The regulations in 9 CFR part 91, “Inspection and Handling of Livestock for Exportation” (referred to below as the regulations), prescribe conditions for exporting animals from the United States. The regulations state, among other things, that all animals, except animals exported by land to Canada or Mexico, must be exported through designated ports of embarkation, unless the exporter can show that the animals would suffer undue hardship if they were required to be moved to a designated port of embarkation.

On September 17, 2010, we published in theFederal Register(75 FR 56914-56916, Docket No. APHIS-2009-0078) a proposal1 to amend the live animal export regulations by removing the list of designated ports of embarkation and their associated export inspection facilities contained in § 91.14(a). We proposed to replace the list with text referring the reader to an Animal and Plant Health Inspection Service (APHIS) Veterinary Services area office for obtaining the list or the APHIS Web site for viewing it. Our proposal was intended to enable us to amend the list, when necessary, in a timelier manner than we previously had been able to and allow us greater flexibility in regulating animal exports. Because the designated ports of embarkation and associated export inspection facilities had been listed in the regulations, the list could only be amended to add or remove ports or export inspection facilities or to update contact information by means of rulemaking.

We also proposed to make some changes to the regulations in § 91.14(d) pertaining to approval and denial, revocation, or suspension of approval of export inspection facilities in order to clarify the regulations and ensure that standards are being maintained at ports and facilities covered under these regulations. Specifically, we proposed to add a requirement to § 91.14(d) that designated ports of embarkation and export facilities be reevaluated annually for compliance with the regulations by means of an APHIS inspection. We also proposed to simplify § 91.14(d) by eliminating references therein to suspension of approval, since the paragraph did not draw a clear distinction between suspension and revocation, and for enforcement purposes, the two were essentially the same. Finally, we proposed to add to § 91.14(d) procedures for reinstatement following revocation of approval, since the existing regulations did not address the subject directly.

We solicited comments concerning our proposal for 60 days ending November 16, 2010. We received one comment by that date, from a livestock exporter. The commenter supported the proposed rule.

Though we are not making any changes to this final rule in response to the comment, we are making one editorial revision. In the September 2010 proposed rule, § 91.14(a) indicated that the determination that an export inspection facility met our requirements would be made by an APHIS veterinarian. To make paragraph (a) consistent with the rest of § 91.14, we are amending that paragraph to indicate that such determinations will be made by the Administrator.

Therefore, for the reasons given in the proposed rule, we are adopting the proposed rule as a final rule, with the change discussed in this document.

This final rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

In accordance with the Regulatory Flexibility Act, we have analyzed the potential economic effects of this action on small entities. The analysis is summarized below. Copies of the full analysis are available on the Regulations.gov Web site (see footnote 1 in this document for a link to Regulations.gov) or by contacting the person listed underFOR FURTHER INFORMATION CONTACT.

This final rule amends the live animal export regulations by removing the list of designated ports of embarkation and their associated export inspection facilities. As a result of this rulemaking, those ports and facilities will henceforth be listed on the Internet rather than in the regulations, allowing us to amend the list, when necessary, in a timelier manner than we were able to previously.

Those entities most likely to be economically affected by the rule are exporters of live animals and domestic livestock producers. These entities either sell goods on their own account (import/export merchants) or arrange for the sale of goods owned by others (import/export agents and brokers). Affected entities may include beef cattle ranching and farming operations, dairy cattle and milk production operations, hog and pig farming operations, sheepand goat farming operations, and cattle feedlots.

The Small Business Administration has established guidelines for determining which businesses are to be considered small. Based on the most recent data we have regarding annual receipts, it is likely that most of the entities that will be affected by this rule are small.

However, this rulemaking only amends APHIS' administrative process for changing the list of designated embarkation ports and associated export inspection facilities. This action does not make any changes in the status of any designated embarkation port or associated export inspection facility, nor does it alter the technical criteria by which designated embarkation ports and associated export inspection facilities are added to or removed from this list. We expect that this final rule will have little effect on U.S. entities other than benefits they may derive from timelier changes to the list of designated ports of embarkation and associated export inspection facilities.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

This program/activity is listed in the Catalog of Federal Domestic Assistance under No. 10.025 and is subject to Executive Order 12372, which requires intergovernmental consultation with State and local officials. (See 7 CFR part 3015, subpart V.)

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule: (1) Preempts all State and local laws and regulations that are inconsistent with this rule; (2) has no retroactive effect; and (3) does not require administrative proceedings before parties may file suit in court challenging this rule.

This final rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501et seq.).

Accordingly, we are amending 9 CFR part 91 as follows:

Accordingly, 9 CFR part 201 is corrected by making the following correcting amendment:

The Consumer Leasing Act (CLA), 15 U.S.C. 1667-1667e, was enacted in 1976 as an amendment to the Truth in Lending Act (TILA), 15 U.S.C. 1601et seq.The purpose of the CLA is to ensure meaningful and accurate disclosure of the terms of personal property leases for personal, family, or household use. The CLA is implemented by the Board's Regulation M (12 CFR part 213).

The CLA and Regulation M require lessors to provide consumers with uniform cost and other disclosures about consumer lease transactions. The statute and the regulation generally apply to consumer leases for the use of personal property in which the contractual obligation has a term of more than four months. An automobile lease is the most common type of consumer lease covered by the CLA and Regulation M. Currently, however, if the lessee's total contractual obligation under the lease exceeds $25,000, the CLA and Regulation M do not apply.See15 U.S.C. 1667(1); 12 CFR 213.2(e).1

This final rule implements Section 1100E of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), which was signed into law on July 21, 2010. Public Law 111-203 § 1100E, 124 Stat. 1376 (2010). The Dodd-Frank Act raises the CLA's $25,000 exemption threshold to $50,000. In addition, the Dodd-Frank Act requires that, on or after December 31, 2011, the threshold shall be adjusted annually for inflation by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as published by the Bureau of Labor Statistics. Therefore, from July 21, 2011 to December 31, 2011, the threshold dollar amount will be $50,000. Effective January 1, 2012, the $50,000 threshold will be adjusted annually based on any annual percentage increase in the CPI-W.

In December 2010, the Board proposed to amend § 213.2(e), the accompanying commentary, and the commentary to § 213.7(a) for consistency with the amendments to the CLA's exemption threshold.See75 FR 78632 (Dec. 16, 2010) (December 2010 Proposed Regulation M Rule). In addition, because the Dodd-Frank Act makes similar amendments to TILA's exemption threshold for consumer credit transactions, the Board simultaneously proposed to amend Regulation Z, which implements the provisions of TILA that do not address consumer leases.See75 FR 78636 (Dec. 16, 2010) (December 2010 Regulation Z Proposed Rule).

The Board received only two comments on the December 2010 Regulation M Proposed Rule. As discussed below, the Board is generally adopting the rule as proposed. Elsewhere in today'sFederal Register, the Board is also adopting a final rule amending Regulation Z in order to implement the amendments to TILA's exemption threshold for consumer credit transactions.

Consistent with the Dodd-Frank Act, the Board's final rule revises § 213.2 and the accompanying staff commentary to provide that, effective July 21, 2011, a consumer lease is exempt from the requirements of Regulation M if the consumer's total contractual obligationunder the lease exceeds $50,000 when the lease is consummated. This final rule further provides that, beginning on January 1, 2012, the $50,000 threshold will be adjusted annually by any annual percentage increase in the CPI-W.

Section 1100H of the Dodd-Frank Act provides that Section 1100E will become effective on the designated transfer date, as defined by Section 1062 of that Act. Section 1062 of the Dodd-Frank Act requires, in relevant part, the Secretary of the Treasury to designate a single calendar date for the transfer of certain functions from other agencies to the Bureau of Consumer Financial Protection. Pursuant to Section 1062(a) of the Dodd-Frank Act, the Secretary of the Treasury has determined that the designated transfer date shall be July 21, 2011.See75 FR 57252 (Sept. 20, 2010). Accordingly, because Section 1100E will become effective on July 21, 2011, this final rule will be effective on that date. However, if the Secretary of the Treasury designates a later transfer date pursuant to Section 1062, this final rule will instead be effective on that date.

One industry commenter requested that the Board delay the statutory effective date by one year (i.e.,until July 21, 2012). This commenter asserted that—in light of the extensive regulatory changes required by the Dodd-Frank Act and other statutes—it would be burdensome for small institutions to comply with Regulation M for consumer leases of $50,000 or less by July 21, 2011. However, the Board understands that, as a general matter, institutions that engage in consumer leasing already have the systems in place to comply with Regulation M. Thus, it should not be unduly burdensome for these institutions to comply with Regulation M with respect to a larger population of leases. Accordingly, in these circumstances, it would not be appropriate to deviate from the effective date established by Congress.

The CLA authorizes the Board to prescribe regulations to update and clarify the requirements and definitions applicable to lease disclosures and contracts, and any other issues specifically related to consumer leasing, to the extent that the Board determines such action to be necessary to carry out the CLA, to prevent circumvention, or to facilitate compliance. 15 U.S.C. 1667f(a). The CLA also provides that any regulations prescribed by the Board may contain classifications and differentiations, and may provide for adjustments and exceptions for any class of transactions, as the Board considers appropriate.Id.In addition, the CLA is a part of TILA, which grants similar authority to the Board.See15 U.S.C. 1604(a) and (f). For the reasons discussed below, the Board believes it is necessary and appropriate to implement Section 1100E of the Dodd-Frank Act by revising Regulation M to effectuate the purposes of the CLA and TILA, to prevent circumvention, and to facilitate compliance.

Section 213.2(e) implements the CLA's definition of consumer lease. Currently, § 213(e)(1) defines “consumer lease” as “a contract in the form of a bailment or lease for the use of personal property by a natural person primarily for personal, family, or household purposes, for a period exceeding four months and for a total contractual obligation not exceeding $25,000, whether or not the lessee has the option to purchase or otherwise become the owner of the property at the expiration of the lease.” As discussed in existing comment 2(e)-3, the total contractual obligation under a lease includes the total of payments as well as non-refundable amounts the lessee is contractually obligated to pay to the lessor. However, comment 2(e)-3 also clarifies that residual value amounts, purchase-option prices, and amounts collected by the lessor but paid to a third party (such as taxes, licenses, and registration fees) are excluded from the total contractual amount.

In addition to increasing the threshold for an exemption from $25,000 to $50,000 effective July 21, 2011, Section 1100E of the Dodd-Frank Act provides that, beginning in 2012, the $50,000 threshold will be further increased annually to reflect any increases in the CPI-W. Accordingly, whether the total contractual obligation under a consumer lease is sufficient to exempt that lease from the CLA will depend on the threshold amount in effect when the lease is consummated. For that reason, the Board proposed to amend § 213.2(e)(1) to provide that a consumer lease is exempt if the total contractual obligation exceeds “the applicable threshold amount,” which would be listed in the official staff commentary. The Board further proposed to amend § 213.2(e)(1) to provide that the threshold amount will be adjusted annually to reflect increases in the CPI-W (as applicable). The Board did not receive any comment on these revisions, which are adopted as proposed.

The Board also proposed to adopt a new comment 2(e)-9 in order to clarify the method for determining the applicable threshold amount with respect to a particular lease. Specifically, this comment clarified that a consumer lease is exempt from the requirements of Regulation M if the total contractual obligation exceeds the threshold amount in effect at the time of consummation.

Proposed comment 2(e)-9 further clarified that the threshold amount in effect during a particular period of time is the amount stated in the comment for that period. The proposed comment also noted that the threshold amount would be adjusted effective January 1 of each year by any annual percentage increase in the CPI-W that was in effect on the preceding June 1. Once the annual percentage increase in the CPI-W in effect on June 1 becomes available, this comment will be amended to provide the threshold amount for the upcoming year. The Board noted that this approach is consistent with that adopted by the Board in other regulations that provide for annual adjustments based on a consumer price index.See, e.g.,12 CFR 226.32(a)(1)(ii) and its accompanying commentary. The Board believes this approach will facilitate compliance by permitting the publication of an increased threshold amount sufficiently in advance of the January 1 effective date.

In addition, proposed comment 2(e)-9 clarified that any increase in the threshold amount would be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI-W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI-W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900. This approach is consistent with Section 1100E(b) of the Dodd-Frank Act, which provides that annual CPI-W adjustments should be “rounded to the nearest multiple of $100, or $1,000, as applicable.” The Board believes that Congress did not intend for an annual CPI-W adjustment to be rounded to the nearest $100 in some circumstances but to the nearest $1,000 in others, which could lead to anomalous results. Because $1,000 is itself a multiple of $100, the Board believes that this commentary clarifies the statutory language in a manner consistent with the intent of Section 1100E.

Finally, the proposed comment clarified that, if a consumer lease is exempt from the requirements ofRegulation M because the total contractual obligation exceeds the threshold amount in effect at the time of consummation, the lease remains exempt regardless of a subsequent increase in the threshold amount. Thus, for example, if a lease with a total contractual obligation of $30,000 was consummated in June 2011, that lease is exempt based on the $25,000 threshold in effect at that time and would remain exempt after July 21, 2011, notwithstanding the increase in the threshold to $50,000. Similarly, if a lease with a total contractual obligation of $55,000 is consummated in August 2011, that lease would be exempt based on the $50,000 threshold in effect at that time and would remain exempt even if the threshold were subsequently increased to $56,000 based on an increase in the CPI-W. This approach is consistent with § 213.3(e), which provides that events that occur after consummation of a consumer lease generally do not require the lessor to provide additional Regulation M disclosures.Seecomment 3(e)-2.

The Board received only one comment regarding this proposed guidance. A Member of Congress suggested that consumer leases with total contractual obligations above the applicable threshold amount at consummation should not be permanently exempt from Regulation M. Instead, this commenter suggested that, if, at any point during the term of the lease, the total amount of the consumer's remaining obligation is less than the applicable threshold amount, the lessor should begin to comply with the regulation. However, the provisions of the CLA and Regulation M generally govern disclosures made at or prior to consummation of a lease. Thus, it does not appear that requiring lessors to comply with Regulation M after consummation would provide benefits to consumers that would outweigh the burden on lessors of continually monitoring each lease to determine when the remaining obligation falls below the applicable threshold amount. Accordingly, comment 2(e)-9 is adopted as proposed.

Section 213.7 imposes certain requirements on advertisements for consumer leases. In order to provide guidance regarding the interaction between § 213.7 and the definition of “consumer lease” in § 213.2(e), the Board proposed to adopt a new comment 7(a)-3. This comment clarified that § 213.7 applies to advertisements for consumer leases, as defined in § 213.2(e). As discussed above, a lease is exempt from the requirements of Regulation M (including § 213.7) if the total contractual obligation exceeds the threshold amount in effect at the time of consummation. Accordingly, proposed comment 7(a)-3 clarified that § 213.7 does not apply to an advertisement for a specific consumer lease if the total contractual obligation for that lease exceeds the threshold amount in effect when the advertisement is made. If a lessor promotes multiple consumer leases in a single advertisement, the entire advertisement must comply with § 213.7 unless all of the advertised leases are exempt under § 213.2(e). The comment also provided illustrative examples. The Board did not receive any comment on this guidance, which is adopted as proposed.

The Regulatory Flexibility Act (5 U.S.C. 601et seq.) (RFA) requires an agency to perform an initial and a final regulatory flexibility analysis on the impact a rule is expected to have on small entities. However, under section 605(b) of the RFA, 5 U.S.C. 605(b), the regulatory flexibility analysis otherwise required under section 604 of the RFA is not required if an agency certifies, along with a statement providing the factual basis for such certification, that the rule will not have a significant economic impact on a substantial number of small entities. Based on its initial and final analyses and for the reasons stated below, the Board believes that this final rule will not have a significant economic impact on a substantial number of small entities.

1.Statement of the need for, and objectives of, the final rule.The final rule implements Section 1100E of the Dodd-Frank Act, which increases the total contractual obligation necessary to exempt a consumer lease from the Consumer Leasing Act (CLA) from more than $25,000 to more than $50,000, effective July 21, 2010. Section 1100E also provides that, beginning in 2012, this amount shall be adjusted annually to reflect any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The supplementary information above describes in detail the reasons, objectives, and legal basis for the final rule.

2.Summary of the significant issues raised by public comment on Board's initial analysis, the Board's assessment of such issues, and a statement of any changes made as a result of such comments.An industry group representing credit unions requested that, in order to reduce regulatory burden, the Board provide additional guidance regarding the types of records that institutions are required to retain in order to demonstrate compliance with Regulation M. Section 213.8 states that lessors must retain “evidence of compliance with the requirements imposed by [Regulation M], other than the advertising requirements under section 213.7, for a period of not less than two years after the disclosures are required to be made or an action is required to be taken.” Comment 8-1 clarifies that these records may be retained “in paper form, on microfilm, microfiche, or computer, or by any other method designed to reproduce records accurately” and that “[t]he lessor need retain only enough information to reconstruct the required disclosures or other records.”

Because the current regulation and commentary provide lessors with considerable flexibility regarding the retention of records, the Board is concerned that adopting a more specific set of requirements (such as a list of documents that lessors must retain) could increase regulatory burden, rather than reducing it. Furthermore, because the Board did not propose any amendments to the record retention requirements in § 213.8, any revisions to those requirements would not have the benefit of input from the public, including small institutions. Although the commenter suggested that the Board work with a focus group of institutions to revise the record retention requirements, it would not be possible for the Board to do so and still issue a final rule sufficiently in advance of the July 21, 2010 statutory effective date. Accordingly, the final rule does not alter the requirements of § 213.8.

3.Small entities affected by the final rule.Currently, Regulation M applies to any person who regularly leases, offers to lease, or arranges for the lease of personal property primarily for personal, family, or household purposes, for a period exceeding four months, and for a total contractual obligation of $25,000 or less. 12 CFR 213.2(e) and (h). Consistent with Section 1100E of the Dodd-Frank Act, the final rule applies Regulation M, beginning on July 21, 2011, to any person who provides consumer leases for a total contractual obligation of $50,000 or less, adjusted annually to reflect increases in the CPI-W.

Based on 2010 call report data, there are no banks with assets of $175 million or less that engage in consumer leasing. There are, however, 306 thrifts and 92 credit unions with assets of $175 million or less that engage in consumerleasing. In addition, the Board's 2005 Finance Company Survey indicates that fewer than ten small finance companies engage in consumer leasing. Commenters did not provide any information on the number of small entities affected by the proposed rule. Nevertheless, the Board acknowledges that the total number of small entities likely to be affected by the final rule is unknown, in part because it is unclear how many of the small entities currently engaged in consumer leasing offer leases with total contractual obligations of more than $25,000 but not more than $50,000.

4.Recordkeeping, reporting, and compliance requirements.The final rule does not impose any new reporting requirements. However, the final rule does impose new recordkeeping requirements for small entities that offer consumer leases with total contractual obligations of more than $25,000 but not more than $50,000. As noted above, § 213.8 requires lessors to retain evidence of compliance with its provisions (except the advertising requirements in § 213.7) for a period of not less than two years after the date the disclosures are required to be made or an action is required to be taken. Thus, beginning on July 21, 2011, the final rule requires lessors to retain records for new consumer leases with total contractual obligations not exceeding $50,000, adjusted annually to reflect increases in the CPI-W.

The final rule also imposes new compliance requirements for consumer leases with total contractual obligations of more than $25,000 but not more than $50,000. Specifically, for consumer leases subject to Regulation M, the lessor must provide certain disclosures regarding payments, liability, and other terms of the lease prior to consummation (§§ 213.3 and 213.4) and when the availability of consumer leases on particular terms is advertised (§ 213.7).

The Board understands that small entities that offer consumer leases generally have systems in place to provide the disclosures required by Regulation M and retain records of those disclosures, even if some of their leases are currently exempt. Thus, while the precise costs to small entities to provide disclosures and retain records for a larger population of leases are difficult to predict, the Board does not believe that the final rule would have a significant economic impact on a substantial number of small entities. Except as already discussed above, the Board did not receive any comments to the contrary.

5.Significant alternatives to the final rule.The final rule implements Section 1100E of the Dodd-Frank Act, which goes into effect on July 21, 2011. As discussed in the supplementary information, the final rule clarifies that, if a consumer lease with a total contractual obligation exceeding $25,000 is consummated prior to July 21, 2011, that lease remains exempt, notwithstanding subsequent increases in the threshold amount. Except as already discussed above, the Board did not receive any comments suggesting alternatives that would minimize the impact of the rule on small entities and would be consistent with Section 1100E of the Dodd-Frank Act.

In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3506; 5 CFR part 1320 Appendix A.1), the Board reviewed the final rule under the authority delegated to the Board by the Office of Management and Budget (OMB). In addition, as permitted by the PRA, the Board is extending for three years the current recordkeeping and disclosure requirements in connection with Regulation M. The collection of information that is required by this rule is found in 12 CFR Part 213. The Board may not conduct or sponsor, and an organization is not required to respond to, this information collection unless it displays a currently valid OMB control number. The OMB control number is 7100-0202.

This information collection is required to provide benefits for consumers and is mandatory (15 U.S.C. 1601et seq.). The respondents/recordkeepers are lessors subject to Regulation M, including for-profit financial institutions and small businesses. Sections 105(a) and 187 of TILA (15 U.S.C. 1604(a) and 1667f) authorize the Board to issue regulations to carry out the provisions of the CLA. The CLA and Regulation M are intended to provide consumers with meaningful disclosures about the costs and terms of leases for personal property. The disclosures enable consumers to compare the terms for a particular lease with those for other leases and, when appropriate, to compare lease terms with those for credit transactions. The act and regulation also contain rules about advertising consumer leases. The information collection pursuant to Regulation M is triggered by specific events. All disclosures must be provided to the lessee prior to the consummation of the lease and when the availability of consumer leases on particular terms is advertised. This information collection is mandatory.

Since the Board does not collect any information, no issue of confidentiality normally arises. However, in the event the Board were to retain records during the course of an examination, the information may be kept confidential pursuant to section (b)(8) of the Freedom of Information Act (5 U.S.C. 522(b)(8)).

Regulation M applies to all types of lessors of personal property. The Board accounts for the paperwork burden associated with the regulation only for Board-supervised institutions. Appendix B of Regulation M defines the Board-supervised institutions as: State member banks, branches and agencies of foreign banks (other than federal branches, federal agencies, and insured state branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act. Other federal agencies account for the paperwork burden on other lessors for which they have administrative enforcement authority.

To ease the compliance cost (particularly for small entities) model forms are appended to the regulation. Lessors are required to retain evidence of compliance for 24 months, but the regulation does not specify types of records that must be retained.

The current annual burden to comply with the provisions of Regulation M is estimated to be 2 hours for each of the 4 State member banks2 that engage in consumer leasing. Thus, the current total annual burden for all respondents is 8 hours.

The Board estimates that the final rule will impose a one-time increase in the total annual burden under Regulation M. The 4 respondents will take, on average, 40 hours (one business week) to update their systems to comply with the requirements of the final rule. This one-time revision will increase the total burden for all 4 respondents by 160 hours. On a continuing basis, the Board estimates that the 4 respondents will each take, on average, an additional 8 hours (one business day) annually to comply with the requirements, which will increase the ongoing total annual burden for all 4 respondents by 32 hours. Therefore, the total annual burden for all respondents is estimated to increase by 192 hours (from 8 to 200 hours) during the first year after this rule takes effect. Thereafter, theestimated ongoing total annual burden will be 40 hours.

The total burden increase represents averages for all respondents regulated by the Board. The Board expects that the amount of time required to implement each of the changes for a given financial institution or entity may vary based on the size and complexity of the respondent. Furthermore, the Board understands that many lessors voluntarily comply with Regulation M for leases that are currently exempt. Thus, the estimated burden increase likely overstates the actual increase in burden for those lessors.

The other Federal financial agencies are responsible for estimating and reporting to OMB the total paperwork burden for the institutions for which they have administrative enforcement authority.3 They may, but are not required to, use the Board's burden estimates. There are approximately 16,200 depository institutions of which the Board estimates that 58 depository institutions4 will be affected by this collection of information and considered respondents for purposes of the PRA. Using the Board's method, the total estimated annual burden for all financial institutions subject to Regulation M is currently approximately 116 hours. The final rule will impose a one-time increase in the estimated annual burden for the estimated 58 institutions thought to engage in consumer leasing by a total of 2,320 hours. On a continuing basis, the final rule will impose an increase in the estimated annual burden by a total of 464 hours. Thus, the total annual burden for the 58 institutions is estimated to increase by 2,784 hours (from 116 to 2,900 hours) during the first year after this rule takes effect. Thereafter, the estimated ongoing total annual burden will be 580 hours. The above estimates represent an average across all respondents and reflect variations between institutions based on their size, complexity, and practices. In addition, other institutions covered by Regulation M, such as retailers and finance companies potentially are affected by this collection of information, and thus are also respondents for purposes of the PRA. As noted above, the estimated burden increase likely overstates the actual increase in burden because many lessors voluntarily comply with Regulation M for exempt leases.

The Board did not receive any comments specifically addressing the foregoing estimates, which were provided in the December 2010 Regulation M Proposed Rule. The Board did receive one comment generally addressing the burdens associated with retaining records pursuant to § 213.8, which is discussed above in the Board's final RFA analysis.

The Board has a continuing interest in the public's opinion on the collection of information. Comments on the collection of information should be sent to Cynthia Ayouch, Acting Federal Reserve Clearance Officer, Division of Research and Statistics, Mail Stop 95-A, Board of Governors of the Federal Reserve System, Washington, DC 20551, with copies of such comments sent to the Office of Management and Budget, Paperwork Reduction Project (7100-0202), Washington, DC 20503.

For the reasons set forth in the preamble, the Board amends Regulation M, 12 CFR part 213, as set forth below:

This final rule implements Section 1100E of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), which was signed into law on July 21, 2010. Public Law 111-203 § 1100E, 124 Stat. 1376 (2010). Section 1100E amends Section 104(3) of the Truth in Lending Act (TILA) by establishing a new threshold for exempt consumer credit transactions. Currently, TILA Section 104(3) exempts “[c]redit transactions, other than those in which a security interest is or will be acquired in real property, or in personal property used or expected to be used as the principal dwelling of the consumer, and other than private education loans (as that term is defined in section 140(a)), in which the total amount financed exceeds $25,000.” 15 U.S.C. 1603(3). Regulation Z implements this exemption in § 226.3(b).

Effective July 21, 2011, the Dodd-Frank Act raises TILA's $25,000 exemption threshold to $50,000. In addition, the Dodd-Frank Act provides that, on or after December 31, 2011, this threshold shall be adjusted annually for inflation by the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), as published by the Bureau of Labor Statistics. Therefore, from July 21, 2011 to December 31, 2011, the threshold dollar amount will be $50,000. Effective January 1, 2012, the $50,000 threshold will be adjusted annually based on any annual percentage increase in the CPI-W.

In December 2010, the Board proposed to amend § 226.3(b) and the accompanying commentary for consistency with the amendments made by the Dodd-Frank Act.See75 FR 78636 (Dec. 16, 2010) (December 2010 Proposed Regulation Z Rule). In addition, because the Dodd-Frank Act makes similar amendments to the exemption threshold in the Consumer Leasing Act (which is part of TILA), the Board simultaneously proposed to amend Regulation M, which implements the Consumer Leasing Act (CLA).See75 FR 78632 (Dec. 16, 2010) (December 2010 Proposed Regulation M Rule).

The Board received 10 comments on the December 2010 Regulation Z Proposed Rule. As discussed below, the Board is adopting the rule largely as proposed with some modifications to facilitate compliance. Elsewhere in today'sFederal Register,the Board is also adopting a final rule amending Regulation M in order to implement the amendments to CLA's exemption threshold for consumer leases.

Consistent with the Dodd-Frank Act, the Board's final rule revises § 226.3(b) and the accompanying staff commentary to provide that, effective July 21, 2011, a consumer credit account is exempt from the requirements of Regulation Z if: (1) The initial extension of credit on the account exceeds $50,000; or (2) the creditor makes a firm commitment ataccount opening to extend credit in excess of $50,000. This final rule further provides that, effective January 1, 2012, the $50,000 threshold will be adjusted annually by any annual percentage increase in the CPI-W.

The Board has also adopted a transition rule in § 226.3(b)(2) to reduce the compliance burden with respect to certain accounts that are currently exempt under the $25,000 threshold. Specifically, this transition rule provides that, if an open-end credit account is exempt on July 20, 2011 based on a firm commitment to extend more than $25,000 in credit, the creditor has until December 31, 2011 to either retain the exemption by increasing the firm commitment to more than $50,000 or begin complying with Regulation Z.

Section 1100H of the Dodd-Frank Act provides that Section 1100E will become effective on the designated transfer date, as defined by Section 1062 of that Act. Section 1062 of the Dodd-Frank Act requires, in relevant part, the Secretary of the Treasury to designate a single calendar date for the transfer of certain functions from other agencies to the Bureau of Consumer Financial Protection. Pursuant to Section 1062(a), the Secretary of the Treasury has determined that the designated transfer date shall be July 21, 2011.See75 FR 57252 (Sept. 20, 2010). Accordingly, because Section 1100E will become effective on July 21, 2011, this final rule will be effective on that date. However, if the Secretary of Treasury designates a later transfer date pursuant to Section 1062, this final rule will instead be effective on that date.

Consumer group commenters argued that, because Section 1100E placed creditors on notice of the increased threshold amount, creditors should be required to begin complying with all aspects of the Board's rule on July 21, 2011. In contrast, one industry commenter requested that the Board delay compliance by one year (i.e.,until July 21, 2012). This commenter asserted that—in light of the extensive regulatory changes required by the Dodd-Frank Act and other statutes—it would be burdensome for small institutions to comply with Regulation Z for credit extensions and firm commitments of $50,000 or less by July 21, 2011. However, the Board understands that institutions that extend consumer credit generally already have the systems in place to comply with Regulation Z. Thus, as a general matter, it should not be unduly burdensome for these institutions to comply with Regulation Z with respect to accounts opened after July 21, 2011. Nevertheless, as discussed in detail below with respect to the transition rule in § 226.3(b)(2), the Board believes it is appropriate to provide additional time for compliance with respect to certain exempt accounts opened prior to July 21, 2011.

TILA mandates that the Board prescribe regulations to carry out TILA's purposes and specifically authorizes the Board, among other things, to do the following:

• Issue regulations that contain such classifications, differentiations, or other provisions, or that provide for such adjustments and exceptions for any class of transactions, that in the Board's judgment are necessary or proper to effectuate the purposes of TILA, facilitate compliance with that Act, or prevent circumvention or evasion. 15 U.S.C. 1604(a).

• Exempt from all or part of TILA any class of transactions if the Board determines that TILA coverage does not provide a meaningful benefit to consumers in the form of useful information or protection. The Board must consider factors identified in TILA and publish its rationale at the time it proposes an exemption for comment. 15 U.S.C. 1604(f).

For the reasons discussed below, the Board believes that it is necessary and appropriate to make amendments to Regulation Z in order to effectuate the purposes of TILA, to prevent circumvention, and to facilitate compliance.

Section 226.3(b) of Regulation Z implements the exemption for certain consumer credit transactions in TILA Section 104(3). Specifically, § 226.3(b) currently provides that Regulation Z does not apply to an extension of credit in which the amount financed exceeds $25,000 or in which there is an express written commitment to extend credit in excess of $25,000, unless: (1) The extension of credit is secured by real property, or by personal property used or expected to be used as the principal dwelling of the consumer; or (2) the extension of credit is a private education loan (as defined in § 226.46(b)(5)). Section 1100E(a)(1) of the Dodd-Frank Act increases the dollar amount of the exemption threshold in TILA Section 104(3) from $25,000 to $50,000. Furthermore, Section 1100E(b) requires that this amount be adjusted annually for inflation. Accordingly, the Board is amending § 226.3(b) and the accompanying commentary to implement Section 1100E.

The Board proposed to redesignate current § 226.3(b) as § 226.3(b)(1)(i) and add a new § 226.3(b)(1)(ii) to provide that the threshold amount will be adjusted annually to reflect any annual percentage increase in the CPI-W.1 Because the threshold amount could change from year to year, § 226.3(b)(1)(i) refers to the “applicable threshold amount,” rather than stating a specific amount.2 Instead, new § 226.3(b)(1)(ii) provides that the threshold amount applicable to a specific extension of credit or express written commitment to extend credit is listed in the official staff commentary. The Board also proposed to amend § 226.3(b) to require that, in order for an account to be exempt based on an initial extension of credit, the amount of creditextended(rather than the amountfinanced) must exceed the applicable threshold amount.

One industry commenter requested that the Board only increase the exemption threshold amount to $50,000 without making subsequent annual adjustments for inflation. The Board believes that such an approach would be inconsistent with Section 1100E(b), which requires that the exemption threshold amount be adjusted annually based on increases in the CPI-W.

Consumer groups and a member of Congress requested that the Board amend § 226.3(b) to eliminate the exemption for accounts with an express written commitment (or firm commitment) to extend credit in excess of the threshold amount. These commenters noted that TILA Section 104(3) does not provide a firm commitment exemption. Furthermore, they expressed concern that a credit card account with a credit limit that exceeds the threshold amount would be exempt from TILA and therefore from the consumer protections in the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit Card Act), which amended TILA.

For purposes of obtaining an exemption, Regulation Z has treated acreditor's firm commitment to extend credit in excess of the threshold amount as the functional equivalent of an extension of credit in excess of that amount since the 1980s. As a result, creditors ranging from large financial institutions to small community banks and credit unions have been relying on this exemption for more than twenty years. Section 1100E did not repeal the firm commitment exemption, and the Board's December 2010 Regulation Z Proposed Rule did not request comment on whether the exemption should be eliminated. Thus, if the Board were to eliminate this exemption, it would do so without the benefit of public comment regarding the operational burden on creditors and the effect on the cost and availability of credit for consumers. For these reasons, this final rule retains the firm commitment exemption.3

The Board also notes that a credit card account is not exempt from TILA and the Credit Card Act simply because the credit card issuer sets the credit limit on the account above the threshold amount. Instead, as discussed in detail below, an open-end account does not qualify for an exemption based on a firm commitment unless the creditor makes an express commitment in writing to extend a total amount of credit that exceeds the threshold amount. Furthermore, the creditor must honor transactions up to the committed amount without requiring additional credit information (although creditors are permitted to, for example, verify the value of collateral before making an extension and perform periodic reviews of the consumer's creditworthiness).4 Thus, unless a credit card issuer can satisfy these requirements, a credit card account with a credit limit above the threshold amount does not qualify for a firm commitment exemption and is subject to TILA and the Credit Card Act.

The member of Congress also suggested that, for accounts that are exempt based on an initial extension of credit, the Board require a creditor to begin to comply with Regulation Z if, at any point in time during the life of the account, the outstanding balance does not exceed the threshold amount. He argued this approach would be consistent with TILA Section 104(3), which refers to “the total amount financed.” Because, however, the balance on an account will almost always fall below the threshold amount as it is repaid, the Board is concerned that this approach would be contrary to the purpose of TILA Section 104(3) because it would effectively prevent any account from remaining exempt based on an initial extension of credit above the threshold. Furthermore, the Board believes that conditioning the exemption on the amount of credit extended—and not the amount financed—promotes consumer understanding.5

Therefore, in order to effectuate the purposes of TILA and to facilitate compliance, the Board uses its authority under TILA Section 105(a) to adopt § 226.3(b)(1) as proposed, with non-substantive revisions to its headings. 15 U.S.C. 1604(a). As discussed below, the Board is also revising and reorganizing the commentary to § 226.3(b).

The Board proposed a new comment 3(b)-1 listing the threshold amounts in effect for specific periods of time.6 In particular, the proposed comment clarified that, prior to July 21, 2011, the threshold amount is $25,000 and that, from July 21, 2011 through December 31, 2011, the threshold amount will be $50,000. The proposed comment also clarified that the threshold amount will be adjusted effective January 1 of each year by any annual percentage increase in the CPI-W that was in effect on the preceding June 1.7 The comment will be amended to provide the threshold amount for the upcoming year after the annual percentage change in the CPI-W that was in effect on the previous June 1 becomes available. For example, after the annual percentage change in the CPI-W in effect on June 1, 2011 becomes available, comment 3(b)-1 will be amended to provide the threshold amount in effect beginning on January 1, 2012. The Board received only one comment regarding this approach, which stated that the proposed timeframe would provide adequate time for creditors to comply with any inflation adjustment in the threshold amount.

Proposed comment 3(b)-1 further clarified that any increase in the threshold amount will be rounded to the nearest $100 increment. For example, if the annual percentage increase in the CPI-W would result in a $950 increase in the threshold amount, the threshold amount will be increased by $1,000. However, if the annual percentage increase in the CPI-W would result in a $949 increase in the threshold amount, the threshold amount will be increased by $900. This approach is consistent with Section 1100E(b) of the Dodd-Frank Act, which provides that annual CPI-W adjustments should be “rounded to the nearest multiple of $100, or $1,000, as applicable.” The Board believes that Congress did not intend for an annual CPI-W adjustment to be rounded to the nearest $100 in some circumstances but to the nearest $1,000 in others, which could lead to anomalous results. Because $1,000 is itself a multiple of $100, the Board believes that this commentary clarifies the statutory language in a manner consistent with the intent of Section 1100E. The only comment the Board received on this aspect of the proposal supported the proposed clarification with respect to rounding. Accordingly, for the reasons discussed above, the Board is adopting comment 3(b)-1 as proposed.

Proposed comment 3(b)-2 provided guidance on the application of § 226.3(b)(1) to open-end credit accounts. Consistent with the existing commentary, proposed comment 3(b)-2.i clarified that an open-end account qualifies for exemption under § 226.3(b) (unless secured by any real property, or by personal property used or expected to be used as the consumer's principal dwelling) if either: (1) The creditor makes an initial extension of credit that exceeds the threshold amount; or (2) the creditor makes a firm written commitment to extend a total amount of credit in excess of the threshold amount with no requirement of additional credit information for any advances on the account (except as permitted from timeto time with respect to open-end accounts pursuant to § 226.2(a)(20)).

In addition, in order to provide certainty regarding the exemption status of an account, the Board proposed to clarify in comment 3(b)-2.i that the initial extension of credit or firm commitment must be made at account opening for purposes of determining whether an open-end account is exempt under § 226.3(b). Some industry commenters supported the requirement that a firm commitment to extend credit in excess of the threshold amount occur at account opening; however, other industry commenters specifically opposed this requirement with respect to initial extensions of credit. In particular, they argued that many consumers open an account in order to have access to credit at a future time and do not want an extension at account opening. In addition, some industry commenters argued that the proposed requirement would impose a significant compliance burden on creditors who offer open-end lines of credit associated with brokerage accounts, which are serviced on systems that cannot presently provide Regulation Z disclosures. They stated that these lines of credit are structured to be exempt under § 226.3(b) based on a contractual requirement that the initial extension of credit must exceed the applicable threshold amount, even if that extension does not occur at account opening.

Based on the comments and further consideration, the Board believes that it is not necessary to require that the initial extension of credit be made at account opening for purposes of § 226.3(b). Instead, the Board has revised comment 3(b)-2.i to clarify that an account is exempt under § 226.3(b) based on an initial extension of credit at or after account opening, provided that extension exceeds the threshold amount in effect at the time the extension is made. In addition to providing flexibility, this approach is consistent with Section 1100E of the Dodd-Frank Act because, regardless of when the account is opened, the initial extension of credit must exceed the threshold amount (as adjusted based on the CPI-W) that is in effect at the time the extension is made. Neither the Dodd-Frank Act nor TILA requires that the initial extension occur at account opening.

However, in order to ensure that consumers are fully protected, the final rule clarifies that, if a creditor makes an initial extension of credit after account opening that does not exceed the threshold amount in effect at the time the extension is made, the creditor must have satisfied all of the applicable requirements of Regulation Z from the date the account was opened (or earlier, if applicable). For example, assume that the threshold amount is $50,000 and that, after account opening, the creditor makes an initial extension of credit of $50,000 or less. In this circumstance, the account is not exempt and the creditor must have satisfied all of the applicable requirements of Regulation Z from the date the account was opened (or earlier, if applicable), including but not limited to the requirements of § 226.6 (account-opening disclosures), § 226.7 (periodic statements), § 226.52 (limitations on fees), and § 226.55 (limitations on increasing annual percentages rates, fees, and charges). Illustrative examples are provided. Comment 3(b)-2.i is otherwise adopted as proposed.

Proposed comment 3(b)-2.ii provided general guidance regarding circumstances in which an account that was exempt under § 226.3(b) no longer qualifies for an exemption. An account would cease to be exempt, for example, if a security interest is taken at a later time in any real property, or in the consumer's principal dwelling. Specifically, the comment clarified that a creditor must begin to comply with all of the applicable requirements of Regulation Z within a reasonable period of time after an account ceases to be exempt. For example, if an open-end account ceases to be exempt, the creditor must within a reasonable period of time provide the disclosures required by § 226.6 reflecting the current terms of the account and begin to provide periodic statements consistent with § 226.7.

Industry commenters, including trade associations representing credit unions and community banks, argued that the proposed guidance would impose significant operational difficulties and requested further clarification regarding creditors' responsibilities when an account no longer qualifies for an exemption under § 226.3(b). Consumer group commenters generally supported the proposed guidance, but requested that, to the extent that a creditor imposed charges that were inconsistent with Regulation Z while the account was exempt, the creditor be required to refund those charges once the exemption is lost.

In order to clarify the proposed guidance, the Board is revising comment 3(b)-2.ii to state that, once an exempt account ceases to be exempt, the applicable requirements of Regulation Z apply prospectively to any balances on the account. For example, if a credit card account under an open-end (not home-secured) consumer credit plan ceases to be exempt, the protections in § 226.55 generally prevent the card issuer from increasing the rate that applies to the account's existing balance, even if that balance consists of transactions that occurred while the account was exempt. The Board further clarifies, however, that the creditor is not required to comply with the requirements of Regulation Z retroactively for the period of time during which the account was exempt. Thus, for example, a creditor is not required to refund amounts charged during the period the account was exempt or to provide disclosures regarding transactions or changes in account terms that occurred during that period. Finally, because the Board understands that many creditors voluntarily comply with Regulation Z for exempt accounts, the final rule clarifies that, if a creditor provided disclosures consistent with the requirements of Regulation Z while the account was exempt (including account-opening disclosures consistent with § 226.6 and change-in-terms notices consistent with § 226.9), the creditor is not required to provide the disclosures required by § 226.6 reflecting the current terms of the account if the account ceases to be exempt.

Proposed comment 3(b)-2.iii addressed the effect of subsequent changes when an open-end account is exempt under § 226.3(b) based on an initial extension of credit. The comment clarified that, if a creditor makes an initial extension of credit that exceeds the threshold amount in effect at that time, the account remains exempt under § 226.3(b) regardless of a subsequent increase in the threshold amount as a result of an increase in the CPI-W. Furthermore, in these circumstances, the account remains exempt even if there are no further extensions of credit, subsequent extensions of credit do not exceed the threshold amount, the account balance is subsequently reduced below the threshold amount (such as through repayment of the extension), or the credit limit for the account is subsequently reduced below the threshold amount. Comment 3(b)-2.iii also clarified that, if the initial extension of credit on an account does not exceed the threshold amount in effect at the time of the extension, the account will not become exempt under § 226.3(b) even if the account balance later exceeds the threshold amount (for example, due to the subsequent accrual of interest).

Industry commenters generally supported the Board's proposal. Although one industry commenter requested that an account becomeexempt once the total amount of the transactions on the account exceeds the threshold, the Board does not believe that this approach would be consistent with the intent of TILA Section 104(3). Accordingly, the Board is adopting comment 3(b)-2.iii as proposed with revisions for clarity and consistency.

Proposed comment 3(b)-2.iv addressed the effect of subsequent changes when an open-end account is exempt under § 226.3(b) based on a firm commitment to extend credit, rather than an initial extension of credit. In particular, proposed comment 3(b)-2.iv.A clarified that if the firm commitment does not exceed the threshold amount, the account is not exempt under § 226.3(b) even if the account balance later exceeds the threshold amount (for example, due to the subsequent accrual of interest). In addition, the proposed comment stated that, in order for an open-end account to remain exempt under § 226.3(b) based on a firm commitment, the amount of the firm commitment must continue to exceed the threshold amount currently in effect, as adjusted annually. Thus, in order for an account to remain exempt under the proposed rule, a creditor could not reduce its firm commitment below the threshold amount currently in effect and would have been required to increase its firm commitment when it no longer exceeded the threshold amount due to increases in the threshold as a result of increases in the CPI-W.

Trade associations representing credit unions and community banks opposed the proposed requirement that, in order for an account to remain exempt based on a firm commitment, the amount of the commitment must continue to exceed the threshold amount currently in effect. These commenters argued that the continuous monitoring of such accounts would impose significant operational costs and compliance burdens, particularly on small institutions. Several industry commenters requested the Board clarify that if an account is exempt based on a firm commitment in excess of the threshold amount at account opening, the account will remain exempt regardless of subsequent increases in the threshold amount as a result of inflation. In addition, some industry commenters argued that the account should remain exempt even if the creditor reduces the firm commitment below the applicable threshold amount. One industry commenter, however, noted that creditors frequently renew lines of credit and that the amount of firm commitment is rarely reduced before renewal. This commenter requested that the Board provide additional flexibility to creditors when the consumer requests a reduction in the firm commitment amount.

As discussed above, consumer groups and a member of Congress requested that the Board eliminate the firm commitment exemption. In the alternative, consumer group commenters urged the Board to adopt the proposed requirement that the firm commitment continue to exceed the threshold amount.

Based on the comments and further analysis, the Board is revising proposed comment 3(b)-2.iv.A in order to ease some of the compliance burden for creditors, while retaining protections against circumvention. As discussed below with respect to the transition rule in § 226.3(b)(2), all creditors that currently rely on the firm commitment exemption must review their accounts and either increase their firm commitments to more than $50,000 by December 31, 2011 or begin to comply with Regulation Z. Although this requirement will impose a one-time burden on creditors, the Board believes that, because Section 1100E of the Dodd-Frank Act was intended to expand TILA's coverage to transactions involving higher dollar amounts, it would be inconsistent with that intent to allow existing accounts to remain exempt based on firm commitments of less than $50,000. In contrast, however, the Board does not believe it would be appropriate to require creditors to continually review and adjust accounts that are exempt based on a firm commitment due to any incremental CPI-W increases in the threshold amount. In particular, the Board notes that, for smaller institutions with limited resources, the burden of monitoring the firm commitment amount in accordance with annual increases in the threshold amount is likely to be significant. In some cases, the Board understands that small institutions would have to conduct this review manually. Accordingly, the Board has revised comment 3(b)-2.iv.A to clarify that if a creditor makes a firm commitment at account opening to extend a total amount of credit that exceeds the threshold amount in effect at that time, the open-end account remains exempt under § 226.3(b) regardless of a subsequent increase in the threshold amount as a result of an increase in the CPI-W. For example, if the applicable threshold amount is $50,000 and an account is exempt at account opening based on a firm commitment of $55,000, the account remains exempt even if the threshold amount subsequently increases to $56,000 as a result of increases in the CPI-W.

However, in order to prevent circumvention, the Board is adopting the proposed guidance in comment 3(b)-2.iv.A with respect to a reduction in a firm commitment. Accordingly, the revised comment clarifies that if a creditor reduces a firm commitment, the account ceases to be exempt unless the reduced firm commitment exceeds the threshold amount in effect at the time of the reduction. For example, if the applicable threshold amount is $56,000 and a $60,000 firm commitment on an exempt account is reduced to $52,000, the account no longer qualifies for an exemption based on the firm commitment. However, if the firm commitment on the exempt account is reduced to $58,000, the account remains exempt because the firm commitment still exceeds the threshold amount in effect at the time of the reduction. This guidance applies to any reduction in the firm commitment, whether upon the creditor's initiative or the borrower's request. The Board believes that the final rule does not impose any unwarranted monitoring burden in these circumstances because the creditor presumably would review the account in order to determine whether to reduce the firm commitment.

Proposed comment 3(b)-2.iv.B clarified that when an open-end account no longer qualifies for an exemption under § 226.3(b) based on a firm commitment, the creditor would not be required to begin complying with Regulation Z if it permitted the consumer to repay any outstanding balance on the account consistent with the account terms without providing additional extensions of credit. This guidance was based on the Board's concern that, if an account ceased to be exempt, the creditor would close the account and require the consumer to repay the outstanding balance rather than begin to comply with Regulation Z. Consumer group commenters opposed adoption of this guidance, arguing that creditors should be required to comply with Regulation Z in these circumstances. In addition, an industry trade association stated that creditors generally comply with Regulation Z even if an account qualifies for an exemption under § 226.3(b). Based on these comments and further analysis, the Board believes that this guidance is not necessary. Furthermore, as discussed above, the Board has revised comment 3(b)-2.ii to provide additional guidance and flexibility for accounts that no longer qualify for an exemption under § 226.3(b). Accordingly, the finalrule does not adopt proposed comment 3(b)-2.iv.B.

Finally, proposed comment 3(b)-2.iv.C addressed circumstances in which an account qualifies for a § 226.3(b) exemption at account opening based on a firm commitment and the creditor subsequently makes an initial extension of credit that exceeds the applicable threshold amount. The comment clarified that, in these circumstances, the account qualifies for a § 226.3(b) exemption based on the initial extension of credit if that extension is a single advance exceeding the threshold amount at the time of the extension. As a result, the account would remain exempt under § 226.3(b) even if the firm commitment is subsequently reduced below the threshold amount. For example, assume that, at account opening on January 1 of year one, the threshold amount in effect is $50,000 and the account is exempt under § 226.3(b) based on the creditor's firm commitment to extend $53,000 in credit. On July 1 of year one, the consumer uses the account for an initial extension of $52,000, which is taken in a single advance. As a result of this extension of credit, the account remains exempt under § 226.3(b) even if, after July 1, the creditor reduces the firm commitment to $50,000 or less.

One industry commenter suggested that the Board permit accounts to qualify for an exemption in these circumstances based on multiple advances that, in total, exceed the applicable threshold amount, instead of a single, initial advance. For consistency with the guidance in revised comment 3(b)-2.i, the Board declines to adopt this suggestion. Therefore, comment 3(b)-2.iv.C is renumbered as comment 3(b)(2)-2.iv.B for organizational purposes and otherwise adopted as proposed, with non-substantive revisions for clarity and consistency.

Proposed comment 3(b)-3 provided guidance on the application of § 226.3(b)(1) to closed-end loans. Specifically, comment 3(b)-3.i clarified that a closed-end loan is exempt under § 226.3(b) in either of two circumstances (unless the extension of credit is secured by any real property, or by personal property used or expected to be used as the consumer's principal dwelling; or is a private education loan as defined in § 226.46(b)(5)).

First, the comment clarified that a closed-end loan would be exempt if the creditor makes an extension of credit at consummation that exceeds the threshold amount in effect at the time of consummation. In these circumstances, the loan remains exempt under § 226.3(b) even if the amount owed is subsequently reduced below the threshold amount, such as through repayment.

Second, the comment clarified that a closed-end loan would be exempt if the creditor makes a loan commitment at consummation to extend a total amount of credit in excess of the threshold amount in effect at the time of consummation. The comment further clarified that, in these circumstances, the loan remains exempt under § 226.3(b) even if the total amount of credit actually extended does not exceed the threshold amount.8 This guidance addressed loan commitments for closed-end credit with terms that provide for scheduled advances or advances at the consumer's option, where the total amount of credit ultimately drawn may be less than the original loan commitment on which the exemption was based.

Proposed comment 3(b)-3.ii provided guidance on the effect of subsequent changes to a closed-end loan or loan commitment or to the threshold amount. Specifically, the comment clarified that, if a creditor makes an extension of credit or loan commitment to extend credit that exceeds the threshold amount in effect at the time of consummation, the closed-end loan remains exempt under § 226.3(b) regardless of a subsequent increase in the threshold amount, such as an increase as a result of Section 1100E or an increase in the CPI-W. In addition, the proposed comment incorporated existing guidance regarding the refinancing of an exempt closed-end loan. Consumer groups and one industry commenter generally supported the proposed comment. Accordingly, the Board is adopting comment 3(b)-3 as proposed with non-substantive revisions for clarity.

Proposed comment 3(b)-4 provided guidance when a security interest in any real property, or in personal property used or expected to be used as the consumer's principal dwelling, is added to an existing account or loan that is exempt under § 226.3(b). The proposed comment incorporated guidance from current comments 3(b)-2.ii and 3(b)-3 with respect to open-end credit and closed-end credit, respectively. The Board did not receive substantive comments on proposed comment 3(b)-4, which is adopted as proposed with non-substantive revisions for clarity.

Proposed comment 3(b)-5 incorporated the guidance currently provided in comment 3(b)-1 regarding credit extensions secured by mobile homes. Specifically, this comment clarified that the exemption in § 226.3(b) does not apply to a credit extension secured by a mobile home used or expected to be used as the principal dwelling of the consumer. The only comment to address this guidance supported adoption of the proposal. Accordingly, the Board is adopting comment 3(b)-5 as proposed.

The Board proposed to add a new § 226.3(b)(2) in order to address transition issues related to open-end accounts that are exempt under current § 226.3(b) but may not be exempt under the revised threshold. Specifically, proposed § 226.3(b)(2) provided that an open-end account that is exempt under § 226.3(b) on July 20, 2011 based on an extension of credit in excess of $25,000 or an express written commitment to extend credit in excess of $25,000 remains exempt until July 21, 2012. However, the account would cease to be exempt under § 226.3(b)(2) if the creditor takes a security interest in any real property, or in personal property used or expected to be used as the consumer's principal dwelling; or if the creditor reduces any express written commitment to extend credit to $25,000 or less. Section 226.3(b)(2) was proposed pursuant to the Board's authority under TILA Section 105(a) to make adjustments that are necessary to effectuate the purposes of, and to facilitate compliance with, TILA. 15 U.S.C. 1604(a).

The Board understands that many creditors currently choose to comply with Regulation Z in circumstances where the initial extension or firm commitment exceeds $25,000. For example, the Board understands that creditors offering closed-end automobile loans typically provide Regulation Z disclosures regardless of the amount of the loan. However, because some currently exempt open-end credit accounts may be serviced on systems that cannot presently provide Regulation Z disclosures, the Board proposed a transition period in order to provide additional flexibility and facilitate compliance with the revisions to § 226.3(b).

In particular, the Board noted that this concern exists with respect to certain open-end lines of credit associated with brokerage accounts that are serviced on systems that cannot currently provideRegulation Z disclosures.9 Industry commenters indicated that creditors offering this type of product would generally be able to comply with the increased threshold amount on July 21, 2011 by requiring that any initial extensions of credit on or after that date exceed $50,000; however, they requested that the Board delay the mandatory compliance date for the proposed requirement that an initial extension of credit occur at account opening. As discussed above, the Board is revising its commentary to clarify that the initial extension of credit on an open-end account is not required to occur at account opening for purposes of § 226.3(b). Therefore, with respect to accounts that are exempt based on an initial extension of credit, the Board believes additional compliance time is not required. Accordingly, the Board is not adopting the proposed transition rule for these accounts.

However, the Board believes that it is appropriate to provide creditors that are currently relying on a firm commitment exemption with additional time to adjust to the increase in the threshold amount from $25,000 to $50,000 pursuant to Section 1100E. As noted above, the Board believes that it would be inconsistent with the intent of Section 1100E to permit accounts to remain exempt based on firm commitments to extend more than $25,000 (but less than $50,000) in credit. Thus, in order to comply with the final rule, creditors must review all accounts that are currently exempt based on a firm commitment and, to the extent the commitment does not exceed $50,000, either increase the commitment or begin to comply with Regulation Z. Industry commenters argued that this task would be burdensome (particularly for small institutions) and requested additional time to comply. However, as noted above, consumer group commenters opposed providing any additional time for compliance.

Based on the comments and further analysis, the Board believes it is appropriate to provide additional time for creditors who currently rely on the firm commitment exemption to make the necessary adjustments to comply with the one-time increase from $25,000 to $50,000; however, the Board does not believe that the proposed one-year transition period is necessary because the Board understands that these creditors generally have the systems and procedures in place to comply with Regulation Z. Accordingly, as adopted in the final rule, § 226.3(b)(2) provides that an open-end account that is exempt on July 20, 2011 based on an express written commitment to extend credit in excess of $25,000 generally remains exempt until December 31, 2011. The Board believes that this will provide creditors with sufficient time to review their accounts and make the necessary adjustments.

The Board is revising proposed comment 3(b)-6 to provide guidance regarding the application of revised § 226.3(b)(2). In particular, the comment clarifies that if, on July 20, 2011, an open-end account is exempt under § 226.3(b) based on a firm commitment to extend credit in excess of $25,000, the account generally remains exempt under § 226.3(b)(2) until December 31, 2011 (unless the firm commitment is reduced to $25,000 or less). If the firm commitment is increased on or before December 31, 2011 to an amount in excess of $50,000, the account remains exempt under § 226.3(b)(1) regardless of subsequent increases in the threshold amount as a result of increases in the CPI-W. If the firm commitment is not increased on or before December 31, 2011 to an amount in excess of $50,000, the account ceases to be exempt under the § 226.3(b) based on a firm commitment. Furthermore, comment 3(b)-6 clarifies that § 226.3(b)(2) applies only to open-end accounts opened prior to July 21, 2011 and does not apply if a security interest is taken in any real property, or in personal property used or expected to be used as the consumer's principal dwelling.

The Regulatory Flexibility Act (5 U.S.C. 601et seq.) (RFA) generally requires an agency to perform an initial and a final regulatory flexibility analysis on the impact a rule is expected to have on small entities. However, under section 605(b) of the RFA, the regulatory flexibility analysis otherwise required under section 604 of the RFA is not required if an agency certifies, along with a statement providing the factual basis for such certification, that the rule will not have a significant economic impact on a substantial number of small entities. The Board has prepared the following final regulatory flexibility analysis pursuant to section 604 of the RFA.

Based on its initial and final analyses and for the reasons stated below, the Board believes that this final rule will not have a significant economic impact on a substantial number of small entities.

1.Statement of the need for, and objectives of, the final rule.The final rule implements Section 1100E of the Dodd-Frank Act, which increases the threshold for consumer credit transactions exempt under TILA from $25,000 to $50,000. Section 1100E also provides that this threshold shall be adjusted annually to reflect any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The supplementary information above describes in detail the reasons, objectives, and legal basis for each component of the final rule.

2.Summary of the significant issues raised by public comment on Board's initial analysis, the Board's assessment of such issues, and a statement of any changes made as a result of such comments.An industry group representing credit unions requested that, in order to reduce regulatory burden, the Board provide additional guidance regarding the types of records that institutions are required to retain in order to demonstrate compliance with Regulation Z. Section 226.25 states that creditors must retain “evidence of compliance with this regulation (other than advertising requirements under sections 226.16 and 226.24) for two years after the date disclosures are required to be made or action is required to be taken.” Comment 25-2 clarifies that “[a]dequate evidence of compliance does not necessarily mean actual paper copies of disclosure statements or other business records.” Instead, “[t]he evidence may be retained on microfilm, microfiche, or by any other method that reproduces records accurately (including computer programs).” Furthermore, “[t]he creditor need retain only enough information to reconstruct the required disclosures or other records. Thus, for example, the creditor need not retain each open-end periodic statement, so long as the specific information on each statement can be retrieved.”

Because the current regulation and commentary provide creditors with considerable flexibility regarding the retention of records, the Board is concerned that adopting a more specific set of requirements (such as a list of documents that creditors must retain) could increase regulatory burden, rather than reducing it. Furthermore, because the Board did not propose any amendments to the record retention requirements in § 226.25, any revisions to those requirements would not have the benefit of input from the public, including small institutions. Accordingly, the final rule does not alter the requirements of § 226.25.

3.Small entities affected by the final rule.All creditors that offer closed-end or open-end consumer credit extensions that exceed $25,000 but do not exceed $50,000, as adjusted annually to reflect increases in the CPI-W, would be affected by the final rule. Based on 2010 call report data, the Board estimates that there are approximately 4,360 banks and thrifts with assets of $175 million or less and 6,655 credit unions with assets of $175 million or less, that would be required to comply with the Board's final rule. The Board acknowledges, however, that the total number of small entities likely to be affected by the final rule is unknown, in part because Regulation Z has broad applicability to individuals and businesses that extend even small amounts of consumer credit. In addition, it is unclear how many of these small entities currently do not have systems in place to comply with Regulation Z because they only extend credit in excess of $25,000. It is also unclear how many of those entities will choose to engage in consumer credit transactions between $25,000 and $50,000, as opposed to only making loans above the new threshold.

4.Recordkeeping, reporting, and compliance requirements.The final rule imposes new recordkeeping, reporting, and compliance requirements under Regulation Z on creditors that extend consumer credit in amounts that exceed $25,000 but do not exceed $50,000, as adjusted annually to reflect increases in the CPI-W. The Board understands that small entities that offer consumer credit generally have systems in place to comply with Regulation Z for extensions of credit of $25,000 or less. The Board notes that the precise costs to small entities to provide Regulation Z disclosures to accounts with consumer credit extensions of more than $25,000 but not more than $50,000, and the costs of updating their systems to comply with the final rule, are difficult to predict. These costs would depend on a number of factors that are unknown to the Board, including, among other things, the specifications of the current systems used by such entities to prepare and provide disclosures and administer accounts, the complexity of the terms of the products that they offer, and the range of such product offerings. One industry commenter noted that the Board's rule could impose operational burden on smaller institutions with respect to open-end accounts exempt prior to July 21, 2011. The Board, however, has revised the rule to provide creditors, particularly smaller institutions, with additional flexibility to ease compliance burden.

This subsection summarizes several of the final amendments to Regulation Z and their likely impact on small entities. More information regarding these and other changes can be found in IV. Section-by-Section Analysis.

On July 21, 2011, the amendments to § 226.3(b)(1)(i) and its accompanying commentary raise the threshold for exempt consumer credit transactions from $25,000 to $50,000. For accounts which do not qualify for the exemption under the new threshold, creditors that are small entities are required to comply with all applicable Regulation Z requirements. The Board anticipates that creditors that are small entities, with some additional burden, will service accounts which do not meet the increased threshold for exemption on the same systems in place for non-exempt accounts. Furthermore, the Board understands that some creditors that are small entities generally do not rely on the exemption in § 226.3(b) and comply with Regulation Z regardless of the amount of the credit extension. Therefore, the Board does not anticipate significant additional burden on small entities by raising the exemption threshold dollar amount.

Under § 226.3(b)(1)(ii), the threshold amount must be adjusted annually by any annual percentage increase in the CPI-W. To the extent creditors that are small entities rely on the exemption under § 226.3(b), § 226.3(b)(1)(ii) requires those creditors to establish processes and alter their systems in order to comply with the provision. The cost of such changes would depend on the size of the institution and the composition of its portfolio. The Board anticipates that creditors that are small entities, with some additional burden, will service accounts which do not or may not meet the applicable threshold for exemption on the same systems in place for non-exempt accounts. In addition, as noted above, the Board understands that many creditors that are small entities generally comply with Regulation Z regardless of the amount of the credit extension. Furthermore, as discussed above, the Board has revised the proposed rule to reduce the monitoring burden for small entities that rely on the firm commitment exemption. As a result, the Board does not anticipate significant additional burden on small entities by adjusting the exemption threshold dollar amount annually for inflation.

Section 226.3(b)(2) addresses circumstances where certain previously exempt open-end accounts would cease to qualify for an exemption based on a firm commitment on July 21, 2011 under the revised threshold amount. Under § 226.3(b)(2), these accounts would have until December 31, 2011 to comply with the revised threshold amount in effect at that time ($50,000). Therefore, the Board has reduced the burden on small entities that rely on the firm commitment exemption by providing additional time to comply with the final rule.

Accordingly, the Board believes that, in the aggregate, the provisions of its final rule would not have a significant economic impact on a substantial number of small entities.

5.Significant alternatives to the revisions.The provisions of the final rule would implement the statutory requirements of the Dodd-Frank Act, which establish new threshold requirements for exempt consumer credit transactions. As discussed above in the supplementary information, the Board has revised the proposed rule to reduce the compliance burden for small entities and to provide small entities with additional time to come into compliance, while effectuating the statute in a manner that is beneficial to consumers.

In accordance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3506; 5 CFR part 1320 Appendix A.1), the Board reviewed the final rule under the authority delegated to the Board by the Office of Management and Budget (OMB). In addition, as permitted by the PRA, the Board extends for three years the current recordkeeping and disclosure requirements in connection with Regulation Z. The collection of information that is required by this final rule is found in 12 CFR part 226. The Board may not conduct or sponsor, and an organization is not required to respond to, this information collection unless the information collection displays a currently valid OMB control number. The OMB control number is 7100-0199.

This information collection is required to provide benefits for consumers and is mandatory (15 U.S.C. 1601et seq.). The respondents/recordkeepers are creditors and other entities subject to Regulation Z, including for-profit financial institutions, small businesses, and institutions of higher education. TILA and Regulation Z are intended to ensure effective disclosure of the costs and terms of credit to consumers. For open-end credit, creditors are required to, among other things, disclose information about the initial costs and terms and to provide periodicstatements of account activity, notices of changes in terms, and statements of rights concerning billing error procedures. Regulation Z requires specific types of disclosures for credit and charge card accounts and for home-equity plans. For closed-end loans, such as mortgage and installment loans, cost disclosures are required to be provided prior to consummation. Special disclosures are required in connection with certain products, such as reverse mortgages, certain variable-rate loans, and certain mortgages with rates and fees above specified thresholds. TILA and Regulation Z also contain rules concerning credit advertising. Creditors are required to retain evidence of compliance for 24 months (§ 226.25), but Regulation Z does not specify the types of records that must be retained.

Under the PRA, the Board accounts for the paperwork burden associated with Regulation Z for the state member banks and other creditors supervised by the Board that engage in lending covered by Regulation Z and, therefore, are respondents under the PRA. Appendix I of Regulation Z defines the Board-regulated institutions as: state member banks, branches and agencies of foreign banks (other than federal branches, federal agencies, and insured state branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act. Other federal agencies account for the paperwork burden on other entities subject to Regulation Z. To ease the burden and cost of compliance with Regulation Z (particularly for small entities), the Board provides model forms, which are appended to the regulation.

The current total annual burden to comply with the provisions of Regulation Z is estimated to be 1,497,362 hours for the 1,138 institutions10 supervised by the Board that are deemed to be respondents for the purposes of the PRA.

On July 21, 2011, the amendments to § 226.3(b)(1)(i) and its accompanying commentary raise the threshold for exempt consumer credit transactions from $25,000 to $50,000. In addition, § 226.3(b)(1)(ii) requires that the threshold dollar amount be adjusted annually for inflation to reflect any annual percentage increase in the CPI-W. As a result, creditors will now be required to comply with Regulation Z requirements for certain accounts with extensions of consumer credit—or express written commitments to extend consumer credit—of more than $25,000 but not more than $50,000, as adjusted annually to reflect increases in the CPI-W.

The Board estimates that the final rule would impose a one-time increase in the total annual burden under Regulation Z. The 1,138 respondents would take, on average, 40 hours (one business week) to update their systems to comply with the requirements of Regulation Z for loans that are no longer exempt. This one-time revision would increase the burden by 45,520 hours. On a continuing basis, the Board estimates that 1,138 respondents would take, on average, 8 hours (one business day) annually to comply with the requirements of Regulation Z for loans that are no longer exempt and would increase the ongoing burden by 9,104 hours. Thus, the total annual burden is estimated to increase by 54,624 hours (from 1,497,362 to 1,551,986 hours) during the first year after the final rule is adopted. Thereafter, the ongoing total annual burden would be 1,506,466.11

The total burden increase represents averages for all respondents regulated by the Board. The Board expects that the amount of time required to implement each of the changes for a given financial institution or entity may vary based on the size and complexity of the respondent. Furthermore, the Board understands that many creditors voluntarily comply with Regulation Z for accounts that are currently exempt. Therefore, the estimated burden increase likely overstates the actual increase in burden for those creditors.

The other Federal financial institution supervisory agencies (the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS), the Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration (NCUA)) are responsible for estimating and reporting to OMB the total paperwork burden for the domestically chartered commercial banks, thrifts, and federal credit unions and U.S. branches and agencies of foreign banks for which they have primary administrative enforcement jurisdiction under TILA Section 108(a), 15 U.S.C. 1607(a). These agencies may, but are not required to, use the Board's methodology for estimating burden. Using the Board's method, the total current estimated annual burden for the approximately 16,200 domestically chartered commercial banks, thrifts, and federal credit unions and U.S. branches and agencies of foreign banks supervised by the Board, OCC, OTS, FDIC, and NCUA under TILA would be approximately 21,813,445 hours. The final rule would impose a one-time increase in the estimated annual burden by 648,000. On a continuing basis, the final rule would impose an increase in the estimated annual burden by 129,600. Thus, the total annual burden is estimated to increase by 777,600 hours to 22,591,045 hours during the first year after the final rule is adopted. Thereafter, the ongoing total annual burden would be 21,943,045. The above estimates represent an average across all respondents and reflect variations between institutions based on their size, complexity, and practices. As noted above, the estimated burden increase likely overstates the actual increase in burden because many creditors voluntarily comply with Regulation Z for exempt accounts.

The Board has a continuing interest in the public's opinion of the collection of information. Comments on the collection of information should be sent to Cynthia Ayouch, Acting Federal Reserve Board Clearance Officer, Division of Research and Statistics, Mail Stop 95-A, Board of Governors of the Federal Reserve System, Washington, DC 20551, with copies of such comments sent to the Office of Management and Budget, Paperwork Reduction Project (7100-0199), Washington, DC 20503.

For the reasons set forth in the preamble, the Board amends Regulation Z, 12 CFR part 226, as set forth below:

Effective March 1, 2011, FinCEN is reorganizing and moving its existing BSA regulations from 31 CFR part 103 to 31 CFR chapter X.See75 FR 65806, October 26, 2010. NCUA is amending provisions of its FCRA FACTA regulations (12 CFR part 717), including Appendix J to 12 CFR part 717, and BSA Compliance (12 CFR part 748) regulations to make minor, non-substantive technical amendments to conform the citations therein to FinCEN's reorganized BSA regulations.

NCUA's FCRA FACTA and BSA Compliance regulations currently cite to FinCEN's BSA regulations in 31 CFR part 103. Due to FinCEN's reorganization of its BSA regulations, these citations to 31 CFR part 103 in NCUA's regulations would become obsolete on March 1, 2011. To avoid this, the final rule amends NCUA's FCRA FACTA regulations (12 CFR 717.82(c)(2)(i)(A)), including Appendix J to 12 CFR part 717, Section III(a), and BSA Compliance regulations (12 CFR 748.1(c)(2)(ii) and (iii) and 748.2(a) and (b)(1) and (2)) to comport with FinCEN's reorganized BSA regulations at 31 CFR chapter X.

Under 5 U.S.C. 553(b)(B) of the Administrative Procedure Act (APA), an agency may, for good cause, find (and incorporate the finding and a brief statement of reasons therefore in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.

This final rule makes minor, non-substantive technical amendments to NCUA's FCRA FACTA and BSA Compliance regulations as described above, to conform certain citations to FinCEN's reorganized BSA regulations. Therefore, NCUA, for good cause, finds that the notice and comment procedures prescribed by the APA are unnecessary because the final rule makes technical amendments to citations without substantive change to the relevant provisions of 12 CFR parts 717 and 748.

The Regulatory Flexibility Act (RFA) does not apply to a rulemaking where a general notice of proposed rulemaking is not required. See 5 U.S.C. 603 and 604. As noted above under Administrative Procedure Act, NCUA has determined, for good cause, that it is unnecessary to publish a notice of proposed rulemaking for this final rule. Accordingly, the RFA's requirements relating to an initial and final regulatory flexibility analysis do not apply.

There are no information collection requirements in this final rule.

For the reasons discussed in theSUPPLEMENTARY INFORMATIONsection above, 12 CFR part 717 and 12 CFR part 748 are amended as follows:

Effective July 30, 2008, the Housing and Economic Recovery Act of 2008 (HERA), Public Law 110-289, 122 Stat. 2654, created FHFA as a new independent agency of the Federal Government, and transferred to FHFA the supervisory and oversight responsibilities of the Office of Federal Housing Enterprise Oversight (OFHEO) over the Federal National Mortgage Association, and the Federal Home Loan Mortgage Corporation (collectively, the Enterprises), the oversight responsibilities of the Finance Board over the Banks and the Office of Finance (OF) (which acts as the Banks' fiscal agent) and certain functions of the Department of Housing and Urban Development.See id.at section 1101, 122 Stat. 2661-62. FHFA is responsible for ensuring that the Enterprises and the Banks operate in a safe and sound manner, including that they maintain adequate capital and internal controls, that their activities foster liquid, efficient, competitive and resilient national housing finance markets, and that they carry out their public policy missions through authorized activities.See id.at section 1102, 122 Stat. 2663-64. The Enterprises, the Banks, and the OF continue to operate under regulations promulgated by OFHEO and the Finance Board until such regulations are superseded by regulations issued by FHFA.See id.at sections 1301, 1302, 1311, 1312, 122 Stat. 2794-95, 2797-98.

The twelve Banks are instrumentalities of the United States organized under the Federal Home Loan Bank Act (Bank Act).1 See12 U.S.C. 1423 and 1432(a). The Banks are cooperatives; only members of a Bank may purchase the capital stock of a Bank, and only members or certain eligible housing associates (such as state housing finance agencies) may obtain access to secured loans, known as advances, or other products provided by a Bank.See12 U.S.C. 1426(a)(4), 1430(a), and 1430b. Each Bank is managed by its own board of directors and serves the public interest by enhancing the availability of residential mortgage and community lending credit through its member institutions.See12 U.S.C. 1427. Any eligible institution (generally a federally insured depository institution or state-regulated insurance company) may become a member of a Bank if it satisfies certain criteria and purchases a specified amount of the Bank's capital stock.See12 U.S.C. 1424; 12 CFR part 1263.

COs, consisting of bonds and discount notes, are the principal funding source for the Banks. Although each Bank is primarily liable for the portion of COs corresponding to the proceeds received by that Bank, each Bank is also jointly and severally liable with the other eleven Banks for the payment of principal and interest on all COs.See12 CFR 966.9. In addition to issuing COs, the Banks are authorized to raise funds and incur liabilities by accepting deposits from members, other Banks and instrumentalities of the United States, purchasing Federal funds and entering into repurchase agreements.See12 CFR 965.2.

Prior to June 2000, COs had for many years been issued on behalf of the Banks by the Finance Board, as the Banks' regulator, under authority in section 11(c) of the Bank Act. Until the passage of HERA, section 11(c) of the Bank Act authorized the Banks' regulator to issue bonds which were the joint and several obligations of all the Banks.See12 U.S.C. 1431(c)(2007).

In June 2000, the Finance Board published a final rule which altered how COs were issued and transferred authority for issuance of the Bank COs to the Banks pursuant to authority under section 11(a) of the Bank Act.See65 FR 36290 (June 7, 2000) (adoptingamong other parts 12 CFR parts 966 and 985). Section 11(a) of the Bank Act allows each Bank to issue debt subject to any conditions and requirements established by the Banks' regulator.See12 U.S.C. 1431(a). Under the rules published in June 2000, the Banks were allowed to issue debt subject to requirements that all such debt be the joint and several obligations of all twelve Banks and be issued through the OF as their agent.See12 CFR 966.2(b). The Finance Board retained the option to issue COs itself under section 11(c) of the Bank Act at any point, although it did not do so.See12 CFR 966.2(a).

In 2008, HERA amended section 11 of the Bank Act to remove the authority of the regulator to issue COs and to allow the Banks to issue such debt through OF as the Banks' agent.Seesection 1204(3), Public Law 110-289, 122 Stat. 2786. As a consequence, the Banks are now able to issue COs pursuant to section 11(c) of the Bank Act on which the Banks are jointly and severally liable by statute.2

On November 8, 2010, FHFA published a proposed rule that would amend its regulations to reflect the changes to the CO provisions and make other organizational and conforming changes to the rules dealing with COs and Bank liabilities.SeeProposed Rule: Federal Home Loan Bank Liabilities, 75 FR 68534 (Nov. 8, 2010). FHFA is now adopting these rule changes. These amendments to FHFA regulations, however, will affect neither current operations and processes for issuing COs nor the Banks' joint and several liability for payment of principal and interest on outstanding COs.

Section 1201 of HERA requires the Director, when promulgating regulations relating to the Banks, to consider the following differences between the Banks and the Enterprises: cooperative ownership structure; mission of providing liquidity to members; affordable housing and community development mission; capital structure; and joint and several liability.Seesection 1201 Public Law 110-289, 122 Stat. 2782-83 (amending12 U.S.C. 4513). Section 1201 specifically provides, however, that its requirements shall not apply if the Director is reissuing any regulation, advisory document or examination guidance previously issued by the Finance Board. This rule falls within that exception because FHFA is reissuing previous Finance Board regulations (including the related Finance Board interpretation of its rules with respect to the prohibition on the direct placement of COs), updated only as necessary to conform with statutory changes made by HERA. Nevertheless, as noted in the preamble to the proposed rule, FHFA considered the differences between the Banks and the Enterprises as they relate to the above factors in developing the proposal. 75 FR at 68535. FHFA also requested comments from the public about whether differences related to these factors should have resulted in any revisions to the proposal, but no specific comments were received in response to that request.

FHFA proposed amending existing regulations previously adopted by the Finance Board that address COs to reflect changes made by HERA to section 11 of the Bank Act.See75 FR at 68536-537. At the same time, FHFA proposed combining the CO regulations with related regulations addressing Banks' authorized sources of funds, deposits from Bank members and book-entry procedures for COs into a single new part 1270 of the FHFA regulations. As proposed, most of these existing Finance Board provisions would have been carried over to new part 1270 without change, other than for certain necessary technical and conforming changes.Id.

In the preamble to the proposed rule, FHFA also noted that section 939A of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requires federal agencies to review regulations that require the use of an assessment of the credit-worthiness of a security or money market instrument, or any references to, or requirements in, such regulations regarding credit ratings issued by nationally recognized statistical rating organizations (NRSROs), and to remove such references or requirements.See id.(citingsection 939A, Public Law 111-203, 124 Stat. 1376, 1887 (July 21, 2010)). FHFA further noted that the Dodd-Frank provision requires the agency to the extent feasible to adopt uniform standards of credit-worthiness in its regulations, taking into account the entities regulated by it and the purpose for which such regulated entities would rely on the credit-worthiness standard.Id.Because theproposed rule provisions carried over a number of references to or requirements based on credit ratings issued by NRSROs, FHFA requested comments on what credit-worthiness standards could be used in the Bank liability rule, and more generally across its regulations, to replace these references or requirements.

FHFA received five comments on the proposed rule. The comments mainly responded to FHFA's request for information on potential standards to replace regulatory references or requirements that cite credit ratings. Overall, these comments did not address specific provisions in the proposed Bank liabilities rule, or suggest changes to those provisions in proposed part 1270 that referenced credit ratings. Instead, the comments identified and discussed broader principles that FHFA should apply in developing new credit-worthiness standards for its regulations more generally.

FHFA has considered these comments. However, given the requirements in section 939A of Dodd-Frank that the agency adopt uniform standards of credit-worthiness across its regulations to the extent feasible, FHFA recently issued an advance notice of proposed rulemaking and request for comment (ANPR) that sought comments on a wider range of issues related to implementation of section 939A of the Dodd-Frank Act than had been raised as part of the Bank liabilities proposed rulemaking.SeeAdvance Notice of Proposed Rulemaking: Alternatives to Use of Credit Ratings in Regulations Governing the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Federal Home Loan Banks, 76 FR 5292 (Jan. 31, 2011). Rather than make changes at this time to proposed provisions in part 1270 that continue to reference specific credit rating requirements, FHFA has determined to carry over these part 1270 provisions as proposed on a temporary basis, pending completion of the ANPR process. FHFA believes that this approach will best allow it to implement the Dodd-Frank requirements that it adopt uniform standards of credit-worthiness in its regulations while not further delaying amending the Bank liability regulations to conform to statutory changes made by HERA in 2008.

FHFA, however, will propose changes to relevant part 1270 provisions as well as to other regulations as part of a future rulemaking or rulemakings designed to remove references to, or requirements based on, specific credit ratings, as required by the Dodd-Frank Act. FHFA will consider the relevant comments received on the Bank liabilities rules along with any additional comments received on the ANPR in developing any proposed amendments needed to define and implement new uniform credit-worthiness standards in its regulations.

In addition to the comments addressing credit-worthiness standards, one comment stated that the meaning of the phrase “joint and several liability” was unclear. However, § 1270.10, as proposed, carried over a long-standing Finance Board provision that addressed joint and several liability and implemented the Banks' collective responsibility for payment on all COs. As this provision makes clear, each Bank individually and collectively has an obligation to make full and timely payment on all COs and to give priority for the payment of COs over the redemption of the stock of, or of any payment to, shareholders. Thus, FHFA believes the concept of “joint and several liability” was adequately addressed by the proposed rule language, and no changes to the proposal are necessary with regard to this point.

Thus, after considering the comments, FHFA has decided to adopt part 1270, as proposed, without making any substantive changes.

The main purpose for this rulemaking is to update Finance Board regulations to reflect amendments made by HERA to section 11 of the Bank Act with regard to Bank authority to issue COs and to combine certain parts of the former Finance Board regulations into new part 1270. 75 FR at 68535. As already discussed, because the Finance Board had previously delegated responsibility to the Banks themselves to issue COs in 2000, the changes made by HERA to section 11 of the Bank Act—or the related regulatory amendments now being adopted—do not alter the current processes or practices for issuing COs. Otherwise, as FHFA noted when it proposed new part 1270, most of the provisions in new part 1270 are being carried over from existing regulations, without substantive change.Id.

As adopted, the final rule will consolidate relevant definitions from parts 965, 966, 969 and 987 of the Finance Board regulations into subpart A of part 1270. To the extent necessary, relevant definitions from part 900 of the Finance Board regulations are also being incorporated into this subpart.3 FHFA is not altering the definitions from those proposed in November 2010.See75 FR at 68535-536.

Therefore, FHFA is adopting a definition in § 1270.1 for “consolidated obligations” that varies slightly from the one that had been set forth in part 900 of the Finance Board regulations. The new definition reflects the amendments made by HERA to section 11 of the Bank Act while recognizing that some outstanding COs may have been issued by the Finance Board under the prior statutory provisions.Id.This definition is the same as one FHFA adopted in other regulations.See, e.g.,12 CFR 1229.1. FHFA is also adopting the proposed definition for the “Office of Finance.” As explained in the preamble of the proposed rule, this definition is based on one that previously had been set forth in part 987 of the Finance Board regulations concerning book-entry procedures but has been somewhat modified because a reference to the OF in part 1270 could be made in circumstances, or to address OF duties, other than those related to book-entry procedures.See75 FR at 68535-536.

Subpart B of part 1270 combines provisions now found in the Finance Board regulations part 965, Sources of Funds, and part 969, Deposits. In this respect, § 965.2 of the Finance Board regulations is being relocated to new § 1270.2, and § 1270.3 combines in a single section the authorizations and requirements that previously had been found in § 965.3 and § 969.2 of the Finance Board regulations. No substantive changes are being made to any of the previous Finance Board regulations that will be carried over to subpart B of part 1270.

Subpart C of part 1270 incorporates § 966.2 through § 966.10 of the Finance Board regulations, addressing COs, as new §§ 1270.4 through 1270.11.4 FHFAis not amending most of these provisions in any substantive fashion.

As it proposed, however, FHFA is amending language now found in § 1270.4, which addresses issuance of COs, to reflect the amendments made by HERA to section 11(c) of the Bank Act. As such, FHFA is removing provisions of the former § 966.2(a) that had reserved to the Banks' regulator the right to issue COs. Similarly, § 1270.4(a), as adopted, provides that the Banks shall issue COs pursuant to authority in section 11(c) of the Bank Act, rather than under section 11(a) of the Bank Act, as had been stated in § 966.2(b) of the Finance Board rules. Certain other changes made to language that had been in the old Finance Board regulations are editorial or are technical and conforming in nature, given amendments made by HERA to the Bank Act.See75 FR at 68536.

Section 1270.4(a) as adopted continues to require the Banks to issue COs subject to the provisions of part 1270 and any other relevant rules, regulations, terms, and conditions as the FHFA Director may prescribe. This provision also makes clear that the Banks remain jointly and severally liable on all COs. The negative pledge requirement previously found in § 966.2(c) of the Finance Board regulations is being carried over without substantive change as new § 1270.4(b). The final rule also removes, as unnecessary, the provision previously found in § 966.4(b) that referred to consolidated notes.See12 CFR 966.4(b). This change has no effect on the Banks' authority to issue COs. Prior § 966.4(a), which provided that all COs be issued inpari passu,is being re-adopted as new § 1270.4(a)(3).

Finally, FHFA is carrying over as § 1270.9(c) the prohibition on the direct placement of COs previously found in § 966.8(c). As it explained in proposing the part 1270 rules, FHFA is amending the language in § 1270.9(c) to incorporate the Finance Board's Regulatory Interpretation 2005-RI-01, which clarified that the Banks could not purchase COs as part of an initial issuance regardless of whether the purchase was directly from the OF or indirectly from one of the firms that formed OF's approved underwriter network.5 See75 FR at 68536 (citingRegulatory Interpretation 2005-RI-01 (Mar. 30, 2005)). As a result, the Finance Board's previous regulatory interpretation on this issue is hereby rescinded as of the effective date of this rule.

FHFA is moving regulations governing book-entry procedures for COs previously found in § 987.2 through § 987.10 of the Finance Board rules to new subpart D of part 1270 as §§ 1270.12 through 1270.20.6 Any changes being adopted to these provisions are technical and conforming in nature, such as amendments to remove and update references to the Finance Board and to make other changes made necessary by the transfer and combination of these regulations into new part 1270. FHFA is not making any substantive amendments to these provisions.

The final rule does not contain any collections of information pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501et seq.). Therefore, FHFA has not submitted any information to the Office of Management and Budget for review.

The final rule applies only to the Banks, which do not come within the meaning of small entities as defined in the Regulatory Flexibility Act (RFA).See5 U.S.C. 601(6). Therefore in accordance with section 605(b) of the RFA, FHFA certifies that this final rule will not have significant economic impact on a substantial number of small entities.

Accordingly, for reasons stated in the preamble and under the authority of 12 U.S.C. 1431, 1432, 1435, 4511, 4512, 4513, and 4526, FHFA is amending subchapters H and K of chapter IX and subchapter D of chapter XII of title 12 of the Code of Federal Regulations as follows:

Under the temporary 504 debt refinancing program authorized by the Small Business Jobs Act (Jobs Act), Public Law 111-240, 124 Stat. 2504, only loans that will mature on or before December 31, 2012, are eligible for this temporary program, unless SBA publishes a Notice in theFederal Registerextending such date based on its assessment of available resources and market conditions.See13 CFR 120.882(g)(3). SBA established this initial maturity date in order to ensure that those small businesses most in need would have access to the limited resources available in this temporary program. Based on a review of program demand, SBA has determined that it currently has the resources available to accept applications for the refinancing of loans with any maturity date. Effective immediately, such loans will now be eligible for this temporary debt refinancing program if they also meet the other statutory and regulatory requirements.

Discussion

The FAA has received a report from CPAC, Inc. describing a crack of 2.35 inches just below the outboard hinge of the right-hand elevator on a CPAC, Inc. Model 114 airplane. The Models 112, 112B, 112TC, 112TCA, 114, 114A, 114B, and 114TC have the same design of the elevator spar and are all part of Type Certificate A12SO. There have been a total of nine elevator spar cracks across seven of these airplanes.

Type Certificate A12SO does not include Models 112A and 115. The Model 112A is a Rockwell “marketing name” for the Model 112. The Model 115 is a Rockwell “marketing name” for the Model 114.

If not corrected, structural failure of the elevator spar could result in separation of the elevator from the airplane with consequent loss of control.

We have included in this AD procedures for removing the elevator and inspecting the forward and aft sides of the right-hand and left-hand elevator forward spar web near and around the outboard hinge area.

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

This AD requires an inspection of the elevator spar for cracks and, if any crack is found, replacement of the elevator spar with a serviceable spar that is found free of cracks or repair/modification with an FAA-approved method. This AD also requires reporting to the FAA of the results of the inspection.

We consider this AD interim action. We are requiring a one-time inspection of the elevator spar with a report to the FAA of the results. We will work with the type certificate holder to evaluate that information to determine repetitive inspection intervals and subsequent terminating action. Based on this evaluation, we may initiate further rulemaking action to address the unsafe condition identified in this AD.

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because structural failure of the elevator spar would result in potential separation of the elevator with consequent loss of control.

Therefore, we find that notice and opportunity for prior public comment are impracticable and that good cause exists for making this amendment effective in less than 30 days.

This AD is a final rule that involves requirements affecting flight safety and was not preceded by notice and an opportunity for public comment. However, we invite you to send any written data, views, or arguments about this AD. Send your comments to an address listed under theADDRESSESsection. Include the docket number FAA-2011-0302 and Directorate Identifier 2011-CE-008-AD at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

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

We estimate that this AD affects 773 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

Currently, there is no FAA-approved repair/modification for a cracked elevator spar. Further flight is prohibited until an FAA-approved repair/modification is submitted to the FAA and FAA-approved. A cracked elevator spar could be replaced with a serviceable one if one is available. The FAA does not have availability and cost information on serviceable elevator spars. Therefore, at this time, the FAA has no way of determining any on-condition costs associated with cracks found in the elevator spar.

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

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

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

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

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

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

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

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

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

History

On January 20, 2011, the FAA published in theFederal Registera notice of proposed rulemaking to amend controlled airspace at Taylor, AZ (76 FR 3570). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Subsequent to publication, the FAA found the geographic coordinates for Taylor Airport needed to be adjusted to coincide with the FAA's aeronautical database. This action makes the adjustment. Also, the airport names have been changed: Taylor Municipal Airport to Taylor Airport, and Show Low Municipal Airport to Show Low Regional Airport. With the exception of editorial changes, and the changes described above, this rule is the same as that proposed in the NPRM.

Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9U dated August 18, 2010, and effective September 15, 2010, which is incorporated by reference in 14 CFR Part 71.1. The Class E airspace designations listed in this document will be published subsequently in that Order.

This action amends Title 14 Code of Federal Regulations (14 CFR) Part 71 by modifying Class E airspace extending upward from 700 feet above the surface at Taylor Airport, Taylor, AZ, to accommodate IFR aircraft using the CAMBO One Departure, and the RNAV standard instrument approach procedures at the airport. This action is necessary for the safety and management of IFR operations. The geographic coordinates for Taylor Airport will be adjusted to coincide with the FAA's aeronautical database. Also, Taylor Municipal Airport has been renamed Taylor Airport and Show Low Municipal Airport has been renamed Show Low Regional Airport.

The FAA has determined this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act. The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106 discusses the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the useof airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace at Taylor Airport, Taylor, AZ.

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

This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or revoking SIAPS, Takeoff Minimums and/or ODPS. The complete regulators description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR part 97.20. The applicable FAA Forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A.

The large number of SIAPs, Takeoff Minimums and ODPs, in addition to their complex nature and the need for a special format make publication in theFederal Registerexpensive and impractical. Furthermore, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their depiction on charts printed by publishers of aeronautical materials. The advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed on FAA forms is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPs and the effective dates of the associated Takeoff Minimums and ODPs. This amendment also identifies the airport and its location, the procedure, and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as contained in the transmittal. Some SIAP and Takeoff Minimums andtextual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPS and Takeoff Minimums and ODPS, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPS contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPS and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedures before adopting these SIAPS, Takeoff Minimums and ODPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) Is not a “significant regulatory action” under Executive Order 12866;(2) is not a “significant rule ” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26,1979) ; and (3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or revoking Standard Instrument Approach Procedures and/or Takeoff Minimums and/or Obstacle Departure Procedures effective at 0902 UTC on the dates specified, as follows:

This rule amends Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (FDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference in theamendment under 5 U.S.C. 552(a), 1 CFR part 51, and § 97.20 of Title 14 of the Code of Federal Regulations.

The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in theFederal Registerexpensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained in FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAP and the corresponding effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP as modified by FDC/P-NOTAMs.

The SIAPs, as modified by FDC P-NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for all these SIAP amendments requires making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs and safety in air commerce, I find that notice and public procedure before adopting these SIAPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making these SIAPs effective in less than 30 days.

The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. It, therefore—(1) is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal regulations, Part 97, 14 CFR part 97, is amended by amending Standard Instrument Approach Procedures, effective at 0901 UTC on the dates specified, as follows:

The electronic file of this document is available on the date of publication in theFederal Registerathttp://www.gpoaccess.gov/fr/index.html.

On August 9, 2007, we issued an interim final rule permitting some attorney advisors to conduct certain prehearing procedures. 72 FR 44763. We instituted this practice to enable us to provide more timely service to the increasing number of applicants for Social Security disability benefits and Supplemental Security Income payments based on disability. We considered the public comments we received on the interim final rule and, on March 3, 2008, issued the rule without change as a final rule. 73 FR 11349. Under this rule, attorney advisors may develop claims and, in appropriate cases, issue fully favorable decisions.

We included in §§ 404.942(g) and 416.1442(g) of the interim final rule a provision that the program would end on August 10, 2009, unless we decided either to terminate the rule earlier or to extend it beyond that date by publication of a final rule in theFederal Register. On July 13, 2009, we published a final rule that extended the sunset date of the program until August 10, 2011. 74 FR 33327.

When we published the final rules reinstating the attorney advisor program in 2008, we discussed a variety of concerns about the program and stated that we intended to closely monitor it and make changes if it did not meet our expectations. 73 FR 11349, 11350, 11351, and 11352. We have been monitoring the program, and it has met our expectations.

The number of requests for hearings has continued to increase significantly in recent years, and we expect that these increases will continue. The attorney advisor program has proven to be an invaluable tool in our efforts to issue favorable decisions timely, decide cases efficiently, and reduce the number of claims pending at the hearing level, while maintaining accuracy in the decision-making process. Accordingly, we have decided to extend the attorney advisor rule for another 2 years, until August 9, 2013. As before, we are reserving the authority to end the program earlier or to extend it by publishing a final rule in theFederal Register. We also are adding additional technical references to §§ 404.942(f)(1) and 416.1442(f)(1) to make clear certain authorities attorney advisors have when they adjudicate claims under the attorney advisor program.

We follow the Administrative Procedure Act (APA) rulemaking procedures specified in 5 U.S.C. 553 when developing regulations. Section 702(a)(5) of the Social Security Act, 42 U.S.C. 902(a)(5). The APA provides exceptions to its notice and public comment procedures when an agency finds there is good cause for dispensing with such procedures because they are impracticable, unnecessary, or contrary to the public interest. We have determined that good cause exists for dispensing with the notice and public comment procedures for this rule. 5 U.S.C. 553(b)(B). Good cause exists because this final rule only extends the sunset date of an existing rule and adds cross-references. It makes no substantive changes to the rule. The current regulations expressly provide that we may extend or terminate this rule. Therefore, we have determined that opportunity for prior comment is unnecessary, and we are issuing this rule as a final rule.

We consulted with the Office of Management and Budget (OMB) and determined that this final rule does meet the criteria for a significant regulatory action under Executive Order 12866 as supplemented by Executive Order 13563. Thus, OMB reviewed the final rule.

We certify that this final rule will not have a significant economic impact on a substantial number of small entities as it affects individuals only. Therefore, a regulatory flexibility analysis is not required under the Regulatory Flexibility Act, as amended.

This rule does not create any new or affect any existing collections and, therefore, does not require OMB approval under the Paperwork Reduction Act.

For the reasons stated in the preamble, we are revising subpart J of part 404 and subpart N of part 416 of title 20 of the Code of Federal Regulations as set forth below:

This document contains final regulations that amend the Procedure and Administration Regulations (26 CFR part 301) under section 6323 of the Code. If any person liable for tax neglects or refuses to pay after demand, the amount of that tax is a lien in favor of the United States against all property and rights to property of such person under section 6321. Section 6323 provides that a Federal tax lien is only valid against certain persons if a notice of Federal tax lien (NFTL) is filed and addresses generally the validity and priority of the Federal tax lien against such persons. Section 6323(b) and (c) addresses the protection of certain interests even though an NFTL has been filed. Section 6323(f) prescribes the place for filing and the form of an NFTL. Section 6323(g) addresses the refiling of an NFTL. Section 6323(h) contains definitions of certain terms used throughout section 6323.

Since 1976, there have been numerous amendments to section 6323 that are not reflected in the existing regulations. There have also been several changes to IRS practice that thus far have not been reflected in the regulations. On April 17, 2008, a notice of proposed rulemaking (REG-141998-06) to reflect these changes in law and practice was published in theFederal Register(73 FR 20877-01). No comments were received and no public hearing was requested or held. Accordingly, in this Treasury Decision, the proposed regulations are adopted substantially without change with the exception of one revision described in this preamble.

Section 301.6323(g)-1(a) sets forth general principles pertaining to refiling NFTLs. Most NFTLs now contain a certificate of release that automatically becomes effective on the date prescribed in the NFTL, which is the date the required refiling period ends. Therefore, if an NFTL that contains a certificate ofrelease is not timely refiled in each jurisdiction where it was originally filed, the lien self-releases and is extinguished in all jurisdictions. See IRC § 6325(f)(1)(A). The extinguishment of the lien invalidates NFTLs filed in other jurisdictions and requires the IRS to file certificates of revocation, as well as new NFTLs, in each jurisdiction where NFTLs were previously filed.

The proposed regulations contemplated amending § 301.6323(g)-1(a)(3) to provide generally that, with respect to an NFTL that includes a certificate of release, failure to timely refile the NFTL in any jurisdiction where it was originally filed extinguishes the lien and renders the NFTL ineffective with respect to property that is the subject matter of a suit to which the United States is a party that is commenced before the required filing period expires, and property that has been levied upon by the United States before the refiling period expires. Further consideration led to the determination that failure to timely refile the NFTL should not render the NFTL ineffective under these circumstances. Accordingly, the final regulations provide that neither failure to timely refile the NFTL, nor the release of the lien, shall alter or impair any right of the United States to property or its proceeds that is the subject of a levy or judicial proceeding commenced prior to the end of the refiling period or the release of the lien, except to the extent that a person acquires an interest in the property for adequate consideration after the commencement of the proceeding and does not have notice of, and is not bound by, the outcome of the proceeding.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

The principal author of these regulations is Debra A. Kohn of the Office of the Associate Chief Counsel (Procedure and Administration).

Accordingly, 26 CFR part 301 is amended as follows:

Regulatory Information

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the Coast Guard did not receive notice of the Charleston Race Week with sufficient time to publish an NPRM and to receive public comments prior to the event. Any delay in the effective date of this rule would be contrary to the public interest because immediate action is needed to minimize the potential danger to race participants, participant vessels, and the general public.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in theFederal Registerfor the reasons enumerated above. In addition, there is an immediate need to protect waterway users from hazards associated with these races.

Charleston Ocean Racing Association, in partnership with the South Carolina Maritime Foundation, will be hosting three sailboat races commencing on April 14, 2011 and concluding on April 17, 2011 in the Charleston Harbor, Charleston, South Carolina. The temporary safety zones are necessary to protect race participants, participant vessels, and the general public from the hazards associated with the sailboat races.

The three temporary safety zones encompass certain navigable waters of the Charleston Harbor, Charleston, South Carolina. The safety zones will be enforced daily from 9 a.m. until 5 p.m. on April 14, 2011 through April 17, 2011. Persons and vessels are prohibited from entering, transiting through, anchoring in, or remaining within any of the safety zones unless specifically authorized by the Captain of the Port Charleston or a designated representative. Persons and vessels desiring to enter, transit through, anchor in, or remain within any of the safety zones may contact the Captain of the Port Charleston via telephone at 843-740-7050, or a designated representative via VHF radio on channel 16, to seek authorization. The Coast Guard will provide notice of the safety zones via broadcast notice to mariners and marine safety information bulletins. On-scene notice will also be provided by the Coast Guard or local law enforcement.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

The economic impact of this rule is not significant for the following reasons: (1) The rule will be in effect for only four days; (2) the safety zones will be enforced for only eight hours each day; (3) although persons and vessels will not be able to enter, transit through, anchor in, or remain within any of the safety zones without authorization from the Captain of the Port Charleston or a designated representative, they will be able to operate in the surrounding area during the enforcement periods; (4) persons and vessels may still enter, transit through, anchor in, or remain within the safety zones if authorized by the Captain of the Port Charleston or a designated representative; and (5) advance notification of the safety zones will be made to the local maritime community via broadcast notice to mariners and marine safety information bulletins.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities, some of which may be small entities: The owners or operators of vessels intending to enter, transit through, anchor in, or remain within the waters of the Charleston Harbor encompassed within any of the three safety zones from 9 a.m. on April 14, 2011 through 5 p.m. on April 17, 2011.For the reasons discussed in the Regulatory Planning and Review section above, this rule will not have a significant economic impact on a substantial number of small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process.

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

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves establishing three temporary safety zones that will be enforced for eight hours each day for four days. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated underADDRESSES.

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

Regulatory Information

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because the dates of the event were changed to an earlier date to eliminate the conflict with a sailing regatta that would have presented a safety issue for participants in both events.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in theFederal Register. Due to the need for immediate action the restriction of vessel traffic and spectator craft is necessary to protect life, property and the environment; therefore, a 30-day notice is impracticable. Delaying the effective date would be contrary to the safety zone's intended objectives of protecting participants and spectators from the known dangers associated with power boat races.

This safety zone is necessary to ensure the safety of the public and boating traffic in the Corpus Christi Marina area during this event. This safety zone is intended to restrict vessel traffic from a portion of the Corpus Christi Marina for short durations of time. The size of the zone was determined by natural barriers on all four sides of the race course and local knowledge about wind, waves, and currents in this particular area.

This safety zone will encompass all waters of the Corpus Christi Marina contained between the People's Street T-Head on the west, the breakwater on the east, the southern boundary running from the southernmost tip of the People's Street T-Head (approx 27N 47′43.4″, −97W 23′16″) along a line running due east to the breakwater (approx 27N 47′43.8″, −97W 23′5.2″), and the northern boundary line running from the northern most tip of the secondary breakwater (approx 27N 47′57″, −97W 23′21.7″) and the end of the primary breakwater (approx 27N 47′59.1″, −97 23′9.5″).

Potential users of the waters contained in the temporary safety zone will be notified by VHF-FM radio from the Patrol Commander and also from a designated representative of the Captain of the Port over the race committee's loud hailer speaker system when thesafety zone will be implemented for the 15 minutes before each race or race heat. The same methods of notification will be used to make notifications of the subsequent re-opening of the waters contained in the safety zone approximately 15 minutes following the conclusion of each race or race heat when the power boats have departed the race course.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. It is not significant under the regulatory policies and procedures of the Department of Homeland Security.

We expect the economic impact of this rule to be so minimal that a full Regulatory Evaluation under the regulatory policies and procedures of DHS is unnecessary.

This determination is based upon the size and location of the safety zone within the waterway. Vessels will only be restricted from the safety zone for a short period of time for each race heat. Vessels may transit through the safety zone with permission from the Captain of the Port Corpus Christi or his designated on-scene patrol commander between each race heat.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit or anchor in the Corpus Christi Marina within the safety zone.

This safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: This rule will only be in effect for 45-60 minutes at a time. Vessel traffic may enter or transit through the safety zone with the permission of the Captain of the Port Corpus Christi or his designated on-scene representative. Before the effective period, we will issue maritime advisories and ensure they are widely available to users of the Corpus Christi marina.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process.

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

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves establishing a temporary safety zone in the Marina of Corpus Christi, Texas.

An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated underADDRESSES.

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

On November 23, 2010, we published a notice of proposed rulemaking (NPRM) entitled Safety Zones: Fireworks Displays in the Captain of the Port Columbia River Zone in theFederal Register(75 FR 71408). We received no comments on the proposed rule. A public meeting was not requested and none was held.

The Oregon Symphony Concert Fireworks Display in Portland, Oregon is an annual fireworks event requiring a safety zone to ensure the safety of the maritime public due to the inherent dangers associated with such events. Although the safety zone is codified in 33 CFR 165.1315(a)(7), in recent years the enforcement period in that regulation has not covered the actual date of the event. As such, the Coast Guard has had to publish a new safety zone for the event. This amendment will change the enforcement period in 33 CFR 165.1315(a)(7) to more accurately cover the time period of when the event occurs each year.

No comments on the proposed rulemaking were received and no changes made to the rule.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. The Coast Guard has made this determination based on the fact that this rule only changes the period during which the safety zone established in 33 CFR 165.1315(a)(7) may be effective and enforced.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities some of which may be small entities: The owners or operators of vessels wishing to transit the safety zone established by this rule. This rule will not have a significant economic impact on a substantial number of small entities, however, because it only changes the period during which the safety zone established in 33 CFR 165.1315(a)(7) may be made effective and enforced.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), in the NPRM we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process.

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

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves amending the enforcement period of an existing safety zone. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated underADDRESSES.

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

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because immediate action is necessary to ensure the safety of participants and spectators in the Naval Air Station Corpus Christi Air Show.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in theFederal Register. Due to the need for immediate action and the fact the no commercial entities and very few recreational fisherman utilize this section of Oso Bay, the restriction of vessel traffic and spectator craft is necessary to protect life, property and the environment; therefore, a 30-day notice is impracticable. Delaying the effective date would be contrary to the safety zone's intended objectives of protecting participants and spectators in the Naval Air Station Corpus Christi Air Show.

The Coast Guard is establishing this temporary safety zone to help ensure thesafety of the maritime public during the Naval Air Station Corpus Christi Air Show taking place on Naval Air Station Corpus Christi in Corpus Christi, Texas. The safety zone is necessary because of the numerous potential hazards associated with air show events.

The temporary safety zone created by this rule encompasses all waters within the points, Ocean Drive Bridge over Oso Bay, (27N 42′36.2″, −97W 18′31.4″) running south to the point (27N 41′50.4″, −97W 18′52.4″), running southeast to the Turtle Cove Park (27N 41′3.3″, −97W 17′55.6″) and running north along the shoreline of the Naval Air Station back to the Ocean Drive bridge across Oso Bay.

The zone resembles a triangle running from the Ocean Drive Bridge over Oso Bay south to the point in the middle of the Bay, then east towards Turtle Cove Park and then running along the shoreline of the Naval Air Station back to the bridge across Oso Bay.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit the affected waterway during the time of enforcement. The safety zone will not have a significant economic impact on a substantial number of small entities for the following reasons: It is minimal in size, shallow in water-depth, short in duration, there are no known commercial fishermen that utilize this affected area and infrequent recreational fishermen utilize this area.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process.

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

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g.), of the Instruction. This rule involves establishing a temporary safety zone on Oso Bay in Corpus Christi, Texas.

An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated underADDRESSES.

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

The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because to do so would be contrary to public interest since the safety zones are immediately necessary to help ensure the safety of the response workers and maritime public due to deleterious state of and ongoing response operations involving the M/V DAVY CROCKETT.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in theFederal Registerbecause to do so would be contrary to public interest since the safety zones are immediately necessary to help ensure the safety of the response workers and maritime public due to deleterious state of and ongoing response operations involving the M/V DAVY CROCKETT.

The M/V DAVY CROCKETT, a 431 ft barge, is anchored on the Washington State side of the Columbia River at approximately river mile 117. The vessel is in a severe state of disrepair. The Coast Guard, other state and federal agencies, and Federal contractors are working to remove the vessel. The response operations require a minimal wake in the vicinity of the vessel to minimize the spread of contaminants and help ensure the safety of response workers on or near the vessel and in the water. In addition, due the deleterious state of the vessel only authorized persons and/or vessels can be safely allowed on or near it.

All or portions of the M/V DAVY CROCKETT may be removed and transported to another location for cleaning and scrapping. Due to the inherent dangers associated with moving large pieces of such a vessel, only authorized persons and vessels can be safely allowed on or near it.

The stationary safety zone created by this rule will cover all waters of the Columbia River encompassed within the following four points: Point one at 45°34′59.16″ N/122°28′27.19″ W, point two at 45°34′54.95″ N/122°28′27.84″ W, point three at 45°34′54.91″ N/122°28′14.48″ W, and point four at 45°34′57.43″ N/122°26′14.63″ W. Geographically this area encompasses all waters of the Columbia River within a rectangle starting at approximately 200 ft up river of the M/V DAVY CROCKETT extending to 200 ft toward the river channel from the M/V DAVEY CROCKETT and then ending 200 ft down river the M/V DAVY CROCKETT.

The moving safety zone created by this rule will encompass all waters of the Columbia and Willamette Rivers within 200 feet in all directions around any portion of the M/V DAVY CROCKETT.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order.

The Coast Guard has made this determination based on the fact that the safety zones created by this rule will not significantly affect the maritime public because the areas covered are limited in size and/or have little commercial or recreational activity. In addition, vessels may enter the safety zones with the permission of the Captain of the Port, Columbia River or his designated representative.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule may affect the following entities some of which may be small entities: the owners and operators of vessels intending to operate in the areas covered by the safety zones created in this rule. The safety zones will not have a significant economic impact on a substantial number of small entities, however, because the areas covered are limited in size and/or have little commercial or recreational activity. In addition, vessels may enter the safety zones with the permission of the Captain of the Port, Columbia River or his designated representative.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we offer to assist small entities in understanding the rule so that they can better evaluate its effects on them and participate in the rulemaking process.

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

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

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

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

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

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

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

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

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

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

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction. This rule involves the creation of safety zones. An environmental analysis checklist and a categorical exclusion determination will be available in the docket where

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

In June 2010, the Office requested comments from the public on a proposal to provide applicants with greater control over when their original utility or plant applications are examined and promote work sharing between intellectual property offices (3-Track).See Enhanced Examination Timing Control Initiative; Notice of Public Meeting,75 FR 31763 (June 4, 2010), 1355Off. Gaz. Pat. Office323 (June 29, 2010). Specifically, the Office proposed to implement procedures under which an applicant would be able to: (1) Request prioritized examination of an original utility or plant nonprovisional application (Track I); (2) request a delay in docketing the application for examination by filing a request for delay in payment of the search fee, the examination fee, the claims fees and the surcharge (if appropriate) for a maximum period not to exceed thirty months in an original utility or plant application filed under 35 U.S.C. 111(a) (Track III); or (3) obtain processing under the current examination procedure (Track II) by not requesting either Track I or Track III processing. The Office, in addition to requesting written comments, conducted a public meeting to collect input from the public. The vast majority of public comments and input that the Office received was supportive of the prioritized examination track (Track I) portion of the 3-Track proposal. While the Office is in the process of considering and revising the Track III proposal (a request for a delay in docketing the application for examination) in view of the public comments and input, the Office wishes to implement the prioritized examination track (Track I) now to provide the optional procedure for prioritized examination to applicants as quickly as possible.

In February of 2011, the Office published a notice of proposed rule making to set forth the proposed procedure for prioritized examination and to seek public comments on the proposed procedure.See Changes to Implement the Prioritized Examination Track (Track I) of the Enhanced Examination Timing Control Procedures,76FR6369 (Feb. 4, 2011), 1364Off. Gaz. Pat. Office50 (March 1, 2011). The Office proposed, among other changes, a fee for filing a request for prioritized examination under 37 CFR 1.102(e) in the amount of $4,000, in addition to filing fees for the application. Since the majority of the public comments supported the optional prioritized examination procedure, the Office is adopting the proposed procedure for prioritized examination (Track I).

The Office, in this final rule, is revising the rules of practice to implement the optional procedure for prioritized examination. The aggregate goal for processing applications under prioritized examination is to provide a final disposition within twelve months of prioritized status being granted. The Office is limiting requests for prioritized examination under 37 CFR 1.102(e) to a maximum of 10,000 applications during fiscal year 2011. The Office will revisit this limit at the end of fiscal year 2011 to evaluate what the appropriate maximum should be, if any, for future years.

The fee for filing a request for prioritized examination under 37 CFR 1.102(e) is set at $4,000.00. The fees due on filing for an application for which prioritized examination is being sought are the filing fees (including any applicable excess claims and application size fees), the prioritized examination fee, processing fee, and publication fee. Therefore, the fee amount due on filing for a utility application for which prioritized examination is being sought (not including any applicable excess claims and application size fees) is $5,520 ($4,892 for a small entity): (1) The $1,090 ($462 small entity) in filing fees which include the $330 ($82 small entity filing by EFS-Web) basic filing fee, the $540 ($270 small entity) search fee, and the $220 ($110 small entity) examination fee; (2) the $4,000 prioritized examination fee; (3) the $130 processing fee; and (4) the $300 publication fee.

Under the Office's current statutory authority, the Office is not permitted to reduce the prioritized examination fee for small entity applicants. The Office indicated in the notice of proposed rule making that if legislation is passed providing a fifty percent fee reduction for providing prioritized examination for small entities under 35 U.S.C. 41(h)(1) and providing that the prioritized examination fees be set to recover the estimated cost of the prioritized examination program, the Office would set the prioritized examination fee at $4800 ($2400 for small entities), since 27.8 percent of the new serialized utility and plant applications filed in fiscal year 2010 were by small entities (based upon data from the Office's Patent Application Locating and Monitoring (PALM) system).See Changes to Implement the Prioritized Examination Track (Track I)of the Enhanced Examination Timing Control Procedures,76 FR at 6370, 1364Off. Gaz. Pat. Officeat 51. Section 9(i) of the America Invents Act provides that “[t]he Director shall reduce fees for providing prioritized examination of utility and plant patent applications by 50 percent for small entities that qualify for reduced fees under section 41(h)(1) of title 35, United States Code, so long as the fees of the prioritized examination program are set to recover the estimated cost of the program,” and § 9(j) of the America Invents Act provides that this change is effective on the date of enactment of S. 23.SeeS. 23, 112th Cong. (2011). S. 23 was passed by the United States Senate on March 8, 2011. Neither S. 23 nor any other legislation, however, has been enacted that provides fifty percent fee reduction for providing prioritized examination under 37 CFR 1.102(e) for small entities. If S. 23 is enacted into law, the fee for providing prioritized examination under 37 CFR 1.102(e) will be $4,800 ($2,400 for small entities) and these fee amounts will be applicable to any request for providing prioritized examination filed on or after the date of enactment of S. 23. Thus, if S. 23 or similar legislation that provides a fifty percent fee reduction for prioritized examination for small entities is enacted into law, the fee amount due on filing for a utility application for which prioritized examination is being sought (not including any applicable excess claims and application size fees) is $6,320 ($3,292 for a small entity): (1) The $1,090 ($462 small entity) in filing fees which include the $330 ($82 small entity filing by EFS-Web) filing fee, the $540 ($270 small entity) search fee, and the $220 ($110 small entity) examination fee; (2) the $4,800 ($2,400 small entity) prioritized examination fee; (3) the $130 processing fee; and (4) the $300 publication fee.

Under prioritized examination, an application will be accorded special status and placed on the examiner's special docket throughout its entire course of prosecution before the examiner until a final disposition is reached in the application. The aggregate goal for handling applications under prioritized examination is to provide a final disposition within twelve months of prioritized status being granted. The final disposition for the twelve-month goal means: (1) Mailing of a notice of allowance, (2) mailing of a final Office action, (3) filing of a notice of appeal, (4) declaration of an interference by the Board of Patent Appeals and Interferences (BPAI), (5) filing of a request for continued examination, or (6) abandonment of the application, within twelve months from the date prioritized status has been granted. An application under prioritized examination, however, would not be accorded special status throughout its entire course of appeal or interference before the BPAI, or after the filing of a request for continued examination.

Unlike the accelerated examination program, the time periods set in Office actions for applications in Track I would be the same as set forth in section 710.02(b) of theManual of Patent Examining Procedure(MPEP) (8th ed. 2001) (Rev. 8, July 2010). In the event, however, an applicant files a petition for an extension of time to file a reply, the prioritized examination of the application will be terminated. In addition, filing a request for a suspension of action or an amendment to the application which results in more than four independent claims, more than thirty total claims, or a multiple dependent claim, prioritized examination will terminate.

To maximize the benefit of prioritized examination, applicants should consider one or more of the following: (1) Acquiring a good knowledge of the state of the prior art to be able to file the application with a clear specification having a complete set of claims from the broadest to which the applicant believes he is entitled in view of the state of the prior art to the narrowest to which the applicant is willing to accept; (2) submitting an application in condition for examination; (3) filing replies that are completely responsive to the prior Office action and within the shortened statutory period for reply set in the Office action; and (4) being prepared to conduct interviews with the examiner. A description of what it means for an application to be in condition for examination is provided at MPEP § 708.02(a) (subsection VIII.C).

The requirements for requesting prioritized examination are summarized below. A patent application may be granted prioritized examination status under the following conditions:

(1) The application must be a new original utility or plant nonprovisional application filed under 35 U.S.C. 111(a) on or after May 4, 2011, the effective date of this final rule. The procedure for prioritized examination does not apply to international applications, design applications, reissue applications, provisional applications, and reexamination proceedings. Applicants may request prioritized examination for a continuing application (e.g.,a continuation or divisional application) by filing a request and the required fees including the $4,000 prioritized examination fee. However, a continuing application will not automatically be given prioritized examination status based on the request filed in the parent application. Each continuing application must on its own meet all requirements for prioritized examination under 37 CFR 1.102(e).

(2) The application must be complete under 37 CFR 1.51(b) including any excess claims fees paid on filing, and the application must be filed via the Office's electronic filing system (EFS-Web) if it is a utility application. Thus, the application must be filed with an oath or declaration under 37 CFR 1.63, the basic filing fee, the search fee, the examination fee, any excess claims fees, and any application size fee.

(3) The application must contain no more than four independent claims and no more than thirty total claims. The application must not contain any multiple dependent claims.

(4) The request for prioritized examination must be filed with the application in compliance with 37 CFR 1.102(e) accompanied by the prioritized examination fee set forth in 37 CFR 1.17(c), the processing fee set forth in 37 CFR 1.17(i), and the publication fee set forth in 37 CFR 1.18(d). Applicants are advised to use the certification and request form PTO/SB/424 which is available on EFS-Web.

(5) The request for prioritized examination may be accepted if the requirements under 37 CFR 1.102(e) are satisfied and the limit for the number of requests for the year has not been reached. The Office is limiting requests for prioritized examination under 37 CFR 1.102(e) to a maximum of 10,000 applications during fiscal year 2011. The Office will revisit this limit at the end of fiscal year 2011 to evaluate what the appropriate maximum should be, if any.

Title 37 of the Code of Federal Regulations, Part 1, is proposed to be amended as follows:

Section 1.17:The Office is implementing a procedure for prioritized examination (Track I) upon applicant's request and payment of a fee at the time of filing of the application, without meeting the requirements of the accelerated examination program (e.g.,examination support document).See§ 1.102(e). Section 1.17(c) is amended to set the fee for filing a request for prioritized examination under § 1.102(e) at $4,000.00. Section 1.17(i) is amended to add a reference for requesting prioritized examination of an application under § 1.102(e).

Section 1.102:Section 1.102 is revised to provide for the Track I procedure in which applicant has the option to request prioritized examination on the date the application is filed. Particularly, § 1.102(a) is revised by adding a reference to paragraph (e) so that applications may be advanced out of turn for examination or for further action upon filing a request under § 1.102(e). Section 1.102(e) is added to set forth the requirements for filing a request for prioritized examination, which provides that a request for prioritized examination will not be granted unless: (1) The application is an original utility or plant nonprovisional application filed under 35 U.S.C. 111(a) that is complete as defined by § 1.51(b), with any fees due under § 1.16 (the filing fee, search fee, examination fee, any applicable excess claims fee, and any applicable application size fee) paid on filing; (2) the application is filed via the Office's electronic filing system (EFS-Web) if it is a utility application; (3) the request for prioritized examination, including the prioritized examination fee set forth in § 1.17(c), the processing fee set forth in § 1.17(i), and the publication fee set forth in § 1.18(d) are present upon filing; and (4) the application contains or is amended to contain no more than four independent claims, no more than thirty total claims, and no multiple dependent claims. Because plant applications may not be filed via EFS-Web, the Office will accept a request for prioritized examination in paper when it accompanies the filing of a plant application.

As discussed previously, a request for prioritized examination may be accepted if the requirements under § 1.102(e) are satisfied and the limit for the number of requests has not been reached. The Office is limiting requests for prioritized examination under § 1.102(e) to a maximum of 10,000 applications during the remainder of fiscal year 2011. The Office will revisit this limit at the end of fiscal year 2011 to evaluate what the appropriate maximum should be, if any.

Response to Comments:In February of 2011, the Office published a notice of proposed rule making to set forth the proposed procedure for prioritized examination and to invite the public to submit written comments on the proposed procedure by March 7, 2011.See Changes to Implement the Prioritized Examination Track (Track I) of the Enhanced Examination Timing Control Procedures,76 FR 6369 (Feb. 4, 2011), 1364Off. Gaz. Pat. Office50 (March 1, 2011) (notice of proposed rule making). The Office received twelve written comments from intellectual property organizations, industry, academic and research institutions, individual patent practitioners and the general public. The Office has considered all of the public comments that were received by March 7, 2011. The comments germane to the changes set forth in this notice for prioritized examination and the Office's responses to those comments are provided below.

Comment 1:A few comments indicated that the Track I proposal has merit, but should be implemented and maintained only if the Office is permitted to retain all the fee income generated by applicants seeking Track 1 status. One comment believed it is premature for the Office to be implementing a rule making that depends on increased spending authority, given the uncertain status of the Office's budget. The comment was concerned that all fees collected by the Office are still not made available to the agency in the current fiscal year and Congress has not authorized a budget that would permit the Office to retain any fees collected under the prioritized examination program. One comment was concerned about the ability of the Office to offer prioritized examination under the Track I program without delaying examination of non-prioritized applications, particularly since the Office will not have any additional resources to conduct prioritized examination of Track I applications at least until it is able to hire and train additional examiners, which it may not be able to do under current budget and hiring restrictions.

Response:Track I prioritized examination is being implemented as a result of a discussion between the Office and its stakeholders, which has included requests for written comments and a public meeting. The vast majority of public input is supportive of prioritized examination, which is designed to provide important benefits to the Office and its stakeholders, including greater control to applicants as to when their utility and plant applications are examined, and greater efficiency in the patent examination process. In view of this widespread support, the Office wishes to implement the procedure so as to provide the procedure to applicants as quickly as possible. The President's Fiscal Year 2012 Budget Request for the Office includes the revenue that is expected to be generated by the prioritized examination program. The Office appreciates that implementation of the Track I program could have an effect on the examination of non-prioritized applications during fiscal year 2011 due to the current budget situation and its impact on the Office's ability to hire new examiners, but any effect should not extend into future fiscal years.

Comment 2:One comment stated that the separate processing fee of $130 under § 1.17(i) should be eliminated if already covered by the $4,000 fee set by proposed § 1.17(c). If the processing fee is not covered, then for the sake of clarity there should be one fee of $4,130 set by proposed § 1.17(c), and the § 1.17(i) fee should be eliminated.

Response:The processing fee is for processing the request for prioritized examination, which is separate and apart from the prioritized examination cost. The Office is tracking the fees separately and thus treating them as two different fees.

Comment 3:One comment stated that the publication fee under § 1.18(d) should not be required from an applicant as an up-front fee because the application might never publish or issue as a patent.

Response:The publication fee under § 1.18(d) is being required as a condition of the Track I program. If an applicant can make the certification required by 35 U.S.C. 122(b)(2)(B)(i) and § 1.213(a), the applicant may request nonpublication under 35 U.S.C. 122(b)(2)(B)(i) in an application in which a request for prioritized examination is also being filed. However, the publication fee is still required to be paid on filing of the application. Applicant may file a nonpublication request upon filing of the application and the nonpublication request may be rescinded at any time. Submission of the publication fee set forth in § 1.18(d) at the time of filing will save time and reduce costs for the Office. If the application is not published as a patent application publication and the application issues as a patent, the applicant may request a refund of the publication fee in accordance with MPEP § 1126.

Comment 4:One comment requested clarification regarding whether the publication fee under § 1.18(d) and the processing fee under § 1.17(i) were required to be paid on filing to participate in the Track I program, or whether the fees are only required if they are applicable. The comment requested clarification regarding the nature of the processing fee and questioned whether the processing fee was required only if early publication was requested.

Response:Both the publication fee under § 1.18(d) and the processing fee under § 1.17(i) are required to be paid at the time of filing by any applicant requesting prioritized examinationunder § 1.102(e). The processing fee is for processing the request for prioritized examination. It is not a fee for requesting early publication.

Comment 5:A few comments indicated that the fee for prioritized examination is too high. One comment stated that the fee should not exceed patent application fees and thus should be less than one thousand dollars. If the fee does significantly exceed patent application fees, then a greater benefit should be given such as a three-month time period from the request until the final examination result. One comment stated that the Office has not explained whether it would cost $4,000 more to examine a prioritized application than a regular application, or whether the fee is for the purpose of supporting more examiners to examine all applications.

Response:As stated in the notice of proposed rule making, the prioritized examination fee is set based on the estimated average cost to the Office of performing the service, per 35 U.S.C. 41(d)(2). A prioritized examination fee that is less than one thousand dollars would not recover the full cost of the necessary resources to increase the work output of the Office without delaying non-prioritized applications. Based on the Office's experience with other accelerated examination programs, the Office would not be able to provide a final examination result within the suggested three-month time period.

Comment 6:Some comments appreciated the statutory limitation on applying fee discounts for small entities, and the fact that such fees are used to hire new examiners, but hoped that such discounts can be implemented in order to make the use of Track I examination more achievable for academic, small business, and other small entity applicants. One comment urged the Office to continue seeking authority to apply small and micro entity fees to the prioritized examination procedure.

Response:The Office appreciates the benefits of the fee reductions currently available to small entities under 35 U.S.C. 41(h)(1), and will continue to seek additional fee setting authority that will permit extension of fee reduction to the prioritized examination fee. As noted in the notice of proposed rule making, the Office has determined an alternate fee structure, should fee reduction be extended to the Track I fee. Upon extension of fee reduction to Track I prioritized examination, the Office would set the prioritized examination fee at $2,400 for small entities, and $4,800 for other entities, in accordance with cost recovery based upon fiscal year 2010 data indicating that 27.8 percent of new serialized utility and plant applications were by small entities.

Comment 7:A few comments indicated that the Track I proposal has merit, but should be implemented and maintained only so long as the program does not adversely impact other patent applicants. One comment was concerned that prioritized examination would promote even further delays in the examination of requests for continued examination since requests for continued examination are currently placed on the examiner's “Special New” application docket, but not eligible for prioritized examination.

Response:The fee for prioritized examination has been calculated to ensure recovery of the full cost of the resources necessary to handle Track I applications without the need to divert resources from non-prioritized applications. As discussed previously, the Office appreciates that implementation of the Track I program could have an effect on the examination of non-prioritized applications during fiscal year 2011 due to the current budget situation and its impact on the Office's ability to hire new examiners, but any effect should not extend into future fiscal years. The prioritized examination program will not further delay the examination of requests for continued examination. Examiners will still be responsible for acting on requests for continued examination in the same time frame.

Comment 8:The Office received three comments regarding restriction requirements in Track I applications. The first comment suggested that examiners should be instructed to make restriction requirements by phone whenever possible and to invite a discussion of the restriction requirement at the time it is made with a view to reaching a consensus with the applicant. The second comment stated that Track I participants should be permitted to traverse restriction requirements. The third comment stated that petitions from restriction requirements in Track I cases should be handled expeditiously such that if the petition decision results in withdrawal of the restriction requirement, the examiner is still able to reach final disposition of the case within the twelve-month target.

Response:Telephone restriction practice is encouraged whenever possible, in accordance with MPEP § 812.01. An applicant who disagrees with a requirement for restriction may traverse in accordance with § 1.143. An applicant's decision to opt-in to prioritized examination has no bearing on restriction practice. Although traversal of a restriction requirement will not terminate the prioritized examination, the benefit to the applicant of a quick examination will be enhanced if such traversals can be avoided. Petitions from requirements for restriction are governed by § 1.144. To ensure prompt consideration of any such petition, applicant should promptly file the petition as soon as the restriction requirement has been made final.

Comment 9:One comment stated that the Office should provide Track I applicants with a notice as to whether or not Track I status has been granted and the reasons for any denial of Track I status.

Response:The Office will notify a Track I applicant of the grant or dismissal of the request for prioritized examination of the application. If the request is denied, the Office will state the reason.

Comment 10:One comment suggested that the language “an original or continuing utility * * * nonprovisional application” should be used in the proposed § 1.102(e) rather than “an original utility * * * nonprovisional application” in order to indicate that continuing applications (continuations, divisionals, and continuations-in-part) with appropriate filing dates are eligible for Track I. Another comment requested clarification regarding whether continuing applications would qualify for prioritized examination and suggested a revision to proposed § 1.102(e) to exclude continuation or divisional applications since it appeared the intent was to limit the rule to first filed utility and plant applications.

Response:The term “original” as used in the patent statute and rules means any application that is not a reissue application. Original applications include first filings as well as continuing applications.SeeMPEP § 201.04(a). Thus, the suggested revision to add a reference to “continuing” applications would introduce a redundancy into the language of the rule. Likewise, the suggested revision to exclude continuation and divisional applications is not being adopted since the rule is applicable to continuing applications.

Comment 11:One comment stated that a request for prioritized examination should be permitted when an international application enters the national stage under 35 U.S.C. 371.

Response:Because it is necessary to limit requests for prioritized examination at least during the first year, applications entering the national stage under 35 U.S.C. 371 are noteligible. The Office may reconsider this decision in future years. An applicant who has filed an international application may choose to participate in prioritized examination by filing a by-pass continuation under 35 U.S.C. 111(a) rather than entering the national stage under 35 U.S.C. 371.

Comment 12:One comment stated that a request for prioritized examination status should be permitted when a request for continued examination is filed under § 1.114, regardless of whether a request for prioritized examination was previously granted in the application. One comment stated that, in an application already granted Track I status, upon filing a request for continued examination the applicant should be given the opportunity to continue the Track I status by the payment of an additional fee.

Response:A request for continued examination is not a new application. In accordance with § 1.114, an applicant cannot request continued examination of an application until prosecution is closed. Furthermore, an application in which a request for continued examination has been filed is placed on an examiner's “Special New” docket.See Notice of Change to Docketing of Requests for Continued Examination, 1348 Off. Gaz. Pat. Office254 (November 10, 2009). The application on this docket having the oldest effective filing date must be taken up for action within two bi-weeks. Thus, when a proper request for continued examination is filed, the application has already undergone examination, and will continue to be treated in an expedited manner relative to new non-continuing applications, but not under the provisions for prioritized examination.

Comment 13:One comment indicated that unexamined applications with the greatest pendency should be given preferential access to the Track I program.

Response:The Office has undertaken an initiative to address the issue of unexamined applications that have been pending for a long time. Current examination resources are being reallocated within and across Technology Centers to start examination of the oldest unexamined applications, with no requirement of additional fees by the applicant. Prioritized examination is a separate initiative for newly filed applications in which applicants may pay an additional fee, which is used by the Office to expand its examination resources. Prioritized examination must be requested upon filing. If an application is pending, the applicant may file a continuing application and request prioritized examination for the new application. This approach ensures equitable treatment for all applicants who seek to participate in the Track I program in view of the limit of 10,000 applications during fiscal year 2011.

Comment 14:A few comments stated that a request for prioritized examination should not be limited to when a patent application is filed. Some comments stated that this would result in applicants filing continuation applications to take advantage of Track I, which will increase the workload of the Office and the applicants. A few comments supported permitting applicants to request prioritized examination with respect to all pending, unexamined applications. One comment suggested requiring a reasonably higher fee for requesting prioritized examination after the patent application has been filed. Another comment supported permitting a request for prioritized examination to be filed at any time.

Response:In recognition of the necessity of adding additional resources so that non-prioritized examination will not be delayed and that prioritized examination will occur within one year, the Office is implementing prioritized examination in a prudent and measured manner. The Office will reevaluate the limitations on prioritized examination based on the results of its initial implementation and after it gains experience with the Track I program. While applicants may file continuing applications at their discretion, any Track I continuation application filed may moot or reduce the issues remaining in the originally filed application. This may result in abandonment of the originally filed application; alternatively, its examination will be aided by the substantial examination performed on the Track I continuing application.

Comment 15:One comment stated that a request for prioritized examination should be permitted for reissue applications to apply the data-driven performance monitoring of Track I to reissue applications.

Response:Reissue applications are already treated as special applications.SeeMPEP § 1442. If the Office were to make prioritized examination available to reissue applications, it would not have any impact on when the examiner is expected to take the application up for action. The Office recognizes that there is a need to better track and monitor the various types of special applications, including reissue applications, and is working on improvements to its tracking and monitoring system as part of its Patents End-to-End Information Technology (IT) project.

Comment 16:One comment suggested that applicants should be permitted to pay the appropriate fees or otherwise make the application complete after filing of the application. The comment noted that applicants are familiar with and rely on missing parts practice to complete applications before they are placed in the examination queue and there appears to be no compelling reason to deviate from this practice for prioritized examination.

Response:Applicants requesting prioritized examination are required to file applications that are complete. If applicants requesting prioritized examination were allowed to file applications that were not complete, it would delay examination of the application, which is directly counter to providing a final disposition of the application in the shortest time possible. In addition, as the Office is initially limiting requests for prioritized examination, the Office considers it appropriate to give priority to applicants whose applications are complete on filing over applicants whose applications require the delays caused by the missing parts practice.

Comment 17:One comment questioned whether the Office will set an annual limit on the number of Track I applications a given applicant can file. One comment questioned whether the Office will set an annual limit on the number of Track I applications per Technology Center.

Response:The Office is not setting an annual limit on the number of requests for prioritized examination that a given applicant can file. The Office is also not setting an annual limit on the number of applications that can be granted Track I prioritized examination per Technology Center. The Office will monitor the Track I program closely. If it is determined that an annual limit is needed per applicant and/or per Technology Center, the Office may make such adjustments to the program in the future.

Comment 18:A few comments indicated that statistics should be published on the number of requests received as well as the aggregate time to final disposition at the greatest level of granularity practical (e.g.,the Group Art Unit level or the Technology Center level). One comment stated that the Office should closely monitor which technological areas are using Track I and minimize any imbalances in the backlog of different technology areas.

A few comments indicated that, for each statistic reported, the data should indicate the numbers of small entity and non-small entity applicants. Such information could potentially be used to advocate for reduced fees for small entities.

One comment stated that in order to ensure that non-prioritized applications and overall examination quality are not being impacted, detailed metrics must be provided to the public, including metrics on pendency, quality, and hiring measured against the Office's current stated goals. The comment suggested that the Office could include the composition of examiners (by GS-level) examining applications in each track to further protect against any track bias.

Response:The Office is committed to providing meaningful statistical reports on the Track I program with as much specificity as is practical. The Office will closely monitor the program and make any needed adjustments. The Office favors reduced fees for small entities and, wherever possible, will develop statistical reports to identify the numbers of small entity and non-small entity applicants to support any such legislation.

The ability of the Office to meet its goals for prioritized examination will be posted on the Office's Internet Web site on a quarterly basis at the work group level. Applications examined under Track I will be subject to the same quality metrics applied to applications undergoing non-prioritized examination. Data relating to prioritized examination will be made public to the extent practicable;e.g.,to the extent that such data is not linked to any specific application and to the extent that the pertinent sample size for a subgroup of data provides a statistically valid basis for reporting such data for that subgroup.

Comment 19:One comment stated that a final action on an application for which prioritized examination has been requested should be made within a couple of months instead of twelve months.

Response:The Office is setting an aggregate goal of twelve months to final disposition based on its perceived ability to meet the goal. Based on the Office's experience with other accelerated examination programs, the Office would not be able to meet an aggregate goal for handling applications under prioritized examination of two or three months to final disposition.

Comment 20:One comment suggested that the filing of an appeal brief, rather than the filing of a notice of appeal, should trigger the termination of prioritized examination because sometimes a notice of appeal is filed to maintain pendency of an application while the examiner considers an after-final response.

Response:The final disposition for the twelve-month goal includes the mailing of a final Office action. In the situation where an applicant files a notice of appeal after a second non-final Office action, the final disposition will include the filing of the notice of appeal. Thus, once a final Office action has been mailed or a notice of appeal has been filed, whichever is earlier, the examination of the application would no longer be prioritized under § 1.102(e). Therefore, there is no need to make the filing of an appeal brief the final disposition for purposes of the twelve-month goal, rather than the filing of a notice of appeal, to accommodate the situation where an applicant files a notice of appeal to maintain pendency of the application while the examiner considers an after-final reply.

Comment 21:One comment requested a relaxation of the limits on the number of claims so that the prioritized examination program would be accessible to more users, although no suggestion was made as to what the claim limit should be.

Response:In recognition of the necessity of adding additional resources so that non-prioritized examination will not be delayed and that the twelve-month aggregate goal for prioritized examination can be achieved, the Office is implementing prioritized examination in a prudent and measured manner. The Office will revisit the limitations on prioritized examination based on the results of its initial implementation.

Comment 22:One comment stated that the limit on claims would result in an applicant being unable to amend the claims to place them in independent form after a final rejection where dependent claims were found allowable. According to the comment, applicants would either have to file an appeal or do without the full protection to which they are entitled. The comment stated that there should not be a limit on how many claims may be placed in independent form during prosecution. Another comment suggested permitting addition of claims once allowable subject matter has been identified, provided that the added claims do not require further search or examination.

Response:Track I is designed to provide prioritized examination of the application; as such, it is directed towards substantive examination of claims for which no final disposition has been reached. Accordingly, prioritized examination accords a special status to the application until a final disposition is reached in the application. As discussed previously, a final disposition for the twelve-month goal means: (1) Mailing of a notice of allowance, (2) mailing of a final Office action, (3) filing of a notice of appeal, (4) declaration of an interference by the Board of Patent Appeals and Interferences (BPAI), (5) filing of a request for continued examination, or (6) abandonment of the application. The submission of an amendment resulting in there being more than four independent claims or more than thirty total claims is not prohibited, but simply terminates the prioritized examination. Thus, upon mailing of a final rejection (at which point prioritized examination is terminated), applicants may amend the claims to place them in independent form where dependent claims were found allowable, or add new claims, subject only to the limitations applicable to any application under final rejection.See§ 1.116. Similarly, upon mailing of a notice of allowance, applicants may submit amendments to the claims, again subject only to the limitations applicable to any application that has been allowed.See§ 1.312

Comment 23:One comment noted that the limit on the number of claims is apparently subject to a preliminary amendment and requested a clarification regarding whether such amendments must be made at the time of filing.

Response:An application in which applicant is requesting prioritized examination under § 1.102(e) must have no more than four independent claims and thirty total claims, and must not have any multiple dependent claims, when the application is filed. Otherwise, the request for prioritized examination under § 1.102(e) will not be granted. While it is possible to file a preliminary amendment on filing of an application to reduce the number of claims to no more than four independent claims and thirty total claims, and to eliminate any multiple dependent claims, the Office strongly encourages applicants to file applications without any preliminary amendments. Applicants should file their applications with the desired claims, rather than submitting a preliminary amendment on filing. This will reduce the amount of processing done by the Office, thus reducing Office costs, and will help ensure patent application publications and patents are printed correctly.See Revised Procedure for Preliminary Amendments Presented on Filing of a Patent Application,1300Off. Gaz. Pat. Office69 (November 8,2005). If an amendment is filed in an application that has been granted prioritized examination that results in more than four independent claims or thirty total claims, or a multiple dependent claim, then prioritized examination will be terminated.

Comment 24:One comment stated that an applicant's request for an extension of time should not result in termination of prioritized examination, particularly where the extension of time leads to early issuance of a patent. Another comment stated that an applicant paying for better service from the Office should not be given less time to respond to Office actions than anyone else.

Response:The Office is being flexible by not prohibiting an applicant from filing a request for extension of time in an application that has been granted prioritized examination under § 1.102(e). However, filing an extension of time would significantly impact the Office's ability to meet the twelve-month aggregate goal to final disposition for handling applications under Track I. Therefore, prioritized examination will be terminated if an applicant does file a request for an extension of time in a Track I application.

A.Regulatory Flexibility Act:For the reasons set forth herein, the Deputy General Counsel for General Law of the United States Patent and Trademark Office has certified to the Chief Counsel for Advocacy of the Small Business Administration that changes set forth in this notice will not have a significant economic impact on a substantial number of small entities.See5 U.S.C. 605(b).

This notice sets forth changes to implement an optional prioritized examination process. The primary impact of the change on the public is that applicants will have the option to request prioritized examination by paying appropriate fees, filing a complete application via the Office's electronic filing system (EFS-Web) with any filing and excess claims fees due paid on filing, and limiting their applications to four independent claims and thirty total claims. No applicant is required to employ this optional prioritized examination process to obtain examination of his or her application under the current procedures for examination of an application for a patent, or to obtain a patent provided that the application meets the current conditions for the applicants to be entitled to a patent. In addition, the availability of this prioritized examination process will not have any significant negative impact on any applicant who elects not to request the prioritized examination process. Therefore, the changes set forth in this notice will not have a significant economic impact on a substantial number of small entities.

B.Executive Order 12866 (Regulatory Planning and Review):This rule making has been determined to be significant for purposes of Executive Order 12866 (Sept. 30, 1993).

C.Executive Order 13563 (Improving Regulation and Regulatory Review):The Office has complied with Executive Order 13563. Specifically, the Office has: (1) Used the best available techniques to quantify costs and benefits, and has considered values such as equity, fairness and distributive impacts; (2) provided the public with a meaningful opportunity to participate in the regulatory process, including soliciting the views of those likely affected prior to issuing a notice of proposed rule making, and provided online access to the rule making docket; (3) attempted to promote coordination, simplification and harmonization across government agencies and identified goals designed to promote innovation; (4) considered approaches that reduce burdens and maintain flexibility and freedom of choice for the public; and (5) ensured the objectivity of scientific and technological information and processes, to the extent applicable.

D.Executive Order 13132 (Federalism):This rule making does not contain policies with federalism implications sufficient to warrant preparation of a Federalism Assessment under Executive Order 13132 (Aug. 4, 1999).

E.Executive Order 13175 (Tribal Consultation):This rule making will not: (1) Have substantial direct effects on one or more Indian tribes; (2) impose substantial direct compliance costs on Indian tribal governments; or (3) preempt tribal law. Therefore, a tribal summary impact statement is not required under Executive Order 13175 (Nov. 6, 2000).

F.Executive Order 13211 (Energy Effects):This rule making is not a significant energy action under Executive Order 13211 because this rule making is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required under Executive Order 13211 (May 18, 2001).

G.Executive Order 12988 (Civil Justice Reform):This rule making meets applicable standards to minimize litigation, eliminate ambiguity, and reduce burden as set forth in sections 3(a) and 3(b)(2) of Executive Order 12988 (Feb. 5, 1996).

H.Executive Order 13045 (Protection of Children):This rule making does not concern an environmental risk to health or safety that may disproportionately affect children under Executive Order 13045 (Apr. 21, 1997).

I.Executive Order 12630 (Taking of Private Property):This rule making will not effect a taking of private property or otherwise have taking implications under Executive Order 12630 (Mar. 15, 1988).

J.Congressional Review Act:Under the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801et seq.), prior to issuing any final rule, the United States Patent and Trademark Office will submit a report containing the final rule and other required information to the United States Senate, the United States House of Representatives and the Comptroller General of the Government Accountability Office. The changes in this notice are not expected to result in an annual effect on the economy of 100 million dollars or more, a major increase in costs or prices, or significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets. Therefore, this notice is not expected to result in a “major rule” as defined in 5 U.S.C. 804(2).

K.Unfunded Mandates Reform Act of 1995:The changes set forth in this notice do not involve a Federal intergovernmental mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, of 100 million dollars (as adjusted) or more in any one year, or a Federal private sector mandate that will result in the expenditure by the private sector of 100 million dollars (as adjusted) or more in any one year, and will not significantly or uniquely affect small governments. Therefore, no actions are necessary under the provisions of the Unfunded Mandates Reform Act of 1995.See2 U.S.C. 1501et seq.

L.National Environmental Policy Act:This rule making will not have any effect on the quality of the environment and is thus categorically excluded from review under the National Environmental Policy Act of 1969.See42 U.S.C. 4321et seq.

M.National Technology Transfer and Advancement Act:The requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) are not applicable because this rule makingdoes not contain provisions which involve the use of technical standards.

N.Paperwork Reduction Act:This rule making is proposed to implement an optional prioritized examination process. The primary impact of the change on the public is that applicants will have the option to request prioritized examination by paying appropriate fees, filing a complete application via the Office's electronic filing system (EFS-Web) with any filing and excess claims fees due paid on filing, and limiting their applications to four independent claims and thirty total claims.

An applicant who wishes to participate in the program must submit a certification and request to participate in the prioritized examination program, preferably by using Form PTO/SB/424. The Office of Management and Budget (OMB) has determined that, under 5 CFR 1320.3(h), Form PTO/SB/424 does not collect “information” within the meaning of the Paperwork Reduction Act of 1995. Therefore, this rule making does not impose additional collection requirements under the Paperwork Reduction Act which are subject to further review by OMB.

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

For the reasons set forth in the preamble, 37 CFR part 1 is amended as follows:

Organization of This Document.The following outline is provided to aid in locating information in this preamble.

A red-line version of the regulatory language that incorporates the changes in this action is available in the docket.

Regulated Entities.Categories and entities potentially affected by the final action are those which operate hospital/medical/infectious waste incinerators (HMIWI). The new source performance standards (NSPS) and emissions guidelines (EG) for HMIWI affect the following categories of sources:

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by the final action. To determine whether your facility would be affected by the final action, you should examine the applicability criteria in 40 CFR 60.50c of subpart Ec. If you have any questions regarding the applicability of the final action to a particular entity, contact the person listed in the precedingFOR FURTHER INFORMATION CONTACTsection.

In addition to being available in the docket, an electronic copy of the final action is available on the Worldwide Web through the Technology Transfer Network Web site (TTN Web). Following signature, EPA posted a copy of the final action on the TTN's policy and guidance page for newly proposed or promulgated rules athttp://www.epa.gov/ttn/oarpg.The TTN Web provides information and technology exchange in various areas of air pollution control.

Under section 307(b)(1) of the Clean Air Act (CAA or Act), judicial review ofthis final rule is available only by filing a petition for review in the U.S. Court of Appeals for the District of Columbia Circuit (the Court) by June 3, 2011. Under section 307(d)(7)(B) of the CAA, only an objection to this final rule that was raised with reasonable specificity during the period for public comment can be raised during judicial review. Section 307(d)(7)(B) of the CAA also provides a mechanism for EPA to convene a proceeding for reconsideration, “[i]f the person raising an objection can demonstrate to EPA that it was impracticable to raise such objection within [the period for public comment] or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule.” Any person seeking to make such a demonstration to us should submit a Petition for Reconsideration to the Office of the Administrator, Environmental Protection Agency, Room 3000, Ariel Rios Building, 1200 Pennsylvania Ave., NW., Washington, DC 20460, with a copy to the person listed in the precedingFOR FURTHER INFORMATION CONTACTsection, and the Associate General Counsel for the Air and Radiation Law Office, Office of General Counsel (Mail Code 2344A), Environmental Protection Agency, 1200 Pennsylvania Ave., NW., Washington, DC 20004. Moreover, under section 307(b)(2) of the CAA, the requirements established by this final rule may not be challenged separately in any civil or criminal proceedings brought by EPA to enforce these requirements.

On September 15, 1997, EPA adopted NSPS (40 CFR part 60, subpart Ec) and EG (40 CFR part 60, subpart Ce) for HMIWI under the authority of sections 111 and 129 of the CAA. Emissions standards were adopted for the nine pollutants required to be regulated under CAA section 129—particulate matter (PM), lead (Pb), cadmium (Cd), mercury (Hg), chlorinated dibenzo-p-dioxins/dibenzofurans, carbon monoxide, nitrogen oxides (NOX), hydrogen chloride (HCl), and sulfur dioxide (SO2). The EPA developed emissions limits for all nine pollutants for three HMIWI size subcategories (large, medium, and small) for the NSPS and four HMIWI size subcategories (large, medium, small, and small rural) for the EG.

On March 2, 1999, the Court inSierra Clubv.EPA,167 F.3d 658 (DC Cir. 1999) remanded the rule to EPA for further explanation regarding how EPA derived the maximum achievable control technology floors for new and existing HMIWI. The Court did not vacate the regulations, and the regulations remained in effect during the remand.

On October 6, 2009, EPA promulgated its response to the Court's remand of the HMIWI regulations and also satisfied its requirement under CAA section 129(a)(5) to conduct a 5-year review of the HMIWI standards. The promulgated rule revised the NSPS and EG emissions limits for all nine of the CAA section 129 pollutants.

Following promulgation of the revised emissions limits, an industry representative informed EPA of an error in the published NSPS emissions limit for NOXfor large HMIWI, which did not appear to reflect EPA's described analytical process for adopting the revised standards. On review, EPA staff determined that the published revised NOXNSPS for large HMIWI indeed did not reflect EPA's intent in the final rule. EPA reviewed the other published NSPS and EG emissions limits for similar errors, and determined that the published revised SO2NSPS for large HMIWI also did not reflect EPA's intent in the final rule. Also after promulgation, a state agency representative informed EPA of an error in the published NSPS reporting and recordkeeping requirements, which incorrectly referred to § 60.56, instead of § 60.56c, in three separate paragraphs.

To correct these errors, EPA issued proposed amendments on May 14, 2010, to the NSPS emissions limits for NOXand SO2for large HMIWI and the NSPS reporting and recordkeeping provisions that have the incorrect cross-reference (75 FR 27249 (May 14, 2010)). EPA provided a public comment period that closed on June 28, 2010. No public comments were received on the proposed amendments during that period. Consequently, today's final action promulgates the amendments as proposed, for the reasons explained in the proposal.

Just prior to proposal of the May 14, 2010, amendments (but too late to be addressed in the proposed rule), EPA staff discovered that the HMIWI rule should be revised to clarify that compliance with the EG must be expeditious if a compliance extension is granted. After proposal of the May 14, 2010, amendments, EPA staff also noted that delegation of authority provisions had been inadvertently omitted from the EG for existing HMIWI. A state agency later informed EPA of an error in the units' description for the Cd and Hg emissions limits in Table 1B to subpart Ec (NSPS). EPA reviewed the other emissions limits tables in the NSPS and EG and found similar errors in the units descriptions for other emissions limits. To address these errors and omissions, EPA is issuing additional amendments to the NSPS and EG, to be effective upon the effective date of this final rule specified above.

EPA received no public comments regarding its proposed amendment to the NOXNSPS limit for new large HMIWI. For the reasons explained in the proposed rule (see 75 FR at 27251/col. 2-27252/col. 1), today's final action amends the HMIWI NSPS to include the correct NOXNSPS limit of 140 parts per million by volume (ppmv) for new large HMIWI, which matches the final NOXEG limit and reflects EPA's intent in the October 6, 2009, final rule.

EPA also received no public comments on its proposed amendment to the SO2NSPS for new large HMIWI. For the reasons explained in the proposed rule (see 75 FR at 27252/cols. 1-2), this final action amends the HMIWI NSPS to include the correct SO2limit of 8.1 ppmv for new large HMIWI, which reflects EPA's intent in the October 6, 2009, final rule.

The NSPS reporting and recordkeeping requirements of the October 6, 2009, final rule include three separate cross-references to “§ 60.56(d), (h), or (j).” The correct cross-reference in each case should have been “§ 60.56c(d), (h), or (j),” consistent with the section numbering format for NSPS subpart Ec. EPA received no public comments on its proposed correction to the cross-references. This final action amends the HMIWI NSPS to correctly cross-reference to sections 60.56c(d), (h), or (j).

Section 129(f)(2) of the CAA states that performance standards and other requirements promulgated pursuant to this section and Section 111 and applicable to existing solid waste incineration units shall be effective as expeditiously as practicable after approval of a State plan under subsection (b)(2) (or promulgation of a plan by the Administrator under subsection (b)(3)) but in no event later than 3 years after the State plan is approved or 5 years after the date such standards or requirements are promulgated, whichever is earlier.

Just prior to proposal of the May 14, 2010, amendments (but too late to be addressed in the proposed rule), EPA staff discovered that paragraph (d)(3) of § 60.39e (compliance times) should be revised to clarify that compliance with the guidelines must be expeditious if a compliance extension is granted. We are amending the HMIWI EG to include this clarifying language. Specifically, we are adding the word “expeditious” to § 60.39e(d)(3) to state that if an extension is granted, require expeditious compliance with the emissions guidelines on or before the date 3 years after EPA approval of the State plan (but not later than September 16, 2002), for the emissions guidelines as promulgated on September 15, 1997, and on or before the date 3 years after EPA approval of an amended State plan (but not later than October 6, 2014), for the emissions guidelines as amended on October 6, 2009.

This action will ensure that compliance with the EG will be “expeditious,” consistent with the requirements of CAA section 129(f)(2).

Provisions regarding delegation of implementation and enforcement authorities are already present in the NSPS for new HMIWI. The NSPS delegation of authority provisions in the October 6, 2009, final rule specify that the following authorities are to be retained by the Administrator and not transferred to a state:

• The requirements of § 60.56c(i) establishing operating parameters when using controls other than those listed in § 60.56c(d).

• Approval of alternative methods of demonstrating compliance under § 60.8 including:

○ Approval of continuous emissions monitoring system (CEMS) for PM, HCl, multi-metals, and Hg where used for purposes of demonstrating compliance,

○ Approval of continuous automated sampling systems for dioxin/furan and Hg where used for purposes of demonstrating compliance, and

○ Approval of major alternatives to test methods;

• Approval of major alternatives to monitoring;

• Waiver of recordkeeping requirements; and

• Performance test and data reduction waivers under § 60.8(b).

Following the May 14, 2010, proposal of amendments to the October 6, 2009, final rule, EPA staff discovered that delegation of authority provisions had been inadvertently omitted from the EG. We are amending the HMIWI EG to include these delegations of authority provisions. Specifically, we are adding a paragraph to § 60.32e of the EG stating that the authorities listed under § 60.50c(i) of the NSPS are to be retained by the Administrator and not be transferred to a state. This action will ensure consistency between the NSPS and EG regarding the implementation and enforcement authorities and avoid any confusion about which authorities can be delegated and exercised by the states and which authorities must be retained by EPA.

EPA was informed by a state agency post-proposal that the units' description for the Cd and Hg emissions limits in Table 1B to subpart Ec (NSPS) included both the concentration units and the not-promulgated percent reduction alternative. Table 1B to subpart Ec includes the amended emissions limits for new HMIWI in the October 6, 2009, final rule, which appropriately do not include a not-promulgated percent reduction alternative.

We are amending Table 1B to subpart Ec effective immediately to remove the units' description for the not-promulgated percent reduction alternative and avoid any confusion regarding the elimination of the percent reduction alternative for new HMIWI in the October 6, 2009, final rule.

EPA found similar errors after reviewing the other emissions limits tables in the NSPS and EG. First, the October 6, 2009, amendments to Table 1A to subpart Ce (EG) mistakenly removed the units' description for the previously promulgated percent reduction alternative for HCl, Pb, Cd, and Hg. Table 1A to subpart Ce includes the emissions limits from the September 15, 1997, EG, including the percent reduction alternative, to which existing HMIWI are subject until revised or new state plans are issued based on the October 6, 2009, amendments (which do not include the percent reduction alternative).

Second, the October 6, 2009, amendments to Table 1A to subpart Ec (NSPS) mistakenly removed the units' description for the previously promulgated percent reduction alternative for HCl and Pb. Table 1A to subpart Ec includes the emissions limits from the September 15, 1997, NSPS, including the percent reduction alternative. Those emissions limits apply to HMIWI that commenced construction after June 20, 1996, but no later than December 1, 2008, or commenced modification after March 16, 1998, but no later than April 6, 2010, except where the emissions limits in the amended EG are more stringent.

We are amending Table 1A to subpart Ce and Table 1A to subpart Ec to restore the units' description for the percent reduction alternative for these pollutants and avoid any confusion regarding the use of a percent reduction alternative for existing and new HMIWI under the original September 15, 1997, rule.

In the course of reviewing the unit's descriptions of the emissions limits, we discovered that some extraneous text had been included with the HCl NSPS limit for new large HMIWI in Table 1A to subpart Ec. (As noted previously, Table 1A to subpart Ec includes the emissions limits from the September 15, 1997, NSPS.) We are amending Table 1A to subpart Ec to remove the extraneous text and thereby avoid any confusion regarding the HCl NSPS limit for new large HMIWI in Table 1A to subpart Ec.

Based on the stringency of the HMIWI standards promulgated on October 6, 2009, sources would likely respond to the HMIWI rule by choosing not to construct new HMIWI and would use alternative waste disposal options rather than incur the costs of compliance. Considering this information, we do not anticipate any new HMIWI, and, therefore, no costs or impacts are associated with the final NSPS amendments for NOXand SO2for new large units.

However, in the unlikely event that a new unit is constructed, we estimated costs and impacts expected for each of three HMIWI model plants (large, medium, and small), which we entered into the docket for the October 6, 2009, promulgation. (See 2009 memoranda entitled “Revised Compliance Costs and Economic Inputs for New HMIWI” and “Revised Baseline Emissions and Emissions Reductions for Existing and New HMIWI,” which are included in the docket.) We estimated baseline NOXemissions of 80 ppmv and baseline SO2emissions of 0.84 ppmv for the large HMIWI model plant, based on the average NOXand SO2emissions measured at the latest large HMIWI to be installed since the 1997 rule. Consequently, the NOXand SO2emissions associated with the large HMIWI model plant are already below both the incorrect NOXand SO2emissions limits of 130 ppmv and 1.6 ppmv, respectively, promulgated in the October 6, 2009,Federal Registernotice, and the correct NOXand SO2 emissions limits of 140 ppmv and 8.1 ppmv, respectively, being promulgated in today's action. Therefore, even if a new large unit were constructed, we would estimate no cost savings or negative impacts associated with today's final amendments to the NOXand SO2emissions limits for new large HMIWI.

None of the other amendments in today's final action change the requirements of the HMIWI rule, and, therefore, will not result in any impacts.

This final action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is, therefore, not subject to review under the Executive Order.

This final action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501,et seq.Burden is defined at 5 CFR 1320.3(b). This final action only includes revised NOXand SO2emissions limits for new large HMIWI, and, as noted previously, no new HMIWI are anticipated. Consequently, this final action will not impose any additional information collection burden for new sources.

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

For purposes of assessing the impacts of this final action on small entities, small entity is defined as follows: (1) A small business as defined by the Small Business Administration's regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; or (3) a small organization that is any not-for-profit enterprise that is independently owned and operated and is not dominant in its field.

After considering the economic impacts of this final rule on small entities, I certify that this final action will not have a significant economic impact on a substantial number of small entities. This final rule will not impose any requirements on small entities. This final action only includes revised NOXand SO2emissions limits for new large HMIWI, and no new HMIWI are anticipated.

This action contains no federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act (UMRA), 2 U.S.C. 1531-1538 for state, local, or tribal governments, or the private sector. This final action imposes no enforceable duty on any state, local, or tribal governments, or the private sector. Therefore, this final action is not subject to the requirements of sections 202 or 205 of the UMRA.

This final action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. Because this final rule's requirements apply equally to HMIWI units owned and/or operated by governments or HMIWI units owned and/or operated by private entities, there would be no requirements that uniquely apply to such government or impose any disproportionate impacts on them.

This final rule does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This final action will not impose substantial direct compliance costs on state or local governments, and will not preempt state law. Thus, Executive Order 13132 does not apply to this rule.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249; November 9, 2000). EPA is not aware of any HMIWI owned or operated by Indian tribal governments. Thus, Executive Order 13175 does not apply to this final action.

EPA interprets Executive Order 13045 (62 FR 19885; April 23, 1997) as applying to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it is based solely on technology performance.

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

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

This action does not involve technical standards. Therefore, EPA did not consider the use of any VCS.

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

EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it does not affect the level of protection provided to human health or the environment. This rule amendmentaffects only new large units, and no new units are anticipated to be constructed. This rule amendment does not relax the control measures on sources regulated by the rule will therefore not cause emissions increased from these sources.

The Congressional Review Act, 5 U.S.C. 801,et seq.,as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of Congress and to the Comptroller General of the United States. EPA will submit a report containing this final rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of this final rule in theFederal Register. A major rule cannot take effect until 60 days after it is published in theFederal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2). This final rule will be effective on May 4, 2011.

For the reasons stated in the preamble, Title 40, chapter I, part 60 of the Code of Federal Regulations is amended as follows:

This is a synopsis of the Commission'sReport and Order,MB Docket No. 09-123, adopted March 15, 2011, and released March 16, 2011. The full text of this document is available for public inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street, SW., Washington, DC 20554. This document will also be available via ECFS (http://fjallfoss.fcc.gov/ecfs/). This document may be purchased from the Commission's duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone 1-800-478-3160 or via the company's Web site,http://www.bcipweb.com.To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an e-mail tofcc504@fcc.govor call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198,see44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980 do not apply to this proceeding.

The Commission will send a copy of thisReport and Orderin a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional review Act,see5 U.S.C. 801(a)(1)(A).

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

The fishery for coastal migratory pelagic fish (king mackerel, Spanish mackerel, cero, cobia, little tunny, and, in the Gulf of Mexico (Gulf) only, dolphin and bluefish) is managed under the Fishery Management Plan for the Coastal Migratory Pelagic Resources of the Gulf of Mexico and South Atlantic (FMP). The FMP was prepared by the Gulf of Mexico and South Atlantic Fishery Management Councils (Councils) and is implemented under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act) by regulations at 50 CFR part 622.

On April 27, 2000, NMFS implemented the final rule (65 FR 16336, March 28, 2000) that divided the Florida west coast subzone of the Gulfof Mexico eastern zone into northern and southern subzones, and established their separate commercial quotas. The northern Florida west coast subzone is located in Federal waters of the Gulf north of 26°19.8′ N lat. (a line directly west from the Lee/Collier County, FL boundary) and east of 87°31.1′ W long. (a line directly south from the Alabama/Florida boundary). The quota for the northern subzone is 168,750 lb (76,544 kg) (50 CFR 622.42(c)(1)(ii)).

In accordance with 50 CFR 622.43(a), NMFS is required to close any zone to the commercial harvest of king mackerel when the zone's quota has been reached, or is projected to be reached, by filing a notification with the Office of the Federal Register. NMFS has determined the commercial quota for Gulf group king mackerel in the northern Florida west coast subzone will be reached by April 04, 2011. Accordingly, commercial fishing for Gulf group king mackerel in the northern Florida west coast subzone is closed effective 12:01 a.m., local time, April 04, 2011, until 12:01 a.m., local time, July 1, 2011, the end of the current fishing year.

During the closure period, no person aboard a vessel for which a commercial permit for king mackerel has been issued may fish for or retain Gulf group king mackerel in Federal waters of the closed subzone. There is one exception, however, for a person aboard a charter vessel or headboat. A person aboard a vessel that has a valid charter/headboat permit and also has a commercial king mackerel permit for coastal migratory pelagic fish may continue to retain king mackerel in or from the closed subzone under the 2-fish daily bag limit, provided the vessel is operating as a charter vessel or headboat. Charter vessels or headboats that hold a commercial king mackerel permit are considered to be operating as a charter vessel or headboat when they carry a passenger who pays a fee or when more than three persons are aboard, including operator and crew.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA), finds the need to immediately implement this commercial closure constitutes good cause to waive the requirements to provide prior notice and opportunity for public comment pursuant to the authority set forth in 5 U.S.C. 553(b)(B), as such procedures would be unnecessary and contrary to the public interest. Such procedures would be unnecessary because the rule itself already has been subject to notice and comment, and all that remains is to notify the public of the closure.

Allowing prior notice and opportunity for public comment is contrary to the public interest because of the need to immediately implement this action to protect the fishery resource because the capacity of the commercial fleet allows for rapid harvest of the quota. Prior notice and opportunity for public comment would require time and potentially result in a harvest well in excess of the established quota.

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

This action is taken under 50 CFR 622.43(a) and is exempt from review under Executive Order 12866.

Regulations implemented under the authority of the Atlantic Tunas Convention Act (16 U.S.C. 971et seq.) and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act; 16 U.S.C. 1801et seq.) governing the harvest of BFT by persons and vessels subject to U.S. jurisdiction are found at 50 CFR part 635. Section 635.27 subdivides the U.S. BFT quota recommended by the International Commission for the Conservation of Atlantic Tunas (ICCAT) among the various domestic fishing categories, per the allocations established in the 2006 Consolidated Highly Migratory Species Fishery Management Plan (2006 Consolidated HMS FMP) (71 FR 58058, October 2, 2006).

The 2011 BFT fishing year, which is managed on a calendar-year basis and subject to an annual calendar-year quota, began January 1, 2011. The Angling category season opened January 1, 2011, and continues through December 31, 2011. Currently, the default Angling category daily retention limit of one school, large school, or small medium BFT (measuring 27 to less than 73 inches (68.5 to less than 185 cm)) applies (§ 635.23(b)(2)). An annual limit of one large medium or giant BFT (73 inches or greater) per vessel also applies (§ 635.23(b)(1)). These retention limits apply to HMS Angling and HMS Charter/Headboat category permitted vessels (when fishing recreationally for BFT).

In order to implement the 2010 ICCAT-recommended baseline annual U.S. BFT quota, NMFS has published a proposed rule that would modify the U.S. BFT quota and base subquotas for all domestic fishing categories, and establish BFT quota specifications for 2011 (76 FR 13583, March 14, 2011). Until the final rule is effective (likely June 2011), the BFT base quotas codified at § 635.27(a) remain in effect. The currently codified Angling category quota is 187.6 mt (97.7 mt for school BFT, 85.6 mt for large school/small medium BFT, and 4.3 mt for large medium/giant BFT).

Under § 635.23(b)(3), NMFS may increase or decrease the retention limit for any size class of BFT based on consideration of the criteria provided under § 635.27(a)(8), which include: The usefulness of information obtained from catches in the particular category for biological sampling and monitoring of the status of the stock; the catches of the particular category quota to date and the likelihood of closure of that segment of the fishery if no adjustment is made; the projected ability of the vessels fishing under the particular category quota to harvest the additional amount of BFT before the end of the fishing year; the estimated amounts by which quotas for other gear categories of the fishery might be exceeded; effects of the adjustment on BFT rebuilding and overfishing; effects of the adjustment on accomplishing the objectives of the fishery management plan; variations in seasonal distribution, abundance, or migration patterns of BFT; effects of catch rates in one area precluding vessels in another area from having a reasonable opportunity to harvest a portion of the category's quota; and a review of dealer reports, daily landing trends, and the availability of the BFT on the fishing grounds. Retention limits may be adjusted separately for specific vessel type, such as private vessels, headboats, or charterboats.

NMFS has considered the set of criteria cited above and their applicability to the Angling category BFT retention limit for the 2011 Angling category fishery. NMFS examined the results of the 2007 through 2010 fishing seasons under the applicable daily retention limits, as well as the observed trend in the recreational fishery toward heavier fish, particularly in the small medium size range (59 to less than 73 inches). Data and dockside observations from 2007 through 2009 indicated a shift in catch to the large school/small medium size class (47 to less than 73 inches (119 to less than 185 cm)), particularly to large school BFT (47 to less than 59 inches (119 to less than 150 cm)) in 2008 and to small medium BFT in 2009. Large school and small medium BFT traditionally have been managed as one size class (47 to less than 73 inches). NMFS has found that as this cohort of fish ages and grows in weight but remains under 73 inches (i.e.,the upper range of the large school/small medium size class), the large school/small medium subquota has been attained with fewer fish landed.

In 2010, based on considerations of the available quota, fishery performance in recent years, and the availability of BFT on the fishing grounds, NMFS adjusted the Angling category retention limit to prohibit the retention of small medium BFT (75 FR 33531, June 14, 2010). Recognizing the different nature, needs, and recent landings results of private and charter/headboat vessels, NMFS implemented separate limits for each. Effective June 12 through December 31, 2010, the limit was one school or large school BFT per vessel per day/trip for private vessels (i.e.,those with HMS Angling category permits), and was one school BFT and one large school BFT per vessel per day/trip for charter vessels (i.e.,those with HMS Charter/Headboat permits, while fishing recreationally for BFT).

In order to constrain landings to the Consolidated HMS FMP-based Angling category allocations, NMFS must implement conservative daily retention limits in 2011. It is important that NMFS constrain landings to BFT subquotas both to adhere to the current FMP quota allocations and to ensure that landings are as consistent as possible with the pattern of fishing mortality (e.g.,fish caught at each age) that was assumed in the projections of stock rebuilding.

Information from the North Carolina Tagging Program and from fishery participants indicates that the vast majority of BFT landed recreationally this year have been 59 inches or greater. Comparisons of 2011/2010 catch rates from the North Carolina Tagging program for the month of January indicated rates were considerably slower in January 2011, however comparisons of January-February indicate catch rates have increased dramatically and are on par, if not slightly higher, than those in 2010. Based on considerations of the available quota, fishery performance in recent years, and the availability of BFT on the fishing grounds, it is reasonable to assume that the large school/small medium subquota (and potentially the Angling category quota) would be exceeded under the default daily retention limit. NMFS has determined that the Angling category retention limit should be adjusted to prohibit the retention of small medium BFT, and that implementation of separate limits for private and charter/headboat vessels is appropriate, recognizing the different nature, needs, and recent landings results of the two sectors. For example, charter operators historically have indicated that a multi-fish retention limit is vital to their ability to attract customers. In addition, recent Large Pelagics Survey estimates indicate that charter/headboat BFT landings constitute approximately 25 percent of recent recreational landings, with the remaining 75 percent landed by private vessels. Therefore, for private vessels,i.e.,those with HMS Angling category permits, the limit is one school or large school BFT per vessel per day/trip (i.e., one BFT measuring 27 to less than 59 inches). For charter vessels (i.e.,those with HMS Charter/Headboat permits), the limit is one school BFT and one large school BFT per vessel per day/trip while fishing recreationally for BFT (i.e.,one BFT measuring 27 to less than 47 inches, and one BFT measuring 47 to less than 59 inches). These retention limits will be effective in all areas, except for the Gulf of Mexico, where NMFS prohibits targeted fishing for BFT. Regardless of the duration of a fishing trip, the daily retention limit applies upon landing. NMFS may adjust the daily retention limit further with an inseason action if warranted.

As discussed above, the determination to adjust the daily retention limit is primarily based on the catches of large school/small medium BFT in recent years and the likelihood of closure of that segment of the fishery if no adjustment is made (§ 635.27(a)(8)(ii)), and the anticipated availability of large school/small medium BFT on the fishing grounds (§ 635.27(a)(8)(ix)). NMFS anticipates that reduction of the BFT daily retention limit will result in landings during 2011 that would not exceed the available subquotas as codified in 2010.

The 2010 codified BFT quotas provide for 4.3 mt of large medium and giant (trophy) BFT (measuring greater than 73 inches) to be harvested from the regulatory area by vessels fishing under the Angling category quota, with 1.4 mt for the area north of 39°18′ N. lat. (off Great Egg Inlet, NJ) and 2.9 mt for the area south of 39°18′ N. lat.

Based on North Carolina Tagging Program information, NMFS has determined that the codified southern area trophy BFT Angling category subquota has been taken and that a closure of the southern area trophy BFT fishery is warranted at this time. Therefore, fishing for, retaining, possessing, or landing large medium or giant BFT south of 39°18′ N. lat. by persons aboard vessels permitted in the HMS Angling category and the HMS Charter/Headboat category (while fishing recreationally) must cease at 11:30 p.m. local time on April 2, 2011. This action is taken consistent with the regulations at § 635.28(a)(1).

These Angling category actions are intended to provide a reasonable opportunity to harvest the U.S. quota of BFT without exceeding it, while maintaining an equitable distribution of fishing opportunities; and to be consistent with the objectives of the Consolidated HMS FMP.

HMS Angling and HMS Charter/Headboat category permit holders may catch and release (or tag and release) BFT of all sizes, subject to the requirements of the catch-and-release and tag-and-release programs at § 635.26. Anglers are also reminded that all released BFT must be returned to the sea immediately with a minimum of injury and without removing the fish from the water, consistent with requirements at § 635.21(a)(1).

If needed, subsequent Angling category adjustments will be published in theFederal Register. In addition, fishermen may call the Atlantic Tunas Information Line at (888) 872-8862 or (978) 281-9260, or accesshttp://www.hmspermits.gov,for updates.

The Assistant Administrator for NMFS (AA) finds that it is impracticable and contrary to the public interest to provide prior notice of, and an opportunity for public comment on, this action for the following reasons:

The regulations implementing the Consolidated HMS FMP provide for inseason retention limit adjustments to respond to the unpredictable nature of BFT availability on the fishing grounds, the migratory nature of this species, and the regional variations in the BFT fishery. Based on available BFT quotas, fishery performance in recent years, and the availability of BFT on the fishing grounds, the reduction in Angling category daily retention limit and closure of the southern area Angling category trophy fishery is necessary to ensure sufficient quota remains available to ensure overall 2011 fishing year landings are consistent with ICCAT recommendations and the 2006 Consolidated HMS FMP. NMFS provides notification of closures and retention limit adjustments by publishing the notice in theFederal Register,e-mailing individuals who have subscribed to the Atlantic HMS News electronic newsletter, and updating the information posted on the Atlantic Tunas Information Line and onhttp://www.hmspermits.gov.

These fisheries are currently underway and delaying this action would be contrary to the public interest as it could result in excessive BFT landings that may result in future potential quota reductions for the Angling category and potentially other BFT quota categories, depending on the magnitude of a potential Angling category overharvest. NMFS must close the southern area trophy BFT fishery and preclude small medium BFT landings in all areas before additional landings of these size BFT accumulate. Therefore, the AA finds good cause under 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment. For all of the above reasons, there is good cause under 5 U.S.C. 553(d) to waive the 30-day delay in effectiveness.

This action is being taken under 50 CFR 635.23(b)(3) and 635.28(a)(1), and is exempt from review under Executive Order 12866.