Table of Contents I. Background II. Section-by-Section Analysis III. Regulatory Flexibility Certification IV. Regulatory Analysis V. Backfitting and Issue Finality VI. Plain Writing VII. Environmental Impact Statement VIII. Paperwork Reduction Act IX. Congressional Review Act X. Voluntary Consensus Standards I. Background

The NSG is a group of like-minded States that seeks to contribute to the nonproliferation of nuclear weapons through the implementation of guidelines for nuclear exports and nuclear-related exports. As a participating government in the NSG, the United States has committed to controlling for export items on the NSG control lists. Participating governments are charged with implementing the changes adopted to the list as soon as possible after approval.

This final rule conforms the NRC's export and import regulations in 10 CFR part 110, “Export and Import of Nuclear Equipment and Material,” and appendices A, B, C, D, E, F, G, H, I, J, K, N, and O, which contain illustrative lists of items under the NRC's export licensing authority, to current nuclear nonproliferation policies of the Executive Branch. These revisions are necessary to implement changes made to the NSG Guidelines, “Guidelines for Nuclear Transfers (INFCIRC/254/Revision 12/Part 1), June 2013,” as adopted by the governments participating in the NSG at the June 2012 and 2013 Plenary Meetings. In addition, this rule amends § 110.30, “Members of the Nuclear Suppliers Group,” to add Mexico and Serbia as member countries of the NSG that are eligible to receive radioactive materials under certain general licenses for export. The NSG Guidelines can be found at: www.nuclearsuppliersgroup.org.

In January 2011, the IAEA published the document titled, “Nuclear Security Recommendations on Physical Protection of Nuclear Material and Nuclear Facilities (INFCIRC/225/Revision 5).” This rule also amends § 110.44 and appendix M to 10 CFR part 110 to incorporate by reference the update and recommendations contained in Revision 5 of this IAEA document.

The NRC staff has determined that these changes are consistent with current U.S. policy, and will pose no unreasonable risk to the public health and safety or to the common defense and security of the United States.

Because this rule involves a foreign affairs function of the United States, the notice and comment provisions of the Administrative Procedure Act do not apply (5 U.S.C. 553(a)(1)). In addition, solicitation of public comments would delay the U.S. conformance with its international obligations, and would be contrary to the public interest (5 U.S.C. 553(b)). The final rule is effective August 11, 2014, except that the changes to § 110.44(a) and (b)(1) and appendix M to 10 CFR part 110 are effective December 31, 2014.

Paragraph (2)(ii) of the definition of “Utilization facility” is amended to make conforming changes consistent with the changes to appendix A to 10 CFR part 110.

This rule amends § 110.26 to make conforming changes to paragraph (a) consistent with the changes to appendix A to 10 CFR part 110.

This rule amends § 110.30 to update the list of NSG members by adding Mexico and Serbia.

This rule amends § 110.42 to make conforming changes to Footnote 1 consistent with the changes to appendix A to 10 CFR part 110.

Paragraphs (a) and (b)(1) of § 110.44 are amended to incorporate by reference the most recent revision to INFCIRC/225/Revision 5, “The Physical Protection of Nuclear Material and Nuclear Facilities.” The effective date for these changes is delayed until December 31, 2014, to provide adequate time for countries to meet the recommendations in Revision 5. “The Physical Protection of Nuclear Material and Nuclear Facilities,” INFCIRC/225/Revision 4 (corrected), July 1999, will continue to be used as the physical protection standard in recipient countries until the effective date for INFCIRC/225/Revision 5, as incorporated by reference in 10 CFR part 110.

These appendices are amended to reflect the updated guidelines of the NSG consistent with the IAEA document, “Guidelines for Nuclear Transfers, (INFCIRC/254/Revision 12/Part 1).” The appendices in 10 CFR part 110 are illustrative only and are not meant to be inclusive lists of facilities and equipment under the NRC's export licensing jurisdiction.

Appendix M is amended to update the Categorization of Nuclear Material table to be consistent with IAEA publication, INFCIRC/225/Revision 5. The changes to appendix M of 10 CFR part 110 are effective December 31, 2014.

As required by the Regulatory Flexibility Act of 1980 (5 U.S.C. 605(b)), the Commission certifies that this final rule will not have a significant economic impact on a substantial number of small entities. This rule affects only companies exporting nuclear equipment and material to and from the United States and they do not fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act (5 U.S.C. 601(3)), or the Size Standards established by the NRC (10 CFR 2.810).

This rulemaking is necessary to reflect the nuclear nonproliferation policy of the Executive Branch including U.S. Government commitments to controlling export items on the NSG control lists and the IAEA publication, INFCIRC/225/Revision 5. This final rule is expected to have no changes in the information collection burden or cost to the public.

The NRC has determined that a backfit analysis is not required for this rule because these amendments do not include any provisions that would impose backfits as defined in 10 CFR Chapter I.

The Plain Writing Act of 2010 (Pub. L. 111-274) requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31883).

The NRC has determined that this final rule is the type of action described in categorical exclusion 10 CFR 51.22(c)(1). Therefore, neither an environmental impact statement nor an environmental assessment has been prepared for the rule.

This final rule does not contain new or amended information collection requirements subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Existing requirements were approved by the Office of Management and Budget (OMB) under approval number 3150-0036.

The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting document displays a currently valid OMB control number.

Under the Congressional Review Act of 1996, the NRC has determined that this action is not a major rule and has verified this determination with the Office of Information and Regulatory Affairs of OMB.

The National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113) requires that Federal Agencies use technical standards that are developed or adopted by voluntary consensus standards bodies unless using such a standard is inconsistent with applicable law or otherwise impractical. This final rule does not constitute the establishment of a standard for which the use of a voluntary consensus standard would be applicable.

For the reasons set out in the preamble and under the authority of the Atomic Energy Act of 1954, as amended, the Energy Reorganization Act of 1974, as amended, and 5 U.S.C. 552 and 553, the NRC is adopting the following amendments to 10 CFR part 110.

On January 18, 2014, we issued AD 2014-03-06, Amendment 39-17743 (79 FR 12368, March 5, 2014), for all the Boeing Company Model 737-100, -200, -200C, -300, -400, and -500 series airplanes. AD 2014-03-06 required repetitive inspections for cracking of the aft support fitting for the main landing gear (MLG) beam, and the rear spar upper chord and rear spar web in the area of rear spar station (RSS) 224.14; and repair if necessary. AD 2014-03-06 resulted from reports of cracks found in the aft support fitting, the rear spar upper chord, and the rear spar web. We issued AD 2014-03-06 to detect and correct cracking of the aft support fitting for the main landing gear (MLG) beam, and the rear spar upper chord and rear spar web in the area of rear spar station (RSS) 224.14, which could grow and result in a fuel leak and possible fire.

Since we issued AD 2014-03-06, Amendment 39-17743 (79 FR 12368, March 5, 2014), two incorrect paragraph references were found. The references to paragraphs (g) and (g)(1) in paragraph (h)(2) of AD 2014-03-06 are incorrect. The correct reference should be to the introductory text of paragraph (h) and paragraph (h)(1) of AD 2014-03-06. Paragraph (h)(2) of AD 2014-03-06 is the corrective action for the inspections required by the introductory text of paragraph (h) and paragraph (h)(1) of this AD. In order to mandate the corrective actions for the inspections required by the introductory text of paragraph (h) and paragraph (h)(1) of this AD, we have revised the references in paragraph (h)(2) of this AD.

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

This AD requires repetitive inspections for cracking of the aft support fitting for the MLG beam, and the rear spar upper chord and rear spar web in the area of RSS 224.14; and repair if necessary. This AD corrects these paragraph references.

AD 2014-03-06, Amendment 39-17743 (79 FR 12368, March 5, 2014), clearly indicated that inspections, and repairs if necessary, are required. Since this new AD merely corrects incorrect paragraph references, notice and opportunity for public comment before issuing this AD are unnecessary.

This AD is a final rule that involves requirements affecting flight safety, and we did not provide you with notice and an opportunity to provide your comments before it becomes effective. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include the docket number FAA-2014-0341 and directorate identifier 2014-NM-102-AD at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

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

We estimate that this AD affects 353 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this AD.

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

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

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

For the reasons discussed above, I certify that this AD:

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

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

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

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

Accordingly, under the authority delegated to me by the Administrator, the FAA amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

The final rule will provide FDA with the information it needs to calculate the amount of user fees assessed for each domestic manufacturer and importer of tobacco products subject to chapter IX of the FD&C Act. The total amount of user fees for each fiscal year is specified in section 919(b)(1) of the FD&C Act. That total is divided into four equal quarterly assessments. The FD&C Act provides for the total quarterly assessment to be allocated among classes of tobacco products and then, within each class of tobacco products, among individual domestic manufacturers and importers. In specifying how to determine each of these two allocations—to a class of tobacco products and then to a domestic manufacturer or importer within a particular class of tobacco products—section 919 of the FD&C Act references the Fair and Equitable Tobacco Reform Act of 2004 (FETRA, Pub. L. 108-357 (7 U.S.C. 518 et seq.)), which is administered by USDA. To date, FDA has received the information needed to calculate user fees from USDA. When the USDA program sunsets at the end of fiscal year 2014 (September 30, 2014), FDA, as required by the FD&C Act, will need to provide for an alternative source of the information necessary to calculate user fees.

This rule is being issued based upon FDA's authority to calculate, assess, and collect tobacco product user fees pursuant to section 919 of the FD&C Act as well as FDA's rulemaking authority under sections 909(a) and 701(a).

The final rule applies to domestic manufacturers and importers of four classes of tobacco products: Cigarettes, snuff, chewing tobacco, and roll-your-own tobacco. Beginning October 2014, the rule requires each domestic manufacturer or importer of these four product classes to submit to FDA specific information regarding units of product removed  1 into domestic commerce and Federal excise taxes paid for each class of tobacco product. The information must be submitted on a monthly basis, even in months when no tobacco product is removed into domestic commerce. This final rule specifies that FDA will continue to follow the current method for allocating the total fees among classes of tobacco product. We will calculate the appropriate allocation by multiplying the total units removed (sticks or pounds) for the class by the 2003 maximum excise tax rate for that class and then calculating each class' percentage of the total quarterly assessment. The final rule also specifies that FDA will continue to use the current method of assessing user fees within each tobacco product class—by multiplying the total amount assessed to the class times the percentage share of Federal excise taxes paid by each domestic manufacturer and importer using information required to be provided to FDA under this final rule. If additional classes of tobacco products are deemed subject to FDA's tobacco regulation, FDA will conduct a new rulemaking to subject those classes to this user fee rule. In addition, the final rule includes provisions about notification of assessments, payment of assessments, procedures for disputing an assessment, and penalties for failure to report required information to FDA or failure to pay tobacco product user fees.

Under our primary baseline, starting in fiscal year 2015, FDA would obtain the information necessary for collecting user fees directly from Federal Agencies (other than USDA) that collect such information. Compared with this baseline, the final rule will impose private costs on industry to submit data to FDA on a monthly basis, with an approximately offsetting reduction in government information collection costs. The net effect may be a small social cost or benefit. This final rule also allows FDA to be in control of the data needed for calculating and billing user fees and resolves impediments that may otherwise exist to FDA's ability to use the data for its intended purpose.

The Family Smoking Prevention and Tobacco Control Act (Tobacco Control Act) was enacted on June 22, 2009 (Pub. L. 111-31), amending the FD&C Act and providing FDA with the authority to regulate tobacco products. Section 101(b) of the Tobacco Control Act amends the FD&C Act by adding new chapter IX (sections 900-920 (21 U.S.C. 387-387u)). Chapter IX provides FDA with tools and funds to regulate tobacco products and imposes certain obligations on domestic tobacco product manufacturers and importers. Included among FDA's authorities are the authorities to assess and collect user fees.

In enacting the Tobacco Control Act, Congress found that tobacco use is the single most preventable cause of disease, disability, and death in the United States. Each year, over 400,000 people die prematurely from smoking or exposure to secondhand smoke. Approximately 8.6 million people in the United States live with a serious illness caused by smoking. A consensus exists within the scientific and medical communities that tobacco products are inherently dangerous and cause cancer, heart disease, and other serious adverse health effects (section 2(2), (3), and (13) of the Tobacco Control Act).

The Tobacco Control Act grants FDA the authority to regulate tobacco products and to protect the public from the harmful effects of tobacco use. Section 901(b) of the FD&C Act provides that chapter IX applies to cigarettes, cigarette tobacco, roll-your-own tobacco, and smokeless tobacco. It also permits FDA to issue a regulation to deem other tobacco products subject to the FD&C Act. 2 More specifically, the Tobacco Control Act gives FDA the authority to, among other things:

• Restrict cigarettes and smokeless tobacco retail sales to youth;

• Require owners and operators of tobacco companies to register annually and be subject to biennial inspection by FDA (section 905 of the FD&C Act);

• require manufacturers and importers who wish to market a new tobacco product to obtain a marketing order from FDA prior to marketing that product (section 910 of the FD&C Act);

• require each manufacturer or importer to report “all constituents, including smoke constituents as applicable, identified by [FDA] as harmful or potentially harmful to health in each tobacco product, and as applicable in the smoke of each tobacco product, by brand and by quantity in each brand and subbrand” (section 904(a)(3) of the FD&C Act);

• establish tobacco product standards if FDA finds that it is appropriate for the protection of the public health (section 907(a)(3) of the FD&C Act);

• conduct compliance check inspections of tobacco product retailers to determine a retailer's compliance with Federal laws and regulations;

• establish science and research programs to inform the development of tobacco product regulations and better understand the risks associated with tobacco use;

• educate the public about the harmful effects of tobacco use; and

• in accordance with section 919, assess and collect user fees from each domestic manufacturer and importer of tobacco products subject to the tobacco product provisions of the FD&C Act.

Section 919(c)(2) of the FD&C Act provides that tobacco product user fees are the sole source of funding for FDA's regulation of tobacco products. Therefore, FDA considers these fees to be critical to the Agency's ability to achieve its mission to protect and promote the public health. User fees provide FDA with a source of stable, consistent funding that has made possible our implementation of the Tobacco Control Act. The revenues from these fees fund the Agency's regulation of tobacco products and the tobacco industry, as described previously.

In the Federal Register of May 31, 2013 (78 FR 32581), FDA issued a notice of proposed rulemaking (NPRM) to add 21 CFR part 1150 to require domestic tobacco product manufacturers and importers to submit to FDA information needed to calculate the amount of user fees assessed under the FD&C Act. This final rule requires domestic tobacco product manufacturers and importers to submit that information beginning October 2014.

The final rule is issued under section 919(a) of the FD&C Act, which requires FDA, in accordance with that section, to “assess user fees on, and collect such fees from, each manufacturer and importer of tobacco products” subject to the tobacco product provisions of chapter IX of the FD&C Act. The total amount of user fees for each fiscal year is specified in section 919(b)(1) of the FD&C Act, and under section 919(a) we are to assess and collect a proportionate amount each quarter of the fiscal year. The FD&C Act provides for the total assessment to be allocated among classes of tobacco products. The class allocation is based on each tobacco product class' volume of tobacco products removed into commerce. Within each class of tobacco products, an individual domestic manufacturer or importer is assessed a user fee based on its market share for that tobacco product class.

In specifying how to determine each of these two allocations—to a class of tobacco products and then to a domestic manufacturer or importer within a particular class of tobacco products—section 919 of the FD&C Act references the Fair and Equitable Tobacco Reform Act of 2004 (FETRA, Public Law 108-357 (7 U.S.C. 518 et seq.)). In determining the user fees to be assessed on each class of tobacco products, section 919(b)(2)(B)(ii) of the FD&C Act provides that the applicable percentage for each tobacco product class “shall be the percentage determined under section 625(c) of [FETRA] for each such class of product for such fiscal year.” In determining the user fee to be paid by each company, section 919(b)(4) of the FD&C Act directs that we use percentage share information “determined for purposes of allocations under subsections (e) through (h) of section 625 of [FETRA].”

FETRA provides for a Tobacco Transition Payment Program (TTPP), administered by the USDA, through which eligible former tobacco quota holders and tobacco producers receive payments in 10 equal installments in each fiscal year 2005 through 2014. FETRA provides for the establishment of quarterly assessments on each domestic manufacturer and importer of tobacco products to fund the 10-year TTPP. The last assessment under FETRA will be in September 2014, which will encompass the 39th and 40th quarterly TTPP assessments. The issuance of the 40th, or last, quarterly assessment will be on September 1, 2014, rather than on December 1, 2014, in accordance with statutory requirements specified in section 625(d)(3)(A) of FETRA (see 78 FR 46905, August 2, 2013). Because section 919 refers to FETRA information and calculations that are currently being made by USDA, FDA has been relying on USDA information for its tobacco product user fee calculations. In light of the sunset of the TTPP program, we are issuing this final rule consistent with section 919(b)(7) of the FD&C Act, which requires that no later than fiscal year 2015, we ensure we are able to make the determinations necessary for assessing tobacco product user fees.

Both USDA's TTPP program and FDA's user fee program follow a two-step process to calculate quarterly assessments:

• Step A allocates assessments among the six classes of tobacco products statutorily identified in those programs—cigarettes, cigars, snuff, chewing tobacco, pipe tobacco, and roll-your-own tobacco—based on each class' volume of tobacco products removed into commerce (section 625(c) of FETRA; 7 CFR 1463.4, 1463.5; and section 919(b)(2)(B) of the FD&C Act). To make this allocation, we will use the same approach and publicly available TTB data that is currently used by USDA (see 78 FR 32581 at 32585 and 32586; 70 FR 7007 at 7007 and 7008, February 10, 2005). The volume of tobacco products removed into domestic commerce for each class is multiplied by the maximum 2003 Federal excise tax rate for that class to generate a dollar figure for the class of tobacco products. The dollar figures for each of the six classes of tobacco products are added, and this aggregate dollar figure is the denominator. The dollar figure for each class of tobacco products is the numerator, and when divided by the aggregate dollar figure, the resulting quotient is the percentage attributable to the class. By using a fixed excise tax rate as a conversion factor, this calculation bases changes in user fee assessments solely on changes in volume of tobacco products removed. As discussed in the NPRM, cigars and pipe tobacco are two classes of products that are not currently regulated under chapter IX of the FD&C Act; as such, they are not currently assessed user fees by FDA. Section 919 provides that the allocation of fees that otherwise would be assessed to unregulated classes of tobacco products are to be reallocated to the classes of tobacco products currently subject to chapter IX of the FD&C Act. Therefore, the total dollar amount of allocations that would be assessed for cigars and pipe tobacco is reallocated, based on relative percentages already calculated, to the four classes of currently regulated tobacco products: Cigarettes, snuff, chewing tobacco, and roll-your-own tobacco.

• Step B allocates the assessment for each class of tobacco products among the domestic manufacturers and importers in that class, so that each domestic manufacturer's or importer's assessment is proportional to its percentage share within that class (section 625(e) through (h) of FETRA; 7 CFR 1463.7; and section 919(b)(3) through (b)(5) of the FD&C Act).

We considered all of the comments to the NPRM. We are finalizing portions of the proposed rule with only minor changes. In response to the comments, we have revised § 1150.15, regarding disputes, to clarify how initial disputes concerning fees and any subsequent requests for further Agency review are to be submitted, the date on which they are due, and that domestic manufacturers and importers are eligible to dispute an assessment. We also clarify that a dispute and any subsequent request for further review must be legible and in English. Although not raised by comments, we have also made minor clarifying edits to §§ 1150.3, 1150.5 and 1150.7. We have also revised § 1150.7(a)(1) to recognize that cigarettes are divided into subclasses for excise tax purposes (small and large cigarettes) and to clarify that our Step A calculations will use the maximum 2003 excise tax rate for small cigarettes for that subclass, rather than using the maximum 2003 excise tax rate (i.e., the excise tax rate for large cigarettes) for all cigarettes. This revision applies only for cigarettes because there are separate excise tax subclasses for cigarettes, and, therefore does not apply to chewing tobacco, roll-your-own tobacco, or snuff. We are not finalizing the portions of the proposed rule relating to the assessment of fees on cigars and pipe tobacco. As described more fully in section III.A of this document, we will revise our user fee regulations in the future if FDA deems cigars or pipe tobacco subject to FDA's authority under chapter IX of the FD&C Act. In addition, as discussed in section III.A, we may revise our user fee regulations if FDA deems additional tobacco products, other than cigars and pipe tobacco, subject to FDA's authority.

We received 12 comments on the proposed rule. Comments were received from tobacco product manufacturers, trade associations, and individuals. To make it easier to identify comments and our responses, the word “Comment,” in parentheses, will appear before each comment, and the word “Response,” in parentheses, will appear before each response. We have numbered the comments to make it easier to distinguish between comments; the numbers are for organizational purposes only and do not reflect the order in which we received the comments or any value associated with them. We have combined similar comments under one numbered comment. In addition to the comments specific to this rulemaking that we address in the following paragraphs, we received two general comments: One expressing a view that all cigarettes should be prohibited, and one expressing a view that too much attention has been focused on the regulation of tobacco products. These comments express broad policy views and do not address specific points related to this rulemaking. Therefore, these general comments do not require a response.

(Comment 1) Multiple comments addressed FDA's authority to assess and collect user fees from domestic manufacturers and importers of products that, in the future, may be deemed subject to FDA's jurisdiction, particularly electronic cigarettes. Some comments stated that FDA must assess and collect fees because no “free riders” are allowed under section 919(a) of the FD&C Act. These comments relied on the language in section 919(a) of the FD&C Act that FDA shall “assess user fees on, and collect such fees from, each manufacturer and importer of tobacco products subject to [chapter IX].” The comments asserted that, unless deemed products are subject to user fees, “some regulated manufacturers and importers would have to pay the cost of their regulation plus the cost of regulating the nonpaying manufacturers and importers,” which would provide the nonpaying manufacturers and importers a significant competitive advantage in terms of reduced costs and prices for their products. Several of the comments claimed that failure to assess user fees on deemed products would violate the Fifth Amendment. Some comments also contended that exempting some products from user fees would be unfair to existing classes, arbitrary and capricious, and violate the Administrative Procedure Act (5 U.S.C. Subchapter II).

In contrast, other comments stated that FDA does not have the authority to assess user fees for any class other than the six classes named in section 919(b)(2)(B) of the FD&C Act and in FETRA. These comments noted that section 919(a) provides that fees must be assessed and collected “in accordance with this section” and, therefore, that FDA can assess fees only on those classes identified in section 919 and FETRA. One of these comments also noted that the reallocation provision in section 919(b)(2)(B)(iv) permits reallocation only to regulated classes of the six FETRA classes. Similarly, another comment stated that FDA cannot deem electronic cigarette manufacturers to meet the definition of domestic manufacturer because FDA “is bound under the FD&C Act to follow the allocation procedures established under FETRA.”

Other comments focused on the burden of regulation more generally to say that their products should be exempt from user fee assessments. One comment argued that premium cigars should be exempt from FDA regulation generally and user fees specifically because FDA regulation would be disproportionately burdensome, as exemplified by the new product requirements in section 910 of the FD&C Act, which would be triggered by the often minor variations intended to alter the taste and aroma of a premium cigar.

(Response) Because these comments are related to tobacco products that are not currently subject to FDA's regulation under chapter IX of the FD&C Act, we do not need to address them at this time. This final rule applies to only domestic manufacturers and importers of the classes of tobacco products identified in section 919 that are currently subject to FDA's regulation under chapter IX of the FD&C Act.

We are not finalizing the portions of the proposed rule relating to the assessment of fees on the cigar and pipe tobacco classes. Instead, we have reserved § 1150.7(a)(2) and § 1150.9(a)(2) should a user fee assessment be applied to cigars and pipe tobacco and limited the definition of “units of product” in § 1150.3 by removing the reference to cigars or pipe tobacco. We did not delete cigars and pipe tobacco from the definition of “class of tobacco products” because that term is used in § 1150.7(b) describing our reallocation of user fees for any class of tobacco products (such as cigars or pipe tobacco) that is not deemed by FDA to be subject to regulation under chapter IX of the FD&C Act. If FDA deems cigars or pipe tobacco, we will respond to comments regarding these provisions and revise these user fee regulations.

We recognize that the issue of whether FDA has authority to assess user fees on future deemed products, other than cigars and pipe tobacco, is controversial. FDA intends to further explore issues related to user fee assessments on tobacco products that may be deemed subject to chapter IX of the FD&C Act by soliciting public comment. FDA will make any appropriate changes to the user fee regulations in a new rulemaking.

(Comment 2) Other comments raised concerns regarding user fee calculations under section 919 in relation to specific products or classes of products that may be deemed subject to FDA's jurisdiction. For example, one comment stated that FDA should not adopt USDA's retrospective calculation method for determining class percentage allocations at Step A because of concerns that a regulation deeming additional products subject to FDA regulation could dramatically alter class allocations from year to year and that class allocation calculations using this method will not be an accurate reflection of each class's current share of the market. This comment stated that small businesses may no longer be able to sell affected products, including dissolvables, electronic cigarettes, and cigars, but may still have to pay their share of their respective classes' user fees.

(Response) As discussed, certain tobacco products (including two classes—cigars and pipe tobacco—that are listed in section 919), are not currently subject to FDA's regulation under chapter IX of the FD&C Act. These comments relate to tobacco products that are not currently subject to chapter IX of the FD&C Act. Because this final rule is only addressing tobacco products that are currently subject to FDA's regulation, we do not address these comments at this time.

(Comment 3) One comment stated that FDA should calculate the applicable percentages for class and individual manufacturers on the basis of net domestic volume rather than gross domestic volume. The comment noted that “FETRA's reliance on gross domestic volume overestimates the actual amount of product ultimately removed into domestic commerce, thereby producing inaccurate user fee assessments at both the class and individual [m]anufacturer levels.” The comment indicated that inaccurate user fee assessments may result in overpayment by some manufacturers.

(Response) We disagree with this comment and will continue to rely on gross domestic volume in our user fee calculations. Section 919 of the FD&C Act directs us to calculate the applicable percentages of each class, and of each domestic manufacturer or importer within each class, by reference to FETRA (section 919(b)(2)(B)(ii) and (b)(4) of the FD&C Act). FETRA defines and relies on “gross domestic volume” to determine class assessments and allocations to each domestic manufacturer and importer within each class (7 U.S.C. 518d(a), (c)(2), and (e)(1)). We note that, while the use of gross rather than net domestic volume might increase an individual company's numerator, it would also increase the denominator for the class. We, therefore, do not think that use of gross domestic volume is likely to significantly affect an individual domestic manufacturer or importer unless there is a disproportionately large difference between a company's net domestic volume and its gross domestic volume as compared to other companies in the class.

(Comment 4) One comment stated that FDA should use the current Federal excise tax rate in Step A, not the 2003 excise tax rate used by USDA. The comment noted that, at the time the comment was submitted, this issue was the subject of ongoing litigation, and the comment urged FDA to make its own determination about which tax rate to use. This and other comments urged FDA to instead compute each class' percentage of the user fees based on the actual Federal excise taxes paid by each class during the relevant fiscal year. One comment supported the continued use of the 2003 excise tax rate, saying that FDA is bound by the FD&C Act to use those rates.

(Response) We disagree with the comments that suggested we use a method other than the 2003 maximum excise tax rate to determine the class allocation. Section 919(b)(2)(B)(ii) of the FD&C Act directs us to use, for the class allocations, the percentage determined under section 625(c) of FETRA (7 U.S.C. 518d). As discussed in the preamble to the proposed rule (78 FR 32581 at 32582), USDA determines the percentages under section 625(c) of FETRA by using the 2003 maximum Federal excise tax rate to convert the volume of each tobacco product class measured in different units (sticks and pounds) to a common metric: Dollar amounts. USDA used 2003 maximum excise tax rates because it determined that Congress used them as a conversion factor to create a common unit across all six classes of tobacco products subject to assessments under FETRA when Congress set the initial class allocations under FETRA. The 2003 maximum excise tax rate has been used since the inception of the TTPP to convert the volume of each tobacco product class to dollar amounts, from which USDA calculates the percentage for each class. This has been upheld as a reasonable interpretation of FETRA ( Philip Morris USA, Inc. v. Vilsack, 736 F.3d 284 (4th Cir. 2013)).

Since the inception of FDA's tobacco user fee program, FDA has been using the class percentages calculated by USDA using this methodology. In this final rule, FDA is adopting the same approach as USDA for class allocations. Because section 919 relies on the FETRA class allocation methodology and provides for class allocation among the same tobacco product classes, it is reasonable for FDA to continue using the 2003 maximum Federal excise tax rates as a conversion factor (converting sticks and pounds to dollars). Continuing to use the 2003 rates also allows FDA, just as it allows USDA, to allocate the total user fees among the classes based on changes in each class' percentage of gross domestic volume over time. Because it is a fixed conversion factor, it will limit changes in user fee assessments to changes in volumes. Moreover, the changes from the 2003 rates to the 2009 rates were not proportionate among the classes. Thus, if FDA were to start using the 2009 rates after USDA's program sunsets, this would cause a change in class allocations that would not be limited to the changes in volume among the classes.

(Comment 5) One comment stated that FDA should use the actual units (e.g., sticks for cigarettes and cigars) removed from bonded storage to calculate market share within those classes of tobacco products (Step B) instead of the amount of Federal excise tax paid. The comment noted that using excise taxes to determine market share favors importers over domestic manufacturers because importers can sell cigars to distributors at a lower price than domestic manufacturers due to lower wages, taxes, and regulatory costs. The comment also noted that using excise taxes to calculate market share within a class of tobacco products (Step B) favors companies that do not accurately calculate excise tax.

(Response) This issue is relevant primarily for imposing user fees on cigar manufacturers and importers, which is not addressed in this final rule. Cigars are currently the only tobacco product for which variable excise taxes may be based on price of the product rather than a flat tax based on sticks or weight. 3 In accordance with FETRA, USDA calculates the percentage share of a domestic manufacturer or importer within a class by dividing the volume of tobacco products (in either sticks or pounds) for the manufacturer or importer by the total volume of tobacco products (in either sticks or pounds) for that class. USDA uses excise taxes as a proxy for volume for all classes except cigars because the tax rate by volume is uniform within each of those classes. This final rule, in § 1150.9, follows that approach. For products for which excise taxes do not vary, there should be no difference in calculating individual assessments using excise taxes or actual units because a firm's percentage of the total class will remain the same. In addition, FDA will have information regarding both excise taxes paid and actual units removed for each domestic manufacturer and importer from information provided in Form FDA 3852 (Ref. 1). Therefore, FDA could check that excise taxes were calculated accurately.

(Comment 6) Several comments urged FDA to consider the impact of the proposed rule on small manufacturers and importers. These comments suggested that FDA take steps to recognize “differences in the scale and resources of regulated entities.”

(Response) FDA does recognize that domestic manufacturers and importers have varying levels of resources available. In an effort to minimize the need for additional resources and for continuity, the rule requires that domestic manufacturers and importers submit essentially the same information to FDA that they are currently submitting to USDA. In addition, actual user fee assessments are based on relative market share so that small domestic manufacturers and importers with fewer products in commerce will pay a relatively smaller share of the total assessment for the fiscal year.

(Comment 7) One comment recommended that FDA “develop a schedule for periodically reevaluating and adjusting user fee percentage allocations” for tobacco product classes as well as manufacturers and importers to ensure that allocations are fair and equitable.

(Response) FDA agrees, and our rule provides for adjustments for percentage allocations for both tobacco product classes and individual domestic manufacturers and importers. For tobacco product classes, § 1150.7 provides for yearly class allocations among the regulated classes of tobacco products. Also, § 1150.9(a) provides for calculation of assessments within each class on a quarterly basis, based on information from the prior quarter. In addition, § 1150.9(b) explains that on an annual basis, FDA will make any necessary adjustments for individual domestic manufacturers and importers if needed to account for any corrections, such as the addition of one or more domestic manufacturers or importers that were not included in relevant calculations under § 1150.9(a).

(Comment 8) Several comments stated that refunds for overpayment of user fees should include interest on the amount that was incorrectly assessed. Some comments indicated that the Internal Revenue Code provides for interest on overpayments (26 U.S.C. 6611(a)) and that FDA should adopt this approach or a similar approach to refunds.

(Response) FDA disagrees with these comments. In order to recover interest from the United States, there must be an explicit waiver of sovereign immunity related to interest payments (see, e.g., United States v. N.Y. Rayon Importing Co., 329 U.S. 654, 659 (1947)). Congress alone has authority to waive the government's sovereign immunity. The Internal Revenue Code provision cited by some comments is specific to the payment of internal revenue tax and provides that interest “shall be allowed and paid upon any overpayment in respect of any internal revenue tax.” The TTPP also explicitly requires that interest be paid on refunded amounts (7 U.S.C. 518d(j)). In contrast, the FD&C Act does not require FDA to pay interest on refunds for overpayment of tobacco product user fees. Moreover, the FD&C Act does not require FDA to pay interest on refunds for overpayment in any other user fee context, and FDA does not pay interest on such refunds.

(Comment 9) Several comments indicated that FDA should clarify the process by which manufacturers and importers may appeal a user fee assessment. One comment detailed the provisions that FDA should include in an appeals process (e.g., establishing timeframes for such challenges as well as FDA review and response, putting the disputed fee in an escrow account pending appeal). This comment also requested that the rule specifically permit judicial review in U.S. district court of FDA's decisions regarding disputes. Another comment suggested that FDA adopt USDA's dispute resolution process for user fees.

(Response) To address some of the concerns raised by the comments, FDA has added information to § 1150.15 on how to submit a dispute. FDA has also revised § 1150.15 to clarify that the dispute must be received by FDA within 45 days of the date on FDA's invoice. However, we believe that establishing additional requirements to the appeals process is unnecessary at this time. To date, FDA has received few requests for corrections regarding individual user fees. Accordingly, FDA has provided a framework in § 1150.15 on where, when, and how to submit a dispute and request for additional review under § 10.75. Should the need arise, FDA may issue additional information through a guidance document specific to tobacco product user fee assessment disputes.

In addition, and of its own initiative, FDA has added the requirements that disputes be legible (FDA must be able to read the document) and in English. These requirements will help expedite FDA's review of the dispute and request for additional review.

(Comment 10) One comment stated that FDA should clarify the data verification provisions for user fees. The comment indicated support for the use of third-party data sources for the purpose of identifying manufacturers and importers who are not providing FDA with market share information (nonreporters) or who understate that information (underreporters). However, the comment noted that third-party data should be used only to identify nonreporters and underreporters within the six classes and should not be used to calculate actual market shares (which must be calculated using excise tax data). This comment also asked FDA to clarify that third-party data could be used to calculate market share for tobacco products not within the six classes if FDA determines there is no better alternative available.

(Response) FDA agrees that it can use information available to the Agency to help ensure that domestic manufacturers and importers are providing the information required under this rule. As stated in § 1150.5(a) FDA will use information submitted to FDA as required under § 1150.5 and any other available information, as the Agency determines appropriate, to make user fee assessments. We do not agree that it is necessary to describe or limit the sources of data that FDA might use.

(Comment 11) One comment suggested that FDA obtain data about product removals directly from the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau (TTB). The comment stated that monthly data submissions are unnecessary and unduly burdensome since this information is already collected by TTB. The comment indicated that FDA should require manufacturers to execute a release or waiver permitting TTB to report this information to FDA and that failure to execute such a release or waiver could be construed as an admission of adulteration under section 902(4) of the FD&C Act. However, the comment noted that manufacturers of regulated tobacco products that do not fit within TTB's excise tax structure could submit information directly to FDA. Another comment suggested that FDA seek a legislative amendment to ensure that FDA has access to excise tax data. In contrast, one comment supported FDA's transition plan for submitting data and noted that it should not be burdensome because manufacturers and importers are familiar with the reporting of this information and the submissions will continue to be made to a single Federal Agency.

(Response) We agree with the comment that, because the rule requires that domestic manufacturers and importers submit to FDA the same information that they have been submitting to USDA (i.e., a summary form supported by the relevant tax forms), the impact of this rule should be minimal and not unduly burdensome. We also note that there are statutory limitations on the access and use by other Federal Agencies of the data collected by TTB, and those limitations preclude us from solely using that data to implement section 919 of the FD&C Act. The summary form will enable us to efficiently identify the amount of tobacco product removed and subject to Federal excise tax, and the supporting tax forms will enable us to verify the accuracy of the information on the summary form. We believe that submission of information directly to FDA regarding removals and imports is important to ensuring that we have the information necessary to efficiently and accurately calculate the amount of user fees assessed.

Section 919(b)(7) of the FD&C Act requires FDA to ensure that we are able to determine the applicable percentages described in section 919(b)(2) and the percentage shares described in section 919(b)(4). Section 909(a) of the FD&C Act authorizes FDA to issue regulations requiring tobacco product manufacturers or importers to make such reports and provide such information as may be reasonably required to assure that their tobacco products are not adulterated or misbranded and to otherwise protect public health. Under section 902(4) of the FD&C Act, a tobacco product is deemed to be adulterated if the manufacturer or importer of the tobacco product fails to pay a user fee assessed to it under section 919. In addition, section 701(a) of the FD&C Act (21 U.S.C. 371(a)) gives FDA general rulemaking authority to issue regulations for the efficient enforcement of the FD&C Act. Consistent with these authorities, FDA is issuing this rule, which is intended to ensure that we are able to make the determinations required by section 919 of the FD&C Act and to assess and collect tobacco product user fees.

The Agency has determined under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA has examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct Agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Agency believes that this final rule is not a significant regulatory action under Executive Order 12866.

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. The potential impact on small entities is uncertain, and FDA is unable to rule out the possibility that this final rule may have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $141 million, using the most current (2012) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount.

Under our primary baseline, starting in fiscal year 2015, FDA would obtain the information necessary for collecting user fees directly from Federal Agencies (other than USDA) that collect such information. Compared with this baseline, this final rule will impose private costs on industry to submit data to FDA on a monthly basis, with an approximately offsetting reduction in government information collection costs. The net effect of this may be a small social cost or benefit. This final rule also allows FDA to be in control of the data needed for calculating and billing user fees and resolves impediments that may otherwise exist to FDA's ability to use the data for its intended purpose. Compared with other possible baseline scenarios, this final rule can be expected to eliminate the potential need for additional legislation and allow the collection of user fees after 2014 to proceed more smoothly than it could without legislation.

Compared to the primary baseline, the estimated one-time private sector transition cost is $159.60 per manufacturer or importer, including small manufacturers and importers, and the annual compliance cost is $2,553.60. One option for regulatory relief would be to exempt firms from reporting in a particular month if they did not introduce any units of any tobacco products for which user fees are assessed into domestic commerce. Another option for regulatory relief would be to require submission of either the FDA form or copies of forms submitted to other Agencies. The full analysis of economic impacts is available as Ref. 2 in Docket No. FDA-2012-N-0920 and at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm .

This final rule contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The title, description, and respondent description of the information collection provisions are shown in the following paragraphs with an estimate of the annual reporting burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.

Title: Tobacco Products, User Fees, Requirements for the Submission of Data Needed to Calculate User Fees for Domestic Manufacturers and Importers of Tobacco Products.

Description: This final rule requires each tobacco product domestic manufacturer and importer to submit to FDA information needed to calculate and assess user fees under the FD&C Act.

The USDA has been collecting information from manufacturers and importers to calculate percentage share for its purposes, and providing FDA with the data FDA needs to determine user fee assessments under the FD&C Act. USDA will cease collecting this information starting in fiscal year 2015. Consistent with the requirements of the FD&C Act, this final rule would continue the submission of this information, but to FDA rather than USDA, and thus would ensure that FDA continues to have the information needed to calculate the amount of user fees assessed to each entity and collect those fees. Section 919 of the FD&C Act establishes the user fee allocation and collection process, which references the FETRA framework for determining tobacco product class allocations and individual domestic manufacturer or importer allocations. As is now required by USDA under FETRA, in this final rule FDA requires domestic manufacturers and importers of tobacco products to submit a form each month with summary information and copies of the reports or forms that relate to the tobacco products removed into domestic commerce.

Description of Respondents: Domestic manufacturers and importers of tobacco products.

Table 1 describes the annual reporting burden of 10,150 hours as a result of the provisions set forth in this final rule. Our estimated number of respondents is based on information we received from USDA on the number of reports it receives from domestic manufacturers and importers each month. The estimate of 200 respondents reflects both reports of no removal into domestic commerce and reports of removal of tobacco product into domestic commerce. The estimate of 100 respondents reflects an average number of domestic manufacturers and importers who may be subject to the payment of fees each fiscal quarter. Although there were no comments on the number of appeals and requests for further review, after discussing internally, we increased our estimate of the number of appeals from 1 to 10, and requests for further review from 1 to 5 in an abundance of caution in case there is an increase in requests for review during the transition from USDA to FDA.

For § 1150.5(a), (b)(1), and (b)(2), FDA estimates that 200 domestic manufacturers and importers will each submit identifying information (e.g., mailing address, telephone number, email address) and summarized tax information on a monthly basis (12 submissions annually) on Form FDA 3852, resulting in a total burden of 7,200 hours. For § 1150.5(b)(3), FDA estimates that 200 domestic manufacturers and importers will each submit, on a monthly basis (12 times annually), certified copies of the returns and forms that relate to the removal of tobacco products into domestic commerce and the payment of Federal excise taxes imposed under chapter 52 of the Internal Revenue Code of 1986, resulting in a total burden of 2,400 hours.

For § 1150.13, FDA estimates that 100 domestic manufacturers and importers will be submitting user fee payments on a quarterly basis. Therefore, the number of burden hours for this section is 400 hours. FDA estimates that approximately 10 of those respondents assessed user fees will dispute the amounts under § 1150.15(a), for a total amount of 100 hours. FDA also estimates that of those who dispute their user fees, five will ask for further review by FDA under § 1150.15(d), for a total amount of 50 hours. Total burden hours for this rule are 10,150 hours (7,200 + 2,400 + 400 + 100 + 50).

The information collection provisions in this final rule have been submitted to OMB for review as required by section 3507(d) of the Paperwork Reduction Act of 1995. The requirements were approved and assigned OMB control number 0910-0749. This approval expires on June 30, 2017. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the final rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the Agency has concluded that the final rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

The following references have been placed on display in the Division of Dockets Management (see ADDRESSES ) and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday, and are available electronically at http://www.regulations.gov. (FDA has verified the Web site address in this reference section, but FDA is not responsible for any subsequent changes to the Web site after this document publishes in the Federal Register .)

1. Form FDA 3852.

2. Regulatory Impact Analysis. Available at: http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

Electronic and Facsimile Availability

This document and additional information concerning OFAC are available from OFAC's Web site ( www.treasury.gov/ofac ). Certain general information pertaining to OFAC's sanctions programs also is available via facsimile through a 24-hour fax-on-demand service, tel.: 202/622-0077.

OFAC originally issued the Zimbabwe Sanctions Regulations, 31 CFR Part 541, on July 29, 2004 (the “Regulations”), as an interim final rule to implement Executive Order 13288 of March 6, 2003, “Blocking Property of Persons Undermining Democratic Processes or Institutions in Zimbabwe” (68 FR 11457, March 10, 2003) (E.O. 13288), effective at 12:01 eastern standard time on March 7, 2003. In E.O. 13288, the President, invoking the authority of, inter alia, the International Emergency Economic Powers Act (50 U.S.C. 1701-1706) (IEEPA), determined that the actions and policies of certain members of the Government of Zimbabwe and other persons to undermine Zimbabwe's democratic processes or institutions, contributing to the deliberate breakdown in the rule of law in Zimbabwe, to politically motivated violence and intimidation in that country, and to political and economic instability in the southern African region, constitute an unusual and extraordinary threat to the foreign policy of the United States and declared a national emergency to deal with that threat. In E.O. 13288, the President ordered the blocking, with certain exceptions, of all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of United States persons, including their overseas branches, of: (1) The persons listed in the Annex to E.O. 13288; and (2) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State, to be owned or controlled by, or acting or purporting to act directly or indirectly for or on behalf of, any of the persons listed in the Annex to E.O. 13288. The property and interests in property of these persons may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

OFAC is adopting as a final rule the interim final rule originally issued on July 29, 2004 (69 FR 45246), with changes to implement two more recent Executive orders and update the Regulations as set forth below.

On November 22, 2005, the President, invoking the authority of, inter alia, IEEPA, issued Executive Order 13391 (70 FR 71201, November 25, 2005) (E.O. 13391), effective at 12:01 a.m. eastern standard time on November 23, 2005. In E.O. 13391, the President took additional steps with respect to the continued actions and policies of certain persons who undermine Zimbabwe's democratic processes or institutions and with respect to the national emergency described and declared in E.O. 13288.

Section 1 of E.O. 13391 provides that the Annex to E.O. 13288, which contained the names of 77 individuals, is replaced and superseded in its entirety by the Annex to E.O. 13391, containing the names of 128 individuals and 33 entities.

Section 2 of E.O. 13391 amends E.O. 13288 by renumbering section 6 of E.O. 13288 as section 8, and by replacing sections 1 through 5 of E.O. 13288 with new sections 1 through 7. New section 1(a) of E.O. 13288, as amended by E.O. 13391 (amended E.O. 13288) blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of United States persons, including their overseas branches, of: (1) The persons listed in the Annex to amended E.O. 13288; and (2) any person determined by the Secretary of the Treasury, in consultation with the Secretary of State: (i) To have engaged in actions or policies to undermine Zimbabwe's democratic processes or institutions; (ii) to have materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of, such actions or policies or any person whose property and interests in property are blocked pursuant to amended E.O. 13288; (iii) to be or have been an immediate family member of any person whose property and interests in property are blocked pursuant to amended E.O. 13288; or (iv) to be owned or controlled by, or acting or purporting to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to amended E.O. 13288. The property and interests in property of these persons may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

In new section 1(b) of amended E.O. 13288, the President determined that the making of donations of certain articles, such as food, clothing, and medicine, intended to be used to relieve human suffering, as specified in section 203(b)(2) of IEEPA (50 U.S.C. 1702(b)(2)), by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to amended E.O. 13288, would seriously impair his ability to deal with the national emergency declared in E.O. 13288. The President, therefore, prohibited the donation of such items unless authorized by OFAC.

New section 1(c) of amended E.O. 13288 replaces old section 2(a) and provides that the prohibition on any transaction or dealing in blocked property or interests in property includes, but is not limited to, the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any person whose property and interests in property are blocked pursuant to amended E.O. 13288, and the receipt of any contribution or provision of funds, goods, or services from any such person.

New sections 2(a) and 2(b) of amended E.O. 13288 renumber old sections 2(b) and 2(c), and prohibit any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, or attempts to violate any of the prohibitions set forth in amended E.O. 13288 as well as any conspiracy formed to violate such prohibitions.

New section 5 of amended E.O. 13288 replaces old section 4 and authorizes the Secretary of the Treasury, in consultation with the Secretary of State, to take such actions, including the promulgation of rules and regulations, and to employ all powers granted to the President by IEEPA, as may be necessary to carry out the purposes of amended E.O. 13288. Section 5 of amended E.O. 13288 also provides that the Secretary of the Treasury may redelegate any of these functions to other officers and agencies of the U.S. Government.

On July 25, 2008, the President, invoking the authority of, inter alia, IEEPA, issued Executive Order 13469 (73 FR 43841, July 29, 2008) (E.O. 13469). In E.O. 13469, the President found that the continued actions and policies of the Government of Zimbabwe and other persons to undermine Zimbabwe's democratic processes or institutions, manifested in the fundamentally undemocratic election held on June 27, 2008, to commit acts of violence and other human rights abuses against political opponents, and to engage in public corruption, including by misusing public authority, constitute an unusual and extraordinary threat to the foreign policy of the United States. To deal with that threat, the President expanded the scope of the national emergency declared in E.O. 13288 and relied upon for additional steps taken in E.O. 13391.

Section 1(a) of E.O. 13469 blocks, with certain exceptions, all property and interests in property that are in the United States, that come within the United States, or that are or come within the possession or control of United States persons, including their overseas branches, of any person determined by the Secretary of the Treasury, after consultation with the Secretary of State: (i) To be a senior official of the Government of Zimbabwe; (ii) to be owned or controlled by, directly or indirectly, the Government of Zimbabwe or an official or officials of the Government of Zimbabwe; (iii) to have engaged in actions or policies to undermine Zimbabwe's democratic processes or institutions; (iv) to be responsible for, or to have participated in, human rights abuses related to political repression in Zimbabwe; (v) to be engaged in, or to have engaged in, activities facilitating public corruption by senior officials of the Government of Zimbabwe; (vi) to be a spouse or dependent child of any person whose property and interests in property are blocked pursuant to E.O. 13288, E.O. 13391, or E.O. 13469; (vii) to have materially assisted, sponsored, or provided financial, material, logistical or technical support for, or goods or services in support of, the Government of Zimbabwe, any senior official thereof, or any person whose property and interests in property are blocked pursuant to E.O. 13288, E.O. 13391, or E.O. 13469; or (viii) to be owned or controlled by, or to have acted or purported to act for or on behalf of, directly or indirectly, any person whose property and interests in property are blocked pursuant to E.O. 13288, E.O. 13391, or E.O. 13469. The property and interests in property of the persons described above may not be transferred, paid, exported, withdrawn, or otherwise dealt in.

Sections 1(b) and 1(c) of E.O. 13469 contain provisions nearly identical to the same sections in amended E.O. 13288. Section 1(d) of E.O. 13469 states that the provisions of E.O. 13288 and E.O. 13391 remain in effect, and that E.O. 13469 does not affect any action taken pursuant to those orders. Sections 2 and 5 of E.O. 13469 also contain provisions nearly identical to the same sections in amended E.O. 13288.

OFAC today is amending the Regulations to implement the relevant provisions of E.O. 13391 and E.O. 13469, as well as to update certain provisions and to make other technical and conforming changes. OFAC is revising and republishing in its entirety subpart B of the Regulations, which sets forth the prohibitions contained in the Executive orders. In particular, OFAC is revising § 541.201 to incorporate the new designation criteria provided for in E.O. 13391 and E.O. 13469.

In subpart C, which defines key terms used throughout the Regulations, new §§ 541.313 through 541.315 are being added to define key terms used in the new blocking prohibitions or elsewhere in the Regulations. Also, certain existing definitions in subpart C are being updated or revised to take account of new provisions and to provide greater clarity with respect to the terms being used.

This rule also revises and republishes in its entirety subpart D, which contains interpretive sections regarding the Regulations. In particular, new § 541.408 is being added to clarify prohibitions with respect to charitable contributions, and new § 541.411 is being added to clarify that a person whose property and interests are blocked pursuant to this program has an interest in all property and interests in property of an entity in which it owns, directly or indirectly, a 50 percent or greater interest.

Transactions otherwise prohibited under the Regulations but found to be consistent with U.S. policy may be authorized by one of the general licenses contained in subpart E of the Regulations or by a specific license issued pursuant to the procedures described in subpart E of 31 CFR part 501. This rule also amends subpart E. In particular, a general license is being added in § 541.508, authorizing payments from outside the United States for the provision of legal services authorized in § 541.507. In addition, a general license that previously had been posted only on OFAC's Web site is being added in § 541.510, authorizing all transactions involving Agricultural Development Bank of Zimbabwe and Infrastructure Development Bank of Zimbabwe, subject to certain limitations.

Finally, this rule revises subparts G and H of the Regulations and republishes them in their entirety. Subpart G of the Regulations describes the civil and criminal penalties applicable to violations of the Regulations, as well as the procedures governing the potential imposition of a civil monetary penalty. Subpart H of the Regulations refers to subpart E of part 501 for applicable provisions relating to administrative procedures and contains a delegation of authority by the Secretary of the Treasury.

Because the amendment of 31 CFR part 541 involves a foreign affairs function, the provisions of Executive Order 12866 of September 30, 1993, and the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, opportunity for public participation, and delay in effective date are inapplicable. Because no notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act (5 U.S.C. 601-612) does not apply.

The collections of information related to the Regulations are contained in 31 CFR part 501 (the “Reporting, Procedures and Penalties Regulations”). Pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), those collections of information have been approved by the Office of Management and Budget under control number 1505- 0164. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

For the reasons set forth in the preamble, the Department of the Treasury's Office of Foreign Assets Control is adopting the interim final rule of July 29, 2004 ( see 69 FR 45246), as final, with the following changes:

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

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

On March 26, 2012, (77 FR 17367), EPA published a Notice of Proposed Rulemaking for the State of Connecticut in which we proposed to approve a Connecticut State Implementation Plan (SIP) submittal as meeting the applicable requirements of the Regional Haze Rule found at 40 CFR 51.308 for the first planning period from 2008 through 2018. The SIP had been submitted by CT DEEP on November 18, 2009, with additional submittals on February 24, 2012 and March 12, 2012.

In the SIP addressing regional haze submitted on November 18, 2009 (“Connecticut Regional Haze SIP Revision, Final, November 2009”) (CT RH SIP), 1 Connecticut chose to demonstrate that programs already developed by the State would provide greater reasonable progress in visibility improvement than source-by-source Best Available Retrofit Technology (BART). The State's demonstration was made in accordance with specific criteria for determining if an alternative measure achieves greater reasonable progress than BART as set out in the Regional Haze Rule at 40 CFR 51.308(e)(2) and (3). Connecticut's Alternative to BART demonstration relied on three components: (1) Connecticut's Regulations of Connecticut State Agencies (RCSA) Section 22a-174-19a (“Control of sulfur dioxide emissions from power plants and other large stationary sources of air pollution”) (Section 19a); (2) revisions to RCSA Section 22a-174-22 (“Control of nitrogen oxides emissions”) (Section 22), including subparagraph 22a-174-22(e)(3); and (3) RCSA Section 22a-174-22c (“The Clean Air Interstate Rule (CAIR) Nitrogen Oxides (NO X ) Ozone Season Trading Program”) (Section 22c). Section 22c implemented the NO X trading program of the Clean Air Interstate Rule. At the time that Connecticut submitted its initial submission, reliance on the annual CAIR program in lieu of BART for electrical generating units (EGUs) had been demonstrated by EPA to achieve greater reasonable progress towards the national visibility goal than BART and the regional haze regulations have been revised to give the States the option of relying on CAIR to meet BART requirements. (70 FR 39104 (July 6, 2005)). In its Regional Haze SIP, however, Connecticut did not rely on this demonstration by EPA but rather on its own State-specific demonstration.

As discussed in greater detail in our March 26, 2012 proposal notice and later in this notice, CAIR subsequently was found to be inconsistent with the requirements of the CAA. See North Carolina v. EPA, 550 F.3d 1176 (D.C. Cir. 2008). To replace CAIR, EPA subsequently adopted the Cross-State Air Pollution Rule (CSAPR), which did not impose any ozone season NO X emission limits for EGUs in Connecticut. To address this deficiency in their alternative to BART, CT DEEP proposed to adopt RCSA 22a-174-22d (Section 22d) as a replacement for Section 22c. Section 22d, once adopted, would have maintained the ozone season NO X emission reductions that were required under the CAIR program.

On February 24, 2012, CT DEEP submitted a request for parallel processing of Section 22d. Under the parallel processing procedure, EPA proposed to take action on Section 22d before the State's final adoption of the regulation. At that time, the EPA was under a consent decree to take final action on the Connecticut Regional Haze SIP by July 13, 2012. Connecticut indicated that they planned to have a final adopted regulation by June 2012, prior to the deadline for EPA's final action. Based on the substance and the intended timeline for adoption of the proposed regulation, EPA proposed approval of Connecticut's proposed regulation Section 22d establishing an intrastate NO X trading program as a CAIR replacement rule as one component of the State's Alternative to BART demonstration. Following a decision by the D.C. Circuit Court vacating the CSAPR trading programs that EPA had developed to replace CAIR, and ordering EPA to continue to implement CAIR, see EME Homer City Generation, L.P. v. EPA, 696 F.3d 7 (D.C. Cir. 2012), Connecticut concluded that it was unable to adopt Section 22d and withdrew its request for parallel processing of the state regulation.

On January 24, 2013 (78 FR 5158), EPA published a supplemental notice proposing approval of the Connecticut Alternative to BART demonstration based, in part, on Connecticut's CAIR rule (Section 22c), as originally submitted by CT DEEP on November 18, 2009. EPA proposed to approve Connecticut's reliance on Section 22c as one component (along with Sections 19a and 22) of the State's Alternative to BART demonstration and solicited comment on the State's reliance on this rule in its Regional Haze SIP.

In addition, as part of the March 26, 2012 rulemaking, EPA proposed the approval of Connecticut General Statute (CGS) 16a-21a, “Sulfur content of home heating oil and off-road diesel fuel. Suspension of requirements for emergency.”

EPA received comments on the March 26, 2012 proposed approval of the Connecticut Regional Haze SIP from the U.S. Forest Service and the Sierra Club. As Connecticut has not finalized Section 22d, EPA is not responding to comments relevant only to Section 22d. The following discussion summarizes and responds to relevant comments submitted by the Sierra Club. The Sierra Club raised concerns regarding the legality of BART alternatives generally and the means by which greater reasonable progress must be demonstrated before a BART alternative can be approved. The commenter also addressed two aspects of Connecticut's BART alternative, the intrastate trading programs for SO 2 and non-ozone-season NO X , upon which the current Connecticut Regional Haze SIP still relies.

Comment 1: The Sierra Club commented that section 169A of the CAA does not allow States to adopt alternative programs that operate in lieu of source-specific BART. The Sierra Club acknowledged that the D.C. Circuit's decisions in Center for Energy & Economic Development v. EPA, 298 F.3d 653 (D.C. Cir. 2005) (“ CEED” ) and Utility Air Regulatory Group v. EPA, 471 F.3d 1333 (D.C. Cir. 2006) (“ UARG” ) expressly upheld EPA's allowance of such alternatives, but argued that these cases cannot be reconciled with the plain language of the Act.

Response 1: EPA disagrees with the commenter that BART alternatives are impermissible under the CAA. As the commenter notes, EPA's interpretation that the CAA allows States to devise alternative programs in lieu of source-specific BART was upheld in both the CEED and UARG decisions. Because the conclusions in these cases have not been upset or overturned by any subsequent decision of the D.C. Circuit, as explained in more detail in our response to a similar comment on EPA's January 24, 2013 supplemental proposed rulemaking, we disagree with the commenter's contention that CEED and UARG were decided erroneously or no longer have force.

Comment 2: The Sierra Club commented that EPA's regulations require a State seeking to rely on a BART alternative to include source-specific BART analyses in its SIP for each subject-to-BART source in the State and each source that is included in its BART alternative. Accordingly, because Connecticut did not include any source-specific BART analyses in its Regional Haze SIP, the Sierra Club contends that Connecticut's BART alternative is not approvable.

Response 2: EPA disagrees. The Regional Haze Rule requires States opting to implement an alternative program in lieu of BART to make a demonstration that the alternative will result in greater reasonable progress than would have resulted under source-specific BART. 40 CFR 51.308(e)(2)(i). To make such a demonstration, the State must compare the emission reductions that will likely be achieved by the BART alternative against a BART benchmark. The BART benchmark may be derived by conducting a five-factor BART analysis “for each source subject to BART and covered by the alternative program.” 40 CFR 51.308(e)(2)(i)(C) (emphasis added). Contrary to the commenter's suggestion, however, this language does not require a State to conduct a BART analysis for each source that is subject to BART within the State and for each source that is included in the BART alternative. Such a disjunctive reading would lead to a situation in which the BART benchmark would include emissions reductions from sources not subject to the BART requirements, which was clearly not EPA's intent. See, e.g., 71 FR 60612, 60619 (October 13, 2006). Rather, 40 CFR 51.308(e)(2)(i)(C) requires the State to conduct BART analyses only for those sources that are both subject to BART and included in the BART alternative. Under this natural (conjunctive) reading of the provision, the BART benchmark includes only those sources that would have required BART controls but for the creation of the alternative program.

We also note that Connecticut was not required to undertake any source-specific BART determinations in establishing a BART benchmark. As we noted in the preamble to the Regional Haze Rule, “[t]he States . . . have flexibility in developing a method to determine the emission reductions that could be achieved through the application of BART.” 64 FR 35714, 35742. Thus, in situations where the BART alternative “has been designed primarily to meet a Federal or State requirement other than BART, a State can use a more simplified approach to demonstrating that the alternative program will make greater reasonable progress than BART.” 71 FR 60612, 60615; see also 40 CFR 51.308(e)(2)(i)(C) (if a State's “alternative measure has been designed to meet a requirement other than BART,” then a State need not conduct source-by-source BART analyses to establish the BART benchmark). One such simplified approach specifically recommended by EPA in past rulemakings is for States to establish a BART benchmark based on the presumptive emission limits for EGUs contained in the BART Guidelines. See 71 FR 60612, 60619. Here, Connecticut's BART alternative consists of Section 19a (control of SO 2 emissions from power plants and other large stationary sources), Section 22 (control of NO X emissions from similar sources, including intrastate emission trading applicable outside the ozone season), and Section 22c (CAIR NO X Ozone Season Program), all three of which were developed to satisfy other air quality requirements. Therefore, consistent with EPA's regulations, Connecticut was not required to perform a five-factor BART analysis for any of its sources when setting its BART benchmark, but could opt instead for a simplified approach, such as one that relied upon presumptive emission limits.

Comment 3: The Sierra Club commented that Connecticut impermissibly compared the SO 2 reductions that would be achieved by its BART alternative to the reductions associated with presumptive BART limits developed by the Mid-Atlantic/Northeast Visibility Union (MANE-VU). The Sierra Club argued that the MANE- VU presumptive limits underestimated the reductions that sources would achieve if they were subject to limits derived from a thorough five-factor analysis. Therefore, the Sierra Club concluded that Connecticut did not conclusively show that its BART alternative would provide greater reasonable progress than source-specific BART.

Response 3: As explained above, EPA has specifically endorsed the use of presumptive limits in setting a BART benchmark in situations such as this one. In referring to the presumptive limits for EGUs contained in the BART Guidelines, EPA previously stated that “the presumptions represent a reasonable estimate of a stringent case BART, particularly because in developing a BART benchmark they would be applied across the board to a wide variety of units with varying impacts on visibility, at power plants of varying size and distance from Class I areas.” 71 FR 60612, 60619. In other words, while in some instances conducting a case-by-case BART analysis based on the five factors could result in limits more stringent than the presumptive limits, in others instances a five-factor analysis could result in limits less stringent than the presumptive limits (including no additional controls at all). Because these differences are likely to balance out, it is reasonable for a State that is entitled to follow a simplified approach, such as Connecticut, to use presumptive limits in setting its BART benchmark. Here, Connecticut chose to use MANE-VU's presumptive limits, which are more stringent than those contained in the BART Guidelines. Consequently, EPA is satisfied that Connecticut's Regional Haze SIP adequately demonstrated that the State's BART alternative will provide for greater reasonable progress than source-specific BART.

Comment 4: The Sierra Club commented that, even when using the MANE-VU presumptive limits as the point of comparison, Connecticut failed to demonstrate that its BART alternative would result in greater reasonable progress than source-specific BART. For both SO 2 and NO X, the Sierra Club argued that Connecticut impermissibly compared the emission reductions from all 59 sources covered by its BART alternative against the reductions that would be achieved by the much smaller set of seven subject-to-BART sources. In the case of NO X , the Sierra Club further contended that, even under the State's flawed comparison, the evidence still showed that the reductions associated with requiring source-specific BART at the seven subject-to-BART sources would exceed the reductions at all 59 sources covered by the BART alternative. The Sierra Club also argued that three additional factors cited by Connecticut in its weight-of-evidence analysis—mandatory retirement of emission reduction credits, the addition of Exeter Energy to the State's CAIR budget, and the State's CAIR allowance allocation methodology—were insufficient to prove that the State's BART alternative would achieve greater reasonable progress. Finally, the Sierra Club reiterated that it would not be onerous for Connecticut to determine the appropriate level of BART control for each subject-to-BART source in setting its BART benchmark.

Response 4: EPA again disagrees with the commenter's strained reading of the Regional Haze Rule. As we stated in our response to comment 2, 40 CFR 51.308(e)(2)(i)(C) does not require States to undertake the task of conducting BART analyses for sources that could never be subject to BART controls in the first place. Rather, the BART benchmark should consist only of the emissions from those sources that are both subject to BART and included in the alternative program. This ensures that the benchmark does not include reductions from any subject-to-BART sources in the State that will not participate in the alternative program and therefore will still be required to install BART. Thus, Connecticut was correct to include in its BART benchmark only the emissions from the seven sources that were both subject to BART and included within the scope of its BART alternative. Moreover, States are permitted to include sources in an alternative program that are not otherwise BART-eligible in order to ensure that the program results in enough emission reductions to result in greater reasonable progress than source-specific BART. Consequently, EPA disagrees with the notion that Connecticut impermissibly conducted an “apples-to-oranges” comparison by including more sources in its BART alternative than would have been subject to control under source-specific BART.

EPA also disagrees with the Sierra Club's arguments regarding the weight-of-evidence analysis. It is important to note that EPA's weight-of-evidence analysis for NO X draws upon, but is not identical to, Connecticut's analysis. Compare 77 FR at 17,377 with id. at 17,378-79.

The uncertainty in Connecticut's NO X analysis derives from the fact that, for the BART benchmark, Connecticut estimated a range of NO X emissions reductions between 3,120 tpy and 17,853 tpy. See 77 FR at 17,378 (Table 7); CT RH SIP at 9-34 (Table 9-16). The lower end of this range (3,120 tpy) resulted from imposition of the least stringent emission limits in the MANE-VU recommended range at every single BART-eligible source. Conversely, the upper end of the range (17,853 tpy) resulted from imposition of the most stringent emission limits in the MANE-VU recommended range at every single BART-eligible source.

EPA's weight-of- evidence approach acknowledges that it is not realistic to expect that source-specific BART determinations would result in imposition of the most stringent controls recommended by MANE-VU at each one of Connecticut's BART-eligible sources. See 77 FR at 17,378-79 for detailed discussion. Given the unlikelihood of this scenario, EPA considers it reasonable to conclude that the appropriate BART benchmark is considerably less than 17,853 tpy of reductions, and, in fact, less than 11,355 tpy of reductions (i.e., the amount attributable to Connecticut's BART alternative).

Furthermore, Connecticut's BART alternative can reasonably be expected to result in additional emissions reductions (if difficult to precisely quantify) that will occur as a consequence of the required reductions. First, the firm cap during ozone season impedes emissions growth during non-ozone season, while the restriction to intrastate trading during non-ozone season impedes emissions growth during ozone season. See id. at 17,379 and further discussion in Response 10. Second, Connecticut's CAIR allowance methodology (which allocates allowances based on electricity output, rather than heat input) can also reasonably be expected to result in actual reductions, not just a change in distribution. In a region like New England with a restructured electricity market, the least efficient generators are dispatched the least often, and under Connecticut's allocation scheme, units that run less often receive fewer CAIR allowances. Thus, the least efficient generators tend to generate less electricity in the first place and therefore receive fewer CAIR allowances, yet require more CAIR allowances for a given quantity of electric output. This tends to result in the least efficient sources operating less often, investing in controls, or repowering, and/or the more efficient sources over-controlling for the purpose of generating marketable allowances. While Connecticut has not modeled either of these effects quantitatively, they are likely to account for some additional reductions. Moreover, as further discussed in Response 10, actual NO X emissions are well below even the low end of the BART benchmark.

Comment 5: The Sierra Club commented that Connecticut has not demonstrated that the SO 2 and NO X emission reductions relied upon in its BART alternative are surplus as required by the Regional Haze Rule. The Sierra Club contended that only the portion of the emission reductions that are surplus to what would otherwise be required to comply with the Clean Air Act may be credited to Connecticut's BART alternative.

Response 5: EPA disagrees that Connecticut has failed to show that the reductions it relied upon are surplus. To show that a BART alternative will achieve greater reasonable progress, the State must include in its SIP a “demonstration that the emission reductions resulting from the [BART alternative] will be surplus to those reductions resulting from measures adopted to meet requirements of the CAA as of the baseline date of the SIP.” 40 CFR 51.308(e)(2)(iv) (emphasis added). In promulgating the Regional Haze Rule in 1999, we explained that the “baseline date of the SIP” in this context means “the date of the emissions inventories on which the SIP relies,” 64 FR 35714, 35742, which is “defined as 2002 for regional haze purposes,” 70 FR 39104, 39143. Any measure adopted after 2002 is accordingly “surplus” under 40 CFR 51.308(e)(2)(iv). Therefore, we believe that Connecticut's Regional Haze SIP adequately demonstrates that the reductions from the State's BART alternative, which consists entirely of regulations enacted after 2002, are properly considered surplus emission reductions for this purpose.

Comment 6: The Sierra Club commented that Connecticut must carefully scrutinize wet- and dry-scrubber technology and selective and non-selective catalytic reduction for Bridgeport Harbor Station Unit 3. The Sierra Club provided cost data and stated that the cost-effectiveness of such controls is reasonable.

Response 6: EPA disagrees that Connecticut was required to conduct a source-specific BART determination for Bridgeport Harbor Station Unit 3, regardless of the cost-effectiveness of additional controls. As discussed above in the response to comment 3, Connecticut was entitled to rely upon the presumptive BART limits established by MANE-VU in setting its BART benchmark. Therefore, no five-factor analysis, including an exploration of the costs of specific control technologies, was required for Bridgeport Harbor Station Unit 3 or any other BART-eligible unit.

In regard to the January 11, 2013 supplemental proposed rulemaking, EPA received comments from the Utility Air Regulatory Group (UARG) and a joint letter from Sierra Club, Earth Justice, and National Parks Conservation Association (for brevity referred to in the singular as, “Sierra Club”). The UARG comments encouraged States to take into account CAIR-related emission reductions when developing and submitting Regional Haze SIPs, including the BART provisions. UARG stated that EPA should finalize the supplemental proposal and approve Connecticut's Regional Haze SIP in full. The following discussion summarizes and responds to the relevant adverse comments submitted by the Sierra Club on EPA's supplemental proposed approval of Connecticut's Regional Haze SIP.

Comment 7: The Sierra Club commented that because all elements of any SIP approved by EPA must be enforceable, EPA cannot approve the Connecticut SIP to the extent it relies on CAIR. The commenter argued that in light of the remand of the rule by the D.C. Circuit in North Carolina, CAIR is neither permanent nor enforceable. Sierra Club also stated that EPA has recognized that CAIR is temporary on a number of occasions and noted that most of EPA's actions to date implicating CAIR reflect that EPA can only rely on CAIR in a limited fashion, namely “to temporarily preserve the environmental values covered by CAIR pending EPA's development and promulgation of a replacement rule that remedies CAIR's flaws.” The commenter also noted that in the “Cross-State Air Pollution Rule (CSAPR) is Better than BART” rulemaking, which was issued after the EME Homer City court stayed CSAPR pending review, EPA found that CAIR was in place only temporarily and that the Agency could not fully approve Regional Haze SIPs that relied on the now-temporary reductions from CAIR. The commenter further argues that even if the emission reductions from CAIR were sufficiently permanent to be used in the 10-year initial planning period of the Connecticut SIP, there is no guarantee that any replacement rule for CAIR will require the same emission reductions for Connecticut.

Response 7: EPA agrees that all control measures in a SIP must be enforceable. See CAA 110(a)(2)(A). EPA disagrees, however, that CAIR is not enforceable at this time, given the scope of the court's order in EME Homer City and the issuance of the mandate in that case.

On May 12, 2005, EPA published CAIR, which requires significant reductions in emissions of SO 2 and NO X from EGUs to limit the interstate transport of these pollutants and the ozone and fine particulate matter they form secondarily in the atmosphere. See 76 FR 70093. The D.C. Circuit initially vacated CAIR, North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), but ultimately remanded the rule to EPA without vacatur to preserve the environmental benefits provided by CAIR, North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008). In response to the court's decision, EPA issued CSAPR to address the interstate transport of NO X and SO 2 in the eastern United States. See 76 FR 48208 (August 8, 2011). On August 21, 2012, the D.C. Circuit issued a decision to vacate CSAPR. In that decision, it also ordered EPA to continue administering CAIR “pending . . . development of a valid replacement.” EME Homer City Generation, 696 F.3d at 38. 2

This directive from the D.C. Circuit in EME Homer City ensures that the reductions associated with CAIR will be enforceable and in place for a number of years. EPA has been ordered by the court to develop a new rule and the opinion makes clear that after promulgating that new rule EPA must provide States an opportunity to draft and submit SIPs to implement that rule. CAIR thus cannot be removed from a SIP as an enforceable measure until EPA has promulgated a final rule through a notice-and-comment rulemaking process, States have had an opportunity to draft and submit SIPs, EPA has reviewed the SIPs to determine if they can be approved, and EPA has taken action on the SIPs, including promulgating a Federal Implementation Plan (FIP) if appropriate. These steps alone will take many years, even with EPA and the States acting expeditiously. In the meantime, neither the State nor EPA has taken any final action to remove CAIR from the Connecticut SIP. These SIP provisions remain in place and are federally enforceable.

Further, in vacating CSAPR and requiring EPA to continue administering CAIR, the D.C. Circuit emphasized that the consequences of vacating CAIR “might be more severe now in light of the reliance interests accumulated over the intervening four years.” EME Homer City, 696 F.3d at 38. The accumulated reliance interests include the interests of States who reasonably assumed they could rely on reductions associated with CAIR to meet the requirements of the Regional Haze Rule.

The proposed and final EPA actions cited by the commenter as support for its argument that EPA has considered CAIR to be temporary all pre-date the vacatur of CSAPR and were based on EPA's expectation that CSAPR was the replacement for CAIR, and thus CAIR would end soon. 3 At the time of those actions, CAIR was reasonably expected to sunset by operation of law in a fairly short timeframe. That background assumption no longer applies. Based on the vacatur of CSAPR and the court's related decision to keep CAIR in force, EPA believes that it is appropriate at this time to rely on CAIR emission reductions as one component of the Connecticut Alternative to BART demonstration while a valid replacement rule is developed and until implementation plans complying with any such new rule are submitted by the States and acted upon by EPA or until the EME Homer City case is resolved in a way that provides different direction regarding CAIR and CSAPR.

As noted above, the commenter also argues that even if the emission reductions from CAIR were sufficiently permanent to be used in the first planning period of the Connecticut Regional Haze SIP, it is unclear what emissions reductions would be required in a future replacement rule for CAIR. The commenter is correct in that we do not know at this time what will be required of Connecticut in any replacement rule for CAIR. The uncertainty surrounding the requirements of a future replacement rule, however, does not mandate that source-by-source BART determinations be required today. For now, the Connecticut Regional Haze SIP addressed in today's action ensures that while CAIR is in place, the BART requirements will be met. The adequacy of the Connecticut Regional Haze SIP to address the BART requirements in the future will be better addressed when a replacement rule for CAIR has been promulgated and the Connecticut SIP revised to comply with that rule. This does not mean that the BART requirements will be later ignored. When Connecticut submits a SIP revision to remove Section 22c, either in response to an EPA replacement rule or for other purposes, the State will be required to demonstrate that such a SIP revision ensures that the BART requirements are met. See CAA § 110(l). EPA would then review the State action, submit its initial determination for public comment, and take final action after responding to significant public comments. This multi-step sequence of events will afford adequate opportunity to review the adequacy of Connecticut's approved Regional Haze SIP under the applicable legal framework at the time of removal of Section 22c. In sum, we do not agree with the commenter that the uncertainty surrounding the timing and contours of a replacement rule mandate that Connecticut undertake a source specific NO X BART determination for its EGUs now rather at a later date when the current regulatory uncertainties have been resolved.

Comment 8: The commenter argues that EPA cannot approve Connecticut's proposal to rely on CAIR to satisfy its obligation to control NO X at BART sources. The Sierra Club states that EPA must require BART determinations at all subject-to-BART sources. The commenter states that there is no statutory authority for EPA to allow a State to rely on CAIR as a better-than-BART alternative and that the force of the holdings in Center for Energy & Economic Dev. v. EPA, 398 F.3d 653 (D.C. Cir. 2005) and Utility Air Regulatory Group v. EPA, 471 F.3d 1333, 1340 (D.C. Cir. 2006) allowing EPA to do just that have been undermined by subsequent decisions of the D.C. Circuit. The commenter cite to several cases to support the argument that the CAA does not allow EPA to waive the statutory mandate for BART at “each” BART-eligible source.

Response 8: It is important to emphasize that Connecticut's Regional Haze SIP submission does not rely on 40 CFR 51.308(e)(4), sometimes known as the “CAIR equals BART” provision, which was at issue in UARG and which permits States to rely on CAIR in lieu of BART without any further analysis. Rather, Connecticut's submission relies on 40 CFR 51.308(e)(2), the “Alternative to BART” or “Better than BART” provision, which was at issue in CEED and which does require an analysis that the alternative measures will achieve greater reductions than source-by-source BART. See id. § 51.308(e)(2)(i). CT DEEP has submitted a combination of regulations (Sections 19a, 22, and 22c), and an appropriate analysis demonstrating that reductions will be superior to those from source-by-source BART, as part of its Alternative to BART package. See CT RH SIP, at 9-28 to 9-35; see also 77 FR at 17,373-17,380. Because of the complex history of this action, and to avoid any confusion, we emphasize that we are approving Connecticut's Regional Haze SIP under 40 CFR 51.308(e)(2), not section 51.308(e)(4).

The commenter's arguments that the plain language of the CAA precludes use of alternative programs (including but not limited to CAIR) to satisfy the BART requirements were raised and rejected in CEED and UARG. CEED and UARG remain good law and have not been questioned by subsequent D.C. Circuit decisions. The decisions cited by the commenter, North Carolina v. EPA, 531 F.3d 896, 906-08 (D.C. Cir. 2008) and NRDC v. EPA, 571 F.3d 1245, 1255-58 (D.C. Cir. 2009) address the requirements of sections 110(a)(2)(D)(i)(I) and 172(c)(1), respectively. Given the differences between the language of these statutory provisions and that of section 169A(b)(2), the courts' interpretation of these other provisions of the CAA do not undermine the two previous rulings of the same court interpreting the visibility provisions of the Act. 4

Similarly, the Supreme Court's conclusions in Massachusetts v. EPA, 549 U.S. 497, 528-29 (2007) regarding the meanings of “each” and “any” do not conflict with or impact the EPA's reading of section 169A(b)(2) of the CAA or the D.C. Circuit's conclusion that the agency's interpretation of the statute is a reasonable one. As the CEED court explained, EPA interprets this provision to mean that “each SIP's `emission limits, schedules of compliance, and other measures' must `include' BART only `as may be necessary to make reasonable progress toward' national visibility goals.” 398 F.3d 653, quoting 42 U.S.C. 7491(b)(2); see also Central Arizona Water Conservation District v. EPA, 990 F.2d 1531, 1543 (9th Cir. 1993) (upholding the same interpretation of section 169A(b)(2)). We do not agree, therefore, that 40 CFR 51.308(e)(2), EPA's regulation allowing for the use of alternative regulatory programs instead of source-specific BART determinations, is inconsistent with the CAA.

Comment 9: The Sierra Club commented that CAIR cannot be used as a substitute for BART because it provides inadequate visibility improvement. The commenter states that the visibility impacts at the Class I areas occur on a much shorter time frame than the annual or seasonal CAIR allocations. The commenter finds that the shorter averaging times for BART provides a more stringent, more protective limit than CAIR's allocations. The commenter states that appropriately averaged limits should be required even if new controls are not required.

Response 9: For a State which opts to pursue an Alternative to BART demonstration, the State must develop an analysis of the best system of continuous emission control technology available and associated emission reductions achievable for BART-eligible sources within the State subject to the alternative plan. The expected emission reductions must be compared to an analysis of the projected emission reductions achievable through the alternative measure. When crafting the alternative measures, States are not required to revise the emission limit to meet each unit's emission capability. In addition, the Regional Haze Rule does not limit the averaging period of the alternative measure. As the commenter suggested, visibility impairment can happen on a much shorter period (24-hour time period) than a seasonal limit, and thus the commenter suggests that a shorter averaging time would result in better visibility improvement. We disagree that a difference in averaging time would affect our conclusions that CAIR, in combination with the other emission limits in the Connecticut Regional Haze SIP, provides for greater reasonable progress than BART. The visibility evaluation required by the Regional Haze Rule requires States to evaluate visibility for the 20-percent best and 20-percent worst days. While EPA collects samples at the IMPROVE monitoring sites over a 24-hour time period, none of the visibility program requirements are based on these 24-hour peaks. Both the 20-percent best days and 20-percent worst days represent a relatively long time period, that is an average over one-fifth of the year, or 73 days. Because this is a relatively long time period, and even though it may be discontinuous, it tends to “smooth out” any variations that would occur over a shorter time period. Similarly, even a shorter 30-day rolling average BART limit represents a relatively long time period that would also tend to smooth out any spikes that may occur over a day. Thus, while a seasonal (in this case 5-month) emission limit may also smooth out the occasional high emission day, the longer averaging period will still provide visibility protection for the Class I area.

In addition, as allowed under 40 CFR 51.308(e)(2)(i)(C), the components of the Connecticut Alternative to BART were developed to meet other regulatory requirements. For example, the ozone season NO X limits in Sections 22 and 22c were designed to meet the ozone National Ambient Air Quality Standard (NAAQS), an 8-hour average standard, which ensures that the emission limit will be consistently met.

Comment 10: The Sierra Club commented that the averaging time for the non-ozone season limitations consist entirely of a 0.15 lb/MMBtu NO X emission limit applicable as averaged over the entire non-ozone season. Again, the Sierra Club contends that this limit does not provide the same averaging time protections as would a BART limit. Furthermore, the commenter continued, although it is not evident from EPA's discussion, most of the BART-eligible units regularly emit well above this non-ozone season limit, presumably taking advantage of Connecticut's application of emission credits. As EPA's original proposal acknowledges, there is no firm year-round cap on EGUs emissions which would be required of the BART-eligible units.

Response 10: While Connecticut's non-ozone season limits do not provide a firm year-round emission cap on each unit, a facility which exceeds the 0.15 lb/MMBtu limit can only use intrastate trading to meet its NO X emission obligation. As a result, the emission reductions come from within the State, a similar geographic area. Moreover, as we noted in the NPR, “the firm cap during ozone season acts as an impediment to emissions growth during nonozone season.” 77 FR at 17379. This relationship works in both directions: The fact that Connecticut imposes a 0.15 lb/MMBtu NO X limit during October through April, and allows only intrastate trading for facilities that exceed that limit, limits facilities' ability to emit above their CAIR allocations and comply with Section 22c simply by purchasing out-of-state allowances.

Data regarding actual emissions supports the argument that Connecticut's alternative program allows for facility flexibility while achieving emission reductions. The actual 2002 baseline NO X emissions from the BART-identified sources were 4,054 tons of NO X . The 2011 actual NO X emissions from these sources under the Connecticut Alternative to BART are 557 tons. 5 These 2011 actual NO X emissions are an order of magnitude lower than even the low-end projected 2006 BART benchmark emissions (9,701 tons) for these same sources.

Comment 11: The commenter suggests that the visibility impacts from several of the BART-eligible units are not, as EPA has described them, minimal. First, it is not clear that the submitted modeling actually reflects the 24-hour maximum emission input required by the BART Guidelines; therefore, the modeling may underestimate the visibility impacts. The commenter notes that Mid-Atlantic/Northeast Visibility Union (“MANE-VU”) has determined that 98 percent of visibility deterioration at Class I areas in its region came from sources with impacts between 0.2 and 0.3 deciviews (dv), based on the existing modeling, and at least one of Connecticut's BART-eligible units has that level of impact from its NO X emissions. The Sierra Club emphasized that the exact purpose of the regional haze program is to reduce the cumulative impacts from multiple sources. For this reason, the Sierra Club commented that source-by-source analysis of the costs and benefits of additional retrofit technology and year-round lower limits with appropriate averaging time is required.

Response 11: We disagree with the conclusions the commenter draws from the MANE-VU report entitled “Five-Factor Analysis of BART-Eligible Sources,” Attachment W to Connecticut's SIP submission.

The purpose of the modeling discussed in Attachment W, as the title suggests, is to support a five-factor analysis for MANE-VU's recommended BART controls. EPA agrees that MANE-VU's modeling does not adhere to the requirements of the BART Guidelines for determining an appropriate threshold for exempting BART-eligible sources from further analysis for BART; however, this modeling was not done for exemption purposes, but rather to inform the decision making process for developing MANE-VU's recommended BART controls. In this context, EPA is not considering MANE-VU's modeling under 40 CFR part 51 Appendix Y (the BART Guidelines), but rather under 40 CFR 51.308(e)(2)(i)(C)'s requirement to establish a BART benchmark for comparison to an alternative program.

While it is true that the purpose of the regional haze program as a whole is to reduce the cumulative impacts from multiple sources, even a source-specific BART determination includes consideration of “the degree of improvement in visibility which may reasonably be anticipated to result from the use of such technology.” 40 CFR 51.308(e)(1)(ii)(A). EPA's BART Guidelines allow States conducting source-by-source BART determinations to exempt sources with visibility impacts as high as 0.5 dv. See 40 CFR part 51 Appendix Y § III.A.1.

As part of its analysis, MANE-VU attempted to assess which sources had the greatest impact on visibility, in accordance with 40 CFR 51.308(e)(1)(ii)(A). However, MANE-VU decided to take a more stringent approach than the BART Guidelines' 0.5 dv threshold. See Attachment W at 14. The report states that “the cumulative frequency visibility impact from all MANE-VU BART-eligible sources corresponds to a maximum 24-hr impact of 0.22 dv from the NWS [National Weather Service]-driven data and 0.29 dv from the MM5 [PSU/NCAR mesoscale model] data.” Attachment W at 13-14. Based on these results, MANE-VU concluded that a range of 0.2 to 0.3 dv would represent a “`significant' impact at MANE-VU Class I areas on an average basis.” Id. at 14. However, as the report stipulates, the analysis only included BART-eligible units within the MANE-VU area, excluding all other BART sources outside of the MANE-VU area, a limitation noted by the report. See id. at 13. Therefore, for purposes of developing its recommended BART controls, MANE-VU “decided to place increased weight on sources with an individual visibility impact greater than 0.1 dv for this 1st order regional 5-factor analysis.” Id. at 14. As MANE-VU noted, “[t]his threshold is overly inclusive relative to exemption processes being conducted by other [Regional Planning Organizations] RPOs, but still provides MANE-VU states flexibility in choosing the weight to be given to the first of the five factors considered (i.e., the degree of visibility improvement that could result from BART).” Id.

Only two of the BART-eligible sources in Connecticut have more than a 0.1 dv impact from NO X , and only one source exceeds a 0.2 dv impact; the rest show impacts far less than these levels. 6 It is, of course, possible that a source-specific BART analysis at one or both of these units exceeding 0.1 dv impact would result in a more stringent BART limit at those particular units than apply under Connecticut's alternative program. However, it is also possible that full consideration of the other four factors would lead to less stringent limits than apply under Connecticut's alternative program. Moreover, it is also quite possibly (indeed, likely) that full consideration of the five factors would result in less stringent limits at the other five BART-eligible units (with impacts well below 0.1 dv) than apply under Connecticut's alternative program. Most importantly, and central to both Connecticut's and EPA's analyses, it is also very likely that source-by-source BART would result in fewer total emissions reductions (and therefore visibility improvements) than apply under Connecticut's alternative program. Thus, while any one particular source might have higher or lower emissions limits under source-by-source BART (as opposed to Connecticut's alternative program), as a whole, EPA does not agree that source-by-source BART would necessarily result in more stringent controls on the BART-eligible sources (let alone the non-BART-eligible sources) as a group.

EPA is approving Connecticut's November 18, 2009, Regional Haze SIP submittal and March 12, 2012, supplemental submittal as meeting the applicable requirements of the Regional Haze Rule found in 40 CFR 51.308. In addition, EPA is approving Connecticut's RCSA Section 22a-174-19a, “Control of sulfur dioxide emissions from power plants and other large stationary sources of air pollution”; revisions to RCSA Section 22a-174-22, “Control of nitrogen oxides emissions,” in particular subparagraph 22a-174-22(e)(3); and CGS 16a-21a, “Sulfur content of home heating oil and off-road diesel fuel. Suspension of requirements for emergency.”

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

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

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

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

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

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

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

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

• is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because it does not include measurement standards; and

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

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

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 8, 2014. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See Section 307(b)(2).)

Part 52 of chapter I, title 40 of the Code of Federal Regulations is amended as follows:

On February 20, 2014 (79 FR 9701), EPA published a notice of proposed rulemaking (NPR) seeking comment on EPA's proposed approval of Pennsylvania's SIP revision that incorporates the Commonwealth's low-sulfur fuel oil provisions into the SIP. The SIP revision was submitted by the Commonwealth of Pennsylvania on February 25, 2013, adopting revisions to 25 Pennsylvania Code (Pa. Code) Chapters 121, 123, and 139. In response to the NPR, EPA received one comment, dated March 24, 2014, from Ms. Jane Kozinski, Assistant Commissioner for the State of New Jersey Department of Environmental Protection (NJDEP). A summary of the NJDEP comment and EPA's response is provided in Unit III. (Summary of Public Comment and EPA Response) of this final rulemaking action.

The SIP revision incorporates Pennsylvania's low-sulfur fuel oil provisions which apply to the owners and/or operators of the following: (1) Refineries; (2) pipelines; (3) terminals; (4) retail outlet fuel storage facilities and ultimate consumers; (5) commercial and industrial facilities; and (6) facilities with a unit burning regulated fuel oil to produce electricity and domestic home heaters. The SIP revision implements low-sulfur fuel oil provisions that will reduce the amount of sulfur in fuel oils used in combustion units and amends associated definitions, sampling and test methods, and recordkeeping and recording provisions. The low-sulfur fuel oil provisions will aid in reducing SO 2 emissions and the formation of sulfates that cause decreased visibility. EPA believes that these regulations will decrease SO 2 emissions in the Commonwealth from certain fuel combustion sources and therefore strengthen the Pennsylvania SIP. EPA also believes that the additional SO 2 emission reductions and reductions in sulfates from Pennsylvania sources will assist the Commonwealth in achieving further reasonable progress towards reducing regional haze. 1 The rationale for EPA's proposed action is explained in the NPR and will not be restated here. Relevant support documents for this action are available online at http://www.regulations.gov, Docket number EPA-R03-OAR-2013-0241.

Comment: NJDEP commented that Pennsylvania's SIP revision, which incorporates low-sulfur fuel oil regulations to reduce the sulfur content of distillate fuel oil to 500 parts per million (ppm), is not consistent with standards adopted by nearby states, which limit sulfur content to 15 ppm. NJDEP stated that a sulfur-content standard of 15 ppm would be consistent with the standard set in the Mid-Atlantic/Northeast Visibility Union (MANE-VU)'s agreement on measures to control air pollutants that contribute to regional haze. NJDEP expressed concern that Pennsylvania's adoption of a higher sulfur-content standard of 500 ppm may jeopardize continued progress to improve visibility levels at the Brigantine Wilderness Area (Brigantine). NJDEP stated that a sulfur-content standard of 15 ppm for distillate fuel oil is a reasonable, cost-effective air pollution control measure necessary to ensure that the reasonable progress goals (RPGs) at Brigantine are met in the future. NJDEP also stated that a lower sulfur-content standard of 15 ppm is a reasonable, cost-effective control measure for SO 2 and fine particulates and “would make for a more widely-marketable fuel across the northeastern and mid-Atlantic United States.” Further, NJDEP stated that in EPA's proposed approval of the Pennsylvania regional haze SIP, “Pennsylvania reports that sulfur dioxide emission reductions from the closure of the Portland Power [P]lant in northeastern Pennsylvania will offset sulfur dioxide emissions expected from a 500 ppm sulfur content in distillate fuel oil in Pennsylvania.” NJDEP commented that, on the contrary, lowering the sulfur content in distillate oil to 15 ppm would have a greater impact on visibility at Brigantine than reductions at Portland because emission reductions would occur over a widespread area from a large number of sources, especially from fuel-burning sources in metropolitan Philadelphia, which is frequently upwind of Brigantine.

Response: EPA appreciates NJDEP's comment on the SIP revision and acknowledges that Pennsylvania is a member state in MANE-VU. Pennsylvania participated fully in the MANE-VU consultation process, which resulted in a course of action for all participating states to reduce emissions to collectively meet the RPGs in the MANE-VU region. 2 The MANE-VU “Ask” provided the MANE-VU states, including Pennsylvania, with up to ten years to pursue adoption and implementation of reasonable and cost-effective nitrogen oxides (NO X ) and SO 2 emissions reduction measures. In its regional haze SIP, Pennsylvania stated that it “will pursue these measures, as appropriate and necessary, and in five years at the time of Pennsylvania's first periodic SIP report, expects to report on progress toward adoption of these measures by 2018.” With respect to the low-sulfur fuel strategy, the MANE-VU “Ask” established two sets of goals, one for the “inner zone” states of the MANE-VU region (Delaware, New Jersey, New York, and Pennsylvania, or portions thereof) and one goal for the “outer zone” states. The “inner zone” goals contained more aggressive compliance schedules and sulfur-content limits than the “outer zone” goals. Nevertheless, states in the “inner zone” could choose to comply with the “outer zone” goals if they experienced supply disruption issues, and the “Ask” effectively provided all states until 2018 to complete the implementation of their low-sulfur fuel strategies. Consistent with this approach, Pennsylvania indicated in its regional haze SIP that, “[b]ased on supply concerns, Pennsylvania will pursue a strategy that will not be less stringent than the outer zone strategy and would meet the sulfur content emission limits listed above by 2018.”

On July 13, 2012, EPA finalized a limited approval of the Pennsylvania regional haze SIP (77 FR 41279). Subsequently, Pennsylvania submitted its February 25, 2013 SIP revision to EPA that included low-sulfur fuel regulations that met the “outer zone” strategy requirements and therefore do not require the sulfur content of distillate oil be reduced to 15 ppm. 3 As EPA explained in detail in the technical support document (TSD)  4 that accompanied our July 13, 2012 limited approval of the Pennsylvania regional haze SIP, Pennsylvania had secured an additional 23,051 tons in SO 2 reductions that were not anticipated at the time of the MANE-VU “Ask.” When these reductions are considered in combination with reductions that will result from Pennsylvania's low-sulfur fuel regulations, EPA believes that a 15 ppm limit on distillate oil is no longer “appropriate and necessary” to achieve the goals of the MANE-VU “Ask” during the first planning period ending in 2018. Consequently, EPA believes that the Pennsylvania regional haze SIP includes all measures necessary to obtain its share of the emission reductions needed to meet the RPGs of downwind states including New Jersey's and therefore has met the requirements of 40 CFR 51.308(d)(3)(ii). See 79 FR 24340 (April 30, 2014) (reissuing limited approval of Pennsylvania's regional haze SIP). However, EPA recognizes that a 15 ppm sulfur content limit for distillate oil, if subsequently implemented, would provide further SO 2 emissions reductions from Pennsylvania sources and further reasonable progress towards the national goal of remedying visibility impairment in Class I areas.

As EPA explained in the NPR for this rulemaking action, EPA believes these regulations strengthen the Pennsylvania SIP and provide additional SO 2 and sulfate reductions that supplement reductions from the Pennsylvania regional haze SIP. Therefore, EPA concludes that the adoption of a low-sulfur fuel oil strategy will provide Pennsylvania additional emission reductions furthering progress towards reducing emissions that contribute to visibility impairment and furthering reasonable progress in the first implementation period towards RPGs for Class I areas outside the Commonwealth affected by emissions from Pennsylvania's sources. While EPA appreciates NJDEP's comment that 15 ppm distillate fuel oil is a reasonable, cost-effective control measure, EPA has concluded that a 15 ppm limit on distillate oil is no longer “appropriate and necessary” for Pennsylvania to achieve the goals of the MANE-VU “Ask” during the first planning period ending in 2018.

While it is possible that a 15 ppm distillate fuel oil standard may result in greater visibility improvement at Brigantine than the closure of Portland as NJDEP alleges, EPA previously concluded in its TSD supporting approval of Pennsylvania's regional haze SIP that Pennsylvania's delay in implementing low-sulfur fuel oil regulations was not anticipated to interfere with the ability of other states to meet their respective RPGs. 5 Based on our previous approval of Pennsylvania's regional haze SIP, and particularly upon our conclusion that a 15 ppm limit on distillate oil is no longer “appropriate and necessary” to achieve the goals of the MANE-VU “Ask,” EPA believes the approved Pennsylvania regional haze SIP adequately addresses visibility impacts from Pennsylvania emission sources on Class I areas outside the Commonwealth, including Brigantine, for the first implementation period and ensures sufficient emission reductions for Class I area states to meet their RPGs. See 77 FR 41279 and 79 FR 24340. Any significant changes in emissions of visibility-impairing pollutants or impacts at Class I areas can be addressed when Pennsylvania evaluates its progress made in the first implementation period towards RPGs for the Class I areas outside the Commonwealth affected by emissions from Pennsylvania's sources as required by 40 CFR 51.308(g). If Pennsylvania's assessment determines an adjustment to its SIP is necessary to ensure reasonable progress, EPA regulations require a SIP revision within a year of the five-year progress report. See 40 CFR 51.308(h)(4).

Finally, EPA appreciates NJDEP's comment regarding potential increased availability and marketability of lower sulfur distillate fuel oil if Pennsylvania were to implement a 15 ppm sulfur-content standard. However, this comment is not relevant to this rulemaking action and no further response is required.

EPA has determined that the revisions made to 25 Pa. Code Chapters 121, 123, and 139 meet the SIP revision requirements of the CAA and is approving the amendments to Pennsylvania's regulations for commercial fuel oil sulfur limits for combustion units.

This action, which makes a determination of attainment based on air quality, will result in the suspension of certain Federal requirements and/or will not impose any additional requirements beyond those imposed by state law. For that reason, this action:

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

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

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

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

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

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

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

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

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

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

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 8, 2014. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action.

This action, approving the implementation of low-sulfur fuel oil provisions that will reduce the amount of sulfur in fuel oils used in combustion units in Pennsylvania, may not be challenged later in proceedings to enforce its requirements. See section 307(b)(2).

Therefore, 40 CFR part 52 is amended as follows:

I. Background

EPA's statutory authority for the regulation of new and existing solid waste incineration units is outlined in CAA sections 129 and 111. Section 129 of the CAA is specific to solid waste combustion, and requires EPA to establish performance standards for each category of solid waste incineration units. These standards include new source performance standards (NSPS), applicable to new units, and emissions guidelines for existing units. Under CAA section 129, an NSPS or emissions guideline must contain numerical emissions limitations for particulate matter, opacity (as appropriate), sulfur dioxide, hydrogen chloride, oxides of nitrogen, carbon monoxide, lead, cadmium, mercury, and dioxins and dibenzofurans. While the NSPS is directly applicable to affected facilities, the emissions guidelines for existing units are intended for states to use in order to develop a state plan to submit to EPA. Once approved by EPA, the state plan becomes federally enforceable. If a State does not submit an approvable state plan to EPA, EPA is responsible for enforcing and implementing a federal plan.

While section 129 of the CAA is specific to the combustion of solid waste, it also relies on CAA section 111 in promulgating the NSPS and emissions guidelines. Section 111 of the CAA gives EPA the statutory authority to promulgate an NSPS and/or emissions guideline for certain categories of stationary sources, and describes the procedural requirements for the development and implementation of these standards. More specifically, CAA section 111(d) requires EPA to establish procedures for States to submit a state plan to EPA for the regulation of existing sources whenever emissions guidelines are promulgated. The general provisions for the submittal and approval of state plans are codified in 40 CFR part 60, subpart B and 40 CFR part 62, subpart A.

States have options other than submitting a state plan in order to fulfill their obligations under CAA sections 111(d) and 129. If a State does not have any existing solid waste incineration units for the relevant emissions guidelines, 40 CFR 60.23(b) and 62.06 provide that a letter may be submitted certifying that no such units exist within the State (i.e., negative declaration) in lieu of a state plan. The negative declaration exempts the State from the requirements of subpart B that would otherwise require the submittal of a CAA section 111(d)/129 plan.

On March 21, 2011 (76 FR 15372), EPA promulgated new source performance standards, 40 CFR part 60, subpart LLLL, and emission guidelines, subpart MMMM, for new and existing SSI units, respectively. Existing SSI units are units that commenced construction on or before October 14, 2010. The DNREC, DDOE, and WVDEP have each determined that there are no existing SSI units subject to CAA sections 111(d) and 129 requirements in their individual air pollution control jurisdictions. In order to fulfill obligations under CAA sections 111(d) and 129, DNREC, DDOE, and WVDEP submitted negative declaration letters to EPA on February 7, 2012, July 26, 2012, and August 27, 2012, respectively. The submittal of these declarations exempts DNREC, DDOE, and WVDEP from the requirement to submit a state plan for existing SSI units.

In this direct final action, EPA is amending part 62 to reflect receipt of the negative declaration letters from DNREC, DDOE, and WVDEP. EPA is publishing this rule without prior proposal because EPA views this as a noncontroversial amendment and anticipates no adverse comment. However, in the “Proposed Rules” section of this Federal Register , EPA is publishing a separate document that will serve as the proposal to approve the negative declarations if adverse comments are filed. This rule will be effective on September 8, 2014 without further notice unless EPA receives adverse comment by August 11, 2014. If EPA receives adverse comment, EPA will publish a timely withdrawal in the Federal Register informing the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely notifies the public of EPA receipt of negative declarations from air pollution control agencies without any existing SSI units in their jurisdiction. This action imposes no requirements. Accordingly, EPA certifies that this rule 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 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). This action also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does 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). This action merely approves negative declarations for existing SSI units from DNREC, DDOE, and WVDEP and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This action also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it is not economically significant.

With regard to negative declarations for existing solid waste incineration facilities received by EPA from states, EPA's role is to notify the public of the receipt of such negative declarations and revise 40 CFR part 62 accordingly. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to approve or disapprove a CAA section 111(d)/129 plan negative declaration submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a CAA section 111(d)/129 negative declaration, to use VCS in place of a section 111(d)/129 negative declaration that otherwise satisfies the provisions of the Clean Air Act. 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. This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ).

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

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 8, 2014. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of this Federal Register , rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action approving negative declarations for SSI units from DNREC, DDOE, and WVDEP may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 62 is amended as follows:

This is a summary of the Commission's Seventh Report and Order in WT Docket No. 96-86, FCC 13-40, released on April 1, 2013. The document is available for download at http://fjallfoss.fcc.gov/edocs_public/ . The complete text of this document is also available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 20554. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to FCC504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (TTY).

1. In 1998, the Commission established the initial band plan and service rules for the 24 megahertz of public safety spectrum in the 700 MHz band, which it reallocated from TV channels 60-69 in accordance with the mandate expressed in the Balanced Budget Act of 1997, 63 FR 58645, November 2, 1998. The Commission also divided the 24 megahertz of spectrum into narrowband (6.25 kilohertz channel) and wideband (50 kilohertz channel) segments.

2. In 2005, the Commission adopted the Sixth Report and Order in WT Docket No. 96-86 which revised the Commission's rules regarding adjacent channel power (ACP) emission limits for the 700 MHz public safety band, 70 FR 21663, April 27, 2005. In the accompanying Seventh Notice of Proposed Rule Making (Seventh NPRM), the Commission sought comment and issued tentative conclusions regarding proposals filed by TIA-PRS, Access Spectrum, Nortel/EADS and the NCC to revise various rules governing the 700 MHz public safety narrowband spectrum, including additional proposed revisions to the ACP rules.

3. In 2007, the Commission adopted the 700 MHz Second Report and Order in PS Docket No. 06-229, which revised the band plan and service rules governing both the commercial and public safety portions of the 700 MHz band, 72 FR 48814, August 24, 2007. Among other things, the Commission redesignated 10 megahertz of public safety 700 MHz spectrum (at 763-768/793-798 MHz) for broadband use and established a plan for development of a nationwide, interoperable broadband public safety communications network. In order to accommodate the new public safety broadband allocation, the Commission eliminated the public safety 50 kilohertz wideband channels and consolidated the public safety 6.25 kilohertz narrowband channels into their current locations at 769-775 and 799-805 MHz.

4. In the Seventh Report and Order, the Commission resolves the proposals considered in the Seventh NPRM that affect the consolidated 700 MHz narrowband channels (6.25 kilohertz). The Commission does not address proposals in the Seventh NPRM that related to the former 700 MHz wideband channels (50 kilohertz), because the elimination of wideband channels in the 700 MHz Second Report and Order renders these portions of the Seventh NPRM moot.

5. The Commission, in the Seventh Report and Order, updates certain ACP limits pertaining to transmitters operating on public safety narrowband (769-775/799-805 MHz) or Guard Band B Block (775-776/805-806 MHz) spectrum. The Commission also clarifies its trunking rules, incorporates by reference the most current industry encryption and interoperability standards, removes limitations on secondary fixed operations and permits public safety licensees to transmit their station identification digitally. The Commission also addresses recommendations from the NCC.

6. The Final Regulatory Flexibility Analysis required by section 604 of the Regulatory Flexibility Act, 5 U.S.C. 604, is included in Appendix A of the Seventh Report and Order.

7. The actions taken in the Seventh Report and Order in WT Docket No. 96-86 have been analyzed with respect to the Paperwork Reduction Act of 1995, Pub. L. 104-13, and found to impose no new or modified recordkeeping requirements or burdens on the public.

8. As required by the Regulatory Flexibility Act (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was incorporated into the Seventh NPRM of this proceeding. The Commission sought written public comment on the IRFA. The RFA requires that an agency prepare a regulatory flexibility analysis for notice-and-comment rulemaking proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA). The present Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA.

9. In the Seventh Report and Order, the Commission adopts changes to its rules covering public safety narrowband spectrum at 769-775 MHz and 799-805 MHz in order to ensure that the technical standards in its rules remain up to date so public safety users can benefit from the latest narrowband technology. The changes the Commission adopts include updating its Adjacent Channel Power (ACP) limits, clarifying its trunking rules and incorporating by reference the most current industry encryption and interoperability standards.

10. There were no comments filed that specifically addressed the rules and policies proposed in the IRFA.

11. The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

12. Public Safety Radio Licensees. As a general matter, Public Safety Radio Licensees include police, fire, local government, forestry conservation, highway maintenance, and emergency medical services. For the purpose of determining whether a Public Safety Radio Licensee is a small business as defined by the SBA, we use the broad census category, Wireless Telecommunications Carriers (except Satellite). This definition provides that a small entity is any such entity employing no more than 1,500 persons. The Commission does not require Public Safety Radio Licensees to disclose information about number of employees, so the Commission does not have information that could be used to determine how many Public Safety Radio licensees constitute small entities under this definition.

13. 700 MHz Guard Band Licenses. In the 700 MHz Guard Band Order, the Commission adopted size standards for “small businesses” and “very small businesses” for purposes of determining their eligibility for special provisions such as bidding credits and installment payments. A small business in this service is an entity that, together with its affiliates and controlling principals, has average gross revenues not exceeding $40 million for the preceding three years. Additionally, a “very small business” is an entity that, together with its affiliates and controlling principals, has average gross revenues that are not more than $15 million for the preceding three years. SBA approval of these definitions is not required. An auction of 52 Major Economic Area (MEA) licenses commenced on September 6, 2000, and closed on September 21, 2000. Of the 104 licenses auctioned, 96 licenses were sold to nine bidders. Five of these bidders were small businesses that won a total of 26 licenses. A second auction of 700 MHz Guard Band licenses commenced on February 13, 2001, and closed on February 21, 2001. All eight of the licenses auctioned were sold to three bidders. One of these bidders was a small business that won a total of two licenses.

14. Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: Transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment.” The SBA has developed a small business size standard for Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing, which is: All such firms having 750 or fewer employees. According to Census Bureau data for 2007, there were a total of 939 establishments in this category that operated for part or all of the entire year. According to Census bureau data for 2007, there were a total of 919 firms in this category that operated for the entire year. Of this total, 771 had less than 100 employees and 148 had more than 100 employees. Thus, under that size standard, the majority of firms can be considered small.

15. This Seventh Report and Order does not adopt a rule that will entail reporting, recordkeeping, and/or third-party consultation.

16. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.

17. In formulating rule changes in the Seventh Report and Order, the Commission strived to ensure Public Safety Radio Licensees benefit from innovative new services. In each case cited below, the Commission considered the alternative of leaving the rule unchanged but concluded the rule changes it adopted would reduce economic burdens and benefit Public Safety Radio Licensees, 700 MHz Guard Band Licenses and/or Wireless Communications Equipment Manufacturers.

18. Adjacent Channel Power. The rule changes the Commission adopts regarding Adjacent Channel Power (ACP) will result in cost savings to manufacturers by reducing the complexity of transmitters with a consequent savings to Public Safety Radio Licensees and 700 MHz Guard Band Licenses while at the same time maintaining the overall level of ACP protection necessary to guard against interference.

19. Secondary Fixed Operations and Digital Station Identification. The rule changes the Commission adopts regarding secondary fixed operations and digital station identification will provide Public Safety Radio Licensees increased capability to meet their communications needs. Absent these rule changes, Public Safety Radio Licensees would endure increased regulatory burdens for no practical purpose.

20. Trunking Requirement. We clarify our trunking requirements to eliminate ambiguity in order to ensure Public Safety Radio Licensees benefit from the increased efficiency resulting from trunked operations. Absent this rule clarification, Public Safety Radio Licensees would be unable to reap the benefits of trunking on State License channels.

21. Encryption and Narrowband Interoperability Standards. We update our rules to reflect the most current industry standards for encryption and interoperability. To ensure a minimum impact on Public Safety Radio Licensees and Wireless Communications Equipment Manufacturers we grandfather equipment certified under the old standards, thus obviating the need for previously approved equipment to be recertified.

22. None.

23. The Commission will send a copy of the Seventh Report and Order, including the FRFA, in a report to be sent to Congress pursuant to the Small Business Regulatory Enforcement Fairness Act of 1996. In addition, the Commission will send a copy of the Seventh Report and Order, including this FRFA, to the Chief Counsel for Advocacy of the Small Business Administration.

24. Accordingly, it is ordered that, pursuant to sections 1, 4(i), 303, 316, 332 and 337 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i), 303, 316, 332 and 337, the Seventh Report and Order is hereby adopted.

25. It is further ordered that the amendments of the Commission's rules as set forth in Appendix C of the Seventh Report and Order are adopted, effective August 11, 2014.

26. It is further ordered that the Commission shall send a copy of the Seventh Report and Order in a report to be sent to Congress and the General Accounting Office pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR parts 27 and 90 as follows:

Legal Basis

The Motor Carrier Safety Act of 1984 (Pub. L. 98-554, Title II, 98 Stat. 2832, October 30, 1984) (the 1984 Act) authorizes the Secretary of Transportation to regulate commercial motor vehicles (CMVs) and equipment, and the drivers and motor carriers that operate them. Section 211 of the 1984 Act also gives the Secretary broad power to “prescribe recordkeeping and reporting requirements” and to “perform other acts the Secretary considers appropriate.” (49 U.S.C. 31133(a)(8) and (10)). The Administrator of FMCSA has been delegated authority under 49 CFR 1.87(f) to carry out the functions vested in the Secretary by 49 U.S.C. chapter 311, subchapters I and III, relating to CMV programs and safety regulation.

On January 4, 2011, FMCSA published regulatory guidance for § 390.31 of the Federal Motor Carrier Safety Regulations (FMCSRs) concerning electronic signatures and documents (76 FR 411). The guidance explained how electronic signatures could be used under the existing regulations while the Agency considers a notice-and-comment rulemaking to amend the FMCSRs to explicitly allow electronic signatures on documents required by the safety regulations. The guidance provides a short-term solution for allowing the use of electronic signatures, to the greatest extent possible under the existing regulations, consistent with the requirements of the Government Paperwork Elimination Act of 1998 (GPEA) and the Electronic Signatures in Global and National Commerce Act of 2000 (E-SIGN). The purpose of GPEA is to improve customer service and governmental efficiency through the use of information technology. The purpose of E-SIGN is to promote the use of electronic recordkeeping in private commerce by establishing legal equivalence between traditional paper-based methods and electronic methods.

On April 28, 2014, FMCSA published a notice of proposed rulemaking concerning “Electronic Documents and Signatures” (79 FR 23306). The proposed regulatory amendments would permit the use of electronic methods to sign, certify, generate, exchange or maintain records so long as the documents accurately reflect the information in the record and can be used for their intended purpose.

Generally, drivers of CMVs as defined in 49 CFR 390.5 who are subject to the Federal hours-of-service requirements must record their duty status for each 24-hour period. However, the rules provide limited exemptions to the RODS requirements, including an exemption for the following drivers:

• CMV drivers (whether the vehicles require a commercial driver's license (CDL) or not) who operate within 100 air-miles of their normal work reporting location and satisfy the time limitations and recordkeeping requirements of § 395.1(e)(1).

• Drivers of property-carrying CMVs for which a CDL is not required and who operate within a 150 air-mile radius of the location where the driver reports for duty and satisfy the time limitations and recordkeeping requirements of § 395.1(e)(2). 1

For drivers that must prepare RODS, 49 CFR 395.8 specifies a particular “grid” or type of form that must be used to document the driver's activities during the 24-hour period.

As an alternative to written RODS, 49 CFR 395.15 allows the use of AOBRDs. The AOBRD regulation was adopted in 1988. To be considered a compliant device, an AOBRD must be integrally synchronized with specific operations of the CMV in which it is installed (see 49 CFR 395.2, Definitions, AOBRD). Use of AOBRDs is voluntary.

Several vendors market software products to assist the driver in recording and storing RODS information electronically. Laptop computers, tablets, and smartphones running driver logging software should not be confused with AOBRDs because the devices are not integrally synchronized with the specific operations of the CMV on which they are being used. Drivers must manually input their duty status information (e.g., driving time, on-duty not driving, etc.) directly into the computer, tablet or smartphone.

Although FMCSA has allowed CMV drivers to use driver logging software, the Agency's regulatory guidance explains that drivers must print and sign the RODS that these devices generate, for each 24-hour period, just as the driver would with any handwritten RODS. The existing Questions 27 and 28 for § 395.8 (available through www.fmcsa.dot.gov ) read as follows:

“ Question 27: Would a driver who prepares his/her log on a computer, `digitally' signs the log, and then transmits it directly to the carrier, be in compliance with 49 CFR 395.8(f)(2)?

Guidance: No. The driver's activities must be recorded in accordance with the provisions of § 395.8(f)(2). This section requires that all entries relating to driver's duty status must be legible and in the driver's own handwriting.”

“ Question 28: May a driver use a computer to generate his or her record of duty status (log book) and then manually sign the computer printouts in lieu of handwritten logs?

Guidance: A driver may use a computer to generate the graph grid and entries for the record of duty status or log books, provided the computer-generated output includes the minimum information required by § 395.8 and is formatted in accordance with the rules. In addition, the driver must:

1. Be capable of printing the record of duty status for the current 24-hour period at the request of an enforcement officer.

2. Print the record of duty status at the end of each 24-hour period, and sign it in his or her handwriting to certify that all entries required by this section are true and correct.

3. Maintain a copy of printed and signed records of duty status for the previous 7 consecutive days and make it available for inspection at the request of an enforcement officer.”

Question 11 from the January 2011 regulatory guidance notice for § 390.31 advises motor carriers and other parties that they may use electronic methods to generate, sign, maintain and/or exchange any document that is generated and maintained or exchanged by private parties, regardless of whether FMCSA subsequently requires them to be produced or displayed to Federal and State enforcement personnel. The list of examples of documents includes RODS.

The Regulatory Guidance for § 390.31 was originally developed to allow motor carriers to store documents in electronic format. The January 2011 revisions to the Guidance expand the scope to allow documents to be created, maintained, and generated in electronic format. Specifically, as stated in the January 2011 Notice:

• Any electronic record or signature is considered the legal equivalent of a paper document or signature if it is the functional equivalent with respect to integrity, accuracy, and accessibility.

• [This revised] guidance establishes parity between paper and electronic records and signatures, greatly expanding interested parties' ability to use electronic records.

The January 2011 regulatory guidance is consistent with the Agency's previous policy concerning RODS prepared using logging software in that it continues to accept them as equivalent to paper documents. Signatures may be electronically embedded on printed copies or may be manually added to printed copies of the records.

Guidance Question 9 to § 390.31 provides that documents stored electronically must be capable of being reproduced in the same time frame as the original document. A paper RODS must be presented to an enforcement official upon request. Therefore, the electronically-stored RODS must also be printed for an enforcement official upon request during a roadside inspection.

Today's guidance harmonizes the January 2011 guidance interpreting § 390.31 with the previously issued guidance interpreting 49 CFR 395.8. FMCSA withdraws Question 27 for § 395.8, which currently states that a driver who prepares his/her log on a computer, `digitally' signs the log, and then transmits it directly to the carrier, would not be in compliance with 49 CFR 395.8(f)(2). In addition, FMCSA revises the response to Question 28 for § 395.8 to make clear that a driver may create, sign and store electronic RODS if certain conditions are met.

Question 28: May a driver use a computer, tablet, or smartphone (that is not an Automatic On-Board Recording Device) to create, electronically sign, and store the record of duty status (RODS)?

Guidance: Yes. A driver may make manual duty-status entries to a computer, tablet, or smartphone program that is used to generate the graph grid and entries for the record of duty status (RODS) or log book, provided the electronically-generated display (if any) and output includes the minimum information required by § 395.8 and is formatted in accordance with that section. The driver must sign the RODS (manually or electronically) at the end of each 24-hour period to certify that all required entries are true and correct.

(A) If electronic signatures are not used:

• The driver must print and manually sign the RODS daily.

• The driver must have in his or her possession the printed and signed RODS for the prior seven consecutive days (if required on those days).

• The driver should be given an opportunity to print and manually sign the current day's RODS at the time of the inspection.

(B) If RODS have been electronically signed:

• At the time of an inspection of records by an enforcement official, the driver may display the current and prior seven days RODS to the official on the device's screen.

• If the enforcement official requests printed copies of the RODS, the driver must be given an opportunity to print the current and prior seven days RODS (if required on those days) at the time of inspection.