspection report and may be subject to enforcement action on a case-by-case basis. Enforcement actions may include issuance of official warnings, civil monetary penalties, license suspension, or license revocation. Licensees and registrants are expected to comply with all requirements of the regulations and standards, including training deadlines.

Several commenters asked who would be determining the adequacy of plans and what training they would have.

APHIS inspectors will review and determine the adequacy of contingency plans. We will provide training to the inspection personnel on evaluating contingency plans pursuant to the criteria set forth in this rule.

One commenter asked on what basis regulated entities would be expected to determine what natural disasters they may face and whether and how this determination will be evaluated by inspectors.

In the proposed rule we provided links to the U.S. Geological Survey “Hazards” Web site and the Weather Channel “WeatherREADY” Web site. These Web sites are good resources for determining the natural disasters facilities are most likely to encounter in their location. We would largely leave it up to the regulated entity to determine which natural disasters they may face. However, if it is apparent the regulated entity is likely to encounter a disaster that the contingency plan does not address (e.g., a facility in Florida that has experienced hurricanes in the past), APHIS inspectors will notify the entity and give the entity time to add provisions for responding to the disaster in the contingency plan. We anticipate that inspectors, who are typically stationed in the local area surrounding the facility, will be able to provide further guidance on potential natural disasters.

One commenter stated that the rule should be revised to include language relieving a regulated facility of responsibility if a higher emergency response authority steps in.

We expect that most emergencies will be of a local nature, such as facility fires or water main breaks. For emergencies or disasters of a larger scale, APHIS will consider the roles of jurisdictional emergency response authorities with respect to contingency plan implementation. It is not the intent of the rule to interfere with local, State, or Federal jurisdictional emergency response activities.

As stated in the proposed rule, training of personnel could be developed and offered by the research facility, dealer, exhibitor, intermediate handler, or carrier or provided by an outside entity. Several commenters stated that training requirements should be identified, including how facilities will document training. One commenter stated that a checklist should be implemented with staff signing off that they have read the standard operating procedures and completed training. Two commenters stated that there should be requirements for training and availability of backup personnel or for ensuring intermediate personnel replacement and training. Several commenters stated that trial runs of the contingency plan must be carried out.

As stated previously, because we recognize that individual circumstances for regulated entities may be different, it is difficult to go into specific detail as to what elements must be included in all contingency plans. Therefore, we do not believe it appropriate to provide technical and tactical requirements, such as protocols for personnel replacement and training, in the regulations. We anticipate that inspectors may confirm that contingency plan training is delivered in a similar manner to their current process for confirming that other required training has been delivered (e.g., for husbandry practices and veterinary care protocols). Such confirmation may include reviewing training documentation maintained by the regulated entity or asking involved employees questions about facility practices. While we have not specifically mandated trial runs of contingency plans, training may include trial runs in order to prepare licensees and registrants adequately in the event of a disaster or emergency.

One commenter stated that both position title and name of employees who play a part in implementing the contingency plan should be included in the contingency plan.

As stated in the proposed rule, regulated entities would need to identify a chain of command and who (by name or position title) will be responsible for fulfilling required tasks. We would leave it up to the regulated entity whether to include both position title and name or whether to include one or the other.

Several commenters stated that training should only apply to individuals who have a role to play within the contingency plan.

We believe the decision of which individuals should be trained is a decision best left up to the discretion of the regulated entity. However, we would expect all personnel who may be involved in or impacted by an emergency or disaster to be trained at an appropriate level.

In the proposed rule, we proposed to require that contingency plans be in place 180 days after the effective date of this final rule. In addition, we proposed that training of personnel would have to take place within 60 days following the adoption of a contingency plan by the research facility, dealer, exhibitor, intermediate handler, or carrier. Employees hired within 30 days or less after adoption of the contingency plan would have to be trained in that 60-day period while employees hired more than 30 days after adoption of the contingency plan would have to be trained within 30 days of their start date.

Several commenters asked that we further push back the effective date of the regulations to allow time to finalize contingency plans. One commenter stated that it was unclear whether the adoption date mentioned in the proposed rule is the date the rule is adopted or the date plans must be in place and that, if it is the former, the rule needs to be revised since this would require training to be completed before the contingency plan, which will guide the training, is in place. The commenter further stated that the 180-day period for having plans in place should begin at the later of either the effective date of the final rule or the date of issuance of guidance documents by APHIS. Two commenters asked whether the 180-day timeframe for having contingency plans in place includes procuring all necessary materials and resources for implementing the contingency plan. The commenters stated that if such is the case, it is too short of a timeframe to gather materials and resources that are not currently available within a facility.

As stated in the proposed rule, the adoption date is the date the contingency plan must be in place. For current licensees and registrants, this date is 180 days after the effective date of this final rule. For future licensees and registrants, we expect the licensee or registrant to have a contingency plan in place prior to conducting regulated activities. We are making changes to paragraphs (l)(2) and (l)(3) in § 2.38 and paragraphs (b) and (c) in § 2.134(b) in order to make it clearer that the adoption date is the date the contingency plans must be finalized. Training of personnel must take place within 60 days after the adoption date. We believe 180 days is a sufficient length of time to ensure that contingency plans are in place and to procure any necessary materials and resources for implementing contingency plans.

Several commenters stated that the 30-day training requirement for newly hired personnel is unnecessary and not in keeping with the lack of specificity for the rest of the plan.

We believe that it is important to ensure that employees of a regulated entity are familiar with the regulated entity's contingency plan. Therefore, it is appropriate to require that training occur within 30 days.

One commenter stated that guidance documents for developing contingency plans should be developed by a lead organization with expertise in collaboration with outside organizations. One commenter stated that guidance documents should not be developed by entities outside of APHIS but that stakeholders/licensees should have input. Several commenters objected to guidance documents or other means for providing criteria outside of the regulations at all. Several commenters stated that the guidance document should be made available via the Internet, and released with the final rule.

APHIS has expertise in collaborating with outside organizations and is also responsible for enforcing the AWA. Therefore, it is appropriate for us to take the lead role in developing guidance documents to support contingency planning. As stated previously, we are providing a guidance document with this final rule. During the comment period for the proposed rule, we asked for public comment, including comment from stakeholders and licensees, on what elements should be included in the guidance document. To reiterate, APHIS will assess the adequacy of a regulated entity's contingency plan using the Animal Welfare Act and Animal Welfare Regulations. The guidance document provides suggestions for how regulated entities may satisfy the criteria in the regulations.

One commenter said that USDA should provide guidance on how contingency plans might address elements unique to each facility. One commenter suggested that APHIS create a Web site with more information that includes guidelines, checklists, and templates. Several commenters supplied examples of contingency plans, links to contingency plans, or resources for drafting contingency plans.

We are issuing a guidance document that may assist regulated entities in addressing the circumstances unique to their location or facility. We also reviewed the information provided by the commenters and will make a list of helpful resources available on our Web site (see footnote 2). The guidance document is intended to be only a tool when considering how a facility might meet the regulatory requirements, and does not provide a new set of criteria.

Many commenters stated that the proposed rule will cause a serious financial impact, especially on small businesses, which make up the majority of those affected. Several commenters stated that a cost-benefit study has not been conducted and asked that APHIS withdraw the rule until one has been conducted or until APHIS has evaluated whether the rule is truly necessary.

A preliminary regulatory impact analysis was conducted for the proposed rule and a final regulatory impact analysis has been conducted for this rule. A summary of the final regulatory impact analysis appears in this document under the heading “Executive Orders 12866 and 13563 and Regulatory Flexibility Act.” The full analysis may be viewed on the Regulations.gov Web site (see footnote 1) or obtained by contacting the person listed under FOR FURTHER INFORMATION CONTACT . One of the components of the preliminary regulatory impact analysis is a cost-benefit analysis. APHIS has estimated that about 5 hours, on average, will be required by a facility to develop a contingency plan, using guides provided and recommended by APHIS. Depending on the size and type of regulated entity and its circumstances, this cost, in terms of the time needed to develop a contingency plan, will vary; some facilities will require less than 5 hours to develop their plans and other entities will require more time. APHIS estimates that it will take 4 to 6 hours to develop and document a contingency plan. We note that many large regulated entities, in particular, already have contingency plans. In addition to the costs associated with the development of a contingency plan, there may also be certain expenditures necessitated by the regulated entity's plan itself. As an example, a particular regulated entity's plan may call for a backup generator to supply electricity in case of a power outage. We expect such costs to total within a reasonable range given that we have largely left it up to the discretion of facilities to determine the best way to fulfill the contingency plan criteria provided in the proposed rule for their own unique circumstances (i.e., size, type of entity, location, etc.). The costs of developing a plan and related equipment purchases should be viewed in terms of the benefits of reduced risk of harm to the animals under a regulated entity's care when there is an emergency or disaster. A reasonably scaled contingency plan that has identified potential emergencies and natural disasters therefore contributes to a regulated entity's long-term operational strength and financial security. To the extent to which the animals held by a licensee or registrant represent a capital asset or business investment, we do not believe it is unreasonable to expect that entities will have already put in place measures to ensure the continued well-being of those animals. Thus, the actual amount of new costs incurred by regulated entities due solely to the identification of a need during the development of a contingency plan should not be significant.

One commenter stated that the rule does not comply with the Regulatory Flexibility Act because it shifts the burden of investigating what would be required for a contingency plan to businesses. One commenter expressed concern that the Small Business Administration was not consulted when developing the proposed rule.

The Regulatory Flexibility Act requires that Federal agencies endeavor to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration. APHIS recognizes that each regulated entity is the best judge of the particular measures that should be included in its contingency plan. APHIS is minimizing the burden of the rule for small entities by allowing each one to determine for itself how best to meet the requirements in accordance with the general criteria and guidance documents. APHIS also consulted with the Small Business Administration in the preparation of the proposed rule and this final rule.

One commenter stated that since the rule is significant and an Initial Regulatory Flexibility Analysis was prepared that APHIS is required to publish a compliance guide which will help regulated industries comply with the regulation.

The guidance document that we are making available concurrently with this rule will assist licensees and registrants in complying with the regulation. Any additional compliance guides will be posted on the APHIS Web site (see footnote 2) and made available to the public to further assist small entities in complying with this rule.

Two commenters asked whether they would have to build additional alternative facilities, or, if not, what shelter would be acceptable on a temporary basis, and whether USDA is ready to help shoulder some of the costs until a facility can be repaired. One commenter expressed concern that they would need to purchase disaster insurance.

We do not intend to require the building of alternative facilities. While the costs for development and execution of the plan are expected to be borne by the regulated entity, they will be determined based on the emergencies and potential natural disasters most likely to be experienced by the regulated entity. As stated previously, we expect that these costs will be reasonable. The purpose of a contingency plan is to help ensure that licensees and registrants are able to respond in a timely and appropriate manner should an emergency or disaster occur. Disaster insurance is not required by this rule, and promoting the purchase of disaster insurance is not an objective of this rule.

Three commenters expressed concern that the number of animals lost during Hurricane Katrina as stated in the economic analysis of the proposed rule is greater than the total number of regulated animals in Louisiana.

In the preliminary regulatory impact analysis, APHIS may have inadvertently implied that the number of animals covered under the Animal Welfare Act that were harmed or killed as a result of Hurricane Katrina was comparable to the 50,000 pets that reportedly were negatively impacted by the disaster. This is incorrect. There is a difference in scale between the number of animals for which pet owners are responsible versus the number of animals for which research facilities and other licensed and registered facilities are responsible. Therefore, AWA licensees and registrants caring for large numbers of animals who did not have contingency plans in place likely found it difficult to evacuate or otherwise ensure the animals' safety during Hurricane Katrina. Our intent in the proposed rule was to illustrate this fact rather than to compare the number of regulated animals negatively impacted to the number of pets that were negatively impacted. We have reexamined the available data and we present our findings in the full final regulatory flexibility analysis, which can be viewed on the Regulations.gov Web site (see the address listed in footnote 1).

One commenter suggested that a tiered contingency plan system be implemented to accommodate small businesses.

As a practical matter, one would expect that the smaller the business, the smaller the scale of the contingency plan that the business would be expected to prepare, just as a large entity with numerous animals would require a larger scale, more complex contingency plan. Because we recognize that individual circumstances may be different between research facilities, dealers, exhibitors, carriers, and intermediate handlers, we have provided general contingency plan criteria and largely left it up to the discretion of regulated facilities to determine how best to fulfill the criteria. Because the response to each criterion will be appropriate to the size of each individual entity, it is reasonable to describe the contingency plan system provided for by this rule as tiered.

Several commenters expressed concern regarding the costs of and time for drafting a contingency plan. One commenter stated that the rule may be imposing redundant paperwork requirements because of similar requirements at the State and local levels.

Many regulated facilities are currently required to have contingency plans by other organizations (e.g., accrediting institutions, State and local regulators). Many of these plans will meet the proposed contingency plan requirements, and paperwork redundancies for entities with such plans should be minimal. Those regulated facilities that do not already have plans in place may incur an additional burden to develop contingency plans. However, we believe that having an established contingency plan promotes animal welfare and will aid in business continuity, therefore reducing the burden on facilities and regulated animals in the event of a natural disaster or emergency.

Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule, with the changes discussed in this document.

This proposed rule has been determined to be significant/economically significant for the purposes of Executive Order 12866 and, therefore, has been reviewed by the Office of Management and Budget.

We have prepared an economic analysis for this rule. The economic analysis provides a cost-benefit analysis, as required by Executive Orders 12866 and 13563, which direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The economic analysis also examines the potential economic effects of this rule on small entities, as required by the Regulatory Flexibility Act. The economic analysis is summarized below. Copies of the full analysis are available on the Regulations.gov Web site (see footnote 1 in this document for a link to Regulations.gov) or by contacting the person listed under FOR FURTHER INFORMATION CONTACT .

Preparedness for emergencies and disasters can reduce the harm to animals and their loss of life. The devastating impact of the 2005 hurricane season underscores the need for contingency planning for all animals covered under the Animal Welfare Act. Currently, only facilities that house marine mammals are required under 9 CFR 3.101 to develop contingency plans. The final rule requires that all of the more than 10,000 licensees and registrants develop and document contingency plans for all other animals covered under the Act. In addition, training to carry out contingency plans will be required of a regulated entity's employees. The majority of establishments that will be affected by this rule are small, based on industry estimates obtained from the Economic Census and the Census of Agriculture.

The full final regulatory flexibility analysis identifies breeders, wholesale dealers, licensed and registered exhibitors, registered research facilities, and registered transport carriers and handlers as those entities most likely to be impacted by the requirement for the development of contingency plans. While no economic data are available on business size for the specific entities, we may assume the majority of the potentially impacted establishments are small, based on the industry estimates obtained from the Economic Census and the Census of Agriculture.

The final rule will impose certain costs to develop and document the contingency plans and provide employee training, but these costs are not expected to be excessive. The cost of training personnel will vary depending on the type and size of business. However, many organizations offer training courses on general disaster planning specific to the type of animals at the particular facility or operation. FEMA offers free training, while some organizations offer courses with prices ranging from $50 to $300. These courses cover the development and implementation of contingency plans. In addition, many of the larger facilities, in particular, already have contingency plans in place. APHIS recognizes that each entity is the best judge of the particular measures that should be included in its contingency plan, and will provide general criteria and guidance documents to minimize compliance costs. Each entity will determine for itself how best to meet the rule's requirements.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. It is not intended to have retroactive effect. The Act does not provide administrative procedures which must be exhausted prior to a judicial challenge to the provisions of this rule.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ), the information collection or recordkeeping requirements included in this rule have been approved by the Office of Management and Budget (OMB) under OMB control number 0579-0352.

The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 851-2908.

Accordingly, we are amending 9 CFR chapter I, subchapter A, as follows:

FSIS periodically issues regulations that require changes in the labeling of meat and poultry food products. Many meat and poultry establishments also produce non-meat and non-poultry food products that are subject to the jurisdiction of the Food and Drug Administration (FDA). FDA also periodically issues regulations that require changes in the labeling of products under its jurisdiction.

On December 14, 2004, FSIS issued a final rule that established January 1, 2008, as the uniform compliance date for new meat and poultry labeling regulations issued between January 1, 2005, and December 31, 2006. The 2004 final rule also provided that the Agency would set uniform compliance dates for new labeling regulations in 2-year increments and periodically issue final rules announcing those dates. Consistent with that final rule, the Agency has published three final rules establishing the uniform compliance dates of January 1, 2010, January 1, 2012, and January 1, 2014 (72 FR 9651, 73 FR 75564, and 75 FR 71344).

This final rule establishes January 1, 2016, as the uniform compliance date for new meat and poultry product labeling regulations that are issued between January 1, 2013 and December 31, 2014, and is consistent with the previous final rules that established uniform compliance dates. In addition, FSIS' approach for establishing uniform compliance dates for new food labeling regulations is consistent with FDA's approach. FDA is also planning to publish a final rule establishing a new compliance date.

Two-year increments enhance the industry's ability to make orderly adjustments to new labeling requirements without unduly exposing consumers to outdated labels. With this approach, the meat and poultry industry is able to plan for use of label inventories and to develop new labeling materials that meet the requirements of all labeling regulations made within the two year period, thereby minimizing the economic impact of labeling changes.

This compliance approach also serves consumers' interests because the cost of multiple short-term label revisions that would otherwise occur would likely be passed on to consumers in the form of higher prices.

FSIS encourages meat and poultry companies to comply with new labeling regulations as soon as it is feasible. If companies initiate voluntary label changes, they should consider incorporating any new requirements that have been published as final regulations.

The new uniform compliance date will apply only to final FSIS regulations that require changes in the labeling of meat and poultry products and that are published after January 1, 2013, and before December 31, 2014. For each final rule that requires changes in labeling, FSIS will specifically identify January 1, 2016, as the compliance date. All meat and poultry food products that are subject to labeling regulations promulgated between January 1, 2013 and December 31, 2014, will be required to comply with these regulations when introduced into commerce on or after January 1, 2016. If any food labeling regulation involves special circumstances that justify a compliance date other than January 1, 2016, the Agency will determine an appropriate compliance date and will publish that compliance date in the rulemaking.

In rulemaking that began with the May 4, 2004, proposed rule, FSIS provided notice and solicited comment on the concept of establishing uniform compliance dates for labeling requirements (69 FR 24539). In the March 5, 2007, final rule, FSIS noted that the Agency received only four comments in response to the proposal, all fully supportive of the policy to set uniform compliance dates. Therefore, in the March 5, 2007, final rule, FSIS determined that further rulemaking for the establishment of uniform compliance dates for labeling requirements is unnecessary (72 FR 9651). The Agency did not receive comments on the final rule. Consistent with its statement in 2007, FSIS finds at this time that further rulemaking on this matter is unnecessary. However, FSIS is providing an opportunity for comment on the uniform compliance date established in this final rule.

This final rule has been reviewed under the Executive Order 12988, Civil Justice Reform. Under this final rule: (1) All state and local laws and regulations that are inconsistent with this rule will be preempted; (2) no retroactive effect will be given to this rule; and (3) no retroactive proceedings will be required before parties may file suit in court challenging this rule.

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

This rule does not have a significant economic impact on a substantial number of small entities; consequently, a regulatory flexibility analysis is not required (5 U.S.C. 601-612).

There are no paperwork or recordkeeping requirements associated with this policy under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

FSIS and USDA are committed to achieving the purposes of the E-Government Act (44 U.S.C. 3601, et seq. ) by, among other things, promoting the use of the Internet and other information technologies and providing increased opportunities for citizen access to Government information and services, and for other purposes.

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.)

Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's Target Center at 202-720-2600 (voice and TTY).

To file a written complaint of discrimination, write USDA, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW., Washington, DC 20250-9410 or call 202-720-5964 (voice and TTY).

FSIS will announce this rule online through the FSIS Web page located at http://www.fsis.usda.gov/regulations_&_policies/Interim_&_Final_Rules/index.asp.

FSIS will also make copies of this Federal Register publication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations, Federal Register notices, FSIS public meetings, and other types of information that could affect or would be of interest to constituents and stakeholders. The Update is communicated via Listserv, a free electronic mail subscription service for industry, trade groups, consumer interest groups, health professionals, and other individuals who have asked to be included. The Update is also available on the FSIS Web page. In addition, FSIS offers an electronic mail subscription service which provides automatic and customized access to selected food safety news and information. This service is available at http://www.fsis.usda.gov/News_&_Events/Email_Subscription/. Options range from recalls to export information to regulations, directives and notices. Customers can add or delete subscriptions themselves, and have the option to password protect their accounts.

I. Introduction A. Authority

Title III of the Energy Policy and Conservation Act of 1975, as amended (“EPCA” or “the Act”) sets forth a variety of provisions designed to improve energy efficiency. Part A of Title III (42 U.S.C. 6291-6309) provides for the Energy Conservation Program for Consumer Products Other Than Automobiles. The National Energy Conservation Policy Act (NECPA), Public Law 95-619, amended EPCA to add Part A-1 of Title III, which established an energy conservation program for certain industrial equipment. (42 U.S.C. 6311-6317)  1

Sections 6299-6305, and 6316 of EPCA authorize DOE to enforce compliance with the energy and water conservation standards (all non-product specific references herein referring to energy use and consumption include water use and consumption; all references to energy efficiency include water efficiency) established for certain consumer products and commercial equipment. (42 U.S.C. 6299-6305 (consumer products), 6316 (commercial equipment)) DOE has promulgated enforcement regulations that include specific certification and compliance requirements. See 10 CFR part 429; 10 CFR part 431, subparts B, U, and V.

On March 7, 2011, DOE published a final rule in the Federal Register that, among other things, modified the requirements regarding manufacturer submission of compliance statements and certification reports to DOE (March 2011 Final Rule). 76 FR 12421. This rule was largely procedural in nature; it did not amend pre-existing sampling provisions, test procedures, or conservation standard levels for any covered products or equipment. It did, however, impose new or revised reporting requirements for some types of covered products and equipment, including a requirement that manufacturers submit annual reports to the Department certifying compliance of their basic models with applicable standards. Finally, the Department emphasized that manufacturers could use their discretion in grouping individual models as a “basic model” such that the certified rating for the basic model matched the represented rating for all included models. See 76 FR 12428-12429 for more information. This reflected a basic requirement of the Department's longstanding self-certification compliance regime—that efficiency certifications and representations must be supported by either testing or an approved alternative method of estimating efficiency.

The March 2011 Final Rule provided for the revised certification provisions to be effective on July 5, 2011. Certain manufacturers of particular types of commercial and industrial equipment  2 stated that, for a variety of reasons, they would be unable to meet that deadline. As a result in a final rule published June 30, 2011, the Department extended the compliance date for certification of commercial refrigeration equipment; commercial HVAC equipment; commercial WH equipment; and walk-in coolers and freezers (June 30 Final Rule). 76 FR 38287 (June 30, 2011). DOE also acknowledged in the June 30 Final Rule that numerous manufacturers for certain types of commercial equipment appear to have been making representations of efficiency and determining compliance with the applicable energy conservation standards without testing products in accordance with all of the provisions of the DOE test procedures, which include sampling plans and certification testing tolerances.

In the June 30 Final Rule, DOE stated that it believed 18 months would be sufficient to provide manufacturers with the time necessary to develop the data and supporting documentation needed to populate the certification reports and certify compliance with DOE's regulations, including the existing testing and sampling procedures. DOE also emphasized that all covered equipment must meet the applicable energy conservation standard and that all testing procedures and sampling provisions were unaffected by the final rule.

On May 31, 2012, DOE published a proposed rule to revise and expand its regulations regarding alternative efficiency determination methods (AEDMs). (77 FR 32038). AEDMs reduce testing burdens by allowing manufacturers to use computer simulations, mathematical models, and other alternative methods to determine the amount of energy used or efficiency by a particular basic model. AEDM provisions for commercial HVAC equipment and commercial WH equipment already exist, but DOE has proposed to revise those regulations and to allow manufacturers of commercial refrigeration equipment to use AEDMs. DOE has not yet finalized the AEDM rulemaking. See Docket EERE-2011-BT-TP-0024. The Department is also reviewing recommendations regarding the feasibility of a negotiated rulemaking to revise the certification requirements for commercial HVAC equipment and commercial refrigeration equipment. 3

In an October 2012 letter to the Secretary of Energy, the Air Conditioning, Heating and Refrigeration Institute (AHRI) requested another certification compliance date extension. (AHRI, No. 1 at pp. 1-2). Specifically, AHRI requested that the compliance date for certification be extended a minimum of 18 months from the date of publication of the AEDM final rule.

On December 6, 2012, the Department proposed to extend compliance date an additional 12 months for commercial refrigeration equipment; commercial HVAC equipment; and commercial WH equipment (December 2012 NOPR). 77 FR 72763. DOE requested comment on its assumption regarding the existence of test data and on whether a longer or shorter period of time would be more appropriate. DOE also proposed to modify the regulatory text to reflect that the compliance dates for certification requirements for walk-in coolers and freezers, distribution transformers, and metal halide lamp ballasts have passed by removing the delayed compliance dates.

Lastly, the Department proposed to correct a technical drafting error for packaged terminal air conditioners and heat pumps that was implemented in the reprinting of Table 5 in 10 CFR 431.97 in a final rule published on May 16, 2012. 77 FR 28994. More specifically, DOE adopted changes to the applicable energy conservation standards for standard size and non-standard size packaged terminal air conditioners and heat pumps with a cooling capacity of 15,000 Btu/h. DOE proposed to correct this error and adopt the original standards for standard size and non-standard size packaged terminal air conditioners and heat pumps with a cooling capacity of 15,000 Btu/h as presented in a final rule evaluating and originally adopting the amended energy conservation for this equipment published on April 7, 2008. 73 FR 18915.

The Department received 14 written comments on the NOPR from a number of interested commenters, including various manufacturers, trade associations, and advocacy groups. The following parties submitted comments for this rule:

As stated above, DOE proposed an additional 12-month extension to the compliance date for filing complete certification reports for manufacturers of commercial refrigeration equipment; commercial HVAC equipment; and commercial WH equipment. 77 FR 72763. Most commenters supported an extension of at least twelve months. (Seasons, No. 4 at p. 1; UTC, No. 8 at pp. 1-2; AAON, No. 9 at pp. 1-2; Ingersoll Rand, No. 10 at pp. 1-2; Lennox, No. 11 at pp. 1-2; Joint Comment, No. 12 at pp. 1-2; Rheem, No. 13 at p. 3; AHRI, No. 14 at p. 1; Traulsen, No. 15 at pp. 2-3, Burnham, No. 16 at p. 1; Goodman, No. 17 at pp. 1-2; and Mitsubishi, No. 18 at pp. 1-2)

Many commenters believed that the compliance date should be tied to the completion of the AEDM rule. (Seasons, No. 4 at p. 1; UTC, No. 8 at pp 1-2; Lennox, No. 11 at p.2; Rheem, No. 13 at p. 3; AHRI, No. 14 at pp. 1-2, Traulsen, No. 15 at p. 2-3; Goodman, No. 17 at pp. 1-2; and Mitsubishi, No. 18 at pp. 1-2) Similarly, AAON commented that the AEDM rule would impact the length of the extension needed. (AAON, No. 9 at p. 2) In addition, AAON, Lennox AHRI, Goodman, and Mitsubishi commented that they believe that the compliance date should be extended a minimum of 18 months from the publication of the AEDM final rule. (AAON, No. 9 at p.2; Lennox, No. 11 at p.2; AHRI, No. 14 at p. 2; Goodman, No. 17 at pp. 1-2; and Mitsubishi, No. 18 at pp. 1-2) Goodman detailed a view shared by Seasons, UTC, AAON, Lennox, and AHRI that the length of the extension required would depend upon the actual results of the testing (due to measurement uncertainties, variances in testing set-ups and product variances) and the tolerances allowed by DOE (for both individual test-to-simulation results as well as average test-to-simulation results), additional testing or a significant amount of effort in development/specification of the internal AEDM procedure may be required. (Goodman, 17 at p. 1; Seasons, No. 4 at p. 1; UTC, No. 8 at pp. 1-2; AAON, No. 9 at p. 2; Lennox, No. 11 at p. 2 and AHRI, No. 14 at p. 2) Ingersoll Rand commented that it was concerned that a December 31, 2013 compliance date may not be sufficient to permit the Department to conduct a negotiated rulemaking and allow manufacturers to develop a means to comply with any modified requirements. (Ingersoll Rand, No. 10 at p. 1-2) In particular, Ingersoll Rand stated that it “hope[s] the Department recognizes [the December 2013 date] is only a stopgap measure, not truly a feasible date for future compliance.” (Ingersoll Rand, No. 10 at p.2) Lennox also suggested that the compliance date should be aligned with the annual certification date for each product. (Lennox, No. 11 at pp. 2-3) Traulsen also supported extending the certification deadline stating that the commercial refrigeration industry may have collected energy consumption performance data for some base model of commercial refrigeration equipment, which may not be appropriate in all circumstances. (Traulsen, No. 15 at p. 2) Traulsen also noted that for certain low volume models of commercial refrigeration equipment current data may not be available because of previously conflicting priorities. (Id.) Mitsubishi also supported an 18-month extension from publication of the AEDM final rule and offered a specific path forward for the Department's consideration: (1) Finalize the AEDM rulemaking; (2) extend the certification compliance deadline for at least 18 months from the date of the AEDM final rule; (3) In the alternative, issue a written DOE Guidance Document regarding the delay of enforcement of commercial certification compliance until the AEDM rulemaking and accompanying extension are finalized; (4) begin the negotiated rulemaking process, which has already provided MEUS an opportunity to clarify the central issues and which is consistent with AHRI's proposed direction; and (5) develop a “basic model” definition that aligns with AHRI's definition—a basic model should be defined by the unit rather than levels of efficiency. (Id.)

One commenter supported the 12-month extension as proposed by the Department without modification. Specifically, Burnham commented in favor of a compliance extension similar to that proposed by the AHRI organization regarding the publication of the AEDM final rule. However, Burmham also clarified that a shorter timeframe would be feasible as well. (Burnham, No. 16 at p. 1)

Several commenters suggested that a significantly longer extension was needed. UTC noted that it believes an additional 12 to 36 months will be necessary after the issuance of a final AEDM rule prior to manufacturers being in a position to submit certification reports. (UTC, No. 8 at p.2) Hoshizaki requested a two-year extension for certification of commercial refrigeration equipment as it has not completed testing of its basic models and is waiting for DOE action on the AEDM rulemaking. (Hoshizaki, No. 6 at p. 1)

In light of the comments above, DOE is extending the compliance date for the certification provisions for commercial refrigeration equipment; commercial warm air furnaces, commercial packaged boilers, and commercial air conditioners and heat pumps (collectively referred to as commercial HVAC equipment); and commercial water heaters, commercial hot water supply boilers, and unfired hot water storage tanks (collectively referred to as commercial WH equipment) to December 31, 2013. DOE believes 12 months is a reasonable extension and will allow DOE time to complete the AEDM rulemaking and allow manufacturers to develop ratings in accordance with any revised AEDM provisions.

As noted above, the Department is reviewing the feasibility of a negotiated rulemaking to revise the certification requirements for commercial HVAC equipment and commercial refrigeration equipment. DOE is also considering the formation of an advisory committee in conjunction with such a rulemaking. Whether DOE proceeds with a negotiated rulemaking, and the outcome of a negotiated rulemaking, however, is uncertain. DOE believes that, should it proceed with a negotiated rulemaking, the process would, of its nature, involve discussion of any need to extend the new deadline further. Moreover, DOE believes that interested parties would raise the extension issue well in advance of December 31, 2013. Accordingly, DOE believes the 12-month extension is sufficient.

Many commenters submitted additional thoughts regarding the AEDM rulemaking, about the definition of “basic model” and about the potential for a negotiated rulemaking. (AAON, No. 9 at p.1; Ingersoll Rand, No. 10 at p. 1-2; Joint Comment, No. 12 at pp. 1-2; Rheem, No. 13 at pp. 1-3; AHRI, No. 14 at pp. 1-2, Goodman, No. 17 at pp. 1-2, and Mitsubishi, No. 18 at p. 2) DOE appreciates the information provided by parties on these matters. The substance of these comments is the subject of other rulemakings and should be raised in those proceedings. This rulemaking is limited to an extension of the compliance date for the March 2011 certification provisions for commercial HVAC equipment, commercial WH equipment, and commercial refrigeration equipment.

DOE emphasizes that the testing and sampling requirements for commercial refrigeration equipment; commercial HVAC equipment; and commercial WH equipment are unchanged by this extension. These regulations can be found on a per product basis in subpart B to part 429 (sampling plans for testing) and 10 CFR 431.64, 431.76, 431.86, 431.96, 431.106, and 431.134 (uniform test methods).

In the December 2012 NOPR, DOE initially proposed to retain the December 31, 2012 deadline to certify compliance but sought comment on whether an extension was needed. Several commenters requested a six-month extension of time for submitting certification reports for automatic commercial ice makers (ACIM). (Scotsman, No. 5 at p. 1; Hoshizaki, No. 6 at p. 1; AHRI, No. 14 at p. 2) Scotsman requested additional time to work with AHRI so that AHRI could build a database to collect the required information and submit the certification reports on Scotsman's behalf. (Scotsman, No. 5 at p. 1) Hoshizaki explained that it has the required test reports but that AHRI's portal for reporting test data is not ready. (Id.) Scotsman, however, indicated that it will need to conduct additional testing prior to submitting certification reports. (Scotsman, No. 5 at p. 1) AHRI requested a six-month extension to allow manufacturers time to complete testing. (AHRI, No. 14 at p. 2)

Scotsman and Hoshizaki commented that DOE released the templates for certification of ACIM in December 2012 and stated that they did not have an automated process to provide many of the data elements contained in the templates. (Scotsman, No. 5 at p. 1; Hoshizaki, No. 6 at p. 1)

Traulsen, on the other hand, noted that it did not have a concern with the Department's proposed certification deadline of December 31, 2012 for ACIMs even though it does not manufacture or supply this type of equipment. (Traulsen, No. 15 at p. 3)

DOE expresses no view regarding an automated process that a regulated entity may develop to provide its certification reports. DOE notes that the data elements required for certification have been public since March 2011 and the CCMS templates for certification are available to manufacturers online. Given the concerns expressed by manufacturers, DOE is extending the compliance date for ACIM to align the compliance date with the next annual certification reporting date. Manufacturers would be required to submit only one certification report in 2013 for current basic models unless they implement design changes to those models resulting in lower efficiency or increased consumption. Consequently, DOE is adopting a compliance date of August 1, 2013, for submission of certification reports for ACIM.

DOE emphasizes that all covered equipment must meet the applicable energy conservation standard. ASAP, ACEEE, ASE, and NRDC also noted in their joint comment that parties are not absolved of their obligations to comply with current standards and encouraged DOE to enforce those standards effectively. (Joint Comment, No. 12 at pp. 1-2) Furthermore, all testing procedures and sampling provisions are unaffected by this final rule. DOE is adopting a 12-month extension to the compliance date for certification only for the commercial refrigeration equipment; commercial HVAC equipment; and commercial WH equipment reporting requirements in the March 2011 final rule. DOE is adopting an 8-month extension to the compliance date for certification only for the ACIM reporting requirements in the March 2011 final rule.

DOE encourages manufacturers to become familiar with the CCMS prior to the certification deadline. The CCMS has templates currently available for all covered equipment available for manufacturers to use when submitting certification data to DOE.

DOE conducts assessment testing of products available for purchase in the United States, pursuant to 10 CFR 429.104. While certification is not required for commercial refrigeration equipment; commercial HVAC equipment; and commercial WH equipment until December 31, 2013, and for ACIM until August 1, 2013, DOE encourages manufacturers to submit to CCMS certification reports to DOE voluntarily prior to the compliance date required for certification. The Department will refrain from selecting models for assessment testing for which the manufacturer has submitted a valid certification report in CCMS. Specifically, in 2013, DOE will, in its enforcement discretion, limit any assessment testing of commercial refrigeration equipment, commercial HVAC equipment, commercial WH equipment, and automatic commercial ice makers to those models for which DOE does not have a valid certification report on file. If DOE purchases a unit for assessment testing prior to a manufacturer submitting a valid certification report, DOE will continue with the assessment test. A valid certification report is one that meets the requirements of 10 CFR part 429, including the manufacturer's determination of compliance being based either on testing in accordance with DOE sampling and test procedures (parts 429 and 431) or on the AEDM procedures in part 429.

DOE will continue to conduct enforcement testing when it has a reason to believe that products do not meet the applicable standard. In addition, DOE will continue to conduct limited testing in support of its rulemaking activities for these equipment types. DOE will also continue to conduct verification testing in support of the ENERGY STAR program.

AHRI commented that it supports DOE's enforcement policy. (AHRI, No. 14 at p. 2-3) DOE appreciates AHRI's support and notes that the enforcement policy is not tied to participation in a voluntary industry certification program and is based upon the voluntary submittal of a valid CCMS certification report to DOE in advance of the compliance date required for certification of the applicable equipment.

DOE proposed to modify the regulatory text to reflect that the compliance dates for walk-in coolers and freezers, distribution transformers, and metal halide lamp ballasts have passed. DOE did not receive any comments on this proposal. Thus, DOE is adopting these amendments to 10 CFR 429.12(i).

The Department proposed to correct a technical drafting error for packaged terminal air conditioners and heat pumps that was implemented in the reprinting of Table 5 in 10 CFR 431.97 in a final rule published on May 16, 2012. 77 FR 28994. More specifically, DOE adopted changes to the applicable energy conservation standards for standard size and non-standard size packaged terminal air conditioners and heat pumps with a cooling capacity of 15,000 Btu/h. DOE did not receive any comments on this proposal.

Consequently, DOE is correcting this error in today's final rule by adopting the original standards for standard size and non-standard size packaged terminal air conditioners and heat pumps with a cooling capacity of 15,000 Btu/h as presented in a final rule evaluating and originally adopting the amended energy conservation for this equipment published on April 7, 2008. 73 FR 18915.

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

DOE has determined, pursuant to authority at 5 U.S.C. 553(d)(1), that this final rule is not subject to a 30-day delay in effective date because this rule extending the compliance date for a requirement relieves a restriction.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) requires preparation of an initial regulatory flexibility analysis (IFRA) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the DOE rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel's Web site: http://energy.gov/gc/office-general-counsel .

DOE reviewed this rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. This rule merely extends the compliance date of a rulemaking already promulgated. To the extent such action has any economic impact it would be positive in that it would allow regulated parties additional time to come into compliance. DOE did undertake a full regulatory flexibility analysis of the original Certification, Compliance, and Enforcement for Consumer Products and Commercial and Industrial Equipment rulemaking. That analysis considered the impacts of that rulemaking on small entities. As a result, DOE certifies that this rule will not have a significant economic impact on a substantial number of small entities.

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

The Secretary of Energy has approved publication of today's final rule.

For the reasons set forth in the preamble, DOE amends chapter II, subchapter D, of Title 10 of the Code of Federal Regulations to read as follows:

Title III, Part B  1 of the Energy Policy and Conservation Act of 1975 (EPCA or the Act), Public Law 94-163 (42 U.S.C. 6291-6309, as codified) sets forth a variety of provisions designed to improve energy efficiency and established the Energy Conservation Program for Consumer Products Other Than Automobiles, a program covering most major household appliances, including residential furnaces and boilers (referenced below as one of the “covered products”). 2 (42 U.S.C. 6292(a)(5) and 6295(f))

Under the Act, this program consists essentially of four parts: (1) Testing; (2) labeling; (3) Federal energy conservation standards; and (4) certification and enforcement procedures. The testing requirements consist of test procedures that manufacturers of covered products must use as the basis for certifying to DOE that their products comply with applicable energy conservation standards adopted pursuant to EPCA and for making representations about the efficiency of those products. (42 U.S.C. 6293(c); 42 U.S.C. 6295(s)) Similarly, DOE must use these test procedures in any enforcement action to determine whether covered products comply with these energy conservation standards. (42 U.S.C. 6295(s))

Under 42 U.S.C. 6293, EPCA sets forth criteria and procedures for DOE's adoption and amendment of such test procedures. Specifically, EPCA provides that “[a]ny test procedures prescribed or amended under this section shall be reasonably designed to produce test results which measure energy efficiency, energy use * * * or estimated annual operating cost of a covered product during a representative average use cycle or period of use, as determined by the Secretary [of Energy], and shall not be unduly burdensome to conduct.” (42 U.S.C. 6293(b)(3)) In addition, if DOE determines that a test procedure amendment is warranted, it must publish proposed test procedures and offer the public an opportunity to present oral and written comments on them. (42 U.S.C. 6293(b)(2)) Finally, in any rulemaking to amend a test procedure, DOE must determine “to what extent, if any, the proposed test procedure would alter the measured energy efficiency * * * of any covered product as determined under the existing test procedure.” (42 U.S.C. 6293(e)(1)) If DOE determines that the amended test procedure would alter the measured efficiency of a covered product, DOE must amend the applicable energy conservation standard accordingly. (42 U.S.C. 6293(e)(2))

On December 19, 2007, the Energy Independence and Security Act of 2007 (EISA 2007), Public Law 110-140, was enacted. The EISA 2007 amendments to EPCA, in relevant part, require DOE to amend the test procedures for all covered products to include measures of standby mode and off mode energy consumption. Specifically, section 310 of EISA 2007 provides definitions of “standby mode” and “off mode” (42 U.S.C. 6295(gg)(1)(A)) and permits DOE to amend these definitions in the context of a given product (42 U.S.C. 6295(gg)(1)(B)). The statute requires integration of such energy consumption into the overall energy efficiency, energy consumption, or other energy descriptor for each covered product, unless the Secretary determines that: (1) The current test procedures for a covered product already fully account for and incorporate the standby mode and off mode energy consumption of the covered product; or (2) such an integrated test procedure is technically infeasible for a particular covered product, in which case the Secretary shall prescribe a separate standby mode and off mode energy use test procedure for the covered product, if technically feasible. (42 U.S.C. 6295(gg)(2)(A))

Under the statutory provisions adopted by EISA 2007, any such amendment must consider the most current versions of IEC Standard 62301, Household electrical appliances—Measurement of standby power, and IEC Standard 62087, Methods of measurement for the power consumption of audio, video, and related equipment . 3 Id. At the time of enactment of EISA 2007, the most current versions of these standards were IEC Standard 62301 (First Edition 2005-06) and IEC Standard 62087 (First Edition 2002).

DOE's current test procedure for residential furnaces and boilers is found at 10 CFR part 430, subpart B, appendix N, Uniform Test Method for Measuring the Energy Consumption of Furnaces and Boilers. This procedure establishes a means for determining annual energy efficiency and annual energy consumption of these products. On October 20, 2010, DOE published a final rule in the Federal Register (hereafter called the October 2010 final rule) amending the test procedures for residential furnaces and boilers to account for the standby mode and off mode energy consumption of these products, as required by EISA 2007. 75 FR 64621. For a more detailed procedural history of the test procedure rulemaking to address standby mode and off mode energy consumption of residential furnaces and boilers, please consult the October 2010 final rule. Id. at 64622.

As discussed above, EISA 2007 amended EPCA to require that DOE test procedures for covered products include provisions for measuring standby mode and off mode energy consumption. (42 U.S.C. 6295(gg)(2)(A)) In establishing test procedures to address standby mode and off mode energy consumption, EISA 2007 requires consideration of the most current version of IEC Standard 62301 to support the added measurement provisions. Id. In the October 2010 final rule, DOE amended its test procedures to prescribe the use of IEC Standard 62301, “Household electrical appliances—Measurement of standby power,” Publication 62301 First Edition 2005-06, which was the most current version of this standard at the time of its incorporation into the DOE regulations. This final rule fulfilled DOE's obligation under EISA 2007.

However, since that time, DOE has continued to address the requirements of EISA 2007 as it relates to standby mode and off mode for other products. For example, DOE has issued similar test procedure amendments for other heating products (water heaters, direct heating equipment, and pool heaters), and during that rulemaking, commenters identified improvements to IEC Standard 62301 that were under development and nearly finalized. These commenters, representing both manufacturers and energy conservation advocacy groups, are presumably the same as those that would comment on the proposals for furnaces and boilers, and they supported the draft revisions to IEC Standard 62301 as applied to the other heating products. The second edition of IEC Standard 62301 has now been finalized. In the abstract of its January 27, 2011 publication, the IEC reports that the second edition provides practical improvement and possible reduction in testing burden. DOE has reviewed IEC Standard 62301 (Second Edition) and agrees that the second edition does provide for improvement in terms of measurement accuracy and, in addition, provides for possible reduced testing burden by allowing for direct meter reading techniques, where appropriate. DOE believes these improvements would be applicable to a variety of heating products, including furnaces and boilers, as well as the other heating products discussed above. Accordingly, after careful review, in a notice of proposed rulemaking (NOPR) published on September 13, 2011 (76 FR 56339; “the September 2011 NOPR”). DOE decided to exercise its discretion to consider incorporation of the revised version of the industry standard into the DOE test procedure for residential furnaces and boilers. (42 U.S.C. 6293(b)(2)) In the September 2011 NOPR, DOE proposed to incorporate by reference the second edition of the IEC Standard 62301 standard in its entirety, calling out the appropriate provisions of that standard in DOE's test procedure regulations for residential furnaces and boilers. 76 FR 56339, 56341 (Sept. 13, 2011). This proposal also clarified the rounding guidance and sampling provisions for the new measurements of standby mode and off mode wattage. A public meeting was held on October 3, 2011 to discuss and receive comments on the issues presented in the September 2011 NOPR. The comment period ended on November 28, 2011.

The September 2011 proposed rule was part of the continued efforts of DOE to address the requirements of EISA 2007 as it relates to standby mode and off mode for all covered products. In particular, after the standby mode and off mode amendments were developed for furnaces and boilers, DOE considered similar test procedure amendments for other heating products (water heaters, direct heating equipment, and pool heaters), and during that rulemaking, commenters identified improvements to IEC Standard 62301 that were under development and nearly finalized. These commenters, which are largely the same as those that would comment on the proposals for furnaces and boilers, supported the draft revisions to IEC Standard 62301. The second edition of the standard has now been finalized. In the abstract of that finalized publication, the IEC reported that the second edition would provide practical improvement and possible reduction in testing burden. DOE reviewed IEC Standard 62301 (Second Edition) and agrees that the second edition does provide for improvement in terms of measurement accuracy and, in addition, provides for possible reduced testing burden by allowing for direct meter reading techniques where appropriate. DOE believes these improvements are applicable to a variety of heating products, including furnaces and boilers, as well as the other heating products mentioned above. Accordingly, after careful review, DOE decided to exercise its discretion to consider incorporation by reference of the revised version of the industry standard into the DOE test procedure for residential furnaces and boilers. (42 U.S.C. 6293(b)(2)) Thus, in the September 2011 NOPR, DOE proposed to incorporate into DOE's test procedure regulations the second edition of IEC Standard 62301 in its entirety, and call out the appropriate provisions of that standard in DOE's test procedure regulations for residential furnaces and boilers.

More specifically, DOE's technical review of IEC Standard 62301 (Second Edition) determined that some improvement to the current DOE test procedure is possible with the incorporation of the second edition of the IEC standard as it applies to residential furnaces and boilers. First, a more comprehensive specification of required accuracy is provided in IEC Standard 62301 (Second Edition) that depends upon the characteristics of the power being measured. DOE believes that this most recent revision to the IEC standard provides improved and realistic accuracy provisions for a range of electricity consumption patterns, thereby making the updated test method appropriate for the variety of electricity-consuming devices that form part of residential furnaces and boilers. The new specification can be met by typical, commercially-available test equipment, whereas requirements in the first version may have necessitated specialized instrumentation that is not readily available.

Another important change in IEC Standard 62301 (Second Edition) that relates to the measurement of standby mode and off mode power consumption in residential furnaces and boilers involves the specification of the stability criteria required to measure that power. IEC Standard 62301 (Second Edition) contains more detailed techniques to evaluate the stability of the power consumption and to measure the power consumption for loads with different stability characteristics. In IEC Standard 62301 (First Edition), the stability of the system is determined by measuring the power consumption over a 5-minute period. If the variation over that period is less than 5 percent, the signal is considered to be stable. There are potential operational modes, however, that could show variation over longer time frames. For example, an electronic component could go into a sleep mode after a 10-minute period. This change in power consumption would not be captured in the 5-minute stability test. IEC Standard 62301 (Second Edition) acknowledges the existence of these different types of modes by creating stability tests for these variable power modes. For constant power modes, the test method specified in the second edition of IEC Standard 62301 matches that specified in the first edition. For cyclical power consumption, the second edition of IEC Standard 62301 adds measurement provisions for situations in which the variation in the signal might not be constant over a 5-minute period. The power measurements would take at least 60 minutes; a test period of this duration is required to accurately capture standby mode and off mode energy consumption for equipment with varying power consumption and is an improvement introduced by IEC Standard 62301 (Second Edition) compared to IEC Standard 62301 (First Edition). These techniques will result in more complete and accurate measures of standby mode and off mode energy consumption over a variety of operational modes. The manufacturer is given a choice of measurement procedures, including less burdensome methods such as direct meter reading methods if certain clearly-described stability conditions are met. DOE believes that the changes incorporated in IEC Standard 62301 (Second Edition) will allow for use of less burdensome methods when appropriate and will ensure accurate measures of standby energy consumption over a range of operating conditions that may be present in residential furnaces and boilers.

Accordingly, for the reasons discussed above, DOE proposed to incorporate IEC Standard 62301 (Second Edition) in its entirety into the overall list of incorporated references in 10 CFR 430.3 and to call out the appropriate provisions of that standard in DOE's test procedure regulations for residential furnaces and boilers.

In addition, the September 2011 NOPR clarified that the rounding guidance in the IEC Standard 62301 (Second Edition) should be used for the new proposed wattage measurements. Specifically, it was proposed that the following sentence be added to the measurement provisions in sections 8.6.1 and 8.6.2: “The recorded standby power (P W,SB ) (or P W,OFF where appropriate) shall be rounded to the second decimal place, and for loads greater than or equal to 10W, at least three significant figures shall be reported.” 76 FR 56339, 56342 (Sept. 13, 2011).

Finally, DOE proposed to apply the existing DOE sampling plans used by residential furnace and boiler manufacturers to determine the representative values for annual energy consumption to the newly proposed standby mode and off mode ratings (P W,SB and P W,OFF ). Id. at 56342-43. For a more complete discussion of DOE's analysis of IEC Standard 62301 (Second Edition), see sections III.A through III.C of the September 2011 NOPR. 76 FR 56339, 56341-43 (Sept. 13, 2011).

In response to the September 2011 NOPR, DOE received very little in the way of comment on this matter. In particular, there was no objection expressed as to the use of the updated version of the IEC standard. Only two comments were received from Crown Boiler and the Air-Conditioning, Heating, and Refrigeration Institute (Crown, No. 5 and AHRI, No. 7, respectively), and they are discussed in detail below. In overview, these comments dealt with the overall burden of measuring standby mode and off mode energy consumption and the associated rounding guidance. No comments were received on the added clarification provisions related to sampling.

Comments from Crown Boiler were supportive of the September 2011 NOPR, in that the company agreed that the use of the second edition of IEC Standard 62301 in lieu of the first edition would result in reduced cost of testing. However, despite this reduction in cost, Crown Boiler opposed testing provisions for standby mode and off mode energy consumption generally, applying to both the current rulemaking and the October 2010 final rule, stating, “…[T]he rule imposes an undue regulatory burden on boiler manufacturers, given the fact that it is unlikely to result in any significant reduction in energy use. In light is this, and in light of Executive Order 13563 (“Improving Regulations and Regulatory Review”), we believe that DOE should modify this rule [in this case, the provisions prescribed by the October 2010 final rule] so that the burden it imposes is commensurate with the real-world benefit it provides (essentially none).” (emphasis added) (Crown, No. 5 at p.1-2)

Initially, DOE notes that most of Crown Boiler's comment involves provisions prescribed by the October 2010 final rule rather than those proposed in the September 2011 NOPR, which are matters beyond the scope of the current rulemaking. However, DOE is addressing the concerns of Crown Boiler here because of the interrelationship between these rules. Crown Boiler maintained that the energy savings potential associated with limiting the standby mode and off mode power consumption of residential boilers would be insignificant because of the small magnitude of energy consumption in these modes. In support of this position, Crown Boiler estimated that most residential boilers would consume less than 5W of standby mode and off mode power and that the annual shipments are only 400,000 units. In response, as summarized in the September 2011 NOPR and as Crown Boiler acknowledges, the EISA 2007 amendments to EPCA, in relevant part, statutorily require DOE to amend the test procedures for all covered products (including furnaces and boilers) to include measures of standby mode and off mode energy consumption. 76 FR 56339, 56341 (Sept. 13, 2011). Specifically, the statute requires integration of such energy consumption into the overall energy efficiency, energy consumption, or other energy descriptor for each covered product, unless the Secretary determines that: (1) The current test procedures for a covered product already fully account for and incorporate the standby mode and off mode energy consumption of the covered product; or (2) such an integrated test procedure is technically infeasible for a particular covered product, in which case the Secretary shall prescribe a separate standby mode and off mode energy use test procedure for the covered product, if technically feasible. (42 U.S.C. 6295(gg)(2)(A))

Furthermore, although DOE realizes that, as pointed out by Crown Boiler, the level of standby mode and off mode energy consumption of boilers is inherently smaller than that of other products, such as forced air furnaces, it nevertheless represents a significant level of energy consumption when viewed in the aggregate. For example, the cost of annual standby mode and off mode energy consumption for the commenter's estimate of annual shipments (400,000 units) and wattage would be nearly $2 million each year for a single year's shipments of boilers (400,000 × 8000 hours × 5W × .00012 $/whr = $1.92 million). Some amount of this energy consumption could be limited by an applicable energy conservation standard in the future. This energy saving potential would be part of the analysis in support of such a standard. Accordingly, for these reasons, DOE cannot eliminate the integration of standby mode and off mode into the residential furnaces and boilers test procedures on the basis of insignificant energy savings potential.

Crown Boiler also argued that the overall burden of conducting the additional tests for standby mode and off mode is significant for small businesses. The commenter specifically stated that the purchase cost of equipment needed to run the IEC Standard 62301 test is significant for small boiler manufacturers. On this matter, DOE certified in the October 2010 final rule that the added provisions to address standby mode and off mode energy consumption will not a have a significant economic impact on a significant number of small entities. 75 FR 64621, 64628-29 (Oct. 20, 2010). Furthermore, in the September 2011 NOPR, DOE tentatively certified that the possible additional burden represented by the adoption of the second edition of IEC Standard 62301 also would not have a significant economic impact on a substantial number of small entities. 76 FR 56339, 56343-44 (Sept. 13, 2011). In today's final rule, DOE affirms its certification, because it has concluded that the possible additional equipment cost for affected manufacturers is a small investment compared to manufacturers' overall financial investment needed to undertake the business enterprise of testing consumer products, including residential boilers.

Crown Boiler also commented on the additional testing time that IEC Standard 62301 (Second Edition) may require on units with unstable readings. DOE analyzed this issue in the September 2011 NOPR and tentatively concluded that in the worst case, the labor costs associated with wait time during testing would result in a small additional cost of $30 per test unit. Id. at 56344. Crown Boiler maintained that in addition to the possible labor cost, the waiting time would result in less availability for the test stand. In response, DOE does not view this as additional burden, since there is no provision in the rule that requires the standby mode and off mode measurements to be made on a particular test stand. Typically, a test stand for full efficiency testing of boilers would require fossil fuel and electricity connections, as well as venting arrangements. If such test stands are in demand, the standby mode and off mode testing could be done in a more convenient place where only an electrical connection is needed.

In its comments, Crown Boiler argued that a second testing burden would arise from the need to separately test different controls systems on various boiler models for standby mode and off mode energy consumption. If, in fact, the energy consumption is different for each type of control system and there are numerous control system options applied to a given basic model, additional testing may be required for those basic models. However, this situation is not unlike any other design feature of a covered product that affects energy consumption. DOE believes this possible difference between control systems, and its potential additional testing costs, could be mitigated by the existing rules regarding conservative ratings, while still satisfying the requirement in EISA 2007 for incorporation into the DOE test procedures. In a recent rulemaking on certification, compliance, and enforcement, DOE clarified the conservative ratings concept within that final rule's discussion of the concept of “basic model.” 76 FR 12422, 12428-29 (March 7, 2011). Specifically, that discussion elaborated on the permitted flexibility in determining how manufacturers choose to group individual models into a basic model with essentially identical energy consumption characteristics. Generally, characteristics, such as different control systems, that have a small effect on overall energy consumption or efficiency need not constitute different basic models and, therefore, would not require additional separate testing. Rather, at the manufacturer's discretion, a basic model could include a variety of control systems, provided that the resulting rated energy consumption would be sufficiently conservative to account for the least-efficient model within the basic model. DOE believes it is reasonable to assume that the manufacturer can determine which control system would be likely to have the highest energy consumption, thereby allowing the manufacturer to avail itself of the conservative ratings in lieu of additional testing, if it so chooses.

Finally, Crown Boiler mentioned as a burden the differences in ambient air specifications between IEC Standard 62301 and the existing DOE test procedure. This is not a valid point, because the October 2010 final rule specifies, expressly to eliminate unnecessary burden, that the existing test procedure specification for ambient air is to be used for all testing. 75 FR 64621, 64623-25 (Oct. 20, 2010). Today's final rule does nothing to alter DOE's existing specifications for ambient temperature.

In sum, the concerns raised by Crown Boiler have not demonstrated an undue burden associated with DOE's proposed standby mode and off mode measurement provisions, which have been adopted pursuant to DOE's mandate in EISA 2007.

Although Crown Boiler would prefer the elimination of standby mode and off mode measurements for residential boilers, in the alternative, it requested consideration of some simplification of the measurement procedures. Specifically, Crown Boiler asked that in lieu of requiring the IEC Standard 62301 measurements, that manufacturers could be allowed, as an option, to assess the standby mode and off mode wattage with a preliminary and less sophisticated measurement procedure. More specifically, Crown Boiler suggested that if that value is below some threshold, the manufacturer would be allowed to report a conservative default value ( i.e., a value greater than the measured value). If the preliminary value is above the relevant threshold, Crown Boiler suggested that the IEC Standard 62301 provisions must be used. Crown Boiler mentioned 7.5 watts and 10 watts as the threshold and default values respectively. This concept could have merit, in that it may reduce testing burden; however, it may not, in effect, be significantly different than the conservative rating concept discussed above. Specifically, the manufacturer, in its discretion, may assess the magnitude of the standby mode/off mode loss through limited testing and choose to make a conservative rating. Therefore, DOE believes the conservative rating allowance is a reasonable pathway for the commenter to use to reduce testing burden. Accordingly, DOE has concluded that there is not a compelling need to modify the test procedure to assign specific threshold and default values along with a defined, less-accurate test measurement procedure as the commenter suggested.

In addition to proposing the use of the second edition of IEC Standard 62301, the September 2011 NOPR provided rounding guidance applicable to the new measures of energy consumption for furnaces and boilers ( i.e., P W,SB and P W,OFF ). For these values, the September 2011 NOPR clarified that the rounding guidance provided in IEC Standard 62301 (Second Edition) would apply. 76 FR 56339, 56342, 56347 (Sept. 13, 2011). Specifically, DOE proposed to add the following sentence to the measurement provisions of the proposed regulatory text, where appropriate: “The recorded standby power (P W,SB ) (or off mode power P W,OFF , where appropriate) shall be rounded to the second decimal place, and for loads greater than or equal to 10W, at least three significant figures shall be reported.” Id. at 56342. DOE requested comments as to the adequacy and appropriateness of this clarification. Here, it is important to note that DOE has established energy conservation standards utilizing these power measurements ( see 76 FR 37408 (June 27, 2011); 76 FR 67037 (Oct. 31, 2011)). These standards are expressed to two significant figures ( i.e., 10 watts P W,SB (or off mode power P W,OFF , where appropriate) for gas-fired and electric furnaces and 11 watts P W,SB (or off mode power P W,OFF , where appropriate) for oil-fired furnaces). Therefore, certification to these standards, utilizing the IEC rounding guidance, would likely require reporting to the second decimal place ( i.e., values below the 10 watt level where the IEC rounding guidance requires three significant figures or the second decimal place). Only reported values between 11 watts and 10 watts for oil-fired and electric furnaces would be allowed a single decimal place report using the IEC rounding guidance. AHRI, in its comments, opined that the second decimal place rounding represents an unnecessary rounding burden on manufacturers without adding any value when one considers the annualized accounting of total electrical energy consumption as represented in the term E SO . (AHRI No. 7 at p. 1-2)

DOE believes that the IEC rounding provisions for wattage measurements are appropriate and within the capabilities of the instrumentation specified in the IEC standard. Specifically, DOE's review of IEC Standard 62301-compliant instrumentation has determined that one can easily support this level of reporting. Moreover, the test procedures for other DOE covered products already utilize IEC Standard 62301 for the wattage measurements, and DOE believes there is benefit in measuring the standby mode and off mode energy consumption of various covered products in a consistent manner for the various DOE requirements ( i.e., annual consumption representations or standards compliance reports). In sum, carrying the IEC level of precision (three significant figures) through the annualized consumption calculations does not represent any additional burden, because it is simply a matter of running a calculation and reporting the result. Accordingly, DOE has concluded that this comment does not justify a departure from the IEC provisions, so DOE is adopting the rounding guidance as proposed.

The effective date for these amendments is January 30, 2013. At that time, representations may be made using the new metrics P W,SB and P W,OFF and any other measure of energy consumption which depends on P W,SB and P W,OFF , which were adopted pursuant to these amendments. The compliance date for any representations relating to standby mode and off mode energy consumption of residential furnaces and boilers is July 1, 2013; on and after this date, any such representations must be based upon results generated under these test procedures and sampling plans.

However, DOE is clarifying here that use of these test procedure amendments related to standby mode and off mode energy consumption are not required for purposes of energy conservation standards compliance until May 1, 2013 (for non-weatherized gas and oil furnaces including mobile home furnaces, and all electric furnaces); this is the compliance date of the recently amended energy conservation standards for residential furnaces, which include standards for standby mode and off mode energy consumption. 76 FR 37408 (June 27, 2011); 76 FR 67037 (Oct. 31, 2011). Again, DOE makes this statement with the caveat that the amended standards only apply to furnaces and not boilers. Amended energy conservation standards addressing standby mode and off mode for boilers will be addressed and apply on the compliance date for the next energy conservation standards rulemaking for those products.

EPCA requires that any test procedures prescribed or amended must be reasonably designed to produce test results which measure energy efficiency, energy use, or estimated annual operating cost of a covered product during a representative average use cycle or period of use, and it must not be unduly burdensome to conduct. (42 U.S.C. 6293(b)(3)) If DOE amends its test procedures, it must determine to what extent, if any, the proposed test procedure would alter the measured energy efficiency or energy use of the covered product, as determined under the existing test procedure. (42 U.S.C. 6293(e)(1)) If DOE determines that the amended test procedure would alter the measured energy efficiency or energy use, it must amend the applicable energy conservation standard to reflect the average energy efficiency or energy use, as determined using the amended test procedure. (42 U.S.C. 6293(e)(2))

Today's amendments to the DOE test procedure for residential furnaces and boilers incorporates the most current version of IEC Standard 62301 in lieu of the previous version. DOE has concluded that these new provisions will continue to produce valid test results, while reducing testing burden. Accordingly, this final rule meets the requirements of 42 U.S.C. 6293(b)(3).

In addition, DOE has determined that these amendments will not alter the measured efficiency or energy use when determining compliance with the current energy conservation standards for these products or with future standards related to standby mode and off mode for furnaces. Accordingly, no modifications to the currently applicable energy conservation standards are required. This is because the currently applicable energy conservation standard is based on the annual fuel utilization efficiency (AFUE) metric which does not include or depend on the new measures of energy consumption regarding standby mode and off mode. In addition, consistent with its mandate pursuant to EISA 2007, DOE is further clarifying here that use of these test procedure amendments related to standby mode and off mode energy consumption are not required for purposes of energy conservation standards compliance, until the compliance date of the next standards final rule that addresses standby mode and off mode. As noted above, DOE has adopted amended energy efficiency standards, as well as standby mode and off mode energy conservation standards, for residential furnaces (but not boilers). 76 FR 37408 (June 27, 2011); 76 FR 67037 (Oct. 31, 2011).

Lastly, DOE does not believe that these test procedure amendments, which adopt a revised version of the IEC test procedure, would significantly alter the energy consumption as measured by the existing DOE test procedure provisions related to standby mode and off mode for residential furnaces and boilers, because the test procedure provisions of IEC Standard 62301 (Second Edition) are limited to providing additional accuracy for the measurements and clarification on the test method. Consequently, DOE does not believe that potential adoption of amendments pertaining to these clarifications and additions would alter any estimates of energy consumption under either DOE's current energy conservation standards or the recently promulgated amended standards.

The Office of Management and Budget has determined that test procedure rulemakings do not constitute “significant regulatory actions” under section 3(f) of Executive Order 12866, “Regulatory Planning and Review.” 58 FR 51735 (Oct. 4, 1993). Accordingly, this regulatory action was not subject to review under the Executive Order by the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB).

The Regulatory Flexibility Act (5 U.S.C. 601 et seq., as amended by the Small Business Regulatory Enforcement Fairness Act of 1996) requires preparation of an initial regulatory flexibility analysis for any rule that, by law, must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. A regulatory flexibility analysis examines the impact of the rule on small entities and considers alternative ways of reducing negative effects. Also, as required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the DOE rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel's Web site at www.gc.doe.gov/gc/office-general-counsel.

Today's final rule adopts test procedure provisions to measure standby mode and off mode energy consumption of residential furnaces and boilers, generally through the incorporation by reference of IEC Standard 62301 (Second Edition). DOE reviewed today's final rule under the provisions of the Regulatory Flexibility Act and the policies and procedures published on February 19, 2003. For the reasons explained below, DOE certifies that the final rule will not have a significant impact on a substantial number of small entities.

As noted above, the test procedure incorporates by reference provisions from IEC Standard 62301 for the measurement of standby mode and off mode energy consumption. IEC Standard 62301 is widely accepted and used internationally to measure electric power in standby mode and off mode.

Based on its analysis of IEC Standard 62301 (Second Edition), DOE has determined that the only possible additional burden represented by the adoption of IEC Standard 62301 (Second Edition) is associated with the testing time. For measurements of power consumption that are determined to be stable, test time would not change. Test time would increase under IEC Standard 62301 (Second Edition), as compared to IEC Standard 62301 (First Edition), should the stability test indicate that the power is being used in a variable manner. For these cases, the revised procedure would increase the time of measurement from the current 15 minutes to up to 60 minutes. No additional setup time would be required for these tests. This possible increase in test time does not necessarily require active labor, because no additional set up is required, and the additional time essentially amounts to a waiting period to determine stability. Nonetheless, assuming the 45 minutes additional test time does incur additional labor cost, the worst-case estimate of an additional $30 per test unit is a small incremental change compared to the overall financial investment needed to undertake the business enterprise of testing consumer products. For these reasons, DOE does not believe that this final rule adds significant costs nor requires any significant investment in test facilities or new equipment.

The Small Business Administration (SBA) considers an entity to be a small business if, together with its affiliates, it employs fewer than a threshold number of workers specified in 13 CFR part 121, which relies on size standards and codes established by the North American Industry Classification System (NAICS). The threshold number for NAICS classification 333415, which applies to Air-Conditioning and Warm Air Heating Equipment and Commercial and Industrial Refrigeration Equipment Manufacturing (including residential furnaces and boilers), is 750 employees. 4 DOE reviewed the Air-Conditioning, Heating, and Refrigeration Institute's Directory of Certified Product Performance for Residential Furnaces and Boilers (June 7, 2010), 5 the ENERGY STAR Product Databases for Gas and Oil Furnaces (Jan. 4, 2010), 6 the California Energy Commission's Appliance Database for Residential Furnaces and Boilers, 7 and the Consortium for Energy Efficiency's Qualifying Furnace and Boiler List (2010). 8 From this review, DOE found that there are approximately 14 small businesses in the furnace and boiler industry. Even though there are a significant number of small businesses within the furnace and boiler industry, DOE has concluded that the test procedure amendments contained in this final rule would not represent a substantial burden to any manufacturer, including small manufacturers, as explained above.

Accordingly, DOE has not prepared a regulatory flexibility analysis for this rulemaking. DOE's certification and supporting statement of factual basis were provided to the Chief Counsel for Advocacy of the SBA for review under 5 U.S.C. 605(b). DOE did not receive any comments demonstrating a significant economic impact on any small entities. Thus, DOE reaffirms and certifies that this rule will not have a significant economic impact on a substantial number of small entities.

Today's final rule would impose no new information or recordkeeping requirements. Accordingly, OMB clearance is not required under the Paperwork Reduction Act. (44 U.S.C. 3501 et seq. )

In this rule, DOE is amending the test procedure for residential furnaces and boilers to address measurement of the standby mode and off mode energy consumption of these products. DOE has determined that this final rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (Pub. L. 91-190, codified at 42 U.S.C. 4321 et seq. ), and DOE's implementing regulations at 10 CFR part 1021. Specifically, this final rule, which adopts an industry standard for measurement of standby mode and off mode energy consumption, amends an existing rule without changing its environmental effect, and, therefore, is covered by Categorical Exclusion A5 found in 10 CFR part 1021, subpart D, appendix A. Today's final rule does not affect the amount, quality, or distribution of energy usage, and, therefore, does not result in any environmental impacts. 9 Accordingly, neither an environmental assessment nor an environmental impact statement is required.

Executive Order 13132, “Federalism,” imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. 64 FR 43255 (August 10, 1999). The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States, and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process that it will follow in developing such regulations. 65 FR 13735. DOE has examined this final rule and has determined that it does not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of today's final rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297(d)) Therefore, Executive Order 13132 requires no further action.

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

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (Pub. L. 104-4, codified at 2 U.S.C. 1501 et seq. ) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. For regulatory actions likely to result in a rule that may cause expenditures by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a) and (b)) Section 204 of UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate.” UMRA also requires an agency plan for giving notice and opportunity for timely input to small governments that may be potentially affected before establishing any requirement that might significantly or uniquely affect them. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820. (This policy is also available at http://www.gc.doe.gov/gc/office-general-counsel ). Today's final rule, which modifies the current test procedures for residential furnaces and boilers, contains neither an intergovernmental mandate, nor a mandate that may result in the expenditure by State, local, and Tribal governments, or by the private sector, of $100 million or more in any year. Accordingly, no further assessment or analysis is required under the Unfunded Mandates Reform Act of 1995.

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. Today's final rule amending DOE test procedures would not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

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

The Treasury and General Government Appropriations Act, 2001 (Pub. L. 106-554, codified at 44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under information quality guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed today's final rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

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

Under section 301 of the Department of Energy Organization Act (Pub. L. 95-91; 42 U.S.C. 7101 et seq. ), DOE must comply with all laws applicable to the former Federal Energy Administration, including section 32 of the Federal Energy Administration Act of 1974 (Pub. L. 93-275), as amended by the Federal Energy Administration Authorization Act of 1977 (Pub. L. 95-70). (15 U.S.C. 788) Section 32 provides that where a proposed rule authorizes or requires use of commercial standards, the notice of proposed rulemaking must inform the public of the use and background of such standards. In addition, section 32(c) requires DOE to consult with the Attorney General and the Federal Trade Commission (FTC) concerning the impact of commercial or industry standards on competition.

Certain of the amendments and revisions in this final rule incorporate testing methods contained in the following commercial standard, the International Electrotechnical Commission (IEC) Standard 62301, “Household electrical appliances—Measurement of standby power” (Second Edition 2011). DOE has evaluated this standard and is unable to conclude whether it fully complies with the requirements of section 32(b) of the Federal Energy Administration Act ( i.e., that it was developed in a manner that fully provides for public participation, comment, and review). DOE has consulted with the Attorney General and the Chairman of the FTC concerning the impact on competition of requiring manufacturers to use the test methods contained in this standard, and neither recommended against incorporation of this standard.

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

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

For the reasons stated in the preamble, DOE is amending part 430 of Chapter II, Subchapter D of Title 10 of the Code of Federal Regulations, as set forth below:

I. Background

The Home Mortgage Disclosure Act of 1975 (HMDA) (12 U.S.C. 2801-2810) requires most mortgage lenders located in metropolitan areas to collect data about their housing-related lending activity. Annually, lenders must report those data to the appropriate Federal agencies and make the data available to the public. The Bureau's Regulation C (12 CFR part 1003) implements HMDA.

Prior to 1997, HMDA exempted certain depository institutions as defined in HMDA ( i.e., banks, savings associations, and credit unions) with assets totaling $10 million or less as of the preceding year-end. In 1996, HMDA was amended to expand the asset-size exemption for these depository institutions. 12 U.S.C. 2808(b). The amendment increased the dollar amount of the asset-size exemption threshold by requiring a one-time adjustment of the $10 million figure based on the percentage by which the CPI-W for 1996 exceeded the CPI-W for 1975, and it provided for annual adjustments thereafter based on the annual percentage increase in the CPI-W, rounded to the nearest multiple of $1 million dollars.

The definition of “financial institution” in Regulation C provides that the Bureau will adjust the asset threshold based on the year-to-year change in the average of the CPI-W, not seasonally adjusted, for each 12-month period ending in November, rounded to the nearest million. 12 CFR 1003.2. For 2012, the threshold was $41 million. During the 12-month period ending in November 2012, the CPI-W increased by 2.23 percent. As a result, the exemption threshold is increased to $42 million. Thus, banks, savings associations, and credit unions with assets of $42 million or less as of December 31, 2012, are exempt from collecting data in 2013. An institution's exemption from collecting data in 2013 does not affect its responsibility to report data it was required to collect in 2012.

Under the Administrative Procedure Act (APA), notice and opportunity for public comment are not required if the Bureau finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest. 5 U.S.C. 553(b)(B). Pursuant to this final rule, comment 1003.2 (Financial institution)-2 in Regulation C, supplement I, is amended to update the exemption threshold. The amendment in this final rule is technical and nondiscretionary, and it merely applies the formula established by Regulation C for determining any adjustments to the exemption threshold. For these reasons, the Bureau has determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary and the amendment is adopted in final form.

Under section 553(d) of the APA, the required publication or service of a substantive rule shall be made not less than 30 days before its effective date except for certain instances, including when a substantive rule grants or recognizes an exemption or relieves a restriction. 5 U.S.C. 553(d). As this rule increases the exemption threshold, and is therefore a substantive rule that grants or recognizes an exemption or relieves a restriction, the Bureau is publishing this final rule less than 30 days before its effective date. Additionally, as it is in the public interest to make the updated threshold for the asset-size exemption available publicly as soon as possible after all data needed for the calculation are available, the Bureau is making the final rule effective immediately upon publication in the Federal Register .

The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where general notice of proposed rulemaking is not required. 5 U.S.C. 603 and 604. As noted previously, the Bureau has determined that it is unnecessary to publish a general notice of proposed rulemaking for this final rule. Accordingly the RFA's requirements relating to an initial and final regulatory flexibility analysis do not apply.

For the reasons set forth in the preamble, the Bureau of Consumer Financial Protection amends 12 CFR part 1003 as follows:

Section 5200 of the Revised Statutes, 12 U.S.C. 84, provides that the total loans and extensions of credit by a national bank to a person outstanding at one time shall not exceed 15 percent of the unimpaired capital and unimpaired surplus of the bank if the loan or extension of credit is not fully secured, plus an additional 10 percent of unimpaired capital and unimpaired surplus if the loan is fully secured. Section 5(u)(1) of the Home Owners' Loan Act (HOLA), 12 U.S.C. 1464(u)(1), provides that section 5200 of the Revised Statutes “shall apply to savings associations in the same manner and to the same extent as it applies to national banks.” In addition, section 5(u)(2) of HOLA, 12 U.S.C. 1464(u)(2), includes exceptions to the lending limits for certain loans made by savings associations. These HOLA provisions apply to both Federal and state-chartered savings associations.

Section 610 of the Dodd-Frank Wall Street Reform and Consumer Protection Act  1 (Dodd-Frank Act) amended section 5200 of the Revised Statutes to provide that the definition of “loans and extensions of credit” includes any credit exposure to a person arising from a derivative transaction, repurchase agreement, reverse repurchase agreement, securities lending transaction, or securities borrowing transaction between a national bank and that person. This amendment was effective July 21, 2012. By virtue of section 5(u)(1) of the HOLA, this new definition of “loans and extensions of credit” applies to all savings associations as well as to national banks.

On June 21, 2012, the OCC published in the Federal Register an interim final rule that, among other things, amended the OCC's lending limits regulation, 12 CFR part 32, by implementing section 610 of the Dodd-Frank Act. 2 Specifically, the interim final rule amended part 32 to provide national banks and savings associations with different options for measuring the appropriate credit exposures of derivatives transactions and securities financing transactions, including an internal model option. The interim final rule was effective on July 21, 2012. Because the OCC recognized that national banks and savings associations would need additional time to comply with these new provisions, the interim final rule provided at 12 CFR 32.1(d) that the requirements of part 32 only apply to a credit exposure arising from a derivative transaction or securities financing transaction on or after January 1, 2013. 3

Based on the public comments received on the interim final rule, the OCC concludes that institutions that wish to use an internal model method to determine credit exposure for derivative transactions and securities financing transactions may not have sufficient time to develop a model, receive approval for its use, and implement the model before the January 1, 2013 expiration of the temporary exception. Moreover, for many institutions with large portfolios, the other non-model methods to measure credit exposure provided by the rule often would not be optimal. For the foregoing reasons, the OCC is extending this exception to July 1, 2013, 4 in advance of finalizing the interim final rule. As indicated in the preamble to the interim final rule, notwithstanding this extension, the OCC retains full authority to address credit exposures that present undue concentrations on a case-by-case basis through our existing safety and soundness authorities.

This final rule is effective on December 31, 2012. Pursuant to the Administrative Procedure Act (APA), at 5 U.S.C. 553(b)(B), notice and comment are not required prior to the issuance of a final rule if an agency, for good cause, finds that “notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.”

This final rule extends the temporary exception from the lending limits rules for extensions of credit arising from derivative transactions or securities financing transactions from January 1, 2013 to July 1, 2013 in order to provide national banks and savings associations with additional time to comply with these provisions. The rule makes no substantive changes to the lending limits rule. Furthermore, on November 16, 2012, the OCC announced its intention to extend this temporary exception, 5 thereby giving notice to interested parties that the January 1, 2013 date would likely be extended. For these reasons, the OCC finds that prior notice and comment are unnecessary.

This interim final rule is effective on December 31, 2012. A final rule may be effective without 30 days advance publication in the Federal Register if an agency finds good cause and publishes such with the final rule. 6 The purpose of a delayed effective date is to permit regulated entities to adjust their behavior before the final rule takes effect. As described above, national banks and savings associations are currently excepted from the lending limits rules for extensions of credit arising from derivative transactions or securities financing transactions until January 1, 2013. This final rule extends this exception through July 1, 2013 in order to provide national banks and savings associations with additional time to comply with these provisions. The rule makes no substantive changes to the lending limits rule. Because the current exception will expire less than 30 days from the date of this rule's publication, it is necessary to make this rule effective immediately. Not doing so would result in national banks and savings associations having to comply with these provisions for a limited amount of time before the July 1, 2013 exception is effective. For these reasons, the OCC finds good cause to dispense with a delayed effective date.

Pursuant to the Regulatory Flexibility Act (RFA), 7 5 U.S.C. 603, an agency must prepare a regulatory flexibility analysis for all proposed and final rules that describe the impact of the rule on small entities, unless the head of an agency certifies that the rule will not have “a significant economic impact on a substantial number of small entities.” However, the RFA applies only to rules for which an agency publishes a general notice of proposed rulemaking pursuant to 5 U.S.C. 553(b). 8 Pursuant to the APA at 5 U.S.C. 553(b)(B), general notice and an opportunity for public comment are not required prior to the issuance of a final rule when an agency, for good cause, finds that “notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” For the reasons discussed above, the OCC did not publish a notice of proposed rulemaking. Therefore, the RFA does not apply to this final rule.

Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 104-4 (2 U.S.C. 1532) (Unfunded Mandates Act), requires that an agency prepare a budgetary impact statement before promulgating any rule likely to result in a Federal mandate that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, § 205 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. The OCC has determined that there is no Federal mandate imposed by this rulemaking that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. Accordingly, final rule is not subject to § 202 of the Unfunded Mandates Act.

In accordance with the requirements of the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521), the OCC may not conduct or sponsor, and a respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. This rule amends rules, which contain information collection requirements under the PRA, that have been previously approved by OMB under OMB Control No. 1557-0221. The amendments in this final rule do not introduce any new collections of information into the rules, nor do they amend the rules in a way that modifies the collection of information that OMB has previously approved for part 32. Therefore, no Paperwork Reduction Act submission to OMB is required.

For the reasons set forth in the preamble, 12 CFR part 32 is amended as follows:

Good Cause for Immediate Adoption

Section 553(b)(3)(B) of the Administrative Procedure Act (APA) (5 U.S.C. 551 et seq. ) authorizes agencies to dispense with notice and comment procedures for rules when the agency for “good cause” finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under this section, an agency, upon finding good cause, may issue a final rule without seeking comment prior to the rulemaking.

In July 2011, the United States Environmental Protection Agency (EPA) proposed new aircraft engine emission standards for oxides of nitrogen (NO X ), compliance flexibilities, and other regulatory requirements applicable to aircraft turbofan or turbojet engines with rated thrusts greater than 26.7 kilonewtons (kN) (76 FR 45012, July 27, 2011). The final rule adopting these proposals was published in the Federal Register on June 18, 2012 (77 FR 36342). The public had an opportunity to comment on the EPA's proposed rule, and the comments received were addressed in the EPA's final rule.

Section 232 of the Clean Air Act Amendments of 1970 (CAA) (42 U.S.C. 7572) directs the FAA to prescribe regulations to ensure compliance with the EPA's aircraft emission standards. The FAA is amending 14 CFR parts 34 and 45 to incorporate the changes promulgated by the EPA in the emission standards and the associated engine marking requirements. The FAA is not adopting any standards or requirements different from those promulgated by the EPA. Accordingly, the FAA finds that further public comment on these standards prior to promulgation is unnecessary, and that further delay in making the regulations consistent would be contrary to the public interest.

Section 553(d)(3) of the Administrative Procedure Act requires that agencies publish a rule not less than 30 days before its effective date, except as otherwise provided by the agency for good cause found and published with the rule.

This rule, as previously adopted by the EPA, contains a production cutoff date of December 31, 2012. In addition, it contains a new production marking requirement that is effective on aircraft engines produced after December 31. In order to give manufacturers the maximum amount of time to adjust their processes to these requirements, the FAA finds that good cause exists to make this rule effective in less than 30 days.

The FAA's authority to issue rules on aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart III. Under Section 232 of the CAA (42 U.S.C. 7571), the FAA is directed to prescribe regulations to ensure compliance with the standards prescribed by the EPA under § 7571, including making such standards applicable in the issuance, amendment, modification, suspension, or revocation of any certificate authorized by part A of subtitle VII of title 49. These regulations are within the scope of that authority, as the FAA is adopting the standards promulgated by the EPA and making them applicable to aircraft engine type certificates issued under the FAA's Title 49 authority.

For the reasons noted above, the FAA is adopting this final rule without prior notice and public comment. The Regulatory Policies and Procedures of the Department of Transportation (DOT) (44 FR 1134; February 26, 1979) provide that, to the maximum extent possible, operating administrations for the DOT should provide an opportunity for public comment on regulations issued without prior notice.

The FAA invites interested persons to participate in this rulemaking by submitting written comments, data, or views. The agency also invites comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the changes. The most helpful comments reference a specific portion of this rule, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, please send only one copy of written comments, or if you are filing comments electronically, please submit your comments only one time.

The FAA will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this rulemaking. Once the comment period closes, the FAA will review and dispose of the comments filed in the rulemaking docket. Because this is a final rule, the FAA will publish a disposition of comments in the Federal Register . Based on the comments received, the FAA will state whether it has decided that (i) no action is necessary other than publishing the disposition of comments in the Federal Register , or (ii) the FAA should prepare a revised final rule.

Privacy: We will post all comments we receive, without change to www.regulations.gov, including any personal information you provide. Using the search function of our docket Web site, anyone can find and read the comments received into any of our dockets, including the name of the individual sending the comment (or signing the comment for an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477-78) or you may visit DocketsInfo.dot.gov.

Docket: To read background documents or comments received, go to regulations.gov at any time or to Docket Operations in Room W12-140 of the West Building Ground Floor at 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

Do not file in the docket information that you consider to be proprietary or confidential business information. Send or deliver this information directly to the person identified in the FOR FURTHER INFORMATION CONTACT section of this document. Mark the information that is considered proprietary or confidential. If the information is on a disk or CD ROM, mark the outside of the disk or CD ROM and also identify electronically within the disk or CD ROM the specific information that is proprietary or confidential.

Under § 11.35(b), when the FAA is aware of proprietary information filed with a comment, the agency does not place it in the docket. The FAA holds it in a separate file to which the public does not have access, and the agency places a note in the docket that it has received it. If the FAA receives a request to examine or copy this information, the FAA treats it as any other request under the Freedom of Information Act, 5 U.S.C. 552. The FAA processes such a request under the DOT procedures found in 49 CFR part 7.

You can get an electronic copy of rulemaking documents using the Internet by:

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

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

(3) Accessing the Government Printing Office's Web page at http://www.gpo.gov/fdsys/browse/collection.action?collectionCode=FR.

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

Section 231(a)(2)(A) of the CAA (42 U.S.C. 7571) directs the Administrator of the EPA to propose aircraft emission standards applicable to the emission of any air pollutant from classes of aircraft engines which in the EPA Administrator's judgment causes or contributes to air pollution that may reasonably be anticipated to endanger public health or welfare. These emission standards have been promulgated by the EPA in 40 CFR part 87.

Section 232 of the CAA (42 U.S.C. 7572) then directs the FAA to prescribe regulations to ensure compliance with the EPA's standards. The FAA has promulgated these emission standards in 14 CFR part 34, and the engine marking requirements in part 45.

The EPA initially regulated gaseous exhaust emissions, smoke and fuel venting from aircraft in 1973, with occasional revision. Since the EPA's adoption of the initial regulations, the FAA has taken subsequent action to ensure that the regulations in 14 CFR are kept current with the EPA's standards. This final rule continues the revisions to the regulations in 14 CFR.

On July 27, 2011, the EPA proposed new aircraft engine emission standards for NO X , compliance flexibilities, and other regulatory requirements for aircraft turbofan or turbojet engines with rated thrusts greater than 26.7 kilonewtons (kN) (76 FR 45012). The EPA also proposed adopting the gas turbine engine test procedures of ICAO. The final rule adopting these proposals was published on June 18, 2012 (77 FR 36342), and was effective July 18, 2012.

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

The EPA has adopted a new naming convention, “tier,” in 40 CFR part 87. The tier numbers distinguish levels of increased stringency in the NO X emission standards. This convention is consistent with the numeric identifier that the Committee on Aviation Environmental Protection (CAEP) of ICAO uses to differentiate the CAEP work cycles that produce new standards. For example, the standards that correspond to CAEP's sixth meeting (CAEP/6) are identified by the EPA as Tier 6, while the standards that correspond to CAEP/8 are called Tier 8. The naming convention is also being applied to previously effective less stringent standards, i.e., Tier 0, Tier 2, and Tier 4. None of the previous standards have been changed, only the tier designation has been added in the regulations for comparison and consistency. The following table identifies the various CAEP cycles and corresponding tier naming convention.

The tier designation departs from the previous FAA practice that described aircraft engine emission standards as amendments. The new designation is a valuable tool that provides a consistent reference to individual standards. The FAA is adopting this naming convention in the emission standards contained in this final rule; the designations appear in §§ 34.21 and 34.23.

The Securities and Exchange Commission is adopting an amendment to temporary rule 206(3)-3T [17 CFR 275.206(3)-3T] under the Investment Advisers Act of 1940 [15 U.S.C. 80b] that extends the date on which the rule will sunset from December 31, 2012 to December 31, 2014. Note that previous related releases used RIN 3235-AJ96. ( See Temporary Rule Regarding Principal Trades with Certain Advisory Clients, Investment Advisers Act Release No. 2653 (Sep. 24, 2007) [72 FR 55022 (Sep. 28, 2007)]; Temporary Rule Regarding Principal Trades with Certain Advisory Clients, Investment Advisers Act Release No. 2965 (Dec. 23, 2009) [74 FR 69009 (Dec. 30, 2009)]; Temporary Rule Regarding Principal Trades with Certain Advisory Clients, Investment Advisers Act Release No. 2965A (Dec. 31, 2009) [75 FR 742 (Jan. 6, 2010)]; Temporary Rule Regarding Principal Trades with Certain Advisory Clients, Investment Advisers Act Release No. 3118 (Dec. 1, 2010) [75 FR 75650 (Dec. 6, 2010)]; Temporary Rule Regarding Principal Trades with Certain Advisory Clients, Investment Advisers Act Release No. 3128 (Dec. 28, 2010) [75 FR 82236 (Dec. 30, 2010)]; Temporary Rule Regarding Principal Trades with Certain Advisory Clients, Investment Advisers Act Release No. 3483 (October 9, 2012), [77 FR 62185 (October 12, 2012)].)

On September 24, 2007, we adopted, on an interim final basis, rule 206(3)-3T, a temporary rule under the Investment Advisers Act of 1940 (the “Advisers Act”) that provides an alternative means for investment advisers that are registered with us as broker-dealers to meet the requirements of section 206(3) of the Advisers Act when they act in a principal capacity in transactions with certain of their advisory clients. 1 In December 2009, we extended the rule's sunset date by one year to December 31, 2010. 2 In December 2010, we further extended the rule's sunset date by two years to December 31, 2012. 3 We deferred final action on rule 206(3)-3T at that time in order to complete a study required by section 913 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”)  4 and to consider more broadly the regulatory requirements applicable to broker-dealers and investment advisers, including whether rule 206(3)-3T should be substantively modified, supplanted, or permitted to sunset. 5

The study mandated by section 913 of the Dodd-Frank Act was prepared by the staff and delivered to Congress on January 21, 2011. 6 Since that time, we have considered the findings, conclusions, and recommendations of the 913 Study in order to determine whether to promulgate rules concerning the legal or regulatory standards of care for broker-dealers and investment advisers. In addition, since issuing the 913 Study, Commissioners and the staff have held numerous meetings with interested parties on the study and related matters. 7

On October 9, 2012, we proposed to extend the date on which rule 206(3)-3T will sunset for a limited amount of time, from December 31, 2012 to December 31, 2014. 8 We received five comment letters addressing our proposal. 9 Four of these commenters generally supported extending rule 206(3)-3T for at least two years, 10 and one opposed a two-year extension. 11 The comments we received on our proposal are discussed below. After considering each of the comments, we are extending the rule's sunset date by two years to December 31, 2014, as proposed.

We are amending rule 206(3)-3T only to extend the rule's sunset date by two additional years. 12 We are not adopting any substantive amendments to the rule at this time. Absent further action by the Commission, the rule would sunset on December 31, 2012. We are adopting this extension because, as we discussed in the Proposing Release, we continue to believe that the issues raised by principal trading, including the restrictions in section 206(3) of the Advisers Act and our experiences with, and observations regarding, the operation of rule 206(3)-3T, should be considered as part of our broader consideration of the regulatory requirements applicable to broker-dealers and investment advisers in connection with the Dodd-Frank Act. 13

Section 913 of the Dodd-Frank Act provides that we may commence a rulemaking concerning, among other things, the legal or regulatory standards of care for broker-dealers, investment advisers, and persons associated with these intermediaries when providing personalized investment advice about securities to retail customers. Since the completion of the 913 Study in 2011, we have been considering the findings, conclusions, and recommendations of the study and the comments we have received from interested parties. 14 In addition, our staff has been working to obtain data and economic analysis related to standards of conduct and enhanced regulatory harmonization of broker-dealers and investment advisers to inform the Commission as it considers any future rulemaking. At this time, our consideration of the regulatory requirements applicable to broker-dealers and investment advisers and the recommendations from the 913 Study is ongoing. We will not complete our consideration of these issues before December 31, 2012, the current sunset date for rule 206(3)-3T.

If we permit rule 206(3)-3T to sunset on December 31, 2012, after that date investment advisers registered with us as broker-dealers that currently rely on rule 206(3)-3T would be required to comply with section 206(3)'s transaction-by-transaction written disclosure and consent requirements without the benefit of the alternative means of complying with these requirements currently provided by rule 206(3)-3T. This could limit the access of non-discretionary advisory clients of advisory firms that are registered with us as broker-dealers to certain securities. 15 In addition, firms would be required to make substantial changes to their disclosure documents, client agreements, procedures, and systems.

As noted above, four commenters generally supported our proposal to amend rule 206(3)-3T to extend it, 16 and one commenter opposed the two-year extension. 17 Commenters who supported the extension cited the disruption to investors that would occur if the rule expired at this time, asserting that investors would lose access to the securities currently offered through principal trades, receive less favorable pricing on such securities, or be forced to buy such securities through brokerage accounts. 18 These commenters further explained that, if the rule were allowed to expire, firms relying on the rule would be required to make considerable changes to their operations, client relationships, systems, policies and procedures at substantial expense, without substantial benefits to investors. 19 One commenter described a recent survey it conducted that indicated reliance on rule 206(3)-3T by dual registrants in order to engage in principal trades. 20 In addition, two commenters specifically addressed Commission consideration of requests for exemptive orders as an alternative means of compliance with section 206(3). Both commenters strongly supported the two-year extension instead of Commission consideration of requests for exemptive orders. 21 One commenter expressed concern about the potential inefficiency and uncertainty created by the need to submit individual requests for exemptive relief. 22 Commenters supporting the extension agreed that extending the rule while the Commission conducted its review of the obligations of broker-dealers and investment advisers, as mandated by the Dodd-Frank Act, would be the least disruptive option. 23

One commenter opposed extending the rule for more than a limited period of time (no more than six months) and questioned maintaining investor choice as a rationale for extending rule 206(3)-3T. 24 This commenter also noted that although instances of “dumping” have not been discovered, the staff has observed related compliance problems in the past. The commenter asserted that a more detailed analysis of principal trades executed in reliance on rule 206(3)-3T, including spreads paid by investors and investment returns, be conducted and suggested that the Commission extend rule 206(3)-3T for no more than six months to conduct such an assessment. 25 The commenter also expressed concern about the open-ended nature of extending this temporary rule. 26

On balance, and after careful consideration of these comments, we conclude that extending the rule for two years is the most appropriate course of action at this time. First, with respect to investors, we agree with commenters that permitting the rule to sunset before we complete our consideration of the regulatory requirements applicable to broker-dealers and investment advisers could produce substantial disruption for investors with advisory accounts serviced by firms relying on the rule. 27 These investors might lose access to securities available through principal transactions and be forced to convert their accounts in the interim, only to face the possibility of future change—and the costs and uncertainty such additional change may entail. 28 We believe that the rule benefits investors because it provides them with greater access to a wider range of securities and includes provisions designed to protect them.

Second, with respect to firms, the letters submitted by three commenters demonstrate that firms in fact do rely on the rule, and that those firms will be faced with uncertainty and disruption of operations should the rule expire just as the Commission is engaging in a comprehensive review process that may ultimately produce different regulatory requirements. 29 One commenter that represents securities firms provided data showing that a substantial number of accounts and volume of trades would be affected by a change in the rule. 30 This disruption will be avoided if the rule remains available while we engage in our broader consideration of the regulatory requirements applicable to broker-dealers and investment advisers.

We believe that the requirements of rule 206(3)-3T, coupled with regulatory oversight, will adequately protect advisory clients for an additional limited period of time while we consider more broadly the regulatory requirements applicable to broker-dealers and investment advisers. 31 In the 2010 Extension Proposing Release, we discussed certain compliance issues identified by the Office of Compliance, Inspections and Examinations. 32 One matter identified in the staff's review resulted in a settlement of an enforcement proceeding and other matters continue to be reviewed by the staff. 33 We are sensitive to the concerns regarding compliance issues with respect to rule 206(3)-3T raised by one commenter. 34 Since 2010 and throughout the period of the extension, the staff has and will continue to examine firms that engage in principal transactions and will take appropriate action to help ensure that firms are complying with section 206(3) or rule 206(3)-3T (as applicable), including possible enforcement action.

We received four comment letters specifically addressing the duration of our proposed extension of rule 206(3)-3T. 35 Three of these commenters expressed support for extending the rule for an additional two years, although two of these commenters suggested that an extension of five years would be more appropriate. 36 One commenter opposed extending the rule for more than a six-month period, during which the rule's effectiveness could be further assessed. 37

As we noted in the Proposing Release, we believe that the rule's sunset date should be extended only for a limited amount of time. 38 That period of time, however, must be long enough to permit us to engage in any rulemaking prompted by our broader review of regulatory requirements applicable to investment advisers and broker-dealers. We do not believe that six months is long enough to engage in this process, and we do not believe that it is appropriate at this time to extend the temporary rule for an additional five years. We are sensitive to comments regarding the duration of the extension and the uncertainty caused by extending a temporary rule, but we believe that a two-year extension is necessary to provide investors uninterrupted access to securities available through principal trades and to provide us adequate time to engage in any rulemaking or other process.

Three commenters addressed the question of whether we should consider changing the requirements for adviser disclosures to have registered advisers provide more information to us and their clients about whether they are relying on rule 206(3)-3T. 39 Each of these commenters asserted that additional requirements for adviser disclosures are unnecessary, noting that certain additional disclosures may be redundant, and that current disclosures appear to be adequate. 40 We are not adopting amendments requiring additional adviser disclosures at this time, but will consider the need for such disclosures in future rulemakings or other processes as necessary. 41

As noted above, one commenter suggested that there be a more detailed analysis of data, including spreads paid and investor returns. 42 These factors are relevant to principal trades in general, and are not specific to rule 206(3)-3T. This commenter also raised the concern that the Commission may ultimately apply a “uniform” fiduciary standard to broker-dealers and investment advisers in two different ways. 43 These comments pertain to our broader consideration of the regulatory requirements applicable to broker-dealers and investment advisers, and we will consider these comments in conducting this broader review.

The amendment to rule 206(3)-3T is effective on December 28, 2012. The Administrative Procedure Act generally requires that an agency publish a final rule in the Federal Register not less than 30 days before its effective date. 44 However, this requirement does not apply if the rule is a substantive rule which grants or recognizes an exemption or relieves a restriction, or if the rule is interpretive. 45 Rule 206(3)-3T is a rule that recognizes an exemption and relieves a restriction and in part has interpretive aspects.

Rule 206(3)-3T contains “collection of information” requirements within the meaning of the Paperwork Reduction Act of 1995. 46 The Office of Management and Budget (“OMB”) last approved the collection of information with an expiration date of May 31, 2014. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The title for the collection of information is: “Temporary rule for principal trades with certain advisory clients, rule 206(3)-3T” and the OMB control number for the collection of information is 3235-0630. The Proposing Release solicited comments on our PRA estimates, but we did not receive comment on them. 47

The amendment to the rule we are adopting today—to extend rule 206(3)-3T's sunset date for two years—does not affect the current annual aggregate estimated hour burden of 378,992 hours. 48 Therefore, we are not revising the Paperwork Reduction Act burden and cost estimates submitted to OMB as a result of this amendment.

We are sensitive to the costs and benefits of our rules. The discussion below addresses the costs and benefits of extending rule 206(3)-3T's sunset date for two years, as well as the effect of the extension on the promotion of efficiency, competition, and capital formation as required by section 202(c) of the Advisers Act. 49

Rule 206(3)-3T provides an alternative means for investment advisers that are registered with the Commission as broker-dealers to meet the requirements of section 206(3) of the Advisers Act when they act in a principal capacity in transactions with their non-discretionary advisory clients. Other than extending the rule's sunset date for two additional years, we are not modifying the rule from its current form. We previously considered and discussed the economic analysis of rule 206(3)-3T in its current form in the 2007 Principal Trade Rule Release, the 2009 Extension Release, and the 2010 Extension Release. 50

The baseline for the following analysis of the benefits and costs of the amendment is the situation in existence today, in which investment advisers that are registered with us as broker-dealers can choose to use rule 206(3)-3T as an alternative means to comply with section 206(3) of the Advisers Act when engaging in principal transactions with their non-discretionary advisory clients. The amendment, which will extend rule 206(3)-3T's sunset date by two additional years, will affect investment advisers that are registered with us as broker-dealers and engage in, or may consider engaging in, principal transactions with non-discretionary advisory clients, as well as the non-discretionary advisory clients of these firms that engage in, or may consider engaging in, principal transactions. The extent to which firms currently rely on the rule is unknown. 51 Past comment letters have indicated that since its implementation in 2007, both large and small advisers have relied upon the rule. 52 A recent letter submitted by one commenter describes survey results of several of its members that rely on the rule. 53

As stated in previous releases, we believe the principal benefit of rule 206(3)-3T is that it maintains investor choice among different types of accounts and protects the interests of investors. Rule 206(3)-3T also provides a lower cost and more efficient alternative for an adviser that is registered with us as a broker-dealer to comply with the requirements of section 206(3) of the Advisers Act. This, in turn, may provide non-discretionary advisory clients greater access to a wider range of securities. Non-discretionary advisory clients also benefit from the protections of the sales practice rules of the Securities Exchange Act of 1934 (the “Exchange Act”) and the relevant self-regulatory organization(s) and the fiduciary duties and other obligations imposed by the Advisers Act. Greater access to a wider range of securities may also allow non-discretionary advisory clients to better allocate capital. In the long term, the more efficient allocation of capital may lead to an increase in capital formation.

We received one comment on our economic analysis. 54 The commenter questioned the importance of investor choice as the principal benefit of rule 206(3)-3T. 55 We continue to believe that providing non-discretionary advisory clients with greater access to a wider range of securities is beneficial. As we have previously stated, many clients wish to access the securities inventory of a diversified broker-dealer through their non-discretionary advisory accounts. 56 We believe that it is appropriate to preserve investors' access to the securities available through principal transactions made in reliance on rule 206(3)-3T while consideration of the regulatory requirements applicable to broker-dealers and investment advisers is ongoing.

Also, in connection with the 2010 extension of the rule, one commenter had disagreed with a number of the benefits of rule 206(3)-3T described above, but did not provide any specific data, analysis, or other information in support of its comment. 57 That commenter argued that rule 206(3)-3T would impede, rather than promote, capital formation because it would lead to “more numerous and more severe violations * * * of the trust placed by individual investors in their trusted investment adviser.”  58 While we understand the view that numerous and severe violations of trust could impede capital formation, we have not seen any evidence that rule 206(3)-3T has caused this result. The staff has not identified instances where an adviser has used the temporary rule to “dump” unmarketable securities or securities that the adviser believes may decline in value into an advisory account, a harm that section 206(3) and the conditions and limitations of rule 206(3)-3T are designed to redress. 59 No commenter provided any substantive or specific evidence to contradict our previous conclusion that the rule benefits investors, and we continue to believe that the rule provides those benefits. 60

We also received comments on the 2007 Principal Trade Rule Release from commenters who opposed the limitation of the temporary rule to investment advisers that are registered with us as broker-dealers, as well as to accounts that are subject to both the Advisers Act and Exchange Act as providing a competitive advantage to investment advisers that are registered with us as broker-dealers. 61 Based on our experience with the rule to date, and as we noted in previous releases, we have no reason to believe that broker-dealers (or affiliated but separate investment advisers and broker-dealers) are put at a competitive disadvantage to advisers that are themselves also registered as broker-dealers. 62 Commenters on the Proposing Release did not address this specific issue, but we intend to continue to evaluate the effects of the rule on efficiency, competition, and capital formation in connection with our broader consideration of the regulatory requirements applicable to broker-dealers and investment advisers.

As we discussed in previous releases, there are also several costs associated with rule 206(3)-3T, including the operational costs associated with complying with the rule. 63 In the 2007 Principal Trade Rule Release, we presented estimates of the costs of each of the rule's disclosure elements, including: prospective disclosure and consent; transaction-by-transaction disclosure and consent; transaction-by-transaction confirmations; and the annual report of principal transactions. We also provided estimates for the following related costs of compliance with rule 206(3)-3T: (i) The initial distribution of prospective disclosure and collection of consents; (ii) systems programming costs to ensure that trade confirmations contain all of the information required by the rule; and (iii) systems programming costs to aggregate already-collected information to generate compliant principal transactions reports. Although one commenter noted that the Commission's cost analysis had remained unchanged, we do not believe the extension we are adopting today materially affects the cost estimates associated with the rule. 64 The commenter did not provide supporting data discrediting the cost analysis we presented in the 2007 Principal Trade Rule Release. 65

In addition to the benefits of rule 206(3)-3T described above and in previous releases, we believe there are benefits to extending the rule's sunset date for an additional two years. The temporary extension of rule 206(3)-3T will have the benefit of providing the Commission with additional time to consider principal trading as part of the broader consideration of the regulatory requirements applicable to broker-dealers and investment advisers without causing disruption to the firms and clients relying on the rule.

One alternative to the extension of the rule's sunset date would be to let the temporary rule sunset on its current sunset date, and so preclude investment advisers from engaging in principal transactions with their advisory clients unless in compliance with the requirements of section 206(3) of the Advisers Act. As explained in the 2010 Extension Release, if we did not extend rule 206(3)-3T's sunset date, firms currently relying on the rule would be required to restructure their operations and client relationships on or before the rule's current expiration date—potentially only to have to do so again later (first when the rule sunsets or is modified, and again if we adopt a new approach in connection with our broader consideration of the regulatory requirements applicable to broker-dealers and investment advisers). 66 As a result of the two-year extension of the rule's sunset date, firms relying on the rule will continue to be able to offer clients and prospective clients the same level of access to certain securities on a principal basis and will not need to incur the cost of adjusting to a new set of rules or abandoning the systems established to comply with the current rule during this two-year period. The extension of the rule will also permit non-discretionary advisory clients who have had greater access to certain securities because of their advisers' reliance on the rule to trade on a principal basis to continue to have the same level of access to those securities without disruption.

Although we did not receive any comments on the rule's compliance costs, we recognize that, as a result of our amendment, firms relying on the rule will incur the costs associated with complying with the rule for two additional years. We also recognize that a temporary rule, by nature, creates long-term uncertainty, which in turn, may result in a reduced ability of firms to coordinate and plan future business activities. 67 However, we believe that it would be premature to allow the rule to sunset or to adopt the rule on a permanent basis while consideration of the regulatory requirements applicable to broker-dealers and investment advisers is ongoing. We also considered extending the rule's sunset date for a period other than two years. Two commenters suggested an extension of five years, noting that this period of time would provide greater certainty for firms and more ample time for the Commission to consider its broader regulation of broker-dealers and investment advisers. 68 Another commenter stated that the rule should be extended for no more than six months. 69 We do not believe that six months is long enough to engage in a review of the regulatory obligations of broker-dealers and investment advisers, and we do not believe that it is appropriate at this time to extend the temporary rule for an additional five years. Should our consideration of the fiduciary obligations and other regulatory requirements applicable to broker-dealers and investment advisers extend beyond the sunset date of the temporary rule, a longer period may be appropriate. On balance, however, we continue to believe that the two-year extension of rule 206(3)-3T appropriately addresses the needs of firms and clients relying on the rule while preserving the Commission's ability to address principal trading as part of its broader consideration of the standards applicable to investment advisers and broker-dealers. We will continue to assess the rule's operation and impact along with intervening developments during the period of the extension.

The Commission has prepared the following Final Regulatory Flexibility Analysis (“FRFA”) regarding the amendment to rule 206(3)-3T in accordance with 5 U.S.C. 604. We prepared and included an Initial Regulatory Flexibility Analysis (“IRFA”) in the Proposing Release. 70

We are adopting an amendment to extend rule 206(3)-3T's sunset date for two years because we believe that it would be premature to require firms relying on the rule to restructure their operations and client relationships before we complete our broader consideration of the regulatory requirements applicable to broker-dealers and investment advisers. The objective of the amendment to rule 206(3)-3T, as discussed above, is to permit firms currently relying on rule 206(3)-3T to limit the need to modify their operations and relationships on multiple occasions before we complete our broader consideration of the regulatory requirements applicable to broker-dealers and investment advisers. Absent further action by the Commission, the rule will sunset on December 31, 2012.

We are amending rule 206(3)-3T pursuant to sections 206A and 211(a) of the Advisers Act [15 U.S.C. 80b-6a and 15 U.S.C. 80b-11(a)].

We did not receive any comment letters related to our IRFA.

Rule 206(3)-3T is an alternative method of complying with Advisers Act section 206(3) and is available to all investment advisers that: (i) Are registered as broker-dealers under the Exchange Act; and (ii) effect trades with clients directly or indirectly through a broker-dealer controlling, controlled by or under common control with the investment adviser, including small entities. Under Advisers Act rule 0-7, for purposes of the Regulatory Flexibility Act an investment adviser generally is a small entity if it: (i) Has assets under management of less than $25 million; (ii) did not have total assets of $5 million or more on the last day of its most recent fiscal year; and (iii) does not control, is not controlled by, and is not under common control with another investment adviser that has assets under management of $25 million or more, or any person (other than a natural person) that had total assets of $5 million or more on the last day of its most recent fiscal year. 71

As noted in the Proposing Release, we estimated that as of August 1, 2012, 547 SEC-registered investment advisers were small entities. 72 As discussed in the 2007 Principal Trade Rule Release, we opted not to make the relief provided by rule 206(3)-3T available to all investment advisers, and instead have restricted it to investment advisers that also are registered as broker-dealers under the Exchange Act. 73 We therefore estimated for purposes of the IRFA that 7 of these small entities (those that are both investment advisers and registered broker-dealers) could rely on rule 206(3)-3T. 74 We did not receive any comments on these estimates.

The provisions of rule 206(3)-3T impose certain reporting or recordkeeping requirements and our amendment will extend the imposition of these requirements for an additional two years. The two-year extension will not alter these requirements.

Rule 206(3)-3T is designed to provide an alternative means of compliance with the requirements of section 206(3) of the Advisers Act. Investment advisers taking advantage of the rule with respect to non-discretionary advisory accounts are required to make certain disclosures to clients on a prospective, transaction-by-transaction and annual basis.

Specifically, rule 206(3)-3T permits an adviser, with respect to a non-discretionary advisory account, to comply with section 206(3) of the Advisers Act by, among other things: (i) Making certain written disclosures; (ii) obtaining written, revocable consent from the client prospectively authorizing the adviser to enter into principal trades; (iii) making oral or written disclosure and obtaining the client's consent orally or in writing prior to the execution of each principal transaction; (iv) sending to the client a confirmation statement for each principal trade that discloses the capacity in which the adviser has acted and indicating that the client consented to the transaction; and (v) delivering to the client an annual report itemizing the principal transactions. Advisers are already required to communicate the content of many of the disclosures pursuant to their fiduciary obligations to clients. Other disclosures are already required by rules applicable to broker-dealers.

Our amendment will only extend the rule's sunset date for two years in its current form. Advisers currently relying on the rule already should be making the disclosures described above.

The Regulatory Flexibility Act directs us to consider significant alternatives that would accomplish our stated objective, while minimizing any significant adverse impact on small entities. 75 Alternatives in this category would include: (i) Establishing different compliance or reporting standards or timetables that take into account the resources available to small entities; (ii) clarifying, consolidating, or simplifying compliance requirements under the rule for small entities; (iii) using performance rather than design standards; and (iv) exempting small entities from coverage of the rule, or any part of the rule.

We believe that special compliance or reporting requirements or timetables for small entities, or an exemption from coverage for small entities, may create the risk that the investors who are advised by and effect securities transactions through such small entities would not receive adequate disclosure. Moreover, different disclosure requirements could create investor confusion if it creates the impression that small investment advisers have different conflicts of interest with their advisory clients in connection with principal trading than larger investment advisers. We believe, therefore, that it is important for the disclosure protections required by the rule to be provided to advisory clients by all advisers, not just those that are not considered small entities. Further consolidation or simplification of the proposals for investment advisers that are small entities would be inconsistent with our goal of fostering investor protection.

We have endeavored through rule 206(3)-3T to minimize the regulatory burden on all investment advisers eligible to rely on the rule, including small entities, while meeting our regulatory objectives. It was our goal to ensure that eligible small entities may benefit from our approach to the rule to the same degree as other eligible advisers. The condition that advisers seeking to rely on the rule must also be registered with us as broker-dealers and that each account with respect to which an adviser seeks to rely on the rule must be a brokerage account subject to the Exchange Act, and the rules thereunder, and the rules of the self-regulatory organization(s) of which the broker dealer is a member, reflect what we believe is an important element of our balancing between easing regulatory burdens (by affording advisers an alternative means of compliance with section 206(3) of the Act) and meeting our investor protection objectives. 76 Finally, we do not consider using performance rather than design standards to be consistent with our statutory mandate of investor protection in the present context.

The Commission is amending rule 206(3)-3T pursuant to sections 206A and 211(a) of the Advisers Act [15 U.S.C. 80b-6a and 80b-11(a)].

For the reasons set out in the preamble, Title 17, Chapter II of the Code of Federal Regulations is amended as follows.

I. Direct Final Rule Procedure

Since removal of the Job Training Partnership Act implementing regulations is not controversial, and the authorizing legislation for these regulations has been repealed, these regulations govern a program that is no longer in operation. The Department therefore has determined that good cause exists to remove these regulations using a Direct Final Rule. No significant adverse comments are anticipated. All interested parties should comment at this time because we will not initiate an additional comment period.

If significant adverse comments are received, we will publish a timely notice in the Federal Register withdrawing this Direct Final Rule. For purposes of withdrawing this Direct Final Rule, a significant adverse comment is one that explains: (1) why the Direct Final Rule is inappropriate, including challenges to the rule's underlying premise or approach; or (2) why the Direct Final Rule will be ineffective or unacceptable without a change. In determining whether a significant adverse comment necessitates withdrawal of this Direct Final Rule, we will consider whether the comment raises an issue serious enough to warrant a substantive response through the notice and comment process.

Through this Direct Final Rule, the Department is removing and reserving the JTPA regulations at 20 CFR parts 626, 627, 628, 631, 632, 633, 634, 636, 637, and 638, which were designed to improve the employment status of disadvantaged young adults, dislocated workers, and individuals facing barriers to employment. These regulations have been superseded by the regulations promulgated under the Workforce Investment Act of 1998 (WIA), 29 U.S.C. 2801 et seq.

The statutory purpose of the JTPA was to establish programs that prepared disadvantaged youth and adults who faced serious barriers to employment for participation in the labor force by providing job training and other services that would result in increased employment and earnings, increased educational and occupational skills, and decreased welfare dependency. See 20 CFR part 626. To carry out this purpose, the Department published regulations that implemented adult and youth training programs, summer youth employment and training programs, provided employment and training assistance for dislocated workers, and authorized programs for other individuals facing barriers to employment. See 20 CFR parts 628, 631. The JTPA regulations also established corrective action and sanctions for instances of noncompliance, provided procedures for hearings, and established standards and expectations for the programs authorized under the Act. See 20 CFR part 627.

On August 7, 1998, Congress passed WIA. Under WIA, which superseded the JTPA, Congress required the Secretary of Labor to develop and publish interim final regulations (IFR) to implement this transition no later than 180 days after WIA's enactment date. See 20 U.S.C. 9276(c)(1). The Department published the WIA IFR on April 15, 1999. See 64 FR 18662. In that IFR, the Department explicitly provided for the phased transition of the JTPA programs to WIA, to be fully completed by July 1, 2000. See 64 FR 18662, 18663 (Apr. 15, 1999). The final rule implementing WIA was published on August 11, 2000. See 65 FR 49293 (Aug. 11, 2000).

Initially, although the JTPA authorizing legislation was repealed, the Department retained the JTPA regulations in the Code of Federal Regulations for grant closeout and auditing purposes. However, now that the JTPA programs have been transitioned to WIA for over a decade, the Department finds no reason to retain the JTPA regulations. Furthermore, the Department has previously removed several other JTPA regulatory provisions. Parts 629 and 630 were removed at 57 FR 62004 (Dec. 29, 1992). Part 635 was re-designated as 20 CFR part 1005 at 54 FR 39352 (Sept. 26, 1989), and the Department later removed part 1005 at 59 FR 26601 (May 23, 1994). Finally, the Department notes that it re-designated part 684 as part 638 at 55 FR 12992 (Apr. 6, 1990). Those JTPA regulatory provisions that remain are subject to this removal notice.

Accordingly, under the authority of the Workforce Investment Act of 1998 (WIA), 29 U.S.C. 9276(a), and for the reasons discussed in the preamble, the Department amends 20 CFR Chapter V by removing Parts 626, 627, 628, 631, 632, 633, 634, 636, 637, and 638 as follows:

FDA is amending the animal drug regulations to reflect original and supplemental approval actions during November 2012, as listed in table 1 of this document. In addition, FDA is informing the public of the availability, where applicable, of documentation of environmental review required under the National Environmental Policy Act (NEPA) and, for actions requiring review of safety or effectiveness data, summaries of the basis of approval (FOI Summaries) under the Freedom of Information Act (FOIA). These public documents may be seen in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, between 9 a.m. and 4 p.m., Monday through Friday. Persons with access to the Internet may obtain these documents at the Center for Veterinary Medicine FOIA Electronic Reading Room: http://www.fda.gov/AboutFDA/CentersOffices/OfficeofFoods/CVM/CVMFOIAElectronicReadingRoom/default.htm.

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

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR parts 520, 522, 529, and 558 are amended as follows:

On July 6, 2012, President Obama exercised his authority under section 517 of the Foreign Assistance Act of 1961 (FAA) to designate the Islamic Republic of Afghanistan as a major non-NATO ally (MNNA) for purposes of the FAA and the Arms Export Control Act. This final rule amends ITAR § 120.32, which lists major non-NATO allies, to account for this designation. Section 126.1 is amended to except the exemptions at ITAR §§ 126.4 and 126.6 from the prohibitions therein and the text is further amended to clarify the requirements therein. Additionally, § 126.1(g) is amended to clarify references to United Nations Security Council resolutions.

The Department of State is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules implementing this function are exempt from sections 553 (rulemaking) and 554 (adjudications) of the Administrative Procedure Act. Since the Department is of the opinion that this rule is exempt from 5 U.S.C. 553, it is the view of the Department that the provisions of section 553(d) do not apply to this rulemaking. Therefore, this rule is effective upon publication. The Department also finds that, given the national security issues surrounding U.S. policy towards Afghanistan, notice and public procedure on this rule would be impracticable, unnecessary, or contrary to the public interest; for the same reason, the rule will be effective immediately.

Since the Department is of the opinion that this rule is exempt from the rulemaking provisions of 5 U.S.C. 553, it does not require analysis under the Regulatory Flexibility Act.

This rulemaking does not involve a mandate that will result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This rulemaking has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996.

This rulemaking will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this rulemaking does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this rulemaking.

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

The Department of State has reviewed this rulemaking in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

The Department of State has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not pre-empt tribal law. Accordingly, the requirement of Executive Order 13175 does not apply to this rulemaking.

This rule does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

Accordingly, for the reasons set forth above, Title 22, Chapter I, Subchapter M, parts 120 and 126 are amended as follows:

Under 38 U.S.C. 1722A(a), VA must require veterans to pay a $2 copayment for each 30-day supply of medication furnished on an outpatient basis for the treatment of a non-service-connected disability or condition unless a veteran has a service-connected disability rated 50 percent or more, is a former prisoner of war, or has an annual income at or below the maximum annual rate of VA pension that would be payable if the veteran were eligible for pension. Under 38 U.S.C. 1722A(b), VA “may,” by regulation, increase that copayment amount and establish a maximum annual copayment amount (a “cap”). We have consistently interpreted section 1722A(b) to mean that VA has discretion to determine the appropriate copayment amount and annual cap amount for medication furnished on an outpatient basis for covered treatment, provided that any decision by VA to increase the copayment amount or annual cap amount is the subject of a rulemaking proceeding. We have implemented this statute in 38 CFR 17.110.

Under 38 CFR 17.110(b)(1), veterans are obligated to pay VA a copayment for each 30-day or less supply of medication provided by VA on an outpatient basis (other than medication administered during treatment). Under the current regulation, for the period from July 1, 2010, through December 31, 2012, the copayment amount for veterans in priority categories 2 through 6 of VA's health care system is $8. 38 CFR 17.110(b)(1)(ii). Thereafter, the copayment amount for all affected veterans is to be established using a formula based on the prescription drug component of the Medical Consumer Price Index (CPI-P), set forth in 38 CFR 17.110(b)(1)(iv). For veterans in priority categories 7 and 8, the copayment amount from July 1, 2010, through December 31, 2011, was $9. 38 CFR 17.110(b)(1)(iii). After December 31, 2011, copayments for veterans in priority categories 7 and 8 were subject to the regulatory formula; however, that formula did not trigger an increase in the copayment amount, so it remains $9.

Current § 17.110(b)(2) also includes a “cap” on the total amount of copayments in a calendar year for a veteran enrolled in one of VA's health care enrollment system priority categories 2 through 6. Through December 31, 2012, the annual cap is set at $960. Thereafter, the cap is to increase “by $120 for each $1 increase in the copayment amount” applicable to veterans enrolled in one of VA's health care enrollment system priority categories 2 through 6.

On December 20, 2011, we published a final rulemaking that “froze” copayments for veterans in priority categories 2 through 6 at $8, through December 31, 2012. 76 FR 78824, Dec. 20, 2011. In that rulemaking, we stated that this freeze was appropriate because this group would be impacted more by the increase due to their likely greater need for medical care as a result of their service-connected disabilities or conditions. This continues to be true, and therefore we are continuing to freeze copayments for these veterans for the next 12 months.

We also believe that a freeze of the copayment rate is now appropriate for veterans enrolled in priority categories 7 and 8. Prior rulemakings justified freezing copayment rates on the basis that higher copayments reduced the utilization of VA pharmacy benefits. The ability to ensure that medications are taken as prescribed is essential to effective health care management. VA can monitor whether its patients are refilling prescriptions at regular intervals while also checking for medications that may conflict with each other when these prescriptions are filled by VA. When non-VA providers are also issuing prescriptions, there is a greater risk of adverse interactions and harm to the patient because it is more difficult for each provider to know if the patient is taking any other medications.

At the end of calendar year 2013, unless additional rulemaking is initiated, VA will once again utilize the CPI-P methodology in § 17.110(b)(1)(iv) to determine whether to increase copayments and calculate any mandated increase in the copayment amount for veterans in priority categories 2 through 8. At that time, the CPI-P as of September 30, 2013, will be divided by the index as of September 30, 2001, which was 304.8. The ratio will then be multiplied by the original copayment amount of $7. The copayment amount of the new calendar year will be rounded down to the whole dollar amount. As mandated by current § 17.110(b)(2), the annual cap will be calculated by increasing the cap by $120 for each $1 increase in the copayment amount. Any change in the copayment amount and cap, along with the associated calculations explaining the basis for the increase, will be published in a Federal Register notice. Thus, the intended effect of this rule is to temporarily prevent increases in copayment amounts and the copayment cap for veterans in priority categories 2 through 8, following which copayments and the copayment cap will increase as prescribed in current § 17.110(b).

In accordance with 5 U.S.C. 553(b)(B) and (d)(3), the Secretary of Veterans Affairs finds that there is good cause to dispense with the opportunity for advance notice and opportunity for public comment and good cause to publish this rule with an immediate effective date. As stated above, this rule freezes at current rates the prescription drug copayment that VA charges certain veterans. The Secretary finds that it is impracticable and contrary to the public interest to delay this rule for the purpose of soliciting advance public comment or to have a delayed effective date. Increasing the copayment amount on January 1, 2013, might cause a significant financial hardship for some veterans.

For the above reasons, the Secretary issues this rule as an interim final rule. VA will consider and address comments that are received within 60 days of the date this interim final rule is published in the Federal Register .

Title 38 of the Code of Federal Regulations, as revised by this interim final rulemaking, represents VA's implementation of its legal authority on this subject. Other than future amendments to this regulation or governing statutes, no contrary guidance or procedures are authorized. All existing or subsequent VA guidance must be read to conform with this rulemaking if possible or, if not possible, such guidance is superseded by this rulemaking.

This interim final rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significant regulatory action,” which requires review by the Office of Management and Budget (OMB), as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.”

The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined to be a significant regulatory action under Executive Order 12866.

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in an expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any given year. This rule will have no such effect on State, local, and tribal governments, or on the private sector.

The Secretary hereby certifies that this interim final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This interim final rule will temporarily freeze the copayments that certain veterans are required to pay for prescription drugs furnished by VA. The interim final rule affects individuals and has no impact on any small entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance program number and title for this rule are as follows: 64.005, Grants to States for Construction of State Home Facilities; 64.007, Blind Rehabilitation Centers; 64.008, Veterans Domiciliary Care; 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans Dental Care; 64.012, Veterans Prescription Service; 64.013, Veterans Prosthetic Appliances; 64.014, Veterans State Domiciliary Care; 64.015, Veterans State Nursing Home Care; 64.016, Veterans State Hospital Care; 64.018, Sharing Specialized Medical Resources; 64.019, Veterans Rehabilitation Alcohol and Drug Dependence; 64.022, Veterans Home Based Primary Care; and 64.024, VA Homeless Providers Grant and Per Diem Program.

The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. John R. Gingrich, Chief of Staff, Department of Veterans Affairs, approved this document on December 7, 2012, for publication.

For the reasons set forth in the preamble, VA amends 38 CFR part 17 as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA.

The SUPPLEMENTARY INFORMATION section is arranged as follows:

EPA is determining that the New York-N. New Jersey-Long Island, NY-NJ-CT fine particle (PM 2.5 ) nonattainment area for the 2006 24-hour PM 2.5 NAAQS, referred to from this point forward as the NY-NJ-CT PM 2.5 nonattainment area, has attained the 2006 24-hour PM 2.5 NAAQS. This determination is based upon quality-assured, quality-controlled and certified ambient air monitoring data that show the area has monitored attainment of the 2006 24-hour PM 2.5 NAAQS for the 2007-2009, 2008-2010, and 2009-2011 monitoring periods. Specific details regarding the determination and the rationale for EPA's action are explained in the proposed rulemaking published in the Federal Register (FR) on August 30, 2012 (77 FR 52626).

EPA's determination is being made in accordance with its longstanding interpretation under the Clean Data Policy, and with previously issued rules and determinations of attainment. A brief description of the Clean Data Policy with respect to the 2006 PM 2.5 standard is set forth below. In addition, the docket for this rulemaking includes documentation providing more detail regarding the application of EPA's Clean Data Policy to determinations of attainment for the 2006 PM 2.5 NAAQS.

In April 2007, EPA issued its PM 2.5 Implementation Rule for the 1997 PM 2.5 standard. 72 FR 20586; (April 25, 2007). In March, 2012, EPA published implementation guidance for the 2006 PM 2.5 standard. See Memorandum from Stephen D. Page, Director, Office of Air Quality Planning and Standards, “Implementation Guidance for the 2006 24-Hour Final Particle (PM 2.5 ) National Ambient Air Quality Standards (NAAQS)” (March 2, 2012). In that guidance, EPA stated its view “that the overall framework and policy approach of the 2007 PM 2.5 Implementation Rule continues to provide effective and appropriate guidance on the EPA's interpretation of the general statutory requirements that states should address in their SIPs. In general, the EPA believes that the interpretations of the statute in the framework of the 2007 PM 2.5 Implementation Rule are relevant to the statutory requirements for the 2006 24-hour PM 2.5 NAAQS * * *” Id., page 1. With respect to the statutory provisions applicable to 2006 PM 2.5 implementation, the guidance emphasized that “EPA outlined its interpretation of many of these provisions in the 2007 PM 2.5 Implementation Rule. In addition to regulatory provisions, the EPA provided substantial general guidance for attainment plans for PM 2.5 in the preamble to the final the [ sic ] 2007 PM 2.5 Implementation Rule.” Id., page 2. In keeping with the principles set forth in the guidance, and with respect to the effect of a determination of attainment for the 2006 PM 2.5 standard, EPA is applying the same interpretation here with respect to the implications of clean data determinations that it set forth in the preamble to the 1997 PM 2.5 standard and in the regulation that embodies this interpretation. 40 CFR 51.1004(c). 1 EPA has long applied this interpretation in regulations and individual rulemakings for the 1-hour ozone and 1997 8-hour ozone standards, the PM-10 standard, and the lead standard.

In 1995, based on the interpretation of Clean Air Act (CAA) sections 171 and 172, and section 182 in the General Preamble, EPA set forth what has become known as its “Clean Data Policy” for the 1-hour ozone NAAQS. See Memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, “Reasonable Further Progress, Attainment Demonstration, and Related Requirements for Ozone Nonattainment Areas Meeting the Ozone National Ambient Air Quality Standard” (May 10, 1995). In 2004, EPA indicated its intention to extend the Clean Data Policy to the PM 2.5 NAAQS. See Memorandum from Steve Page, Director, EPA Office of Air Quality Planning and Standards, “Clean Data Policy for the Fine Particle National Ambient Air Quality Standards” (December 14, 2004).

The Clean Data Policy represents EPA's interpretation that certain requirements of subpart 1 of part D of the Act are by their terms not applicable to areas that are currently attaining the NAAQS. 2 The specific requirements that are inapplicable to an area attaining the standard are the requirements to submit a SIP that provides for: attainment of the NAAQS; implementation of all reasonably available control measures; reasonable further progress (RFP); and implementation of contingency measures for failure to meet deadlines for RFP and attainment.

It is important to note that the obligation of a State with respect to an area which attains the 2006 PM 2.5 standard based on three years of data, to submit an attainment demonstration and related planning submissions is suspended only for so long as the area continues to attain the standard. If EPA subsequently determines, after notice-and-comment rulemaking, that the area has violated the NAAQS, the requirements for the State to submit a SIP to meet the previously suspended requirements would be reinstated. It is likewise important to note that the area remains designated nonattainment pending a further redesignation action.

EPA received one adverse comment on the proposal, from a pseudonymous commenter. A summary of the comment submitted and EPA's response is provided below.

Comment: The commenter alleges that the determination of attainment for the NY-NJ-CT PM 2.5 nonattainment area is inappropriate due to particulate matter released from burning and allegedly inadequate air quality monitoring. The commenter also questioned the interaction between the New Jersey Department of Environmental Protection and EPA.

Response: In this rulemaking, EPA is making the determination that the NY-NJ-CT PM 2.5 nonattainment area has attained the 2006 PM 2.5 NAAQS. EPA is finalizing its determination only after conducting notice and comment rulemaking, through a transparent process in which the information on which the determination is based has been made available in the docket and also placed in the Technical Support Document for this rulemaking. EPA's determination of attainment is based on quality-assured, quality-controlled, and certified ambient air monitoring data. These data establish that, for 2007-2009, 2008-2010, and 2009-2011 the NY-NJ-CT PM 2.5 nonattainment area meets the 2006 24-hour PM 2.5 NAAQS. Air monitoring data available for 2012 also indicate that the NY-NJ-CT PM 2.5 nonattainment area is continuing to meet the 2006 24-hour PM 2.5 NAAQS. Contrary to the commenter's contention, the air monitoring networks for Connecticut, New Jersey, and New York are adequate, and meet the requirements for monitoring as specified in 40 CFR Part 58. EPA meets annually with the states to determine the adequateness of the monitoring networks. Air monitoring network approval letters are included in the Technical Support Document and docket for the proposed rule. In conclusion, the determination of attainment is being made based on quality-assured air quality data from approved monitoring networks. The suspension of requirements for this area to submit attainment-related planning SIP submission requirements lasts only as long as the area continues to meet that standard. No other requirements are suspended and no control measures in the SIP are being relaxed. This action does not change the implementation of control measures, or air quality, in the area.

Table 1 shows the design values by county (i.e., the 3-year average of 98th percentile 24-hour PM 2.5 concentrations) for the 2006 24-hour PM 2.5 NAAQS for the NY-NJ-CT PM 2.5 nonattainment area monitors for the years 2007 through 2011 based on complete (except where otherwise noted), quality-assured and certified air quality monitoring data. As shown in Table 1, none of the design values for the periods of 2007-2009, 2008-2010, and 2009-2011 in the NY-NJ-CT PM 2.5 nonattainment area exceeds the 2006 24-hour PM 2.5 NAAQS of 35.0 micrograms per cubic meter (μg/m 3 ).

Table of Contents I. Background A. Regional Haze B. Lawsuits C. Our Proposal D. Public Participation II. Final Action III. Basis for Our Final Action IV. Issues Raised by Commenters and EPA's Response A. NO X BART for Tri-State Craig Unit 1 and Unit 2 B. NO X BART Determination for Martin Drake Units 5, 6, and 7 C. BART Determination for Colorado Energy Nations (CENC) Unit 4 and Unit 5 D. NO X BART Determination for Cemex Lyons Kiln E. NO X BART Determination for Comanche Unit 1 and Unit 2 F. NO X Reasonable Progress Determination for Craig Unit 3 G. NO X Reasonable Progress Determination for Nucla H. Reasonable Progress for Rio Grande Cement Company (GCC) I. Legal Issues 1. Public Service Company of Colorado (PSCO) BART Alternative 2. Timing of Implementation 3. Compliance With Section 110(l) J. Comments Generally in Favor of Our Proposal V. Statutory and Executive Order Reviews Definitions

For the purpose of this document, we are giving meaning to certain words or initials as follows:

The CAA requires each state to develop plans, referred to as SIPs, to meet various air quality requirements. A state must submit its SIPs and SIP revisions to us for approval. Once approved, a SIP is enforceable by EPA and citizens under the CAA, also known as being federally enforceable. This action addresses the requirement that states have SIPs that address regional haze.

In 1990, Congress added section 169B to the CAA to address regional haze issues, and we promulgated regulations addressing regional haze in 1999 (64 FR 35714, July 1, 1999, codified at 40 CFR part 51, subpart P). The requirements for regional haze, found at 40 CFR 51.308 and 51.309, are included in our visibility protection regulations at 40 CFR 51.300-309. The requirement to submit a regional haze SIP applies to all 50 states, the District of Columbia and the Virgin Islands. States were required to submit a SIP addressing regional haze visibility impairment no later than December 17, 2007 (40 CFR 51.308(b)).

Few states submitted a regional haze SIP prior to the December 17, 2007, deadline, and on January 15, 2009, EPA found that 37 states, including Colorado, the District of Columbia, and the Virgin Islands, had failed to submit SIPs addressing the regional haze requirements (74 FR 2392). Once EPA has found that a state has failed to make a required submission, EPA is required to promulgate a Federal Implementation Plan (FIP) within 2 years unless the state submits a SIP and the Agency approves it within the 2-year period. CAA section 110(c)(1).

Colorado submitted a SIP addressing regional haze on May 25, 2011.

In a lawsuit in the U.S. District Court for the District of Colorado, environmental groups sued us for our failure to take timely action with respect to the regional haze requirements of the CAA and our regulations. In particular, the lawsuits alleged that we had failed to promulgate FIPs for these requirements within the 2-year period allowed by CAA section 110(c) or, in the alternative, fully approve SIPs addressing these requirements.

As a result of these lawsuits, we entered into a consent decree. The consent decree requires that we sign a notice of final rulemaking addressing the regional haze requirements for Colorado by September 10, 2012. We are meeting that requirement with the signing of this notice of final rulemaking.

We signed our notice of proposed rulemaking on March 15, 2012, and it was published in the Federal Register on March 26, 2012 (77 FR 18052). In that notice, we provided a detailed description of the various regional haze requirements. We are not repeating that description here; instead, the reader should refer to our notice of proposed rulemaking for further detail. 1 In our proposal, we proposed to approve Colorado's May 25, 2011, regional haze SIP.

We requested comments on all aspects of our proposed action and provided a 60-day comment period, with the comment period closing on May 25, 2012. We received comments on our proposed rule that generally supported our proposed action and comments that were critical of certain aspects of our proposed action. In this action, we are responding to the comments we have received, taking final rulemaking action, and explaining the bases for our action.

With this action, EPA is approving a SIP revision submitted by the State of Colorado on May 25, 2011, that addresses regional haze. We are approving the State's regional haze SIP, including revisions submitted as part of the regional haze SIP to:

• Regulation No. 3, Part F, Section VI and Section VII.

• Regulation No. 3, Part D, Section XIV.F.

• Regulation No. 7, Section XVII.E.3.a.

We have fully considered all significant comments on our proposal and have concluded that no changes from our proposal are warranted. Our action is based on an evaluation of Colorado's regional haze SIP submittal against the regional haze requirements at 40 CFR 51.300-51.309 and CAA sections 169A and 169B. All general SIP requirements contained in CAA section 110, other provisions of the CAA, and our regulations applicable to this action were also evaluated. The purpose of this action is to ensure compliance with these requirements. Our authority for action on Colorado's SIP submittal is based on CAA section 110(k).

We are approving the State's regional haze SIP provisions because they meet the relevant regional haze requirements. Most of the adverse comments we received concerning our proposed approval of the regional haze SIP pertained to the State's best available retrofit technology (BART) and reasonable progress determinations. With respect to the BART determinations, we understand that there is room for disagreement about certain aspects of the State's analyses. Furthermore, we may have reached different conclusions had we been performing the determinations in the first instance. However, the comments have not convinced us that the State, conducting specific case-by-case analyses for the relevant units, acted unreasonably or that we should disapprove the State's BART determinations.

With respect to the State's reasonable progress determinations, the State included emission limits in the SIP that reflect reasonable levels of control for reasonable progress for this initial planning period. Here again, we understand that there is room for disagreement about the State's analyses and appropriate limits. And, again, we may have reached different conclusions had we been performing the determinations. However, the comments have not convinced us that the State, conducting specific case-by-case analyses for the relevant units, made unreasonable determinations for this initial planning period or that we should disapprove the State's SIP.

Comment: We received comments that the State and EPA did not follow the BART guidelines or otherwise meet the intent of the BART requirements because the State and we did not evaluate the most stringent control efficiencies associated with operating selective catalytic reduction (SCR). The commenters pointed out that State and EPA evaluations assumed that SCR is capable of achieving 0.07 lb/MMBtu on an annual average and 0.07-0.08 lb/MMBtu on a 30-day rolling average. Commenters stated that this level reflects 74-75% reduction from baseline emissions from these units, and SCR is well known to be capable of control efficiencies greater than 90% and limits of 0.05 lb/MMBtu or less on a 30-day rolling average. One commenter pointed out that in a November 2010 report, Tri-State's own consultants evaluated a 0.05 lb/MMBtu design emission rate for SCR. One commenter also pointed out that previous statements by EPA and the National Park Service (NPS) to the State about the Colorado regional haze plan reflect this. 2 3

One commenter went on to say that if an emission rate of 0.05 lb/MMBtu had been used to assess the cost of SCR, the State would have found the cost to be $5,879 per ton of NO X reduced for Unit 1 and $5,728 per ton of NO X reduced for Unit 2. Commenters provided numerous examples of electric generating units (EGUs) that are achieving or will be required to achieve a NO X emission rate of 0.05 lb/MMBtu or less on an annual and 30-day rolling average.

Response: We agree that SCR in some cases can achieve annual NO X emission rates as low as 0.05 lb/MMBtu. However, the annual emission rate assumed by Colorado, 0.07 lb/MMBtu, is within the range of actual emission rates demonstrated at similar facilities in EPA's Clean Air Markets Division (CAMD) emission database.

Comment: The proposed emission limit of 0.27 lb/MMBtu for selective non-catalytic reduction (SNCR) does not reflect what is achievable for that control technology. The State's technical support document (TSD) shows that Craig Unit 1 is already meeting an emission rate of 0.27 lb/MMBtu, even without SNCR. Furthermore, as noted by EPA in its October 26, 2010, letter, SNCR is capable of achieving emission reductions of 20-30% below baseline. This would mean that SNCR would actually be capable of achieving an emission rate of around 0.20 lb/MMBtu or lower at Units 1 and 2, not 0.27 lb/MMBtu.

Response: We disagree that the State's TSD shows that Craig 1 is already achieving a 30-day rolling average emission rate of 0.27 lb/MMBtu, even without SNCR. The commenter has confused actual average annual emission rates that Colorado used for cost calculations with 30-day rolling average emission rates. Colorado's TSD shows that the maximum actual 30-day rolling average emission rate during this period was 0.304 lb/MMBtu. Therefore, Craig 1 is currently operating above, not below, the BART emission limit. However, we understand that the commenter's larger point is that the emission limit for Craig Unit 1 does not reflect the level of control that can be achieved with SNCR.

As noted by the commenter, SNCR can typically achieve a 20-30% reduction after combustion controls. By contrast, Colorado assumed that at Craig SNCR could achieve a 15% reduction after combustion controls. This in turn was based on Tri-State's assertion that the Craig BART units can only meet this level of control since the effectiveness of SNCR is lower for wall-fired boilers similar to those at Craig. Under the circumstances, we do not find that the State's conclusion was unreasonable.

Comment: EPA provided no insight as to what it considers presumptive BART to be for Craig Units 1 and 2. Presumptive BART for the Craig units should be based on the primary type of coal burned there, which is sub-bituminous. EPA should establish the presumptive BART limit for Craig at 0.23 lb/MMBtu. On this basis, the limits proposed by EPA exceed presumptive BART.

Response: The presumptive limits for EGUs, which are reflective of combustion controls for all but cyclone boilers, are clearly stated in the BART guidelines. The presumptive limit for dry-bottom wall-fired EGUs firing sub-bituminous coal, such as the Craig BART units, is 0.23 lb/MMBtu (70 FR 39172, July 6, 2005).

Colorado has stated that the Craig BART units fire sub-bituminous coal that is “bituminous-like” with respect to NO X formation. 4 That is, they exhibit relatively higher NO X emissions. This is supported by actual emissions data, which show that the units fail to achieve the presumptive limit with the existing ultra low-NO X burners and overfire air, the same combustion controls that EPA assumed for sources when it established the presumptive limit. The State's analysis of CEMs data in EPA's CAMD emissions database shows an actual maximum 30-day rolling average emission rate of 0.304 lb/MMBtu at each unit (2006-2008). Thus, we conclude that the presumptive limit that applies to Craig—0.23 lb/MMBtu—does not provide a meaningful benchmark for evaluating the State selected limits at Craig. Furthermore, our BART guidelines are clear that the BART analysis may result in a limit that differs from the presumptive limit.

Comment: One of the options suggested by the BART Guidelines to evaluate cost effectiveness is cost/deciview. Applying the cost/deciview metric to SCR at Craig yields about $10 million/deciview for Mt. Zirkel and $2.6 million/deciview on a cumulative basis. Both values are reasonable when compared to the national average of $14-$18 million/deciview.

Response: The BART Guidelines require that cost effectiveness be calculated in terms of annualized dollars per ton of pollutant removed, or $/ton (70 FR 39167). The commenters are correct in that the BART Guidelines list the $/deciview ratio as an additional cost effectiveness metric that can be employed along with $/ton for use in a BART evaluation. However, the State was not required to use this metric. We do not generally recommend the use of this metric as it can be complicated to use and the results can be difficult to assess. We also note that the $/deciview metric has not been widely used as a comparative tool. It is sufficient to analyze the cost effectiveness of potential BART controls using $/ton, in conjunction with an assessment of the modeled visibility benefits of the BART control.

Comment: Because the control efficiency for SCR was underestimated, the visibility benefits from SCR are underestimated by the modeling.

Response: We disagree with this comment. As stated above, while we recognize that lower annual emission rates for SCR have been demonstrated at some facilities, the annual emission rate of 0.07 lb/MMBtu assumed by Colorado in estimating the costs and benefits of SCR is within the overall range for similar facilities in EPA's CAMD emission database. Given this, we find that it was not unreasonable for Colorado to use 0.07 lb/MMBtu to model the predicted visibility improvement from SCR.

Other Comments: A number of commenters objected to our proposed approval of the State's BART determination for Craig Unit 1 on other grounds and asserted that the State should have selected SCR as BART. These commenters articulated several bases for their comments. The comments fall into four main categories, as follows:

We received numerous comments that the State, relying on Tri-State's cost analysis, significantly overestimated capital costs for SCR at Craig Unit 1 and Unit 2, and that EPA did not conduct a detailed review of Tri-State's cost analysis. Commenters cited numerous sources to show that the expected capital costs for SCR at Unit 1 and Unit 2 should be lower than what Tri-State assumed in its cost estimates. Commenters noted limited or missing information, such as lack of vendor quotes or detailed cost estimates. According to a commenter, this type of information is necessary for the public or other agencies to be able to thoroughly review and comment on the proposed determinations. According to commenters, the absence of this underlying information renders EPA's proposed approval of the BART determinations for these sources arbitrary. Commenters said that, to the extent that the State or EPA relied on such information, failure to include it in the docket further illegally impaired and deprived the public of its notice and comment rights, by concealing important grounds for the proposed action and preventing the public from examining and offering meaningful comment thereon.

Commenters noted several items in Tri-State's and the State's cost analyses that are not allowed by or are inconsistent with EPA's Control Cost Manual (CCM). According to commenters, Tri-State and the State: (1) Disregarded EPA's cost method, often referred to as the “overnight cost method;”  5 (2) included Allowance for Funds During Construction (AFUDC); 6 (3) used escalation, which is inappropriate and generally not allowed; (4) included lost generation costs with no support or justification for the costs, the duration of outages needed, and why time beyond normal scheduled outages would be necessary; (5) provided no justification for the inclusion of owner's costs as 10% of the direct cost; (6) included a 50-hour workweek in their cost estimate without any justification; (6) included no consideration of the cost savings when controls like SCR are applied to multiple units at the same facility; and (7) used an unrealistic equipment life and interest rate.

Commenters provided revised cost analyses for SCR at Craig Units 1 and 2. One commenter calculated that a more accurate cost effectiveness value would be no higher than $3,460/ton and $3,370/ton at Unit 1 and Unit 2, respectively. Another commenter calculated that average costs would be $2,209/ton for Unit 1 and $1,962/ton for Unit 2. Commenters pointed out that these costs were below the threshold established by the State for choosing SCR.

Commenters point out that EPA only provides the impacts to the most impacted Class I area, Mt. Zirkel, and that the cumulative impact of a source's emissions on visibility, as well as the cumulative benefit of emission reductions, is a necessary consideration as part of the fifth step in the BART analysis. Commenters provided examples where other EPA regions (Region 6 and Region 9) have considered cumulative visibility benefits. The NPS performed modeling and submitted the results as part of its comments. NPS modeling shows that the cumulative visibility impact from Craig Units 1 and 2 is 17.61 deciviews, while SCR at both units would provide a cumulative visibility improvement of 8.99 deciviews. The modeling also shows that SCR at both units would achieve at least a 0.5 deciview improvement at each of five Class I areas.

Commenters identified numerous issues with the State's determination of BART and consideration of the five factors. First, commenters pointed out that the State relied on a predetermined set of thresholds applicable only to post-combustion NO X controls for determining what is BART, 7 and that the State attempted to justify this by a short discussion of its belief that “the costs of control should have a relationship to visibility improvement.” According to commenters, the State articulated no governing principle or rational explanation for how it considered the five factors within the context of this threshold.

Commenters asserted that EPA, in its October 26, 2010, comment letter to Colorado, anticipated some of the reasons the State's threshold is untenable. One commenter went on to say that in the unlikely scenario that the appropriate cost of SCR at Craig Units 1 and 2 is in fact above $5,000/ton, the State's criteria “preclude a reasonable weighing of the five factors,” as EPA had foretold. Commenters indicated that EPA relied on the State's vague and unsubstantiated criteria without resolving or even discussing its prior concerns.

Commenters noted that the Craig analysis presented data for each of the five BART factors, but pointed out that when it came to the crux of the BART determination, the actual weighing of the factors, EPA's proposed rulemaking failed to explain how EPA determined that costs were unjustified in light of anticipated visibility benefits and the other considerations. As such, commenters said that EPA had failed to require a reasoned basis for weighing the five factors in the Craig BART analysis and determination. One commenter went on to say that to comply with the Administrative Procedure Act, the Agency must provide a reasoned basis for its BART determination, including a reasonable explanation why certain benefits do not justify certain costs, why EPA's chosen methods for evaluating costs and benefits are appropriate, and what significance the Agency has accorded to each of the five BART factors. The commenter argued that EPA's failure to identify its method of decision making amounts to an arbitrary decision.

One commenter stated that it was concerned that, although the State found SCR to be reasonable as BART for Craig Unit 2, it found the control technology to be unreasonable for Unit 1, even though according to the five factors, it would meet the same reasonability threshold as for Unit 2. Notably, the State found the cost of SCR for Unit 2, $5,728 per ton of NO X reduced, to be reasonable as it was ultimately adopted as BART.

Commenters pointed out that the Craig BART alternative fails to provide for greater reasonable progress than would be achieved if an adequate source-specific BART limit were required of both subject-to-BART Craig units. Commenters went on to say that BART should have been SCR on both Craig units and thus, the BART alternative of SNCR on Unit 1 and SCR on Unit 2 is not better than BART. According to commenters, given that 40 CFR 51.308(e)(2)(C) requires states to make a BART determination for any source subject to an alternative to BART, the State's flawed BART analysis fails to support an alternative to BART pursuant to EPA regulations.

Response: While we agree with some aspects of the commenters' assertions in these four categories, we disagree with others and ultimately conclude that Colorado's plan achieves a reasonable result overall. We acknowledged in our October 26, 2010, comment letter to the State that the cost analysis was not conducted by Colorado in accordance with EPA's Control Cost Manual, and we agreed that the costs for SCR at Craig Units 1 and 2 appeared to be substantially overestimated, which the commenters also pointed out. In addition, as we suggested during the State's public comment period, the State should have more thoroughly considered the visibility impacts of controlling emissions from Craig 1 on the various impacted Class I areas and not just have focused on the most impacted Class I area.

EPA acknowledges that Colorado's approach appears to be a novel and comprehensive strategy for addressing regional haze requirements and other air quality goals. In 2010, the Colorado General Assembly adopted legislation authorizing the Air Quality Control Commission and the Public Utilities Commission to develop a comprehensive plan for coal-fired electric generating units in the state that would address not only regional haze but also potential new ozone standards and mercury standards, as well as other requirements that, in the State's view, could apply to coal-fired electric generation units in the foreseeable future. The State desired to address these issues in a coordinated way in order to achieve the most cost-effective strategy that accounted for not only current, but other imminent regulatory requirements. This approach appears to be unique and, as noted below, will yield significant emissions reductions not only of pollutants that affect visibility in Class I areas, but also significant reductions in pollutants that contribute to ozone formation, nitrogen deposition, and mercury emissions and deposition. The State spent considerable time and conducted sequential and extended hearings to develop a plan which seeks to balance a number of variables beyond those that would be involved in a simpler and narrower regional haze determination.

Colorado's BART requirements for the Craig units reflect a balance struck by Tri-State Generation & Transmission Association, Inc. and several environmental groups before the Colorado Air Quality Control Commission during an extensive and formal proceeding; at the conclusion of the proceeding, the Commission adopted the agreement reached by Tri-State and those environmental groups as part of Colorado's regional haze plan. As a result, the plan requires installation of SCR at one of the two Craig BART-eligible units even though the Commission previously had concluded that installation of SCR was not warranted at either unit. In addition, we note that Colorado has imposed SCR as BART on two other EGUs in western Colorado—Hayden Units 1 and 2—and at the Pawnee plant in eastern Colorado. Moreover, Colorado has exceeded the minimum requirements for BART and reasonable progress for sources included in the PSCO BART Alternative (as described in our notice of proposed rulemaking, 77 FR 18073-18075), and has imposed substantial and meaningful controls, that go beyond what EPA's regulations otherwise might have required, to address reasonable progress sources for the initial planning period.

Under the unique circumstances discussed above, EPA concludes that Colorado's plan achieves a reasonable result overall. Based on this, we are approving the entirety of the Colorado regional haze SIP, even though the State's BART analysis for Craig 1 only analyzed visibility impacts at the most impacted Class I area and appears to overestimate the costs of SCR controls. We expect Colorado to revisit the appropriateness of SCR controls on Craig Unit 1 in the next reasonable progress planning period.

Finally, we note that the State's plan will result in NO X emission reductions of 34,774 tons per year, SO 2 emission reductions of 35,776 tons per year, and PM reductions of 532 tons per year. As many of the NO X emission reductions will occur along Colorado's Front Range, the State's plan should help reduce ozone levels in Colorado's ozone non-attainment area and nitrogen deposition in Rocky Mountain National Park. In addition, portions of Colorado's plan includes retirement and fuel-switching of existing coal-fired units, resulting in significant reductions of emissions of mercury into the atmosphere at levels that exceed what a straightforward application of emission reduction technology to satisfy BART and reasonable progress would have conferred on sources throughout the state.

Comment: The NO X BART determination for Martin Drake underestimates the control efficiency of SCR. A conservative, but more appropriate control efficiency would be an annual average of 0.05 lb/MMBtu. This would result in additional reductions of 41, 69, and 105 tons of NO X per year at Units 5, 6, and 7, respectively. This would also result in larger modeled visibility benefits.

Response: We agree that at some facilities, SCR has achieved annual NO X emission rates as low as 0.05 lb/MMBtu; however, the annual emission rate of 0.07 lb/MMBtu assumed by Colorado in estimating the costs and benefits of SCR is within the range of actual emission rates demonstrated at similar facilities in EPA's CAMD emission database. Given this, we find that it was not unreasonable for Colorado to use 0.07 lb/MMBtu to model the predicted visibility improvement from SCR. Moreover, while we do agree that assuming a control efficiency of 0.05 lb/MMBtu would have resulted in greater modeled visibility benefits, we do not agree that the difference in visibility benefits would have led Colorado to a different conclusion given the magnitude of the benefits associated with SCR.

Comment: The costs of SCR were overestimated in the Martin Drake analysis in the following ways: (1) The SCR costs were estimated using the Integrated Emissions Control Cost (IECCOST) model, not the CCM as required by the BART Guidelines; (2) the calculated costs included items that are expressly disallowed or typically excluded when following the CCM methodology, including royalties, initial catalyst and chemicals, and escalation. These costs add millions of dollars to the total amount attributed to SCR; (3) the $/kW costs were extremely high. While SCR retrofits typically range from $83—$300/kW, including the most complex and space constrained projects, the costs for the Martin Drake units were $558/kW, $448/kW, and $325/kW, for Units 5, 6, and 7, respectively; and (4) the analysis did not consider the cost savings when controls like SCR are applied to multiple units at the same facility. This discount is on the order of 4-10%.

Response: We agree with several points in this comment. In fact, we raised many of the same issues related to cost analysis in our October 26, 2010, comment letter to the State. However, we note that Colorado eliminated SCR from consideration for the Martin Drake BART units primarily on the basis of the level of visibility improvement. The visibility improvement associated with SCR at Units 5, 6, and 7, is 0.12, 0.27, and 0.37 deciviews, respectively. In addition, as the State noted, the incremental visibility improvement from SCR versus ultra-low NO X burners and overfire air (the control technology upon which the State's NO X BART limits are based) is even lower—0.04, 0.07, and 0.11 deciview, respectively, at Units 5, 6, and 7. The State concluded that lower costs would not change its BART determination. Based on these visibility improvement values and the expectation that cost effectiveness values for SCR calculated in accordance with the CCM would still be relatively high compared to the selected control option, we find that the State's NO X BART determination for Martin Drake Units 5, 6, and 7 was reasonable.

Comment: A cost analysis consistent with the CCM would indicate that SCR is cost effective for the Martin Drake units. A revised costs analysis would show that the revised cost effectiveness for SCR is under the State's $5000/ton threshold.

Response: The commenter did not provide sufficient data or analysis to support this assertion regarding a revised cost analysis. Regardless, for the reasons stated above, we conclude that the State's BART determination was reasonable. Even if a control technology is arguably cost-effective on a dollar per ton basis, a State may conclude that the control technology is not warranted based on a consideration of all BART factors.

Comment: EPA failed to consider the cumulative visibility benefits on all of the impacted Class I areas. Additionally, the predicted improvement for SCR at the most affected Class I area, at least 0.12 deciview, 0.27 deciview, and 0.37 deciview, for Units 5, 6, and 7, respectively, are not insignificant.

Response: While we agree that Colorado should have considered impacts to the various impacted Class I areas, we have no reason to believe that the cumulative visibility benefits would warrant a change in our approval of the State's NO X BART determination for Martin Drake Units 5, 6, and 7. Regarding the predicted improvement at the most affected Class I area, while we agree that the levels are not insignificant, they are not significant enough for us to conclude that the State's BART determination was unreasonable, particularly when the incremental visibility improvement and expected costs of SCR are considered.

Comment: Cost-effective visibility benefits were rejected as a result of Colorado's criteria that holds post-combustion controls and SCR in particular to a higher standard of visibility benefits. As EPA itself previously pointed out in its October 26, 2010, letter: “* * * the criteria appear to discriminate against SCR as a potential control option. Under the criteria, if the cost of SCR is under $5,000/ton and the modeled visibility benefit is 0.20 delta-deciview or greater but less than 0.50 delta-deciview, the State would reject SCR. Using the State's criteria, the State would find SNCR reasonable with the same $/ton and delta-deciview values. We are not aware of a valid basis for applying different criteria to the two control options.”

This example proves EPA's point. By this logic, if the evaluated technology in this instance were SNCR instead of SCR, it would be BART for at least Units 6 and 7, and possibly Unit 5. We concur with EPA's previous critique: this distinction has no basis and is untenable.

Response: While we do not necessarily agree with the State's criteria for post-combustion controls, we find the State's NO X BART determination for Martin Drake Units 5, 6, and 7 to be reasonable within the context of the five factors for the reasons stated above.

Comment: In determining BART for Units 4 and 5, the State failed to identify and analyze alternative fueling scenarios that would lead to greater reductions in NO X , sulfur dioxide (SO 2 ), and particulate matter. The proposed rule notes, and the underlying record clearly explains, that Units 4 and 5 are capable of burning (and do in fact burn) fuels other than coal. In particular, the proposed rule states that Unit 4 can and does burn natural gas or fuel oil and that Unit 5 can and does burn fuel oil. Both boilers may fire ethanol or sludge from the Coors Brewery.

Despite this, the State did not assess whether alternative fueling scenarios, such as a full or partial shift from coal to natural gas or fuel oil at Units 4 and 5 would represent BART. This is a concern because according to the CAA Title V Operating Permit for the facility, both Units 4 and 5 could meet stronger SO 2 and NO X emission rates than have been proposed by the State as BART. The operating permit shows that the permitted emission rates for Units 4 and 5, when firing natural gas and/or fuel oil, are already lower than the proposed BART emission rates. 8 Given that permitted emission rates are higher than actual emissions, this means that the facility is most likely capable of achieving far greater emission reductions under an alternative fueling scenario. Indeed, for Unit 4, whether firing natural gas or fuel oil, both permitted SO 2 and NO X emission rates are lower than the proposed BART limits. For Unit 5, when firing fuel oil, the permitted SO 2 emission rate is lower than proposed BART. Furthermore, although the permitted NO X emission rate for Unit 5 when firing fuel oil is higher than the proposed BART, it is based on a 3-hour average (as opposed to a 30-day average) and even then, actual emissions are likely to be lower than the proposed BART

Here, alternative fueling scenarios, such as a full or partial shift away from coal to fuels that are already being burned in Units 4 and 5 (including natural gas and fuel oil) both seem to represent the “best system of continuous emission control technology” and seem entirely reasonable when considering the five factors required to be assessed by states when determining BART. The State failed to analyze alternative fueling in its SIP. Alternative fueling is an available technology that should have been analyzed by the State given that the visibility benefits to Class I areas could be tremendous. Although the State purported to identify “all available technologies” in its BART analysis, clearly it did not identify all available technologies.

The failure to analyze alternative fueling scenarios is especially confusing because the State did, apparently, identify in its TSD for the CENC facility a fuel switch to natural gas as an available technology and in analyzing “SO 2 Emissions Management” as potential BART, noted that an option to reduce emissions could involve a “dispatch [of] natural gas-fired capacity.” There is, however, no explanation in the TSD as to why “fuel switching,” or otherwise increased reliance on natural gas, would not constitute BART or would be contrary to the five factors required to be considered in establishing BART under the CAA.

The failure to analyze alternative fueling scenarios is further confusing because the EPA's BART guidelines indicate that alternative fueling scenarios should be analyzed by states when determining BART. The guidelines specifically state that “potentially applicable retrofit control alternatives” can include the “use of inherently lower-emitting processes/practices” or “combinations of inherently lower-emitting processes and add-on controls.” Appendix Y at Section IV.D.3. Above all, states should “identify potentially applicable retrofit technologies that represent the full range of demonstrated alternatives.” Id. The guidelines clearly indicate that inherently “lower-emitting processes,” such as alternative fueling, are squarely within the realm of what may be considered BART.

Given the State's failure to take into consideration an available technology, the EPA must disapprove the BART determinations for CENC Units 4 and 5 and in accordance with the CAA promulgate a FIP that establishes BART limits based on a full consideration of alternative fueling scenarios.

Response: Although the State did not present the information in the SIP and was not required to analyze such scenarios, the State in fact analyzed alternative fueling scenarios for Unit 4 and Unit 5. 9 The State examined fuel switching to a number of different fuels. The State determined that Units 4 and 5 are not capable of burning wood or other biomass fuels and the use of sludge as the primary fuel is not technically feasible due to handling and storage issues. The State determined residual oil, distillate oil, ethanol, and natural gas were technically feasible options.

The State determined residual oil would not result in pollutant reductions, and that distillate oil, ethanol, and biodiesel are high cost fuels for boilers of this size, with prices about two to three times the cost of natural gas, and six to seven times the cost of coal (at the time of analysis—December 2009) and highly volatile. Thus, the State eliminated these fuels from further consideration.

Furthermore, the State determined the cost effectiveness of fuel-switching to natural gas for SO 2 and NO X control for Units 4 and 5. The State determined the costs for fuel switching to natural gas for SO 2 would be $29,985/ton removed for Unit 4 and $30,945/ton removed for Unit 5. The State determined the costs for fuel switching to natural gas for NO X would be $64,102/ton removed for Unit 4 and $82,834/ton removed for Unit 5. Because of the high cost effectiveness values, the State did not perform any visibility modeling for fuel switching to natural gas and the State eliminated it from further consideration for BART. We have reviewed the State's cost calculations and find them reasonable.

Based on the above statement from our BART guidelines, and based on the State's analysis, we agree with the State's conclusion that fuel switching to natural gas is not BART at CENC Units 4 and 5.

Comment: Colorado did not appropriately analyze whether SCR was reasonable as BART for the kiln at the Cemex Lyons cement plant. In particular, the State rejected SCR as not an available technology. EPA itself did not agree with this finding. Despite this, EPA allowed the State to reject SCR due to perceived uncertainty over its cost effectiveness. However, because the State rejected SCR as an available technology, no analysis of the costs of SCR was actually undertaken and therefore, EPA's claims are baseless.

SCR has been an available emission control technology for NO X emissions for many years. Although its use on cement kilns has come about recently, several sources indicate that the technology is available and cost-effective, contrary to claims by the State. A report commissioned by Rocky Mountain Clean Air Action, which later merged with WildEarth Guardians, found that SCR “is an effective and proven technology to reduce nitrogen oxide emissions from cement kilns.”  10 The report concluded that: “The installation of SCR on the [Cemex] Lyons Cement Plant could be expected to achieve substantial reductions (85-95%) in emissions of NO X .” The report also found that the cost effectiveness of utilizing SCR ranges between $1,500 and $3,800 per ton of NO X reduced, which is “easily within regulatory cost thresholds for many NO X control programs.” Follow up correspondence from the author of the report, Dr. Armendariz to the State further confirmed that SCR was available and cost-effective. 11

EPA cannot come to conclusions on the cost effectiveness of SCR without analytical support, and there is no support for approving the State BART determination for the Cemex Lyons cement kiln. We request the EPA promulgate a FIP that objectively and thoroughly analyzes SCR as an available technology for purposes of establishing BART limits for the Cemex Lyons cement kiln.

Response: We disagree with this comment and stand by the rationale presented in our proposal (77 FR 18062). As we said there, we accept the State's decision, not to analyze SCR further for the purposes of regional haze. EPA has acknowledged, in the context of establishing the New Source Performance Standards (NSPS) for Portland Cement Plants, substantial uncertainty regarding the cost effectiveness associated with the use of SCR at such plants (75 FR 54995). In particular, while EPA noted that SCR had been used at three cement kilns in Europe, and had been agreed to by one domestic cement kiln as part of a settlement, EPA also noted the potential for dust buildup on the catalyst, “which [could] be influenced by site specific raw material characteristics present in the facility's proprietary quarry, such as trace contaminants that may produce a stickier particulate than is experienced at sites where the technology has been installed.” Id. at 54994, 54995. EPA went on to state in the NSPS rulemaking that “[t]his buildup could reduce the effectiveness of the SCR technology, and make cleaning of the catalyst difficult resulting in kiln downtime and significant costs.” Id. Because of the uncertainty, EPA was unable to estimate these costs. Id. For the reasons stated in our NSPS rulemaking and in the State's regional haze SIP, there is also substantial uncertainty regarding the costs and control effectiveness of SCR at Cemex. We are not convinced that cost and control effectiveness information from the European plants or from SCR applications at other types of sources is sufficiently reliable to guide a BART determination for Cemex. 12 Under the circumstances, we find that Colorado reasonably eliminated SCR as a potential BART control technology. As we stated in our proposal, we expect the State to reevaluate SCR technology in subsequent reasonable progress planning periods as more information regarding the use of SCR at cement kilns becomes available.

Comment: Comanche Units 1 and 2 are currently meeting lower NO X emission rates than the emission limits the State proposed for BART. With regard to the proposed BART limits, the State has proposed, and EPA has proposed to approve, a 30-day emission rate for Units 1 and 2 of 0.20 lb/MMBtu and a combined annual average emission rate of 0.15 lb/MMBtu for Units 1 and 2. According to the State, these limits will be met with no additional controls on Unit 1 or Unit 2.

The State's own BART analysis notes that currently Unit 1 is emitting at an average annual rate of 0.124 lb/MMBtu and Unit 2 is emitting at an average annual rate of 0.165 lb/MMBtu. This means that both on a 30-day rolling average basis and on an annual average basis, both units are capable of emitting, and indeed do emit, at rates below the proposed BART limits of 0.20 lb/MMBtu on a 30-day rolling average and 0.15 lb/MMBtu on an annual basis. In essence, Colorado's BART proposal actually allows Comanche Units 1 and 2 to emit more pollution than what they currently emit.

Under the State's proposed BART, emissions will be allowed to increase on an annual basis. Using annual heat input totals from the baseline year of 2009 obtained from the EPA's Air Markets Program Data Web site (24,247,113.27 MMBtu for unit 1 and 27,423,612.26 MMBtu for unit 2) and using the proposed annual combined average BART limits, it appears that under the annual BART limits, NO X emissions will be allowed to increase by at least 14 tons per year (tpy).

Concerning the 30-day rolling average limits, there will definitely be allowed emission increases. During the baseline year of 2009, both Comanche Unit 1 and Unit 2 emitted far lower than the proposed BART limit of 0.20 lb/MMBtu. During the baseline year of 2009, 30-day rolling average NO X emissions were consistently far below 0.20 lb/MMBtu for the year. Even the peak 30-day rolling averages of 0.142 and 0.179 lb/MMBtu for Units 1 and 2, respectively, are below the proposed limit. Based on this, the proposed BART would actually allow Unit 1 to emit at least 40% more NO X than the baseline 30-day rolling average peak and Unit 2 to emit 12% more NO X . However, this is just in the context of the baseline peak 30-day rolling average. In all reality, actual 30-day rolling average emission will remain even further below the proposed BART limit of 0.20 lb/MMBtu.

Clearly, Comanche Units 1 and 2 could easily meet lower emission limits as BART. We do not suggest that the State was required to set the emission limits exactly at the levels emitted, but clearly when the data demonstrates that Unit 1 could meet a 30-day rolling average NO X emission limit of 0.15 lb/MMBtu and Unit 2 could meet a limit of 0.18 lb/MMBtu without any trouble, the BART limits should reflect what is achievable.

Although the State and the EPA may claim the proposed limits are necessary to provide a margin or cushion of compliance, nothing in the CAA or the EPA's regulations suggests that it is appropriate to build in such margins or cushions into BART limits, especially given that BART must represent that “best system of continuous emission reduction.” If Comanche Units 1 and 2 can do better, than clearly, the proposed BART limits are not the best. Nothing in the CAA or the EPA's regulations implementing the regional haze program suggest or remotely imply that a state could allow emission increases as BART.

Accordingly, EPA must disapprove of Colorado's NO X BART determinations for Comanche Unit 1 and Unit 2 and adopt a FIP that establishes BART limits that are consistent with the CAA and that represent actual emission reductions.

Response: In our October 26, 2010, comment letter to Colorado, we asked Colorado to evaluate tightening Comanche's NO X limits as potential BART. As discussed in Colorado's BART analysis for the Comanche units, Colorado did in fact evaluate emission limit tightening in response to our concerns. Colorado subsequently concluded that a 0.20 lb/MMBtu 30-day rolling average emission limit was necessary to account for uncertainty regarding load fluctuations, cold-weather operating, start-up, and cycling for renewable energy. Colorado noted that greater future reliance on renewable energy will lead to increased cycling of the Comanche units and more frequent start-ups. This in turn may lead to increased emissions over shorter averaging periods compared to past actual emissions. Colorado also noted the limited amount of actual emissions data for the two units since controls were installed for SO 2, and the same is true for NO X . Thus, while Colorado established an annual NO X BART limit of 0.15 lb/MMBtu that is lower than the average actual emissions of 0.16 lb/MMBtu for Units 1 and 2 between January and October 2010, Colorado allowed greater leeway in the 30-day rolling average limit than would result from the strict application of a 15% buffer to 0.16 lb/MMBtu (0.20 lb/MMBtu versus 0.184 lb/MMBtu). Given some of the uncertainties regarding future operations and emissions, we have determined that the State acted reasonably in setting the emission limits for Comanche Units 1 and 2. We also note that commenter's own analysis suggests that the difference in annual emissions between maximum emissions under the BART limit using 2009 heat inputs and 2009 actuals would only be 14 tons per year. This is not significant when compared to Comanche's annual NO X emissions of approximately 3,860 tons; it does not warrant disapproval and a subsequent FIP.

In addition, Comanche's actual emissions following the installation of low NO X burners and over-fire air occurred under permit limits that are identical to those the State selected as BART. The commenter has provided no evidence that the State's adoption of the same limits as BART limits will cause an increase in actual emissions.

Comment: The State failed to assess appropriately the cost of SCR. In particular, the State assumed that SCR would achieve an emission rate of 0.07 lb/MMBtu. However, as EPA itself noted in its October 26, 2010, comment letter to the State, SCR does achieve emission rates as low as 0.04 lb/MMBtu on an annual basis, and a 0.05 lb/MMBtu emission rate is a more appropriate benchmark from which to assess the cost effectiveness of SCR.

In this case, the State did not assess the cost effectiveness of SCR based on a rate of 0.05 lb/MMBtu. Thus, it did not reasonably take into account the cost of compliance with SCR in accordance with the CAA. Without an adequate case-specific cost analysis, there is simply no support for concluding SCR, particularly for Unit 2, is unreasonable.

Response: As stated above, we agree that SCR has in some cases achieved annual NO X emission rates as low as 0.05 lb/MMBtu, the emission rate that commenters suggest would have been a more appropriate benchmark in assessing the costs of SCR at Commanche; however, the 0.07 lb/MMBtu annual emission rate assumed by Colorado in estimating the costs and visibility benefits associated with SCR is within the range of actual emission rates demonstrated at similar facilities in EPA's CAMD emission database. Moreover, as with Martin Drake, we do not believe that if Colorado had used a more stringent emission rate that the impact on the BART analysis would have led Colorado to a different conclusion given the magnitude of the benefits associated with SCR. Given this, we conclude that the State's use of 0.07 lb/MMBtu to evaluate the cost effectiveness of SCR at Comanche was not unreasonable.

Comment: The State appears to have overestimated the capital cost of SCR. Both the EPA and the NPS previously commented to the State that the State should have used the EPA's CCM and noted that the CUECost model relied upon by the State is not appropriate. Nowhere in the record does the State explain why CUECost was reasonable, particularly in light of the concerns expressed by the EPA and the NPS. It appears that the reliance on CUECost led to artificially inflated capital costs, which in turn overestimated the true cost of SCR.

Response: We agree that there were flaws in Colorado's approach to estimating the costs of SCR for the Comanche BART units. However, we find that the State's NO X BART determination to be reasonable within the context of the five factors, particularly based on the relatively modest visibility improvement associated with SCR—0.14 deciviews at Unit 1, and 0.17 deciviews at Unit 2—and the expectation that cost effectiveness values for SCR calculated in accordance with the CCM would still be relatively high compared to the selected control option.

Comment: Although the State and EPA may claim that, even if the costs were accurately assessed, the visibility benefits of SCR would not be significant, even for Unit 2, there is no support for this assertion. In particular, it appears as if the State's assessment of visibility improvements is based on an assumption that the proposed BART limits ( i.e., the “do nothing” BART) would actually improve visibility. Given that the proposed BART limits would allow increased emissions, it would not actually improve visibility. When compared to the real impacts of the State's proposed BART for Comanche unit 1, SCR would appear to provide significant visibility improvements because, as opposed to the proposed BART, SCR would actually achieve improvements. For Unit 2, this is especially significant because SCR was the only available technology analyzed for BART. Thus, by all indications, SCR is the only means of actually achieving visibility improvements at Comanche Unit 2.

Response: We disagree with this comment. As shown in Colorado's visibility impact analysis for the Comanche BART units, Colorado assessed the benefit of control options relative to both the subject-to-BART baseline and to the installation of new LNB in 2007 and 2008. In addition, the subject-to-BART modeling emission rates were based on the maximum 24-hr rate consistent with the BART guidelines. Colorado's analysis shows visibility benefits for all of the control options considered, not just SCR. Moreover, relative to the subject-to-BART baseline, Colorado's BART selection (combustion controls), does in fact show visibility improvement (0.16 deciview and 0.31 deciview for Units 1 and 2, respectively). Therefore, EPA finds that no changes to the BART determinations or to the SIP are needed in response to this comment.

Comment: It is unclear why the State rejected SNCR for Comanche Unit 1, particularly given that the proposed BART limit for Unit 1 is less stringent than Unit 1's current actual emissions. Under an SNCR scenario, Unit 1 would meet a 30-day rolling average emission rate of 0.10 lb/MMBtu according to the EPA. According to the State, the cost, coupled with the State's perceived “low visibility improvement” warranted a determination that SNCR was not reasonable. However, according to the State's analysis, SNCR is cost effective at Unit 1, costing $3,644 per ton of NO X reduced, which is squarely within the range of what the State considers to be cost-effective.

Response: We find that the State's rejection of SNCR was reasonable based on its weighing of the BART factors. The State reasonably concluded that the cost of SNCR was not warranted given the relatively modest visibility improvement that would result—0.11 deciviews. Even if a control technology is arguably cost-effective on a dollar per ton basis, a State may conclude that the control technology is not warranted based on a reasonable consideration of all BART factors.

Comment: With regard to visibility benefits, the State's analysis also indicates that SNCR would achieve greater improvement than an emission rate of 0.20 lb/MMBtu on a 30-day rolling average. Although the State asserts that the improvement would amount to 0.11 deciviews, it is unclear why such improvements are not reasonable or are otherwise insignificant, particularly given that the purpose of BART is to reduce or eliminate visibility impairment, and indeed there is no explanation in the record supporting the State's assertion. It also appears as if the State's assessment of visibility improvements is based on an assumption that the proposed BART limits would actually improve visibility. Given that the proposed BART allows increased emissions, it would not improve visibility. When compared to the real impacts of the State's proposed BART for Comanche Unit 1, SNCR appears to provide significant visibility improvements because, as opposed to the proposed BART, SNCR would actually achieve improvements. This further underscores why the State's BART determination for Comanche Unit 1 is flawed and why EPA must promulgate a FIP that establishes appropriate NO X BART limits.

Response: The commenter is correct that the State predicted that SNCR would result in additional improvement in visibility over the control technology the State selected as BART. However, this does not mean the CAA or our regulations required the State to select SNCR as BART. For the reasons stated above, we find that it was reasonable for the State to reject SNCR based on consideration of all the BART factors. Regarding the commenter's suggestion that the State's selected limits will lead to an increase in emissions, as noted above, the commenter has presented no evidence that this will occur. Moreover, as indicated in a separate response to comments, above, Colorado assessed the benefit of control options relative to both the subject-to-BART baseline and to the installation of new LNB in 2007 and 2008. Relative to the subject-to-BART baseline, Colorado's BART determination does in fact result in visibility benefits. The installation of LNB resulted in a visibility improvement of 0.16 deciview and 0.31 deciview for Comanche Units 1 and 2, respectively.

Comment: We received comments that the reasonable progress evaluation of Craig Unit 3 includes the same flaws as for Units 1 and 2 (see comments in section IV.A.1—4 above). One commenter indicated that the estimated cost effectiveness is no higher than $3,190/ton, and likely lower, considering the conservative $300/kW starting point for their analysis. Another commenter estimated the cost effectiveness of SCR at Unit 3 as $2,385/ton.

Based on visibility modeling from the NPS, commenters pointed out that the visibility benefits of adding SCR to Unit 3 are similar to those at Units 1 and 2—over 0.5 deciview at five Class I areas, and additional benefits at several more. The commenters asserted that, cumulatively, Unit 3 has an 8.39 deciview impact, with SCR providing a cumulative visibility improvement of 4.56 deciviews. Commenters went on to say that SCR at a limit of 0.05 lb/MMBtu should be required as reasonable progress for Craig Unit 3.

Response: We agree that the State likely overestimated the cost associated with SCR at Unit 3, but we are not prepared to disapprove the State's reasonable progress determination for Craig Unit 3. Assuming the commenters' assessments of the cost effectiveness of SCR are reasonably accurate, the values are not so low that it is clear that the State would have been unreasonable to reject SCR, especially given the State's requirement that Craig Unit 3 install SNCR and the resulting visibility benefits. We expect the State to re-evaluate SCR for Unit 3 in the next planning period.

Comment: The State's proposed SIP appears to allow increased emissions from the Nucla coal fired power plant under the reasonable progress aspect of the proposed SIP. In light of this, it is unclear how the proposed emission limits for NO X and SO 2 actually meet the State's reasonable progress goals. Under the reasonable progress prong of the regional haze requirements of the CAA, the State determined that additional controls at the Nucla plant were reasonable to protect Class I areas. Accordingly, the State proposed to require the power plant to achieve a NO X emission limit of 0.5 lb/MMBtu and an SO 2 limit of 0.4 lb/MMBtu, both over a 30-day rolling average period. However, according to data from EPA's Air Markets Program Database, Nucla has been meeting emission rates far below these proposed reasonable progress limits.

Indeed, data from the EPA demonstrates that between January 1, 2009, and December 31, 2011, Nucla has been meeting an average monthly NO X emission rate of 0.367 lb/MMBtu and an average monthly SO 2 emission rate of 0.301 lb/MMBtu. These rates indicate that Nucla is able to meet more stringent emission rates at no additional cost. The monthly SO 2 and NO X emission rates actually achieved by Nucla in the past 3 years clearly demonstrate that the power plant has consistently emitted at rates below the reasonable progress limits proposed by the State. Nucla is capable of achieving NO X and SO 2 emission rates lower than 0.30 lb/MMBtu on a 30-day basis.

More importantly though, these rates indicate that the State's proposed reasonable progress limits actually allow more air pollution to be emitted from Nucla than is currently emitted. An increase in emissions would not appear to ensure reasonable progress in restoring visibility in Colorado's Class I areas. Thus, the State's proposed SIP is not approvable by EPA because it fails to ensure reasonable progress in accordance with 42 U.S.C. 7491(g)(1) and 40 CFR 51.308(d)(1)(i). At the least, the proposed reasonable progress emission limits for Nucla demonstrate that the State failed to appropriately assess the costs of compliance in accordance with the CAA. Indeed, if the State had appropriately assessed the costs of compliance, it would have found that lower emission rates would be equally cost-effective and more protective of visibility. Such a flawed analysis of reasonable progress in relation to the Nucla plant cannot be approved by EPA.

The EPA must promulgate a FIP that establishes reasonable progress limits at the Nucla plant that actually achieve cost-effective emissions reductions. To this end, we request EPA adopt reasonable progress limits that limit NO X emissions to no more than 0.25 lb/MMBtu and SO 2 emissions to no more than 0.28 lb/MMBtu. Such limits are achievable and appear to be very cost-effective given that they would cost nothing.

Response: We disagree with this comment. Colorado based the SO 2 emission limit of 0.4 lb/MMBtu on the existing limestone injection system for SO 2 , and it based the NO X limit of 0.5 lb/MMBtu on the inherent low-NO X nature of the circulating fluidized bed boiler. A review of recent (2008-2010) monthly data in EPA's CAMD emissions database shows monthly NO X emission rates as high as 0.45 lb/MMBtu and monthly SO 2 emission rates as high as 0.33 lb/MMBtu. These rates are commensurate with the reasonable progress emission limits established by Colorado. Based on its reasonable progress analysis, Colorado concluded that no additional controls were reasonable. We concur with that conclusion.

Comment: The State should have analyzed visibility impacts due to GCC, as either a permit modification or as a reasonable progress source. To date, the State has not considered the impacts of the source under either program. Had the State compared GCC's emissions (Q) as a function of distance (d) to the threshold Q/d > 20 used to determine whether a source would be included in the reasonable progress analysis, GCC would have qualified for reasonable progress review. The State contends that GCC was not included in the reasonable progress review because the State used 2007 emissions to determine which sources were subject to reasonable progress review, and GCC did not begin normal operations until 2009. However, in its analysis of the proposed permit modification, the State asserts that GCC's actual emissions should be based upon the current permit limits, not zero emissions. In that case, GCC's permit emissions should have been used to trigger inclusion in the Colorado reasonable progress analysis.

It is essential that any regulatory program try to maintain a “level playing field.” There are two other cement plants in Colorado, and additional NO X controls are being required on both under Colorado's regional haze SIP.

GCC has installed SNCR but the current permit does not require these controls to be operated. We believe that, because the GCC permit allows emissions that exceed the State's threshold for determining which sources are subject to a reasonable progress analysis, GCC should have been included as a reasonable progress source. It is likely, based on the State's actions regarding the other two cement plants that the State would have required continuous operation of SNCR. EPA should require GCC to reduce NO X emissions by 45% on a continuous basis.

Response: The State based its evaluation of potential reasonable progress sources on stationary sources with actual emissions of 100 tpy or greater of PM, NO X, and SO 2 based on Air Pollution Emissions Notice (APEN) reports from 2007. The APEN reports for 2007 are based on data reported to the State by April 30, 2007, which is based on the previous full year of production (2006). The State formalized its reasonable progress analysis process in 2009. At that time, the APEN report data the State had (that had undergone full quality assurance and quality control) were the 2007 APEN reports based on the source reported 2006 data.

In 2006, Rio Grande Cement reported zero emissions because it did not operate. In 2007, Rio Grande Cement did report APEN emissions (based on permitted limits) resulting in a Q/d>20, but those emissions were not actual emissions because the source did not actually begin producing cement until April 2008. Because the State based its reasonable progress evaluation on 2006 actual emissions, we find it reasonable that the State did not further evaluate GCC for purposes of reasonable progress. We expect the State to do so for the next reasonable progress planning period.

Comment: Phase III of the SIP Rulemaking (at which the PSCO BART Alternative was adopted), to which Colorado Mining Association (CMA) was a party, was based upon numerous irregularities and violations of the Colorado Administrative Procedures Act, the Colorado Air Pollution Prevention and Control Act, and H. B. 10-1365. CMA filed a complaint challenging the Air Quality Control Commission's (AQCC) SIP Rulemaking on March 16, 2011, in Denver District Court. The CMA case is pending review by the District Court. The issues before the court are numerous and establish the AQCC's Phase III rulemaking was improper and that the PSCO BART Alternative should be stricken from the Colorado regional haze SIP. If the Court determines that the Phase III rulemaking was improper, and therefore, portions of the proposed Colorado SIP were invalid under State law, those same portions of the proposed Colorado SIP would be unenforceable under federal law.

As a result of the AQCC's egregious failures in Phase III of the SIP Rulemaking, the PSCO BART Alternative should not be included in the Colorado regional haze SIP. Until the Court has completed its review, EPA should not act to include the PSCO BART Alternative in the State's regional haze SIP.

Response: Once a state has submitted a SIP revision to us, we must approve it if it meets the CAA's minimum requirements. One of the relevant requirements is that the State have adequate authority under State law to carry out the plan. See CAA section 110(a)(2)(E). Absent a stay or determination by a court that a plan is invalid, or some other clear indication that the State lacks authority to implement the plan, we have no basis to disapprove it under 110(a)(2)(E). Here, there is no indication that Colorado lacks authority to implement the PSCO BART Alternative. Indeed, it is our understanding that CMA's lawsuit has been dismissed by the Denver District Court as moot. We have included a copy of the court's June 6, 2012 order in the docket for this action. If a court subsequently invalidates the PSCO BART Alternative, we will need to evaluate the Colorado SIP at that time, but the possibility of future invalidation does not provide a basis for us to disapprove the PSCO BART Alternative.

Comment: Colorado's proposed SIP appears to contain a blanket schedule of BART compliance that states, “sources must comply as expeditiously as practicable, but no later than 5 years from EPA approval of the SIP.” This blanket schedule of compliance, which applies to all subject-to-BART sources under the proposed Colorado SIP, is contrary to the CAA. It is true that the CAA requires that subject-to-BART sources “procure, install, and operate, as expeditiously as practicable” any additional controls that may represent BART. However, simply stating verbatim in the SIP that “sources must comply as expeditiously as practicable” fails to give force and effect to this statutory provision. In this case, it is unclear what “as expeditiously as practicable” means, particularly in the context of individual subject-to-BART sources. The lack of any specificity renders this provision unenforceable, which further undermines the adequacy of the SIP under CAA section 110 and frustrates the statutory mandate set forth under the CAA.

Additionally, the CAA is clear that in mandating “expeditious” compliance, SIPs must ensure that subject-to-BART sources comply as soon as possible. In this case, Colorado's SIP simply fails to ensure compliance with BART as soon as possible. It lacks any concrete dates by which subject-to-BART sources must comply, other than to state that sources must comply within the statutory maximum compliance date of 5 years. However, the CAA is clear that if a source can comply with BART before 5 years, it must comply by that earlier date. See 42 U.S.C. 7491(g)(4). Simply deferring to the 5-year deadline undermines the Congressional intent behind the “as expeditiously as practicable” provision.

It is notable that in other situations, the EPA has proposed to require concrete compliance dates to satisfy the CAA's “as expeditiously as practicable” provisions under the regional haze program. For example, in proposing a FIP for BART for the San Juan Generating Station in New Mexico, the EPA proposed a 3-year compliance date, finding it to be “as expeditiously as practicable” (76 FR 504). Although EPA ultimately concluded that a 5-year schedule of compliance was appropriate, the Agency's proposed action clearly signaled that a concrete date is needed to satisfy the CAA.

The EPA must therefore disapprove of Colorado's blanket schedule of BART compliance. In its place, the Agency must promulgate a FIP that sets forth concrete dates by which all subject-to-BART sources must “procure, install, and operate” BART that represent the most expeditious dates practicable.

Response: We have reviewed the compliance dates for meeting BART limits that are contained in the SIP. These dates are reasonable given the magnitude of the retrofits being undertaken. We note that the State's Regulation Number 3— Stationary Source Permitting And Air Pollutant Emission Notice Requirements that we are approving as part of this action provides for compliance as expeditiously as practicable, but in no event later than 5 years from EPA final approval of the SIP.

Comment: The EPA is duty-bound to ensure the proposed SIP does not interfere with attainment and maintenance of the National Ambient Air Quality Standards (NAAQS), in accordance with section 110(l) of the CAA. Thus, the EPA must ensure that the proposed SIP adequately limits air pollution in order to safeguard public health.

In this case, we are concerned that in proposing to approve Colorado's regional haze plan that the EPA has not demonstrated that the proposal adequately safeguards the 2008 8-hour ozone NAAQS, the newly promulgated 1-hour nitrogen dioxide NAAQS, the newly promulgated 1-hour SO 2 NAAQS, and the 2006 fine particulate matter (PM 2.5 ) NAAQS. Thus, EPA has not shown the extent to which public health is likely to be protected under the proposed SIP.

We are particularly concerned that the EPA overlooked its 110(l) obligations under the CAA given that, although the proposed rule may lead to emission reductions, no analysis or assessment has been prepared to demonstrate that even after these emission reductions, the recently promulgated NAAQS will be met. In this case, we are particularly concerned that the recently promulgated 1-hour NO 2 and SO 2 NAAQS could be jeopardized. Indeed, many, if not most, of the proposed emission rates are based on 30-day rolling averages. There is no indication that meeting emission rates on a 30-day rolling average will ensure that 1-hour NAAQS will be sufficiently protected. Indeed, a source could comply with a 30-day rolling average limit, yet still emit enough pollution on an hourly basis to cause or contribute to violations of the NAAQS, thereby interfering with attainment or maintenance.

We are further concerned over the fact that several BART limits allow for increased emissions. For example, the proposed NO X BART determinations for Comanche Units 1 and 2 allow for greater emissions than are currently released by the units. This raises concerns over the impacts to the NAAQS. These impacts must be addressed by EPA.

In this case, the EPA must either disapprove of the Colorado SIP over the State's failure to perform a 110(l) analysis or prepare its own 110(l) analysis to demonstrate that the SIP will effectively protect public health and not interfere with attainment or maintenance of the NAAQS.

Response: CAA section 110(l) provides that EPA “shall not approve a revision of a plan if the revision would interfere with any applicable requirement concerning attainment and reasonable further progress * * *, or any other applicable requirement of” the CAA. It is not clear that the regional haze SIP submitted by Colorado is a “revision of a plan” within the meaning of CAA section 110(l) as it is the first implementation plan due under the regional haze program. See, e.g., § 51.308(b). However, even if such an analysis were required, the commenter has not provided any evidence that the Colorado regional haze SIP will interfere with any applicable requirement concerning attainment and reasonable progress or any other applicable requirement of the CAA, or that further analysis under 110(l) is necessary.

Although the Colorado regional haze SIP will lead to emission reductions, the commenter asserts that that even so EPA must determine that the SIP revision will ensure the NAAQS are met. We disagree with this interpretation of CAA section 110(l). The Act and EPA's regulations require the regional haze SIP to address visibility impairment in mandatory Class I areas—attainment of the NAAQS is provided for through a separate SIP process. It is EPA's consistent interpretation of section 110(l) that a SIP revision does not interfere with attainment and maintenance of the NAAQS if the revision at least preserves the status quo air quality by not relaxing or removing any existing emissions limitation or other SIP requirement. EPA does not interpret section 110(l) to require a full attainment or maintenance demonstration for each NAAQS for every SIP revision. See, e.g., Kentucky Resources Council, Inc., v. EPA, 467 F.3d 986 (6th Cir. 2006); see also, 61 FR 16050, 16051 (April 11, 1996) (actions on which the Kentucky Resources Council case were based).

Thus, in this action, we need not determine whether a 30-day limit is adequate to protect a shorter-term NAAQS because the regional haze SIP is not required to ensure attainment of the NAAQS. The fact that the regional haze SIP specifies 30-day limits will not preclude Colorado from adopting limits with a shorter averaging time, if at some future date such limits are found to be necessary and required by the CAA to protect the NAAQS.

The commenter also alleges that “several BART limits allow for increased emissions” over current actual source emissions and cites as an example the NO X BART limits for Comanche Units 1 and 2. The commenter claims this raises concerns over impacts to the NAAQS. However, the Colorado regional haze SIP imposes new emissions limits on a number of existing sources, and it does not relax any existing emissions limits or other SIP requirements. In fact, the regional haze SIP makes violations of the NAAQS less likely because without the BART limits, actual emissions could increase even more. And, the regional haze SIP does not prevent the State from adopting lower limits in the future as necessary to protect the NAAQS. Thus, the regional haze SIP revision and its BART limits will not interfere with “any applicable requirement concerning attainment and reasonable further progress * * *, or any other applicable requirement of” the CAA.

Comment: We received comment letters fully in support of our rulemaking from Xcel Energy, Tri-State Generation, and a letter on behalf of Colorado Environmental Coalition, Environment Colorado, Environmental Defense Fund, and Western Resource Advocates. We received 84 comments from members of National Parks Conservation Association generally in support of our action. These comments from National Parks Conservation Association members also urged EPA to finalize stricter NO X controls on Tri-State Craig Unit 1, which we have addressed above. We also received comments from National Parks Conservation Association, the NPS, and WildEarth Guardians that supported the majority of our action, but pointed out some concerns, to which we have responded above.

Response: We acknowledge the support of these commenters for part or all of our proposed action.

Under the Clean Air Act, 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 Clean Air Act. 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 Clean Air Act; and

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 1, 2013. 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 CAA section 307(b)(2).)

For the reasons discussed in the preamble, 40 CFR chapter I is amended as follows:

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

On May 4, 2011 the Ohio EPA submitted its request to redesignate the Ohio portion of the Huntington-Ashland nonattainment area to attainment for the 1997 annual PM 2.5 NAAQS, and for EPA approval of the state's SIP revision containing an emissions inventory and a maintenance plan for the area. On December 22, 2011 (76 FR 79593), EPA proposed approval of Ohio's redesignation request, emissions inventories and plan for maintaining the 1997 annual PM 2.5 NAAQS. EPA also proposed approval of Ohio's determination that on-road emissions of PM 2.5 and NO X are insignificant contributors to PM 2.5 concentrations in the area. Additional background for today's action is set forth in EPA's December 22, 2011, proposed rulemaking.

In the proposed redesignation of the Huntington-Ashland area, EPA proposed to determine that the emission reduction requirements that contributed to attainment of the 1997 annual PM 2.5 standard in the nonattainment area could be considered permanent and enforceable. At the time of proposal, EPA noted that the Clean Air Interstate Rule (CAIR), which had been in place through 2011, had been replaced by the recently promulgated Cross-State Air Pollution Rule (CSAPR). 76 FR 48208, August 8, 2011. CSAPR included regulatory changes to sunset (i.e., discontinue) CAIR and the CAIR Federal Implementation Plans (FIPs) for control periods in 2012 and beyond. See 76 FR 48322. Although Ohio's redesignation request and maintenance plan relied on reductions associated with CAIR, EPA proposed to approve the request based in part on the fact that CSAPR achieved “similar or greater reductions in the relevant areas in 2012 and beyond.” 76 FR 79598. On December 30, 2011, eight days after the proposed redesignation, the U.S. Court of Appeals for the D.C. Circuit (referred to as D.C. Circuit or court hereafter) issued an order addressing the status of CSAPR and CAIR in response to motions filed by numerous parties seeking a stay of CSAPR pending judicial review. In that order, the court stayed CSAPR pending resolution of the petitions for review of that rule in EME Homer Generation, L.P. v. EPA (No. 11-1302 and consolidated cases). The court also indicated that EPA was expected to continue to administer CAIR in the interim until judicial review of CSAPR was completed.

On August 21, 2012, the D.C. Circuit issued a decision in EME Homer Generation, L.P. v. EPA, to vacate and remand CSAPR and ordered EPA to continue administering CAIR pending the promulgation of a valid replacement. That judgment is not yet final as the mandate has not been issued by the court and on October 5, 2012, EPA filed a petition for rehearing en banc asking the full court to reconsider that decision. EPA has determined that it is appropriate to move forward with final approval of this redesignation action, even though the emission reductions associated with CSAPR that EPA referenced in the proposal notice may not be relied upon at this time given the rule's legal status. As discussed in greater detail in this notice, the submission received from the state relied on reductions achieved from CAIR and demonstrated that the Huntington-Ashland area achieved attainment due in part to emission reductions required by CAIR. The D.C. Circuit's order that EPA continue administering CAIR until a valid replacement rule is developed ensures that the reductions that led to attainment are sufficiently permanent and enforceable to meet the requirements of CAA section 107(d)(3)(E)(iii).

EPA has determined that the entire Huntington-Ashland area has attained and continues to attain the 1997 annual PM 2.5 standard  1 (76 FR 55542) and that the Ohio portion of the area meets the requirements for redesignation under section 107(d)(3)(E) of the CAA. On September 7, 2011, at 76 FR 55542, EPA finalized its determinations that the Huntington-Ashland area attained the 1997 PM 2.5 NAAQS and that the area attained the 1997 PM 2.5 NAAQS by the applicable attainment date of April 5, 2010. Subsequent to EPA's final determination of attainment and proposed redesignation of the Ohio portion of the Huntington-Ashland area, additional monitoring data have become available, quality-assured, and certified. Table 1 below sets forth design values for 2007-2009, 2008-2010, and 2009-2011, last of which is based on the most current 3-years of data, which shows that the area continues to attain. Preliminary data available for 2012 also are consistent with continued attainment.

A list of potentially affected entities is provided in the Federal Register of September 21, 2012 (77 FR 58666) (FRL-9357-2). If you have questions regarding the applicability of this action to a particular entity, consult the technical person listed under FOR FURTHER INFORMATION CONTACT .

In the Federal Register of September 21, 2012 (77 FR 58666), EPA issued several direct final SNURs, including SNURs for the chemical substances that are the subject of this removal. These direct final rules were issued pursuant to the procedures in 40 CFR part 721, subpart D. In accordance with § 721.160(c)(3)(ii), EPA is removing these rules issued for four chemical substances which were the subject of PMNs P-07-204, P-10-58, P-10-59, and P-10-60, because the Agency received notice of intent to submit adverse comments without sufficient time to respond prior to the effective date of the rules. EPA intends to publish proposed SNURs for these chemical substances under separate notice and comment procedures.

For further information regarding EPA's expedited process for issuing SNURs, interested parties are directed to 40 CFR part 721, subpart D, and the Federal Register of July 27, 1989 (54 FR 31314). The record for the direct final SNURs for the chemical substances that are being removed was established at EPA-HQ-OPPT-2011-0941. That record includes information considered by the Agency in developing this rule and the notice of intent to submit adverse comments.

To access the electronic docket, please go to http://www.regulations.gov and follow the online instructions to access docket ID number EPA-HQ-OPPT-2011-0941. Additional information about the Docket Facility is provided under ADDRESSES in the Federal Register of September 21, 2012 (77 FR 58666). If you have questions, consult the technical person listed under FOR FURTHER INFORMATION CONTACT .

This final rule removes existing regulatory requirement and does not contain any new or amended requirements. As such, the Agency has determined that this removal will not have any adverse impacts, economic or otherwise. The statutory and executive order review requirements applicable to the direct final rule were discussed in the Federal Register of September 21, 2012 (77 FR 58666). Those review requirements do not apply to this action because it is a removal and does not contain any new or amended requirements.

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, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR parts 9 and 721 are amended as follows:

The regulations are being revised to update, clarify, and streamline the language of procedural provisions, and to incorporate certain changes brought about by the amendments to the FOIA under the OPEN Government Act of 2007, Public Law 110-175, 121 Stat. 2524. Additionally, the regulations are being updated to reflect developments in the case law and to include current cost figures to be used in calculating and charging fees.

The revisions also incorporate changes to the language and structure of the FOIA regulations in order to improve the Department's FOIA performance. More nuanced multitrack processing can be found at § 2.15. Partial fee waivers are expressly permitted under § 2.45. Revisions of the Department's fee schedule can be found at §§ 2.42, 2.49(a)(1), and Appendix A. The duplication charge for physical records or scanning records increased from thirteen to fifteen cents a page. The amount at or below which the Department will not charge a fee increased from $30.00 to $50.00.

On September 13, 2012, the Department published a proposed rule in the Federal Register (77 FR 56592) and requested comments over a 60-day period ending on November 13, 2012. All comments received were considered in drafting this final rule.

Six commenters responded to the invitation for comments, including one commenter from a subcomponent of a Federal agency and five commenters from non-Federal sources. While most of the commenters generally supported the proposed changes, they identified thirty specific issues or recommendations, which the Department addressed as follows:

One commenter suggested that § 2.1 discuss how to submit a FOIA request (and also expressed concern that the regulations might only allow FOIA requests to be submitted to the Department electronically). Because § 2.3 directly addresses where to send a FOIA request (and specifically discusses where to find the physical and email addresses of each bureau's FOIA Officer), the Department has not adopted this suggestion.

One commenter suggested that requiring requesters to “write directly to the bureau that you believe maintains those records” in § 2.3(b) was overly burdensome and creates barriers to access, because requesters may not know where the records are maintained. However, § 2.3(d) specifically notes that “[q]uestions about where to send a FOIA request should be directed to the bureau that manages the underlying program or to the appropriate FOIA Public Liaison, as discussed in § 2.66.” Therefore, the Department does not believe § 2.3 is unduly burdensome and has not amended it.

One commenter suggested that examples of how requesters can reasonably describe the records they seek be added to § 2.5(b), and the Department has adopted this suggestion.

One commenter suggested, in the context of § 2.5, that the use of “does not hear from you” was ambiguous. The Department has adopted this suggestion by replacing the ambiguous phrase with “does not receive a written response from you” everywhere it occurred (§§ 2.5, 2.6, and 2.51).

One commenter suggested that the time for requesters to respond to the Department in §§ 2.5(c), 2.6(c), and 2.50(e) be expanded from 20 workdays (the time period in the draft version of the final rule, as well as in the Department's previous version of the final rule) to 30 workdays. As the commenter notes, the Department does “expend[] numerous resources to produce documents pursuant to the FOIA, and the agency has an interest in resolving FOIA matters in an organized and timely fashion.” Although the commenter believes the 20 workday deadline is “unreasonable and arbitrary,” it has been the standard for the Department for over a decade and the Department believes that it is reasonable and comports with the statutory FOIA processing deadlines. The Department therefore declines to adopt this suggestion.

One commenter suggested § 2.8(b) be revised to require a bureau to inform requesters in advance if it intends to charge the requester any direct costs for converting the requested records into a requested format. The Department has adopted this suggestion by adding a cross reference to § 2.44 and adding this scenario to the examples given in § 2.44(b).

One commenter suggested that the juxtaposition of §§ 2.10 and 2.11 could lead to confusion about what kinds of “requests” were being referenced in these sections. The Department agrees and has adopted this suggestion by amending § 2.10.

One commenter suggested that, in § 2.13(c) and (e), the Department notify requesters of whether part of the request or entire request has been referred, and the Department has adopted this suggestion. The same commenter also suggested that the Department provide the requester with the contact information (in addition to the name) of the person the request had been referred to, and the Department has adopted this suggestion. Another commenter expressed concerns about § 2.13, stating that portions of it were “ambiguous and have no legal basis.” This commenter specified that § 2.13(e) permitted the Department to withhold the identity of outside agencies to which the Department refers FOIA requests, under limited circumstances, and §§ 2.13(f)(2) and 2.13(f)(4) did not have concrete examples. The Department has carefully reviewed § 2.13(e) and finds it to be unambiguous and consistent with law and policy. The Department has also concluded that adding examples to §§ 2.13(f)(2) and 2.13(f)(4) would not be beneficial, as the situations that will arise under these sections are highly fact specific and general examples would be bulky and would not be illuminating. However, the Department agrees that the previous versions of §§ 2.13(a) and 2.13(h) were unintentionally confusing. The Department therefore has adopted this suggestion in part and revised these sections for clarity.

One commenter suggested that the multiple tracks for processing FOIA requests outlined in § 2.15 violated FOIA's requirement that agencies “determine within 20 days [or longer in unusual circumstances] * * * after the receipt of any [FOIA] request whether to comply with such request * * * ” 5 U.S.C. 552(a)(6)(A). However, § 2.15 does not alter the statutory requirement for a bureau to determine whether it will comply with a request. To the contrary, it implements 5 U.S.C. 552(a)(6)(D)(i), which specifically permits agencies to promulgate regulations “providing for multitrack processing of requests for records based on the amount of work or time (or both) involved in processing requests.” This provision of the FOIA recognizes that a bureau exercising due diligence can determine whether it will comply with a request within the statutory timeframe, but may need additional time to search for and process the records in question. It also recognizes that simple requests should not have to wait for long periods of time while more complex requests are processed. To clarify this point, the Department has added paragraph (f) to this section. (The Department has also corrected a typographical error in § 2.15(c)(3) that may have created confusion about processing times.) The same commenter also suggested the definition of “review” in § 2.70 would violate FOIA's mandated time limits. However, the definition addresses when fees will be charged to a requester, not how long a bureau has to respond to a FOIA request. Neither § 2.15 nor § 2.70 expands the time period for determining whether to comply with a request and therefore neither have been amended.

One commenter suggested a clause and a sentence be added to § 2.16(a) referring to the potential of a 10-day extension, to help set the requester's expectations of when to expect a response. The Department has adopted the suggestion to refer to the potential extension, but consolidated the suggested language. The final rule already has a provision discussing when the bureau may extend the basic time limit (§ 2.19) and a cross reference to it has been added to § 2.16(a). The Department has also amended § 2.16(a) to more exactly track the language of 5 U.S.C. 552(a)(6)(A)(i).

One commenter expressed concern that the provisions in § 2.18(b) exceeded the FOIA's provisions for temporarily suspending the statutory response period because a temporary suspension was allowed to occur more than once if the bureau needed to clarify issues regarding fee assessments. However, 5 U.S.C. 552(a)(6)(A) makes it clear that, although a temporary suspension can occur only once when a bureau is reasonably asking for clarifying information unrelated to fee assessments (and the temporary suspension ends with a requester's response), temporary suspensions of the statutory response period can occur as many times as is necessary when a bureau needs clarifying information regarding a fee assessment. This section therefore does not exceed FOIA's temporary suspension authority and has not been amended.

One commenter suggested that the Department add a clause to § 2.21(b) requiring bureaus to provide a brief description of the subject of the request in its acknowledgment letter. The Department declines to adopt the portion of the suggestion about making this description mandatory, due to the increased burden it would place on bureaus (especially those with a high rate of FOIA requests) and the dampening effect this would have on experimenting with new forms of written acknowledgments that could more quickly serve requesters (such as post cards). The Department has, however, added a sentence to § 2.21(b) noting this information may be included.

A commenter suggested modifying § 2.23 to clarify when a request is being denied as opposed to the denial of procedural benefits under FOIA. The Department agrees this would be helpful and has made the suggested modifications, along with a few minor clarifications. The Department also made a minor change to paragraph (a)(3) of this section because a some material that had previously been included in § 2.13(h), amendments to which were discussed above, made more sense in this context.

One commenter suggested § 2.24 be amended to state that, where possible, the requester will be provided with the precise volume of denied material, rather than an estimated volume. Although the Department has declined to adopt this exact suggestion (because it believes the change would have a significant negative impact on the Department's processing and response times while providing the requester with very little, if any, additional, meaningful information), it has amended § 2.25 to more exactly track the language of 5 U.S.C. 552(b), which the commenter referenced. Another commenter suggested § 2.24 be amended to require “a detailed justification for [a] denial,” citing case law requiring detailed justifications in a litigation context. The Department has considered this suggestion, but declined to adopt it because it is not required at an administrative level and would have a tremendous negative impact on the Department's processing and response times.

One commenter suggested that § 2.36 be amended to state that only trade secrets can be withheld under the Trade Secrets Act, 18 U.S.C. 1905. However, the Trade Secrets Act is a broadly worded criminal statute that prohibits the unauthorized disclosure of more than simply “trade secrets.” See, e.g., Bartholdi Cable Co. v. FCC, 114 F.3d 274, 281 (D.C. Cir. 1997) (citing CAN Fin. Corp v. Donovan, 830 F.2d 1132, 1140 (D.C. Cir. 1987) and declaring: “[W]e have held that information falling within Exemption 4 of FOIA also comes within the Trade Secrets Act.”); Parker v. Bureau of Land Mgmt., 141 F. Supp. 2d 71, 77 n.5 (D.D.C. 2001) (“Although FOIA exemptions are normally permissive rather than mandatory, the D.C. Circuit has held that the disclosure of material which is exempted under [Exemption 4 of the FOIA] is prohibited under the Trade Secrets Act”). This section therefore has not been amended.

One commenter suggested that §§ 2.38 and 2.70 be amended to reflect that the FOIA provides for three fee categories, not four. While the Department agrees that only three categories are referred to in the FOIA, it has found over many years that requesters appreciate and benefit from the additional clarity provided by having one of the broader categories split in two. The Department therefore has not adopted this suggestion.

One commenter suggested that § 2.41(b) be amended from “the fees will be the average hourly General Schedule (“GS”) base salary, plus the District of Columbia locality payment” to “the fees will be the average hourly General Schedule (“GS”) base salary, plus any applicable locality payment.” The Department utilized the District of Columbia (“DC”) locality payments as its standardized locality payment in its previous version of the final rule and found it to be both efficient and reasonable. It allows the Department to create a standard chart that all bureaus can use to calculate fees, rather than each bureau calculating different amounts for different employees (in the Department, it is not unusual for people who work on the same request to be in multiple geographic locations) and requesters being confused by widely varying charges for the same work. It makes sense to use the DC locality as the standard, given the large numbers of the Department's FOIA professionals and processors that are based in DC The Department therefore has not adopted this suggestion.

One commenter suggested that § 2.45(c) unduly limits bureau decisions on fee waivers and this would negatively impact appeal decisions under § 2.57. However, § 2.45(c) merely allows a bureau to make fee waiver decisions based on what is submitted to it by the requester, rather than being required to seek additional information (although it is free to do so, at its discretion). The Department therefore has not amended these sections.

One commenter suggested adding the following sentence to § 2.45(d) in order to further assist the Department in setting expectations for requesters regarding fee waivers: “A fee waiver is tied to the subject of the request in addition to the identity of the requester.” The Department is concerned that adopting this suggestion would give the mistaken impression that only these two criteria are at issue in fee waiver determinations. But, in response to this comment, § 2.45(d) now includes two cross references. These cross references, to the fee waiver criteria in §§ 2.45(a) and 2.48, will help set requesters' expectations regarding fee waivers.

One commenter suggested that § 2.46 discuss where and how to file a fee waiver request. Because § 2.6 directly addresses where and how to file fee waiver requests (and § 2.46 already cross references § 2.6), the Department believes adopting this suggestion is not necessary.

One commenter expressed concern that § 2.48(a)(4), which outlines one of the four criteria bureaus are asked to consider when evaluating a fee waiver request, was narrower than FOIA's fee waiver standards. However, this provision does not narrow the scope of 5 U.S.C. 552(a)(4)(A)(iii), it simply helps the Department analyze whether the disclosure of the information is likely to contribute significantly to public understanding of the operations or activities of the government. Because § 2.48(a)(4) is not narrower than FOIA's fee waiver standards, the Department has not adopted this suggestion. The same commenter also expressed concern about a change of phrasing in § 2.48(a)(3)(iv) from the parallel provision in the previous version of the final rule. The Department did not intend to change the provision's meaning. Therefore, in accordance with the commenter's suggestion, the word “unlikely” has been removed and the phrase “less likely” restored.

One commenter suggested that § 2.50(e) be amended to require the Department to “collaborate with FOIA requesters to establish a payment schedule that would permit requesters to pay [advance payments] in installments instead of closing out requests.” As the commenter notes, this provision mirrors the applicable provision in the previous version of the final rule. Changing it would greatly add to the complexity, uncertainty, and time spent processing advance fee payments, impairing the Department's FOIA processing. The Department therefore declines to adopt this suggestion.

One commenter suggested the Department should articulate its rationale for combining or aggregating requests more clearly in § 2.54. The Department agrees the previous version of this section was unintentionally confusing. The lettering/numbering therefore has been amended. Additionally, a “will” in § 2.54(a)(2) has been amended to “may.”

One commenter suggested it may be helpful to include examples of the particular types of records that a bureau may charge fees for outside of the scope of the FOIA in § 2.55. The Department has carefully considered this suggestion and has concluded that examples in this area would be so specific and narrow that they would be more distracting than illuminating. The Department therefore has not adopted this suggestion.

One commenter suggested that § 2.56 be amended to allow for the discretionary reduction of fees (in addition to the discretionary waiver of fees) and the Department has adopted this suggestion. The same commenter also suggested that new language be added to give Department employees additional, broader discretion for waiving or reducing fees, for example, whenever “the interest of the United States Government would be served.” The Department has declined to adopt this suggestion, because it is concerned that it would create unrealistic expectations on the part of requesters, undercut FOIA's statutory fee requirements, and provide Department employees with an unacceptably vague standard.

One commenter suggested that the Department require all responses to FOIA requests be posted online (except those that implicate the Privacy Act) and that it adopt a policy to proactively disclose information to the greatest extent possible. The Department has carefully considered this suggestion, but declines to adopt it because it believes the final rule reflects the appropriate balance between providing useful information and an appropriate use of the Department's resources.

Two commenters suggested the final rule discuss the services offered by OGIS. The Department agrees that OGIS's role in the FOIA process should be noted in the final rule. Rather than waiting until after an appeal decision has been made to introduce this information (as one of the commenters suggested), the Department has adopted this suggestion by requiring bureaus to provide information on OGIS in letters taking final action on a request, which will ensure maximum dissemination of the information at the most appropriate stage of the process. The revised § 2.21(a) both clarifies the provision and requires the Department to provide notice of the services offered by OGIS to all of the Department's FOIA requesters, rather than just the ones that file appeals.

One commenter suggested the Department require submitters of older records to provide additional information to explain why the information is still confidential and its release would still be harmful after the passage of time. However, § 2.28(g) already requires this, so the Department believes adopting this suggestion is not necessary.

One commenter asserted, in addition to a number of specific comments, that the final rule directly contravenes transparency goals. The Department has carefully considered this assertion, but believes the final rule improves overall processing and increases transparency, so no changes have been made based on this comment.

One commenter's entire comment was: “NO.Do not change the freedom of info act.” As noted above, this rule consists of the regulations that the Department follows in processing records under the FOIA. It does not change the FOIA itself in any way. Another commenter asserted, in addition to a number of specific comments, that the final rule exceeded the scope of the Department's rulemaking authority and was “contrary to law.” The Department has carefully considered these assertions, but believes the final rule was fully within the scope of the Department's rulemaking authority and completely consistent with all applicable laws, so no changes have been made based on this comment.

A number of commenters made suggestions related to minor word choices, minor clarifications, and additional citations, many of which have been adopted without further comment. The Department has also fixed a few minor typographical errors. Additionally, the Department added cross references, and/or made very minor clarifications in the following sections: 2.7(a) and (b), 2.15(a), 2.17, 2.19(c), 2.20(c), 2.22(c), 2.33, 2.41(a) and (c), 2.42(a), 2.43(a), and 2.60(b). Finally, in the interests of clarity, the Department also added phrases to §§ 2.31(a) and 2.63(c) and a second paragraph to § 2.37(f).

Executive Order 12866 provides that the Office of Information and Regulatory Affairs will review all significant rules. The Office of Information and Regulatory Affairs has determined that this rule is not significant.

Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.

The Department of the Interior certifies that this rule will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ).

This is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:

a. Does not have an annual effect on the economy of $100 million or more.

b. Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.

c. Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

This rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. This rule does not have a significant or unique effect on State, local or tribal governments or the private sector. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531 et seq. ) is not required.

In accordance with Executive Order 12630, this rule does not have significant takings implications. A takings implication assessment is not required.

In accordance with Executive Order 13132, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. It would not substantially and directly affect the relationship between the Federal and state governments. A Federalism Assessment is not required.

In accordance with Executive Order 12988, the Office of the Solicitor has determined that this rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order.

Under the criteria in Executive Order 13175, we have evaluated this rule and determined that it has no potential effects on federally recognized Indian tribes. This rule does not have tribal implications that impose substantial direct compliance costs on Indian Tribal governments.

This rule does not contain information collection requirements, and a submission to the Office of Management and Budget under the Paperwork Reduction Act is not required.

This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 is not required. Pursuant to Department Manual 516 DM 2.3A(2), Section 1.10 of 516 DM 2, Appendix 1 excludes from documentation in an environmental assessment or impact statement “policies, directives, regulations and guidelines of an administrative, financial, legal, technical or procedural nature; or the environmental effects of which are too broad, speculative or conjectural to lend themselves to meaningful analysis and will be subject late to the NEPA process, either collectively or case-by-case.”

This rule is not a significant energy action under the definition in Executive Order 13211. A Statement of Energy Effects is not required. This rule will not have a significant effect on the nation's energy supply, distribution, or use.

For the reasons stated in the preamble, the Department of the Interior amends 43 CFR subtitle A as follows:

The Federal Emergency Management Agency (FEMA) makes the final determinations listed below of the modified BFEs for each community listed. These modified BFEs have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Deputy Associate Administrator for Mitigation has resolved any appeals resulting from this notification.

The modified BFEs are not listed for each community in this notice. However, this final rule includes the address of the Chief Executive Officer of the community where the modified BFE determinations are available for inspection.

The modified BFEs are made pursuant to section 206 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4105, and are in accordance with the National Flood Insurance Act of 1968, 42 U.S.C. 4001 et seq., and with 44 CFR part 65.

For rating purposes, the currently effective community number is shown and must be used for all new policies and renewals.

The modified BFEs are the basis for the floodplain management measures that the community is required either to adopt or to show evidence of being already in effect in order to qualify or to remain qualified for participation in the National Flood Insurance Program (NFIP).

These modified BFEs, together with the floodplain management criteria required by 44 CFR 60.3, are the minimum that are required. They should not be construed to mean that the community must change any existing ordinances that are more stringent in their floodplain management requirements. The community may at any time enact stricter requirements of its own or pursuant to policies established by other Federal, State, or regional entities.

These modified BFEs are used to meet the floodplain management requirements of the NFIP and also are used to calculate the appropriate flood insurance premium rates for new buildings built after these elevations are made final, and for the contents in those buildings. The changes in BFEs are in accordance with 44 CFR 65.4.

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

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

Regulatory Classification. This final rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866 of September 30, 1993, Regulatory Planning and Review, 58 FR 51735.

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

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

Accordingly, 44 CFR part 65 is amended to read as follows:

The Federal Emergency Management Agency (FEMA) makes the final determinations listed below for the modified BFEs for each community listed. These modified elevations have been published in newspapers of local circulation and ninety (90) days have elapsed since that publication. The Deputy Associate Administrator for Mitigation has resolved any appeals resulting from this notification.

This final rule is issued in accordance with section 110 of the Flood Disaster Protection Act of 1973, 42 U.S.C. 4104, and 44 CFR part 67. FEMA has developed criteria for floodplain management in floodprone areas in accordance with 44 CFR part 60.

Interested lessees and owners of real property are encouraged to review the proof Flood Insurance Study and FIRM available at the address cited below for each community. The BFEs and modified BFEs are made final in the communities listed below. Elevations at selected locations in each community are shown.

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

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

Regulatory Classification. This final rule is not a significant regulatory action under the criteria of section 3(f) of Executive Order 12866 of September 30, 1993, Regulatory Planning and Review, 58 FR 51735.

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

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

Accordingly, 44 CFR part 67 is amended as follows: