The regulations in “Subpart-Fruits and Vegetables” (7 CFR 319.56-1 through 319.56-63, referred to below as the regulations) prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world to prevent the introduction and dissemination of plant pests that are new to or not widely distributed within the United States.

On January 30, 2013, the Animal and Plant Health Inspection Service (APHIS) published in the Federal Register (78 FR 6222-6227, Docket No. APHIS-2012-0002), a proposal  1 to amend the fruits and vegetables regulations to allow the importation of avocados from continental Spain (excluding the Balearic Islands and Canary Islands) into the United States subject to a systems approach and treatment. We proposed to allow the importation of avocados from continental Spain only if they were produced in accordance with a systems approach jointly agreed upon in a bilateral workplan between APHIS and the national plant protection organization (NPPO) of Spain. The systems approach addresses one pest of quarantine significance present in continental Spain that could be introduced into the United States through the importation of avocados. That pest is Ceratitis capitata (Wiedemann), the Mediterranean fruit fly.

The proposed systems approach included the following requirements:

• Registration, monitoring, and oversight of places of production;

• Grove sanitation;

• Harvesting requirements for safeguarding and identification of the fruit;

• Packinghouse requirements for safeguarding and identification of the fruit;

• Inspection by the NPPO of Spain for C. capitata; and

• Cold treatment for avocado varieties other than Hass.

Additionally, we proposed that all avocados from Spain must be accompanied by a phytosanitary certificate issued by the NPPO of Spain. The phytosanitary certificate accompanying Hass variety avocados would have to contain an additional declaration stating that the avocados were grown in an approved place of production and the consignment has been inspected and found free of C. capitata. The phytosanitary certificate accompanying non-Hass avocados would have to contain an additional declaration stating that the avocados were grown in an approved place of production and the consignment has been inspected and found free of C. capitata, and, if treated prior to export, that the consignment has been treated for C. capitata in accordance with 7 CFR part 305. We proposed to add these requirements to the regulations in a new § 319.56-58 titled Avocados from continental Spain. 2

We solicited comments concerning our proposal for 60 days ending April 1, 2013. We reopened and extended the deadline for comments until June 13, 2013, in a document published in the Federal Register on May 29, 2013 (78 FR 32183-32184, Docket No. APHIS-2012-0002). We received 20 comments by that date. They were from the European Union (EU), a State department of agriculture, an organization representing State plant regulatory agencies, domestic avocado growers, and private citizens. They are discussed below by topic.

One commenter stated that the proposed rule identifies the NPPO of Spain as the body responsible for conducting and supervising inspections, monitoring, trapping, surveying, etc., in the systems approach. However, there are other bodies and stakeholders involved, such as the Spanish Autonomous Communities (the first-level political and administrative divisions in Spain), auditing companies, integrated pest management associations, and field technicians and advisors, as defined by Directive 2009/128/EC of the European Parliament and of the Council of October 21, 2009, establishing a framework for EU action to achieve the sustainable use of pesticides. The commenter stated that responsibilities of each partner should be specified in future workplans under the rules.

Under APHIS programs, the NPPO certifies that it is taking responsibility to ensure that these other involved parties act under NPPO direction and perform the actions required by the regulations and workplan. Whether the NPPO achieves this through other parties whose roles are described in EC Directives or other means is an internal matter not subject to our regulations. If the NPPO desires, workplans for the avocado program can include information about which entities will perform which required actions, but in the event of failure to perform any required action APHIS will hold only the NPPO responsible for correcting the problems. We note that the cited EC Directive addresses only pesticide use and integrated pest management, rather than systems approaches for the growth and certification of crops for export, and even within that scope the Directive emphasizes in many places the responsibility of competent authorities in the Member State to ensure required actions are taken.

One comment addressed the requirement proposed in § 319.56-58(b)(1) that “[t]he NPPO of Spain must visit and inspect registered places of production monthly, starting at least 2 months before harvest and continuing until the end of the shipping season, to verify that the growers are complying” with proposed requirements. The commenter stated that the harvest period is approximately February 1 through May 1, which would mean six inspections from December to May. The commenter stated that six inspection visits are unnecessary and not cost-effective, and suggested instead that the NPPO visit production sites once at the beginning of the export season, once during harvest, and at any other times the NPPO finds necessary to verify compliance. The commenter noted that throughout harvest the NPPO, the Autonomous Communities, and the auditing companies employed by them would control, evaluate, and validate field notebooks maintained by growers and inspection reports from field technicians or advisors.

APHIS is making two changes in response to this comment. It is essential that the NPPO effectively monitor compliance before and during harvest to identify and prevent pest risks. However, effective inspection does not necessarily require six visits each year, and depending on the personnel authorized by the NPPO to conduct various compliance monitoring activities, it may not be necessary that NPPO employees visit each production site each month. While it is important that the production site be inspected prior to harvest, both to look for early signs of pests that may not be as visible later and to familiarize the inspector with the production area, upon further consideration we believe a reasonable standard is that a pre-harvest inspection occur at least 1 month prior to harvest rather than the proposed 2 months. Therefore, we are changing the proposed standard to read “starting at least 1 month before harvest.” We also note that the term “before harvest” refers to the harvest as conducted at each production site, not to the harvest season in general. This could result in fewer inspections in some cases. For example, if a production site begins its harvest on February 15 and ends it April 15, its inspections could be scheduled on January, February, March, and April 10 (or various other dates), for a total of four inspections. We also note that, as discussed above, production site inspections are the responsibility of the NPPO and must be done under NPPO direction to verify the conditions and actions required by the regulations and workplan.

While the responsibility for inspections remains with the NPPO, the identity of the personnel authorized to conduct inspection-related activities may be determined by the NPPO and specified in the workplan. We understand that in some cases the NPPO may authorize personnel who are not NPPO employees, such as employees of an Autonomous Community or an auditing company, to perform duties related to inspection. If so, these personnel must be accountable to the NPPO. To make this clear, in this final rule we are changing the relevant sentence in proposed § 319.56-58(b)(1) to read “The NPPO of Spain, or an authorized person designated in the workplan, must visit and inspect. . . .”

One commenter noted that proposed § 319.56-58(e)(1) would require a registered packinghouse to pack no fruit for other markets during a period when it packs avocados produced in accordance with the proposed rule's systems approach. The commenter suggested that packinghouses should be allowed to pack fruit for other markets during the same period under conditions to prevent commingling, i.e., that (1) the packing lines in packinghouses be cleared prior to packing avocados for the United States; and (2) fruit destined to the United States must always be identified and stored separately from fruit destined to other markets. The commenter stated that this is similar to measures for the program to export sweet oranges, clementines, and other mandarins from Spain to the United States.

After careful consideration, we have decided to change the rule in response to this comment, according to the following reasoning. Consider the following scenario for avocados produced in accordance with the proposed rule (regulated avocados). There are two areas of pest risk associated with the packinghouse. There is a very minor risk that C. capitata could enter the packinghouse associated with other articles destined for other markets, move to regulated avocados, and lay eggs in the regulated avocados. This is very unlikely because normal packinghouse operations make such movement of pests between lots exceedingly rare. There is a slightly larger risk that articles destined for other markets could become accidentally mixed with regulated avocados and shipped to the United States. If the other articles were better hosts than regulated avocados, e.g., untreated non-Hass avocado varieties or even fruits other than avocados, such admixture could result in C. capitata larvae being shipped to the United States. We believe both of these areas of risk can be controlled using the type of methods suggested by the commenter. Maintaining the identity of regulated avocados at the packinghouse and ensuring separation between them and other articles are the key concerns. The proposed rule, in § 319.56-58(d), states that regulated avocados must “remain identifiable when the fruit leaves the grove, at the packinghouse, and throughout the export process.”

This identity requirement will aid achieving separation in the packinghouse. To fully achieve effective separation, we are changing proposed § 319.56-58(e)(1) to read as follows: “During the time registered packinghouses are in use for packing avocados for export to the United States in accordance with the requirements of this section, packing lines must be cleared of all other articles and plant debris prior to packing such avocados, and such avocados must be stored in a room separate from any other fruits, plant articles, and other potential C. capitata hosts while the avocados are at the packinghouse.”

Another commenter stated that the proposal indicates “Packinghouses should not pack avocados for other countries while packing for the United States.” The commenter stated that this language needs to be more directive and inclusive, such as: “During the time the packinghouse is in use for exporting avocados to the United States, the packinghouse may only receive fruit from registered, approved places of production.”

The sentence containing the word “should” that was quoted by the commenter appears in the risk management document (RMD) that was prepared prior to the proposed rule and made available with it. The RMD was an evaluative and advisory document that was used during decisionmaking for the proposed rule. The corresponding language in § 319.56-58(e) of the proposed rule was mandatory, and read “packinghouses may only accept avocados that are from registered places of production.” However, as discussed with regard to the comment above, we have changed the standard in this final rule for the circumstances under which other articles may be allowed in a packinghouse at the same time as regulated avocados.

The same commenter stated that, while the proposed rule calls for registered orchards to practice field sanitation and pest control measures, there is no requirement for trapping to monitor for C. capitata in avocado production blocks.

That is correct, and we are not making any change in response to this comment. A specific trapping requirement is not necessary because the foundation of the proposal is not freedom of the grove areas from C. capitata, but rather the 2010 APHIS finding that intact Hass avocados with the stem attached are not a host to C. capitata and our requirement for treatment of other avocado varieties that are better hosts. We note that while trapping is not needed and therefore is not required by the proposed rule, it is necessary and required for export of articles that are better C. capitata hosts, e.g., citrus, and that to the best of our knowledge the regions that will be exporting Hass avocados also export citrus. In those regions, the autonomous communities conduct annual surveys for C. capitata and perform mass trapping and surveillance trapping under the Mediterranean fruit fly management program established by the Government of Spain (see, e.g., “Real Decreto 461/2004, de 18 de marzo, por el que se establece el Programa nacional de control de la mosca mediterránea de la fruta” at http://www.lexureditorial.com/boe/0404/05823.htm ).

One commenter stated that allowing avocado imports instead of supporting the domestic avocado industry is short-sighted and counter-productive, and noted that domestic growers have recently been challenged by both natural factors (such as cold, wind, heat, fire, and lack of water) as well as market conditions. Several other commenters objected in general terms to the economic effects of importing avocados rather than relying on domestic production.

We are not making any change in response to this comment. The Plant Protection Act (7 U.S.C. 7701 et seq. ), the authorizing statute for APHIS' plant-health-related activities, authorizes the Secretary of Agriculture to prohibit or restrict the importation of any plant product if the Secretary determines that the prohibition or restriction is necessary to prevent the introduction of a plant pest or noxious weed into the United States. We have determined that the measures in the systems approach we proposed, amended as described earlier, are sufficient to prevent the introduction of any plant pests. The factors cited by the commenters are not within our decisionmaking authority under the Act.

We have analyzed the economic effects of this rule as required by Executive Order 12866 and the Regulatory Flexibility Act, both in the proposed rule and in the section below. Part of this analysis concluded that it is likely that at least a portion of the projected avocado imports from Spain would displace imports from other foreign sources rather than domestic sources when fresh avocado supplies are low and demand is high. The analysis also concluded that the projected volume of avocado imports from Spain, a few hundred metric tons, is well under half of 1 percent of domestic production and would therefore have minor economic effects.

The Florida Department of Agriculture and Consumer Services commented on the requirement in proposed § 319.56-58(a)(5) that avocados other than Hass variety from continental Spain must be treated for C. capitata. We proposed to require cold treatment in accordance with the regulations in 7 CFR 305.6, which allows treatment to occur prior to export to the United States, or upon arrival prior to release. The commenter stated that allowing untreated product into Florida for treatment would greatly increase the possibility of introducing C. capitata and is a major departure from long-standing plant protection protocols. It also stated that the required treatments should not preclude an additional high level of inspection at the port of entry to ensure procedures are in place to confirm the treatments were applied properly.

We are not making any change to the rule in response to this comment. The rule will not authorize treatment of any avocados in Florida. We expect post-arrival cold treatment will be infrequent since the industry norm is cold treatment prior to departure or in transit. Further, the regulations will continue to prohibit cold treatment after arrival in Florida. The current regulations on cold treatment, 7 CFR 305.6, allow the establishment of cold treatment facilities for imported articles in certain specific areas of the United States as follows. Facilities may be located on the mainland United States either in the area that is north of 39° latitude and east of 104° longitude, or under special conditions at one of the following ports: The maritime ports of Wilmington, NC; Seattle, WA; Corpus Christi, TX; and Gulfport, MS; Seattle-Tacoma International Airport, Seattle, WA; and Hartsfield-Atlanta International Airport, Atlanta, GA. In a recent proposed rule (78 FR 27864-27866; Docket No. APHIS-2012-0089, published May 13, 2013), we proposed adding MidAmerica St. Louis Airport, Mascoutah, IL, to this list.

The ability of these facilities to conduct cold treatments without spreading and establishing fruit fly populations has been documented several times, most recently in a treatment evaluation document prepared for the proposed rule mentioned above, and in an earlier APHIS study “Characterizing and mitigating relative risk associated with the movement of tropical fruit fly host material into the United States for cold treatment at certain ports.” Both of these documents have been added to the administrative record for this rule, available at http://www.regulations.gov/#!docketDetail;D=APHIS-2012-0002.

With regard to the commenter's second point about inspection levels at the port of entry, APHIS inspection will serve as a check on the effectiveness of the systems approach. We do not plan to inspect at a higher level than our usual level, unless evidence indicates that there may be a problem with the implementation of the systems approach. We have found the NPPO of Spain to have the necessary resources and capacity to implement the systems approach, but will continually monitor the program's effectiveness through activities both in Spain and through inspections upon arrival.

This commenter also asked what corrective measures will be taken to prevent a reoccurrence if inspectors find live larvae during inspection, and what penalties will apply in such cases.

Proposed § 319.56-58(f) stated that if any C. capitata are detected in the required postharvest inspection in Spain, the place of production where the infested avocados were grown will immediately be suspended from the export program until an investigation has been conducted by APHIS and the NPPO of Spain and appropriate mitigations have been implemented. If any C. capitata are detected through inspection at arrival, APHIS will refuse entry to the shipment unless an inspector finds it can be treated to destroy the pests, and APHIS may also order the place of production where the infested avocados were grown to be immediately suspended from the export program pending an investigation.

Another commenter stated that we should not apply the proposed § 319.56-58(f) requirement to non-Hass variety avocados. Under that requirement, if any C. capitata are detected in the required postharvest inspection in Spain of non-Hass avocados, the place of production where the infested avocados were grown will immediately be suspended from the export program until an investigation has been conducted by APHIS and the NPPO of Spain and appropriate mitigations have been implemented. The commenter noted that this means that if a single larva of C. capitata is found, the entire consignment of non-Hass avocados would be rejected. However, a certain percentage of infestation should be accepted for non-Hass varieties because they will be subjected to a cold treatment. The commenter stated that this is the case in other bilateral workplans between the United States and Spain, e.g., the preclearance operational workplan for the export of sweet oranges, clementines, and other mandarins from Spain.

We are not making any change based on this comment. Given the serious threat C. capitata poses, we believe that it is reasonable to have no tolerance level for C. capitata infestation, and to stop accepting shipments from a production site pending investigation when a single larvae is found during inspection. Furthermore, neither the operational plan nor the regulations for shipment of sweet oranges, clementines, and mandarins has such a tolerance. The regulations in this area are even stricter, in consideration of the better host status of such citrus. The relevant section for clementines, § 319.56-34(f), states “If inspectors find a single live Mediterranean fruit fly in any stage of development during an inspection, the entire consignment of clementines will be rejected. If a live Mediterranean fruit fly in any stage of development is found in any two lots of fruit from the same orchard during the same shipping season, that orchard will be removed from the export program for the remainder of that shipping season.”

One commenter suggested a biometric sample size of 200 fruits for the post-harvest inspection of C. capitata. The commenter calculated that sample size using the standard in International Standards for Phytosanitary Measures (ISPM) No. 31, “Methodologies for sampling of consignments” (IPPC, 2009  3 ). The commenter stated that calculating sample size for 95 percent confidence level, at a 2 percent level of detection, according to a 75 percent efficacy value where the lot size is large and sufficiently mixed, yields 199 or 200 fruits by the binomial or Poisson distribution, respectively.

We do not disagree with the commenter's methodology, but as stated in the proposed rule, the actual sampling rate with be worked out by technical experts in APHIS in consultation with their counterparts in the NPPO of Spain. The sample size will then be specified in the workplan required by proposed § 319.56-58(a). Specifying the sample size in the workplan rather than the regulations will give us the flexibility to raise or lower the fruit sampling rate when conditions indicate a higher or lower risk of C. capitata infestation.

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

This final rule has been has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

In accordance with the Regulatory Flexibility Act, we have analyzed the potential economic effects of this action on small entities. The analysis is set forth below.

In response to a request by the NPPO of Spain that APHIS authorize market access for commercial shipments of fresh avocados into the United States, APHIS is allowing the importation of such shipments if Spain produces the avocados in accordance with a systems approach intended to prevent the introduction of quarantine pests.

In 2009, the United States was the world's third largest avocado producer, after Mexico and Chile; the United States accounted for about 7 percent of global production, while Mexico and Chile accounted for 32 percent and 9 percent, respectively. Commercial production of avocado occurs in three States. California accounts for about 90 percent of U.S. production, followed by Florida with about 9 percent, and Hawaii with less than 1 percent. In 2010, U.S. utilized production of avocado totaled about 135,500 metric tons (MT), only one-half of the 271,000 MT produced in 2009, and indicative of the significant variability in yield from year to year.

In the last decade, U.S. per capita consumption of avocado has risen significantly, from 1 kilogram in 2000 to 1.86 kilograms in 2010, representing an annual growth rate of about 6.4 percent. Although the United States is a major producer of avocado, it is also the largest import market (since 2002) and has been a net importer since the late 1980s. During this time, the gap between U.S. imports and U.S. exports has widened substantially. The average annual value of U.S. avocado imports, 2008-2010, was nearly $622 million, compared to average annual exports valued at less than $16 million.

Spanish avocado producers expect to export to the United States about 260 MT of fresh avocado annually, an amount equivalent to 0.15 percent of U.S. production, 0.07 percent of U.S. net imports (imports minus exports), and 0.05 percent of U.S. supply (production plus net imports), based on 2008-2010 average annual U.S. production and trade quantities.

Entities that may be directly affected by the rule are U.S. importers and producers of avocado. Avocado importers are classified in the North American Industry Classification System (NAICS) under Fresh Fruit and Vegetable Merchant Wholesalers (NAICS 424480). Avocado producers are classified under Other Noncitrus Fruit Farming (NAICS 111339). The Small Business Administration (SBA) has established guidelines for determining which establishments are to be considered small. A firm primarily engaged in fresh fruit and vegetable wholesaling is considered small if it employs not more than 100 persons. A firm primarily engaged in noncitrus fruit farming is considered small if it has annual sales of not more than $750,000.

In 2007, nearly 95 percent of fruit and vegetable wholesale establishments (4,207 of 4,437 businesses) that operated the entire year were small by the SBA's small-entity threshold of not more than 100 employees. That same year, nearly 93 percent of farms that sold fruits, tree nuts, or berries (104,424 of 112,690 operations) had annual sales of less than $500,000, well below the SBA's small-entity threshold of $750,000. The subset of these farms that comprise the industry Other Noncitrus Fruit Farming numbered 23,641, and can be assumed to be also primarily composed of small entities. Of these Other Noncitrus Fruit Farming establishments, there were 8,245 avocado farms in 2007, also presumed to be principally small operations.

While most entities that may be affected by the rule are small, any effects should be insignificant because of the small quantity of avocado expected to be imported from continental Spain.

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

This final rule allows avocados to be imported into the United States from continental Spain. State and local laws and regulations regarding avocados imported under this rule will be preempted while the fruit is in foreign commerce. Fresh avocados are generally imported for immediate distribution and sale to the consuming public and would remain in foreign commerce until sold to the ultimate consumer. The question of when foreign commerce ceases in other cases must be addressed on a case-by-case basis. No retroactive effect will be given to this rule, and this rule will not require administrative proceedings before parties may file suit in court challenging this rule.

In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the information collection or recordkeeping requirements included in this final rule, which were filed under 0579-0400, have been submitted for approval to the Office of Management and Budget (OMB). When OMB notifies us of its decision, if approval is denied, we will publish a document in the Federal Register providing notice of what action we plan to take.

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

Accordingly, we are amending 7 CFR part 319 as follows:

Background

The regulations in “Subpart-Fruits and Vegetables” (7 CFR 319.56-1 through 319.56-62, referred to below as the regulations) prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world to prevent the introduction and dissemination of plant pests within the United States.

On January 30, 2013, we published in the Federal Register (78 FR 6227-6232, Docket No. APHIS-2011-0132) a proposal  1 to amend the regulations concerning the importation of fruits and vegetables to allow the importation of fresh apricots ( Prunus armeniaca L.)  2 from continental Spain (excluding the Balearic Islands and Canary Islands) into the United States. We proposed to allow the importation of fresh apricots from continental Spain only if they were produced in accordance with a systems approach jointly agreed upon in a bilateral workplan between the Animal and Plant Health Inspection Service (APHIS) and the national plant protection organization (NPPO) of Spain. The systems approach addresses four quarantine pests that the pest risk analysis (PRA) determined could follow the pathway of consignments of fresh apricots imported from continental Spain into the United States:

• The Mediterranean fruit fly (Medfly), Ceratitis capitata Wiedemann,

• The plum fruit moth, Cydia funebrana (Treitschke),

• Leaf scorch, Apiognomonia erythrostoma (Pers.), a fungus, and

• Brown rot, Monilinia fructigena Honey, a fungus.

The proposed systems approach included the following requirements: Registration of production locations and packinghouses; pest monitoring and control, including trapping for C. funebrana and C. capitata to demonstrate areas of low prevalence; grove sanitation; chemical controls; inspection by the NPPO of Spain for quarantine pests; and phytosanitary treatment in accordance with 7 CFR part 305 and the Plant Protection and Quarantine (PPQ) Treatment Manual. 3 We also proposed that fruit would have to be imported in commercial consignments, with each consignment identified throughout its movement from place of production to port of entry in the United States, and that consignments would have to be accompanied by a phytosanitary certificate issued by the NPPO of Spain stating that the fruit is free from all pests of quarantine concern and has been produced in accordance with the systems approach.

We solicited comments concerning our proposal for 60 days ending April 1, 2013. We reopened and extended the deadline for comments until June 13, 2013, in a document published in the Federal Register on May 29, 2013 (78 FR 32184, Docket No. APHIS-2011-0132). We received four comments by that date. They were from a foreign government, a State department of agriculture, an organization representing State plant regulatory agencies, and a university professor. They are discussed below by topic.

One commenter stated that we should not allow the import of apricots from Spain that have been sprayed with pesticides, unless methods can be devised to ensure that such fruit will not be toxic to consumers.

The U. S. Environmental Protection Agency (EPA) is responsible for registering pesticides for use in the United States. EPA also has the responsibility to establish limits, or tolerances, for pesticide residues in both raw agricultural commodities and processed foods; these tolerances apply to both imported and domestically grown foods. EPA-established tolerances are commodity specific and represent the maximum amount of pesticide residue that may legally remain in food. In the absence of a tolerance, any level of pesticide residue is prohibited. The U. S. Food and Drug Administration is responsible for enforcing EPA pesticide residue tolerances and for determining whether an imported food violates the Federal Food, Drug, and Cosmetic Act.

The proposed rule identifies the NPPO of Spain as the body responsible for conducting and supervising inspections, monitoring, trapping, surveying, and other activities required in the systems approach.

A commenter acknowledged that the NPPO of Spain is responsible for these activities but noted that there are other bodies and stakeholders involved, such as the Spanish Autonomous Communities (the first-level political and administrative divisions in Spain), auditing companies, integrated pest management associations, and field technicians and advisors. Their roles are defined by Directive 2009/128/EC of the European Parliament and of the Council of 21 October 2009, which established a framework for European Union (EU) action to achieve the sustainable use of pesticides. The commenter stated that the responsibilities of each partner should be specified in future workplans under the proposed rules.

In all APHIS fruit and vegetable importation programs, the NPPO certifies that it is taking responsibility to ensure that these other involved parties act under NPPO direction and perform the actions required by the regulations and workplan. Moreover, the NPPO is the official participant in the International Plant Protection Convention, which establishes the reciprocal obligations that trading countries have to each other. Whether the NPPO fulfills its duties through other parties whose roles are described in European Community (EC) directives or through other means is an internal matter not subject to our regulations. If the NPPO of Spain desires, workplans for the apricot program can include information about which entities will perform which required actions, but in the event of failure to perform any required action APHIS will hold only the NPPO responsible for correcting the problems. We note that the cited EC directive addresses only pesticide use and integrated pest management, rather than systems approaches for the growth and certification of crops for export, and even within that scope the directive emphasizes in many places the responsibility of competent authorities in the Member State to ensure required actions are taken.

One commenter recommended that the bilateral workplan track closely with the pest mitigation measures specified by APHIS in the systems approach.

That will be the case. The bilateral workplan is based on the regulations but specifies the pest mitigation measures of the systems approach in greater detail.

We stated in the preamble to the proposed rule that, as a condition of entry, apricots from Spain would have to be produced in accordance with a limited harvest period and treated with surface disinfectant.

One commenter noted that neither of these mitigation measures appears in the proposed regulatory language for the systems approach and asked that we remove these measures.

The commenter is correct. These mitigation measures are not intended to be part of the systems approach and are not included in this final rule.

We proposed in § 319.56-58(c)  4 the requirement that the NPPO of Spain would have to visit and inspect places of production monthly, starting 2 months (60 days) before harvest and continuing until the end of the shipping season to verify that growers are complying with the proposed requirements.

One commenter stated that, given the ripening period of apricot is approximately May 1 through July 15, official inspections would have to be conducted from March to August, which under the proposed regulations would require six inspections. The commenter stated that six inspections are unnecessary and not cost-effective and suggested instead that the NPPO visit production sites once at the beginning of the export season, once during harvest, and at any other times the NPPO finds necessary to verify compliance. The commenter stated that throughout harvest the NPPO, the Autonomous Communities, and the auditing companies employed by them would control, evaluate, and validate field notebooks maintained by growers and inspection reports from field technicians or advisors. The commenter added that the NPPO of Spain would ensure that APHIS requirements are being fulfilled by the involved parties.

APHIS is making two changes in response to this comment. It is essential that the NPPO effectively monitor compliance before and during harvest to identify and prevent pest risks. However, effective inspection does not necessarily require six visits each year, and depending on the personnel authorized by the NPPO to conduct various compliance monitoring activities, it may not be necessary that NPPO employees visit each production site each month. While it is important that the production site be inspected prior to harvest, both to look for early signs of pests that may not be as visible later and to familiarize the inspector with the production area, upon further consideration we believe a reasonable standard is that a pre-harvest inspection occur at least 1 month prior to harvest rather than the proposed 2 months. Therefore, we are changing the proposed standard to read “starting at least 1 month before harvest.” We note also that the term “before harvest” refers to the harvest as conducted at each place of production, not to the harvest season in general, which in some cases could result in fewer inspections being necessary.

As noted above, production site inspections are the responsibility of the NPPO and must be done under NPPO direction to verify the conditions and actions required by the regulations and workplan. However, we acknowledge that the identity of the personnel authorized to conduct inspection-related activities may be determined by the NPPO and specified in the workplan, and that in some cases the NPPO may authorize other personnel, such as employees of an Autonomous Community or an auditing company, to perform duties related to inspection. If so, these personnel must be accountable to the NPPO. Therefore, in this final rule we are changing the relevant sentence in § 319.56-58(c)(1) to read “The NPPO of Spain, or an authorized person designated in the workplan, must visit and inspect. . . .”

We proposed to require in § 319.56-58(c)(1) that any personnel conducting trapping and pest surveys in accordance with the systems approach be hired, trained, and supervised by the NPPO of Spain.

The same commenter noted that, while under EU regulations the NPPO of Spain is responsible for ensuring that such personnel are appropriately trained, such personnel are not necessarily hired or trained by the NPPO of Spain. The commenter asked that we delete the words “hired” and “trained” from this requirement.

As we noted above, we understand that in some cases the NPPO may authorize other personnel not hired or trained by the NPPO, such as employees of an Autonomous Community or an auditing company, to perform duties related to inspection under the supervision of the NPPO. However, we agree that they do not necessarily have to be hired or trained by the NPPO. Therefore, we are deleting the words “hired” and “trained” from the proposed requirement in § 319.56-58(c)(1) and replacing those words with the term “accredited” to indicate they have been determined by the NPPO to be qualified to perform the assigned duties.

Two commenters stated that procedures should be in place to confirm that approved treatments are applied properly to fresh apricot fruit imported from continental Spain.

Under the bilateral workplan, APHIS will confirm that treatments of fresh apricot fruit are properly applied under supervision of the NPPO of Spain in accordance with the cold treatment regulations in § 305.6 and the PPQ Treatment Manual. Furthermore, under § 319.56-58(c)(4), the NPPO of Spain will be required to retain all forms and documentation related to export program activities, including approved treatments, in places of production and packinghouses for at least 1 year and, upon request, provide them to APHIS for review.

One commenter noted that the PRA identifies the fungus A. erythrostoma as a pest that could follow the pathway of consignments of fresh apricots imported from Spain to the United States. The commenter stated, however, that scientific literature  5 identifies A. erythrostoma as being only a pest of cherry in Spain, and consequently the mitigation measures we proposed for A. erythrostoma in fresh apricot are not supported by the literature.

We reviewed the documents cited by the commenter to support that A. erythrostoma does not occur on apricot in Spain. None of the documents rules out A. erythrostoma as being a potential pest risk to apricot in Spain, and one of the documents (Santiago, 2008) acknowledged that apricots are in fact a host of the pathogen. Moreover, A. erythrostoma has been reported as an apricot pest in Italy, Bulgaria, and Austria, and is listed as an apricot pest in the 2004 European and Mediterranean Plant Protection Organization standard “Good Plant Protection Practices for Stone Fruits.”

If a plant pest of quarantine concern is reported on a commodity in a particular country, APHIS considers it to be an import risk for all potential hosts of that pest in that country, unless there are mitigations in place to prevent its spread. No pest-free or low-prevalence areas for A. erythrostoma have been established in Spain, leading to the risk that apricot production could be affected by the pathogen if the proposed mitigations are not applied. Therefore, we are making no changes with regards to the mitigations we proposed to require for A. erythrostoma.

We proposed to require in § 319.56-58(f) that the NPPO of Spain use one of two mitigation options to address the risk potential posed by C. funebrana, the plum fruit moth, which we determined in the PRA to be one of the pests that could follow the pathway of apricot from Spain. Under the first mitigation option in § 319.56-58(f)(1), apricots would have to originate from an area designated as free of C. funebrana in accordance with § 319.56-5. Under the second option in § 319.56-58(f)(2), apricots would have to originate from an area that has been demonstrated to have a low prevalence of C. funebrana. The NPPO of Spain would be required to visit and visually inspect registered places of production during the growing season and harvest period for signs of C. funebrana to demonstrate that the places of production have a low prevalence of C. funebrana and to verify that the growers are complying with the mitigation measures required as part of the systems approach.

One commenter stated that, while the PRA identifies C. funebrana as a quarantine pest that could follow the pathway, its prevalence in apricots is much lower than that of the oriental fruit moth, C. molesta, and outbreaks of C. funebrana only take place occasionally in apricot orchards located near plum orchards. The commenter recommended that mitigation measures for C. funebrana such as pheromone trapping and monitoring should only be required for those apricot orchards located in the vicinity of plum orchards.

We have no evidence to suggest that outbreaks of C. funebrana only occur in apricot orchards that are located near plum orchards. At any rate, it would not be practical to find every apricot orchard located near a plum orchard and determine specific boundaries within which mitigations for C. funebrana would be required.

As part of the mitigations for establishing an area of low pest prevalence for C. funebrana, we proposed to require in § 319.56-58(f)(2) that the NPPO of Spain sample and visually inspect a quantity of fruit specified in the workplan. Specific inspection requirements would be included in the bilateral workplan and adjusted as necessary to ensure that inspection is effective. We would initially require samples of 20 fruits per tree from 50 trees within every 4 hectares to be visually inspected by the NPPO of Spain every 7 days during the growing season. During the harvest period, samples of 40 fruits per tree from 50 trees within every 4 hectares would have to be visually inspected by the NPPO of Spain every 7 days until harvest is completed. If more than 1 percent of the fruits sampled in a week are damaged or found to have any life stage of C. funebrana, remedial measures would have to be implemented.

The same commenter opposed the requirement to increase the sampling size during the harvest period, stating that the symptoms of C. funebrana are more visible in the latter part of the growing season, thereby making infested fruit easier to detect. As support, the commenter cited APHIS pest response guidelines  6 stating that C. funebrana larvae feed internally, resulting in internal symptoms only. Citing another study, 7 the commenter added that infested fruits may ripen faster than uninfested fruits, allowing them to be readily detectable. The commenter concluded that the biology of C. funebrana does not support increasing the sample size during harvest period from 1,000 to 2,000 fruits per 4 hectares each week and recommended that the sample size of 20 fruits per tree from 50 trees within every 4 hectares should remain invariable through the petal fall phase to the harvest period.

We are making no changes based on the comment. Contrary to the commenter's point, the APHIS pest response guidelines the commenter cited actually state that symptoms of infestation are readily visible on fruit early in the growing season. During the harvest season, the sample size must remain higher in order to minimize the risk of larvae being imported to the United States in infested fruit.

The same commenter stated that we did not specify in the proposed regulatory text a minimum amount of sampled fruit in relation to the area of the place of production and suggested that in accordance with current standards of integrated production we amend § 319.56-58(f)(2) to set a minimum of 50 trees per place of production.

The minimum amount of sampled fruit in relation to the area of the place of production will be worked out by APHIS in consultation with the NPPO of Spain. The sample amount will then be specified in the workplan required in § 319.56-58(a)(1). Specifying the sample size in the workplan rather than in the regulations will give us the flexibility to change the size to meet changing conditions.

Finally, the commenter stated that fruit is the primary sample unit and therefore the term “growing season” should be restricted to a more specific period such as “fruit setting” or “after petal fall.”

Our use of the term “growing season” is compatible with the specific period suggested by the commenter, i.e., from fruit set through the end of harvest season.

We proposed to require in § 319.56-58(g)(1) that trapping for C. capitata, a fruit fly, be conducted in the places of production to demonstrate that those places have a low prevalence of C. capitata. If the prevalence rises above levels specified in the bilateral workplan, remedial measures approved jointly by APHIS and the NPPO of Spain would have to be implemented. We also proposed to require in § 319.56-58(g)(2) that all apricots for export from continental Spain to the United States be treated for C. capitata in accordance with 7 CFR part 305.

Referring to the trapping requirements we proposed for C. capitata, one commenter stated that the threshold of 0.5 flies per trap per day would not allow growers to meet the technical guidelines of integrated production and would have a negative impact on the environmental sustainability of the growing region. The commenter stated that in accordance with current technical standards of integrated production used in the Autonomous Communities of Spain, 2 flies per trap per day is a more accurate intervention threshold for C. capitata.

We are making no changes in response to the comment. C. capitata is a serious quarantine pest that is not present in the United States, but is endemic to Spain. Accordingly, we require a high level of protection against the introduction of C. capitata. The threshold of 0.5 flies per trap per day is appropriate given apricot's host status to C. capitata and is consistent with other import programs, such as the one for Spanish clementines.

We stated in the proposed rule that two phytosanitary mitigation measures for C. capitata would be required because high larval populations in fruit can overwhelm the effectiveness of cold treatment. We noted that the trapping and field mitigation measures together would maintain populations of C. capitata at acceptably low prevalence levels and ensure that cold treatment is effective.

One commenter asked to define what we mean by “high larval populations.” The commenter stated that such language does not provide additional information or quantitative scientifically supported data and that it would be necessary to state whether those populations are related to a percentage of fruit infestation.

What APHIS determines to be high larval populations varies with the fruit in question and the prevalence of C. capitata in a particular area. Generally, high larval populations are those that pose a substantial risk of overwhelming pest mitigations that are in place. For example, in 2001 high populations of C. capitata larvae were detected in imported Spanish clementines that had undergone cold treatment, some of which were alive upon arrival in the United States.

One commenter recommended that all treatments of fresh apricot fruit from continental Spain should be applied prior to importation into the United States.

Pest mitigation measures, including treatments approved by APHIS and the NPPO of Spain, are applied to the fruit prior to its importation to the United States. The phytosanitary certificate issued by the NPPO of Spain will also have to confirm that each consignment of apricot fruit has undergone cold treatment for C. capitata.

In proposed § 319.56-58(i), we included the requirement that, during the time the packinghouse is used to pack and export apricot fruit to the United States, the packinghouse must only accept fruit from places of production registered and approved by the NPPO of Spain. We proposed to require the packinghouse to pack no fruit for other markets during the time it packs apricots produced in accordance with the proposed rule's systems approach.

One commenter suggested that we allow packinghouses to pack fruit for other markets during the same period, but under conditions that would prevent commingling of the fruit. The conditions they provided were (1) the packing lines in packinghouses be cleared prior to packing apricots for the United States, and (2) fruit destined for the United States must always be identified and stored separately from fruit destined for other markets. The commenter added that similar measures are already included in preclearance work plans for the export of sweet oranges, clementines, and other mandarins to the United States.

After careful consideration, we have decided to change the rule in response to this comment, according to the following reasoning. Consider the following scenario for apricots produced in accordance with the proposed rule. There are two areas of pest risk associated with the packinghouse. There is a small risk that C. capitata could enter the packinghouse associated with other articles destined for other markets, move to regulated apricots, and lay eggs in those apricots. However, this is unlikely because normal packinghouse operations make such movement of pests between lots exceedingly rare. There is a slightly larger risk that articles destined for other markets could become accidentally mixed with regulated apricots and shipped to the United States. Such mixing of articles could result in C. capitata larvae being shipped to the United States. We believe both of these areas of risk can be controlled using the methods suggested by the commenter. Maintaining the identity of regulated apricots at the packinghouse and ensuring separation between them and other articles are the key concerns. The proposed rule, in § 319.56-58(a)(4), states that regulated apricots must “remain identifiable when the fruit leaves the grove, at the packinghouse, and throughout the export process.”

This identity requirement will aid achieving separation in the packinghouse. To fully achieve effective separation, we are changing the packinghouse requirement in § 319.56-58(i) to read as follows: “During the time registered packinghouses are in use for packing apricots for export to the United States in accordance with the requirements of this section, packing lines must be cleared of all other articles and plant debris prior to packing such apricots, and such apricots must be stored in a room separate from any other fruits or plant articles while the apricots are at the packinghouse.”

Two commenters stated that risk mitigation measures should include an additional high level of inspection by APHIS at the U.S. port of entry.

The risk mitigations we are adding to the regulations for the importation of fresh apricots from continental Spain include two points of inspection, one in continental Spain and one at the U.S. port of entry. Under § 319.56-58(j)(1), a biometric sample of apricots, jointly agreed upon by APHIS and the NPPO of Spain, will be required to be inspected in Spain by the NPPO following post-harvest processing. The sample will have to be visually inspected for the quarantine pests A. erythrostoma, C. funebrana, and M. fructigena, and a portion of the fruit cut open to inspect for the internal pest C. capitata. If any of these quarantine pests are found, the entire consignment of apricots will be prohibited from import into the United States. In addition, each lot of apricot fruit from continental Spain will have to be presented for inspection at the U.S. port of entry with an accompanying shipping document indicating the place of production and the packinghouse in which the fruit was processed. Each consignment of apricot fruit will have to be accompanied by a phytosanitary certificate issued by the NPPO of Spain stating that the fruit has been treated for C. capitata in accordance with 7 CFR part 305 and includes an additional declaration stating that the fruit in the consignment was inspected and found free from A. erythrostoma, C. capitata, C. funebrana, and M. fructigena.

One commenter stated that we should not suspend exports from the places of production if any C. capitata are detected in the required postharvest inspection of apricots in Spain. The commenter stated that a certain percentage of infestation should be accepted for apricots because they will be subjected to a cold treatment, which is the case in other operational workplans between Spain and the United States for the export of sweet oranges, clementines, and other mandarins. The commenter also stated that the phytosanitary certificate should not be required to state that the consignment is free of C. capitata.

We are making no changes based on this comment. Given the serious threat C. capitata poses, we believe that it is reasonable to have no tolerance level for C. capitata infestation and to stop accepting shipments from a place of production pending investigation when a single larva is found during inspection. Furthermore, neither the operational workplan nor the regulations for importation of sweet oranges, clementines, and mandarins from Spain have such tolerances. We note that the relevant requirement in our regulations for the importation of clementines from Spain, § 319.56-34(f), states that “If inspectors find a single live Mediterranean fruit fly in any stage of development during an inspection, the entire consignment of clementines will be rejected. If a live Mediterranean fruit fly in any stage of development is found in any two lots of fruit from the same orchard during the same shipping season, that orchard will be removed from the export program for the remainder of that shipping season.”

The same commenter suggested a biometric sample size of 200 fruits for the post-harvest inspection of C. capitata. The commenter calculated that sample size using the standard in the International Standards For Phytosanitary Measures No. 31, “Methodologies for sampling of consignments” (International Plant Protection Convention, 2009). 8 The commenter stated that calculating the sample size for a 95 percent confidence level at a 2 percent level of detection, according to a 75 percent efficacy value where the lot size is large and sufficiently mixed, yields 199 or 200 fruits by the binomial or Poisson distribution, respectively.

We do not disagree with the commenter's methodology, but as we stated in the proposed rule, the actual sampling rate will be worked out by technical experts in APHIS in consultation with the NPPO of Spain. The sample size will then be specified in the workplan required in § 319.56-58(a)(1). Specifying the sample size in the workplan rather than in the regulations will give us the flexibility to raise or lower the fruit sampling rate when conditions indicate a higher or lower risk of C. capitata infestation.

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

This final rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

In accordance with the Regulatory Flexibility Act, we have analyzed the potential economic effects of this action on small entities. The analysis is summarized below. Copies of the full analysis are available by contacting the person listed under FOR FURTHER INFORMATION CONTACT or on the Regulations.gov Web site (see ADDRESSES above for instructions for accessing Regulations.gov).

This rule will amend the regulations to allow the importation into the United States of fresh apricots from continental Spain, subject to a systems approach.

The economic analysis examines impacts for U.S. small entities of a rule that would allow fresh apricot imports from continental Spain. Spain is expected to export at most 10 standard shipping containers of fresh apricot per year to the United States. Each container can hold approximately 18 metric tons (MT), thus fresh apricot imports from Spain may total as much as 180 MT annually. This amount is equivalent to about 1 percent of current U.S. consumption. With U.S. fresh apricot exports four times the quantity imported, and the amount expected to be imported from Spain very small in comparison to current U.S. consumption, any market effects of such a relatively small change in supply would be minor.

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

This final rule allows fresh apricots to be imported into the United States from continental Spain. State and local laws and regulations regarding fresh apricots imported under this rule will be preempted while the fruit is in foreign commerce. Fresh fruits are generally imported for immediate distribution and sale to the consuming public, and remain in foreign commerce until sold to the ultimate consumer. The question of when foreign commerce ceases in other cases must be addressed on a case-by case basis. No retroactive effect will be given to this rule, and this rule will not require administrative proceedings before parties may file suit in court challenging this rule.

In accordance with section 3507(d) of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.), the information collection or recordkeeping requirements included in this final rule, which were filed under 0579-0402, have been submitted for approval to the Office of Management and Budget (OMB). When OMB notifies us of its decision, if approval is denied, we will publish a document in the Federal Register providing notice of what action we plan to take.

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

Accordingly, we are amending 7 CFR part 319 as follows:

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

Under EPCA, this program consists essentially of four parts: (1) Testing; (2) labeling; (3) Federal energy conservation standards; and (4) certification and enforcement procedures. The testing requirements consist of test procedures that manufacturers of covered equipment must use (1) as the basis for certifying to DOE that their equipment complies with the applicable energy conservation standards adopted under EPCA, and (2) for making representations about the efficiency of such equipment. Similarly, DOE must use these test requirements to determine whether the equipment complies with any relevant standards promulgated under EPCA. DOE's existing testing regulations allow manufacturers of commercial heating, ventilation, and air conditioning (HVAC) equipment, water heating (WH) equipment, distribution transformers, electric motors, and small electric motors the use of an alternative efficiency determination method (AEDM), in lieu of actual testing, to simulate the energy consumption or efficiency of certain basic models of covered equipment under DOE's test procedure conditions.

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

On March 7, 2011, DOE published a final rule in the Federal Register that, in part, modified the requirements regarding manufacturer submission of compliance statements and certification reports to DOE (hereafter referred to as the March 2011 Final Rule). 76 FR 12421. As part of this rule, DOE imposed new or revised reporting requirements for some types of covered products and equipment, including a requirement that manufacturers submit annual reports to the Department certifying compliance of their basic models with applicable standards. See 76 FR 12428-12429 for more information.

In response to the initial deadline for certifying compliance imposed by the March 2011 Final Rule on commercial HVAC, refrigeration, and WH equipment manufacturers, certain manufacturers of particular types of commercial and industrial equipment stated that, for a variety of reasons, they would be unable to meet that deadline. DOE initially extended the deadline for certifications for commercial HVAC, WH, and refrigeration equipment in a final rule published June 30, 2011 (hereafter referred to as the June 2011 Final Rule). 76 FR 38287 (June 30, 2011). DOE subsequently extended the compliance date for certification by an additional 12 months to December 31, 2013, for these types of equipment (December 2012 Final Rule) to allow, among other things, the Department to explore the negotiated rulemaking process for setting requirements for these equipment categories. 77 FR 72763.

In the summer of 2012, DOE had an independent convener evaluate the likelihood of success, analyzing the feasibility of developing certification requirements for commercial HVAC, WH, and refrigeration equipment (not including walk-in coolers and freezers) through consensus-based negotiations among affected parties. In October 2012, the convener issued his report based on a confidential interview process involving forty (40) parties from a wide range of commercial HVAC, WH, and refrigeration equipment interests. Ultimately, the convener recommended that, with the proper scope of issues on the table surrounding commercial HVAC, WH, and refrigeration equipment certification, a negotiated rulemaking appeared to have a reasonable likelihood of achieving consensus based on the factors set forth in the Negotiated Rulemaking Act because the interviewed parties believed the negotiated rulemaking was superior to notice and comment rulemaking for certification-related issues. Additional details of the report can be found at https://www1.eere.energy.gov/buildings/appliance_standards/pdfs/convening_report_hvac_cre_1.pdf.

On February 26, 2013, members of the Appliance Standards and Rulemaking Federal Advisory Committee (ASRAC) unanimously decided to form a working group to engage in a negotiated rulemaking effort on the certification of commercial HVAC, WH, and refrigeration equipment. A notice of intent to form the Commercial Certification Working Group (Working Group) was published in the Federal Register on March 12, 2013, to which DOE received 35 nominations. 78 FR 15653. On April 16, 2013, the Department published a notice of open meeting that announced the first meeting and listed the 22 nominees that were selected to serve as members of the Working Group, in addition to two members from ASRAC, and one DOE representative. 78 FR 22431. The members of the Working Group were selected to ensure a broad and balanced array of stakeholder interests and expertise, and included efficiency advocates, manufacturers, a utility representative, and third-party laboratory representatives.

AEDMs are computer modeling or mathematical tools that predict the performance of non-tested basic models. They are derived from mathematical models and engineering principles that govern the energy efficiency and energy consumption characteristics of a type of covered equipment. These computer modeling and mathematical tools, when properly developed, can provide a relatively straight-forward and reasonably accurate means to predict the energy usage or efficiency characteristics of a basic model of a given covered product or equipment and reduce the burden and cost associated with testing.

Where authorized by regulation, AEDMs enable manufacturers to rate and certify their basic models by using the projected energy use or energy efficiency results derived from these simulation models in lieu of testing. DOE has authorized the use of AEDMs for certain covered products and equipment that are difficult or expensive to test in an effort to reduce the testing burden faced by manufacturers of expensive or highly customized basic models. DOE's regulations currently permit manufacturers of commercial HVAC, WHs, distribution transformers, electric motors, and small electric motors to use AEDMs to rate their non-tested basic models (and combinations, where applicable) provided they meet the Department's regulations governing such use.

Initially, DOE undertook a conventional rulemaking to consider expanding and revising its regulations for AEDMs. On April 18, 2011, DOE published a Request for Information (hereafter referred to as the April 2011 RFI). 76 FR 21673. The April 2011 RFI requested suggestions, comments, and information relating to the Department's intent to expand and revise its existing AEDM and ARM requirements. In response to comments it received on the April 2011 RFI, DOE published a Notice of Proposed Rulemaking (NOPR) in the Federal Register on May 31, 2012 (hereafter referred to as the May 2012 NOPR). 77 FR 32038. DOE proposed to permit AEDM-based ratings and certifications for additional types of equipment, such as commercial refrigeration equipment (CRE), automatic commercial ice makers (ACIMs), beverage vending machines (BVMs), and walk-in cooler and freezer (WICF or walk-in) refrigeration systems. 77 FR 32055. DOE also proposed a number of requirements for manufacturers to meet to use an AEDM and laid out a method that DOE would employ to determine if an AEDM had been used appropriately by a manufacturer—along with the consequences if it had not. 77 FR 32055-32056.

During the Working Group's first meeting, Working Group members voted to expand the scope of the negotiated rulemaking efforts to include developing methods of estimating equipment performance based on AEDM simulations. The issues discussed by the various participants during the negotiations with DOE were those raised by the commenters in response to the May 2012 NOPR. The discussion of those issues in the negotiated rulemaking and the consensus reached are summarized in two documents included in the docket of this final rule and constitute DOE's response to the comments on the May 2012 NOPR. The documents discuss the particular elements that the AEDM simulations for each equipment should address and other related considerations of note, including potential basic model definitions, test procedure issues, the treatment of certain features, and certification of these equipment. See http://www.regulations.gov/#!docketBrowser;rpp=25;po=0;dct=SR;D=EERE-2013-BT-NOC-0023.

As required, the Working Group submitted an interim report to ASRAC on June 26, 2013, summarizing the group's recommendations regarding AEDMs for commercial HVAC, WH, and refrigeration equipment. The interim report to ASRAC can be found at http://www.regulations.gov/#!documentDetail;D=EERE-2013-BT-NOC-0023-0046. ASRAC subsequently voted unanimously to approve the recommendations in the interim report for AEDMs. Subsequently, the Working Group submitted a final report on August 30, 2013, summarizing the Working Group's recommendations for model grouping, certification requirements and deadlines. That report also detailed the features to be excluded from certification, verification, and enforcement testing as long as specific conditions were met. ASRAC voted unanimously to approve the recommendations in the final report.

On October 22, 2013, the Department published in the Federal Register a Supplemental Notice of Proposed Rulemaking regarding AEDMs, basic model definitions, and the compliance process for commercial HVAC, refrigeration, and WH equipment (AEDM SNOPR). 78 FR 62472. DOE proposed the Working Group's recommendations in the AEDM SNOPR, without modification, for AEDMs, basic model definitions, and the initial compliance date for certification. DOE will be addressing the remaining recommendations of the Working Group regarding certification requirements, and for the treatment of specific features when testing, in a separate rulemaking or guidance document. DOE will also be addressing the AEDM proposals of the May 2012 NOPR for BVM, ACIM and WICFs in a separately supplemental notice of proposed rulemaking.

On May 14-15, 2013, the Working Group held a two-day meeting at the U.S. Department of Energy's headquarters in Washington, DC. Sixty-nine interested parties, including members of the Working Group, attended. A more detailed account of the discussions and recommendations can be found in the Working Group meeting transcripts, which are located at http://www.regulations.gov/#!docketDetail;D=EERE-2013-BT-NOC-0023.

As noted above, DOE published the Working Group's recommendations in an SNOPR on October 22, 2013, and received comments from 14 stakeholders including manufacturers, trade associations, advocacy groups, and a utility association. Table II.1 lists the entities that submitted comments and their affiliation. These comments are discussed in more detail below, and the full set of comments can be found at: http://www.regulations.gov/#!docketDetail;dct=FR%252BPR%252BN%252BO%252BSR%252BPS;rpp=25;po=0;D=EERE-2011-BT-TP-0024.

DOE received general comments on the proposals in the AEDM SNOPR. Goodman, MEUS, and AHRI expressed support for the AEDM SNOPR. (Goodman, No. 0086.1 at p.1; MEUS, No. 0083.1 at p.1; AHRI, No.0076.1 at p.1) MEUS stated that the proposals in the AEDM SNOPR were representative of the Working Group's agreements. (MEUS, No. 0083.1 at p.1) The Joint Comment supported the AEDM SNOPR to the extent that it represented the consensus agreements reached by the Working Group. The Joint Comment also recommended that DOE conduct a review of the AEDM process two years after implementation to assess whether the process is fair and prevents undue gaming of equipment ratings. (Joint Comment, No. 0081.1 at p.2)

While DOE appreciates the Joint Comment's recommendation, DOE currently does not plan at this time to re-evaluate the AEDM regulations in two years. DOE may reconsider this decision depending on whether new circumstances present themselves that may merit a review of these regulations.

Goodman made a general recommendation that in the regulatory text pertaining to AEDMs it is unnecessary to state “validated AEDM” because the regulations require all AEDMs to be validated before a manufacturer may use an AEDM for certification purposes. (Goodman, No. 0086.1 at p. 2) DOE agrees with Goodman and will remove the term “validated.”

The Working Group unanimously recommended that DOE not require pre-approval for AEDMs for commercial HVAC, WH, or refrigeration equipment. The SNOPR adopted this approach. 78 FR 62472. DOE did not receive any adverse comments on this proposal and thus DOE is not adopting a pre-approval process for AEDMs for the aforementioned equipment.

The Working Group unanimously recommended the following types of covered equipment be allowed to use AEDMs.

DOE currently allows the use of AEDMs for commercial HVAC and WH equipment. DOE proposed in the SNOPR to also permit manufacturers to use AEDMs when certifying CRE basic models. 78 FR 62472, 62474. Zero Zone stated that it was pleased that DOE plans to allow CRE manufacturers to use AEDMs because it would be impossible for manufacturers to evaluate the efficiency of all of their models without AEDMs. (Zero Zone, No. 0077.1 at p.1) Lennox and Hoshizaki American both supported extending AEDMs to commercial refrigeration equipment. (Lennox, No. 0080.1 at p.2; Hoshizaki America, No. 0087.1 at p.1) In this final rule, DOE is allowing CRE manufacturers to certify their basic models using AEDMs.

Lennox also recommended that DOE allow manufacturers to use AEDMs when certifying walk-in refrigeration systems. (Lennox, No. 0080.1 at p. 4) DOE notes that it has already proposed to allow the use of AEDMs for walk-in refrigeration systems in the May 2012 NOPR. See 77 FR 32038, 32041. The issue of using AEDMs for walk-ins is outside the scope of this notice, but the Department will continue to address this issue separately.

Lochinvar requested that DOE allow water volume for commercial water heaters to be calculated by an AEDM and have a 5 percent tolerance. (Lochinvar, No. 0088.1 at p. 1) DOE notes that AEDMs are used specifically for determining the energy efficiency or energy consumption of covered equipment but expects that capacity or volume measurements may be generated as a step in determining the model's applicable efficiency rating. DOE did not propose tolerances on measurements other than energy efficiency descriptors, thus this issue is beyond the scope of this rulemaking.

Prior to use for certifying the energy efficiency or energy use of a basic model, DOE generally requires AEDMs to be validated. The Working Group recommended the following validation process for AEDMs, which DOE proposed in the AEDM SNOPR. 78 FR 62472, 62474.

To validate an AEDM, a manufacturer must select at least the minimum number of basic models, specified in Table II.2 through Table II.6, for each of the validation classes to which the AEDM will apply. Each selection represents a single test conducted in accordance with the DOE test procedure (TP) or applicable DOE TP waiver at a manufacturer's testing facility or a third-party testing facility, whose test result is directly compared to the result for that model from the AEDM.

A manufacturer may elect to develop multiple AEDMs per validation class and each AEDM may span multiple validation classes; however, the minimum number of tests must be maintained per validation class for each AEDM a manufacturer chooses to develop and use. An AEDM may be applied to any individual model within the applicable validation classes at the manufacturer's discretion. All documentation of test results for the models used to validate each AEDM, the AEDM results, and the subsequent comparisons to the AEDM must be maintained as part of both the test data underlying the certified rating and the AEDM validation package pursuant to 10 CFR 429.71. 78 FR 62472, 62474.

DOE received two comments in support of the minimum number of basic models required for each validation class. AAON commented in support of the number of validation tests for commercial HVAC equipment. (AAON, No. 0082.1 at p. 1) Zero Zone agreed with the number of basic models required for each specific validation class. (Zero Zone, No. 0077.1 at p. 2)

Hussmann requested that DOE clarify in the preamble that two tests, one per basic model, are required at a minimum for each validation class. (Hussmann, No. 0079 at p. 1) DOE agrees with Hussmann that DOE intended that the proposal indicate that only one sample is required to be tested for each basic model selected to validate an AEDM. The result of each test must be directly compared to the result for that model from the AEDM.

DOE has modified the language in paragraph 429.70(a) to remove language that appeared to contradict this provision. Paragraph 429.70(a) now states that testing must be conducted in accordance with 429.11. Section 429.11 states that the general rule is that two units must be tested but that the testing requirement may be modified by another, more specific provision. Therefore, for equipment types permitted to use an AEDM that were not subject to the negotiated rulemaking, the default rule of testing two units still applies. For the equipment types that were subject to the negotiated rulemaking, the paragraphs directly applicable to those equipment types state that only one unit of each basic model must be tested. DOE also notes, as was often discussed during Working Group meetings, that these testing limits are absolute minimums. A manufacturer must ensure that its AEDM(s) accurately predict performance for the full range of equipment classes to which the manufacturer is applying the AEDM.

ABMA commented that existing test data for large commercial packaged, built-to-order boilers are based on ASME PTC-4.1 instead of the DOE test procedure. ABMA requested that DOE grant a blanket waiver allowing these types of commercial boilers to be rated to ASME PTC-4.1 instead of the DOE test procedure so that AEDMs can be developed around this existing data. Additionally, ABMA suggested that large commercial packaged, built-to-order boilers be reclassified as “industrial” boilers to help distinguish these equipment types from smaller, high-volume boilers. (ABMA, No. 0075 at p. 1) DOE appreciates ABMA's suggestion, but clarifies that each manufacturer of a large commercial packaged, built-to-order boilers must individually submit a petition for waiver as outlined in 10 CFR 431.401. Pursuant to the test procedure waiver regulations, DOE cannot issue a blanket waiver for a test procedure waiver. While it is outside the scope of this rulemaking to consider a petition for waiver and propose alternative methods of testing requirements for commercial packaged boilers, DOE currently has an open rulemaking for commercial boilers where it may address the testing issues.

As DOE did not receive adverse comments regarding the AEDM SNOPR proposal for the minimum number of basic models, specified in Table II.2 through Table II.6, required to validate an AEDM, DOE is adopting these requirements as part of today's final rule.

To validate the AEDM, the test results from each model required to be tested according to the validation requirements described in the previous section must be compared to the simulated results from the applicable AEDM. The Working Group recommended that for energy consumption metrics, the AEDM result for a model must be greater than or equal to 95 percent of the tested results for that same model. Similarly, for energy efficiency metrics, the AEDM results for a model would need to be less than or equal to 105 percent of the tested results for that same model. In the AEDM SNOPR, DOE proposed this one-sided 5 percent tolerance for AEDM validation for all commercial HVAC, WH, and refrigeration equipment. 78 FR 62472, 62476.

DOE received several comments on validation tolerances. AAON commented in support of the one-sided tolerances for comparing test results to the AEDM output proposed in the SNOPR. (AAON, No. 0082.1 at p. 1) Zero Zone commented that DOE should provide tolerances for AEDMs, but requested DOE modify the regulatory language to state that test results used to validate an AEDM can be less than the energy efficiency standard or more than the energy consumption standard by the proposed 5 percent tolerance. (Zero Zone, No. 0077.1 at p. 1) DOE does not agree with Zero Zone. All test results used to validate an AEDM must at least meet the applicable energy conservation standard—Zero Zone's approach would not ensure the applicable standard would be met.

Hussmann commented that although the Working Group agreed on a one-sided 5 percent tolerance when comparing the validation test results to the AEDM output, this tolerance is only acceptable if a manufacturer can control the test conditions. Hussmann stated that inherent component tolerances, fluctuation of the internal average temperature, and fluctuation of the test room conditions could produce test results that vary more than 5 percent from the rating produced by an AEDM. (Hussmann, No. 0079 at p. 1) In response to Hussmann's comment, DOE clarifies that validation testing refers only to the requirements manufacturers must satisfy to confirm the functionality of an AEDM before such AEDM can be used to produce certified ratings. DOE did not propose any requirements on the test labs or test process for validation testing. A manufacturer may conduct its own validation testing within its facilities and control the test conditions to the extent allowable by the applicable test procedure. Conversely, verification testing, which is discussed in more detail in section II.C, is testing conducted by the Department as a means of checking the performance of an equipment model distributed in commerce. Verification testing is conducted at a third-party laboratory unless extenuating circumstances prevent third-party testing in which case the Department may allow testing at a manufacturer's lab. DOE has added regulatory text to clarify this issue. DOE notes Hussmann's concern that fluctuations in test conditions can produce test results that may vary more than 5 percent from the estimated performance rating produced by an AEDM. However, this concern is more germane to verification testing and will be discussed in more detail in section II.C.4.

In today's final rule, DOE is adopting the one-sided five percent tolerance for AEDM validation. As previously stated, for energy consumption metrics, the AEDM result for a model must be greater than or equal to 95 percent of the tested results for that same model. For energy efficiency metrics, the AEDM results for a model must be less than or equal to 105 percent of the tested results for that same model. In addition, AEDM results must meet the applicable standard.

For each basic model of commercial HVAC, WH, and refrigeration equipment distributed in commerce, manufacturers must determine the certified rating based on testing or use of a validated AEDM. DOE's current regulations provide manufacturers with some flexibility in rating each basic model by allowing the manufacturer the discretion to rate conservatively. The Working Group recommended that in the case of models rated with energy consumption metrics, those values must use a certified rating less than or equal to the applicable Federal standard and greater than or equal to the model's AEDM result. For energy efficiency metrics, each model's certified rating must be less than or equal to the model's AEDM result and greater than or equal to the applicable Federal standard. DOE proposed in the AEDM SNOPR to retain the flexibility provided by its current regulatory approach and proposed the Working Group's recommendation without modification. 78 FR 62472, 62476.

Lennox and Zero Zone agreed that DOE should allow manufacturers to rate their products conservatively. (Lennox, No. 0080.1 at p. 3; Zero Zone, No. 0077.1 at p. 3) AAON also supported the concept of rating conservatively based on AEDM results as long as such ratings are better than the applicable energy conservation standards. (AAON, No. 0082.1 at p. 1) DOE received no adverse comments and thus is continuing to allow manufacturers to rate conservatively.

Once a basic model has been distributed in commerce, DOE may select any model and verify the equipment's performance at any time. 10 CFR 429.104. The Working Group recommended the process described below in sections II.C.1 through II.C.7 for DOE's verification of certified ratings determined by an AEDM. DOE proposed this process in the AEDM SNOPR. 78 FR 62472, 62476.

DOE received several comments on the verification process. Specifically, manufacturers commented on existing regulatory text that allows the Department to verify the performance of an AEDM used for certified ratings by observing the operation of the AEDM, collecting analyses of previous simulations, and/or conducting testing on units certified using an AEDM. Traulsen requested an explanation as to the purpose of this text. (Traulsen, No. 0085.1 at p. 2) AHRI commented that although this regulatory text currently exists in the CFR, the AEDM validation requirements recommended by the Working Group makes these regulations unnecessary and redundant. AHRI recommended that DOE remove this text in its entirety. (AHRI, No. 0076.1 at p. 2)

DOE disagrees that these provisions are redundant with the validation requirements. The validation requirements provide for a manufacturer to ensure that its AEDM is functioning properly prior to using the AEDM. The verification testing requirements allow DOE to ensure that a specific basic model is properly rated using the AEDM. These provisions provide a mechanism for DOE to verify that a manufacturer is using its AEDM in conformance with the regulations.

Currently, DOE's regulations do not permit a manufacturer to be present for DOE-initiated testing to verify equipment performance of a given basic model. The Working Group considered a variety of approaches to ensure manufacturers have an opportunity to witness the test set-up for verification testing of a basic model.

DOE received a number of comments regarding its proposal. Some comments supported the witness testing process proposed in the SNOPR. See AAON, No. 82.1 at p. 1 and Zero Zone, No. 0077.1 at p. 3) Zero Zone added that a manufacturer may not be able to witness the initial verification test unless it knows in advance which units will be tested. (Zero Zone, No. 0077.1 at p. 3)

Other commenters, however, raised specific issues regarding the proposal. Hoshizaki America, for example, disagreed with the proposed requirement that up to 10 percent of a manufacturer's certified basic models be subjected to witness testing because the affected units are so complex that slight changes could result in separate basic models. Instead, Hoshizaki America suggested DOE collaborate with existing bodies that test annually like the EPA's ENERGY STAR program. (Hoshizaki, No. 0087.1 at p. 1) Hussmann noted that CRE manufacturers have concerns about the expertise of third-party test facilities to either operate the CRE units under test or to conduct the DOE test procedure. (Hussmann, No. 0079.1 at p. 2)

Hussmann also remarked that manufacturers are responsible for the expense of any retesting needed. (Hussmann, No. 0079.1 at p. 2)

DOE has given consideration to the concerns raised by these commenters. In reviewing their comments, DOE now believes that its proposed regulatory text, which was based in large part on the Working Group's recommendation, may not have been sufficiently clear. Accordingly, DOE has decided to not finalize any regulation on witness testing at this time. To ensure that the regulatory text adequately reflects the recommendation of the Working Group, DOE will propose revised regulatory text for this particular aspect of the rule in order to provide additional clarification regarding the witness testing process. As part of this effort, DOE will provide interested parties with additional time within which to file comments before these particular provisions would be finalized and incorporated into DOE's regulations. DOE will issue a separate notice to address specifically this issue.

DOE notes that the witness testing provisions are triggered by DOE performing verification testing, which ensures that certified ratings are within specified tolerances of test results. DOE notes that manufacturers are not required to certify these equipment types for six to eighteen months (depending on equipment type) plus an additional six month enforcement grace period; therefore, DOE will have sufficient time to adopt final witness testing provisions before these verification testing procedures would be triggered.

In the AEDM SNOPR, DOE proposed the Working Group's recommended verification process that DOE will use to assess a unit's performance through third-party testing. Under this approach, DOE will begin the verification process by selecting a single unit of a given basic model for testing either from retail or by obtaining a sample from the manufacturer, with a preference for a unit from retail. DOE will select a third-party testing laboratory at its discretion to test the unit selected. The lab will adhere to the requirements recommended by the Working Group described in section II.C.3. As discussed in section II.C.1, DOE will address the witness testing arrangements in a subsequent rulemaking. In all cases, the Department will be responsible for the logistics of arranging a witnessed test, and the laboratory is not allowed to communicate directly with the manufacturer. 78 FR 62472, 62476.

Further, under this process, the manufacturer will provide any additional information regarding test set up or testing to DOE through the certification process in pdf format. (This provision will be addressed in a separate rulemaking on commercial certification of HVAC, WH, and refrigeration equipment.) DOE will provide this information to the test facility as long as the additional instructions do not conflict with the DOE test procedure or an applicable DOE test procedure waiver. The test facility may not use any additional information during the testing process that has not been approved by DOE or shipped in the packaging of the unit. If needed, the test facility may request from DOE additional information on test set up, installation, or testing. Upon receiving a request from the test facility for additional information, DOE may hold and coordinate a meeting with the manufacturer and the test facility to discuss the additional details needed for testing. Additional instructions may be given to the test facility as agreed upon by DOE and the manufacturer. At no time may the test facility discuss DOE verification testing with the manufacturer without the Department present. 78 FR 62472, 62476.

Zero Zone agreed with the Department's proposal since, in its view, manufacturers should be able to provide additional test and set up information for third-party labs. (Zero Zone, No. 0077.1 at p. 3) Goodman, which also largely agreed with DOE's proposal, suggested that DOE amend the proposed regulatory text to allow a third-party test lab to use any manual that a manufacturer submits in connection with its certification report for verification testing. Goodman recommended this amendment to account for the possibility of a literature change after the initial production of the unit. (Goodman, No. 0086.1 at p. 2) As discussed in the Working Group, DOE will use supplementary information submitted with the certification report as long as the information was submitted to DOE before the unit was selected for verification testing. DOE will not use manuals that only reside on a manufacturer's Web site; DOE will only use supplementary information that is submitted with the certification report. DOE also notes that the supplementary information submitted with the certification report is only one of the types of information to which DOE will refer when testing. In no case shall the contents of these supplemental items displace the provisions specified in the DOE test procedure.

If a unit is tested and determined to fall outside the rating tolerances described in section II.C.4, DOE will notify the manufacturer. The manufacturer will receive all documentation related to the test set up, test conditions, and test results for the unit if the unit falls outside the rating tolerances. At that time, a manufacturer may present all claims regarding any issues directly associated with the test and initiate a discussion regarding retesting. If the manufacturer was not on-site for the initial test, the manufacturer may request a retest of the same unit, and DOE and the manufacturer can be present for the retest. DOE will not retest a different unit of the same basic model unless DOE and the manufacturer determine it is necessary based on the test results, claims presented, and DOE regulations. 78 FR 62472, 62476.

Lennox commented that DOE should clarify that the AEDM verification process codified in 429.70(c)(6) is based on a “single unit” unless a manufacturer has elected to have verification tests for up to 10 percent of the manufacturer's certified basic models rated with an AEDM. DOE concurs that an invalid rating can be determined by conducting verification testing on a single unit; however, to clarify, DOE did not propose to permit a manufacturer to have 10 percent of its basic models tested using the verification testing process. Instead, DOE proposed to permit a manufacturer to designate up to 10% of its basic models that were certified with an AEDM for witness testing if selected for verification testing. As discussed in section II.C.1, DOE will address the witness testing arrangements in a subsequent rulemaking.

Lennox also requested that DOE clarify that the verification provisions and tolerances proposed in this section and in section II.C.4, respectively, supersede and replace those in 10 CFR 429.110 with respect to a model rated using an AEDM. (Lennox, No. 0080.1 at p. 2) DOE notes that these proposals do not replace the enforcement regulatory text to which Lennox is referring. The enforcement regulations allow DOE to determine if a model complies with the applicable standard. The verification process outlined in today's final rule is specifically for determining if a unit was certified with a valid rating, i.e., that the test results for the basic model that was verification tested are within the permitted tolerance range from the AEDM-derived performance rating. The verification process also serves to ensure that the AEDM is generating valid results across a range of basic models.

ABMA commented that, as long as no efficiency or energy use criteria have changed, DOE should not require a retest for built-to-order packaged boilers on a periodic basis as there are enough checks and balances built into the boiler manufacturing system. Alternatively, company officers could issue a statement to DOE stating that no efficiency-related changes have been made within a certain period of time. (ABMA, No. 0075.1 at p. 2) DOE understands ABMA's comment to mean that no verification testing is necessary for built-to-order boilers. While it may be true that the boiler industry has a number of safeguards to ensure consistent energy performance from built-to-order boilers, the Department still reserves the right to verify a boiler's certified efficiency. DOE is not requiring boiler manufacturers to periodically retest units for the purposes of certification or AEDM validation, and the Department already requires manufacturers to submit a compliance statement with their annual certification that states, among other things, that all basic models included in the certification report comply with the applicable energy conservation standards. 10 CFR 429.12(c). DOE also notes that the certification deadline for these products is being delayed an additional 18 months as part of this final rule.

In today's final rule, DOE is adopting the verification process outlined in this section.

The Working Group recommended that all AEDM verification tests should be conducted in a third-party testing facility of DOE's choice. Commercial equipment that cannot be tested at an independent third-party facility may be tested at a manufacturer's facility upon DOE's request. DOE proposed the Working Group's recommendation in the AEDM SNOPR. 78 FR 62472, 62477.

FGNA supported the Department's proposal that verification testing should generally take place at a third-party facility but should allow for equipment to be tested at the manufacturer's facility if the equipment cannot be tested at a third-party laboratory. (FGNA, No. 0085.1 at p. 2) AAON also agreed that verification testing should be conducted at a third-party facility qualified to conduct the specific test procedure. (AAON, No. 0082.1 at p. 2) Goodman encouraged DOE to utilize laboratories that are ISO 17025-certified to reduce the probability of questionable or disputed test results from incorrect testing or test set-ups. (Goodman, No. 0086.1 at p. 1) Regarding Goodman's recommendation, DOE notes that 10 CFR 429.110(a)(3) requires all DOE enforcement testing be performed at a lab accredited to ISO 17025:2005(E). While this requirement does not preclude verification testing from occurring at an unaccredited laboratory, DOE generally will use an ISO 17025:2005(E) accredited lab so that any verification test results could be used as part of an enforcement testing sample, if necessary, to reduce redundant testing. Therefore, DOE is not specifying that verification testing must occur at an ISO 17025:2005(E) accredited lab.

Zero Zone and Hoshizaki America recommended that for verification testing, a manufacturer's test facilities should be the primary facility to conduct this testing (rather than a third-party lab), in part to reduce cost. (Zero Zone, No. 0077.1 at p. 3; Hoshizaki, no. 0087.1 at p. 1) DOE does not agree that verification testing at a manufacturer's test facility should be preferred over testing at a third-party lab. Testing at a third-party lab inherently offers impartiality in the test results, which a manufacturer-run test facility does not.

ABMA commented that the proposal to require all testing to be performed at an ISO-certified, third-party test facility or witnessed by personnel from such a facility has the potential to pose logistical problems. (ABMA, No. 0075.1 at p. 2) DOE did not propose to require all testing to be performed at an ISO-accredited, third-party test facility or witnessed by personnel from such a facility. As discussed in this section, DOE proposed to conduct verification testing at a third-party test facility but does not require that facility to be ISO-accredited.

DOE is adopting the Certification Working Group recommendation that all AEDM verification tests should be conducted in a third-party testing facility of DOE's choice and commercial equipment for which there is no third-party lab capable of conducting testing may be tested at a manufacturer's facility upon DOE's request.

DOE proposed in the AEDM SNOPR that to verify the certified rating of a given model, the test results from a single unit test of the model will be compared to the certified rating in accordance with the tolerances set forth below. For energy consumption metrics, the Working Group recommended:

For energy efficiency metrics, the Working Group recommended:

DOE received several comments regarding the confidence level for HVAC equipment. Goodman commented in support of the verification tolerances in the SNOPR but commented that HVAC equipment should have a 90% confidence level due to the uncertainty in psychrometric testing. (Goodman, No. 0086.1 at p. 2) MEUS and AHRI also commented that DOE should change the confidence level for HVAC equipment from 95% to 90% to match the confidence level of residential central air conditioners. (MEUS, No. 0083.1 at p. 1) Lennox requested that DOE change the confidence level for the IEER metric from 95% to 90%. (Lennox, No. 0080.1 at p. 3) DOE assumes that the references made by Goodman, AHRI, MEUS, and Lennox to “confidence level” refers to certification testing instead of verification testing because “confidence level” is the term used in 10 CFR 429.43, which applies in the certification context. DOE notes that aspects regarding the certification testing process fall outside the scope of this rulemaking.

AHRI and AAON also recommended that DOE adopt sampling procedures for low volume equipment as discussed in the Working Group meetings. (AHRI, No. 0076.1 at p. 2; AAON, No. 0082.1 at p. 2) DOE intends to address certification testing of low volume equipment and the remaining recommendations from the Working Group in a separate rulemaking. See, infra section IV.

Zero Zone noted that the proposed tolerances are too low to account for variability in products and testing. It asserted that DOE should have tolerances that do not penalize a manufacturer if one verification test does not meet the energy conservation standard plus the AEDM tolerance. Zero Zone recommended that DOE commission a study to evaluate the amount of experimental error in the Department's test procedures, and until its completion, DOE should include an additional 5% test tolerance to account for experimental errors. (Zero Zone, No. 0077.1 at pp. 1-3) DOE notes that the verification tolerances proposed in this notice were developed by a Working Group that included representatives of CRE, HVAC, and WH manufacturers, efficiency advocates, a utility representative, and third-party laboratory representatives. The collective expertise of these different parties helped shape the provisions contained in today's final rule, which reflects the technical expertise of the different industries that will be affected by the rule. Consequently, the tolerance provisions in today's final rule account for the relevant technical factors. As a result, after careful consideration of these factors, DOE believes that the proposed tolerances—which are being adopted in today's rule—are reasonable and is declining to increase the tolerances by an additional 5% as suggested by Zero Zone.

Hussmann asked what the tolerance level would be to exceed the Federal energy conservation standards. (Hussmann, No. 0079.1 at p. 2) DOE clarifies that a certified rating, calculated in accordance with the applicable sampling plan in part 429 or as determined using an AEDM, must, at a minimum, meet the applicable energy conservation standard. However, a rating will not be deemed invalid by a single unit verification test result as long as the result adheres to the verification tolerances described in this section. This means, for example, for equipment with an energy efficiency standard, a verification result may be less than the efficiency standard level as long it does not fall outside the applicable tolerance level listed in Table II.7. However, DOE may initiate enforcement testing—in which case, a basic model will be determined compliant or non-compliant with the energy conservation standards based on the applicable enforcement statistics provided in 10 CFR 429.110.

Modine stated that the DOE test procedure for water-source heat pumps does not require part load tests, which result in the integrated energy efficiency ratio (IEER). In its view, DOE should not propose tolerances on IEER ratings. (Modine, No. 0084.1 at p. 1) DOE agrees that, at this time, part load testing is not required by the DOE test procedure and adds that DOE cannot verify a metric that is not certified to the Department. However, in light of the Working Group's recommended tolerances for part load metrics, the Department is not inclined at this time to remove these tolerances from the approach recommended by Working Group.

Lennox requested DOE clarify whether the tolerances discussed above in this section supersede the tolerances currently found in Appendix B to Subpart C of 10 CFR part 429, with respect to products certified with an AEDM. (Lennox, No. 0080.1 at p. 3) DOE notes that the proposed tolerances do not replace the sampling plan for enforcement testing of covered equipment and certain low-volume covered products as found in 10 CFR part 429, subpart C, appendix B. As discussed in section II.C.2, the regulations on enforcement testing are not superseded by today's verification testing proposals. Enforcement testing is the Department's method to determine if a model complies with the energy conservation standard; in contrast, verification testing determines if a model was rated correctly using an AEDM.

AAON supported the proposed tolerances for product and test uncertainty. (AAON, No. 0082.1 at p. 2). For the reasons stated above, DOE is adopting the tolerances described in this section as recommended by the Working Group.

In those cases where DOE has determined that a basic model's test results fall outside of the tolerances based on the verification process described in sections II.C.1 through II.C.4, the Working Group recommended that the following process apply when remedying the invalid rating. First, DOE will notify the manufacturer and the manufacturer will have 15 days to select and report one of the following options: (1) Conservatively rerate and recertify the model based on the DOE test data only, (2) discontinue the model through the certification process, or (3) conduct additional testing, rerate, and recertify the model in accordance with the sampling provisions of part 429, subpart B, using all additional manufacturer test data and the DOE test data. The manufacturer and DOE will determine the specific date by which the manufacturer must complete the process for correcting the invalid rating, but the process shall not take more than 180 days to complete.

AAON and Zero Zone support the options manufacturers can select to address an invalid rating. (AAON, No. 0082.1 at p. 2; Zero Zone, No. 0077.1 at p. 3) Lennox remarked that DOE should clarify that any notice of noncompliance shall not be issued pursuant to 10 CFR 429.114, with respect to a model rated with an AEDM, until after a manufacturer has been provided an opportunity to respond to an invalid rating as outlined in 429.70(c)(6)(vii). (Lennox, No. 0077.1 at p. 2) DOE notes that an invalid rating, which is determined by verification testing, is not equivalent to a determination of noncompliance. A unit may be found to be noncompliant based on enforcement testing, which is codified in 10 CFR 429.110. As no adverse comments were received regarding the Working Group's recommended process for addressing invalid ratings, DOE will adopt the process in today's final rule.

The Working Group negotiated the consequences of DOE determining that a rating is invalid for a given basic model based on assessment testing, which DOE proposed in the AEDM SNOPR. If the Department finds that within 24 rolling months a manufacturer has more than one basic model with an invalid rating whose results were derived from the same AEDM, then the manufacturer will be subject to the requirements listed in Table II.8. In general, to continue using the AEDM, if a manufacturer has between two and seven basic models with invalid ratings that were derived from the same AEDM, then the manufacturer must re-validate the AEDM according to the requirements in Table II.8 by conducting new testing of different basic models. If the manufacturer has eight or more basic models with invalid ratings from the same AEDM, then all the basic models to which the AEDM applied must be re-rated with physical testing in accordance with the applicable sampling plans in part 429. 10 CFR 429.11. 78 FR 62472, 62478.

DOE received comments in support of the consequences proposed in the AEDM SNOPR from AAON and Zero Zone. (AAON, No. 0082.1 at p. 2; Zero Zone, No. 0077.1 at p. 3) Hussmann commented that the penalty for six failures appeared less severe than the penalty for four failures. (Hussmann, No. 0079.1 at p. 2) DOE agrees with Hussmann that the table does not clearly indicate that if a manufacturer has 6 invalid certified ratings from the same AEDM within a rolling 24-month period then the manufacturer must conduct the minimum number of validation tests at a third-party test facility. The manufacturer must conduct additional testing, at least half the minimum number of validation tests for the validation classes to which the AEDM is applied, at either a third-party test facility or at the manufacturer's lab.

Goodman commented that Table II.8 should be modified from “adjust the rating as appropriate” to “adjust the ratings as appropriate.” (Goodman, No. 0086.1 at p. 2) DOE agrees with Goodman's suggestion to correct the typographical error. In today's final rule, DOE is adopting the proposed penalties for invalid ratings with Hussmann's and Goodman's suggested modifications as discussed in further detail above.

If, as a result of eight or more invalid ratings, a manufacturer has lost the privilege of using an AEDM for rating purposes, the manufacturer may regain the ability to use an AEDM by (1) investigating the cause(s) for the failures, (2) identifying the root cause(s) for the failures, (3) taking corrective action to address the root cause(s), (4) validating the AEDM by performing six new tests for each validation class with a minimum of two of the tests performed at a third-party test facility, and (5) obtaining DOE authorization to resume the use of the AEDM. At its discretion, DOE may reduce or waive these requirements, in which case, DOE will provide public notice and a written explanation of the grounds for reducing or waiving the requirements. 78 FR 62472, 62478. AAON and Zero Zone commented in support of the process outlined for allowing manufacturers to regain the use of AEDMs. (AAON, No. 0082.1 at p. 2; Zero Zone, No. 0077.1 at p. 3) As no adverse comments were received, DOE is adopting this proposed process.

The Working Group recommended amended basic model definitions for commercial refrigeration equipment; commercial warm air furnaces; commercial packaged boilers; and commercial water heaters. Additionally, the Working Group recommended distinct basic model definitions for each type of commercial HVAC equipment, such as packaged terminal air conditioners (PTACs) and heat pumps (PTHPs); small, large, and very large air-cooled commercial package air conditioning and heating equipment; small, large, and very large water-cooled, evaporatively-cooled, and water source commercial package air conditioning and heating equipment; single package vertical air conditioners and heat pumps (SPVUs); computer room air conditioners; and variable refrigerant flow multi-split air conditioners and heat pumps with capacities greater than 65,000 Btu/h. The AEDM SNOPR presented the basic model definitions by covered equipment type that the Working Group developed and added several clarifications made by DOE to harmonize the wording of the definitions for consistency purposes. These clarifications did not change the meaning of the definitions as agreed upon by the Working Group. 78 FR 62472, 62478.

Goodman commented that DOE added the term “within a single equipment class” to all the definitions, and in some cases this term is not applicable. (Goodman, No. 0086.1 at p. 2) DOE does not agree with Goodman's comment. When evaluating and establishing energy conservation standards, DOE divides covered equipment into equipment classes by the type of energy used or by capacity or other performance-related features that justify a different standard. (42 U.S.C. 6295(q)) Currently, DOE has established a number of different equipment classes for commercial HVAC, WH, and refrigeration equipment in the course of the individual standards rulemakings by considering the type of energy use, capacity, or other performance-related features of the equipment. Each equipment class has a different standard that applies. Thus, DOE does not believe manufacturers are able to group models into basic models that span equipment classes and may have different standards that apply. Consequently, DOE is clarifying that a basic model cannot extend across multiple equipment classes. In today's rule, DOE is adopting the basic model definitions as they were proposed in the AEDM SNOPR.

In the AEDM SNOPR, DOE proposed the Working Group's recommendation that certification reports must be initially submitted for all basic models distributed in commerce according to the schedule shown in Table IV.1. After the initial certification date, DOE's existing regulations require that manufacturers certify: (1) New basic models before distribution in commerce; (2) existing basic models, whose certified rating remains valid, annually; (3) existing basic models, whose design is altered resulting in a change in rating that is more consumptive or less efficient, at the time the design change is made; and (4) previously certified basic models that have been discontinued annually.

The Working Group also agreed to the following caveats on the above schedule. If, in the separate, certification rulemaking, DOE adopts regulations that are significantly different from the remainder of the Working Group recommendations, then the initial certification compliance dates will be based on the final rule date for the separate rulemaking effort. The Working Group agreed that in no instance should the initial certification compliance date be less than two months after the issuance of the final rule adopting the remainder of the Working Group's recommendations. Additionally, the Working Group recommended that DOE allow a six-month grace period following each certification date during which DOE will not pursue civil penalties for certification violations. The Working Group emphasized that a grace period would allow manufacturers time to gain familiarity with the certification process and remedy any problems. 78 FR 62472, 62478.

Lennox commented that it is essential for DOE to extend the current compliance dates by the timeline outlined in the AEDM SNOPR and include the 6-month grace period, agreed upon by the Working Group, in the finalized regulatory text. Additionally, Lennox indicated that DOE should reiterate the caveats to the compliance date extensions that the Working Group recommended (Lennox, No. 0080.1 at p. 2). DOE notes that the six-month grace period and caveats agreed upon by the working group are clearly stated in the previous paragraph. Hoshizaki America requested that DOE give more time to allow each manufacturer to review and validate its AEDMs. (Hoshizaki American, No. 0087.1 at p. 1) The Working Group determined that the extension to the certification deadlines described in Table IV.1 allowed manufacturers sufficient time to validate AEDMs and certify compliance. The Department agrees with the Working Group's proposal.

DOE plans to issue a notice of proposed rulemaking containing the remaining issues from the Working Group recommendations before the end of the year, which was the target timeframe discussed by the Working Group. Accordingly, DOE is adopting the schedule in today's final rule.

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

DOE has determined, pursuant to authority at 5 U.S.C. 553(d)(1), that the amendment to 10 CFR 429.12 is not subject to a 30-day delay in effective date because this rule extending the compliance date for a requirement relieves a restriction.

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

DOE reviewed the AEDM requirements being adopted under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003. As discussed in more detail below, DOE found that because the provisions of this rule will not result in increased testing and/or reporting burden for manufacturers already eligible to use an AEDM and will extend AEDM use to a number of manufacturers, thus reducing their testing burden. Manufacturers will not experience increased financial burden as a result of this rule.

Today's final rule, which adopts voluntary methods for certifying compliance in lieu of conducting actual physical testing, would not increase the testing or reporting burden of manufacturers who currently use, or are eligible to use, an AEDM to certify their products. Furthermore, the requirements for validation of an AEDM adopted in today's final rule do not require more testing than that required by the AEDM provisions included in the March 7, 2011 Certification, Compliance and Enforcement Final Rule (76 FR 12422) (“March 2011 Final Rule”), and would relax tolerances that tested equipment are required to meet in order to substantiate the AEDM.

DOE has also clarified in today's final rule how it intends to exercise its authority to verify the performance of equipment certified using an AEDM. DOE negotiated the process with industry, resulting in the requirements that are being adopted in today's final rule. Because testing conducted to verify AEDM performance would be DOE-initiated and conducted testing and the process to determine an invalid rating includes manufacturer involvement throughout, DOE does not believe that verification of ratings resulting from an AEDM will have a substantial impact on small businesses.

Today's final rule also permits the manufacturer of other types of covered equipment that are currently not permitted to use an AEDM to rate and certify equipment using an AEDM. Manufacturers that are not eligible to use AEDMs must currently test at least two units of every basic model that they produce to certify compliance to the Department pursuant to the March 2011 Final Rule. The provisions in today's final rule would, if followed by a manufacturer choosing to use an AEDM rather than conduct a full physical test, reduce that manufacturer's testing burden by enabling it to simulate testing based on test data derived from a reduced number of units. While the Department believes that permitting the greater use of AEDMs will reduce the affected manufacturer's test burden, use of an AEDM is at the manufacturer's discretion. If, as a result of any of the regulations in this final rule, a manufacturer believes that use of an AEDM would increase rather than decrease its financial burden, the manufacturer may choose not to employ this alternative method. Should a manufacturer choose to abstain from using an AEDM, this provision would not apply and the manufacturer would continue to remain subject to the requirements of any DOE test procedure that applies to that product, which would result in no change in burden from that which is required currently.

Finally, DOE is codifying two aspects regarding the certification of commercial HVAC, WH, and refrigeration equipment that should further decrease the burden of existing DOE regulations. First, DOE is clarifying its basic model definitions, which allow a manufacturer to group individual models based on certain characteristics. The basic model definitions provide the manufacturer with flexibility in making these groupings and were negotiated as part of the Working Group's meetings to develop a recommended proposal for adoption by DOE. Lastly, DOE is extending the initial compliance date for the certification of commercial HVAC, WH, and refrigeration equipment from the current date of December 31, 2013. The new compliance dates range from 6 months to 18 months from publication of this final rule.

For the reasons enumerated above, DOE is certifying that this final rule will not have a significant impact on a substantial number of small entities.

Manufacturers of the covered equipment addressed in today's final rule must certify to DOE that their equipment comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their equipment according to the applicable DOE test procedures for the given equipment type, including any amendments adopted for those test procedures, or use an AEDM to develop the certified ratings of the basic models. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including the equipment at issue in this final rule. (76 FR 12422 (March 7, 2011)). The collection-of-information requirement for these certification and recordkeeping provisions is subject to review and approval by OMB under the Paperwork Reduction Act (PRA). This requirement has been approved by OMB under OMB Control Number 1910-1400. Public reporting burden for the certification is estimated to average 20 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

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

DOE has determined that this rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321, et seq.) and DOE's implementing regulations at 10 CFR part 1021. Specifically, this rule would adopt changes for certifying certain covered equipment, so it would not affect the amount, quality or distribution of energy usage, and, therefore, would not result in any environmental impacts. Thus, this rulemaking is covered by Categorical Exclusion A6 under 10 CFR part 1021, subpart D. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has examined this rule and has determined that it 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. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the equipment that is the subject of today's final rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42 U.S.C. 6297(d)) No further action is required by Executive Order 13132.

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

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a proposed regulatory action likely to result in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820; also available at www.gc.doe.gov. DOE examined today's rule according to UMRA and its statement of policy and determined that the rule contains neither an intergovernmental mandate, nor a mandate that may result in the expenditure of $100 million or more in any year, so these requirements do not apply.

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

DOE has determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights” 53 FR 8859 (March 18, 1988),that this regulation would not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.

Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed today's rule under the OMB and DOE guidelines and has concluded that it is consistent with the applicable policies in those guidelines.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OMB, a Statement of Energy Effects for any proposed significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any proposed significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use should the proposal be implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.

Today's rule to establish alternate certification requirements for certain covered equipment is not a significant regulatory action under Executive Order 12866. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as a significant energy action by the Administrator of OIRA. Therefore, it is not a significant energy action, and, accordingly, DOE has not prepared a Statement of Energy Effects.

Under section 301 of the Department of Energy Organization Act (Pub. L. 95-91; 42 U.S.C. 7101), DOE must comply with section 32 of the Federal Energy Administration Act of 1974, as amended by the Federal Energy Administration Authorization Act of 1977. (15 U.S.C. 788; FEAA) Section 32 essentially provides in relevant part that, where a proposed rule authorizes or requires use of commercial standards, the notice of proposed rulemaking must inform the public of the use and background of such standards. In addition, section 32(c) requires DOE to consult with the Attorney General and the Chairman of the Federal Trade Commission (FTC) concerning the impact of the commercial or industry standards on competition. Today's rule to amend regulations relating to AEDMs does not propose the use of any commercial standards.

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

For the reasons set forth in the preamble, DOE amends parts 429 and 431 of chapter II, subchapter D, of title 10 of the Code of Federal Regulations, as set forth below:

Airworthiness Directive 99-01-05 R1, Amendment 39-17688 (78 FR 73997, December 10, 2013), will require repetitively inspecting the wing lift struts for corrosion; repetitively inspecting the wing lift strut forks for cracks; replacing any corroded wing lift strut; replacing any cracked wing lift strut fork; repetitively replacing the wing lift strut forks at a specified time for certain airplanes; and incorporating a “NO STEP” placard on the wing lift strut.

As published, table 1 of paragraph (c) in the Applicability section is incorrect. Several Piper Aircraft, Inc. Model PA-18 airplanes were inadvertently omitted from the final rule; however, those models were included in the notice of proposed rulemaking that was published in the Federal Register on January 16, 2013 (78 FR 3356).

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

The effective date of this AD remains January 14, 2013.

The Entity List (Supplement No. 4 to Part 744) notifies the public about entities that have engaged in activities that could result in an increased risk of the diversion of exported, reexported or transferred (in-country) items to weapons of mass destruction (WMD) programs. Since its initial publication, grounds for inclusion on the Entity List have expanded to include activities sanctioned by the State Department and activities contrary to U.S. national security or foreign policy interests, including terrorism and export control violations involving abuse of human rights. Certain exports, reexports, and transfers (in-country) to entities identified on the Entity List require licenses from BIS and are usually subject to a policy of denial. The availability of license exceptions in such transactions is very limited. The license review policy for each entity is identified in the license review policy column on the Entity List and the availability of license exceptions is noted in the Federal Register notices adding persons to the Entity List. BIS places entities on the Entity List based on certain sections of part 744 (Control Policy: End-User and End-Use Based) of the EAR.

The ERC, which is composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes all decisions regarding additions to, removals from, or other modifications to the Entity List. The ERC makes all decisions to add an entry to the Entity List by majority vote and all decisions to remove or modify an entry by unanimous vote.

This rule implements a decision of the ERC to remove three entries consisting of one person located in Russia, along with entries for this person in Germany and Taiwan, from the Entity List on the basis of a removal request by the listed person. Based upon a review of the information provided in the removal request in accordance with § 744.16 (Procedure for requesting removal or modification of an Entity List entity), the ERC determined that this person should be removed from the Entity List.

The ERC decision to remove this person took into account this person's cooperation with the U.S. Government, as well as this person's assurances of future compliance with the EAR. In accordance with § 744.16(c), the Deputy Assistant Secretary for Export Administration has sent written notification to this person, informing the person of the ERC's decision to remove the person from the Entity List.

This final rule removes the following person in Russia, along with entries for this person under Germany and Taiwan from the Entity List:

(1) T-Platforms GmbH, a.k.a., the following one alias: -tPlatforms GmbH. Woehlerstrasse 42, d-30163, Hanover, Germany (See alternate addresses under T-Platforms in Russia and T Platforms in Taiwan).

(1) T-Platforms, Leninsky Prospect 113/1, Suite B-705, Moscow, Russia; and 8 Vvedenskogo Street, Suite K52B, Moscow, Russia (See alternate addresses under T-Platforms GmbH in Germany and T Platforms in Taiwan).

(1) T Platforms, a.k.a., the following one alias: -Platforms Solutions Development Limited. 10F, No. 409, Sec. 2 Tiding Blvd., Neihu District, Taipei, Taiwan (See alternate addresses under T-Platforms GmbH in Germany and T-Platforms in Russia).

The removal of the above referenced person from the Entity List eliminates the existing license requirements in Supplement No. 4 to part 744 for exports, reexports and transfers (in-country) to this person. However, the removal of this person from the Entity List does not relieve persons proposing to export, reexport or transfer (in-country) items subject to the EAR to the removed person of other obligations under part 744 of the EAR or under other parts of the EAR. Neither the removal of a person from the Entity List nor the removal of Entity List-based license requirements relieves persons of their obligations under General Prohibition 5 in § 736.2(b)(5) of the EAR which provides that, “you may not, without a license, knowingly export or reexport any item subject to the EAR to an end-user or end-use that is prohibited by part 744 of the EAR.” Additionally this removal does not relieve persons of their obligation to apply for export, reexport or in-country transfer licenses required by other provisions of the EAR. BIS strongly urges the use of Supplement No. 3 to part 732 of the EAR, “BIS's `Know Your Customer' Guidance and Red Flags,” when persons are involved in transactions that are subject to the EAR.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013) and as extended by the Notice of August 8, 2013, 78 FR 49107 (August 12, 2013), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act. BIS continues to carry out the provisions of the Export Administration Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222 as amended by Executive Order 13637.

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been determined to be not significant for purposes of Executive Order 12866.

2. Notwithstanding any other provision of law, no person is required to respond to nor be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves collections previously approved by OMB under control number 0694-0088, Simplified Network Application Processing System, which includes, among other things, license applications and carries a burden estimate of 43.8 minutes for a manual or electronic submission. Total burden hours associated with the PRA and OMB control number 0694-0088 are not expected to increase as a result of this rule. You may send comments regarding the collection of information associated with this rule, including suggestions for reducing the burden, to Jasmeet K. Seehra, Office of Management and Budget (OMB), by email to Jasmeet_K._Seehra@omb.eop.gov, or by fax to (202) 395-7285.

3. This rule does not contain policies with Federalism implications as that term is defined in Executive Order 13132.

4. Pursuant to the Administrative Procedure Act (APA), 5 U.S.C. 553(b)(3)(B), BIS finds good cause to waive requirements that this rule be subject to notice and the opportunity for public comment because it would be contrary to the public interest.

In determining whether to grant removal requests from the Entity List, a committee of U.S. Government agencies (the End-user Review Committee (ERC)) evaluates information about and commitments made by listed persons requesting removal from the Entity List, the nature and terms of which are set forth in 15 CFR part 744, Supplement No. 5, as noted in 15 CFR 744.16(b). The information, commitments, and criteria for this extensive review were all established through the notice of proposed rulemaking and public comment process (72 FR 31005 (June 5, 2007) (proposed rule), and 73 FR 49311 (August 21, 2008) (final rule)). This removal has been made within the established regulatory framework of the Entity List. If the rule were to be delayed to allow for public comment, U.S. exporters may face unnecessary economic losses as they turn away potential sales because the customer remained a listed person on the Entity List even after the ERC approved the removal pursuant to the rule published at 73 FR 49311 on August 21, 2008. By publishing without prior notice and comment, BIS allows the applicant to receive U.S. exports immediately since the applicant already has received approval by the ERC pursuant to 15 CFR part 744, Supplement No. 5, as noted in 15 CFR 744.16(b).

The removals from the Entity List granted by the ERC involve interagency deliberation and result from review of public and non-public sources, including sensitive law enforcement information and classified information, and the measurement of such information against the Entity List removal criteria. This information is extensively reviewed according to the criteria for evaluating removal requests from the Entity List, as set out in 15 CFR part 744, Supplement No. 5 and 15 CFR 744.16(b). For reasons of national security, BIS is not at liberty to provide to the public the information on which the ERC relied to make the decision to remove this entity. In addition, the information included in the removal request is specific to information exchanged between the applicant and the ERC, which by law (section 12(c) of the Export Administration Act (EAA)), BIS is restricted from sharing with the public. The removal requests from the Entity List contain confidential business information, which is necessary for the extensive review conducted by the U.S. Government in assessing such removal requests.

Section 553(d) of the APA generally provides that rules may not take effect earlier than thirty (30) days after they are published in the Federal Register. BIS finds good cause to waive the 30-day delay in effectiveness under 5 U.S.C. 553(d)(1) because this rule is a substantive rule which relieves a restriction. This rule removes a requirement (the Entity-List-based license requirement and limitation on use of license exceptions) on this one person being removed from the Entity List. The rule does not impose a requirement on any other person.

No other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this final rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required under the APA or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) are not applicable. As a result, no final regulatory flexibility analysis is required and none has been prepared.

Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:

Sections 1291 through 1298 of the Internal Revenue Code (“Code”) set forth three tax regimes for shareholders that own stock of a PFIC: (i) the excess distribution rules under section 1291 (“section 1291 regime”); (ii) the qualified electing fund (“QEF”) rules under section 1293; and (iii) the mark to market (“MTM”) rules under section 1296. In general, section 1291 imposes a special tax and interest charge on a United States person that is a shareholder of a PFIC and that receives an excess distribution (within the meaning of section 1291(b)) from a PFIC or recognizes gain derived from a disposition of stock in a PFIC that is treated as an excess distribution (within the meaning of section 1291(a)(2)). A shareholder that is subject to the QEF rules includes amounts in gross income under section 1293, and a shareholder that is subject to the MTM rules includes amounts in gross income under section 1296. Section 1298 sets forth special rules applicable to shareholders of PFICs, including attribution rules that treat a United States person as the owner of PFIC stock that is owned by another person (other than an individual). For instance, section 1298(a)(2) sets forth the attribution rules for ownership through a corporation, and section 1298(a)(3) sets forth the attribution rules for ownership through a partnership, estate, or trust. In addition, section 1298(a)(1)(B) provides that, pursuant to regulations, stock owned (or treated as owned) by a United States person may be treated as owned by another United States person.

On April 1, 1992, the Federal Register published proposed regulations (57 FR 11024) under sections 1291, 1293, 1295, and 1297 of the Code concerning, among other things, the taxation of shareholders of certain PFICs upon payment of distributions by such companies or upon disposition of the stock of such companies (“1992 proposed regulations”). The IRS and the Department of the Treasury (“Treasury Department”) received written comments on the 1992 proposed regulations and held a hearing on November 23, 1992.

Subsequently, the Taxpayer Relief Act of 1997 (Public Law 105-34, 111 Stat. 788) (“Taxpayer Relief Act”) modified certain aspects of the PFIC rules. Section 1122(a) of the Taxpayer Relief Act added the MTM regime under section 1296 to the Code, and section 1121 of the Taxpayer Relief Act added section 1297(d). Section 1297(d) provides that, in certain situations, a PFIC that is also a controlled foreign corporation (“CFC”) is not treated as a PFIC with respect to certain shareholders. However, section 1298(a)(2)(B) provides that a foreign corporation that would, but for the rules of section 1297(d), be a PFIC is treated as a PFIC with respect to its shareholders for purposes of determining whether the shareholders own an interest in any PFIC held by the foreign corporation.

Section 521 of the Hiring Incentives to Restore Employment Act of 2010 (Pub. L. 111-147, 124 Stat. 71) (“HIRE Act”) added new paragraph (f) to section 1298, effective March 18, 2010. Section 1298(f) requires a United States person that is a shareholder of a PFIC to file an annual report containing such information as the Secretary may require. The HIRE Act also amended section 6501(c)(8) (which was further amended by Public Law 111-226, 124 Stat. 2389) to extend the statute of limitations for assessment of tax for a shareholder that fails to comply with the reporting requirements of section 1298(f).

In Notice 2010-34 (2010-1 CB 612 (April 26, 2010)) (see 26 CFR § 601.601(d)(2)(ii)( b )), the IRS and the Treasury Department announced that they were developing further guidance regarding the reporting obligations under section 1298(f) and that PFIC shareholders that were not otherwise required to file Form 8621 prior to March 18, 2010, would not be required to file an annual report under section 1298(f) for taxable years beginning before March 18, 2010.

In Notice 2011-55 (2011-29 CB 663 (July 18, 2011)) (see 26 CFR § 601.601(d)(2)(ii)( b )), the IRS and the Treasury Department announced their intention to issue regulations under section 1298(f) and to release a revised Form 8621, modified to reflect the reporting requirements under section 1298(f). In addition, Notice 2011-55 suspended the section 1298(f) reporting requirements until the release of the revised Form 8621 for PFIC shareholders that were not otherwise required to file Form 8621 under the then-current Instructions to Form 8621. The notice stated that PFIC shareholders with Form 8621 reporting obligations as provided in the then-current Instructions to Form 8621 were required to continue filing Form 8621 with an income tax or information return filed prior to the release of the revised Form 8621. Notice 2011-55 further provided that following the release of revised Form 8621, PFIC shareholders for which the filing of Form 8621 had been suspended under the notice would be required to attach Form 8621 for the suspended taxable year to their next income tax or information return required to be filed with the IRS. The notice also provided that a failure to furnish Form 8621 for a suspended taxable year could result in the extension of the statute of limitations for such year under section 6501(c)(8), and penalties could apply. However, since Notice 2011-55 was issued, the IRS and the Treasury Department have determined that it is not necessary for taxpayers to file a Form 8621 under section 1298(f) for suspended taxable years. Accordingly, these regulations provide that PFIC shareholders are not required to file Form 8621 under section 1298(f) with respect to taxable years ending before December 31, 2013.

This document contains amendments to 26 CFR part 1 under sections 1291 and 1298. Although comments were received on the 1992 proposed regulations, none relate to the specific issues addressed in these temporary regulations. These temporary regulations generally adopt certain portions of the 1992 proposed regulations, some of which are revised to take into account statutory changes. This preamble discusses these revisions but does not discuss comments concerning other rules in the 1992 proposed regulations, which are beyond the scope of these temporary regulations. These temporary regulations also set forth the filing requirements under section 1298(f), including the time and manner for filing Form 8621 for taxable years ending on or after December 31, 2013.

This document contains amendments to 26 CFR part 1 under sections 6038 and 6046. Sections 6038 and 6046 set forth information return reporting requirements applicable to certain United States persons that own an interest in foreign corporations and certain United States persons that are officers and directors of the foreign corporations. These temporary regulations provide guidance on an exception to the requirement to file Form 5471 under sections 6038 and 6046 that is applicable to certain United States persons that own an interest in a foreign corporation under constructive ownership rules.

In addition, these regulations take into account statutory changes in section 1012(i) of the Technical and Miscellaneous Revenue Act of 1988 (Pub. L. 100-647, 102 Stat. 3342) and section 1146(a) of the Taxpayer Relief Act. The first statutory change relates to the requirement for persons treated as United States shareholders under section 953(c) to file an information return under section 6046. This requirement was added to the Code in 1988, shortly after section 953(c) was added to the Code by the Tax Reform Act of 1986 (Pub. L. 99-514, 100 Stat. 2085). On April 17, 1991, the Federal Register published proposed regulations (56 FR 15540; INTL-939-86; REG-208289-86) under sections 953 and 6046 concerning, among other things, the requirements for persons treated as United States shareholders under section 953(c) to file an information return with respect to the CFC, and for certain United States persons that are officers and directors of such CFCs to file an information return (“1991 proposed regulations”). These regulations finalize § 1.6046-1 of the 1991 proposed regulations (REG-116180-12; RIN 1545-BK91) without substantive changes. The other portions of the 1991 proposed regulations (REG-123286-13; RIN 1545-BL63) remain in proposed form.

The second statutory change relates to the ownership threshold for reporting set forth in section 6046. Prior to the modifications made by the Taxpayer Relief Act, the stock ownership threshold at which reporting was required under section 6046 was 5 percent. These regulations revise § 1.6046-1 to reflect the 10 percent ownership threshold change that was made in the Taxpayer Relief Act. In addition, these regulations revise the examples to reflect the 10 percent ownership threshold.

Finally, these regulations revise § 1.6046-1 to reflect the current name and form number of the information return required to be filed pursuant to section 6046.

Prop. Treas. Reg. § 1.1291-1(b)(2)(ii) of the 1992 proposed regulations defines the term pedigreed QEF, and § 1.1291-9(j)(2)(ii) contains a similar definition of the term. Section 1.1291-1T(b)(2)(ii) adopts the 1992 proposed regulations' definition of pedigreed QEF without substantive modification to be consistent with the definition of pedigreed QEF in § 1.1291-9(j)(2)(ii). The definition of pedigreed QEF in the 1992 proposed regulations is withdrawn in this issue of the Federal Register .

Prop. Treas. Reg. § 1.1291-1(b)(2)(v) of the 1992 proposed regulations defines the term section 1291 fund as an unpedigreed QEF or a nonqualified fund. These temporary regulations adopt the 1992 proposed regulations' definition of section 1291 fund with some modifications to reflect the enactment of the MTM rules under section 1296, which occurred after the 1992 proposed regulations were published. Under § 1.1291-1T(b)(2)(v), a PFIC is a section 1291 fund with respect to a shareholder unless the PFIC is a pedigreed QEF with respect to the shareholder or a section 1296 election is in effect with respect to the shareholder. The definition of section 1291 fund in the 1992 proposed regulations is withdrawn in this issue of the Federal Register .

Prop. Treas. Reg. § 1.1291-1(b)(7) and (b)(8) of the 1992 proposed regulations define the terms shareholder and indirect shareholder for purposes of section 1291. These definitions are cross-referenced in the definition of shareholder provided in § 1.1291-9(j)(3). However, § 1.1295-1(j) defines shareholder for QEF purposes, and section 1296(g) and § 1.1296-1(e) provide a separate set of attribution rules for purposes of applying the MTM rules to United States persons that own an interest in a PFIC.

These temporary regulations generally adopt the definition of shareholder provided in the 1992 proposed regulations. Under § 1.1291-1T(b)(7), the term shareholder means any United States person that owns stock of a PFIC directly or indirectly. For purposes of these regulations, a domestic partnership or an S corporation is treated as a shareholder of a PFIC only for purposes of the information reporting requirements of sections 1291 and 1298, including section 1298(f). In addition, these regulations provide that a domestic grantor trust is treated as a shareholder of a PFIC only for purposes of the information reporting requirement set forth at § 1.1298-1T(b)(3)(i), which applies to domestic liquidating trusts and fixed investment trusts.

These temporary regulations revise certain aspects of the definition of indirect shareholder in the 1992 proposed regulations and adopt other aspects of the definition without amendment. Section 1.1291-1T(b)(8) defines the term indirect shareholder as a United States person that indirectly owns stock in a PFIC and provides rules for attributing ownership of PFIC stock through corporations, partnerships, S corporations, estates, and trusts. The rule in the 1992 proposed regulations concerning ownership through a PFIC has been revised in § 1.1291-1T(b)(8)(ii)(B) to incorporate a statutory change to section 1298(a)(2)(B) made in the Taxpayer Relief Act, which provides that section 1297(d) does not apply for purposes of determining whether a United States person owns a PFIC indirectly through a foreign corporation. Thus, in the case of a person that owns stock of a PFIC that is also a CFC, notwithstanding that under section 1297(d) such corporation may not be treated as a PFIC with respect to certain shareholders, the foreign corporation is treated as a PFIC with respect to the shareholder for purposes of determining whether the shareholder owns an interest in any stock of a PFIC held by the foreign corporation.

These temporary regulations make certain changes to the rules in the 1992 proposed regulations for attributing ownership of PFIC stock through partnerships, estates, and trusts. The 1992 proposed regulations generally provide that in the case of a partnership, S corporation, estate, or trust that directly or indirectly owns stock, the partners, shareholders, or beneficiaries (as the case may be) are considered to own a proportionate amount of such stock. These temporary regulations clarify that the attribution rules apply to both domestic and foreign partnerships, estates, and trusts.

These temporary regulations also provide special rules for nongrantor trusts and grantor trusts. In particular, Treas. Reg. § 1.1291-1T(b)(8)(iii)(D) provides that if a foreign or domestic grantor trust directly or indirectly owns PFIC stock, a person that is treated under sections 671 through 679 as the owner of any portion of the trust that holds an interest in the stock is considered to own an interest in the stock held by that portion of the trust. In addition, Treas. Reg. § 1.1291-1T(b)(8)(iii)(C) provides that, in general, if a foreign or domestic estate or nongrantor trust directly or indirectly owns PFIC stock, each beneficiary of the estate or trust is considered to own a proportionate amount of such stock. The cross-referenced notice of proposed rulemaking on this subject in the Proposed Rules section of this issue of the Federal Register requests comments on the determination of proportionate ownership by a beneficiary of PFIC stock held by a domestic or foreign estate or nongrantor trust. Until further guidance is provided on estate and trust attribution rules, beneficiaries of estates and nongrantor trusts that hold PFIC stock subject to the section 1291 regime should use a reasonable method to determine their ownership interests in a PFIC held by the estate or nongrantor trust. Moreover, until further guidance is provided, beneficiaries of estates and nongrantor trusts that are subject to the section 1291 regime with respect to PFIC stock held by the estate or nongrantor trust are exempt from section 1298(f) filing requirements for taxable years in which the beneficiary is not treated as receiving an excess distribution (within the meaning of section 1291(b)) or as recognizing gain that is treated as an excess distribution (under section 1291(a)(2)) with respect to the stock of the PFIC that the beneficiary is considered to own through the estate or trust. See, for example, § 1.1298-1T(b)(3)(iii).

These temporary regulations do not provide guidance on the application of section 1291 when an estate or nongrantor trust, or beneficiary thereof, receives, or is treated as receiving, an excess distribution (including an amount of gain treated as an excess distribution). Section 1291 and the principles of subchapter J must, however, be applied in a reasonable manner with respect to estates and trusts, and beneficiaries thereof, to preserve or trigger the tax and interest charge rules under section 1291. Accordingly, until further guidance is issued, the estate or trust, or the beneficiary thereof, must take excess distributions into account under section 1291 in a reasonable manner, consistent with the general operating rules of subchapter J. It would be unreasonable for the shareholders of the section 1291 fund to take the position that neither the beneficiaries nor the estate or trust are subject to the tax and interest charge rules under section 1291. The definitions in the 1992 proposed regulations of shareholder and indirect shareholder are withdrawn in this issue of the Federal Register .

As stated earlier, the term shareholder is defined in § 1.1291-9(j)(3) by cross-reference to the definitions of shareholder and indirect shareholder set forth in the 1992 proposed regulations. Certain other provisions, including §§ 1.1291-10(a), 1.1297-3(a), and 1.1298-3(a), cross-reference the definition of shareholder in § 1.1291-9(j)(3). These temporary regulations include a definition of shareholder in § 1.1291-9T(j)(3) that cross-references the definitions of shareholder and indirect shareholder in § 1.1291-1T(b)(7) and (b)(8). In addition, § 1.1291-9(j)(3) is amended to cross-reference the definition of shareholder in § 1.1291-9T(j)(3) rather than the definitions of shareholder and indirect shareholder in the 1992 proposed regulations. Accordingly, the § 1.1291-1T(b) definition of shareholder applies for purposes of sections 1291 and 1298(f) as well as other provisions that cross-reference § 1.1291-9(j)(3).

Except as otherwise provided by the Secretary, section 1298(f) requires a United States person that is a shareholder of a PFIC to file an annual report containing such information as the Secretary may require. These temporary regulations generally require a United States person that is a shareholder of a PFIC to complete and file Form 8621 (or successor form). The requirement to file Form 8621 under these temporary regulations applies to a shareholder that owns an interest in a PFIC at any time during the shareholder's taxable year, regardless of whether the PFIC has a taxable year ending within the shareholder's taxable year. These temporary regulations generally require the United States person that is at the lowest tier in a chain of ownership, and that is a shareholder (including an indirect shareholder) of a PFIC, to file an annual report on Form 8621. In addition, a United States person that owns PFIC stock through another United States person also is required to file an annual report in certain circumstances, including when that person is required to include an amount in income with respect to the PFIC or when that person is subject to tax under section 1291 as a result of being treated as receiving an excess distribution or as recognizing gain that is treated as an excess distribution with respect to the PFIC. For example, if a United States citizen owns an interest in a domestic partnership, which, in turn, owns an interest in a PFIC, the domestic partnership is required to file an annual report because the domestic partnership is the United States person that is at the lowest tier in the chain of ownership. In addition, the United States citizen is required to file an annual report when such person is treated as receiving an excess distribution or as recognizing gain that is treated as an excess distribution with respect to the PFIC.

In order to eliminate certain duplicative reporting obligations, these regulations provide an exception to the rule that requires a United States person that owns an interest in a PFIC through another United States person to submit an annual report. In particular, under § 1.1298-1T(b)(2)(ii), a United States person that is required to include an amount in income only under the QEF or MTM rules with respect to PFIC stock held through other United States persons generally is not required to file an annual report under section 1298(f) with respect to the PFIC if another shareholder through which the United States person holds the PFIC stock timely files an annual report under section 1298(f) with respect to the PFIC. This exception does not apply, however, if the United States person made a QEF election with respect to the PFIC and then transferred the shares of the PFIC to a domestic partnership or S corporation that did not itself make a QEF election with respect to the PFIC.

The section 1298(f) filing requirements set forth in these temporary regulations generally apply to domestic estates, domestic nongrantor trusts, and United States persons that are treated under sections 671 through 679 as owners of any portion of foreign and domestic grantor trusts. In general, domestic estates and nongrantor trusts are required to file an annual report (subject to the exceptions provided in these regulations) under the rules generally applicable to United States persons, which are set forth in § 1.1298-1T(b)(1) and (b)(2). United States persons that are treated as the owners of domestic and foreign grantor trusts that own PFIC stock generally are required to file an annual report under § 1.1298-1T(b)(1) and (b)(2) (subject to the exceptions provided in these regulations).

However, a United States person that is treated as the owner of any portion of a domestic liquidating trust described in § 301.7701-4(d) of this chapter and created pursuant to a court order issued in bankruptcy under Chapter 7 (11 U.S.C. 701 et seq. ) of the Bankruptcy Code or pursuant to a confirmed plan under Chapter 11 (11 U.S.C. 1101 et seq. ) of the Bankruptcy Code, or of any portion of a domestic widely held fixed investment trust under § 1.671-5, is not required to file Form 8621 under section 1298(f) and these regulations with respect to any PFICs owned by such trust. In such a case, § 1.1298-1T(b)(3)(i) provides that the trust itself must file Form 8621.

Further, § 1.1298-1T(b)(3)(ii) provides that the filing requirement under section 1298(f) does not apply to a United States person that is treated as the owner of any portion of a foreign grantor trust that is a foreign pension fund operated principally to provide pension or retirement benefits, if, pursuant to an income tax convention to which the United States is a party, income earned by the pension fund is taxed as income of the United States person only when and to the extent it is paid to, or for the benefit of, the United States person.

United States persons that are beneficiaries of foreign estates and nongrantor trusts and that have made elections under section 1295 or 1296 with respect to PFIC stock held by the estate or trust are required to file an annual report under these regulations (subject to the exceptions provided in these regulations) with respect to the PFIC. United States persons that are beneficiaries of domestic estates and nongrantor trusts that hold PFIC stock, which have made elections under section 1295 or 1296 with respect to the PFIC stock, generally are required to file an annual report under these regulations (subject to the exceptions provided in these regulations) with respect to the PFIC only if the estate or trust (and any other United States person in the chain of ownership) fails to file an annual report under these regulations. In addition, United States persons that are beneficiaries of domestic and foreign estates and nongrantor trusts are required to file an annual report under these regulations (subject to the exceptions provided in these regulations) for taxable years in which the beneficiary is treated as receiving an excess distribution (under section 1291(b)) or recognizing gain treated as an excess distribution (under section 1291(a)(2)) with respect to PFIC stock held by the estate or trust.

A United States person that qualifies as a tax exempt organization under certain Code provisions may own an interest in a PFIC but may not be subject to tax under subchapter F of Subtitle A of the Code (addressing exempt organizations) with respect to the PFIC. In such a case, the United States person is not required to file an annual report under section 1298(f) and these regulations with respect to the PFIC. Specifically, § 1.1298-1T(c)(1) provides that a shareholder that is an organization exempt under section 501(a), a state college or university described in section 511(a)(2)(B), a plan described in section 403(b) or 457(b), an individual retirement plan or annuity as defined in section 7701(a)(37), or a qualified tuition program described in section 529 or 530 is required to file an annual report under section 1298(f) with respect to a PFIC only if the income derived with respect to the PFIC would be taxable to the organization under subchapter F of Subtitle A of the Code.

A comment letter was received that requested the IRS and the Treasury Department to exercise the authority to promulgate exceptions to the filing requirements set forth under section 1298(f). These temporary regulations provide exceptions to the section 1298(f) filing requirements to address the concerns underlying the comment. Section 1.1298-1T(c)(2)(i) provides exceptions to the requirement to file an annual report under section 1298(f) and these regulations for certain shareholders with respect to an interest owned in a PFIC for which the shareholder is subject to tax only under section 1291 (that is, no QEF or MTM election is in effect with respect to the shareholder). Under § 1.1298-1T(c)(2)(i), this exception applies with respect to a PFIC only if: (i) The shareholder is not subject to tax under section 1291 with respect to any excess distributions received from the PFIC, or gains derived with respect to the PFIC that are treated as excess distributions, during the taxable year of the shareholder (§ 1.1298-1T(c)(2)(i)(B)); and (ii) either (A) the aggregate value of all PFIC stock owned by the shareholder at the end of the taxable year of the shareholder does not exceed $25,000, or (B) the PFIC stock is owned by the shareholder through another PFIC, and the value of the shareholder's proportionate share of the upper-tier PFIC's interest in the lower-tier PFIC does not exceed $5,000. The $25,000 threshold in § 1.1298-1T(c)(2)(i)(A)( 1 ) is increased to $50,000 for shareholders who file a joint return.

These temporary regulations provide special rules for determining whether the $25,000 threshold is met in the case of indirect ownership. Under § 1.1298-1T(c)(2)(ii), shareholders must take into account all PFIC stock owned directly or indirectly except for PFIC stock owned through another United States person that itself is a shareholder of the PFIC. Moreover, for these purposes, shareholders would not take into account PFIC stock owned through another PFIC because the value of the stock of the lower tier PFIC is reflected in the value of the upper tier PFIC stock.

Shareholders are not required to obtain an appraisal in order to determine the value of PFIC stock. Section 1.1298-1T(c)(2)(iv) provides that shareholders may rely upon periodic account statements provided at least annually to determine the value of a PFIC unless the shareholder has reason to know that the statements do not reflect a reasonable estimate of the PFIC's value.

Section 1298(f) was effective on March 18, 2010. As stated earlier, Notice 2010-34 provided that PFIC shareholders that were not otherwise required to file Form 8621 prior to March 18, 2010, would not be required to file an annual report under section 1298(f) for taxable years beginning before March 18, 2010. Furthermore, Notice 2011-55 suspended the requirement to file an annual report under section 1298(f) for taxable years beginning on or after March 18, 2010, for PFIC shareholders that were not otherwise required to file Form 8621 under the then-current Instructions to Form 8621. Section 1.1298-1T(c)(3) provides that United States persons are not required under section 1298(f) and these regulations to file an annual report with respect to a PFIC for a taxable year of the United States person ending before December 31, 2013. The rules described in Notice 2011-55 for suspended taxable years (as defined in Notice 2011-55) with respect to section 1298(f) and Form 8621 are no longer applicable. For taxable years ending on or after December 31, 2013, a shareholder that is required to file Form 8621 under these regulations with respect to a PFIC that it owns during a taxable year must attach Form 8621 to its Federal income tax return (or, if applicable, partnership or exempt organization return) for such taxable year. See § 1.1298-1T(d). Although Notice 2011-55 is no longer applicable with respect to section 1298(f) and Form 8621, these regulations do not affect Notice 2011-55 with respect to filing requirements under section 6038D (relating to Form 8938).

These temporary regulations provide that if a United States person is required to file Form 8621 with respect to more than one PFIC, the United States person must file a separate Form 8621 for each PFIC. However, United States persons that file a joint return may file a single Form 8621 with respect to a PFIC in which they jointly or individually own an interest. See § 1.1298-1T(e).

A revised Form 8621 has been released and the Instructions to the form will be modified to reflect the filing requirements under section 1298(f) and these regulations.

A shareholder may be required to file Form 8621 pursuant to provisions other than those under section 1298(f) and these temporary regulations. For example, § 1.1295-1(f)(2)(i) requires a shareholder to file Form 8621 annually in connection with the shareholder's QEF election. Moreover, a shareholder must file Form 8621 in order to make certain elections (such as a deemed sale election pursuant to § 1.1297-3(b)(4)). Nothing in section 1298(f) or these regulations relieves a person from the obligation to file Form 8621 under any other provision. If a shareholder is required to file Form 8621 (or successor form) with respect to a PFIC pursuant to section 1298(f) and these regulations, as well as another information reporting obligation, the shareholder may file a single Form 8621 that contains all of the required information.

Section 6038D requires an individual who holds any interest in a specified foreign financial asset (as defined in section 6038D(b)) during any taxable year to provide information with respect to such asset. Certain United States persons that own an interest in a PFIC may be subject to the information reporting requirements of both sections 1298(f) and 6038D with respect to the PFIC interest. The regulations under section 6038D provide guidance coordinating the two reporting requirements to eliminate duplicative reporting. See §§ 1.6038D-1T through 1.6038D-8T for rules relating to section 6038D reporting. Pursuant to those regulations, in order to avoid duplicative reporting of assets, a United States person is not required to report a PFIC under section 6038D if the person reports the PFIC on a timely filed Form 8621 and the person's report under section 6038D (on Form 8938) indicates, as provided on the form, that the person complied with its Form 8621 filing requirement with respect to the PFIC.

Pursuant to sections 6038 and 6046, certain United States persons are required to file an information return on Form 5471, “Information Return of U.S. Persons with Respect to Certain Foreign Corporations,” with respect to their ownership in certain foreign corporations or because they are an officer or director of certain foreign corporations.

Certain United States persons otherwise required to file Form 5471 do not have to file if: (i) the United States person does not directly own an interest in the foreign corporation, (ii) the United States person would otherwise be required to furnish the information solely by reason of attribution of stock ownership from a United States person, and (iii) the person from whom the stock ownership is attributed furnishes all of the information required to be reported by the person to whom the stock ownership is attributed (“constructive ownership exception”). See §§ 1.6038-2(j)(2) and 1.6046-1(e)(4)(iii). In addition, pursuant to §§ 1.6038-2(j)(3) and 1.6046-1(e)(5), shareholders that are excepted from filing Form 5471 under the constructive ownership exception have been required to file a statement with their returns indicating that the requirement to provide information has been satisfied and identifying the return with which the information was or will be filed and the place of filing. The IRS believes that this statement is not necessary. Accordingly, these temporary regulations remove the requirement to file a statement in circumstances where a United States person qualifies for the constructive ownership exception. See §§ 1.6038-2T(j)(3) and 1.6046-1T(e)(5).

As discussed earlier, the requirement to file an information return for persons treated as United States shareholders under section 953(c), as well as certain United States persons that are officers and directors of the CFC, was added to the Code in 1988. The 1991 proposed regulations addressed these new filing requirements.

These regulations finalize § 1.6046-1(a)(2) and (c) to reflect the additional filing requirement imposed on United States persons treated as section 953(c) shareholders, and officers and directors of CFCs that have United States persons treated as section 953(c) shareholders, without any substantive changes from the 1991 proposed regulations.

Section 6046(a)(1)(B) through (D) mandates the filing of an information return by United States persons that: (i) acquire 10 percent or more of the stock of a foreign corporation; (ii) acquire stock, which, when added to any stock owned on the date of acquisition, equals 10 percent or more of the stock of the foreign corporation; (iii) are treated as a United States shareholder under section 953(c) with respect to a foreign corporation; or (iv) become a United States person while owning 10 percent or more of the stock of a foreign corporation. As discussed earlier, prior to the modifications made by the Taxpayer Relief Act, the stock ownership threshold at which reporting was required was 5 percent. Section 1.6046-1 was published in 1962, when the stock ownership threshold was 5 percent. These regulations revise § 1.6046-1 to reflect the 10 percent ownership threshold change that was made in the Taxpayer Relief Act. These regulations also revise the examples to reflect the 10 percent ownership threshold.

In addition, several paragraphs of § 1.6046-1 reference “Form 959”, Return by an Officer, Director, or Shareholder with Respect to the Organization or Reorganization of a Foreign Corporation and Acquisition of Stock. Form 959 was replaced in 1983 by Form 5471. These regulations modify § 1.6046-1 to reference Form 5471 (or subsequent form), rather than Form 959, and remove § 1.6046-1(f)(4), which described Form 959.

Notice 2010-34 (2010-1 CB 612) is obsolete as of December 31, 2013. Notice 2011-55 (2011-29 CB 663) is partially obsolete as of December 31, 2013. Notice 2011-55 is only obsolete with respect to section 1298(f) and Form 8621. Notice 2011-55 continues to be in effect with respect to section 6038D and Form 8938.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13653. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) and (d) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. For applicability of the Regulatory Flexibility Act (5 U.S.C. chapter 6), please refer to the cross-referenced notice of proposed rulemaking published elsewhere in this issue of the Federal Register . Pursuant to section 7805(f), these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

The principal authors of these regulations are Barbara E. Rasch and Susan E. Massey of the Office of Associate Chief Counsel (International). However, other personnel from the IRS and the Treasury Department participated in their development.

Accordingly, 26 CFR part 1 is amended as follows:

Purpose of Program: The MEP, authorized in title I, part C, section 1301 et seq. of the Elementary and Secondary Education Act of 1965, as amended (ESEA) (20 U.S.C. 6391 et seq. ), is a State-operated and State-administered formula grant program. The MEP helps SEAs support high-quality and comprehensive educational programs that do two things: provide migratory children with appropriate educational and supportive services that address their special needs in a coordinated and efficient manner, and give migratory children the opportunity to meet the same challenging State academic content and student academic achievement standards that all children are expected to meet.

One component of the MEP is the CIG program, authorized in section 1308(d) of the ESEA (20 U.S.C. 6398(d)). Through the MEP CIG program, the Department provides financial incentives to SEAs to participate in high-quality consortia that improve the interstate or intrastate coordination of migrant education programs by addressing key needs of migratory children who have their education interrupted.

Program Authority: 20 U.S.C. 6398.

Applicable Program Regulations: 34 CFR part 200, subpart C.

We published a notice of proposed requirement for this program in the Federal Register on July 3, 2013 (78 FR 40084). That notice contained background information and our reasons for proposing the particular requirement.

Except for one minor technical revision, there are no differences between the proposed requirement and this final requirement.

Public Comment: In response to our invitation in the notice of proposed requirement, the Department received one comment.

Comment: The one comment supported the proposed requirement because the additional year will allow time for projects to mature and will also provide time to disseminate successful and promising practices, as well as share lessons learned.

Changes: None.

The Secretary may provide a maximum project period of three years for grants awarded under the MEP CIG program. The Secretary may extend the current two-year project period of the FY 2012 grantees to three years as well as determine a project period for future competitions of up to three years.

For grants with a three-year project period, grantees must submit a performance report at the end of each project year and are eligible for a continuation award at the end of the first and second project years based on the two-tiered funding formula in the 2004 Notice of Final Requirements published in the Federal Register on March 3, 2004 (69 FR 10110). The second and third year's continuation funding is contingent on the grantee making substantial progress in performing the previous year's consortium activities and in attaining the outcomes identified in the approved consortium application. Grantees must submit their final summary evaluation report at the end of the third project year.

Under Executive Order 12866, the Secretary must determine whether this regulatory action is ”significant” and, therefore, subject to the requirements of the Executive order and subject to review by the Office of Management and Budget (OMB). Section 3(f) of Executive Order 12866 defines a “significant regulatory action” as an action likely to result in a rule that may—

(1) Have an annual effect on the economy of $100 million or more, or adversely affect a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities in a material way (also referred to as an ”economically significant” rule);

(2) Create serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles stated in the Executive order.

This final regulatory action is not a significant regulatory action subject to review by OMB under section 3(f) of Executive Order 12866.

We have also reviewed this final regulatory action under Executive Order 13563, which supplements and explicitly reaffirms the principles, structures, and definitions governing regulatory review established in Executive Order 12866. To the extent permitted by law, Executive Order 13563 requires that an agency—

(1) Propose or adopt regulations only upon a reasoned determination that their benefits justify their costs (recognizing that some benefits and costs are difficult to quantify);

(2) Tailor its regulations to impose the least burden on society, consistent with obtaining regulatory objectives and taking into account—among other things and to the extent practicable—the costs of cumulative regulations;

(3) In choosing among alternative regulatory approaches, select those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity);

(4) To the extent feasible, specify performance objectives, rather than the behavior or manner of compliance a regulated entity must adopt; and

(5) Identify and assess available alternatives to direct regulation, including economic incentive—such as user fees or marketable permits—to encourage the desired behavior, or provide information that enables the public to make choices.

Executive Order 13563 also requires an agency ”to use the best available techniques to quantify anticipated present and future benefits and costs as accurately as possible.” The Office of Information and Regulatory Affairs of OMB has emphasized that these techniques may include ”identifying changing future compliance costs that might result from technological innovation or anticipated behavioral changes.”

We are issuing this final requirement only on a reasoned determination that its benefits justify its costs. In choosing among alternative regulatory approaches, we selected those approaches that maximize net benefits. Based on the analysis that follows, the Department believes that this regulatory action is consistent with the principles in Executive Order 13563.

We also have determined that this regulatory action does not unduly interfere with State, local, and tribal governments in the exercise of their governmental functions.

In accordance with both Executive orders, the Department has assessed the potential costs and benefits, both quantitative and qualitative, of this regulatory action. The potential costs are those resulting from statutory requirements and those we have determined as necessary for administering the Department's programs and activities.

Intergovernmental Review: This program is subject to Executive Order 12372 and the regulations in 34 CFR part 79. One of the objectives of the Executive order is to foster an intergovernmental partnership and a strengthened federalism. The Executive order relies on processes developed by State and local governments for coordination and review of proposed Federal financial assistance.

This document provides early notification of our specific plans and actions for this program.

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

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

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

A. Why are revisions to state programs necessary?

States which have received final authorization from EPA under RCRA section 3006(b), 42 U.S.C. 6926(b), must maintain a hazardous waste program that is equivalent to, consistent with, and no less stringent than the Federal program. As the Federal program changes, States must change their programs and ask EPA to authorize the changes. Changes to State programs may be necessary when Federal or State statutory or regulatory authority is modified or when certain other changes occur. Most commonly, States must change their programs because of changes to EPA's regulations in Title 40 of the Code of Federal Regulations (CFR) parts 124, 260 through 266, 268, 270, 273 and 279.

We have concluded that Vermont's application to revise its authorized program meets all of the statutory and regulatory requirements established by RCRA. Therefore, we grant Vermont Final authorization to operate its hazardous waste program with the changes described in the authorization application. Vermont has responsibility for permitting treatment, storage, and disposal facilities (TSDFs) within its borders and for carrying out the aspects of the RCRA program covered by its revised program application, subject to the limitations of the Hazardous and Solid Waste Amendments of 1984 (HSWA). New Federal requirements and prohibitions imposed by Federal regulations that EPA promulgates under the authority of HSWA take effect in authorized States before they are authorized for the requirements. Thus, EPA will implement any such requirements and prohibitions in Vermont, including issuing permits, until the State is granted authorization to do so.

The effect of this decision is that a facility in Vermont subject to RCRA will now have to comply with the authorized State requirements instead of the equivalent Federal requirements in order to comply with RCRA. Vermont has enforcement responsibilities under its State hazardous waste program for violations of such program, but EPA also retains its full authority under RCRA sections 3007, 3008, 3013, and 7003, which includes, among others, authority to:

• Perform inspections, and require monitoring, tests, analyses or reports

• Enforce RCRA requirements and suspend or revoke permits

• Take enforcement actions

This action does not impose additional requirements on the regulated community because the regulations for which Vermont is being authorized by today's action are already effective under state law, and are not changed by today's action.

EPA did not publish a proposal before today's rule because we view this as a routine program change and do not expect adverse comments that oppose this approval. We are providing an opportunity for public comment now. In addition to this rule, in the “Proposed Rules” section of today's Federal Register we are publishing a separate document that proposes to authorize the State program changes.

If EPA receives comments that oppose this authorization, we will withdraw this rule by publishing a document in the Federal Register before the rule becomes effective. EPA will base any further decision on the authorization of the State program changes on the proposal mentioned in the previous paragraph. We will then address all public comments in a later final rule based upon this proposed rule that also appears in today's Federal Register . You may not have another opportunity to comment. If you want to comment on this authorization, you should do so at this time.

If we receive adverse comments that oppose only the authorization of a particular change to the State hazardous waste program, we will withdraw that part of this rule but the authorization of the program changes that the comments do not oppose will become effective on the date specified in this document. The Federal Register withdrawal document will specify which part of the authorization will become effective, and which part is being withdrawn.

The State of Vermont initially received Final authorization on January 7, 1985, with an effective date of January 21, 1985 (50 FR 775) to implement the RCRA hazardous waste management program. The Region published an immediate final rule for certain revisions to Vermont's program on May 3, 1993 (58 FR 26242) and reopened the comment period for these revisions on June 7, 1993 (58 FR 31911). This authorization became effective August 6, 1993 (58 FR 31911). The Region granted authorization for further revisions to Vermont's program on September 24, 1999 (64 FR 51702), effective November 23, 1999. On October 18, 1999 (64 FR 46174) the Region published a correction to the immediate final rule that was published on September 24, 1999. The Region granted authorization for further revisions to Vermont's program on October 26, 2000, effective December 26, 2000 (65 FR 64164). That Federal Register also made a technical correction. On June 23, 2005 (70 FR 36350) the Region published an immediate final rule for additional revisions to Vermont's program. This authorization became effective on August 22, 2005. The most recent authorization was granted to Vermont on March 16, 2007 (72 FR 12568) and became effective on May 15, 2007.

On August 20, 2013, Vermont submitted a final complete program revision application, seeking authorization for their changes in accordance with 40 CFR 271.21. In particular, Vermont is seeking authorization for updated state regulations addressing federal requirements added from July 1, 2005 through June 30, 2011. Also, Vermont is seeking authorization for various changes it recently has made to its base program regulations.

We are now making an immediate final decision that, subject to reconsideration only if we receive written comments that oppose this action, Vermont's hazardous waste program revisions satisfy all of the requirements necessary to qualify for Final authorization. Therefore, we grant Vermont Final authorization for the following program changes. First, we are authorizing state regulations that track federal regulations adopted since July 1, 2005, as follows (the Federal Citation is followed by the analog from chapter 7 of the Vermont Environmental Protection Rules (Hazardous Waste Management Regulations), effective March 15, 2013): Federal: Methods Innovation Rule and SW-846 Final Update IIIB [70 FR 34538, June 14, 2005. As amended August 1, 2005; 70 FR 44150] (Checklist 208)- State: 7-106(a), 7-109(a), 7-109(b)(1), 7-202(a)(9), 7-205(a)(1), 7-206(a)(1) & (a)(2), 7-210, 7-217(c), 7-219, 7-219(c), 7-219(e), 7-504(e)(1), 7-505(c), 7-510(c)(1), 7-511(a) & (d), 7-805(f), 7-811(b)(5), 7-812(d), 7-813(a); Federal: Revision of Wastewater Treatment Exemptions for Hazardous Waste Mixtures (“ Headworks exemptions ”) [70 FR 57769, October 4, 2005] (Checklist 211)- State: 7-109(a) and 203(k)(3); Federal: Burden Reduction Initiative ; [71 FR 16862, April 4, 2006] (Checklist 213)—State: 7-106(a), 7-109(a), 7-109(b)(1), 7-204(b)&(c), 7-203(i)(4), 7-504(e)(1), 7-505(c), 7-507(f)(1), 7-510(c)(1); Federal: Corrections to Errors in the Code of Federal Regulations [71 FR 40254, July 14, 2006] (Checklist 214)—State: 7-103, 7-106(a), 7-108(d), 7-109(a), 7-109(b)(1) & (b)(2), 7-203(i)(4), 7-203(v), 7-203(r), 7-204(f), 7-204(f)(3), 7-204(g), 7-204(g)(1) & (g)(2), 7-205(a)(3) & (a)(4), 7-205(a)(4)(A), (B), (C) & (D), 7-208(b), 7-210, 7-215, 7-217(c), 7-311(h), 7-501, 7-502(d), 7-504, 7-504(e)(1), 7-505, 7-505(c), 7-507(f)(1), 7-508(e)(2), 7- 510(c)(1), 7-510(d), 7-512, 7-606, 7-608, 7-705(b)(2), 7-705(d), 7-706(c), 7-708(c), 7-802, 7-803, 7-805(f)(2), 7-806(e), 7-811(b)(3), 7-811(b)(5)(A), 7-811(b)(6)(A), 7-811(i)(1), 7-811(i)(3)(A), 7-812(c), 7-812(d), 7-813, 7-902(d), 7-911, 7-912(d)(2), Appendix I, II, III, IV & IX; Federal: Academic Laboratories Generator Standards and Technical Corrections [73 FR 72912, December 1, 2008 and 75 FR 79304, December 20, 2010] (Checklists 220 and 226)—State: 7-103, 7-109(b)(4), 7-305(a)(7), 7-306(c)(1)(A), 7-306(d), 7-307(c)(1) and (6), 7-307(d), 7-308(b)(1) and (6), 7-308(c); OECD Requirements; Export Shipments of Spent Lead-Acid Batteries [75 FR 1236, January 8, 2010] (Checklist 222)—State: 7-109(a), 7-204(f)(3), 7-307(c)(8 & 9), 7-308(b)(8 & 9), 7-402(b), 7-504(e), 7-510(c), 7-704(c) & (e), 7-705(c) & (d), 7-706(c), 7-707(c) (but note that EPA directly administers the export and import requirements in 40 CFR part 262, subpart H referenced by the State regulations); Hazardous Waste Technical Corrections and Clarifications [75 FR 12989, March 18, 2010 and 75 FR 31716, June 4, 2010] (Checklist 223)—State: 7-103, 7-106(a), 7-109(a) & (a)(7), 7-202(e), 7-203(j)(1), 7-203(j)(3), 7-204(f), 7-204(g), 7-207(a)(8), 7-209(b), 7-210, 7-306, 7-306(a)(2) & (a)(3), 7-306(b) & (c), 7-307(c)(4), 7-308(a) & (b) and “Note” in (b), 7-310(a), 7-311(c), 7-504(e)(1), 7-510(c)(1), 7-512, 7-607, 7-608, 7-702(b)(12), 7-706(b), 7-707(a), (b) & (d), 7-708(a), Appendix I, III, & IV; Removal of Saccharin and Its Salts from the Lists of Hazardous Constituents [75 FR 78918, December 17, 2010] (Checklist 225) —State: Appendix II & III; Revision of the Land Disposal Treatment Standards for Carbamate Wastes [76 FR 34147, June 13, 2011] (Checklist 227)—State: IBR, 7-106(a).

In addition to the regulations listed above, there are various previously authorized state program regulations to which the state has made changes. The EPA is also authorizing these changes. These changes are as follows: Regarding Subchapter 1 of the State Regulations, Federal: definitions in 40 CFR 260.10—State: added definitions of elementary neutralization unit, tank system and wastewater treatment unit (instead of citing federal definitions), revised definitions of pesticidal waste, registration, and used oil, and removed the definition for “performance track member facility” in 7-103; Federal: 40 CFR 262.12 (i.d. numbers)—State: provisions for temporary i.d. numbers added to 7-104; Federal: 40 CFR part 260-279—State: general update to incorporation by reference of federal regulations, 7-109(a); Regarding Subchapter 2 of the State Regulations, Federal: 40 CFR 262.11 (waste determinations)—State: 7-202(d) revised to clarify recordkeeping requirements; Federal: 40 CFR 261.4(a)(13) and (14) (scrap metal and shredded circuit board exemptions. Note: EPA interprets the scrap metal exemption to cover intact circuit boards that meet certain conditions.)—State: Revision to 7-204(h) allowing intact as well as shredded circuit boards, meeting the required conditions, to qualify for the exemption; Federal: 40 CFR 261.2(c)(2)(ii), exemption for certain commercial chemical products burned as fuels—State: clarified container and tank marking requirements and added requirements for aggregation facilities, 7-204(1)(4) and (6); Federal: 40 CFR 261.33(c), regarding commercial chemical products listings—State: 7-214(d) and 7-215(d) revised to track the federal language; Regarding Subchapter 3 of the State Regulations, Federal: 40 CFR 262.12 (i.d. nos.)—State: 7-304(a), revision clarifying that temporary i.d. numbers are only issued for hazardous wastes that are episodically generated; Federal: 40 CFR 265.111, 265.114 and 265.197 (generator closure)—State: revisions to generator closure requirements at 7-304(d) and 7-309(c)(2), being authorized as applied to tank closures and is broader in scope as applied to closure of other units; Federal: 40 CFR 262.34(d), small quantity generators—State: clarification of small quantity generator requirements in 7-307; Federal: 40 CFR 262.34(a), large quantity generators—State: clarification of large quantity generator requirements in 7-308; Federal: 40 CFR 262.34(d)(5)(iv), regulation of small quantity generator emergency response requirements—State: revised, 7-307(c)(14) by revising subsection (A) and adding subsection (D) making it equivalent to the federal requirements; Federal: 40 CFR 265.32(b), preparedness and prevention requirements for large quantity generators and small quantity generators as referenced in 40 CFR 262.34(a)(4) and 40 CFR 262.34(d)(4), respectively—State: revised to make the requirements more up-to-date with current practices (e.g., substituted reference to cell phone for reference to two-way radios), 7-307(c)(14)(B), 7-308(b)(14)(A)(iv), 7-309(a)(1)(B), and 7-309(a)(3)(B); Federal: 40 CFR 261.5, requirements for CESQGs—State: 7-306, except for 7-306(c)(1)(G) (fees). Note: 7-306 previously was authorized in 1999 with respect to Checklist 153, we are now confirming that this provision is authorized for all purposes, not just with respect to Checklist 153; Federal: 40 CFR 270.1(c), prohibition of unpermitted disposal of hazardous waste—State: 7-302(a), prohibiting disposal of hazardous waste by evaporation. Note: this provision was adopted by the State in 1998 but was inadvertently not previously authorized and is being authorized now; Regarding Subchapter 4 of the State Regulations, Federal: 40 CFR 263.12, transfer facility requirements—State: clarifying requirements for the management of off-loaded containers of hazardous waste from transport vehicles, 7-404(b) (formerly 7-404(c)); Federal: 40 CFR part 263—State: clarification when transporter requirements apply, 7-401(b)(1)(A) and 7-405(d); Regarding Subchapter 5 of the State Regulations, Federal: 40 CFR 264.1(g)(6), 265.1(c)(10) and 270.1(c)(2)(v), elementary neutralization and wastewater treatment unit exemptions—State: revised exemption (changed cross-reference) at 7-502(c); Federal: 40 CFR 262.34, as interpreted at 51 FR 10168—State: 7-502(o) revisions to generator treatment in containers and tanks standards, except for 7-502(o)(8) and revision to the note following 7-502(o)(10) (not yet submitted for authorization), and addition of 7-502(k)(1)(C); Federal: 40 CFR 270.50, duration of permits—State: 7-504(g), changing from 5 year permits to 10 year permits, as federally allowed; Regarding Subchapter 6 of the State Regulations, Federal: 40 CFR 260.30, variances—State: 7-608(d), (e) & (f) setting time limits on variances, as applied to any federally regulated wastes; Regarding Subchapter 8 of the State Regulations, Federal: 40 CFR 279.11, specification used oil burned for energy recovery—State: revised 7-801 and 7-802, and 7-812(c)(3) and added 7-804(g) (being authorized except for (g)(3) which is broader in scope); Federal: 40 CFR 279.20—279.24, generator standards—State: 7-807(h), added record-keeping requirement; Regarding Subchapter 9 of the State Regulations, Federal: 40 CFR 273.11 and 40 CFR 273.31, prohibitions of treatment by universal waste handlers—State: added Notes clarifying that drum top crushing is regulated as treatment rather than being considered an exempt recycling activity (this is equivalent to the federal approach with respect to universal waste handlers); Federal: 40 CFR part 273, Standards for Universal Waste Management—State: 10 V.S.A. sec. 6680 designating postconsumer paint as universal waste and setting management standards, 7-901, 7-910, 7-911, 7-912(a)&(b), 7-912(c)(1)&(c)(2)(A), 7-912(c)(2)Note, 7- 912(c)(3), 7-912(f)-(k), 7-913, 7-914, 7-915, 7-916.

The final authorization of new state regulations and regulation changes is in addition to the previous authorization of state regulations, which remain part of the authorized program. Vermont initially received authorization for its base program requirements in 1985 and again in 1993. Vermont subsequently reformatted and renumbered various base program regulations, and submitted revised base program Checklists in connection with the EPA's 1999 authorization. The renumbered and reformatted provisions, as referenced in those Checklists, are part of the authorized program. See 64 FR 51706 (Sept. 24, 1999). The current authorized program consists of the base program requirements together with the additional requirements and changes authorized by the EPA in the 1993, 1999, 2000, 2005 and 2007 authorizations. Added to this will be the requirements being authorized through this rulemaking today.

The most significant differences between the State rules being authorized and the Federal rules are summarized below. It should be noted that this summary does not describe every difference, or every detail regarding the differences that are described. Members of the regulated community are advised to read the complete regulations to ensure that they understand all of the requirements with which they will need to comply.

There are aspects of the Vermont program which are more stringent than the Federal program. All of these more stringent requirements are, or will become, part of the federally enforceable RCRA program when authorized by the EPA and must be complied with in addition to the State requirements which track the minimum Federal requirements. These more stringent requirements include the following: (a) the state has adopted the federal Academic Labs rule but has also added requirements for Laboratory Management Plans that are more stringent, 7-109(b)(4)(B) to (D); (b) the State has revised its exemption for commercial chemical product fuels in 7-204(l)(6) by more stringently specifying the management requirements for aggregation facilities. As noted in our 2007 authorization, the underlying State exemption is equivalent to the combination of the federal exemption for commercial chemical product fuels being burned for energy recovery and the federal exemption for commercial chemical products being reclaimed, in 40 CFR 261.2(c)(2)(ii) and (c)(3), respectively.

There are also aspects of the Vermont program which are broader in scope than the Federal program. The portion of the State requirements which are broader in scope are not considered to be part of the Federally enforceable RCRA program. However, they are fully enforceable under State law and must be complied with by sources in Vermont. These broader in scope requirements include the following: (a) the state has revised its Used Oil regulations by adding management standards in 7-804(g) for used oil that has been shown to meet fuel burning specifications (“used oil fuel”). The broader in scope provisions are found in 7-804(g)(3); (b) With respect to point source discharges of wastewaters that are hazardous wastes, the State has amended state regulation 7-203(q) to only exempt from its hazardous waste regulations those discharges that are “in compliance with” State water act requirements rather than exempting from hazardous waste requirements all discharges that are “subject to” the State water act requirements. The comparable federal exemption at 40 CFR 261.4(a)(2) exempts discharges that are “subject to” section 402 of the Clean Water Act. Thus the State is exempting fewer sources from hazardous waste regulation than does the federal exemption and is, therefore, regulating more broadly in scope.

Vermont also has added a provision to its state statute which differs from the Federal regulations but has been determined to be equivalent to them. These State revisions will become part of the federally enforceable RCRA program when authorized by the EPA. These different but equivalent provisions are as follows. Vermont has added postconsumer paint to its Universal Waste rules through a state statutory provision found at 10 V.S.A. sec. 6680. We are authorizing this as being equivalent to the requirements of 40 CFR part 273 Subpart G since we have determined that it is an appropriate universal waste to approve and that the rules allow the States the flexibility to add additional wastes to their list of universal wastes. In particular, we are authorizing the specific management requirements for these paint wastes as they are identified in the statute under sec. 6680(b) and (c). The statute also specifies that the existing state universal waste regulation requirements apply to the handling of postconsumer paint. In addition, EPA is reauthorizing the existing universal waste regulations as they are applied to the paint wastes.

Vermont will issue permits for all the provisions for which it is authorized and will administer the permits it issues. EPA will implement and issue permits for any HSWA requirements for which Vermont is not yet authorized in the future.

Codification is the process of placing the State's statutes and regulations that comprise the State's authorized hazardous waste program into the Code of Federal Regulations. We do this by referencing the authorized State rules in 40 CFR Part 272. We reserve the amendment of 40 CFR Part 272, Subpart UU for this authorization of Vermont's program until a later date.

The Office of Management and Budget (OMB) has exempted this action (RCRA State Authorization) from the requirements of Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011), therefore, this action is not subject to review by OMB. This action authorizes State requirements for the purpose of RCRA 3006 and imposes no additional requirements beyond those imposed by State law. Accordingly, I certify that this action will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). Because this action authorizes pre-existing requirements under State law and does not impose any additional enforceable duty beyond that required by State law, it 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). For the same reason, this action also does not significantly or uniquely affect the communities of Tribal governments, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action 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, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999), because it merely authorizes State requirements as part of the State RCRA hazardous waste program without altering the relationship or the distribution of power and responsibilities established by RCRA. This action also is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997), because it is not economically significant and it does not make decisions based on environmental health or safety risks. This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a “significant regulatory action” as defined under Executive Order 12866.

Under RCRA 3006(b), EPA grants a State's application for authorization as long as the State meets the criteria required by RCRA. It would thus be inconsistent with applicable law for EPA, when it reviews a State authorization application, to require the use of any particular voluntary consensus standard in place of another standard that otherwise satisfies the requirements of RCRA. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. As required by section 3 of Executive Order 12988 (61 F.R. 4729, February 7, 1996), in issuing this rule, EPA has taken the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. EPA has complied with Executive Order 12630 (53 F.R. 8859, March 15, 1988) by examining the takings implications of the rule in accordance with the “Attorney General's Supplemental Guidelines for the Evaluation of Risk and Avoidance of Unanticipated Takings” issued under the executive order. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Executive Order 12898 (59 FR 7629, Feb. 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States. Because this rule authorizes pre-existing State rules which are equivalent to, and no less stringent than existing federal requirements, and imposes no additional requirements beyond those imposed by State law and there are no anticipated significant adverse human health or environmental effects, the rule is not subject to Executive Order 12898.

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

In FR Doc. 2013-25326 of October 30, 2013 (78 FR 65046), final rule entitled “Patient Protection and Affordable Care Act; Program Integrity: Exchange, Premium Stabilization Programs, and Market Standards; Amendments to the HHS Notice of Benefit and Payment Parameters for 2014 (78 FR 65046), there was a technical nonconformity that is identified and corrected in the regulations text of this correction notice. This correction is effective December 30, 2013, just as if it had been included in the document published on October 30, 2013.

The October 30, 2013 final rule implements provisions of the Patient Protection and Affordable Care Act (Pub. L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152) (collectively referred to as the Affordable Care Act). In relevant part, the October 30, 2013 final rule establishes standards, at 45 CFR part 155, subpart M, that require State Exchanges to submit certain reports to the Department of Health and Human Services (HHS) and to undertake certain recordkeeping and self-auditing activities to ensure compliance with Federal requirements, such as those governing eligibility determinations for advance payments of the premium tax credit and cost-sharing reductions. The standards established at subpart M enable HHS to carry out its responsibility of ensuring that Federal funds are used appropriately in the administration of State Exchange activities.

On page 65095, in the Federal Register of October 30, 2013, we added subpart M “Oversight and Program Integrity Standards for State Exchanges” to the regulations text at 45 CFR part 155. While it was clear from the preamble and regulations text that subpart M applies to all Exchanges, including small business health options program (SHOP) Exchanges, due to an oversight we inadvertently omitted cross-referencing new subpart M at § 155.705(a) of the regulations in part 155, subpart H—Exchange Functions: Small Business Health Options Program. Accordingly, we are revising § 155.705(a) so that the regulations in part 155 consistently reflect our policy that all Exchanges, including SHOP Exchanges, must carry out the required functions of an Exchange that are set forth at subpart M. We are correcting § 155.705(a) by adding a cross reference to subpart M, so that the provision reads, “Exchange functions that apply to SHOP”. The SHOP must carry out all the required functions of an Exchange described in this subpart and in subparts C, E, K, and M of this part, except: . . . .”

We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of a rule take effect, in accordance with section 553(b) and (c) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b) & (c)). However, we can waive notice and comment if the Secretary finds, for good cause, that notice and comment would be impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the finding and the reasons therefor in the notice.

Section 553(d) of the APA ordinarily requires a 30-day delay in the effective date of final rules after the date of their publication in the Federal Register . This 30-day delay in effective date can be waived, however, if the Secretary finds for good cause that the delay is impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the findings and the reasons therefor in the rule issued.

It was clear from both the preamble and the regulations text for 45 CFR part 155, subpart M, that subpart M applies to all Exchanges, including SHOP Exchanges. Both the preamble and the regulations text for part 155, subpart M use the term “Exchange” when describing the new requirements. The term “Exchange” is defined at § 155.20 as including SHOP Exchanges. In relevant part, the definition of “Exchange” in § 155.20 states: “Unless otherwise identified, this term includes an Exchange serving the individual market for qualified individuals and a SHOP serving the small group market for qualified employers . . . .” This conforming amendment merely corrects a technical nonconformity in the regulations text so that the regulations consistently reflect the policy adopted in the October 30, 2013 final rule. Therefore, we find that undertaking further notice and comment before this correction is incorporated into the final rule is unnecessary.

For the same reasons, we also find good cause to waive the 30-day delay in effective date.

On page 65095, in the third column, after the regulations text for § 155.420—Special enrollment periods, insert the following amendment to § 155.705—Functions of a SHOP to read as follows:

Every two years, the trade agreements thresholds are escalated according to a pre-determined formula set forth in the agreements. The United States Trade Representative has specified the following new thresholds in the Federal Register (78 FR 76700, December 18, 2013):

Publication of proposed regulations, 41 U.S.C. 1707, is the statute which applies to the publication of the Federal Acquisition Regulation. Paragraph (a)(1) of the statute requires that a procurement policy, regulation, procedure or form (including an amendment or modification thereof) must be published for public comment if it relates to the expenditure of appropriated funds, and has either a significant effect beyond the internal operating procedures of the agency issuing the policy, regulation, procedure or form, or has a significant cost or administrative impact on contractors or offerors. This final rule is not required to be published for public comment, because it implements the new thresholds in the clause prescriptions at DFARS 225.1101, 225.7017-3, 225.7503 and in the clauses at 252.225-7017 and 252.225-7018. These requirements affect only the internal operating procedures of the Government.

Executive Orders (E.O.s) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

The Regulatory Flexibility Act does not apply to this rule because this final rule does not constitute a significant FAR revision within the meaning of FAR 1.501-1, and 41 U.S.C. 1707 and does not require publication for public comment.

The rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

Therefore, 48 CFR parts 225 and 252 are amended as follows:

In 1988, a coalition of environmental groups, led by the Natural Resources Defense Council (NRDC), filed a lawsuit challenging renewal of long-term water service contracts between the United States and the Central Valley Project (CVP) Friant Division contractors (NRDC, et al., v. Kirk Rodgers, et al. ). After more than 18 years of litigation, a Settlement was reached (Settlement) on September 13, 2006. The Settling Parties, including NRDC, Friant Water Users Authority (now the Friant Water Authority (FWA)), and the U.S. Departments of the Interior and Commerce, agreed on the terms and conditions of the Settlement, which was subsequently approved by the U.S. Eastern District Court of California on October 23, 2006. The Settlement establishes two primary goals: (1) Restoration Goal—To restore and maintain fish populations in “good condition” in the mainstem San Joaquin River below Friant Dam to its confluence with the Merced River, including naturally reproducing and self-sustaining populations of salmon and other fish; and (2) Water Management Goal—To reduce or avoid adverse water supply impacts on all of the Friant Division long-term contractors that may result from the interim and restoration flows provided for in the Settlement. Paragraph 14 of the Settlement indicates that the Restoration Goal shall include the reintroduction of Central Valley spring-run Chinook salmon (hereafter, CV spring-run Chinook salmon) to the San Joaquin River between Friant Dam and its confluence with the Merced River. The settlement is implemented through the San Joaquin River Restoration Program (SJRRP).

In 2009, as part of the Omnibus Public Land Management Act, Congress enacted the San Joaquin River Restoration Settlement Act (Pub. L. 111-11, 123 Stat. 1349) (SJRRSA), which ratified the terms of the Settlement and provided additional authorities to the Department of the Interior to facilitate successful implementation of the Settlement. The SJRRSA provides that if the Secretary of Commerce (Secretary) concludes that a program to reintroduce CV spring-run Chinook salmon into the San Joaquin River can be implemented consistent with other requirements of the ESA, the reintroduction “shall be [conducted] pursuant to § 10(j)” of the ESA.

This is a final rule stemming from a proposed rule that was published January 16, 2013 (78 FR 3381). This final rule implements the experimental population area to include the San Joaquin River just upstream from its confluence with, but not including, the Merced River upstream to Friant Dam; all sloughs, channels, floodways, and waterways that allow for CV spring-run Chinook salmon access along the San Joaquin River; and portions of the Kings River, when high water years connect the Kings River with the San Joaquin River. This experimental area is part of the species' historical range. The San Joaquin River experimental population is all CV spring-run Chinook salmon, including fish that have been released or propagated, naturally or artificially, within the defined experimental population area.

The CV spring-run Chinook salmon Evolutionarily Significant Unit (ESU; 70 FR 37160; June 28, 2005) is listed as threatened under the ESA, and its threatened status was recently confirmed following completion of a 5-year review (NMFS, 2011). The CV spring-run Chinook salmon ESU includes all naturally spawned populations of spring-run Chinook salmon in the Sacramento River and its tributaries, as well as the Feather River Fish Hatchery (FRFH) spring-run Chinook salmon program. We have issued protective regulations under section 4(d) of the ESA for CV spring-run Chinook salmon that prohibit their “take” unless otherwise authorized (50 CFR 223.203).

Section 10(j) of the ESA (16 U.S.C. 1539(j)) defines an experimental population as a population that has been authorized for release by the Secretary but only when, and at such times as, the population is wholly separate geographically from nonexperimental populations of the same species. The Secretary may authorize the release of “experimental” populations of listed species outside of their current range if the release would “further the conservation” of the listed species. Section 10(j) also requires that before authorizing the release of an experimental population, the Secretary identify the experimental population by regulation and determine, based on the best available information, whether the experimental population is “essential to the continued existence” of the listed species (16 U.S.C. 1539(j)(2)(B)).

The U.S. Fish and Wildlife Service (USFWS) promulgated regulations to guide its implementation of section 10(j) (see 50 CFR 17.80 through 17.84). While we do not have regulations governing the designation of experimental populations, we considered their regulations where appropriate in making the required determinations under section 10(j) and in formulating this rule to designate and release an experimental population of CV spring-run Chinook salmon into the San Joaquin River upstream of the Merced River confluence. Although the USFWS regulations do not govern our regulatory action, the record demonstrates that this rule would be consistent with the criteria of those regulations.

Using the best available information, the following three key elements of ESA section 10(j) were analyzed in formulating this rule:

Element 1: Whether release of an experimental population of CV spring-run Chinook salmon into the San Joaquin River would further the conservation of the species;

Element 2: An appropriate means to identify the experimental population; and

Element 3: Whether the experimental population is essential to the continued existence of the species in the wild.

We discuss in more detail below how we considered each of these three elements.

In addition to the requirements of ESA section 10(j), we considered whether any additional measures were necessary to address management concerns under local conditions and to comply with Section 10011 and 10004 of the SJRRSA. Also, we considered a process for data collection and periodic review of the status of the experimental population. These additional considerations are not required under ESA section 10(j), but they provide information as to how our determination was reached, as well as explaining how we intend to assess the effect of the reintroduction on the conservation of the species.

Section 10(j) of the ESA requires that an experimental population be treated as a threatened species under the ESA, with two exceptions that apply if an experimental population is not determined to be essential to the listed species' continued existence (i.e., nonessential): 1) section 7 of the ESA applies in a different manner as described below in this paragraph, and 2) critical habitat shall not be designated for that experimental population. If the experimental population is determined to be nonessential, then section 10(j) requires that we apply the section 7 consultation provisions as if the population is a species proposed for listing. This means that the section 7(a)(2) consultation requirement does not apply to any experimental population of CV spring-run Chinook salmon that we determine is nonessential. The only provisions of section 7 that apply to a nonessential experimental population (NEP) outside of a National Park or Wildlife Refuge are sections 7(a)(1) and 7(a)(4). Section 7(a)(1) requires that Federal agencies use their authorities in furtherance of the purposes of the ESA by carrying out programs for the conservation of threatened and endangered species. Section 7(a)(4) requires Federal agencies to confer, rather than consult, with us on actions that are likely to jeopardize the continued existence of a species proposed to be listed. The results of a conference are advisory in nature.

Section 7 of the ESA does not apply to activities undertaken on private land unless they are authorized, funded, or carried out by a Federal agency. The take exceptions outlined below associated with the experimental population will provide sufficient protections to reduce effects of existing or anticipated Federal or State actions, or private activities within or adjacent to the experimental population area.

Element 1: Whether release of an experimental population of CV spring-run Chinook salmon into the San Joaquin River would further the conservation of the species.

The ESA defines “conservation” as “the use of all methods and procedures which are necessary to bring any endangered species or threatened species to the point at which the measures provided pursuant to this [Act] are no longer necessary.” In making the determination whether release of an experimental population would “further the conservation” of CV spring-run Chinook we considered the following factors: (1) the effects of gathering broodstock on the extant populations of the ESU; (2) the potential for the released population to survive in the foreseeable future; and (3) the potential contribution of an experimental population to the recovery of the Central Valley spring-run Chinook salmon ESU.

We first considered the most appropriate source of fish within the CV spring-run Chinook salmon ESU to be used to establish an experimental population. Reintroduction efforts have the best chance for success when the donor population has life history characteristics and genetic diversity compatible with the anticipated environmental conditions of the habitat into which fish will be reintroduced. Populations found in watersheds closest to the reintroduction area are most likely to have adaptive traits that will lead to a successful reintroduction, and therefore, only spring-run Chinook salmon populations found in the California Central Valley will be used in establishing the experimental population in the San Joaquin River. The selection of which source population(s) will be utilized for the SJRRP reintroduction effort will be dependent upon the genetic diversity needs of the broodstock, the specific conditions of the proposed donor population(s) at the time, and whether the collection will jeopardize the continued existence of the species.

Functionally independent populations of CV spring-run Chinook salmon occur in Deer, Mill, and Butte creeks and on the Feather River. The Feather River CV spring-run Chinook salmon population is also supplemented by operation of the FRFH. All of these populations are genetically unique from one another. Additional dependent or establishing populations occur in the Sacramento River Basin, but these are not known to be genetically unique. The Deer and Mill creek populations have been at a high risk of extinction and special care and consideration will be used when considering these fish as a donor source for reintroduction into the San Joaquin River. The Butte Creek CV spring-run Chinook salmon population is considered to be at a low risk of extinction and has the largest run size of the three major CV spring-run Chinook salmon populations in the Central Valley (NMFS, 2011). Thus it may be possible to remove fish from this population in years with high adult returns.

Through our ESA section 10 permitting authority and the section 7 consultation process, we will also ensure that the use of CV spring-run Chinook salmon from any donor populations for release into the San Joaquin River is not likely to jeopardize the continued existence of the species in the wild. Recently NMFS issued a permit under section 10(a)(1)(A) of the ESA along with a section 7 Biological Opinion (2012) that reached a non-jeopardy conclusion on the first 5 years of broodstock collection from FRFH.

As noted above, there are several choices for source populations for this experimental population. A captive broodstock program is being established as part of the SJRRP to augment and supplement the establishment of an experimental population in the San Joaquin River. Initially we will be using FRFH fish for captive broodstock and direct release to the river. We would later consider diversifying the donor stock with fish from naturally spawning populations in other streams if and when those populations can sustain the removal of fish. Any collection of CV spring-run Chinook salmon would be subject to approval of a permit under ESA section 10(a)(1)(A), which includes analysis under the National Environmental Policy Act (NEPA) and ESA Section 7.

Over time, we expect the captive broodstock at the San Joaquin River conservation hatchery will produce sufficient numbers of eggs and juveniles to support reintroduction actions, and will reduce or eliminate the need for fish to be taken from existing hatchery or natural populations in the Sacramento River basin. If we consider using CV spring-run Chinook salmon from naturally spawning populations, we will remove only small numbers when such collections would not jeopardize the continued existence of the species and will contribute to the enhancement or propagation of the species. FRFH fish used for the reintroduction will be genetically screened to avoid hybrids. The FRFH is planning to produce sufficient fish to allow for eggs or juveniles to be collected for the reintroduction, in addition to the hatchery production needed for the Feather River. The consistent availability of hatchery produced fish, combined with existing protections for wild populations, can allow collection of fish for reintroduction of CV spring-run Chinook salmon to the San Joaquin River with no adverse impact on the ESU.

In determining whether release of the experimental population would further the conservation of CV spring-run Chinook salmon, we also considered the potential for the released population to survive in the foreseeable future. The California Central Valley drainage as a whole is estimated to have supported spring-run Chinook salmon returns as large as 600,000 fish between the late 1880s and 1940s (CDFG, 1998). However, the CV spring-run Chinook salmon runs in the San Joaquin River were extirpated as a direct result of the completion of Friant Dam and the associated operation of the Friant-Kern and Madera irrigation canals, which caused the river to run dry in many locations. As a result of these impacts, the last substantial CV spring-run Chinook salmon spawning cohort (numbering >1,900) returned in 1948 (Yoshiyama et al., 1996). Central Valley spring-run Chinook salmon were originally most abundant in the San Joaquin River basin where the run ascended to high-elevation streams fed by snow-melt where they over-summered until the fall spawning season (Yoshiyama et al., 1996). Construction of other low elevation dams in the foothills of the Sierra Nevada on the American, Mokelumne, Stanislaus, Tuolumne, and Merced rivers largely extirpated CV spring-run Chinook salmon in these watersheds as well.

NMFS' Draft Recovery Plan for Central Valley salmonids characterizes the San Joaquin River basin below Friant Dam as having a high potential to support a spawning population of reintroduced CV spring‐run Chinook salmon with implementation of the SJRRP. The Settlement establishes a framework for accomplishing the Restoration Goal including channel and structural modifications along the San Joaquin River below Friant Dam and releases of water from Friant Dam downstream to the river's confluence with the Merced River. Based on the available information, we believe that implementation of these actions will create habitat conditions in the San Joaquin River from Friant Dam to its confluence with the Merced River sufficient to support the establishment of CV spring‐run Chinook salmon populations.

In addition to actions undertaken by the SJRRP, there are many Federal and State laws and regulations that will also aid in the establishment and survival of the experimental population through the protection of aquatic and riparian habitat. Section 404 of the Clean Water Act (CWA) (33 U.S.C. 1344) requires a permit before dredged or fill material may be discharged into waters of the United States, unless the activity is exempt. This permit program provides avoidance, minimization, and mitigation measures for the potential adverse effects of dredge and fill activities within the nation's waterways. CWA section 401 (33. U.S.C. 1341) requires an application for a Federal license or permit to provide a certification for the relevant state(s) that any discharges from the facility will comply with applicable state water quality standards. In addition, CWA Section 402 (33 U.S.C. 1342) establishes the National Pollutant Discharge Elimination System permit program to regulate point source discharges of pollutants into waters of the United States. Also, the Magnuson-Stevens Fishery Conservation and Management Act, as amended (16 U.S.C. 1801 et seq. ), requires that essential fish habitat (EFH) be identified and Federal action agencies must consult with NMFS on any activity which they fund, permit, or carry out that may adversely affect EFH. Freshwater EFH for Pacific salmon in the California Central Valley includes waters currently or historically accessible to salmon within the Central Valley ecosystem as described in Myers et al. (1998), which includes the area where this NEP is located.

At the state level, the California Fish and Game Code section 1600, et seq. and the California Environmental Quality Act (Pub. Resources Code sections 21000, et seq. ) (CEQA) set forth criteria for the incorporation of avoidance, minimization, and feasible mitigation measures for on-going activities as well as for individual projects. Section 1600, et seq. was enacted to provide conservation for the state's fish and wildlife resources and includes requirements to protect riparian habitat resources on the bed, channel, or bank of streams and other waterways.

Section 1600, et seq. prohibits an entity from: (1) substantially diverting or obstructing the natural flow of any river, stream, or lake: (2) substantially changing or using any material from the bed, channel, or bank of, any river, stream, or lake: or (3) depositing or disposing of debris, waste, or other material containing crumbled, flaked, or ground pavement where it may pass into any river, stream, or lake, without first notifying the California Department of Fish and Wildlife (CDFW) of the activity. CDFW (previously called California Department of Fish and Game until December 31, 2012) then has the opportunity to determine whether the activity may substantially adversely affect an existing fish or wildlife resource and, if the activity may have such an effect, to issue a final agreement that includes reasonable measures necessary to protect the resource (California Fish and Game Code Section 1602). Under CEQA, no public agency shall approve or carry out a project without identifying all feasible mitigation measures necessary to reduce impacts to a less than significant level, and shall incorporate such measures absent overriding considerations. In addition, protective measures, including programs for strategic screening and participation in habitat conservation programs, will be implemented in conjunction with SJRRP activities and are intended to provide a net benefit to the reintroduction.

This rule incorporates all reasonably feasible management restrictions, protective measures, prohibitions, and exceptions to the prohibitions to avoid and minimize the impacts of any taking allowed by this regulation. The combination of SJRRP actions, implemented to achieve the Restoration Goal, the protective measures in this rule, as well as compliance with existing laws, statutes, and regulations, including in particular those that provide specific protections for aquatic and riparian habitats, provides these measures, and is expected to result in the survival of the experimental population in the San Joaquin River into the foreseeable future.

The third consideration in determining whether release of the experimental population would further the conservation of the CV spring-run Chinook salmon ESU is the potential contribution of the experimental population toward recovery of the ESU. NMFS' Draft Recovery Plan for Central Valley salmonids contains specific management strategies for recovering CV spring-run Chinook salmon that include securing existing populations and reintroducing populations into historically occupied habitats, including the San Joaquin River. Establishing an experimental population of CV spring-run Chinook salmon in the San Joaquin River that persists into the foreseeable future is expected to reduce the species' overall extinction risk from natural and anthropogenic factors by increasing its abundance, productivity, spatial structure, and diversity within the Central Valley. These expected improvements in the overall viability of CV spring-run Chinook salmon, in addition to other actions being implemented throughout the Central Valley, will contribute to the species' recovery. In light of the foregoing, we conclude that release of the experimental population would further the conservation of CV spring-run Chinook salmon.

Element 2. Identification of the experimental population.

Section 10(j) of the ESA requires that the experimental population be designated only when, and at such times, as it is geographically separate from nonexperimental populations of the same species. We are designating the experimental population area for the experimental population of CV spring-run Chinook salmon as the San Joaquin River from its confluence upstream of the Merced River to Friant Dam, including all sloughs, channels, and waterways that connect the San Joaquin River and provide passage for the species. In addition, the experimental area includes portions of the Kings River in high water years that provide connectivity between the Kings River and the San Joaquin River. The experimental population area is within the species' historical range, but it is presently unoccupied by CV spring-run Chinook salmon.

False pathways (waterways that salmon follow that do not lead to spawning habitat) that fish may use as a result of restored flows have not yet been identified; however, the SJRRP includes actions to prevent or reduce straying to false pathways, and this experimental population designation assumes that the SJRRP will take appropriate action to reduce losses of the experimental population caused by undesirable straying. In addition, we will be using other means of identifying fish that are reintroduced, such as marking fish with specific fin clips (e.g., coded-wire tags, genetic testing) or other methods and field sampling.

Element 3. Whether the experimental population is essential to the continued existence of the species.

Because we do not have regulations implementing ESA section 10(j), we considered the USFWS regulations (50 CFR 17.80(b)), which define an essential experimental population as one “whose loss would be likely to appreciably reduce the likelihood of the survival of the species in the wild.” While we are not bound by the definition of “essential” in the USFWS regulations, we have determined it is appropriate for use in this rule.

In making the determination whether the experimental population of CV spring-run Chinook salmon is essential, we used the best available information as required by ESA section 10(j)(2)(B). Furthermore, we considered the geographic location of the experimental population in relation to other populations of CV spring-run Chinook salmon, and the likelihood of survival of these populations without the existence of the experimental population. The San Joaquin River is geographically separated from the watersheds that support extant populations of CV spring-run Chinook salmon in the Sacramento River basin.

We expect that CV spring-run Chinook salmon reintroduced to the San Joaquin River will imprint on this river and would therefore be unlikely to stray, beyond natural levels, into the Sacramento River basin and interact with extant populations found in that watershed. Natural straying rates would be expected to be low such that existing populations would not depend on supplementation of individuals from the experimental population to persist. The ESU includes four independent populations, one of which is supplemented by a hatchery, and several dependent or establishing populations. Given current protections and restoration efforts, these populations are persisting or expanding, without the presence of a population in the NEP area. Thus it is expected that the experimental population will exist as a population independent from those in the Sacramento River basin and will not contribute to the survival of those populations.

Based on these considerations, we conclude that the loss of the experimental San Joaquin River population of CV spring-run Chinook salmon is not likely to appreciably reduce the likelihood of the survival of the species in the wild. Accordingly, this population will be considered nonessential under this designation.

The ESA defines “take” to mean: harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or attempt to engage in any such conduct. For threatened species such as the NEP of CV spring-run Chinook salmon, the ESA does not automatically prohibit take, but ESA section 4(d) (16 U.S.C. 1533(d)) provides that the Secretary of Commerce shall issue protective regulations he or she deems necessary and advisable for the species' conservation. Such protective regulations may, if appropriate, include the take prohibitions of section 9 of the ESA and exceptions to those take prohibitions.

In addition to take prohibitions in regulations promulgated under ESA section 4(d), section 7 and section 10 of the ESA provide for exceptions or authorizations of take of listed species under certain circumstances. The consultation process under section 7 of the ESA provides an exception for incidental take of listed species under certain circumstances. Section 7(a)(2) of the ESA provides that each Federal agency shall, through consultation with and with the assistance of the Secretary of Commerce, insure that any action authorized, funded, or carried out by such agency is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of critical habitat designated for such species. The formal consultation process results in NMFS issuing a biological opinion with an incidental take statement. The incidental take statement, among other things, specifies the amount or extent of incidental taking of listed species as a result of the proposed action, reasonable and prudent measures that NMFS considers necessary and appropriate to minimize the impact of such incidental taking, and terms and conditions that the Federal agency or applicant must comply with in order to implement the reasonable and prudent measures. Under the terms of section 7(b)(4) and section 7(o)(2) of the ESA, any such incidental taking is not considered to be prohibited taking under the ESA, provided that such taking is in compliance with the terms and conditions of the incidental take statement. Section 10 of the ESA provides NMFS with authority to issue permits under certain circumstances for any otherwise prohibited act or taking. NMFS may issue permits for scientific purposes or to enhance the propagation or survival of the affected species, including, but not limited to, acts necessary for the establishment and maintenance of experimental populations pursuant to ESA section 10(j); or taking that is incidental to, and not the purpose of, the carrying out of an otherwise lawful activity (i.e., incidental take permits).

In conjunction with our designation and authorization of the release of a CV spring-run Chinook salmon NEP in the San Joaquin River, we are also promulgating protective regulations under section 4(d) of the ESA that apply to the NEP. To ensure that the NEP has protections from activities that are not lawful under Federal, State or local laws and regulations, we are applying all take prohibitions listed under ESA sections 9(a)(1)(A) through 9(a)(1)(G), except for section 9(a)(1)(C) which involves the irrelevant issue of take upon the high seas, to the experimental population when it is within the experimental population area. Such activities include those resulting in direct intentional take or harm or illegal activities that result in incidental take or harm, including angling. These prohibitions apply to all CV spring-run Chinook salmon in the experimental population area that have intact adipose fins as well as those that are adipose fin-clipped.

In addition, the unintentional take of CV spring-run Chinook salmon in the experimental population area that is caused by otherwise lawful activities is excepted from the take prohibitions under section 9. Examples of otherwise lawful activities include, but are not limited to, recreation, agriculture, municipal usage, flood control, water management, and other similar activities which are carried out in accordance with Federal, State, and local laws and regulations. Take that is intentional, or incidental to unlawful activities or negligent conduct is not excepted. The intent of the action that results in take is a consideration in this exception. Negligent conduct includes the failure to exercise the degree of care that a reasonably prudent person would exercise in like circumstances. Negligence denotes a lack of diligence, a disregard of the consequences likely to result from one's actions, or carelessness. Similarly, this rule excepts handling of fish in the experimental population for salvage/rescue and scientific research subject to specific requirements. We are providing an exception from the section 9 take prohibitions for specified scientific research activities conducted by the State of California that is consistent with the existing state research programs excepted under the current ESA section 4(d) rule established for threatened salmonids (codified at 50 CFR 223.203), making use of the system already in place. Federal, State, and private-sponsored research activities for scientific research or enhancement purposes that are not covered under the exception described above, may take CV spring-run Chinook salmon in the NEP pursuant to the specifications of an ESA section 10 permit. Section 9(a)(1)(B) take prohibitions will not apply to ongoing research activities if an application for an ESA section 10(a)(1)(A) permit is received by NMFS, preferably through the NMFS online application Web site. Because the cycle for the existing State research program, described above, may not coincide with the effective date of this rule, an exception for take resulting from the research activities proposed in the Monitoring and Assessment Plan developed by the SJRRP and approved by NMFS, has been included.

As described above, there is an exception to the take prohibitions under this rule applicable to take that is unintentional and incidental to carrying out an otherwise lawful activity. Within the experimental population area, persons or entities diverting or receiving water pursuant to applicable State and Federal laws would be carrying out an otherwise lawful activity. Therefore, this exception would apply to incidental take of CV spring-run Chinook salmon by those persons or entities, and this rule would not impose any water supply reductions, additional storage releases or bypass flows unwillingly on them. Questions regarding whether specific activities will constitute a violation of the section 9 take prohibition, and general inquiries regarding prohibitions, exceptions, and permits, should be directed to NMFS (see ADDRESSES ).

As noted above, we prohibit the intentional take of CV spring-run Chinook salmon in the experimental population area by angling. We intend to work with CDFW to review fishing regulations in the geographic area in order to minimize the impact of this prohibition on current angling on other species. In the future, if the experimental population becomes established, we may consider allowing limited harvest of CV spring-run Chinook salmon in the experimental population area through a Fishery Management and Evaluation Plan developed by CDFW and approved by NMFS.

The SJRSSA established two twin objectives relating to the impacts associated with the CV spring-run Chinook salmon reintroduction. First the SJRRSA established that the reintroduction of CV spring-run Chinook salmon to the San Joaquin River must not impose more than de minimus water supply reductions, additional storage releases, or bypass flows on unwilling third parties. Second, the SJRRSA provides that nothing in the SJRRSA diminishes ESA protections for listed species other than the reintroduced population of CV spring-run Chinook salmon. This final rule is therefore framed to achieve these twin objectives by specifying how the take prohibitions and exceptions apply to activities in the NEP area and activities downstream of the NEP area, as described further below. Further, nothing in this rule precludes imposing protections under the ESA for other listed species when those protections provide incidental benefits to such reintroduced CV spring-run Chinook salmon.

The SJRRSA defines “third party” to mean persons or entities diverting or receiving water pursuant to applicable State and Federal laws. This includes CVP contractors outside of the Friant Division of the CVP and the State Water Project (SWP) contractors. Because some of these third parties operate outside of the experimental population area, this rule also includes limited take exceptions outside of the experimental population area when avoidance of take of CV spring-run Chinook salmon reintroduced by the SJRRP would result in more than de minimus impact to water supply reductions, additional storage releases, or bypass flows on unwilling third parties. These limited take exceptions apply to fish that have been released or propagated, naturally or artificially, within the experimental population area in the San Joaquin River above the confluence with the Merced River. Outside of the experimental population area, CV spring-run Chinook salmon will continue to be covered by the take prohibitions and exceptions applicable to the non-experimental part of the ESU (50 CFR 223.203), but additional limited take exceptions will now apply to meet the de minimus conditions of the SJRRSA. In the lower San Joaquin River and its tributaries, including the Merced River, downstream from its confluence with the Merced River to Mossdale County Park in San Joaquin County, take of CV spring-run Chinook salmon is excepted if the avoidance of such take would impose more than de minimus impact on water supply reductions, additional storage releases, or bypass flows on unwilling third parties. This exception applies to CV spring-run Chinook salmon that may occur in the lower San Joaquin River and its tributaries, and is not specifically limited to reintroduced CV spring-run Chinook salmon.

This exception does not diminish current protections for CV spring-run Chinook salmon downstream of the NEP area for the following reasons. First, past and recent status reviews have concluded that CV spring-run Chinook salmon have been largely extirpated in this area. Therefore, NMFS generally has not consulted under ESA section 7 on the effects on this species of proposed actions in the lower San Joaquin River and its tributaries. However, connectivity with the south Delta does not prohibit potential individual CV spring-run Chinook salmon from straying to these waterways. After reintroduction of CV spring-run Chinook salmon into the experimental population area, CV spring-run Chinook salmon that originate from the experimental population area will migrate through the lower San Joaquin River. In the lower San Joaquin River and its tributaries it will be difficult to differentiate whether any individual CV spring-run Chinook salmon originated from the experimental population area or strayed from the area outside the San Joaquin River. These fish will more likely have originated from the experimental population area because of the numbers of fish to be released for the reintroduction and the close proximity of the Lower San Joaquin River and its tributaries to the experimental population area.

Second, California Central Valley (CCV) steelhead, a threatened species, does occur in the lower San Joaquin River and its tributaries. Owing to similarities in habitat requirements, actions that could adversely affect CV spring-run Chinook salmon would also similarly affect CCV steelhead. Therefore, ESA consultation and take avoidance requirements for CCV steelhead would apply whether or not CV spring-run Chinook salmon were present. Should NMFS decide to consult on CV spring-run Chinook salmon and avoidance measures were required over and above those required for CCV steelhead, then NMFS would not require or implement these measures, if such measures would result in more than a de minimus impact on water supply reductions, additional storage releases, or bypass flows, on unwilling third parties. This determination would be made on a case by case basis as part of the ESA section 7 or section 10 processes. Take avoidance or minimization measures that would have a de minimus or no effect on water supply reductions, additional storage releases, or bypass flows associated with the aforementioned third parties, could still be required through the ESA section 7 or section 10 processes. Such measures might include best management practices such as sediment containment, in-water work windows, or bank revegetation associated with stream construction activities.

As stated above, the definition of “third parties” in the SJRRSA section 10011(c) includes CVP contractors outside of the Friant Division of the CVP and the SWP contractors. This rule prescribes the process by which the de minimus requirement in the SJRRSA will be implemented through the NMFS June 2009 Biological Opinion on the Long-term Operations of the CVP and SWP (NMFS 2009 Biological Opinion) or future and successive biological opinions on these operations. The aforementioned NMFS 2009 Biological Opinion identifies operational triggers intended to avoid or minimize take of listed anadromous fish, including CV spring-run Chinook salmon. The successful reintroduction of CV spring-run Chinook salmon to the San Joaquin River potentially could result in application of operational triggers more frequently or could result in reaching allowed take thresholds, and thereby impact water supply.

NMFS will develop a technical memorandum (tech memo) annually containing a share of take calculation in coordination with and with opportunity for comment by interested parties. The purpose of this tech memo is to ensure that avoidance of take of CV spring-run Chinook salmon originating from reintroduction to the San Joaquin River does not cause more than a de minimus impact on water supply, additional storage releases, and bypass flows associated with the operations of the CVP and SWP. NMFS will annually calculate and document the proportionate contribution of CV spring-run Chinook salmon originating from the reintroduction to the San Joaquin River and deduct or otherwise adjust for this share of CV spring-run Chinook salmon take when applying the operational triggers and incidental take statements associated with the NMFS 2009 Biological Opinion or subsequent future biological opinions, or section 10 permits. Section 11.2.1 (Decision Making Procedures) of the aforementioned NMFS 2009 Biological Opinion (with 2011 amendments) provides for an annual adjustment process. In preparing the tech memo, NMFS will consider whether the presence of such fish will modify the application of operational triggers more frequently, reach allowed take thresholds that otherwise would not have been reached, or cause changes to project operations by other factors. These adjustments will ensure that the reintroduction will not impose more than de minimus water supply reductions, additional storage releases, or bypass flows on unwilling third party water users. NMFS will use best available commercial or scientific information to inform these calculations. Depending on available information and relevance to operational triggers, these calculations may include incidental take of CV spring-run Chinook salmon that originate from the reintroduction to the San Joaquin river that may occur due to: (1) elevated water temperatures and poor water quality, (2) entrainment at unscreened diversions, (3) predation associated with diversion waterways and facilities, (4) reverse flow conditions in the Delta as a result of CVP/SWP pumping, and (5) direct loss at the CVP/SWP South Delta pumping and salvage facilities. This exception does not diminish ESA protections for existing listed species because it is limited to spring-run Chinook salmon that originate from the reintroduction to the San Joaquin River.

The ESA requires that NMFS conduct a status review every 5 years for all listed species under its responsibility. This requirement will ensure that NMFS is tracking the status of the reintroduced spring-run Chinook population and the ESU, and will develop information to assess the effectiveness of this rule, and if necessary, will trigger revision to the regulation through the rulemaking process. This will ensure that the reintroduction of spring-run Chinook to the San Joaquin River is providing for the conservation of the species as expected, and that the experimental population is not essential to the continued survival of the species.

Monitoring and analysis is necessary to gauge the progress of the reintroduction program and to provide information for decision-making and adaptive management. Fish passage, fish biology, aquatic habitat, and conservation hatchery facility operations will be the primary focus of the monitoring (FMP, 2009).

Fish passage monitoring will focus on addressing a variety of issues important to successful reintroduction. These issues include measuring fish passage success, smolt injury and mortality rates, and adult river passage to spawning areas. Passive integrated transponder tags and radio tags will be used to evaluate and monitor fish passage effectiveness. Biological evaluation and monitoring will concentrate on adult escapement and spawning success, competition with resident species, predation, disease transfer, smolt production, harvest, and sustainability of natural runs. Habitat monitoring will focus on long-term trends in the productive capacity of the reintroduction area (i.e., habitat availability, habitat effectiveness, riparian condition) and natural production (the number, size, productivity, and life history diversity) of CV spring-run Chinook salmon in the experimental population area.

Monitoring at the conservation hatchery facility will focus on multiple issues important to the quality of fish collected and produced for use in the reintroduction program. Monitoring activities will consist mainly of tracking broodstock sources; disease history and treatment; pre-release performance such as survival, growth, and fish health by life stage; the numerical production advantage provided by the conservation hatchery facility program relative to natural production; and success of the conservation hatchery facility program in meeting the program's objectives.

While this monitoring is being conducted for adaptive management purposes to make the reintroduction effort successful, we will also use the information to determine if the experimental population designation is causing any harm or benefit to CV spring-run Chinook salmon that are part of the threatened ESU and their habitat, and then, based on this and other available information, determine if any changes to the experimental population designation may be warranted. Any contribution that an experimental population might make to the overall viability of CV spring-run Chinook salmon would be considered in future status assessments required under the ESA.

The public comment period for the proposed rule and draft Environmental Assessment (EA) was open from January 16 until March 4, 2013. Public scoping meetings were held January 24, January 25, and February 5, 2013 to obtain public comment and to help us better understand their concerns with the proposed experimental population designation, take and take exceptions, and associated Draft EA. During the comment period, NMFS received written comments on the rule and draft EA from 29 different entities representing various agencies, non-governmental organizations, and individuals. A summary of the comments and our responses to those comments are presented here. The summary begins with the comments we received in response to the specific questions that we posed with the proposed rule.

Comment 1: Two commenters thought that the location should be larger to include the lower San Joaquin River, its tributaries, and the entire Delta to include water users in these areas to be excepted from take of CV spring-run Chinook salmon. One commenter, based on incorrect interpretation, wanted the location to be smaller to exclude all back water, sloughs, and flood control channels that salmon may be able to swim into, so that less regulatory burden would be placed on flood management and maintenance activities. Clarification was requested as to whether the Merced River was included in the NEP area. Four comments were received in favor of keeping the experimental population area as defined in the proposed rule.

Response: The comments were noted; but the proposed NEP area was not changed for the reasons discussed below. Including the tributaries and the delta within the experimental population area was not an option, as the ESA is very clear that the experimental population must be wholly geographically isolated from other populations of the species. There is some current evidence, as seen in the discussions in section 3 in the EA associated with this rule, that there are spring-running fish within the tributaries of the San Joaquin River, and therefore those areas cannot be included in the designation. The NEP description has been modified to delineate that the Merced River is not included in the NEP. The experimental population area does include all backwater, sloughs and flood control channels that salmon may be able to access upstream of the confluence of the Merced River. By including all of the possible locations that salmon may be able to access we are protecting water users and land owners from having undue regulatory burden placed upon them if there were no experimental population designation.

Comment 2: Two responses indicated agreement that other existing laws and regulations will provide protection for the reintroduced fish. Other responses to this question did not address how the experimental population might be affected, rather two commenters raised concerns that they would be affected by the reintroduction if the implementation of the SJRRP is delayed or only partially implemented.

Response: Most of the concerns expressed were related to impacts associated with implementation of the SJRRP as a whole. These impacts have been analyzed in the SJRRP Program Environmental Impact Statement/Report and are beyond the scope of this regulation. The EA was revised to include analysis of the impact of the proposed rule in the event that the SJRRP was only partially implemented and no significant impacts were identified.

Comment 3: A comment was raised that management restrictions, and protective measures, should be considered and/or be extended to basic flood control problems and to management and maintenance of facilities of the State Plan of Flood Control in the project area. The comment stated that these flood control facilities could be impacted by the restrictions of the ESA. We received two comment letters suggesting that the rule should include a list of all activities for which take exceptions would apply. In addition, one comment letter advocated reintroduction of CV spring-run Chinook salmon using only volitional straying of fish.

Response: We did not adopt the approach of listing all take excepted activities, as it would be virtually impossible to list all the activities that are intended to be covered by the rule language. We have included some examples of common activities that would be covered in the Supplemental Information of this rule. Incidental take that may result from the lawful operation and maintenance of flood control facilities, which are located within the experimental population area, is excepted. Hence, such activities will not be restricted by the reintroduction of spring-run Chinook salmon. The definition of “third parties” in the SJRRSA as it pertains to the 4(d) rule is not written to include flood management activities outside of the NEP area.

In response to advocating volitional reintroduction of CV spring-run Chinook salmon, this approach to reintroduction was analyzed in the No Action Alternative of the EA and rejected because, while restoration of flows to the San Joaquin River make it possible that spring-run Chinook could potentially recolonize the San Joaquin River naturally, there is no evidence that such a volunteer population could meet either the terms of the Settlement or spring-run Chinook recovery objectives.

Comment 4: We received seven comment letters regarding the ESA 4(d) rule required by the SJRRSA. Some stated that the regulations needed to be more explicitly related to the purpose of the 4(d) rule outlined in section 10011(c)(3) of the SJRRSA including; (1) the rule should include authorization for all take NMFS attributed to CVP and SWP operations, such as indirect take, not only take “at” the export pumps, and (2) the final rule should be as definite as possible about how NMFS will ensure no more than de minimus water supply reductions from reintroduction. There was concern by two commenters over the contents of the annual technical memo that the annual schedule for revision was too frequent, and there was little involvement of stakeholders in its development. This commenter wanted to have a larger involvement in the development and execution of the technical memo. One comment stated that the take exception for CVP and SWP operations should apply to all progeny of the reintroduced fish, especially when they stray to the Sacramento River, and to any CV spring-run Chinook salmon that are spawned in the San Joaquin river or its tributaries.

Response: The paragraphs of the regulation that describe take exceptions to achieve the de minimus requirement (now (b)(5)(i) and (b)(5)(ii) of 50 CFR 223.301) have been modified to connect, more explicitly, the purpose of these take exceptions to the language of section 10011(c)(3) of the SJRRSA. Section 10011(c)(3) of the SJRRSA requires that the rule issued pursuant to ESA section 4(d) shall provide that the reintroduction of CV spring-run Chinook salmon to the San Joaquin River will not impose more than de minimus water supply reductions, additional storage releases, or bypass flows on unwilling third parties [as specifically defined] due to such reintroduction. It does not require that all take be excepted. The regulation has been modified in paragraph (b)(5)(ii) of 50 CFR 223.301 to define the purpose of the annual technical memo, and NMFS' commitment to coordinate with parties outside the agency in the development of this document. The schedule for this document was not changed, because we believe that an annual assessment of the effectiveness of the methodology to achieve the de minimus impact requirement is warranted. We acknowledge that over some periods there may be no need to revise this document, but in other years, conditions may change or the progress of the reintroduction may require a change in the methodology. The regulation has been edited to more clearly relate to the population of CV spring-run Chinook salmon reintroduced to the San Joaquin River. This would not include progeny of adult CV spring-run Chinook salmon that were spawned in the San Joaquin River, but then strayed as adults to Sacramento River basin streams to spawn. Some straying occurs naturally in all salmonid populations, but at naturally low levels, to the degree that it is our determination that this would not exceed the de minimus impact requirement of SJRRSA section 10011(c)(3). Imprinting procedures for CV spring-run Chinook salmon released to the San Joaquin River will further assure more natural, low levels of straying of adults. However, should this calculation be proven to be incorrect in the future, the annual methodology produced by NMFS to account for the proportionate share of the take by the CVP and SWP can be adjusted to ensure the de minimus standard is met.

Comment 5: All but one of the four responses to this question supported the nonessential designation. The dissenting view was based on an objection based on an incorrect interpretation that this designation would change the status of individual wild fish that were collected for the reintroduction.

Response: The nonessential designation was not changed as all but one response supported this designation. The designation of an experimental population area does not change the status of individual fish found in locations outside of the designated area.

Comment 6: Five commenters expressed concerns over the impacts of collection of CV spring-run Chinook salmon on the donor/source populations, especially that Mill Creek should not be considered for collection of donor stock. These same 5 commenters questioned the basis for expecting that CV spring-run Chinook salmon could survive in the San Joaquin River, both under present and future restored conditions.

Response: Mill Creek fish are included in the collection possibilities because we concluded, based on the best available scientific information, that genetic input from the most diverse range of CV spring-run Chinook salmon populations will give the best chance of survival to founding stock released to the San Joaquin River. Collection of CV spring-run Chinook salmon from Mill Creek, or any other population, will be subject to approval of a permit under ESA section 10(a)(1)(A) which includes analysis under NEPA and ESA section 7. No collection would occur on Mill Creek if such collection would jeopardize the continued existence of CV spring-run Chinook salmon. This process will utilize the best information available at the time, including the 5-year status reviews for the species, the latest of which occurred in 2011 and is cited in the EA.

Additional information was included in the EA to provide a better explanation of available habitat under current conditions of the San Joaquin River, and links were provided to the background reports and literature that led to the Settlement requirement that both spring-run and fall-run Chinook salmon be reintroduced to the San Joaquin River.

Comment 7: Eight comments noted that the habitat restoration and construction of site specific work required under the Settlement has not begun and is delayed. Some postulated that the river is currently not ready for the reintroduction of CV spring-run Chinook salmon. The question was raised as to what is the validity of placing threatened CV spring-run Chinook salmon in the river prior to habitat construction being complete.

Response: For the purposes of the EA, we assumed that all channel and structural modifications, habitat improvements, and water release, will be implemented as required by the Settlement. Implementing only some of these measures would not achieve the Restoration Goal, and thereby would not fulfill the terms and conditions of the Settlement.

The SJRRP is currently in the process of developing and implementing activities associated with the restoration of Chinook salmon habitat between Friant Dam and the Merced River confluence. These projects are large and complex and will take several years to complete. Timeframes associated with these actions are identified through the SJRRP. Surveys for gravel suitability, temperatures, egg survival, and other fisheries elements have been occurring and are available by referencing the SJRRP Monitoring and Analysis Plan, http://restoresjr.net/flows/ATR/index.html. Specific actions, such as riparian habitat restoration, are part of the site-specific channel improvement projects identified in the Settlement and are not part of the EA for an experimental population designation. Any collection and release activities would be subject to approval of a permit under ESA section 10(a)(1)(A), which includes analysis under NEPA and ESA section 7. No collection or release will occur if such collection or release would jeopardize the continued existence of CV spring-run Chinook salmon. In addition, there is currently an interim Salmon Conservation and Research Facility and plans for a permanent facility which will house the broodstock. Those fish collected from donor streams will be collected and used as broodstock, and their offspring will then be either used for the next generation of broodstock, or be placed into the river. Suitable habitat for CV spring-run Chinook salmon is present below Friant Dam, but lack of flow and other past channel modifications have prevented salmon from accessing these areas. Until full channel and flow restoration is completed, Chinook salmon will need assistance by the agencies to access available habitat.

Comment 8: We received two comments concerned that fall-run Chinook salmon would hybridize with reintroduced spring-run Chinook salmon or cause fall-run superimposition on spring-run redds in the limited spawning areas below Friant Dam.

Response: The SJRRP is evaluating the risk of hybridization and spawning interference between CV fall-run and spring-run Chinook salmon to determine what measures may be necessary to address these concerns. The SJRRP is determining where CV fall-run and spring-run Chinook salmon will spawn, determining the timing of spawning in the Restoration Area for each run, and evaluating exclusion methods (e.g., fall-run exclusion weir). The results of these evaluations will help the program determine if a physical separation weir is necessary to protect spawning CV spring-run Chinook salmon and their eggs. Currently, Hills Ferry Barrier is maintained near the confluence of the Merced River to prevent fall-run Chinook salmon from entering the Restoration Area.

Comment 9: There were five comments on the duration or expiration of the experimental population designation.

Response: The final rule has no specified expiration date as all feedback on this matter indicated support for no expiration date, as was proposed, or an expiration date that was much later than 2025.

Based on the best available scientific information, we have determined that the designation and release of a NEP of CV spring-run Chinook salmon in the San Joaquin River basin as described in this final rule will further the conservation of CV spring-run Chinook salmon. Fish used for the reintroduction will be obtained from hatchery fish produced for the reintroduction, or fish produced from a conservation hatchery facility from limited collection of wild and hatchery fish. The collection of wild fish will be permitted only after issuance of permits under section 10(a)(1)(A) of the ESA, which includes analysis under ESA section 7, that ensures that any such collections will not be likely to jeopardize the continued existence of listed species. We have determined that this experimental population is nonessential because it is not essential to the continued existence of CV spring-run Chinook salmon. However, the experimental population is expected to contribute to the recovery of CV spring-run Chinook salmon if the reintroduction is successful. This experimental population designation and release is being implemented in association with the reintroduction efforts called for in the SJRRP and the Settlement. Actions of the SJRRP are intended to provide habitat conditions that will be sufficient to establish a naturally self-sustaining CV spring-run Chinook salmon population in the San Joaquin River while at the same time ensuring that no further protections will be needed and that the reintroduction will meet the applicable requirements of the SJRRSA. The success of the reintroduction of CV spring-run Chinook salmon in the experimental population area will be monitored as part of the SJRRP. We will assess the contribution of the NEP to the status of the species during the required 5 year status review of the CV spring-run Chinook salmon ESU. This information will be used by NMFS to determine if changes to the NEP designation may be warranted.

In December 2004, the Office of Management and Budget (OMB) issued a Final Information Quality Bulletin for Peer Review pursuant to the Information Quality Act (Section 515 of Public Law No. 106-554) in the Federal Register on January 14, 2005 (70 FR 2664). The Bulletin established minimum peer review standards, a transparent process for public disclosure of peer review planning, and opportunities for public participation with regard to certain types of information disseminated by the Federal Government. The peer review requirements of the OMB Bulletin apply to influential or highly influential scientific information disseminated on or after June 16, 2005. There are no documents supporting this rule that meet this criteria.

This final rule has been determined to be not significant under E.O. 12866.

Under the Regulatory Flexibility Act (as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996; 5 U.S.C. 801 et seq.), whenever a Federal agency is required to publish a notification of rulemaking for any proposed or final rule, it must prepare, and make available for public comment, a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e., small businesses, small organizations, and small government jurisdictions). However, no regulatory flexibility analysis is required if the head of an agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. The SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide a statement of the factual basis for certifying that a rule will not have a significant economic impact on a substantial number of small entities.

The Chief Counsel for Regulation, Department of Commerce, certified to the Chief Counsel for Advocacy at the Small Business Administration, that this rule will not have a significant economic effect on a substantial number of small entities. The factual basis for this certification was published with the proposed rule and is not repeated here. No comments were received regarding the economic impact of this final rule. As a result, a final regulatory flexibility analysis is not required and one was not prepared.

In accordance with E.O. 12630, the rule does not have significant takings implications. A takings implication assessment is not required because this rule: (1) Would not effectively compel a property owner to have the government physically invade their property, and (2) would not deny all economically beneficial or productive use of the land or aquatic resources. This rule would substantially advance a legitimate government interest (conservation and recovery of a listed fish species) and would not present a barrier to all reasonable and expected beneficial use of private property.

In accordance with E.O. 13132, we have determined that this rule does not have federalism implications as that term is defined in E.O. 13132.

The Office of Management and Budget (OMB) regulations at 5 CFR part 1320, which implement provisions of the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ), require that Federal agencies obtain approval from OMB before collecting information from the public. A Federal agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. This rule does not include any new collections of information that require approval by OMB under the Paperwork Reduction Act.

In compliance with all provisions of the National Environmental Policy Act of 1969, we have analyzed the impact on the human environment and considered a reasonable range of alternatives for this rule. We made the draft EA available for public comment along with the proposed rule, received 36 written comment documents, and responded to those comments in an Appendix to the EA. We have prepared a final EA on this action and have made it available for public inspection (see ADDRESSES section).

E.O. 13175, Consultation and Coordination with Indian Tribal Governments, outlines the responsibilities of the Federal Government in matters affecting tribal interests. If we issue a regulation with tribal implications (defined as having a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes), we must consult with those governments or the Federal Government must provide funds necessary to pay direct compliance costs incurred by tribal governments.

There are no tribally owned or managed lands included in the experimental population area. We have invited all possibly impacted tribes (letter dated November, 15, 2010, from Maria Rea, Central Valley Office Supervisor, NMFS) to discuss the rule at their convenience should they choose to have a government-to-government consultation.

On May 18, 2001, the President issued E.O. 13211 on regulations that significantly affect energy supply, distribution, and use. E.O. 13211 requires agencies to prepare Statements of Energy Effects when undertaking any action that promulgates or is expected to lead to the promulgation of final rule or regulation that (1) is a significant regulatory action under E.O. 12866 and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy.

This final rule is not expected to significantly affect energy supplies, distribution, and use. Therefore, this action is not a significant energy action and no Statement of Energy Effects is required. We did not receive any comments regarding energy supplies, distribution, and use.

A complete list of all references cited in this rule is available upon request from National Marine Fisheries Service office (see FOR FURTHER INFORMATION CONTACT ).

For the reasons set out in the preamble, part 223 of chapter II, title 50 of the Code of Federal Regulations, is amended as follows.