The Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA)  1 required that the FDIC establish a risk-based deposit insurance assessment system. To implement this requirement, the FDIC adopted by regulation a system that placed all insured depository institutions (IDIs or banks) into nine risk classifications based on two criteria: Capital evaluations and supervisory ratings. 2 Each bank was assigned one of three capital evaluations based on data reported in its Consolidated Report of Condition and Income (Call Report): Well capitalized, adequately capitalized, or undercapitalized. The capital ratios and ratio thresholds used to determine each capital evaluation were based on the capital ratios and ratio thresholds adopted by the FDIC, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Federal Reserve), and the Office of Thrift Supervision (OTS)—the Federal banking agencies at that time—for prompt corrective action (PCA) purposes. 3 In 1993, the ratios and ratio thresholds used to determine each capital evaluation for assessment purposes were as shown in Table 1.

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2013-0548; Directorate Identifier 2013-NM-008-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

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

We issued an NPRM to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc. Model BD-700-1A11 airplanes. The NPRM published in the Federal Register on July 18, 2013 (78 FR 42893). The NPRM proposed to require replacement of certain oxygen mask lanyards.

Since we issued the NPRM (78 FR 42893, July 18, 2013), the airplane manufacturer found that the service information cited in the NPRM had information that caused some airplanes to not be corrected. Also, we have identified an additional Supplemental Type Certificate that is affected by the identified unsafe condition.

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2012-31R1, dated September 17, 2013 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for the specified products, because the previous MCAI referred to the faulty service information. The MCAI states:

Bombardier, Inc. has issued Service Bulletin 700-1A11-35-009, Revision 02, dated May 28, 2013. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

We gave the public the opportunity to comment on the NPRM (78 FR 42893, July 18, 2013). We received no comments on the NPRM or on the determination of the cost to the public.

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

Certain changes described above expand the scope of the NPRM (78 FR 42893, July 18, 2013). As a result, we have determined that it is necessary to reopen the comment period to provide additional opportunity for the public to comment on this proposed AD.

Since late 2006, we have included a standard paragraph titled “Airworthy Product” in all MCAI ADs in which the FAA develops an AD based on a foreign authority's AD.

The MCAI or referenced service information in an FAA AD often directs the owner/operator to contact the manufacturer for corrective actions, such as a repair. Briefly, the Airworthy Product paragraph allowed owners/operators to use corrective actions provided by the manufacturer if those actions were FAA-approved. In addition, the paragraph stated that any actions approved by the State of Design Authority (or its delegated agent) are considered to be FAA-approved.

In another NPRM, Directorate Identifier 2012-NM-101-AD (78 FR 78285, December 26, 2013), we proposed to prevent the use of repairs that were not specifically developed to correct the unsafe condition, by requiring that the repair approval provided by the State of Design Authority or its delegated agent specifically refer to the FAA AD. This change was intended to clarify the method of compliance and to provide operators with better visibility of repairs that are specifically developed and approved to correct the unsafe condition. In addition, we proposed to change the phrase “its delegated agent” to include a design approval holder (DAH) with State of Design Authority design organization approval (DOA), as applicable, to refer to a DAH authorized to approve required repairs for the proposed AD.

One commenter to the other NPRM, Directorate Identifier 2012-NM-101-AD (78 FR 78285, December 26, 2013), stated the following: “The proposed wording, being specific to repairs, eliminates the interpretation that Airbus messages are acceptable for approving minor deviations (corrective actions) needed during accomplishment of an AD mandated Airbus service bulletin.”

This comment has made the FAA aware that some operators have misunderstood or misinterpreted the Airworthy Product paragraph to allow the owner/operator to use messages provided by the manufacturer as approval of deviations during the accomplishment of an AD-mandated action. The Airworthy Product paragraph does not approve messages or other information provided by the manufacturer for deviations to the requirements of the AD-mandated actions. The Airworthy Product paragraph only addresses the requirement to contact the manufacturer for corrective actions for the identified unsafe condition and does not cover deviations from other AD requirements. However, deviations to AD-required actions are addressed in 14 CFR 39.17, and anyone may request the approval for an alternative method of compliance to the AD-required actions using the procedures found in 14 CFR 39.19.

To address this misunderstanding and misinterpretation of the Airworthy Product paragraph, we have changed that paragraph and retitled it “Contacting the Manufacturer.” This paragraph now clarifies that for any requirement in this proposed AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the FAA, TCCA, or Bombardier's TCCA Design Approval Organization (DAO). Where necessary throughout this proposed AD, we also replaced any reference to approvals of corrective actions with a reference to the Contacting the Manufacturer paragraph.

The Contacting the Manufacturer paragraph also clarifies that, if approved by the DAO, the approval must include the DAO-authorized signature. The DAO signature indicates that the data and information contained in the document are TCCA-approved, which is also FAA-approved. Messages and other information provided by the manufacturer that do not contain the DAO-authorized signature approval are not TCCA-approved, unless TCCA directly approves the manufacturer's message or other information.

This clarification does not remove flexibility previously afforded by the Airworthy Product paragraph. Consistent with long-standing FAA policy, such flexibility was never intended for required actions. This is also consistent with the recommendation of the Airworthiness Directive Implementation Aviation Rulemaking Committee to increase flexibility in complying with ADs by identifying those actions in manufacturers' service instructions that are “Required for Compliance” with ADs. We continue to work with manufacturers to implement this recommendation. But once we determine that an action is required, any deviation from the requirement must be approved as an alternative method of compliance.

We estimate that this proposed AD affects 22 airplanes of U.S. registry. We also estimate that it would take about 16 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Required parts would cost about $0 per product. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $29,920, or $1,360 per product.

Where the service information lists required parts costs that are covered under warranty, we have assumed that there will be no charge for these parts. As we do not control warranty coverage for affected parties, some parties may incur costs higher than estimated here.

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

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

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2014-0454; Directorate Identifier 2013-NM-138-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

On April 2, 2002, we issued AD 2002-07-08, Amendment 39-12702 (67 FR 17917, April 12, 2002), for certain the Boeing Company Model 737 airplanes. AD 2002-07-08 requires repetitive inspections for cracking of the lower skin at the lower row of fasteners in the lap joints of the fuselage; repair of any cracking found; modification of the fuselage lap joints at certain locations, which terminates the repetitive inspections of the modified areas; and replacement of a certain preventive modification with an improved modification. AD 2002-07-08 resulted from the FAA's determination that, in light of additional crack findings, certain modifications of the fuselage lap joints did not provide an acceptable level of safety. We issued AD 2002-07-08 to detect and correct cracking of the fuselage lap joints, which could result in sudden decompression of the airplane.

Structural fatigue damage is progressive. It begins as minute cracks, and those cracks grow under the action of repeated stresses. This can happen because of normal operational conditions and design attributes, or because of isolated situations or incidents such as material defects, poor fabrication quality, or corrosion pits, dings, or scratches. Fatigue damage can occur locally, in small areas or structural design details, or globally. Global fatigue damage is general degradation of large areas of structure with similar structural details and stress levels. Multiple-site damage is global damage that occurs in a large structural element such as a single rivet line of a lap splice joining two large skin panels. Global damage can also occur in multiple elements such as adjacent frames or stringers. Multiple-site-damage and multiple-element-damage cracks are typically too small initially to be reliably detected with normal inspection methods. Without intervention, these cracks will grow, and eventually compromise the structural integrity of the airplane, in a condition known as widespread fatigue damage (WFD). As an airplane ages, WFD will likely occur, and will certainly occur if the airplane is operated long enough without any intervention.

The FAA's WFD final rule (75 FR 69746, November 15, 2010) became effective on January 14, 2011. The WFD rule requires certain actions to prevent structural failure due to WFD throughout the operational life of certain existing transport category airplanes and all of these airplanes that will be certificated in the future. For existing and future airplanes subject to the WFD rule, the rule requires that design approval holders (DAHs) establish a limit of validity (LOV) of the engineering data that support the structural maintenance program. Operators affected by the WFD rule may not fly an airplane beyond its LOV, unless an extended LOV is approved.

The WFD rule (75 FR 69746, November 15, 2010) does not require identifying and developing maintenance actions if the DAHs can show that such actions are not necessary to prevent WFD before the airplane reaches the LOV. Many LOVs, however, do depend on accomplishment of future maintenance actions. As stated in the WFD rule, any maintenance actions necessary to reach the LOV will be mandated by airworthiness directives through separate rulemaking actions.

In the context of WFD, this action is necessary to enable DAHs to propose LOVs that allow operators the longest operational lives for their airplanes, and still ensure that WFD will not occur. This approach allows for an implementation strategy that provides flexibility to DAHs in determining the timing of service information development (with FAA approval), while providing operators with certainty regarding the LOV applicable to their airplanes.

Since we issued AD 2002-07-08, Amendment 39-12702 (67 FR 17917, April 12, 2002), we have determined that adjacent stringers and window frames have cracked in locations outside the inspection areas addressed by AD 2002-07-08. More extensive inspections over a larger area are therefore necessary.

We reviewed Boeing Service Bulletin 737-53A1177, Revision 7, dated June 14, 2013, which describes procedures for certain new actions that were not included in previous revisions of this service information. These new actions include repetitive inspections for cracking at certain window corner fastener holes, a preventive modification, and post-repair/alteration and butt joint repetitive inspections and repair if necessary. For information on the procedures and compliance times, see this service information at http://www.regulations.gov by searching for Docket No. FAA-2014-0454.

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

This proposed AD would retain certain requirements of AD 2002-07-08, Amendment 39-12702 (67 FR 17917, April 12, 2002). This proposed AD would also require accomplishing the actions specified in the service information described previously, except as discussed under “Difference Between this Proposed AD and the Service Information.”

Boeing has identified a group of airplanes affected by AD 2002-07-08, Amendment 39-12702 (67 FR 17917, April 12, 2002), that did not specify crown lap splice inspections until they reached their modification threshold of 50,000 total flight cycles. This was determined to be a safety concern. We have issued AD 2013-09-01, Amendment 39-17442 (78 FR 27001, May 9, 2013), to require these crown lap splice inspections for the affected airplanes, and this proposed AD would remove the overlapping requirements (paragraphs (a), (b), (c), and (f)) from AD 2002-07-08. Those crown lap splice inspections are described in Boeing Service Bulletin 737-53A1255, Revision 2, dated August 7, 2012.

AD 2013-09-01, Amendment 39-17442 (78 FR 27001, May 9, 2013), applies to certain Model 737 airplanes and requires various repetitive inspections for cracking of certain fuselage crown lap joints. The lap joint modification/repair specified in this proposed AD would terminate certain inspections of AD 2013-09-01.

Boeing Service Bulletin 737-53A1177, Revision 7, dated June 14, 2013, specifies to contact the manufacturer for instructions for certain actions, but this proposed AD would require accomplishment of those actions in one of the following ways:

• In accordance with a method that we approve; or

• Using data that meet the certification basis of the airplane, and that have been approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) whom we have authorized to make those findings.

This proposed AD will address only Model 737 airplanes with line numbers 292 through 2565. Model 737 airplanes with line numbers 1 through 291 have been addressed in AD 2003-23-03, Amendment 39-13367 (68 FR 64980, November 18, 2003).

Boeing Commercial Airplanes has received an ODA. This proposed AD would delegate the authority to approve an alternative method of compliance for any repair or modification required by this proposed AD to the Boeing Commercial Airplanes ODA rather than a Designated Engineering Representative (DER).

The compliance time for the preventive modification specified in this proposed AD for addressing WFD was established to ensure that discrepant structure is modified before WFD develops in airplanes. Standard inspection techniques cannot be relied on to detect WFD before it becomes a hazard to flight. We will not grant any extensions of the compliance time to complete any AD-mandated service bulletin related to WFD without extensive new data that would substantiate and clearly warrant such an extension.

We estimate that this proposed AD affects 247 airplanes of U.S. registry. We estimate the following costs to comply with this proposed AD:

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

The cost estimate figures discussed above are based on assumptions that no operator has yet accomplished any of the actions required by this proposed AD, and that no operator would accomplish those actions in the future if this proposed AD were not adopted. However, we have been advised that the lap joint modification has already been installed on some affected airplanes. Therefore, based on the current number of U.S.-registered airplanes below the threshold of 50,000 total flight cycles, the future economic cost impact of this proposed AD on U.S. operators is expected to be less than the cost impact figure indicated above.

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

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

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

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

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

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

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

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

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

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2014-0455; Directorate Identifier 2014-NM-006-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

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

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2013-0310, dated December 20, 2013 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

The actions in this AD include a rototest inspection for cracking of the open tack holes and rivet holes at the cargo floor support fittings of the fuselage, modification of the fuselage, including doing all applicable related investigative actions, and repair if necessary. Related investigative actions include rotating probe inspections for cracking of the holes. You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2014-0455.

Airbus has issued Service Bulletin A320-53-1257, dated December 21, 2012, and Service Bulletin A320-53-1261, dated December 21, 2012. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

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

Since late 2006, we have included a standard paragraph titled “Airworthy Product” in all MCAI ADs in which the FAA develops an AD based on a foreign authority's AD.

The MCAI or referenced service information in an FAA AD often directs the owner/operator to contact the manufacturer for corrective actions, such as a repair. Briefly, the Airworthy Product paragraph allowed owners/operators to use corrective actions provided by the manufacturer if those actions were FAA-approved. In addition, the paragraph stated that any actions approved by the State of Design Authority (or its delegated agent) are considered to be FAA-approved.

In an NPRM having Directorate Identifier 2012-NM-101-AD (78 FR 78285, December 26, 2013), we proposed to prevent the use of repairs that were not specifically developed to correct the unsafe condition, by requiring that the repair approval provided by the State of Design Authority or its delegated agent specifically refer to the FAA AD. This change was intended to clarify the method of compliance and to provide operators with better visibility of repairs that are specifically developed and approved to correct the unsafe condition. In addition, we proposed to change the phrase “its delegated agent” to include a design approval holder (DAH) with State of Design Authority design organization approval (DOA), as applicable, to refer to a DAH authorized to approve required repairs for the proposed AD.

One commenter to the NPRM having Directorate Identifier 2012-NM-101-AD (78 FR 78285, December 26, 2013), stated the following: “The proposed wording, being specific to repairs, eliminates the interpretation that Airbus messages are acceptable for approving minor deviations (corrective actions) needed during accomplishment of an AD mandated Airbus service bulletin.”

This comment has made the FAA aware that some operators have misunderstood or misinterpreted the Airworthy Product paragraph to allow the owner/operator to use messages provided by the manufacturer as approval of deviations during the accomplishment of an AD-mandated action. The Airworthy Product paragraph does not approve messages or other information provided by the manufacturer for deviations to the requirements of the AD-mandated actions. The Airworthy Product paragraph only addresses the requirement to contact the manufacturer for corrective actions for the identified unsafe condition and does not cover deviations from other AD requirements. However, deviations to AD-required actions are addressed in 14 CFR 39.17, and anyone may request the approval for an alternative method of compliance to the AD-required actions using the procedures found in 14 CFR 39.19.

To address this misunderstanding and misinterpretation of the Airworthy Product paragraph, we have changed that paragraph and retitled it “Contacting the Manufacturer.” This paragraph now clarifies that for any requirement in this proposed AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the FAA, the European Aviation Safety Agency (EASA), or Airbus's EASA DOA.

The Contacting the Manufacturer paragraph also clarifies that, if approved by the DOA, the approval must include the DOA-authorized signature. The DOA signature indicates that the data and information contained in the document are EASA-approved, which is also FAA-approved. Messages and other information provided by the manufacturer that do not contain the DOA-authorized signature approval are not EASA-approved, unless EASA directly approves the manufacturer's message or other information.

This clarification does not remove flexibility previously afforded by the Airworthy Product paragraph. Consistent with long-standing FAA policy, such flexibility was never intended for required actions. This is also consistent with the recommendation of the Airworthiness Directive Implementation Aviation Rulemaking Committee to increase flexibility in complying with ADs by identifying those actions in manufacturers' service instructions that are “Required for Compliance” with ADs. We continue to work with manufacturers to implement this recommendation. But once we determine that an action is required, any deviation from the requirement must be approved as an alternative method of compliance.

We estimate that this proposed AD affects 847 airplanes of U.S. registry.

We also estimate that it would take about 471 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Required parts (for the modification) would cost about $6,570 per product. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $39,474,435, or $46,605 per product.

We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this proposed 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 proposed regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

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

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

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

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

3. Will not affect intrastate aviation in Alaska; and

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

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

We invite you to participate in this rulemaking by submitting written comments, data, or views. We also invite comments relating to the economic, environmental, energy, or federalism impacts that might result from adopting the proposals in this document. The most helpful comments reference a specific portion of the proposal, explain the reason for any recommended change, and include supporting data. To ensure the docket does not contain duplicate comments, commenters should send only one copy of written comments, or if comments are filed electronically, commenters should submit only one time.

We will file in the docket all comments that we receive, as well as a report summarizing each substantive public contact with FAA personnel concerning this proposed rulemaking. Before acting on this proposal, we will consider all comments we receive on or before the closing date for comments. We will consider comments filed after the comment period has closed if it is possible to do so without incurring expense or delay. We may change this proposal in light of the comments we receive.

We propose to adopt a new AD for Sikorsky Model S-92A helicopters. This proposed AD would require, depending on the helicopter's serial number, installing an MGB failed pump sensor and vacuum switch wiring, installing an MGB oil auto bypass system, activating AMS 7.1 software to show a new MGB “OIL OUT” visual warning, updating the EGPWS software to include an aural annunciation of a complete oil pressure loss condition, and inserting an RFM Supplement into the applicable RFM.

This proposed AD is prompted by one accident and one in-service oil leakage incident where it was discovered during subsequent investigations that the pilot failed to activate the bypass valve within 5 seconds of the oil pressure dropping below 35 psi, as required by the RFM. Both accident and incident investigations found that the pilot activated the bypass valve well beyond the 5 seconds.

The manual operation of the bypass valve within 5 seconds of the oil pressure dropping below 35 psi has proven not to be a realistic expectation. The MGB failed pump sensor and vacuum switch wiring is a system that will detect an oil pressure drop in the input module and alert the pilot if the low oil pressure is the result of a failed oil pump. The MGB oil auto bypass system eliminates the need for the pilot to manually switch the bypass valve when the oil pressure drops below 35 psi. The AMS software upgrade is to automate the bypass valve and to alert the pilot that the low oil pressure may be the result of a failed oil pump. Knowing the low oil pressure is the result of a failed oil pump and not due to oil leakage will allow the pilot to switch the bypass valve out of bypass to cool the oil. When the oil is not cooled, the hot oil may cause the input module seals to fail allowing an excessive amount of oil to leak resulting in failure of the MGB. There have been several incidents of a pump failure where the oil had the potential to reach a high enough temperature to damage the seals. The EGPWS software change provides a new aural warning of a complete oil pressure loss.

We are proposing this AD because we evaluated all known relevant information and determined that an unsafe condition exists and is likely to exist or develop on other helicopters of this same type design.

Sikorsky has issued the following service information:

• Alert Service Bulletin (ASB) No. 92-63-024C, Revision C, dated October 7, 2011, for certain serial-numbered helicopters specifies installing a main module input gear box switch assembly and modifying the MGB vacuum switch wiring. Before making the modification, the ASB states an AMS 4.1 or greater version must first be installed and the following Customer Service Notices (CSN) completed: CSN 92-068C, Revision C, dated March 27, 2012, and CSN 92-069A, Revision A, dated November 10, 2011.

• ASB 92-63-027, Basic Issue, dated January 21, 2013, for certain serial-numbered helicopters specifies installing an MGB oil pressure automatic bypass system, activating an MGB “OIL OUT” visual warning in the AMS 7.1 software, and performing systems operational checkout procedures. Before or when installing the MGB oil pressure auto bypass system, the ASB states the following must be complied with: CSN 92-089, Basic Issue, dated January 10, 2013; ASB 92-34-002, Basic Issue, dated January 21, 2013; and ASB 92-63-024C, Revision C, dated October 7, 2011.

• ASB 92-34-002, Basic Issue, dated January 21, 2013, for certain serial-numbered helicopters with certain part-numbered EGPWS installed, specifies installing EGPWS updated software version 030, which adds an MGB “OIL OUT” aural warning, in accordance with Honeywell International, Inc., Service Bulletin 965-1595-34-23, Revision 0, dated March 13, 2012. Before or during installation of the updated software, the ASB states the following must be complied with: ASB 92-63-027, Basic Issue, dated January 21, 2013, and CSN 92-089, Basic Issue, dated January 10, 2013.

The proposed AD would require, within 500 hours time-in-service (TIS):

• Inserting a copy of the Sikorsky S-92A RFM Supplement No. 45, Part I, dated July 30, 2012, into the RFM.

• For certain serial-numbered helicopters, installing an MGB failed pump sensor and MGB vacuum switch wiring.

• For certain other serial-numbered helicopters, installing an MGB auto bypass system, activating AMS 7.1 software, and installing EGPWS software version 030.

This AD proposes compliance within 500 hours TIS, and the service information specifies certain dates and calendar times.

We estimate that this proposed AD would affect 44 helicopters of U.S. Registry.

We estimate that operators may incur the following costs in order to comply with this AD. Labor costs are estimated at $85 per hour. The work hours and required parts costs are estimated as follows:

• .5 work hour to insert the RFM Supplement into the RFM.

• 8 work hours plus $2,200 for required parts to install an MGB failed pump sensor;

• 4 work hours plus $250 for required parts to install MGB vacuum switch wiring;

• 71.7 work hours plus $4,100 for required parts to install an MGB oil pressure auto bypass system;

• 1 work hour to activate AMS 7.1; and

• 1 work hour plus $500 for required parts to install EGPWS software.

The total cost of compliance for all actions would be about $14,377 per helicopter and $632,588 for the U.S. fleet.

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

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

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

For the reasons discussed, I certify this proposed regulation:

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

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

3. Will not affect intrastate aviation in Alaska to the extent that it justifies making a regulatory distinction; and

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

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

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

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2014-0494; Directorate Identifier 2014-CE-017-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

The Civil Aviation Authority (CAA), which is the aviation authority for New Zealand, has issued AD DCA/750XL/16A, dated June 18, 2014 (referred to after this as “the MCAI”), to correct an unsafe condition for Pacific Aerospace Limited Model 750XL airplanes and was based on mandatory continuing airworthiness information originated by an aviation authority of another country. The MCAI states:

Pacific Aerospace Limited has issued Mandatory Service Bulletin (MSB) PACSB/XL/068, issue 3, dated May 29, 2014. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

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

We estimate that this proposed AD will affect 17 products of U.S. registry. We also estimate that it would take about 1 work-hour per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour.

Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $1,445, or $85 per product.

In addition, we estimate that any necessary follow-on actions would take about 5 work-hours and require parts costing $328, for a cost of $753 per product. We have no way of determining the number of products that may need these actions.

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

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

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

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

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

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

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

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

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

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers (FAA Docket No. FAA-2014-0309 and Airspace Docket No. 14-AWP-3) and be submitted in triplicate to the Docket Management System (see ADDRESSES section for address and phone number). You may also submit comments through the Internet at http://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2014-0309 and Airspace Docket No. 14-AWP-3”. The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the Internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's Web page at http://www.faa.gov/airports_airtraffic/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 1601 Lind Avenue SW., Renton, WA 98057.

Persons interested in being placed on a mailing list for future NPRM's should contact the FAA's Office of Rulemaking, (202) 267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by creating Class E airspace extending upward from 700 feet above the surface within a 4-mile radius of Lampson Field, Lakeport, CA. Controlled airspace is needed for RNAV (GPS) standard instrument approaches and departures. This action would enhance the safety and management of aircraft operations at the airport.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9X, dated August 7, 2013, and effective September 15, 2013, which is incorporated by reference in 14 CFR Part 71.1. The Class E airspace designation listed in this document will be published subsequently in this Order.

The FAA has determined this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation; (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); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified this proposed rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106, describes the authority for the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would modify controlled airspace at Lampson Field, Lakeport, CA.

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR Part 71 as follows:

The Consumer Product Safety Improvement Act of 2008 (CPSIA, Pub. L. 110-314) was enacted on August 14, 2008. Section 104(b) of the CPSIA, part of the Danny Keysar Child Product Safety Notification Act, requires the Commission to: (1) Examine and assess the effectiveness of voluntary consumer product safety standards for durable infant or toddler products, in consultation with representatives of consumer groups, juvenile product manufacturers, and independent child product engineers and experts; and (2) promulgate consumer product safety standards for durable infant and toddler products. These standards are to be “substantially the same as” applicable voluntary standards or more stringent than the voluntary standard if the Commission concludes that more stringent requirements would further reduce the risk of injury associated with the product. Section 104(f)(1) of the CPSIA defines the term “durable infant or toddler product” as “a durable product intended for use, or that may be reasonably expected to be used, by children under the age of 5 years.” Section 104(f)(1)(H) provides that the term “durable infant or toddler product” includes “infant carriers.”

Section 104 also requires manufacturers of durable infant or toddler products to comply with a registration program that the Commission establishes. Section 104(d).

In this document, the Commission is proposing a safety standard for sling carriers. Section 104(f)(2)(H) of the CPSIA lists “infant carriers” as one of the categories of durable infant or toddler products identified for purposes of section 104. As indicated by a review of ASTM's standards and retailers' Web sites, the category of “infant carriers” includes hand-held infant carriers, soft infant carriers, frame backpack carriers, and sling carriers. The Commission has issued final rules for hand-held infant carriers (78 FR 73415 (December 6, 2013)) and soft infant carriers (78 FR 20511 (April 5, 2013)) and a proposed rule on frame backpack carriers (79 FR 28458 (May 16, 2014)). In the Commission's product registration card rule identifying additional products that the Commission considered durable infant or toddler products necessitating compliance with the product registration card requirements, the Commission specifically identified infant slings, or sling carriers, as a durable infant or toddler product. 76 FR 68668 (December 29, 2009). The durability of infant slings is discussed in section II.B. of this document.

Because the voluntary standard on infant slings, ASTM 2907-14a, “Standard Consumer Safety Specification for Sling Carriers,” refers to “infant slings” as “sling carriers,” the notice of proposed rulemaking refers to infant slings as “sling carriers.” The terms are intended to be interchangeable and have the same meaning.

Pursuant to Section 104(b)(1)(A), the Commission consulted with manufacturers, retailers, trade organizations, laboratories, consumer advocacy groups, consultants, and members of the public in the development of this proposed standard, largely through the ASTM process. CPSC staff participated in the ASTM sling carrier subcommittee meetings and task group meetings and worked with the ASTM sling carrier task groups to develop ballot language for revisions to the sling carrier voluntary standard. The proposed rule is based on the voluntary standard developed by ASTM International (formerly the American Society for Testing and Materials), ASTM F2907-14a, “Standard Consumer Safety Specification for Sling Carriers” (ASTM F2907-14a), without change.

The ASTM standard is copyrighted, but the standard is available as a read-only document during the comment period on this proposal only, at: http://www.astm.org/cpsc, by permission of ASTM.

ASTM F2907-14a “Standard Consumer Safety Specification for Sling Carriers” defines a “sling carrier” as “a product of fabric or sewn fabric construction, which is designed to contain a child in an upright or reclined position while being supported by the caregiver's torso.” These products generally are intended for children starting at full-term birth until a weight of about 35 pounds. The designs of infant slings vary, but the designs generally range from unstructured hammock-shaped products that suspend from the caregiver's body, to long lengths of material or fabric that are wrapped around the caregiver's body. Infant slings normally are worn with the infant positioned on the front, hip, or back of the consumer, and with the infant facing toward or away from the consumer. As stated in the sling carrier definition, these products generally allow the infant to be placed in an upright or reclined position. However, the reclined position is intended to be used only when the infant is worn on the front of the consumer. The ability to carry the infant in a reclined position is the primary feature that distinguishes sling carriers from soft infant and toddler carriers, another subset of sling carriers.

The Commission identified three broad classes of sling carrier products available in the United States:

• Ring slings are hammock-shaped fabric products, in which one runs fabric through two rings to adjust and tighten the sling.

• Pouch slings are similar to ring slings but do not use rings for adjustment. Many pouch slings are sized rather than designed to be adjustable. Other pouch slings are more structured and use buckles or other fasteners to adjust the size.

• Wrap slings are generally composed of a long length of fabric, upwards of six yards long, and up to two feet wide. A wrap sling is completely unstructured with no fasteners or other means of structure; instead, the caregiver uses different methods of wrapping the material around the caregiver's body and the child's body to support the child. Wrap-like slings mimic the manner in which a wrap supports the child but use fabric in other manners, such as loops, to reduce the need for caregivers to learn wrapping methods.

ASTM F2907 does not distinguish among the type of slings. The voluntary standard's requirements apply equally to all slings.

ASTM F2907-14a states that sling carriers generally are intended for children starting at full-term birth, until a weight of about 35 pounds (15.9 kg). According to the data tables used to produce the 2000 Centers for Disease Control and Prevention (CDC) U.S. growth charts, the median (50th percentile) weight of a child does not exceed 35 pounds until about 46 months for boys and 49 months for girls (CDC, 2000). Moreover, the 5th percentile bodyweight of a child does not exceed 35 pounds until about 65 months for boys and 69 months for girls. This means that more than half of all 3-year-olds are likely to be at or below the maximum weight of 35 pounds, and that even some 5-year-olds are likely to be at or below this upper weight limit. Although the Commission believes that sling carriers are most likely to be used with infants, it seems reasonably foreseeable that some portion of the user population will use these carriers with preschool-aged children.

Evidence suggests that sling carriers are often reused for multiple children. For example, according to a 2005 survey conducted by the American Baby Group (2006 Baby Products Tracking Study ), nearly one-third (31 percent) of mothers who own slings had a sling that was handed down or purchased secondhand. Preliminary data from CPSC's Durable Nursery Products Exposure Survey found that 21 percent of sling owners acquired the sling used. The Survey also found that after the owner discontinued use of the sling, only 4 percent threw away the sling; 96 percent of owners stored the sling for future use, sold the sling, gave the sling away, or returned the sling to the original owner. These results suggest that most sling owners at least perceive sling carriers to have a future useful life, even if the sling had been used previously.

The Commission is aware of several online Web sites, forums, and “babywearing” groups dedicated to buying, selling, and trading previously used sling carriers. (“Babywearing” is commonly used to describe the wearing or carrying of a baby in a sling or similar carrier.) For example, a simple search of sold listings for a used “baby sling” on eBay resulted in more than 1,700 listings during a roughly 3-month period. Although some of the products in these ads do not meet the definition of a “sling carrier,” a brief examination of the most recent 200 sales suggests that a very large percentage of these products would be considered a sling carrier. Thus, many consumers appear to be purchasing slings secondhand.

The Commission has identified 47 suppliers to the U.S. market, but there may be hundreds more suppliers that produce small quantities of slings. (The Commission made these determinations using information from Dun & Bradstreet and Reference USAGov, as well as firm Web sites.) Web sites such as Etsy show thousands of listings for artisans producing slings and wraps (although each firm may have multiple listings), which accounts for additional suppliers who are not among the 47 suppliers identified. Sling carriers are distributed by a variety of methods, such as mass merchandisers, small specialty juvenile products stores, and Internet-only distributors.

Of the 47 sling carrier suppliers identified, 33 companies are based in the United States: 25 are manufacturers, and four are importers. Available information does not identify the supply source for four firms. There are also 14 foreign companies that export directly to the United States via Internet sales or directly to U.S. retailers.

A sling carrier is an uncomplicated product to produce, typically requiring only fabric, thread, rings (and in some cases, fasteners), and a sewing machine. A common scenario for a sling manufacturer starts with a mother using various slings or soft carriers and then deciding to make her own design in her home. Some of these home businesses grow into larger businesses that become more specialized and sophisticated, typically designing and marketing their own products but having the product manufactured overseas. However, the newer home businesses may be relatively unsophisticated and may not be aware of the sling carrier voluntary standard effort or know that sling carriers may be subject to existing federal regulations on children's products.

According to a the 2006 Baby Products Tracking Study, 17 percent of new mothers own sling carriers. As noted previously, approximately 31 percent of sling carriers were handed down or purchased secondhand. Thus, about 69 percent of sling carriers were acquired new. (The data collected for the Baby Products Tracking Study do not represent an unbiased statistical sample. American Baby Products surveyed potential respondents from its mailing lists to generate a sample of 3,600 new and expectant mothers. Additionally, because the most recent survey information is from 2005, the data may not reflect the current market.) This information suggests annual sales of about 471,000 sling carriers (.17 × .69 × 4 million births per year), with prices ranging from $30 to around $150. (U.S. Department of Health and Human Services, Centers for Disease Control and Prevention (CDC), National Center for Health Statistics, National Vital Statistics System, “Births: Final Data for 2009,” National Vital Statistics Reports Volume 61, Number 1 (August 28, 2012): Table I. Number of births in 2010 is rounded from 3,999,386.)

However, this sales estimate may be a substantial underestimate for two reasons: (1) Industry sources state that slings have increased in popularity since the survey was done in 2005; and (2) other products like wraps, pouches, and some soft carriers, which fall under the standard, may not have been included in the Baby Products Tracking study. Based on discussions with an industry representative, sales of these other products that fall under the proposed rule for sling carriers could increase the Commission's sales estimate to about 600,000 to 1 million units annually.

The Commission is aware of a total of 122 incidents (16 fatal and 106 nonfatal) related to sling carriers, which were reported to have occurred from January 1, 2003 through October 27, 2013. Because reporting is ongoing, the number of reported fatalities, nonfatal injuries, and non-injury incidents may change in the future. Given that reporting is incomplete, the Commission strongly discourages drawing inferences based on the year-to-year increase or decrease shown in the reported data. (The CPSC databases searched were the In-Depth Investigation (INDP) file, the Injury or Potential Injury Incident (IPII) file, the Death Certificate (DTHS) file, and the National Electronic Injury Surveillance System (NEISS). These reported deaths and incidents do not provide a complete count of all deaths and incidents that occurred during that time period. However, they do provide a minimum number of deaths and incidents occurring during this time period and illustrate the circumstances involved in the incidents related to sling carriers.)

Among the incidents in which age was reported, all but one of the children were 12 months old or younger; the age of the oldest child was reported to be 3 years. Some incident reports did not indicate the age because there was no injury involved or age was unknown. Table 1 provides the age breakdown as reported in the 122 incidents.

CPSC received reports of 16 fatalities associated with the use of a sling carrier that occurred during the period from January 1, 2003 through October 27, 2013. Eleven of the 16 decedents were 1-month olds; the remaining five were between 3- and 5-months old. Nine of the decedents were described as having died of smothering, (also known as “suffocation,” or “positional asphyxia.”) Suffocation can occur when babies are contained entirely within the pouch of a sling. Infants who are placed with their heads below the rim of the sling are likely to stay in the same position because they are surrounded by unyielding fabric under the tension of their weight, and are tightly confined within the product, typically with their faces directed towards or held against the parent's body. The highest risk of suffocation occurs when the infant's face (nose and mouth) is pressed against the mother's body, blocking the infant's breathing, and rapidly suffocating the baby within a few minutes. The cause of death was undetermined for the remaining decedents.

One fatal victim was 5 months old. The age range of the remaining 15 fatal victims was from birth to 3 months; 11 infants were ages 1 month and younger, and the remaining four were 3 months old. Infants younger than 4 months old are at a high risk for suffocation because they have relatively immature physiological systems controlling breathing and arousal.

Of the 106 sling carrier-related nonfatal incidents that were reported to have occurred from January 1, 2003 through October 27, 2013, 54 reports reflected an injury to the infant during use of the product. Age was unreported for one of the injured, and one report stated that a 3-year-old was injured. For the rest of the incidents, the child's age ranged from 1 month to 11 months.

Among the 54 reported nonfatal injuries, nine were reported as involving hospitalizations. Among the hospitalizations, one injury was described as a permanent brain injury due to breathing difficulties suffered by the infant. The rest of the hospitalizations were serious head injuries, such as a fracture and/or brain hemorrhage, which resulted from infants falling from the carrier. Eleven additional skull/face/wrist fracture injuries were reported, but none of these incidents was reported to involve hospitalizations. The remaining non-hospitalized injuries included closed-head injuries, contusions/abrasions, lacerations/scratches, among others. (A closed head injury is a head injury where the skull remained intact. A closed head injury can range from a minor bump to the head to a severe life threatening traumatic brain injury.) A majority of the injuries resulted from falls from the carrier; most of these falls resulted from the caregiver slipping, tripping, or bending over while carrying the infant in the sling. The remaining injuries were due to miscellaneous product-related issues or other caregiver missteps, such as the caregiver not allowing enough safety clearance for the child in the sling carrier while the caregiver performed daily activities.

The remaining 52 incident reports stated that no injury had occurred or provided no information about any injury.

The Commission considered all 122 reported incidents (16 fatal and 106 nonfatal) to identify hazard patterns associated with sling carriers. In order of frequency of incident reports, the Commission grouped the hazard patterns into the following categories:

1. Problems with the positioning of the infant in the sling carrier: Thirty-one of the 122 reported incidents (25 percent) were in this category. Among them were nine deaths due to smothering, one permanent brain impairment injury due to breathing difficulty, and two other injuries—one related to breathing difficulty and the other related to blood-circulation in the infant's leg. The rest of the incidents reported that the infant suffered breathing problems while in the carrier or that the caregiver had difficulty safely positioning the infant in the sling carrier to avoid the potential for suffocation.

2. Caregiver missteps: Twenty of the 28 incidents (23 percent) in this category were reported to have occurred when the caregiver slipped, tripped, or bent over, causing the infant in the sling to either fall with the caregiver or fall out of the carrier. Eight additional incidents among the 28 reported in this category occurred when caregivers dropped the infant during placement into/removal out of the carrier or failed to provide enough safety clearance for the infant in the carrier as the caregivers conducted their daily activities. Examples of the latter scenario include an infant getting struck by a door or a falling object, or an infant hitting a wall. Although these 28 incidents did not involve any fatalities, all but one incident resulted in an injury to the infant. These incidents included 11 reports of skull fractures and one report of bleeding in the brain. Other injuries included closed-head injuries, contusions of the head/leg/back, and a finger laceration.

3. Undetermined or unspecified cause: Twenty five reported incidents (20 percent) included seven fatalities, two hospitalized injuries, and 13 non-hospitalized injuries, with very little information available on the circumstances leading to the incidents. The official reports did not indicate a specific cause of death. Among the injuries, which included fractures of the skull/wrist, as well as other serious head injuries, most were reported through hospital emergency departments with very little scenario-specific information.

4. Problems with buckles: Twelve of the 122 incidents (10 percent) reported buckles releasing, slipping, or breaking, causing infants to fall or nearly fall. There was one hospitalization for a skull fracture and two non-hospitalized injuries. There were no fatalities in this category.

5. Miscellaneous product-related issues: There were nine incident reports (seven percent) in which consumers complained of a design flaw posing a possible strangulation hazard, a broken component, rough fabric, or a sharp surface; or consumers indicated an unspecified product failure. Although these reports did not include any fatalities, there were six injuries reported in this category, including one skull fracture.

6. Consumer comments: There were 17 non-event reports (14 percent) of consumer comments or observations of perceived safety hazards. In most of these cases, the consumer did not own the sling carrier in question. None of these reports indicates that any event actually occurred.

Since January 1, 2003, the CPSC has issued five consumer-level recalls involving sling carriers. All five recalls were for product defects that created a substantial product hazard and resulted in the recall of about 1.1 million sling carriers. Two of the recalled products posed a suffocation hazard, while three recalls were related to structural integrity and fall or potential fall hazards.

The Commission identified one European standard that covers fabric carriers without rigid structure. In addition, a guideline for sling carriers is under development in Europe.

1. British Standard EN13209-2:2005, Child Use and Care Articles—Baby Carriers—Safety Requirements and Test Methods—Part 2: Soft Carriers (27 September 2005), is the European standard for soft, fabric carriers. However, EN13209 specifically states that the scope is intended for a “product [that] has holes designed to accommodate the child's legs.” Sling carriers do not have holes through which a child's legs pass. Although some individual requirements in the EN13209 standard may be more stringent than those in F2907-14a, the reported incidents do not suggest that these are prevalent hazard patterns associated with sling carriers. Therefore, the Commission does not believe that incorporating these more stringent requirements would further reduce the risk of injury associated with sling carriers.

2. CEN/TR 16512, Child use and care articles—Guidelines for the safety of children's slings, is a guideline that is under development in Europe. However, because this guideline, once completed would not be a standard, CEN/TR 16512 is not an option for consideration. The Commission expects that this guideline, when published, will contain recommendations similar to EN13209, but with recommendations adapted for the unique attributes of sling carriers.

The Commission notes that the ASTM F15.21 subcommittee has worked to make F2907 the most appropriate standard for the unique nature of sling carriers by harmonizing with other standards ( e.g., EN13209 and ASTM F2236), when appropriate, but also addressing the uniqueness of sling carriers, when needed. The Commission believes that ASTM F2907-14a is the most comprehensive standard that addresses the incident hazard patterns and that F2907-14a adequately addresses the hazards identified to date.

ASTM F2907, “Standard Consumer Safety Performance Specification for Sling Carriers,” establishes safety performance requirements, test methods, and labeling requirements to minimize the hazards to children presented by sling carriers. ASTM first published a consumer product safety standard for sling carriers in 2012. ASTM has revised the voluntary standard five times since then. The current version, ASTM F2907-14a, was approved on February 15, 2014, and published in March 2014. ASTM F15.21 subcommittee issued a ballot on May 16, 2014, that proposed a modification in the occupant retention test pass/fail criteria. According to the ballot, “the current Occupant Retention test criteria (section 6.3) are not accurately separating good ring slings from poorly-constructed ring slings.” The modification ASTM has proposed would increase from 1 inch to 3 inches the amount the ring sling attachment system may slip while still passing the standard. At the time of writing, the Commission does not have sufficient information to assess this change. Staff welcomes comments on the issue.

The current version of the sling carrier standard, ASTM F2907-14a, contains requirements to address the following issues:

• Laundering;

• Hazardous sharp points or edges;

• Small parts;

• Lead in paint;

• Wood parts;

• Locking and latching;

• Openings;

• Scissoring, shearing, and pinching;

• Monofilament threads;

• Flammability;

• Marking and labeling; and

• Instructional literature.

In addition, F2907-14a includes construction, quality, and durability test methods that are specific to sling carriers in the static, dynamic, occupant retention, and restraint system tests. These test methods combine to ensure that slings meet a minimum level of durability.

• Static load test: This test checks that the sling can support the sling's maximum recommended weight with a safety factor of three, by gradually applying a weight of three times the manufacturer's maximum recommended weight, or 60 lbs., whichever is greater, in the support area of the sling, and maintain the weight for one minute.

• Dynamic load test: This test assesses the durability of the sling and proper functioning of the sling's fasteners by dropping a 35-lb. load into the sling's support area in each recommended carrying position every 4 seconds for up to 1,000 cycles.

• Occupant retention test: This test assesses whether the sling retains the occupant as the caregiver moves about. The test also assesses the sling's durability. The sling is attached to a test torso, and a test mass is placed in the sling. The test torso will move up and down at a rate of two times per second (approximately a brisk walking speed). The sling is tested to determine whether the adjustment mechanisms ( e.g. rings, knots) release.

• Restraint system test: This test assesses whether any child restraints used by the sling are sufficient. Each restraint system is tested with a 45-lb. force on the restraint and again with a CAMI dummy. The anchorages for the restraint system are not to separate from their attachment points during or after testing.

Positioning. The Commission identified positioning as the primary hazard pattern in 31 cases. This includes nine deaths due to smothering, one permanent brain impairment injury due to breathing difficulty, and two other injuries—one related to breathing difficulty and the other related to blood circulation in the infant's leg.

As noted previously, the Commission identified suffocation/asphyxia related to positioning as a risk associated with sling carriers. Suffocation can occur when babies are contained entirely within the pouch of a sling. The highest risk of suffocation occurs when the infant's face (nose and mouth) is pressed against the mother's body, blocking the infant's breathing and rapidly suffocating a baby within a few minutes. Furthermore, because of its shape and lack of support, a sling carrier can facilitate an infant being positioned within the confines of the sling in a manner that causes acute neck hyper-flexion (chin touching the chest). Infants found in this compromised position are likely to stay in the position because infant neck muscles are too weak to support the weight of their head. Infants who stay for prolonged periods of time in this position can experience compromised airflow to the lungs, resulting in an inadequate supply of oxygen to the brain. Oxygen deprivation to the brain can lead to loss of consciousness and death.

Although there is no performance test for positioning in ASTM F2907-14a, ASTM F2907-14a requires statements in the warnings and instructions for sling carriers to caution against the hazards identified by the Commission through examination of the sling carrier incidents. Section 8.3.3 of F2907-14a specifies the warnings that must appear on each sling and addresses each of the hazard patterns the Commission found in the suffocation data. In short, all sling carriers must: (1) Include a safety alert symbol

More specifically, according to ASTM F2097-14a, the warnings that pertain to suffocation and positioning must address:

• the risk of suffocation to infants younger than 4 months if the infant's face is pressed against the caregiver's body within the confines of the sling and the increased risk of suffocation to infants born prematurely or those with respiratory problems;

• the need to check often to make sure that the infant's face remains uncovered, clearly visible to the caregiver, and away from the caregiver's body at all times;

• the importance of making sure that the infant does not curl into a position with the chin resting on or near the infant's chest, which can interfere with breathing even when nothing is covering the nose or mouth;

• the need to reposition the infant after nursing so the infant's face is not pressed against the caregiver's body; and

• the importance of never using the sling with infants smaller than 8 pounds, without seeking the advice of a healthcare professional.

Section 9 of ASTM F2907-14a specifies what instructional literature must be provided with the sling. This section requires that the instructions contain an image of each manufacturer's recommended carrying position, include all of the warning statements that are required to appear on the sling, and provide several additional instructions.

ASTM subcommittees for other durable nursery product standards have also tried to address positioning hazards related to a C-shaped curl in an infant's head, neck, and torso area; however, there has been no repeatable performance test identified. The Commission attempted to address the positioning hazard associated with sling carriers in a new manner, based on the recognition that a sling carrier is worn by the caregiver and involves direct contact with the caregiver, thereby allowing for the possibility of the caregiver seeing a child who is in distress. Specifically, the Commission explored a “face exposure” test that, at a minimum, could keep a sling from preventing the caregiver from observing the infant's face. The Commission pursued this possible test with the ASTM task group but found that the available anthropomorphic mannequins, e.g., CAMI dummies, do not accurately represent the manner in which a child sits in a sling, and that the variable nature of sling products makes the repeatability of a test questionable. Together with the ASTM task group, the Commission concluded that a test to address positioning hazards is technically infeasible at this point.

Ultimately, the Commission concluded that warning requirements about proper and improper infant positioning present in ASTM F2907-14a is the only feasible hazard-mitigation strategy at this time. The Commission will continue to consider possible performance requirements pertaining to this issue and will pursue such an approach with the ASTM Subcommittee in the future, if an approach becomes feasible. Because there is no feasible performance test and because the warning statements in ASTM F2907 were developed considering both known hazard patterns for sling carriers and established practices for warning labels, the Commission believes that the warnings and instructions published in ASTM F2907-14a are adequate to inform caregivers about how to reduce the likelihood of positioning incidents.

Caregiver Missteps. Incidents involving caregiver missteps included 11 reports of skull fractures and one episode of bleeding in the brain. Other injuries included closed head injuries, contusions of the head/leg/back, and a finger laceration. The Commission determined that these incidents were related directly to the actions, often accidental, of the caregiver. Examples include a caregiver slipping or tripping while wearing the sling carrier with the child inside, or incidental contact occurring between the child and an object, such as a door or wall. Although these types of incidents cannot be addressed directly through a performance test, the standard addresses these incidents by alerting caregivers of the hazard and making sure that the sling contains the infant. ASTM F2907-14a requires the following statement to appear on the on-product label to address the fall hazard to infants associated with “caregiver missteps,” such as tripping or bending over:

FALL HAZARD—Leaning, bending over, or tripping can cause baby to fall. Keep one hand on baby while moving.

In addition, the occupant retention test in ASTM F2907-14a is intended to reduce the likelihood that the child will fall out of the sling due to a caregiver misstep. ASTM F2907-14a requires the test mass to be contained within the sling for the duration of the test.

Buckles. Twelve of the incidents involved buckles releasing, slipping, or breaking, and included a hospitalization for a skull fracture and two non-hospitalized injuries. ASTM F2907-14a addresses this hazard in several ways, using the static, dynamic, occupant retention, and restraint system tests. For the reasons described previously, the Commission believes that the performance tests in F2907-14a adequately address hazards associated with buckle failure.

The Administrative Procedure Act (APA) requires that the effective date of the rule be at least 30 days after publication of the final rule, 5 U.S.C. 553(d). The Commission generally considers 6 months sufficient time for suppliers to come into compliance with a proposed durable infant and toddler product rule. Six months is the period the Juvenile Products Manufacturers Association (JPMA) typically allows for products in JPMA's certification program to shift to a new voluntary standard once that new voluntary standard is published. Therefore, juvenile product manufacturers are accustomed to adjusting to new standards with this time frame. However, in this instance, a large number of very small suppliers potentially will experience significant economic impacts complying with the rule. In addition, because ASTM F2907 has only been in existence for approximately 2 years, there is relatively little information regarding compliance with the voluntary standard. Thus, the Commission is proposing a 12-month effective date. The Commission invites comment on whether 12 months is an appropriate length of time for sling carrier manufacturers to come into compliance with the rule.

The Regulatory Flexibility Act (RFA) requires agencies to review proposed rules for a rule's potential economic impact on small entities, including small businesses. Section 603 of the RFA generally requires that agencies prepare an initial regulatory flexibility analysis (IRFA) and make the analysis available to the public for comment when the agency publishes a general notice of proposed rulemaking. The IRFA must describe the impact of the proposed rule on small entities and identify any alternatives that may reduce the impact. Specifically, the IRFA must contain:

• a description of, and where feasible, an estimate of the number of small entities to which the proposed rule will apply;

• a description of the reasons why action by the agency is being considered;

• a succinct statement of the objectives of, and legal basis for, the proposed rule;

• a description of the projected reporting, recordkeeping, and other compliance requirements of the proposed rule, including an estimate of the classes of small entities subject to the requirements and the types of professional skills necessary for the preparation of reports or records; and

• identification, to the extent possible, of all relevant federal rules which may duplicate, overlap, or conflict with the proposed rule.

The Danny Keysar Child Product Safety Notification Act, section 104 of the CPSIA, requires the CPSC to promulgate mandatory standards for nursery products that are substantially the same as, or more stringent than, the voluntary standard. The Commission worked closely with ASTM to develop the new requirements and test procedures that have been incorporated into ASTM F2907-14a, which the Commission proposes to incorporate by reference.

The Commission is incorporating by reference the current voluntary standard, with no revision, to form the proposed rule. Some of the more significant requirements of the current voluntary standard for sling carriers (ASTM F2907-14a) include static and dynamic load testing to verify the structural integrity of the sling carriers and occupant retention testing to help ensure that the child is not ejected from the sling carrier. The ASTM standard requires that the buckles, fasteners, and knots that secure the sling carrier remain in position before and after these three performance tests. There is also a separate restraint system test to help ensure that any restraints used by the sling do not release while in use.

The voluntary standard also includes:

• requirements for several features to prevent cuts (hazardous sharp points or edges, and wood parts);

• small parts;

• marking and labeling requirements;

• flammability requirements;

• requirements for the permanency and adhesion of labels; and

• requirements for instructional literature.

The updated warning statements provide additional details of the fall and suffocation hazards and are intended to address the primary fatality risk associated with infant slings, suffocation.

Section 14(a)(2) of the Consumer Product Safety Act (CPSA) requires every manufacturer and private labeler of a children's product that is subject to a children's product safety rule to certify, based on third party testing conducted by a CPSC-accepted laboratory, that the product complies with all applicable children's product safety rules. Section 14(i)(2) of the CPSA requires the Commission to establish protocols and standards by rule for, among other things, making sure that a children's product is tested periodically and when there has been a material change in the product, and safeguarding against the exercise of undue influence by a manufacturer or private labeler against a conformity assessment body. A final rule implementing sections 14(a)(2) and 14(i)(2) of CPSA, Testing and Labeling Pertaining to Product Certification (16 CFR part 1107), became effective on February 13, 2013 (the 1107 rule). When the sling carrier rule is finalized, sling carriers will be subject to a mandatory children's product safety rule. Accordingly, sling carriers will also be subject to the third party testing requirements of section 14 of the CPSA and the 1107 rule. Slings are already subject to lead and phthalates testing under the 1107 Rule. This rule adds certain mechanical tests and other requirements to the third party testing requirement.

In addition, the 1107 rule requires certifiers to use CPSC-accredited laboratories to conduct the third party testing of children's products. Section 14(a)(3) of the CPSA required the Commission to publish a notice of requirements (NOR) for the accreditation of third party conformance assessment bodies ( i.e., testing laboratories) to test for conformance with each children's product safety rule. The NORs for existing rules are set forth in 16 CFR part 1112. Consequently the Commission is proposing an amendment to 16 CFR part 1112 that would establish the requirements for the accreditation of testing laboratories to test for compliance with the sling carrier final rule.

Of the 47 identified suppliers of sling carriers to the U.S. market, 33 are domestic firms. (We limit our analysis to domestic firms because U.S. Small Business Administration (SBA) guidelines pertain to U.S.-based entities.) Under SBA guidelines, a manufacturer of sling carriers is small if it has 500 or fewer employees, and importers and wholesalers are small if the importers or wholesalers have 100 or fewer employees. Based on these guidelines, 31 of the domestic firms supplying sling carriers to the U.S. market appear to be small businesses. These businesses consist of 23 manufacturers, four importers, and four firms with unknown supply sources.

Additionally, as noted previously, an unquantified number of producers supply baby slings to the U.S. market via Web sites such as Etsy. Although we have no information on these suppliers, based on the general nature of suppliers selling products on Etsy and similar markets, we assume that these suppliers are well within SBA criteria for small business. For purposes of analysis, we refer to these suppliers as “very small manufacturers” to distinguish them from the more established manufacturers, but this is not an official SBA designation.

Before preparation of a regulatory flexibility analysis, the Commission conducts a screening analysis to determine whether a regulatory flexibility analysis or a certification statement of no significant impact on a substantial number of small entities is appropriate for a proposed rule. The SBA gives considerable flexibility in defining the threshold for “no significant economic impact.” However, the Commission typically uses 1 percent of gross revenue as a threshold; unless the impact is expected to fall below the 1 percent threshold for the small businesses evaluated, the Commission prepares a regulatory flexibility analysis.

Because we were unable to demonstrate that the draft proposed rule would impose an economic impact less than 1 percent of gross revenue for the affected firms, the Commission did not prepare a certification statement, but conducted an IRFA.

JPMA and the Baby Carrier Industry Alliance (BCIA) have advised some manufacturers of F2907-12, F2907-13a, F2907-13b, and F2907-14. These organizations are offering assistance to member manufacturers on testing and compliance with the ASTM sling carrier standards. However, the ASTM sling carrier standards are relatively new, and there is no established history of compliance among manufacturers.

As of January 2014, only two of the 23 known small manufacturers of sling carriers are listed on the JPMA Web site as certified compliant. Based on our review of small firm Web sites and a conversation with a small ring sling manufacturer, we have identified three additional firms (not JPMA certified) that have conducted testing to some version of the ASTM standard, for a total of five firms that have conducted testing to some version of the ASTM standard. These firms may have already experienced the impacts of the proposed rule and may not experience any additional impacts. The remaining firms are likely to incur some cost associated with the proposed rule.

Due to the nature of the product and the relative ease of production, the Commission believes that most of the physical changes needed to meet the standard, such as changing fabrics, changing stitching, adding reinforcements, changing buckles, changing rings, changing labels, and changing instructions, are unlikely to be costly. Because sling carriers are largely made of fabric, tooling costs are not usually a large factor.

Some manufacturers of ring slings are having difficulties with their products passing the occupant retention tests consistently. The problem appears to be variation in testing results based on how the sling is positioned on the test fixture. At this time, the precise cost of changes necessary to satisfy testing under the ASTM standard is unknown; and we cannot rule out the potential for costs high enough to lead to significant economic impacts, especially for the very small manufacturers.

According to one manufacturer, changes to warning labels required under the proposed rule may have an impact on very small suppliers. We do not have sufficient data to determine whether this impact is expected to be economically significant. For example, if the cost of printing and sewing in the labels is 30 cents per sling, then the impact would be 1 percent of the sales price for a $30 sling. CPSC staff contacted a representative from the BCIA to obtain label prices but has no independent estimate at this time. An additional consideration is that the labels are relatively large and may reduce the appeal of the product if they cannot be readily concealed. However, this impact will apply to all sling manufacturers.

Another manufacturer also expressed concerns that minor deviations from the font sizes required by the standard on the labels could force manufacturers to redo portions of the testing. This phenomenon may diminish as businesses become familiar with the requirements. Testing costs are discussed below.

The majority of the costs associated with the proposed standard will probably be related to testing. Few of the sling carrier manufacturers have the technical capability or the equipment to conduct any testing in house; and most small and very small manufacturers probably will have to rely on third party testing during product development. Some small and very small manufacturers could experience significant costs simply testing to find out initially whether their products comply with the proposed standard and with any additional testing necessary to develop complying products.

In addition, under section 14 of the CPSA, sling carriers are subject to third party testing and certification. Once the new requirements become effective, all manufacturers will be subject to the additional costs associated with the third party testing and certification requirements under the testing rule, Testing and Labeling Pertaining to Product Certification (16 CFR part 1107). This will include any physical and mechanical test requirements specified in the final rule; lead and phthalates testing, if applicable, are already required; hence, lead and phthalates testing are not included in this discussion.

According to a BCIA representative, third party testing to the ASTM sling carrier voluntary standard could cost around $500−$1,050 per model sample, with $700 as an average cost. Third party testing consists of two costs: the testing costs unique to F2907 associated with the dynamic load test, the static load test, the occupant retention test, and the restraints test; and the general testing costs associated with testing for flammability, small parts, sharp edges, instructions, and labels. The testing costs unique to sling carriers vary widely, from $210 to $650, depending on whether the testing is done in China or the United States and whether a discount, such as the discount negotiated by the BCIA for its members, is applied. The general testing costs may amount to $300 to $400. The very small firms that manufacture in the United States will probably also test in the United States to avoid logistical difficulties, thus incurring higher costs.

The $700 estimate for average testing costs includes all the required testing, such as flammability, sharp edges, etc. If a very small manufacturer with one model only needed to conduct one third party test annually, the costs of testing would amount to $700. A very small manufacturer producing 20 to 30 low-priced slings a month might have annual revenues of $10,800 (30 slings per month × 12 months × $30 per sling). Testing one sample at $700 would amount to 6.5 percent ($700/$10,800) of annual revenue for this hypothetical very small manufacturer, which we would clearly classify as a significant economic impact. Even if this manufacturer could sell its slings for $150, testing one sample at $700 would amount to 1.3 percent of annual revenue of $54,000 (360 slings*$150 per sling).

As a comparison, third party testing costs for soft infant and toddler carriers (SITCs) were estimated at $500−$600 per sample for the SITC standard, ASTM F2236-14. However, the higher testing costs for slings could reflect additional testing for occupant retention, which is not part of the SITC standard.

Based upon the previous example, even in the unlikely case that very small sling manufacturers are able to develop a complying product without incurring significant economic impacts, very small sling manufacturers are still likely to incur significant economic impacts complying with section 14 of the CPSA. These types of impacts would apply to the very small producers marketing their products primarily via Etsy and other Web sites.

Although information on sales revenue is limited to half of all manufacturers, we estimate that most of the 23 small domestic manufacturers have substantially larger sales volumes than the example above, with annual sales ranging between $200,000 and $16 million. Thus, product development and testing costs would be a lower percentage of sales revenue than the example above. At the lower range of $200,000 in revenues, significant economic impacts would occur if the producer had to test three models per year. Firms with revenues closer to the upper end of the range, $16 million, would need to test more than 200 models per year to experience significant economic impacts from testing. The number of tests needed for product development purposes or to meet the “high degree of assurance” criteria under section 14 of the CPSA is not known.

About a third of firms (8 of 23) also have other product lines, which may cushion the impact of design changes and increased testing costs for sling carriers. These other products may be similar products, such as mei tais (a traditional Asian unstructured soft carrier falling under the SITC standard) or SITCs, or these other products may be completely unrelated juvenile products.

At this time, only one of the four importers identified is in compliance with F2907-12, F2907-13a or F2907-13b. Depending upon the costs of coming into compliance incurred by the importers' suppliers and whether the importers' suppliers are able to pass on the costs, the other three importers could experience a significant economic impact. Three of the four importers are owned by foreign parent companies that supply the importers' slings. These parent companies must make the business decision to comply or to discontinue U.S. operations. Two of the four importers could respond by simply discontinuing their sling product line altogether because these importers have varied product lines.

As is the case with manufacturers, all importers will be subject to third party testing and certification requirements. Consequently, these importers will experience the associated costs of compliance. The resulting costs could have a significant impact on these small importers.

As mentioned previously, four of the small domestic firms have unknown supply sources, and none of these supply sources has claimed compliance with any version of F2907. However, two firms have varied product lines and may be in a better position to comply without incurring significant economic impacts. The other two appear to be small firms specializing in slings, and therefore, these small firms may be impacted more heavily by compliance and testing costs.

Under the Danny Keysar Child Product Safety Notification Act, section 104 of the CPSIA, one alternative would be to set an effective date later than 12 months. Setting a later effective date would reduce the economic impact on firms in two ways. First, firms would be less likely to experience a lapse in production, which could result if firms are unable to comply within the required timeframe. Second, firms could spread costs over a longer time period, thereby reducing their annual costs and the present value of their total costs. Given the large number of very small suppliers who potentially will experience significant economic impacts, a later effective date may warrant consideration. The Commission welcomes comments regarding an appropriate effective date.

The Commission's regulations address whether we are required to prepare an environmental assessment or an environmental impact statement. If our rule has “little or no potential for affecting the human environment,” our rule will be categorically exempted from this requirement. 16 CFR 1021.5(c)(1). The proposed rule falls within the categorical exemption.

This proposed rule contains information collection requirements that are subject to public comment and review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). In this document, pursuant to 44 U.S.C. 3507(a)(1)(D), we set forth:

• a title for the collection of information;

• a summary of the collection of information;

• a brief description of the need for the information and the proposed use of the information;

• a description of the likely respondents and proposed frequency of response to the collection of information;

• an estimate of the burden that shall result from the collection of information; and

• notice that comments may be submitted to the OMB.

Title: Safety Standard for Sling Carriers.

Description: The proposed rule would require each sling carrier to comply with ASTM F2907-14a, Standard Consumer Safety Specification for Sling Carriers. Sections 8 and 9 of ASTM F2907-14a contain requirements for marking, labeling, and instructional literature. These requirements fall within the definition of “collection of information,” as defined in 44 U.S.C. 3502(3).

Description of Respondents: Persons who manufacture or import sling carriers.

Estimated Burden: We estimate the burden of this collection of information as follows:

Our estimates are based on the following:

Section 8.1.1 of ASTM F2907-14a requires that the name and the place of business (city, state, mailing address, including zip code, or telephone number) and Web site, if applicable, of the manufacturer, distributor, or seller be marked clearly and legibly on each product and its retail package. Section 8.1.2 of ASTM F2907-14a requires a code mark or other means that identifies the date (month and year, as a minimum) of manufacture.

There are 47 known entities supplying sling carriers to the U.S. market. All 47 firms are assumed to use labels already on both their products and their packaging, but the firms might need to make some modifications to their existing labels. The estimated time required to make these modifications is about 1 hour per model. Each entity supplies an average of three different models of sling carrier; therefore, the estimated burden associated with labels is 1 hour per model × 47 entities × 3 models per entity = 141 hours. We estimate the hourly compensation for the time required to create and update labels is $27.71 (U.S. Bureau of Labor Statistics, “Employer Costs for Employee Compensation,” September 2013, Table 9, total compensation for all sales and office workers in goods-producing private industries: http://www.bls.gov/ncs/ ). Therefore, the estimated annual cost to industry associated with the labeling requirements is $3,907.11 ($27.71 per hour × 141 hours = $3,907.11). There are no operating, maintenance, or capital costs associated with the collection.

Section 9.1 of ASTM F2907-14a requires instructions to be supplied with the product. Sling carriers do not generally require assembly, but require instructions for proper use, fit, and adjustment on a caregiver's body, as well as maintenance, cleaning, and storage. Under the OMB's regulations (5 CFR 1320.3(b)(2)), the time, effort, and financial resources necessary to comply with a collection of information that would be incurred by persons in the “normal course of their activities” are excluded from a burden estimate, where an agency demonstrates that the disclosure activities required to comply are “usual and customary.” Therefore, because we are unaware of sling carriers that generally require some instructions for use, but lack any instructions to the user, we estimate tentatively that there are no burden hours associated with section 9.1 of ASTM F803-13 because any burden associated with supplying instructions with sling carriers would be “usual and customary” and would not within the definition of “burden” under the OMB's regulations.

Based on this analysis, the proposed standard for sling carriers would impose a burden to industry of 141 hours, at an estimated cost of $3,907.11 annually.

In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), we have submitted the information collection requirements of this rule to the OMB for review. Interested persons are requested to submit comments regarding information collection by August 22, 2014, to the Office of Information and Regulatory Affairs, OMB (see the ADDRESSES section at the beginning of this notice).

Pursuant to 44 U.S.C. 3506(c)(2)(A), we invite comments on:

• whether the collection of information is necessary for the proper performance of the CPSC's functions, including whether the information will have practical utility;

• the accuracy of the CPSC's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;

• ways to enhance the quality, utility, and clarity of the information to be collected;

• ways to reduce the burden of the collection of information on respondents, including the use of automated collection techniques, when appropriate, and other forms of information technology; and

• the estimated burden hours associated with label modification, including any alternative estimates.

Section 26(a) of the CPSA, 15 U.S.C. 2075(a), provides that where a consumer product safety standard is in effect and applies to a product, no state or political subdivision of a state may either establish or continue in effect a requirement dealing with the same risk of injury, unless the state requirement is identical to the federal standard. Section 26(c) of the CPSA also provides that states or political subdivisions of states may apply to the Commission for an exemption from this preemption under certain circumstances. Section 104(b) of the CPSIA refers to the rules to be issued under that section as “consumer product safety rules.” Therefore, the preemption provision of section 26(a) of the CPSA would apply to a rule issued under section 104.

The CPSA establishes certain requirements for product certification and testing. Products subject to a consumer product safety rule under the CPSA, or to a similar rule, ban, standard, or regulation under any other act enforced by the Commission, must be certified as complying with all applicable CPSC-enforced requirements. 15 U.S.C. 2063(a). Certification of children's products subject to a children's product safety rule must be based on testing conducted by a CPSC-accepted third party conformity assessment body. Id. 2063(a)(2). The Commission must publish a notice of requirements (NOR) for the accreditation of third party conformity assessment bodies (or laboratories) to assess conformity with a children's product safety rule to which a children's product is subject. Id. 2063(a)(3). Thus, the proposed rule for 16 CFR part 1228, “Safety Standard for Sling Carriers,” when issued as a final rule, will be a children's product safety rule that requires the issuance of an NOR.

To meet the requirement that the Commission issue an NOR for the sling carrier standard, the Commission proposes to amend an existing rule. The Commission published a final rule, Requirements Pertaining to Third Party Conformity Assessment Bodies, 78 FR 15836 (March 12, 2013), which is codified at 16 CFR part 1112 (referred to here as Part 1112). This rule took effect on June 10, 2013. Part 1112 establishes requirements for accreditation of third party conformity assessment bodies (or laboratories) to test for conformance with a children's product safety rule in accordance with Section14(a)(2) of the CPSA. The final rule also codifies all of the NORs that the CPSC had published to date. All new NORs, such as the sling carrier standard, require an amendment to part 1112. Accordingly, the proposed rule would amend part 1112 to include the sling carrier standard, along with the other children's product safety rules for which the CPSC has issued NORs.

Laboratories applying for acceptance as a CPSC-accepted third party conformity assessment body to test to the new standard for sling carriers would be required to meet the third party conformity assessment body accreditation requirements in part 1112. When a laboratory meets the requirements as a CPSC-accepted third party conformity assessment body, the laboratory can apply to the CPSC to have 16 CFR part 1228, Safety Standard for Sling Carriers, included in the laboratory's scope of accreditation of CPSC safety rules listed for the laboratory on the CPSC Web site at: www.cpsc.gov/labsearch.

As required by the RFA, staff conducted a final regulatory flexibility analysis (FRFA) when the Commission issued the part 1112 rule (78 FR 15836, 15855-58). Briefly, the FRFA concluded that the accreditation requirements would not have a significant adverse impact on a substantial number of small laboratories because no requirements were imposed on laboratories that did not intend to provide third party testing services. The only laboratories that were expected to provide such services were those that anticipated receiving sufficient revenue from the mandated testing to justify accepting the requirements as a business decision.

Based on similar reasoning, amending the part 1112 rule to include the NOR for the sling carrier standard will not have a significant adverse impact on small laboratories. Moreover, based upon the number of laboratories in the United States that have applied for CPSC acceptance of the accreditation to test for conformance to other juvenile product standards, we expect that only a few laboratories will seek CPSC acceptance of their accreditation to test for conformance with the sling carrier standard. Most of these laboratories will have already been accredited to test for conformance to other juvenile product standards, and the only costs to them would be the cost of adding the sling carrier standard to their scope of accreditation. As a consequence, the Commission certifies that the NOR for the sling carrier standard will not have a significant impact on a substantial number of small entities.

This proposed rule begins a rulemaking proceeding under section 104(b) of the CPSIA to issue a consumer product safety standard for sling carriers. We invite all interested persons to submit comments on any aspect of the proposed rule.

Comments should be submitted in accordance with the instructions in the ADDRESSES section at the beginning of this notice.

For the reasons discussed in the preamble, the Commission proposes to amend Title 16 of the Code of Federal Regulations as follows:

1. Pursuant to section 215 of the Federal Power Act (FPA), the Commission proposes to approve Reliability Standard CIP-014-1 (Physical Security). The North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization (ERO), submitted the proposed Reliability Standard for Commission approval in response to a Commission order issued on March 7, 2014. 1 The purpose of the proposed Reliability Standard CIP-014-1 is to enhance physical security measures for the most critical Bulk-Power System facilities and thereby lessen the overall vulnerability of the Bulk-Power System facilities against physical attacks. The Commission proposes to approve Reliability Standard CIP-014-1. In addition, the Commission proposes to direct NERC to develop two modifications to the physical security Reliability Standard. Further, the Commission seeks comment on other concerns regarding the proposed Reliability Standard, as discussed below.

2. Section 215 of the FPA requires the Commission to certify an ERO to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval. 2 Once approved, the Reliability Standards may be enforced in the United States by the ERO, subject to Commission oversight, or by the Commission independently. 3

3. In the March 7 Order, the Commission determined that physical attacks on the Bulk-Power System could adversely impact the reliable operation of the Bulk-Power System, resulting in instability, uncontrolled separation, or cascading failures. Moreover, the Commission observed that the current Reliability Standards do not specifically require entities to take steps to reasonably protect against physical security attacks on the Bulk-Power System. Accordingly, to carry out section 215 of the FPA and to provide for the reliable operation of the Bulk-Power System, the Commission directed NERC, pursuant to FPA section 215(d)(5), to develop and file for approval proposed Reliability Standards that address threats and vulnerabilities to the physical security of critical facilities on the Bulk-Power System. 4

4. The March 7 Order indicated that the Reliability Standards should require owners or operators of the Bulk-Power System to take at least three steps to address the risks that physical security attacks pose to the reliable operation of the Bulk-Power System. Specifically, the March 7 Order directed that: (1) The Reliability Standards should require owners or operators of the Bulk-Power System to perform a risk assessment of their systems to identify their “critical facilities;” (2) the Reliability Standards should require owners or operators of the identified critical facilities to evaluate the potential threats and vulnerabilities to those identified facilities; and (3) the Reliability Standards should require those owners or operators of critical facilities to develop and implement a security plan designed to protect against attacks to those identified critical facilities based on the assessment of the potential threats and vulnerabilities to their physical security.

5. The March 7 Order stated that the risk assessment used by an owner or operator to identify critical facilities should be verified by an entity other than the owner or operator, such as by NERC, the relevant Regional Entity, a reliability coordinator, or another entity. 5 In addition, the March 7 Order indicated that the Reliability Standards should include a procedure for the verifying entity, as well as the Commission, to add or remove facilities from an owner's or operator's list of critical facilities. 6 The March 7 Order further stated that the determination of threats and vulnerabilities and the security plan should be reviewed by NERC, the relevant Regional Entity, the reliability coordinator, or another entity with appropriate expertise.

6. The March 7 Order stated that, because the three steps of compliance with the contemplated Reliability Standards could contain sensitive or confidential information that, if released to the public, could jeopardize the reliable operation of the Bulk-Power System, NERC should include in the Reliability Standards a procedure that will ensure confidential treatment of sensitive or confidential information but still allow for the Commission, NERC and the Regional Entities to review and inspect any information that is needed to ensure compliance with the Reliability Standards.

7. The Commission directed NERC to submit the proposed Reliability Standards to the Commission for approval within 90 days of issuance of the March 7 Order (i.e., June 5, 2014).

8. On May 23, 2014, NERC petitioned the Commission to approve proposed Reliability Standard CIP-014-1 and its associated violation risk factors and violation severity levels, implementation plan, and effective date. 7 NERC maintains that the proposed Reliability Standard is just, reasonable, not unduly discriminatory, or preferential, and in the public interest. In addition, NERC asserts that the proposed Reliability Standard complies with the Commission's directives in the March 7 Order.

9. NERC explains that proposed Reliability Standard CIP-014-1 “serves the vital reliability goal of enhancing physical security measures for the most critical Bulk-Power System facilities and lessening the overall vulnerability of the Bulk-Power System to physical attacks.”  8 NERC maintains that the “appropriate focus of the proposed Reliability Standard is Transmission stations and Transmission substations, which are uniquely essential elements of the Bulk-Power System.”  9 The proposed Reliability Standard is applicable to transmission owners that satisfy the Applicability Sections 4.1.1.1, 4.1.1.2, 4.1.1.3, or 4.1.1.4 and to transmission operators. NERC states that the transmission facilities covered by Applicability Sections 4.1.1.1 through 4.1.1.4 match the “Medium Impact” transmission facilities listed in Attachment 1 of Reliability Standard CIP-002-5.1. 10 According to NERC, the “standard drafting team determined that using the criteria for `Medium Impact' Transmission Facilities set forth in Reliability Standard CIP-002-5.1 is an appropriate applicability threshold as the Commission has acknowledged that it is [ ] a technically sound basis for identifying Transmission Facilities, which, if compromised, would present an elevated risk to the Bulk-Power System.”  11

10. Proposed Reliability Standard CIP-014-1 has six requirements. Requirement R1 requires applicable transmission owners to perform risk assessments on a periodic basis to identify their transmission stations and transmission substations that, if rendered inoperable or damaged, could result in widespread instability, uncontrolled separation, or cascading within an Interconnection. Requirement R1 also requires transmission owners to identify the primary control center that operationally controls each of the identified transmission stations or transmission substations.

11. Requirement R2 requires that each applicable transmission owner have an unaffiliated third party with appropriate experience verify the risk assessment performed under Requirement R1. Requirement R2 states that the transmission owner must either modify its identification of facilities consistent with the verifier's recommendation or document the technical basis for not doing so. In addition, Requirement R2 requires each transmission owner to implement procedures for protecting sensitive or confidential information made available to third party verifiers or developed under the proposed Reliability Standard from public disclosure.

12. Requirement R3 requires the transmission owner to notify a transmission operator that operationally controls a primary control center identified under Requirement R1 of such identification to ensure that the transmission operator has notice of the identification so that it may timely fulfill its obligations under Requirements R4 and R5 to protect the primary control center.

13. Requirement R4 requires each applicable transmission owner and transmission operator to conduct an evaluation of the potential threats and vulnerabilities of a physical attack on each of its respective transmission stations, transmission substations, and primary control centers identified as critical in Requirement R1.

14. Requirement R5 requires each transmission owner and transmission operator to develop and implement documented physical security plans that cover each of their respective transmission stations, transmission substations, and primary control centers identified as critical in Requirement R1.

15. Requirement R6 requires that each transmission owner and transmission operator subject to Requirements R4 and R5 have an unaffiliated third party with appropriate experience review its Requirement R4 evaluation and Requirement R5 security plan. Requirement R6 states that the transmission owner or transmission operator must either modify its evaluation and security plan consistent with the recommendation, if any, of the reviewer or document its reasons for not doing so.

16. Pursuant to FPA section 215(d)(2), we propose to approve proposed Reliability Standard CIP-014-1 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. In addition, the Commission proposes to approve the violation risk factors, violation severity levels, implementation plan, and effective date proposed by NERC.

17. The proposed Reliability Standard CIP-014-1 largely satisfies the directives in the March 7 Order concerning the development and submittal of proposed physical security Reliability Standards. However, as discussed below, the Commission proposes to direct NERC to develop a modification to the physical security Reliability Standard to allow applicable governmental authorities (i.e., the Commission and any other appropriate federal or provincial authorities) to add or subtract facilities from an applicable entity's list of critical facilities under Requirement R1. The Commission also proposes to direct NERC to modify the physical security Reliability Standard to remove the term “widespread.”

18. In addition to the proposed modifications to the physical security Reliability Standard, the Commission proposes to direct NERC to make an informational filing within six months of the effective date of a final rule in this proceeding addressing the possibility that, as described below, proposed Reliability Standard CIP-014-1 may not provide physical security for all “High Impact” control centers, as that term is defined in Reliability Standard CIP-002-5.1, necessary for the reliable operation of the Bulk-Power System. The Commission also proposes to direct NERC to make an informational filing within one year of the effective date of a final rule in this proceeding addressing possible resiliency measures that can be taken to maintain the reliable operation of the Bulk-Power System following the loss of critical facilities.

19. Below, the Commission discusses and seeks comment from NERC and interested entities on the following issues: (A) Providing for applicable governmental authorities to add or subtract facilities from an entity's list of critical facilities; (B) the standard for identifying critical facilities; (C) control centers; (D) exclusion of generators from the applicability section of the proposed Reliability Standard; (E) third-party recommendations; (F) resiliency; (G) violation risk factors and violation severity levels; and (H) implementation plan and effective date.

20. In the March 7 Order, the Commission stated that:

21. The proposed Reliability Standard does not include a procedure that allows the Commission to add or subtract facilities from an applicable entity's list of critical facilities under Requirement R1. Instead, NERC states that the Commission has the existing authority to enforce NERC Reliability Standards pursuant to FPA section 215(e)(3). 13 NERC explains that a transmission owner must be able to demonstrate that its method for performing its risk assessment under Requirement R1 “was technically sound and reasonably designed to identify its critical Transmission stations and Transmission substations.”  14 NERC maintains that if “in the course of assessing an entity's compliance with the proposed Reliability Standard, NERC, a Regional Entity or [the Commission] finds that the entity's transmission analysis was patently deficient and that the Requirement R2 verification process did not cure those deficiencies, they could use their enforcement authority to compel Transmission Owners to re-perform the risk assessment using assumptions designed to identify the appropriate critical facilities.”  15

22. The proposed Reliability Standard does not include a procedure that allows the Commission to add or subtract facilities from an applicable entity's list of critical facilities. Accordingly, if the Commission determines through an audit of an applicable entity, or through some other means, that a critical facility does not appear on the entity's list of critical facilities, there is no provision in the proposed Reliability Standard to allow the Commission to require its inclusion. We agree with NERC that failure to identify a critical facility would be a violation of Requirement R1, and thus could subject the relevant applicable entity to compliance or enforcement actions. However, we believe that NERC's proposal is not an equally efficient or effective alternative to the directive in the March 7 Order. While the Commission anticipates that we would exercise such authority only rarely, we propose to direct NERC to modify the physical security Reliability Standard to include a procedure that would allow applicable governmental authorities to add or subtract facilities from an applicable entity's list of critical facilities.

23. As discussed above, we agree with NERC that an applicable entity's failure to develop an appropriate list of critical facilities consistent with Requirement R1, even if the list is verified by a third-party under Requirement R2, constitutes non-compliance with Requirement R1. According to NERC, the corrective action for non-compliance would be to require the applicable entity to correct and repeat the Requirement R1 assessment, with the expectation that the omitted facility would then be assessed as critical. While NERC appears to expect that correcting and re-performing the assessment would result in the applicable entity adding to its critical facilities list the previously omitted facility or facilities that the Commission thought critical, there is no guarantee that would happen in a timely manner, if at all. We are concerned that, as currently proposed, the Commission, NERC, or Regional Entities cannot “effectively require Transmission Owners to add or remove facilities” under Requirement R1. 16 Accordingly, we propose to determine that NERC's proposal does not satisfy the directive in the March 7 Order, either directly or in an equally efficient and effective manner. We therefore propose to direct that NERC develop a modification to the physical security Reliability Standard to include a procedure that would allow applicable governmental authorities, i.e., the Commission and any other appropriate federal or provincial authorities, to add or subtract facilities from an applicable entity's list of critical facilities.

24. The Commission seeks comment on this proposed directive.

25. The March 7 Order stated that a critical facility is “one that, if rendered inoperable or damaged, could have a critical impact on the operation of the interconnection through instability, uncontrolled separation or cascading failures on the Bulk-Power System.”  17

26. The proposed Reliability Standard states that its purpose is to “identify and protect Transmission stations and Transmission substations, and their associated primary control centers, that if rendered inoperable or damaged as a result of a physical attack could result in widespread instability, uncontrolled separation, or Cascading within an Interconnection.” Requirement R1 of the proposed Reliability Standard states that the “initial and subsequent risk assessments shall consist of a transmission analysis or transmission analyses designed to identify the Transmission station(s) and Transmission substation(s) that if rendered inoperable or damaged could result in widespread instability, uncontrolled separation, or Cascading within an Interconnection.” In the technical guidance document appended to the proposed Reliability Standard, which is intended to assist applicable entities to identify critical facilities under Requirement R1, NERC indicates that, in performing its risk assessment to identify critical transmission stations and transmission substations, “[a]n entity could remove all lines, without regard to the voltage level, to a single Transmission station or Transmission substation and review the simulation results to assess system behavior to determine if Cascading of Transmission Facilities, uncontrolled separation, or voltage or frequency instability is likely to occur over a significant area of the Interconnection.”  18 The NERC petition also uses the term “uncontrollable impact” to describe the scope of the proposed Reliability Standard. 19

27. The Commission proposes to direct NERC to modify the physical security Reliability Standard to remove the term “widespread” as it appears in the proposed Reliability Standard in the phrase “widespread instability.” The phrase “widespread instability” is undefined by NERC and is inconsistent with the March 7 Order's explanation of “critical facility” and the definition of “reliable operation” in FPA section 215(a)(4). 20

28. The phrase “widespread instability” in Requirement R1 could, depending on the meaning of “widespread,” narrow the scope (and number) of identified critical facilities under the proposed Reliability Standard beyond what was contemplated in the March 7 Order. The March 7 Order required the identification of facilities whose loss could result in instability, uncontrolled separation, or cascading failures, which is consistent with the definition of “reliable operation” in FPA section 215(a)(4). The term “widespread” is undefined and could potentially render the Reliability Standard unenforceable or could lead to an inadequate level of reliability by omitting facilities that are critical to the reliable operation of the Bulk-Power System.

29. Accordingly, pursuant to section 215(d)(5) of the FPA, we propose to direct that NERC develop a modification to Reliability Standard CIP-014-1 to remove the term “widespread” as it appears in the proposed standard in the phrase “widespread instability.” The Commission seeks comment on this proposal.

30. The March 7 Order stated that a “critical facility is one that, if rendered inoperable or damaged, could have a critical impact on the operation of the interconnection through instability, uncontrolled separation or cascading failures on the Bulk-Power System.”  21 The March 7 Order, while not mandating that a minimum number of facilities be deemed critical under the physical security Reliability Standards, explained that the “Commission expects that critical facilities generally will include, but not be limited to, critical substations and critical control centers.”  22

31. NERC states that the proposed Reliability Standard addresses the protection of primary control centers, which NERC defines as facilities that “operationally control[] a Transmission station or Transmission substation when the electronic actions from the control center can cause direct physical actions at the identified Transmission station or Transmission substation, such as opening a breaker.”  23

32. NERC maintains that “[c]ontrol centers that provide back-up capability and control centers that cannot operationally control a critical Transmission station or Transmission substation do not present similar direct risks to Real-time operations if they are the target of a physical attack,” and thus they are not covered by the proposed Reliability Standard. 24 NERC explains that the destruction of a back-up control center would “have no direct reliability impact in Real-time as the entity can continue operating . . . from its primary control center.”  25 With respect to control centers that do not physically operate Bulk-Power System facilities, such as control centers operated by reliability coordinators, NERC states that, while “certain monitoring and oversight capabilities might be lost as a result of a physical attack on such control centers, the Transmission Owner or Transmission Operator that operationally controls the critical Transmission station or Transmission substation would be able to continue operating its transmission system to prevent widespread instability, uncontrolled separation, or Cascading within an Interconnection.”  26

33. NERC acknowledges that certain control centers categorized as “High Impact” or “Medium Impact” under Reliability Standard CIP-002-5.1 (Cyber Security—BES Cyber System Categorization) would not be covered control centers under the proposed Reliability Standard. 27 NERC explains that this:

34. NERC points out that Reliability Standard CIP-006-5 already requires physical security protections that are “designed to restrict physical access to locations containing High and Medium Impact Cyber Systems,” which include control centers and backup control centers for reliability coordinators, balancing authorities, transmission operators and generation operators irrespective of their ability to operationally control Bulk-Power System facilities. 29

35. The Commission proposes to direct NERC to make an informational filing within six months of the effective date of a final rule in this proceeding indicating whether the development of Reliability Standards that provide physical security for all “High Impact” control centers, as that term is defined in Reliability Standard CIP-002-5.1, is necessary for the reliable operation of the Bulk-Power System.

36. Proposed Reliability Standard CIP-014-1, Requirement R1.2 requires applicable transmission owners to “identify the primary control center that operationally controls each Transmission station or Transmission substation identified in the Requirement R1 risk assessment.” Thus the proposed Reliability Standard, while addressing transmission owners' primary control centers, does not encompass transmission owner back-up control centers or any control centers owned or operated by other functional entity types, such as reliability coordinators, balancing authorities, and generator operators.

37. Primary and back-up control centers of functional entities other than transmission owners and operators identified as “High Impact” may warrant assessment and physical security controls under this Reliability Standard because a successful attack could prevent or impair situational awareness, especially from a wide-area perspective, or could allow attackers to distribute misleading and potentially harmful data and operating instructions that could result in instability, uncontrolled separation, or cascading failures.

38. NERC's petition recognizes that Reliability Standard CIP-006-5 (Cyber Security—Physical Security of BES Cyber Systems) already requires certain physical security protections for applicable primary and backup control centers of reliability coordinators, balancing authorities, transmission operators, and generator operators. Reliability Standard CIP-006-5 applies to primary and backup control centers containing BES Cyber Systems that are “High Impact” or “Medium Impact,” as defined in Reliability Standard CIP-002-5.1, Attachment 1. “High Impact” facilities include the control centers and backup control centers of reliability coordinators and certain balancing authorities, transmission operators, and generator operators. The “Medium Impact” categorization applies to all transmission operator primary and backup control centers not categorized as “High Impact” and to primary and backup control centers for certain generator operators and balancing authorities.

39. The proposed informational filing should address whether there is a need for consistent treatment of “High Impact” control centers for cybersecurity and physical security purposes through the development of Reliability Standards that afford physical protection to all “High Impact” control centers. The Commission notes that the development of physical security protections for all “High Impact” control centers would not be without precedent because, as noted above, Reliability Standard CIP-006-5 already requires that “High Impact” control centers have some physical protections, including restrictions on physical access, to protect BES Cyber Assets. However, the security measures required by Reliability Standard CIP-006-5 may not be comparable to those required by proposed Reliability Standard CIP-014-1, and thus may not be sufficient to “deter, detect, delay, assess, communicate, and respond to potential threats and vulnerabilities” as required in Requirement R5 of the proposed Reliability Standard. Further, Reliability Standard CIP-006-5 does not require an “unaffiliated third party review” of the evaluation and security plan required by proposed Reliability Standard CIP-014-1.

40. The Commission seeks comment on this proposal.

41. The March 7 Order did not direct NERC to make the physical security Reliability Standards applicable to specific functional entity types. The March 7 Order stated that “some of the requirements imposed by these newly proposed Reliability Standards may best be performed by the owner and other activity may best be performed by the operator,” and that NERC should clearly indicate which entity is responsible for each requirement. 30 With regard to the applicable types of facilities, the Commission stated that it “is not requiring NERC to adopt a specific type of risk assessment, nor is the Commission requiring that a mandatory number of facilities be identified as critical facilities under the Reliability Standards.”  31

42. In explaining why the proposed Reliability Standard does not include generator owners and generator operators as applicable entities, the standard drafting team found that:

43. NERC explains that generator owners and generator operators were not included in the applicability section because, “while the loss of a generator facility due to a physical attack may have local reliability effects, the loss of the facility is unlikely to have the widespread, uncontrollable impact” contemplated in the March 7 Order. 33 NERC maintains that a “generation facility does not have the same critical functionality as certain Transmission stations and Transmission substations due to the limited size of generating plants, the availability of other generation capacity connected to the grid, and planned resilience of the transmission system to react to the loss of a generation facility.”  34

44. The Commission proposes to approve the applicability section of the proposed Reliability Standard without the inclusion of generator owners and generator operators. Omitting generator owners and generator operators from the applicability section is consistent with the March 7 Order. The March 7 Order explained that the “number of facilities identified as critical will be relatively small compared to the number of facilities that comprise the Bulk-Power System.”  35 We affirm this understanding and approach to physical security. The directive from the March 7 Order was intended to fill a recognized gap in the reliable operation of the Bulk-Power System. From that perspective, it is reasonable to focus attention on the most critical facilities in order to provide the most effective use of resources while adequately addressing the identified reliability gap.

45. Accordingly, we propose to accept NERC's justification for excluding generator owners and operators because it is in keeping with the March 7 Order's focus on protecting the most critical facilities. NERC explains that a generation facility “does not have the same critical functionality as certain Transmission stations and Transmission substations due to the limited size of generating plants, the availability of other generation capacity connected to the grid, and planned resilience of the transmission system to react to the loss of a generation facility.”  36 Also, as NERC points out, Requirement R1 mandates a transmission analysis that accounts for transmission owner or transmission operator-owned substations that connect generating stations to the Bulk-Power System with step-up transformers. The Commission seeks comment on this proposal. In addition, while we propose to accept the applicability section of the proposed Reliability Standard, we note that NERC's proposed omission of generator owners and generator operators could potentially exempt substations owned or operated by generators. The Commission seeks comment on the potential reliability impact of excluding generator owned or operated substations.

46. In the March 7 Order, the Commission stated that “the risk assessment used by an owner or operator to identify critical facilities should be verified by an entity other than the owner or operator . . . [and] [s]imilarly, the determination of threats and vulnerabilities and the security plan should also be reviewed by NERC, the relevant Regional Entity, the Reliability Coordinator, or another entity with appropriate expertise.”  37

47. Requirement R2 of the proposed Reliability Standard requires transmission owners to have their risk assessments verified by an unaffiliated third party. Requirement R6, likewise, requires each transmission owner and transmission operator to have its vulnerability and threat assessment(s) along with its security plan(s) for any critical facilities reviewed by an unaffiliated third party.

48. Regarding how an applicable entity is supposed to address any recommendations by a third-party verifier, the proposed Reliability Standard, in Requirement R2.3, states that the transmission owner must either (a) “modify its identification . . . consistent with the recommendation” or (b) “document the technical basis for not modifying the identification in accordance with the recommendation.” Similarly, Requirement R6.3 explains the procedure for considering any recommendations from the reviewing entity as to the threat assessments and security plans: the applicable entity must either (a) “modify its evaluation or security plan(s) consistent with the recommendation” or (b) “document the reason(s) for not modifying the evaluation or security plan(s) consistent with the recommendation.”

49. NERC states that “[r]equiring documentation of the technical basis for not modifying the identification in accordance with the recommendation will help ensure that a Transmission Owner meaningfully considers the verifier's recommendations and follows those recommendations unless it can technically justify its reasons for not doing so. To comply with Part 2.3, the technical justification must be sound and based on acceptable approaches to conducting transmission analyses.”  38 The NERC petition contains a similar explanation for the third-party review (Requirement R6) of the threat assessments and security plans mandated in Requirements R4 and R5. 39

50. We propose to approve the proposed Reliability Standard, including the third-party verification and review method proposed by NERC in Requirements R2 and R6. Failure to provide a written, technically justifiable reason for rejecting a third-party recommendation would render the applicable entity non-compliant. With that understanding, we propose to approve NERC's proposal regarding third-party verification and review in Requirements R2 and R6 of the proposed Reliability Standard as an equally efficient and effective alternative to the directive in the March 7 Order.

51. The Commission seeks comment on this proposal.

52. In the March 7 Order, the Commission stated that the development of physical security Reliability Standards “will help provide for the resiliency and reliable operation of the Bulk-Power System. To that end, the proposed Reliability Standards should allow owners or operators to consider resiliency of the grid in the risk assessment when identifying critical facilities, and the elements that make up those facilities, such as transformers that typically require significant time to repair or replace. As part of this process, owners or operators may consider elements of resiliency such as how the system is designed, operated, and maintained, and the sophistication of recovery plans and inventory management.”  40

53. The proposed Reliability Standard mentions resiliency in Requirement R5, stating in Requirement R5.1 that the physical security plans that entities develop shall include, among other attributes: “Resiliency or security measures designed collectively to deter, detect, delay, assess, communicate, and respond to potential physical threats and vulnerabilities identified during the evaluation conducted in Requirement R4.” The NERC petition describes Requirement R5.1, with regard to resiliency, as referring to “steps an entity may take that, while not specifically targeted as hardening the physical security of the site, help to decrease the potential adverse impact of a physical attack . . . including modifications to system topology or the construction of a new Transmission station . . . that would lessen the criticality of the facility.”  41

54. The NERC petition describes resiliency measures that could be included in the required physical security plans. However, specific resiliency measures are not required by the proposed Reliability Standard, which is consistent with the March 7 Order. Instead, the proposed Reliability Standard allows the security plans to be flexible in order to meet different threats and protect varying Bulk-Power System configurations.

55. Resiliency is as, or even more, important than physical security given that physical security cannot protect against all possible attacks. In the case of the loss of a substation, the Bulk-Power System may depend on resiliency to minimize the impact of the loss of facilities and restore blacked-out portions of the Bulk-Power System as quickly as possible. Some entities may implement resiliency measures rather than security measures, such as by adding facilities or operating procedures that reduce or eliminate the importance of existing critical facilities. Such measures could significantly improve reliability and resiliency.

56. According to the NERC petition, the NERC Board of Trustees expects NERC management to monitor and assess the implementation of the proposed Reliability Standard on an ongoing basis. 42 According to NERC, this effort includes: The number of assets identified as critical under the proposed Reliability Standard; the defining characteristics of the assets identified as critical; the scope of security plans (i.e., the types of security and resiliency measures contemplated under the various security plans); the timelines included in the security plan for implementing the security and resiliency measures; and industry progress in implementing the proposed Reliability Standard. NERC explains that this information could be used to provide regular updates to Commission staff. 43 The Commission proposes to rely on NERC's ongoing assessment of the proposed Reliability Standard's implementation and to require NERC to make such information available to Commission staff upon request.

57. In addition, the Commission proposes to direct NERC to submit an informational filing that addresses the resiliency of the Bulk-Power System when confronted with the loss of critical facilities. The informational filing should explore what steps can be taken, in addition to those required by the proposed Reliability Standard, to maintain the reliable operation of the Bulk-Power System when faced with the loss or degradation of critical facilities. In this regard, we note that NERC issued a report on severe impact resilience in 2012. 44 The filing proposed here could draw on NERC's 2012 report but should also reflect subsequent work and development on this topic, particularly non-confidential information regarding supply chain, transporting and other logistical issues for equipment such as large transformers. The Commission proposes to direct NERC to submit the informational filing within one year after the effective date of the final rule in this proceeding. The Commission seeks comment on this proposal.

58. Each requirement of proposed Reliability Standard CIP-014-1 includes one violation risk factor and has an associated set of at least one violation severity level. The ranges of penalties for violations will be based on the sanctions table and supporting penalty determination process described in the Commission-approved NERC Sanction Guidelines, according to the NERC petition. The Commission proposes to approve the proposed violation risk factors and violation severity levels for the requirements proposed in Reliability Standard CIP-014-1 as consistent with the Commission's established guidelines. 45

59. The NERC petition proposes that proposed Reliability Standard CIP-014-1 become effective the “first day of the first calendar quarter that is six months beyond the date that this standard is approved by applicable regulatory authorities.” In other words, the effective date of the proposed Reliability Standard would be the first day of the first calendar quarter that is six months after the effective date of a final rule in this proceeding approving the proposed Reliability Standard. 46 NERC states that the initial risk assessment required under Requirement R1 must be completed by or before the effective date of the proposed Reliability Standard. 47 As described in the requirements of the proposed Reliability Standard, NERC also identifies when Requirements R2, R3, R4, R5, and R6 must be complied with following the effective date of the proposed Reliability Standard. The Commission proposes to approve NERC's implementation plan and effective date for proposed Reliability Standard CIP-014-1.

60. The Office of Management and Budget (OMB) regulations require approval of certain information collection requirements imposed by agency rules. Upon approval of a collection(s) of information, OMB will assign an OMB control number and an expiration date. Respondents subject to the filing requirements of an agency rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number. The Paperwork Reduction Act (PRA) requires each federal agency to seek and obtain OMB approval before undertaking a collection of information directed to ten or more persons, or contained in a rule of general applicability.

61. The Commission is submitting these reporting requirements to OMB for its review and approval under section 3507(d) of the PRA. Comments are solicited on the Commission's need for this information, whether the information will have practical utility, ways to enhance the quality, utility, and clarity of the information to be collected, and any suggested methods for minimizing the respondent's burden, including the use of automated information techniques.

62. The Commission based its paperwork burden estimates on the NERC compliance registry as of May 28, 2014. According to the registry, there are 357 transmission owners and 197 transmission operators. The NERC compliance registry also shows that there are only 19 transmission operators that are not also registered as a transmission owner.

63. The following table shows the Commission's burden and cost estimates, broken down by requirement and year:

64. In arriving at the figures in the above table, the Commission made the following assumptions:

a. Requirement R1: We assume that responsible entities will complete the required risk assessment at approximately the same time as they complete the assessments required under the existing TPL Reliability Standards. Accordingly, the burden for proposed Reliability Standard CIP-014-1 only represents the documentation required in addition to what entities currently prepare. Conservatively, we assume that in the first year all transmission owners and transmission operators will complete the required risk assessment. 49 In the third year, we assume that only 30 transmission operators will be required to do another risk assessment and that the entities with critical facilities after the first risk assessment will still have critical facilities after the second risk assessment.

b. Requirement R5: We assume that developing physical security plans in the first year will be more time consuming than in later years because in later years the plans will likely only need to be updated.

65. Title: FERC-725U, Mandatory Reliability Standards: Reliability Standard CIP-014-1.

Action: Proposed collection of information.

OMB Control No: To be determined.

Respondents: Business or other for profit, and not for profit institutions.

Frequency of Responses: Ongoing.

Necessity of the Information: The proposed Reliability Standard CIP-014-1, if adopted, would implement the Congressional mandate of the Energy Policy Act of 2005 to develop mandatory and enforceable Reliability Standards to better ensure the reliability of the nation's Bulk-Power System. Specifically, the proposal would ensure that applicable entities with critical Bulk-Power System facilities develop and implement physical security plans to address physical security threats and vulnerabilities that could result in instability, uncontrolled separation, or cascading within an Interconnection.

Internal review: The Commission has reviewed the proposed Reliability Standard and has determined that the proposed Reliability Standard is necessary to ensure the reliability and integrity of the Nation's Bulk-Power System.

66. Interested persons may obtain information on the reporting requirements by contacting: Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426 [Attention: Ellen Brown, Office of the Executive Director, email: DataClearance@ferc.gov, Phone: (202) 502-8663, fax: (202) 273-0873]. Comments on the requirements of this rule may also be sent to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503 [Attention: Desk Officer for the Federal Energy Regulatory Commission]. For security reasons, comments should be sent by email to OMB at oira_submission@omb.eop.gov. Comments submitted to OMB should include Docket Number RM14-15-000.

67. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment. 50 The Commission has categorically excluded certain actions from this requirement as not having a significant effect on the human environment. Included in the exclusion are rules that are clarifying, corrective, or procedural or that do not substantially change the effect of the regulations being amended. 51 The actions proposed here fall within this categorical exclusion in the Commission's regulations.

68. The Regulatory Flexibility Act of 1980 (RFA)  52 generally requires a description and analysis of proposed rules that will have significant economic impact on a substantial number of small entities.

69. The Small Business Administration (SBA) recently revised its size standard (effective January 22, 2014) for electric utilities from a standard based on megawatt hours to a standard based on the number of employees, including affiliates. 53 Under SBA's new size standards, transmission owners and transmission operators likely come under the following category and associated size threshold: Electric bulk power transmission and control, at 500 employees. 54

70. Based on U.S. economic census data, the approximate percentage of small firms in this category is 57 percent. 55 Currently, the Commission does not have information concerning how the economic census data compares with entities registered with NERC and is unable to estimate the number of small transmission owners and transmission operators using the new SBA definition. However, the Commission recognizes that proposed Reliability Standard CIP-014-1 only applies to transmission owners and transmission operators that own and/or operate certain critical Bulk-Power System facilities. The Commission believes that the proposed Reliability Standard will be applicable to a relatively small group of large entities and that an even smaller subset of large entities will have to comply with each of the requirements in the proposed Reliability Standard.

71. Based on the above, the Commission certifies that proposed Reliability Standard CIP-014-1 will not have a significant impact on a substantial number of small entities. Accordingly, no initial regulatory flexibility analysis is required. The Commission seeks comment on this proposal.

72. The Commission invites interested persons to submit comments on the matters and issues proposed in this notice to be adopted, including any related matters or alternative proposals that commenters may wish to discuss. Comments are due September 8, 2014. Reply comments are due September 22, 2014. Comments must refer to Docket No. RM14-15-000, and must include the commenter's name, the organization they represent, if applicable, and their address in their comments.

73. The Commission encourages comments to be filed electronically via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing formats. Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format. Commenters filing electronically do not need to make a paper filing.

74. Commenters that are not able to file comments electronically must send an original of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE., Washington, DC 20426.

75. All comments will be placed in the Commission's public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. Commenters on this proposal are not required to serve copies of their comments on other commenters.

76. In addition to publishing the full text of this document in the Federal Register , the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through the Commission's Home Page ( http://www.ferc.gov ) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, Washington, DC 20426.

77. From the Commission's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.

78. User assistance is available for eLibrary and the Commission's Web site during normal business hours from the Commission's Online Support at 202-502-6652 (toll free at 1-866-208-3676) or email at ferconlinesupport@ferc.gov, or the Public Reference Room at (202) 502-8371, TTY (202) 502-8659. Email the Public Reference Room at public.referenceroom@ferc.gov.

On May 2, 2014, the National Postal Policy Council, the Association for Mail Electronic Enhancement, the Association of Marketing Service Providers, GrayHair Software, Inc., the Greeting Card Association, the International Digital Enterprise Alliance, Inc., the Major Mailers Association, and the National Association of Presort Mailers (Petitioners) filed a petition pursuant to 39 CFR 3050.11. 1 The Petition requests that the Commission initiate a proceeding to review and consider improvements to the econometric elasticities demand model used by the Postal Service and the Commission. Petition at 2. Petitioners contend that the econometric volume demand model prepared by the Postal Service materially understates the true price elasticities of demand for major postal products. Id.

In response to requests from the public, the EPA is extending the previously announced public-comment period. The public-comment period will end September 2, 2014, rather than August 1, 2014. The direct final rule published at 79 FR 37644 on July 2, 2014 was withdrawn. The withdrawal notice of the direct final rule was published in the Federal Register on Thursday, July 17, 2014 at 79 FR 41646.

I. What action is EPA proposing? II. What is the background for EPA's proposed action? III. EPA's Conversion of Conditional Approval of the Commonwealth's SIP IV. What is EPA's analysis of the Commonwealth's SIP revision? V. Proposed Action VI. Statutory and Executive Order Reviews I. What action is EPA proposing?

On January 31, 2013, KDAQ submitted a SIP revision to EPA for approval into the Kentucky SIP to adopt Federal requirements for NSR permitting. The Commonwealth's SIP revision makes changes to the regulations at Kentucky's Air Quality Regulations, 401 KAR 51:001 —Definitions for 401-KAR Chapter 51; 401 KAR 51:017— Prevention of significant deterioration of air quality and 401 KAR 51:052— Review of new sources in or impacting upon nonattainment areas to adopt NSR requirements related to the implementation of the PM 2.5   1 NAAQS as promulgated in the rulemakings entitled “Implementation of the New Source Review (NSR) Program for Particulate Matter Less Than 2.5 Micrometers,” Final Rule, 73 FR 28321 (May 16, 2008) (hereafter referred to as the NSR PM 2.5 Rule) and “Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM 2.5 )—Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC),” Final Rule, 75 FR 64864 (October 20, 2010) (hereafter referred to as the “PM 2.5 PSD Increments-SILs-SMC Rule”) to comply with Federal NSR permitting regulations at 40 CFR 51.166 and 51.165. 2

Additionally, the Commonwealth's January 31, 2013 SIP submission satisfies EPA's multiple conditional approvals of the PSD-related requirements for sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) and 110(a)(2)(J) of Kentucky's infrastructure SIPs for the 1997 and 2006 PM 2.5 and 2008 8-hour ozone NAAQS. As a result, EPA is proposing to convert from conditional approval to full approval KDAQ's infrastructure requirements related to its PSD program. More details on EPA's conditional approvals are discussed in section III of this rulemaking.

EPA is not, however, proposing action to approve into the Kentucky SIP the PM 2.5 SILs and SMC thresholds and provisions promulgated in EPA's PM 2.5 PSD Increment-SILs-SMC Rule, 75 FR 64864 (October 20, 2010). 3 More information regarding EPA's decision to not take action on these provisions is provided below in section II.