I. Background A. CARD Act Annual Adjustments

In 2010, the Board of Governors of the Federal Reserve System (Board) published amendments to Regulation Z implementing the CARD Act, which amended TILA. Public Law 111-24, 123 Stat. 1734 (2009). Pursuant to the CARD Act, the Board's Regulation Z amendments established new requirements with respect to open-end consumer credit plans, including requirements for the disclosure of minimum interest charge amounts and the establishment of a safe harbor provision allowing card issuers to impose penalty fees for violating account terms without violating the restrictions on penalty fees established by the CARD Act. See 75 FR 7658, 7799 (Feb. 22, 2010) and 75 FR 37526, 37527 (June 29, 2010). The final rule issued by the Board required that these thresholds be calculated annually using the Consumer Price Index as published by the Bureau of Labor Statistics (BLS). 1

Sections 1026.6(b)(2)(iii) and 1026.60(b)(3) of the Bureau's Regulation Z provide that the minimum interest charge thresholds will be re-calculated annually using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) that was in effect on the preceding June 1. When the cumulative change in the adjusted minimum value derived from applying the annual CPI-W level to the current amounts in §§ 1026.6(b)(2)(iii) and 1026.60(b)(3) has risen by a whole dollar, the minimum interest charge amounts set forth in the regulation will be increased by $1.00. This adjustment is based on the CPI-W index in effect on June 1, 2014, which was reported on May 15, 2014. The BLS publishes consumer-based indices monthly, but does not report a CPI change on June 1; adjustments are reported in the middle of the month. The CPI-W is a subset of the CPI-U index (based on all urban consumers) and represents approximately 28 percent of the U.S. population. The adjustment reflects a 2 percent increase in the CPI-W from April 2013 to April 2014 and is rounded to the nearest $1 increment. This increase in the CPI-W when applied to the current amounts in §§ 1026.6(b)(2)(iii) and 1026.60(b)(3) did not trigger an increase in the minimum interest charge threshold of at least $1.00, and therefore the Bureau is not amending §§ 1026.6(b)(2)(iii) and 1026.60(b)(3).

The Bureau's Regulation Z provides that the safe harbor provision which establishes the permissible fee thresholds in § 1026.52(b)(1)(ii)(A) and (B) will be re-calculated annually using the CPI-W that was in effect on the preceding June 1. The BLS publishes consumer-based indices monthly, but does not report a CPI change on June 1; adjustments are reported in the middle of the month. This adjustment is based on the CPI-W index in effect on June 1, 2014, which was reported on May 15, 2014. The CPI-W is a subset of the CPI-U index (based on all urban consumers) and represents approximately 28 percent of the U.S. population. When the cumulative change in the adjusted minimum value derived from applying the annual CPI-W level to the current amounts in § 1026.52(b)(1)(ii)(A) and (B) has risen by a whole dollar, those amounts will be increased by $1.00. Similarly, when the cumulative change in the adjusted minimum value derived from applying the annual CPI-W level to the current amounts in § 1026.52(b)(1)(ii)(A) and (B) has decreased by a whole dollar, those amounts will be decreased by $1.00. See comment 52(b)(1)(ii)-2. The adjustment to the permissible fee thresholds being adopted here reflects a 2 percent increase in the CPI-W from April 2013 to April 2014 and is rounded to the nearest $1 increment.

On January 10, 2013, the Bureau issued a final rule pursuant to, inter alia, section 1431 of the Dodd-Frank Act, which revised the loan amount threshold for HOEPA loans. 78 FR 6856 (Jan. 31, 2013) (2013 HOEPA Final Rule). The 2013 HOEPA Final Rule adjusted the dollar amount threshold used in connection with calculating whether a transaction meets the percentage point thresholds in the points and fees coverage test to $20,000. Specifically, under § 1026.32(a)(1)(ii)(A) and (B), when determining whether a transaction is a high cost mortgage, the determination of the applicable points and fees coverage test is based upon whether the total loan amount is for more or less than $20,000. The HOEPA 2013 Final Rule provides that this threshold amount be recalculated annually and the Bureau uses the Consumer Price Index for All Urban Consumers (CPI-U) index, as published by the BLS, as the index for adjusting the $20,000 figure. The CPI-U is based on all urban consumers and represents approximately 88 percent of the U.S. population. The BLS publishes consumer-based indices monthly, but does not report a CPI change on June 1; adjustments are reported in the middle of each month. The adjustment to the CPI-U index reported by BLS on May 15, 2014, was the CPI-U index in effect on June 1, and reflects the percentage change from April 2013 to April 2014. The adjustment to the $20,000 figure being adopted here reflects a 2 percent increase in the CPI-U index for this period and is rounded to whole dollars for ease of compliance.

Pursuant to section 1431 of the Dodd Frank Act and § 1026.32(a)(1)(ii)(B) as amended by the 2013 HOEPA Final Rule, implementation of the 2013 HOEPA Final Rule also changed the HOEPA fee trigger to $1,000. The HOEPA 2013 Final Rule provides that this threshold amount will be recalculated annually and the Bureau uses the CPI-U index, as published by the BLS, as the index for adjusting the $1,000 figure. The adjustment to the CPI-U index reported by BLS on May 15, 2014, was the CPI-U index in effect on June 1, and reflects the percentage change from April 2013 to April 2014. The adjustment to the $1,000 figure being adopted here reflects a 2 percent increase in the CPI-U index for this period and is rounded to whole dollars for ease of compliance.

On January 10, 2013, the Bureau issued a final rule pursuant to, inter alia, sections 1411 and 1412 of the Dodd-Frank Act, which implemented laws requiring mortgage lenders to consider a consumer's ability to repay home loans before extending them credit. 78 FR 6407 (Jan. 31, 2013) (2013 ATR/QM Final Rule). The 2013 ATR/QM Final Rule established the points and fees limits that a loan must not exceed in order to satisfy the requirements for a qualified mortgage. Specifically, a covered transaction is not a qualified mortgage unless the transactions points and fees do not exceed 3 percent of the total loan amount for a loan amount greater than or equal to $100,000; $3,000 for a loan amount greater than or equal to $60,000 but less than $100,000; 5 percent of the total loan amount for loans greater than or equal to $20,000 but less than $60,000; $1,000 for a loan amount greater than or equal to $12,500 but less than $20,000; and 8 percent of the total loan amount for loans less than $12,500. The 2013 ATR/QM Final Rule provides that the limits and loan amounts in 1026.43(e)(3)(i) be recalculated annually for inflation and the Bureau uses the Consumer Price Index for All Urban Consumers (CPI-U) index, as published by the BLS, as the index for adjusting the figures. The CPI-U is based on all urban consumers and represents approximately 88 percent of the U.S. population. The BLS publishes consumer-based indices monthly, but does not report a CPI change on June 1; adjustments are reported in the middle of each month. The adjustment to the CPI-U index reported by BLS on May 15, 2014, was the CPI-U index in effect on June 1, and reflects the percentage change from April 2013 to April 2014. The adjustment to the figures being adopted here reflects a 2 percent increase in the CPI-U index for this period and is rounded to whole dollars for ease of compliance.

The minimum interest charge amounts for §§ 1026.6(b)(2)(iii) and 1026.60(b)(3) will remain unchanged for the year 2015. Accordingly, the Bureau is not amending these sections.

Effective January 1, 2015, the permissible fee threshold amounts are $27 for § 1026.52(b)(1)(ii)(A) and $38 for § 1026.52(b)(1)(ii)(B). Accordingly, the Bureau is revising § 1026.52(b)(1)(ii)(A) and (B) to state that the fee imposed for violating the terms or other requirements of an account shall not exceed $27 and $38 respectively. The Bureau is also amending comment 52(b)(1)(ii)-2.i to preserve a list of the historical thresholds for this provision.

Effective January 1, 2015, for purposes of determining the total loan amount threshold that determines whether a transaction is a high cost mortgage when the points and fees are either 5 percent or 8 percent  2 is $20,391. Comment 32(a)(1)(ii)-3, which lists the adjustments for each year, is amended to reflect the new dollar threshold amount for 2015.

Effective January 1, 2015, for purposes of determining whether a consumer credit transaction that is secured by a consumer's principal dwelling and is not otherwise exempt is covered by § 1026.32 (based on the total points and fees payable by the consumer at consummation), a loan is covered if the points and fees exceed $1,020 or 8 percent of the total loan amount, whichever is lower. Comment 32(a)(1)(ii)-1, which lists the adjustments for each year, is amended to reflect the new dollar threshold amount for 2015.

Effective January 1, 2015, for purposes of determining whether a covered transaction is a qualified mortgage, a covered transaction is not a qualified mortgage unless the transaction's total points and fees do not exceed 3 percent of the total loan amount for a loan amount greater than or equal to $101,953; $3,059 for a loan amount greater than or equal to $61,172 but less than $101,953; 5 percent of the total loan amount for loans greater than or equal to $20,391 but less than $61,172; $1,020 for a loan amount greater than or equal to $12,744 but less than $20,391, and 8 percent of the total loan amount for loans less than $12,744. Comment 43(e)(3)(ii)-1, which lists the adjustments for each year, is amended to reflect the new dollar threshold amounts for 2015.

Under the Administrative Procedure Act (APA), notice and opportunity for public comment are not required if the Bureau finds that notice and public comment are impracticable, unnecessary, or contrary to the public interest. 5 U.S.C. 553(b)(B). Pursuant to this final rule in Regulation Z, § 1026.52(b)(1)(ii)(A) and (B) in subpart E is amended and comments 1026.32(a)(1)(ii)-3.i, 1026.43(e)(3)(ii)-1.i, 1026.52(b)(1)(ii)-2.i.b in supplement I are added to update the exemption thresholds. The amendments in this final rule are technical and non-discretionary, and they merely apply the method previously established in Regulation Z for determining adjustments to the thresholds. For these reasons, the Bureau has determined that publishing a notice of proposed rulemaking and providing opportunity for public comment are unnecessary. Therefore, the amendments are adopted in final form.

Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a).

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3506; 5 CFR 1320), the Bureau reviewed this final rule. No collections of information pursuant to the Paperwork Reduction Act are contained in the final rule.

For the reasons set forth in the preamble, the Bureau amends Regulation Z, 12 CFR part 1026, as set forth below:

Discussion

The Agência Nacional de Aviação Civil (ANAC), which is the aviation authority for Brazil, has issued Brazilian Airworthiness Directive 2014-07-01, dated July 10, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition on all Embraer S.A. Model ERJ 190-100 STD, -100 LR, -100 ECJ, -100 IGW, -200 STD, -200 LR, and -200 IGW airplanes. The MCAI states:

Embraer has issued the following service information:

• Embraer Alert Service Bulletin 190-54-A015, Revision 03, dated June 27, 2014.

• Embraer Alert Service Bulletin 190LIN-54-A006, Revision 02, dated June 27, 2014.

• Embraer Service Bulletin 190-54-0013, dated November 27, 2012.

• Embraer Service Bulletin 190-54-0015, dated July 3, 2014.

• Embraer Service Bulletin 190LIN-54-0004, dated December 20, 2012.

• Embraer Service Bulletin 190LIN-54-0006, dated July 3, 2014.

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 issuing this AD because we evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

The applicability of the MCAI does not include production airplanes. This FAA AD, however, applies to all airplanes of the affected models to ensure that the repetitive retorquing is done on the fleet (as specified in paragraph (i) of this AD) and to prohibit the installation of certain lock nuts on any airplane in the fleet (as specified in paragraph (j) of this AD).

The airplanes affected by paragraph (g)(2) of this AD include one airplane (serial number 19000641) that is not included in the corresponding requirement of the ANAC AD. For the airplanes affected by this requirement, the ANAC AD refers to Embraer Alert Service Bulletin 190LIN-54-A006, Revision 02, dated June 27, 2014. This FAA AD, however, refers to the most recent service information—Embraer Service Bulletin 190LIN-54-0006, dated July 3, 2014, which includes this additional airplane. This has been coordinated with ANAC.

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 the paragraph and retitled it “Contacting the Manufacturer.” This paragraph now clarifies that for any requirement in this AD to obtain corrective actions from a manufacturer, the actions must be accomplished using a method approved by the FAA, ANAC, or ANAC's authorized Designee.

The Contacting the Manufacturer paragraph also clarifies that, if approved by the ANAC Designee, the approval must include the Designee's authorized signature. The Designee's signature indicates that the data and information contained in the document are ANAC-approved, which is also FAA-approved. Messages and other information provided by the manufacturer that do not contain the ANAC Designee's authorized signature approval are not ANAC-approved, unless ANAC 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 consider this AD interim action. If final action is later identified, we might consider further rulemaking then.

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because loss of a shear pin on the pylon outboard and inboard lower link fittings could result in failure of the fitting and consequent separation of the engine from the wing. Therefore, we determined that notice and opportunity for public comment before issuing this AD are impracticable and that good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2014-0531; Directorate Identifier 2014-NM-142-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD 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 AD.

We estimate that this AD affects 86 airplanes of U.S. registry. We also estimate that it will take about 6 work-hours per product to comply with the basic requirements of this AD. Required parts will cost about $0. The average labor rate is $85 per work-hour. Based on these figures, we estimate the cost of this AD on U.S. operators to be $43,860, or $510 per product.

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

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

We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, Section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This 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 AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

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

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

2. Is not a “significant rule” under 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 amends 14 CFR part 39 as follows:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2008-14-17, Amendment 39-15612 (73 FR 40958, July 17, 2008). AD 2008-14-17 applied to certain Airbus Model A330-200 and A340-300 series airplanes. The NPRM published in the Federal Register on March 3, 2014 (79 FR 11717).

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA Airworthiness Directive 2013-0158, dated July 22, 2013 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Airbus Model A330-200 and A340-300 series airplanes. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (79 FR 11717, March 3, 2014) or on the determination of the cost to the public.

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.

We have become 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 the paragraph and retitled it “Contacting the Manufacturer.” This paragraph now clarifies that for any requirement in this AD to obtain corrective actions from a manufacturer, the actions must be accomplished using a method approved by the FAA, 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 also have decided not to include a generic reference to either the “delegated agent” or “design approval holder (DAH) with State of Design Authority design organization approval,” but instead we have provided the specific delegation approval granted by the State of Design Authority for the DAH throughout this AD.

We reviewed the available data and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 11717, March 3, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 11717, March 3, 2014).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We estimate that this AD affects 7 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

The new requirements of this AD add no additional economic burden.

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

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

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

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

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

2. Is not a “significant rule” under 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.

You may examine the AD docket on the Internet at http://www.regulations.gov/#!docketDetail;D=FAA-2014-0121; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section.

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2006-26-06, Amendment 39-14864 (71 FR 77586, December 27, 2006). AD 2006-26-06 applied to Boeing Model 777-200 and -300 series airplanes, equipped with Rolls-Royce engines. The NPRM published in the Federal Register on July 3, 2013 (78 FR 40060). The NPRM proposed to continue to require repetitive inspections to detect cracks of the outer V-blades of the thrust reverser, and corrective action if necessary. The NPRM also proposed to continue to provide an optional terminating action for the repetitive inspections. The NPRM also proposed to require, for airplanes on which the optional terminating action is done, repetitive inspections for cracking in the outer V-blade fittings of the hinge beam and latch beam ends of each thrust reverser half, and replacement of an affected thrust reverser half if necessary.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal (78 FR 40060, July 3, 2013) and the FAA's response to each comment.

Boeing, American Airlines (AAL), Air New Zealand, Delta Airlines, and Transaero requested that we allow the modifications and inspections defined in Boeing Special Attention Service Bulletin 777-78-0091, dated June 18, 2013, as an alternative to the inspections specified in paragraph (j) of the NPRM (78 FR 40060, July 3, 2013). Boeing stated that Boeing Special Attention Service Bulletin 777-78-0091, dated June 18, 2013, has been approved as an alternative method of compliance (AMOC) with AD 2006-26-06, Amendment 39-14864 (71 FR 77586, December 27, 2006), and is intended as an alternative to the inspections proposed by the NPRM. Boeing also requested that we provide credit for actions specified in paragraph (j) of the NPRM that were done before the effective date of the new AD in accordance with Boeing Special Attention Service Bulletin 777-78-0091, dated June 18, 2013.

We disagree with the request. Boeing is considering revising Boeing Special Attention Service Bulletin 777-78-0091, dated June 18, 2013, to incorporate feedback on the Accomplishment Instructions of the service bulletin that resulted from validation of the service bulletin. The new revision might include improvements to the L-fitting modification to eliminate short edge margin, fastener changes to eliminate interference, and other changes to the installation sequence and other procedures. We will consider approving the revision of Boeing Special Attention Service Bulletin 777-78-0091 as an AMOC to the actions specified in paragraph (j) of this AD, once this service bulletin is approved and is released. We find that delaying this action would be inappropriate in light of the urgency of the identified unsafe condition. No change has been made to this final rule in this regard.

Boeing requested that we add Boeing Special Attention Service Bulletin 777-78-0064, Revision 2, dated June 14, 2012, as a reference to paragraph (g) of the NPRM (78 FR 40060, July 3, 2013). Boeing stated that Boeing Special Attention Service Bulletin 777-78-0064, Revision 2, dated June 14, 2012, reiterates the repetitive inspection intervals from Boeing Special Attention Service Bulletin 777-78-0064, Revision 1, dated November 30, 2006.

We agree. The compliance times specified in Boeing Special Attention Service Bulletin 777-78-0064, Revision 1, dated November 30, 2006; and Revision 2, dated June 14, 2012; are the same, except that Revision 2 states that the compliance times are measured from the effective date of AD 2006-26-06, Amendment 39-14864 (71 FR 77586, December 27, 2006), rather than the issue date of Boeing Special Attention Service Bulletin 777-78-0064, Revision 1, dated November 30, 2006. We have revised paragraph (g) of this final rule to add Boeing Special Attention Service Bulletin 777-78-0064, Revision 2, dated June 14, 2012, as a reference for accomplishing the actions.

Air New Zealand requested that we change the format of the NPRM (78 FR 40060, July 3, 2013) to clarify the requirements. The commenter requested that we list all repetitive inspection requirements for all airplane configurations in one paragraph. The commenter stated that the format of the NPRM was confusing.

We disagree with changing the format as it is consistent with the format used for most supersedure ADs. Paragraph (g) of this AD clearly identifies the affected airplanes that must continue to accomplish the retained repetitive inspections. Paragraph (j) of this AD clearly identifies the affected airplanes that must accomplish the new repetitive inspections. No change has been made to this final rule in this regard.

AAL requested that, in the spirit of the AD ARC to improve the AD process, we consider the guidance from the AD ARC when considering its comments to the proposed AD. AAL provided a general comment noting that certain service information referenced in the proposed AD is quite lengthy and contains extremely detailed data, while one of the referenced service documents is only 29 pages long. AAL does not consider the lengthy service information to be “AD-Friendly.” Further, AAL stated that the instructions in this service information does not differentiate between critical and non-critical tasks and figures (i.e., the service information does not incorporate the “Required for Compliance” (RC) concept developed by the AD ARC).

We agree that it is helpful when service information is presented in a way that meets “AD-Friendly” guidelines. The focus of AD-friendly service information is to ensure that the language (including compliance times and instructions) in the document is clear and legally enforceable and, therefore, easier for the FAA to adopt into an AD. However, this focus does not mean the service information will be brief. Many service bulletins are necessarily lengthy and complex due, in part, to multiple actions, multiple airplane groups/configurations, and multiple or complex compliance times.

The RC concept is an additional improvement to service information. The concept was developed between the FAA and industry under the AD ARC to further enhance service bulletins and, in turn, the AD process. The RC concept is a new process for annotating which steps in the service information are “required for compliance” with an AD. Differentiating these steps from other tasks in the service information is expected to improve an owner's/operator's understanding of AD requirements and help provide consistent judgment in AD compliance. However, the RC concept does not necessarily result in less lengthy service information. Details might be necessary to provide clear understanding and accurate service instructions.

In response to the AD ARC's recommendations, the FAA released Advisory Circular (AC) 20-176, dated December 19, 2011 ( http://rgl.avs.faa.gov/Regulatory_and_Guidance_Library/rgAdvisoryCircular.nsf/0/a78cc91a47b192278625796b0075f419/$FILE/AC%2020-176.pdf ); and Order 8110.117, dated September 12, 2012 ( http://rgl.avs.faa.gov/Regulatory_and_Guidance_Library/rgOrders.nsf/0/984bb9eb07cdd86986257a7f0070744c/$FILE/Order%208110.117.pdf ); which discusses the RC concept. The FAA includes this concept in ADs when we receive service information containing RC steps. While some design approval holders have implemented the RC concept, the implementation is voluntary. The FAA does not intend to develop or revise AD requirements to incorporate the RC concept if it is not included in the service information.

AAL requested that rather than requiring compliance with the referenced service bulletins, the AD should focus compliance requirements on identifying detailed inspections by task name, identifying an optional configuration change by part numbers, and specifying the corrective action for crack findings. AAL stated that requiring compliance with the entirety of the referenced service bulletins would introduce an unnecessary and excessive burden on the operators, impede progress toward correcting the unsafe condition, and introduce unintended compliance risks not relevant to correcting the unsafe condition.

We disagree with the request. As stated previously, the FAA does not intend to develop or revise AD requirements to incorporate the RC concept if it is not included in the service information. This final rule requires certain repetitive inspections and, as applicable, certain corrective actions and replacements, which are described in detail in the service information. No change has been made to this final rule in this regard.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (78 FR 40060, July 3, 2013) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (78 FR 40060, July 3, 2013).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We consider this AD interim action. The manufacturer is currently developing a modification that will address the unsafe condition identified in this AD. Once this modification is developed, approved, and available, we might consider additional rulemaking.

We estimate that this AD affects 55 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to the specified products. The NPRM was published in the Federal Register on May 12, 2014 (79 FR 26905). The NPRM proposed to correct an unsafe condition for the specified products. The MCAI states:

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (79 FR 26905, May 12, 2014).

We reviewed the available data and determined that air safety and the public interest require adopting this AD as proposed.

We estimate that this AD affects 8 engines installed on helicopters of U.S. registry. We also estimate that it will take about 2 hours per engine to comply with this AD. The average labor rate is $85 per hour. Required parts cost about $750 per engine. Based on these figures, we estimate the cost of this AD on U.S. operators to be $1,360.

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

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

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

For the reasons discussed above, I certify this AD:

(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.

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

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc. Model DHC-8-400 series airplanes. The NPRM published in the Federal Register on January 2, 2014 (79 FR 76). Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2013-27, dated September 25, 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:

You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2013-1068-0002.

We gave the public the opportunity to participate in developing this AD. The following presents the comment received on the NPRM (79 FR 76, January 2, 2014) and the FAA's response to the comment.

Horizon Air requested that we revise the proposed AD (79 FR 76, January 2, 2014) to allow compliance for Bombardier Service Bulletin 84-36-04, Revision B, dated January 2, 2014, or Bombardier Service Bulletin 84-36-04, Revision A, dated April 17, 2013.

We agree with the commenter's request to reference the latest service information. We have revised this AD by referencing Bombardier Service Bulletin 84-36-04, Revision B, dated January 2, 2014, throughout this AD. We have also revised paragraph (h) of this AD to give credit for actions done before the effective date of this AD in accordance with Bombardier Service Bulletin 84-36-04, Revision A, dated April 17, 2013, as well as Bombardier Service Bulletin 84-36-04, dated March 13, 2013.

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 the NPRM (79 FR 76, January 2, 2014), 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 this 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.

No comments were provided to the NPRM (79 FR 76, January 2, 2014) about these proposed changes. However, a comment was provided for an NPRM having Directorate Identifier 2012-NM-101-AD (78 FR 78285, December 26, 2013). The commenter 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 the paragraph and retitled it “Contacting the Manufacturer.” This paragraph now clarifies that for any requirement in this AD to obtain corrective actions from a manufacturer, the actions must be accomplished using a method approved by the FAA, TCCA, or Bombardier, Inc.'s TCCA Design Approval Organization (DAO).

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.

Other commenters to the NPRM having Directorate Identifier 2012-NM-101-AD (78 FR 78285, December 26, 2013) pointed out that in many cases the foreign manufacturer's service bulletin and the foreign authority's MCAI might have been issued some time before the FAA AD. Therefore, the DOA might have provided U.S. operators with an approved repair, developed with full awareness of the unsafe condition, before the FAA AD is issued. Under these circumstances, to comply with the FAA AD, the operator would be required to go back to the manufacturer's DOA and obtain a new approval document, adding time and expense to the compliance process with no safety benefit.

Based on these comments, we removed the requirement that the DAH-provided repair specifically refer to this AD. Before adopting such a requirement, the FAA will coordinate with affected DAHs and verify they are prepared to implement means to ensure that their repair approvals consider the unsafe condition addressed in this AD. Any such requirements will be adopted through the normal AD rulemaking process, including notice-and-comment procedures, when appropriate.

We also have decided not to include a generic reference to either the “delegated agent” or “DAH with State of Design Authority design organization approval,” but instead we have provided the specific delegation approval granted by the State of Design Authority for the DAH throughout this AD.

We reviewed the relevant data, considered the comment received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (79 FR 76, January 2, 2014) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 76, January 2, 2014).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.

We estimate that this AD affects 78 airplanes of U.S. registry.

We also estimate that it will take about 7 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts will cost about $0 per product. Based on these figures, we estimate the cost of this AD on U.S. operators to be $46,410, or $595 per product.

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

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

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

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

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

2. Is not a “significant rule” under 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.

You may examine the AD docket on the Internet at http:/www.regulations.gov#!docketDetail;D=FAA-2013-1068; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section.

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

On March 2, 2012, the Nabb, IN (ABB), VHF Omni-directional Range (VOR)/Tactical Air Navigation (VORTAC) navigation aid (NAVAID) was damaged by a tornado. A Notice to Airmen (NOTAM) was published the following day documenting the ABB VORTAC being out of service and has remained published to present. The Louisville B Service Support Center, Eastern Service Area Technical Operations, evaluated the ABB VORTAC and determined that it was damaged beyond repair and the cost to replace it would be prohibitive. Based on the cost analysis to repair or replace the ABB VORTAC, and the availability of existing adjacent area navigation routes and VOR Federal airways in the area supported by the ABB VORTAC, the FAA made a determination to decommission the ABB VORTAC.

As a result of the ABB VORTAC being decommissioned, the four VOR Federal airways V-44, V-47, V-49, and V-51 require amendment actions. The FAA is modifying these airways by removing the route segments previously supported by the ABB VORTAC due to insufficient ground-based navigation aid coverage. The modifications will result in non-continuous route structures for these airways; however, there are other existing adjacent routes and airways available for aircraft flying in the area of the route segments being removed. Since this action merely involves editorial changes by removing reference to the NAVAID in the legal descriptions of the above VOR Federal Airways, and does not involve a change in the dimensions or operating requirements of that airspace, notice and public procedure under 5 U.S.C. 553(b) are unnecessary.

The FAA is amending Title 14, Code of Federal Regulations (14 CFR) part 71 to modify VOR Federal airways V-44, V-47, V-49, and V-51. The ABB VORTAC being damaged beyond repair in March 2012, NOTAMed out of service since then, and scheduled to be decommissioned has made this action necessary. The route modifications are outlined below.

V-44: V-44 extends between the Columbia, MO, VOR and Albany, NY, VORTAC. This action removes the route segment between the Samsville, IL, VOR and the Falmouth, KY, VOR.

V-47: V-47 extends between the Pine Bluff, AR, VOR and Waterville, OH, VOR. This action removes the route segment between the Pocket City, IN, VORTAC and the Cincinnati, OH, VORTAC.

V-49: V-49 extends between the Vulcan, AL, VORTAC and Mystic, KY (MYS), VOR. This action terminates the airway at the Mystic, KY, VOR by removing the route segment between the MYS VOR and the ABB VORTAC.

V-51: V-51 extends between Pahokee, FL, VORTAC and Chicago Heights, IL, VORTAC. This action removes the route segment between the Louisville, KY, VORTAC and the Shelbyville, IN, VORTAC.

The navigation aid radials cited in the VOR Federal airway descriptions are stated relative to True north.

Domestic VOR Federal airways are published in paragraph 6010(a) of FAA Order 7400.9X dated August 7, 2013, and effective September 15, 2013, which is incorporated by reference in 14 CFR 71.1. The VOR Federal airways listed in this document would be subsequently published in the Order.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (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 only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does 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 United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart 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 modifies the route structure as necessary to preserve the safe and efficient flow of air traffic within the NAS.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures,” paragraph 311a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 71 as follows:

Background

This document contains final regulations that amend the Income Tax Regulations (26 CFR part 1) relating to the retail inventory method of accounting under § 1.471-8 of the Income Tax Regulations. On October 7, 2011, a notice of proposed rulemaking (REG-125949-10) was published in the Federal Register (76 FR 62327). A public hearing was not requested or held. No comments were received during the comment period. Three comments were received after the end of the comment period and were considered, as discussed later in this preamble. The proposed regulations are adopted as amended by this Treasury decision.

Section 471 of the Internal Revenue Code provides that a taxpayer's method of accounting for inventories must clearly reflect income. Section 1.471-2(c) provides that the bases of inventory valuation most commonly used and meeting the requirements of section 471 are (1) cost and (2) cost or market, whichever is lower (LCM). Section 1.471-3 provides rules for determining inventories at cost. Section 1.471-4 provides rules for determining inventories at lower of cost or market. Section 1.471-8 of the regulations contains rules specific to retailers, allowing them to approximate cost or LCM of the goods in their ending inventory by using the retail inventory method. Under the retail inventory method, a taxpayer computes the value of ending inventory by multiplying a cost complement by the retail selling prices of the goods on hand at the end of the taxable year. The numerator of the cost complement is the value of beginning inventory plus the cost of purchases during the taxable year, and the denominator is the retail selling prices of beginning inventory plus the initial retail selling prices of purchases. For taxpayers using the retail inventory method to value inventories at cost (retail cost method), the denominator of the cost complement is adjusted for all permanent markups and markdowns. Taxpayers using the retail inventory method to value inventories at LCM (retail LCM method) generally do not make adjustments to the denominator for markdowns.

The proposed regulations provided that a taxpayer using the retail LCM method may not reduce the numerator of the cost complement by the amount of an allowance, discount, or price rebate that is related to or intended to compensate for a permanent reduction in the taxpayer's retail selling price of inventory, often called a margin protection payment or a markdown allowance. The proposed regulations also provided that a taxpayer using the retail inventory method (whether valuing inventories at LCM or at cost) may not reduce the numerator of the cost complement by the amount of a sales-based vendor allowance.

Commenters suggested that taxpayers using the retail LCM method to value inventories should reduce the numerator of the cost complement for all vendor allowances and discounts, including margin protection payments and sales-based vendor allowances (but should not be required to reduce the denominator by the related price reduction), because all allowances and discounts reduce the cost of inventory and allow retailers to achieve their margin goals. The commenters asserted that if the numerator of the cost complement is not reduced for margin protection payments and sales-based vendor allowances, taxpayers' income will not be clearly reflected, the economics of the underlying business transaction will be ignored, and small retailers would be adversely affected. The commenters suggested that small retailers have less bargaining power than large retailers and are less able to negotiate purchase-based discounts from vendors.

The final regulations do not adopt these comments. A margin protection payment, unlike other types of allowances, is inherently related to a markdown that will be reflected in the retail selling prices of the items remaining in ending inventory. When a taxpayer using retail LCM reduces the numerator of the cost complement by the amount of a margin protection payment without reducing the denominator by the amount of the corresponding markdown, ending inventory value does not clearly reflect income, and does not reflect the economics of the underlying transaction. Taxpayers using the retail cost method to value inventories, as opposed to retail LCM, are allowed to reduce the numerator of the cost complement by the amount of a margin protection payment because these taxpayers also reduce the denominator of the cost complement by the amount of a related markdown, maintaining the relationship between cost and retail price.

With regard to sales-based vendor allowances, the final regulations adopt, with a modification, the proposed rule that the numerator of the cost complement is not reduced for sales-based vendor allowances. Proposed regulations under § 1.471-3(e) provided that sales-based vendor allowances (the amount of an allowance, discount, or price rebate that a taxpayer earns by selling specific merchandise) reduce cost of goods sold and do not reduce ending inventory value. Because the retail inventory method produces an ending inventory value and sales-based vendor allowances could not be allocated to ending inventory, the proposed regulations under § 1.471-8 provided that sales-based vendor allowances do not reduce the numerator of the cost complement. The final regulations under § 1.471-3(e) (TD 9652, 79 FR 2094) apply specifically to only one type of sales-based vendor allowance, a sales-based vendor chargeback, and reserve rules for other types of sales-based vendor allowances. To conform to this modification, these final regulations under § 1.471-8 provide that sales-based vendor allowances that are required to reduce only cost of goods sold under § 1.471-3(e) do not reduce the numerator of the cost complement. This rule will apply only to sales-based vendor chargebacks until further guidance is issued under § 1.471-3(e).

Commenters also requested that the final regulations allow retail LCM taxpayers to reduce the numerator of the cost complement by margin protection payments and sales-based vendor allowances because requiring taxpayers to track margin protection payments and sales-based vendor allowances separately from other types of allowances would create burdensome recordkeeping requirements. This comment is not adopted because, as discussed earlier in this preamble, allowing a retail LCM taxpayer to reduce the numerator of the cost complement by the amount of a margin protection payment without reducing the denominator by the amount of the corresponding markdown would not clearly reflect income and would not reflect the economics of the underlying transaction. Nonetheless, as discussed later in this preamble, to ease taxpayers' compliance burden, the final regulations provide alternative methods and procedures for computing the cost complement for retail LCM taxpayers.

The preamble to the proposed regulations requested comments on an alternative method for retail LCM taxpayers to account for margin protection payments when computing the cost complement. The method described in that preamble would have permitted retail LCM taxpayers to reduce the numerator of the cost complement for all non-sales-based allowances, discounts, or price rebates, including margin protection payments or markdown allowances, and also would have required a reduction of the denominator of the cost complement for permanent markdowns to which the margin protection payments or markdown allowances relate (related markdowns). Although commenters did not address this proposal explicitly, they stated that in some cases, based on the nature of their business dealings with vendors and the variety of allowances offered, taxpayers have difficulty distinguishing between the different types of vendor allowances their vendors provide. For example, commenters contend that it might be difficult for a taxpayer to distinguish the amount of a margin protection payment or markdown allowance received from a vendor from the amounts of other types of allowances received from that vendor, thus making it difficult to determine the amount by which they were required to reduce the numerator of the cost complement under the proposed regulations.

The final regulations address these comments and ease taxpayers' compliance with the regulations by allowing retail LCM taxpayers to use a method similar to the method described in the preamble to the proposed regulations that does not require taxpayers to distinguish the amounts of margin protection payments from the amounts of other vendor allowances (except for vendor allowances required to be allocated to cost of goods sold under § 1.471-3(e)). Under the alternative method provided in the final regulations, retail LCM taxpayers reduce the numerator for margin protection payments and must quantify and reduce the denominator for the related markdowns. This alternative method results in a reduction of the numerator of the cost complement by all vendor allowances other than those required to reduce cost of goods sold under § 1.471-3(e). This alternative method accordingly reduces the compliance burden for taxpayers that cannot distinguish margin protection payments from other allowances, but that can identify the markdowns related to those margin protection payments.

Commenters also stated that some accounting systems cannot sufficiently track the related markdowns. Accordingly, a second alternative provided in the final regulations allows taxpayers that are able to determine the amount of their margin protection payments to reduce the numerator of the cost complement for the margin protection payments and adjust the denominator by the amount that, in conjunction with the reduction of the numerator, maintains what would have been the cost complement percentage before taking into account the margin protection payments and related markdowns. This second alternative method assumes that a margin protection payment maintains the taxpayer's profit margin after a related markdown in retail selling price. Thus, if before taking into account the margin protection payment and the related markdown the cost complement is 50 percent ($10/$20), and the taxpayer receives a margin protection payment of $2, the taxpayer must reduce the denominator by $4 to maintain a cost complement of 50 percent ($8/$16) under this second alternative method.

A retail LCM taxpayer must use one of these three methods (the general method and the two alternative methods) for computing all of its cost complements. A change from one to another of these methods is a change in method of accounting.

The final regulations further facilitate identifying margin protection payments and related markdowns by allowing retail LCM taxpayers to use statistical sampling in accordance with Rev. Proc. 2011-42 (2011-37 IRB 318), see § 601.601(d), in conjunction with any of the three methods. A retail LCM taxpayer using statistical sampling must use it for all margin protection payments and related markdowns associated with the inventory items valued by a particular cost complement. However, a retail LCM taxpayer that calculates more than one cost complement is not required to use statistical sampling for all cost complements. A change from using to not using statistical sampling, or from not using to using statistical sampling, to identify margin protection payments and related markdowns is not a change in method of accounting.

The proposed regulations provided that a taxpayer may apply the retail inventory method to a department, a class of goods, or a stock-keeping unit. A commenter suggested that the final regulations specify that a taxpayer may use the retail inventory method to value ending inventory for a sub-class of goods, style of goods, or other similar category of goods to avoid the implication that the scope of the retail inventory method is limited to those groupings specifically identified in the proposed regulations. The categories suggested by the commenter are already encompassed by the terms department, class of goods, or stock-keeping unit. Accordingly, the final regulations do not adopt this comment.

A commenter suggested that the final regulations should allow taxpayers to calculate their cost complements using a measurement period shorter than the entire taxable year and should clarify whether beginning inventory may or must be eliminated from the cost complement of a last-in, first-out (LIFO) taxpayer using the retail inventory method. These issues were not addressed in the proposed regulations and therefore are not addressed in the final regulations. However, the final regulations do not reflect a change in established administrative practice regarding whether LIFO taxpayers using the retail inventory method may exclude beginning inventory from the cost complement.

These regulations apply to taxable years beginning after December 31, 2014. For taxable years beginning before January 1, 2015, see § 1.471-8 as contained in 26 CFR part 1, revised April 1, 2014.

This Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. Section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations and, because the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking that preceded these final regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. No comments were received from the Small Business Administration.

The principal author of these regulations is Natasha M. Mulleneaux of the Office of Associate Chief Counsel (Income Tax and Accounting). However, other personnel from the IRS and the Treasury Department participated in their development.

Accordingly, 26 CFR part 1 is amended as follows:

PBGC's regulation on Benefits Payable in Terminated Single-Employer Plans (29 CFR Part 4022) prescribes actuarial assumptions — including interest assumptions — for paying plan benefits under terminating single-employer plans covered by title IV of the Employee Retirement Income Security Act of 1974. The interest assumptions in the regulation are also published on PBGC's Web site ( http://www.pbgc.gov ).

PBGC uses the interest assumptions in Appendix B to Part 4022 to determine whether a benefit is payable as a lump sum and to determine the amount to pay. Appendix C to Part 4022 contains interest assumptions for private-sector pension practitioners to refer to if they wish to use lump-sum interest rates determined using PBGC's historical methodology. Currently, the rates in Appendices B and C of the benefit payment regulation are the same.

The interest assumptions are intended to reflect current conditions in the financial and annuity markets. Assumptions under the benefit payments regulation are updated monthly. This final rule updates the benefit payments interest assumptions for September 2014. 1

The September 2014 interest assumptions under the benefit payments regulation will be 1.25 percent for the period during which a benefit is in pay status and 4.00 percent during any years preceding the benefit's placement in pay status. In comparison with the interest assumptions in effect for August 2014, these interest assumptions are unchanged.

PBGC has determined that notice and public comment on this amendment are impracticable and contrary to the public interest. This finding is based on the need to determine and issue new interest assumptions promptly so that the assumptions can reflect current market conditions as accurately as possible.

Because of the need to provide immediate guidance for the payment of benefits under plans with valuation dates during September 2014, PBGC finds that good cause exists for making the assumptions set forth in this amendment effective less than 30 days after publication.

PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866.

Because no general notice of proposed rulemaking is required for this amendment, the Regulatory Flexibility Act of 1980 does not apply. See 5 U.S.C. 601(2).

In consideration of the foregoing, 29 CFR part 4022 is amended as follows:

I. Background

The RESTORE Act makes funds available for the restoration and protection of the Gulf Coast region through a new trust fund in the Treasury of the United States, known as the Gulf Coast Restoration Trust Fund. The trust fund will contain 80 percent of the administrative and civil penalties paid after July 6, 2012, under the Federal Water Pollution Control Act in connection with the Deepwater Horizon oil spill. These funds will be invested and made available through five components of the Act described below.

The Direct Component sets aside 35 percent of the penalties paid into the trust fund for eligible activities proposed by the State of Alabama, the State of Mississippi, the State of Texas, the State of Louisiana and 20 Louisiana parishes, and 23 Florida counties. The Comprehensive Plan Component sets aside 30 percent of the penalties, plus half of all interest earned on trust fund investments, to be managed by a new independent Federal entity called the Gulf Coast Ecosystem Restoration Council (Council). The Council includes members from six Federal agencies or departments and the five Gulf Coast States. One of the Federal members, the Secretary of Commerce, at this time serves as Chairperson of the Council. The Council will direct those funds to projects and programs for the restoration of the Gulf Coast region, pursuant to a comprehensive plan that will be developed by the Council. Under the Spill Impact Component, entities representing the Gulf Coast States can use an additional 30 percent of penalties in the trust fund for eligible activities pursuant to State Expenditure Plans approved by the Council. The remaining five percent of penalties, plus one-half of all interest earned on trust fund investments, will be divided equally between the NOAA RESTORE Act Science Program established by the National Oceanic and Atmospheric Administration (NOAA), an operating unit of the Department of Commerce, and the Centers of Excellence Research Grants Program.

Treasury has several roles in administering the trust fund. One role is to establish procedures, in consultation with the Departments of the Interior and Commerce, concerning the deposit and expenditure of amounts from the trust fund. The procedures must include compliance measures for the programs and activities carried out under the Act, as well as auditing requirements to determine whether amounts are expended as intended. Treasury will also administer grants for the Direct Component and Centers of Excellence Research Grants Program. The Treasury Inspector General is authorized to conduct, supervise, and coordinate audits and investigations of projects, programs, and activities funded under the Act. In addition, the Act requires Treasury to withhold funds from a Gulf Coast State, Florida county, or Louisiana parish if Treasury determines that trust fund monies have been used for an unauthorized purpose, or if a condition on the use of funds has been violated.

Treasury published a proposed rule on September 6, 2013, containing procedures regarding trust fund investments, as well as procedures to implement the five components of the Act. These procedures recognized that each component makes funds available through grants. Accordingly, the procedures contained not only requirements in the Act, but also administrative requirements common to Federal grant programs. The procedures also outlined a structure for compliance monitoring. The Federal and state entities that administer grants under the Act will be primarily responsible for overseeing compliance with the terms of their award agreements. In addition, Treasury will have an important and supplemental role in overseeing the states' compliance with requirements in the Comprehensive Plan Component and the Spill Impact Component.

Treasury received over 1,200 comment letters on the proposed rule from individuals, public interest groups, state and local governments, and research institutions. The comments were generally positive. Most comments offered views or requested information regarding the activities eligible for funding, the process and timing for issuing grants, and other aspects of grant administration. Several comments also urged that Treasury provide additional opportunities for public comment.

Treasury is issuing its regulations as an Interim Final Rule, which will take effect 60 days after publication in the Federal Register . Treasury will accept comments on the Interim Final Rule for 30 days after publication, and publish a Final Rule after considering any comments. Separately, Treasury has published a proposed rule that allocates shares to individual Louisiana parishes under the Direct Component. Treasury is accepting public comments on the proposed rule for 30 days after publication.

As noted in the preamble to the September 6, 2013, proposed rule, requirements for RESTORE Act grants are partly defined by the Act and Treasury's regulations, and partly by an extensive body of pre-existing requirements. Some of these pre-existing requirements are administrative requirements in circulars issued by the Office of Management and Budget (OMB). When Treasury published its proposed rule, OMB was completing a compilation and modification of uniform requirements for grants awarded by Federal agencies to states, local governments, Indian tribes, institutions of higher learning, and nonprofit organizations. OMB published an Advanced Notice of Proposed Guidance on February 12, 2012, (ANPG available at www.regulations.gov under docket number OMB-2012-0002), and a Notice of Proposed Guidance on February 1, 2013 (NPG available at www.regulations.gov under docket number OMB-2013-0001). After considering more than 300 public comments, OMB issued its final guidance on December 26, 2013. The final guidance, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), will be published in the Code of Federal Regulations at 2 CFR Part 200, and is currently available at 78 FR 78590.

Because OMB's Uniform Guidance has already undergone an extensive public review, its requirements do not need additional public comment before they are applied to grants under the RESTORE Act. Readers seeking information about the requirements applying to audits, allowable costs, disbursements, payments, procurements, recordkeeping, and reporting, among other topics, should consult OMB's Uniform Guidance. Requirements in areas covered by the guidance will be applied to individual grants through a grant agreement.

The Interim Final Rule continues to require compliance with applicable Federal laws and policies for grants, and does not refer specifically to OMB's Uniform Guidance. Treasury received many comments requesting that Treasury's regulation specifically identify the requirements that apply. Each individual grant agreement is the appropriate place to comprehensively identify these requirements. As stated in the Uniform Guidance, the Federal awarding agency must communicate to the non-Federal entity all relevant public policy requirements, including those in general appropriation provisions, and incorporate them either directly or by reference in the terms and conditions of the award. 2 CFR 200.300. The Uniform Guidance describes most administrative requirements, cost principles, and audit requirements applying to Federal awards under the Act. All federal agencies, however, are required to implement the policies and procedures in the Uniform Guidance by promulgating a regulation that will be effective by the end of the year. Because regulations to implement the Uniform Guidance must still be published, Treasury's RESTORE Act regulations generally refer to Federal laws and policies applying to grants.

This section describes the general scope of the Interim Final Rule. Editorial changes have been made for clarity.

This section defines terms used in the Interim Final Rule. The Interim Final Rule has several new definitions from the proposed rule. Activity has been defined to mean “activity, project, or program.” The Act uses the term activity broadly to encompass projects, programs, and other activities that may be funded under the Act. When the Interim Final Rule uses the term activity, it has the same broad meaning. In response to a comment, infrastructure has been defined as well, in order to assist the Council and the Gulf Coast States in applying the limits on infrastructure projects in the Spill Impact Component. The Interim Final Rule also includes a definition of assignee, a term used in the Comprehensive Plan Component of the Interim Final Rule. An assignee is a Federal agency or a Gulf Coast State that has been assigned primary authority and responsibility for a project or program included in the Comprehensive Plan.

The definitions of administrative costs and administrative expenses have been revised in response to comments on the proposed rule. Several comments asked Treasury to clarify the scope of these terms, and questioned why the terms were defined differently. Other comments suggested revisions. At least one comment suggested that administrative costs should not be defined at all.

The statute specifically authorizes and the rule defines administrative expenses and administrative costs. Funds are also available for other costs authorized by the five RESTORE Act components or programs. Treasury encourages grantees to minimize administrative expenses, administrative costs, and indirect costs within these components or programs to the extent possible.

The Act uses the term administrative expenses with reference to the Council and NOAA. The Act does not define the term, and it does not have a precise, commonly accepted meaning in government accounting. The Act does cap administrative expenses at 3 percent of funds made available to the Council and NOAA. Because the cap effectively limits administrative activities, the term should be construed to avoid unintended limits on the restoration, protection, and scientific activities Congress requires the Council and NOAA to perform.

In light of public comments, the Interim Final Rule defines administrative expenses to mean expenses incurred for administration by the Council or NOAA, including expenses for general management functions, general ledger accounting, budgeting, human resource services, general procurement services, and general legal services. Administrative expenses do not include expenses that are identified specifically with, or readily assignable to, (a) facilities; (b) eligible projects, programs, or planning activities; (c) activities related to grant applications, awards, audit requirements, or post-award management, including payments and collections; (d) the Council's development, publication, and implementation of the Comprehensive Plan and any subsequent amendments; (e) the Council's development and publication of regulations and procedures for implementing the Spill Impact Component, and the review of State Expenditure Plans submitted under the Spill Impact Component; (f) preparation of reports required by the Act; (g) establishment and operation of advisory committees; or (h) collection and consideration of scientific and other research associated with restoration of the Gulf Coast ecosystem. The definition applies to administrative expenses for services provided by the Council and NOAA staff, as well as such services provided through an interagency agreement, or by contract. When an expense has a mixed purpose, the Council and NOAA will need to make reasonable judgments about the percentage attributable to administrative activities.

Treasury is also clarifying the definition of administrative costs in the Interim Final Rule. The term administrative costs is used with reference to the Gulf Coast States, Florida counties, and Louisiana parishes, which receive their funds through grants. The revised definition is similar, but not identical, to the definition of administrative expenses. Under the Interim Final Rule, administrative costs are indirect costs for administration incurred by the Gulf Coast States, coastal political subdivisions, and coastal zone parishes that are allocable to activities authorized under the Act. Administrative costs may include costs for general management functions, general ledger accounting, budgeting, human resource services, general procurement services, and general legal services. Administrative costs do not include indirect costs that are identified specifically with, or readily assignable to, (a) facilities; (b) eligible projects, programs, or planning activities; or (c) activities relating to grant applications, awards, audit requirements, or post-award management, including payments and collections. When a cost can be attributed to more than one purpose, states and local governments will need to make reasonable judgments about the percentage that is administrative. OMB's Uniform Guidance provides an extensive discussion of allowable and allocable costs, which applies to administrative costs under the Act. See 2 CFR 200.402—200.414.

Treasury has added a new definition of planning assistance, an eligible activity listed in § 34.201. This definition is discussed later in the preamble.

In addition to these changes, the Interim Final Rule includes editorial changes to the definition of Gulf Coast State entity, a new definition of Multiyear Implementation Plan and pass-through entity for the reader's convenience, and a technical change to the definition of recipient. The technical change makes clear that a recipient also includes a pass-through entity that provides a subaward to a recipient to carry out part of the RESTORE Act program.

Treasury is not revising the definition of best available science. Like the proposed rule, the Interim Final Rule defines this term exactly as stated in the Act. The term means science that maximizes the quality, objectivity, and integrity of information, including statistical information; uses peer-reviewed and publicly available data; and clearly documents and communicates risks and uncertainties in the scientific basis for such projects.

Some comments proposed broader definitions of best available science, asserting that the statutory definition is inadequate. Other comments urged Treasury to require consideration of cultural and social knowledge and other factors, and proposed characteristics of best available science. Treasury does not have authority to change the definition Congress wrote into the Act. Treasury recognizes, however, that guidelines regarding interpretation and application of this term may be helpful. In consultation with Council members, Treasury is developing guidelines for use in evaluating the best available science criteria for grants under the Direct Component. Treasury will provide further information at a later time.

Treasury received other comments suggesting additional definitions and editorial changes. OMB's Uniform Guidance includes an extensive list of definitions pertaining to grants, audits, and cost principles. These definitions will apply to grants issued under the Act.

This section describes the deposit of amounts into the trust fund, and when the trust fund terminates. Minor editorial changes were made to clarify when the trust fund terminates.

This section describes how Treasury will invest amounts in the trust fund. There are no changes in this section from the proposed rule.

This section describes the availability of interest earned on amounts in the trust fund. There are no changes in this section from the proposed rule.

This section describes the general allocation of trust fund amounts. In response to comments, editorial changes have been made for consistency with the Act.

The Interim Final Rule states that trust fund amounts are available for expenditure solely for direct and indirect expenses of eligible activities without fiscal year limitation. Treasury has deleted a reference in the proposed rule to administrative costs and administrative expenses, because these costs and expenses are included among other allowable costs. The proposed rule also stated that grantees must minimize the time between the receipt of funds and the disbursement of funds. Treasury received several comments seeking clarification on this statement and more generally on requirements pertaining to payments and program income.

OMB's Uniform Guidance has an extensive discussion of the requirements applying to payments at 2 CFR 200.305. To ensure consistency between the Interim Final Rule and OMB's Uniform Guidance, Treasury is deleting the sentence from § 34.104 in the proposed rule regarding the timing of disbursements. The Uniform Guidance also has a discussion about program income at 2 CFR 200.307. Please refer to the Uniform Guidance for detailed information about general requirements that apply to payments and program income.

This section describes the circumstances when Treasury may waive or modify in a single case or class of cases a requirement in the regulations. Several comments asked Treasury to clarify when this section will be used, and to seek public comment before applying it. Treasury expects to use its waiver authority sparingly, and never in a manner that is inconsistent with applicable law. Treasury included this section because it is difficult to foresee, at an early stage in implementing the Act, how the regulations will apply to all circumstances. Treasury will provide public notice whenever a waiver or modification under this section would materially change a regulatory requirement.

Treasury received numerous comments proposing uniform requirements for the Direct Component, Comprehensive Plan Component, and Spill Impact Component of the Gulf RESTORE Program. Several comments urged uniform eligibility criteria. Other comments suggested criteria that would give priority to certain project proposals, based on whether they provide an overall net benefit, benefit a variety of resources, are cost effective, or other factors. Additional comments proposed changes that would allow individuals to submit project proposals, and other changes that would require uniform requirements for public engagement.

The Act does not mandate uniform requirements for the Direct Component, Comprehensive Plan Component, and Spill Impact Component. For each component, there are different eligibility criteria, different processes for selecting activities, and different entities responsible for making those selections. Accordingly, the Interim Final Rule has different requirements for each component. The Interim Final Rule and the Council's own procedures provide opportunities for the public to offer views on project selection and design. Members of the public who have views in these areas should present them to the entities that will propose activities for funding.

This section generally describes the policies and procedures for eligible activities under the Direct Component, Comprehensive Plan Component, and Spill Impact Component. Treasury has revised this section in the Interim Final Rule.

In the proposed rule, § 34.200(a)(1) stated that costs incurred, whether charged on a direct or indirect basis, must conform with the applicable OMB circulars and guidance. Treasury received several comments seeking clarification of the rules applying to costs. OMB's Uniform Guidance includes an extensive discussion of administrative requirements, including information about allowable costs. At this time, the Uniform Guidance applies to grants issued under the Act. Within the year, all Federal agencies are required to incorporate the Uniform Guidance into their own regulations. Because the governing rule in the future will likely be an agency regulation, rather than the Uniform Guidance, the Interim Final Rule refers to “applicable Federal law and policies on grants.”

Section 34.200(a)(3) in the proposed rule stated that environmental review and compliance procedures must be complied with for each program, project, or activity, as applicable. Treasury has deleted this sentence because it is unnecessary, given broader and more descriptive requirements in OMB's Uniform Guidance. The Uniform Guidance states, that the Federal awarding agency must manage and administer the Federal award in a manner so as to ensure that Federal funding is expended and associated programs are implemented in full accordance with U.S. statutory and public policy requirements: Including, but not limited to, those protecting public welfare, the environment, and prohibiting discrimination. The Federal awarding agency must communicate to the non-Federal entity all relevant public policy requirements, including those in general appropriations provisions, and incorporate them either directly or by reference in the terms and conditions of the Federal award. 2 CFR 200.300(a).

Section 34.200(a)(3) in the proposed rule also mentioned pre-award costs. The proposed rule stated that grant agreements may provide for pre-award costs of environmental review and compliance in the manner prescribed by applicable OMB circulars and guidance. Treasury received a number of requests, particularly from Florida counties, to make a more definite statement in the Interim Final Rule about the availability of pre-award costs.

OMB's Uniform Guidance states that pre-award costs are allowable only to the extent that they would have been allowable if incurred after the date of the Federal award and only with the written approval of the Federal awarding agency. 2 CFR 200.458. Treasury cannot, in the context of a rulemaking, determine whether any particular pre-award cost is eligible for reimbursement under future grants. In addition, Treasury is not the Federal awarding agency for three of the five components in the Act. To avoid inconsistency with the Uniform Guidance, the sentence about pre-award costs has been deleted from the Interim Final Rule. Entities should contact the appropriate Federal awarding agency for guidance about reimbursement of particular pre-award costs.

Finally, § 34.200(b) of the proposed rule stated that a Gulf Coast State, coastal political subdivision, and coastal zone parish may use funds available under the Direct Component or Spill Impact Component to satisfy the non-Federal cost-share of a project or program that is an eligible activity and authorized by Federal law. Treasury received several comments about this provision. One comment suggested that Treasury prohibit other Federal agencies from reducing their funding to states by the amount of RESTORE Act funds used for cost sharing or matching. Another comment suggested that this provision be extended to the Centers of Excellence Research Grants Program. Other comments asked for clarification about the scope of the provision.

Treasury has not substantively changed the text of § 34.200(b) in the Interim Final Rule, which closely follows the statutory language at section 311(t)(1)(N) and (t)(3)(F) of the Federal Water Pollution Control Act. Under OMB's Uniform Guidance, a non-Federal entity cannot use amounts paid by the Federal government under a Federal award to satisfy the entity's cost sharing or matching responsibilities under another Federal award, unless certain criteria are met. One criterion is when a Federal statute authorizing a program specifically provides that Federal funds made available for such program can be applied to matching or cost sharing requirements of other Federal programs. 2 CFR 200.306(b)(5). The Act allows funds made available under the Direct Component and Spill Impact Component to satisfy the cost-sharing requirements of other Federal programs, but not funds made available under other parts of the Act.

Minor editorial changes have been made to other parts of § 34.200 for clarity.

This section describes the activities that are eligible for funding under the Direct Component. Treasury received many comments about this section. Several comments urged Treasury to defer to the states' judgment on selection and design. As stated in the preamble to the proposed rule, Treasury will review applications to determine that they document, with some specificity, compliance with eligibility and other requirements in the RESTORE Act and these regulations. On matters requiring special expertise, such as the application of best available science, Treasury will apply a “reasonable person” standard of review that recognizes the substantive expertise of the states, Florida counties, and Louisiana parishes, while still requiring the submittal of supporting documentation. Treasury is using a similar standard when evaluating an activity's geographic scope, as discussed below. This approach acknowledges the expertise and important role that states, Florida counties, and Louisiana parishes have in selecting projects for the Direct Component, while going beyond mere “check the box” review.

Several comments also addressed the geographic scope of eligible activities. The proposed rule stated that certain activities are eligible for funding to the extent they are carried out in the Gulf Coast region. Several comments urged Treasury to interpret this language broadly, in order to allow activities benefitting that geographic area regardless of where the work is done. Treasury agrees that a broad interpretation is most consistent with the statute and Congressional intent. Repeatedly, the Act refers to the Gulf Coast region as the place where results occur, not necessarily where work is done. An interpretation that focused solely on the geographic location of the project site—rather than project benefits—would unnecessarily exclude activities contemplated by the Act, and be difficult to apply when work is done in multiple locations.

In response to these comments, the Interim Final Rule explains when a Direct Component activity is “carried out” in the Gulf Coast region. The rule states that activities are carried out in the Gulf Coast Region when, in the reasonable judgment of the entity applying to Treasury for a grant, each severable part of the activity is primarily designed to restore or protect that geographic area. Applicants must demonstrate that the activity will be carried out in the Gulf Coast Region when they apply for a grant.

Treasury intends this new language to achieve several goals. The language recognizes the expertise of the entity applying for a grant, as well as Treasury's limited role in grant review and the applicant's knowledge and understanding of Gulf Coast restoration. Potential applicants for funds will be Gulf Coast States, counties, and parishes, each of which has significant local and technical expertise. The language focuses on “each severable part” of an activity, to discourage grant applicants from seeking approval of ineligible projects by grouping them with eligible ones. The language also requires that each severable part be “primarily designed” to restore or protect the Gulf Coast region. Treasury anticipates that some activities which are designed to benefit the Gulf Coast region may also provide secondary benefits to other areas. An upstream water quality project that is designed to reduce nutrient loading at the coast may also improve water quality within the watershed. By focusing on what an activity is primarily designed to accomplish, Treasury seeks to avoid arguments that secondary benefits to other geographic areas are enough to disqualify otherwise eligible activities.

Additional comments urged Treasury to add eligibility requirements, or to declare that particular kinds of activities are eligible for funding, such as long-term stewardship activities. Treasury is not adding new eligibility criteria for activities under the Act, or singling out particular activities that are not mentioned in the Act. The Act sets broad criteria for selecting activities, and leaves to the Gulf Coast States, Florida counties, and Louisiana parishes whether to apply additional criteria to achieve economic or environmental goals. Members of the public should direct their suggestions for additional eligibility factors to the entities that will propose activities for funding.

Treasury also received several comments regarding planning assistance. Some comments asked Treasury to add public engagement as a type of planning activity. Florida counties urged that planning costs should include costs for the Gulf Consortium, which is an entity formed under Florida law and made up of 23 Florida counties. Several comments also asserted that funds should be available to pay for Multiyear Implementation Plans. Other comments asserted that planning activities should not be defined at all.

The Interim Final Rule has been revised to address the comments on planning. The Interim Final Rule now uses the term planning assistance, to be consistent with the Act, and defines that term in § 34.2. Planning assistance means tasks required to prepare plans for eligible activities, as well as one-time preparations that will allow the recipient to establish systems and processes needed to review grant applications, award grants, and monitor grants after award, and audit compliance with respect to activities in a Multiyear Implementation Plan or State Expenditure Plan. This change addresses comments, particularly from Florida counties, that noted the expense of starting up an operation to manage grants. Effective grants management may require one-time investments to track payments, develop policies and internal controls, and make other preparations necessary to comply with the Act and Treasury regulations. Eligible entities may seek grants to fund preparations of this kind with respect to activities in a Multiyear Implementation Plan or State Expenditure Plan. Planning assistance is not intended to cover ongoing activities or operations and maintenance, although costs for activities, operations, and maintenance may be allocable to grants for other eligible activities.

The revised language is broad enough to include public engagement activities that are part of data gathering, studies, analysis, or the preparation of plans for eligible activities. For example, obtaining public comment on Multiyear Implementation Plans and State Expenditure Plans is an eligible planning activity, because it is a necessary part of preparing the plans.

Additional language, new in the Interim Final Rule, requires that all Direct Component activities be included in and conform to the Multiyear Implementation Plan required by § 34.303. As stated in the rule, states must seek public review and comment on their Multiyear Implementation Plans before submitting them to Treasury. This step allows the public to offer views on particular projects, the order in which they will be funded, and the overall strategy for using funds under the Act. The new language added to § 34.201 will help ensure that activities submitted in a grant application have been presented to the public and incorporated into the Multiyear Implementation Plan.

The section identifies the activities eligible for funding under the Comprehensive Plan Component. The list includes not only projects and programs, but also activities that the Act specifically requires or allows the Council to perform. Many comments addressed project selection under the Comprehensive Plan Component. In response to these comments and for clarity, Treasury has revised the proposed rule to provide that the Council may expend funds to carry out activities in the Gulf Coast region that are included in the Comprehensive Plan, as described in 33 U.S.C. 1321(t)(2).

Among other things, the statute prescribes priorities that the Council must follow when selecting projects and programs for the Initial Comprehensive Plan that will be carried out in the first three years, subject to available funds. Except for certain projects and programs that were authorized prior to July 6, 2012, the Council's three-year list must give highest priority to projects meeting one or more of the following criteria:

1. Projects that are projected to make the greatest contribution to restoring and protecting the natural resources, ecosystems, fisheries, marine and wildlife habitats, beaches, and coastal wetlands of the Gulf Coast region, without regard to geographic location within the Gulf Coast region.

2. Large-scale projects and programs that are projected to substantially contribute to restoring and protecting the natural resources, ecosystems, fisheries, marine and wildlife habitats, beaches, and coastal wetlands of the Gulf Coast ecosystem.

3. Projects contained in existing Gulf Coast State comprehensive plans for the restoration and protection of natural resources, ecosystems, fisheries, marine and wildlife habitats, beaches, and coastal wetlands of the Gulf Coast region.

4. Projects that restore long-term resiliency of the natural resources, ecosystems, fisheries, marine and wildlife habitats, beaches, and coastal wetlands most impacted by the Deepwater Horizon oil spill.

The proposed rule allowed the Council to use funds from the Comprehensive Plan Component to fund its activities under the Spill Impact Component. Some comments questioned this use. The Act requires the Council to undertake several functions with regard to the Spill Impact Component. The Council must issue regulations allocating funds between the five Gulf Coast States, review State Expenditure Plans, and disburse amounts for eligible projects and programs, among other things. Because all of the Council's funding to operate comes through the Comprehensive Plan Component, the Council must use funds from that component to perform its statutory obligations. For this reason, the Council included its responsibilities under the Spill Impact Component in the Initial Comprehensive Plan.

In response to comments, Treasury has added new language to § 34.202 to clarify when a project or program selected by the Council is carried out in the Gulf Coast region, as required by 33 U.S.C. 1321(t)(2)(E)(IV). That occurs when, in the reasonable judgment of the Council, each severable part of the project or program is primarily designed to restore or protect that geographic area. The Interim Final Rule requires the Council to document the basis for its judgment when it selects the project or program. Similar language also appears in the Direct Component and the Spill Impact Component of Treasury's regulation. In each case, the language gives deference to the reasonable judgment of the entity that selects an activity to restore or protect the Gulf Coast region.

One activity that is not specifically mentioned in the Comprehensive Plan Component is public engagement. Public engagement can be an eligible activity. It is a necessary part of selecting projects and programs, conducting assessments under the National Environmental Policy Act, as well as performing other programmatic and administrative activities. To the extent public engagement costs can be identified specifically with, or readily assignable to the programmatic activities excluded from the definition of administrative expenses, they will not be subject to a three percent cap.

This section describes the activities that are eligible for funding under the Spill Impact Component. Several comments suggested additional or different eligibility criteria, such as the criteria applying to activities under the Comprehensive Plan Component. Other comments proposed that Treasury give the states guidance on how they demonstrate ecological, fisheries restoration, and economic recovery in their State Expenditure Plans. Several comments offered views about how particular states should spend their funds. Comments also requested that funds be available for the preparation of State Expenditure Plans.

The Act gives the Council responsibility for administering the Spill Impact Component. Among other things, the Council determines each state's share, based on criteria in the Act, and disburses funds for eligible activities. The Council chair also must approve State Expenditure Plans. Given these important roles, the Council is an appropriate body to determine whether and how to elaborate on the statutory eligibility criteria. Accordingly, the Interim Final Rule preserves the Council's discretion to issue guidance or regulations on this subject that are consistent with the Act.

Treasury made other changes, however, in response to comments. Treasury added a provision describing when an activity in a State Expenditure Plan is carried out in the Gulf Coast region. Treasury also clarified that funding is available for developing State Expenditure Plans. The Interim Final Rule also states that eligible activities must be included in, and conform to, the State Expenditure Plan. This clarification helps ensure that all funded activities have gone through the public comment process required of State Expenditure Plans.

This section described statutory limitations on activities funded through the Direct Component, Comprehensive Plan Component, and Spill Impact Component. Treasury received several comments suggesting that Treasury remove limitations here and clarify how grant recipients demonstrate the criteria in § 34.204(b).

Treasury has deleted this section and moved its provisions to § 34.803 of the Interim Final Rule, so that they apply to all five components of the Act. This change, along with minor wording changes, makes the regulation consistent with section 1607 of the Act. The limitations cannot be removed entirely from the Interim Final Rule because they are statutorily required. There is not a bright-line test for documenting that an acquisition is necessary for the restoration and protection of the natural resources, ecosystems, fisheries, marine and wildlife habitats, beaches, and coastal wetlands. However, the documentation required may well be useful for other purposes, such as demonstrating that an activity is being carried out in the Gulf Coast region. Treasury will consider issuing further guidance if needed.

This section implements the three percent cap on administrative costs and administrative expenses. The proposed rule used different methods for calculating the cap on administrative costs and expenses, because the Gulf Coast States, coastal political subdivisions, and coastal zone parishes receive their funds episodically through grants. Measuring costs on an individual grant basis is easier to monitor. The Council, however, receives its funds through an annual apportionment from OMB. Treasury received several comments seeking an explanation of this section.

The Interim Final Rule contains the same method for calculating the Council's and NOAA's administrative expenses. This method gives the Council and NOAA some flexibility to incur administrative expenses above three percent during a start-up period, so long as the total does not exceed three percent of amounts received by the end of the fourth, or most recent, fiscal year, whichever is later. For the sake of consistency, Treasury has amended the language applying to NOAA in § 34.604 of the Interim Final Rule to be consistent with language applying to the Council.

Some comments questioned why the cap applies to administrative expenses and costs attributable to staff, when the statute is silent on this point. Treasury has clarified the rule by removing the reference to staff. The regulation defines “administrative expenses” and “administrative costs.” To the extent that staff costs are captured by these definitions, they are subject to the three percent cap.

Other comments questioned why the three percent cap applies to funds received under the Spill Impact Component. The Act states that the three percent cap applies to amounts received by a Gulf Coast State under section 311(t) of the Federal Water Pollution Control Act, which includes the Direct Component, Comprehensive Plan Component, and Spill Impact Component. See 33 U.S.C. 1321(t)(1)(B)(iii).

Several comments asked whether the three percent cap applies to subawards that state and local governments make under the Direct Component, Comprehensive Plan Component, or Spill Impact Component. Treasury interprets the Act to impose a cap based on amounts that Gulf Coast States, coastal political subdivisions, and coastal zone parishes receive directly from Treasury, the Council, or a Federal agency designated by the Council to issue grants. The cap does not apply to the administrative costs of subrecipients. These costs will be governed by general requirements in OMB's Uniform Guidance.

Some comments asked how the cap on administrative costs affects a state's negotiated indirect cost rate. The cap may reduce an award for the indirect costs of a state, county, or parish, depending on the circumstances. The amount of the cap must be calculated for each grant, and will equal three percent of all funds a state, county, or parish receives in that grant. If the amount of the cap is greater than the indirect costs of a state, county, or parish, no reduction is needed. If indirect costs exceed the administrative cost cap, there are two options. The state, county, or parish can reduce its claim for indirect costs to an amount at or below the cap. Alternatively, the state, county, or parish can demonstrate that its administrative costs—a subset of all indirect costs—do not exceed the cap. Treasury will issue guidance, as necessary, to resolve indirect cost questions.

The Interim Final Rule applies the three percent cap on administrative costs to amounts received under an award. Treasury has amended § 34.204(a) to clarify that the three percent limit will be applied to the total amount received under each award, not to amounts received in individual fiscal years. Administrative and other costs may be monitored throughout the award period, however, by the Federal awarding agency.

The Interim Final Rule does not include a cap on administrative costs for the Centers of Excellence Research Grants Program, because the Act does not include one. In the absence of a statutory cap, the general rule is that all costs charged to a Federal award must be “necessary and reasonable for performance of the Federal award and be allocable thereto” under the principles in OMB's Uniform Guidance. 2 CFR 200.403(a). The Uniform Guidance lists other factors as well. Whether a state's administrative costs are allowable under the Centers of Excellence Research Grants Program will be measured against the standards in the Uniform Guidance.

Treasury has moved a provision regarding the Alabama Gulf Coast Recovery Council to § 34.302(a) of the Interim Final Rule, and clarified its meaning. The Act states that “Administrative duties for the Alabama Gulf Coast Recovery Council may only be performed by public officials and employees that are subject to the ethics laws of the State of Alabama.” 33 U.S.C. 1321(t)(1)(F). Treasury interprets this requirement to govern who performs duties for the Alabama council, not just to limit how the Alabama council spends RESTORE Act funds.

This section describes an auditing requirement for the Council. The provision regarding audits by the Treasury Inspector General has been clarified to be consistent with the Act.

This section introduces a subpart on the Direct Component, and states that funds provided to the Gulf Coast States, Florida counties, and Louisiana parishes will be in the form of grants.

This section states that Treasury will be the Federal awarding agency for Direct Component grants. Editorial changes have been made for clarity.

This section describes how funds will be allocated between Alabama, Florida counties, Louisiana state government and parishes, Mississippi, and Texas. Treasury received comments relating to the shares allocated to the Florida counties and the Louisiana parishes.

The Act allocates funds to 15 nondisproportionately impacted counties in Florida according to a weighted formula, and a share to 8 disproportionately affected counties. The Act did not state each county's specific share. Treasury's proposed rule stated that Treasury would divide funds among the eight disproportionately affected counties according to the formula mutually agreed upon by the counties and included in the Multiyear Implementation Plan submitted by each county. The proposed rule did not further specify the share allocated to each nondisproportionately impacted county.

Treasury received several comments from the Florida counties regarding their shares. The 23 counties have formed a consortium under Florida law, called the Gulf Consortium. According to a comment submitted by the Gulf Consortium, the consortium is a public entity that adheres to Florida's public records and public meeting requirements, and provides reports to the Florida Auditor General and Florida's Chief Financial Officer. The Gulf Consortium states that the eight disproportionately affected counties have agreed upon a formula, which distributes 20 percent among the counties equally, and 80 percent based on oiled shoreline, per capita sales tax collections, population and distance from the Deepwater Horizon oil rig. Treasury accepts the counties' allocation formula; however, the proposed calculation only distributes 99.997 percent of the counties' share. In order to distribute the full amount, Treasury added a proportionate amount of the difference between 99.997 percent and 100 percent to each county's share, and rounded the result to nine decimal places.

The Gulf Consortium also proposed a specific allocation for the 15 nondisproportionately impacted counties. This allocation uses the 2010 population census, the per capita sales tax collections for 2012, and data from NOAA for the distance to the Deepwater Horizon oil rig. Treasury agrees that these data sources are appropriate, and that the methodology used is reasonable. However, the proposed allocation adds up to 100.16 percent of the nondisproportionately impacted counties' share. In order to distribute the correct amount, Treasury subtracted a proportionate amount of the difference between 100.16 percent and 100 percent from each county's share, and rounded the result to three decimal places. The resulting shares are stated in the Interim Final Rule.

The proposed rule requested comments on the best methodology for determining the allocation for the Louisiana parishes. The Act says that the parish allocation should be determined according to a weighted formula of three elements: (a) 40 percent based on the weighted average of miles of parish shoreline oiled, (b) 40 percent based on the weighted average of the population of the parish, and (c) 20 percent based on the weighted average of the land mass of the parish. The State of Louisiana and one parish proposed that Treasury include additional factors, in order to account for the degree of oiling, measures of re-oiling, the type of shoreline that experienced oiling, and several other factors. They suggested that an approach which takes these factors into account would provide a more comprehensive assessment of injury and fairer allocation of funds. Louisiana did not describe how these factors should be weighed, identify an authoritative source for the data, or provide a statutory basis for applying these new criteria.

Treasury has published a separate Notice of Proposed Rulemaking addressing these comments. In that notice, Treasury proposes an allocation for each of the eligible Louisiana parishes, to be incorporated into § 34.302(e). Treasury will consider any public comments on the allocation to Louisiana parishes before issuing a final rule.

This section describes how to apply for grants under the Direct Component. Treasury requires that applicants submit a Multiyear Implementation Plan describing the activities they intend to fund, and a grant application for each activity. Applicants must publish the Multiyear Implementation Plan for public review and comment before submitting it to Treasury. The Multiyear Implementation Plan and grant application serve related but different purposes. Requirements for the Multiyear Implementation Plan are designed to help applicants plan strategically, and to involve the public in the process of selecting activities. Treasury will use the grant application to determine whether proposed activities comply with requirements in the Act and these regulations, and to prepare an enforceable grant agreement that meets requirements in OMB's Uniform Guidance.

Treasury received many comments about the grant application process. Several comments stated that the rule should allow applicants to develop Multiyear Implementation Plans incrementally, and to modify them over time. Other comments recommended that Treasury collect additional information, in order to identify an activity's potential environmental, social, and economic effects, as well as conflicts with projects funded from other sources. Some comments expressed concerns about the adequacy of the public comment process. Additional comments requested that applicants give assurances about an activity's environmental benefits, and about how applicants will monitor projects. Other comments asserted that the proposed rule required too much information.

Treasury has revised the proposed rule to address public comments. The Interim Final Rule clarifies that Multiyear Implementation Plans can be amended and prepared incrementally. With litigation ongoing and the ultimate size of the trust fund still unknown, applicants will be allowed to adjust their plans to accommodate new information. The Interim Final Rule clarifies that funding is available for preparing Multiyear Implementation Plans. The Interim Final Rule also extends the public comment period to a minimum of 45 days, and requires applicants to make their Multiyear Implementation Plans available for public review and comment in a manner calculated to obtain broad-based participation from individuals, businesses, Indian tribes, and non-profit organizations. Applicants will need to consider the methods most appropriate to obtain broad-based participation, such as accessible public meetings, presentations in languages other than English, and postings on the Internet. Other editorial changes were made for clarity.

This section states that Treasury will execute a grant agreement with the recipient after determining that the Multiyear Implementation Plan and application meet the requirements of the Act and these regulations. Editorial changes have been made for clarity.

This section generally describes how funds can be used. Treasury has amended the proposed rule in several respects in response to comments. A sentence in § 34.305(a) regarding unexpended funds has been removed as unnecessary. Grant recipients should refer to OMB's Uniform Guidance at 2 CFR 200.343 for more detailed requirements concerning the closeout of grants. Treasury has also added a new provision at § 34.305(c) regarding a grant recipient's ability to issue subawards. Under this provision, a Gulf Coast State, coastal political subdivision, or coastal zone parish that proposes to issue subawards must demonstrate its ability to manage and monitor these subawards in compliance with Federal law and policies on grants. For requirements applying to the monitoring and management of subrecipients, see OMB's Uniform Guidance at 2 CFR 200.330-200.332.

Several comments addressed the topic of contracting preferences, which are discussed in § 34.305(b). Comments asked for clarification on whether Federal, state, or local procurement rules will apply to grant recipients. Comments also recommended that Treasury include local or special hiring preferences for all five components as a means of achieving the goals of the Act.

OMB's Uniform Guidance has an extensive discussion of the administrative rules that apply to procurements under a Federal award. See 2 CFR 200.317-200.332. In general, states will use the same policies and procedures that apply to procurements using non-Federal funds, with certain narrow exceptions. Other non-Federal entities, including the Florida counties and Louisiana parishes and subrecipients of states, will use their own documented procurement procedures reflecting applicable state and local laws and regulations, provided that the procurements conform to applicable Federal law and the standards in the Uniform Guidance. 2 CFR 200.317.

The Act discusses geographic preferences for contracts in only two places. In the Direct Component, the Act allows a Gulf Coast State or coastal political subdivision to “give preference to individuals and companies that reside in, are headquartered in, or are principally engaged in business in the State of project execution.” 33 U.S.C. 1321(t)(1)(K). The Act requires the Council to develop standard terms to include in contracts for projects and programs awarded pursuant to the Comprehensive Plan “that provide a preference to individuals and companies that reside in, are headquartered in, or are principally engaged in business in a Gulf Coast State. . . .” 33 U.S.C. 1321(t)(2)(C)(vii)(V). Because the Act does not include geographic preferences for other components, the Interim Final Rule does not either.

OMB's Uniform Guidance makes clear that geographic preferences are allowed only when permitted by Federal law. The Uniform Guidance provides in part, that the non-Federal entity must conduct procurements in a manner that prohibits the use of statutorily or administratively imposed state or local preferences in the evaluation of bids or proposals, except in those cases where applicable Federal statutes expressly mandate or encourage geographic preference. 2 CFR 200.319(b). OMB's Uniform Guidance does encourage, however, non-Federal entities to take “all necessary steps” to assure that small and minority businesses, women's business enterprises, and labor surplus area firms are offered contracts when possible. The Uniform Guidance has more information at 2 CFR 200.321.

These sections generally discuss reporting, recordkeeping, and audits. Some editorial changes were made to conform to the terms used in OMB's Uniform Guidance, which has a robust discussion of these topics.

This section introduces the subpart discussing the Comprehensive Plan Component.

This section generally describes the Council's responsibility for administering the Comprehensive Plan Component and certain requirements in the Act. Editorial changes have been made for the sake of clarity.

This section broadly describes the Council's responsibility to establish an application procedure and grant award process. Several comments on the proposed rule requested that Treasury provide more direction to the Council concerning grant administration. The Council, an independent Federal entity, has a great deal of discretion under the Act in its choice of projects and programs, as well as the manner in which these projects and programs are carried out. The Act requires the Council to assign projects and programs to its member states and Federal agencies. Without standards to govern how its members carry out their responsibilities, there is potential for inconsistent application of the Act and OMB's Uniform Guidance, as well as potential difficulties in compliance monitoring after award. For this reason, the Interim Final Rule requires the Council to develop standards for administering grants under the Comprehensive Plan Component, and to make these standards publicly available.

This section generally states the requirements for funding activities under the Comprehensive Plan Component.

These sections generally discuss reporting, recordkeeping, and audits. OMB's Uniform Guidance has a robust discussion of each of these topics.

This section introduces the subpart discussing the Spill Impact Component, and states that funds will be made available as grants.

This section states that the Council is responsible for awarding and administering grants under this subpart. A sentence regarding compliance monitoring has been moved to the section on grant administration.

This section states that the Council will allocate amounts to the Gulf Coast States through regulations they will publish.

This section describes the content of State Expenditure Plans and which entities will prepare them. Treasury received several comments on this section. Comments suggested that requirements in this section be more consistent with those for Multiyear Implementation Plans under the Direct Component. State entities requested that funding be available to develop these plans. Public interest groups also sought opportunities for public comment on these plans.

The Interim Final Rule makes several changes to the requirements for State Expenditure Plans. The rule is more explicit about the content of these plans, and now requires states to make their plans available for public review and comment before submitting them to the Council for approval. As in the Direct Component, the public comment process can help states select projects and plan strategically to use RESTORE Act funds. The plans can be incremental and modified at a later date, to provide the states with flexibility. The Interim Final Rule requires the Council to develop requirements specifying when modifications to a State Expenditure Plan require the Council's approval. Other clarifying changes have also been added to the regulation.

A clarifying change has also been made to the restrictions on infrastructure spending. The Act limits the amounts that can be spent on infrastructure, unless the State Expenditure Plan has required certifications. The Interim Final Rule clarifies that the 25 percent limit applies to the amount the state spends, not to the amount a state proposes to spend in its plan. Because a state may not execute all the projects in its plan, the original language did not carry out the statutory intent of limiting actual expenditures.

This section generally describes the Council's responsibility to establish policies and procedures for administration of the grants it awards, and to make these policies and procedures publicly available. The Interim Final Rule deletes a sentence that requires a state's grant application to demonstrate all the elements of the State Expenditure Plan to the satisfaction of the Federal grant administrator. While the Federal awarding agency cannot proceed with a grant if it has grounds to believe that the underlying facts are inaccurate, requiring a secondary review of the State Expenditure Plan after the Council has approved it was redundant.

This section generally describes the requirements applying to expenditures under the Spill Impact Component.

These sections generally discuss reporting, recordkeeping, and audits. OMB's Uniform Guidance has a robust discussion of these topics.

This section introduces requirements for the NOAA RESTORE Act Science Program.

This section generally describes the responsibilities of NOAA and the United States Fish and Wildlife Service for administering this component. Treasury received several comments on this subpart. One comment recommended that Treasury develop guidelines and procedures for NOAA to use when making grant applications and monitoring compliance. Another comment proposed that NOAA use a science-based, competitive process for selecting grant recipients, and that all research findings initiated through the program be publicly accessible and released in a timely manner. A third comment encouraged NOAA to engage with underserved, environmental justice populations by working with community-based organizations.

The Act gives NOAA wide discretion in using RESTORE Act funds, which it may use to fund work through grants, cooperative agreements, contracts, and interagency agreements. Treasury's Interim Final Rule preserves this discretion. NOAA currently plans to award grants and cooperative agreements through its National Center for Coastal Ocean Science within the National Ocean Service. This Center has administered large regional ecosystem science initiatives using competitive processes for more than two decades.

As planned, the science-based, competitive process for selecting successful applicants will include three steps. First, NOAA intends to screen all applications for consistency with the NOAA RESTORE Act Science Framework. Second, NOAA intends to screen applications to ensure they meet the minimum requirements that are spelled-out in the federal funding opportunity. Next, eligible proposals will enter the review process, which may include mail reviews by scientific experts in the field prior to being reviewed by a panel of 5 to 10 individuals with the needed subject matter expertise. NOAA intends to screen all mail and panel members for conflicts of interest. Ratings will be compiled by the program manager, along with a comprehensive written justification for selecting proposals recommended for funding. These recommendations will travel along a supervisory approval chain to the selecting official for final approval.

Treasury has no compliance role with respect to NOAA's program, other than functions reserved to the Treasury Inspector General. NOAA reports that it plans to use program managers to ensure that the teams of investigators stay on track with milestones, progress reporting and other measures of project performance. Through comprehensive oversight, NOAA anticipates a high rate of return for complex projects that advance knowledge and predictive capabilities for management and restoration of ecosystems.

The Interim Final Rule also does not prescribe how NOAA should engage with the public. NOAA has informed Treasury that it is working with the U.S. Fish and Wildlife Service to conduct a broad set of engagement activities to connect with stakeholders, including community-based organizations throughout the Gulf. Thus far, NOAA has invited the public to in-person events as well as virtual meetings. NOAA plans to connect, as appropriate, with community organizations serving underserved and environmental justice populations in a manner that aligns with the Commerce Department's environmental justice strategy. NOAA also intends to seek input from researchers at institutions of higher education throughout the Gulf of Mexico region, including institutions that focus on the needs of under-served communities. NOAA expects to provide the public with timely access to environmental data and information that are collected and created using RESTORE Act funds, typically no later than two years after the data are collected or created, except where limited by law, regulation, policy or by security requirements.

Further information about the NOAA RESTORE Act Science Program is available at http://restoreactscienceprogram.noaa.gov/.

This section describes the activities that can be funded using amounts from the trust fund. Treasury has amended this section to capture all activities permitted by section 1604 of the Act.

This section describes limitations on the activities NOAA can fund under the Act. The Interim Final Rule has not changed this section from the proposed rule.

This section describes how the statutory cap is applied to NOAA's administrative expenses, as well as NOAA's ability to seek reimbursement from the trust fund for administrative expenses incurred before the effective date of Treasury's regulations. A sentence from § 34.604(b) has been deleted to be consistent with the cap applying to the Council's administrative expenses.

These sections describe general requirements for reports, recordkeeping, and audits. Editorial changes have been made for clarity and consistency with OMB's Uniform Guidance.

This section introduces the subpart containing requirements for the Centers of Excellence Research Grants Program.

This section states that Treasury is responsible for administering grants to the Gulf Coast States. Treasury has developed an application process for these grants, which is consistent with requirements in OMB's Uniform Guidance.

This section identifies the state entities which can apply for grants from Treasury, and the percentage of funds they are entitled to receive. Consistent with the Act, the proposed rule stated that Florida's share would be administered by a consortium of public and private research institutions within the State which will include the Florida Department of Environmental Protection and the Florida Fish and Wildlife Conservation Commission. Treasury received comments urging that the Florida Institute of Oceanography be designated in the final rule as the consortium mentioned in the statute. The statute does not identify the consortium, but it does say that the consortium must include the Florida Department of Environmental Protection and the Florida Fish and Wildlife Conservation Commission. According to their comment on the proposed rule, these agencies agree that the Florida Institute of Oceanography is the proper entity. Given that no other entity could fit the statutory description without the cooperation of these agencies, the Interim Final Rule states that the Florida Institute of Oceanography is Florida's representative for the Centers of Excellence Research Grants Program.

This section generally describes the demonstration a Gulf Coast State must make when it applies for grants. Treasury received several comments concerning the selection of Centers of Excellence.

Several comments pertained to states that announced their selection in advance of Treasury's proposed rule. Some comments proposed that Treasury should allow these selections to stand. Although the Act requires states to issue competitive grants, some comments asserted that the competition requirements should apply to how the centers award research funding. Other comments proposed additional criteria for selecting the Centers of Excellence, including the centers' geographic location and whether they partner with industry.

Treasury's regulations must implement the language of the Act. Section 1605(a) of the Act makes funds available “to establish centers of excellence to conduct research only on the Gulf Coast Region. . . .” Later, section 1605(c) makes clear that states must make funds available through competitive grants to nongovernmental entities and consortia in the Gulf Coast region, including public and private institutions of higher education, and “give priority to entities and consortia that demonstrate the ability to establish the broadest cross-section of participants with interest and expertise” in the disciplines mentioned in the Act. The Act gives no latitude to excuse states from using a competitive process when they award grants to establish centers of excellence.

Additional comments requested that Treasury clarify the selection criteria in the rule. One comment urged that entities and consortia have priority if they agree to partner with industry. Another comment requested additional details on the weight states should give to applicants having a cross-section of participants. Other comments stated that the connection required to the Gulf Coast region was unclear, and suggested instead that entities headquartered in and primarily operating in the Gulf Coast region be designated as Centers of Excellence. Another comment asked for clarification that a state may select one center of excellence, and that the states receive equal shares.

The Interim Final Rule does not add any new eligibility criteria for Centers of Excellence. The Act gives states discretion to decide what information to request from institutions applying to become Centers of Excellence, as well as discretion on the science, technology, and monitoring projects to fund. Accordingly, the Interim Final Rule also gives states discretion in these areas. A state also has discretion in choosing the location of a Center of Excellence. While states must use a competitive selection process that complies with the Act, they do have discretion regarding the geographic location of Centers of Excellence. Accordingly, Treasury has revised the proposed rule to remove the sentence on geographic location.

Treasury has also amended the proposed rule to require more details in state grant applications. The new requirements are designed to measure a state's program against the statutory criteria.

This section describes the activities that can be funded from amounts made available under the Centers of Excellence Research Program. This provision makes grants available to establish Centers of Excellence. Treasury interprets the scope of eligible activities to include the founding of Centers of Excellence, as well as research into the disciplines identified in section 1605(d) of the Act.

Treasury received comments on how the Centers of Excellence should award grants. One comment, made on behalf of several research institutions, suggested that Centers of Excellence prepare a five year progress report for review by independent experts, who would recommend whether the Center should continue or a new competition be held. Another comment requested that the Centers engage with underserved, environmental justice populations.

Treasury is not incorporating performance requirements into its regulations at this time. Because of the discretion afforded states under this program, there may be several approaches for measuring and monitoring the success of grants. Treasury will expect states to identify appropriate measures for defining and measuring success of the Centers of Excellence, as well as appropriate engagement with affected communities.

This section states that activities that are not authorized under § 34.704 are ineligible for funding.

These sections generally describe the reporting, recordkeeping, and auditing requirements for the Centers of Excellence Research Grants Program. OMB's Uniform Guidance provides additional details about these requirements. Editorial changes have been made for consistency with the Uniform Guidance.

This section introduces the subpart that contains requirements pertaining to grants awarded by the Council, NOAA, Gulf Coast States, coastal political subdivisions, and coastal zone parishes. It also describes Treasury's authority to inspect records and the authority of the Treasury Inspector General. Treasury has revised this section to more accurately describe the content of this subpart.

This section states that grant agreements must conform to applicable law and Federal policies pertaining to grants.

This section includes certifications that must be in grant agreements for the Direct Component, Comprehensive Plan Component, and Spill Impact Component. In response to comments, the Interim Final Rule clarifies who can sign a certification. The certification pertaining to consideration of public comments has been amended for consistency with the Act. The rule also includes a revised certification pertaining to procurements. The proposed rule required grant recipients to certify that they had followed state procurement laws. While recipients are generally required to comply with state procurement laws, the Uniform Guidance contains exceptions. Recipients should refer to 2 CFR 200.317-200.326 for more specific information.

This section contains conditions that apply to every grant agreement. The list of conditions is not comprehensive. As noted throughout the regulation, all grant agreements must comply with Federal laws and policies on grants, which include the requirements in OMB's Uniform Guidance.

Treasury has deleted a condition stating that grant recipients must deposit all grant funds into accounts dedicated for that purpose because that condition is inconsistent with OMB's Uniform Guidance. At 2 CFR 200.305(b)(7)(1), the Uniform Guidance precludes Federal awarding agencies from requiring separate depository accounts for funds provided to non-Federal entities. The Uniform Guidance does require non-Federal entities to account for the receipt, obligation, and expenditure of funds. Treasury's regulation retains that requirement as a condition for all grant agreements.

Treasury received several comments pertaining to the condition on program income. The Interim Final Rule continues to provide that grant recipients track program income, but does not discuss how program income should be used. Grant recipients should refer to OMB's Uniform Guidance for further information on the use of program income. In addition to this change, minor editorial changes have been made for consistency with the Uniform Guidance.

This section in the proposed rule has been deleted. Section 34.804(a) in the proposed rule gave Treasury broad access to the Council's and NOAA's records and personnel for purposes of assessing compliance with their own obligations under the Act. Because the Act does not authorize Treasury to take enforcement actions with respect to the Council or the NOAA RESTORE Act Science Program, § 34.804(a) went further than necessary. A more narrowly tailored provision now appears in the section addressing Treasury's remedies for noncompliance. Treasury has also deleted § 34.804(b) in the proposed rule. This provision described a reporting requirement for grants lasting more than three years. Because the Federal awarding agency already has authority to require reports as necessary, this requirement was redundant of other authorities in the rule.

This section describes Treasury's authority to withhold funds from the Gulf Coast States, coastal political subdivisions, and coastal zone parishes under the Direct Component, Comprehensive Plan Component, and Spill Impact Component. This section implements authorities in section 1603 of the Act (33 U.S.C. 1321(t)(1)(G) and (H)). An introductory statement in the proposed rule was unnecessary and has been deleted.

Treasury received several comments on its compliance functions. Several comments noted overlapping compliance roles for Treasury, the Treasury Inspector General, and the Council. Other comments requested that Treasury develop a review or grievance procedure for the public to use when funds are not being used in compliance with the Act. Comments also asked Treasury to assess penalties for violations of the Act.

Under the Uniform Guidance, the Federal awarding agency has primary responsibility for overseeing compliance by the recipient. If the recipient, acting as a “pass-through entity,” issues a subaward under the Act, the recipient is responsible for overseeing compliance by the subrecipient. If a non-Federal entity fails to comply with the award agreement, the Federal awarding agency or pass-through entity may impose special conditions, temporarily withhold cash payments, disallow costs, suspend or terminate the Federal award, and take other actions. See 2 CFR 200.338. All of these remedies are available to Treasury, the Council, and NOAA when they are awarding funds under the Act, and to the states and other non-Federal entities when they are the pass-through entity.

Congress gave Treasury supplemental compliance responsibilities with respect to a grant recipient's use of funds under the Comprehensive Plan Component and the Spill Impact Component. Treasury can withhold funds under appropriate circumstances, but Treasury has no ability to assess monetary penalties under these or the other components. Treasury's authorities, described in section 1603 of the Act (33 U.S.C. 1321(t)(1)(G) and (H)), do not apply to grants issued by NOAA. Treasury anticipates exercising these authorities only if the entities primarily responsible for compliance under the Uniform Guidance fail to act. Public concerns about compliance with the Act should be referred, in the first instance, to the Federal awarding agency and pass-through entity for resolution.

The Treasury Inspector General will also receive reports from the public about violations of law and information concerning possible waste, fraud, and abuse. Congress gave the Treasury Inspector General broad authority to conduct, supervise, and coordinate audits and investigations of projects, programs, and activities funded under the Act. Nothing in the Interim Final Rule limits this authority, or constrains the public's ability to bring their concerns to the Treasury Inspector General's office.

This section is new to the Interim Final Rule, and restates the Treasury Inspector General's authority under the Act.

Treasury received several comments concerning audits. Some comments sought clarity about the scope and timing of required audits, including whether the Single Audit Act will apply. Other comments suggested using state auditors and raising the ceiling on administrative costs to pay for audits. Several comments also asked Treasury to clarify when it would use its audit authority, and how audits would be coordinated with the Treasury Inspector General and the Council.

The Act does not describe specific audit requirements. Rather, section 1602 of the Act authorizes Treasury to identify “auditing requirements to ensure that amounts in the trust fund are expended as intended. . . .” The general audit requirements for the Act are described in OMB's Uniform Guidance, 2 CFR 200.500-200.521. These provisions describe not only audit requirements applying to grant recipients, but also requirements that apply to the Federal awarding agency. Treasury (including the Treasury Inspector General) and the Federal awarding agency may conduct or arrange for additional audits and evaluations of Federal awards. 2 CFR 200.503. If additional audits are needed, the Uniform Guidance encourages Federal agencies to minimize duplication and to build upon work performed by other auditors. 2 CFR 200.503(b). Because these audits and evaluations may depend on risks associated with individual awards, Treasury's regulations do not address them in detail.

Audit services can be an allowable cost under a Federal award, as described in 2 CFR 200.425. Treasury does not anticipate that the cap on administrative costs will limit a grant recipient's ability to perform required audits, given the definition of administrative costs and the provisions at 2 CFR 200.503(d), concerning the cost of audits not required under the Uniform Guidance.

The National Environmental Policy Act (NEPA), 42 U.S.C. 4321-4347, and its implementing regulations, 40 CFR Parts 1500-1508, establish a broad national policy to protect and enhance the quality of the human environment, and develop programs and measures to meet national environmental goals. Under NEPA, Federal agencies are required to prepare an environmental analysis for “Federal actions.” 42 U.S.C. 4332(C); see also 40 CFR 1508.18(a) and (b). The purpose of NEPA review is to help public officials make decisions with an understanding of their environmental consequences. An action under consideration must be “potentially subject to Federal control and responsibility.” 40 CFR 1508.18. If the Federal agency has no discretion to exercise and no decision to make, and its action is administrative or ministerial, NEPA review would not affect the decision and is therefore not required.

Treasury received several comments about NEPA's application to eligible activities. Comments requested guidance about whether and how NEPA applies to Multiyear Implementation Plans and State Expenditure Plans. Several comments also expressed concern about whether NEPA compliance would delay the completion of plans and the issuance of grants.

The Interim Final Rule does not specifically address NEPA. The Federal agency awarding the funds is primarily responsible for determining how NEPA applies to its actions, and Treasury is not the awarding agency for a majority of funds made available under the Act. The Council has completed a programmatic environmental assessment under NEPA for the Initial Comprehensive Plan, and has begun developing NEPA compliance procedures for projects and programs it decides to fund. The Council is also developing processes to further engage with the public. The Council will determine how NEPA applies to its activities.

Treasury is the Federal awarding agency for grants under the Direct Component and Centers of Excellence Research Grants Program. Treasury will soon publish agency-wide NEPA policy and procedures in the Federal Register for public comment. At this time, however, Treasury does not anticipate that its review of Multiyear Implementation Plans or the issuance of individual grants will require a NEPA review. Other Federal actions connected with activities funded through a RESTORE Act grant, such as issuance of a permit, may require NEPA review by the agency issuing the permit. Treasury's view is based on its statutory role for the administration of the Direct Component and Centers of Excellence Research Grants Program.

The RESTORE Act gives Treasury a very limited role in awarding grants. The Direct Component gives Treasury no role in project selection or design; these roles are given to Gulf Coast States, Florida counties, and Louisiana parishes. Treasury also has no role in approving Multiyear Implementation Plans. Treasury's limited role for the Centers of Excellence Research Grants Program is particularly evident in section 1605 of the Act, where Treasury is not mentioned at all. Treasury's role in awarding grants arises in part from its responsibility to establish procedures, and to identify conditions and certifications, necessary to ensure compliance with the Act. RESTORE Act section 1602(e); 33 U.S.C. 1321(t)(1)(E). Treasury's role also arises from its authority to withhold funds under 33 U.S.C. 1321(t)(1)(G) and (H) for non-compliance with the Act. Without explicit instructions in the Act about how to make grant awards, Treasury will review Multiyear Implementation Plans and grant applications to determine whether they satisfy financial and administrative requirements in the Act and these regulations, and apply the administrative requirements in OMB's Uniform Guidance. These are determined to be administrative and ministerial duties that do not require an environmental analysis under NEPA.

The Regulatory Flexibility Act (5 U.S.C. 601 et seq. ) generally requires agencies to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. In the preamble to the proposed rule, Treasury certified that this rule will not have a significant economic impact on a substantial number of small entities, and thus no initial regulatory flexibility analysis is required. While this rule describes procedures concerning the allocation and expenditure of amounts from the trust fund, most of these requirements come from the Act itself or other Federal law. Treasury invited comments on this certification.

Treasury received comments on behalf of seven counties in Florida that will receive funds under the Direct Component and have populations of less than 50,000 people. According to the comments, the State of Florida recognizes these counties as “fiscally constrained counties” that have limited resources to meet requirements of a safe society. The comments observed that compliance with the rule will be costly, in relation to the budgets of these counties. The comments did not quantify the compliance costs.

While these seven counties provided many comments on the proposed rule, directly and through the Gulf Consortium, Levy County's comments provided the most detail about the regulations' cost. Levy County's situation may be representative of the other fiscally constrained counties. Levy County stated that its tax base is so low that it struggles to provide basic government services, and as a result, “the County cannot afford to acquire staff or consultants with the expertise and educational background necessary to comply with the provisions of the Proposed Rule.”  1 In particular, Levy County stated that it may not be able to hire people with expertise to develop the Multiyear Implementation Plan or grant application, or to develop and implement projects and programs. To address these needs, Levy County requested that Treasury make funding available for planning and administrative costs prior to the grant application stage, including funding to educate the public, form an advisory committee, develop a Multiyear Implementation Plan, and develop potential projects.

In general, the costs of developing plans and projects, and of complying with Federal grant requirements, arise from the Act and not Treasury's regulations. The Act makes funds available subject to conditions that include plans, public engagement, and financial controls. The counties, however, have considerable discretion in how they comply with these requirements, which enables them to control some of their costs. The Act also provides some latitude concerning when funds are made available. In response to these comments, Treasury has revised the rule to make grants available to develop Multiyear Implementation Plans, including related public engagement activities. These grants will include funds to cover administrative costs. As noted elsewhere in this preamble, the Florida counties and other grant recipients may also negotiate reimbursement of pre-award costs, as described in OMB's Uniform Guidance. These measures will not reduce the counties' costs in complying with the Act, or exempt the counties from any legal requirement. Every grant recipient is expected to comply with the Act and other Federal requirements that apply to Federal awards. However, these measures do make funding available for allowable costs.

For these reasons, Treasury concludes that the rule will not have a significant economic impact on a substantial number of small entities.

The collections of information contained in the notice of proposed rulemaking were submitted to the Office of Management and Budget (OMB) for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) and approved under control number 1505-0250. Treasury requested comments in the following areas:

• Whether the proposed collection[s] of information is necessary for the proper performance of the functions of the Treasury Department, including whether the information will have practical utility;

• The accuracy of the estimated burden associated with the proposed collection[s] of information (see below);

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

• How to minimize the burden of complying with the proposed collections of information, including the application of automated collection techniques or other forms of information technology.

Treasury received comments concerning the content of Multiyear Implementation Plans and State Expenditure Plans and grant applications. Comments also requested more specific information about the reporting requirements stated in the rule. These comments, and resulting changes in the regulation, have been discussed in the section-by-section analysis in this preamble. Treasury received no comments on the accuracy of the burden assessments or suggestions for minimizing the burden of complying with the proposed collections of information.

The collections of information in this Interim Final Rule are in 31 CFR Part 34. This information is required to support applications for grants under the Act and monitor the use of RESTORE Act funds. Respondents will be recipients of these funds. For the Direct Component, recipients will be Alabama, certain Florida counties, Louisiana and certain Louisiana parishes, Mississippi, and Texas. For the Centers of Excellence Research Grants Program, recipients will be Alabama, the Florida Institute of Oceanography, Louisiana, Mississippi, and Texas.

Estimated total annual burden hours for applications, reporting and recordkeeping: 6,864 hours for the Direct Component and the Centers of Excellence Research Grants Program. The Federal entities who administer the Comprehensive Plan Component, Spill Impact Component, and the NOAA RESTORE Act Science Program will submit their estimates separately to OMB. The public will have the opportunity to comment at that time.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.

This regulation is a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. OMB has reviewed the regulation. If adopted, this rule may have an annual effect on the economy of $100 million or more. The Regulatory Impact Assessment prepared by Treasury for this regulation is provided below.

This rule deals with the transfer of amounts in the Gulf Coast Ecosystem Trust Fund. On March 21, 2013, $323,392,877 was deposited into the trust fund and invested in Treasury securities. A second deposit was made on March 5, 2014, in the amount of $329,641,425. The amount in the trust fund is expected to increase due to investments and additional deposits of civil penalties from ongoing litigation.

The Act requires Treasury to establish procedures necessary for the deposit into, and expenditure of amounts from, the Gulf Coast Ecosystem Trust Fund. The Interim Final Rule implements those responsibilities. Included in this rulemaking are procedures for issuing grants to the Gulf Coast States, Florida counties, and Louisiana parishes, as well as reporting and auditing requirements. The procedures supplement responsibilities in other Federal laws and policy that apply to grants.

This rulemaking affects those entities in the five Gulf Coast States that are eligible to receive funding under the RESTORE Act. In general, funds will be made available to state and local governments in the form of grants, and to Federal agencies through interagency agreements, for projects, programs, and activities they select within the broad parameters of the Act. Funds are also available to NOAA for a science program, and to the Council, a body comprised of state and Federal entities, for projects and programs the Council identifies in its Comprehensive Plan.

Under the Direct Component and Spill Impact Component, 65 percent of the trust fund is available to support projects, programs, and activities proposed by governmental entities in the five Gulf Coast States. The Act lists a broad range of eligible activities, including the restoration and protection of natural resources, mitigation of damage to fish and wildlife, and workforce development and job creation. State entities may apply to the Treasury Department for grant funds under the Direct Component, and to the Council for grant funds under the Spill Impact Component.

The Comprehensive Plan Component makes 30 percent of the trust fund, plus a portion of accrued interest, available to the Council to carry out activities in the Gulf Coast region that are included in the Comprehensive Plan, as described in 33 U.S.C. 1321(t)(2). The Council will identify the projects and programs it wants to fund in its Comprehensive Plan, and assign primary responsibility for them to its members. The Council will provide funds to the states in the form of grants and to agencies through interagency agreements, and may permit its Federal and state members to issue grants to or contract with nongovernmental entities.

The Act also makes 2.5 percent of the trust fund, plus a portion of accrued interest, available to NOAA for the NOAA RESTORE Act Science Program. In this program, NOAA may use funds to carry out research, observation, and monitoring to support the long-term sustainability of the ecosystem, fish stocks, fish habitat, and the recreational, commercial, and charter fishing industry in the Gulf of Mexico. NOAA may carry out these functions directly, transfer funds to the Gulf States Marine Fisheries Commission, and expend funds through grants, cooperative agreements, contracts, and interagency agreements.

The fifth component is the Centers of Excellence Research Grants Program. In this program, Treasury will issue grants to governmental entities in the five Gulf Coast States using 2.5 percent of the trust fund, plus a portion of accrued interest. The state entities will use the funds to issue their own competitive grants to establish centers of excellence. These centers will be nongovernmental entities and consortia in the Gulf Coast region, including public and private institutions of higher education. They will focus on science, technology, and monitoring in five disciplines described in the RESTORE Act.

The Interim Final Rule helps implement the Act, which is generally focused on the environmental restoration and economic recovery of the Gulf Coast region. This region is an area in which the people, animals, minerals, land, and water are interconnected. The ecosystem and resources are vitally important to the United States economy, contributing about 30 percent of the nation's gross domestic product in 2009 (National Oceanic and Atmospheric Administration, 2010). The region provides more than 90 percent of the nation's offshore oil and natural gas production (US Information Agency, 2010) and one-third of the nation's seafood (National Marine Fisheries Service, 2010). The region also has significant recreation and tourism.

On April 20, 2010, the largest oil spill in United States history occurred, exacerbating the effects of previous natural disasters. Oil flowed unchecked for three months. The cause was an explosion of the Deepwater Horizon, an oil drilling rig in the Gulf of Mexico. Before the well was capped, millions of barrels of crude oil were released, closing tens of thousands of square miles of federal waters for fishing while contaminating hundreds of miles of shoreline, bayous, bays, and islands with oil and chemicals used during response activities. The released oil dispersed over Gulf waters, wildlife, and coasts, causing extensive damage to marine and wildlife habitats, fishing, and tourism.

This Interim Final Rule describes procedures concerning the expenditure of amounts from the trust fund, including compliance and auditing requirements. The amounts made available from the trust fund will continue efforts that provide for the long-term health of the ecosystems and economy of the Gulf Coast region. The Council, NOAA, and program grant recipients will determine how to advance these efforts using trust fund amounts.

The Administrative Procedure Act (5 U.S.C. 551 et seq. ) (APA) generally requires public notice and comment procedures before promulgation of regulations and a delay in effective date. See 5 U.S.C. 553(b). The APA allows agencies to dispense with notice and comment procedures when the agency finds that good cause exists under 5 U.S.C. 553(b) that such procedures would be unnecessary, impracticable, or contrary to the public interest.

The Department published a notice of proposed rulemaking requesting comment on the proposed rule on September 6, 2013. As explained earlier in this preamble, the Department is issuing this rule as an Interim Final Rule because it believes the rulemaking would benefit from additional public comment on previously proposed provisions as well as provisions adopted in this interim rule. Further, the Department believes that it would be contrary to the public interest to delay implementation of the rule pending further public comment because of the overwhelming public interest in making funds available under the Act.

The Congressional Review Act, 5 U.S.C. 801 et seq., generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is a “major rule” as defined by 5 U.S.C. 804(2) and will be effective 60 days after publication.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires federal agencies to assess the effects of their regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a state, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Treasury believes that the regulatory impact assessment provided in this preamble provides the analysis required by the Unfunded Mandates Reform Act.

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(3)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule. Completing the full NPRM process is contrary to the public interest as it would delay the additional safety measures necessary to protect participants and event personnel from the possible marine hazards present during the swimming portion of this event. The “Tri Clarksville Triathlon” is planned to take place on August 23, 2014; the swimming portion of this event will take place on the Cumberland River at approximately 127.4. Upon reviewing the details of this event, the Coast Guard determined that a special local regulation is necessary during the event's swim portion. The event has been advertised and is planned by the local community. Delaying the special local regulation would also unnecessarily interfere with the planned event and has the potential to affect contractual obligations of the event sponsors.

For the same reasons, under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Providing 30 days notice for this occurrence would unnecessarily delay the effective date and would be contrary to public interest because immediate action is necessary to protect event participants from the possible marine hazards present during the swim portion of this event.

The swim portion of the “Tri Clarksville Triathlon” takes place on the Cumberland River from mile 127.0 to 128.0. The Coast Guard determined that a temporary special local regulation is needed to protect the 700 participants in the “Tri Clarksville Triathlon” during the swim portion. The legal basis and authorities for this rule are found in 33 U.S.C. 1233, which authorizes the Coast Guard to establish and define special local regulations. The COTP Ohio Valley is establishing a special local regulation for the waters of the Cumberland River, from mile 127.0 to 128.0 to protect the participants during the swim portion of the “Tri Clarksville Triathlon”. Entry into this area is prohibited unless specifically authorized by the COTP Ohio Valley or designated representative.

The COTP Ohio Valley is establishing a special local regulation for the waters of the Cumberland River, from mile 127.0 to 128.0, during the swim portion of the “Tri Clarksville Triathlon”. During this event, vessels shall not enter into, depart from, or move within the regulated area without permission from the COTP Ohio Valley or his authorized representative. Persons or vessels requiring entry into or passage through the regulated area must request permission from the COTP Ohio Valley, or a designated representative. Sector Ohio Valley may be contacted on VHF-FM Channel 13 or 16, or 1-800-253-7465. This rule is effective from 7:00 a.m. to 9:30 a.m. August 23, 2014. The COTP Ohio Valley will inform the public through Broadcast Notices to Mariners (BNM) of the enforcement period for the special local regulation as well as any changes in the planned schedule.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.

This special local regulation restricts transit on the Cumberland River from mile 127.0 to 128.0 and covers a period of two and one half hours, from 7:00 a.m. to 9:30 a.m. on August 23, 2014. Due to its short duration and limited scope, it does not pose a significant regulatory impact. BNMs will also inform the community of this special local regulation so that they may plan accordingly for this short restriction on transit. Vessel traffic may request permission from the COTP Ohio Valley or a designated representative to enter the restricted area or deviate from this regulation. Requests to deviate from this regulation will be considered on a case-by-case basis.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit from mile 127.0 to 128.0 on the Cumberland River, from 7:00 a.m. to 9:30 a.m. on August 23, 2014. The special local regulation will not have a significant economic impact on a substantial number of small entities because this rule will be in effect for a short period of time. Before the activation of the zone, we would issue maritime advisories widely available to waterway users. If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES ) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT , above.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has 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. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

This rule is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishing a temporary special local regulation to protect the participants in the swimming portion of the “Tri Clarksville Triathlon” on the Cumberland River from mile 127.0 to 128.0 for two and one half hour period on one day. This rule is categorically excluded, under figure 2-1, paragraph (34)(h), of the Commandant Instruction.

An environmental analysis was performed during the marine event permit process for the swimming event and a checklist and a categorical exclusion determination are not required for this special local regulation.

For the reasons discussed in the preamble, the U. S. Coast Guard amends 33 CFR part 100 as follows:

Table of Acronyms DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking A. Regulatory History and Information

The regulation for this marine event may be found at 33 CFR 100.501, Table to § 100.501, section (a), line “9”.

The Coast Guard is issuing this final rule without prior notice and opportunity to comment, and to take effect in less than 30 days, pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b) and (d)(3)), which authorizes an agency to issue a rule without prior notice and opportunity to comment, and to take effect in less than 30 days, when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” The Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule immediate action is needed to minimize potential danger to the public during the event. The potential dangers posed by power boat race make this change to the special local regulation necessary to provide for the safety of participants, spectator craft, and other vessels transiting the event area. For the safety concerns noted, it is in the public interest to have this regulation in effect during the event. The Coast Guard will issue broadcast notice to mariners to advise vessel operators of navigational restrictions. On scene Coast Guard and local law enforcement vessels will also provide actual notice to mariners. For the same reasons, the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register .

The legal basis and authorities for this rulemaking establishing a special local regulation are found in 33 U.S.C. 1233, which authorize the Coast Guard to establish and define special local regulations. The Captain of the Port Delaware Bay is establishing a special local regulation for the waters of Sunset Lake, near Wildwood Crest, NJ, to protect event participants, spectators and transiting vessels. Entry into this area is prohibited unless specifically authorized by the Captain of the Port Delaware Bay or designated representative.

The Sunset Lake Hydrofest Association sponsors an annual power boat race usually held on the last Friday, Saturday and Sunday in September in the waters of Sunset Lake adjacent to Wildwood Crest, New Jersey.

The regulation listing annual marine events within the Fifth Coast Guard District and special local regulation locations is 33 CFR 100.501. The Table to § 100.501 identifies special local regulations by COTP zone, with the COTP Delaware Bay zone listed in section “(a.)” of the Table. The Table to § 100.501, at section (a.) event Number “9”, describes the enforcement date and regulated location for this marine event.

The date listed in the Table has the marine event on the last Friday, Saturday and Sunday in September. However, this temporary rule changes the marine event date to September 13, 2014 and September 14, 2014, to reflect the actual date of the event.

A fleet of spectator vessels is anticipated to gather nearby to view the marine event. Due to the need for vessel control during the marine event vessel traffic will be temporarily restricted to provide for the safety of participants, spectators and transiting vessels. Under provisions of 33 CFR 100.501, during the enforcement period, vessels may not enter the regulated area unless they receive permission from the Coast Guard Patrol Commander.

The Coast Guard will temporarily suspend the regulation listed in Table to § 100.501, section (a) event Number “9”, and insert this temporary regulation at Table to § 100.501, at section (a.) as event Number “18”, in order to reflect that the safety zone will be effective and enforced from 8:00 a.m. until 4:30 p.m. on September 13, 2014 and September 14, 2014. This change is needed to accommodate the sponsor's event plan. No other portion of the Table to § 100.501 or other provisions in § 100.501 shall be affected by this regulation.

The regulated area of this special local regulation includes All waters of Sunset Lake, New Jersey, from shoreline to shoreline, south of latitude 38°58′32″ N.

During the period of the safety zone, all persons and vessels will be prohibited from entering, transiting, mooring, or remaining within the zone, unless specifically authorized by the Captain of the Port Delaware Bay, or her designated representative. Those persons authorized to transit through the safety zone shall abide by and follow all directions provided by the Captain of the Port Delaware Bay, or her designated representative, in order to ensure they are not disrupting this marine event. U.S. Coast Guard Sector Delaware Bay will notify the public by broadcast notice to mariners at least one hour prior to the times of enforcement.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. Although this regulation will restrict access to the regulated area, the effect of this rule will not be significant because: (i) The Coast Guard will make extensive notification of the Safety Zone to the maritime public via maritime advisories so mariners can alter their plans accordingly; (ii) vessels may still be permitted to transit through the safety zone with the permission of the Captain of the Port on a case-by-case basis; and (iii) this rule will be enforced for only the duration of the air show.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: the owners or operators of vessels intending to anchor or transit along a portion of the Sunset Lake adjacent to Wildwood Crest, New Jersey from 8:00 a.m. to 4:30 p.m. on September 13, 2014 and September 14, 2014, unless cancelled earlier by the Captain of the Port once all operations are completed.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reason: vessel traffic will be allowed to pass through the zone with permission of the Coast Guard Captain of the Port Delaware Bay or her designated representative and zone is limited in size and duration. Sector Delaware Bay will issue maritime advisories widely available to users of the Delaware Bay and River.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT , above.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has 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. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves implementation of regulations within 33 CFR Part 100, applicable to special local regulations on the navigable waterways. This zone will temporarily restrict vessel traffic from transiting the waters of Sunset Lake adjacent to Wildwood Crest, NJ, in order to protect the safety of life and property on the waters for the duration of the power boat race. This rule is categorically excluded from further review under paragraph 34(h) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES . We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:

The regulation for this marine event may be found at 33 CFR 100.501, Table to § 100.501, section (a), line “14”.

The Coast Guard is issuing this final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule immediate action is needed to minimize potential danger to the public during the event. The potential dangers posed by this triathlon make this change to the special local regulation necessary to provide for the safety of participants, spectator craft, and other vessels transiting the event area. For the safety concerns noted, it is in the public interest to have this regulation in effect during the event. The Coast Guard will issue broadcast notice to mariners to advise vessel operators of navigational restrictions. On scene Coast Guard and local law enforcement vessels will also provide actual notice to mariners.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date would be contrary to the public interest, because immediate action is needed to ensure the safety of the event. However, notifications will be made to users of the affected area near Atlantic City, NJ, via marine information broadcasts and a local notice to mariners.

The legal basis and authorities for this rulemaking establishing a special local regulation are found in 33 U.S.C. 1233, which authorize the Coast Guard to establish and define special local regulations. The Captain of the Port Delaware Bay is establishing a special local regulation for the waters of the New Jersey Intracoastal Waterway, near Atlantic City, NJ, to protect event participants, spectators and transiting vessels. Entry into this area is prohibited unless specifically authorized by the Captain of the Port Delaware Bay or designated representative.

Atlantic City, NJ, sponsors an annual triathlon usually held on the third Sunday in September in the waters of the New Jersey Intracoastal Waterway adjacent to Atlantic City, New Jersey.

The regulation listing annual marine events within the Fifth Coast Guard District and special local regulation locations is 33 CFR 100.501. The Table to § 100.501 identifies special local regulations by COTP zone, with the COTP Delaware Bay zone listed in section “(a.)” of the Table. The Table to § 100.501, at section (a.) event Number “14”, describes the enforcement date and regulated location for this marine event.

The date listed in the Table has the marine event on the third Sunday of September. However, this temporary rule changes the marine event date to September 14, 2014, to reflect the actual date of the event.

Approximately 2000 people anticipated to participate in this marine event. Due to the need for vessel control during the marine event vessel traffic will be temporarily restricted to provide for the safety of participants, spectators and transiting vessels. Under provisions of 33 CFR 100.501, during the enforcement period, vessels may not enter the regulated area unless they receive permission from the Coast Guard Patrol Commander.

The Coast Guard will temporarily suspend the regulation listed in Table to § 100.501, section (a) event Number “14”, and insert this temporary regulation at Table to § 100.501, at section (a.) as event Number “17”, in order to reflect that the safety zone will be effective and enforced from 6:00 a.m. until 12:00 p.m. on September 14, 2014. This change is needed to accommodate the sponsor's event plan. No other portion of the Table to § 100.501 or other provisions in § 100.501 shall be affected by this regulation.

The regulated area of this special local regulation includes All waters of the New Jersey Intracoastal Waterway (ICW) bounded by a line connecting the following points; latitude 39°21′20″ N, longitude 074°27′18″ W thence northeast to latitude 39°21′27.47″ N, longitude 074°27′10.31″ W thence northeast to latitude 39°21′33″ N, longitude 074°26′57″ W thence northwest to latitude 39°21′37″ N, longitude 074°27′03″ W thence southwest to latitude 39°21′29.88″ N, longitude.

During the period of the safety zone, all persons and vessels will be prohibited from entering, transiting, mooring, or remaining within the zone, unless specifically authorized by the Captain of the Port Delaware Bay, or her designated representative. Those persons authorized to transit through the safety zone shall abide by and follow all directions provided by the Captain of the Port Delaware Bay, or her designated representative, in order to ensure they are not disrupting this marine event. U.S. Coast Guard Sector Delaware Bay will notify the public by broadcast notice to mariners at least one hour prior to the times of enforcement.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. Although this regulation will restrict access to the regulated area, the effect of this rule will not be significant because: (i) The Coast Guard will make extensive notification of the Safety Zone to the maritime public via maritime advisories so mariners can alter their plans accordingly; (ii) vessels may still be permitted to transit through the safety zone with the permission of the Captain of the Port on a case-by-case basis; and (iii) this rule will be enforced for only the duration of the triathlon.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: the owners or operators of vessels intending to anchor or transit along a portion of the New Jersey Intracoastal Waterway adjacent to Atlantic City, New Jersey from 6:00 a.m. to 12:00 p.m. on September 14, 2014, unless cancelled earlier by the Captain of the Port once all operations are completed.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reason: vessel traffic will be allowed to pass through the zone with permission of the Coast Guard Captain of the Port Delaware Bay or her designated representative and zone is limited in size and duration. Sector Delaware Bay will issue maritime advisories widely available to users of the Delaware Bay and River.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT , above.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has 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. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the FOR FURTHER INFORMATION CONTACT section to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places or vessels.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves implementation of regulations within 33 CFR Part 100, applicable to special local regulations on the navigable waterways. This zone will temporarily restrict vessel traffic from transiting the waters of the Atlantic Ocean adjacent to Atlantic City, NJ, in order to protect the safety of life and property on the waters for the duration of the triathlon. This rule is categorically excluded from further review under paragraph 34(h) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES . We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 100 as follows:

The Coast Guard will enforce the safety zone listed in Table 1 to 33 CFR 165.160(4.4) on the specified date and time as indicated below. The final rule establishing this safety zone was published in the Federal Register on November 9, 2011 (76 FR 69614).

Under the provisions of 33 CFR 165.160, No persons or vessels will be allowed to enter into, transit through, or anchor in the safety zone without the permission of the COTP or a designated representative. Vessels wishing to transit through the safety zone may contact a designated representative via VHF channel 13 or 16 to request permission. Vessels may transit outside the safety zone but may not anchor, block, loiter in, or impede the transit of other vessels. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.

This notice is issued under authority of 33 CFR 165.160(a) and 5 U.S.C. 552 (a). In addition to this notice in the Federal Register, the Coast Guard will provide mariners with advanced notification of enforcement periods via the Local Notice to Mariners and marine information broadcasts. If the COTP determines that the safety zone need not be enforced for the full duration stated in this notice, a Broadcast Notice to Mariners may be used to grant general permission to enter the safety zone.

On September 23, 2013, VA published in the Federal Register (78 FR 58264), a proposed rule to add § 9.21 to 38 CFR part 9, to clarify that, as part of its responsibilities under 38 U.S.C. 1966 and 44 U.S.C. 3301, VA has the right to complete and unrestricted access to the records of any insurer, reinsurer(s), and their successors (jointly referred to hereafter as “insurer”) with respect to the SGLI policy and related benefit programs or services that are derived from the policy. In order for VA to meet its responsibilities under sections 1966 and 3301, VA requires access to any records relating to the operation and administration of the benefit programs derived from the policy and records related to the organization, functions, policies, decisions, procedures, and essential transactions of the insurer. VA's access to records includes records containing financial information of the insurer and records of individuals insured under the policy or utilizing other related program benefits and services or who may be entitled to benefits derived through the SGLI programs, including personally identifiable information concerning such individuals and their beneficiaries.

The proposed rule was published in the Federal Register (78 FR 58264) on September 23, 2013. A 60-day comment period was provided. No public comments were received regarding the proposed rule. As a result, based on the rationale set forth in the proposed rule, we adopt the provisions of the proposed rule as a final rule without change. This rule will apply to the insurer as of the effective date of the final rule, namely 30 days following the date of publication of the final rule.

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

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

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

The economic, interagency, budgetary, legal, and policy implications of this final rule have been examined, and it has been determined not to be a significant regulatory action under Executive Order 12866. VA's impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of the rulemaking and its impact analysis are available on VA's Web site at http://www1.va.gov/orpm/, by following the link for “VA Regulations Published.”

The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This final rule will directly affect only the insurer and entities acting on its behalf and individuals whose records may be held by the insurer and will not directly affect any small entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance number and title for the program affected by this document is 64.103, Life Insurance for Veterans.

The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Jose D. Riojas, Chief of Staff, Department of Veteran Affairs, approved this document on August 11, 2014, for publication.

For the reasons set forth in the preamble to this final rule and to the proposed rule, VA amends 38 CFR part 9 as follows:

This Federal Register document, the petitions for reconsideration, the letters responding to the petitioners and the Response to Comment document are available in the docket that the EPA established for the “National Emission Standards for Hazardous Air Pollutants for Existing Reciprocating Internal Combustion Engines” under Docket ID No. EPA-HQ-OAR-2008-0708. The document numbers for the petitions for reconsideration are EPA-HQ-OAR-2008-0708-1505, EPA-HQ-OAR-2008-0708-1506 and EPA-HQ-OAR-2008-0708-1507. All documents in the docket are listed in the www.regulations.gov index. The EPA also relies on documents in Docket ID Nos. EPA-HQ-OAR-2002-0059, EPA-HQ-OAR-2005-0029, EPA-HQ-OAR-2005-0030 and EPA-HQ-OAR-2010-0295, and incorporated those dockets into the docket for this action. Although listed in the index, some information is not publicly available, e.g., Confidential Business Information or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically at www.regulations.gov or in hard copy at the EPA Docket Center, EPA WJC West Building, Room 3334, 1301 Constitution Ave. NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742.

This Federal Register notice, the petitions for reconsideration, the letters providing the EPA's decision on the reconsideration and the Response to Comment document can also be found on the EPA's Web site at http://www.epa.gov/ttn/atw/icengines/. The amendments to the National Emission Standards for Hazardous Air Pollutants for Stationary Reciprocating Internal Combustion Engines and the Standards of Performance for Stationary Internal Combustion Engines were published in the Federal Register on January 30, 2013, at 78 FR 6674. The notice of reconsideration and request for public comment was published in the Federal Register on September 5, 2013, at 78 FR 54610.

Any petitions for review of the letters announcing the EPA's decision not to propose changes to the regulations in response to the public comments received on the three issues under reconsideration described in this Notice must be filed in the U.S. Court of Appeals for the District of Columbia Circuit by October 14, 2014.

Acronyms and Abbreviations. The following acronyms and abbreviations are used in this document.

Background Information. On November 4, 2013 (78 FR 66108), the EPA proposed revisions to the FPUF Production NESHAP based on our RTR, and we also proposed to amend provisions related to emissions during periods of SSM, to add requirements for electronic reporting of performance testing, and to clarify certain rule requirements. In this action, we are finalizing revisions to the rule. We summarize some of the comments we received regarding the proposed rule and provide our responses in this preamble. A summary of the public comments on the proposal not presented in the preamble, and the EPA's responses to those comments are available in Docket ID No. EPA-HQ-OAR-2012-0510. A “track changes” version of the regulatory language that reflects how the current FPUF NESHAP is being revised is available in the docket for this action.

Organization of this Document. We provide the following outline to assist in locating information in the preamble.

Regulated Entities. Categories and entities potentially regulated by this action are shown in Table 1 of this preamble.

Table 1 of this preamble is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by the final action for the source category listed. To determine whether your facility is affected, you should examine the applicability criteria in the appropriate NESHAP. If you have any questions regarding the applicability of any aspect of this NESHAP, please contact the appropriate person listed in the preceding FOR FURTHER INFORMATION CONTACT section of this preamble.

In addition to being available in the docket, an electronic copy of this final action will be available on the World Wide Web through the Technology Transfer Network (TTN). Following signature by the EPA Administrator, the EPA will post a copy of this final action on the project Web site at: http://www.epa.gov/ttn/atw/foam/foampg.html. The TTN provides information and technology exchange in various areas of air pollution control.

Additional information is available on the RTR Web page at http://www.epa.gov/ttn/atw/rrisk/rtrpg.html. This information includes an overview of the RTR program, links to project Web sites for the RTR source categories, and detailed emissions and other data we used as inputs to the risk assessments.

Under Clean Air Act (CAA) section 307(b)(1), judicial review of this final action is available only by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit by October 14, 2014. Under CAA section 307(b)(2), the requirements established by this final rule may not be challenged separately in any civil or criminal proceedings brought by the EPA to enforce the requirements.

Section 307(d)(7)(B) of the CAA further provides that “[o]nly an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review.” This section also provides a mechanism for the EPA to reconsider the rule, “[i]f the person raising an objection can demonstrate to the EPA that it was impracticable to raise such objection within [the period for public comment] or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule.” Any person seeking to make such a demonstration should submit a Petition for Reconsideration to the Office of the Administrator, U.S. EPA, Room 3000, William Jefferson Clinton Building, 1200 Pennsylvania Ave. NW., Washington, DC 20460, with a copy to both the person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT section, and the Associate General Counsel for the Air and Radiation Law Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200 Pennsylvania Ave. NW., Washington, DC 20460.

Section 112 of the CAA establishes a two-stage regulatory process to address emissions of hazardous air pollutants (HAP) from stationary sources. In the first stage, we must identify categories of sources emitting one or more of the HAP listed in CAA section 112(b) and then promulgate technology-based NESHAP for those sources. “Major sources” are those that emit, or have the potential to emit, any single HAP at a rate of 10 tons per year (tpy) or more, or any combination of HAP at a rate of 25 tpy or more. For major sources, these standards are commonly referred to as maximum achievable control technology (MACT) standards and must reflect the maximum degree of emission reductions of HAP achievable (after considering cost, energy requirements and non-air quality health and environmental impacts). In developing MACT standards, CAA section 112(d)(2) directs the EPA to consider the application of measures, processes, methods, systems or techniques that reduce the volume of or eliminate HAP emissions through process changes, substitution of materials or other modifications; enclose systems or processes to eliminate emissions; collect, capture or treat HAP when released from a process, stack, storage or fugitive emissions point; and/or are design, equipment, work practice or operational standards.

For these MACT standards, the statute specifies certain minimum stringency requirements, which are referred to as MACT floor requirements and may not be based on cost considerations. See CAA section 112(d)(3). For new sources, the MACT floor cannot be less stringent than the emission control achieved in practice by the best-controlled similar source. The MACT standards for existing sources can be less stringent than floors for new sources, but they cannot be less stringent than the average emission limitation achieved by the best-performing 12 percent of existing sources in the category or subcategory (or the best-performing five sources for categories or subcategories with fewer than 30 sources). In developing MACT standards, we must also consider control options that are more stringent than the floor, under CAA section 112(d)(2). We may establish standards more stringent than the floor, based on the consideration of the cost of achieving the emissions reductions, any non-air quality health and environmental impacts, and energy requirements.

In the second stage of the regulatory process, the CAA requires the EPA to undertake two different analyses, which we refer to as the technology review and the residual risk review. Under the technology review, we must review the technology-based standards and revise them “as necessary (taking into account developments in practices, processes, and control technologies)” no less frequently than every 8 years, pursuant to CAA section 112(d)(6). Under the residual risk review, we must evaluate the risk to public health remaining after application of the technology-based standards and revise the standards, if necessary, to provide an ample margin of safety to protect public health or to prevent, taking into consideration costs, energy, safety and other relevant factors, an adverse environmental effect. The residual risk review is required within 8 years after promulgation of the technology-based standards, pursuant to CAA section 112(f). In conducting the residual risk review, if the EPA determines that the current standards provide an ample margin of safety to protect public health, it is not necessary to revise the MACT standards pursuant to CAA section 112(f). 1 For more information on the statutory authority for this rule, see 78 FR 66108.

The EPA promulgated the FPUF Production NESHAP on October 7, 1998 (63 FR 53979). The standards are codified at 40 CFR part 63, subpart III. The FPUF Production industry consists of facilities that produce slabstock or molded flexible polyurethane foam or rebond foam. The source category covered by these MACT standards currently includes 12 facilities.

The FPUF Production NESHAP contains requirements specific to each of the three types of foam production processes. For slabstock foam production, these standards include diisocyanate and HAP auxiliary blowing agent (ABA) emissions reduction requirements. For molded and rebond foam production, these standards prohibit the use of HAP in mold release agents and equipment cleaners, except in very limited circumstances.

No changes have been made to the FPUF Production NESHAP since the promulgation of the NESHAP on October 7, 1998. On November 4, 2013, the EPA published a proposed rule in the Federal Register for the FPUF Production NESHAP, 40 CFR part 63, subpart III, proposing revisions to the MACT based on the RTR analyses and proposing additional revisions. We proposed the following revisions:

• A prohibition of the use of HAP-based ABAs for slabstock foam production facilities;

• Revisions to requirements related to emissions during periods of SSM, including the addition of provisions for an affirmative defense to civil penalties for violations of emission standards that are caused by malfunctions;

• The addition of requirements for reporting of performance testing through the ERT;

• Clarifications to the leak detection methods allowed for diisocyanate storage vessels at slabstock foam production facilities; and

• Addition of a schedule for delay of leak repairs for valves and connectors.

Today's action finalizes the EPA's determinations for the FPUF Production source category pursuant to the RTR provisions of CAA section 112, and amends the FPUF Production NESHAP based on those determinations. With one exception, today's action also finalizes the changes to the NESHAP described in section II.C. of the preamble. For the reasons explained in section IV.C of the preamble, we are not including the proposed affirmative defense provisions in the final rule. In the following subsections, we introduce and summarize the final amendments to the FPUF Production NESHAP.

Pursuant to CAA section 112(f), we are revising the FPUF Production NESHAP to include a prohibition of the use of HAP or HAP-based products as ABAs for all slabstock FPUF Production operations. We evaluated the costs, emissions reductions, energy implications and cost effectiveness of this standard and determined that this measure is cost effective and technically feasible and will provide the public with an ample margin of safety from exposure to emissions from the FPUF Production source category.

We identified one development in practices, processes or control technologies that we determined to be cost-effective. Therefore, to satisfy the requirements of CAA section 112(d)(6), we are revising the MACT standards to include that development. Specifically, as we proposed, we are finalizing a prohibition of the use of HAP or HAP-based products as ABAs for all slabstock FPUF Production operations. As noted in section III.A of the preamble, we are concurrently promulgating this HAP and HAP-based ABA prohibition under section 112(f)(2) of the CAA to provide an ample margin of safety to protect public health.

We are finalizing changes to the FPUF Production NESHAP to eliminate the SSM exemption. Consistent with Sierra Club v. EPA, the EPA has established standards in this rule that apply at all times. Table 2 of the General Provisions (applicability table) is being revised to change several of the references related to requirements that apply during periods of SSM. We also eliminated or revised certain recordkeeping and reporting requirements related to the eliminated SSM exemption. The EPA also made changes to the rule to remove or modify inappropriate, unnecessary or redundant language in the absence of the SSM exemption. We determined that facilities in this source category can meet the applicable emission standards at all times, including periods of startup and shutdown, in compliance with the current MACT standards; therefore, the EPA made the determination that no additional standards are needed to address emissions during these periods.

For the reasons explained in section IV.C of the preamble, we are not including the proposed affirmative defense provisions in the final rule.

To increase the ease and efficiency of data submittal and data accessibility, we are finalizing changes to the FPUF Production NESHAP to require owners and operators of FPUF Production facilities to submit electronic copies of certain required performance test reports through an electronic performance test report tool called the ERT. This requirement to submit performance test data electronically to the EPA does not require any additional performance testing and applies only to those performance tests conducted using test methods that are supported by the ERT.

Today's rule also finalizes clarifications to the leak detection methods allowed for diisocyanate storage vessels at slabstock foam production facilities. During unloading events at these facilities, the current requirements allow the vapor return line to be inspected for leaks using visual, audible or any other detection method. Today, the EPA is clarifying that “any other detection method” must be an instrumental detection method.

We are also finalizing a revision to the requirements for delay of leak repairs for valves and connectors in diisocyanate service. This revision requires equipment leaks from valves and connectors that are on a delay of repair schedule to have repairs completed as soon as practicable, but not later than 6 months after the leak is detected.

The revisions to the FPUF Production NESHAP being promulgated in this action are effective on August 15, 2014.

The compliance date for the revised SSM requirements and electronic reporting requirements for existing FPUF Production facilities is August 15, 2014. The compliance date for the new requirements prohibiting the use of HAP ABAs for existing slabstock FPUF Production facilities is 90 days from the effective date of the promulgated standards, November 13, 2014.

New sources must comply with all of the standards immediately upon the effective date of the standard, August 15, 2014, or upon startup, whichever is later.

For each issue, this section provides a description of what we proposed and are finalizing for the issue, the EPA's rationale for the final decisions and amendments and a summary of key comments and responses. For all comments not discussed in this preamble, comment summaries and the EPA's responses can be found in the comment summary and response document available in the docket.

Pursuant to CAA section 112(f), we conducted a residual risk review and presented the results of this review, along with our proposed decisions regarding risk acceptability and ample margin of safety, in the November 4, 2013, proposed rule for the FPUF Production NESHAP (78 FR 66108). The results of the risk assessment are presented briefly below in Table 2, and in more detail in the residual risk document: Final Residual Risk Assessment for the Flexible Polyurethane Foam Production Source Category, which is available in the docket for this rulemaking. Based on actual emissions for the FPUF Production source category, the maximum individual risk (MIR) was estimated to be up to 0.7-in-1 million, the maximum chronic non-cancer total organ-specific hazard index (TOSHI) value was estimated to be up to 0.9, and the maximum off-site acute hazard quotient (HQ) value was estimated to be up to 0.9. The total estimated national cancer incidence from these facilities based on actual emission levels was 0.00004 excess cancer cases per year, or one case in every 25,000 years. Based on MACT-allowable emissions for the FPUF Production source category, the MIR was estimated to be up to 5-in-1 million, the maximum chronic non-cancer TOSHI value was estimated to be up to 0.9, and the maximum off-site acute HQ value was estimated to be up to 4. The total estimated national cancer incidence from these facilities based on MACT-allowable emission levels was 0.0004 excess cancer cases per year, or one case in every 2,500 years. We also found there were no persistent and bio-accumulative HAP (PB-HAP) or any of the seven “environmental HAP” emitted by facilities in this source category. We weighed all health risk factors in our risk acceptability determination, and we proposed that the residual risks to public health from the FPUF Production source category are acceptable.

We then considered whether the FPUF Production NESHAP provides an ample margin of safety to protect public health and prevent adverse environmental effects. In considering whether the standards should be tightened, we considered the same risk factors that we considered for our acceptability determination and also considered the costs, technological feasibility and other relevant factors related to each of the “developments in practices, processes and control technologies” identified under our technology review. Based on that analysis, we proposed to prohibit the use of HAP and HAP-based ABAs at slabstock foam production facilities, which were shown to contribute nearly 100 percent to the maximum individual cancer risks at the MACT-allowable emissions level for this source category. Furthermore, we proposed that additional HAP emissions controls for FPUF production diisocyanate storage vessels and diisocyanate equipment leaks are not necessary to provide an ample margin of safety.

Information received from a commenter on the proposed rule indicates that one facility included in the FPUF Production dataset at proposal is not a major source of HAP and is not subject to the FPUF Production NESHAP. Based on this information, we determined that the modeling dataset for the FPUF Production source category does not need to include this facility. Removing this facility from the dataset and performing additional modeling would result in slightly decreased emissions and risks from the source category. This change would not affect our decisions regarding risk acceptability or ample margin of safety; thus, we determined that additional modeling to include this revision is not necessary.

We revised the risk assessment documentation for one aspect of the analysis which was not explained previously. To estimate ambient concentrations for evaluating long-term exposures, the Human Exposure Model (HEM) uses the geographic centroids of census blocks as dispersion model receptors. The census block centroids are generally good surrogates for where people live within a census block; however, risk estimates based on such centroids can be underestimated for those residences nearer to a facility than the centroid and overestimated for those residences farther from the facility than the centroid. For this source category, we added several receptors for census blocks where the centroid location was not representative of the residential locations. We revised the risk assessment documentation to provide additional information on census block centroid changes in Appendix 7 of the Final Residual Risk Assessment for the Flexible Polyurethane Foam Production Source Category document, which is available in the docket for this action.

We also revised the proximity analysis, which identifies any overrepresentation of minority, low income or indigenous populations near facilities in the source category, to add a map of the facilities in the source category, and to remove a previously included facility that is not part of the source category. The results of this analysis are presented in the section of this preamble titled, “Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations.”

Several comments were received regarding the FPUF Production source category risk review. The following is a summary of one of those comments and our response. Other comments received and our responses to those comments can be found in the Comment Summary and Response document available in the docket for this action (EPA-HQ-OAR-2012-0510).

Comment: One commenter stated that the EPA refused to strengthen the existing standards for storage vessels and equipment leaks based purely on its cost-benefit analysis. The commenter declared that the EPA's approach considered only the cost per ton of HAP emission reduction, without assessing relevant factors such as: The individual HAP emitted and the impact those HAP can have at a level below 1 ton; how many people would be affected by the potential emission reductions; where they live and whether they are in a community containing multiple HAP sources; or whether they face a longstanding environmental justice impact. The commenter further stated that the EPA also did not consider or address whether the standards would provide any “margin of safety” to protect public health, much less whether the margin is “ample.” Thus, the commenter claims the EPA ignored and violated section 112(f)(2) of the CAA.

Response: We disagree with the comment that the EPA based its decision under CAA section 112(f) that it was not necessary to tighten the FPUF Production standards for storage vessels and equipment leaks only on a cost-benefit analysis. To address the requirements of CAA section 112(f)(2) for the FPUF Production source category, we performed a risk assessment, and based on the results of that assessment, made a determination of whether emissions remaining after implementation of the existing standards result in risks that are acceptable. We did not consider costs as part of that analysis. For purposes of determining whether the existing standards provide an ample margin of safety to protect public health, we assessed the additional risk reductions that would result from tightening the standards (see 78 FR 66123-66124). Specifically, we investigated the possibility of requiring additional emissions controls for diisocyanate storage vessels and equipment leaks at slabstock production facilities and determined that these control options would not achieve a reduction in the maximum individual cancer risks or any of the other risk metrics. In addition to looking at the effect of these controls on risk, we also determined that they would result in very low emissions reductions and would be expensive to implement (see 78 FR 66123-66124). Based on the analysis of the emission and risk reductions and the costs, we proposed (and are determining in this final rule) that it is not necessary to modify the existing standards to provide an ample margin of safety.

Further, the EPA disagrees with the commenter that we did not assess the individual HAP emitted or the impact those HAP can have at a level below 1 tpy. As noted at proposal (see 78 FR 66122), we assessed the risks considering all individual HAP emissions, regardless of emission level, from the FPUF Production source category. We also assessed the impact that the potential emission control options would have on the level of emissions of the individual HAP and on the risks associated with those emissions.

Regarding the comment that the EPA should consider whether people live in a community containing multiple HAP sources, we note that background risks and contributions to risk from sources outside the facilities under review were not considered in the ample margin of safety determination for this source category, mainly because of the significant uncertainties associated with emissions estimates for such sources (see 78 FR 66121). Our approach here is consistent with the approach we took regarding this issue in the Hazardous Organic NESHAP (HON) RTR, which the court upheld in the face of claims that the EPA had not adequately considered background ( NRDC v. EPA, 529 F.3d 1077 (D.C. Cir. 2008)).

With regard to the comment concerning longstanding environmental justice impacts, we refer to the preamble of the proposed rule regarding how we examine environmental justice concerns generally, as well as in this specific rulemaking.

For the reasons explained in the proposed rule, we determined that the FPUF Production NESHAP, as modified to include the HAP and HAP-based ABA prohibition described above, will provide an ample margin of safety to protect public health and prevent an adverse environmental effect. Since proposal, neither the risk assessment nor our determinations regarding risk acceptability and ample margin of safety have changed. Therefore, pursuant to CAA section 112(f)(2), we are revising the FPUF Production NESHAP to prohibit the use of HAP and HAP-based ABAs at slabstock foam production facilities to provide an ample margin of safety.

Pursuant to CAA section 112(d)(6), we conducted a technology review, which focused on identifying and evaluating developments in practices, processes and control technologies for the emission sources in the FPUF Production source category. At proposal, we identified developments in practices, processes or control technologies for slabstock production lines, diisocyanate storage vessels and equipment leaks.

For slabstock production facilities, the current MACT standards allow limited use of HAP-based ABAs in the slabstock foam production line, while prohibiting the use of HAP-based products in equipment cleaners, except at facilities operating under the provisions for a source-wide emission limit for a single HAP ABA. Prohibiting the use of HAP-based ABAs and HAP-based equipment cleaners at slabstock foam production facilities was identified at proposal as a development in practices and/or processes that could reduce HAP emissions from the slabstock foam production facilities, principally from the foam production line. Data available to the EPA showed that none of the facilities subject to the FPUF Production NESHAP were using any HAP ABAs, or ABAs containing HAP (i.e., HAP-based ABAs). Therefore, we concluded that there would be no cost associated with codifying a prohibition on the use of HAP or HAP-based ABAs, which is consistent with current industry practice.

For diisocyanate storage vessels, two potential control technologies were identified at proposal, regenerative and recuperative thermal oxidizers, which could increase the emissions capture and control efficiency from 95 percent to 98 percent for those tanks that are currently controlled with a carbon adsorption system. We estimated an additional emission reduction of 0.0026 tpy of diisocyanate would be associated with this increase in emissions control efficiency, and the estimated costs would be $124 million and $270 million per ton of HAP reduced for regenerative and recuperative thermal oxidizers, respectively.

For equipment leaks, two potential developments in practices, processes or control technologies were identified at proposal: use of “leakless” valves in diisocyanate service at slabstock facilities and implementation of an enhanced leak detection and repair (LDAR) program for diisocyanate equipment leaks at slabstock foam production facilities.

“Leakless” valves are in place in some facilities outside the FPUF Production source category, particularly oil refineries. We analyzed the costs associated with requiring this technology for valves in diisocyanate service in the FPUF Production source category using cost estimates developed for the synthetic organic chemical manufacturing industry. Nationwide annual costs were estimated to be $310,000/yr, with total capital investments of $2,260,000. Emission reductions were estimated to be approximately 1 tpy, resulting in a cost effectiveness of $305,000/ton HAP reduction.

At proposal, we evaluated an enhanced LDAR program for equipment in diisocyanate service at slabstock foam production facilities that would require instrumental monitoring, employing Method 21 of 40 CFR part 60, appendix A, and we considered two sets of leak definitions for this program. For both sets of leak definitions, nationwide total annual costs are estimated to be approximately $28,200/yr, with total capital investments of approximately $32,400. Reduction of HAP emissions are estimated to be approximately 0.38 tpy, resulting in a cost effectiveness of approximately $74,000/ton HAP reduction.

In addition to instrumental monitoring, another aspect of an enhanced LDAR program was investigated at proposal. The current MACT standards allow leak repairs to be delayed under certain circumstances. Limits on the number of leaking components awaiting repair were identified as a development in a practice that could reduce diisocyanate emissions from equipment leaks as part of an enhanced LDAR program. We estimate the costs of requirements that would limit the number of leaking equipment components awaiting repair, require mass emission testing for leaking valves and require valves with high leak rates to be repaired within 7 days. Nationwide annual costs are estimated to be $19,300/yr, with no capital investments required. Emission reductions are estimated to be 0.08 tpy, resulting in a cost effectiveness of $233,800 per ton of HAP reduction for equipment in diisocyanate service at slabstock facilities.

Based on the costs and the emission reductions that would be achieved with the identified developments, we proposed that it was necessary to revise the MACT standard pursuant to CAA section 112(d)(6) to prohibit the use of HAP and HAP-based ABAs at slabstock foam production facilities, and we proposed that it was not necessary to revise the MACT standards pursuant to CAA section 112(d)(6) to require the identified developments in practices, processes or control technologies for diisocyanate storage vessels or equipment leaks. More information concerning our technology review can be found in the memorandum titled, Technology Review and Cost Impacts for the Proposed Amendments to the Flexible Polyurethane Foam Production Source Category, which is available in the docket and in the preamble to the proposed rule, 78 FR at 66108 to 66138.

We have not changed any aspects of our technology review since the proposal.

The following is a summary of the comments received regarding the FPUF Production source category technology review and our responses to these comments.

Comment: One commenter claims the EPA did not fulfill the letter or purpose of CAA section 112(d)(6) to ensure that the EPA updates standards when developments have occurred that would create stronger protection for public health. Another commenter also believes this rule could be more stringent in order to encourage advancement in technology to reduce HAP emissions and noted that the EPA's cost-benefit analysis of control technologies considered does not foster growth of more effective or less expensive technologies.

Response: CAA section 112(d)(6) requires the EPA to “review, and revise as necessary (taking into account developments in practices, processes, and control technologies), emission standards promulgated under this section no less often than every 8 years.” The EPA retains significant discretion in balancing relevant factors in determining whether it is “necessary” to revise the existing technology-based MACT standards. See, e.g., Sierra Club v. EPA, 325 F. 3d 374, 378 (D.C. Cir. 2003) (under CAA section 202(l)(2), the EPA is to consider factors beyond pure technological capability, and the statute does not direct how the EPA should weigh such factors). In reviewing standards promulgated pursuant to CAA section 112(d)(2) and (3), and determining whether revising them is “necessary” under section 112(d)(6), the EPA may take into consideration cost and feasibility when evaluating developments in practices, processes and control technologies.

The commenter does not specifically indicate what action the EPA should take to “foster growth of more effective or less expensive technologies.” To the extent the commenter is suggesting that the EPA require controls under CAA section 112(d)(6) that it has concluded are not cost effective at this time in the hope that it will spur action to find ways to reduce cost, we disagree that such a result is required by CAA section 112(d)(6).

Comment: One commenter stated that by not updating the leak definitions of the rule, the EPA is authorizing an unlimited amount of HAP to be emitted, as long as the leaks are below the leak definitions. According to the commenter, this violates National Lime Association v. EPA, 233 F.3d 625 (D.C. Cir. 2000), in which the Court held that the EPA must set an emission standard to limit all emitted HAP. The commenter asserted that the EPA must set emission limits that prohibit leaks above specific levels.

Response: We disagree with the commenter that the EPA must set emission limits that prohibit leaks above a certain level. Under CAA section 112, national emission standards must, whenever possible, take the format of a numerical emission standard. However, CAA section 112(h)(2) recognizes two conditions under which the EPA is not required to establish a numerical emission limit. These conditions are (1) If the pollutants cannot be emitted through a conveyance designed and constructed to emit or capture the pollutant or (2) if the application of measurement methodology is not practicable due to technological and economic limitations. If a numerical emission limit cannot be established, the EPA may instead establish a design, equipment, work practice, or operational standard or combination thereof. For equipment leak sources, the EPA has determined that equipment leaks meet both of these conditions, and it is not feasible to prescribe or enforce emission standards. See e.g., 57 FR 62608 (HON)).

In the 1998 FPUF Production NESHAP, the EPA developed LDAR requirements for equipment leaks at slabstock foam production facilities, which are primarily work practices. The 1998 FPUF Production NESHAP for equipment leaks does not specify numeric leak definitions. These standards require an LDAR program that employs visual, audible or other methods for detecting leaks. In the technology review we conducted pursuant to CAA section 112(d)(6), we investigated an option to require an enhanced LDAR program that would require instrument monitoring for leaks using EPA Method 21 and numeric leak definitions. The costs of an enhanced LDAR program for the FPUF Production source category using either of the two analyzed sets of leak definitions are estimated to be approximately $28,200/yr, with total capital investments of approximately $32,400. Reduction of HAP emissions are estimated to be about 0.38 tpy, with a cost effectiveness of approximately $74,000/ton HAP reduction. Because of the high cost of these controls, we proposed (and are determining in this final rule) that it is not necessary to revise the MACT standards pursuant to CAA section 112(d)(6) to include the enhanced LDAR program.

For the reasons provided above and in the preamble to the proposed rule, we have determined that it is necessary, pursuant to CAA section 112(d)(6), to revise the MACT standards to prohibit the use of HAP and HAP-based ABAs at slabstock foam production facilities. Also explained in the preamble to the proposed rule, there are no estimated costs, industry is already complying with this HAP and HAP-based ABA prohibition in practice and reductions in allowable emissions will be achieved. As noted in section IV.A.3 of the preamble, we are promulgating this HAP and HAP-based ABA prohibition concurrently under section 112(f)(2) of the CAA to provide an ample margin of safety to protect public health. Furthermore, for the reasons discussed above and in the preamble to the proposed rule, we have determined that it is not necessary pursuant to CAA section 112(d)(6) to revise the MACT to require additional HAP emission controls for FPUF Production diisocyanate storage vessels or diisocyanate equipment leaks.

In its 2008 decision in Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008),the United States Court of Appeals for the District of Columbia Circuit vacated portions of two provisions in the EPA's CAA section 112 regulations governing the emissions of HAP during periods of SSM. Specifically, the Court vacated the SSM exemption contained in 40 CFR 63.6(f)(1) and 40 CFR 63.6(h)(1), holding that under CAA section 302(k) of the CAA, emissions standards or limitations must be continuous in nature and that the SSM exemption violates the CAA's requirement that some CAA section 112 standards apply continuously. Consistent with Sierra Club v. EPA, the EPA proposed standards in this rule that apply at all times. In proposing the standards in this rule, the EPA took into account startup and shutdown periods and, for the reasons explained below, did not propose alternate standards for those periods. Information on periods of startup and shutdown received from the facilities in the FPUF Production industry indicated that emissions during these periods are the same as during normal operations. The primary means of compliance with the standards are through work practices and product substitutions, which eliminate the use of HAP, and are in place at all times. Therefore, we determined that separate standards for periods of startup and shutdown are not necessary.

Periods of startup, normal operations and shutdown are all predictable and routine aspects of a source's operations. However, by contrast, malfunction is defined as a “sudden, infrequent, and not reasonably preventable failure of air pollution control and monitoring equipment, process equipment or a process to operate in a normal or usual manner . . .” (40 CFR 63.2). The EPA interprets CAA section 112 as not requiring emissions that occur during periods of malfunction to be factored into development of CAA section 112 standards. Under CAA section 112, emissions standards for new sources must be no less stringent than the level “achieved” by the best controlled similar source and for existing sources generally must be no less stringent than the average emission limitation “achieved” by the best performing 12 percent of sources in the category. There is nothing in CAA section 112 that directs the agency to consider malfunctions in determining the level “achieved” by the best performing sources when setting emission standards. As the DC Circuit has recognized, the phrase “average emissions limitation achieved by the best performing 12 percent of” sources “says nothing about how the performance of the best units is to be calculated.” Nat'l Ass'n of Clean Water Agencies v. EPA, 734 F.3d 1115, 1141 (D.C. Cir. 2013). While the EPA accounts for variability in setting emissions standards, nothing in CAA section 112 requires the agency to consider malfunctions as part of that analysis. A malfunction should not be treated in the same manner as the type of variation in performance that occurs during routine operations of a source. A malfunction is a failure of the source to perform in a “normal or usual manner” and no statutory language compels EPA to consider such events in setting CAA section 112 standards.

Further, accounting for malfunctions in setting emission standards would be difficult, if not impossible, given the myriad different types of malfunctions that can occur across all sources in the category and given the difficulties associated with predicting or accounting for the frequency, degree and duration of various malfunctions that might occur. Therefore, the performance of units that are malfunctioning is not “reasonably” foreseeable. See, e.g., Sierra Club v. EPA, 167 F.3d 658, 662 (D.C. Cir. 1999) (“The EPA typically has wide latitude in determining the extent of data-gathering necessary to solve a problem. We generally defer to an agency's decision to proceed on the basis of imperfect scientific information, rather than to 'invest the resources to conduct the perfect study.' ”) See also, Weyerhaeuser v. Costle, 590 F.2d 1011, 1058 (D.C. Cir. 1978) (“In the nature of things, no general limit, individual permit, or even any upset provision can anticipate all upset situations. After a certain point, the transgression of regulatory limits caused by `uncontrollable acts of third parties,' such as strikes, sabotage, operator intoxication or insanity, and a variety of other eventualities, must be a matter for the administrative exercise of case-by-case enforcement discretion, not for specification in advance by regulation.”).

In addition, emissions during a malfunction event can be significantly higher than emissions at any other time of source operation. For example, if an air pollution control device with 99 percent removal goes off-line as a result of a malfunction (as might happen if, for example, the bags in a baghouse catch fire) and the emission unit is a steady state type unit that would take days to shut down, the source would go from 99 percent control to zero control until the control device was repaired. The source's emissions during the malfunction would be 100 times higher than during normal operations. As such, the emissions over a 4-day malfunction period would exceed the annual emissions of the source during normal operations. As this example illustrates, accounting for malfunctions could lead to standards that are not reflective of (and significantly less stringent than) levels that are achieved by a well-performing non-malfunctioning source. It is reasonable to interpret CAA section 112 to avoid such a result. The EPA's approach to malfunctions is consistent with CAA section 112 and is a reasonable interpretation of the statute.

In the event that a source fails to comply with the applicable CAA section 112 standards as a result of a malfunction event, the EPA would determine an appropriate response based on, among other things, the good faith efforts of the source to minimize emissions during malfunction periods, including preventative and corrective actions, as well as root cause analyses to ascertain and rectify excess emissions. The EPA would also consider whether the source's failure to comply with the CAA section 112 standard was, in fact, “sudden, infrequent, not reasonably preventable” and was not instead “caused in part by poor maintenance or careless operation.” 40 CFR 63.2 (definition of malfunction).

Further, to the extent the EPA files an enforcement action against a source for violation of an emission standard, the source can raise any and all defenses in that enforcement action, and the federal district court will determine what, if any, relief is appropriate. The same is true for citizen enforcement actions. Similarly, the presiding officer in an administrative proceeding can consider any defense raised and determine whether administrative penalties are appropriate. Recognizing that even equipment that is properly designed and maintained can sometimes fail and that such failure can sometimes cause a violation of the relevant emission standard, we proposed to add provisions for an affirmative defense to civil penalties for violations of emission standards that are caused by malfunctions. We also proposed other regulatory provisions to specify the elements that would be necessary to establish this affirmative defense.

To address the United States Court of Appeals for the District of Columbia Circuit vacatur of portions of the EPA's CAA section 112 regulations governing the emissions of HAP during periods of SSM, Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008), we proposed to revise and add certain provisions to the FPUF Production rule. As described in detail below, we proposed to revise the General Provisions (Table 2) to change several of the references related to requirements that apply during periods of SSM. We also proposed to add the following provisions to the FPUF Production rule: (1) The general duty to minimize emissions at all times, (2) the requirement for sources to comply with the emission limits in the rule at all times, and (3) malfunction recordkeeping and reporting requirements.

We proposed to revise the General Provisions table (Table 2) entry for 40 CFR 63.6(e)(1)-(2) by adding rows specifically for 40 CFR 63.6(e)(1)(i), 63.6(e)(1)(ii) and 63.6(e)(1)(iii) and to include a “no” in the second column for the 40 CFR 63.6(e)(1)(i) entry. Section 63.6(e)(1)(i) describes the general duty to minimize emissions. Some of the language in that section is no longer necessary or appropriate in light of the elimination of the SSM exemption. We proposed instead to add general duty regulatory text at 40 CFR 63.1290(d)(4) that reflects the general duty to minimize emissions while eliminating the reference to periods covered by an SSM exemption. The current language in 40 CFR 63.6(e)(1)(i) characterizes what the general duty entails during periods of SSM. With the elimination of the SSM exemption, there is no need to differentiate between normal operations, startup and shutdown and malfunction events in describing the general duty. Therefore the language the EPA proposed did not include that language from 40 CFR 63.6(e)(1).

We also proposed to include a “no” in the second column for the newly added 40 CFR 63.6(e)(1)(ii) entry. Section 63.6(e)(1)(ii) imposes requirements that are not necessary with the elimination of the SSM exemption or are redundant of the general duty requirement proposed to be added at 40 CFR 63.1290(d)(4).

We proposed to revise the General Provisions table (Table 2) entry for 40 CFR 63.6(f) by adding a specific entry for 40 CFR 63.6(f)(1) and including a “no” in the second column for this entry. The current language of 40 CFR 63.6, paragraph (f)(1) exempts sources from non-opacity standards during periods of SSM. As discussed above, the court in Sierra Club vacated the exemptions contained in section 63.6(f)(1) and held that the CAA requires that CAA section 112 standards apply continuously. Consistent with Sierra Club, the EPA proposed to revise the standards in this rule to apply at all times.

We proposed to revise the General Provisions table (Table 2) entry for 40 CFR 63.10(a)-(b) by adding rows specifically for 40 CFR63.10(a), 63.10(b)(1), 63.10 b)(2)(i), 63.10(b)(2)(ii), 63.10(b)(2)(iii), 63.10(b)(2)(iv)-(xi), 63.10(b)(2)(xii), 63.10(b)(xiii) and 63.10(b)(2)(xiv) in order to specify changes we proposed to the applicability of several of the 40 CFR63.10(b)(2) paragraphs.

In the entry for 40 CFR 63.10(b)(2)(i), we proposed to include a “no” in the second column. Section 63.10(b)(2)(i) describes the recordkeeping requirements during startup and shutdown. These recording provisions are no longer necessary because the EPA proposed that recordkeeping and reporting applicable to normal operations would apply to startup and shutdown. In the absence of special provisions applicable to startup and shutdown, such as a startup and shutdown plan, there is no reason to retain additional recordkeeping for startup and shutdown periods. In the entry for 40 CFR 63.10(b)(2)(ii), we proposed to include a “no” in the second column. Section 63.10(b)(2)(ii) describes the recordkeeping requirements during a malfunction. The EPA proposed to add such requirements to 40 CFR 63.1307(h). It is not necessary to cross-reference the General Provisions because we proposed specific regulatory text addressing recordkeeping for malfunctions in the FPUF Production NESHAP. The provision in the General Provisions requires the creation and retention of a record of the occurrence and duration of each malfunction of process, air pollution control, and monitoring equipment. The EPA proposed requirement for 40 CFR 63.1307(h) provides that for any failure to meet an applicable standard, the source is required to record the date, time, and duration of the failure rather than the “occurrence.” The EPA also proposed to add to 40 CFR 63.1307(h) a requirement that sources keep records that include a list of the affected sources or equipment and actions taken to minimize emissions, an estimate of the volume of each regulated pollutant emitted over the standard for which the source failed to meet a standard, and a description of the method used to estimate the emissions. Examples of such methods would include product loss calculations, mass balance calculations, measurements when available or engineering judgment based on known process parameters.

The EPA proposed to require that sources keep records of this information to ensure that there is adequate information to allow the EPA to determine the severity of any failure to meet a standard and to provide data that may document how the source met the general duty to minimize emissions when the source has failed to meet an applicable standard.

We proposed to include a “no” in the second column in the entry for 40 CFR 63.10(b)(2)(iv) and 63.10(b)(2)(v). When applicable, these paragraphs in the General Provisions require sources to record actions taken during SSM events when actions were inconsistent with their SSM plan. These requirements are not appropriate because SSM plans are not (and were not) required by the FPUF Production NESHAP, and the General Provisions applicability table referenced these sections in error.

We proposed to revise the General Provisions table (Table 2) entry for 40 CFR 63.10(d)(4)-(5) by adding a separate entry for 40 CFR 63.10(d)(5) and including a “no” in the second column for this 40 CFR 63.10(d)(5) entry. Section 63.10(d)(5) describes the reporting requirements for startups, shutdowns, and malfunctions. As explained above, the EPA proposed to add reporting requirements to 40 CFR 63.1306(f) in place of a cross-reference to the reporting requirements in the General Provisions. The proposed requirement for the FPUF Production standard does not include periodic SSM reports as stand-alone reports. Rather, the proposed language requires sources that fail to meet an applicable standard at any time to report the information concerning such events in reports already required under the FPUF Production standard—the semiannual report for slabstock affected sources and the annual compliance certification for molded and rebond affected sources. We describe the content of these proposed reports in section IV.C.1.c of the preamble.

Because we proposed specific recordkeeping requirements in the FPUF standard, we also proposed to eliminate the cross reference to section 63.10(d)(5)(i) that contains the description of the SSM report format and submittal schedule for the General Provisions.

The proposed rule also eliminated the cross-reference to section 63.10(d)(5)(ii). Section 63.10(d)(5)(ii) describes an immediate report for startups, shutdown, and malfunctions when a source failed to meet an applicable standard but did not follow the SSM plan. These requirements are not appropriate because SSM plans are not (and were not) required by the FPUF Production NESHAP, and the General Provisions applicability table referenced this section in error.

In several prior CAA section 112 rules and in the proposed rule, the EPA included an affirmative defense to civil penalties for violations caused by malfunctions in an effort to create a system that incorporates some flexibility, recognizing that there is a tension, inherent in many types of air regulations, to ensure adequate compliance while simultaneously recognizing that despite the most diligent of efforts, emission standards may be violated under circumstances entirely beyond the control of the source. Although the EPA recognized that its case-by-case enforcement discretion provides sufficient flexibility in these circumstances, it included the affirmative defense to provide a more formalized approach and more regulatory clarity. See Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1057-58 (D.C. Cir. 1978) (holding that an informal case-by-case enforcement discretion approach is adequate); but see Marathon Oil Co. v. EPA, 564 F.2d 1253, 1272-73 (9th Cir. 1977) (requiring a more formalized approach to consideration of “upsets beyond the control of the permit holder.”). Under the EPA's regulatory affirmative defense provisions, if a source could demonstrate in a judicial or administrative proceeding that it had met the requirements of the affirmative defense in the regulation, civil penalties would not be assessed. Recently, the United States Court of Appeals for the District of Columbia Circuit vacated an affirmative defense in one of the EPA's CAA Section 112 regulations. NRDC v. EPA, No. 10-1371 (D.C. Cir. April 18, 2014) 2014 U.S. App. LEXIS 7281 (vacating affirmative defense provisions in a CAA Section 112 rule establishing emission standards for Portland cement kilns). The court found that the EPA lacked authority to establish an affirmative defense for private civil suits and held that under the CAA, the authority to determine civil penalty amounts in such cases lies exclusively with the courts, not the EPA. Specifically, the Court found: “As the language of the statute makes clear, the courts determine, on a case-by-case basis, whether civil penalties are `appropriate.'” See NRDC, 2014 U.S. App. LEXIS 7281 at *21 (“[U]nder this statute, deciding whether penalties are `appropriate' in a given private civil suit is a job for the courts, not EPA.”). 2

In light of NRDC, the EPA is not including a regulatory affirmative defense provision in the final rule. As explained above, if a source is unable to comply with emissions standards as a result of a malfunction, the EPA may use its case-by-case enforcement discretion to provide flexibility, as appropriate. Further, as the DC Circuit recognized, in an EPA or citizen enforcement action, the court has the discretion to consider any defense raised and determine whether penalties are appropriate. Cf. NRDC, 2014 U.S. App. LEXIS 7281 at *24 (arguments that violations caused by unavoidable technology failures can be made to the courts in future civil cases when the issue arises). The same is true for the presiding officer in EPA administrative enforcement actions. 3

Several comments were received regarding the proposed revisions to the SSM provisions for the FPUF Production source category. The following is a summary of one of these comments and our response to that comment. Other comments received and our responses to those comments can be found in the Comment Summary and Response document available in the docket for this action (EPA-HQ-OAR-2012-0510).

Comment: One commenter states that “EPA is legally required to remove all unlawful exemptions from the emission standards that have previously existed for SSM and not to set any new such exemptions. The agency recognizes this is necessary and that it is important for EPA to remove these exemptions in this rulemaking. 78 FR 66,126. EPA is taking comment on the requirements it must change to comply with the DC Circuit's decision in Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008).” The commenter claims that equipment leaks are a kind of equipment malfunction and that EPA may not authorize any such leaks, because to do so would be in violation of CAA section 302(k) and DC Circuit precedent the Sierra Club v. EPA decision. The commenter also stated EPA's proposal to not update the leak detection and repair (LDAR) requirements is an unlawful authorization of a malfunction exemption.

Response: We disagree with the commenter's claim that the types of equipment leaks addressed in the FPUF Production NESHAP are “malfunctions.” Equipment leaks typically occur from equipment such as valves, transfer pumps and connectors in diisocyanate service. 40 CFR 63.1294; See also 63 FR at 53982. At the time we developed the NESHAP for this source category, we recognized that these emission points regularly emit small quantities of HAP, and we promulgated standards regulating equipment leaks from these components at 40 CFR 63.1294. This provision requires flexible polyurethane foam facilities to monitor for leaks and to repair any detected leaks. This requirement does not establish any exemption, and the commenter's suggestion that leaks are “exempt” from regulation or that they are “authorized” is not supported. While any specific equipment leak is not predictable, the types of equipment leaks addressed by the regulations at 40 CFR 63.1294 are fairly routine emissions from sources and are not the type of unpredictable or infrequent event for which we cannot anticipate when, where or how they may occur and that we generally consider to be malfunctions.

For the reasons provided above and in the preamble for the proposed rule, we have removed the SSM exemption from the FPUF Production NESHAP; eliminated or revised certain recordkeeping and reporting requirements related to the eliminated SSM exemption; and removed or modified inappropriate, unnecessary or redundant language in the absence of the SSM exemption. We are finalizing our proposed determination that no additional standards are needed to address emissions during startup or shutdown periods.

Furthermore, for the reasons provided in section IV.C. of the preamble, we are not including the proposed affirmative defense provisions in the final rule.

As stated in the preamble to the proposed rule, the EPA proposed to take a step to increase the ease and efficiency of data submittal and data accessibility. Specifically, the EPA proposed to require owners and operators of FPUF Production facilities to submit electronic copies of certain required performance test reports. The details are provided in the FPUF Production proposal.

We reviewed the proposed provisions regarding the electronic reporting of performance test data and made minor edits to the language to clarify these requirements.

No comments regarding electronic reporting of performance test data were received.

For the reasons provided below, the EPA is finalizing the proposed provisions requiring owners and operators of FPUF Production facilities to submit electronic copies of certain required performance test reports.

Data will be collected by direct computer-to-computer electronic transfer using EPA-provided software. This EPA-provided software is an electronic performance test report tool called the ERT. The ERT will generate an electronic report package which will be submitted to the Compliance and Emissions Data Reporting Interface (CEDRI) and then archived to the EPA's Central Data Exchange (CDX). A description and instructions for use of the ERT can be found at: http://www.epa.gov/ttn/chief/ert/index.html and CEDRI can be accessed through the CDX Web site: ( http://www.epa.gov/cdx ).

The requirement to submit performance test data electronically to the EPA will not create any additional performance testing and will apply only to those performance tests conducted using test methods that are supported by the ERT. A listing of the pollutants and test methods supported by the ERT is available at the ERT Web site. Further, the EPA believes, through this approach, industry will save time in the performance test submittal process. Additionally, this rulemaking benefits industry by reducing recordkeeping costs as the performance test reports that are submitted to the EPA using CEDRI will no longer be required to be kept in hard copy.

State, local and tribal agencies may benefit from more streamlined and accurate review of performance test data that will be available on the EPA WebFIRE database. Additionally, performance test data will become available to the public through WebFIRE. Having such data publicly available enhances transparency and accountability. For a more thorough discussion of electronic reporting of performance tests using direct computer-to-computer electronic transfer and using EPA-provided software, see the discussion in the preamble to the proposal.

In summary, in addition to supporting regulation development, control strategy development and other air pollution control activities, having an electronic database populated with performance test data will save industry, state, local, tribal agencies and the EPA significant time, money and effort while improving the quality of emission inventories and air quality regulations.

The EPA proposed to revise the FPUF Production NESHAP to clarify the leak detection methods allowed for diisocyanate storage vessels at slabstock foam production facilities and to add a schedule for leak repairs of valves and connectors in diisocyanate service that are on a delay of repair schedule.

Specifically, the EPA proposed to clarify the leak detection methods that may be used for diisocyanate storage vessels at slabstock foam production facilities during unloading events. The current requirements allow the vapor return line to be inspected for leaks during unloading events using visual, audible or any other detection method. The EPA proposed to clarify, that “any other detection method” must be an instrumental detection method.

The EPA also proposed to revise the provisions regarding delay of leak repairs for valves and connectors in diisocyanate service. A delay of repair is currently allowed by the NESHAP if the owner or operator determines that diisocyanate emissions of purged material resulting from immediate repair are greater than the fugitive emissions likely to result from a delay of repair. However, the current provisions for these valves and connectors do not state how long such a delay may last. Under the proposed requirements, the repair must be completed as soon as practicable, but not later than 6 months after the leak is detected.

We have not changed any aspects of the proposed rule amendments regarding the clarification to diisocyanate storage vessels leak detection methods or the leak delay of repair requirements for valves and connectors in diisocyanate service.

No comments were received regarding the clarification to diisocyanate storage vessels leak detection methods, and one comment regarding the diisocyanate equipment leak delay of repair requirements for valves and connectors was received. The following is a summary of this comment and our response.

Comment: One commenter noted that the EPA proposed to allow sources to delay leak repair for 6 months in certain circumstances and stated that this is both an unreasonably long period and that it creates a 6-month exemption from the emission standards. The commenter also asserted that the 15 days allowed for repair under normal conditions is an unlawful exemption from the standard. The commenter contended that the EPA must require leak repair to occur, once detected, within the absolute minimum time needed to end each leak.

Response: EPA did not propose to revise 40 CFR 63.1294(c), the provision that specified when leaks must be repaired under normal conditions, and thus the issue of whether this provision is appropriate is outside the scope of this rulemaking. We disagree, however, that when leaks must be repaired establishes an exemption from the standard. As noted earlier in this preamble, consistent with CAA section 112(h), EPA established an LDAR program as a work practice standard in lieu of setting specific emission limits for equipment leaks. A necessary component of such a program is a requirement that the leaks be repaired within specified timeframes. The existing rules require that leak repairs be made as soon as practicable, with a first attempt required within 5 calendar days of detection, and the repairs must be completed within 15 calendar days of detection. As noted in Technology Review and Cost Impacts for the Proposed Amendments to the Flexible Polyurethane Foam Production Source Category, the format for these requirements was based on the requirements of the HON, 40 CFR 63, subpart H. As explained in the proposal preamble for that rule, 57 FR at 62608, these time periods are intended to provide effective emission reduction, while allowing the time necessary for scheduling of more complex repairs.

Regarding the proposed requirement that repairs to components placed on a delay of repair schedule be completed within 6 months, we note that the 1998 FPUF Production NESHAP has no requirement for when repairs must be completed for valves and connectors, while there is a requirement that pumps must be repaired within 6 months. The requirements being finalized today will ensure that repair of leaks at valves and connectors is not delayed beyond 6 months. This requirement is consistent with the existing provision for pumps. We further note that a facility may take up to 6 months to repair a leak only if the facility determines that emissions of purged material resulting from immediate repair are greater than the fugitive emissions likely to result from delay of repair. In other words, a delay of repair is allowed only when the net result is lower emissions.

For the reasons provided in above and in the preamble to the proposed rule, the EPA is finalizing the proposed revisions to the FPUF Production NESHAP to clarify that the reference to “any other detection method” for diisocyanate storage vessels leak detection methods means an instrumental detection method. We are furthermore, adding a 6-month maximum timeframe for delay of repairs for diisocyanate equipment leaks from valves and connectors.

The facilities affected by this final rule include facilities with new and existing flexible polyurethane foam or rebond foam processes that emit HAP and are located at a plant site that is a major source for HAP emissions. We anticipate that 12 FPUF Production facilities currently operating in the United States will be affected by these final amendments.

We estimate that the final amendments to the FPUF Production NESHAP will not result in any directly quantifiable reduction of actual HAP emissions. However, we estimate that the MACT-allowable HAP emissions for the FPUF Production source category will be reduced by 735 tpy. We are finalizing requirements to prohibit the use of HAP and HAP-based ABAs at slabstock foam production facilities. As HAP and HAP-based ABAs are no longer used by FPUF Production facilities, no additional emission reductions will be realized as a result of these requirements, although potential increases in emissions in the future will be prevented. We do not expect any emissions impacts due to the final requirements to report performance tests through the ERT.

Under the final amendments, FPUF Production facilities are not expected to incur any costs. However, there may be small cost savings at some facilities due to reduced monitoring and recordkeeping costs. The memorandum, Technology Review and Cost Impacts for the Proposed Amendments to the Flexible Polyurethane Foam Production Source Category includes a complete description of the cost estimate methods prepared during the development of this rule and is available in the docket for this action (EPA-HQ-OAR-2012-0510).

Though the cost savings cannot be monetized, consistent with Executive Order 13563, “Improving Regulation and Regulatory Review,” issued on January 18, 2011, the electronic reporting requirements being finalized in this action for performance test reports are expected to reduce the burden for the FPUF Production facilities in the future by reducing recordkeeping costs and the costs associated data collection requests, which may be fewer or less substantial (due to performance test information being readily available on the EPA's WebFIRE database).

Since no costs or a small cost savings are expected as a result of the final amendments, there will not be any significant impacts on affected firms or their consumers as a result of this proposal.

As no small firms face significant control costs, this regulation is not expected to have a significant impact on small entities.

We do not anticipate any significant actual HAP emissions reductions as a result of these final amendments. However, as explained in the air quality impacts section, we are finalizing requirements to prohibit the use of HAP and HAP-based ABAs at slabstock foam production facilities. Because no sources are currently using these ABAs, we expect no additional emission reductions will be realized, although increases in emissions in the future will be prevented. For the final revisions to the FPUF Production NESHAP including changes regarding SSM, the clarification to the leak detection methods allowed for diisocyanate storage vessels, and the inclusion of a schedule for delay of leak repairs for valves and connectors, these changes may result in fewer emissions during SSM periods, less frequent SSM periods, and fewer emissions from diisocyanate storage vessels and equipment leaks. However, the possible emission reductions are difficult to quantify and are not included in our assessment of health benefits. We do not expect any emissions impacts due to the final requirements to report performance tests through the ERT.

This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is, therefore, not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

The information collection requirements in the final rule have been submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act, 44 U.S.C. 3501, et seq. The Information Collection Request (ICR) document prepared by the EPA has been assigned EPA ICR number 1783.07. The information collection requirements are not enforceable until OMB approves them.

The information requirements in this rulemaking are based on the notification, recordkeeping and reporting requirements in the NESHAP General Provisions (40 CFR part 63, subpart A), which are mandatory for all operators subject to national emission standards. These recordkeeping and reporting requirements are specifically authorized by CAA section 114 (42 U.S.C. 7414). All information submitted to the EPA pursuant to the recordkeeping and reporting requirements for which a claim of confidentiality is made is safeguarded according to agency policies set forth in 40 CFR part 2, subpart B.

The OMB previously approved the information collection requirements contained in the existing regulation being amended with this final rule (i.e., 40 CFR part 63, subparts III) under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501, et seq. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9. Burden is defined at 5 CFR 1320.3(b).

We estimate approximately 12 regulated entities are currently subject to 40 CFR part 63, subpart III, and will be subject to all final standards. The total annual monitoring, reporting, and recordkeeping burden for this collection (averaged over the first 3 years after the effective date of the standards) for subpart III (FPUF Production), including today's final amendments, is 882 labor hours per year at a total labor cost of $46,810 per year, and total non-labor capital and operation and maintenance costs of $0 per year.

The total burden for the federal government (averaged over the first 3 years after the effective date of the standard) is estimated to be 60 hours per year at a total labor cost of $3,234 per year. Burden is defined at 5 CFR 1320.3(b).

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for the EPA's regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is approved by OMB, the agency will publish a technical amendment to 40 CFR part 9 in the Federal Register to display the OMB control number for the approved information collection requirements contained in this final rule.

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations and small governmental jurisdictions.

For purposes of assessing the impacts of this final rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise that is independently owned and operated and is not dominant in its field. According to the SBA small business standards definitions, for the FPUF Production source category, which has the NAICS code of 326150 (i.e., Urethane and Other Foam Product (except Polystyrene) Manufacturing), the SBA small business size standard is 500 employees.

After considering the economic impacts of this final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This final rule will not impose any requirements on small entities. Three facilities, or 25 percent of the 12 affected facilities, are small entities. Total annualized costs for the final rule are estimated to be $0, and no small entities are projected to incur costs. Because HAP ABAs are no longer used by FPUF Production facilities, there are no impacts on any entities subject to this rulemaking.

This rule does not contain a federal mandate that may result in expenditures of $100 million or more for state, local or tribal governments, in the aggregate, or the private sector in any one year. This final rule is not expected to impact state, local or tribal governments, and FPUF Production facilities are not expected to incur any costs as a result of this final rule. Thus, this rule is not subject to the requirements of sections 202 or 205 of the Unfunded Mandates Reform Act (UMRA).

This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. This rule contains no requirements that apply to such governments nor does it impose obligations upon them.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This action will not impose substantial direct compliance costs on state or local governments, nor will it preempt state law, and none of the facilities subject to this action are owned or operated by state governments. Thus, Executive Order 13132 does not apply to this action.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). There are no FPUF Production facilities that are within 3 miles of tribal lands. Thus, Executive Order 13175 does not apply to this action. Although Executive Order 13175 does not apply to this action, the EPA solicited comments on this action from tribal officials, but received none.

This action is not subject to Executive Order 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in Executive Order 12866, and because the EPA does not believe the environmental health or safety risks addressed by this action present a disproportionate risk to children. This action will not relax the control measures on existing regulated sources, and the EPA's risk assessments (included in the docket for this action) demonstrate that the regulation, as amended to include today's final changes, is health protective.

This action is not subject to Executive Order 13211, (66 FR 28355, May 22, 2001), because it is not a significant regulatory action under Executive Order 12866.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113 (15 U.S.C. 272 note) directs the EPA to use voluntary consensus standards (VCS) in its regulatory activities, unless to do so would be inconsistent with applicable law or otherwise impractical. VCS are technical standards (e.g., materials specifications, test methods, sampling procedures and business practices) that are developed or adopted by VCS bodies. The NTTAA directs the EPA to provide Congress, through OMB, explanations when the agency decides not to use available and applicable VCS.

This action involves technical standards. Therefore, the EPA conducted a search to identify potentially applicable VCSs. However, we identified no such standards, and none were brought to our attention in comments. Therefore, the EPA has decided to continue to use EPA Method 25A, ”Determination of Total Gaseous Organic Concentration Using a Flame Ionization Analyzer,” 40 CFR part 60, Appendix A, to measure organic compound concentrations.

Executive Order 12898 (59 FR 7629, February 16, 1994) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies and activities on minority populations and low-income populations in the United States.

To gain a better understanding of the FPUF Production source category and near‐source populations, the EPA conducted a proximity analysis at a study area of 3 miles of the facilities in the source category prior to the November 2013 proposal, and revised the analysis for this final rulemaking. This analysis identifies, on a limited basis, the subpopulations that may be exposed to air pollution from the regulated sources, and thus, are expected to benefit most from this regulation. The analysis does not quantify the level of risk faced by those individuals or communities. The revised proximity analysis shows that most demographic categories are within 20 percent of their corresponding national averages, except for the African American population, which exceeds the national average by 53 percent (19 percent versus 13 percent). To the extent that any minority, low‐income or indigenous subpopulation is disproportionately impacted by hazardous air pollutant emissions due to the proximity of their homes to sources of these emissions, that subpopulation also stands to see increased environmental and health benefits from the emission reductions called for by this rule. The revised proximity analysis results are presented in the July 2014 memorandum titled, Final Environmental Justice Review: Flexible Polyurethane Foam Production, a copy of which is available in the docket for this action (EPA-HQ-OAR-2012-0510).

The EPA has determined that the current health risks posed by emissions from the FPUF production source category are acceptable and, along with the existing NESHAP, as modified to include the HAP and HAP-based ABA prohibition that we are finalizing today, provide an ample margin of safety to protect public health and prevent adverse environmental effects. Additionally, the final changes to the standard increase the level of environmental protection for all affected populations by ensuring no future emissions increases from the source category.

U.S.C. 801, et seq. , as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that, before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this final rule and other required information to the United States Senate, the United States House of Representatives and the Comptroller General of the United States prior to publication of the final rule in the Federal Register . A major rule cannot take effect until 60 days after it is published in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective on August 15, 2014.

For the reasons stated in the preamble, the Environmental Protection agency is amending title 40, chapter I, of the Code of Federal Regulations as follows:

You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2013-0444 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before October 14, 2014. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2013-0444, by one of the following methods:

• Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

• Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001.

• Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.htm.

In the Federal Register of July 19, 2013 (78 FR 43117) (FRL-9392-9), EPA issued a document pursuant to FFDCA section 408, 21 U.S.C. 346a, announcing the filing of a pesticide petition (PP IN-10547) by AG-Chem Consulting (12208 Quinque Lane, Clifton VA 21024), on behalf of Oro-Agri, Inc., 990 Trophy Club Drive, Trophy Club, TX 76262. The petition requested that 40 CFR 180.910 be amended by establishing an exemption from the requirement of a tolerance for residues of sweet orange peel tincture when used as an inert ingredient when used as a surfactant, fragrance and adjuvant up to 10% (weight/weight) concentration in pesticide products applied to all pre- and post-harvest food commodities. That document referenced a summary of the petition prepared by AG-Chem Consulting, the petitioner, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Inert ingredients are all ingredients that are not active ingredients as defined in 40 CFR 153.125 and include, but are not limited to, the following types of ingredients (except when they have a pesticidal efficacy of their own): Solvents such as alcohols and hydrocarbons; surfactants such as polyoxyethylene polymers and fatty acids; carriers such as clay and diatomaceous earth; thickeners such as carrageenan and modified cellulose; wetting, spreading, and dispersing agents; propellants in aerosol dispensers; microencapsulating agents; and emulsifiers. The term “inert” is not intended to imply nontoxicity; the ingredient may or may not be chemically active. Generally, EPA has exempted inert ingredients from the requirement of a tolerance based on the low toxicity of the individual inert ingredients.

Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

EPA establishes exemptions from the requirement of a tolerance only in those cases where it can be clearly demonstrated that the risks from aggregate exposure to pesticide chemical residues under reasonably foreseeable circumstances will pose no appreciable risks to human health. In order to determine the risks from aggregate exposure to pesticide inert ingredients, the Agency considers the toxicity of the inert in conjunction with possible exposure to residues of the inert ingredient through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings. If EPA is able to determine that a finite tolerance is not necessary to ensure that there is a reasonable certainty that no harm will result from aggregate exposure to the inert ingredient, an exemption from the requirement of a tolerance may be established.

Consistent with FFDCA section 408(c)(2)(A), and the factors specified in FFDCA section 408(c)(2)(B), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for sweet orange peel tincture including exposure resulting from the exemption established by this action. EPA's assessment of exposures and risks associated with sweet orange peel tincture follows.

EPA has evaluated the available toxicity data and considered their validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children. Specific information on the studies received and the nature of the adverse effects caused by sweet orange peel tincture as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies are discussed in this unit.

Sweet orange peel tincture and sweet orange peel oil are chemically the same (EINECS No. 232-433-8; CAS 8028-48-6). The only difference is the method of extraction. Sweet orange peel tincture is extracted in alcohol and the extraction process leads to the formation of a “tincture”. Sweet orange peel oil is extracted by cold press expression. Both are extracted from the same plant, Citrus sinensis family Rutaceae. Both forms of the sweet orange peel extract contain d-limonene as its primary component (>90%) and lesser amounts of myrcene. The EPA has conducted a “Screening-Level Hazard Assessment” of a class of compounds called monoterpene hydrocarbons, d-limonene and myrcene are among the monoterpene hyrdrocarbons assessed. The chemical class was “based on structural similarity, similar molecular weights and functional groups and the expectation that inherent physicochemical, environmental and toxicological properties are predicted to be similar”. That analysis also included a review of data on sweet orange peel oil since it is a complex mixture containing greater than 90% monoterpene hydrocarbons (including d-limonene and myrcene), and is expected to have “physicochemical, environmental and toxicological properties similar to the major components . . . limonene and myrcene”. Therefore, the Agency assessed the potential toxicity of sweet orange peel tincture based on the available toxicity data for sweet orange peel oil, and where data for sweet orange peel oil is missing, relied upon available data for the monoterpene hydrocarbons chemical class.

The acute oral and dermal toxicity of sweet orange peel oil is low. The oral LD 50 was >5,000 milligram/kilogram (mg/kg) in rats and rabbits, respectively.

In a 28-day study with sweet orange peel oil, lesions in the non-glandular stomach and clinical chemistry were observed at 1,500 mg/kg/day (above the limit dose of 1,000 mg/kg/day) in rats. Lesions in the non-glandular stomach is attributed to the irritating property of the chemical. The NOAEL was 600 mg/kg/day.

In a combined reproductive/developmental toxicity screening test with sweet orange peel oil, stillbirths and pup mortality were observed at 1,500 mg/kg/day. The offspring NOAEL was 750 mg/kg/day. Signs of toxicity were not observed in maternal rats, the NOAEL was 1,500 mg/kg/day.

Evidence of mutagenicity was not observed in the Ames test. Although evidence of mutagenicity was observed in mouse lymphoma assay, it was noted that cytotoxic concentrations were not reported and this could contribute to an inflated mutation rate. In addition, d-limonene was not mutagenic in an Ames test, mouse lymphoma, sister chromatid exchange nor in chromosome aberrations in Chinese hamster ovary cells assays. Therefore, based on the weight of evidence sweet orange peel tincture is not expected to be mutagenic.

Evidence of immunotoxicity was not observed. Sweet orange peel oil exhibited no effects on cell-mediated or humoral immune response at doses up to 2,500 mg/kg/day in a plaque-forming cell assay in mice.

Although a carcinogenicity study was not available for sweet orange peel tincture, carcinogenicity studies were available in the rat and mouse for d-limonene. An increased incidence of tumor formation was not observed in a 2 year carcinogenicity study on female rats or in male and female mice treated with d-limonene up to 1,000 mg/kg/day. An increased incidence of tubular cell hyperplasia, adenomas, and adenocarcinomas of the kidney was observed in the male rat. However, these lesions are related to the accumulation of the alpha 2u-globulin protein which is specific to the male rat and is not relevant for human risk assessment. Based on this available information and the data supporting EPA's conclusion that sweet orange peel tincture is not expected to be mutagenic, EPA concludes that sweet orange peel tincture is not likely to be carcinogenic.

The available toxicity studies indicate that sweet orange peel tincture has low toxicity. Since no endpoint of concern was identified for sweet orange peel tincture, a qualitative risk assessment is appropriate.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to sweet orange peel tincture, EPA considered exposure under the proposed exemption from the requirement of a tolerance (40 CFR 180.910 as an inert ingredient used in pesticide formulations applied to growing crops). EPA assessed dietary exposures from sweet orange peel tincture in food as follows:

Dietary exposure can occur from eating foods containing residues of sweet orange peel tincture. Because no hazard endpoint of concern was identified for the acute and chronic dietary assessment (food and drinking water), a quantitative dietary exposure risk assessment was not conducted.

2. Dietary exposure from drinking water. Sweet orange peel tincture residues may be found in drinking water. However, since an endpoint of concern was not identified for the dietary assessment (food and drinking water), a quantitative dietary exposure risk assessment was not conducted.

3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., textiles (clothing and diapers), carpets, swimming pools, and hard surface disinfection on walls, floors, tables). Sweet orange peel tincture is used as an inert ingredient in pesticide products that could result in short- and intermediate-term residential exposure. However, based on the lack of toxicity, a quantitative exposure assessment from residential exposures was not performed.

4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

EPA has not found sweet orange peel tincture to share a common mechanism of toxicity with any other substances and sweet orange peel tincture does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that sweet orange peel tincture does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act (FQPA) Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

Based on an assessment of sweet orange peel oil, EPA has concluded that there are no toxicological endpoints of concern for the U.S. population, including infants and children, and has conducted a qualitative assessment. As part of its qualitative assessment, the Agency did not use safety factors for assessing risk, and no additional safety factor is needed for assessing risk to infants and children.

EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate point of departure (PODs) to ensure that an adequate MOE exists.

Based on the lack of any endpoints of concern, EPA concludes that there is a reasonable certainty that no harm will result to the general population or to infants and children from aggregate exposure to sweet orange peel tincture residues.

An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation.

Therefore, an exemption from the requirement of a tolerance is established under 40 CFR 180.910 for sweet orange peel tincture (CAS Reg. No. 8028-48-6) when used as an inert ingredient in pesticide formulations for use as a surfactant, fragrance and adjuvant up to 10% (weight/weight) on all pre- and post-harvest food commodities.

This final rule establishes an exemption from the requirement of a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this final rule has been exempted from review under Executive Order 12866, this final rule is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This final rule does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq. ), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the exemption to the requirement of a tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq. ), do not apply.

This final rule directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian Tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this final rule. In addition, this final rule does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) (2 U.S.C. 1501 et seq. ).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register . This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

This is a summary of the Commission's Memorandum Opinion and Order, MB Docket No. 08-243, adopted July 24, 2014, and released July 25, 2014. The full text of this Commission decision is available for inspection and copying during normal business hours in the Commission's Reference Center 445 12th Street SW., Washington, DC 20554. The complete text of this decision may also be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20054, telephone 1-800-378-3160 or www.BCPIWEB.com. This document is not subject to the Congressional Review Act. (The Commission is, therefore, not required to submit a copy of this Memorandum Opinion and Order to the General Accounting Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A), because the Petition for Reconsideration was denied.

This is a synopsis of the Commission's Report and Order, adopted July 24, 2014, and released July 25, 2014. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street SW., Washington, DC 20554. This document may also be purchased from the Commission's duplicating contractors, Best Copy and Printing, Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20554, telephone 1-800-378-3160 or via email www.BCPIWEB.com. This document does not contain proposed information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

In regards to the reimbursement issue, we disagree with WGHN, Inc. and Synergy Lakeshore Licenses, LLC that Roy Henderson should be required to reimburse the parties although he was the original Petitioner of the Evart allotment because Henderson was not the ultimate permittee of Channel 274A at Evart, Michigan. Although Bay View Broadcasting Inc. has filed a construction permit for Channel 242A at Pentwater, it states that Station WMOM(FM) still operates on its original Channel 274A at Pentwater. Additionally, Synergy Lakeshore Licenses, LLC, licensee of Station WMLQ(FM) has not filed an application for Channel 282A at Manistee, Michigan, but the station still operates on its original Channel 249A. Therefore, since we delete Channel 274A at Evart and return Stations WMLQ(FM) and WMOM(FM) to their original channels, we find that no party is responsible for reimbursement expenses. In regards to the Ludington allotment, WGHN, Inc. has voluntarily consented to the channel change, so we conclude that no party is required to reimburse WGHN, Inc. for the costs of filing an application to specify Channel 242A at Ludington.

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR Part 73 as follows:

NMFS manages the reef fish fishery of the Gulf, which includes greater amberjack, under the Fishery Management Plan for the Reef Fish Resources of the Gulf (FMP). The Gulf of Mexico Fishery Management Council (Council) prepared the FMP and NMFS implements the FMP under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622. All greater amberjack weights discussed in this temporary rule are in round weight, which are equal to whole weight.

The commercial ACL for Gulf greater amberjack is 481,000 lb (218,178 kg), as specified in 50 CFR 622.41(a)(1), and the commercial ACT (equivalent to the commercial quota) is 409,000 lb (185,519 kg), as specified in 50 CFR 622.39(a)(1)(v).

The 2014 recreational ACL for Gulf greater amberjack is 1,299,000 lb (589,216 kg) and the recreational ACT (recreational quota) is 1,130,000 lb (512,559 kg) as specified in 50 CFR 622.41(a)(2)(iii) and 50 CFR 622.39(a)(2)(ii), respectively. However, because preliminary landings data indicated an overage of the recreational ACL of 267,488 lb (121,331 kg) in 2013, NMFS implemented AMs to reduce the recreational ACT and ACL in 2014. The recreational ACT was reduced to 862,512 lb (391,229 kg) for 2014 and the recreational ACL was reduced to 1,031,512 lb (467,886 kg) for 2014 through a temporary rule (79 FR 22594, April 23, 2014). Landings data for the recreational sector were finalized in May 2014, and NMFS determined the final recreational overage was 241,171 lb (109,393 kg). Therefore, this rule increases the recreational ACL for 2014 to 1,057,829 lb (479,823 kg), and increases the recreational ACT for 2014 to 888,829 lb (403,166 kg).

Under 50 CFR 622.41(a)(1)(i) and 50 CFR 622.41(a)(2)(i), NMFS is required to close the commercial and recreational sectors for greater amberjack, respectively, when the commercial ACT and recreational ACT, respectively, are reached, or are projected to be reached, by filing a notification to that effect with the Office of the Federal Register. NMFS has determined the 2014 commercial ACT and the 2014 recreational ACT will be reached by August 24, 2014. Accordingly, NMFS closes the commercial and recreational sectors for Gulf greater amberjack effective 12:01 a.m., local time, August 25, 2014, until 12:01 a.m., local time, January 1, 2015, unless changed by subsequent notification in the Federal Register .

The operator of a vessel with a valid commercial vessel permit for Gulf reef fish having greater amberjack aboard must have landed, bartered, traded, or sold such greater amberjack prior to 12:01 a.m., local time, August 25, 2014. During the commercial closure, the sale or purchase of greater amberjack taken from the EEZ is prohibited. During the recreational closure, the bag and possession limit of greater amberjack in or from the Gulf EEZ is zero. The prohibition on sale or purchase and the bag and possession limit apply in the Gulf on board a vessel for which a valid Federal charter vessel/headboat permit for Gulf reef fish has been issued, without regard to where such species were harvested, i.e. in state or Federal waters. The prohibition on sale or purchase does not apply to the sale or purchase of greater amberjack that were harvested, landed ashore, and sold prior to 12:01 a.m., local time, August 25, 2014, and were held in cold storage by a dealer or processor.

The commercial and recreational sectors for greater amberjack will reopen on January 1, 2015, the beginning of the 2015 commercial and recreational fishing seasons.

The Regional Administrator, Southeast Region, NMFS, has determined this temporary rule is necessary for the conservation and management of Gulf greater amberjack and is consistent with the Magnuson-Stevens Act and other applicable laws.

This action is taken under 50 CFR 622.41(a)(1) and (2) and is exempt from review under Executive Order 12866.

These measures are exempt from the procedures of the Regulatory Flexibility Act because the temporary rule is issued without opportunity for prior notice and comment.

This action responds to the best scientific information available. Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive the requirements to provide prior notice and opportunity for public comment on this temporary rule because such procedures are unnecessary and contrary to the public interest. Prior notice and opportunity for public comment is unnecessary because the AMs specified in 50 CFR 622.39(a)(1)(v) and (a)(2)(ii) state that NMFS will file a notification with the Office of the Federal Register to close the commercial and recreational sectors for Gulf greater amberjack for the remainder of the fishing year if commercial and recreational landings, respectively, reach or are projected to reach the commercial recreational ACTs, respectively. All that remains is to notify the public of the reduced commercial and recreational fishing seasons for greater amberjack for the remainder of the fishing year.

Allowing prior notice and opportunity for public comment is contrary to the public interest because of the need to immediately implement this action to protect the greater amberjack resource. Any delay in the closure of the commercial and recreational sectors could result in the ACLs being exceeded. The AMs state that if commercial and recreational landings exceed the ACL, NMFS will file a notification with the Office of the Federal Register, at or near the beginning of the following fishing year, to reduce the commercial and recreational ACLs and the ACTs for that following fishing year by the amount of the ACL overages in the prior fishing year. Reducing the commercial and recreational ACLs and ACTs the following fishing season could be disruptive to business plans and would provide less flexibility to fishermen.

For the aforementioned reasons, the Assistant Administrator, NMFS, also finds good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).