On December 9, 2013, the Rural Housing Service (RHS) published an interim final rule concerning the streamlining and reengineering its Single Family Housing Guaranteed Loan Program. The effective date of September 1, 2014 is being deferred to December 1, 2014 to allow for adequate implementation of affected automated processes.

Background

The Census Bureau is responsible for collecting, compiling, and publishing export trade statistics for the United States under the provisions of Title 13, United States Code (U.S.C.), Chapter 9, Section 301. The Automated Export System (AES) is the primary instrument used for collecting export trade data, which are used by the Census Bureau for statistical purposes. Through the AES, the Census Bureau collects the Electronic Export Information (EEI), the electronic equivalent of the export data formerly collected on the Shipper's Export Declaration, reported pursuant to Title 15, Code of Federal Regulations (CFR), Part 30. The EEI consists of data elements set forth in 15 CFR 30.6 for an export shipment, and includes information such as the exporter's name, address and identification number, and detailed information concerning the exported product. Traditionally, other federal agencies have used the EEI for export control purposes to detect and prevent the export of certain items by unauthorized parties or to unauthorized destinations or end users. The EEI is exempt from public disclosure unless the Secretary of Commerce determines under the provisions of Title 13, U.S.C., Chapter 9, Section 301(g) that such exemption would be contrary to the national interest.

The Security and Accountability For Every Port Act of 2006 (SAFE Port Act, Pub. L. 109-347) established the International Trade Data System (ITDS). Pursuant to the Section 405(d) of that Act, the purpose of the ITDS is to eliminate redundant information requirements, efficiently regulate the flow of commerce and to effectively enforce laws and regulations relating to international trade by establishing a single portal system for the collection and distribution of standard electronic import and export data required by all participating federal agencies. Therefore, the AES will include export information collected under other federal agencies' authority, which is subject to those agencies' disclosure mandates. Access and use of EEI by other federal agencies will also increase under the ITDS.

This rule clarifies the confidentiality provisions of the EEI by amending section 30.60 of the Foreign Trade Regulations. This revision will allow federal agencies with appropriate authority to access export data in the AES, and ensure consistency with the Executive Order of February 19, 2014, titled Streamlining the Export/Import Process for America's Businesses. The ultimate goal of this rule is to facilitate the legitimate sharing of export data consistent with the goals for the International Trade Data System (ITDS).

The Census Bureau is amending the following section of the FTR:

• Revise § 30.60 to reflect changes related to the implementation of the International Trade Data System (ITDS) and subsequent changes to the access to Electronic Export Information (EEI).

The Census Bureau finds good cause pursuant to Title 5, United States Code (U.S.C.), 553(b)(3)(B) to waive prior notice and opportunity for public comment, as contrary to the public interest. With the implementation of the International Trade Data System (ITDS), the Automated Export System (AES) will capture export information collected and used by other federal agencies under their authorities. The Census Bureau is undertaking this amendment in order to accurately reflect the authorized uses of electronic export information (EEI) by other federal agencies resulting from the ITDS. In particular, this rule amends section 30.60 of the Foreign Trade Regulations to help ensure that federal agencies with appropriate authority can access export data in the AES, which access will help ensure the efficient and timely flow of exports as well as protect U.S. interests in export controls and enforcement. Additionally, the rule complies with the directives and timelines established by Executive Order of February 19, 2014, titled Streamlining the Export/Import Process for America's Businesses. Allowing for a period of notice and comment may delay exports and make export control more difficult, both of which are contrary to the public interest.

Additionally, and for similar reasons, the Census Bureau finds good cause pursuant to 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness for this rule. This rule imposes no additional requirements or obligations on any member of the public, and so delaying its effectiveness is unnecessary. Moreover, if this rule were delayed, federal agencies would not have direct access to export data in a timely manner, which could delay or impede the flow of exports, as well as hamper critical export control and enforcement activities. Therefore, the Census Bureau has determined that it will make this rule effective on August 22, 2014.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration (SBA) that this rule will not have a significant impact on a substantial number of small entities.

The purpose and goal of this rule are explained in the preamble, and are not repeated here. This rule does not mandate any new filing requirements and does not directly impact any small or large entities. Rather, this rule's impact is largely on federal entities. Indeed, to the extent they will be indirectly impacted by this rule, small entities will see reduced burdens for exports because this rule creates a “single window” through which exporters can comply with export laws and regulations. Therefore, no Regulatory Flexibility analysis is required and none has been prepared.

This rule has been determined to be not significant for purposes of Executive Order 12866. It has been determined that this rule does not contain policies with federalism implications as that term is defined under Executive Order 13132.

Notwithstanding any other provision of law, no person is required to respond to, nor shall a person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act (PRA), unless that collection of information displays a current, valid Office of Management and Budget (OMB) control number. This rule, however, does not contain any information collection subject to the PRA.

For the reasons set out in the preamble, 15 CFR part 30 is amended as follows:

Outline I. Legal Authority II. Background III. Determination To Transfer Hydrocodone Combination Products (HCPs) to Schedule II IV. Comments Received A. Support of the Proposed Rule B. Request for Extended Comment Period C. Clarification of Affected Drugs and Substances D. Opposition to the Proposed Rule 1. Authority to Control Drugs or Substances 2. Requirements Applicable to Prescriptions 3. Patient Access to Medicine 4. Impacts on Unique Populations 5. Impacts on Long-Term Care Facilities (LTCFs) 6. Abuse Prevention 7. Diversion Prevention 8. Responsibilities of Pharmacists 9. Requirements Applicable to Manufacturers and Distributors 10. Economic Impact 11. Proposed Alternatives V. Scheduling Conclusion VI. Determination of Appropriate Schedule VII. Requirements for Handling HCPs VIII. Regulatory Analyses I. Legal Authority

The DEA implements and enforces titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended. Titles II and III are referred to as the “Controlled Substances Act” and the “Controlled Substances Import and Export Act,” respectively, and are collectively referred to as the “Controlled Substances Act” or the “CSA” for the purpose of this action. 21 U.S.C. 801-971. The DEA publishes the implementing regulations for these statutes in title 21 of the Code of Federal Regulations (CFR), parts 1300 to 1321. The CSA and its implementing regulations are designed to prevent, detect, and eliminate the diversion of controlled substances and listed chemicals into the illicit market while providing for the legitimate medical, scientific, research, and industrial needs of the United States. Controlled substances have the potential for abuse and dependence and are controlled to protect the public health and safety.

Under the CSA, every controlled substance is classified into one of five schedules based upon its potential for abuse, currently accepted medical use in treatment in the United States, and the degree of dependence the drug or other substance may cause. 21 U.S.C. 812. The initial schedules of controlled substances established by Congress are found at 21 U.S.C. 812(c), and the current list of all scheduled substances is published at 21 CFR part 1308. 21 U.S.C. 812(a).

Pursuant to 21 U.S.C. 811(a)(1), the Attorney General may, by rule, “add to such a schedule or transfer between such schedules any drug or other substance if he (A) finds that such drug or other substance has a potential for abuse, and (B) makes with respect to such drug or other substance the findings prescribed by [21 U.S.C. 812(b)] for the schedule in which such drug is to be placed * * *.” The Attorney General has delegated this scheduling authority to the Administrator of the DEA. 28 CFR 0.100(b).

The Administrator may initiate the scheduling of any drug or other substance (1) on her own motion; (2) at the request of the Secretary of the Department of Health and Human Services (HHS); or (3) on the petition of any interested party. 21 U.S.C. 811(a). This action was initiated by a petition to reschedule hydrocodone combination products (HCPs)  1 from schedule III to schedule II of the CSA, and is supported by, inter alia, a recommendation from the Assistant Secretary for Health of the HHS  2 and an evaluation of all relevant data by the DEA. This final action imposes the regulatory controls and administrative, civil, and criminal sanctions of schedule II controlled substances on any person who handles, or proposes to handle, HCPs.

Hydrocodone was listed in schedule II of the CSA upon the enactment of the CSA in 1971. Public Law 91-513, 84 Stat. 1236, sec. 202(c), schedule II, paragraph (a), clause (1) (codified at 21 U.S.C. 812(c)); initially codified in DEA regulations at 21 CFR 308.12(b)(1)(x) (36 FR 7776, April 24, 1971) (currently codified at 21 CFR 1308.12(b)(1)(vi)). At that time, hydrocodone was listed in schedule III of the CSA when formulated with specified amounts of an isoquinoline alkaloid of opium or one or more therapeutically active nonnarcotic ingredients. Pub. L. 91-513, 84 Stat. 1236, sec. 202(c), schedule III, paragraph (d), clauses (3) and (4) (codified at 21 U.S.C. 812(c)); initially codified at 21 CFR 308.13(e) (3) and (4) (36 FR 7776, April 24, 1971) (currently codified at 21 CFR 1308.13(e)(1) (iii) and (iv)). 3 Any other hydrocodone single-entity products or combinations of hydrocodone with other substances outside the range of specified doses are listed in schedule II of the CSA. 4

Pursuant to 21 U.S.C. 811(a), proceedings to add a drug or substance to those controlled under the CSA, or to transfer a drug between schedules, may be initiated on the petition of any interested party. The DEA received a petition requesting that HCPs be controlled in schedule II of the CSA. In response, in 2004, the DEA submitted a request to the HHS to provide the DEA with a scientific and medical evaluation of available information and a scheduling recommendation for HCPs, pursuant to 21 U.S.C. 811 (b) and (c). In 2008, the HHS provided to the DEA its recommendation that HCPs remain controlled in schedule III of the CSA. In response, in 2009, the DEA requested that the HHS re-evaluate their data and provide another scientific and medical evaluation and scheduling recommendation based on additional data and analysis.

On July 9, 2012, President Obama signed the Food and Drug Administration Safety and Innovation Act (Pub. L. 112-144, 126 Stat. 993) (FDASIA). Section 1139 of the FDASIA directed the Food and Drug Administration (FDA) to hold a public meeting to “solicit advice and recommendations” pertaining to the scientific and medical evaluation in connection with its scheduling recommendation to the DEA regarding drug products containing hydrocodone, combined with other analgesics or as an antitussive. Additionally, the Secretary was required to solicit stakeholder input “regarding the health benefits and risks, including the potential for abuse” of HCPs “and the impact of up-scheduling these products.” Accordingly, on January 24 and 25, 2013, the FDA held a public Drug Safety and Risk Management Advisory Committee (DSaRM) meeting, at which the DEA made a presentation. 5 The DSaRM Committee included members with scientific and medical expertise in the subject of opioid abuse, and a patient representative. Members included representatives from the National Institute on Drug Abuse (NIDA) and the Centers for Disease Control (CDC). There was also an opportunity for the public to provide comment. The DSaRM voted 19 to 10 in favor of recommending that HCPs be placed into schedule II. According to the FDA, 768 comments were submitted to the FDA by patients, patient groups, advocacy groups, and professional societies.

Upon evaluating the scientific and medical evidence, along with the above considerations mandated by the FDASIA, the HHS on December 16, 2013, submitted to the Administrator of the DEA its scientific and medical evaluation entitled, “Basis for the Recommendation to Place Hydrocodone Combination Products in Schedule II of the Controlled Substances Act.” Pursuant to 21 U.S.C. 811(b), this document contained an eight-factor analysis of the abuse potential of HCPs, along with the HHS's recommendation to control HCPs in schedule II of the CSA.

The HHS stated that the comments received during the open public hearing and submitted to the docket, and the discussion of the DSaRM members of the FDA DSaRM meeting provided support for its conclusion that: (1) Individuals are taking HCPs in amounts sufficient to create a hazard to their health or to the safety of other individuals or to the community; (2) there is significant diversion of HCPs; and (3) individuals are taking HCPs on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs. The HHS stated that it gave careful consideration to the fact that the members of the DSaRM voted 19 to 10 in favor of rescheduling HCPs from schedule III to schedule II under the CSA. The HHS considered the increasing trends, the public comments, the recommendation of the DSaRM, the health benefits and risks, and the information available about the impact of rescheduling, and concluded that HCPs have high potential for abuse.

After a review of the available data, including the scientific and medical evaluation and the scheduling recommendation from the HHS, the Administrator of the DEA published in the Federal Register a notice of proposed rulemaking (NPRM) entitled “Schedules of Controlled Substances: Rescheduling of Hydrocodone Combination Products from Schedule III to Schedule II” which proposed to reschedule HCPs from schedule III to schedule II of the CSA. 79 FR 11037, Feb. 27, 2014. Both the DEA and HHS eight-factor analyses, as well as the DEA's Economic Impact Analysis (EIA), were made available in their entirety in the public docket for this rule (Docket No. DEA-389) and are available at http://www.regulations.gov/#!docketDetail;D=DEA-2014-0005 under “Supporting and Related Material.” The proposed rule provided an opportunity for interested persons to file a request for hearing in accordance with DEA regulations by March 31, 2014. No requests for such a hearing were received by the DEA. The NPRM also provided an opportunity for interested persons to submit written comments on the proposal on or before April 28, 2014. The DEA specifically solicited comments on the economic impacts of rescheduling with a request that commenters describe the specific nature of any impact on small entities and provide empirical data to illustrate the extent of such impact.

The DEA received 573 comments on the proposed rule to reschedule HCPs. Fifty-two percent (52%) (298 comments) supported, or supported with qualification, controlling HCPs in schedule II of the CSA. Forty-one percent (41%) (235 comments) opposed rescheduling HCPs into schedule II. Seven percent (7%) (40 comments) did not take a definitive position regarding rescheduling of HCPs.

Comments were submitted by a variety of individuals, including among others: Federal and State Government officials, manufacturers, distributors, pharmacies, surgeons, emergency physicians, dentists, physician assistants, nurse practitioners, pharmacists and pharmacy students, ultimate users of HCPs, and members of the general public. 6 7 The DEA also received comments from a number of national and regional trade associations with memberships comprised of manufacturers and distributors, pharmacists, pharmacies, physicians, pain specialists, doctors of optometry, physician assistants, nurse practitioners, and long term care facilities (LTCFs). In addition, the DEA received comments from patient advocacy groups. The 5 commenter categories with the most submissions were physicians (13%; 73 comments); mid-level practitioners  8 (5%; 31 comments); pharmacists and pharmacy students (21%; 122 comments); the general public (44%; 250 comments); and ultimate users (6%; 35 comments).

As discussed above, 52% of all commenters (298 of 573 comments) supported, or supported with qualification, controlling HCPs in schedule II of the CSA. The majority of those supporting the rule were members of the general public and physicians. Comments submitted by the general public comprised 62% of the total 298 comments that supported, or supported with qualification, the rescheduling. Seventy-four percent (74%) (184 of 250 comments) of all comments submitted by the general public were in support, or supported with qualification, the rescheduling. Comments by physicians comprised 14% of the total 298 comments that supported or supported with qualification rescheduling. Fifty-six percent (56%) (41 of 73 comments) of all comments submitted by physicians were in support, or supported with qualification, rescheduling.

Forty-one percent (41%) of commenters (235 of 573 comments) opposed the proposal to reschedule HCPs from schedule III to schedule II of the CSA. The majority of those opposed to rescheduling HCPs were pharmacists, pharmacy students, and ultimate users. Pharmacists and pharmacy students comprised 31% of the total 235 comments submitted in opposition to the rule. Sixty percent (60%) (122 comments) of all comments submitted by pharmacists and pharmacy students were in opposition to the rule. Comments from ultimate users comprised 14% of the total 235 comments in opposition to the rule. Ninety-one percent (91%) (32 of 35 comments) of all comments submitted by ultimate users were in opposition to rescheduling.

Further discussions of these comments are included below.

Two hundred ninety-eight commenters (52%) supported, or supported with qualification, controlling HCPs in schedule II of the CSA. Forty-one percent (41%) of commenters opposed controlling HCPs in schedule II, and 7% of commenters did not have a clearly defined position either in support or in opposition to the rescheduling. The majority of those supporting the rule were members of the general public (62%) and physicians (14%), with 74% of comments from the general public supporting, or supporting with qualification, and 56% of comments from physicians supporting, or supporting with qualification, making HCPs schedule II controlled substances. Manufacturers, pharmacists, mid-level practitioners, pharmacy students, and trade associations also expressed support for the rule. Of all comments submitted, in support and opposition, 40% of pharmacists, 9% of ultimate users, and 78% of the general public were in support.

The State Attorney General and a U.S. Senator from the State with last year's highest per capita rate of prescription drug overdose in the nation wrote in strong support of rescheduling HCPs. The State Attorney General wrote that, “This reclassification is not only justified given the high abuse and addiction potential of hydrocodone prescription painkillers * * *, it is necessary to combat the drug abuse epidemic that is destroying so many [ ] communities. I urge you to proceed with your rulemaking without delay. The abuse of hydrocodone is an urgent problem that necessitates urgent action.” The U.S. Senator wrote that, “rescheduling hydrocodone combination drugs would be a tremendous step forward in the fight to curb the prescription drug abuse epidemic that has ravaged * * * our country. It will help prevent these highly addictive drugs from getting into the wrong hands and devastating families and communities * * *. I urge the DEA to move quickly in finalizing its regulations so that we are able to save hundreds of thousands of lives.”

Two U.S. Senators from two other States, wrote a joint comment in support of rescheduling, stating that: “As members of the Judiciary Committee and senators from states hit particularly hard by the opioid epidemic, we are well aware of the alarming rates of diversion and prescription drug abuse,” and “we fully support DEA's efforts to combat this nationwide public health crisis.” All three Senators expressed their desire that patients maintain access to legitimate care.

A major component of the rescheduling of HCPs was to evaluate their abuse potential as required under 21 U.S.C. 812(b)(2). Many commenters indicated support for controlling HCPs in schedule II based on the scientific evidence demonstrating the high abuse potential of HCPs, evidence that HCPs may lead to severe psychological or physical dependence, history and current pattern of abuse, significance of abuse, and risk to the public health and safety. Of the total 47 commenters who referenced the scientific, medical, and epidemiological data that was used to support the statutory requirement under 21 U.S.C. 812(b)(2) for control of HCPs in schedule II of the CSA, 29 agreed with the data used to support control of HCPs in schedule II. Nineteen commenters specifically discussed the eight-factor analysis that was conducted in support of rescheduling HCPs into schedule II. Ten of those 19 commenters were in agreement with the DEA's analysis. Nine of the commenters who cited the DEA's eight-factor analysis indicated that the presented evidence was congruent with the requirements for placing a drug or other substance into schedule II of the CSA. (One commenter, while in agreement with the conclusion of the eight-factor analysis, did not favor rescheduling HCPs.)

Commenters generally agreed that there is psychological and physical dependence associated with HCPs that support placement into schedule II. For example, one commenter stated that rescheduling HCPs from schedule III to schedule II “would be in the best interest of the general public” because he has personally witnessed the increase in abuse of prescription pain medication over the course of his 45-year career as a pharmacist. Additional supportive comments included that the mechanism of action of hydrocodone is identical to oxycodone and morphine, both in schedule II as combination and single-entity products. Some commenters indicated that lower doses of hydrocodone in HCPs do not lower abuse and therefore agreed with the transfer to schedule II. Other commenters mentioned that HCPs are metabolized to hydromorphone, a schedule II opioid, and also have similar mechanisms of action to other schedule II opioids including oxycodone, morphine, and fentanyl, suggesting that abuse potential would be comparable. Some of the commenters indicated that HCPs are more likely to be abused due to their greater availability.

Many of the commenters cited one of their primary reasons for supporting the rule was that it would lead to tighter regulation of HCP prescriptions. For example, one commenter stated: “Hydrocodone combination products should not be available with multiple refills on a single prescription and need to be prescribed more cautiously.” Similarly, another commenter stated: “Rescheduling HPCs [ sic ] would directly address the problem of `leftover' pills in parents [ sic ] medicine cabinets, and would keep kids safe. Furthermore, lowering the quantity a doctor can prescribe will decrease the number of drugs that are sold on the street, which will in turn decrease crime and decrease HCP abuse overtime [ sic ].”

Many of the commenters wrote of their personal experiences with loved ones who suffer or had suffered with abuse and addiction, including many youths and young adults who have tragically died as a result of HCPs or other prescription opioids. The commenters wrote that the path to abuse and addiction was varied—sometimes beginning with a practitioner prescribing HCPs, and other times by recreational use of pills that were available for them to access as a result of practitioner overprescribing. Many of these commenters believe that controlling HCPs as a schedule II controlled substance will impose controls necessary to prevent the abuse and diversion of HCPs.

DEA Response: The DEA appreciates the comments in support of this rulemaking.

The DEA received two comments requesting that the DEA reopen the period for public comment. One of the commenters specifically requested that the comment period be reopened for a minimum of 180 days. The stated justification of one of the commenters was that “[t]he current period is utterly inadequate to large segments of the population who have had no meaningful notice, have extremely limited internet access in small time periods through use of computers at public libraries and are particularly at risk from harm if this rule is adopted.” Both requests for extended comment periods were accompanied by meaningful comment along with the request for extension.

DEA response: The Administrative Procedure Act does not set a minimum length of time for public comment. 21 U.S.C. 553; Phillips Petroleum Co. v. U.S. E.P.A., 803 F.2d 545, 558-59 (10th Cir. 1986) (upholding the EPA's refusal to extend the 45-day comment period on an NPRM, noting that courts have uniformly upheld comment periods of 45 days or less) (internal citations omitted). However, both Executive Orders 12866 and 13563 provide that agencies should afford the public a comment period of at least 60 days. The DEA published in the Federal Register the NPRM proposing to reschedule HCPs into schedule II of the CSA on February 27, 2014. 79 FR 11037. The DEA provided 60 days for interested persons to submit written comments (either online or through the mail) on the proposal. The comment period closed April 28, 2014. Seven hundred twenty-four submissions on the associated docket at http://www.regulations.gov were submitted by the close of the comment period. Several paper submissions duplicating electronic submissions were received via the mail as well. (The 724 number differs from the finalized number of 573 comments received because, as alluded to above, many commenters submitted multiple, duplicate submissions. Multiple submissions of exactly identical comments submitted by the same person or entity are considered by the DEA as only a single, submitted comment.) Based on the following considerations, the DEA declines to reopen the period for additional public comment.

The Federal Register is published daily, Monday through Friday, except official holidays, by the Office of the Federal Register, National Archives and Records Administration, under the Federal Register Act (44 U.S.C. chapter 15). Section 7 of the Federal Register Act (44 U.S.C. 307) provides that publication in the Federal Register constitutes constructive notice to persons subject thereto or affected thereby. The Federal Register is published in paper and on microfiche. It is also available online at no charge at http://www.gpo.gov/fdsys/.

The NPRM was also available on http://www.regulations.gov to enable the public to conveniently access the proposal and the supporting materials. Of additional consideration, on the same day as publication in the Federal Register , the DEA issued a press release stating that the Administration had published in the Federal Register an NPRM to move HCPs from schedule III to schedule II (available at http://www.justice.gov/dea/divisions/hq/2014/hq022714.shtml ). The press release advised individuals where a complete copy of the NPRM could be obtained as well as how they could submit comments in response to the proposal. The DEA accepted written comments submitted either through Regulations.gov or through the mail.

In accordance with the Administrative Procedure Act, the DEA's published NPRM included “the terms or substance of the proposed rule” and “a description of the subject and issues involved.” 5 U.S.C. 553(b)(3). The quality and quantity of the responses received in response to the published NPRM, as well as the variety of respondents, including those advocating on behalf of persons residing in LTCFs and other populations that may potentially feel distributional regulatory impacts, demonstrate to the DEA that there has been an adequate opportunity for meaningful public participation by interested persons in accordance with the Administrative Procedure Act. 5 U.S.C. 553(c); Idaho Farm Bureau Fed'n v. Babbitt, 58 F.3d 1392, 1404 (9th Cir. 1995) (holding that comments discussing the proposed action and supporting data were evidence that the public had obtained and reviewed the information and thus adequate opportunity for public comment had been given).

The DEA notes that the submission by a nurse located in Australia shows that the published NPRM was widely read and reviewed. In addition, those commenters requesting additional time for comment accompanied their request for an extension with substantial comment on the rule. This demonstrates to the DEA that adequate notice and opportunity for meaningful comment was provided by the DEA on this rulemaking.

The DEA received some comments, though limited in number, indicating it would be helpful to provide detailed discussion of what products are affected by this rule. One commenter specifically requested clarification as to whether the action would apply to cough syrups that contain hydrocodone. The second commenter requested the DEA not change the schedule of Zohydro TM ER. The third commenter requested that Zogenix, the manufacturer of Zohydro TM ER, be “allow[ed] to bring their new drug to market.”

DEA response: This rulemaking action affects hydrocodone combination products, which are those substances described in 21 CFR 1308.13(e)(1) (iii) and (iv). All other products containing hydrocodone are already controlled in schedule II of the CSA and are not impacted by this action. Zohydro TM ER does not meet the definition of either 21 CFR 1308.13(e)(1) (iii) or (iv); it is currently a schedule II controlled substance under 21 CFR 1308.12(b)(1)(vi) and is not affected by this action.

Other than Zohydro TM ER, all pharmaceuticals containing hydrocodone currently on the market in the United States are HCPs and are subject to this rulemaking. Hydrocodone is the most frequently prescribed opioid in the United States with nearly 137 million prescriptions for HCPs dispensed in 2013. IMS Health, National Sales Perspective TM (NSP). There are several hundred brand name and generic hydrocodone products marketed with the most frequently prescribed combination being hydrocodone and acetaminophen (e.g., Vicodin®, Lortab®). Currently marketed HCPs approved as cough suppressants include Hycodan®, Mycodone®, Tussionex®, Pennkinetic®, Tussigon®, and several generics.

Two hundred thirty-five commenters (41% of all commenters) opposed the proposal to reschedule HCPs from schedule III to schedule II of the CSA. Many comments submitted in opposition came from pharmacists, including pharmacy school students/interns (31%); the general public (23%); and ultimate users (14%). Of all comments submitted, in support and in opposition, 60% of pharmacists were opposed; 22% of the general public were opposed; and 91% of ultimate users were opposed. These commenters opposed the rescheduling HCPs for a variety of reasons. The comments in opposition can be grouped in the following general categories: (1) Concerns over the DEA's authority to reschedule HCPs; (2) concerns over prescribing practices; (3) concerns regarding patient access to medicine; (4) concerns regarding impacts at LTCFs; (5) concerns that rescheduling HCPs will not prevent abuse or diversion; (6) concerns that rescheduling HCPs will increase provider and pharmacist workload; (7) concerns regarding economic impacts to manufacturers, distributors, pharmacies, physicians, and ultimate users; (8) concerns that alternatives to rescheduling had not been explored and/or implemented first; and (9) concerns about the amount of time to comply with the rule. Each of these general categories is addressed below.

One commenter questioned the DEA's general authority to schedule drugs.

DEA response: Recognizing the need for a high level of scrutiny over controlled substances due to their potential for abuse and danger to the public health and safety, Congress established a closed system of distribution for all controlled substances with the passage of the Comprehensive Drug Abuse Prevention and Control Act of 1970. See H.R. Rep. No. 91-1444, 1970 U.S.C.C.A.N. at 4566. The DEA implements and enforces titles II and III of the Comprehensive Drug Abuse Prevention and Control Act of 1970, as amended. 28 CFR 0.100. Pursuant to 21 U.S.C. 811(a)(1), the Attorney General may, by rule, “add to such a schedule or transfer between such schedules any drug or other substance if he (A) finds that such drug or other substance has a potential for abuse, and (B) makes with respect to such drug or other substance the findings prescribed by [21 U.S.C. 812(b)] for the schedule in which such drug is to be placed * * *.” Pursuant to 28 CFR 0.100(b), the Attorney General has delegated this scheduling authority to the Administrator of the DEA. The DEA's authority to implement and enforce the CSA, including adding to the schedules, has been repeatedly recognized and upheld in the Courts. E.g., U.S. v. Alexander, C.A.9 (Cal.) 1982, 673 F.2d 287 (1982), cert. denied, 459 U.S. 876 (Congress' delegation to Attorney General of authority to reclassify controlled substances is constitutional); U.S. v. Roya, C.A.7 (Ill.) 1978, 574 F.2d 386, cert. denied, 439 U.S. 857 (finding no merit to the claim that the addition and reclassification of amobarbital and phenmetrazine as schedule II controlled substances by the Attorney General was an unconstitutional delegation of authority under separation of powers doctrine); U.S. v. Kinder, C.A.5 (Tex.) 1991, 946 F.2d 362, cert. denied, 503 U.S. 987, cert. denied, 504 U.S. 946, rehearing denied, 505 U.S. 1238 (Attorney General followed proper procedures in reclassifying methamphetamine as schedule II controlled substance, pursuant to the CSA; Attorney General properly delegated his authority to the Director of the Bureau of Narcotics and Dangerous Drugs (BNDD) who then reclassified methamphetamine).

One commenter questioned whether the rescheduling action would have illegal discriminatory effects, and “violate laws against disability and age discrimination.” This same commenter also asserted without premise that the rescheduling action could potentially conflict with parts of the Affordable Care Act and “deprivation of rights under color of authority.”

DEA response: Executive Order 12866 of September 30, 1993, “Regulatory Planning and Review,” and Executive Order 13563 of January 18, 2011, “Improving Regulation and Regulatory Review,” direct Federal agencies to assess costs and benefits of available regulatory alternatives and, if the regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Paragraph (b)(1) of section 1 of Executive Order 12866 specifically directs Federal agencies to “avoid regulations that are inconsistent, incompatible, or duplicative with its other regulations or those of other Federal agencies.” The DEA has reviewed the impacts of this scheduling action against the principles edified by Executive Orders 12866 and 13563 and finds no basis that it would have illegal discriminatory effects, or “violate laws against disability and age discrimination.”

Twenty-six commenters opposed rescheduling HCPs as schedule II controlled substances based on concerns regarding the eight-factor analyses. Twenty-four commenters believed that the eight-factor analyses did not support rescheduling into schedule II and that HCPs should remain in schedule III. Two commenters believed that HCPs should be rescheduled into a lower schedule than schedule III. (One commenter stated that HCPs should be down-scheduled into schedule V and made over-the-counter for those 21 years and older.)

Eighteen commenters expressed disagreement about the data that was used to support the statutory requirement under 21 U.S.C. 811(c) and 812(b)(2) for placement into schedule II of the CSA. Some of these commenters stated that the available data are limited and do not support rescheduling HCPs into schedule II. Some commenters indicated that there was no scientific consensus in support of moving HCPs from schedule III to schedule II.

Many of the comments in opposition to the proposed scheduling action were statements by ultimate users of HCPs that HCPs are not abused by patients with legitimate prescriptions. Some of the commenters stated that the small amounts of hydrocodone in HCPs have never contributed to addiction and acetaminophen in HCPs would actually decrease abuse rates. Commenters suggested that abuse potential of HCPs is lowered or negated by the fact that it is often used with other substances such as alcohol. Some commenters supported their assertions with statements that deaths are extremely rare with HCPs.

DEA response: The DEA conducted a comprehensive evaluation of epidemiological, diversion, pharmacological, and pharmacokinetic data to conclude that HCPs have a high abuse potential. All of the data was reviewed collectively, and the data supports the finding that HCPs have a high abuse potential similar to other schedule II controlled substances, such as oxycodone products. The DEA's decision to reschedule HCPs from schedule III to schedule II is also supported by the HHS review and the FDA's DSaRM recommendation.

The DEA disagrees that there is a lack of scientific consensus among scientific experts. Some commenters, in support of their dissenting opinions, cited some selective information presented in the briefing document for the FDA's DSaRM meeting in January 2013. It should be noted that the DSaRM members received the selected information cited by the commenters, and, upon deliberating extensively on all the available data voted 19 to 10 in favor of rescheduling HCPs from schedule III to schedule II. The DEA's determination of the appropriate schedule under the CSA in which to place HCPs is based on a comprehensive review of all available data, rather than selected portions of available data, and the DEA did in fact review and consider the selected information presented by the commenters. The DEA also considered the HHS scientific and medical evaluation and scheduling recommendations.

The DEA finds that the scientific, medical, and epidemiological data are robust and support rescheduling HCPs into schedule II of the CSA. Various drug abuse indicators for HCPs indicate that HCPs are widely diverted and abused at rates largely similar to that of oxycodone products (schedule II). The data indicate that HCPs have an abuse potential similar to schedule II opioid analgesics such as oxycodone and their abuse is associated with severe psychological or physical dependence. Abuse of HCPs is also associated with large numbers of individuals being admitted to addiction treatment centers. Individuals are taking these drugs in sufficient quantities to create a hazard to their health, and abuse of HCPs is associated with large numbers of deaths. Further, data from several different drug abuse monitoring databases support the conclusion that HCPs have a high potential for abuse similar to other schedule II opioid analgesics.

Contrary to the views expressed by some commenters, the review by the DEA and HHS of all the relevant data found that HCPs are abused at high rates and have high dependence potential as indicated by the data reported by the National Survey on Drug Use and Health (NSDUH), Monitoring the Future (MTF), National Poison Data System (NPDS), Drug Abuse Warning Network (DAWN), and Treatment Episode Data Set (TEDS). There have been large numbers of deaths and emergency department visits associated with abuse of HCPs. In addition, the data indicate that HCPs and oxycodone products have similar abuse potential. Based on these considerations, the DEA believes that the high abuse and dependence potential and harm associated with HCPs support rescheduling into schedule II of the CSA.

Contrary to statements made by some ultimate users, even low doses of HCPs have the potential for adverse impacts on the public health and safety. According to the CDC, while an estimated 80% of patients who are prescribed opioids are prescribed low doses (<100 mg morphine equivalent dose per day) by a single practitioner, these patients account for an estimated 20% of all prescription drug overdoses. 9 (An estimated 10% of patients who are prescribed opioids are prescribed high doses (≥100 mg morphine equivalent dose per day) by single prescribers. These patients account for an estimated 40% of all prescription opioid overdoses. An estimated 10% of patients are patients who seek care from multiple doctors and are prescribed high daily doses of opioids. They account for another 40% of all opioid overdoses.) Id.

After careful consideration of relevant data, the DEA finds that HCPs have abuse potential supporting placement into schedule II.

One commenter wanted the DEA to draw distinctions among abuse, addiction, and dependence. A second commenter objected to the DEA's consideration of “individuals taking the drug or other substance on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs” as a criterion of abuse.

DEA response: As noted by researchers, “[t]here is no agreement between researchers for terms such as drug abuse, psychological dependence, drug dependence and drug addiction,” and that, “[o]ften these terms are used interchangeably.”  10 The DEA is aware that the most recent version of the Diagnostic and Statistical Manual, the DSM-V, released in 2013, removed the distinction between abuse and dependence for diagnostic purposes, and replaced them with a combined single disorder called “substance use disorder.” However, the DEA derives authority from the CSA, and when acting under its authority must speak under the terms and conditions imposed by it. The CSA does not define “abuse” in terms of the DSM; in fact it does not define the term at all. The CSA uses terms such as “potential for abuse,” “pattern of abuse,” and “significance of abuse.” E.g., 21 U.S.C. 811 and 812.

One looks first to the face of a law to understand its meaning, and “[i]f the statute's meaning is plain and unambiguous, there is no need for further inquiry.” United States v. Fisher, 289 F.3d 1329, 1337-38 (11th Cir.2002) (internal quotation marks and citation omitted). However, if the language is ambiguous, the relevant legislative history may be used to aid in understanding meaning. United States v. Dodge, 597 F.3d 1347, 1352 (11th Cir. 2010). The legislative history of the CSA suggests four factors that may be considered in determining whether a particular drug or substance has a “potential for abuse,” including whether individuals are taking the drug or drugs containing such a substance on their own initiative rather than on the basis of medical advice from a practitioner licensed by law to administer such drugs in the course of his professional practice. 11 Accordingly, the DEA uses this as one factor in determining a substance's potential for abuse.

“Addict” is defined by the CSA as a person who “habitually uses any narcotic so as to endanger the public morals, health, safety, or welfare, or who is so far addicted to the use of narcotic drugs as to have lost the power of self-control with reference to his addiction.” 21 U.S.C. 802(1). The DEA uses this definition for the terms “addict” and “addiction.”

One commenter asserted that HCPs were not compared to appropriate reference drugs and have lower abuse ratios and abuse potential than schedule II oxycodone combination products. Another commenter expressed the opinion that HCPs are substantially cheaper than oxycodone products which would affect drug selection as opposed to the notion that HCPs have more addiction potential. The commenters did not provide any appropriate alternative comparison drug for HCPs.

DEA response: HCPs were compared to oxycodone products, currently schedule II controlled substances, to evaluate abuse potential. The DEA, in agreement with the HHS review, considers the comparison of HCPs to oxycodone products appropriate due to similarities between their pharmacological properties, therapeutic uses and patterns, as well as market history. In their eight-factor analysis, the FDA noted that it is not always possible to identify an “appropriate opioid comparator in Schedule III.” The FDA went on to state that: “While FDA considered codeine as a potential comparator, it was deemed inappropriate for several reasons * * *. Given the absence of an appropriate Schedule III comparator, FDA focused its analyses on comparing the abuse liability of hydrocodone combination products (Schedule III) with oxycodone products (Schedule II).”

With regard to the comment about the lower costs of HCPs contributing to its high abuse potential, it is important to note that abuse potential of a given drug is also influenced by various other factors (e.g., pharmacological properties, ease of availability, etc.). Additionally, actual abuse data comparing HCPs and oxycodone combination drugs indicate that the abuse potential between the two drugs is similar. Contrary to the views expressed by some commenters, the review by the DEA of all the relevant data found that HCPs are abused at high rates and have high dependence potential as indicated by the data reported by the NSDUH, MTF, NPDS, DAWN, and TEDS. There have been large numbers of deaths and emergency department visits associated with abuse of HCPs. Based on these considerations, the DEA believes that the high abuse and dependence potential and harm associated with HCPs support rescheduling into schedule II of the CSA.

Nine commenters disagreed with the conclusions in the DEA's eight-factor analysis. These commenters asserted that the DEA's eight-factor analysis was not a balanced presentation and did not include the therapeutic benefits or the negative impact on patients with a legitimate medical use for HCPs. In addition, some of the commenters stated that the DEA's eight-factor analysis used flawed analytical methods and failed to show that HCPs were more dangerous or more abused than oxycodone. Several of these commenters requested that DEA include both sides of the clinical argument and peer-reviewed clinical research.

DEA response: The DEA reviewed the required eight factors in accordance with the provisions stated in 21 U.S.C. 811(c), specifically exploring the abuse potential and potential harms of HCPs. The DEA's analysis also acknowledges that there is a currently accepted medical use, and accordingly therapeutic benefit, of HCPs. Consistent with the CSA, an evaluation of abuse and dependence potential, risk to the public health and safety, and other factors are included in the analysis. 21 U.S.C. 811(c). The CSA does not require that HCPs be more dangerous or abused than oxycodone in order to be placed in schedule II. Rather, relative abuse potential must be established. The DEA's analysis shows that HCPs have a high potential for abuse, and the abuse potential of HCPs is comparable to the schedule II controlled substance oxycodone. Thus, HCPs are appropriately placed in schedule II, along with oxycodone. Further, the analytical methods that were presented in the DEA's eight-factor analysis were consistent with the HHS's eight-factor analysis that was finalized in December 2013. The DEA used the best available methods based on current science to complete the eight-factor analysis.

Nineteen commenters opposed rescheduling HCPs as schedule II controlled substances based on concerns related to the restricted authority of mid-level practitioners to prescribe medications that are schedule II controlled substances.

DEA response: The DEA recognizes that some States do not allow all providers to prescribe schedule II controlled substances. However, it is outside of the DEA's scope of authority under the CSA to determine what categories of practitioners may prescribe controlled substances. Under the CSA, it is up to each State to decide who has the authority to prescribe controlled substances within that State. This is reflected in 21 U.S.C. 823(f), which requires DEA to register a practitioner who is authorized under the laws of the State in which he practices unless the practitioner's registration would be inconsistent with the public interest. 21 U.S.C. 823, 824. This is also echoed in 21 CFR 1306.03, which states that a practitioner can issue a prescription for controlled substances so long as the practitioner is authorized to prescribe controlled substances by the jurisdiction where he is licensed to practice his profession and is registered or exempted from registration pursuant to 21 CFR 1301.22(c) and 21 CFR 1301.23. Each State has this authority, so long as it does not conflict with federal law.

Multiple commenters opposed rescheduling HCPs as schedule II controlled substances based on concerns related to the transmittal methods available for schedule II as compared to schedule III controlled substances, specifically the circumstances required in order to provide oral prescriptions and to transmit prescriptions via facsimile. Both ultimate users and providers expressed concern that HCPs as schedule II controlled substances will not be available on nights and weekends. They were especially concerned about dental emergencies that might occur over the weekend. Four commenters stated that patients needing night or weekend prescriptions for HCPs will overburden Emergency Departments (EDs).

DEA response: The requirements for issuing an emergency oral prescription for a schedule II controlled substance do not hinder legitimate access to HCPs. The procedural requirements relating to transmission of a legitimate prescription do not hinder legitimate access either.

Contrary to concerns of commenters, practitioners will still be allowed to call-in prescriptions for HCPs in the event of an emergency. In the event of an emergency, as defined by 21 CFR 290.10, a pharmacist may dispense a schedule II controlled substance upon receiving oral authorization of a prescribing individual practitioner in accordance with 21 CFR 1306.11(d).

Five commenters opposed rescheduling HCPs as schedule II controlled substances based on concerns regarding “triplicate prescriptions.” One commenter stated that emergency physicians do not have triplicate prescription forms, and as a result, they will be required to prescribe drugs that are less effective for pain management. Two commenters stated that emergency physicians do not want to carry a triplicate prescription pad.

DEA response: Neither the CSA nor DEA regulations require prescriptions to be prepared in triplicate. The DEA recognizes that some States, such as Texas and California, require the use of triplicate prescription forms for some or all controlled substances. As stated in the November 19, 2007, final rule, “Issuance of Multiple Prescriptions for Schedule II Controlled Substances,” the “DEA supports the efforts of States to take the specific action they deem necessary to prevent the diversion of controlled substances within their jurisdictions.” 72 FR 64921, 64923.

Pharmacists, prescribers, and ultimate users expressed concern about the quantity and frequency of fills and refills for HCPs as schedule II controlled substances that would be allowed if HCPs were placed into schedule II. Several commenters, mostly ultimate users, asserted that up-scheduling would result in patients being limited to a 30-day supply of medication and would correspondingly need to begin seeing their doctors monthly. Other commenters, primarily pharmacists and physicians, expressed their belief that rescheduling HCPs will result in larger quantities of pills being authorized on each prescription to prevent patients from running out of medication and being in pain. Most of these commenters had corresponding concerns that these larger prescriptions would lead to more unused medication in the home that would be available for diversion. Examples include the following: One commenter mentioned his concern that since larger prescriptions would be authorized, he would be unable to monitor whether the patient is taking the medication or taking too much of it. An emergency physician opined that removing the ability to get refills on HCPs may result in prescriptions for more potent medications being issued. One ultimate user was concerned that the elimination of refills on HCPs would result in patients getting insufficient quantities to treat the acute illness for which it was prescribed.

DEA response: While courts have recognized that prescribing an “inordinately large quantity of controlled substances” can be evidence of a violation of the CSA, 12 generally neither the CSA nor DEA regulations impose a specific quantitative minimum or maximum limit on the amount of medication that may be prescribed on a single prescription, or the duration of treatment intended with the prescribed controlled substance. The quantity prescribed and dispensed is limited in an emergency situation as defined by 21 CFR 290.10 when dispensing a schedule II controlled substance upon oral authorization in accordance with 21 CFR 1306.11(d). The CSA and implementing regulations require all controlled substance prescriptions to be “valid.” A prescription is not “valid” unless it is issued for a legitimate medical purpose and within the usual course of professional practice. 21 CFR 1306.04(a). A pharmacist who fills a prescription has a corresponding responsibility, and the person who fills an illegitimate prescription is subject to penalty. Id.

While the CSA and DEA regulations generally contain no specific limit on the quantity that may be prescribed on a single prescription, or the duration of treatment intended for a single prescription, some States do impose specific limits on prescribing schedule II controlled substances. Likewise, some limitations on the quantity or frequency of schedule II controlled substances may be limited by individual prescription benefit providers. Any limitations imposed by State law apply, in addition to the corresponding requirements under Federal law, so long as the State requirements do not conflict with or contravene the Federal requirements. 21 U.S.C. 903; 21 CFR 1306.12(b)(1)(v); “Clarification of Existing Requirements Under the Controlled Substances Act for Prescribing Schedule II Controlled Substances,” 70 FR 50408, Aug. 26, 2005.

Although the CSA prohibits refills of prescriptions for schedule II controlled substances, a practitioner may issue multiple schedule II prescriptions in order to provide up to a 90-day supply of medication in accordance with 21 CFR 1306.12. Furthermore, DEA regulations do not require patients to be seen monthly by their provider. Rather, practitioners must determine on their own, based on sound medical judgment, and in accordance with established medical standards how often to see their patients when prescribing controlled substances.

Note, however, that DEA regulations should not be “construed as mandating or encouraging individual practitioners to issue multiple prescriptions or to see their patients only once every 90 days when prescribing Schedule II controlled substances. Rather, individual practitioners must determine on their own, based on sound medical judgment, and in accordance with established medical standards, whether it is appropriate to issue multiple prescriptions and how often to see their patients when doing so.” 21 CFR 1306.12(b)(2). The DEA does not regulate the general practice of medicine and the agency lacks the authority to issue guidelines (or make policy statements) that constitute advice on the general practice of medicine.

The DEA received numerous comments, predominantly from ultimate users, who voiced concerns about the possible effects rescheduling would have on patients' access to appropriate treatment for pain. Commenters were concerned about the possible need for increased provider visits, and associated increased time and cost to receive medical care. Commenters were concerned about access to health care providers, such as possibly needing to change health care providers and in some cases having to drive longer distances to get to practitioners' offices because of limitations on types of practitioners who can prescribe schedule II controlled substances. Commenters were also concerned that rescheduling could result in doctors changing prescriptions to alternative medications which might be less effective for treating some kinds of pain and/or cause adverse health effects.

Several commenters were concerned that because of the rescheduling, practitioners will be less likely to prescribe HCPs. One commenter suggested that since a practitioner can no longer call in or fax a prescription to the pharmacy, the practitioner will be reluctant to prescribe HCPs. Other commenters stated the scheduling action will impose additional burdens on practitioners and therefore they will stop prescribing for HCPs and prescribe less effective drugs. One commenter stated that many EDs do not typically prescribe schedule II narcotics. Likewise, two commenters suggested that cumbersome and slow ordering processes for schedule II substances will cause local shortages of HCPs, and thus practitioners will turn to prescribing other drugs.

DEA Response: The processes and procedures associated with dispensing a controlled substance are not relevant factors to the determination of whether a substance should be controlled or under what schedule a substance should be placed if it is controlled. See 21 U.S.C. 811 and 812. Nonetheless, controlling HCPs as a schedule II controlled substance should not hinder legitimate access to the medicine. As recognized and noted by commenters, scheduling a medication does not make it impossible to prescribe, dispense, or administer the medication. However, it does alert prescribing-practitioners, pharmacists medical support professionals and perhaps even some patients and non-professional caregivers that the medication has potential dangers for addiction and misuse, and careful monitoring and evaluation of use of such drugs is necessary for appropriate patient care. “The placing of a drug into [a particular schedule of the CSA] will alert a physician that the drug does cause physical and psychological dependence. This is valuable information for a physician to possess before prescribing any drug.” 50 FR 8104, 8107, Feb. 28, 1985 (“Schedules of Controlled Substances; Rescheduling of Buprenorphine From Schedule II to Schedule V of the Controlled Substances Act”).

The DEA does not intend for legitimate patients to go without adequate care. A prescription for a controlled substance to be effective must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice. 21 CFR 1306.04(a). When a practitioner prescribes a medication that is a controlled substance for a patient, it must be because he/she has made a professional medical determination that it would be medically appropriate for the patient's medical condition to treat with that specific controlled substance.

The DEA recognizes that rescheduling a legitimately marketed pharmaceutical controlled substance may have some effect on the decision of a practitioner to prescribe that particular controlled substance. There may be some practitioners who are reluctant to prescribe a schedule II controlled substance although authorized by State law to do so. However, the DEA notes that other schedule II controlled substances are widely prescribed. Given that classification has not deterred practitioners from prescribing those drugs, the DEA believes that when a practitioner makes a medical determination that a particular controlled substance is appropriate to treat a patient's medical condition, the practitioner will prescribe the appropriate controlled substance, regardless of the substance's schedule. The DEA notes that a doctor from New York, one of the States that has already scheduled HCPs as schedule II controlled substances under State law, asserted in his comment that up-scheduling “has reduced unconscious (or conscience-less) prescribing without impacting patients' access to medications.”

Some commenters expressed concern that transferring HCPs to schedule II would deter prescribers from properly treating pain for fear of facing criminal action. According to one commenter, many providers limit the number of pills for schedule II medications “because they feel they are being watched by monitoring programs and are afraid the DEA `will investigate' them for too many CII scripts.”

DEA response: One of the most important principles underlying the CSA is that every prescription for a controlled substance must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice. 21 CFR 1306.04(a); U.S. v. Moore, 423 U.S. 122 (1975) (holding registered physicians may be prosecuted for violation of the CSA when their activities fall outside the usual course of professional practice). The DEA policy statement entitled “Dispensing Controlled Substances for the Treatment of Pain,” 71 FR 52715, Sept. 6, 2006, makes clear that this longstanding requirement should in no way interfere with the legitimate practice of medicine or cause any practitioner to be reluctant to provide legitimate pain treatment. Practitioners (as well as ultimate users) become subject to administrative, civil, and/or criminal action when their activity involving controlled substances is not authorized by, or is in violation of, the CSA, regardless of whether the activity involves a schedule II controlled substance or a schedule III controlled substance.

Two commenters suggested this rule will result in limited drug availability because wholesalers are limiting distributions to community pharmacies. These commenters assert that if a pharmacy goes over a pre-determined amount, they cannot obtain the needed pharmaceuticals until the following month. The commenter asserted that this practice may have particularly adverse impacts in rural areas where a pharmacy may only be serviced by one distributor. Another commenter suggested there will be local shortages of HCPs because of the cumbersome and slow schedule II ordering process. Two commenters were concerned that limited availability may result from delays associated with manufacturer production due to annual production requirements for schedule II controlled substances.

DEA response: DEA registered distributors are required to provide effective controls against diversion of controlled substances. However, the DEA does not limit the quantity of controlled substances that may be legitimately distributed to pharmacies. Any arbitrary limits placed on community pharmacies by distributors are the result of a business decision of that distributor.

The DEA does impose requirements for distributors to operate a system to disclose suspicious orders of controlled substances. 21 CFR 1301.74(b). Suspicious orders include orders of unusual size, orders deviating substantially from a normal pattern, and orders of unusual frequency. Id. Part of the due diligence associated with that requirement, as well as the general requirement under 21 CFR 1301.71(a) for registrants to “provide effective controls and procedures to guard against theft and diversion of controlled substances,” is to “know your customer.” While order volume may be one indicator of a suspicious order, the totality of circumstances must be used in making a determination. Generally, no single indicator is independently a suggestion that a given order is suspicious. Order volume should be examined not only on an industry-wide comparison level, but also on a local level. For example, a pharmacy located near an oncology clinic may be more likely to regularly order higher volumes of certain controlled pharmaceuticals than one that is not.

The DEA does not find evidence to support the claim that the ordering process for schedule II controlled substances will result in limited availability of HCPs. A DEA Form 222, or its electronic equivalent—the Controlled Substance Ordering System (CSOS), is required for all distributions of schedule I or II controlled substances, with specific exceptions, 21 U.S.C. 828(a); 21 CFR 1305.03, which enables the DEA to monitor the flow of these controlled substances from their point of manufacture through commercial distribution. It takes approximately an hour to complete each order using the paper DEA Form 222. It takes approximately three minutes to complete an order using CSOS. (The DEA Form 222 permits ten line items per form; electronic orders are not subject to the same requirement and may contain an unlimited number of transactions (line items)). While CSOS transactions are faster, the paper DEA Form 222 orders are also able to be processed quickly through the system. In 2013, 109,632 registrants ordered schedule I or II controlled substances. About 4.8 million orders were processed on Form 222s and 924,257 were processed electronically via CSOS (approximately 16% of all orders). The paper orders represented roughly 27.7 million transactions (or about 6 per order); the electronic orders represented roughly 21.2 million transactions or slightly more than 23 per order.

There should be no impact on availability due to schedule II annual production requirements (i.e., manufacturing quota). Registrants that manufacture hydrocodone are already required to obtain an annual quota in order to manufacture hydrocodone because it is a schedule II controlled substance unless and until it is formulated into dosage form HCPs.

Manufacturing quotas are issued to bulk manufacturers who manufacture either from synthetic routes (e.g., hydrocodone from codeine), or extraction from narcotic raw material. Bulk manufacturing quota will not be impacted by the movement of HCPs from schedule III into schedule II.

Procurement quotas are typically issued to dosage form manufacturers and repackagers or relablers for manufacturing activities. As related to HCPs, a procurement quota is required to: (1) Receive bulk Active Pharmaceutical Ingredients to be manufactured into dosage units; and (2) for a company to receive bulk finished dosage units for relabeling or repackaging.

Nine commenters expressed concern about the ability to access health care providers who can prescribe schedule II controlled substances. Specifically, commenters stated that mid-level health care providers such as physician assistants and nurse practitioners, who provide primary health care, cannot prescribe schedule II controlled substances in many States. As a result, these patients will not have access to the medicine they need to treat their pain. In addition, one commenter stated this will have a negative impact on patients who visit rural practices where mid-level practitioners often prescribe pain medication. Moreover, one commenter stated the scheduling action would make it mandatory for a patient to see a physician for pain. Another commenter stated that because of this scheduling they would now have to find new doctors, which would increase travel time and the amount of money spent on gas.

DEA response: State authorization to handle controlled substances is both a necessary precondition for Federal authorization to handle controlled substances and a qualifying determinate as to the extent of the practitioner's scope of authority in regard to such substances. U.S. v. Moore, 423 U.S. 122, 141 (1975) (“The federal registration, which follows automatically, extends no further [than the scope of authority granted by the State to practice medicine and to dispense drugs in connection with their professional practice].”). A DEA registered practitioner may only engage in those activities involving controlled substances that are authorized by the laws of the State on which the practitioner's Federal registration is based. If an individual practitioner, or a class of practitioners, has not been granted authorization to prescribe certain controlled substances that is the rightful determination of the State under its authority to regulate the practice of medicine.

Concerns were raised that changes in the scheduling for HCPs could drive the use of alternative treatments. One class of commenters who were particularly concerned about this was emergency physicians who work in States that require triplicate prescriptions and/or facilities whose policy is not to handle schedule II controlled substances in their emergency departments. Some emergency providers in triplicate-prescription States said that they did not carry triplicate prescriptions due to concerns about them being stolen. Some emergency physicians who work in States that require triplicate prescription forms (but who are able to write schedule II controlled substance prescriptions while working in their emergency departments) stated that if “forced to get a triplicate,” then he will start writing for more schedule II controlled substances, such as Percocet, because it is a “better pain med[icine] than HCPs.” Other commenters were concerned that some prescribers might switch to prescribing “stronger drugs with significant abuse potential,” or alternatively switch to medications such as non-steroidal anti-inflammatory drugs (NSAIDs) which are less effective for treating some kinds of pain and may cause other adverse effects, leaving people in untreated pain. One commenter was concerned that tramadol would be prescribed in place of HCPs, which worried them because of issues with tramadol specific to renal patients.

DEA response: The DEA does not regulate the general practice of medicine and the agency lacks authority to issue guidelines (or make policy statements) that constitute advice on the general practice of medicine. A prescription for a controlled substance must be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice. 21 CFR 1306.04(a); U.S. v. Moore, 423 U.S. 122 (1975). A practitioner must use sound medical judgment to determine which controlled substance they will prescribe to appropriately treat his or her patient's medical condition, rather than make a determination based upon whether a triplicate prescription form is required by the State or by their employer's policy to not prescribe schedule II controlled substances.

Several commenters stated that making HCPs schedule II controlled substances would limit access to HCPs, causing people to buy drugs on the street, including HCPs and heroin.

DEA response: As discussed above, schedule II controlled substances are readily available for legitimate medical use.

A national advocacy group for cancer patients requested that the DEA “require monitoring plans and an annual report to Congress, in the event that HCPs are upscheduled, that assess the impact on access by patients with legitimate needs, as emphasized and urged by HHS” and to “adjust policy accordingly if it finds that access is impeded for patients who legitimately need HCPs for pain management.”

DEA response: Once upscheduled the DEA will continue to monitor the diversion of HCPs. However, it is outside the scope of the DEA's authority under the CSA to require monitoring plans or reports not authorized under the Act.

The DEA received several comments regarding the impact on patients who suffer from chronic pain, cancer, rare diseases, chronic and end-stage renal disease, as well as dental and surgical post-op patients, and rural residents. Many commenters also voiced concerns about possible effects of rescheduling on the elderly and disabled. Several commenters who are affected by chronic pain voiced a concern that the scheduling action will be a burden and make it harder for them to obtain their medicine. As a result, these commenters stated they will suffer solely because of the people that abuse HCPs. Another commenter stated that because of this burden, patients might start self-medicating. One commenter said that practitioners will start prescribing drugs that are not as effective as HCPs, which could have a negative impact on patients mentally. One commenter stated that many cancer patients are in chronic pain, and because of this action, these patients will suffer as they cannot get their required medication. Others suggested post-op patients will have to suffer in pain after their surgeries because they will not be able to get the required medications from doctors on weekends. Several commenters stated that patients in rural areas who are currently seen by mid-level practitioners will need to drive an hour or more to be treated by a physician because their mid-level provider is not authorized to issue prescriptions for schedule II controlled substances. In addition, another commenter stated that many rural physicians are already overbooked, which will cause rural patients to suffer in pain until they can get an appointment. Another commenter stated that rural patients have a tough time physically picking up handwritten prescriptions. Several commenters noted that the nearest doctor is more than an hour away and that having to drive that distance once a month to obtain HCPs is inconvenient.

DEA response: Scheduling determinations are based on scientific determinations regarding the substance's potential for abuse, its potential for psychological and physical dependence, and whether the substance has a currently accepted medical use in treatment in the United States. 21 U.S.C. 812(b). The DEA may not reschedule, or refuse to reschedule, a drug or other substance based merely on the population it is intended or approved to treat.

Many commenters, including two U.S. Senators, requested that the DEA closely examine possible impacts of rescheduling HCPs in the long-term care facility (LTCF) setting. Many commenters had concerns that placing HCPs into schedule II will impact a substantial number of LTCF residents and may result in untreated pain due to the lack of ready-access to other appropriate medications. For example, according to one commenter, “HCPs are the current, albeit less preferred alternative because of its combination with acetaminophen, which has to be restricted in older adults due to toxicity risk. However, long-term care providers have been forced to use HCPs as a substitute for Schedule II drugs” because they are more readily available for administration due to less restrictive handling requirements for controlled substances in lower schedules than schedule II. According to this same commenter, “the remaining pain care options still in schedule II are not as clinically effective in treating pain for the elderly as HCPs.”

Two commenters stated that LTCF residents, especially post-surgical patients, need medications immediately and that obtaining prescriptions is not quick because most LTCFs do not operate with in-house doctors on site.

DEA response: As previously discussed, scheduling determinations are based on scientific determinations regarding the substance's potential for abuse, its potential for psychological and physical dependence, and whether the substance has a currently accepted medical use in treatment in the United States. 21 U.S.C. 812(b). Nonetheless, the DEA has promulgated many regulations to accommodate the unique circumstances of LTCF residents. For example, in accordance with 21 CFR 1306.11(f), a prescription for a schedule II controlled substance for a resident of an LTCF may be transmitted by the practitioner or practitioner's agent to the dispensing pharmacy by facsimile. In accordance with 21 CFR 1306.13(b), a prescription for a schedule II controlled substance written for a patient in an LTCF may be filled by the pharmacy in partial quantities to include individual dosage units.

Several commenters requested that the DEA waive/exempt LTCFs from the more restrictive schedule II handling requirements with respect to HCPs. Some commenters asserted that such a waiver/exemption would be justified based on their assertion that there is a lower risk of misuse, abuse, and diversion of HCPs in an LTCF setting as compared to other settings. One nationwide professional association stated that:

This same commenter asserted that the “nursing home population is unlikely to be drug abusers” because “[t]heir health conditions often make them bed-bound or otherwise dependent on nurses for the administration of their medications.”

DEA response. Nursing home residents take, on average, eight to ten medications per day. 13 At least 17% of those medications are unused. 14 Controlled substance medications are often stored and administered in LTCF settings as monthly punch cards (a.k.a. “bingo cards”), and liquid controlled substances are often dispensed in large-volume packaging. 15   16 In addition, a 2011 report by the HHS Office of Inspector General found that almost all sampled nursing facilities employed one or more individuals with at least one criminal conviction, and nearly half of sampled nursing facilities employed five or more individuals with at least one conviction. Further, 44% of employees with convictions were convicted of crimes against property (e.g., burglary, shoplifting, writing bad checks). 17 LTCFs are unique potential sources of diversion because the care provided to residents results in the accumulation of large amounts of controlled substances in a single, un-registered, relatively unsecure environment, where the disabled and elderly cannot defend themselves or adequately report what has happened.

While focusing on the limited mobility of many residents in LTCFs as justification for why LTCFs should be able to adhere to less restrictive handling requirements for HCPs, commenters gave little consideration to potential diversion by employees, contractors, outside professionals, or visitors who may have access to their facilities. Direct access to controlled substances around a vulnerable population provides many opportunities for diversion of controlled substances, to the detriment of the LTCF residents as well as the general public. For example, the Oregon Aging and People with Disabilities Division, alone, investigated 29 instances of drug theft at 17 different LTCFs in three counties, between 2009 and 2013. 18 The average was 15.8 cases of medication theft per 1,000 beds/units, with the most often stolen products being narcotic painkillers—such as HCPs. 19 These medication thefts occurred in both large nursing homes and small adult foster homes. 20

Although not addressing LTCFs directly, the Mayo Clinic has reported on the diversion of drugs from within health care facilities and the threat to public health and safety such actions cause. 21 Those risks included risk to patients receiving adulterated or contaminated drugs in place of the diverted drug as well as the risk of receiving substandard care from addicted employees. 22 The Oregon investigations also included reports of having a patient's medication replaced with blood pressure medication—thus causing the combined risk of not receiving proper medication with the risk of overdose of another medication.

The most cursory of searches readily reveals multiple allegations reported in the news of thefts of controlled substances in nursing homes. For example, in 2012 six nursing home employees in Oklahoma were charged with operating a drug ring out of the facility for whom they were employed. Charges Filed in Nursing Home Drug Theft, KWGS News, July 5, 2012, available at http://publicradiotulsa.org/post/charges-filed-nursing-home-drug-theft. The Oklahoma Bureau of Narcotics (OBN) reported that 9,000 dosage units of controlled substances had been diverted from the facility by the nursing home employees, 8,400 of which involved hydrocodone. Press Release, Oklahoma Bureau of Narcotics and Dangerous Drugs Control (July 5, 2012) (on file with the Oklahoma Bureau of Narcotics); Oklahoma Nursing Home Employees Accused of Running Drug Ring: State v. Alexander, 15 No. 1 Westlaw Journal Nursing Home 4 (2012). The spokesman for OBN stated that employees would call in fraudulent prescriptions of hydrocodone for residents: “These residents had not been prescribed the Hydrocodone by doctors. There is no evidence that any resident was deprived of their legitimate medications. Evidence suggests some of the employees would personally use small amount of the diverted medication, but the majority of the fraudulent drugs were sold on the streets * * *.” Id.

Criminal acts at LTCFs “often go undocumented, are seldom reported to law enforcement, and are rarely prosecuted.” 23 Even so, theft and diversion at LTCFs likely occurs on a local level, and when reported, are investigated and prosecuted at the local level. The diversion of controlled substances at LTCFs, whether wide-spread or discrete events, are a threat to the public health and safety, especially considering that such activity poses a real and direct threat to a vulnerable population. Public health and safety threats to disadvantaged, underrepresented, and historically vulnerable populations, including the elderly and mentally, physically, and emotionally/behaviorally disabled, disordered, or challenged, must be taken that much more seriously by those public bodies charged with protecting the public health and welfare. The DEA further notes that the misuse, abuse, and diversion of controlled substances, including pharmaceutical controlled substances, are not limited to any particular age group or functional level.

One commenter requested two changes to the transmittal methods for prescriptions: (1) Allow a prescribing practitioner to call in to the pharmacy an order for a limited supply, up to a 72 hour quantity, of a schedule II medication for an LTCF patient in an emergency situation, under existing regulations for schedule III-V controlled substances; and (2) Allow a practitioner's agent, acting on behalf of a prescribing practitioner, to call in the prescribing practitioner's verbal order for a small (72 hour) supply of a schedule II medication for an LTCF patient in an emergency situation, under existing regulations for schedule III-V controlled substances.

DEA response: The CSA requires that prescriptions for schedule II controlled substances be written, except in emergency situations as defined by the HHS. 21 U.S.C. 829(a). Pursuant to 21 CFR 1306.11(d), in the case of an emergency situation, a pharmacist may dispense a schedule II controlled substance upon receiving oral authorization from a prescribing individual practitioner provided that the quantity prescribed and dispensed is limited to the amount adequate to treat the patient during the emergency period (dispensing beyond the emergency period must be pursuant to a written prescription signed by the prescribing individual practitioner).

The DEA recognizes the unique challenges and issues pertaining to handling and using controlled substances at LTCFs and has previously addressed these issues within the limits of the CSA. 24 For example, a prescription for a schedule II controlled substance for an LTCF resident may be transmitted by the practitioner or the practitioner's agent to the dispensing pharmacy by facsimile. 21 CFR 1306.11(f). In addition, a prescription for a schedule II controlled substance for an LTCF resident may be filled in partial quantities to include individual dosage units. 21 CFR 1306.13(b).

It is emphasized that a DEA registered practitioner may not delegate to a nurse, a pharmacist, or anyone else, his or her authority to make a medical determination whether to prescribe a particular controlled substance. Note that the practitioner remains responsible for ensuring that the prescription conforms in all essential respects to the law and regulations, 21 CFR 1306.05(f). 75 FR 61613, 61614, Oct. 6, 2010. This requires the practitioner alone to determine on a prescription by prescription basis whether the prescription is supported by a legitimate medical purpose and that all the essential elements of the prescriptions are met.

One commenter requested that the DEA “promote the adoption of e-prescribing by requiring facilities and their respective pharmacy suppliers to allow physicians to electronically prescribe controlled substances consistent with the law and appropriate safeguards.”

DEA response: This request is outside the scope of this rulemaking.

One commenter requested that the DEA “promote adoption of consistent and effective laws and policies across all states for the content and use of emergency kits (E-Kits) in the PA/LTC setting.”

DEA response: This request is outside the scope of this rulemaking.

Commenters raised concerns that, despite the scheduling of drugs, individuals will always find substances to abuse. These commenters argued that the proposed schedule II controls for HCPs will not address or stop the abuse of HCPs because other schedule II controlled substances such as oxycodone products are highly abused and diverted.

DEA response: The cycle of abuse between licit and illicit opioids, abuse of licit and illicit non-narcotic prescription drugs, and continued abuse of schedule I controlled substances such as LSD demonstrates that what individuals and communities are facing is not a problem specific to HCPs. Rather, it is an addiction problem. Heroin use and prescription drug abuse are both addictions that begin with use and are sustained and promoted through increased trafficking. This serious public health problem can be addressed by education, appropriate screening and treatment, recovery, support, and enforcement. These initiatives can be effective regardless of whether the problem is fed by heroin or prescription drugs, including HCPs, and the DEA supports all of these initiatives to address both prescription drug misuse and abuse and heroin use.

The problem of prescription drug abuse is fueled due to a combination of excessive prescribing, drug availability through friends and family, rogue pain clinics, practitioners who prescribe pharmaceutical controlled substances without legitimate medical purpose or outside the usual course of professional practice, pharmacies that dispense illegitimate prescriptions, and supply chain wholesalers and manufacturers that fail to provide effective controls and procedures to guard against diversion—all of which fuel illicit access at the expense of the public health and safety.

A balanced drug control strategy, one that includes strong enforcement, education, prevention, and treatment components, can make significant progress in protecting our nation from the dangers of drug abuse.

The DEA's enforcement responsibility as it pertains to drugs and other substances is clearly delineated in Federal law. Pursuant to 21 U.S.C. 811(a), the CSA authorizes the DEA, under authority delegated by the Attorney General, to add to a schedule any drug or other substance if it is found that the drug or other substance has a potential for abuse, and makes with respect to such drug or other substance the findings prescribed by 21 U.S.C. 812(b). As such, the legal system established by Congress specifically accounts for new substances to be added to the list of controlled substances without regard to the number of substances already controlled. See also 21 U.S.C. 812(a) (“Such schedules shall initially consist of * * *” ( emphasis added )).

The dynamic structure constructed in the establishment of the schedules of controlled substances takes into consideration that the conclusions reached under each of the eight-factors specified under 21 U.S.C. 811(c) may change over time. Scientific knowledge about a drug or substance grows, pharmacological knowledge increases, history and current patterns of abuse change, etc. The CSA scheduling protocols also take into account that new drug applications for drugs with abuse potential are submitted to and approved by the FDA as well as that clandestine chemists attempt to manipulate the molecular structures of controlled substances to create synthetic drugs that would have the same pharmacologic properties of a controlled drug, but not expose the chemist or distributor to criminal violations. The CSA, however does not only account for one-time scheduling determinations regarding the control of drugs and other substances. In addition to the initial control of drugs and other substances to schedules, the CSA likewise takes into account and provides for the transfer of a drug or other substance between schedules, or for a drug or other substance to be removed entirely from the schedules. 21 U.S.C. 811(a) and (b).

Nevertheless, the DEA disagrees that control of HCPs in schedule II will not decrease abuse of HCPs. Control of HCPs in schedule II will result in increased monitoring of these drugs as well as increased safeguards for legitimate prescriptions.

Commenters also questioned whether moving HCPs to schedule II would reduce diversion of HCPs. These commenters argued that the proposed schedule II controls for HCPs will not address or stop the diversion of HCPs because other schedule II controlled substances such as oxycodone products are still diverted despite their schedule II status.

DEA response: The DEA disagrees that control of HCPs as schedule II controlled substances will not decrease their diversion. Control of HCPs into schedule II will result in increased monitoring of these drugs as well as increased safeguards for legitimate prescriptions.

The DEA received many comments, from pharmacists, physicians, ultimate users, and the general public, who were concerned that the increased administrative burden on pharmacists that might occur as a result of moving HCPs into schedule II would cause pharmacists to devote time to the administrative burdens rather than on patient counseling and safety. Commenters stated that the administrative burden would be greatly increased in the pharmacy setting because: separate prescriptions would have to be entered for every HCP; pharmacists would have to count the prescriptions, as technicians are not legally allowed to do so in some States; inventories would be required of all HCPs; and increased workload associated with recordkeeping requirements (i.e., DEA Form 222).

DEA response: The processes and procedures associated with dispensing a controlled substance are not relevant factors to the determination of whether a substance should be controlled or under what schedule a substance should be placed if it is controlled. See 21 U.S.C. 811 and 812.

Several of the comments submitted by members of industry (manufacturers, wholesale distributors, veterinary distributors, retail pharmacies), and/or trade associations representing them, focused on the timeframe for implementation of various handling requirements. A national trade association comprised of manufacturers and distributors of generic pharmaceutical products requested that the DEA “allow sufficient time for all parts of the supply chain to integrate the new requirements into their business operations.” Similar requests were also posed by an individual manufacturer of HCPs, a wholesale distributor, and a retail pharmacy/mail pharmacy service provider, each who proposed a blanket six month delay before a final rule would go into effect. A national trade association comprised of distributors requested that the DEA allow at least 12 to 24 months, with opportunity for additional extension for individual registrants on an as needed basis, from the effective date of the final rule to allow for changes to facilities, policies and procedures. The national trade association requested that during the interim period registrants be allowed to continue to hold HCPs in cages rather than to be immediately required to place these items in vaults. Specifically, the association proposed that the DEA “[r]ecognize a registrant's compliance with the physical security requirements if the registrant has, by the implementation date of the storage requirements resulting from a rescheduling decision, submitted to the agency plans, blueprints, sketches, or other materials, including but not limited to signed contracts with contractors to implement any proposed physical security changes to the registrant's premises, and has otherwise been and continues to be in compliance with physical security requirements pursuant to [21 CFR 1301.72] for HCPs subject to this rescheduling decision as of the date prior to the effective date of a rescheduling decision.” The national trade association additionally requested that the DEA provide specifics regarding the “process for submission of the materials demonstrating the vault construction plans” and how they might be able to “demonstrate compliance in lieu of vault construction completion.”

DEA Response: In accordance with the Administrative Procedure Act, generally, DEA scheduling actions are effective 30 days from the date of publication of the final rule in the Federal Register . 5 U.S.C. 553(d). In order to ensure the continued availability of HCPs for legitimate medical use, while also ensuring they are not subject to misuse, abuse, and diversion, the DEA is establishing an effective date 45 days from the date of publication of this final rule. This 45-day period is a reasonable amount of time for registrants to comply with the handling requirements for a schedule II controlled substance and was established upon a full consideration of the totality of circumstances specific to HCPs.

The DEA understands that 45 days to implement all schedule II handling requirements may be perceived as short by some distributors. While the DEA acknowledges that the supply chain will need to plan and coordinate efforts, and may even need to temporarily modify existing ordering and inventory management practices, the DEA is required to consider the risk of diversion and risk to public health and safety of U.S. residents.

As summarized in the NPRM and the DEA presentation at the January 24, 2013, public DSaRM meeting, available at http://www.fda.gov/downloads/advisorycommittees/committeesmeetingmaterials/drugs/drugsafetyandriskmanagmentadvisorycommittee/ucm346941.pdf, and discussed in detail in the supporting eight-factor analyses, HCPs are being abused with adverse effects both individually and to the public health and safety, accordingly, it should be placed into schedule II as soon as practicable. Prescription drug abuse refers to the intentional misuse of a medication by using more than medically indicated in order to feel the drug's psychoactive effects and/or using the drug in a manner that is not medically indicated. Prescription drug abuse has increased exponentially in the last 15 years and is the Nation's fastest growing drug problem. Factors including excessive prescriptions, drug availability through friends and family, Internet trafficking, rogue pain clinics, pharmacies that dispense illegitimate prescriptions, and failed safeguards by wholesalers and manufacturers to guard against diversion have all contributed to the prescription drug abuse problem.

The increase in prescription drug abuse has also been attributed to ease of obtaining the drug and the misconception that abusing prescription drugs is much safer than using and abusing street drugs. According to the 2012 Partnership Attitude Tracking Study (PATS), 43% of teenagers believe that prescription medications are “easier to obtain” than illegal drugs. In addition, the 2012 PATS also reported that 27% of teens believe that misusing or abusing prescription drugs is “safer” than using street drugs. Some of the increased demand for prescription opioid painkillers is from people who use them non-medically (using drugs without a prescription or just for the high they cause), sell them, or get them from multiple prescribers at the same time (CDC Vital Signs, July 2014, Opioid Painkiller Prescribing, Where You Live Makes a Difference).

According to the 2012 National Survey on Drug Use and Health (NSDUH), approximately 2.6% or 6.8 million people ages 12 and older are nonmedical users of prescription drugs. Abuse of opioid drugs, including HCPs, can lead to addiction, respiratory depression, and death. There were more than 16,000 deaths due to abuse of opioid drugs including HCPs in 2010. That is more than 1,333 people dying each month. According to the CDC, 38,329 people died from a drug overdose in the United States in 2010. Of these deaths, 22,134 people or 60% involved prescription drugs. Seventy-five percent of the prescription drug overdose deaths (16,651 people) were due to opioid drugs primarily containing oxycodone, hydrocodone, or methadone.

Abuse of prescription drugs is particularly alarming since data are strongly indicating that prescription opioid drug abuse can lead to heroin abuse. 25 Specifically, the data show that the population with the highest rate of heroin initiation was that population with prior nonmedical pain reliever use. The rate of heroin initiation among prior nonmedical pain reliever users was approximately 19 times greater than those who did not have such prior use. The rate of heroin initiation increased with increases in the frequency of past year nonmedical pain reliever use. Id.

The DEA has long held that increased heroin use is driven primarily by an increase in the misuse and abuse of prescription opioid drugs, particularly HCPs. The DEA's investigations indicate that the cost of prescription opioid drugs on the street may be as high as $80.00 per tablet and makes it difficult for teens and young adults to purchase drugs in support of their addiction. Therefore, abusers of prescription opioid drugs may resort to using heroin, a much cheaper alternative that produces similar euphoric effects, to keep the drug seeker/abuser from experiencing painful withdrawal symptoms. According to the most recent NSDUH, there were 335,000 heroin users in 2012, which is more than double the number in 2007 (161,000). In the decade from 2002 to 2011, the annual number of drug poisoning deaths involving heroin doubled, from 2,089 deaths in 2002 to 4,397 deaths in 2011. 26

HCPs are the most prescribed drug in the United States. Production of HCPs has increased from 15,359 kilograms in 1998 to 63,338 kilograms in 2012 (IMS, 2014). Increased production of HCPs is directly due to the increased prescription of these drugs to treat and alleviate pain. Even though there is legitimate use of HCPs, data indicate that a considerable population misuse HCPs. The National Poison Data System (NPDS) reported during the period of 2006-2012, that 45.4% of the total exposures to HCPs were considered intentional exposures, a surrogate to usage for abuse or misuse. The high percentage of HCPs for misuse supports that HCPs are contributing to prescription opioid drug abuse and may consequently lead to heroin abuse and death.

In order to prevent continued misuse, abuse and diversion, it is necessary to set an effective date for this scheduling action, including security and labeling requirements, with all reasonable haste. After careful consideration of the risk to the U.S. public health and safety related to the diversion and abuse of HCPs, the DEA believes the 45-day effective date is reasonable.

From the 2007 Economic Census, the DEA estimates that the inventory turnover ratio for the industry  27 is approximately 11.3. 28 The inventory turnover ratio represents the number of times the inventory sells (turns) in a year. The 11.3 inventory turnover ratio equates to an average of 32 days to sell inventory. The 11.3 turnover ratio is consistent with that of large distributors where financial information was publicly available and reviewed. The inventory turnover ratio is a reasonable estimate for the entire industry and all products under the circumstances. Publicly reviewed data show that about 85% of all revenues (an indirect indicator of dosage units moved) from drug distribution in the United States come from three public wholesalers, each with annual revenue in the billions. The DEA additionally notes that many regional and specialist pharmaceutical wholesalers have been acquired by the largest three distribution companies. Because the 32 days to sell inventory is an average based on industry-wide Census data, it is possible for an individual company and/or product line to experience a shorter or longer time to sell.

Since HCPs are the most prescribed opioid drugs in the United States, with over 137 million prescriptions dispensed in 2013, 29 the DEA expects distributors to continue to receive and distribute HCPs at high volume and with regularity; thus, anticipating shorter than average days to sell HCPs than the overall industry average ratio. In other words, the very high volume of sales indicates that HCPs are moving very quickly through the supply chain to meet demand, indicating high turnover and low inventory. However, to accommodate those manufacturers and distributors that have lower than average industry turnover ratio, the DEA is establishing an effective date of this final rule, including labeling and packaging requirements, 45 days from the date of publication. Based on the available information, and the lack of specific information regarding manufacturer and distributor inventory practices with respect to HCPs, the DEA believes this will provide a reasonable time for distributors to sell existing stock with pre-control labeling and packaging (C-III) and to stock inventory with post-control labeling and packaging (C-II).

The DEA anticipates manufacturers to begin developing inventory of HCPs with schedule II labels prior to the effective date of the rule to have stock ready to be distributed upon effect of this rule. The DEA estimates that 45 days is a reasonable amount of time for manufacturers and distributors to deplete existing inventory of HCPs. The packaging and labeling requirements for manufacturers and distributors do not apply to dispensers. Dispensers with HCPs in commercial containers labeled as schedule III may continue to dispense these HCPs after the implementation of this rule.

The DEA believes that HCPs labeled as C-III can be exchanged with HCPs containing new labels at nominal cost. The rule allows this exchange in a similar manner to the return of expired controlled substances authorized under existing regulations. Since manufacturers are expected to have ready-inventory of HCPs with new labels, exchanges are expected to occur without delay. In this rule, the DEA is allowing transfers of HCPs labeled as schedule III to be returned in exchange for HCPs labeled as schedule II without the requirement for procurement quota. Therefore, the DEA believes HCP manufacturers and distributors can reasonably make the necessary labeling changes and have inventory to meet the demands of customers.

The DEA acknowledges distributors may need to make some modifications to their inventory management system and operating procedures. However, these changes are expected to be procedural changes with only nominal impact on the burden created by the activities. For example, a distributor will need to receive, unpack, record the product in inventory, store, accept orders, and ship out to customers. These are all activities that occur regardless of the control status of HCPs. The anticipated changes may be a modification to the inventory management system and possible expansion of storage space (vaults).

The DEA has carefully considered the security requirements for compliance with this rule. As confirmed by the national trade association comprised of distributors, current distributors of HCPs are DEA registrants with existing controlled substance storage facilities that comply with DEA regulations. The DEA believes the DEA regulations provide flexibility that enables the supply chain to quickly implement the new rule without delay or significant cost.

Modifications necessary for physical security compliance will be a one-time modification primarily to provide for appropriate storage. The DEA understands that handlers of HCPs may also need to make modifications to their current security procedures for compliance. To a lesser extent, there may be necessary modifications to operating procedures, staff training, and amendments to suspicious order monitoring systems. However, due to the high diversion and abuse profile of HCPs, it is reasonably likely that most, if not all, manufacturers and distributors already provide controls and procedures to guard against theft and diversion of HCPs. That is, due to the high diversion potential of HCPs, most, if not all, manufacturers and distributors likely already have operating procedures (e.g., suspicious order monitoring systems, staff training) to guard against theft and diversion of HCPs, thereby necessitating minimal (if any) changes to these non-physical security controls. The DEA believes that a 45-day period will provide handlers of HCPs a reasonable amount of time to implement any one-time modifications to comply with the DEA regulations. Registrants are familiar with the applicable security regulations, and already have systems in place with respect to other schedule II controlled substances. Accordingly, it is reasonable to revise operating procedures, amend monitoring systems, and train staff with respect to HCPs as schedule II controlled substances within the 45-day compliance timeframe.

The DEA has specifically chosen not to stagger implementation dates of handling requirements for the reasons stated herein. Also, different implementation dates leads to confusion and inconsistent application of the law, particularly with respect to rescheduling a drug from schedule III to schedule II. Schedule II and III substances are subject to different recordkeeping and reporting requirements, for example, and registrants would have difficulty keeping and maintaining records and inventories. Also, if one registrant category were to handle HCPs as schedule III controlled substances while another registrant category were to handle HCPs as schedule II controlled substances, it would be confusing (for the registrants and for enforcement authorities), particularly with respect to the relevant transaction records.

The DEA strongly advises registrants to work closely with their local DEA office regarding submission of materials, storage containers, all applicable security requirements, and any necessary modifications due to compliance with this rule. 21 CFR 1301.71(d); see also 21 CFR 1307.03. After 45 days from the date of publication, HCPs will be subject to schedule II security requirements and must be handled and stored pursuant to 21 U.S.C. 821 and 823 and in accordance with 21 CFR 1301.71-1301.93.

The comments of a manufacturer, wholesale distributor, and national trade association comprised of distributors, each discussed their concerns about how commercial containers of HCPs labeled as “C-III” would be handled. The manufacturer requested that the DEA allow at least nine months from the date of issuance of the final rule for distribution of commercial products labeled as “C-III” in order to allow time for the supply chain to be restocked. This same company also requested that the DEA clarify the ability of reverse distributors and other registrants to continue to handle HCPs labeled as “C-III” for at least three months after the expiration date of the substance, in order to account for handling HCPs for purposes of destruction. The wholesale distributor wrote in favor of immediate implementation of the use of DEA Form 222, while allowing HCPs already labeled as C-III to be continuously distributed until depleted.

DEA response: For the reasons discussed in response to the previous comments, as of the effective date of the final rule, pursuant to 21 U.S.C. 821, 825, and 958(e) and in accordance with 21 CFR 1302.03, manufacturers are required to print upon the labeling of each commercial container of HCPs they distribute the designation of HCPs as “C-II.” It shall be unlawful for commercial containers of HCPs to be distributed downstream without bearing the label properly identifying them as schedule II controlled substances in accordance with 21 CFR part 1302. As clearly stated in 21 CFR 1302.05, “[a]ll labels on commercial containers of, and all labeling of, a controlled substance which either is transferred to another schedule or is added to any schedule shall comply with the requirements of § 1302.03, on or before the effective date established in the final order for the transfer or addition.” Accordingly, the DEA is requiring that commercial containers of HCPs distributed on or after 45 days from the date of publication of the final rule be labeled as “C-II” and be packaged in accordance with 21 CFR part 1302.

A distribution of HCPs on or after the effective date of this final rule, is a distribution of a schedule II controlled substance, and a DEA Form 222 is required to be used to conduct the transfer in accordance with 21 CFR 1305.03. A registrant may transfer commercial containers of HCPs labeled as “C-III” upstream on or after the effective date of the final rule, with utilization of a DEA Form 222 as required in accordance with 21 CFR 1305.03. Utilization of the DEA Form 222 ensures that schedule I and II controlled substances are accounted for, and allows for the detection and prevention of diversion.

Additionally, as discussed previously in more detail in the Economic Impact Analysis, the DEA believes that any manufacturer or distributor that requires more than 45 days to sell HCP inventory under normal circumstances can make minor modifications to ordering and stocking procedure for a transitional period to meet the established effective date. Distributors also have the option of returning excess stock of HCPs labeled as “C-III” to the manufacturer, or the manufacturer's authorized agent, as authorized by this final rule, or in accordance with 21 CFR 1307.12.

The DEA takes this opportunity to clarify that the regulation pertaining to labeling of commercial containers applies to distributions by manufacturers and distributors. The DEA does not regulate the labeling and packing of commercial containers of controlled substance downstream of distributors.

A national trade association comprised of distributors and an individual manufacturer of HCPs requested that the DEA provide an exemption from the schedule II controlled substance security requirements for manufacturers and distributors of HCPs. Both commenters based this request on the assertion that manufacturers and distributors are not a documented significant source of diversion.

DEA response: Scheduling determinations are based on scientific determinations regarding the drug or other substance's potential for abuse, its potential for psychological and physical dependence, and whether the drug or other substance has a currently accepted medical use in treatment in the United States. 21 U.S.C. 812(b). The DEA may not reschedule, or refuse to reschedule, a drug or other substance based on purported sources of diversion. One of the primary functions of the DEA Diversion Control Program is to ensure that registrants are in compliance with the safeguards inherent in the CSA. This proactive approach is designed to identify and prevent the large scale diversion of controlled substances and listed chemicals into the illicit market. Manufacturers and distributors pose the greatest potential for large-scale diversion. As discussed in the final rule, “Controlled Substances and List I Chemical Registration and Reregistration Fees,” there is great risk and grave consequences associated with the quantity and purity of controlled substances and/or chemicals with each manufacturer at this point in the closed system. 77 FR 15234, 15241, March 15, 2012. Accordingly, non-practitioners such as manufacturers and distributors must adhere to very stringent physical security requirements. The DEA has determined that there is a high potential for abuse of HCPs, and this, inter alia, requires that HCPs be controlled in schedule II. The physical security requirements applicable to schedule II controlled substances will provide secure controls to detect and prevent diversion of HCPs. Accordingly, the DEA declines to exempt manufacturers or distributors from the physical security requirements applicable to HCPs upon control in schedule II. However, the DEA encourages manufacturers and distributors to work closely with their local DEA office regarding submission of materials, storage containers, all applicable security requirements, and any necessary modifications due to compliance with this rule. 21 CFR 1301.71(d); see also 21 CFR 1307.03.

Several commenters stated that the DEA had failed to fully take into account costs and impacts to ultimate users in its economic impact analysis.

DEA response: Scheduling decisions are based on scientific determinations regarding the drug or other substance's potential for abuse, its potential for psychological and physical dependence, and whether the drug or other substance has a currently accepted medical use in treatment in the United States. 21 U.S.C. 812(b). The DEA may not reschedule, or refuse to reschedule, a drug or other substance based on the population it is intended or approved to treat, or potential impacts thereon. However, as discussed above, scheduling or rescheduling a drug does not hinder legitimate access to needed medication. For the reasons discussed earlier in this document, the DEA does not believe that there will be significant impacts, if any, on ultimate users associated with this rulemaking.

Several commenters suggested that it would cost millions of dollars for distributors and retail pharmacies to obtain new vaults or increase the size of their vaults to accommodate for the influx of HCPs. Another commenter suggested that only a limited number of firms can build vaults that meet the requirements of the DEA and because of this, constructing a vault would be time consuming and costly.

DEA response: Scheduling determinations are based on scientific determinations regarding the drug or other substance's potential for abuse, its potential for psychological and physical dependence, and whether the drug or other substance has a currently accepted medical use in treatment in the United States. 21 U.S.C. 812(b). The DEA may not reschedule, or refuse to reschedule, a drug or other substance based on economic impacts.

Retail pharmacies are not required by the CSA or DEA regulations to place schedule II controlled substances in a vault or safe. In accordance with 21 CFR 1301.75(b), pharmacies may disperse schedule II controlled substances throughout their stock of noncontrolled substances in such a manner as to obstruct the theft or diversion of the controlled substances.

Several commenters requested the implementation of a national prescription drug monitoring program (PDMP) either as an alternative to rescheduling HCPs, or possibly in addition thereto, as a means of curtailing doctor shopping and preventing abuse. For example, one commenter noted that “Despite broad consensus that prescribers and public health officials need these essential tools modernized to support clinical decision-making and identify state and regional patterns of abuse and diversion, state-based PDMPs continue to have limited financial resources and interoperability * * *.” Another commenter stated that PDMPs “can be improved by creating incentives for inter-state connectivity, making data available in a more timely fashion and unifying standard submissions.”

DEA response: One of the best ways to combat the rising tide of prescription drug abuse is the implementation and use of PDMPs. PDMPs help prevent and detect the diversion and abuse of pharmaceutical controlled substances, particularly at the retail level where no other automated information collection system exists. PDMPs are valuable tools for prescribers, pharmacists, and law enforcement agencies to identify, detect, and prevent prescription drug abuse and diversion.

The DEA supports and encourages the development and maintenance of PDMPs at the State level. Currently, 48 States have an operational PDMP (meaning collecting data from dispensers and reporting information from the database to authorized users). One State has enacted legislation enabling the program to come online; Missouri has no state PDMP. As of February, 2014, only 16 States mandate usage of PDMP. Of those 16 States, 6 States mandate its usage in designated circumstances and 10 mandate its use in broader circumstances. Currently, 26 States have adopted the Interconnect platform for data sharing.

The DEA agrees with these commenters that the use of PDMPs is challenging across State lines because interconnectivity is limited. Interconnectivity or a nationwide system would help deter and detect drug traffickers and drug seekers, many of whom willingly travel hundreds of miles to gain easy access to unscrupulous pain clinics and physicians.

The Department has supported the development of PDMPs through the Harold Rogers Prescription Drug Monitoring grant program, distributing a total of over $87 million from FY 2002 to FY 2014, including $7 million in FY 2014. The purpose of this program is to enhance the capacity of regulatory and law enforcement agencies to collect and analyze controlled substance prescription data. It focuses on providing help for States that want to establish a PDMP or expand an existing PDMP. In 2012, the Department provided further policy guidance on data sharing efforts among State PDMPs, a critical aspect of the program.

One commenter suggested that State monitoring systems should be used in a way to specifically identify usage of HCPs in the respective State. The commenter stated that this would allow each State to develop its own methods for handling the abuse of HCPs problem rather than making a nationwide rule rescheduling HCPs to schedule II. Another commenter suggested that practitioners should use State prescription monitoring programs more to prevent unnecessary refills and prescriptions, thereby preventing abuse. Another commenter suggested that States should be mandated to implement a PDMP if they don't already have one in existence.

DEA response: As mentioned above, States are free to implement their own PDMP. Moreover, States may customize their PDMP in a way that is most beneficial to that State. The States can do this so long as the laws governing the program do not conflict with the CSA, DEA regulations, or other federal law.

However, the DEA, as required by the CSA, has an obligation to control drugs or other substances that have a potential for abuse. Once the DEA controls a drug or substance, it must apply the provisions of the CSA to that newly controlled drug or substance. As stated, scheduling determinations are based on scientific determinations regarding the drug or other substance's potential for abuse, its potential for psychological and physical dependence, and whether the drug or other substance has a currently accepted medical use in treatment in the United States. 21 U.S.C. 812(b).

One commenter suggested “that people who genuinely need the medication * * * be listed in the state monitoring system as patients who have been vetted and should be prescribed the medication without [schedule II] requirements.” The commenter proposed that such vetting could be done on a six month renewal basis.

DEA response: The CSA does not prevent the States from enacting laws related to controlled substances or prevent States from creating stricter laws. See 21 U.S.C. 903. However, States cannot create rules that are more relaxed than the CSA, and its implementing regulations, as this would be a conflict. See Id. Creating a list of vetted patients who do not have to comply with schedule II requirements would be in direct conflict with the CSA and schedule II prescription requirements. An individual practitioner must determine if an individual has a legitimate medical purpose to be issued a prescription for a controlled substance each time a prescription is issued. There is no mechanism to “vet” a patient in the CSA.

One commenter stated that “I believe more effort should go into the monitoring the narcotics registry and targeting [of] patients or doctors that are suspicious for abuse rather than trying to restrict the narcotics given.” Another suggested to “vet the patients by 2 different doctor evaluations, vetting to extend for 6 months. Register the vetted patients in the state drug monitoring programs as `OK' to obtain 90-day supplies. Patients not vetted get a very limited supply.”

DEA response: The DEA actively pursues administrative action and civil and criminal prosecution of DEA registrants and individuals who divert controlled substances. One of the primary functions of the DEA Diversion Control Program is to ensure that all DEA registrants are in compliance with the safeguards inherent in the CSA. This proactive approach is designed to identify and prevent diversion of controlled substances and listed chemicals into the illicit market. Insofar as the issuance of and the filling of controlled substance prescriptions is concerned, prescribers and pharmacies, have an obligation to ensure that they do not prescribe or dispense controlled substances to individuals with no legitimate medical purpose for the controlled substance.

Several commenters suggested that the DEA change prescription requirements for HCPs while keeping them as schedule III controlled substances instead of transferring them to schedule II of the CSA. For example, some commenters suggested that subcategories be created for specific categories of practitioners, such as oncologists or emergency practitioners. Other commenters suggested that the DEA should limit the quantity of HCPs prescribed or number of refills authorized instead of rescheduling HCPs. As an example, one commenter suggested that any HCP prescriptions of 30 tablets and under should remain as a schedule III controlled substance and prescriptions for over 30 tablets of HCPs should be a schedule II controlled substance.

DEA response: The DEA cannot retain schedule III status for HCPs, as the DEA has determined that HCPs satisfy the criteria for control in schedule II of the CSA. 21 U.S.C. 812(b).

The Assistant Secretary of the HHS provided a scientific and medical evaluation and a scheduling recommendation to control HCPs as a schedule II controlled substance. In accordance with 21 U.S.C. 811(c), the DEA conducted its own analysis of the eight factors determinative of control. Besides published literature, various other data as detailed in the supporting documents were considered in making the scheduling determination for HCPs. Thus, the scheduling determination is based on a comprehensive evaluation of all available data as related to the required eight factors. The summary of each factor as analyzed by the HHS and the DEA, and as considered by the DEA in this scheduling action, was provided in the proposed rule. Both the DEA and the HHS analyses have been made available in their entirety under “Supporting and Related Material” of the public docket for this rule at http://www.regulations.gov under Docket No. DEA-389. Based on the review of the HHS evaluation and scheduling recommendation and all other relevant data, the DEA found that HCPs have an abuse potential and meets the requirements for schedule II controls under the CSA.

Several commenters suggested that prescribing practitioners should receive education about the problems of HCP abuse, addiction, and prevention of diversion rather than rescheduling HCPs.

DEA response: The DEA fully supports efforts by medical professionals, acting alone and as part of professional organizations, as well as industry associations, to educate members of their profession/industry on the risks associated with prescription opioid use and on ways to prevent misuse, abuse, and diversion of prescription opioid products. These efforts are an important and integral part of tackling the problem of prescription opioid abuse.

However, as recognized by the CDC, the United States is in the midst of a public health crisis regarding prescription painkiller overdose. Individuals, families, and society are suffering the effects of abuse and addiction. People are dying. In their 2011 report, the CDC estimated that 75 opioid-related deaths occur each day. That equates to over 27,000 people each year. As a society, America simply cannot afford to wait for self-initiated educational programs and measures by medical professionals and industry to solve the problem on their own. As acknowledged by commenters advocating solely for an educational approach, opioid consumption in the United States continues to increase despite self-initiated professional educational endeavors such as symposia and scientific articles.

One physician who wrote in support of rescheduling asserted that only a limited number of practitioners have paid attention to the warnings issued regarding the risk of addiction, overdose, and death associated with use of HCPs. It was this physician's belief that: “The opioid epidemic has mainly resulted from a large volume of misinformed doctors failing to understand the risks and limited benefits of these drugs, especially for chronic noncancer pain, one of the most common reasons why patients seek medical care.” This concern has been echoed by the HHS. The HHS has noted “Multiple studies have shown that a small percentage of prescribers are responsible for prescribing the majority of opioids.” Behavioral Health Coordinating Committee, Prescription Drug Abuse Subcommittee, HHS. Addressing Prescription Drug Abuse in the United States: Current Activities and Future Opportunities. 2013. (internal citations omitted). The HHS points out, however, that “Providers who are not high-volume prescribers may also contribute to opioid abuse and overdose because of a lack of education and awareness about appropriate opioid prescribing * * *.” The HHS additionally stated, “Even when sufficient information exists, studies show that some providers do not follow risk mitigation strategies even for patients known to be at high risk for abuse.” Id. The physician-commenter asserted that “Upscheduling hydrocodone combination products will, at the very least, send a clear message to these providers that hydrocodone is a narcotic in the same class as oxycodone, morphine and heroin, which should be prescribed and refilled with the utmost of selectivity, caution and close patient follow-up.”

The problem must be addressed both nationally and locally by using all available legal and social measures at hand. At the Federal level, this includes following the legal path directed by Congress to address issues of substance abuse and trafficking. As part of a comprehensive approach involving multiple Federal and State actors to address these concerns, Congress has charged the DEA with the responsibility to implement and enforce, to the fullest extent of the law, the requirements of the CSA. This includes ensuring that drugs and other substances are appropriately scheduled concordant with the factors for each schedule under 21 U.S.C. 812(b).

Several commenters suggested that patient education and/or rehabilitation was the proper route to address abuse of HCPs rather than rescheduling.

DEA response: A multi-pronged approach, one that includes education, treatment, monitoring, and law enforcement is needed to combat this epidemic. The DEA supports all efforts to educate patients about the risks associated with use of substances with abuse potential. As discussed above, an analysis of the eight factors determinative of control demonstrates that HCPs warrant control II of the CSA. 21 U.S.C. 812(b).

Several commenters voiced an opinion that there should be strict enforcement against those that have diverted and illegally sold prescription HCPs. These commenters stated it would be a good idea to ban these offenders from receiving HCPs or reduce limits on how much HCPs an offender can receive. In addition, several commenters suggested tougher sanctions and enforcement should be applied to providers who are not lawfully practicing their trade rather than punishing those who are obeying the laws.

DEA response: The DEA mission is to implement and enforce the CSA and corresponding regulations to the fullest extent of the law. The DEA actively pursues administrative action and civil and criminal prosecution of DEA registrants and other individuals who divert controlled substances. One of the primary functions of the DEA Diversion Control Program is to ensure that registrants are in compliance with the safeguards inherent in the CSA. The DEA supports State and local law enforcement, and State professional and regulatory boards in their efforts to prevent diversion and enforce the controlled substances laws.

Based on consideration of all comments, the scientific and medical evaluation and accompanying recommendation of the HHS, and based on the DEA's consideration of its own eight-factor analysis, the DEA finds that these facts and all other relevant data constitute substantial evidence of potential for abuse of HCPs. As such, the DEA is rescheduling HCPs as a schedule II controlled substance under the CSA.

The CSA outlines the findings required to transfer a drug or other substance between schedules (I, II, III, IV, or V) of the CSA. 21 U.S.C. 811(a); 21 U.S.C. 812(b). After consideration of the analysis and rescheduling recommendation of the Assistant Secretary for Health of the HHS and review of available data, the Administrator of the DEA, pursuant to 21 U.S.C. 811(a) and 21 U.S.C. 812(b)(2), finds that:

1. HCPs have a high potential for abuse. The abuse potential of HCPs is comparable to the schedule II controlled substance oxycodone;

2. HCPs have a currently accepted medical use in treatment in the United States. Several pharmaceutical products containing hydrocodone in combination with acetaminophen, aspirin, other NSAIDs, and homatropine are approved by the FDA for use as analgesics for pain relief and for the symptomatic relief of cough and upper respiratory symptoms associated with allergies and colds; and

3. Abuse of HCPs may lead to severe psychological or physical dependence.

Based on these findings, the Administrator of the DEA concludes that HCPs warrant control in schedule II of the CSA. 21 U.S.C. 812(b)(2).

Upon the effective date of this final rule, any person who handles HCPs will be subject to the CSA's schedule II regulatory controls and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, dispensing, importing, exporting, engaging in research, conducting instructional activities, and conducting chemical analysis, of schedule II controlled substances, including the following:

Registration. Any person who handles (manufactures, distributes, dispenses, imports, exports, engages in research, conducts instructional activities with, or conducts chemical analysis with) HCPs, or who desires to handle HCPs, must be registered with the DEA to conduct such activities pursuant to 21 U.S.C. 822, 823, 957, and 958, and in accordance with 21 CFR parts 1301 and 1312 as of October 6, 2014.

Security. HCPs are subject to schedule II security requirements and must be handled and stored pursuant to 21 U.S.C. 821 and 823, and in accordance with 21 CFR 1301.71-1301.93 as of October 6, 2014.

Labeling and Packaging. All labels, labeling, and packaging for commercial containers of HCPs must comply with 21 U.S.C. 825 and 958(e), and be in accordance with 21 CFR part 1302 as of October 6, 2014, except with respect to exchanges for purposes of relabeling/repackaging as provided below under “Quotas.”

Quotas. A quota assigned pursuant to 21 U.S.C. 826 and in accordance with 21 CFR part 1303 is required in order to manufacture HCPs as of October 6, 2014. Registrants required to obtain an individual manufacturing quota shall not manufacture HCPs on or after October 6, 2014, unless an individual manufacturing quota is granted for such quantities of HCP to be manufactured. Registrants required to obtain a procurement quota shall not procure HCPs on or after October 6, 2014, unless a procurement quota is granted for such quantities of HCP to be procured.

Except, registrants authorized to manufacture schedule II and III controlled substances may relabel/repackage HCPs labeled as “CIII” or “C-III” without obtaining procurement quota for such activity, under the following conditions:

(1) The manufacturing activity occurs before December 8, 2014;

(2) if the manufacturer is relabeling/repackaging HCPs that were returned to the manufacturer, the manufacturer returns the same quantity and strength of HCPs labeled as “CII” or “C-II” back to the registrant that returned HCPs labeled as “CIII” or “C-III” to the manufacturer; and

(3) an invoice or the DEA Form 222 (whichever is applicable) records the transfer and reflects that the transfer occurred pursuant to the authority contained in this final rule.

For example, if before October 6, 2014, distributor A transfers 5 packages of 100-bottle 5/325 HCPs labeled as CIII/C-III to manufacturer B, solely for the purpose of relabeling, the invoice would reflect that the transfer occurred pursuant to the authority in this final rule. If the return occurs after October 6, 2014, the DEA Form 222 would reflect that the transfer occurred pursuant to the authority contained in this final rule. When the manufacturer distributes HCPs labeled as “CII” or C-II” back to the registrant that returned the HCPs labeled as “CIII” or “C-III,” the manufacturer must return the same quantity and strength that was originally received for relabeling/repackaging. The DEA Form 222 will, again, reflect that the transfer occurred pursuant to the authority contained in this final rule.

In the above example, the manufacturer would not be required to obtain a procurement quota in order to relabel/repackage 5 packages of 100-bottle 5/325 HCPs, so long as manufacturer B subsequently transfers to distributor A 5 packages of 100-bottle 5/325 HCPs labeled as CII/C-II, unless the relabel/repackage activity occurs after December 8, 2014.

Registrants may continue to return HCPs pursuant to 21 CFR 1307.12.

Inventory. Any person who becomes registered with the DEA on or after the effective date of the final rule must take an initial inventory of all stocks of controlled substances (including HCPs) on hand on the date the registrant first engages in the handling of controlled substances pursuant to 21 U.S.C. 827 and 958, and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11(a) and (b) as of October 6, 2014.

After the initial inventory, every DEA registrant must take a new inventory of all stocks of controlled substances (including HCPs) on hand every two years pursuant to 21 U.S.C. 827 and 958, and in accordance with 21 CFR 1304.03, 1304.04, and 1304.11.

Records and Reports. Every DEA registrant must maintain records and submit reports with respect to HCPs pursuant to 21 U.S.C. 827 and 958, and in accordance with 21 CFR parts 1304 and 1312 as of October 6, 2014. Each pharmacy with a modified registration under 21 U.S.C. 823(f) that authorizes the dispensing of controlled substances by means of the Internet must submit reports to the DEA regarding HCPs pursuant to 21 U.S.C. 827 and in accordance with 21 CFR 1304.55 as of October 6, 2014.

Orders for HCPs. Every DEA registrant who distributes HCPs must comply with order form requirements, pursuant to 21 U.S.C. 821, 828, 871 and in accordance with 21 CFR parts 1305 and 1307 as of October 6, 2014.

Prescriptions. All prescriptions for HCPs must comply with 21 U.S.C. 829(a) and must be issued in accordance with 21 CFR part 1306 and subpart C of 21 CFR part 1311 as of October 6, 2014. No prescription for HCPs issued on or after October 6, 2014 shall authorize any refills. Any prescriptions for HCPs that are issued before October 6, 2014, and authorized for refilling, may be dispensed in accordance with 21 CFR 1306.22-1306.23, 1306.25, and 1306.27, if such dispensing occurs before April 8, 2015.

Importation and Exportation. All importation and exportation of HCPs must be in compliance with 21 U.S.C. 952, 953, 957, and 958, and in accordance with 21 CFR part 1312 as of October 6, 2014.

Liability. Any activity involving HCPs not authorized by, or in violation of, the CSA or its implementing regulations, occurring as of October 6, 2014, is unlawful, and may subject the person to administrative, civil, and/or criminal action.

In accordance with 21 U.S.C. 811(a), this scheduling action is subject to formal rulemaking procedures performed “on the record after opportunity for a hearing,” which are conducted pursuant to the provisions of 5 U.S.C. 556 and 557. The CSA sets forth the procedures and criteria for scheduling a drug or other substance. Such actions are exempt from review by the Office of Management and Budget (OMB) pursuant to section 3(d)(1) of Executive Order 12866 and the principles reaffirmed in Executive Order 13563.

This regulation meets the applicable standards set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 Civil Justice Reform to eliminate drafting errors and ambiguity, minimize litigation, provide a clear legal standard for affected conduct, and promote simplification and burden reduction.

This rulemaking does not have federalism implications warranting the application of Executive Order 13132. The rule does not have substantial direct effects on the States, on the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government.

This rule does not have tribal implications warranting the application of Executive Order 13175. It does not have substantial direct effects 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.

The Administrator, in accordance with the Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA), has reviewed this rule, and by approving it, certifies that it will not have a significant economic impact on a substantial number of small entities. The purpose of this rule is to place HCPs into schedule II of the CSA. No less restrictive measures (i.e., non-control or control in a lower schedule) would enable the DEA to meet its statutory obligation under the CSA.

HCPs are widely prescribed drugs for the treatment of pain and cough suppression. Handlers of HCPs primarily include manufacturers, distributors, exporters, pharmacies, practitioners, mid-level practitioners, and hospitals/clinics. 30 It is possible that other registrants, such as importers, researchers, analytical labs, teaching institutions, etc., also handle HCPs. However, based on its understanding of its registrant population, the DEA assumes for purposes of this analysis that for all business activities other than manufacturers, distributors, exporters, pharmacies, practitioners, mid-level practitioners, and hospitals/clinics, that the volume of HCPs handled is nominal, and therefore de minimis to the economic impact determination of this rescheduling action.

Because HCPs are so widely prescribed, for the purposes of this analysis, the DEA conservatively assumes all distributors, exporters, pharmacies, practitioners, mid-level practitioners, and hospitals/clinics currently registered with the DEA to handle schedule III controlled substances are also handlers of HCPs. The DEA estimated the number of manufacturers and exporters handling HCPs directly from DEA records. In total, the DEA estimates that nearly 1.5 million controlled substance registrations, representing approximately 376,189 entities, would be affected by this rule.

The DEA does not collect data on company size of its registrants. The DEA used DEA records and multiple subscription-based and public data sources to relate the number of registrations to the number of entities and the number of entities that are small entities. The DEA estimates that of the 376,189 entities that would be affected by this rule, 366,351  31 are “small entities” in accordance with the RFA and Small Business Administration size standards. 5 U.S.C. 601(6); 15 U.S.C. 632.

The DEA examined the registration, security (including storage), labeling and packaging, quota, inventory, recordkeeping and reporting, ordering, prescribing, importing, exporting, and disposal requirements for the 366,351 small entities estimated to be affected by the rule. The DEA estimates that only the physical security requirements will have material economic impact and such impacts will be limited to manufacturers, exporters, and distributors. Many manufacturers and exporters are likely to have sufficient space in their existing vaults to accommodate HCPs. However, the DEA understands that some manufacturers, exporters, and distributors will need to build new vaults or expand existing vaults to store HCPs in compliance with schedule II controlled substance physical security requirements. Due to the uniqueness of each business, the DEA made assumptions based on research and institutional knowledge of its registrant community to quantify the costs associated with physical security requirements for manufacturers, exporters and distributors.

The DEA estimates there will be significant economic impact on 1 (2.0%) of the affected 50 small business manufacturers, and 54 (7.9%) of the affected 683 small business distributors. The DEA estimates no significant impact on the remaining affected 4 small business exporters, 50,774 small business pharmacies, or 314,840 small business practitioners/mid-level practitioners/hospitals/clinics.

In summary, 55 of the 366,351 (0.015%) affected small entities are estimated to experience significant impact, (i.e., incur costs greater than 1% of annual revenue) as a result of this rule being finalized. The percentage of small entities with significant economic impact is below the 30% threshold for all registrant business activities. The DEA's assessment of economic impact by size category indicates that the rule to reschedule HCPs as schedule II controlled substances will not have a significant economic impact on a substantial number of small entities.

On the basis of information contained in the “Regulatory Flexibility Act” section above, the DEA has determined and certifies pursuant to the Unfunded Mandates Reform Act (UMRA) of 1995 (2 U.S.C. 1501 et seq. ), that this action would not result in any Federal mandate that may result “in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted for inflation) in any one year * * *.” Therefore, neither a Small Government agency Plan nor any other action is required under provisions of the UMRA of 1995.

This action does not impose a new collection of information requirement under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521). This action would not impose recordkeeping or reporting requirements on State or local governments, individuals, businesses, or organizations. 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.

This rule is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (Congressional Review Act (CRA)). This rule will not result in: an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign based companies in domestic and export markets. However, pursuant to the CRA, the DEA has submitted a copy of this final rule to both Houses of Congress and to the Comptroller General.

For the reasons set out above, 21 CFR part 1308 is amended as follows:

Background and Explanation of Provisions

The final regulations that are the subject of this document are under section 864(e) of the Internal Revenue Code.

As published, final regulations (TD 9676) contain errors that may prove to be misleading and are in need of clarification.

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

The Coast Guard will enforce the special local regulation for the annual Wheeling Vintage Raceboat Regatta listed in 33 CFR 100.801 Table 1, Entry No. 25; Sector Ohio Valley on August 30-31, 2014 from 9:00 a.m. until 6:00 p.m.

Under the provisions of 33 CFR 100.801, entry into the safety zone listed in Table 1, Entry No. 25; Sector Ohio Valley, is prohibited unless authorized by the COTP or a designated representative. Persons or vessels desiring to enter into or passage through the safety zone must request permission from the COTP or a designated representative. If permission is granted, all persons and vessels shall comply with the instructions of the COTP Pittsburgh or designated representative.

This notice is issued under authority of 5 U.S.C. 552(a) and 33 U.S.C. 1233. The Coast Guard will provide the maritime community with advance notification of this enforcement period via Local Notice to Mariners and updates via Marine Information Broadcasts.

If the COTP or designated representative determines that the special local regulation need not be enforced for the full duration stated in this notice of enforcement, he or she may use a Broadcast Notice to Mariners to remove this restriction or to grant general permission to enter the regulated area.

The County of San Joaquin has requested a temporary change to the operation of the San Joaquin County highway bridge, mile 1.0, over Bishop Cut, between King Island and Bishop Tract, CA. The drawbridge navigation span provides approximately 6 feet vertical clearance above Mean High Water in the closed- to-navigation position. In accordance with 33 CFR 117.143, the draw opens on signal if at least 12 hours notice is given to the San Joaquin County Department of Public Works at Stockton. Navigation on the waterway is commercial and recreational.

The drawspan will be secured in the closed-to-navigation position from 7 a.m. on August 18, 2014 to 5 p.m. on October 23, 2014 to allow the bridge owner to make necessary structural maintenance repairs and to replace approach deck slabs. This temporary deviation has been coordinated with the waterway users. No objections to the proposed temporary deviation were raised.

Vessels able to pass through the bridge in the closed position may do so at any time. The bridge will not be able to open for emergencies, and Disappointment Slough can be used as an alternate route for vessels unable to pass through the bridge in closed position. The Coast Guard will inform waterway users of this temporary deviation via our Local and Broadcast Notices to Mariners, to minimize resulting navigational impacts.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the effective period of this temporary deviation. This deviation from the operating regulations is authorized under 33 CFR 117.35.

This temporary deviation supersedes the previous deviation of the same docket number published on August 5, 2014 (79 FR 45344) with respect to the closer times from September 6, 2014 to November 22, 2014. The Washington State Department of Transportation, on behalf of the University of Washington Police Department, has requested that 30 additional minutes be added to the requested time periods published on August 5, 2014 to facilitate timely movement of pre-game and post-game football traffic. The Montlake Bridge bascule span will remain closed and need not open to vessel traffic from 9:30 a.m. to 12:30 p.m., and from 2:30 p.m. to 5:30 p.m. on September 6, 2014; from 10:30 a.m. to 1:30 p.m. and from 3:30 p.m. to 6:30 p.m. on September 13, 2014. The times for the closures on September 20, 2014, September 27, 2014, October 25, 2014, November 8, 2014, and November 22, 2014 will be determined and announced in the Coast Guard's Local Notice to Mariners and Broadcast Notice to Mariners as they become available. Due to NCAA television scheduling, the times for the games are not currently available. The bridge shall operate in accordance to 33 CFR 117.1051(e) at all other times.

The Montlake Bridge crosses the Lake Washington Ship Canal at mile 5.2, and while in the closed position provides 30 feet of vertical clearance throughout the navigation channel and 46 feet of vertical clearance throughout the center 60-feet of the bridge. These vertical clearance measurements are made in reference to the Mean Water Level of Lake Washington. The normal operating schedule for the Montlake Bridge states that the bridge opens on signal, subject to the list of exceptions provided in 33 CFR 117.1051(e).

Waterway usage on the Lake Washington Ship Canal ranges from commercial tug and barge to small pleasure craft. Vessels able to pass through the bridge in the closed positions may do so at any time. The bridge will be able to open for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridges must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Seattle Department of Transportation (SDOT) has requested a temporary deviation from the operating schedule for the Fremont Bridge, mile 2.6, crossing the Lake Washington Ship Canal at Seattle, WA. The deviation is necessary to accommodate SDOT workers for a bridge painting project. To facilitate this event, the full draw of the bridge need not open for vessel traffic unless a five hour advance notice is provided to the bridge operator. Additionally, one half of the draw of the bridge will be maintained in the closed-to-navigation position, and the clearance reduced up to four feet. This deviation will begin at 7 a.m. on August 6, 2014 and continue until 6 p.m. on January 21, 2015.

The Fremont Bridge, mile 2.6, is a double leaf bascule bridge which provides a vertical clearance of 14 feet (31 feet of vertical clearance for the center 36 horizontal feet) in the closed position. The clearance is referenced to the mean water elevation of Lake Washington. The normal operating schedule for the Fremont Bridge is set out in 33 CFR 117.1051 and states that the bridge need not open from 7 a.m. to 9 a.m. and from 4 p.m. to 6 p.m. Monday through Friday for vessels less than 1000 tons. The normal operating schedule for this bridge also requires one hour advance notification for bridge openings between 11 p.m. and 7 a.m. daily. Waterway usage on the Lake Washington Ship Canal ranges from commercial tug and barge to small pleasure craft.

Vessels able to pass through the bridge in the closed positions may do so at any time. The bridge will be able to open one leaf, half of the draw span, for emergencies and there is no immediate alternate route for vessels to pass. The Coast Guard will also inform the users of the waterways through our Local and Broadcast Notices to Mariners of the change in operating schedule for the bridge so that vessels can arrange their transits to minimize any impact caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Coast Guard will enforce the safety zone listed in Table 1 to 33 CFR 165.151(9.3) on the specified dates and times as indicated below. The final rule establishing this safety zone was published in the Federal Register on May 24, 2013 (78 FR 31402).

Under the provisions of 33 CFR 165.151, the fireworks display listed above is established as a safety zone. During the enforcement period, persons and vessels are prohibited from entering into, transiting through, mooring, or anchoring within the safety zone unless they receive permission from the COTP or designated representative This notice is issued under authority of 33 CFR 165 and 5 U.S.C. 552(a). In addition to this notice in the Federal Register , the Coast Guard will provide the maritime community with advance notification of this enforcement period via the Local Notice to Mariners or 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.

Table of Acronyms APA Administrative Procedure Act CFR Code of Federal Register DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking POTUS President of the United States USC United States Code USCG United States Coast Guard A. Regulatory Information

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)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because of the sensitive security issues related to the POTUS and first family. Providing a public notice and comment period is contrary to national security concerns and the public interest.

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 . Any delay encountered in this temporary rule's effective date would be contrary to the public interest given the immediate need to ensure the safety and security of the POTUS and first family during their visit to Martha's Vineyard, Massachusetts, from August 08, 2014 through August 24, 2014.

The legal basis for this rule is 33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Public Law 107-295, 116 Stat. 2064; and Department of Homeland Security Delegation No. 0170.1.

The POTUS and first family will visit Martha's Vineyard, Massachusetts, from August 08, 2014 through August 24, 2014. It is expected they will reside and/or participate in activities on property that borders navigable waters within the Captain of the Port, Southeastern New England zone. The U.S. Secret Service has requested that the Coast Guard provide 1000-yard waterside security zones around the POTUS and the first family. These security zones are intended to provide security for the POTUS and first family by preventing vessels and persons from approaching the location of the POTUS and first family without prior authorization from the U.S. Secret Service.

This temporary rule establishes 1000-yard security zones in the navigable waters in the vicinity of the POTUS and first family during their visit to Martha's Vineyard, Massachusetts, from August 08-24, 2014. Vessels and persons will be prohibited from entering these security zones whenever they are enforced due to the presence of the POTUS and/or first family.

This rule is effective from 8:00 a.m. on Friday, August 08, 2014 through 5:00 p.m. on Sunday, August 24, 2014.

This action is intended to temporarily prohibit vessels or people from approaching within 1000 yards of the POTUS and/or first family while they are in or near the navigable waters of the U.S. during their visit to Martha's Vineyard, Massachusetts.

The Captain of the Port, Southeastern New England, anticipates negligible negative impact on vessel traffic from these temporary security zones, as they will be in effect for only sixteen days, and will only be enforced while the POTUS and/or first family are in the vicinity of the navigable waters of the U.S. at Martha's Vineyard, Massachusetts. It has been determined that the necessary security enhancements provided by this rule greatly outweigh any potential negative impacts.

We developed this rule after considering numerous statutes and executive orders relating 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, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

The Coast Guard expects the economic impact of this rule to be so minimal that a full regulatory evaluation under the regulatory policies and procedures of DHS is unnecessary. The effect of this rule will not be significant as the duration of the security zones is for only sixteen days, and will only be in effect while the POTUS and/or first family are in the vicinity of the navigable waters of the U.S. at Martha's Vineyard, Massachusetts.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. 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 may affect the following entities, some of which may be small entities: the owners and operators of vessels intending to transit in the vicinity of Martha's Vineyard, Massachusetts from 8:00 a.m. on Friday, August 8, 2014 through 5:00 p.m. on Sunday, August 24, 2014. The security zones will not have a significant impact on a substantial number of small entities for the following reasons: The security zones are temporary and effective only while the POTUS and/or first family are in the vicinity of the navigable waters of the U.S. at Martha's Vineyard, Massachusetts. Thus, the temporary nature and limited effective period of the zones, coupled with the ability of the maritime public to maneuver around the zones, will allow small entities to plan and conduct their business accordingly.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process. If you think your small business or organization would be affected by this rule and you have any questions concerning its provisions or options for compliance, please call Mr. Edward G. Leblanc at (401) 435-2351.

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 calls for no 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 State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it 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.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

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 which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g) of the Instruction. This rule fits the category selected from paragraph (34)(g), as it establishes temporary security zones for a limited period of time. An environmental analysis checklist and a categorical exclusion determination will be 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 165 as follows:

On May 16, 2014, we published a notice of proposed rulemaking (NPRM) entitled “Security Zone, Change of Enforcement Period, Chesapeake Bay; Between Sandy Point and Kent Island, MD” in the Federal Register (79 FR 28468). We received no comments on the proposed rule. No public meeting was requested, and none was held.

The legal bases and authorities for this rule are found in 33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Public Law 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to propose, establish, and define regulatory security zones. The purpose of this security zone is to protect persons and property, mitigate potential terrorist acts or incidents, and enhance public and maritime safety and security in order to safeguard life, property, and the environment on or near the navigable waters.

The Coast Guard received no comments in response to the NPRM. No public meeting was requested and none was held.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes and 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 would restrict access to this area, the effect of this rule will not be significant because: (i) The security zone will only be in effect annually on the second Sunday in November from 7 a.m. through 11 a.m., and if necessary due to inclement weather, on the third Sunday in November from 7 a.m. through 11 a.m., and (ii) the Coast Guard will give advance notification via maritime advisories so mariners can adjust their plans accordingly, and will continue such advisories on the status of the security zone until the completion of the event.

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 received no comments from the Small Business Administration on this rule. 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 may affect the following entities, some of which may be small entities: the owners or operators of vessels intending to operate or transit through or within, or anchor in, the security zone during the enforcement period. This security zone will not have a significant economic impact on a substantial number of small entities for the reasons provided under Regulatory Planning and Review.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule affects 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 establishing a security zone. This rule is categorically excluded from further review under paragraph 34(g) 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 .

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

I. Background

The RESTORE Act, Public Law 112-141 (July 6, 2012), codified at 33 U.S.C. 1321(t) and note, 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 (Trust Fund). The Trust Fund will contain 80 percent of the administrative and civil penalties paid by the responsible parties 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 RESTORE Act. On August 15, 2014, the Department of Treasury (Treasury) issued regulations (79 FR 48039) applicable to all five components, and which generally describe the responsibilities of the Federal and State entities that administer RESTORE Act programs and carry out restoration activities in the Gulf Coast Region.

Two of the five components, the Comprehensive Plan and Spill Impact Components, are administered by the Council, an independent federal entity created by the RESTORE Act. Under the Spill Impact Component (33 U.S.C. 1321(t)(3)), the subject of this regulation, 30 percent of funds in the Trust Fund will be disbursed to the five Gulf Coast States (Alabama, Florida, Louisiana, Mississippi, and Texas) or their administrative agents based on an allocation formula established by the Council by regulation based on criteria in the RESTORE Act. The RESTORE Act establishes a statutory minimum under which each of the five Gulf Coast States is guaranteed five percent of the funds made available in a fiscal year under this component. In order for funds to be disbursed to a Gulf Coast State, the RESTORE Act requires each Gulf Coast State to develop a SEP and submit it to the Council for approval. The RESTORE Act specifies the particular entity within each Gulf Coast State that will prepare the individual SEPs: in Alabama, the Alabama Gulf Coast Recovery Council; in Florida, a consortium of local political subdivisions that includes a minimum of one representative of each affected county (officially named the “Gulf Consortium” as organized under Florida law); in Louisiana, the Coastal Protection and Restoration Authority of Louisiana; in Mississippi, the Office of the Governor or an appointee of the Office of the Governor; and in Texas, the Office of the Governor or an appointee of the Office of the Governor. 33 U.S.C. 1321(t)(3)(B)(iii).

SEPs must meet the statutory requirements of the RESTORE Act, including: (1) All projects, programs and activities included in the SEP are eligible activities as defined by the RESTORE Act; (2) all projects, programs and activities included in the SEP contribute to the overall economic and ecological recovery of the Gulf Coast; (3) the SEP takes the Council's Comprehensive Plan into consideration and is consistent with the goals and objectives of the Comprehensive Plan; and (4) no more than 25 percent of the allotted funds are used for infrastructure projects unless the SEP contains certain certifications from the Gulf Coast State submitting the SEP. The funds the Council disburses to the Gulf Coast States upon approval of a SEP will be in the form of grants. As required by federal law, the Council will award a grant or grants to each of the Gulf Coast States and incorporate into the grant award(s) standard administrative terms on such topics as recordkeeping, reporting, and auditing. The Council is currently developing another set of regulations to more fully implement the Spill Impact Component of the RESTORE Act. These regulations will be published in the Federal Register at a later date and will establish how funds made available from the Trust Fund will be allocated based on the formula between the five Gulf Coast States. It will also generally describe the responsibilities of the Gulf Coast States in applying for and administering the financial assistance awards made under the Spill Impact Component.

Each of the five Gulf Coast States, Alabama, Florida, Louisiana, Mississippi, and Texas, are statutorily guaranteed a minimum of five percent of amounts made available from the Trust Fund under the Spill Impact Component each fiscal year. 33 U.S.C. 1321(t)(3)(A)(iii). A Gulf Coast State may receive more than the statutory minimum depending on the calculation of each Gulf Coast State's share using an allocation formula established by the Council by regulation based on criteria specified in the Act. 33 U.S.C. 1321(t)(3)(A)(ii). The Council is developing a regulation to be published in the Federal Register at a later date establishing this allocation formula.

The Council is issuing this regulation as an Interim Final Rule in order to facilitate expeditious development of SEPs by the Gulf Coast States and thus make funds available sooner for the restoration and protection of the Gulf Coast Region. The Council is not providing a waiting period for implementation of this Interim Final Rule because the five affected parties (four of the Gulf Coast States and the Gulf Consortium of Florida counties) are already on notice of the contents of the Interim Final Rule and it does not change any existing requirement that would necessitate any sort of transition period.

Under this regulation an amount of funds less than or equal to the statutory minimum allocation (five percent of funds available under the Spill Impact Component) would be available to a Gulf Coast State, or eligible entity for a SEP that funds planning activities only, an eligible activity under the Spill Impact Component. 33 U.S.C. 1321(t)(1)(B)(i)(VIII); 33 U.S.C. 1321(t)(3)(B)(i)(I). Eligible entities include the States of Louisiana, Mississippi, and Texas, the Alabama Gulf Coast Recovery Council, and the Gulf Consortium of Florida counties. All planning activities authorized under the Interim Final Rule would relate solely to the development of a comprehensive SEP, including conceptual design and feasibility studies related to specific projects. It does not include engineering and environmental studies related to specific projects. It also does not include any pre-award costs incurred prior to the date of publication of this Interim Final Rule; any pre-award costs incurred after the date of publication will be evaluated pursuant to 2 CFR Part 200. In order to receive a grant for planning activities under this Interim Final Rule, the Gulf Coast State or eligible entity must submit an application for grant funding to the Council for approval.

The Council will accept comments on the Interim Final Rule for 30 days after publication, and publish a Final Rule after considering any comments.

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 this Interim Final Rule will not have a significant economic impact on a substantial number of small entities. The Council hereby certifies that this rule will not have a significant economic impact on a substantial number of small entities, for the following reasons.

This rule, if implemented, would only affect the those Gulf Coast States that are eligible recipients of these funds, and States are not considered “small entities” under the Regulatory Flexibility Act. For two Gulf Coast States, Alabama and Florida, the Act mandates that entities not officially part of the Executive Office of the State's government develop the SEPs. The Alabama Gulf Coast Recovery Council, in the context of the Act, serves as an administrative agent of the State of Alabama so the effects of this rule are still directed solely at the State. For the State of Florida, while the Gulf Consortium of counties is tasked with developing the SEP, it is a consortium of 23 counties with a population of greater than 50,000. As such neither entity is considered “small entities” under the Regulatory Flexibility Act.

Additionally, while this rule describes procedures concerning the allocation and expenditure of amounts from the Trust Fund under the Spill Impact Component, most of these requirements come from the RESTORE Act itself or other Federal law. The RESTORE Act determines the statutory minimum percentage of funds available to the Gulf Coast States under the Spill Impact Component.

Because no small entities will be impacted by this rule no initial regulatory flexibility analysis is required, and none has been prepared. Notwithstanding this certification, the Council invites comments on this rule's impact on small entities.

The collections of information contained in this Interim Final Rule would at most require submissions of grant paperwork from five entities (four of the Gulf Coast States, or their administrative agents, and the Gulf Consortium) below the threshold requirement for application of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). As such, any request for information under this Interim Final Rule is not considered a “collection of information” subject to the Paperwork Reduction Act of 1995. Notwithstanding this determination, the Council invites comments on the application of the Paperwork Reduction Act to this Interim Final Rule.

As an independent federal entity that is composed of, in part, six federal agencies, including the Departments of Agriculture, the Army, Commerce, and the Interior, the Department in which the Coast Guard is operating, and the Environmental Protection Agency, the requirements of Executive Orders 12866 and 13563 are inapplicable to this rule.

For the reasons set forth in the preamble, the Gulf Coast Ecosystem Restoration Council amends 40 CFR to establish a new chapter VIII, consisting of part 1800, to read as follows:

Abbreviations Frequently Used AAR Association of American Railroads CFR Code of Federal Regulations FRA Federal Railroad Administration MGT million gross tons NPRM notice of proposed rulemaking PIH material poisonous by inhalation (as defined in 49 CFR 171.8, 173.115 and 173.132) hazardous material PTC positive train control (as further described in 49 CFR 236.1005) PTCIP PTC Implementation Plan (as required under 49 U.S.C. 20157 and further described in 49 CFR 236.1011) PTCSP PTC Safety Plan (as further described in 49 CFR 236.1015) PTCWG PTC Working Group of the Railroad Safety Advisory Committee RFA Request for Amendment (of a plan or system made by a railroad required to implement a PTC system as defined in 49 CFR 236.1003, in accordance with 49 CFR 236.1021) RRR Retrospective Regulatory Review RSAC Railroad Safety Advisory Committee RSIA Sec. 104 of the Rail Safety Improvement Act of 2008 (Public Law 110-432, Div. A) (49 U.S.C. 20157) Sec. section WG Working Group Terms Frequently Used

Categorical de minimis exception means the exception to the requirement to implement a PTC system on a given track segment provided by 49 CFR 236.1005(b)(4)(iii)(A) and (B) before this final rule is effective and by 49 CFR 236.1005(b)(4)(iii)(A) and (B) after this final rule is effective.

General de minimis exception means the exception to the requirement to implement a PTC system on a given track segment provided by 49 CFR 236.1005(b)(4)(iii)(C) that existed prior to this final rule and by 49 CFR 236.1005(b)(4)(iii)(A) and (C) after this final rule is effective.

Old section or old provision refers to the section or provision as it existed on the day before the section or provision of this final rule is effective. PTC-preventable accident means an accident or incident that could be prevented by the functions of a positive train control system required by 49 U.S.C. 20157.

Section 104 of the Rail Safety Improvement Act of 2008, Public Law 110-432, 122 Stat. 4854, (Oct. 16, 2008) (codified at 49 U.S.C. 20157) (hereinafter “RSIA”) requires the installation of PTC systems governing all train operations on certain track. RSIA defines “PTC system” as “a system designed to prevent train-to-train collisions, over-speed derailments, incursions into established work zone limits, and the movement of a train through a switch left in the wrong position.” 49 U.S.C. 20157(i)(3). While there are different PTC system configurations, and there is no specific technological model that defines a PTC system, all PTC systems generally have the same four parts: (1) An onboard apparatus for the locomotive controlling each applicable train; (2) wayside devices such as wayside interface units; (3) a centralized dispatch system; and (4) a communications system linking these components.

On December 11, 2012, FRA published a notice of proposed rulemaking (NPRM) primarily to amend its existing PTC regulations to provide covered railroads with additional regulatory guidance and flexibility for their implementation of this statutory mandate. 77 FR 73589. Having considered public comments in response to the NPRM and FRA's subsequent notice of clarification issued on January 28, 2013 (78 FR 5767), and having later met with the PTC Working Group (PTC WG) of the Railroad Safety Advisory Committee (RSAC), FRA now responds to the comments on the proposed regulatory changes and issues this final rule, which will become effective on October 21, 2014.

For years, FRA has supported the nationwide proliferation and implementation of PTC systems, forecasting substantial benefits of advanced train control technology in supporting a variety of business and safety purposes. In 2005, for example, FRA promulgated regulations providing for the voluntary implementation of processor-based train control systems. See 70 FR 11,052 (Mar. 7, 2005) (codified at 49 CFR part 236, subpart H). However, implementation was not mandated by FRA because the costs for the systems far outweighed the possible safety benefits at that time.

Partially as a consequence of certain very severe railroad accidents, coupled with a series of other less serious accidents, Congress passed RSIA, which mandates the implementation of PTC systems by December 31, 2015, on lines meeting certain thresholds. RSIA requires PTC system implementation on all Class I railroad main lines that carry poison- or toxic-by-inhalation hazardous (PIH or TIH) materials and 5 million gross tons (MGT) or more of annual traffic, and on any railroad's main line tracks over which intercity or commuter rail passenger train service is regularly provided. In addition, RSIA provides the Secretary of Transportation (Secretary) with the authority to require PTC system implementation on any other line. The Secretary has delegated this authority to the Administrator of FRA. 49 CFR 1.89 (formerly codified at 1.49).

FRA's existing PTC regulations (codified primarily in 49 CFR part 236 subpart I) include various exceptions from mandatory PTC system implementation. For instance, the de minimis exception was developed to provide railroads an opportunity to avoid PTC system implementation on certain freight-only track segments where the burdens of the regulation would yield a gain of trivial or no value. See 49 CFR 236.1005(b)(4)(iii). In accordance with FRA's statutory authority, FRA's existing regulations also include a limited operations exception, which is for passenger operations or segments over which limited or no freight railroad operations occur. 49 CFR 236.1019(c).

In a petition for rulemaking dated April 22, 2011 (“Petition”), the Association of American Railroads (AAR) requested that FRA initiate a rulemaking to expand the de minimis exception and otherwise amend the rules concerning the limited operations exception, en route failures of trains operating within PTC systems, and the discontinuance of signal systems once PTC systems are installed. AAR also requested that FRA develop a new exception that would allow unequipped trains associated with certain yard operations to operate within PTC systems. In response to the Petition, FRA issued an NPRM on December 11, 2012, proposing several changes to part 236, subpart I, and expressing concerns over several other suggestions made in the Petition. The scope of the rulemaking was later clarified in a notice of clarification published January 28, 2013, in order to ensure that all commenters were aware that all of the Petition's proposals remained open for consideration.

Having considered the public comments on the NPRM and notice of clarification and discussions with the RSAC PTC Working Group, FRA is promulgating this final rule. The rule makes substantial revisions to the de minimis exception for freight-only track segments under 49 CFR 236.1005(b)(4)(iii). In particular, this final rule revises the annual car limitation to remove cars containing only a residue  1 of PIH materials; replaces the criterion “ruling grade of less than one percent” with the term “heavy grade” as defined in FRA's end-of-train device rule; limits to two per day the number of trains carrying any quantity of PIH materials; and replaces the temporal separation requirement with a requirement that a train carrying any quantity of PIH materials be operated with a vacant block ahead of and behind the train. A new exception for PTC-unequipped locomotives used in freight operations and PTC-unequipped freight trains has been added, which allows yard movements by these locomotives and trains to operate on PTC-equipped main track with speed restrictions and with operating rules in place to protect against conflicting movements. Further, the en route failure provision at 49 CFR 236.1029 has also been revised to remove the requirement that an absolute block be placed in advance of train movements where the onboard PTC apparatus fails en route, as well as to add several temporary exceptions that last from the effective date of the final rule through the two years after the statutory deadline for PTC system implementation. In addition to these changes, the final rule provides in 49 CFR part 235 an alternative method for reviewing some applications for signal system modifications related to PTC system implementation and makes a number of technical corrections to 49 CFR parts 234 and 236.

For the first 20-years of the final rule, the estimated quantified benefits to society, due to the regulatory changes, total approximately $700 million discounted at 7 percent and $922 million discounted at 3 percent. The largest components of the benefits come from reduced costs of PTC system wayside components because of extensions of the de minimis risk exception under 49 CFR 236.1005(b)(4)(iii) and reduced costs of onboard PTC systems on locomotives used in freight operations in yard areas. A smaller benefit, independent of the other benefits, comes from changes to the application process for a discontinuation or material modification of a signal system under 49 CFR part 235 where the application would have been filed as part of a PTC system installation.

FRA analyzed the final rule under three cases. The “base case” is FRA's best estimate of the likely impact of the final rule. To address uncertainty related to assumptions and inputs, FRA also analyzed a “high case,” where the impacts are greater than FRA's best estimate, and a “low case,” where the impacts are less than FRA's best estimate. The cases used for the sensitivity analysis are discussed in more detail below, in the discussion of regulatory impact. All values in the analysis are measured in 2009 dollars. FRA is using 2009 dollars throughout this analysis, to aid in comparison to the analysis of the original 2010 PTC rule. The following table presents the quantified benefits discounted over 20 years:

For the same 20-year period, the estimated quantified cost totals $6.61 million discounted at 7 percent and $9.75 million discounted at 3 percent. The costs associated with the regulatory relief result from a slight increase in accident avoidance risk. FRA was able to estimate the monetized costs affected by changes in the de minimis provisions, but was not able to estimate the costs of changes to the provision affecting locomotives in yard areas. The following table presents the total quantified costs of the final rule:

The net benefit amounts for each case, subtracting the costs from the benefits, provide the following results:

The analysis indicates that the savings of the final rule far outweigh the cost.

The President signed RSIA into law on October 16, 2008, mandating PTC system implementation by December 31, 2015. To effectuate this goal, RSIA required the covered railroads to submit for FRA approval a PTC implementation plan (PTCIP) within 18 months ( i.e., by April 16, 2010).

On July 27, 2009, FRA published an NPRM regarding the mandatory implementation and operation of PTC systems in accordance with RSIA. During the comment period for that proceeding, CSX Transportation, Inc. (CSX) suggested that FRA create a de minimis exception to the requirement that lines carrying PIH materials traffic (but not applicable passenger traffic) be equipped with PTC systems.

The final rule, published on January 15, 2010, included a de minimis exception, since FRA believed that it contained significant merit and that it fell within the scope of the issues set forth in the proposed rule. However, since none of the parties had an opportunity to comment on this specific exception as provided in the final rule, FRA sought further comments on the extent of the de minimis exception. The further comments responsive to this issue were largely favorable, although AAR sought some further modification and clarification. In publishing its second PTC system final rule on September 27, 2010, FRA decided not to amend the de minimis exception any further based on the comments submitted.

AAR, in its Petition dated April 22, 2011, requested that FRA initiate a rulemaking to expand the de minimis exception and otherwise amend the rules concerning the limited operations exception, en route failures of trains operating with PTC systems, and the discontinuance of signal systems once PTC systems were installed. AAR also requested that FRA develop a new exception to allow unequipped trains to operate on PTC lines during certain yard operations. On October 21, 2011, FRA held a meeting in Washington, DC with the PTC WG to the RSAC to seek input and guidance concerning the issues raised in AAR's Petition and other technical amendments. FRA facilitated a valuable group discussion relating to each of the proposed amendments.

Taking into account this input, FRA published an NPRM on December 11, 2012. With respect to the categorical de minimis exception at 49 CFR 236.1005(b)(4)(iii), FRA proposed to modify the categorical de minimis exception to raise the maximum number of freight cars containing PIH materials from fewer than 100 cars to fewer than 200 cars and revise the grade limitation to be more consistent with the definition of “heavy grade” present in 49 CFR part 232. FRA also proposed to remove the traffic limitation of 15 MGT from the general de minimis exception in paragraph (b)(4)(iii)(C), but not the categorical exception in paragraph (b)(4)(iii)(B). In response to AAR's suggestions for a yard move exception, FRA proposed to add a freight yard movement exception, which would authorize movements by unequipped locomotives over PTC-equipped main line track segments for the purpose of switching service or transfer train movements related to freight operations. FRA did not propose to create an additional limited operations exemption, remove oversight from signal system discontinuances, or modify the default rules for resolving en route failures of a PTC system, though FRA requested comments on these elements of AAR's Petition. FRA also proposed a number of technical amendments to the signal and grade crossing regulations of 49 CFR parts 234, 235, and 236. After learning that some viewed the scope of the NPRM as ambiguous, FRA published a notice of clarification on January 28, 2013, to ensure that commenters would have an adequate opportunity to address each element of AAR's Petition. After the close of the comment period, FRA held a meeting of the RSAC PTC WG on May 24, 2013, in order to gather more information relating to the comments and an additional meeting on July 9, 2013, to discuss draft rule text.

In March 1996, FRA established RSAC, which provides a forum for developing consensus recommendations to the Administrator of FRA on rulemakings and other safety program issues. 61 FR 9740 (Mar. 11, 1996). RSAC's charter under the Federal Advisory Committee Act (Pub. L. 92-463) was most recently renewed in 2014. 79 FR 28591 (May 16, 2014).

RSAC includes representation from all of FRA's major stakeholders, including railroads, labor organizations, suppliers and manufacturers, and other interested parties. An alphabetical list of RSAC members includes the following:

When appropriate, FRA assigns a task to RSAC, and after consideration and debate, RSAC may accept or reject the task. If the task is accepted, RSAC establishes a working group that possesses the appropriate expertise and representation of interests to develop recommendations to FRA for action on the task. These recommendations are developed by consensus. A working group may establish one or more task forces to develop facts and options on a particular aspect of a given task. The task force then provides that information to the working group for consideration.

If a working group comes to a unanimous consensus on recommendations for action, the proposal is presented to the full RSAC for a vote. If the proposal is accepted by a simple majority of RSAC, the proposal is formally recommended to FRA. FRA then determines what action to take on the recommendation. Because FRA staff members play an active role at the working group level in discussing the issues and options and in drafting the language of the consensus proposal, FRA is often favorably inclined toward the RSAC recommendation.

However, FRA is in no way bound to follow the RSAC recommendation, and the agency exercises its independent judgment on whether the recommended rule achieves the agency's regulatory goal, is soundly supported, and is in accordance with policy and legal requirements. Often, FRA varies in some respects from the RSAC recommendation in developing the actual regulatory proposal or final rule. Any such variations would be noted and explained in the rulemaking document issued by FRA. If the working group or RSAC is unable to reach consensus on recommendations for action, FRA will proceed to resolve the issue through traditional rulemaking proceedings.

In 2009, FRA re-convened the PTC Working Group that had produced the rule recommendation resulting in 49 CFR part 236, subpart H, the set of regulations governing the voluntary implementation of processor-based signal and train control systems. The following organizations contributed members: AASHTO; ACC; Amtrak, APTA; ASLRRA; AAR; ASRSM; BMWED; BLET; BRS; FTA,* IBEW; NRCMA; NTSB; RSI; Transport Canada; * Tourist Railway Association, Inc.; and UTU. (The asterisk indicates associate, non-voting membership.)

While the rule was not put before the PTC Working Group or the RSAC to develop a consensus on recommendations for action, FRA consulted with the PTC Working Group several times in the development of both the NPRM and this final rule.

FRA received nine comments in response to the NPRM. Two of these comments were from individuals. The remaining seven were from GE Transportation; the Western Interstate Energy Board High Level Radioactive Waste Committee (WIEB); Amtrak; AAR; ACC; a joint comment from the Brotherhood of Railroad Signalmen, Sheet Metal, Air, Rail and Transportation Workers, and the American Train Dispatchers Association; and the Transportation Trades Department, AFL-CIO. The majority of the content of these comments is discussed in the appropriate portions of the Section-by-Section Analysis. However, some portions of the Petition and comments received do not pertain to sections modified by this final rule. Unless otherwise noted, all references below to a “section” or to “§ ” refer to a section in title 49 of the Code of Federal Regulations (CFR).

AAR, in its Petition, recommends that FRA allow automatic approval for the removal of cab signal systems from PTC-equipped lines or the removal of any signal system where stand-alone PTC systems are used, avoiding the need for an application pursuant to 49 CFR part 235 or the parallel process established by § 236.1021. However, the Petition did not provide adequate justification to support the categorical approval of such changes without any FRA oversight. AAR's petition even conceded that new PTC systems are likely to suffer en route failures, as discussed in more detail below. Such failures would be mitigated by the presence of an underlying signal system. FRA noted these difficulties in the NPRM, and the comments received did not provide a basis to conclude otherwise; the only comment received on the matter was a comment against the proposal. Additionally, Amtrak's comment on § 235.7, discussed below, reflects a similar concern with the proposal for this section. The final rule does not amend § 236.1021.

AAR also suggested in its Petition that FRA should exempt certain limited freight operations in a similar manner as provided for limited passenger operations under § 236.1019(c). AAR suggested exempting track segments over which not more than two trains containing PIH materials carloads are transported daily, where the annual freight traffic over the line is less than 15 MGT. RSIA provided FRA with the authority to redefine “main line” for intercity or commuter rail passenger transportation routes or segments where there are limited or no freight operations. See 49 U.S.C. 20157(i)(2)(B). Under this authority, FRA, in § 236.1019(c), provides an exception from PTC system implementation on line segments where there are limited or no freight operations and where either all trains are limited to restricted speed, temporal separation is provided between passenger trains and other trains, or passenger service is operated under a risk mitigation plan. The purpose of § 236.1019(c) is to eliminate the requirement for PTC system installation in the case of low-risk passenger operations.

Because the express language of 49 U.S.C. 20157(i)(2)(B) only applies to “intercity rail passenger transportation or commuter rail passenger transportation routes or segments,” FRA does not believe it is within its authority to use this statutory framework in order to exclude track segments carrying PIH materials from the PTC implementation mandate. Nevertheless, FRA recognizes that the exception sought by AAR already exists, albeit in a different and limited form. The exception of § 236.1005(b)(4)(iii)(C) allows railroads to apply for an exception from the requirement to implement PTC systems on track segments where the railroad can demonstrate that the track segment poses an equivalent or lesser degree of risk as the track segments covered by the categorical de minimis exception. AAR, in its comment, recommended a new de minimis exception for track segments with only two trains carrying PIH materials per day and fewer than 300 loaded PIH cars annually, or 150 loaded PIH cars in dark territory. Given that the daily limit on trains carrying PIH materials has been added to the existing categorical de minimis exception as discussed above, this provision would effectively replace the categorical de minimis exception of § 236.1005(b)(4)(iii). While there may be some limited circumstances under which FRA could view a track segment with as many as 300 loaded PIH cars as posing an equivalent or lesser degree of risk, FRA does not have an adequate basis for concluding that would be the case for all circumstances. Accordingly, the final rule does not adopt AAR's suggestion to amend § 236.1019.

The WIEB comment expresses concerns over costs of transportation of spent nuclear fuel and high-level radioactive waste as they may relate to PTC system implementation. However, these concerns are outside the scope of the present rulemaking.

Until amended by this final rule, paragraph (b) of § 234.207 read as follows: “Until repair of an essential component is completed, a railroad shall take appropriate action under § 234.105, Activation failure, § 234.106, Partial activation, or § 234.107, False activation, of this part.” During training and enforcement actions, FRA has found the regulated entities to have misconceptions and misunderstandings regarding the response required under § 234.207. FRA believes that various regulated entities have misread paragraph (b) to indicate that the necessary response to any essential component of a highway-rail grade crossing warning system failing to perform its intended function under paragraph (a) is only applicable where the result of such failure is one of the three types of warning system malfunctions listed in paragraph (b). In the NPRM, FRA proposed to modify the language of paragraph (b) to make clear that if an essential component fails, it must be repaired without undue delay and regardless of whether the component failure results in an activation failure, partial activation, or false activation.

In response to this proposal, one individual commenter asked under what circumstances an essential component could fail without constituting one of these three error states. FRA believes that such a circumstance could arise specifically in the context of a partial activation, which is defined to be an “activation of a highway-rail grade crossing warning system indicating the approach of a train, however, the full intended warning is not provided due to one of the following conditions: (1) At non-gated crossings equipped with one pair of lights designed to flash alternately, one of the two lights does not operate properly (and approaching motorists cannot clearly see flashing back lights from the warning lights on the other side of the crossing; (2) at gated crossings, the gate arm is not in a horizontal position; or (3) at gated crossings, any portion of a gate arm is missing if that portion normally had a gate arm flashing light attached.” This exclusive list of grade crossing partial activation failures requires remedial action under § 234.106, but does not include all potential failures of essential components. For instance, at a gated crossing equipped with two pairs of lights designed to flash alternately, if one pair of lights is not operating as intended, that failure does not constitute a partial activation or activation failure, but is nonetheless a failure of an essential component of the grade crossing warning system that should be repaired without undue delay.

The commenter also requested that FRA enumerate what constitutes an “essential component.” FRA declines to do so, as the language is consistent with FRA's longstanding signal and train control rules. 2 Given the variety of grade crossing warning systems currently in use, an exclusive list of components deemed essential would bloat the rule and would likely serve only to create more confusion.

To resolve the ambiguity of § 234.207, paragraph (a) is amended to make clear that all failures of essential components, including but not limited to failures resulting in an activation failure, partial activation, or false activation, must be investigated to determine the cause of the failure to perform their intended function and the failed components must be adjusted, repaired, or replaced without undue delay. Paragraph (b) is amended to make clear that, for those failures of essential components that constitute false activations, partial activations, and activation failures, railroads must also comply with §§ 234.105, 234.106, or 234.107, as appropriate, until such adjustments, repairs, or replacements are made.

Until amended by this final rule, § 234.213 indicated that each circuit that affects the proper functioning of a highway-rail grade crossing warning system shall be kept free of any ground or combination of grounds that will permit a current flow of 75 percent or more of the release value of any relay or electromagnetic device in the circuit. With the migration of many warning systems, subsystems, and components from relay-based to microprocessor-based technologies, FRA believes that a more comprehensive indicator of prohibited current flow grounds is required. In the NPRM, FRA proposed to amend this language to prohibit any ground that could “adversely affect the proper safety-critical functioning of the warning system.”

Several commenters noted the ambiguity of this language, and suggested revisions to both define the quantity at issue and the meaning of “adversely affect.” FRA agrees that the proposed language was unnecessarily ambiguous, and therefore is amending the proposed rule text to be consistent with its prior prohibition while addressing processor-based systems. The final rule prohibits any ground or combination of grounds that will permit a current flow of 75 percent or more of the value necessary to retain a permissive state of a safety appliance such as a highway-rail grade crossing warning system. Because it is neither feasible nor necessary to test the internal microprocessor or microprocessor memory circuitry for ground leakage current, the final rule also explicitly excludes such circuitry from the grounds prohibition. To improve the readability of the rule, the text has been separated into two paragraphs: Paragraph (a) providing the limitation on grounds, and paragraph (b) listing the exceptions.

This final rule adds new § 235.6, which allows specified changes within existing signal or train control systems to be made without the necessity of filing an application for approval with FRA's Associate Administrator for Railroad Safety/Chief Safety Officer (Associate Administrator). The amendment provides each railroad a simplified process to obtain approval to modify existing signal systems directly associated with PTC system implementation.

Under a different provision, § 235.7, Changes not requiring filing of application, a railroad may avoid filing an application for a broad variety of modifications to a signal system, so long as the resultant arrangement is in compliance with part 236. FRA recognizes that, during the process of installing the wayside PTC equipment, the railroads may have the resources and time available to implement needed or desired wayside signal system upgrades. Such modifications generally require FRA approval in accordance with § 235.5, Changes requiring filing of application. Given that the outcome of such modifications must be in compliance with part 236, FRA now creates an expedited approval process for modifications of the signal system by the installation, relocation, or removal of signals, interlocked switches, derails, movable-point frogs, or electronic locks in an existing system where the modification is directly associated with the implementation of PTC systems. Instead of filing an application for approval to the Associate Administrator, a railroad is permitted to instead submit its request to the FRA regional office that has jurisdiction over the affected territory, with a copy provided to representatives of signal employees, similar to the information provided under the provisions for pole line circuit elimination, § 235.7(c)(24)(vi). If the Regional Administrator for the appropriate regional office denies approval of the requested modification, the request would then be forwarded to the FRA Railroad Safety Board as an application for signal system modification. However, express approval from the Regional Administrator is necessary before the modifications may begin. In the NPRM, this provision was located in a new paragraph of § 235.7, but has been moved to a new section to reflect that it does not fall cleanly into either § 235.5 or § 235.7.

Amtrak, in its comment, sought clarification that FRA does not intend to allow the removal of signal systems without approval under part 235. This reading is correct; the amendments to § 235.7 do not allow the discontinuance of a signal system nor a decrease of its limits. FRA rejected such a proposal, as discussed in more detail below in the analysis of § 236.1021. Section 235.5 defines three types of changes: discontinuance; decrease of limits; and modification. The language of § 235.6 authorizes this expedited procedure only for modifications, and not for discontinuances or decreases of limits. Accordingly, a railroad may not use the process defined in § 235.7(d) for the removal of an entire signal system. Amtrak continues to have the authority to comment on any such proposed removal through a part 235 discontinuance proceeding or review of a railroad's Request for Amendment (of a plan or system made by a PTC railroad in accordance with § 236.1021) (RFA) requesting discontinuance in accordance with § 236.1021(c).

AAR asked that FRA revise this section to be consistent with § 235.7(c)(24)(vi), governing modifications of signal systems as part of a conversion from pole line circuits to electronic (coded) track circuits. Paragraph (c)(24)(vi) provides that a signal system modification will be deemed acceptable unless the Regional Administrator stays action within 60 days of receiving notice from the railroad of the proposed modifications, whereas paragraph (d) requires an affirmative response from the Regional Administrator. Because FRA anticipates signal system modifications related to PTC system implementation to be of a broader nature than the modifications associated with pole line conversion, the 60-day deadline of the pole line conversion provision would not provide adequate time for review in all cases. However, FRA will work expeditiously to respond to all railroad requests for modifications under new § 235.6.

The final rule removes paragraph (i), Preemptive effect. FRA believes that this provision is unnecessary because 49 U.S.C. 20106 sufficiently addresses the preemptive effect of FRA's regulations. Providing a separate Federal regulatory provision concerning the preemptive effect of 49 CFR part 236 is duplicative and unnecessary. FRA received no comments on the proposal to remove the provision on preemptive effect.

Mirroring old § 234.213, old § 236.2 provided that each circuit that affects the safety of train operations shall be kept free of any ground, or combination of grounds, that permits a current flow of 75 percent or more of the release value of any relay or electromagnetic device in the circuit. For the same reasons cited in the discussion of old and revised § 234.213 above, the final rule amends old § 236.2 to prohibit any ground or combination of grounds that permits a current flow of 75 percent or more of the value necessary to retain a permissive state of a safety appliance, such as a signal lamp or locking circuit. As with § 234.213, the text has been separated into two paragraphs: paragraph (a) providing the limitation on grounds, and paragraph (b) listing the exceptions.

In the interest of providing clarity, FRA amends old § 236.15 to require explicitly the designation of PTC system territory, equal to the other types of signal and train control systems that are already required to be designated in a railroad's timetable instructions (i.e., “[a]utomatic block, traffic control, train stop, train control, and cab signal . . .”). During the July 9, 2013, PTC WG meeting, FRA discussed broadening the old provision to require that “all signal and train control systems” be designated in timetable instructions, in order to account for future advances in signal and train control systems. However, the discussion indicated that this change would cause more confusion, and accordingly the final rule simply adds PTC to the list of systems governing operations in a territory that must be designated in timetable instructions. Beyond that issue, FRA received no comments on this provision as proposed.

Old § 236.567, which applied to territories where “an automatic train stop, train control, or cab signal device fails and/or is cut out en route,” required trains with en route failures to proceed in a specified restrictive manner until reaching the next available point of communication, where a report had to be made to a designated officer and an absolute block had to be established in advance of the train on which the device was inoperative. Once the railroad established the absolute block (under the manual block system), the train was permitted to proceed at a speed not exceeding 79 miles per hour (mph), premised upon the same requirement in old § 236.0 as applicable to a train operating in a manual block system with an absolute block in advance of the train. However, effective on or after January 17, 2012, manual block systems are no longer approved as a method of operation for freight trains operating at greater than 49 mph or passenger trains operating at greater than 59 mph under § 236.0(c)(2). See 75 FR 2598 at 2607 (Jan. 15, 2010). This change to § 236.0 resulted in an inconsistency between § 236.0 and old § 236.567, which was not contemporaneously revised.

To rectify this inconsistency, FRA's present final rule amends old § 236.567 to reflect the amendment previously made to § 236.0. Accordingly, for trains operating in territory without a block signal system installed and operated in compliance with part 236, this amendment to old § 236.567 reduces the maximum allowable speed from 79 mph to 59 mph for passenger trains and to 49 mph for freight trains. Where a block signal system is operational, the maximum allowable speed remains at 79 mph. FRA received no comments on this provision as proposed.

Because the harmonizing changes made the old paragraph structure too complicated, FRA has reorganized the section with discrete paragraphs for each of the three operating phases: (1) Prior to the report to a designated officer; (2) after the report but prior to the establishment of an absolute block in advance of the train; and (3) after the establishment of the absolute block. This reorganization does not change the meaning of § 236.567, except as discussed above. For trains operating without a block signal system installed and operated in compliance with part 236, this amendment to § 236.567 reduces the maximum allowable speed from 79 mph to 59 mph for passenger trains and to 49 mph for freight trains. Where a block signal system is operational, the maximum allowable speed remains at 79 mph. The language has also been revised to replace the phrase “medium speed” with an explicit speed, 40 mph, to reduce confusion.

The final rule replaces “PIH Materials” with “PIH materials” to correct an error in capitalization and to change the definition to make clear that even though the term is in the plural, the term includes the singular (i.e., only one PIH material).

Paragraph (a) specifies PTC system functionality and implementation requirements. A typographical error is corrected in the table header in paragraph (a); an asterisk is present with no accompanying text.

Paragraph (b) provides for certain exclusions and the temporary rerouting of unequipped locomotives, locomotive consists, and trains (i.e., locomotives, locomotive consists, and trains not equipped with PTC) on PTC-system-equipped track. Until amended by this final rule, the allowable exclusions of § 236.1005(b)(4)(iii) addressed track segments with de minimis risk based upon specified criteria that can be expected to result in a risk a PTC-preventable accident being negligible on the subject track segment. The categorical criteria under old paragraph (b)(4)(iii)(A) and (B) were as follows:

• A minimal amount of PIH materials cars transported (fewer than 100 cars per year, either loads or residue);

• A train speed limitation of either Class 1 or 2 track as described in 49 CFR part 213;

• Less than 15 MGT of traffic annually;

• A ruling grade of less than 1 percent; and

• A train-spacing requirement where any train transporting a car containing PIH materials (including a residue car) shall be operated under conditions of temporal separation from other trains.

In its Petition, AAR made certain proposals to modify these criteria, which are further discussed below. In the NPRM, FRA adopted some of these proposals, modified others, and rejected some elements. In this final rule, FRA is adopting additional elements of the Petition and adjusting the general de minimis exception for clarity.

In considering the suggestions contained in the Petition, FRA recognizes that any de minimis exception (in the generic sense of the term, as developed in case law) must apply in a way that fulfills Congress' intent. In other words, such exceptions must only cover situations where “the burdens of regulation yield a gain of trivial or no value” and should apply not “to depart from the statute, but rather [as] a tool to be used in implementing the legislative design.” Environmental Defense Fund, Inc. v. EPA, 82 F.3d 451, 466 (D.C. Cir. 1996) (inner quotations omitted); Alabama Power Co. v. Costle, 636 F.2d 323, 360-61 (D.C. Cir. 1979).

FRA continues to believe that de minimis exceptions are warranted for low-density main lines with minimal safety hazards that carry a truly minimal quantity of PIH materials. The preamble discussion to the final rule published January 15, 2010, focused primarily on the risks associated with PIH materials exposure. However, any de minimis exception must also consider the risks associated with the events that Congress intended PTC systems must be designed to prevent. In other words, when a de minimis exception applies, there must be de minimis risk that a train-to-train collision, overspeed derailment, incursion into a roadway worker zone, or movement over a switch in the wrong position may occur. See 49 U.S.C. 20157(i)(3).

After reviewing the Petition and the comments received in response to the NPRM, FRA is amending the old categorical de minimis exception at § 236.1005(b)(4)(iii)(A) and (B) to reflect with the restrictions discussed below.

The final rule moves the annual limitation on cars carrying PIH materials from paragraph (b)(4)(iii)(A) into paragraph (b)(4)(iii)(B) and restricts its scope to no longer include cars containing only a residue of PIH material. As background, first, AAR proposed that the limit of fewer than 100 cars apply to loaded PIH cars only, not residue cars. FRA responded in the NPRM by proposing in § 236.1005(b)(4)(iii)(A) to increase the total car limit to fewer than 200 cars containing PIH materials, including both loaded cars and residue cars, expressing concern that completely excluding residue cars from consideration could increase the risk of a PIH materials release beyond a negligible level. As was noted in the NPRM, most residue tank cars are routed back to the original shipper along the identical route that brought them to the location where they were offloaded. While this fact supported FRA's proposal, it also indicated that the impact of excluding residue cars from consideration would not dramatically increase the set of track segments eligible for the de minimis exception, as most track segments that would qualify under the limit of fewer than 100 loaded cars would also qualify under the limit of fewer than 200 loaded and residue cars. The PTC WG identified two situations where residue cars are not travelling back along an identical route to their original shipment route. First, AAR identified situations where multiple track segments deliver loaded tank cars, with residue car traffic being consolidated for a return trip. Second, several members of the PTC WG raised the issue of tank car repair facilities. Because a tank car is considered to be a residue car unless it is refilled or cleaned and purged, the locations where the cleaning and purging take place will necessarily have a disproportionately high volume of residue tank cars that does not necessarily entail a disproportionately high level of risk from the residue of PIH materials. As the hazards related to the movement of residue PIH cars are diminished somewhat compared to the hazards of loaded PIH cars, and considering the public interest in purging, cleaning, and repairing cars handling PIH materials in a timely manner, FRA finds it unnecessary to address those limited number of line segments that may haul significantly more residue cars than loaded cars. Moreover, the new limitations that must be met to qualify under the de minimis exception further reduce the risk from these residue cars. For these reasons, FRA concludes that removing residue cars from the annual limit of fewer than 100 cars is appropriate.

This conclusion does not change DOT's underlying position on the risk posed by tank cars containing a residue of hazardous materials. Rather, FRA recognizes the contextual difference between regulating the treatment of individual tank cars containing a residue of hazardous materials and assessing the risk to a track segment as a whole based on the total number of tank cars containing a residue of hazardous materials operating over the track segment on an annual basis. It remains imperative for each car containing a residue of hazardous materials to be properly marked, labeled, placarded, and inspected prior to being offered for transportation, and to conform with all other regulations applicable to the transportation of hazardous materials. However, when viewed in conjunction with the other limitations of the de minimis exception, the movement of residue cars is not a determining factor in increasing the level of risk on a given track segment as a whole above a negligible level, and the final rule therefore removes cars containing only a residue of PIH materials from consideration in the annual car limit.

The old rule text did not provide a daily train limitation. However, with the potential increase in PIH materials traffic moving over a track segment under this final rule, FRA views it to be necessary to look not only to the risk profile of a track segment on an annual basis, but also on a day-by-day basis. In the NPRM, FRA proposed to add the limitation on trains per day carrying PIH materials to ensure that the risk of PIH materials release remained negligible in light of the other changes made to the de minimis exception. Under ordinary circumstances, one might reasonably expect the overall number of cars containing PIH materials to be distributed throughout the year, such that the train-per-day limit would not be necessary. AAR noted this in its comment, opposing the imposition of the limit but stating, “[f]rom an operational perspective, this limit is not a significant issue because the annual limit on the number of PIH cars makes a 2-train per day limit insignificant.” This perspective assumes some degree of uniform distribution of cars carrying PIH materials, but that assumption may not be met in all circumstances. Absent a daily limitation on the number of trains carrying PIH materials, a railroad would be permitted to operate a large number of trains carrying PIH materials in a single day on a track segment subject to the de minimis exception, while nonetheless increasing the exposure to the risk of PIH-materials release on that day well above what would be the case in the ordinary situation of transporting cars containing PIH materials regularly throughout the year, due to the increased PIH materials traffic on that particular day. The qualitative judgment of FRA is that such a potential outcome would likely exceed negligible risk and therefore the final rule adds an additional limit of two trains carrying any quantity of PIH materials per day to the de minimis exception. Because this restriction is not a calculation of the level of risk posed by aggregate movements over the track segment, but rather governs the day-to-day operations on the track segment, this limitation includes cars containing only a residue of PIH materials. The trains-per-day limitation removes such unusual operations from the scope of the general de minimis exception. It bears emphasis that AAR indicated in its comment that it viewed the limitation as “insignificant,” reflecting a degree of industry agreement with FRA's underlying premise that the limitation will not reach the ordinary circumstances that it is not intended to address. Rather, the limitation precludes only the unusual outlier situations which are best handled under paragraph (b)(4)(iii)(C). A railroad anticipating one or more days upon which it expects to move many trains carrying PIH materials may request that the track segment at issue be excluded despite the high number of trains carrying PIH materials on particular days by showing what steps will be taken to render the exposure to risk of PIH-materials release on those days to a level equivalent or lesser than the risk of operations where the transportation of cars containing PIH materials is divided throughout the year.

Until amended by this final rule, the categorical de minimis exception, under § 236.1005(b)(4)(iii)(B)( 1 ), limited maximum authorized train speed on the subject track segment to that afforded for Class 1 (10 mph) or Class 2 (25 mph) tracks in order to reduce the kinetic energy available in any accident and to ensure that involved tank cars carrying PIH materials are capable of surviving the forces generated. AAR's Petition proposed that the regulation provide a speed limitation only for those trains transporting PIH materials. Specifically, AAR proposed a speed restriction of 40 mph ( i.e., the same maximum authorized speed provided for certain rail-to-rail at-grade crossings under § 236.1005(a)(1)(i)), to be enforced by operating rules and only for trains carrying PIH materials. In the NPRM, FRA expressed concern that increasing the speed limit on the track segment from 25 mph to 40 mph would substantially increase the risk of PIH materials release due to the increase in kinetic energy in the event of a collision. However, comments received in response to the NPRM and discussions with the PTC WG indicate that the current track class limitation serves as a disincentive to maintain the track segment to a higher standard. By moving from a limitation based on track class (restricting the speed of all movement over the track segment) to a speed restriction for only those trains carrying PIH materials, the revised rule will encourage routing the PIH materials traffic over track segments maintained to a higher quality, which should decrease the risk of track-caused incidents. 3 Track-caused accidents and incidents are generally not PTC-preventable, but represent a larger percentage of accidents and incidents than PTC-preventable accidents and are appropriately considered when considering the overall level of risk posed by operations over a track segment.

In addition to the comments received and discussions during PTC WG meetings, FRA has also considered other limitations imposed on PIH materials traffic. When considering then-current tank car strength, the Pipeline and Hazardous Materials Safety Administration set a speed limitation of 50 mph for tank cars containing PIH materials. 49 CFR 174.86. Since that rulemaking, newer tank car designs have further reduced the probability of rupture in the event of collision or derailment due to improvements in structural design. When combined with the other limitations of the de minimis exception, the 40-mph limit is an appropriate replacement for the track class restriction that existed in old § 236.1005(b)(4)(iii)(B)( 1 ).

In the NPRM, FRA also expressed concern regarding the enforcement of a speed restriction for trains carrying PIH materials. AAR responded in its comment by noting that any speed restriction would be subject to errors by the locomotive engineer, whether that speed restriction was imposed for all trains operating over a given track segment or only for those trains carrying PIH materials. This argument has merit; without a PTC system or automatic train control system, a train's speed is limited only by rule and is subject to human failure by the train crew. It is also not unusual for FRA regulations or railroad operating rules to require temporary speed restrictions for certain trains or certain track segments, such as where a significant track defect exists.

In its Petition, AAR proposed that lines eligible for the categorical de minimis exception be restricted to grades that are not “heavy grades” as defined by FRA in part 232. “Heavy grade” is defined in § 232.407(a)(1).

The steeper the grade, the more susceptible a train operation becomes to concerns relating to train handling, overspeed, and other factors that may contribute to a PTC-preventable accident. FRA continues to believe that placing a limit on ruling grade helps to avoid situations in which an engineer may lose control of a train as a result of a failure to make a timely and sufficiently strong brake application. In the NPRM, FRA expressed concern with the train-specific nature of the proposed definition, as the requirement to implement PTC systems applies to track segments in addition to locomotives. The PTC WG discussed the issue and supported referencing the definition, with the possibility of civil penalties in instances where the trailing tonnage of a train causes the track segment to be classified as heavy grade. The NPRM proposed that track segments with average grades equal to or greater than one percent over three continuous miles and less than two percent over two continuous miles could qualify for the general de minimis exception despite being ineligible for the categorical de minimis exception. However, the train-specific criterion is specific enough that it is feasible to include in the categorical de minimis exception.

The final rule references § 232.407, such that a track segment will not qualify for the categorical de minimis exception if it has a “heavy grade” as that term is defined under that section for a train operating over the track segment. Any operation of a train with more than 4,000 trailing tons over a segment that has an average grade exceeding one percent over three continuous miles, and that has been excluded under the categorical de minimis exception, will constitute a violation of this § 236.1005.

As an additional risk mitigation, AAR's Petition recommended strengthening operating practices protecting against unauthorized incursions into roadway work zones on track segments that have received approval to avoid PTC system implementation under the de minimis risk provision. AAR proposed that—in the case of a train approaching working limits on a line subject to the de minimis exception—the train crew be required to call the roadway worker in charge at a minimum distance of two miles in advance of the working limits to advise of the train's approach. If the train crew does not have knowledge of the working limits prior to approaching within two miles of the working limits or if it is impracticable to provide notification two miles in advance, such as if the working limits are less than two miles from the initial terminal, AAR proposed that the train crew would be required to call the roadway worker in charge as soon as practicable. In the NPRM, FRA indicated that it viewed the criterion as covering the same requirements as existing operating rules. However, as preventing incursions into roadway work zones is a core function of PTC, it is appropriate for the categorical de minimis exception to include mitigations to reduce the risk of this form of PTC-preventable accident, and commenters expressed concern over protection for roadway workers. Accordingly, the final rule adopts the proposal of AAR's Petition and includes the requirement that a railroad adopt and comply with an operating rule requiring train crews approaching working limits to notify the roadway worker in charge at least two miles in advance of the working limits, or as soon as practical if the train crew does not have advance knowledge of the working limits.

Until amended by this final rule, a requirement of the categorical de minimis exception was that trains carrying PIH materials be temporally separated  4 from other trains. Temporal separation reduces the risk of train-to-train collisions, a core PTC function, by prohibiting other trains from operating on the track segment at the same time as any train carrying PIH material. In its Petition, AAR requested that FRA revise the requirement so that a vacant block ahead of and behind the train would constitute temporal separation. The NPRM explained that such a requirement would not be temporal separation, but requested comment on the concept as an alternative to temporal separation. AAR, in its comment, reiterated its argument from the Petition that this form of protection would suffice.

FRA previously expressed openness to the concept, and suggested that interested railroads use the general de minimis exception at § 236.1005(b)(4)(iii)(C) as the basis for excluding track segments using a vacant block ahead of and behind a train as an alternative means of protecting against train-to-train collisions. AAR's comment argued that the desire to substitute its alternative for the prior temporal separation requirement is industry-wide, suggesting that an industry-wide resolution of the proposal is appropriate. In light of the other elements of the categorical de minimis exception, FRA is revising the separation requirement to no longer require temporal separation, and instead allow track segments to qualify where any train carrying PIH materials is operated with a vacant block ahead of and behind the train.

AAR recommended that if the other criteria for de minimis exceptions are met, the amount of annual traffic on the track segment should not disqualify it from eligibility for the exemption. With respect to paragraph (b)(4)(iii)(B), FRA has endeavored to address AAR's concerns with a provision that is broad enough to permit considerations of actual circumstances, limit this exception to track segments that would not otherwise need to have a PTC system implemented, and make explicit reference to the requirement for potential safety mitigations. FRA has chosen below 15 MGT as the area where mitigations are in place, or could be put in place, to establish a high sense of confidence that operations will continue to be conducted safely. FRA has concern that eliminating the traffic density criterion would result in an exception being outside the scope of the de minimis risk, and specifically that increasing the traffic density criterion would put the exception outside of FRA's statutory authority to grant a de minimis exception. As explained above, any de minimis exception must only cover situations where “the burdens of regulation yield a gain of trivial or no value.” Environmental Defense Fund, Inc. v. EPA, 82 F.3d 451, 466 (D.C. Cir. 1996). A de minimis exception explicitly may not be granted where “the regulatory function does provide benefits, in the sense of furthering the regulatory objectives, but the agency concludes that the acknowledged benefits are exceeded by the costs.” Alabama Power Co. v. Costle, 636 F.2d 323, 361 (D.C. Cir. 1979). The derailment data cited by AAR is only a portion of the data that needs to be considered, as it concerns only one of the four varieties of PTC-preventable accidents. When analyzing AAR's proposal, FRA found that the track segments AAR sought to exclude received disproportionately higher benefits from the implementation of PTC systems. It is therefore impossible for FRA to conclude that PTC implementation on those segments yields “a gain of trivial or no value”: The gain is greater than the average track segment required to implement PTC systems. As such, granting AAR's request is well outside of FRA's inherent authority to grant a limited de minimis exception based on the lack of benefits. Even if FRA did possess such authority, the fact that the track segments at issue receive greater-than-average benefits from PTC system implementation means that granting AAR's request to remove the 15 MGT limitation would be ill-advised. Throughout the PTC regulatory process, FRA has sought to use what little authority it has to focus PTC system implementation on those track segments that will receive the most benefit from the systems, and removing the track segments at issue would be antithetical to that aim.

FRA does recognize the potential for a higher density line not being eligible for this exemption even though it may have fewer than 100 PIH materials cars on the line in a year and even though that particular track segment may have less comparable risk than a track segment covered by the categorical de minimis exception. Consequently, while the final rule does not amend this limitation, FRA remains open to the possibility of considering some risk evaluation factors in lieu of a prescriptive train-density limitation. During PTC WG meetings, AAR suggested the number of trains traversing a track segment annually as an example of an alternative metric of train density. The flexibility available under paragraph (b)(4)(iii)(C) allows for such alternatives if the track segment is similar to those covered by the categorical de minimis exception.

AAR's Petition also requested several changes to § 236.1005(b)(4)(iii)(C), which provides that FRA will “consider” relief from the obligation to install PTC systems on track segments with annual traffic levels under 15 MGT where the risk of a release of PIH materials is “negligible.” In addition to requesting the elimination of the 15-MGT limit within the categorical de minimis exception, AAR suggested eliminating the limit contained in general de minimis exception as well. Moreover, AAR contended that it is unclear what constitutes a “negligible” risk and what discretion FRA would exercise should there be a showing of negligible risk. AAR further requested that FRA set a quantitative threshold for negligible risk, and suggests “one-in-a-million” as the criterion. AAR references a U.S. Department of Defense standard regarding standard practice for system safety, MIL-STD-882C, 5 as the basis for such criterion, which provides a method for categorizing and assessing risk, but does not specifically explain how this standard would apply.

In response to the arguments made by AAR that the exception was vague and unworkable without quantification, the final rule replaces the general de minimis exception with a provision more consistent with FRA's intent for the exception. The provision of paragraph (b)(4)(iii)(A) limiting the application of the de minimis exception to only those track segments carrying less than 15 MGT annually has been moved to paragraph (b)(4)(iii)(B), applying solely to the categorical de minimis exception. Paragraph (b)(4)(iii)(C) now allows for a de minimis exception for FRA approval of track segments similar but not identical to those covered by paragraph (b)(4)(iii)(B), the categorical de minimis exception. Instead of being measured against the “negligible risk” standard, a railroad requesting the exception must demonstrate to FRA that the track segment at issue poses an equivalent or lesser risk of a PTC-preventable accident than the risk posed by track segments qualifying for the categorical de minimis exception by comparing the discrepancies between the categorical standard and the proposed alternative.

In the NPRM, FRA proposed to preserve the general de minimis exception largely, only changing the exception to eliminate the 15-MGT traffic density limitation. The NPRM responded to AAR's request to quantify “negligible risk” by explaining that such quantification would not be a valuable decisional criterion, would require additional determinations on appropriate factors to quantify, and may not be possible given FRA's experience attempting to develop the residual risk test. See generally 77 FR 28285. FRA has come to view the general de minimis exception as providing flexibility for circumstances similar to but nonetheless distinct from the criteria of the categorical de minimis exception. FRA has determined that the track segments qualifying for the categorical de minimis exception pose a negligible risk, and therefore any similar track segment that can be shown to have an equivalent or lesser level of risk would necessarily also pose only a negligible risk. However, this interpretation was not readily apparent from the text of the NPRM. To address AAR's concerns of ambiguity, the general de minimis exception has been replaced with a provision providing an exception for track segments similar to those covered by the categorical de minimis exception where the track segments are shown to pose an equivalent or lesser level of risk of a PTC-preventable accident. For instance, a track segment with a higher annual MGT traffic density could qualify for the exception based on fewer PIH cars carried annually or additional operating rules providing additional protection beyond that present in the categorical de minimis exception. 6 This comparison will necessarily be qualitative; rather than calculate the absolute risk levels involved, FRA review of such requests will entail an evaluation of the deviances from the categorical de minimis exception to ensure that the proposal maintains an equivalent level of safety. Where available, quantitative data on the proposals compared to the requirements of paragraph (b)(4)(iii)(B) will be a valuable component of that review, but not a necessary component.

It bears emphasizing that the risk considered under the general de minimis exception is the risk of all PTC-preventable accidents rather than being limited solely to PTC-preventable accidents resulting in the release of PIH materials. In the January 15, 2010 PTC final rule, while FRA indicated that any de minimis exception would have to consider the four statutory PTC-preventable accident types and the level of PIH materials release, FRA also focused primarily on de minimis PIH materials risk, titling the paragraph “Lines with de minimis PIH risk.” This may have been confusing, and FRA would like to take this opportunity to provide further clarification. FRA originally used this term since the exception would only apply to freight traffic on lines where PIH materials are transported. To be clear, FRA did not intend to exclude the four statutory PTC-preventable accidents as risk elements requiring consideration in order to qualify for the exception. Accordingly, the final rule changes the regulatory language to comport with this perspective by modifying the heading of paragraph (b)(4)(iii) to eliminate the potential for confusion; the heading now reads, “Freight lines with de minimis risk not used for regularly provided intercity or commuter passenger service.”

AAR, in its Petition, requested that FRA permit locomotives without operational onboard PTC apparatuses to operate over PTC-equipped track segments when the movement is for freight switching operations or freight transfer train movements. AAR suggested that dispatchers hold the area of such movement clear of PTC-equipped trains through what AAR dubbed “absolute protection,” with trains lacking operational onboard PTC apparatuses limited to speeds below 30 mph and multiple concurrent train movements limited to restricted speed. The final rule largely adopts this suggestion.

In this section, FRA uses the term “freight switching service” to refer to switching service as defined by § 232.5. In turn, § 232.5 defines “train” as “one or more locomotives coupled with one or more freight cars, except during switching service.” This distinction between switching service and train movements is drawn from longstanding judicial interpretations of what constitutes a “train movement.” See, e.g., United States v. Seaboard Air Line R. R. Co., 361 U.S. 78 (1959); Louisville & Jeffersonville Bridge Co. v. United States, 249 U.S. 534 (1919); see also 66 FR 4104, 4148 (Jan 17, 2001) (defining “switching service”). FRA has previously recognized that the nature of switching service precludes the application of some safety technologies or operational practices that are applicable to train movements. See, e.g., 49 CFR part 232, subpart C (not requiring air brake tests as part of switching service, but requiring such tests for train movements of short distances). FRA has also previously recognized that Congress did not intend to sweep in yard tracks in the mandate for PTC system implementation. In the first PTC system rulemaking, FRA defined “main line” to exclude “where all trains are limited to restricted speed within a yard or terminal area or an auxiliary or industry tracks.” § 236.1003. In the final rule prescribed in that proceeding, FRA stated that “any track within a yard used exclusively by freight operations moving at restricted speed is excepted from the definition of main line.” 75 FR 2598, 2657 (Jan. 15, 2010); see also § 236.1003. Such tracks are generally considered to be other- than-main line track, and Congress's limitation of the PTC system mandate to “main line” suggests that these tracks were not intended to be included. See also S. Rep. 110-270 (taking notice of the limited value that PTC systems offer in preventing accidents in yards or terminals). FRA also exercised its authority to define “main line” with respect to passenger trains to exclude trackage “used exclusively as yard or terminal tracks by or in support of regularly scheduled intercity or commuter passenger service.” 49 CFR 236.1019(b); see also 49 U.S.C. 20157(i)(2)(b). The result of excluding freight yard track from the PTC system implementation mandate is that many freight switching operations are excluded from the scope of the PTC system mandate, where these operations do not extend onto the main line track that connects to the yard.

However, as AAR explains in its Petition, freight switching operations frequently require some movement along main track adjacent to or within a yard, for purposes of reaching other yard tracks or obtaining necessary distance, or “headroom,” from yard tracks to make switching movements. Despite the exclusion of these other-than-main line tracks, switching service could therefore require PTC-equipped locomotives in order to make these movements on main line track. Given the statutory language suggesting that switching service is not subject to the PTC system mandate and the potential to apply operation restrictions to reduce risk to an acceptable level, FRA agrees that it would be appropriate to provide an additional exception for freight locomotives performing switching service from the requirements to be equipped with a PTC system if appropriate safeguards are implemented.

In response to the Petition, the NPRM proposed to create a new de minimis exception for yard movements. The proposed exception was limited to 10-mile movements with a maximum authorized speed of 25 mph, in order to maintain consistency with the de minimis exception of § 236.1005(b)(4) and the overall 20-mile zone of unequipped movements allowed by § 236.1006(b)(4). This exception would add to the existing definitional exclusion of operations at restricted speed within a yard, terminal, auxiliary tracks, and industry tracks from the meaning of “main line.”

AAR, in its comment, argues that because “yard movements” were not intended to be included within the scope of PTC system implementation, movements onto PTC-equipped main track made pursuant to yard, local, industrial, or hostling service should all be excluded from the requirement to have an operational onboard PTC apparatus. In support of this position, AAR cites discussion in FRA's first final rule implementing the PTC system mandate where FRA acknowledges that yard tracks and yard movements were not intended to be covered by the PTC system mandate. However, that discussion references the existing exclusion of yard, industry, and auxiliary track from the scope of the PTC mandate, not an exception for movements made on PTC-equipped track by locomotives without operational onboard PTC apparatuses. Mindful of this distinction, FRA nonetheless recognizes the impracticability of initializing PTC systems for switching operations and transfer train movements. Similarly, AAR makes a reasonable argument that it may not be feasible for PTC systems to provide appropriate communications to each locomotive operating in a yard environment.

In the NPRM, FRA proposed a performance-based exception for yard movements, allowing the exception to apply whenever sufficient risk mitigations were applied to reduce the risk of a PTC-preventable accident to negligible levels. AAR, in its comment, expressed concern over this formulation, arguing that the negligible-risk standard is too vague if left unquantified. While FRA refrains from developing a definite method to quantify risk, to address AAR's concern the final rule provides a prescriptive set of requirements for the freight yard movement exception, with an option for performance-based alternatives if justified in a railroad's PTC Safety Plan (PTCSP).

In the NPRM, FRA proposed a speed restriction of 25 mph, consistent with the speed restriction applied to movements under the categorical de minimis exception of § 236.1005(b)(4)(iii). AAR, in its comment, argues that 30 mph is a more appropriate speed, referencing the previous en route failure language of § 236.1029. This suggestion has merit. The categorical de minimis exception applies to operations over an unequipped track segment, whereas both the freight yard movement exception and the en route failure provision address movement without operational onboard PTC apparatuses within PTC-equipped territory. FRA agrees that the en route failure procedures are the more apt analogy. Accordingly, the speed restriction in the final rule has been increased to 30 mph.

AAR also suggested that the PTC system enforce positive stops to ensure that no trains with operative onboard PTC apparatuses are permitted to enter a zone where unequipped movements are taking place and that, when multiple PTC-inoperative movements occur in the same zone concurrently, the maximum speed be reduced to restricted speed.

While the PTC system will prevent PTC-equipped trains from entering an area where unequipped movements occur, it is unable to protect equipped trains from a PTC-unequipped yard movement that has exceeded its authority on PTC-equipped main track. In the July 9, 2013, PTC WG meeting, FRA raised the idea of taking this procedure and adding a requirement that a vacant absolute block be placed between unequipped movements and PTC-equipped trains, in order to address this concern. The railroads presented substantial arguments during the meeting that such a requirement would hamstring yard operations, given the number of PTC-equipped main tracks over which a yard movement might operate, even if the route were locked in such a way as to preclude a PTC-unequipped locomotive or train from exceeding its authority into an area where PTC-equipped trains could operate. The PTC WG discussion led to the idea of a more narrowly-tailored restriction, applying only where the risk of such an incursion exists: situations where the unequipped movement is to end on PTC-equipped main track. In such situations, if the unequipped movement exceeds its authority, it would pose a risk to PTC-equipped trains that the PTC system would be unable to protect against. The final rule mitigates this risk by requiring that, if a movement terminates on PTC-equipped main track, the movement must operate on that final main track segment at restricted speed. While restricted speed is not a panacea against train-to-train collisions, it does reduce the risk of such collisions to an acceptable level when combined with the other operational restrictions in place in the yard movements exception.

AAR also suggested the use of what it terms “absolute protection” to mitigate the risk of train-to-train collisions. From AAR's presentation at the July 9, 2013, PTC WG meeting, FRA understands “absolute protection” to refer to an operating practice adopted by some railroads wherein a route is lined for a movement by a dispatcher and “locked” to require explicit acknowledgement and action before any switch in the route is permitted to be lined for a conflicting movement. The final rule adopts this suggestion, requiring that the route of the unequipped movement be protected from conflicting movements by the PTC system and sufficient operating rules. The type of protection described by AAR is sufficient; however, because the discussion in the PTC WG meeting indicated that there is some degree of diversity in the implementation of the concept, the final rule is phrased generally for greater flexibility.

AAR did not discuss how to handle roadway workers or roadway working limits in the Petition or in its comments to the NPRM. Several labor organizations commented to express concern for roadway worker protection during periods where PTC-inoperative movements are occurring. To mitigate this hazard, the final rule also requires movements at restricted speed when the zone of PTC-inoperative movements includes working limits established under 49 CFR part 214. This requirement is intended to reduce the risk of an incursion into established work zone limits, one of the four statutory PTC system functions.

The NPRM also considered the exception for movements by Class II and Class III railroads under § 236.1006(b)(4) in determining an appropriate distance limitation for yard movements. While the maximum allowable distance for Class II and Class III railroads with unequipped locomotives is 20 miles, the NPRM limited the maximum distance of yard movements under the exception to 10 miles in either direction from a point of entry on to PTC-equipped main track to limit the total area of unequipped movements to 20 miles. Such a limitation would cover a 20-mile transfer train movement that originated and ended at the same location, but would not include pairs of transfer train movements of 20 miles each between two points. Allowing 20-mile movements in either direction from a point of entry on to PTC-equipped main tracks creates a 40-mile zone where potential movements without operative onboard PTC apparatuses; however, this potential also exists for Class II and Class III movements. With the operating restrictions in place, as discussed above, and considering the limitations of PTC systems for yard movements and transfer trains, FRA has concluded that allowing movements of up to 20 miles does not increase the risk of a PTC-preventable accident beyond a negligible level.

To provide some flexibility, the yard movements exception also allows railroads to propose alternatives. Because the “negligible risk” standard for evaluating these alternatives has caused great concern, the final rule provides an alternative structure. AAR proposes a quantified level of risk. However, as noted in the NPRM and discussed in more detail above, FRA has previously attempted, but was unable, to develop appropriate risk-quantification methodology with the necessary level of precision to be used for such a task. See 77 FR 28285 (May 14, 2012). Instead, the final rule uses the parameters of the freight yard movement exception discussed above as an explicit baseline; alternatives will be accepted if, in FRA's discretion, they are determined to be as safe as or safer than the prescriptive requirements. This method of analysis is consistent with the final rule's restatement of the general de minimis exception.

The final rule adds a new paragraph (b)(5) to exclude certain freight yard movements from the requirement to be controlled by a locomotive with an operational onboard PTC apparatus. Paragraphs (b)(5)(i) through (vi) provide the general parameters for approval of the exception. Paragraph (b)(5)(vii) provides the opportunity for railroads to propose alternatives, with the consideration of those alternatives committed to FRA's discretion. Subparagraph (viii) makes clear that this provision does not prohibit locomotives with operative onboard PTC apparatuses from making certain types of movements to assist other locomotives, such as rescuing locomotives or cars.

In addition to the new freight yard movement exception, several other changes have been made to § 236.1006. Paragraph (a) has been revised to clarify that it encompasses all operations, not just PIH operations specifically. Paragraph (b)(2) has been reserved, as discussed in the analysis of § 236.1009, below. A new paragraph (d) has been added to address the onboard PTC apparatus. The text of new paragraph (d)(1), regarding the visibility of the onboard PTC apparatus, has been moved from § 236.1029(f) to § 236.1006. Sec. 236.1006(d)(1) is a more intuitive location for the requirement. Aside from changing the phrase “PTC system's onboard apparatus” to the commonly-used phrase “onboard PTC apparatus,” the content has not changed; no change in meaning exists or is intended. New paragraph (d)(2) incorporates the concept that the NPRM addressed in proposed § 236.1029(g), and responds to GE Transportation's comment. FRA views distributed onboard PTC apparatuses to be acceptable if contemplated within a railroad's PTCSP, and now provides regulatory text making that view explicit.

The final rule moves the PTCIP reporting requirement from old paragraph (b)(2) of § 236.1006 to a new paragraph (a)(5) of § 236.1009. The purpose of this change is not merely for organizational purposes; the annual report no longer pertains solely to locomotives. The revised text requires the submission of additional information so that FRA may better fulfill its Congressional reporting obligations and otherwise fully and accurately monitor the progress of PTC system implementation. The previous language of § 236.1006(b)(2) required each railroad to report the status of achieving its goals with respect to equipping locomotives with fully-operative onboard PTC apparatuses for use on PTC-equipped track segments. However, for FRA to fulfill its statutory obligations and regulatory objectives, it requires additional implementation information concerning all components of PTC system implementation. Accordingly, in the final rule, FRA requires submission of implementation data relating to wayside interface units, communication technologies, back-end computer systems, transponders, and any other PTC system components. FRA did not receive comments on this amendment as proposed.

In response to AAR's proposals for modifications to § 236.1029, FRA expressed concern that the less restrictive proposals may result in locomotives with faulty onboard PTC apparatuses being used for significant distances before being repaired or being exchanged with other locomotives equipped with fully-operative PTC apparatuses. During PTC WG meetings, AAR suggested that FRA alleviate this concern by requiring that railroads submit, as part of their PTCSP, the locations where locomotives will regularly be exchanged or repaired, as well as listing potential movements of locomotives with failed onboard PTC apparatuses that exceed 500 miles. The final rule adopts this suggestion, and a new paragraph (d)(21) has been added to this § 236.1015 to require that this information be submitted as part of each railroad's PTCSP.

The final rule revises old paragraph (a) of § 236.1029 by adding a heading (“In general.”) and correcting a grammatical error (disagreement between subject and verb) in the last sentence of the paragraph. No change in meaning is intended.

As amended by this final rule, paragraph (b) of § 236.1029 provides a means of safely reacting to the en route failure of a PTC system. When a component of a PTC system fails en route resulting in loss of PTC functionality aboard the locomotive, the old text of § 236.1029(b) required that the train proceed at restricted speed—or at medium speed where a block signal system is in operation according to signal indication—until an absolute block is established ahead of the train; after the absolute block is established, the train may proceed at speeds between 30 mph and 79 mph, depending on the nature of the signal system in place, if any, and the nature of the train. AAR, in its Petition, assented to this procedure for each location where a PTC system is the exclusive means of delivering mandatory directives, but suggested substantial revisions to this procedure where a PTC system is not the exclusive means of delivering mandatory directives ( e.g., where mandatory directives are also delivered by radio). The AAR proposal would allow trains to continue to a designated repair or exchange location identified in a railroad's PTCSP. While travelling to one of these locations, freight trains would be allowed under the proposal to continue at track speed in signaled territory, up to 40 mph for freight trains in non-signaled territory, and up to 30 mph for trains carrying cars loaded with PIH materials. The proposal also recommended a 30 mph limitation for passenger trains; Amtrak suggested that the appropriate limitation for passenger trains is 40 mph, which AAR later endorsed. The AAR proposal broke from how the en route failure of train control systems has been handled in the past by not requiring an absolute block in advance of the train that experienced failure; as discussed above, § 236.567 requires an absolute block be established in advance of the movement. However, AAR and other participants in the PTC WG meetings made the valid point that the comparison between PTC systems and systems covered by § 236.567 is not completely apt, as PTC systems are not the method of operation in the overwhelming majority of situations, unlike cab signal systems. FRA agrees that this is a relevant difference that supports changes to the procedures for handling en route failures.

FRA is also sensitive to the concerns expressed regarding PTC system reliability and the railroads' desire to ensure that PTC system implementation does not result in dramatically reduced railroad capacity. AAR, in its comment to the NPRM, provided data suggesting that there could be substantial disruptions in service due to frequent failures of PTC systems. This data is necessarily somewhat speculative, since PTC systems remain in development. FRA expects that system reliability will improve as railroads acquire more experience with PTC systems. Reflecting the current status of PTC system development and the economic risks of substantially reduced rail capacity, the final rule provides additional flexibility for railroads. This relief is provided in several forms. First, while the final rule maintains the speed limitations present in the old rule, the final rule removes the requirement that an absolute block be established in advance of the train. Given the potential scope of PTC system failures, FRA is concerned that requiring an absolute block in advance of each train experiencing PTC system failure may exacerbate system disruptions as train dispatchers manage each of the blocks.

Old paragraph (f) of § 236.1029 has been moved to new § 236.1006(d)(1), as that section is a more intuitive location for that requirement. No change in meaning exists or is intended as part of this rearrangement. See discussion under new § 236.1006(d)(1), above.

New paragraph (g) of § 236.1029 provides three forms of temporary relief, which will be in effect from October 21, 2014 through the first two years following the statutory deadline for full implementation of PTC systems. First, under paragraph (g)(1), a railroad may choose in its PTCSP to operate under the requirements of new § 236.567 (the provision that applies to automatic train stop, automatic train control, and cab signal systems) in lieu of new § 236.1029. The provisions of new § 236.567 are structured similarly to those of new § 236.1029, but authorize higher maximum speeds of up to 79 mph where a functional signal system remains in place, though they require an absolute block in advance of the movement.

Second, under paragraph (g)(2) of § 236.1029, a train may proceed under either new § 236.1029 or new § 236.567 where the PTC system fails to initialize prior to the train's departure from its initial terminal. This relief will permit rail traffic to continue to flow when PTC system initialization problems occur while exchange or repair is arranged at one of the locations designated in the railroad's PTCSP.

Finally, under paragraph (g)(3) of § 236.1029, where a PTC system requires repair or maintenance that necessitates removing the system from service, a railroad may do so with notice to the appropriate FRA regional office either a week in advance for planned work or contemporaneously in the event of unplanned work. When a railroad exercises this option, the rule requires that it make reasonable efforts to schedule the removal from service for those times posing the least risk to railroad safety, generally but not necessarily when few or no trains are expected to operate over the track segment. The railroad is also required to place the system back into service without undue delay, the same requirement that is in place for all signal and train control system failures. This provision is intended to give railroads the flexibility necessary to address system software and hardware issues quickly without unduly restricting rail capacity or creating excessive safety risks. In summary, the final rule appends new paragraph (g), which provides these temporary authorities.

In authorizing these more lenient provisions until the end of the first two years following the statutory mandate for full PTC system implementation, FRA recognizes that there may be issues that could be identified and resolved in the early days following PTC system implementation and revenue service operation. AAR argues that the complex nature of PTC systems will inevitably create frequent and unavoidable en route failures, and that these problems will not be solved in time. Based on the evidence available at this time, FRA disagrees. However, under this final rule, it will be several years before the default en route failure provisions are due to come fully into effect. Experience over these intervening years will provide more empirical data on PTC system reliability, and may be a basis for FRA to revisit this issue at a later date should circumstances warrant. To facilitate the gathering of this data, the final rule includes a new reporting requirement in new paragraph (h) relating to en route failures. Each calendar year, the rule requires railroads that have implemented PTC systems to report the number of PTC system failures, categorized by type. This report will allow FRA to be aware of reliability issues as PTC systems are implemented and put into use, and will provide useful information for potential improvements in the rule once FRA and the rail industry have more experience with this new technology. This requirement was discussed in the July 9, 2013, PTC WG meeting, and members did not express any objections.

Additionally, as noted in the NPRM, old § 236.1029 had avenues for flexibility with respect to en route failures. Old paragraph (c) allowed for deviations from the requirements of old paragraph (b) if justified in a railroad's PTCDP, PTCSP, or Order of Particular Applicability. 7 However, this language was unnecessarily vague, and the final rule clarifies the intent of the provision. A railroad may, based on the circumstances of its operations, propose alternative en route failure procedures similar to those of paragraph (b) for approval as part of its PTCSP, RFA, or Order of Particular Applicability. The final rule revises the language of old paragraph (c) to make it consistent with similar provisions discussed earlier with respect to the de minimis exception and the yard movements exception.

AAR, in its Petition, also requested clarification concerning the failure of an onboard PTC apparatus of the train's controlling locomotive, where a second PTC-equipped locomotive exists capable of providing PTC system functionality. In the NPRM, FRA proposed to amend old § 236.1029 to indicate specifically that, when a trailing locomotive is used to maintain full PTC system functionality, the system is considered operable and therefore is not considered to have failed en route. However, as discussed above, this proposal has been adopted in new § 236.1006(d)(2) and revised to apply to PTC systems generally, rather than being limited to only instances where there is a PTC system failure.

This final rule has been evaluated in accordance with existing policies and procedures, and determined to be significant under Executive Order 12866, Executive Order 13563, and DOT policies and procedures. 44 FR 11034 (Feb. 26, 1979). FRA prepared and placed in the docket a regulatory impact analysis (RIA) addressing the economic impact of this final rule.

In this final rule, FRA mainly amends the regulations implementing the 2008 statutory mandate that certain passenger and freight railroads install PTC systems governing operations on certain main line tracks. In particular, the final rule amends 49 CFR part 236 by revising an existing regulatory exception to the requirement to install a PTC system for track segments carrying freight only that present a de minimis safety risk; adding a new exception for unequipped freight trains associated with certain yard operations to operate within PTC systems; revising the provision related to en route failures of a PTC system; and adding new temporary provisions related to various failures of a PTC system. The final rule also streamlines and simplifies the application process for FRA approval of a material modification of a signal system under 49 CFR part 235 where the application would have been filed as part of a PTC system installation. In addition to making these changes related to the PTC requirements, the final rule makes technical amendments to FRA's other signal and train control regulations at 49 CFR part 236 and FRA's regulations governing highway-rail grade crossing warning systems at 49 CFR part 234.

FRA analyzed the final rule under three cases. The “base case” is FRA's best estimate of the likely impact of the final rule. To address uncertainty related to assumptions and inputs, FRA also analyzed a “high case,” where the impacts are estimated as greater than FRA's best estimate, and a “low case.” where the impacts are estimated as less than FRA's best estimate.

FRA's base case analyzed the impact of extending the de minimis exception to cover an additional 4,073 miles of wayside (based on comments from the Association of American Railroads (AAR)) at an estimated savings of $50,000 per mile, as well as two sensitivity cases—one where the estimated savings per mile was higher ($100,000), the high case, and one where the mileage affected was lower (3,000 miles), the low case.

FRA also analyzed the benefits of adding a regulatory exception at 49 CFR 236.1006(b)(5) for locomotives not equipped with onboard PTC apparatuses that are involved in yard operations with equipped locomotives. Again, FRA faced uncertainty in estimating the number of locomotives that will be affected. For the base case, FRA estimated that 2,098 locomotives will be affected at a unit savings of $55,000 per locomotive. FRA also analyzed two cases for sensitivity—a high case where the unit savings would be $68,750 and a low case where 1,500 locomotives will be affected.

FRA used values from AAR comments to determine how many units of installations could be avoided by the final rule, and used unit costs from the first PTC final rule. The number of units from the AAR comments are much higher than FRA's assumptions used to analyze the NPRM, and may be high. FRA's assumptions of unit costs from that analysis of the first PTC final rule appear to be low, based on anecdotal evidence, especially reports from commuter railroads. Class I railroads may be able to avoid some of the factors that have led to higher unit costs on commuter railroads, but the unit costs used in the base case analysis of the first PTC final rule are now appearing to be low case estimates. FRA continues to use those unit cost estimates in order to allow more comprehensible comparisons between the estimated net costs of the first PTC final rule and this final rule. Were FRA to adjust the unit cost estimates for this rule, small reductions in the scope of the total PTC system implementation could render total net costs, reflecting each of the four PTC final rules issued to date, dramatically lower.

All values in the analysis are measured in 2009 dollars. FRA used values in 2009 dollars in order to continue using the same values used in analyzing the 2010 final rule amended here, so that readers may readily evaluate the cumulative effect of the initial final rule and amendments to that rule.

For both wayside and onboard portions of the benefit, FRA included the maintenance costs saved by avoiding installation. FRA estimated the annual maintenance costs as 15 percent of the value of the installed base. The reader should note that this regulation reduces regulatory burden, so the benefits of the final rule are reduced regulatory costs, and the costs of the final rule are foregone safety benefits, a mirror image of the typical elements of a benefit cost analysis.

FRA also estimated the annualized benefits of the accompanying final rule.

In general, the costs of allowing railroads the ability to avoid PTC implementation costs will be foregone safety benefits coupled with some reporting costs. The provisions to extend the de minimis risk exception affect track segments that are likely to have a risk of PTC-preventable accidents that is only slightly greater than similar segments equipped with PTC wayside units. FRA analyzed those incremental costs, the only costs analyzed.

A second de minimis exception, 8 codified under § 236.1006(b)(5), affects whether locomotives used in freight switching operations need to be equipped with onboard PTC apparatuses in order to cross or travel along main track in yards. This newly created provision requires the railroads to maintain a negligible risk of PTC-preventable accidents. FRA believes that negligible risk is near zero, and that the marginal costs of that risk compared to PTC are practically zero.

The costs of the changes to reporting requirements (§ 236.1029(h)) are very low, and only consist of forwarding to FRA data likely already compiled for railroad management purposes.

FRA calculated the net societal benefits, both 20-year discounted totals and 20-year annualized values.

FRA analyzed alternatives to the final rule. One alternative would be to leave the rule unchanged, the “status quo” alternative. By definition, the “status quo” alternative is treated as having no benefits or costs; however, it is the benchmark from which all other cases are analyzed.

FRA also analyzed an alternative where the de minimis exception (at § 236.1005(b)(4)(iii)) would apply without regard to line tonnage. This alternative would create greater net societal benefits, since nearly 7,000 miles could be excluded; however, because of concerns about additional risks which are not negligible, FRA does not believe that it has the authority to adopt this alternative. FRA believes that if it had the authority to adopt this alternative and if FRA adopted it, the net societal benefits would be $1,062,422,244 over 20 years, discounted at 7 percent, or $1,393,851,865 over 20 years, discounted at 3 percent.

In short, the final rule will create net benefits in all scenarios, with the only uncertainty being the magnitude of those benefits. At the NPRM stage, FRA requested comments on all aspects of the RIA. Such comments and related discussion are discussed in the RIA submitted to the docket.

To ensure that the impact of this rulemaking on small entities is properly considered, FRA developed this final rule in accordance with Executive Order 13272 (“Proper Consideration of Small Entities in Agency Rulemaking”) and DOT's policies and procedures to promote compliance with the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The Regulatory Flexibility Act requires an agency to review regulations to assess their impact on small entities. The meaning of “small entity” for purposes of the Regulatory Flexibility Act is discussed below. An agency must conduct a regulatory flexibility analysis unless it determines and certifies that a rule is not expected to have a significant economic impact on a substantial number of small entities.

This final rule is summarized under the immediately previous section of the preamble as well as earlier in the preamble. FRA is certifying that this final rule will result in “no significant economic impact on a substantial number of small entities.” The following section explains the reasons for this certification.

The “universe” of the entities under consideration here includes only those small entities that can reasonably be expected to be directly affected by the provisions of this final rule. In this case, FRA concludes that the “universe” will be five Class III freight railroads that operate on rail lines that are currently required to have PTC systems installed. Such lines are owned by railroads not considered to be small. No small passenger railroads will be affected by the final rule.

The U.S. Small Business Administration (SBA) stipulates in its “Size Standards” that the largest that a for-profit railroad business firm may be, and still be classified as a “small entity,” is 1,500 employees for “Line Haul Operating Railroads” and 500 employees for “Switching and Terminal Establishments.” “Small entity” is defined in the Regulatory Flexibility Act as a small business that is independently owned and operated, and is not dominant in its field of operation. Additionally, 5 U.S.C. 601(5) defines “small entity” as including governments of cities, counties, towns, townships, villages, school districts, or special districts with populations less than 50,000.

Federal agencies may adopt their own size standards for small entities in consultation with SBA and in conjunction with public comment. Pursuant to that authority, FRA has published a final policy that formally establishes “small entities” for purposes of the Regulatory Flexibility Act as including freight railroads that meet the line haulage revenue requirements of a Class III railroad and passenger railroads that serve populations less than 50,000. 9 The revenue requirements are currently $20 million or less in annual operating revenue. The $20 million limit (which is adjusted by applying the railroad revenue deflator adjustment)  10 is based on the Surface Transportation Board's (STB) threshold for a Class III railroad carrier. FRA is using the STB's threshold in its definition of “small entities” that are freight railroads for this rule.

This final rule adds new § 235.6, which allows specified changes within existing signal or train control systems to be made without the necessity of filing an application for approval with FRA's Associate Administrator. The amendment provides each railroad a simplified process to obtain approval to modify existing signal systems directly associated with PTC system implementation. In the absence of this change in the accompanying rule, a railroad would have to submit the detailed application required for approval under § 235.10, along with the additional information required by § 235.12, every time it modified any of the underlying signal systems as described in § 235.5, even if those changes were part of the PTCIP. The entire application would then be subject to the filing procedure described in § 235.13, and FRA would publish under the requirements of § 235.14 and resolve protests under the provisions of § 235.20. The process is burdensome for both the railroad and FRA, where FRA has already reviewed significant elements of what would be the application, as part of the PTCIP. FRA believes this could create a benefit for any of the five small railroads affected by the final rule, but that the likelihood of such filings is very low for the small railroads affected. If the small railroads do file, the filing is likely to be for a very small portion of the railroad affected, and the benefits would be very small.

FRA believes that portions of the rule revising the requirements at 49 CFR 236.567 regarding en route failures are technical in nature, and do not create any economic impacts on any regulated entities, large or small.

The changes to the de minimis provisions in the final rule (i.e., § 236.1005(b)(4)(iii)) will impact Class III freight railroads that operate on lines of other railroads currently required to have PTC systems installed. To the extent that such host railroads receive relief from such a requirement along certain lines, Class III freight railroads that operate over those lines will not have to equip their locomotives with PTC system components. FRA believes that small railroads operating over the affected lines are already allowed to avoid equipping locomotives under existing § 236.1006(b)(4), or are otherwise equipping their locomotives to operate over other track segments equipped with PTC systems. Further, some Class III freight railroads host passenger operations, but FRA does not believe any of those Class III freight railroads have any switching operations that would be affected by the final rule (i.e., the freight yard movements exception at § 236.1006(b)(5)). To the extent that any Class III freight railroads are affected in circumstances of which FRA is unaware, the effect would be a benefit, in that the Class III freight railroads would be able to avoid installing PTC systems on some locomotives. FRA requested comment on whether any other small entities would be affected, and if such small entities would be affected what the impacts on them would be, whether those impacts would be significant and whether the number of small railroads affected is substantial, but received no comments on the topic. FRA believes that no small entities will be affected by changes to the de minimis provisions and the freight locomotive yard movements exception, and that therefore the number of small entities affected is not substantial, and that the impact on them is not significant.

These five small freight railroads are required to file a PTCIP by the existing PTC regulations and will be affected by the final rule's changes in the reporting requirements in § 236.1009. The reporting requirements will require the railroad to report its progress in installing PTC, in April 2013, 2014, and 2015, in order to comply with the statutory deadlines. FRA believes that all railroads implementing PTC will track this information and compile the information as part of internal management activities at least as frequently for what is likely to be a relatively large capital project on every affected railroad. FRA believes the incremental reporting regulatory burden is negligible, on the order of forwarding to FRA an email already generated within a railroad. FRA believes this is not a significant burden upon the railroads affected.

Certain other provisions (e.g., § 236.15 (regarding timetable instructions) and § 236.1015(d)(21) (lists related to locomotives with failed onboard PTC apparatus, etc.) are minor and should not create any economic impacts on any regulated entities, large or small other than paperwork, which is accounted for under V.C. of the preamble, below; FRA believes these are not a significant burden on these five small railroads.

FRA believes that the portions of the rule revising the requirements at § 234.207 (regarding adjustment, etc. of essential components), § 234.213 (regarding grounds), § 236.2 (regarding grounds), and § 236.567 (regarding en route failures) are technical in nature, and do not create any economic impacts on any regulated entities, large or small. Likewise, the revised and new relief provisions at § 236.1029(b), (c), and (g) (which are considered as clarifying the intent of the original PTC final rule) are not expected to create economic impacts on any regulated entities, large or small.

For the reasons summarized above, FRA believes the reporting requirements will not have a significant impact on a substantial number of small entities.

Pursuant to the Regulatory Flexibility Act, 5 U.S.C. 605(b), the FRA Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities.

FRA analyzed this rule in accordance with the principles and criteria contained in Executive Order 13175 (“Consultation and Coordination with Indian Tribal Governments”).

Because this rule does not significantly or uniquely affect tribes and does not impose substantial and direct compliance costs on Indian tribal governments, the funding and consultation requirements of Executive Order 13175 do not apply, and a tribal summary impact statement is not required.

The information collection requirements in this final rule are being submitted for approval to the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501 et seq. The sections that contain the both the new and current information collection requirements and the estimated time to fulfill each requirement are as follows:

All estimates include the time for reviewing instructions; searching existing data sources; gathering or maintaining the needed data; and reviewing the information. Pursuant to 44 U.S.C. 3506(c)(2)(B), FRA solicits comments concerning: Whether these information collection requirements are necessary for the proper performance of the functions of FRA, including whether the information has practical utility; the accuracy of FRA's estimates of the burden of the information collection requirements; the quality, utility, and clarity of the information to be collected; and whether the burden of collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology, may be minimized. For information or a copy of the paperwork package submitted to OMB, contact Mr. Robert Brogan, Information Clearance Officer, Office of Safety, at 202-493-6292, or Ms. Kimberly Toone, Office of Information Technology, at 202-493-6132, or via email at the following addresses: Robert.Brogan@dot.gov; Kimberly.Toone@dot.gov .

Organizations and individuals desiring to submit comments on the collection of information requirements should direct them to the Office of Management and Budget, Office of Information and Regulatory Affairs, Washington, DC 20503, Attention: FRA Desk Officer. Comments may also be sent via email to the Office of Management and Budget at the following address: oira_submissions@omb.eop.gov.

OMB is required to make a decision concerning the collection of information requirements contained in this final rule responding to petitions for reconsideration between 30 and 60 days after publication of this document in the Federal Register . Therefore, a comment to OMB is best assured of having its full effect if OMB receives it within 30 days of publication.

FRA cannot impose a penalty on persons for violating information collection requirements which do not display a current OMB control number, if required. FRA intends to obtain current OMB control numbers for any new information collection requirements resulting from this rulemaking action prior to the effective date of this final rule. The OMB control number, when assigned, will be announced by separate notice in the Federal Register .

Executive Order 13132, “Federalism” (64 FR 43255, Aug. 10, 1999), requires FRA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” are defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, the agency may not issue a regulation with federalism implications that imposes substantial direct compliance costs and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments or the agency consults with State and local government officials early in the process of developing the regulation. Where a regulation has federalism implications and preempts State law, the agency seeks to consult with State and local officials in the process of developing the regulation.

FRA has analyzed this rule in accordance with the principles and criteria contained in Executive Order 13132. If adopted, this rule would not have a substantial direct effect on the States, on the relationship between the Federal government and the States, or on the distribution of power and responsibilities among the various levels of government. FRA has also determined that this rule would not impose substantial direct compliance costs on State and local governments. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.

However, this rule could have preemptive effect by operation of law under 49 U.S.C. 20106 (Section 20106). Section 20106 provides that States may not adopt or continue in effect any law, regulation, or order related to railroad safety or security that covers the subject matter of a regulation prescribed or order issued by the Secretary of Transportation (with respect to railroad safety matters) or the Secretary of Homeland Security (with respect to railroad security matters), except when the State law, regulation, or order qualifies under the “local safety or security hazard” exception to Section 20106.

In sum, FRA has analyzed this rule in accordance with the principles and criteria contained in Executive Order 13132. As explained above, FRA has determined that this rule has no federalism implications, other than the possible preemption of State laws under Section 20106. Accordingly, FRA has determined that preparation of a federalism summary impact statement for this rule is not required.

FRA has evaluated this rule in accordance with its “Procedures for Considering Environmental Impacts” (FRA's Procedures) (64 FR 28545, May 26, 1999) as required by the National Environmental Policy Act (42 U.S.C. 4321 et seq. ), other environmental statutes, Executive Orders, and related regulatory requirements. FRA has determined that this action is not a major FRA action (requiring the preparation of an environmental impact statement or environmental assessment) because it is categorically excluded from detailed environmental review pursuant to section 4(c)(20) of FRA's Procedures. 64 FR 28547, May 26, 1999. In accordance with section 4(c) and (e) of FRA's Procedures, the agency has further concluded that no extraordinary circumstances exist with respect to this final rule that might trigger the need for a more detailed environmental review. As a result, FRA finds that this rule is not a major Federal action significantly affecting the quality of the human environment.

Pursuant to Section 201 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 2 U.S.C. 1531), each Federal agency “shall, unless otherwise prohibited by law, assess the effects of Federal regulatory actions on State, local, and tribal governments, and the private sector (other than to the extent that such regulations incorporate requirements specifically set forth in law).” Section 202 of the Act (2 U.S.C. 1532) further requires that “before promulgating any general notice of proposed rulemaking that is likely to result in the promulgation of any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) [currently $140,800,000] in any 1 year, and before promulgating any final rule for which a general notice of proposed rulemaking was published, the agency shall prepare a written statement” detailing the effect on State, local, and tribal governments and the private sector. FRA is publishing this final rule to provide additional flexibility in standards for the development, testing, implementation, and use of PTC systems for railroads mandated by RSIA to implement PTC systems. The RIA provides a detailed analysis of the costs and benefits of the final rule. This analysis is the basis for determining that this rule will not result in total expenditures by State, local, or tribal governments, in the aggregate, or by the private sector of $140,800,000 or more in any one year. The costs associated with this final rule are reduced accident reduction from an existing rule.

Executive Order 13211 requires Federal agencies to prepare a Statement of Energy Effects for any “significant energy action.” See 66 FR 28355 (May 22, 2001). Under the Executive Order a “significant energy action” is defined as any action by an agency that promulgates or is expected to lead to the promulgation of a final rule or regulation, including notices of inquiry, advance notices of proposed rulemaking, and notices of proposed rulemaking: (1)(i) that is a significant regulatory action under Executive Order 12866 or any successor order, and (ii) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (2) that is designated by the Administrator of the Office of Information and Regulatory Affairs as a significant energy action. FRA has evaluated this rule in accordance with Executive Order 13211. FRA has determined that this rule is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Consequently, FRA has determined that this final rule is not a “significant energy action” within the meaning of the Executive Order.

FRA wishes to inform all interested parties that anyone is able to search the electronic form of any written communications and comments received into any agency docket by the name of the individual submitting the document (or signing the document, if submitted on behalf of an association, business, labor union, etc.). Interested parties may also review DOT's complete Privacy Act Statement in the Federal Register published on April 11, 2000 (65 FR 19477) or visit http://www.regulations.gov/#!privacyNotice.

In consideration of the foregoing, FRA amends chapter II, subtitle B of title 49, Code of Federal Regulations as follows:

The final rule contains errors concerning the delineation of the boundary of the Cape Cod Bay Restricted Management Area. In addition, the final rule incorrectly omitted New Hampshire state waters from the definition of the Northern Inshore State Waters Management Area. This correction notice provides clarification regarding the correct boundaries of these management areas.

This final rule has been determined to be not significant for the purposes of Executive Order 12866. The Assistant Administrator for Fisheries, NOAA, finds good cause under the Administrative Procedures Act to waive notice and opportunity for public comments as it is unnecessary for a non-substantive correcting amendment.

Accordingly, the final rule, in FR Doc. 2014-14936, published on June 27, 2014, in 79 FR 36586, is corrected as follows:

Background

The U.S. North and South Atlantic swordfish fisheries are managed under the 2006 Consolidated HMS FMP. Implementing regulations at 50 CFR part 635 are issued under the authority of the Magnuson-Stevens Act, 16 U.S.C. 1801 et seq., and ATCA, 16 U.S.C. 971 et seq. ATCA authorizes the Secretary of Commerce (Secretary) to promulgate regulations as may be necessary and appropriate to implement ICCAT recommendations.

For North Atlantic swordfish, this final action maintains the U.S. baseline quota of 2,937.6 metric tons (mt) dressed weight (dw), implements an ICCAT-recommended quota transfer of 18.8 mt dw from the United States to Mauritania, and discontinues the 112.8 mt dw quota transfer to Morocco, consistent with removal of the measure in the ICCAT recommendation. Additionally, this final rule modifies the regulations to comply with the ICCAT-recommended reduced underharvest carryover limit, which becomes effective in 2015 and thus will apply to any underharvest accrued in 2014 and beyond, pursuant to ICCAT Recommendation 13-02. For South Atlantic swordfish, this action maintains the U.S. South Atlantic swordfish quota at 75.2 mt dw (100 mt whole weight (ww)), carries over 75.1 mt dw of 2013 underharvest, and authorizes the transfer of 50 mt ww (37.6 mt dw) to Namibia, 25 mt ww (18.8 mt dw) to Côte d'Ivoire, and 25 mt ww (18.8 mt dw) to Belize, consistent with ICCAT Recommendation 13-03. Information regarding the quota calculations can be found below. Additional details regarding the quotas and other actions in this rule and their impacts can be found in the proposed rule (79 FR 27553, May 14, 2014).

Based on the 2013 ICCAT Standing Committee on Research and Statistics (SCRS) stock assessment, North Atlantic swordfish are fully rebuilt and not experiencing overfishing. At the 2013 ICCAT annual meeting, Recommendation 13-02 was adopted, maintaining the overall North Atlantic swordfish total allowable catch (TAC) of 10,301 metric tons (mt) dressed weight (dw) (13,700 mt whole weight (ww)) through 2016. Of this TAC, the United States' baseline quota is 2,937.6 mt dw (3,907 mt ww) per year. ICCAT Recommendation 13-02 also includes an 18.8 mt dw (25 mt ww) annual quota transfer from the United States to Mauritania, discontinues the 112.8 mt dw quota transfer to Morocco, consistent with removal of the measure in the ICCAT recommendation, and limits allowable 2013 underharvest carryover to 25 percent of a contracting party's baseline quota. Underharvest accrued in 2014 and beyond is limited to 15 percent of a contracting party's baseline quota. Therefore, the United States may carry over a maximum of 734.4 mt dw (976.8 mt ww) of underharvest from 2013 and add it to the 2014 baseline quota. This final rule adjusts the U.S. baseline quota for the 2014 fishing year to account for the annual quota transfer to Mauritania and the 2013 underharvest. Additionally, this final rule modifies the regulations to comply with the reduced underharvest carryover limit, which becomes effective in 2015 and thus will apply to underharvest accrued in 2014 and beyond.

The 2014 North Atlantic swordfish baseline quota is 2,937.6 mt dw (3,907 mt ww). The North Atlantic swordfish underharvest for 2013 was 1,391.8 mt dw (1,851.1 mt ww) which exceeds the maximum carryover cap of 734.4 mt dw (976.8 mt ww). This updated estimate, while lower than that estimated in the proposed rule, is still lower than the maximum allowable underharvest carryover. Thus, as proposed, NMFS is carrying forward the same maximum amount allowed per ICCAT Recommendation 13-02. The baseline quota would be reduced by the 18.8 mt dw (25 mt ww) annual quota transfer to Mauritania and increased by the underharvest carryover maximum of 734.4 mt dw (976.8 mt ww), resulting in an adjusted quota of 3,653.2 mt dw (4,857.8 mt ww) for the 2014 fishing year. From that final adjusted quota, per § 635.27(c)(1)(i), the directed category quota of 3,303.2 mt dw (4,393.3 mt ww) is split equally into two seasons (January through June, and July through December), the reserve category quota is 50 mt dw (66.5 mt ww), and the incidental category quota, which includes recreational landings and catch by incidental swordfish permit holders, is 300 mt dw (399 mt ww) (Table 1).

In 2013, ICCAT Recommendation 13-03 established the South Atlantic swordfish TAC at 11,278.2 mt dw (15,000 mt ww) for 2014, 2015, and 2016. Of this, the United States' baseline quota is 75.2 mt dw (100 mt ww). ICCAT Recommendation 13-03 limits the amount of South Atlantic swordfish underharvest that can be carried forward. For South Atlantic swordfish, the United States may carry forward underharvest up to 100 percent of its baseline quota (75.2 mt dw). Recommendation 13-03 also included a total of 75.2 mt dw (100 mt ww) of quota transfers from the United States to other countries. These transfers were 37.6 mt dw (50 mt ww) to Namibia, 18.8 mt dw (25 mt ww) to Côte d'Ivoire, and 18.8 mt dw (25 mt ww) to Belize.

In 2013, U.S. fishermen landed 0.1 mt dw of South Atlantic swordfish and there were no dead discards. Therefore, 75.1 mt dw of underharvest is available to be carried over to 2014 and added to the baseline quota. That combined quota will then be reduced by the 75.2 mt dw of annual international quota transfers outlined above, resulting in an adjusted quota of 75.1 mt dw (100 mt ww) for South Atlantic swordfish (see Table 1) for 2014.

During the proposed rule comment period, NMFS received two written comments, one of which was directly related to the proposed rule. A summary of the relative comment on the proposed rule is shown below with NMFS' response. The second comment suggested banning harvest of all swordfish, which was outside the scope of the current rulemaking. All written comments submitted during the comment period can be found at http://www.regulations.gov/ by searching for NOAA-NMFS-2014-0054.

Comment: NMFS should apportion some of commercial underharvest to allow for recreational harvest and sale of swordfish caught in the Florida Swordfish Management Area, considering landings of Atlantic swordfish are below the established quotas.

Response: Currently, in the Atlantic, Gulf of Mexico, and Caribbean, recreationally caught swordfish ( i.e., those caught on U.S. vessels possessing the HMS Angling permit or the HMS Charter-Headboat permit when on a for-hire trip) may not be sold. Only permit holders that hold commercial permits may sell swordfish. Those commercial permit holders are required to sell to permitted dealers; except that individuals issued a valid HMS Commercial Caribbean Small Boat permit and operating in the U.S. Caribbean may sell swordfish to non-dealers (see 50 CFR 635.31(d)).

Given the rebuilt status of the North Atlantic swordfish stock and their resulting increased availability, NMFS has made efforts to provide additional harvest opportunities that will allow both recreational and commercial fishermen to more fully utilize the U.S. swordfish quota allocation. Management measures have included increasing retention limits, reducing the minimum cleithrum to caudal keel (CK) length, raising vessel upgrade limits on limited access commercial permits, creating two new commercial permits (the HMS Commercial Caribbean Small Boat permit, which is specific to the U.S. Caribbean, and the Swordfish General Commercial permit), and modifying the HMS Charter-Headboat permit to allow for commercial retention of swordfish when on a non-for hire trip.

The Swordfish General Commercial permit and modified HMS Charter-Headboat permit were first implemented in 2014 after finalization of Amendment 8 to the 2006 Consolidated HMS FMP (Amendment 8). Both of these permits allow for commercial retention of swordfish using rod and reel, handline, bandit gear, harpoon, and green-stick gear (the same gears authorized for the Atlantic Tunas General category permit). Amendment 8 also established swordfish management regions (including the Florida Swordfish Management Area), established default regional retention limits, and allowed for the adjustment of the regional retention limits during a fishing season from zero to six swordfish based on certain criteria ( e.g., dealer reports, landing trends, available quota, etc). The default regional swordfish retention limit varies depending on the specific region; for the Florida Swordfish Management Area, the default regional swordfish retention limit is zero. Please refer to the final rule for Amendment 8 for additional details (78 FR 52012, August 21, 2013).

The swordfish retention limit in the Florida Swordfish Management Area is currently set to zero fish for vessels with a Swordfish General Commercial Permit or an HMS Charter-Headboat permit when on a non-for hire trip, as NMFS is taking a cautious approach at this time while issuing the new open-access commercial swordfish permit for the first time. This cautious approach is particularly important off the southeast coast of Florida, where the Florida Swordfish Management Area was implemented to conserve juvenile swordfish habitat in a region where fishing grounds are easily accessible to a large number of fishermen. The initial retention limit of zero swordfish was implemented in part upon consideration of public comments on Amendment 8, including a comment from the Florida Fish and Wildlife Conservation Commission indicating a high potential for the rapid growth of a commercial fishery in the Florida Swordfish Management Area.

Currently, NMFS is observing the patterns of harvest, including how fishing for swordfish changes throughout the fishing year in different regions, and seeing how changes in patterns of harvest relate to other portions of the U.S. fishery in overall landings. NMFS does not feel that the low harvest levels to date indicate a need to adjust the regional retention limits at this time. NMFS will continue to monitor the fishery and, based upon the inseason adjustment criteria specified at 50 CFR 635.24 (b)(4)(iv), will consider whether to adjust regional retention limits in the future.

The final rule contains no changes from the proposed rule, except for minor landings updates based on more recent 2013 landings reports and dead discard estimates.

Pursuant to the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that the final rule is consistent with the 2006 Consolidated HMS FMP and its amendments, other provisions of the Magnuson-Stevens Act, and other applicable law.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. No comments were received regarding this certification. As a result, a regulatory flexibility analysis was not required and none was prepared.

For reasons set out in the preamble, 50 CFR part 635 is amended as follows:

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. Regulations governing sideboard protections for GOA groundfish fisheries appear at subpart B of 50 CFR part 680.

The 2014 Pacific cod TAC apportioned to catcher/processors using trawl gear in the Central Regulatory Area of the GOA is 1,638 metric tons (mt), as established by the final 2014 and 2015 harvest specifications for groundfish of the GOA (79 FR 12890, March 6, 2014).

In accordance with § 679.20(d)(2), the Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the 2014 Pacific cod TAC apportioned to catcher/processors using trawl gear in the Central Regulatory Area of the GOA has been reached. Therefore, NMFS is requiring that of Pacific cod caught by catcher/processors using trawl gear in the Central Regulatory Area of the GOA be treated as prohibited species in accordance with § 679.21(b).

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the prohibition of retention of Pacific cod by catcher/processors using trawl gear in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of August 18, 2014.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. Regulations governing sideboard protections for GOA groundfish fisheries appear at subpart B of 50 CFR part 680.

The 2014 Pacific ocean perch TAC apportioned to the incidental catch allowance for Pacific ocean perch in the Central Regulatory Area of the GOA is 1,200 metric tons (mt), as established by the final 2014 and 2015 harvest specifications for groundfish of the GOA (79 FR 12890, March 6, 2014).

In accordance with § 679.20(d)(2), the Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the 2014 Pacific ocean perch TAC apportioned to the incidental catch allowance in the Central Regulatory Area of the GOA has been reached. Therefore, NMFS is requiring that catches of the incidental catch allowance for Pacific ocean perch in the Central Regulatory Area of the GOA be treated as prohibited species in accordance with § 679.21(b).

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the prohibition of retention of catches of the incidental catch allowance for Pacific ocean perch in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of August 18, 2014.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679. Regulations governing sideboard protections for GOA groundfish fisheries appear at subpart B of 50 CFR part 680.

The 2014 rex sole sideboard limit for non-exempt AFA catcher vessels in the Central Regulatory Area of the GOA is 239 metric tons (mt), as established by the final 2014 and 2015 harvest specifications for groundfish of the GOA (79 FR 12890, March 6, 2014).

In accordance with § 679.20(d)(1)(iv), the Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the 2014 rex sole sideboard limit for non-exempt AFA catcher vessels in the Central Regulatory Area of the GOA has been reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 300 mt and is setting aside the remaining 29 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for the 2014 rex sole sideboard limit for non-exempt AFA catcher vessels in the Central Regulatory Area of the GOA.

After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the directed fishing closure of the rex sole sideboard limit by non-exempt AFA catcher vessels in the Central Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of August 18, 2014.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.