DOE provides assistance to eligible applicants through a number of different programs. This assistance can take the form of financial assistance (i.e.,grants, cooperative agreements, and technology investment agreements), loan guarantees, and direct loans, among others. DOE has consistently sought to protect trade secrets and commercial or financial information that is privileged or confidential submitted by applicants for these forms of assistance, but the procedures required of applicants when submitting such information can vary. DOE proposes procedures for the submission to DOE of trade secrets and commercial or financial information that is privileged or confidential meant to standardize DOE's procedures for processing and handling applicant submissions containing such information. The procedures proposed in this rulemaking are modeled after existing procedures DOE uses to process loan applications submitted to DOE's Advanced Technology Vehicles Manufacturing Incentive Program.

DOE proposes minor changes to the Notice of Restriction on Disclosure and Use of Data in 10 CFR 600.15(b)(1), as well as corresponding changes to 10 CFR 600.15(a) and 600.15(b)(2) and (3). These changes are intended to allow for cross reference from other portions of subpart H (specifically, parts 609—Loan Guarantees for Projects that Employ Innovative Technologies and 611—Advanced Technology Vehicles Manufacturer Assistance Program) while recognizing that part 600 does not otherwise apply to loans and loan guarantees.

DOE proposes to amend 10 CFR 600.15(b)(1) to require a party submitting information to DOE, at the time of submission, to identify and assert a claim of exemption regarding information it considers to be trade secrets or commercial or financial information that is privileged or confidential such that the information would be exempt from disclosure under the Freedom of Information Act (FOIA, 5 U.S.C. 552). This claim of exemption must be made by placing the following notice on the first page of the application or other document and specifying the page or pages to be restricted: “Pages [__] of this document may contain trade secrets or commercial or financial information that is privileged or confidential and exempt from public disclosure. Such information shall be used or disclosed only for evaluation purposes or in accordance with a financial assistance or loan agreement between the submitter and the Government. The Government may use or disclose any information that is not appropriately marked or otherwise restricted, regardless of source.”

To further protect trade secrets and commercial or financial information that is privileged or confidential, DOE also proposes to add a requirement in section 600.15(b)(1) that each page containing such data must be specifically identified and marked with text that is similar to the following: “May contain trade secrets or commercial or financial information that is privileged or confidential and exempt from public disclosure.” In addition, each line or paragraph containing trade secrets or commercial or financial information that is privileged or confidential on the page or pages on which this statement appears must be marked with brackets or other clear identification, such as highlighting.

DOE acknowledges that the marking procedures set forth above may not be feasible on unalterable forms submitted through Grants.gov. In such cases only, DOE proposes that submitters include in a cover letter or the project narrative a notice containing language substantially similar to the following: “Forms [__] may contain trade secrets or commercial or financial information that isprivileged or confidential and exempt from public disclosure. Such information shall be used or disclosed only for evaluation purposes or in accordance with a financial assistance or loan agreement between the submitter and the Government. The Government may use or disclose any information that is not appropriately marked or otherwise restricted, regardless of source.” The cover letter or project narrative must also specify the particular information on such forms that the submitter believes to be trade secrets or commercial or financial information that is privileged or confidential.

DOE also proposes to amend 10 CFR 603.850 to require that the markings affixed to data for technology investment agreements that may contain trade secrets or commercial or financial information that is privileged or confidential conform to the marking requirements of 10 CFR 600.15.

DOE further proposes that the regulations implementing its loan guarantee program for projects that employ innovative technologies under Title XVII of the Energy Policy Act of 2005 (42 U.S.C. 16511-16514) cross-reference 10 CFR 600.15. These regulations are set forth at 10 CFR part 609. DOE proposes to establish the same marking requirements as described above for any information submitted through the Title XVII loan application process, including pre-applications, applications, and any additional information provided by loan applicants. Similarly, DOE proposes that the regulations implementing its Advanced Technology Vehicles Manufacturing (ATVM) Incentive Program at 10 CFR part 611 cross-reference 10 CFR 600.15. DOE already applies to the ATVM program procedures virtually identical to those proposed in this notice. DOE here proposes to establish the marking requirements described above in the program's implementing regulations.

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

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

DOE has reviewed today's proposed rule under the Regulatory Flexibility Act and certifies that, if adopted, the rule would not have a significant impact on a substantial number of small entities. While DOE recognizes that some applicants for assistance may be small businesses according to SBA size standards, DOE believes that the impact on such applicants of the proposed rule would not be significant. The proposed rule does not change the information applicants are required to submit to apply for the various forms of DOE assistance. It merely instructs applicants how to mark information that they believe to be trade secrets or commercial or financial information that is privileged or confidential.

The information collection requirements for the various forms of assistance to which the marking requirements in this proposed rule would apply have been approved under OMB Control Numbers 1910-0400 (Financial Assistance Regulations) and 1910-5134 (Title XVII loan guarantee program).

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

In this proposed rule, DOE proposes procedures for the submission of information relating to various forms of assistance, including grants, cooperative agreements, technology investment agreements, loans, and loan guarantees. DOE has determined that this rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321et seq.) and DOE's implementing regulations at 10 CFR part 1021. Specifically, this proposed rule is a procedural rule covered by Categorical Exclusion A6 under 10 CFR part 1021, subpart D, which applies to any rulemaking that is strictly procedural in nature. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999), imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have other federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE has considered today's proposed rule in accordance with Executive Order 13132 and its policy and determined that this proposed rule setting forth requirements for the marking of trade secrets and commercial or financial information that is privileged or confidential, if adopted, would not preempt State law or have any federalism impacts. No further action is required by Executive Order 13132.

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

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

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

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

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

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

DOE has concluded that today's regulatory action, which would establish marking requirements for information submitted to DOE that the submitter believes to be trade secrets or commercial or financial information that is privileged or confidential, is not a significant energy action because the proposed standards are not likely to have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as such by the Administrator at OIRA. Accordingly, DOE has not prepared a Statement of Energy Effects for the proposed rule.

On December 16, 2004, OMB, in consultation with the Office of Science and Technology Policy, issued its Final Information Quality Bulletin for Peer Review (the Bulletin). 70 FR 2664 (Jan. 14, 2005). The Bulletin establishes that certain scientific information shall be peer reviewed by qualified specialists before it is disseminated by the Federal Government, including influential scientific information related to agency regulatory actions. The purpose of the bulletin is to enhance the quality and credibility of the Government's scientific information. DOE has determined that today's proposed rule does not contain any influential or highly influential scientific information that would be subject to the peer review requirements of the OMB Bulletin.

The Secretary of Energy has approved publication of this proposed rule.

For the reasons stated in the preamble, DOE proposes to amend Subchapter H of Chapter II of Title 10, Code of Federal Regulations, to read as set forth below:

Background

The Pension Benefit Guaranty Corporation (PBGC) administers the single-employer pension plan termination insurance program under Title IV of the Employee Retirement Income Security Act of 1974 (ERISA). The program covers certain private-sector, single-employer defined benefit plans, for which premiums are paid to PBGC each year.

Covered plans that are underfunded may terminate either in a distress termination under section 4041(c) of ERISA or in an involuntary termination (one initiated by PBGC) under section 4042 of ERISA. When such a plan terminates, PBGC typically is appointed statutory trustee of the plan, and becomes responsible for paying benefits in accordance with the provisions of Title IV.

Under sections 4022(b)(1) and 4022(b)(7) of ERISA and §§ 4022.24 through .26 of PBGC's regulation on Benefits Payable in Terminated Single-Employer Plans, 29 CFR part 4022, PBGC's guarantee of new pension benefits and benefit increases is “phased in” over a five-year period, which begins on the date the new benefit or benefit increase is adopted or effective (whichever is later).

On August 17, 2006, the Pension Protection Act of 2006, Public Law 109-280 (PPA 2006), was signed into law. Section 403 of PPA 2006 amended section 4022 of ERISA by adding a new section 4022(b)(8), which changes the start of the phase-in period for plant shutdown and other “unpredictable contingent event benefits” (UCEBs). Under new section 4022(b)(8), the phase-in rules are applied as if a plan amendment creating a UCEB was adopted on the date the unpredictable contingent event (“UCE”) occurred rather than as of the actual adoption date of the amendment, which is almost always earlier. As a result of the new provision, the guarantee of benefits arising from plant shutdowns and other UCEs that occur within 5 years of plan termination (or the date the plan sponsor entered bankruptcy, if applicable under PPA 2006, as explained below) generally will be lower than under prior law. This new provision, which does not otherwise change the existing phase-in rules, applies to benefits that become payable as a result of a UCE that occurs after July 26, 2005.

This proposed rule would amend part 4022 to implement the PPA 2006 changes to the guarantee of UCEBs. With one exception, explained below under the heading “Bankruptcy filingdate treated as deemed termination date,” the other provisions of PPA 2006 affecting PBGC's guarantee do not affect phase-in of the guarantee of UCEBs and thus are not addressed in this proposed rule.

Under section 4022(b)(7) of ERISA, the guarantee of benefits under a new plan or of a new benefit or benefit increase under an amendment to an existing plan (all of which are referred to in PBGC's regulations as “benefit increases”) is “phased in” based on the number of full years the benefit increase is in the plan. The time period that a benefit increase has been provided under a plan is measured from the later of the adoption date of the provision creating the benefit increase or the effective date of the benefit increase. Generally, 20 percent of a benefit increase is guaranteed after one year, 40 percent after two years,etc.,with full phase-in of the guarantee after five years. If the amount of the monthly benefit increase is below $100, the annual rate of phase-in is $20 rather than 20 percent.

The phase-in limitation generally serves to protect the insurance program from losses caused by benefit increases that are adopted or made effective shortly before plan termination. This protection is needed because benefit increases can create large unfunded liabilities. An example is a plan amendment that significantly increases credit under the plan benefit formula for service performed prior to the amendment. Such increases generally are funded over time under the ERISA minimum funding rules. An immediate full guarantee would result in an inappropriate loss for PBGC if a plan terminated before an employer significantly funded a benefit increase. Phase-in of the guarantee allows time for some funding of new liabilities before they are fully guaranteed.

Funding of liabilities created by a benefit increase generally starts at the same time as the PBGC guarantee first applies under the phase-in rule. Under ERISA and the Internal Revenue Code (“Code”), liability created by a benefit increase must be reflected in a plan's required contribution no later than the plan year following adoption of the benefit increase. For example, a benefit increase that is adopted and effective in the 2009 plan year must be reflected in the minimum funding contribution calculations for a plan year not later than the 2010 plan year. Similarly, such a benefit increase would become partially guaranteed during the 2010 plan year.

Over the years, legislative reforms, including those in PPA 2006, have generally shortened the permitted funding period from thirty years to seven years (or less in certain cases). This closer coordination between the permitted funding period and five-year guarantee phase-in period generally enhanced the effectiveness of phase-in in protecting the PBGC insurance program against losses due to unfunded benefit increases. However, as explained below, before the PPA 2006 changes to the phase-in of UCEBs, this coordination generally failed in the case of UCEBs.

UCEBs, described more specifically below, are benefits or benefit increases that become payable solely by reason of the occurrence of a UCE such as a plant shutdown.

UCEBs typically provide a full pension, without any reduction for age, starting well before an unreduced pension would otherwise be payable. The events most commonly giving rise to UCEBs are events relating to full or partial plant shutdowns or other reductions in force. UCEBs, which are frequently provided in pension plans in various industries such as the steel and automobile industries, are payable with respect to full or partial plant shutdowns as well as shutdowns of different kinds of facilities, such as administrative offices, warehouses, retail operations,etc.UCEBs are also payable, in some cases, with respect to layoffs and other workforce reductions.1

A typical shutdown benefit provision in the steel industry—the so-called “70/80 Rule”—generally allows participants who lose their jobs due to the complete or partial closing of a facility or a reduction-in-force and whose age plus service equals 70 (if at least age 55) or 80 (at any age) to begin receiving their full accrued pension immediately, even though they have not reached normal retirement age. Similar UCEBs are common in the automobile industry with respect to shutdowns and layoffs. The purpose of these benefits is to assist participants financially in adjusting to a permanent job loss.

A UCEB provision typically has been in a plan many years before the occurrence of the event that eventually triggers the benefit, such as a plant shutdown. As a result, before PPA 2006, shutdown benefits, for example, were often fully guaranteed under the phase-in rules when a shutdown occurred. Because the benefit is contingent on the occurrence of an unpredictable event, plan sponsors typically did not make contributions to provide for advance funding of such benefits; funding of such benefits often did not begin until after the UCE had occurred. If, as often happened, plan termination occurred within a few years after a shutdown, the time lag between the start of the phase-in period and the start of funding resulted in an increased loss to the insurance program.

Congress first explicitly addressed UCEBs in funding reforms contained in the Pension Protection Act of 1987, enacted as part of Public Law 100-203, the Omnibus Budget Reconciliation Act of 1987 (OBRA 1987). The OBRA 1987 rules for deficit reduction contributions required employers to recognize UCEBs on an accelerated basis (generally, within five to seven years), beginning after the triggering event occurred.2 However, the rules did not address the mismatch of the funding and guarantee phase-in periods discussed above. They also did not address the fact that UCEBs are likely to be triggered when the employer is experiencing financial difficulty, which threatens both funding and continuation of the plan. For these reasons, in the years since OBRA 1987, PBGC has assumed more than $1 billion of unfunded benefit liabilities from shutdown and similar benefits.

Congress further addressed UCEBs in PPA 2006. PPA 2006 affected UCEBs in two important ways.

First, PPA 2006 added new ERISA section 206(g) and parallel Code section 436(b) that restrict payment of UCEBs with respect to a UCE if the plan is less than 60 percent funded for the plan year in which the UCE occurs (or would be less than 60 percent funded taking the UCEB into account). Unless the restriction is removed during that plan year as a result of additional contributions to the plan or an actuarial certification meeting certainrequirements, the restriction becomes permanent and, under Treas. Reg. § 1.436-1(a)(4)(iii),3 the plan is treated as if it does not provide for those UCEBs.4 Because PBGC guarantees only benefits that are provided under a plan, a UCEB that is treated as not provided under the plan because of this restriction is not guaranteeable by PBGC at all, and the phase-in rules that are the subject of this proposed regulation do not come into play for such a UCEB. Moreover, under Treas. Reg. § 1.436-1(a)(3)(ii), benefit limitations under ERISA section 206(g) that were in effect immediately before plan termination continue to apply after termination.

Second, PPA 2006 better aligns the starting dates of the funding and guarantee phase-in of UCEBs. Under PPA 2006, phase-in of the PBGC guarantee does not start until the UCE actually occurs. Specifically, ERISA section 4022(b)(8), added by section 403 of PPA 2006, provides: “If an unpredictable contingent event benefit (as defined in section 206(g)(1)) is payable by reason of the occurrence of any event, this section shall be applied as if a plan amendment had been adopted on the date such event occurred.” The provision applies to UCEs that occur after July 26, 2005. Thus, for purposes of the phase-in limitation, the date a UCE occurs is treated as the adoption date of the plan provision that provides for the related UCEB. This statutory change provides the PBGC insurance program a greater measure of protection than prior law from losses due to unfunded UCEBs—most notably, benefits that become payable by reason of a plant shutdown or similar event such as a permanent layoff.5

ERISA section 206(g)(1), as added by section 103(a) of PPA 2006, defines “unpredictable contingent event benefit” as:

“any benefit payable solely by reason of —

(i) A plant shutdown (or similar event, as determined by the Secretary of the Treasury), or

(ii) An event other than the attainment of any age, performance of any service, receipt or derivation of any compensation, or occurrence of death or disability.”

PPA 2006 did not alter the rule that UCEBs are not guaranteed at all unless the triggering event occurred prior to the plan termination date (see PBGCv.Republic Tech. Int'l, LLC,386 F.3d 659 (6th Cir. 2004)).

On October 15, 2009 (at 74 FR 53004), the Department of the Treasury (Treasury) published a final rule on Benefit Restrictions for Underfunded Pension Plans that defines UCEB for purposes of ERISA section 206(g)(1), and thus also for purposes of section 4022(b)(8). Treasury's final regulation clarifies the following points regarding UCEBs:

• UCEBs include only benefits or benefit increases to the extent such benefits or benefit increases would not be payable but for the occurrence of a UCE.

• The reference to “plant shutdown” in the statutory definition of UCEB includes a full or partial shutdown.

Treasury's final regulation also states that a UCEB includes benefits triggered by events similar to plant shutdowns. Treas. Reg. § 1.436-1(j)(9) defines a UCEB as follows:

This proposed regulation incorporates the definition of UCEB under section 206(g)(1)(C) of ERISA and Treas. Reg. § 1.436-1(j)(9). It also provides that the guarantee of a UCEB would be phased in from the latest of the date the benefit provision is adopted, the date the benefit is effective, or the date the UCE that makes the benefit payable occurs.

Under the proposed regulation, PBGC would determine the date the UCE occurs based on the plan provisions and the relevant facts and circumstances, such as the nature and level of activity at a facility that is closing and the permanence of the event. The date of the event as conceived, planned, announced, or agreed to by the employer might be relevant but would not be controlling. Where a plan provides that a UCEB is payable only upon the occurrence of more than one UCE, the proposed regulation provides that the guarantee would be phased in from the latest date when all such UCEs have occurred. For example, if a UCEB is payable only if a participant is laid off and the layoff continues for a specified period of time, the phase-in period would begin at the end of the specified period of time. Similarly, if a UCEB is payable only if both the plant where an employee worked is permanently shut down and it is determined that the employer has no other suitable employment for the employee, the phase-in period would begin when it is determined that the employer had no other suitable employment for the employee (assuming that date was later than the shutdown date).

The proposed regulation includes eight examples that show how the UCEB phase-in rules would apply in the following situations:

• Shutdown that occurs later than the announced shutdown date.

• Sequential permanent layoffs.

• Skeleton shutdown crews.

• Permanent layoff benefit for which the participant qualifies shortly before the sponsor enters bankruptcy.

• Employer declaration during a layoff that return to work is unlikely.

• Shutdown benefit with age requirement that can be met after the shutdown.

• Retroactive UCEB.

• Removal of IRC Section 436 restriction.6

Whether a UCEB phase-in determination applies on a participant-by-participant basis, as opposed to facility-wide or some other basis, would depend largely upon plan provisions. For example, a benefit triggered by a reduction-in-force would be determined with respect to each participant, and thus layoffs that occur on different dates would generally be distinct UCEs. But a benefit payable only upon the complete shutdown of the employer's entire operations would apply plan-wide, and thus the shutdown date generally would be the date of the UCE for all participants.

As noted above, new ERISA section 4022(b)(8), added by section 403 of PPA 2006, changes the rules for phasing in the guarantee of UCEBs in the case of UCEs that occur after July 26, 2005. Section 4022(b)(8) covers shutdown-type benefits, including benefits payable by reason of complete shutdowns of plants, and benefits payable when participants lose their jobs or retire as a result of partial closings or reductions-in-force at all kinds of facilities, in addition to other UCEBs. Accordingly, proposed § 4022.27(a) expressly refers to benefits payable as a result of “plant shutdowns or other unpredictable contingent events * * * , such as partial facility closings and permanent layoffs.”7

As stated above, a UCEB is defined by section 206(g)(1)(C) of ERISA to include benefits payable solely by reason of (1) a plant shutdown or similar event, or (2) an event other than an event such as attainment of a certain age or performance of service, that would trigger eligibility for a retirement benefit. The proposed regulation provides that PBGC would determine whether a benefit is a UCEB based on the facts and circumstances; the substance of the benefit, not what it is called, determines whether the benefit would be a UCEB covered by the new phase-in rule. Accordingly, under proposed § 4022.27(b), the guarantee of any benefit that PBGC determines, based on plan provisions and facts and circumstances, is a shutdown benefit or is otherwise a UCEB would be phased in as a UCEB.

The proposed definition of UCEB under § 4022.2 provides that a benefit does not cease to be a UCEB for phase-in purposes merely because the UCE has already occurred or its occurrence has become reasonably predictable. This interpretation is supported by the plain language of ERISA section 4022(b)(8), which incorporates ERISA section 206(g)(1)(C). Section 206(g)(1)(C) expressly defines a UCEBnotin terms of degree of predictability, but rather whether a benefit is “payable solely by reason of a shutdown or similar event * * * or an event other than the attainment of any age, performance of any service, receipt or derivation of any compensation, or occurrence of death or disability.” In other words, section 206(g)(1)(C) provides that a UCEB remains a UCEB after the UCE occurs. Because many events that are not reliably and reasonably predictable become predictable immediately before they occur, and the concept of predictability does not apply to events after they have occurred, PBGC interprets ERISA section 4022(b)(8) to apply to benefits such as shutdown benefits regardless of whether the events triggering those benefits have already occurred or have become predictable.

ERISA sections 4022(b)(1) and 4022(b)(7) provide that PBGC's guarantee of a benefit increase is phased in from the date the benefit increase is “in effect,”i.e.,from the later of the adoption date or effective date of the increase. ERISA section 4022(b)(8) (added by PPA 2006) provides that, for phase-in purposes, shutdown benefits and other UCEBs are deemed to be “adopted on the date * * * [the UCE] occurs.” Thus ERISA section 4022(b)(8) protects PBGC in the typical situation where a shutdown or permanent layoff occurs long after a shutdown benefit provision was originally adopted.

Section 4022(b)(8) could be read to produce an incongruous result in an unusual situation—where the UCE occurs first and a UCEB is adopted later, effective retroactive to the UCE. Because the date of the UCE would be treated under section 4022(b)(8) as the adoption date of the UCEB, in this situation the phase-in arguably would begin on the date of the UCE (the later of the adoption date or effective date of the UCEB), rather than on the actual adoption date of the plan amendment, as under pre-PPA 2006 law. The result would be a more generous—and more costly—guarantee of UCEBs than under pre-PPA 2006 law. To avoid this incongruous result, proposed § 4022.27(c) provides that a benefit increase due solely to a UCEB would be “in effect” as of the latest of the adoption date of the plan provision that provides for the UCEB, the effective date of the UCEB, or the date the UCE occurs.

Finally, if a UCEB becomes payable because a restriction under IRC section 436 is removed after, for example, an adequate funding contribution is made, the effective date of the UCEB for phase-in purposes is determined without regard to the restriction.

When PBGC becomes trustee of a pension plan that terminates without sufficient assets to provide all benefits, it allocates plan assets to plan benefits in accordance with the statutory priority categories in section 4044 of ERISA. The category to which a particular benefit is assigned in the asset allocation can affect insurance program costs and the extent to which participants receive nonguaranteed benefits.

Priority category 3 in the asset allocation is particularly important, because it often includes benefits that, depending on the level of the plan assets, may be paid by PBGC even though not guaranteed. Priority category 3 contains only those benefits that were in pay status at least three years before the termination date of the plan (or that would have been in pay status if the participant had retired before that three-year period). An individual's benefit amount in priority category 3 is based on the plan provisions in effect during the five-year period preceding plan termination under which the benefit amount would be the least. Thus priority category 3 does not include benefit increases that were adopted or became effective in the five years before plan termination or, in some cases as discussed below, the bankruptcy filing date.

PBGC considered whether the UCEBs that are not guaranteed under the PPA 2006 changes should be excluded from priority category 3. Under that approach, plan assets would go farther to pay for other benefits, especially guaranteed benefits, and participants would be less likely to receive UCEBs that are not guaranteed. Alternatively, if UCEBs that are not guaranteed under the PPA 2006 changes were included in priority category 3—as they are under pre-PPA law and PBGC's current regulation on Allocation of Assets (part4044)—plan assets would be less likely to reach other benefits, especially guaranteed benefits, and participants would be more likely to receive UCEBs that are not guaranteed.

Because section 403 of PPA 2006 does not make any reference to section 4044,8 PBGC concluded that the latter interpretation is the better one, and thus the proposed regulation does not amend part 4044.

On July 1, 2008 (73 FR 37390), PBGC published a proposed rule, “Bankruptcy Filing Date Treated as Plan Termination Date for Certain Purposes; Guaranteed Benefits; Allocation of Plan Assets; Pension Protection Act of 2006,” to implement section 404 of PPA 2006, which added a new section 4022(g) to ERISA. This section provides that when an underfunded plan terminates while its contributing sponsor is in bankruptcy, the amount of guaranteed benefits under section 4022 will be determined as of the date the sponsor entered bankruptcy (the “bankruptcy filing date”) rather than as of the termination date. The provision applies to plans terminating while the sponsor is in bankruptcy, if the bankruptcy filing date is on or after September 16, 2006.9

Section 4022(g) applies to all types of plan benefits, including UCEBs. Under this provision, if a permanent shutdown (or other UCE) occurs after the bankruptcy filing date, UCEBs arising from the UCE are not guaranteed because the benefits are not nonforfeitable as of the bankruptcy filing date. Similarly, if the shutdown (or other UCE) occurs before the bankruptcy filing date, the five-year phase-in period for any resulting UCEBs is measured from the date of the UCE to the bankruptcy filing date, rather than to the plan termination date. For example, if a permanent shutdown occurs three years before the bankruptcy filing date, the guarantee of any resulting UCEBs will be only 60 percent phased in, even if the shutdown was more than five years before the plan's termination date. This rule is illustrated by Examples 4 and 5 in the proposed regulation.

PBGC considered whether UCEBs could be excepted from the section 4022(g) bankruptcy provision on the ground that the general phase-in rule in section 4022(g) is superseded by the specific section 4022(b)(8) phase-in rule for UCEBs. However, PBGC concluded that the language of the bankruptcy and UCEB statutory provisions does not allow for any such exception. The UCEB provision alters the starting date for phase-in of UCEBs, while the bankruptcy provision alters the date beyond which no further phase-in is allowed for any benefit increase, including a UCEB. PBGC sees no conflict in applying both provisions to UCEBs.

ERISA section 4041(c)(3)(D)(ii)(IV) requires administrators of plans terminating in a distress termination to limit payment of benefits to estimated guaranteed benefits and estimated non-guaranteed benefits funded under section 4044, beginning on the proposed termination date. Section 4022.62 of PBGC's regulation on Benefits Payable in Terminated Single-Employer Plans contains rules for computing estimated guaranteed benefits, including provisions for estimating guaranteed benefits when a new benefit or benefit increase was added to the plan within five years before plan termination. The proposed regulation would amend § 4022.62 to provide that the date the UCE occurs is treated as the date the UCEB was adopted,i.e.,the date the plan was amended to include the UCEB.

The regulatory changes made by this rule, like section 403 of PPA 2006, would apply to UCEBs that become payable as a result of a UCE that occurs after July 26, 2005.

PBGC has determined that this proposed rule is a “significant regulatory action” under Executive Order 12866. The Office of Management and Budget has therefore reviewed the proposed rule under Executive Order 12866.

Under Section 3(f)(1) of Executive Order 12866, a regulatory action is economically significant if “it is likely to result in a rule that may * * * [h]ave an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or Tribal governments or communities.” The PBGC has determined that this proposed rule does not cross the $100 million threshold for economic significance and is not otherwise economically significant.

The economic effect of the proposed rule is entirely attributable to the economic effect of section 403 of PPA 2006. Three factors tend to reduce the economic impact of section 403.

First, before section 403 went into effect, PBGC often involuntarily terminated plans with shutdown liabilities before company-wide shutdowns, under the “long-run loss” provision in section 4042(a)(4) of ERISA. That provision allows PBGC to initiate termination proceedings if its long-run loss “may reasonably be expected to increase unreasonably if the plan is not terminated.” A sudden increase in PBGC's liabilities resulting from a shutdown could create just such an unreasonable increase in long-run loss. Section 403 avoids the need for PBGC to make case-by-case decisions whether to initiate such “pre-emptive” terminations. Although it is difficult to make assumptions about PBGC's ability and intent to pursue such terminations if section 403 had not gone into effect, this factor tends to reduce its economic impact.

Second, another PPA 2006 amendment provides that if a plan terminates while the sponsor is in bankruptcy, the amount of benefits guaranteed by PBGC is fixed at the date of the bankruptcy filing rather than at the plan termination date. Because of that provision, if a plant shutdown or other UCE occurred between the bankruptcy filing date and the termination date, the resulting UCEB would not be guaranteed at all, and thus section 403 would have no economic effect.

Third—and perhaps most important—as also discussed above, other PPA 2006 provisions restrict payment of UCEBs if a plan is less than 60 percent funded. If, because of those restrictions, a UCEB was not payable at all, section 403 again would have no economic effect.

As stated above in Applicability, section 403 applies to any UCEB that becomes payable as a result of a UCE that occurs after July 26, 2005. PBGC estimates that, to date, the total effect of section 403—in terms of lower benefits paid to participants and associated savings for PBGC—is less than $4 million. Although PBGC cannot predict with certainty which plans with UCEBs will terminate, the funding level of such plans, or what benefits will be affected by the guarantee limits, given the relatively low estimate of the effect of the statutory provision to date, PBGC has determined that the annual effect ofthe proposed rule will be less than $100 million.

PBGC certifies under section 605(b) of the Regulatory Flexibility Act that this proposed rule would not have a significant economic impact on a substantial number of small entities. The amendments implement and in some cases clarify statutory changes made in PPA 2006; they do not impose new burdens on entities of any size. Virtually all of the statutory changes affect only PBGC and persons who receive benefits from PBGC. Accordingly, sections 603 and 604 of the Regulatory Flexibility Act do not apply.

For the reasons given above, PBGC proposes to amend 29 CFR part 4022 as follows:

On December 8, 2010, we published an NPRM entitled Drawbridge Operation Regulation; Fox River, Oshkosh, WI. in theFederal Register(75 FR 76322). The rulemaking concerned the request by the drawbridge owner, Canadian National Railway (CN RR), for the District Commander to approve remote operation of the drawbridge in accordance with 33 CFR 117.42. The drawbridge has been remotely operated without specific authorization from the District Commander for approximately 3-4 years, and is currently required to open on signal year round. Vessel operators have recently informed the Coast Guard that the drawbridge was formerly left in the open-to-navigation position and only closed when a train was crossing, but this practice was no longer used and vessels were reporting unreasonable delays, including no response from the remote bridge operator to signals for openings, and difficulties establishing communications with the remote operator. During the summer of 2010 the U.S. Coast Guard met with CN RR officials and developed the operating regulation proposed in the NPRM, including a set of visual warning signals to provide adequate warning to vessels that the railroad bridge was about to move from the open-to-navigation position to the closed-to-navigation position. Between April 15 and October 15 each year, the proposed regulation would require the bridge to remain in the open-to-navigation position unless train traffic is crossing, then reopen once train traffic has passed. The proposed light and sound signals would provide vessels with a method of warning when the bridge is expected to either close for train traffic or reopen for vessel traffic without having to establish direct communication with the remote bridge operator. The bridge would also be required to maintain and operate a marine radiotelephone, along with the equipment to visually monitor the waterway and communicate with vessels using all signaling methods described in 33 CFR 117.15. The proposed regulation also would have established a permanent winter operating schedule by requiring vessels to provide at least 12 hours advance notice for a bridge opening during winter, or during the traditional non-boating season, between approximately October 16 and April 14 each year.

The Coast Guard received four comments regarding the NPRM, two that were successfully received by the Docket Management Facility that were negative and two received by direct emails that were positive.

Both negative comments characterized the proposed 10-minute advance visual warning method to vessel operators as a required 10-minute delay for trains, resulting in slowed or stopped trains, blockages of City of Oshkosh streets, and impacts to emergency response providers. The two negative comments also suggested a 2-minute warning method for vessels. The NPRM never suggested or implied any change to train operations, or that trains must change speed or stop and wait 10 minutes on either bridge approach, or on City streets. Among the positive comments to the NPRM the local marine law enforcement entity stated it is not uncommon for ten to twenty vessels to be waiting for a bridge opening on weekends and holidays. For public safety reasons the area around the bridge is a county regulated slow no-wake speed zone for all vessels and the suggested 2-minute warning would not provide adequate warning before the span transitioned between the open and closed positions.

The Coast Guard is responsible for enforcement of the federal drawbridge regulations in 33 CFR part 117. Any decision by the Coast Guard to authorize remote operations or promulgate a drawbridge operation regulation must ensure that the proposed action provides for the safety and reasonable needs of navigation. After careful consideration of the comments from all parties it is determined to be in the best interest of navigation to withdraw the proposed rule. The bridge will be required to be manned by drawtenders and to conform to the general requirements and regulations found in Subpart A of Part 117 of Title 33 of the Code of Federal Regulations.

This action is taken under the authority of 33 U.S.C. 499; 33 CFR 1.05-1; Department of Homeland Security Delegation No. 0170.1.

I. Executive Summary

This NPRM proposes requirements for each person (i.e.,carrier or facility) who loads, unloads, or provides transfer equipment1 to load or unload a hazardous material to or from a cargo tank motor vehicle in accordance with part 177. The proposal addresses safety concerns raised by National Transportation Safety Board (NTSB) and Chemical and Safety Hazard Investigation Board (CSB) investigations, and PHMSA's internal review of hazardous material incident data. The proposal aims to reduce the overall number of hazardous material incidents caused by human error and equipment failures during cargo tank loading and unloading operations. As discussed in more detail throughout this document, the NPRM proposes the following requirements:

The overall costs and benefits of the proposed regulations are dependent on the level of existing pre-compliance and the overall effectiveness of the proposed regulations (reduction in loading/unloading incidents). To monetize the costs and benefits PHMSA used a number of assumptions to develop a base case.2 In aggregate, PHMSA estimates the mean present value of the total monetizable costs of these proposals (over 20 years, 7% discountrate3 ) to be $18.5 million and total monetizable benefits (over 20 years, 7% discount rate) to be $18.3 million. A summary of the expected annual costs and benefits is provided in the table below.

PHMSA requests comments on the analysis underlying these estimates, as well as possible approaches to reduce the costs of this rule while maintaining or increasing the benefits. While PHMSA has concluded that the aggregate benefits justify the aggregate costs, under some scenarios, the monetizable benefits may fall short of the monetizable costs. PHMSA seeks comments on possible changes or flexibilities that might improve the rule.

On January 4, 2008, PHMSA published a notice (73 FR 916) to solicit comments and information on a set of recommended practices for loading and unloading operations involving bulk packagings used to transport hazardous materials. In that notice, PHMSA summarized incident data related to bulk loading and unloading operations, discussed recommendations issued by the NTSB and CSB, provided an overview of current Federal regulations applicable to bulk loading and unloading operations, summarized the results of a public workshop PHMSA hosted in June 2007, and set forth proposed recommended practices for bulk loading and unloading operations. PHMSA indicated its intention to consider strategies for enhancing the safety of bulk loading and unloading operations, including whether additional regulatory requirements may be necessary. In addition, PHMSA solicited comments on whether there are existing gaps or overlaps in regulations promulgated by PHMSA, the Occupational Safety and Health Administration (OSHA), the Environmental Protection Agency (EPA), and the United States Coast Guard (USCG) that adversely affect the safety of these operations, and how any identified gaps or overlaps in Federal regulations should be addressed.

The proposed recommended practices set forth in the notice suggested that an offeror, carrier, or facility operator should conduct a thorough, orderly, systematic analysis to identify, evaluate, and control the hazards associated with specific loading and unloading operations and develop a step-by-step guide to loading and unloading that is clear, concise, and appropriate to the level of training and knowledge of its employees. PHMSA recommended that operating procedures address specific pre-loading/pre-unloading operations, loading/unloading operations, and post-loading/post-unloading operations and the procedures should be reviewed as often as necessary to ensure that they reflect current operating practices, materials, technology, personnel responsibilities, and equipment. In addition, PHMSA suggested that the operating procedures should identify and implement emergency procedures (including training and drills), maintenance and testing of equipment, and training in the operational procedures.

In this NPRM, PHMSA is proposing to amend the Hazardous Materials Regulations (HMR; 49 CFR parts 171-180) to require persons who load a hazardous material into, or unload a hazardous material from, a CTMV to develop and implement safety procedures governing such operations. PHMSA's review of transportation incident data and the findings of several NTSB and CSB accident investigations involving bulk hazardous materials loading and unloading operations suggest there may be opportunities to enhance the safety of such operations. (SeeSection II of this notice for detailed discussion). Several comments PHMSA received in response to our January 2008 notice generally support this view. PHMSA has identified a broad range of highway- and rail-specific loading and unloading safety issues that should be addressed through rulemaking. PHMSA plans to address the identified safety issues through separate rulemakings. PHMSA is evaluating the safety issues associated with rail tank car loading and unloading operations and may propose regulatory changes if our safety analysis concludes that such action is warranted.

In an effort to develop data to help identify and target risks associated with bulk loading and unloading of hazardous materials transported by highway and rail, PHMSA reviewed incident data submitted in accordance with the reporting criteria specified in § 171.16 of the HMR. A report, “A Summary Evaluation of Risk Associated with Bulk Loading/Unloading of Hazmat” (February 8, 2007), is available in the docket for this rulemaking. PHMSA conducted a detailed review of hazardous materials transportation incidents occurring over a three-year period (2004-06). An overarching conclusion of the review is that addressing risks associated with bulk loading and unloading operations for highway and rail transport provides an opportunity to enhance the safety of such operations and reduce the overall risk of serious incidents.

Based on indications from the initial review of incident data, and following a review of comments received in response to our January 4, 2008 notice, PHMSA conducted an additional review of serious incident data involving bulk loading and unloading of hazardous materials transported by highway and rail occurring over a five-year period (2003-07) (PHMSA has since updated the review to include incident data through 2009).4 PHMSA reviewed serious incidents involving hazardous materials in quantities of 3,000 liters or greater to identify the causes of the incidents and to identify common issues or problems that should be addressed. The analysis of the incident data suggests that human error is the greatest single primary cause of incidents during loading and unloading operations, accounting for 33% of serious incidents that reported a failure cause (26% of all incident reports reviewed). [Note that the analysis reflects failure causes reported on incident reports. Not all incident reports reported a failure cause and PHMSA did not make an assumption on the failure cause for those incidents where a failure cause was not indicated on the report; approximately 39% of the incident reports did not include a failure cause] During our review of incident data we noted that human error generally was a result of inattention to detail when performing a loading or unloading function; examples include failure to attend or monitor the operation, leaving valves in the wrong position, or improperly connecting hoses and other equipment. Overfilling of packagings or receiving tanks accounted for 25% of the incidents. Defective or deteriorating devices or components (e.g.,valve failure, gasket leak) as the primary cause accounted for approximately 16% of serious incidents, and a variety of other causes (e.g.,freezing temperatures, lading plugs in piping, lading/vessel incompatibility) accounted for the remainder. Further, a comparison of the serious incidents shows that the overwhelming majority involved CTMVs by highway; approximately 90% (615 of 680) of the serious incidents occurred during highway loading or unloading operations, and approximately 75% of those incidents involved CTMVs.

The general conclusion of the review is that the safety of bulk loading and unloading operations can be enhanced through targeted requirements such as more comprehensive training for hazmat employees performing a bulk loading or unloading function or more detailed procedures for conducting such operations. (SeeSection VSection-by-Section Reviewfor detailed descriptions of the proposed amendments in this notice). PHMSA seeks comments or data relevant to the accuracy of the conclusion that human error is the leading causal factor in CTMV loading and unloading incidents.

PHMSA is proposing additional training and qualification requirements as a means to increase hazmat employee awareness and accountability while reducing on-the-job complacency. As a result, PHMSA expects a reduction in the number of loading and unloading incidents caused by human error. Significant reductions to human error have been recognized using similar methods in the transportation and medicine fields. A discussion of these findings is available in the Preliminary Regulatory Impact Assessment, which is available in the docket for this rulemaking. Further, the incident analysis suggests that specific safety regulations targeting the loading and unloading of CTMVs used for highway transportation would address the majority of serious loading and unloading incidents. All data used for the report and our additional review are available from the Hazardous Materials Information System (HMIS;http://phmsa.dot.gov/hazmat/library/data-stats/incidents). PHMSA is seeking comments on whether the estimated costs and benefits, detailed in the Preliminary Regulatory Impact Assessment for these proposals, provide an accurate representation of the expected costs and benefits of the proposed regulations. Further, do commenters agree that documentation of operational procedures along with additional hazmat employee training and qualification is the best way to reduce the overall number of loading and unloading incidents caused by human error? If not, what are some more effective approaches, both regulatory and non-regulatory, to reduce the overall number of loading and unloading incidents caused by human error?

NTSB has investigated several serious accidents related to bulk loading and unloading operations:

On July 14, 2001, in Riverview, Michigan, methyl mercaptan was released from a rail tank car during unloading, when a pipe attached to a fitting on the unloading line fractured and separated. The methyl mercaptan ignited, engulfing the tank car in flames. Fire damage to cargo transfer hoses on an adjacent tank car resulted in the release of chlorine. Three plant employees were killed in the accident, and about 2,000 people in the surrounding neighborhood were evacuated from their homes. The fractured piping used for the unloading operation exhibited significant corrosion damage. As a result of this investigation, NTSB issued the following recommendations to DOT:

○ I-02-1: Develop, with the assistance of the Environmental Protection Agency and Occupational Safety and Health Administration, safety requirements that apply to the loading and unloading of railroad tank cars, highway cargo tanks, and other bulk containers that address the inspection and maintenance of cargo transfer equipment, emergency shutdown measures, and personal protection requirements.

○ I-02-2: Implement, after the adoption of safety requirements developed in response to Safety Recommendation I-02-1, an oversight program to ensure compliance with these requirements.

On September 13, 2002, in Freeport, Texas, a tank car containing about 6,500 gallons of hazardous waste ruptured at a transfer station. The car had been steam-heated to permit the transfer of the waste to a CTMV for subsequent disposal. As a result of the accident, 28 people received minor injuries, and residents living within one mile of theaccident site had to shelter-in-place for 51/2hours. The tank car, highway cargo tank, and transfer station were destroyed. The force of the explosion propelled a 300-pound tank car dome housing about1/3mile away from the tank car. Two storage tanks near the transfer station were damaged; they released about 660 gallons of the hazardous material oleum (fuming sulfuric acid and sulfur trioxide). As a result of its investigation, NTSB issued the following recommendation to PHMSA:

○ R-04-10: In cooperation with the Occupational Safety and Health Administration and the Environmental Protection Agency, develop regulations that require safe operating procedures to be established before hazardous materials are heated in a railroad tank car for unloading; at a minimum, the procedures should include the monitoring of internal tank pressure and cargo temperature.

CSB has investigated two incidents in which chlorine was released during rail tank car unloading operations:

On August 14, 2002, in Festus, Missouri, approximately 24 tons of chlorine were released during a three-hour period following the rupture of an unloading hose. The magnitude of the incident was exacerbated because the emergency shutdown system failed to operate properly. Three residents were admitted to the hospital, and hundreds of residents were evacuated or asked to shelter-in-place.

On August 11, 2005, in Baton Rouge, Louisiana, a chlorine transfer hose ruptured. However, the emergency shutdown system operated properly, and the release ended in under a minute. The successful activation of the emergency shutdown system prevented a major release and off-site impact. As a result of its investigations, CSB issued recommendation 2006-06-I-LA-RI to DOT to:

Other accidents illustrate that loading and unloading operations involving CTMVs can also have catastrophic consequences. For example, on October 6, 2007, at a foundry in Tacoma, Washington, a delivery driver took an improperly repaired fill hose and began to unload the gas from his 8,000-gallon tanker truck. In less than a minute, the hose detached from its connection to the truck's tank, which allowed propane gas to rapidly flow from the open valve and fill the air with the explosive gas; the liquefied petroleum (LP) gas ignited and the first explosion engulfed the truck and fill area. Eight minutes later, the heated tanker truck exploded in a huge fireball witnessed by hundreds of people in the area and heard up to a mile away. The truck driver was fatally injured. The accident investigation found that workers had improperly repaired the foundry's damaged LP-gas fill hose, attaching the fill nozzle using fasteners that were not designed to withstand pressurized gas. The Washington State Department of Labor and Industries cited the company for three serious violations of workplace safety and health regulations that contributed to the explosion.

In response to PHMSA's January 4, 2008 notice, PHMSA received comments from the following organizations and individuals:

Some of the comments are discussed as they relate to the measures PHMSA is considering in this NPRM to enhance the safety of loading and unloading bulk packagings.

Most commenters support adoption in the HMR of procedures governing loading and unloading of bulk packagings as the best way to enhance the safety of such operations. ACC states, “[s]uccessfully enhancing safety depends on there being an enforceable Federal rule on the loading and unloading of bulk hazmat shipments in the truck and rail modes.” NTSB supports incorporation of the recommended practices into the HMR:

ACC, Arkema, DGAC, DuPont, and IME support regulatory requirements governing loading and unloading of bulk packagings, but recommend the adoption of a set of operating procedures proposed by the Interested Parties for Hazardous Materials Transportation (Interested Parties) and submitted to PHMSA as a petition for rulemaking by DGAC. IME states, “[w]e do not believe that the `recommended practices' published in the [January 4, 2008 notice] are as comprehensive as those developed by the Interested Parties * * * PHMSA's recommended practices do not address, for example, incidental storage or security.”

PHMSA agrees with commenters on the need to implement regulations governing the loading and unloading of bulk transport tanks. PHMSA's review of incident data involving tanks with a capacity of 3,000 liters or greater revealed that 90% of the incidents occur by highway, and nearly all of those incidents involve cargo tank motorvehicles. PHMSA also notes that there are unique operational differences between loading and unloading operations conducted by highway and rail (types of equipment, operating environments, techniques, access, training,etc.). Therefore, PHMSA is limiting the scope of the proposals in this rulemaking to CTMVs. Safety issues related to loading and unloading by rail continue to be evaluated and may be addressed in a future rulemaking action. PHMSA believes a regulatory approach that targets the primary causes of loading and unloading incidents involving cargo tank motor vehicles is the most cost beneficial approach. Security and incidental storage of bulk transport tanks are beyond the scope of this rulemaking action.

Two commenters oppose adoption of regulations governing loading and unloading of bulk packagings. ILTA suggests that “it is unnecessary to either proceed with issuing the proposal as a recommended practice or to move forward with a rulemaking. Our position is based on: (1) Existing regulations that presently address each [recommended practice]; (2) jurisdictional conflict * * * ; and (3) cost-benefit considerations.” ILTA suggests that other Federal agencies, particularly EPA, currently regulate loading and unloading operations and that adoption by PHMSA of its proposed recommended practices would result in “redundancy of enforcement authority with regard to loading operations that is neither necessary nor warranted.” ILTA also suggests that “the benefits of implementing [the recommended practices] would be minimal.” Accu Chem states that most hazardous materials facilities have implemented procedures governing loading and unloading operations and that the real problem is inadequate training. “It is [Accu Chem's] opinion that the best way to minimize complacency in the work place is by constant bombardment of wide[ly] accepted industry practices. By this [we] mean new hire training, monthly safety meetings, and yearly refresher training.”

PHMSA disagrees with the commenter's assertion that rulemaking is unnecessary. PHMSA's incident analysis indicates that there are loading and unloading safety risks that could be reduced by implementing additional loading and unloading regulations.

PHMSA does agree with the commenter that additional training is necessary to reduce the safety risks associated with CTMV loading and unloading. PHMSA has modified its approach to addressing loading and unloading safety issues. In this NPRM, PHMSA is proposing targeted requirements to address safety issues identified through the incident analysis discussed earlier in this notice. PHMSA is proposing additional training and qualification requirements for hazmat employees who engage in CTMV loading and unloading operations. The proposal includes a requirement for annual qualification for hazmat employees who perform CTMV loading and unloading operations. PHMSA coordinated this proposal with EPA and does not believe that any of the proposals in this notice would create redundant enforcement authority or conflict with existing EPA regulations.

API, NACD, and NPGA express concern that both the recommended practices set forth in our January 4, 2008 notice and the operational procedures proposed by the Interested Parties may be too prescriptive. These commenters recommend that PHMSA develop a broad performance standard that accommodates existing standards and regulations already in widespread use by the regulated community. NACD suggests the adoption of a rule that establishes hazard level-based performance standards rather than prescriptive requirements. For example, NACD expresses concern that the elements outlined in the DGAC November 17, 2007 petition for rulemaking “are too prescriptive and would not be appropriate for all situations. In addition, requirements that are too prescriptive might not recognize that many elements are already covered by other existing laws and regulations.”

PHMSA has modified its approach to addressing loading and unloading safety issues in this rulemaking action. The proposals in this notice are intended to be performance based and flexible to allow persons to develop operational procedures unique to their industry and operating environment. Further, PHMSA recognizes that existing industry standards may address many of the proposals in this notice. Therefore, existing standards and procedures may be used to comply with the regulations proposed in this notice.

ATA and NTTC contend that the adoption of regulations governing loading and unloading of bulk packagings “has the potential to create additional liability for motor carriers and to erode the regulatory uniformity necessary for carrier[s] to operate in compliance with the HMR.” These commenters note that a typical truck driver serves dozens or even hundreds of facilities each year, and requiring motor carriers to train drivers on each facility's loading and unloading practices is impractical. ATA states that, “[i]t is critically important that PHMSA not choose a path forward that allows each facility to enact unique operating requirementsandsimultaneously holds motor carriers legally responsible for mastering the nuances contained in each facility's operating procedures.” (Emphasis in original.)

PHMSA understands the concerns presented by the commenters. In this notice, PHMSA is proposing requirements that would apply to operators of facilities that actively engage in loading and unloading operations (e.g.,provide equipment such as hoses to the carrier for loading or unloading) in addition to the motor carriers. Further, PHMSA recognizes that many carriers may not be trained in the operational procedures unique to certain facilities. Therefore, PHMSA is proposing that the facility operators take on responsibility for communicating any unique operating requirements to the carrier prior to loading or unloading. In addition, if the facility operator provides employees or equipment to the carrier for loading or unloading operations, then it is PHMSA's intent that the facility operator share responsibility for the safety of the loading or unloading operation.

ACC, DGAC, DuPont, IME, and NACD advocate incorporating into the HMR operating procedures proposed by the Interested Parties, an informal association of shippers, carriers, and industrial package organizations. DGAC submitted a petition, on behalf of the Interested Parties, to incorporate the procedures into the HMR. Their procedures address the loading, unloading, and incidental storage of hazardous materials in bulk packagings having a capacity greater than 3,000 liters. The scope of their procedures is limited to bulk packagings with capacities greater than 3,000 liters on the basis that: (1) PHMSA already uses this capacity as an upper limit for intermediate bulk containers; (2) packagings up to 3,000 liters are handled very much like non-bulk packagings in that they are not loaded or unloaded in the same manner or locations as rail tank cars and CTMVs; and (3) the 3,000 liter capacity threshold is sufficient to ensure that the bulk packagings of primary concern to PHMSA and NTSB (e.g.,rail tank cars, CTMVs, portable tanks) are covered.

The operating procedures developed and proposed by the Interested Parties specify information and processes that offerors, consignees, or transloadingfacility operators must address. Some key elements include procedures applicable to pre-transfer operations (e.g.,securement of the transport vehicle against movement), transfer operations (e.g.,monitoring the temperature of the lading), post-transfer operations (e.g.,evacuation of the transfer system and depressurization of the containment vessel), storage incidental to movement (e.g.,monitoring for leaks and releases), and emergency procedures (e.g.,use of emergency shutdown systems). However, other commenters, including NACD, suggest that the operating procedures proposed by the Interested Parties “are too prescriptive and would not be appropriate for all situations.” These commenters support adoption of risk-based performance standards rather than prescriptive requirements.

PHMSA commends the Interested Parties for their efforts to develop consensus-based loading and unloading procedures. However, at present, PHMSA finds more persuasive the view of those commenters who suggest that those procedures may not be appropriate for all companies and all situations. Accordingly, PHMSA's approach is to consider measures that are mode-specific to account for operating differences in the highway and rail modes. Safety of rail loading and unloading operations may be addressed in a separate future rulemaking action. In addition, in this notice, PHMSA is considering a more flexible regulatory regime than that proposed by the interested parties to permit companies to adapt operating procedures to site-specific and material-specific safety concerns. Note that PHMSA used the operating procedures proposed by the Interested Parties as a baseline in developing the amendments proposed in this NPRM. These proposed amendments cover most of the areas specified in their proposal. However, PHMSA has modified the proposal to target specific loading and unloading safety risks identified through the incident analysis discussed earlier in this notice.

Based on comments received in response to the January 2008 notice and analysis of the safety risks posed by bulk loading and unloading operations involving CTMVs, in this NPRM, PHMSA proposes to require persons who load or unload cargo tanks to develop and implement operating procedures governing these operations. PHMSA agrees with those commenters who suggest that a regulatory requirement for the development and implementation of operating procedures will be more effective in reducing risks than issuance of a set of recommended practices or procedures. PHMSA believes that a regulatory approach would establish a uniform safety standard that ensures safety and accountability of all persons who engage in CTMV loading and unloading operations. As a result, PHMSA expects a reduction in the overall number of loading and unloading incidents, particularly for those companies who do not already implement the safety practices proposed in this notice. PHMSA is seeking comments on whether there are better alternatives, regulatory or non-regulatory, that would adequately address the loading and unloading safety issues identified in this notice.

Currently, the HMR require each hazmat employee to receive function-specific training at least once every three years. Function-specific training includes training in the specific job functions that the hazmat employee is responsible for performing, including regulations applicable to loading and unloading. In this NPRM, PHMSA proposes to require each hazmat employer who loads or unloads hazardous materials from a cargo tank to ensure that the hazmat employees conducting such operations are trained and qualified. PHMSA is proposing to require operators to develop and implement a qualification program that provides ongoing year-round training, including practice sessions, drills, supervisor observation, and other mechanisms to identify and correct problems or errors that could lead to an incident. Under this proposal, at minimum, persons who engage in loading and unloading operations would have to be qualified by their employer at least once each year. Hazmat employers would be required to document that each hazmat employee has been trained and qualified on an annual basis. The costs and benefits of this proposed requirement are discussed in detail in the Preliminary Regulatory Impact Assessment, which is available in the docket for this rulemaking. PHMSA is seeking comment on the accuracy of the estimated costs and benefits of such a training and qualification program, and whether commenters agree that this type of qualification program would effectively reduce the overall number of loading and unloading incidents caused by human error.

The proposed recommended practices in PHMSA's January 2008 notice included a section on training, emphasizing that personnel involved in loading and unloading and emergency response operations need to know and understand their specific responsibilities during loading and unloading operations, including attendance or monitoring responsibilities. Several commenters (NPGA, IME, DGAC) suggest that the recommended training requirements are unnecessary because training for hazardous materials employees is already addressed in Subpart H of Part 172 of the HMR. Two commenters (Dow, Accu Chem) support the training provisions. “It only makes sense to make DOT refresher training a yearly requirement in step with EPA and OSHA * * * [T]he best way to minimize complacency in the workplace is by constant bombardment of widely excepted [sic] industry practices.” (Accu Chem)

As discussed in detail above, PHMSA's analysis of loading and unloading accidents suggests that human error is a significant causal factor. PHMSA agrees with Accu Chem that “constant bombardment” may help to change the safety culture and eliminate complacency in a way that periodic training requirements cannot. Therefore, in this NPRM, PHMSA proposes a new approach to training and qualification. PHMSA is proposing to require companies subject to the requirements in this NPRM to develop a training plan and a qualification program that provide ongoing training, reinforcement of that training, and periodic evaluation of employees who perform loading and unloading tasks. The training and qualification program should include routine practice sessions, drills, supervisor observation, quality control groups, and other mechanisms to identify and correct problems or errors that could lead to incidents. In particular, such programs should include mandatory refresher training and evaluation after releases or “close-calls”—events that could have led to a release of a hazardous material. Under the proposed amendments, the employer would be responsible for developing and implementing the training and qualification program. The employer would be required to maintain training records and provide recurrent training for each of its employees, at least once every three years, inaccordance with the training requirements in Part 172, Subpart H. In addition, the employer must annually evaluate and certify that employees who engage in loading, unloading, or transloading operations are satisfactorily qualified to do so. An employer may not certify that an employee is qualified until that person demonstrates that they can successfully perform the loading or unloading operation in accordance with the employer's operational procedures. Certification must be documented in the employee's training record along with the date of certification. PHMSA is seeking comment on the additional training and qualification requirements proposed herein. More specifically, PHMSA is asking commenters to provide input as to what should be included in the additional training and qualification requirements, and the associated costs and benefits of the proposed training and qualification requirements. In addition, PHMSA is seeking information on how many hazmat employers are currently practicing annual qualification programs that include similar elements to those proposed in this notice.

The use of formalized and documented procedures, safety checklists, and additional training will reduce loading/unloading errors, resulting in a reduction in the number and severity of incidents of these types. The magnitude of the impact will vary from industry to industry and from firm to firm. An example from Great Britain is the public-private Safer Port Initiative, which achieved a 22 percent overall reduction in serious accidents at maritime freight facilities through the use of standardized guidance and safety audits.5 (Other fields, such as medicine, have seen even more dramatic results, with relatively simple interventions such as written checklists leading to reductions in human error of 66 percent or more.6 ) Numerous industry associations in the U.S. have also promoted the use of standardized procedures and checklists in hazardous materials transportation. For example, the Chlorine Institute requires its member companies to use a standardized checklist for bulk handling of chlorine.7 Although these practices are believed to yield safety benefits, no quantitative estimates of their effects in the cargo tank loading/unloading context are available. PHMSA is seeking comments on the overall effectiveness of safety training and employee qualification programs in the hazardous materials transportation industry. More specifically, PHMSA is seeking data and information that could be used to better estimate the amount of human error reduction that could be expected from implementing the additional training and qualification requirements proposed in this notice.

In this NPRM, PHMSA proposes to add a new section (§ 177.831) to Subpart B of Part 177 to address loading and unloading procedures for cargo tanks. Based on comments received in response to PHMSA's January 4, 2008, notice and analysis of the safety risks associated with loading and unloading of bulk packagings, PHMSA is proposing requirements for each person (facility or carrier) who loads or unloads cargo tanks to perform a risk assessment and develop and implement operating procedures, based upon the results of the risk assessment, governing these operations. Due to distinct differences in loading and unloading operations conducted by rail and highway, PHMSA is planning to address rail loading and unloading operations in a separate rulemaking.

The proposed cargo tank loading and unloading procedures are based on the proposed recommended practices published in PHMSA's January 2008 notice. PHMSA's intention is to establish a performance standard for assessing safety risks and implementing measures to address those risks, allowing sufficient flexibility to accommodate unique or site-specific operating conditions.

The proposed requirements in the new § 173.831 would apply to facilities that conduct loading operations or provide transfer equipment to the motor carrier for loading and unloading, and motor carriers who conduct loading and unloading operations. As one commenter suggests, “Unlike an employee at a fixed facility that can be trained on the detailed operations of that facility, the typical truck driver services dozens or even hundreds of different facilities each year. * * * [F]or non-standardized chemical deliveries, the facility operator must play an active role in helping to ensure that the facility's operating procedures are followed.” (ATA) PHMSA agrees. To address the issues highlighted in the ATA and NTTC comments, PHMSA is proposing adoption of operating procedures that would differentiate between operating procedures for the loading and unloading of CTMVs conducted at facilities and assisted by facility personnel and those conducted by motor carrier personnel. The proposed regulations in this notice would require facilities that have unique operating procedures to communicate those procedures to the motor carrier through direct supervision, written instruction, or training programs designed to provide the motor carrier with sufficient knowledge and experience to perform the loading or unloading operation in accordance with the facility's operating procedures. PHMSA notes that, in many cases, motor carriers and facilities share responsibility for loading or unloading hazardous materials (e.g.,a motor carrier uses a hose provided by a facility to unload the contents of a cargo tank into the facility's storage tanks). Therefore, motor carriers and facility operators should work together to ensure that loading or unloading procedures and equipment are safe and compatible.

The proposed requirements in the new § 172.831 also address cargo tank loading and unloading operations conducted solely by motor carrier personnel. As indicated above, for loading and unloading operations conducted at facilities, the facility operator has primary responsibility for compliance with the operating procedure requirements proposed in this NPRM. Frequently, however, a motor carrier will deliver and unload hazardous materials at a residence, business, or other venue where primary responsibility for the safety of the transfer operation belongs to the motor carrier. Examples include deliveries of fuel oil or propane to residences or businesses, or gasoline to local gas stations. As proposed in this NPRM, a motor carrier's responsibility for developing loading and unloading procedures extends to the CTMV and associated equipment, attachments, and appurtenances. Thus, for a loading or unloading operation that takes place at a facility and is supervised by facility personnel, the motor carrier must conduct a risk assessment and develop operating procedures that are specific to the cargo tank involved in the transfer operation. A similar proposal in this notice applies for loading or unloading operations at locations where the motor carrier is primarily responsible for the safety of the transfer operation, such as at a business or residence. For example,a motor carrier that delivers and unloads propane at a residence must conduct a risk assessment for such operations. The motor carrier need not conduct a separate risk assessment of each residence or retail outlet (i.e.,gas station) to which it delivers propane or gasoline, but may instead assess the overall risk of such operations and develop operating procedures that apply generally to such operations.

PHMSA is not proposing requirements for other bulk packagings such as portable tanks or intermediate bulk containers (IBCs) in this rulemaking. PHMSA agrees with the comment submitted by NACD, which states, “[t]he data on the most serious loading and unloading incidents seems to implicate packagings over 3,000 liters. * * * The Hazardous Materials Interested Parties Working Group chose a limit of 3,000 liters based upon the fact that most packagings smaller than that are not loaded and unloaded using pumping equipment and are not loaded while on the transport vehicle.” The agency's assessment of the safety risks associated with loading and unloading operations suggests that loading and unloading operations involving large-capacity containers (e.g.,cargo tanks) pose more significant risks, based on the quantity of material being handled and the potential consequences of a release, than smaller packages and containers.

PHMSA agrees with commenters who suggest that a regulatory requirement for the development and implementation of operating procedures will be more effective in reducing risks than the issuance of a set of recommended practices or procedures. A regulatory approach provides a uniform set of safety requirements, provides a mechanism for accountability through compliance inspections, and levels the competitive playing field by requiring all companies engaged in hazmat loading and unloading operations to meet the same minimum set of safety regulations.

The operating procedures would be based on a systematic assessment of the risks associated with the specific loading or unloading procedure and would, at a minimum, consider: the characteristics and hazards of the material to be loaded or unloaded; measures necessary to ensure safe handling of the material; and conditions that could affect the safety of the operation, including access control, lighting, ignition sources, physical obstructions, and weather conditions. The operating procedures would address pre-loading or pre-unloading procedures, loading or unloading procedures, emergency management, post-loading or post-unloading procedures, and maintenance and testing of equipment. These measures would include general requirements for an operating procedure's components, rather than a prescriptive list of specific items that should be included, resulting in a performance standard that would provide operators with the flexibility necessary to develop operating procedures addressing their individual situations and operations. Accordingly, each operating procedure would be different because it would be based on an operator's individualized assessment of the safety risks associated with the specific hazardous materials it ships or transports and its own circumstances and operational environment. PHMSA is seeking comments on whether the general components of an operational procedure proposed in this notice would adequately address safety risks while providing enough flexibility to address individual situations and environments.

PHMSA is proposing to require facilities that perform loading or unloading operations or provide transfer equipment to the motor carrier for loading or unloading operations to ensure that the carrier is either (a) supervised or assisted by a facility employee who is trained on the operating procedures, or (b) provided with written instructions on how to conduct the loading or unloading operation in accordance with the facility's unique operating procedures. To provide flexibility, a facility need not provide supervision or written instructions if the motor carrier has sufficient knowledge to perform the loading or unloading operation in accordance with the facility's operating procedures. “Sufficient knowledge” may include formal or on-the-job training in the operating procedures of a particular facility, or significant experience performing loading or unloading operations in accordance with the operating procedures of a particular facility. The term “transfer equipment” includes any device in the loading and unloading system that is designed specifically to transfer product between the internal valve on the cargo tank and the first permanent valve on the supply or receiving equipment (e.g.,pumps, piping, hoses, connections,etc.). As proposed in this notice, by providing “transfer equipment” for a loading or unloading operation, the facility would share responsibility with the carrier for ensuring the integrity of the equipment, that it is compatible with the tank and the material, and that the carrier has sufficient knowledge to perform the loading or unloading operation in accordance with facility operating procedures. PHMSA is seeking comment on whether this requirement would facilitate better communication between facility operators and carrier personnel, thus reducing the overall risk of an incident during loading or unloading operations. Further, PHMSA is seeking comments and information on the overall number of facilities that actually provide equipment, such as hoses, personnel, or instruction to carriers for loading or unloading operations performed at those facilities. Should PHMSA implement regulations applicable to facility operators that provide transfer equipment, or actively engage in CTMV loading or unloading operations?

PHMSA is proposing to require the risk assessment and operating procedures to be in writing and a copy maintained on the motor vehicle, or for facilities the principal place of business (i.e.,office at the facility where loading and unloading operations are conducted), for as long as the operating procedures remain in effect.

The operating procedures must be accessible at or through the principal place of business and must be made available, upon request, to an authorized official of a Federal, state, or local government agency at reasonable times and locations. At a minimum, the proposed operating procedures must cover:

(1) Pre-loading or -unloading procedures to ensure the integrity of the cargo tank and associated transfer equipment, prepare the cargo tank and equipment for the transfer operation, and verify the vessel into which the material is to be transferred;

(2) Loading or unloading procedures for monitoring the transfer operation;

(3) Procedures for handling emergencies;

(4) Post-loading or -unloading procedures to ensure that all transfer equipment is disconnected and all valves and closures are secured;

(5) Facility oversight of carrier personnel; and

(6) Design, maintenance, and testing of equipment.

PHMSA is soliciting comments on the proposed documentation requirements for the operational procedures. Should facilities be required to document their loading and unloading operating procedures? If so, are the minimum requirements for documenting risk assessments and operational procedures appropriate and flexible enough toapply to all types of loading and unloading operations? Would documented loading and unloading procedures ensure compliance and improve the overall safety of loading and unloading operations? Would regulated entities incur documentation costs to develop and maintain risk assessments and operational procedures? If so, what is a fair estimate of the potential costs?

For each component of the operating procedures, PHMSA is proposing that the procedures include measures to address particular risks to safety. For example, pre-loading and -unloading procedures must include measures to ensure that the cargo tank and transfer equipment are free of defects, leaks, or other unsafe conditions; secure the tank; and verify that the material is being transferred into the appropriate packagings or containment vessels. Similarly, loading and unloading procedures must include measures to initiate and control lading flow; monitor the temperature of the material being transferred and the pressures of the vessels involved in the process; monitor filling limits; and terminate lading flow.

PHMSA has a particular concern for cargo tank loading and unloading operations that utilize a hose provided by the facility at which the operation takes place rather than the hose that is carried on a cargo tank motor vehicle. The HMR require operators of MC 330, MC 331, and non-specification cargo tanks used for the transportation of liquefied compressed gases to implement a comprehensive hose maintenance program that includes monthly visual inspections, annual leakage tests, and pressure testing of new and repaired hose assemblies (see§ 180.416). Further, the HMR require the operator to visually inspect the hose prior to initiating the unloading operation and after the operation is complete. The operator may not use a hose found to have any of the following conditions: (1) Damage to the hose cover that exposes the reinforcement; (2) wire braid reinforcement that has been kinked or flattened so as to permanently deform the wire braid; (3) soft spots when not under pressure, bulging under pressure, or loose outer covering; (4) damaged, slipping, or excessively worn hose couplings; or (5) loose or missing bolts or fastenings on bolted hose coupling assemblies.

PHMSA is concerned that facility hoses may not be maintained to the standard established under the HMR (see piping and hose requirements in §§ 173.345-9, 178.337-9, and 180.416). The 2007 accident in Tacoma, Washington, described above, demonstrates the serious safety problems that can result from the use of a damaged or improperly repaired hose for unloading operations. Therefore, in this NPRM, PHMSA is proposing to require facilities that provide transfer equipment that is connected directly to CTMVs and used to load or unload product from the tank, to implement maintenance and inspection programs consistent with existing standards for hoses carried aboard CTMVs. At a minimum, the operational procedure must include a hose maintenance program. Further, PHMSA is proposing to require the operator of the CTMV to conduct a visual examination of the facility equipment being used for the loading or unloading operation to identify any obvious defects that could substantially impact the safety of the loading or unloading operation, because the vehicle operator must not commence a loading or unloading operation using equipment that is found to have any readily apparent defect. Note that the operator of the motor vehicle is not expected to use instruments or take extraordinary actions to check components not readily visible. The operator of the transport vehicle may rely on information provided by the facility to determine that the transfer equipment meets the appropriate specifications, is of sound quality, has been properly tested and maintained, and is compatible with the material.

PHMSA is proposing a paragraph § 177.831(c) to address the relationship of the proposed requirements for loading and unloading risk assessments and operating procedures to other Federal or state regulatory requirements. As discussed above, both OSHA and EPA regulate operations involving the handling of hazardous materials at fixed facilities.

For example, OSHA's Process Safety Management (PSM) standard (29 CFR 1910.119) contains requirements for processes that use, store, manufacture, handle, or transport particular chemicals on-site. Bulk loading and unloading operations involving PSM-covered chemicals are subject to the requirements of the PSM standard. The PSM standard requires employers to compile process safety information (PSI) to enable employers and employees to identify and understand the hazards of the process. The PSI must include: (1) Physical and reactivity data of the highly hazardous chemicals in the process; (2) safe upper and lower limits of the process such as temperatures, pressures, flows and compositions; and (3) an evaluation of the consequences of deviation. Using the PSI, employers must perform a process hazard analysis to systematically identify, evaluate, and control the hazards of the process. After an employer completes a process hazard analysis, the employer must develop and implement written operating procedures providing clear, written instructions for safe operations of a process, including loading and unloading operations to or from bulk containers (see29 CFR 1910.119(f)). After the procedures are developed, each employee (including contract employees) involved in loading and off-loading operations must be trained in accordance with 29 CFR 1910.119(g) in an overview of the process and the procedures required.

The OSHA standards also include requirements for the handling and storage of specific hazardous materials, such as compressed gases, flammable and combustible liquids, explosives and blasting agents, liquefied petroleum gases, and anhydrous ammonia. For example, the OSHA standard at 29 CFR 1910.106, Flammable and combustible liquids, contains requirements for storage of these liquids, including among others, requirements for grounding and bonding during transfer operations and controlling ignition sources, such as static electricity. Specifically, 29 CFR 1910.106(f), Bulk plants, contains requirements for workplaces that receive flammable and combustible liquids by rail tank car and cargo tank motor vehicle. These bulk plants store or blend the flammable and combustible liquids for subsequent distribution by various modes of transportation, including rail tank cars. The standard at 29 CFR 1910.106(f) also contains specific provisions for loading and unloading facilities. Additionally, the OSHA standard at 29 CFR 1910.120, Hazardous waste operations and emergency response, establishes requirements for emergency response operations. When there is a release of a hazardous substance, or a substantial threat of a release, then emergency response operations must comply with 29 CFR 1910.120(q).

In situations where an operation or a material is not covered by the PSM standard or the other OSHA standards, employers are obligated under Section 5(a)(1)—“the General Duty Clause”—of the Occupational Safety and Health Act of 1970 to protect employees from serious “recognized” hazards.

EPA regulations also establish a general duty for facility owners or operators to identify hazards associated with the accidental releases ofextremely hazardous substances, design and maintain a safe facility as needed to prevent such releases, and minimize the consequences of releases. In addition, stationary sources with more than a threshold quantity of a regulated substance in a process are subject to EPA's accident prevention regulations, including the requirement to develop risk management plans (40 CFR part 68). EPA's risk management plan requirements are virtually identical to the OSHA PSM standards. Facilities must develop and implement risk management plans that contain three main elements: (1) A hazard assessment; (2) a prevention program; and (3) an emergency response program.

EPA's Spill Prevention, Control, and Countermeasure (SPCC) program (40 CFR part 112) for non-transportation-related facilities is designed to prevent the discharge of oil from non-transportation-related onshore and offshore facilities into or onto the navigable waters of the United States or adjoining shorelines.” SPCC regulations apply to the following facilities: (1) Oil storage facilities, including all related equipment and appurtenances and bulk plant storage; (2) terminal oil storage; (3) pumps and drainage systems used in the storage of oil, except for in-line or breakout tanks needed for the continuous operation of a pipeline system; and (4) any terminal facility, unit, or process integrally associated with the transfer of oil in bulk to or from a vessel. The SPCC regulations include several requirements for facility rail tank car and cargo tank motor vehicle loading and unloading racks, such as a secondary containment system and lights or barriers to prevent the vehicle from departing the facility prior to disconnecting transfer lines. Loading racks, transfer hoses, loading arms, and other equipment that is appurtenant to a non-transportation-related facility or terminal and that is used to transfer oil in bulk to or from highway vehicles or rail cars are also subject to regulation under the SPCC program. Facility owners and operators should be aware that the regulation of equipment or operations by PHMSA does not preclude EPA from regulating the same equipment or operations. Additionally, DOT jurisdiction does not define the limits of EPA jurisdiction and in certain cases there may be overlapping regulations. However, today's action may allow compliance with the SPCC rule to satisfy the new PHMSA requirements. Further, the proposals in this NPRM do not affect the scope of EPA's authority or regulations promulgated under CAA Section 112(r) or the Oil Pollution Act.

States may also have adopted standards or regulations applicable to the handling, including loading and unloading, of hazardous materials at fixed facilities. For example, all states have adopted the National Fire Protection Association (NFPA) Standard 58, LP-Gas Code. NFPA 58 is a nationally recognized consensus document used throughout the United States as the primary standard for installing systems used to store, handle, transport, and use liquefied petroleum gases. NFPA 58 requires written operating procedures for loading and unloading that address, among other items, transfer hoses, chocks, fire extinguishers, sources of ignition, personnel, containers, signage, security and access, and fire response. The standard also requires written maintenance procedures that address corrosion control, physical protection, hoses, piping, appurtenances, containers, and fire protection equipment.

In addition, as noted in the January 2008 notice, PHMSA is aware of a variety of existing national consensus standards that address bulk loading and unloading operations. For example, the American Petroleum Institute (API) has issued Recommended Practices for Loading and Unloading MC 306/DOT 406 cargo tank motor vehicles (RP # 1007). The American Chemistry Council has developed the Responsible Care® management system, which establishes an integrated, structured approach to drive results in seven key areas: (1) Community awareness and emergency response; (2) security; (3) distribution; (4) employee health and safety; (5) pollution prevention; (6) process safety; and (7) product stewardship.

Several commenters (API, ILTA) express concern that the adoption of PHMSA regulations applicable to loading and unloading operations would complicate jurisdictional boundaries between DOT and EPA. “Implementation of the [recommended practices] would result in redundancy of enforcement authority with regard to loading operations that is neither necessary nor warranted. Further simplification of these jurisdictional boundaries should be an objective for future action rather than confusion through the implementation of competing or duplicative regulation.” (ILTA) Commenters suggest that it “would be appropriate for PHMSA to acknowledge that [proposed requirements for loading and unloading procedures] would not apply to facilities already covered by SPCC, or to state that other Federal agency regulations provide sufficient documentation for the [PHMSA regulations].” (API)

Similarly, one commenter is concerned “over the potential for confusion or conflict for those who already comply with the requirements of NFPA 58 if the proposed recommended practices were to be adopted as regulation by PHMSA.” (NPGA) This commenter recommends that “for any action PHMSA chooses to take with regard to the proposed recommended practices, the agency should defer to any industry consensus standards pertaining to the loading and unloading process that are already adopted as regulation.”

PHMSA agrees with commenters that HMR requirements applicable to loading and unloading operations should not conflict with regulations or standards already in widespread use by hazardous materials shippers, carriers, and consignees. Therefore, PHMSA is proposing that regulations, protocols, guidelines, or standards developed by other Federal agencies, state agencies, international organizations, or industry may be used to satisfy the requirements in the NPRM provided such regulations or guidelines cover the risk assessment and operating procedure components specified in the NPRM.

This notice of proposed rulemaking is considered a significant regulatory action under Executive Order 12866 and the Regulatory Policies and Procedures of the Department of Transportation (44 FR 11034) because of significant public interest. A regulatory evaluation is available for review in the public docket for this rulemaking, and PHMSA seeks comments on the methodology, assumptions, and calculations contained within it.

Executive Orders 12866 and 13563 require agencies to regulate in the “most cost-effective manner,” to make a “reasoned determination that the benefits of the intended regulation justify its costs,” and to develop regulations that “impose the least burden on society.” In this NPRM we propose to amend the Hazardous Materials Regulations to require each person (i.e.,carrier or facility) who engages in cargo tank loading or unloading operations to perform a risk assessment of the loading and unloading operation and develop and implement safe operating procedures based uponthe results of the risk assessment. Many firms are part of industry associations with voluntary codes of safe practice, and these practices may be sufficient for compliance with the rule as long as all of the relevant safety areas are addressed and documented. PHMSA assumes that for firms in these categories, the proposed rule requires little or no change to existing practice or behavior and incremental compliance costs will thus be close to zero. At the same time, the potential for additional safety benefits is also very limited in these cases, as existing practice and operations are already minimizing the number of incidents. Therefore, the benefit and cost figures discussed below should be viewed asupper bounds,both of which will be reduced by the extent of current practice. Although comments in the docket provided some information on current practices, the share of firms for which the changes will be minimal cannot be estimated. As such, this evaluation uses a breakeven analysis to assess the cost-effectiveness of the rule atany given levelof current practice. PHMSA asks that commenters provide data, information, or professional estimates on how many companies are currently performing the safety elements proposed in this notice.

PHMSA estimates the upper bound of total compliance costs for documentation and training is $3.5 million per year. This reflects the total costs that would be incurred if none of the relevant hazmat carriers were currently subject to voluntary practices or non-DOT regulations that are similar to the proposed rule. There were 3,501 relevant incidents during the ten-year study period, including those that related to errors in loading or unloading and those that occurred during transportation but that were ultimately caused by errors in loading. Together, these incidents resulted in four hazmat-related fatalities, 157 hazmat-related injuries, and a total societal cost of $69.2 million over ten years, or an annual average of $6.9 million.

Based on the assumptions and estimates described above, the breakeven point for this rule—that is, the point at which benefits and costs are approximately equal—occurs at an incident-reduction effectiveness level of approximately 40 percent for affected firms. For this analysis, based on available literature and expert judgment, we believe that an effectiveness level of 40 percent is a reasonable assumption for this group of safety interventions, particularly since the subject incidents have been defined narrowly as those in which (largely preventable) human error occurs during the loading or unloading phase, such as overfilling, over-pressurizing, or loading incompatible materials. The table below summarizes the annual benefits and costs of the proposed rule. (Seethe Regulatory Impact Assessment, which is available in the docket for this rulemaking). The benefit-cost ratio is roughly 1.0. These benefit and cost figures depend on the assumptions that have been made, particularly on the extent of current compliance and the effectiveness of the interventions.

This notice has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). This notice would preempt state, local, and Indian tribe requirements but does not propose any regulation with substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.

The Federal hazardous materials transportation law, 49 U.S.C. 5101et seq.,contains an express preemption provision (49 U.S.C. 5125(b)) preempting State, local, and Indian tribe requirements on the following subjects:

(1) The designation, description, and classification of hazardous materials;

(2) The packing, repacking, handling, labeling, marking, and placarding of hazardous materials;

(3) The preparation, execution, and use of shipping documents related to hazardous materials and requirements related to the number, contents, and placement of those documents;

(4) The written notification, recording, and reporting of the unintentional release in transportation of hazardous material; or

(5) The design, manufacture, fabrication, marking, maintenance, recondition, repair, or testing of a packaging or container represented, marked, certified, or sold as qualifiedfor use in transporting hazardous material.

This proposed rule addresses subject area (2), above. If adopted as final, this rule would preempt any state, local, or Indian tribe requirements concerning these subjects unless the non-Federal requirements are “substantively the same” as the Federal requirements.

Federal hazardous materials transportation law provides at 49 U.S.C. 5125(b)(2) that, if DOT issues a regulation concerning any of the covered subjects, DOT must determine and publish in theFederal Registerthe effective date of Federal preemption. The effective date may not be earlier than the 90th day following the date of issuance of the final rule and not later than two years after the date of issuance. PHMSA proposes that the effective date of Federal preemption will be 90 days from publication of a final rule in this matter in theFederal Register.

This NPRM has been analyzed in accordance with the principles and criteria contained in Executive Order 13175 (“Consultation and Coordination with Indian Tribal Governments”). Because this NPRM does not have tribal implications and does not impose substantial direct compliance costs, the funding and consultation requirements of Executive Order 13175 do not apply.

The Regulatory Flexibility Act (5 U.S.C. 601et seq.) requires an agency to review regulations to assess their impact on small entities unless the agency determines that a rule is not expected to have a significant impact on a substantial number of small entities. The primary costs to small entities include developing and updating a risk assessment, developing and updating operating procedures, and additional training for hazmat employees who perform loading and unloading operations.

PHMSA expects the impacts of this rule will be quite limited for many small entities due to their compliance with other, existing Federal regulations or their participation in industry-wide initiatives. For example, many hazmat shippers and carriers already document their loading/unloading safety practices to comply with Occupational Safety and Health Administration (OSHA) rules on workplace safety, Environmental Protection Agency (EPA) regulations on environmental protection, or state and local requirements. PHMSA's proposed rule also explicitly acknowledges that many firms are part of industry associations with voluntary codes of safe practice, and that these may be sufficient for compliance with the rule as long as all of the relevant safety areas are addressed and documented. For firms in these categories, the proposed rule requires little or no change to existing practice or behavior and incremental compliance costs will thus be close to zero. Therefore, the benefit and cost figures discussed below should be viewed asupper bounds,both of which will be reduced by the extent of current practice.

PHMSA estimates that there are 5,427 potentially affected small entities. The annualized documentation cost for developing and updating the risk assessment and the operating procedures is estimated to be $250/small entity. The annualized cost of additional training for affected employees, primarily drivers of cargo tank motor vehicles, is estimated to be approximately $22/employee. Further, PHMSA estimates that approximately 50% of small businesses are already implementing procedures which would be compliant with the proposals in this notice. Based upon the above estimates and assumptions, PHMSA certifies that the proposals in this NPRM would not have a significant economic impact on a substantial number of small entities. Further information on the estimates and assumptions used to evaluate the potential impacts to small entities is available in the Regulatory Impact Assessment that has been placed in the public docket for this rulemaking. In this notice, PHMSA is soliciting comments on the preliminary conclusion that the proposals in this NPRM would not cause a significant economic impact on a substantial number of small entities.

PHMSA currently has an approved information collection under OMB Control No. 2137-0034, “Hazardous Materials Shipping Papers and Emergency Response Information,” expiring on May 31, 2011. We estimate an additional increase in burden as a result of this proposed rulemaking.

Section 1320.8(d), Title 5, Code of Federal Regulations requires PHMSA to provide interested members of the public and affected agencies an opportunity to comment on information collection and recordkeeping requests. This notice identifies proposed new requirements regarding cargo tank motor vehicles to the current information collections under OMB Control No. 2137-0034. Under OMB Control No. 2137-0034, we anticipate an increase in burden resulting from proposals to require persons who engage in cargo tank loading or unloading operations to perform a risk assessment of their loading and unloading operation, and to develop and implement safe operating procedures based upon the results of the risk assessment. In addition, PHMSA is proposing to require persons who engage in cargo tank loading or unloading operations to develop and implement a training and qualification program for employees who perform loading or unloading functions. PHMSA will submit revised information collections to the Office of Management and Budget (OMB) for approval based on the requirements in this proposed rule. We estimate that the additional information collection burden as proposed under this rulemaking is as follows:

OMB Control No. 2137-0034:Hazardous Materials Shipping Papers and Emergency Response Information.

Additional Annual Number of Respondents:6,538.

Additional Annual Responses:6,538.

Additional Annual Burden Hours:65,380.

Additional Annual Burden Cost:$1,438,360.

PHMSA specifically requests comments on the information collection and recordkeeping burden associated with developing, implementing, and maintaining these requirements for approval under this proposed rule.

Address written comments to the Dockets Unit as identified in theADDRESSESsection of this rulemaking. We must receive your comments prior to the close of the comment period identified in theDATESsection of this rulemaking. Under the Paperwork Reduction Act of 1995, no person is required to respond to an information collection unless it displays a valid OMB control number. If these proposed requirements are adopted in a final rule with any revisions, PHMSA will resubmit any revised information collection and recordkeeping requirements to the OMB for re-approval.

Please direct your requests for a copy of this proposed revised information collection to Steven Andrews or T. Glenn Foster, Office of Hazardous Materials Standards (PHH-12), Pipeline and Hazardous Materials Safety Administration, 1200 New Jersey Avenue, SE., 2nd Floor, Washington, DC 20590-0001.

A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of FederalRegulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.

This notice does not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995. It will not result in costs of $140.8 million or more, in the aggregate, to any of the following: State, local, or Native American tribal governments, or the private sector.

The National Environmental Policy Act of 1969 (NEPA) requires Federal agencies to consider the consequences of major Federal actions and prepare a detailed statement on actions significantly affecting the quality of the human environment. PHMSA has preliminarily concluded that there are no significant environmental impacts associated with this NPRM. In fact, PHMSA believes that the proposed regulations will have a positive impact on the environment by reducing the number of incidents involving the release of a hazardous material; and, in the case of a release, minimizing the quantity of hazardous material released to the environment.

As discussed in Section II of this document, PHMSA performed an analysis of incident data to identify and target risks associated with bulk loading and unloading of hazardous materials transported by highway and rail. PHMSA's review of transportation incident data and the findings of several NTSB and CSB accident investigations involving bulk hazardous material loading and unloading operations suggest there may be opportunities to enhance the safety of such operations, thereby reducing the overall impact to the environment of hazardous material releases during CTMV loading and unloading.

PHMSA considered three separate alternatives for addressing the identified loading and unloading safety problem: (1) Do nothing; (2) propose operating procedures developed by the Interested Parties working group for the loading and unloading of both highway and rail transport tanks with a capacity of more than 3,000 liters; and (3) propose performance-based loading and unloading requirements specifically involving CTMVs, using the Interested Parties proposal as a baseline. Alternative (1) was not chosen because it would neglect a safety problem identified by PHMSA, NTSB, CSB, and the Interested Parties. Alternative (2) was not chosen because some of the requirements proposed by the Interested Parties may not be appropriate for all companies and all situations. In particular, PHMSA believes that operational differences between the highway and rail modes should be handled separately. Alternative (3) was selected because PHMSA believes that a risk-based performance standard provides the necessary flexibility for affected persons to develop operating procedures that are appropriate for their unique operating conditions. In addition, it minimizes the overall compliance burden to companies who have already implemented operating procedures in accordance with existing industry standards or with other Federal or state requirements.

In this NPRM, PHMSA is proposing to require persons who load or unload CTMVs to perform a “risk assessment” of the CTMV transfer operations and to develop “operating procedures” based upon the risk assessment. The operating procedures must include mechanisms to ensure that transfer equipment is appropriate for the material being transferred and has been properly maintained and tested. Further, the operating procedures must address “emergency management,” including mechanisms to monitor for leaks and releases, and to immediately stop the flow of product when a release is detected. PHMSA is also proposing additional training and qualification requirements for persons who load and unload CTMVs. The proposed regulations are intended to improve safety by significantly reducing human error and minimizing the number of equipment failures during loading and unloading operations. As a result, PHMSA expects that the proposed regulations could significantly reduce the number of incidents involving a release of a hazardous material to the environment during CTMV loading and unloading.

PHMSA is soliciting comments on the preliminary conclusion that the proposals in this NPRM would not cause significant impacts to the environment.

In consideration of the foregoing, PHMSA is proposing to amend Title 49, Subtitle B, Chapter I as follows:

I. Background

This rule proposes to implement the recommendations of the DoD Inspector General (IG), by providing a DFARS clause to use in lieu of the FAR clause 52.203-14, Display of Hotline Poster(s).

GAO Report GAO-09-591, Regarding the Display of DoD Inspector General Fraud Hotline Posters by DoD Contractors, recommended that the DoD IG determine the need for defense contractors' display of the DoD IG's fraud hotline poster, including directing a contractor to display the DoD IG hotline poster in common work areas for performance of DoD contracts.

The DoD IG determined that DoD contractors, including contractors who have an ethics and compliance program that includes a reporting mechanism such as a hotline poster, need to display DoD fraud hotline posters in a common work area within business segments performing work under the contract and at contract work sites.

FAR 52.203-14(c) states that “If the Contractor has implemented a business ethics and conduct awareness program, including a reporting mechanism, such as a hotline poster, then the Contractor need not display any agency fraud hotline posters, other than any required DHS posters.”

The DoD IG finds that this exemption has the potential to make the DoD hotline program less effective by ultimately reducing contractor exposure to DoD IG fraud hotline posters and diminishing the means by which fraud, waste, and abuse can be reported under the protection of Federal whistleblower protection laws. Some contractor's posters may not be as effective as the DoD poster in advertising the hotline number, which is integral to the fraud program. The DoD IG is also revising the DoD IG fraud hotline poster to inform contractor employees of their Federal whistleblower protections.

The new DFARS clause therefore provides no exception to the use of the DoD hotline poster for contractors that have implemented a business ethics and conduct awareness program, including a reporting mechanism such as a hotline poster. The clause also provides for display of any applicable Department of Homeland Security hotline poster identified by the contracting officer.

This rule was not subject to Office of Management and Budget review under Executive Order 12866, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

In accordance with Executive Order 13563, Improving Regulation and Regulatory Review, dated January 18, 2011, DoD has determined that this rule is not excessively burdensome to the public, and is consistent with requirements to report fraud, waste, and abuse under the protection of Federal whistleblower protection laws.

DoD does not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601,et seq.,because the requirement to display posters has minimal economic impact and the rule only applies to contracts and subcontracts that exceed $5 million in value, so many small business concerns are not impacted at all. Nevertheless, an initial regulatory flexibility analysis has been performed and is summarized as follows:

This proposed rule is in response to a study by the General Accountability Office (GAO-09-591), which recommended that the DoD IG determine the need for defense contractors' display of the DoD IG's fraud hotline poster, including directing a contractor to display the DoD IG hotline poster in common work areas for performance of DoD contracts.

The DoD IG determined that DoD contractors, including contractors who have an ethics and compliance program that includes a reporting mechanism such as a hotline poster (currently exempt), need to display DoD fraud hotline posters in a common work area within business segments performing work under the contract and at contract work sites.

The objective of the proposed rule is to remove this exemption for contractors that post their own posters, and require all DoD contractors with contracts that exceed $5 million to post the DoD IG fraud hotline poster. The DoD IG finds that this exemption has the potential to make the DoD hotline program less effective by ultimately reducing contractor exposure to DoD IG fraud hotline posters and diminishing the means by which fraud, waste, and abuse can be reported under the protection of Federal whistleblower protection laws. Some contractors' posters may not be as effective as the DoD poster in advertising the hotline number, which is integral to the fraud program. The DoD IG is also revising the DoD IG fraud hotline poster to inform contractor employees of their Federal whistleblower protections. The legal basis for the rule is 41 U.S.C. 1303 and 48 CFR chapter 1.

The rule applies to all contractors with DoD contracts that exceed $5 million. Many small businesses are, therefore, not impacted at all. The FAR currently provides that “If the Contractor has implemented a business ethics and conduct awareness program, including a reporting mechanism, such as a hotline poster, then the Contractor need not display any agency fraud hotline posters, other than any required DHS posters.” Therefore, even those contractors with contracts that exceed $5 million are not significantly impacted, because they are already required to post either their own fraud hotline poster or the DoD fraud hotline poster. This rule just removes the exemption for contractors that post their own fraud hotline posters.

There is no information collection requirement associated with this proposed rule.

The rule does not duplicate, overlap, or conflict with any other Federal rules.

There are no known significant alternatives to the rule that would achieve the objectives of the rule.

DoD invites comments from small business concerns and other interested parties on the expected impact of this rule on small entities.

DoD will also consider comments from small entities concerning the existing regulations in subparts affected by this rule in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 610 (DFARS Case 2010-D026) in correspondence.

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

Therefore, DoD proposes to amend 48 CFR parts 203 and 252 as follows:

1. The authority citation for 48 CFR Parts 203 and 252 continues to read as follows:

A. Background

A release of claims is a requirement under GSAR clause 552.232-72, Final Payment, precedent to making final payment under construction and building service contracts. Prior to deleting the form, GSA Contracting Officers relied upon GSA Form 1142 to obtain the release of claims under these contracts. However, GSAR 532.905-71 which prescribed the use of GSA Form 1142 for releases of claims under construction and building service contracts was inadvertently deleted as part of the Rewrite of GSAR Part 532, Contract Financing published in theFederal Registerat 74 FR 54915, on October 29, 2009, GSAR Case 2006-G515. GSAR 532.905-71 also provided guidance on deductions to final payments under construction and building service contracts.

GSA Form 1142, Release of Claims, uses standard language for contractors to attest that is has no claims, or no claims except for those they may set forth where indicated on the form. The form requires a signature from the contractor and a witness. Additionally, there is a location for the firm's seal.

GSA believes that GSA Form 1142 provides great value and accountability in providing uniformity and consistency for the release of claims process. Without the GSA Form 1142, GSA Contracting Officers will be required to verify that contractor release of claims letter includes appropriate wording before final payment is made, resulting in their devotion of considerable additional resources to this process. Further, the coverage on deductions under GSAR 532.905-71 was useful in preventing overpayments to contractors consistent with the Administration Improper Payments Elimination and Recovery Act and OMB efforts to eliminate improper payments.

Consequently, GSA proposes to amend the GSAR to restore the coverage at GSAR 532.905-71. Since the referenced GSAR Rewrite of Part 532 (74 FR 54915) also deleted GSAR 532.905-70, this coverage will be restored at GSAR 532.905-70 vice GSAR 532.905-71.

This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of Executive Order 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804. In accordance with Executive Order 13563, Improving Regulation and Regulatory Review, dated January 18, 2011, GSA has determined that this rule is not excessively burdensome to the public, and that GSA Form 1142 which is prescribed by the rule is useful to contractors in presenting their release of claims to the Government.

The General Services Administration does not expect this proposed rule to have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601,et seq.,because the rule requires the collection of the information that is administrative in nature. Submission of this information should not be burdensome to the contractor but should provide a consistent format that the contractor can use to report their claims information to the GSA. An Initial Regulatory Flexibility Analysis has, therefore, not been performed. We invite comments from small businesses and other interested parties. GSA will consider comments from small entities concerning the affected GSAR Part 532 in accordance with 5 U.S.C. 610. Interested parties must submit such comments separately and should cite 5 U.S.C. 601,et seq.(GSAR case 2010-G509), in correspondence.

The Paperwork Reduction Act does apply; however, these changes to the GSAR do not impose additional information collection requirements to the paperwork burden previously approved under OMB Control Number 3090-0080.

Therefore, GSA proposes to amend 48 CFR part 532 as set forth below:

NMFS manages the groundfish fisheries in the exclusive economic zone (EEZ) of the Bering Sea and Aleutian Islands management area (BSAI) under the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP). The North Pacific Fishery Management Council (Council) prepared the FMP pursuant to the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act), 16 U.S.C. 1801et seq.Regulations implementing the FMP appear at 50 CFR part 679. General regulations that pertain to U.S. fisheries appear at subpart H of 50 CFR part 600.

The Council and NMFS annually establish biological thresholds and annual total allowable catch limits (TACs) for groundfish species to ensure the sustainability of the groundfish fisheries in the BSAI and to assist in the allocation of groundfish TACs among various user groups. To achieve these objectives, NMFS requires vessel operators participating in groundfish fisheries in the BSAI to comply with various restrictions, such as fishery closures to maintain catch within specified TACs and prohibited species catch limits, and associated sector and seasonal allocation apportionments. NMFS also requires various permits that authorize or limit access to the groundfish fisheries, such as a Federal fisheries permit (FFP) and a license limitation program (LLP) license. Many of the catch monitoring regulations that apply to vessels designated on an FFP or an LLP license while participating in Federal fisheries also apply to these vessels when fishing in parallel fisheries in State of Alaska (State) waters. Parallel fisheries are open concurrently with Federal fisheries, and groundfish catch in the parallel fisheries is deducted from Federal TACs and any sector and seasonal allocations of the Federal TACs. State waters fisheries that are not parallel are referred to as “non-parallel State fisheries”. Targeted groundfish catch in the non-parallel State fisheries are deducted from a State guideline harvest level (GHL), rather than a Federal TAC. Currently, non-parallel State fisheries for BSAI groundfish are established only for pollock, Pacific cod, and sablefish in specified areas shoreward of the Aleutian Islands Subarea (AI).

Federal groundfish fisheries in the EEZ from 3 to 200 nm off the coast of Alaska may be opened by NMFS to directed fishing for selected groundfish species. Parallel fisheries for groundfish species in State waters (from 0 nm to 3 nm) may be opened by the Commissioner for the Alaska Department of Fish and Game (ADF&G) through emergency order under the authority of State regulations at 5 AAC 28.086. Non-parallel-State fisheries (also occurring from 0 to 3 nm) may be opened and closed by the ADF&G to fishing but during distinct seasons that generally do not overlap with the parallel and Federal groundfish seasons.

All vessels used to fish for groundfish in the Federal groundfish fisheries of the BSAI must be designated by name on an FFP. Operators of a vessel designated on an FFP must comply with NMFS observer and recordkeeping and reporting requirements in both Federal groundfish and parallel fisheries. In addition, operators of vessels designated on an FFP must comply with NMFS vessel monitoring system (VMS) reporting requirements if they participate in the directed Atka mackerel, Pacific cod, or pollock fisheries in Federal EEZ or Alaska State waters. However, a vessel used to fish exclusively in Alaska State waters is not required to be designated on an FFP, and the operator of a vessel that is not designated on an FFP is not subject to NMFS observer, VMS, or recordkeeping and reporting requirements.

An FFP is issued on a 3-year cycle and is in effect from the date of issuance through the end of the current 3-year cycle. A person issued an FFP may surrender it at any time and have the FFP reissued at any time later in the 3-year cycle. There is no limit on the number of times an FFP may be surrendered and reissued within the 3-year permit cycle. The flexibility provided by allowing a vessel owner to surrender an FFP and have it reissued in a short period of time is intended to provide a vessel opportunities to participate in Alaska State waters fisheries, for which no FFP is required, without having to comply with all the Federal requirements associated with an FFP.

FFPs may include many endorsements, such as, type of gear (pot, hook-and-line, and trawl), vessel operation category (catcher/processor (C/P) or catcher vessel (CV)), and management area (BSAI or Gulf of Alaska (GOA)) in which a licensed vessel may fish, and in some cases a species endorsement. These endorsements are required for a vessel to participate in a particular fishery. For example, vessels used to participate in Federal fisheries for Atka mackerel, Pacific cod, or pollock must bedesignated on an FFP with endorsements that indicate the use of pot, trawl, or hook-and-line gear in these fisheries. With the exception of the GOA inshore processing endorsement, an FFP may be amended to remove an endorsement any number of times during a year. While any vessel owner may apply for an FFP with a C/P or CV endorsement (or both) as well as any area, gear, or species endorsements, an FFP with a specific set of endorsements, by itself, does not authorize the operator of the vessel to participate in the Pacific cod fishery in the BSAI. In most cases, an LLP license also is required to participate in this fishery.

Most vessels deployed in a directed fishery for groundfish in the BSAI are required to be named on an LLP license. The LLP authorizes a vessel to be used in a particular directed groundfish fishery under specified vessel operation, gear, area, and (where applicable) species and operation type endorsements. For some groundfish species, such as Pacific cod, additional endorsements may be required. For example, if the operator of a pot C/P wished to participate in a directed fishery for groundfish in the AI, the C/P must be named on an LLP with endorsements for C/P vessel operation, non-trawl gear, and AI area. In addition, to engage in the AI directed fishery for Pacific cod, the vessel also must be designated on an LLP license with an endorsement for Pacific cod in the AI for a C/P using pot gear. Unlike the FFP, the endorsements on an LLP license are not severable from the license. An LLP license with its associated endorsements may be assigned to a different vessel only once per year.

There are several exceptions to the requirement for a vessel to be designated on an LLP license to fish for groundfish in the BSAI: (1) Vessels less than 32 ft length overall (LOA); (2) vessels not directed fishing for LLP groundfish species that may retain incidentally caught groundfish up to the maximum retainable amounts (including individual fishing quota halibut or sablefish); and (3) catcher vessels less than 60 ft LOA that are exempted from having a Pacific cod endorsement on their LLP license to participate in the fixed gear BSAI Pacific cod fishery. In addition, vessels fishing in the parallel fisheries are not required to be designated on an LLP license because these fisheries occur only in State waters.

The TAC for BSAI Pacific cod is divided into sector allocations, which include allocations of separate portions of the TAC to pot C/Ps, pot CVs, hook-and-line C/Ps and hook-and-line CVs. Each sector allocation for Pacific cod is further divided into two or more seasonal allocations. These sector and seasonal allocations were implemented under Amendment 67 to the BSAI FMP (67 FR 18129, April 15, 2002) and Amendment 85 to the BSAI FMP (72 FR 50788, September 4, 2007). These two FMP amendments limited the number of vessels in each sector and implemented sector allocations of Pacific cod to vessels in each sector. These amendments limited access and reduced competition in the derby-style Pacific cod fishery that has existed throughout much of the last two decades.

Amendment 67 to the BSAI FMP was intended to limit vessel participation with hook-and-line and pot gear in the BSAI Pacific cod fishery, and thus authorized exclusive participation in the hook-and-line and pot gear BSAI Pacific cod fisheries. It was implemented by issuing LLP license endorsements to LLP holders demonstrating historic and recent participation, and economic dependence in the Pacific cod fishery. Of four separate Pacific cod endorsements, one was created for Pacific cod pot C/P and one for Pacific cod hook-and-line C/P.

Amendment 85 to the BSAI FMP modified previously established allocations of Pacific cod among ten fishery sectors created in Amendment 67, to better reflect the historical dependency and use of Pacific cod by each sector. Two of the industry sectors that received modified allocations under Amendment 85 were the pot C/P sector and the hook-and-line C/P sector.

There is a substantial difference in the amount of Pacific cod allocated between the pot and hook-and-line sectors. The pot C/P sector has historically caught a small amount of Pacific cod. The Amendment 85 allocation to the pot C/P sector is only 1.5 percent of the BSAI Pacific cod TAC after subtraction of the allocation to the Western Alaska Community Development Quota (CDQ) reserve. The C/P hook-and-line allocation of Pacific cod is substantially larger at 48.5 percent of the TAC after subtraction of the allocation to the CDQ reserve. The hook-and-line C/P sector recently completed a voluntary capacity reduction program, and in January 2008 the owners of vessels in this fleet began repaying a $35 million Federal loan. The hook-and-line C/P sector's ability to repay the loan is based on a secure annual allocation of Pacific cod to the sector participants who have been issued the appropriate Amendment 67 endorsed LLP licenses.

At the October 2008 Council meeting, the members of the BSAI groundfish pot and hook-and-line C/P sectors informed the Council that following the implementation of Amendment 85, Federally-permitted pot and hook-and-line C/Ps have been participating in increasing numbers in the Pacific cod parallel fishery. Owners of several of these C/Ps have not been issued FFPs and LLP licenses with the endorsements necessary to fish in the Pacific cod fishery in the BSAI EEZ. However, the catch of Pacific cod in the parallel fishery from these C/P vessels accrues against the sector allocations in the Federal fishery that were designed to be available only to vessels with the appropriate Pacific cod endorsements issued under Amendment 67.

In April 2009, information prepared for the EA/RIR/IRFA (See ADDRESSES) confirmed that several operators of hook-and-line C/Ps that have been participating in the parallel Pacific cod fishery have not been issued all the FFP and LLP licenses and endorsements that are necessary to participate in the Federal Pacific cod fishery. The EA/RIR/IRFA also confirmed that hook-and-line C/Ps that have been issued all the FFP and LLP license endorsements required to fish as C/Ps in the Federal Pacific cod fishery, also fish as C/Ps in the parallel fishery. However, if the hook-and-line C/P sector's season closes in the Federal fishery and vessels in the hook-and-line C/P sector continue to fish in the parallel fishery as hook-and-line C/Ps, NMFS continues to credit that catch in the parallel fishery to the hook-and-line C/P sector allocation. That additional amount credited to the C/P sector allocation in the current season could result in a reduction in the allocation available to the C/P sector participants during a subsequent season of that year. The Council concluded that the additional catch of Pacific cod resulting from this activity, while only a fraction of a percent of the BSAI Pacific cod allocation, may be circumventing the intent of previous decisions made by the Council regarding license limitation and endorsements, sector allocations, and catch reporting. While the additional fishing activity had not violated Federal permit and license regulations, the Council concluded that additional fishing activity in the Pacific cod parallel fishery has reduced “or circumvented” the intendedeffectiveness of Pacific cod sector allocations and the capacity reduction program.

The EA/RIR/IRFA prepared for this action (See ADDRESSES) highlighted how increased participation in BSAI C/P hook-and-line sector in recent parallel fisheries has undermined the capacity reduction program undertaken by particular members of that sector. The increased participation has eroded the opportunity of historical participants to harvest the Pacific cod allocated to the C/P sector under Amendment 85. The increased participation in the parallel fishery involved Federally-permitted C/Ps without an Amendment 67 Pacific cod endorsement, or an AI area endorsement. These vessel owners and operators are recent entrants to the Pacific cod fishery and have not demonstrated long-term economic dependence on the fishery.

An increase in recent parallel fishery participation by vessels in the pot and hook-and-line C/P sectors has correspondingly increased fishing competition in the BSAI Pacific cod fishery. This increased fishing pressure has resulted in shortened Federal seasons, has exacerbated the race for fish, and has increased the concentration of Pacific cod harvest in State waters relative to catch in the Federal waters. The increased fishing competition and catch from these sectors in the parallel Pacific cod fishery have also increased the complexity and difficulty in managing sector allocations and seasonal apportionments. Furthermore, owners of some vessels used to fish for Pacific cod in a Federal groundfish fishery have surrendered their FFPs before fishing in a parallel fishery or in the non-parallel-State waters Pacific cod fishery to avoid NMFS observer and recordkeeping and reporting requirements. Operators of vessels designated on an FFP are subject to NMFS observer, VMS, and recordkeeping and reporting requirements while fishing in Federal and State water groundfish fisheries. Some Pacific cod C/Ps may have avoided complying with these important NMFS enforcement and recordkeeping tools while fishing in the State waters by surrendering or amending their FFP. As a consequence, these vessels may be degrading the quality of information available to NMFS to manage the Pacific cod fishery.

In consideration of the effects of these practices on the allocation of Pacific cod and data quality, the Council recommended three actions at its June 2009 meeting to further restrict participation of pot or hook-and-line C/Ps in the Pacific cod parallel fishery. These three actions would amend regulations for pot and hook-and-line C/Ps by extending FFP and LLP endorsement requirements that apply in Federal fisheries to the Pacific cod parallel fishery: placing restrictions on reissuing or amending an FFP, and requiring operators of these pot and hook-and-line C/Ps participating in the parallel fishery to comply with seasonal closures of Pacific cod in the BSAI.

The first of three actions recommended by the Council would add requirements for additional endorsements on an FFP and LLP license. The endorsements would apply to vessels designated on an FFP that fish for Pacific cod in the parallel fishery, use pot or hook-and-line gear, and catch and process Pacific cod. The proposed rule would implement this recommendation by amending § 679.7(c)(3) to prohibit a person from using pot or hook-and-line gear from a vessel designated on an FFP to catch and process Pacific cod in the parallel fishery in the BSAI unless:

1. The FFP has a C/P vessel operation endorsement; a pot or hook-and-line gear endorsement; and a BSAI area endorsement; and

2. The LLP license has a C/P vessel operation endorsement; a non-trawl gear endorsement; an Aleutian Islands area endorsement or a Bering Sea area endorsement; and a BSAI C/P Pacific cod hook-and-line or BSAI C/P Pacific cod pot endorsement.

The prohibitions would clarify that under the authority of the Magnuson-Stevens Act, the endorsements listed in 1 and 2, and any conditions of these FFP and LLP endorsements, apply to Federally permitted pot or hook-and-line C/P vessels fishing for Pacific cod in the parallel fishery.

The second action recommended by the Council is to prohibit the owner of a C/P using pot or hook-and-line gear in the BSAI from surrendering his or her FFP during the 3-year term of the FFP. Rather than prohibiting surrender of an FFP, NMFS proposes to implement the Council's recommendation by not reissuing an FFP once it is surrendered. The proposed rule would add paragraph (B) at § 679.4(b)(4)(ii) to state that, once surrendered, NMFS will not reissue an FFP to the owner of a vessel with a C/P vessel operation, pot or hook-and-line gear type, and BSAI area endorsement during the remainder of the 3-year term of the original FFP.

This approach would be more efficient for NMFS to administer because it would only require NMFS to track the number of vessel owners applying for a new FFP with a pot or hook-and-line C/P endorsement who had previously surrendered an FFP rather than track whether each permit holder who submitted a request to surrender an FFP had participated as a pot or hook-and-line C/P in the BSAI within the 3-year term of the surrendered permit.

The proposed rule also would add paragraph (B) to § 679.4(b)(4)(iii) to prohibit the owner of a vessel named on an FFP with endorsements for C/P vessel operation category, pot or hook-and-line gear, and BSAI area groundfish endorsement from amending the FFP by removing the C/P operation, pot or hook-and-line gear, or BSAI area endorsements.

The proposed rule also would revise § 679.4(b)(4)(iii) to refer to the “owner” of a vessel who applied for and held an FFP rather than to the “owner or operator”. The term operator would be removed because FFPs may only be issued to vessel owners.

The third action recommended by the Council is to clarify that Pacific cod seasonal closure requirements for Federally permitted pot and hook-and-line C/Ps apply in both Federal and parallel Pacific cod fisheries. The proposed rule would implement this recommendation by adding paragraph (4) to § 679.7(c), to prohibit operators of vessels in the pot or hook-and-line C/P sector that are named on an FFP from fishing for Pacific cod in the parallel fishery once the directed fishery for Pacific cod for their sector is closed in Federal waters.

Owners of Federally permitted pot or hook-and-line C/Ps, intending to catch and process Pacific cod from the parallel fishery, would receive actual and/or constructive notice from NMFS that any Pacific cod caught by that vessel in parallel fisheries will be deducted from the Federal TAC. The notice would improve enforceability of regulations proposed under § 679.7(c)(3) and (c)(4), by clarifying that a Federally permitted pot or hook-and-line C/P would be in violation of these prohibitions for catching and processing Pacific cod in parallel fisheries without the required FFP and LLP licenseendorsements or during a Pacific cod seasonal closure.

The requirements in this proposed action for pot and hook-and-line C/Ps to be issued specific permits and endorsements to fish for Pacific cod in the parallel fishery, combined with proposed restrictions on surrendering and reissuing an FFP would address the Council's problem statement by requiring that, once a vessel owner of a pot or hook-and-line C/P is issued an FFP, he or she must choose to fish for Pacific cod predominantly in the Federal fishery or surrender his or her FFP and fish in State waters for the remainder of the 3-year term of the FFP. Owners of pot or hook-and-line C/Ps eligible to participate in the Federal fisheries are unlikely to surrender their FFP and give up the opportunity to continue to fish Pacific cod in the Federal fishery, unless they are close to the end of the 3-year term of the FFP. Relying exclusively on Pacific cod catch in parallel and non-parallel State fisheries for up to 3 years would represent a significant loss in revenue for many C/Ps because most Pacific cod are located in and caught in the Federal waters of the BSAI. Although these proposed regulatory amendments would not prohibit a C/P without an FFP or LLP license from participating in the parallel fishery, it would discourage the current practice of surrendering an FFP or removing an endorsement from an FFP before participating in the parallel fishery to avoid NMFS observer, VMS, and recordkeeping and reporting requirements.

This action implements the conservation and management of Federal fisheries as provided by Amendments 67 and 85 to the BSAI FMP. Amendment 67 created exclusive pot C/P and hook-and-line C/P sectors for participating in the BSAI Pacific cod fishery through a license limitation program (LLP). The creation of sectors effectively removed some vessels that did not historically participate in these Pacific cod fisheries, and reduced competition that contributed to the race for fish. Some of the C/Ps that did not qualify for the necessary LLP endorsement in Amendment 67 continue to fish for Pacific cod in the parallel fishery off of allocations for the C/P pot and hook-and-line sectors created by Amendment 85. This proposed rule would apply the same LLP endorsements required for Federally permitted pot or hook-and-line C/Ps to participate in the BSAI Pacific cod fishery to the parallel Pacific cod fishery, limiting ability of C/Ps without an LLP or the appropriate LLP endorsements to fish off of these Pacific cod sector allocations in the parallel fishery. Thus, this proposed action would contribute to conservation and management objectives by preventing C/Ps without an LLP or the appropriate endorsements to continue to participate in parallel fishery, reducing the pool of vessels competing for limited allocations to the C/P pot and hook-and-line sectors, and limiting the race for fish in the BSAI.

The interim final rule for Steller sea lion (SSL) protection measures (75 FR 77535, December 13, 2010, corrected 75 FR 81921, December 29, 2010) establish closures in critical habitat waters 0 nm to 3 nm around certain rookeries and haulouts in the Aleutian Islands subarea. The harvest of Pacific cod in the parallel fisheries was included in the action considered in the November 2010 biological opinion on the Alaska Federal groundfish fisheries. In the analysis of the action in the biological opinion, the parallel fisheries were expected to be managed with the same closures as specific for the Federal Pacific cod fisheries as shown in Table 12 to 50 CFR part 679. The interim final rule closed State waters occurring inside Steller sea lion critical habitat. On January 11, 2011, the State issued an emergency order that allows for Pacific cod harvest by hook-and-line vessels 58 ft or less and by pot vessels 60 feet or less in State waters critical habitat between 175 degrees W longitude and 178 degrees W longitude that are closed to Federally permitted vessels. NMFS has initiated an Endangered Species Act Section 7 consultation on the State's emergency order. This proposed action would discourage a pot or hook-and-line C/P from surrendering its FFP and fishing in the parallel fisheries in those areas closed in Table 12 to 50 CFR part 679 but open under State parallel management. This proposed action would facilitate implementation of the closure areas for the protection of Steller sea lion critical habitat, as provided in the interim final rule (75 FR 77535, December 13, 2010, corrected 75 FR 81921, December 29, 2010) and required by the biological opinion.

Pursuant to sections 304(b)(1)(A) and 305(d) of the Magnuson-Stevens Act, the NMFS Assistant Administrator has determined that this proposed rule is consistent with the FMP, other provisions of the Magnuson-Stevens Act, and other applicable law, subject to further consideration after public comment.

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

An initial regulatory flexibility analysis (IRFA) was prepared, as required by section 603 of the RFA (RFA). The IRFA describes the economic impact this proposed rule, if adopted, would have on small entities. A description of the action, why it is being considered, and the legal basis for this action are contained at the beginning of this section in the preamble and in theSUMMARYsection of the preamble. A summary of the remainder of the IRFA follows. A copy of this analysis is available from NMFS (see ADDRESSES).

The directly regulated entities for this proposed action are the members of the commercial fishing industry that operate groundfish pot or hook-and-line C/Ps in the BSAI and State parallel waters. Under a conservative application of the Small Business Administration criterion and the best available data, there are four small entities out of a total of 44 vessels in 2008 that would be directly regulated by the proposed action. To provide these estimates, earnings from all Alaskan fisheries for 2008 were matched with the vessels that participated in the BSAI pot or hook-and-line fishery for that year.

To minimize impacts on small entities, this action would not apply to pot or hook-and-line C/Ps of less than 32 ft LOA, or to pot or hook-and-line CVs. The CVs participating in these fisheries are generally operating in non-parallel-State and parallel fisheries only, and are not required by NMFS to be designated on an LLP license or FFP to participate in these groundfish fisheries.

In addition to the proposed alternative, the Council evaluated an alternative to prohibit any vessel with a C/P endorsement on its FFP from amending the C/P endorsement, and only allow surrender or reactivation of the FFP at the end of the FFP permit cycle. That alterative was rejected because it would have applied to jig and trawl C/Ps, and was beyond the scope of the Council's problem statement and analysis.

The Council also evaluated the no action alternative, which would maintain the fishery under the status quo, but it was rejected because it would not address the problem statement.

The majority of the directly regulated entities under this action are not considered small entities, as defined under the Regulatory FlexibilityAnalysis. Within the universe of small entities that are the subject of this IRFA, impacts may accrue differently (i.e.,some small entities would be negatively affected and others positively affected). Thus, the proposed action represents tradeoffs in terms of impacts on small entities. However, the Council deliberately sought to provide options for the smallest of the small entities under this amendment by excluding CVs from the proposed regulatory changes. The restrictions on participation in the BSAI Pacific cod parallel fishery would only apply to pot and hook-and-line C/Ps; therefore only these C/Ps are considered here.

Overall, it is unlikely that the combination of these proposed restrictions would preclude vessels with a high degree of economic dependence upon the pot or hook-and-line groundfish fisheries from participating in the Pacific cod parallel fishery. Most of the vessel owners who are highly dependent on these fisheries were issued an LLP license with pot or hook-and-line Pacific cod endorsements, in 2003 under Amendment 67 by demonstrating recent catch history in the BSAI Pacific cod fishery. Most of the vessel owners who have not been issued an LLP license with a Pacific cod endorsement, and who have fished in parallel fisheries, are recent entrants to the fishery and have not demonstrated long-term economic dependence on the fishery. These vessel owners would continue to have access to the State Pacific cod fishery after implementation of the proposed action.

Based upon the best available scientific data, and consideration of the objectives of this action, it appears that there are no alternatives to the proposed action that have the potential to accomplish the stated objectives of the Magnuson-Stevens Act and any other applicable statutes and that have the potential to minimize any significant adverse economic impact of the proposed rule on small entities. The analysis did not identify any Federal rules that would duplicate, overlap, or conflict with the proposed rule. This rule requires revisions to some existing recordkeeping and reporting requirements but imposes no new requirements on the effected vessel owners or operators.

This proposed rule contains a collection-of-information requirement subject to review and approval by Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). This requirement has been submitted to OMB for approval under OMB Control No. 0648-0206. Public reporting burden for an Application for a Federal Fisheries Permit is estimated to average 21 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection information. This rule also contains a collection-of-information that has been approved by OMB under OMB Control No. 0334. Total public reporting burden for the License Limitation Program is estimated at 268 hours.

Public comment is sought regarding: whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; the accuracy of the burden estimate; ways to enhance the quality, utility, and clarity of the information to be collected; and ways to minimize the burden of the collection of information, including through the use of automated collection techniques or other forms of information technology. Send comments on these or any other aspects of the collection of information to NMFS Alaska Region at theADDRESSESabove, and by e-mail toOIRA_Submission@omb.eop.gov,or fax to 202-395-7285.

Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB control number.

For the reasons set out in the preamble, 50 CFR part 679 is proposed to be amended as follows: