This proposed rule is issued under Marketing Agreement No. 125 and Order No. 966, both as amended (7 CFR part 966), regulating the handling of tomatoes grown in Florida, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

The Department of Agriculture (USDA) is issuing this proposed rule in conformance with Executive Orders 12866 and 13563.

This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. Under the marketing order now in effect, Florida tomato handlers are subject to assessments. Funds to administer the order are derived from such assessments. It is intended that the assessment rate as proposed herein would be applicable to all assessable Florida tomatoes beginning on August 1, 2013, and continue until amended, suspended, or terminated.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. Such handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This proposed rule would increase the assessment rate established for the Committee for the 2013-14 and subsequent fiscal periods from $0.024 to $0.0375 per 25-pound carton of Florida tomatoes.

The Florida tomato marketing order provides authority for the Committee, with the approval of USDA, to formulate an annual budget of expenses and collect assessments from handlers to administer the program. The members of the Committee are producers of Florida tomatoes. They are familiar with the Committee's needs and with the costs of goods and services in their local area and are therefore in a position to formulate an appropriate budget and assessment rate. The assessment rate is formulated and discussed in a public meeting. Thus, all directly affected persons have an opportunity to participate and provide input.

For the 2012-13 and subsequent fiscal periods, the Committee recommended, and USDA approved, an assessment rate of $0.024 per 25-pound carton of tomatoes that would continue in effect from fiscal period to fiscal period unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other information available to USDA.

The Committee met on August 22, 2013, and unanimously recommended 2013-14 expenditures of $1,824,600 and an assessment rate of $0.0375 per 25-pound carton of Florida tomatoes. In comparison, last year's budgeted expenditures were $1,672,952. The assessment rate of $0.0375 is $0.0135 higher than the rate currently in effect. The Committee depleted its reserve by using the funds to help meet its annual expenditures over the past year. Therefore, the Committee recommended increasing the assessment rate to generate sufficient funds to cover expenditures and increase its reserve balance.

The major expenditures recommended by the Committee for the 2013-14 year include $800,000 for education and promotion, $458,500 for salaries, and $300,000 for research. Budgeted expenses for these items in 2012-13 were $750,000, $436,372, and $250,000, respectively.

The assessment rate recommended by the Committee was derived by reviewing anticipated expenses; expected shipments of Florida tomatoes; income from interest, Market Access Program funds, and specialty crop block grants; and the need to add additional funds to the reserve. Florida tomato shipments for the year are estimated at 35 million 25-pound cartons, which should provide $1,312,500 in assessment income. Income derived from handler assessments, interest, and other sources would be adequate to cover budgeted expenses. Reserve funds projected to be $440,500 would be kept within the maximum permitted by the order of no more than approximately one fiscal period's expenses as stated in § 966.44.

The proposed assessment rate would continue in effect indefinitely unless modified, suspended, or terminated by USDA upon recommendation and information submitted by the Committee or other available information.

Although this assessment rate would be in effect for an indefinite period, the Committee would continue to meet prior to or during each fiscal period to recommend a budget of expenses and consider recommendations to modify the assessment rate. The dates and times of Committee meetings are available from the Committee or USDA. Committee meetings are open to the public and interested persons may express their views at these meetings. USDA would evaluate Committee recommendations and other available information to determine whether modification of the assessment rate is needed. Further rulemaking would be undertaken as necessary. The Committee's 2013-14 budget and those for subsequent fiscal periods would be reviewed and, as appropriate, approved by USDA.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this proposed rule on small entities. Accordingly, AMS has prepared this initial regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 80 handlers of tomatoes subject to regulation under the marketing order and approximately 100 producers in the production area. Small agricultural service firms are defined by the Small Business Administration (SBA) as those whose annual receipts are less than $7,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000 (13 CFR 121.201).

Based on industry and Committee data, the average annual price for fresh Florida tomatoes during the 2012-13 season was approximately $10.64 per 25-pound carton, and total fresh shipments were approximately 35.5 million cartons. Based on the average price, about 80 percent of handlers could be considered small businesses under SBA's definition. In addition, based on production data, grower prices as reported by the National Agricultural Statistics Service, and the total number of Florida tomato growers, the average annual grower revenue is below $750,000. Thus, the majority of handlers and producers of Florida tomatoes may be classified as small entities.

This proposal would increase the assessment rate for the 2013-14 and subsequent fiscal periods from the current rate of $0.024 to $0.0375 per 25-pound carton of tomatoes. The Committee unanimously recommended the increased assessment rate and 2013-14 expenditures of $1,824,600. The increase was recommended to generate sufficient funds to cover the Committee's expenditures and add to its reserve. As previously stated, income derived from handler assessments, interest, and other income would be adequate to meet this year's anticipated expenses.

A review of historical information and preliminary information pertaining to the upcoming season indicates that the grower price for the 2013-14 season should average around $9.73 per 25-pound carton of tomatoes. Utilizing this estimate and the proposed assessment rate of $0.0375, estimated assessment revenue as a percentage of total grower revenue would be approximately 0.4 percent for the season.

Alternative expenditure and assessment levels were discussed prior to arriving at this budget. However, the Committee agreed on $1,824,600 in expenditures, reviewed the quantity of assessable tomatoes and the need to add additional funds to the reserve, and recommended an assessment rate of $0.0375 per 25-pound carton of tomatoes.

This action would increase the assessment obligation imposed on handlers. While assessments impose some additional costs on handlers, the costs are minimal and uniform on all handlers. These costs would be offset by the benefits derived from the operation of the marketing order. In addition, the Committee's meeting was widely publicized throughout the Florida tomato industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the August 22, 2013, meeting was a public meeting and all entities, both large and small, were able to express views on this issue. Finally, interested persons are invited to submit comments on this proposed rule, including the regulatory and informational impacts of this action on small businesses.

In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. Chapter 35), the order's information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0178 Vegetable and Specialty Crops. No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval.

This proposed rule would impose no additional reporting or recordkeeping requirements on either small or large Florida tomato handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide more opportunities for citizens to access Government information and services, and for other purposes.

USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this action.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to Jeffrey Smutny at the previously-mentioned address in the FOR FURTHER INFORMATION CONTACT section.

A 15-day comment period is provided to allow interested persons to respond to this proposed rule. Fifteen days is deemed appropriate because: (1) The 2013-14 fiscal period began on August 1, 2013, and the marketing order requires that the rate of assessment for each fiscal period apply to all assessable Florida tomatoes handled during such fiscal period; (2) the Committee needs to have sufficient funds to pay its expenses, which are incurred on a continuous basis; and (3) handlers are aware of this action, which was unanimously recommended by the Committee at a public meeting.

For the reasons set forth in the preamble, 7 CFR part 966 is proposed to be amended as follows:

In 2007, the Commission approved the initiation of a rulemaking recommended by the NRC staff in SECY-07-0148, to strengthen security requirements at ISFSIs. On December 16, 2009 (74 FR 66589), the NRC staff published in the Federal Register a notice of availability and request for comment on the NRC staff's draft regulatory basis for the rulemaking. In light of opposition, expressed in comments, on some of the key technical approaches discussed in the draft regulatory basis, the staff sought direction from the Commission concerning the proposed rulemaking. In SRM-SECY-10-0114, the Commission directed the staff to continue its assessment of the threat against ISFSIs, engage stakeholders, develop draft guidance, and provide a supplemental paper (now due on May 14, 2014) to evaluate whether changes in the proposed rulemaking's direction are necessary. The NRC staff is still in the information gathering stage for this planned security rulemaking.

The comments on the draft regulatory basis have been summarized for purposes of clarity and conciseness and grouped together into 20 subject areas. Five individuals or groups submitted written comments on the draft regulatory basis, and their comments have been assigned the following identification (ID) numbers:

The NRC staff has responded to all comments. The comment summaries and the staff's responses are available in ADAMS under Accession No. ML13085A150.

Availability of Documents: The following table lists the documents that are available to the public and how they may be obtained:

On October 25, 2013, DOE published a NOPR in the Federal Register (78 FR 64067) to make available and invite comments on the proposed rule regarding energy conservation standards for residential furnace fans. That notice set a deadline for the submission of written comment by December 24, 2013, and comments were also accepted at a public meeting held at DOE Headquarters on December 3, 2013. Several stakeholders requested an extension of the comment period. These stakeholders stated the additional time is necessary for interested parties to consider and respond to the proposed rule and public meeting presentation, in order to submit meaningful and useful comments.

After careful consideration of the multiple requests for more time to develop comments, DOE has determined that an extension of the public comment period is appropriate and in the public interest based on the foregoing reasoning. Accordingly, DOE is hereby extending the comment period and will consider any comments received by January 23, 2014.

The Federal Credit Union Act (Act) requires FCUs to “make financial reports to it [the NCUA Board] as and when it may require” and requires FCUs to make “books and records accessible to” NCUA for examination purposes. 1 Likewise, federally insured, state-chartered credit unions must make “reports of condition . . . in such form . . . as the Board may require. 2 Under this authority, the Board requires all insured credit unions to file quarterly call reports. 3

The Act also requires and authorizes the Board to appoint examiners to examine any insured credit union to determine the credit union's condition. 4 NCUA examiners often review and verify the information credit unions submit in their call reports through on-site examinations. Specialized NCUA staff, such as problem case officers, also visit credit unions to address issues identified in the examination process.

In addition to the Board's statutory responsibilities to obtain financial reports and conduct examinations of insured credit unions, the Act gives the Board general authority to adopt regulations related to the oversight of FCUs. Taken together, these powers give the Board the authority to specify the location and other conditions of examinations and other on-site contacts with FCUs, as well as to require FCUs to conduct business in a commercial setting rather than in a home.

The Act grants the Board authority to “direct employees of the Board”  5 and “define their duties.”  6 Most of NCUA's 1,260 employees are credit union examiners who work on-site at credit union locations, performing examinations and other types of reviews. By requiring that all examinations and other on-site contacts between NCUA staff and FCU officials occur in business offices or other public locations, the proposal ensures that examinations and other FCU contacts occur in a professional and safe setting.

In the early days of credit union organizing, it was common for a credit union to operate out of the home of one of its officials. As credit unions grew, however, most added offices either at a sponsor's location or in another commercial setting. NCUA has identified approximately 95 remaining home-based, federally insured credit unions. These are credit unions operated out of a home or on the premises of a home address, such as in a garage, sunroom, or basement apartment. Eighty-one of these are FCUs, with assets ranging from $34,000 to $12,000,000. Most of these FCUs are very small; 34 have assets below $1,000,000 and 38 have assets between $1,000,000 and $5,000,000. 7

More recently, NCUA has encouraged examiners and other staff to arrange meetings with officials of home-based FCUs in public places, such as libraries or hotel conference rooms. NCUA did not, however, prohibit staff from meeting with an FCU official at a private home if the official was reluctant to come to another location.

When an on-site contact occurs at the home of an FCU official, NCUA has no way of ensuring the environment is safe for its employees or conducive to working efficiently and securely. NCUA staff who have conducted on-site contacts in homes have recently raised concerns about the conditions they sometimes face. These concerns include: aggressive animals; lack of proper seating, lighting, and rest room access; interruptions from other residents of the home; exposure to allergens; poorly maintained driveways that pose hazards to examiners' vehicles; and low clearances or dilapidated stairways to access basement home offices. These types of concerns are much less likely to arise in a public, non-residential setting. For those home-based credit unions located in rural areas, NCUA is also concerned about the potential for examiners being isolated in a remote location.

Recently, NCUA began extensive efforts to encourage home-based credit unions to obtain commercial office space. NCUA's Office of Small Credit Union Initiatives (OSCUI) has worked with NCUA's Regional Offices to identify home-based credit unions. OSCUI then contacted each of these credit unions to offer assistance in planning for the credit union's long-term viability, including obtaining office space. OSCUI also offered grants to support relocation of home-based credit unions holding the NCUA Low Income Designation. To date, no home-based credit union has taken advantage of these services.

The Board proposes to amend its regulations to require that any examinations or other on-site contacts between NCUA staff and FCU officials occur at an FCU's business offices or at a mutually agreeable public location. This does not include a private residence. No later than two years following the effective date of a final rule, the proposal would also require all FCUs to obtain and maintain a business office, not located in a private residence. The Board is proposing this rule because, as discussed above, it is concerned that continuing to allow NCUA staff to meet with FCU officials at private residences poses safety risks and is not favorable to conducting business in an appropriate fashion. In addition, the lack of a business office impedes the ability of FCUs to thrive and grow by obtaining new members or providing additional services to existing members.

The proposed rule would also require FCUs to maintain and monitor telephone numbers or electronic mail addresses, or both. The Board believes another impediment to an FCU's long-term viability is the inability of members to contact the FCU. In the recent outreach to home-based credit unions, OSCUI staff discovered that many of these credit unions lacked a dedicated telephone number with an answering system, a monitored electronic mail address, or both. Lacking both telephone and electronic mail access is not acceptable for a present-day financial institution. NCUA staff, FCU members, and potential FCU members need a reliable way to reach the FCU by electronic mail or telephone, leave messages, and receive prompt replies.

Operating an FCU out of a private residence also creates significant operational risks. The preservation and security of records is a critical concern, and NCUA is concerned many home-based FCUs are storing records in areas where they are at risk for accidental destruction, such as in basements near water heater tanks. Member privacy is also at risk if records are stored where other residents of the household could access them. Finally, as occurred in a recent situation, if an FCU official operating a home-based credit union dies or becomes disabled, NCUA can face barriers to accessing the FCU's records.

Further, a home-based FCU that pays rent for its space to the residing official creates disincentives for FCU management to procure appropriate space. These rental arrangements, by their nature, pose a potential conflict of interest for FCU officials.

The Board also notes that requiring examinations and other contacts with NCUA staff to occur in an alternative public location for credit unions that lack offices is not an ideal long-term solution. While addressing NCUA's concerns about staff safety and working conditions, meeting in public locations raises other risks. The main concern is the potential for inadvertent violations of privacy laws, or disclosure of confidential supervisory information related to the FCU's condition. For example, credit union examinations frequently involve discussion of the details of particular member loan files, which contain personally identifiable information (PII) that can be used to distinguish or trace an individual's identity. Likewise, examination contacts focus on the FCU's operations and often involve discussions of corrective actions the FCU must take. If these discussions occur in the alternative public locations, as permitted for the first two years under the proposal, NCUA staff and FCU officials must exercise caution that no other parties can overhear any PII or confidential supervisory information.

Having credit union officials move paper files to and from meeting locations, as would be required by the proposal if the credit union is unable to send records electronically, also entails privacy risks. When examiners take possession of an FCU's books and records outside of a credit union's office, the potential for inadvertent disclosure of PII increases further. As required by the Office of Management and Budget, NCUA has adopted guidance for staff regarding privacy responsibilities. These instructions require staff to take a variety of steps to safeguard PII. 8 One requirement is that staff taking possession of an FCU's records must conduct the contact in a non-public place. 9 Combining this requirement with the proposal's prohibition on meetings in residences limits the number of acceptable locations for off-site contacts.

In summary, while conducting contacts in alternative public locations, NCUA staff and credit union officials must exercise extreme care to avoid violations of privacy laws or revealing confidential supervisory information about the credit union. In the longer term, the Board has determined to eliminate this risk by requiring all FCUs to have an office that will facilitate discussions involving members' PII and confidential supervisory information without the risk of unauthorized disclosure of this sensitive information.

The Board emphasizes that it is sensitive to the challenges the smallest FCUs face, and wants to ensure the long-term viability of all FCUs. Lacking appropriate commercial office space, however, is a significant barrier to both long-term viability and effective supervision. As noted above, over the past year, NCUA has undertaken extensive efforts to assist home-based credit unions, and these efforts will continue. OSCUI will offer another round of grants to support relocation of home-based credit unions that hold the NCUA Low Income Designation in 2014. OSCUI will also produce a Home Relocation Guide best practice document and work with all affected FCUs to provide guidance on relocation.

The proposed rule adds new section 701.40 to part 701 of NCUA's regulations. Paragraph (a) requires that any meetings between an FCU and NCUA staff occur at an FCU's offices or another alternative public location. This paragraph excludes from the definition of “office,” private homes, as well as separate areas of residential premises. Defining “office” in this manner will address the many varieties of home-based offices, including rooms in homes, separate apartments attached to homes, separate buildings on residential premises such as garages, and separate apartments within a residential apartment building not zoned for retail use. All of these types of locations raise similar concerns in terms of working conditions and safety for NCUA staff, as well as member accessibility.

Paragraph (b) specifies that any home-based FCU official that meets with NCUA staff at an alternative public location must deliver all necessary records to that location. The proposal lists examples of acceptable alternative public locations, such as restaurants, hotel lobbies or meeting rooms, libraries, and community centers. For FCUs that operate from churches or other communal sites such as lodges, the church or lodge office would also be an acceptable alternative public location under the proposed rule. FCU officials and NCUA staff must, however, find a meeting space that complies with NCUA's privacy regulations related to the security of records provided to NCUA. Where an FCU's records with PII are present and in the possession of NCUA staff, the meeting space must be in a separate area, such as a conference room in a hotel, library, or community center.

Subparagraph (c) requires FCUs to maintain and monitor, at a minimum, either an electronic mail address or a telephone number.

The proposed rule applies only to FCUs, not all federally insured credit unions. State supervisory authorities may continue to conduct their examinations of home-based, state credit unions at any location they choose.

Two years after the final rule's effective date, the proposal would revise § 701.40 to prohibit FCUs from operating out of homes. The proposal would also prohibit storage of FCU records at residential locations and continue to require FCUs to maintain at least one method of contact. As permitted in conjunction with the requirement that NCUA staff meet with FCU officials at an office or other public location, an FCU that operates out of a church office or similar location will be deemed in compliance with the requirement to obtain office space. OSCUI will consult with affected FCUs to determine if specific situations meet the office requirement.

The proposed rule does not immediately require FCUs to operate out of an office location, so that all affected FCUs have time to adapt to this change. The delayed effective date for obtaining office space, combined with the immediate requirement to meet in public places, improves working conditions for NCUA staff in the short term without immediately imposing a new requirement on small FCUs. As noted above, OSCUI staff will continue to be available to assist affected FCUs as they transition to obtaining business office locations, with appropriate and secure records storage areas, over the next two years.

The proposed rule intends to ensure that all FCUs operate in a manner consistent with modern-day expectations for insured financial institutions. In conjunction with its recent rule requiring all federally insured credit unions to file quarterly call reports electronically, NCUA provided grants so that all credit unions with NCUA's Low Income Designation that lacked computers could obtain them. NCUA will make similar efforts to assist home-based FCUs to comply with these proposed requirements.

NCUA requests comments on all aspects of the proposed rule. In light of NCUA's concerns about staff safety and working conditions, NCUA particularly requests comments about whether the portion of the rule requiring home-based credit unions to meet NCUA staff at an alternative public location should also apply to state-chartered, federally insured credit unions.

The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a proposed rule may have on a substantial number of small credit unions (primarily those under $50 million in assets). Although this rule would affect relatively few FCUs, NCUA recognizes that all of the affected FCUs are small credit unions. As discussed above, NCUA is offering assistance to locate suitable meeting space at low or no cost as well as assistance with initial relocation expenses. Over the longer term, NCUA will work with officials of affected FCUs to provide consulting, training, and education and resource support as home-based FCUs transition to commercial locations. Accordingly, NCUA certifies this rule will not have a significant economic impact on a substantial number of small credit unions.

The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency creates a new paperwork burden on regulated entities or modifies an existing burden. For purposes of the PRA, a paperwork burden may take the form of either a reporting or a recordkeeping requirement, both referred to as information collections. The proposed change to part 701 simply requires examinations and other meetings with NCUA staff to occur in certain authorized locations, and that FCUs maintain a functioning telephone number or electronic mail address, or both. This proposed rule will not create new paperwork burdens or modify any existing paperwork burdens.

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the executive order to adhere to fundamental federalism principles. Given the minor requirements the rule imposes on FCUs only, it 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. NCUA has determined that this proposed rule does not constitute a policy that has federalism implications for purposes of the Executive Order.

NCUA has determined that this proposed rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999. 10

For the reasons set forth above, NCUA proposes to amend 12 CFR part 701 as follows:

We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning these special conditions. You can inspect the docket before and after the comment closing date. If you wish to review the docket in person, go to the address in the ADDRESSES section of this preamble between 7:30 a.m. and 4:00 p.m., Monday through Friday, except Federal holidays.

We will consider all comments we receive on or before the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive.

If you want us to acknowledge receipt of your comments on this proposal, include with your comments a self-addressed, stamped postcard on which you have written the docket number. We will stamp the date on the postcard and mail it back to you.

On August 25, 2008, Airbus applied for a type certificate for their new A350-900 series airplane. Later, Airbus requested and the FAA approved an extension to the application for FAA type certification to June 28, 2009. The A350-900 series has a conventional layout with twin wing-mounted Rolls Royce Trent engines. It features a twin aisle 9-abreast economy class layout, and accommodates side-by-side placement of LD-3 containers in the cargo compartment. The basic A350-900 series configuration accommodates 315 passengers in a standard two-class arrangement. The design cruise speed is Mach 0.89 with a Maximum Take-Off Weight of 591,000 lbs. Airbus proposes the A350-900 series to be certified for extended operations (ETOPS) beyond 180 minutes at entry into service for up to a 420 minute maximum diversion time.

The A350-900, like Airbus A320, A330, A340 and A380 series aircraft, has a high speed protection system that limits nose down pilot authority at speeds above V C/ M C , and prevents the airplane from actually performing the maneuver required under § 25.335(b)(1). Special conditions are necessary to address the Airbus A350-900 series high speed protection system. The proposed special conditions identify various symmetric and non-symmetric maneuvers that will ensure that an appropriate design dive speed, V D /M D , is established.

Under Title 14, Code of Federal Regulations (14 CFR) 21.17, Airbus must show that the A350-900 series meets the applicable provisions of part 25, as amended by Amendments 25-1 through 25-129.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 25) do not contain adequate or appropriate safety standards for the A350-900 series because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same or similar novel or unusual design feature, the special conditions would also apply to the other model under § 21.101.

In addition to the applicable airworthiness regulations and special conditions, the A350-900 series must comply with the fuel vent and exhaust emission requirements of 14 CFR part 34 and the noise certification requirements of 14 CFR part 36 and the FAA must issue a finding of regulatory adequacy under section 611 of Public Law 92-574, the “Noise Control Act of 1972.”

The FAA issues special conditions, as defined in 14 CFR 11.19, under § 11.38, and they become part of the type-certification basis under § 21.17(a)(2).

The Airbus A350-900 series will incorporate the following novel or unusual design features:

A high speed protection system that limits nose down pilot authority at speeds above V C/ M C , and prevents the airplane from actually performing the maneuver required under § 25.335(b)(1). The proposed special conditions identify various symmetric and non-symmetric maneuvers that will ensure that an appropriate design dive speed, V D /M D , is established.

Section 25.335(b)(1) is an analytical envelope condition which was originally adopted in Part 4b of the Civil Air Regulations in order to provide an acceptable speed margin between design cruise speed and design dive speed. Flutter clearance design speeds and airframe design loads are impacted by the design dive speed. While the initial condition for the upset specified in the rule is 1g level flight, protection is afforded for other inadvertent overspeed conditions as well. Section 25.335(b)(1) is intended as a conservative enveloping condition for potential overspeed conditions, including non-symmetric ones.

To establish that potential overspeed conditions are enveloped, the applicant should demonstrate that any reduced speed margin, based on the high speed protection system in the A350-900 series, will not be exceeded in inadvertent, or gust induced, upsets resulting in initiation of the dive from non-symmetric attitudes; or that the airplane is protected by the flight control laws from getting into non-symmetric upset conditions. The proposed special conditions identify various symmetric and non-symmetric maneuvers that will ensure than an appropriate design dive speed, V D /M D , is established.

These special conditions are proposed in lieu of § 25.335(b)(1). Section 25.335(b)(2), which also addresses the design dive speed, is applied separately (Advisory Circular (AC) 25.335-1A provides an acceptable means of compliance to § 25.335(b)(2)). The applicant should conduct a demonstration that includes a comprehensive set of conditions, as described below.

Paragraph (2) of the proposed special condition references AC 25-7C, section 32.c.(3), included here for information.

“(3) Gust Upset. In the following three upset tests, the values of displacement should be appropriate to the airplane type and should depend upon airplane stability and inertia characteristics. The lower and upper limits should be used for airplanes with low and high maneuverability, respectively.

(a) With the airplane trimmed in wings-level flight, simulate a transient gust by rapidly rolling to the maximum bank angle appropriate for the airplane, but not less than 45 degrees nor more than 60 degrees. The rudder and longitudinal control should be held fixed during the time that the required bank is being attained. The rolling velocity should be arrested at this bank angle. Following this, the controls should be abandoned for a minimum of 3 seconds after V MO /M MO or 10 seconds, whichever occurs first.

(b) Perform a longitudinal upset from normal cruise. Airplane trim is determined at V MO /M MO using power/thrust required for level flight but with not more than maximum continuous power/thrust. (If V MO /M MO cannot be reached in level flight with maximum continuous power or thrust, then the airplane should be trimmed at V MO /M MO in a descent.) This is followed by a decrease in speed, after which a pitch attitude of 6-12 degrees nose down, as appropriate for the airplane type, is attained using the same power/thrust and trim. The airplane is permitted to accelerate until 3 seconds after V MO /M MO . The force limits of § 25.143(d) for short term application apply.

(c) Perform a two-axis upset, consisting of combined longitudinal and lateral upsets. Perform the longitudinal upset, as in paragraph (b) above, and when the pitch attitude is set, but before reaching V MO /M MO , roll the airplane 15-25 degrees. The established attitude should be maintained until 3 seconds after V MO /M MO .”

Paragraphs (3) and (4) of the proposed special condition indicate that failures of the high speed protection system must be improbable and must be annunciated to the pilots. If these two criteria are not met, then the probability that the established dive speed will be exceeded, and the resulting risk to the airplane, is too great. On the other hand, if the high speed protection system is known to be inoperative, then dispatch of the airplane could be acceptable under an approved Minimum Equipment List (MEL) containing language similar to paragraph (5). Dispatch under an MEL would require that appropriate reduced operating speeds, V MO /M MO , are provided in the airplane flight manual, and the cockpit display of those reduced speeds, as well as the overspeed warning for exceeding those speeds, are equivalent to that of the normal airplane with the high speed protection system operative.

We do not believe that application of the Interaction of Systems and Structures special condition (reference A350 issue paper A-3) or the European Aviation Safety Agency (EASA) Certification Specification (CS) 25.302, is appropriate in this case, because design dive speed is, in and of itself, part of the design criteria. Stability and control, flight loads, and flutter evaluations all depend on the design dive speed. Therefore, a single design dive speed should be established that will not be exceeded taking into account the performance of the high speed protection system, as well as its failure modes, failure indications and accompanying flight manual instructions.

As discussed above, these special conditions apply to A350-900 series airplanes. Should Airbus apply at a later date for a change to the type certificate to include another series incorporating the same novel or unusual design feature, the special conditions would apply to that series as well.

This action affects only certain novel or unusual design features on the Airbus A350-900 series airplanes. It is not a rule of general applicability.

The authority citation for these special conditions is as follows:

Accordingly, the Federal Aviation Administration (FAA) proposes the following special conditions as part of the type certification basis for Airbus A350-900 series airplanes.

(1) In lieu of compliance with § 25.335(b)(1), if the flight control system includes functions that act automatically to initiate recovery before the end of the 20 second period specified in § 25.335(b)(1), V D /M D must be determined from the greater of the speeds resulting from conditions (a) and (b) below. The speed increase occurring in these maneuvers may be calculated, if reliable or conservative aerodynamic data are used.

(a) From an initial condition of stabilized flight at V C /M C , the airplane is upset so as to take up a new flight path 7.5 degrees below the initial path. Control application, up to full authority, is made to try and maintain this new flight path. Twenty seconds after initiating the upset, manual recovery is made at a load factor of 1.5 g (0.5 acceleration increment), or such greater load factor that is automatically applied by the system with the pilot's pitch control set to neutral. Power, as specified in § 25.175(b)(1)(iv), is assumed until recovery is initiated, at which time power reduction and the use of pilot controlled drag devices may be used.

(b) From a speed below V C /M C , with power to maintain stabilized level flight at this speed, the airplane is upset so as to accelerate through V C /M C at a flight path 15 degrees below the initial path (or at the steepest nose down attitude that the system will permit with full control authority if less than 15 degrees). The pilot's controls may be in the neutral position after reaching V C /M C and before recovery is initiated. Recovery may be initiated three seconds after operation of the high speed warning system by application of a load of 1.5g (0.5 acceleration increment), or such greater load factor that is automatically applied by the system with the pilot's pitch control neutral. Power may be reduced simultaneously. All other means of decelerating the airplane, the use of which is authorized up to the highest speed reached in the maneuver, may be used. The interval between successive pilot actions must not be less than one second.

(2) The applicant must also demonstrate that the speed margin, established as above, will not be exceeded in inadvertent, or gust induced, upsets resulting in initiation of the dive from non-symmetric attitudes, unless the airplane is protected by the flight control laws from getting into non-symmetric upset conditions. The upset maneuvers described in AC 25-7C, Chapter 2, Section 8, Paragraph 32c.(3)(a) and (c), may be used to comply with this requirement.

(3) Detected loss of the high speed protection function must be less than 10 −3 per flight hour.

(4) Failures of the system must be annunciated to the pilots. The Operating Limitations Section of the Airplane Flight Manual must contain instructions that reduce the maximum operating speeds, V max /M max , to a value that maintains a speed margin between these speeds and V D /M D that is consistent with showing compliance to § 25.335(b) without the benefit of the high speed protection system.

(5) Dispatch of the airplane with the high speed protection system inoperative is prohibited except under an approved Minimum Equipment List (MEL) that requires Airplane Flight Manual instructions to indicate reduced maximum operating speeds, as described in paragraph (4). In addition, the cockpit display of the reduced operating speeds, as well as the overspeed warning for exceeding those speeds, must be equivalent to that of the normal airplane with the high speed protection system operative. Also, it must be shown that no additional hazards are introduced with the high speed protection system inoperative.

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2007-27009; Directorate Identifier 2007-NE-02-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

On May 24, 2010, we issued AD 2007-19-09R1, Amendment 39-16322 (75 FR 30687, June 2, 2010). That AD applies to all Turbomeca S.A. 2B1 turboshaft engines that do not incorporate modification TU157. That AD requires replacement of the HMU with a serviceable HMU. AD 2007-19-09R1 resulted from reports of HMU valve rupture. We issued AD 2007-19-09R1 to prevent failure of the HMU, which could lead to damage to the engine and damage to the aircraft.

Since we issued AD 2007-19-09R1, Amendment 39-16322 (75 FR 30687, June 2, 2010), we received reports of ruptures on HMU constant delta pressure valves that have less than 2,000 hours in service. Also since we issued AD 2007-19-09R1, the European Aviation Safety Agency has issued AD 2013-0171, dated July 30, 2013, which reintroduces a requirement for periodic replacement of the HMU.

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

This proposed AD would retain certain requirements of AD 2007-19-09R1, Amendment 39-16322 (75 FR 30687, June 2, 2010) but would reduce the compliance interval and include the C2 cycle consumption rate when determining compliance times.

We estimate that this proposed AD affects 264 engines installed on aircraft of U.S. registry. We also estimate that it would take about 1 hour per engine to comply with this proposed AD. The average labor rate is $85 per hour. Parts cost about $5,000 per engine. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $1,342,440.

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

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

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

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

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

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

(3) Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction, and

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

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

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

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2013-1029; Directorate Identifier 2013-NM-177-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

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

On June 10, 2010, we issued AD 2010-13-04, Amendment 39-16335 (75 FR 35622, June 23, 2010). AD 2010-13-04 requires actions intended to address an unsafe condition on the products listed above.

Since we issued AD 2010-13-04, Amendment 39-16335 (75 FR 35622, June 23, 2010), Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2009-29R1, dated August 14, 2013 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

This proposed AD would also add airplanes to the applicability. AD 2010-13-04, Amendment 39-16335 (75 FR 35622, June 23, 2010), affected Model DHC-8-400 series airplanes, serial numbers 4001, 4003, 4004, 4006, and 4008 through 4238 inclusive. This proposed AD would affect serial numbers 4001 through 4435 inclusive. You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating it in Docket No. FAA-2013-1029.

Bombardier, Inc. has issued Service Bulletin 84-32-110, Revision A, dated April 8, 2013. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all pertinent information and determined an unsafe condition exists and is likely to exist or develop on other products of the same type design.

We estimate that this proposed AD affects 383 airplanes of U.S. registry.

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

According to the manufacturer, some of the costs of this proposed AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate

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

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

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

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

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2013-1057; Directorate Identifier 2013-CE-041-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

We received reports of two M7 Aerospace LLC Model SA227 airplanes with multiple fatigue cracks in the FS 69.31 front pressure bulkhead. The cracks are located in the radii of the left-hand and right-hand part number 27-21027 frames. The cracks were discovered by maintenance personnel after the flight crew reported trouble maintaining normal cabin pressure. The root cause for multiple site fatigue cracking is the normal ground-air-ground pressure cycles.

This unsafe condition, if not corrected, could result in cabin depressurization.

We reviewed M7 Aerospace LLC SA26 Series Service Bulletin 26-53-001 R1; SA226 Series Service Bulletin 226-53-017 R1; SA227 Series Service Bulletin 227-53-011 R1; and SA227 Series Commuter Category Service Bulletin CC7-53-007 R1, all revised November 6, 2013. The service information describes procedures for repetitively inspecting (visually) the FS 51.31 front pressure bulkhead on SA26 series airplanes and FS 69.31 front pressure bulkhead on SA226 and SA227 series airplanes for cracks, and, if any crack damage is found, reporting and repairing any cracked bulkhead.

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

This proposed AD would require accomplishing the actions specified in the service information described previously. This proposed AD also requires sending the inspection results to M7 Aerospace LLC.

Operators who had the initial inspection and resulting repairs accomplished using procedures different from the M7 Aerospace LLC service information required by this AD action may apply for an alternative method of compliance (AMOC) following the instructions in paragraph (m) of this AD.

We estimate that this proposed AD affects 360 airplanes of U.S. registry.

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

We estimate the following costs to do any necessary repairs that would be required based on the results of the proposed inspection. We have no way of determining the number of aircraft that might need these repairs:

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid OMB control number. The control number for the collection of information required by this proposed AD is 2120-0056. The paperwork cost associated with this AD has been detailed in the Costs of Compliance section of this document and includes time for reviewing instructions, as well as completing and reviewing the collection of information. Therefore, all reporting associated with this proposed AD would be mandatory. Comments concerning the accuracy of this burden and suggestions for reducing the burden should be directed to the FAA at 800 Independence Ave. SW., Washington, DC 20591. ATTN: Information Collection Clearance Officer, AES-200.

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

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

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

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

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

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

(3) Will not affect intrastate aviation in Alaska and

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

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

Purpose: This document is to announce that a forum will be convened by the Office to discuss the proposed changes to the Office's rules of practice in order to implement title I of the PLTIA. See Changes To Implement the Hague Agreement Concerning International Registration of Industrial Designs, 78 FR 71870 (Nov. 29, 2013). Public comments will not be solicited for the forum. However, written comments to the proposed rules can be submitted on or before January 28, 2014, as set forth in the Office's notice of proposed rulemaking. While public attendees may have the opportunity to ask questions, group consensus advice will not be sought. Additional details regarding specific topics for the forum will be made available on the Office's Web site.

Background: The Hague Agreement provides that an applicant may apply for design protection in all member countries and with intergovernmental organizations by filing a single, standardized international design application in a single language. Title I of the PLTIA amends title 35 to implement the provisions of the Hague Agreement and is to take effect on the entry into force of the Hague Agreement with respect to the United States. For the forum, the Office intends to provide information regarding the proposed rule changes to implement the PLTIA. Additional information concerning the proposed rules and the Hague Agreement, and any updates concerning the forum, can be found on the Office's Web site, www.uspto.gov.

Throughout this document, the following terms have the meanings described below:

• “we,” “us,” and “our” refer to EPA.

• “Act” and “CAA” means Clean Air Act.

• “40 CFR” means Title 40 of the Code of Federal Regulations—Protection of the Environment.

• “SIP” means State Implementation Plan as established under section 110 of the Act.

• “NSR” means new source review, a phrase intended to encompass the statutory and regulatory programs that regulate the construction and modification of stationary sources as provided under CAA section 110(a)(2)(C), CAA Title I, parts C and D, and 40 CFR 51.160 through 51.166.

• “Minor NSR” means NSR established under section 110 of the Act and 40 CFR 51.160.

• “NNSR” means nonattainment NSR established under Title I, section 110 and part D of the Act and 40 CFR 51.165.

• “PSD” means prevention of significant deterioration of air quality established under Title I, section 110 and part C of the Act and 40 CFR 51.166.

• “Major NSR” means any new or modified source that is subject to NNSR and/or PSD.

• “TSD” means the Technical Support Document for this action.

• “NAAQS” means national ambient air quality standards promulgated under section 109 of that Act and 40 CFR part 50.

• “TCEQ” means “Texas Commission on Environmental Quality.”

EPA is proposing to approve four submittals from the State of Texas as revisions to the Texas New Source Review (NSR) State Implementation Plan (SIP) that incorporate the Standard Permit for Installation and/or Modification of Oil and Gas Facilities (hereafter referred to as the “Oil and Gas Standard Permit”). Texas initially submitted the Standard Permit provisions on September 20, 1995, and submitted subsequent revisions to those provisions on April 19, 1996; July 22, 1998; and September 11; 2000. We also are proposing to approve submittals from the State of Texas as a revision to the NSR SIP that contain non-substantive changes to the applicability provisions of the Standard Permits SIP permitting program. Texas submitted revisions to the Standard Permit applicability provisions on February 1, 2006 and resubmitted them on March 11, 2011.

We have evaluated the SIP submissions for whether they meet the Act and 40 CFR part 51, and are consistent with EPA's interpretation of the relevant provisions. Based upon our evaluation, EPA has concluded that the SIP revision submittals for the Oil and Gas Standard Permit and the non-substantive revisions to the Standard Permit applicability provisions meet the applicable requirements of the Act and 40 CFR part 51. Therefore, EPA is proposing to approve the provisions of the submittals relating to the Oil and Gas Standard Permit SIP revisions and to the Standard Permit applicability provisions. EPA is proposing this action under section 110 of the Clean Air Act (CAA).

The TCEQ has developed and submitted the Oil and Gas Standard Permit as a revision to the Texas Minor NSR permit program. The Standard Permit was initially developed by TCEQ in 1995, and TCEQ has adopted subsequent amendments and submitted these as revisions to the Texas SIP since that time. As discussed in Section I of this rulemaking, EPA is proposing approval of the Oil and Gas Standard Permit—from the date of the initial submittal, dated September 20, 1995, through the September 11, 2000 SIP revision. This Section contains a brief summary of each of the SIP revisions pertaining to the Oil and Gas Standard Permit that is subject to our proposed approval.

On July 26, 1995, the Texas Natural Resources Conservation Commission (TNRCC)  1 adopted revisions to the state regulations to establish the Oil and Gas Standard Permit. The Standard Permit was adopted at Title 30 of the Texas Administrative Code (30 TAC) Chapter 116.617(3). Note that the September 20, 1995 SIP submittal contained additional, severable, revisions to 30 TAC Chapter 116, which are not addressed as part of this rulemaking.

On March 27, 1996, the TNRCC adopted amendments to the state regulations to delete 30 TAC 116.617(3)—Installation and/or Modification of Oil and Gas Facilities and move the Standard Permit to 30 TAC 116.620. The Standard Permit previously contained in 30 TAC 116.617(3) was moved and renumbered to conform these sections to Texas Register style conventions and to allow ease in revising the section in the future. Note that the April 19, 1996 SIP submittal contained additional, severable, revisions to 30 TAC Chapter 116, which are not addressed as part of this rulemaking.

On June 17, 1998, the TNRCC adopted amendments to the state regulations that included amendments to 30 TAC 116.620. These revisions added a requirement that sources subject to National Emission Standards for Hazardous Air Pollutants (NESHAPs) show compliance with Maximum Achievable Control Technology (MACT) standards, and also made non-substantive changes. Note that the July 22, 1998 SIP submittal contained additional, severable, revisions to 30 TAC Chapter 116, which are not addressed as part of this rulemaking.

On August 9, 2000, the TNRCC adopted amendments to the state regulations that included amendments to 30 TAC 116.620. These revisions made non-substantive changes. Note that the September 11, 2000 SIP submittal contained additional, severable, revisions to 30 TAC Chapters 101 and 116, which are not addressed as part of this rulemaking.

On January 11, 2006, the TCEQ adopted revisions to the Standard Permit SIP rules, which made non-substantive changes to the applicability provisions in 30 TAC 116.610(a) and (b). Note that the February 1, 2006 SIP submittal contained additional, severable, revisions to 30 TAC Chapter 116, which are not addressed as part of this rulemaking.

On March 11, 2011, the same changes that were submitted on February 1, 2006, to 30 TAC 116.610(a) and (b) were resubmitted. Note that the March 11, 2011 SIP submittal contained additional, severable, revisions to 30 TAC Chapter 116, which are not addressed as part of this rulemaking.

EPA approved Texas' general regulations for Standard Permits in 30 TAC Subchapter F of 30 TAC Chapter 116 on November 14, 2003 (68 FR 64543) as meeting the federal requirements for Minor NSR. 2 The November 14, 2003, action describes how those rules meet EPA's requirements for new minor sources and minor modifications. A Standard Permit is a minor NSR permit that is adopted under Chapter 116, Subchapter F. Subchapter F provides an alternative process for approving the construction of certain categories of new and modified sources for which TCEQ has adopted a Standard Permit. These provisions provide for a streamlined minor NSR mechanism for authorizing the construction of certain sources within source categories for which TCEQ has adopted a Standard Permit. A Standard Permit is not available to a facility or group of facilities that undergo a change that constitutes a new major source or major modification under Title I of the Act, part C (Prevention of Significant Deterioration of Air Quality) or part D (Nonattainment Review). Such major source or major modification must comply with the applicable permitting requirements under Chapter 116, Subchapter B, which meet the new source review requirements in Title I, part C or part D of the Act. A facility that qualifies for a minor NSR Standard Permit must also comply with all applicable provisions of section 111 of the Act (NSPS) and section 112 of the Act (NESHAP). Furthermore, a facility that qualifies for a minor NSR Standard Permit must comply with all rules and regulations of TCEQ.

A Standard Permit is not a case-by-case Minor NSR SIP permit, but rather it is a streamlined mechanism with all permitting requirements for construction and operation of a certain source category. Therefore, each Standard Permit approved in a SIP should contain all terms and conditions on the face of it (combined with the SIP general requirements), and it should not be used to address site-specific determinations.

The Oil and Gas Standard Permit was developed to provide a streamlined permitting process for oil and gas facilities. The Standard Permit contained in 30 TAC 116.620 simplifies the permit review process for these facilities by establishing standardized conditions applicable to the oil and gas industry, which help to streamline the agency review process and allow more rapid approval than would be possible under case-by-case minor NSR review permitting.

The standardized conditions contained in the Oil and Gas Standard Permit include emission specifications, control requirements, inspection requirements, approved test methods provisions, and monitoring and recordkeeping requirements. In addition, a source applying for authorization under 30 TAC 116.620 must also meet the applicable requirements contained in the other Sections under 30 TAC Chapter 116, Subchapter F—Standard Permits, which include registration and fee requirements and general permit conditions for Standard Permits. In accordance with 30 TAC 116.610(b), the Oil and Gas Standard Permit is limited to Minor NSR and cannot be used to authorize a project that constitutes a new major stationary source or major modification. Therefore, as discussed in the following section, the Oil and Gas Standard Permit provisions are evaluated with respect to the applicable Minor NSR requirements.

As previously mentioned, the Oil and Gas Standard Permit includes standardized conditions for the emission units located at oil and gas facilities that may be authorized by the Standard Permit. The types of emission units that may be authorized by the Standard Permit are the following:

• Internal combustion engines (ICEs),

• Natural gas turbines (NG turbines),

• Flares,

• Other combustion units (design heat input > 40 million Btu per hour),

• Natural gas glycol dehydration units,

• Storage tanks,

• Separators,

• Condensers,

• Vapor recovery units,

• Process vents, and

• Process fugitives.

In order for one of the previously-listed emission units to be authorized by the Standard Permit, that unit must meet the applicable unit-specific standardized conditions, and, the oil and gas facility as a whole must meet any applicable site-wide standardized conditions contained in the Standard Permit. If a proposed project at an oil and gas facility includes any emission units that are not explicitly covered by the Oil and Gas Standard Permit, the permit applicant would turn to another type of Standard Permit authorization or a permit-by-rule (PBR) or, if necessary, case-by-case NSR permitting for authorization. For example, the Oil and Gas Standard Permit does not provide authorization for cooling towers. Therefore, an oil and gas facility with a cooling tower on-site would not be able to use the Oil and Gas Standard Permit to authorize the emissions from that emission unit, but could rely upon the separate cooling tower SP or PBR. 3 Any other emission units not specifically authorized under the Oil and Gas Standard Permit also could obtain authorization through either a SP or PBR that explicitly addresses it or obtain a case-by-case minor NSR permit. In addition to cooling towers, other examples of emission units that may be found at oil and gas facilities that are not covered by the Oil & Gas Standard Permit include, but are not limited to, truck loading emissions, heat exchangers, amine sweetening units, and sulfur recovery units. If EPA discovers evidence to support the determination that the TCEQ were found to be misapplying the Oil and Gas Standard Permit or a permittee obtained authorization under this Standard Permit for emission units that are outside the scope of 116.620, then EPA or the public could address this implementation failure on a permit specific basis or other CAA remedy mechanism, such as a finding of failure to implement.

The Act at Section 110(a)(2)(C) requires states to develop and submit to EPA for approval into the state SIP, preconstruction review and permitting programs applicable to certain new and modified stationary sources of air pollutants for attainment and nonattainment areas that cover both major and minor new sources and modifications, collectively referred to as the NSR SIP. The CAA NSR SIP program is composed of three separate programs: Prevention of Significant Deterioration (PSD), Nonattainment New Source Review (NNSR), and Minor NSR. PSD is established in part C of title I of the CAA and applies in areas that meet the NAAQS—“attainment areas”—as well as areas where there is insufficient information to determine if the area meets the NAAQS—“unclassifiable areas.” The NNSR SIP program is established in part D of title I of the CAA and applies in areas that are not in attainment of the NAAQS—“nonattainment areas.” The Minor NSR SIP program addresses construction or modification activities that do not emit, or have the potential to emit, beyond certain major source/major modification thresholds and thus do not qualify as “major” and applies regardless of the designation of the area in which a source is located. Any submitted SIP revision, including revisions to a Minor NSR program, must meet the applicable requirements for SIP elements in section 110 of the Act, and be consistent with all applicable statutory and regulatory requirements.

EPA regulations governing the criteria that states must satisfy for EPA approval of the NSR programs as part of the SIP are contained in 40 CFR Sections 51.160-51.166. Regulations specific to Minor NSR programs are contained in 40 CFR Section 51.160-51.164. The TCEQ has developed the Oil and Gas Standard Permit as a component of the Texas Minor NSR program; therefore we will evaluate the Standard Permit as submitted on September 20, 1995; April 19, 1996; July 22, 1998; and September 11, 2000, against the federal requirements for Minor NSR programs.

40 CFR Section 51.160 establishes the requirements that all Minor NSR programs must meet. We will address these specific requirements in Section III.A. 40 CFR Section 51.161 establishes the public notice requirements for Minor NSR programs. We will address the public notice requirements more fully in Section III.B. Section 51.160-51.164 requires that a SIP revision demonstrate that the adopted rules will not interfere with any applicable requirement concerning attainment and reasonable further progress, or any other applicable requirement of the CAA. We will address the specific requirements for permitting activities that ensure attainment more fully in Section III.C.

EPA's regulations addressing a Minor NSR program as part of a state's SIP are included at 40 CFR 51.160, which applies to all programs under Title I of the CAA. These provisions of a Minor NSR program must provide that the permitting authority will not permit the construction of a facility or modification that will cause a violation of applicable portions of the control strategy or interfere with attainment or maintenance of a NAAQS. To accomplish this goal, the state's Minor NSR program must include the means by which the state agency will review and take final action on proposed new construction or modification to be protective of the control strategy and NAAQS. As stated in 40 CFR 51.160, all NSR programs, including the Minor NSR program, must include legally enforceable  4 procedures that meet the following requirements:

• Provide for the submission, by the owner or operator of the building, facility, structure or installation to be constructed or modified of such information on the nature and amounts of emissions to be emitted by it or emitted by associated mobile sources; and the design, construction and operation of such facility, building, structure, or installation as may be necessary to allow the permitting authority to make a determination on approvability. 40 CFR 51.160(c).

• The Minor NSR program must provide that approval of any construction or modification must not affect the responsibility of the owner or operator to comply with applicable portions of the control strategy. 40 CFR 51.160(d).

• The Minor NSR program must include procedures to identify the types and sizes of facilities, buildings, structures, or installations which will be subject to review. The Minor NSR program must also discuss the basis for determining which facilities will be subject to review. 40 CFR 51.160(e).

• The Minor NSR program must also discuss the air quality data and the dispersion or other air quality modeling used to meet the NSR requirements. 40 CFR 51.160(f).

The SIP submittals being evaluated as part of this rulemaking are for a Standard Permit that is submitted as part of Texas's Minor NSR program; therefore, the provisions from the Oil and Gas Standard Permit are evaluated against the federal requirements for Minor NSR and in conjunction with the existing SIP-approved provisions of the Standard Permitting Program found in 30 TAC Chapter 116, Subchapter F—Standard Permits that provides the basic requirements that a facility must meet to qualify for a Standard Permit.

Based on our evaluation, we propose to find that the Oil and Gas Standard Permit provisions found in 30 TAC 116.620 provide for the necessary procedures and applicable requirements that are required for Minor NSR programs. Our evaluation is summarized below with additional details regarding our evaluation available in the TSD accompanying this rulemaking.

In accordance with 30 TAC 116.611, sources seeking authorization via the Oil and Gas Standard Permit are required to submit a Standard Permit registration to TCEQ, which is to include information regarding the proposed project to be authorized (e.g., emission estimates, description of project and related process, description of equipment being installed). 30 TAC 116.615 includes general conditions that must be met by sources authorized via a Standard Permit, including the Oil and Gas Standard Permit. These general conditions specifically require that sources authorized under a Standard Permit comply with all “rules, regulations, and orders of the commission issued in conformity with the [Texas Clean Air Act].” See 30 TAC 116.615(10). In the case where more than one state or federal rule of regulation or permit condition are applicable, the source must comply with the most stringent requirement or limit. See 30 TAC 116.615(10). Therefore, the conditions of the Standard Permit in no way supersede or relax other applicable state or federal requirements. In addition, the provisions found in the Oil and Gas Standard Permit under 30 TAC 116.620 also require that sources authorized under the Standard Permit submit appropriate documentation to demonstrate compliance with state and federal provisions, including PSD, NNSR, NSPS, and NESHAP. The Standard Permit also requires that new or increased emissions authorized under the permit shall not cause or contribute to a violation of any NAAQS and references that engineering judgment and/or air dispersion modeling may be used to demonstrate NAAQS compliance for the specific minor construction project. See 30 TAC 116.620(a)(13)-(17). Regarding testing, recordkeeping, reporting and monitoring provisions, the Oil and Gas Standard Permit contains provisions that include these requirements for the emission sources that can be authorized under the Standard Permit. See 30 TAC 116.620(c)-(e). As discussed in Section I.E of this rulemaking and the accompanying TSD, the Oil and Gas Standard Permit may be used to authorize only those emission sources that are specifically covered by the Standard Permit provisions. Therefore, the Standard Permit contains testing, recordkeeping, reporting and monitoring provisions for the covered emission sources as necessary to ensure compliance with applicable requirements for those covered sources.

Based on our evaluation of the proposed provisions found in the Standard Permit, in conjunction with the underlying SIP-approved provisions of the Texas Standard Permitting Program found in Chapter 116, Subchapter F, we propose to find that the Oil and Gas Standard Permit meets the requirements that are applicable to Minor NSR.

Federal requirements for public notice of Minor NSR programs are found at 40 CFR 51.160 and 51.161. The procedures for a Minor NSR program in 40 CFR 51.160 require an opportunity for public comment on information submitted by the permit applicant and on the permitting authority's analysis of the application, submitted materials and proposed approval or disapproval of the permit application. EPA further explains at 40 CFR 51.161(b) that opportunity for public comment is, at a minimum, the availability for public inspection in at least one location in the area affected of the information submitted by the owner/operator and of the permitting authority's analysis of the effect on air quality; a 30-day period for submittal of public comment; and a notice by prominent advertisement in the area affected of the location where the public can see the submitted materials and analysis. The SIP submittals being evaluated as part of this rulemaking are for a Standard Permit; therefore, the provisions from the Oil and Gas Standard Permit are evaluated against the federal requirements regarding public notice in conjunction with the existing SIP-approved provisions of the Standard Permits Program found in 30 TAC Chapter 116, Subchapter F—Standard Permits that provides the basic requirements that a facility must meet to qualify for a Standard Permit, including public participation requirements. See 30 TAC 116.603.

Based on our evaluation, we propose to find that the SIP's general provisions for all Standard Permits found at 30 TAC 116.603 apply to the Oil and Gas Standard Permit. These general provisions were found to meet EPA's requirements for public participation for minor NSR permits and in some cases are more stringent. (73 FR 53716, September 17, 2008). As required by 30 TAC 116.603, a Standard Permit must comply with the following public notice requirements:

• Notice of a proposed Standard Permit is required to be published in the Texas Register, the commission's publicly accessible electronic media, and in a daily or weekly newspaper of general circulation in the area affected by the activity that is subject to the proposed permit. If the proposed standard permit will have statewide applicability, notice will be published in the daily newspaper of largest general circulation within each of the following metropolitan areas: Austin, Dallas, and Houston and any other regional newspapers designated by the executive director on a case-by-case basis. Additionally, the commission will publish notice in the Texas Register and issue a press release;

• The notice must provide for a public comment period on the proposed Standard Permit of at least 30 days;

• A public meeting is required to be held to provide an additional opportunity for public comment;

• Written responses must be prepared to all public comments received from the public related to the issuance of a Standard Permit, which will be made available to the public;

• Notice of the final action on the proposed Standard Permit is required to be published in the Texas Register, including the text of the response to comments; and

• Copies of the final issued Standard Permit along with the response to public comments received on the draft permit are required to be made available at the TCEQ Austin office and appropriate TCEQ regional offices.

Based on our evaluation of the proposed provisions found in the Oil & Gas Standard Permit, as well as the underlying SIP-approved provisions of the Texas Standard Permitting Program found in Chapter 116, Subchapter F, we propose to find that the Oil and Gas Standard Permit meets the federal public notice requirements that are applicable to Minor NSR for those emission sources that are specifically covered by the Standard Permit provisions. In addition, Texas has provided documentation within their SIP revision submittals to document that the SIP-approved public notice process was followed consistent with the 30 TAC 116.603 requirements when the Oil and Gas Standard Permit was initially issued and subsequently amended. The SIP submittals are available in the docket accompanying this rulemaking.

Under Section 110(l), the regulations submitted as SIP revisions establishing the Oil and Gas Standard Permit must meet the procedural requirements of Section 110(l) by demonstrating that the State followed all necessary procedural requirements such as providing reasonable notice and public hearing of the SIP revision. Additionally, the SIP revision must demonstrate that the adopted rules will not interfere with any applicable requirement concerning attainment and reasonable further progress, or any other applicable requirement of the CAA. We propose to find that the TCEQ satisfied all procedural requirements pursuant to Section 110(l) as detailed in our accompanying TSD.

A Minor NSR program is a requirement of the CAA and EPA's regulations at 40 CFR 51.160-51.164. As discussed in this proposed action and in the accompanying TSD, EPA proposes that the Oil and Gas Standard Permit as submitted on September 20, 1995, and revised through SIP submittals dated April 19, 1996; July 22, 1998; and September 11, 2000, satisfies the minimum requirements for a Minor NSR program, including adequate provisions for legal enforceability and public participation to ensure protection of the control strategy and any applicable NAAQS. The Oil and Gas Standard Permit also contains sufficient safeguards to prevent circumvention of Major NSR permitting requirements. Therefore, we propose that the Oil and Gas Standard Permit is protective of the NAAQS and applicable control strategy requirements and satisfies the requirements of 110(l) of the Act.

For the reasons presented above, EPA proposes to find that the Oil and Gas Standard Permit, as submitted on September 20, 1995, and revisions submitted on April 19, 1996; July 22, 1998; and September 11, 2000, is limited to Minor NSR. EPA proposes to find that the program satisfies the federal requirements for Minor NSR and contains sufficient enforceable safeguards to ensure that the NAAQS and applicable control strategies are protected.

On February 1, 2006, and March 11, 2011, the State of Texas submitted revisions to the Standard Permit SIP rules, which made non-substantive changes to the applicability provisions in 30 TAC 116.610(a) and (b). The revisions include changes such as defining acronyms, changing capitalization, rephrasing, and updating and deleting cross-references as appropriate due to revisions to other sections. EPA proposes to approve the revisions to 30 TAC 116.610(a) and (b) because these changes are ministerial and non-substantive in nature.

We are proposing to approve the submittals for a Minor NSR Oil and Gas Standard Permit submitted September 20, 1995; April 19, 1996; July 22, 1998; and September 11, 2000. We also are proposing to approve the submittals for the Standard Permit SIP rules making non-substantive changes to the Standard Permit applicability provisions in 30 TAC 116.610(a) and (b) as submitted February 1, 2006, and resubmitted March 11, 2011. EPA is proposing this action in accordance with section 110 of the Act.

After review and consideration of public comments, we will take final action on the SIP revisions that are identified herein.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Clean Air Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this notice merely proposes to approve 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.

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

Organization of this document. The following outline is provided to aid in locating information in this preamble.

The City of Manchester, New Hampshire (Manchester) and the City of Nashua, New Hampshire (Nashua) were designated nonattainment by EPA for carbon monoxide on March 3, 1978 (43 FR 8962) and April 11, 1980 (45 FR 24869), respectively. The current National Ambient Air Quality Standard (NAAQS) for CO is 9.0 parts per million (ppm) for an 8-hour average concentration and 35 ppm for a 1-hour concentration, not to be exceeded more than once per calendar year. In 1991, following passage of the Clean Air Act Amendments of 1990 (CAA), both cities were designated “nonattainment” and “not classified” (November 6, 1991; 56 FR 56694) although ambient monitoring showed NAAQS attainment had been achieved by that time. In February 1999, the State of New Hampshire submitted a formal CO redesignation request and a CO maintenance plan for Manchester and Nashua. Effective January 29, 2001 (November 29, 2000; 65 FR 71060), EPA redesignated Manchester and Nashua from nonattainment to attainment for CO and approved New Hampshire's CO maintenance plan.

On May 30, 2007, the New Hampshire Department of Environmental Services (NH DES) submitted a SIP revision to EPA that contained modifications to their CO maintenance plan for the Nashua CO maintenance area. These modifications which were approved by EPA through a direct final rule (September 10, 2007; 72 FR 51564) changed the triggering mechanism by which contingency measures would be implemented in Nashua, and allowed the State to discontinue CO monitoring in the Nashua maintenance area. New Hampshire would rely on data from the CO monitor in Manchester to determine when, and if, monitoring would be reestablished in the Nashua maintenance area, and, in some circumstances, when contingency measures would be triggered in the Nashua maintenance area. At the time of the SIP revision approval, CO concentrations measured in Nashua were below the NAAQS for nearly 20 years, and maximum measured concentrations were less than 50% of the 9 parts per million 8-hour CO standard.

On August 1, 2012, the NH DES submitted a limited maintenance plan SIP revision for the remainder of Manchester and Nashua's second ten-year maintenance plans (January 29, 2011 to January 29, 2021). The revision also requests discontinuance of CO monitoring in Manchester to be replaced by a CO monitoring station in Londonderry, New Hampshire (mid-way between Manchester and Nashua). These revisions are the subject of today's notice of proposed rulemaking.

Under the CO limited maintenance plan New Hampshire would continue to implement strategies that have helped reduce CO emissions in Manchester and Nashua. These strategies include: New Hampshire's Vehicle Inspection/Maintenance On Board Diagnostic (OBD II) program; Vehicle Miles Travel reductions (implement congestion and emission reduction programs such as traffic signal coordination, increased mass transit, RideShare, anti-idling and other traffic mitigation measures); and Low Emissions Vehicles Standards. New Hampshire has also committed to continuing CO monitoring in Londonderry with triggers to reestablish CO monitoring in Manchester and Nashua. In the event monitored carbon monoxide concentrations reach or exceed the limited maintenance eligibility criteria of 7.65 parts per million, then the area would revert to a full maintenance plan.

For the Manchester and Nashua areas, NH DES's SIP revision uses EPA's limited maintenance plan approach, as detailed in the EPA guidance memorandum, “Limited Maintenance Plan Option for Nonclassifiable CO Nonattainment Areas” from Joseph Paisie, Group Leader, Integrated Policy and Strategies Group, Office of Air Quality and Planning Standards (OAQPS), dated October 6, 1995, (the Paisie Memorandum, [a copy of which is included in the Docket as part of the States' SIP revision]). Pursuant to this approach EPA will consider the maintenance demonstration satisfied for “not classified” areas if the monitoring data show the design value is at or below 7.65 parts per million, or 85 percent of the level of the 8-hour carbon monoxide NAAQS. The design value must be based on eight consecutive quarters of data. For such areas, there is no requirement to project emissions of air quality over the maintenance period. EPA believes if the area begins the maintenance period at, or below, 85 percent of the CO 8 hour NAAQS, the applicability of “Prevention of Significant Deterioration” (PSD), the control measures already in the SIP, and Federal measures (including the Federal Motor Vehicle Control Program emission standards, limiting CO emissions), should provide adequate assurance of maintenance over the initial 10-year maintenance period. In addition, the design value for the area must continue to be at or below 7.65 ppm until the time of final EPA action on the redesignation.

The 8-hour CO design values for each of New Hampshire's CO maintenance areas are summarized in Table 1 below. In all cases, 8-hour design values are significantly less than the 7.65 ppm threshold specified in EPA guidance, thus making each area potentially eligible for the limited maintenance plan option.

Consistent with EPA's guidance for limited maintenance plans, the State developed an attainment emissions inventory to identify the level of emissions in Hillsborough County, which includes Manchester and Nashua, sufficient to attain the NAAQS. (See Table 2 below.) The State also developed an attainment emissions inventory identifying the level of emissions statewide associated with attaining and maintaining the CO NAAQS. (See Table 3 below.) These inventories are consistent with EPA's most recent guidance on emissions inventories for nonattainment areas available at the time, and they document a downward trend in CO emissions during the time period associated with the monitoring data achieving attainment and continued maintenance of the CO NAAQS.

The maintenance demonstration requirement is considered to be satisfied if the monitoring data show that the area is meeting the air quality criteria for limited maintenance areas (7.65 ppm or 85% of the CO NAAQS). There is no requirement to project emissions over the maintenance period. The EPA believes since the area is below 85 percent of exceedance levels, the air quality along with the continued applicability of PSD requirements, any control measures already in the SIP, and Federal measures, should provide adequate assurance of maintenance over the remainder of the 10-year maintenance period.

When EPA approves a limited maintenance plan, EPA is concluding that an emissions budget may be treated as essentially not constraining for the length of the maintenance period because it is unreasonable to expect that such an area will experience so much growth in that period that a violation of the CO NAAQS would result.

In its SIP revision, NH DES commits to continue CO monitoring year-round at the Londonderry Moose Hill station in Londonderry. NH DES worked closely with EPA to carefully select this site due to its central proximity to Manchester and Nashua. The Londonderry Moose Hill Station came online on January 1, 2011 as a National Core (NCore) multi-pollutant monitoring station measuring a wide variety of pollutants. The Londonderry station measures fine particulate (PM 2.5 ), nitrogen oxides, ozone, sulfur dioxide and carbon monoxide, in addition to wind speed, wind direction, and relative humidity.

Section 175A(d) of the Act requires that a maintenance plan include contingency provisions, as necessary, to promptly correct any violation of the NAAQS that occurs after redesignation of the area. Under section 175A(d), contingency measures do not have to be fully adopted at the time of redesignation. However, the contingency plan is considered to be an enforceable part of the SIP and should ensure that the contingency measures are adopted expeditiously once they are triggered by a specified event. Previously implemented contingency measures and emissions reductions strategies in New Hampshire have proven successful, and will be continued through the maintenance period. These include: Vehicle Inspection/Maintenance (I/M); vehicle miles traveled reductions; and other emissions reduction programs.

Vehicle Inspection/Maintenance (I/M)—EPA approved New Hampshire's I/M program on January 25, 2013 (78 FR 5292). In its CO maintenance plan SIP revision, NH DES commits to continued implementation of this program.

Vehicle Miles Traveled reductions—In its CO maintenance plan SIP revision, NH DES commits to continue working with the NH Department of Transportation and regional Metropolitan Planning Organizations (MPOs) to identify effective congestion and emission reduction project and programs such as traffic signal coordination, increased mass transit, RideShare, anti-idling and other traffic management strategies.

Other emissions reductions programs—NH DES and local MPOs are actively promoting low emissions vehicles and emissions reductions strategies such as anti-idling programs and park & ride lot construction as part of their long range transportation plans.

New Hampshire will monitor CO levels using the Londonderry Moose Hill station and emissions inventories. Because New Hampshire proposes to discontinue monitoring CO in Manchester, it will adopt a more stringent contingency threshold or “trigger” than indicated in the 2007 SIP revision. In the event the second highest CO concentration in any calendar year monitored in Londonderry reaches 50 percent of the Federal 1-hour or 8-hour NAAQS for CO, New Hampshire will, within six months of recording such concentrations, reestablish the CO monitoring site in Manchester consistent with EPA siting criteria, and resume analyzing and reporting those data. If the reestablished Manchester CO monitor measures a violation of the either the Federal 1-hour or 8-hour NAAQS for CO, contingency measures will be implemented in Manchester and Nashua. Contingency measures in Nashua would cease once a reestablished CO monitor in Nashua shows that the area is in attainment of the CO standard.

Section 176(c) of the Act defines transportation conformity as conformity to the SIP's purpose of eliminating or reducing the severity and number of violations of the NAAQS and achieving expeditious attainment of such standards. The Act further defines transportation conformity to mean that no Federal transportation activity will: (1) Cause or contribute to any new violation of any standard in any area; (2) increase the frequency or severity of any existing violation of any standard in any area; or (3) delay timely attainment of any standard or any required interim emission reductions or other milestones in any area. The Federal Transportation Conformity Rule, 40 CFR part 93 subpart A, sets forth the criteria and procedures for demonstrating and assuring conformity of transportation plans, programs and projects which are developed, funded or approved by the U.S. Department of Transportation, and by metropolitan planning organizations or other recipients of funds under title 23 U.S.C. or the Federal Transit Laws (49 U.S.C. Chapter 53). The transportation conformity rule applies within all nonattainment and maintenance areas. As prescribed by the transportation conformity rule, once an area has an applicable State Implementation Plan with motor vehicle emissions budgets, the expected emissions from planned transportation activities must be consistent with (“conform to”) such established budgets for that area.

According to EPA's guidance on limited maintenance plans, in the case of the Manchester and Nashua New Hampshire CO limited maintenance plan areas, the emissions budgets may be treated as essentially not constraining for the length of the maintenance period as long as the area continues to meet the limited maintenance criteria, because there is no reason to expect that these areas will experience so much growth in that period that a violation of the CO NAAQS would result. In other words, emissions from on-road transportation sources need not be capped for the maintenance period because it is unreasonable to believe that emissions from such sources would increase to a level that would threaten the air quality in this area for the duration of this maintenance period. Therefore, for limited maintenance plan CO maintenance areas, all Federal actions that require conformity determinations under the transportation conformity rule are considered to satisfy the regional emissions analysis and “budget test” requirements in 40 CFR 93.118 of the rule.

Since limited maintenance plan areas are still maintenance areas, however, transportation conformity determinations are still required for transportation plans, programs and projects. Specifically, for such determinations, transportation plans, transportation improvement programs, and projects must still demonstrate that they are fiscally constrained (40 CFR part 108) and must meet the criteria for consultation and Transportation Control Measure (TCM) implementation in the conformity rule (40 CFR 93.112 and 40 CFR 93.113, respectively). In addition, projects in limited maintenance areas will still be required to meet the criteria for CO hot spot analyses to satisfy “project level” conformity determinations (40 CFR 93.116 and 40 CFR 93.123) which must incorporate the latest planning assumptions and models that are available. All aspects of transportation conformity (with the exception of satisfying the emission budget test) will still be required.

If the Manchester or Nashua CO attainment areas monitor CO concentrations at or above the limited maintenance eligibility criteria or 7.65 parts per million, then that maintenance area would no longer qualify for a limited maintenance plan and would revert to a full maintenance plan. In this event, the limited maintenance plan would remain applicable for conformity purposes only until the full maintenance plan is submitted and EPA has found its motor vehicle emissions budgets adequate for conformity purposes or EPA approves the full maintenance plan SIP revision. Any required new conformity determinations could not be made until there is an adequate budget or approved full maintenance plan. At that time, regional emissions analyses would resume as a transportation conformity criteria.

EPA is proposing to approve conversion of the Manchester and Nashua current carbon monoxide maintenance plans to a limited maintenance plan for the remainder of the City of Manchester, and the City of Nashua, New Hampshire CO maintenance plans which terminate on January 29, 2021.

EPA is proposing to approve replacement of the CO air quality monitoring in Manchester with carbon monoxide monitoring at the Londonderry Moose Hill station in Londonderry, New Hampshire with triggers to reestablish CO monitoring sites in Manchester and Nashua if elevated CO levels are recorded in Londonderry.

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 proposed 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 proposed 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).

I. Background

The Health Insurance Portability and Accountability Act of 1996 (HIPAA), Public Law 104-191, 110 Stat. 1936 added title XXVII of the Public Health Service Act (PHS Act), part 7 of the Employee Retirement Income Security Act of 1974 (ERISA), and chapter 100 of the Internal Revenue Code (the Code), providing portability and nondiscrimination provisions with respect to health coverage. These provisions of the PHS Act, ERISA, and the Code were later augmented by other consumer protection laws, including the Mental Health Parity Act of 1996, 1 the Mental Health Parity and Addiction Equity Act of 2008, 2 the Newborns' and Mothers' Health Protection Act, 3 the Women's Health and Cancer Rights Act, 4 the Genetic Information Nondiscrimination Act of 2008, 5 the Children's Health Insurance Program Reauthorization Act of 2009, 6 Michelle's Law, 7 and the Affordable Care Act. 8

The Affordable Care Act reorganizes, amends, and adds to the provisions of part A of title XXVII of the PHS Act relating to group health plans and health insurance issuers in the group and individual markets. The term “group health plan” includes both insured and self-insured group health plans. 9 Section 715(a)(1) of ERISA and section 9815(a)(1) of the Code, as added by the Affordable Care Act, incorporate the provisions of part A of title XXVII of the PHS Act into ERISA and the Code to make them applicable to group health plans and health insurance issuers providing health insurance coverage in connection with group health plans. The PHS Act sections incorporated by these references are sections 2701 through 2728.

Sections 2722 and 2763 of the PHS Act, section 732 of ERISA, and section 9831 of the Code provide that the requirements of title XXVII of the PHS Act, part 7 of ERISA, and chapter 100 of the Code, respectively, generally do not apply to excepted benefits. Excepted benefits are described in section 2791 of the PHS Act, section 733 of ERISA, and section 9832 of the Code.

The parallel statutory provisions establish four categories of excepted benefits. The first category includes benefits that are generally not health coverage  10 (such as automobile insurance, liability insurance, workers compensation, and accidental death and dismemberment coverage). The benefits in this category are excepted in all circumstances. In contrast, the benefits in the second, third, and fourth categories are types of health coverage but are excepted only if certain conditions are met.

The second category of excepted benefits is limited excepted benefits, which may include limited scope vision or dental benefits, and benefits for long-term care, nursing home care, home health care, or community based care. Section 2791(c)(2)(C) of the PHS Act, section 733(c)(2)(C) of ERISA, and section 9832(c)(2)(C) of the Code authorize the Secretaries of HHS, Labor, and the Treasury (collectively, the Secretaries) to issue regulations establishing other, similar limited benefits as excepted benefits. The Secretaries exercised this authority previously with respect to certain health flexible spending arrangements (health FSAs). 11 To be excepted under this second category, the statute provides that limited benefits must either: (1) be provided under a separate policy, certificate, or contract of insurance; or (2) otherwise not be an integral part of a group health plan, whether insured or self-insured.

The third category of excepted benefits, referred to as “noncoordinated excepted benefits,” includes both coverage for only a specified disease or illness (such as cancer-only policies), and hospital indemnity or other fixed indemnity insurance. These benefits are excepted only if all of the following conditions are met: (1) The benefits are provided under a separate policy, certificate, or contract of insurance; (2) there is no coordination between the provision of such benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor; and (3) the benefits are paid with respect to any event without regard to whether benefits are provided under any group health plan maintained by the same plan sponsor. 12

The fourth category of excepted benefits is supplemental excepted benefits. Such benefits must be: (1) Coverage supplemental to Medicare, coverage supplemental to the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) or to Tricare, or similar coverage that is supplemental to coverage provided under a group health plan; and (2) provided under a separate policy, certificate, or contract of insurance. 13

These proposed regulations would amend the second category of excepted benefits, limited excepted benefits.

In 2004, the Departments of the Treasury, Labor, and HHS published final regulations with respect to excepted benefits (the HIPAA regulations). 14 (Subsequent references to the “Departments” include all three Departments, unless the headings or context indicate otherwise.) Under the HIPAA regulations, vision and dental benefits are excepted if they are limited in scope (described as benefits, substantially all of which are for treatment of the eyes or mouth, respectively) and are either: (1) Provided under a separate policy, certificate, or contract of insurance; or (2) are otherwise not an integral part of a group health plan. While only insured coverage may qualify under the first test, both insured and self-insured coverage may qualify under the second test. The HIPAA regulations provided that benefits are not an integral part of a plan if participants have the right to elect not to receive coverage for the benefits, and if participants elect to receive coverage for such benefits, they pay an additional premium or contribution for it. By contrast, health FSA benefits could qualify as excepted benefits without any participant contribution under the HIPAA regulations. 15

Following enactment of the Affordable Care Act, various stakeholders asked the Departments to amend the regulations in order to remove conditions for limited-scope vision and dental benefits to be treated as excepted benefits. Specifically, some employers represented that, although their vision and dental benefits complied with the pre-Affordable Care Act requirements in title XXVII of the PHS Act, part 7 of ERISA, and chapter 100 of the Code (such as the nondiscrimination and preexisting condition exclusion provisions), compliance with the Affordable Care Act provisions (including the 90-day waiting period limitation  16 and the prohibition on annual limits)  17 presented additional challenges. These employers argued that, where employers are providing such benefits on a self-insured basis and without a contribution from employees, employers should not be required to charge a nominal contribution from participants simply for the benefits to qualify as excepted benefits. In some cases, the cost of collecting the nominal contribution would be greater than the contribution itself. Moreover, they pointed out that employers providing dental and vision benefits through a separate insurance policy are not required to charge a participant any premium in order for the dental or vision benefits to be considered excepted benefits. Similarly, consumer groups argued that, if an employer offers primary group health coverage that is unaffordable to individuals, but limited-scope vision or dental coverage that is affordable, such limited-scope vision or dental coverage should qualify as excepted benefits so as not to make such individuals ineligible for the premium tax credit under section 36B of the Code for enrolling in coverage through an Affordable Insurance Exchange, or “Exchange” (also called a Health Insurance Marketplace or Marketplace).

In response to these concerns, and to level the playing field between insured and self-insured coverage, these proposed regulations would eliminate the requirement under the HIPAA regulations that participants pay an additional premium or contribution for limited-scope vision or dental benefits to qualify as benefits that are not an integral part of a plan (and therefore as excepted benefits). The Departments invite comments on this approach.

The Affordable Care Act requires that non-grandfathered health plans in the individual and small group markets cover essential health benefits (EHB), which include items and services in ten statutorily specified categories that are equal in scope to a typical employer plan. 18 Because employer group coverage varies from State to State, HHS regulations at 45 CFR 156.100 provide for States to adopt individual benchmarks from among a range of primarily small group plan offerings in each State to serve as a reference plan, reflecting both the scope of services and limits offered by a typical employer plan in that State. 19

Prior to the Affordable Care Act, there was no Federal requirement that health coverage in the individual and small group market include a standardized set of benefits such as those included in EHB. Self-insured group health plans and health insurance coverage in the large group market often cover items and services in addition to the types of services included in EHB. For example, items and services that either cannot be or are unlikely to be included in EHB include routine adult vision and dental care, long-term/custodial nursing home care, non-medically necessary pediatric orthodontia, and coverage that extends beyond the benchmark plan's coverage of wellness programs, manipulative treatment, infertility, home health care, private duty nursing, hospice, or certain non-traditional treatments. In addition, some of these group health plans may provide broader provider networks, in terms of the number and types of contracted providers, than those often included in the individual and small group market. Federal law is designed to encourage employers to provide group coverage for their employees. 20

Experts suggest that most workers who are offered minimum value employer-sponsored coverage will not meet the criteria for the premiums to be considered to be “unaffordable” and thus not qualify for the premium tax credit for enrolling in coverage through an Exchange. 21 Nevertheless, in some cases, employer plans may be unaffordable for some employees. These individuals might purchase coverage through an Exchange with a premium tax credit. While such individuals might pay lower premiums for coverage through an Exchange, they might also have less generous coverage in terms of benefits or a different provider network than they would have had in their group health plan. Some group health plan sponsors have asked whether wraparound coverage could be provided for employees for whom the employer premium is unaffordable and who obtain coverage through an Exchange. This approach would allow employers to provide such employees with overall coverage that is comparable to the group health plan coverage, taking into account both the wraparound coverage and the Exchange coverage.

Accordingly, the Departments have developed these proposed regulations to treat certain wraparound coverage provided under a group health plan as excepted benefits when it is offered to individuals who could receive such benefits through their group health plan if they could afford the premiums, but who do not enroll in the employer-sponsored plan because the premium is unaffordable under the law. As excepted benefits, the coverage would generally be exempt from the HIPAA and Affordable Care Act market reform requirements of ERISA, the PHS Act, and the Code. Wraparound coverage would only qualify as excepted benefits under limited circumstances in order to alleviate two concerns. First, the wraparound coverage could not replace group coverage for employers who drop coverage or who otherwise do not offer minimum value coverage. Instead, the wraparound coverage would only be considered to be an excepted benefit if it is used to provide additional coverage to individuals and families enrolled in non-grandfathered individual health insurance coverage and for whom minimum value coverage under the employer's group health plan is offered but is unaffordable. Second, the proposed rules aim to prevent plan sponsors from structuring wraparound coverage so that low-income workers receive fewer primary benefits than high-income workers. These proposed regulations are intended to allow a plan sponsor to maintain a comparable level of benefits for all potential enrollees, including not only high-income workers in their group health plan but also low-income workers that enroll in non-grandfathered individual market coverage, promoting equity in coverage.

The proposed regulations, which the Departments are proposing would be effective for plan years starting in 2015, describe the circumstances under which employer-provided wraparound coverage would constitute excepted benefits (limited wraparound coverage) and therefore would not disqualify an employee from eligibility for the premium tax credit and cost-sharing reductions. The Departments note that provision of excepted benefits will not satisfy an applicable large employer's responsibilities under section 4980H of the Code. Under these proposed regulations, limited wraparound coverage is an excepted benefit if five conditions are met.

First, the coverage can wrap around only certain coverage provided through the individual market. Specifically, the individual health insurance coverage must be non-grandfathered and cannot consist solely of excepted benefits. In States that elect to establish a Basic Health Program (BHP), certain low-income individuals ( for example, those with household income between 133% and 200% of the Federal poverty level) who would otherwise qualify for a tax credit to obtain a qualified health plan through an Exchange will instead be enrolled in coverage through the BHP. Therefore, the Departments invite comments on how an employer might make wraparound coverage available to BHP enrollees.

Second, the limited wraparound coverage must be specifically designed to provide benefits beyond those offered by the individual health insurance coverage. Specifically, the limited wraparound coverage must provide either benefits that are in addition to EHBs, or reimburse the cost of health care providers considered out-of-network under the individual health insurance coverage, or both. The Departments invite comments on the types of benefits and provider arrangements that could be included in this coverage as well as their similarities to, or differences from, other types of excepted benefits described in the HIPAA regulations. The Departments also invite comments on whether the proposed standard should be modified to require that these wraparound coverage benefits be “substantial” or “material” and, if so, how those terms should be defined.

The limited wraparound coverage may, but is not required to, also provide benefits to reimburse for participants' otherwise applicable cost sharing under the individual health insurance policy, but that cannot be its primary purpose. For the benefits to be considered specifically designed to wrap around the individual health insurance coverage, it must provide additional wraparound benefits as discussed in the immediately preceding paragraph; the coverage cannot provide benefits solely pursuant to a coordination-of-benefits provision that simply pays benefits whenever the individual health insurance policy does not cover all or part of a medical expense.

The third condition requires the limited wraparound coverage to be otherwise not an integral part of a group health plan. That is, under the proposed regulations, the plan sponsor offering the limited wraparound coverage must sponsor another group health plan meeting minimum value (as defined under section 36B(c)(2)(C)(ii) of the Code) for the plan year, referred to as the “primary plan.” This primary plan must be affordable for a majority of the employees eligible for the primary plan. Only individuals eligible for this primary plan may be eligible for the limited wraparound coverage. The Departments seek input on this proposed standard, including whether the majority level is an appropriate level (or whether the primary plan should provide coverage that is affordable for a higher or lower percentage of employees), recognizing the goal of preventing plan sponsors from shifting participants from the employer-sponsored primary plan to the individual market with limited wraparound coverage. Assuming use of the 9.5% of income test set forth in section 36B(c)(2)(C)(i) of the Code as the basic definition of “affordable,” the Departments also request comments on how to implement that definition here—for example, whether the Departments should use a Form W-2 safe harbor based on employee wages like the one set forth in the proposed regulations under Code section 4980H.

Under the fourth condition set forth in the proposed regulations, the limited wraparound coverage must be limited in amount. Specifically, the total cost of coverage under the limited wraparound coverage must not exceed 15 percent of the cost of coverage under the primary plan offered to employees eligible for the wraparound coverage. 22 For this purpose, the cost of coverage includes both employer and employee contributions towards coverage and is determined in the same manner as that in which the applicable premium is calculated under a COBRA continuation provision. 23 This is similar to the standard in the 2007 enforcement safe harbor for treating supplemental health insurance coverage as excepted benefits. Under the safe harbor, the cost of coverage under the supplemental policy, certificate, or contract of insurance must not exceed 15 percent of the cost of primary coverage. 24 The Departments solicit comment on the level of this threshold, as well as other possible thresholds that could be used to ensure that the benefit is limited in amount, such as whether other thresholds used in the context of health FSAs or health savings accounts (HSAs) would be easier to administer or more appropriate.

The fifth and final condition for the limited wraparound coverage to qualify as excepted benefits relates to nondiscrimination. The limited wraparound coverage must not differentiate among individuals in eligibility, benefits, or premiums based on any health factor of an individual (or any dependent of the individual), consistent with the requirements of section 2705 of the PHS Act (as incorporated into ERISA section 715 and Code section 9815) and its implementing regulations. This condition is similar to the standard in the 2007 enforcement safe harbor treating supplemental health insurance coverage as excepted benefits. In addition to the cost standard mentioned above, the safe harbor requires that such coverage be similar to Medicare Supplemental Coverage in that it must not differentiate among individuals in eligibility, benefits, or premiums based on any health factor of an individual (or any dependent of the individual).

In addition, to satisfy the fifth condition, the limited wraparound coverage must not impose any preexisting condition exclusion, consistent with the requirements of section 2704 of the PHS Act (as incorporated into ERISA section 715 and Code section 9815) and its implementing regulations. Finally, both the primary coverage and the limited wraparound coverage must not discriminate in favor of highly compensated individuals, consistent with the provisions of section 2716 of the PHS Act (also incorporated by reference into ERISA section 715 and Code section 9815) and section 105(h) of the Code, and its implementing regulations at 26 CFR 1.105-11 as applicable. 25 These limitations are intended to ensure the coverage is available regardless of health status and to prevent employers from shifting employees with high medical costs to an Exchange. Conditioning excepted benefit status on meeting standards consistent with the compensation-based nondiscrimination rules, in combination with the requirement that the primary plan be affordable for a majority of the employees eligible for it, helps ensure that employers will not be able to use wraparound coverage to send excessive numbers of low wage workers to the Exchanges. Comments are invited as to whether additional nondiscrimination standards are needed to prevent such cost-shifting and abuse.

Employee assistance programs (EAPs) are typically programs offered by employers that can provide a wide-ranging set of benefits to address circumstances that might otherwise adversely affect employees' work and health. Benefits may include short-term substance use disorder or mental health counseling or referral services, as well as financial counseling and legal services. They are typically available free of charge to employees and are often provided through third-party vendors. To the extent an EAP provides benefits for medical care, it would generally be considered group health plan coverage, which would generally be subject to the HIPAA and Affordable Care Act market reform requirements, unless the EAP meets the criteria for being excepted benefits.

Since enactment of the Affordable Care Act, various stakeholders have asked the Departments to treat EAPs as excepted benefits for reasons analogous to the arguments described above with respect to vision and dental benefits. Specifically, some employers represented that compliance with the prohibition on annual limits could be problematic as such benefits are typically very limited, and that EAPs generally are intended to provide benefits in addition to those provided under other group health plans sponsored by employers. Moreover, consumer groups have represented that EAPs with very limited benefits, which may be the only coverage offered to employees, may prohibit the employee from obtaining a premium tax credit under section 36B of the Code if the EAP is treated as minimum essential coverage under section 5000A of the Code. At the same time, the Departments recognize that no universal definition exists for EAPs, and are concerned that employers not act to shift primary coverage to a separate “EAP plan,” exempt from the consumer protection provisions of title XXVII of the PHS Act, part 7 of ERISA, and chapter 100 of the Code, including the mental health parity provisions. 26

The Departments issued guidance on September 13, 2013, which stated the Departments' intent to amend the excepted benefits regulations with respect to EAPs. 27 The guidance also provided transition relief, stating, “[u]ntil rulemaking is finalized, through at least 2014, the Departments will consider an employee assistance program or EAP to constitute excepted benefits only if the employee assistance program or EAP does not provide significant benefits in the nature of medical care or treatment. For this purpose, employers may use a reasonable, good faith interpretation of whether an employee assistance program or EAP provides significant benefits in the nature of medical care or treatment.”

These proposed regulations set forth criteria for an EAP to qualify as excepted benefits beginning in 2015. Under these proposed regulations, benefits provided under EAPs are excepted if four criteria are met. First, the program cannot provide significant benefits in the nature of medical care. The Departments invite comments on how to define “significant.” For example, the Departments request comments as to whether a program that provides no more than 10 outpatient visits for mental health or substance use disorder counseling, an annual wellness checkup, immunizations, and diabetes counseling, with no inpatient care benefits, should be considered to provide significant benefits in the nature of medical care. 28