The USGSA (7 U.S.C. 71-87k) authorizes USDA to waive the mandatory inspection and weighing requirements of the USGSA in circumstances when the objectives of the USGSA would not be impaired. Current waivers from the official inspection and Class X weighing requirements for export grain appear in § 800.18 (7 CFR 800.18) of the regulations issued under the USGSA. These waivers are provided for grain exported for seeding purposes, grain shipped in bond, grain exported by rail or truck to Canada or Mexico, grain not sold by grade, exporters and individual elevator operators shipping less than 15,000 metric tons during the current and preceding calendar years, and when services are not available or in emergency situations.

High quality specialty grain is defined as grain in which all factors exceed the grade limits for U.S. No. 1 grain, except for the factor test weight, or grain designated as “organic” as defined in § 205.2 (7 CFR 205.2) of the regulations issued under the Organic Food Productions Act of 1990, as amended (OFPA) (7 U.S.C. 6501-6522). Typically, shippers of high quality specialty grain exported in containers are small entities that up until recently handled less than 15,000 metric tons of grain annually and were exempt from mandatory inspection and weighing requirements in accordance with § 800.18(b) of the USGSA regulations. As the high quality specialty grain market has expanded, the volume of this specialty product has begun to exceed the 15,000 metric ton waiver threshold, making such grain subject to mandatory inspection and weighing under the USGSA.

GIPSA has found that transactions involving high quality specialty grain typically are made between dedicated buyers and sellers who have ongoing business relationships and fully understand each other's specific needs and capabilities. Typically, sales are for grain that meets strict commercial contract specifications for quality, production, handling, and packaging. GIPSA believes that mandating official inspection and weighing services for this specialty market adds an unnecessary cost. The cost of official inspection and weighing for these specialty operations is approximately $1.80 per metric ton compared to an average $0.34 per metric ton for traditional grain exports.

On December 13, 2005, GIPSA published in theFederal Registera final rule (70 FR 73556) establishing a 5-year waiver for high quality specialty grain exported in containers in order to relieve the burden of grain exporters having to obtain and pay for mandatory official inspection and weighing services for this emerging niche market. On July 19, 2010, GIPSA published in theFederal Registeran interim rule that extended the waiver until July 31, 2012, and proposed making the waiver permanent. Based on the comments discussed below, this final rule makes permanent the waiver for high quality specialty grain exported in containers.

Since establishing the waiver in 2005, GIPSA has required that exporters of high quality specialty grain in containers maintain, submit upon request, and make available documentation that fully and correctly discloses their transactions. GIPSA has used this documentation to determine if the high quality specialty grain waiver continues to advance the objectives of the USGSA and to ensure that exporters of high quality specialty grain comply with the waiver provisions: (1) That all factors exceed the grade limits for U.S. No. 1 grain, except for the factor test weight, or (2) Specify “organic” as defined by the regulations issued under the OFPA. Under this final rule, GIPSA will continue to collect information from exporters of high quality specialty grain in containers in order to ensure the integrity of the high quality specialty grain program. GIPSA will also require exporters to maintain records generated during their normal course of business that pertain to these shipments and make these documents available to GIPSA upon request for review or copying purposes. These records must be maintained for a period of 3 years. Accordingly, organizations exporting high quality specialty grain will continue to be required to notify GIPSA of their actions for registration purposes in accordance with the USGSA. Moreover, nothing in this permanent waiver will prevent buyers and sellers of high quality specialty grain exported in containers from requesting and receiving official inspection and weighing services should they desire such services.

Since the waiver was implemented, GIPSA has reviewed documentation provided by exporters of high quality specialty grain and has determined that the documentation provided by exporters complied with the waiver provisions. By making this waiver permanent, GIPSA believes that this final rule will provide regulatory relief to a small evolving sector of the grainindustry, while continuing to advance the objectives of the USGSA.

On July 19, 2010, GIPSA published an interim rule (75 FR 41693) that extended for 2 years, or until July 31, 2012, and also proposed making the waiver pernment for high quality specialty grain exported in containers that was established from a final rule on December 13, 2005 (70 FR 73556). The interim rule invited interested parties to comment on making this waiver for high quality specialty grain exported in containers permanent. GIPSA received two comments, which are discussed below:

One comment supported the issuance of the interim rule to extend through July 31, 2012, the waiver from mandatory inspection and weighing requirements for high quality specialty grain exported in containers to eliminate uncertainty that otherwise might have occurred. The commenter also supported making the waiver permanent and urged GIPSA to not propose major changes to the mandatory inspection and weighing requirements of the USGSA that would adversely affect the marketing system or current priorities and operations of the agency. Because this commenter agreed that the waiver be made permanent, we are making no changes to this final rule based on the comment.

The second commenter did not support GIPSA making permanent the current waiver for high quality specialty grain exported in containers from the mandatory inspection and weighing requirements and urged GIPSA to extend the waiver for an additional year and review the quality assurance options for rail shipments to Mexico and the impact of this rule change on overseas container shipments. GIPSA does not believe that this rule will impact rail shipments to Mexico or have an adverse impact on overseas container shipments. GIPSA established the waiver to facilitate the marketing of high quality specialty grain by eliminating the burden of obtaining mandatory inspection and weighing requirements for organic and other types of high quality specialty grain. Since the waiver was implemented in 2005, GIPSA has collected data from exporters of high quality specialty grain that verifies that exporters of high quality specialty grain have complied with the waiver provisions and that a permanent waiver will continue to advance the objectives of the USGSA. Moreover, nothing in this final rule will prevent buyers and sellers of high quality specialty grain from requesting and receiving official inspection and weighing services should they desire such services. Therefore, GIPSA is making no change to the final rule based on the comment.

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

This final rule would provide regulatory relief to both large and small businesses. The Small Business Administration (SBA) defines small businesses by their North American Industry Classification System Codes (NAICS).1 The SBA defines small grain exporters in its regulations (13 CFR 121.201) as entities having less than $7,000,000 in average annual receipts (NAICS code 115114). Small grain exporters that export less than 15,000 metric tons per year are exempt from the mandatory inspection and weighing requirements under § 800.18 of the USGSA regulations (7 CFR 800.18). GIPSA believes that making permanent this waiver would effectively eliminate the cost impact on small grain exporters that would otherwise have to pay for GIPSA's onsite inspection and weighing services without impairing the objectives of the USGSA.

The growing market for high quality specialty grain exported in containers has caused shippers of high quality specialty grain to exceed the 15,000 metric ton waiver threshold for export inspection and weighing. GIPSA has consulted with its Grain Inspection Advisory Committee (Advisory Committee) on this issue. GIPSA's Advisory Committee is composed of members representing grain producers, handlers, processors, and exporters. The Advisory Committee has advocated that GIPSA make permanent the waiver for high quality specialty grain exported in containers from the mandatory inspection and weighing requirements of the USGSA. GIPSA agrees with the Advisory Committee that granting a permanent waiver is consistent with the intent of the USGSA and will allow this market to continue to grow.

This final rule will continue to allow exporters of high quality specialty grain shipped in containers to ship high quality specialty grain without the cost burden of mandatory inspection and weighing, while allowing them to request GIPSA inspection and weighing services when desired. Relieving this cost burden will continue to allow the grain industry to grow and equitably compete with global competitors.

Therefore, pursuant to requirements set forth in the Regulatory Flexibility Act (5 U.S.C. 601-612), GIPSA has considered the economic impact of this final rule on small entities and has determined that its provisions would not have a significant economic impact on a substantial number of small entities.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This action is not intended to have retroactive effect. The USGSA provides in section 87g (7 U.S.C. 87g) that no subdivision may require or impose any requirements or restrictions concerning the inspection, weighing, or description of grain under the USGSA. Otherwise, this final rule would not preempt any State or local laws, or regulations, or policies unless they present an irreconcilable conflict with this rule. There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of this final rule.

This final rule has been reviewed with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. This rule will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications.

In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), the information collection and recordkeeping included in this final rule were approved by the Office of Management and Budget under Control No. 0580-0022, and will expire on May 31, 2012. This information collection continues to be necessary in order for GIPSA to ensure that exporters of high quality specialty grain shipped in containers comply with the waiver provisions contained in § 800.18 (7 CFR 800.18) of the regulations issued under the USGSA.

GIPSA is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

For reasons set out in the preamble, 7 CFR part 800 is amended as follows:

The FAA has determined that notice and opportunity for prior public comment hereon are impracticable because these procedures would significantly delay issuance of the approval design and thus delivery of the affected aircraft. In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA, therefore, finds that good cause exists for making these special conditions effective upon issuance.

We invite interested persons to submit such written data, views, or arguments, as they desire. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data. We ask that you send us two copies of written comments.

We will file in the docket all comments we receive, as well as a report summarizing each substantive public contact with FAA personnel about these special conditions. You may inspect the docket before and after the comment closing date. If you wish to review the docket in person, go to the address in theADDRESSESsection of this preamble between 7:30 a.m. and 4 p.m., Monday through Friday, except Federal holidays.

We will consider all comments we receive by the closing date for comments. We will consider comments filed late if it is possible to do so without incurring expense or delay. We may change these special conditions based on the comments we receive.

If you want us to let you know we received your comments on these special conditions, send us a pre-addressed stamped postcard on which the docket number appears. We will stamp the date on the postcard and mail it back to you.

On February 3, 2011, AmSafe, Inc. applied for a Supplemental Type Certificate (STC), for the installation of a three-point safety belt restraint system for the pilot, co-pilot and the passenger seats, each incorporating inflatable airbags, for model LC40-550FG, LC41-550FG, and LC42-550FG airplanes.

The inflatable restraint systems are: Three-point safety belt restraint systems consisting of a lap belt and shoulder harness with an inflatable airbag attached to the lap belt. The inflatable portion of the restraint system will rely on sensors to electronically activate the inflator for deployment.

If an emergency landing occurs, the airbags will inflate and provide a protective cushion between the occupant's head and the structure within the airplane. This will reduce the potential for head and torso injury. The inflatable restraint behaves in a manner similar to an automotive airbag; however, in this case, the airbag is integrated into the lap belt. While airbags and inflatable restraints are standard in the automotive industry, the use of an inflatable restraint system is novel for general aviation operations.

The FAA has determined that this project will be accomplished on the basis of providing the same current level of safety as the conventional certification basis airplane occupantrestraint systems. The FAA has two primary safety concerns with the installation of airbags or inflatable restraints:

• That they perform properly under foreseeable operating conditions; and

• That they do not perform in a manner or at such times as to impede the pilot's ability to maintain control of the airplane or constitute a hazard to the airplane or occupants.

The latter point has the potential to be the more rigorous of the requirements. An unexpected deployment while conducting the takeoff or landing phases of flight may result in an unsafe condition. The unexpected deployment may either startle the pilot or generate a force sufficient to cause a sudden movement of the control yoke. Either action could result in a loss of control of the airplane, the consequences of which are magnified due to the low operating altitudes during these phases of flight. The FAA has considered this when establishing these special conditions.

The inflatable restraint system relies on sensors to electronically activate the inflator for deployment. These sensors could be susceptible to inadvertent activation, causing deployment in a potentially unsafe manner. The consequences of an inadvertent deployment must be considered in establishing the reliability of the system. AmSafe, Inc. must show that the effects of an inadvertent deployment in flight are not a hazard to the airplane or that an inadvertent deployment is extremely improbable. In addition, general aviation aircraft are susceptible to a large amount of cumulative wear and tear on a restraint system. The potential for inadvertent deployment may increase as a result of this cumulative damage. Therefore, the impact of wear and tear on inadvertent deployment must be considered. The effect of this cumulative damage means a life limit must be established for the appropriate system components in the restraint system design.

There are additional factors to be considered to minimize the chances of inadvertent deployment. General aviation airplanes are exposed to a unique operating environment, since the same airplane may be used by both experienced and student pilots. The effect of this environment on inadvertent deployment must be understood. Therefore, qualification testing of the firing hardware/software must consider the following:

• The airplane vibration levels appropriate for a general aviation airplane; and

• The inertial loads that result from typical flight or ground maneuvers, including gusts and hard landings.

Other influences on inadvertent deployment include high intensity electromagnetic fields (HIRF) and lightning. Since the sensors that trigger deployment are electronic, they must be protected from the effects of these threats. To comply with HIRF and lightning requirements, the AmSafe, Inc. inflatable restraint system is considered a critical system, since its inadvertent deployment could have a hazardous effect on the airplane.

Given the level of safety of the occupant restraints currently installed, the inflatable restraint system must show that it will offer an equivalent level of protection for an emergency landing. If an inadvertent deployment occurs, the restraint must still be at least as strong as a Technical Standard Order approved belt and shoulder harnesses. There is no requirement for the inflatable portion of the restraint to offer protection during multiple impacts, where more than one impact would require protection.

The inflatable restraint system must deploy and provide protection for each occupant under an emergency landing condition. The seats of LC40-550FG, LC41-550FG, and LC42-550FG model airplanes are certificated to the structural requirements of § 23.562; therefore, the test emergency landing pulses identified in § 23.562 must be used to satisfy this requirement.

A wide range of occupants may use the inflatable restraint; therefore, the protection offered by this restraint should be effective for occupants that range from the fifth percentile female to the ninety-fifth percentile male. Energy absorption must be performed in a consistent manner for this occupant range.

In support of this operational capability, there must be a means to verify the integrity of this system before each flight. AmSafe, Inc. must establish inspection intervals where they have demonstrated the system to be reliable between these intervals.

An inflatable restraint may be “armed” even though no occupant is using the seat. While there will be means to verify the integrity of the system before flight, it is also prudent to require unoccupied seats with active restraints not constitute a hazard to any occupant. This will protect any individual performing maintenance inside the cockpit while the aircraft is on the ground. The restraint must also provide suitable visual warnings that would alert rescue personnel to the presence of an inflatable restraint system.

In addition, the design must prevent the inflatable seatbelt from being incorrectly buckled and/or installed such that the airbag would not properly deploy. AmSafe, Inc. must show that such deployment is not hazardous to the occupant and will still provide the required protection.

The cabins of the Cessna model airplanes identified in these special conditions are confined areas, and the FAA is concerned that noxious gasses may accumulate if the airbag deploys. When deployment occurs, either by design or inadvertently, there must not be a release of hazardous quantities of gas or particulate matter into the cockpit.

An inflatable restraint must not increase the risk already associated with fire. Therefore, the inflatable restraint must be protected from the effects of fire to avoid creating an additional hazard by, for example, a rupture of the inflator.

Finally, the airbag is likely to have a large volume displacement, and possibly impede the egress of an occupant. Since the bag deflates to absorb energy, it is likely that the inflatable restraint would be deflated at the time an occupant would attempt egress. However, it is appropriate to specify a time interval after which the inflatable restraint may not impede rapid egress. Ten seconds has been chosen as reasonable time. This time limit will offer a level of protection throughout the impact event.

Under the provisions of § 21.101, AmSafe, Inc. must show that the LC40-550FG, LC41-550FG, and LC42-550FG model airplanes continue to meet the applicable provisions of the applicable regulations in effect on the date of application for the type certificate. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The following model is covered by this special condition:

For the models listed above, the certification basis also includes all exemptions, if any; equivalent level of safety findings, if any; and special conditions not relevant to the special conditions adopted by this rulemaking action.

If the Administrator determines that the applicable airworthiness regulations (i.e., part 23 as amended) do not contain adequate or appropriate safety standards for the AmSafe, Inc., inflatable restraint as installed on these Cessna Aircraft Company models because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions, as appropriate, as defined in § 11.19, are issued in accordance with § 11.38, and become part of the type certification basis in accordance with § 21.101.

Special conditions are initially applicable to the models for which they are issued. Should the applicant apply for a supplemental type certificate to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, the special conditions would also apply to that model under the provisions of § 21.101.

The Cessna Aircraft Company LC40-550FG, LC41-550FG, and LC42-550FG model airplanes will incorporate the following novel or unusual design feature: A three-point safety belt restraint system incorporating an inflatable airbag for the pilot, co-pilot, and passenger seats.

The purpose of the airbag is to reduce the potential for injury in the event of an accident. In a severe impact, an airbag will deploy from the lap belt. The airbag will deploy between the head of the occupant and airplane interior structure, which will provide some protection to the head of the occupant. The restraint will rely on sensors to electronically activate the inflator for deployment.

The Code of Federal Regulations states performance criteria for seats and restraints in an objective manner. However, none of these criteria are adequate to address the specific issues raised concerning inflatable restraints. Therefore, the FAA has determined that, in addition to the requirements of part 21 and part 23, special conditions are needed to address the installation of this inflatable restraint.

Accordingly, these special conditions are adopted for the Cessna Aircraft Company LC40-550FG, LC41-550FG, and LC42-550FG model airplanes equipped with three-point inflatable restraints. Other conditions may be developed, as needed, based on further FAA review and discussions with the manufacturer and civil aviation authorities.

As discussed above, these special conditions are applicable to the Cessna Aircraft Company, LC40-550FG, LC41-550FG, and LC42-550FG model airplanes equipped with the three or four-point inflatable restraint systems.

This action affects only certain novel or unusual design features on the previously identified Cessna Aircraft Company model airplanes. It is not a rule of general applicability, and it affects only the applicant who applied to the FAA for approval of these features on the airplane.

Under standard practice, the effective date of final special conditions would be 30 days after the date of publication in theFederal Register; however, the substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. For this reason, and because a delay would significantly affect the delivery of the airplane(s), the FAA has determined that prior public notice and comment are unnecessary and impracticable, and good cause exists for adopting these special conditions upon issuance. The FAA is requesting comments to allow interested persons to submit views that may not have been submitted in response to the prior opportunities for comment described above.

The authority citation for these special conditions is as follows:

Under the Federal Advisory Committee Act of October 6, 1972 (Pub. L. 92-463 (5 U.S.C. app.2)); section 1004 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 394); and 21 CFR 14.40(b), FDA is announcing the establishment of the Medical Imaging Drugs Advisory Committee by the Commissioner. The Committee advises the Commissioner and designee in discharging responsibilities as they relate to helping to ensure safe and effective drugs for human use and, as required, any other product for which the Food and Drug Administration has regulatory responsibility. The Committee reviews and evaluates data concerning the safety and effectiveness of marketed and investigational human drug products for use in diagnostic and therapeutic procedures using radioactive pharmaceuticals and contrast media used in diagnostic radiology and makes appropriate recommendations to the Commissioner.

The Medical Imaging Drugs Advisory Committee will be composed of a core of 12 voting members including the Chair. Members and the Chair are selected by the Commissioner or designee from among authorities knowledgeable in the fields of nuclear medicine, radiology, epidemiology or statistics, and related specialties. Members will be invited to serve for overlapping terms of up to 4 years. Almost all non-Federal members of this committee serve as Special Government Employees. The core of voting members may include one technically qualified member, selected by the Commissioner or designee, who is identified with consumer interests and is recommended by either a consortium of consumer-oriented organizations or other interested persons. In addition to the voting members, the Committee may include one non-voting member who is identified with industry interests.

Elsewhere in this issue of theFederal Register, FDA is publishing notices requesting nominations for membership of members as well as a consumer and industry representative on this committee.

Under 5 U.S.C. 553(b)(3)(B) and (d) and 21 CFR 10.40(d) and (e), the agency finds good cause to dispense with notice and public comment procedures and to proceed to an immediate effective date on this rule. Notice and public comment and a delayed effective date are unnecessary and are not in the public interest as this final rule merely adds the name of the Medical Imaging Drugs Advisory Committee, already established by charter, to the list of standing advisory committees in 21 CFR 14.100.

Therefore the Agency is amending 21 CFR 14.100(a) as set forth below.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 14 is amended as follows:

Section 4011 of ERISA requires certain underfunded plans to give an annual notice to participants of plan funding status and the limits on PBGC's guarantee. PBGC's implementing regulations are at 29 CFR part 4011.

Section 501 of the Pension Protection Act of 2006, Public Law 109-280 (2006), repealed section 4011 of ERISA for plan years beginning after 2006 and replaced the disclosure requirement under that section with a disclosure requirement under Title I of ERISA (under the jurisdiction of the Department of Labor). On January 22, 2007 (at 72 FR 2615), PBGC amended its regulation part 4011 to reflect that statutory change.

Executive Order 13563 on Improving Regulation and Regulatory Review, among other requirements, directs agencies to periodically review regulations to remove those that are obsolete. As a result of that review, PBGC is issuing this final rule to remove part 4011 from its regulations.

Because this rule simply removes an obsolete regulation as a result of a statutory change, PBGC has determined that notice and public comment on this amendment are unnecessary. Further, for this same reason, PBGC finds good cause for making this final rule effective immediately.

The PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866. Because no general notice of proposed rulemaking is required for this rule, the Regulatory Flexibility Act of 1980 does not apply. See 5 U.S.C. 601(2).

The BSA, Titles I and II of Public Law 91-508, as amended, codified at 12 U.S.C. 1829b and 1951-1959, and 31 U.S.C. 5311-5314 and 5316-5332, authorizes the Secretary of the Treasury (the “Secretary”) to issue regulations requiring financial institutions to keep records and file reports that the Secretary determines “have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counterintelligence matters, including analysis to protect against internationalterrorism.”1 The Secretary's authority to administer the BSA and its implementing regulations has been delegated to the Director of FinCEN.2 FinCEN has interpreted the BSA through implementing regulations (“BSA regulations” or “BSA rules”) that appear at 31 CFR Chapter X.3

FinCEN has defined the BSA term “financial institution” to include a “money services business,”4 (“MSB”) a category that includes: a dealer in foreign exchange; a check casher; an issuer, seller, or redeemer of traveler's checks, money orders, or stored value; and money transmitter.5 FinCEN is authorized to deem any business engaged in an activity determined by regulation to be an activity similar to, related to, or a substitute for these activities a “financial institution.”6

FinCEN has issued regulations implementing the recordkeeping, reporting, and other requirements of the BSA. MSBs are required with some exceptions to: (1) Establish written anti-money laundering (AML) programs that are reasonably designed to prevent the MSB from being used to facilitate money laundering and the financing of terrorist activities;7 (2) file Currency Transaction Reports (“CTRs”)8 and Suspicious Activity Reports (“SARs”);9 and (3) maintain certain records, including records relating to the purchase of certain monetary instruments with currency,10 relating to transactions by dealers in foreign exchange,11 and relating to certain transmittals of funds.12 Most types of MSBs are required to register with FinCEN.13

On May 22, 2009, the President signed the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 (“CARD Act”).14 Section 503 of the CARD Act required the issuance of “regulations in final form implementing the Bank Secrecy Act, regarding the sale, issuance, redemption, or international transport of stored value, including stored value cards.”15 Pursuant to the BSA and the CARD Act, FinCEN published the Notice of Proposed Rulemaking Definitions and Other Regulations Relating to Prepaid Access on June 28, 2010 (“NPRM”).16

In 1999, when FinCEN issued its final MSB rule,17 it deferred certain requirements for stored value based on its complexity and the desire to avoid unintended consequences with respect to an industry then in its infancy. Therefore, unlike most other categories of MSB, an issuer, seller, or redeemer of stored value was not required to register as an MSB with FinCEN or to file SARs. An issuer, seller or redeemer of stored value, as defined by our regulations, was required to file CTRs18 and to establish a written AML program, including policies, procedures, and internal controls commensurate with its activities and reasonably designed to prevent it from being used to facilitate money laundering and the financing of terrorist activities.19

In a 2009 notice of proposed rulemaking generally addressing the MSB definition,20 we proposed folding all regulated entities dealing with stored value into one category so thatissuersof stored value andsellers or redeemersof stored value would be in the same category. In that rulemaking, FinCEN did not propose making any substantive changes to the definition of this category, reserving those changes for the rulemaking specifically focused on prepaid access.

FinCEN's proposed rule on the regulation of prepaid access marked the agency's effort to establish a more comprehensive regulatory regime over an industry in which technological advances had outpaced existing regulation. Previously regulated to a lesser degree than its MSB counterparts, prepaid access (formerly “stored value”) is becoming increasingly pervasive in American commerce, far more so than in the late 1990s when the original MSB categories were established and accompanying regulations were drafted. We believe that the prepaid access market has matured and now warrants, at a minimum, commensurate regulation with other MSBs.

In the NPRM, we sought to regulate this industry with an approach and terminology that acknowledged its unique characteristics, in that it inhabits both the physical, tangible dimension (cards, key fobs, tokens), yet appears to exhibit increasing migration to the Internet space (e-retailers and social networking sites). Increasingly, other technology developments, such as smartphones, are being employed for tendering and receiving payment, by both individuals and merchants. These technological innovations are being widely embraced by the American consumer, particularly among the younger demographic.

The growth of prepaid access in the marketplace continues to flourish. The most recent Federal Reserve Payments Study21 noted that, of all forms of noncash payment methods included in its research, prepaid card usage was the fastest growing segment. On average, the number of prepaid card transactions increased 21.5 percent per year from 2006 to 2009, and the value of prepaid transactions increased 22.4 percent per year. Private label (commonly known as “gift cards”) was the most used type of prepaid card, with 2.7 billion transactions in 2009.22 A 2005 American Bankers Association study revealed that consumers prefer both giving and receiving retailer-specific gift cards instead of cash, as they are considered more personal and valued by the recipient.23 Based on the above, the American public has not just acceptedprepaid access; it often prefers it to other types of payment methods.

Our NPRM addressing prepaid access proposed comprehensive regulation of stored value, addressing the needs of law enforcement, the financial services industry, and the general public. From FinCEN's law enforcement stakeholders, we have heard that prepaid access has been implicated in a number of criminal enterprises, for example, involving border smuggling of blank card stock. Law enforcement generally has expressed the need for strict regulation of prepaid access, in some cases extending beyond existing requirements for other MSBs. Law enforcement's concern comes in part due to the ease with which prepaid access can be obtained, the high velocity of money that potentially can be moved with prepaid access, and the anonymous use of some, primarily closed loop, prepaid access. While we seek to empower law enforcement with the necessary information to perform its mission, we also seek to balance the many legitimate uses and societal benefits offered by prepaid access.

The prepaid industry and other financial services member stakeholders have an interest in delivering payment options to the general public that have proven popular and are increasing in demand. Other stakeholders, such as transit systems, university and academic environments, and even segments of the Federal government are also among those finding that prepaid access is an attractive, cost-effective method to transact business.

In the following, we will discuss the principal issues surfaced by the public comments received in response to our NPRM, and how we have resolved the issues in the final rule. In total, we received 76 comment letters, representing viewpoints from depository institutions, prepaid access program managers, service providers, industry trade associations, retailers, state and Federal government agencies, private individuals and others. As varied were the sources, so were the opinions offered. We have carefully read, catalogued and analyzed the information provided to us and have used it to inform our final decisions.

In the NPRM we sought to define the provider of a prepaid access program consistently with the other categories of MSBs.24 To that end, we expressly stated that the provider would be determined by the “facts and circumstances” surrounding the activities in which the party engaged. To aid the reader, we also offered a list of five activities that we believed would generally be descriptive of the provider role while cautioning that no single act or duty alone would be determinative. The “facts and circumstances” standard would employ a totality approach.

Consistency with wording in other MSB regulations, while important, was not our only reason for this approach. We believed that prepaid programs, although many and varied in their purposes and operation, would always involve a central entity that would meet the definition of a provider, according to the factors and activities that we delineated.

The commenting public, to a degree, agreed that our five elements were fundamental aspects of any prepaid program; but, in general, they strongly disagreed that one entity would always, or even primarily, be responsible for these duties. They asserted that the duties were typically allocated among several entities, and that the various activities might circulate from one participant to another at various points throughout the development of a prepaid program. FinCEN received approximately 26 letters commenting on these issues.25

Another objection, offered by 16 commenters, was the lack of an MSB-entity in the prepaid transaction chain that could accurately meet the definitional test of a provider as defined in the NPRM. Instead, these comments explained, the various duties and the “centrality” concept would lead directly to the issuing bank26 in most cases. Although all of these commenting parties agreed that the appropriate regulatory focus should be on the depository institution, they differed with respect to their preferred alternative regulatory approaches. Some stated that banks are already sufficiently regulated; while others argued for additional regulatory constraints on banks involved in the prepaid access business. Of these 16 letters, four were submitted by prepaid access-issuing banks themselves.27

The body of opinions addressing how to identify the correct party as the provider was quite varied, but a single common recommendation surfaced among many of the commenters: the best solution, both for clarity among the participants in the prepaid program and for simplicity in administration, would be to allow a contractual determination among the participants as to who would serve as the provider (“the agreement approach”). Commenters were nearly unanimous in the belief that only this approach allowed for a clear allocation of duties that would benefit the operation of the program, as well as regulators and law enforcement authorities. The ability to clearly identify the provider by the mutually-determined decision, along with the requisite submission to FinCEN of MSB registration materials, would offer instant identification of the principal entity in the transaction. FinCEN is finalizing the rule with the agreement approach.

Under the agreement approach, the provider will serve as the principal conduit of information for the other members of the program, thereby simplifying the production and strengthening the integrity of required reports and recordkeeping. The provider will accept and manage the flow of information generated by all of the program participants in such a way as to comply with regulatory requirements. The decisions regarding what processes or methodologies are established to accomplish this objective are best left to the program participants; the providersimply must have the ability to amass the appropriate information with dispatch.

We understand that prepaid transactions often involve more parties and sub-parties than might be typical of routine debit or credit card transactions and, for this reason, the information generated by the sale and use of prepaid access is often more dispersed. But because the information needs of law enforcement often necessitate speed and efficiency for successful criminal investigation and prosecution, requiring the separate pursuit of various records or documents all along the points of the transaction chain would be inefficient and inevitably lead to lost opportunities. Having the provider serve as the central source of information should help to minimize the inefficiency and allow for those most knowledgeable about how the business operates to make this fundamental business decision.

As we have discussed, the final rule adopts the agreement approach, and we begin our regulatory text by stating that the participants within a prepaid program must determine a single participant to be the provider of prepaid access. A determination among the program participants, communicated through the appropriate filing of an MSB registration with FinCEN, will identify the participant subject to regulatory obligations as the provider.

We noted previously, however, that there is rapid growth and innovation in many segments of the payments industry and such is certainly the case with prepaid access. We believe that our regulations should anticipate, to the degree possible, situations where the program participants fail to come to an agreement.

In the NPRM, we listed five criteria pertaining to the oversight and control necessary to be deemed a provider of prepaid access. While we heard objections to this list of factors when it was published as the determinative criteria in the NPRM, we have chosen to retain the language in the final rule as illustrative of the analytical factors that would be useful in determining the provider. We note that while the commenters took issue with the application of our list of criteria to a single entity, they offered positive observations on the accuracy and utility of the list. Commenters stated that the factors were appropriate and helpful and demonstrated FinCEN's understanding of the complexities of the ways in which prepaid programs function.

We understand that it would be unlikely to find all of these characteristics present in a single entity in the prepaid program; however, it may be helpful to weigh and assess the totality of the factors against the characteristics of the various program participants in reaching a regulatory determination of the provider. The list of factors is by no means exhaustive. We retain them within the regulatory text, however, to demonstrate that FinCEN will use these factors to make a provider determination in instances where a provider of prepaid access has failed to register.

In the NPRM, FinCEN proposed to regulate sellers of prepaid access as a separate category of MSB. Specifically, the NPRM proposed to require sellers to: (1) Develop and implement an effective AML program; (2) report suspicious activity; and (3) comply with recordkeeping requirements related to customer identifying information and transactional data. The NPRM did not include a registration requirement for sellers of prepaid access. The NPRM did, however, raise the possibility of an additional limitation to the definition of a seller of prepaid access, which would cover only those entities that sold prepaid products (including products not covered under the regulatory definition of prepaid program) in an amount over $1,000 to any person on any day in one or more transactions.

The rationale behind covering sellers of prepaid access under the BSA was based on the unique role played by sellers in the prepaid transaction chain. Typically, sellers of prepaid access are general purpose retailers such as pharmacies, convenience stores, supermarkets, discount stores or any of a number of other types of businesses offering a full spectrum of products. Sellers of prepaid access generally have face-to-face contact with consumers at the point of sale and, thus, they are in the best position to collect customer identifying information. As a general matter, AML program requirements applicable to a range of financial institutions can play an important role in mitigating risks involved in certain face-to-face transactions as they relate to the “placement” stage of money laundering.

In response to the NPRM, FinCEN received 45 comment letters that addressed the proposal to regulate sellers of prepaid access. These letters were primarily from companies whose business operations include some aspect of providing or selling prepaid access, including individual retailers, issuing banks, prepaid program managers, prepaid card networks, payment processors, other service providers, trade groups and other associations. Most of these commenters opposed any direct regulation of sellers of prepaid access. Some commenters questioned whether the Internal Revenue Service (IRS), the current delegated examiner for MSBs, has the resources to adequately examine and enforce such rules, and whether the information collected by sellers of prepaid access would be useful to law enforcement. Other commenters expressed concerns that implementation of the proposed rule would result in: high compliance costs; customer service challenges; privacy and data security issues; conflicts with state laws; and stigmatization of the unbanked and underbanked population.

None of these comments challenge the underlying rationale behind regulating sellers of prepaid access. Although, as some commenters pointed out, prepaid access devices and vehicles may be sold in convenience stores, pharmacies and other retail establishments alongside non-financial products, prepaid access is fundamentally different than non-financial products and services. It would be an unacceptable loophole in the BSA rules if prepaid access could be bought and sold without adequate oversight. Because prepaid access is essentially a financial service that provides consumers with access to the financial system, it should be subject to an appropriate level of regulation to prevent its misuse.

Based on this underlying rationale, FinCEN continues to consider it appropriate to regulate sellers of prepaid access as a type of MSB. However, FinCEN has decided to make certain changes to the rule with respect to sellers of prepaid access, balancing the concerns expressed in the comment letters with the legitimate need to mitigate money laundering risks and provide law enforcement with the information and investigatory tools necessary to prevent the use of prepaid access for money laundering, terrorist financing and other criminal purposes. FinCEN has adopted a targeted approach to regulating sellers of prepaid access, focusing on the sale of prepaid access whose inherent features or high dollar amounts pose heightened money laundering risks.

The NPRM defined a prepaid program broadly as “an arrangement under which one or more persons acting together provide(s) a particular form ofprepaid access.” The NPRM excluded from the definition of prepaid program five types of arrangements because they are typically low-risk. However, the NPRM also identified three high-risk factors that would negate any exclusion.

Comments tended to focus on the various exclusions from the core definition of “prepaid program” rather than on the core definition itself. Many public comments received in response to the various exclusions from the definition of a prepaid program argued for a more liberal, expansive reading of the relevant exclusions. Some commenters asserted that the exclusions were appropriate carve-outs, but that they did not go far enough. Other commenters expressed concerns about the effect of the three limits to the exclusions: international use, person-to-person transfers, and re-loads from a non-depository source other than for closed loop prepaid access. These limits to the exclusions, many commenters asserted, undercut the efficacy of the exclusions and would effectively render them meaningless. Only a handful of commenters chose not to address the program exclusions at all.

We revised the rule in an effort to reconcile the need to make the exclusions as precise as possible with limiting any possible risks or vulnerabilities. The final rule differs from the NPRM with a new framework to more effectively achieve our goal of targeting those arrangements that present a realistic risk of being used for money laundering, terrorist financing, or other illicit activities.

We heard from a broad range of American retailers, including lines of business as diverse as amusement parks, restaurants, and Internet software sales, commenting that our inclusion of closed loop prepaid access was an unwelcome departure from long-standing FinCEN policy. For a number of years, FinCEN has held that closed loop gift certificates and gift cards were not included within the regulatory interpretation of stored value.28

Many commenters asserted that the inclusion of any closed loop prepaid access as a type of prepaid program was unnecessary. They explained that closed loop prepaid access offers very limited criminal or money laundering opportunities given that, by its nature, it only allows use within a narrowly-defined universe of entities, such as a specific retailer, a retail chain (including franchisees), a shopping center, or a group of retailers linked by common ownership, corporate affiliation or geographic proximity. In all of these instances, the prepaid access is “closed” to any other retailers which are not part of the specifically identified group of retailers. In addition, many of these commenters noted that closed loop prepaid access involved relatively low dollar amounts, most commonly issued in denominations of $500 or less. Such low dollar limits and the inability, except under rare,de minimissituations,29 to convert closed loop prepaid access to cash make it an inefficient, cumbersome tool for use by money launderers.

In the NPRM, we explained that there were attributes potentially associated with closed loop prepaid access that raised its risk level. We treated these potential attributes in two of the proposed “limits to the exclusions.”30 Based on information provided by law enforcement, we were concerned that closed loop prepaid access, when used internationally or with the ability to transfer value from person-to-person, heightened its money laundering vulnerability considerably. We asked specific questions in the NPRM on this topic, and we received a great many responses. A total of 45 comment letters were received referencing closed loop prepaid access.

Some commenters provided very comprehensive, thoughtful responses in which they offered data and statistics about how their products operate and the reasons they view them as inapplicable to this rulemaking. The most frequent and strongly asserted statement was the limited dollar/limited scope of closed loop prepaid access. Even in a forum such as a shopping mall or a university campus, closed loop prepaid access offers the consumer only goods or services.

For some retailers, such as coffee vendors or fast food restaurants, convenience was the reason for offering closed loop prepaid access. The product array they offer is often limited to items retailing for just a few dollars, with conservative caps set on the maximum value available on the closed loop prepaid access they offer. They asserted that their closed loop prepaid access served consumers' needs when making repeat, low-dollar ticket purchases when the only other option would be cash; and it worked to the merchants' advantage for speedy transactions as well as encouraging repeat business and more liberal “spend per ticket.”

Other retail segments, such as furniture sellers, pointed out that closed loop prepaid access was used as a form of voucher in situations where a big-ticket item was returned, and that the limitations established in the NPRM were unworkable. Rather than returning cash in amounts of several hundred or thousand dollars, often exceeding the amount of cash maintained on hand, the merchant wanted the option to provide closed loop prepaid access as an accommodation to the customer and a convenience to the merchant itself. The furniture retailer was assured of repeat business and the customer was not burdened with the prospect of theft or loss of a large sum of cash. We believe that, for this segment of the closed loop prepaid access market whose inventory is comprised of mostly high-dollar merchandise, we have drawn a suitable compromise. As discussed below, FinCEN revised the threshold of closed loop in the final rule. Closed loop prepaid access sold in amounts of $2,000 or less is exempted, which will accommodate this practice of returns.

Based on comments received in response to the NPRM specifically with regard to closed loop prepaid access, FinCEN understands that a requirement to collect customer identifying information may necessitate changes in the way that businesses escheat funds to states if those funds are not claimed by their owners, depending on the differences between escheat laws for funds belonging to identifiable persons and for anonymous funds. As discussed herein, the final rule significantly limits the scope of closed loop prepaid access covered under the definition of a prepaid program. Accordingly, the final rule should have minimal effects, if any, on businesses in connection with state escheat laws.

The most common theme underlying the varying objections in the comment letters was that closed loop prepaid access products were used by retailers to pre-sell goods and services, not to serve as a medium through which the funds paid can later be recovered in the form of cash. If an individual is seeking to launder funds, closed loop prepaid access is a cumbersome and ineffective method to accomplish such; funds placed in closed loop prepaid access do not offer withdrawal or transfer options. Retailers commented that a closed loop gift card that is redeemed for cash ratherthan merchandise is of little economic benefit to them.

As a result of the many, diverse comment letters we received that addressed this aspect of the NPRM, we now better appreciate that closed loop prepaid access differs from open loop prepaid access in a very material way, both in operation and purpose. Closed loop prepaid access has evolved in its present form from the paper “gift certificate” that has existed for many years in the traditional retail environment. The migration to a card bearing a magnetic stripe reflects technological improvements that allow the merchant to track the remaining balance, the goods or services purchased, demographic data and other valuable marketing information. But, fundamentally, the closed loop prepaid access remains limited to its defined merchant and it is not redeemable in cash.

In our analysis of the appropriate treatment of closed loop prepaid access in the final rule, we have attempted to reconcile the perspectives of the commenting public with the cautions we continue to receive from law enforcement. Law enforcement has stressed to us that, in very large dollar amounts, closed loop prepaid access remains vulnerable to use by criminal enterprises for laundering funds through merchandise and trade, particularly for the purchase of consumer electronics and technology hardware.

Accordingly, FinCEN has chosen to set a dollar threshold of $2,000 for closed loop prepaid access, which helps address the concerns of both retailers and law enforcement. We believe that law enforcement presents legitimate concerns about potential for abuse in a limited segment of the closed loop prepaid access market. Of equal importance, however, is FinCEN's objective to facilitate legitimate commerce. As discussed below, we have determined that the limits to exclusions we had proposed for closed loop pertaining to international use and third-party transfers are not necessary at this point; all closed loop prepaid access that is issued in amounts of $2,000 or less will be excluded from the definition of prepaid program. This dollar level should encompass the bulk of retail sales of closed loop prepaid access for most consumer goods and services, and mitigate the potential for abuse by those who might otherwise seek to intermediate significant amounts of value outside of regulatory controls under the premise of the closed loop exclusion.

In the NPRM, we discussed the increasing use by the Federal government of open loop branded prepaid access as a means of delivering various types of benefits and assistance, such as Social Security, disability and disaster relief payments. We also noted that state and local governments were increasingly interested in using prepaid access to deliver regular payments, such as unemployment benefits or child support, in a more efficient way than the traditional issuance and mailing of a check.

The available market research indicated that both government entities and recipients were receptive to this migration to prepaid access.31 For the government payor, prepaid access offered a lower-cost, more secure payment method. For the payee, security features and the immediacy of the funds were considered very positive characteristics.

In the NPRM, we asked whether the use of prepaid access for the payment of government benefits posed any identifiable vulnerability. We had generally concluded that adequate controls were in place for government-administered prepaid access programs to safeguard against illicit use. But we believed that we could benefit by posing specific questions to the commenting public for issues or recommendations worthy of attention.

We received only a handful of comment letters that addressed this issue. All of these commenters strongly supported the use of prepaid access by government agencies. We also heard from a government agency at the Federal level charged with responsibility for establishing and operating prepaid access programs, with a very thorough explanation of the controls and safeguards in place.

Given these factors, we believe that our initial stance in the NPRM remains correct, and that these prepaid access programs are appropriately excluded from coverage under the final rule. As noted below, the exclusion will not be limited in the final rule. We have expanded the regulatory text to capture all facets of government at the Federal, state and local level, to include Tribal governments and U.S. Territories and Insular Possessions. The revised language is consistent with our intent in the NPRM and with other BSA regulations.

We have retained the exclusion for prepaid access to flexible spending and dependent care funds in the final rule. As noted below, there will be no limitations on this exclusion. The wording of the regulatory text used in the final rule differs slightly from that in the NPRM, due to recommendations offered to us by the IRS. The addition of the regulatory citations is not intended to broaden or limit the scope of this exclusion from that proposed in the NPRM.

We received significant public comment on this section of the proposed rule. Most commenters approved of this specific exclusion, and many recommended a broadening to include any type of employer-sponsored reimbursement account, such as fitness/wellness programs and commuter benefits programs. Additionally, some commenters urged us to expand the exclusion to include Health Savings Accounts (“HSAs”), which allow the commingling of health and non-health related funds.

We have chosen to retain our original scope of reimbursements as proposed in the NPRM. With respect to HSAs, we have consulted with the IRS and understand that funds in these types of accounts are not required to be earmarked for health care. Because the strict limitations inherent in health reimbursement arrangements (“HRAs”) are not present with HSAs, it is not prudent to allow any prepaid access associated with their use to be excluded from the definition of a prepaid program. We have also determined that it would not be appropriate to exclude prepaid access issued by various employer-sponsored reimbursement programs from the definition of a prepaid program. The operation of these private programs can vary greatly, and they also do not meet the same strict standards that apply to HRAs.

In the NPRM, the limitations applied to all of the exclusions from the definition of a prepaid program. In the final rule, by contrast, we have identified only two categories of prepaid access that may present vulnerabilities to criminal use, but at the same time offer considerable benefits to American commerce and to the individual consumer. Under the final rule these two categories of prepaid access may remain outside the definition of a prepaid program but only if the use of the prepaid access is restricted in ways that limit the risk of misuse.

The limited exclusions under the final rule only apply to prepaid access to: (1) employment benefits, incentives, wages or salaries; or (2) funds not to exceed $1,000 maximum value and from which not more than $1,000 maximum value can be initially or subsequently loaded, used or withdrawn on any day through a device or vehicle. Such prepaid access is not entitled to exclusion, and therefore is a prepaid program, if it permits (1) funds or value to be transmitted internationally; (2) transfers between or among users of prepaid access within a prepaid program; or (3) loading additional funds or the value of funds from non-depository sources.

The use of prepaid access to deliver employment benefits, incentives, wages or salaries is a popular and widespread application. In many instances, it is a cost minimizer for the employer, who no longer must issue paper checks that may be lost, stolen or altered, and that often carry attendant postage costs. Instead, the employer appreciates the ability to assign payment electronically to prepaid access with a minimum of effort and cost; the employee is equally pleased with the efficiencies and cost savings, and the ability to access funds immediately with no need to cash a paper check. In addition, the use of prepaid access offers a solid audit trail that equals and sometimes exceeds that of paper instruments.

Commenters also pointed to the attributes of prepaid access over some payment situations where wages are paid out in cash, for example, to seasonal or migrant workers. Under these circumstances, the wage earner may not have access to traditional banking services or may be unable to transact business in a traditional setting, due to language or cultural barriers. The use of the prepaid access can serve as a form of “mainstreaming” for this individual.

Unfortunately, for all of the attributes that prepaid access presents for the payment of wages and salaries, it is also one of the areas of greatest law enforcement concern. Repeatedly, we have heard that payroll schemes involving prepaid access are growing in breadth and dollar volume, and that criminal actors continue to thrive in this environment. Where prepaid access to wages and salaries can be used to move significant amounts of money, on a repeated basis, to many different individuals, we believe that it is appropriate to require reasonable regulatory protections against misuse.

The final rule provides such protection by retaining the qualified exclusion for the use of payroll prepaid access that was proposed in the NPRM, under which prepaid program status is triggered if funds can be transmitted internationally, transferred to others, or reloaded at a non-depository institution. Businesses that provide payroll prepaid access will either tailor their prepaid access programs to the limitations or subject their prepaid program to the regulatory requirements associated with prepaid program status. Although this decision to keep payroll prepaid access subject to these limitations runs counter to the majority of the opinions expressed in the public comments, we believe that the better view is to exercise caution with respect to this type of prepaid access, especially because law enforcement has strongly warned about its vulnerability to money laundering.

Similarly, we have chosen to retain the three limitations with respect to prepaid access to funds that can exceed $1,000 in load, use or withdrawal capability at any time through a device or vehicle. We have done so based on the same continuing concerns about the vulnerability to money laundering of unlimited low denomination prepaid access that we have with respect to payroll prepaid access. We have, however, eliminated the requirement in the NPRM for a dollar limit to be clearly visible on the prepaid access device or vehicle in response to the many comments that this was not practicable and that it discriminated against those technologies for which it was impossible to manifest such a dollar limit on the prepaid access device or vehicle.

If payroll cards and prepaid access products below the $1,000 threshold do not permit international use, person-to person payments, or non-depository source loads, then such prepaid access is excluded from BSA regulation. In this construct, FinCEN wishes to clarify that we do not intend to sweep back into the scope of the rule prepaid access that might be used in conjunction with another prepaid access device that permits such activities, when the first prepaid access device does not. In that regard, status as a prepaid program is determined by the functionality of the product(s) within that program, not by the functionality of other products or services which they can purchase. Thus, a prepaid product that could be used to reload another prepaid product might not necessarily trigger the scope of the regulations, but such a prepaid product that was reloaded might itself be part of a program subject to the regulations if it can, for example, be used internationally. With respect to the limitations to the exclusions pertaining to transfers between or among users and reloadability by non-depository institutions, the same construct applies.

FinCEN also wishes to clarify that the limitation on international transmission is specifically intended to cover prepaid access devices that can be directly used outside of the United States. For example, while a network branded prepaid card with an initial and maximum load limit of $500 would generally be excluded, if it can be used to withdraw cash or purchase goods and services directly from foreign ATMs or merchants (via the Internet, in person, or otherwise) the limitation would apply and providers and sellers of such cards would be subject to the prepaid access rules. The limitation does not apply to prepaid access products that cannot be directly used for such foreign transactions. An example of such a product would be a network branded prepaid card with controls in place to prevent it from being used to withdraw cash or purchase goods and services directly from foreign ATMs or merchants (via the Internet, in person, or otherwise).

With respect to Internet transactions, the relevant issue is the foreign location of the merchant rather than the location of the person using the prepaid access product or the location where products are delivered or services rendered. Thus, for example, a prepaid card that permits an individual visiting a foreign country to make Internet purchases from a U.S.-based merchant would not be covered under the international use limitation by virtue of that functionality because the card cannot be used as a vehicle for moving money outside the United States. Additionally, if a prepaid access product can be used to fund a U.S.-based bank or other account or to purchase a different prepaid access device that permits international use, the original product does not trigger the international use limitation by virtue of that functionality.

Section 1010.100(ff)(4)(i) defines a provider of prepaid access as the one participant among the entities engaged in offering a particular prepaid access program that agrees to serve as the contact and source of information for FinCEN, law enforcement and regulators for the particular program. The participants in a particular prepaid program should determine the single participant that serves as provider of prepaid access. As discussed above, this change was made because we werepersuaded of the value of the ability to clearly identify the provider by the mutually-determined decision, which offers other members of the program and law enforcement instant identification and expedient access to the entity in the transaction chain that will serve as “the principal conduit of access to information.” The provider must register as an MSB with FinCEN and will be subject to BSA regulations. The provider will be subject to oversight and examination for these obligations which include maintaining an AML program, reporting SARs, and recordkeeping and customer identification requirements.

Section 1010.100(ff)(4)(ii) provides factors for determination of the provider of prepaid access in the event that no participant in the prepaid program registers as the provider. Determining the provider of prepaid access in such a situation is a matter of identifying the participant with “principal oversight and control.” The determination of which participant in the prepaid program has principal oversight and control will be a matter of facts and circumstances. We recognize that there may be situations in which no single participant engages in all of the factors listed in 1010.100(ff)(4)(ii). However, there will be an identifiable participant in the prepaid program with the principal oversight and control, which will be in the best position to serve as a conduit for information for regulatory and law enforcement purposes. The rule lists the following five factors, each not dispositive on its own, which may indicate “principal oversight and control” and which FinCEN will use to identify a provider of prepaid access when there has been a failure by the parties to do so:

a. Organizing the prepaid program.

“Organizing the prepaid program” includes the initiation and establishment of the prepaid program. This may involve actions or activities as diverse as identifying the need for a prepaid program, developing a business plan, obtaining financing, and contracting with other principals. A participant that organizes the prepaid program demonstrates oversight and control.

b. Setting the terms and conditions of the prepaid program and determining that the terms have not been exceeded.

This factor concerns the technical specifications involved in establishing and operating the prepaid program. Setting the terms and conditions encompasses a range of decisions concerning sales locations for prepaid access, fees assessed for activation and reloading, providing customer service, and other aspects of the program. A participant that sets the terms and conditions of a prepaid program demonstrates oversight and control.

c. Determining the other businesses that will participate in the prepaid program, which may include the issuing bank, the payment processor, or the distributor.

This factor addresses the participant that identifies and recruits the other participants involved in the prepaid program. The provider of prepaid access may choose other participants based on geographic proximity, specialized expertise in a particular line of prepaid access such as payroll programs, market expertise, or other considerations. Regardless of the reasons other participants are chosen, a participant that determines the other entities involved demonstrates oversight and control.

d. Controlling or directing the appropriate party to initiate, freeze, or terminate prepaid access.

The ability to affect the movement of funds is a very important factor in determining the provider of prepaid access. We understand that a participant in a prepaid program may exercise this authority alone, in tandem with other participants or at the direction of law enforcement or judicial authority. A participant that either moves or suspends funds or directs another participant to move or suspend funds demonstrates oversight and control.

e. Engaging in activity that demonstrates oversight and control of the prepaid program.

This factor is intended to capture situations where oversight and control may be evidenced by activities that do not fit squarely within items (a) through (d), preceding. To the extent that both the prepaid industry and our understanding of it continue to evolve, this criterion provides the flexibility needed to ensure reasonable longevity for the rule.

Section 1010.100(ff)(4)(iii) defines a prepaid program as an arrangement under which one or more persons acting together provide(s) prepaid access. There are circumstances, however, where particular arrangements involving prepaid access may be organized in such a way that they do not fall within the definition of a prepaid program. Arrangements whose operations fall squarely within one or more of the exclusions described below in (a)-(d) present such a low risk of money laundering or other illicit behavior that they do not justify regulation under the BSA and are therefore, not deemed to be a prepaid program under the rule. An arrangement is not a prepaid program if:

a. It provides closed loop prepaid access to funds not to exceed $2,000 maximum value that can be associated with a prepaid access device or vehicle on any day.

An arrangement that provides closed loop prepaid access to funds not to exceed $2,000 is not defined under this rule as a prepaid program. The effort required to use closed loop prepaid access for the placement, layering or integration of funds makes them unattractive and unlikely vehicles for moving large sums of money efficiently. Closed loop prepaid access is only used for particular goods or services, which limits the ability to use it to move money quickly and easily in large amounts. The limitation to an identifiable merchant (which is an element of the definition of “closed loop prepaid access,” as discussed below) similarly restricts the utility of closed loop prepaid access for money laundering purposes.

As discussed above, the exemption for closed loop prepaid access has been changed in response to comments. The exemption now applies to closed loop prepaid access of less than $2,000 maximum value.32 Unlike the NPRM, it exempts such closed loop prepaid access even if it allows international use, transfers within the prepaid program, or loading from non-depository sources. We believe these changes more accurately reflect the risks associated with closed loop prepaid access.

b. It provides prepaid access solely to funds provided by a Federal, State, local, Territory and Insular Possession, or Tribal government agency.

Various government agencies provide funds for many types of obligations such as salaries, tax refunds and benefits including unemployment, child support, disability, Social Security, veterans' benefits and disaster relief assistance through prepaid access. Given governmental oversight over these programs and the single source of the funds, we see minimal opportunity for the placement or layering of illicit funds into the financial system through prepaid access to government benefits.

As discussed above, the exemption for government funded prepaid access has been changed in response to commentsto exempt all such prepaid access without regard to international use, transfers within the prepaid program, or loading from non-depository sources. These changes more accurately reflect the low risks associated with government funded prepaid access.

c. It provides prepaid access solely to funds from pre-tax flexible spending arrangements for health care and dependent care expenses, or from Health Reimbursement Arrangements (as defined in 26 U.S.C. 105(b) and 125) for health care expenses.

Generally administered by a central payor, these arrangements are pre-funded by employee and/or employer contributions to an account maintained by the payor. There are maximum annual dollar limits established for these accounts, and the funds can only be accessed as reimbursement for defined, qualifying expenses. We believe that these types of highly controlled, low risk accounts are of minimal value to potential money launderers as a means of placing or layering funds. For this reason, we have excluded these arrangements from the definition of prepaid program.

As discussed above, the exemption for health and dependent care flexible spending prepaid access has been changed in response to comments to exempt all such prepaid access even if it allows international use, transfers within the arrangement, or loading from non-depository sources. We believe these changes more accurately reflect the low risks associated with health and dependent care flexible spending prepaid access.

d. It provides prepaid access solely to (i) employment benefits, incentives, wages or salaries; or (ii) funds not to exceed $1,000 maximum value and from which no more than $1,000 maximum value can be initially or subsequently loaded, used, or withdrawn on any one day through a device or vehicle, subject to certain limitations.

Prepaid access to benefits and salaries and prepaid access subject to low funds limits do not fall within the definition of prepaid program under this final rule unless they contain certain higher risk features that obscure financial transparency, thereby meriting regulation. Specifically, arrangements limited to funding employment benefits, incentives, wages or salaries, and those limited to funds not to exceed $1,000 maximum value and from which no more than $1,000 maximum value can be initially or subsequently loaded, used, or withdrawn on any day through a device or vehicle, do not fall within the definition of prepaid program under this final rule if they do not allow international use, person-to-person transfers, or loading from non-depository sources.

i. Employment benefits, incentives, wages or salaries.

In most employer-employee relationships, the necessary personal details regarding the employee (such as full name, address, date of birth and a government identification number) are known to the employer. In those situations, where the individual employees paid under the program are identified by the employer, and where this information is shared with (or made available to) the provider of prepaid access, there are sufficient checks on possible money laundering abuse to warrant exclusion for this type of program. These payroll programs, in addition to regularly scheduled wage and benefits payments, may also include bonus or incentive payments paid at intervals outside the norm. This exemption applies only to arrangements in which the employer, and not the employee, can add to the funds. The ability to co-mingle funds accessed through the payroll card from sources other than the employer would obscure financial transparency and greatly increase the money laundering risk. The payment of “[b]enefits, incentives, wages or salaries” solely from the employer generally does not represent an opportunity for the placement of ill-gotten funds into the financial system (at least as distinct from criminal activity on the part of the employer originating the payments, not related to the use of prepaid access).

ii. Funds not to exceed $1,000 maximum value and from which no more than $1,000 maximum value can be initially or subsequently loaded, used, or withdrawn on any day through a device or vehicle.

We believe that the potential for misuse is significantly lessened where the prepaid access is to funds limited to a $1,000 maximum limitation and no subsequent loading or reloading can increase the funds beyond the stated maximum on any day through a device or vehicle. We have chosen a $1,000 maximum for this provision for a number of reasons: (1) 2009—2010 industry research findings for average and maximum initial loads;33 (2) consistency with thresholds established for other MSB categories; and (3) the appropriate balance between the concerns expressed by law enforcement and industry.

This final rule differs from the NPRM in that the phrasing of the $1,000 maximums has been collapsed from three separate subsections into one because it is more concise and, we believe, clearer. It also clarifies that this limitation applies to a single device or vehicle, not across an entire prepaid program. Additionally, the NPRM included a requirement that the maximum value of the prepaid access product eligible for this exemption must be clearly visible on the product itself. The final rule does not include this requirement based on present concerns, as informed by some comments, that the requirement may be un-workable and may not be technologically neutral.

iii. Limitations on the payroll and limited value prepaid access exemptions.

Payroll cards and limited value prepaid access devices or vehicles are subject to a qualified exception under the final rule, allowing the programs to fall outside of the requirements unless key risk factors change. Specifically, the exemption is not applicable, and prepaid program status is triggered, if funds can be transmitted internationally, electronically transferred to other users of the prepaid access, or reloaded at a non-depository institution. While not inherently suspect, arrangements having these characteristics have risks significantly greater than the otherwise minimal risk presented by payroll and limited value prepaid access arrangements.34

In the NPRM, a seller of prepaid access was defined as “any person that receives funds or the value of funds in exchange for providing prepaid access as part of a prepaid program directly to the person that provided the funds or value, or to a third party as directed by that person.” As discussed more fully below, FinCEN has modified the definition of seller of prepaid accessto cover a much smaller, more targeteduniverse of retailers. The NPRM also proposed to require sellers of prepaid access to: (1) Develop and implement an effective AML program; (2) report suspicious activity; and (3) comply with recordkeeping requirements related to customer identifying information and transactional data. These regulatory requirements remain largely unchanged in the final rule.

In the final rule, FinCEN has replaced the phrase “* * * in exchange for providing prepaid access as part of a prepaid program directly to the person that provided the funds or value, or to a third party as directed by that person” with “in exchange for an initial loading or subsequent loading of prepaid access. * * *” Thus, if the other conditions of the rule are met, a person is a seller of prepaid access if the person accepts payment in exchange for the initial or subsequent loading of prepaid access. The modified language more clearly articulates the types of transactions covered under the definition.

As proposed, the rule would only apply to retailers that sell prepaid access devices or vehicles that are part of a prepaid program as defined in the rule. One of the primary issues raised in the comment letters was that low-dollar closed loop prepaid access (with some comments also referring to closed loop prepaid access that permits international use), was covered under the proposed definition of prepaid program. As such, the proposed rule would have subjected retailers that sell such prepaid access to regulation as sellers of prepaid access. Commenters argued that low-dollar closed loop prepaid access is relatively low-risk, and retailers that sell such access should not be subject to the regulation by virtue of that activity alone. FinCEN agrees that low-dollar closed loop prepaid access poses limited money laundering risks. Therefore, as discussed above, FinCEN has modified the definition of prepaid program in the final rule to cover only closed loop prepaid access with a value of $2,000 or more. Additionally, as discussed above, the definition of prepaid program in the final rule does not cover closed loop prepaid access merely because it can be used internationally. Under the final rule, retailers that sell low-dollar closed loop prepaid access are not subject to regulation as sellers of prepaid access by virtue of that activity alone. However, retailers that sell high-dollar (in excess of $2,000) closed loop prepaid access are subject to regulation as sellers of prepaid access.

FinCEN continues to believe that prepaid access such as general purpose reloadable products with no restrictions on international use poses heightened money laundering risks, regardless of the value of the funds to which such access is being provided. As discussed above, the final rule adopts the formulation in the NPRM that includes this prepaid access under the definition of prepaid program. Accordingly, this type of prepaid access triggers the regulatory obligations applicable to both providers and sellers of prepaid access.

Under section 1010.100(ff)(7) of the final rule, a seller of prepaid access is any person that receives funds or the value of funds in exchange for an initial loading or subsequent loading of prepaid access if that person sells prepaid access offered under a prepaid program that can be used before verification of customer identification under § 1022.210(d)(1)(iv); or sells prepaid access (including closed loop prepaid access) to funds that exceed $10,000 to any person during any one day, and has not implemented policies and procedures reasonably adapted to prevent such a sale.

Under paragraph (ff)(7)(i), a person is a seller of prepaid access if the person sells any prepaid access under any prepaid program, where the customer can use the prepaid access before verification of customer identification by any participant in the prepaid program. However, a person is not a seller of prepaid access under this provision with respect to the sale of prepaid access that requires post-purchase activation and the collection of customer identifying information before use. The phrase “that can be used before verification of customer identification” only refers to use of features of a prepaid access product that would make it qualify as a prepaid program. For example, the sale of a prepaid access product that allowed the initial funds loaded, if below $1,000, to be used for purchases and did not have access to features such as international use, person-to-person transfers, and loads from non-depository sources prior to verification would not make a retailer a seller. FinCEN believes this approach appropriately regulates retailers that sell high-risk products, while not imposing undue obligations on retailers that only sell relatively low-risk products.

Under paragraph (ff)(7)(ii), a person is a seller of prepaid access if the person sells any prepaid access—even that which is not covered under the definition of prepaid program—that provides access to more than $10,000 to any person during any one day, subject to an exemption for retailers with policies and procedures reasonably adapted to prevent such sales. FinCEN believes this additional activity threshold is necessary in light of FinCEN's more targeted approach to regulating sellers of prepaid access in this final rule. All retailers should already be familiar with reporting requirements for cash transactions exceeding $10,000. Retailers are obligated under the BSA rules to file reports on the receipt of currency in excess of $10,000 in the course of engaging in a trade or business.35 However, the sale of prepaid access in an amount greater than $10,000 should automatically raise a red flag with a retailer, regardless of whether the customer makes the purchase in cash or some other form of payment. High dollar transactions involving prepaid access pose inherent money laundering risks. To permit such transactions to occur without the prospect of any BSA reporting or recordkeeping requirements, other than the reporting of cash transactions, would deprive law enforcement of access to highly useful information. Therefore, it is appropriate to regulate retailers that sell prepaid access in an amount greater than $10,000, requiring them to maintain an anti-money laundering program, report suspicious activity and collect customer identifying information.

However, we do not think it is necessary to impose such regulatory burdens on retailers that implement and adhere to policies and procedures that are reasonably adapted to prevent the sale of more than $10,000 of prepaid access. This is consistent with a risk-based regulatory approach. Retailers may take into consideration their lines of business, customer base, and prepaid access sales volume in developing their internal policies and procedures in such a way as to reduce their risk of money laundering. FinCEN believes that such a risk-based approach for sellers strikes the right balance with respect to including certain sellers within the scope of the rule, while at the same time enabling those with lower risks to avoid the full scope of the rule. FinCEN believes the definition of seller of prepaid access will apply to a relatively small number of retailers and will not impose an unjustifiable burden on any retailers.

The prior regulations used the term “stored value.” 31 CFR 1010.100(ww), formerly 103.11(vv), defined the term as funds or the value of funds represented in digital electronic format (whether or not specially encrypted) and stored or capable of storage on electronic media in such a way as to be retrievable and transferable electronically. The term “stored value,” as discussed previously, was known from its inception to be a less-than-perfect label for this payment mechanism, given that no value is actually “stored” on the card. Very shortly after the publication of the MSB final rule in 1999, the term “prepaid”emerged as the more common industry term. This rule revises our term to correspond to the more accurate, more prevalent term in the marketplace.

This rule employs more precise terminology while still striving for regulatory flexibility, so that the rule will not become obsolete with the next innovative product. We believe the definition has the necessary regulatory elasticity to survive future technological advancements. Specifically, we define “prepaid access” as “[a]ccess to funds or the value of funds that have been paid in advance and can be retrieved or transferred at some point in the future through an electronic device or vehicle, such as a card, code, electronic serial number, mobile identification number, or personal identification number.” The definition has been changed somewhat from that proposed in the NPRM to clarify that prepaid access is not itself a device or vehicle, but that such a device or vehicle is a means through which prepaid funds are accessed. The two main elements of prepaid access are stated in the definition: (1) funds have been paid in advance; and (2) those funds can be retrieved or transferred at some point in the future. We also reduce the number of examples in the definition to eliminate redundancy.

The term “closed loop prepaid access” is defined as “[p]repaid access to funds or the value of funds that can be used only for goods or services involving a defined merchant or location (or a set of locations), such as a specific retailer or retail chain, a college campus, or a subway system.” This definition, which supersedes the definition of “closed loop stored value” proposed in FinCEN's 2009 MSB rulemaking, revises slightly the definition proposed in the NPRM. Compared to the definition proposed in the NPRM, it limits closed loop prepaid access to use for goods and services, excluding transfers of value to third parties and cash withdrawals.36 It continues to limit closed loop prepaid access to transactions involving a defined merchant or location(s). In this context, FinCEN wishes to clarify that a defined merchant may comprise a set of affiliated retailers or retail chains.

This rule revises the regulation implementing 31 U.S.C. 5318(h) that requires MSBs to maintain an adequate anti-money laundering program. Specifically, it amends 31 CFR 1022.210(d)(1), formerly 31 CFR 103.125(d)(1), by prescribing that, as part of their anti-money laundering programs, providers and sellers of prepaid access must have policies and procedures for access to and retention of customer identifying information and either retaining that information (in the case of sellers of prepaid access) or retaining access to that information (in the case of providers of prepaid access).

In implementing 31 CFR 1022.210, FinCEN stated that the uniqueness of each financial institution required the adaptation of policies, procedures, and internal controls to a level commensurate to the risks in the financial institution's business model, including geography and customer base. Therefore, we did not intend for each MSB to have identical policies and procedures for their AML programs. Based on inherent risks, some businesses would be required to implement more comprehensive policies, procedures, and internal controls than others.

This regulation adds a customer information recordkeeping requirement (including, name, date of birth, address, and identification number) for the provider and seller of prepaid access. Providers of prepaid access must retain access to such identifying information for five years after the lastuseof the prepaid access. Sellers of prepaid access must retain such identifying information for five years from the date of thesaleof the prepaid access. FinCEN believes that obtaining and retaining (or retaining access to) such customer information is necessary for greater financial transparency concerning the purchasers of prepaid access. We anticipate that access to and retention of such records will assist providers and sellers, and may be of great value to law enforcement.

The requirement that providers of prepaid access must obtain the identifying information of a person who obtains prepaid access under a prepaid program is linked to and narrowed by the definition of “prepaid program.” Accordingly, providers of prepaid access in an arrangement that does not fall within the definition of a prepaid program under 31 CFR 1010.100(ff)(4)(iii) will not be required to obtain customer information. For example, prepaid access to funds less than $1,000 through a device or vehicle that does not allow international use, transfers between prepaid access products within one prepaid program, or loads from non-depository sources does not require a provider to collect customer identification.

With respect to sellers of prepaid access, there are two situations under which customer information must be collected. Under one situation, sellers that fall within the scope of the regulations by virtue of the definition at 31 CFR 1010.100(ff)(7)(i) (i.e.,where the customer can access funds under a prepaid access program without verification of customer identification) are responsible for collecting customer information. Since this definition is also linked to the definition of prepaid program, this situation will involve both the provider and the seller of prepaid access being responsible for the collection of this information. While both are responsible under the regulation for the collection of this information, they may agree with one another as to which will collect the information. Under the other situation, sellers that fall within the scope of the regulations by virtue of 31 CFR 1010.100(ff)(7)(ii) (i.e.,sale of any type of prepaid access in a combined amount greater than $10,000) must also obtain customer identification. Since this definition is linked to the sale of more than $10,000 of any type of prepaid access, whether covered under a prepaid program or not (including closed loop access), there may be situations under which the seller, but not the provider, is obligated to collect the customer information.

The rule requires collection, verification, and retention of standard identifying information, including name, date of birth, address, and identification number. This information will be highly useful to law enforcement in the investigation and prosecution of criminal, tax, and regulatory investigations and proceedings. These requirements are intended to mirror the customer identification programs required of other financial institutions and draws on the explanations and interpretations issued with respect to those requirements.37 Providers and sellers of prepaid access are reminded that the AML programs they develop pursuant to this rule should be appropriate for their prepaid program operations. AML programs must be sufficiently detailed with standards and criteria specified for how the information is to be accessed, collected, verified, and retained. There should also be provisions addressing communication to employees and for the training of any individuals or entities acting as their agents.

The Blynman (SR127) Bridge, across the Blynman Canal, mile 0.0, at Gloucester, Massachusetts has a vertical clearance in the closed position of 7 feet at mean high water and 16 feet at mean low water. The existing drawbridge operation regulations are listed at 33 CFR 117.586.

The waterway supports both commercial and seasonal recreational vessel traffic.

Under this deviation the Blynman (SR127) Bridge may remain in the closed position from 7:30 a.m. through 10:30 a.m. on August 7, 2011, to facilitate a public event, the 2011 Gloucester Fisherman Triathlon. Vessels that can pass under the closed draws may do so at any time.

This deviation is necessary for public safety, to facilitate vehicular traffic management during the 2011 Gloucester Fisherman Triathlon.

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

The City of San Francisco requested a temporary change to the operation of the Third Street Drawbridge, mile 0.0, over China Basin, at San Francisco, CA. The Third Street Drawbridge navigation span provides a vertical clearance of 7 feet above Mean High Water in the closed-to-navigation position. The draw opens on signal if at least one hour notice is given as required by 33 CFR 117.149. Navigation on the waterway is recreational.

The drawspan will be secured in the closed-to-navigation position 7 a.m. to 1 p.m. on July 31, 2011, to allow participants in the San Francisco Marathon to cross the bridge during the event. This temporary deviation has been coordinated with the waterway users. No objections to the proposed temporary deviation were raised. The drawspan can be operated upon one hour advance notice for emergencies requiring the passage of waterway traffic.

Vessels that can transit the bridge, while in the closed-to-navigation position, may continue to do so at any time.

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

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 publishing a NPRM would be contrary to public interest due to the amount of notification received by the Coast Guard and the contractually imposed timeline for the installation of flood control structures/barriers. The Coast Guard received notice of the installation timeline in late May and promptly completed its required review and approval of the plan in June, leaving insufficient time to complete the NPRM process before the initial canal operations in June. Additionally, delaying the canal operations will impact L & A Contracting Co. requirements for delivery andinstallation by Mar 2013. Therefore, it would be impracticable to publish a NPRM and immediate action is needed to protect the personnel, general public, vessel and tows, and mariners from hazards associated with the installation process.

Under 5 U.S.C. 553(d)(3), based on the contractually imposed timeline and the notification received by the Coast Guard good cause exists for making this rule effective less than 30 days after publication in theFederal Register. The installation timeline presented to the USCG required immediate action and a delayed effective date would be contrary to public interest. Delaying or rescheduling the installation to provide 30 days notice also is impractical because the contractual timelines for beginning delivery and installation of the canal structures/barriers are in June, 2011. By making the rule effective immediately upon publication and enforceable with actual notice upon signature, the delivery and installation of the canal structures/barriers can continue under the applicable contract. Delaying the effective date would be impracticable as immediate action is need to protect the personnel, general public, vessel and tows, and mariners from hazards associated with the installation process.

The Coast Guard received notice and application for the installation of Flood Control Structures/Barriers in the Houma Navigation Canal, from Waterway Mile Markers 19.0 to 20.0, southwest of Bayou Plat, Terrebonne Parish, LA. These structures/barriers are part of a plan to implement storm surge protection identified as Reach F and Segment 1 of Reach G of the Morganza to the Gulf hurricane protection system. The installation of the Flood Control Structures/Barriers requires the staging of equipment along the banks of the Houma Navigation Canal. To protect the general public, vessels and tows from destruction, loss or injury due to the installation, the Coast Guard is establishing a temporary safety zone which will continue through March 14, 2013. Vessels and tows transiting this zone will proceed at slowest safe speed to minimize wake.

The Coast Guard is establishing a temporary Safety Zone in the Houma Navigation Canal, from Waterway Mile Markers 19.0 to 20.0, Southwest of Bayou Plat, bank to bank, Terrebonne Parish, LA. The temporary safety zone will continue through 11:59 p.m., March 14, 2013. Vessels and tows transiting this zone will proceed at slowest safe speed to minimize wake. All work on the project is scheduled to be complete by March 14, 2013.

The installation of the Flood Control Structures/Barriers requires the staging of equipment along the banks of the Houma Navigation Canal. The sequence of construction must allow a minimum of 125 feet for navigation to be open continuously as coordinated and approved by the U.S. Coast Guard and local industry.

The installation process will involve the following activities which are estimated to occur as scheduled, but Broadcast Notice to Mariners and Local Notice to Mariners will be used to inform the public of the safety zone enforcement periods as the project progresses.

Beginning on June 27, 2011, between Houma Navigation Canal Mile Markers 19.0 to 20.0, slowest safe speed to minimize wake will be required by all mariners transiting the zone until installation is completed on March 14, 2013.

During the installation, any anticipated waterway closures, if necessary to assist in the installation process, will be made through Broadcast Notice to Mariners and Local Notice to Mariners. During a closure, vessels and tows may request permission and the necessary restrictions from the Captain of the Port Morgan City, or a designated representative, for passage through the Safety Zone. During a closure, passage through the safety zone will be evaluated on a case-by-case basis.

Mariners should exercise extreme caution when transiting through the construction site and pass at slowest safe speed to minimize wake.

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.

This rule will only require mariners to proceed at the slowest safe speed to minimize wake while transiting the safety zone and any waterways closures needed to assist in the installation will be made through Broadcast Notice to Mariners and Local Notice to Mariners. Passage during a closure may be requested and will be considered on a case-by-case basis. The impacts on routine navigation are expected to be minimal.

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 through the safety zone June 27, 2011 through March 14, 2013. This safety zone will not have a significant economic impact on a substantial number of small entities because the slowest safe speed to minimize wake is the only requirement through March 14, 2013. Any waterway closures, if necessary to assist in the installation process, will be made through Broadcast Notice to Mariners and Local Notice to Mariners. Passage during a closure may be requested and will be considered on a case-by-case basis.

If you are a small business entity and are significantly affected by this regulation, please contact ENS Nicholas Jones, Marine Safety Unit Houma, at (985) 857-8507 ext. 232.

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 byemployees 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 establishes a temporary safety zone to protect the public from the dangers associated with construction activity.

An environmental analysis checklist and a categorical exclusion determination will be provided and made available at the docket as indicated in theADDRESSESsection.

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

Throughout this document, whenever “we,” “us,” or “our” is used, we mean EPA.

This supplementary information section is arranged as follows:

In accordance with section 179(c)(1) of the CAA, EPA is determining that the Harrisburg, Johnstown, Lancaster, York, and Reading PM2.5nonattainment areas have attained the 1997 annual PM2.5NAAQS by the applicable attainment date of April 5, 2010 and in accordance with EPA's PM2.5Implementation Rule of April 25, 2007 (72 FR 20664). These determinations are based upon complete, quality assured, and certified ambient air monitoring data from 2007-2009 that show the Areas monitored attainment of the 1997 annual PM2.5NAAQS during this monitoring period.

On July 18, 1997 (62 FR 36852), EPA established a health-based PM2.5NAAQS at 15.0 micrograms per cubic meter (μg/m3) based on a 3-year average of annual mean PM2.5concentrations (hereafter referred to as “the annual PM2.5NAAQS” or “the annual standard”). At that time, EPA also established a 24-hour standard of 65 μg/m3(the “1997 24-hour standard”).See40 CFR 50.7. On January 5, 2005 (70 FR 944), EPA published its air quality designations and classifications for the 1997 PM2.5NAAQS based upon air quality monitoring data for calendar years 2001-2003. These designations became effective on April 5, 2005. The Harrisburg, Johnstown, Lancaster, York, and Reading areas were designated nonattainment for the 1997 annual PM2.5NAAQS during this designations process.See40 CFR 81.339. The Harrisburg nonattainment area consistsof Cumberland, Dauphin, and Lebanon Counties. The Johnstown nonattainment area consists of Cambria County and the part of Indiana County which includes the Townships of West Wheatfield, Center, East Wheatfield, and Armagh Borough and Homer City Borough. The Lancaster nonattainment area consists of Lancaster County. The York nonattainment area consists of York County. The Reading nonattainment area consists of Berks County.

On October 17, 2006 (71 FR 61144), EPA retained the 1997 annual PM2.5NAAQS at 15 μg/m3based on a 3-year average of annual mean PM2.5concentrations, and promulgated a 24-hour standard of 35 μg/m3based on a 3-year average of the 98th percentile of 24-hour concentrations (the “2006 24-hour standard”). On November 13, 2009, EPA designated the Harrisburg-Lebanon-Carlisle-York Area, the Johnstown Area, and the Lancaster Area as nonattainment for the 2006 24-hour standard (74 FR 58688). The Air Quality Control Region (AQCR) 151 Northeast Pennsylvania-Upper Delaware Valley Interstate area which includes Berks County (Reading) is designated as attainment for the 2006 24-hour standard (74 FR 58688). In that action, EPA also clarified that the designations for these Areas were attainment for the 1997 24-hour PM2.5standard. Today's actions, however, do not address the 1997 or the 2006 24-hour PM2.5standard.

In response to legal challenges of the annual standard promulgated in 2006, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) remanded this standard to EPA for further consideration.See American Farm Bureau Federation and National Pork Producers Council, et al.v.EPA,559 F.3d 512 (D.C. Circuit 2009). However, given that the 1997 and 2006 annual PM2.5standards are essentially identical, attainment of the 1997 annual standard would also indicate attainment of the remanded 2006 annual standard.

EPA previously made clean data determinations related to the 1997 annual PM2.5NAAQS for each of these Areas pursuant to 40 CFR 51.1004(c). A clean data determination was made for the Harrisburg Area on August 25, 2008 (73 FR 49949) and clean data determinations were made for the Johnstown, Lancaster, York, and Reading Areas on September 25, 2009 (74 FR 48863) and remain in effect.

Under CAA section 179(c), EPA is required to make a determination that a nonattainment area has attained by its attainment date, and publish that determination in theFederal Register. The determination of attainment is not equivalent to a redesignation, and the state must still meet the statutory requirements for redesignation in order for the Areas to be redesignated to attainment. Complete, quality assured, certified PM2.5air quality monitoring data recorded in the EPA Air Quality System (AQS) database for 2007 through 2009, show that the Harrisburg, Johnstown, Lancaster, York, and Reading, PA Areas attained the 1997 annual PM2.5NAAQS by the applicable attainment date.

EPA has reviewed the ambient air monitoring data for PM2.5, consistent with the requirements contained in 40 CFR part 50 and recorded in the EPA AQS database for the Harrisburg, Johnstown, Lancaster, York, and Reading nonattainment areas for the monitoring period from 2007 through 2009. On the basis of that review, EPA has concluded that the areas attained the 1997 annual PM2.5NAAQS based on data for the 2007-2009 monitoring period.

Under EPA regulations at 40 CFR 50.7, the annual primary and secondary PM2.5standards are met when the annual arithmetic mean concentration, as determined in accordance with 40 CFR part 50, Appendix N, is less than or equal to 15.0 μg/m3. The values calculated in accordance with 40 CFR part 50 Appendix N are referred to as design values, and these values are used to determine if an area is attaining the NAAQS. According to the PM2.5implementation rule, the attainment date for these areas is April 5, 2010 and monitoring data from the period 2007 through 2009 is used to determine if the areas attained by April 5, 2010.

EPA's review of the data indicate that the Harrisburg, Johnstown, Lancaster, York, and Reading nonattainment areas attained the annual 1997 PM2.5NAAQS by the applicable attainment date. The data, presented in Tables 1 through 5, are available athttp://www.epa.gov/air/airtrends/values.htmland can be found under the heading: Design Values 2007-2009, PM2.5Design Values.

Table 1 shows the PM2.5design values for each monitor in the Harrisburg Area for the years 2007-2009. All 2007-2009 design values are below 15.0 μg/m3and all monitors meet the data completeness requirements. Therefore, the Harrisburg Area attained the 1997 annual PM2.5NAAQS by its attainment date.

Table 2 shows the PM2.5design values for each monitor in the Johnstown Area for the years 2007-2009. All 2007-2009 design values are below 15.0 μg/m3and all monitors meet the data completeness requirements. Therefore, the Johnstown Area attained the 1997 annual PM2.5NAAQS by its attainment date.

Table 3 shows the PM2.5design values for each monitor in the Lancaster Area for the years 2007-2009. All 2007-2009 design values are below 15.0 μg/m3and all monitors meet the data completeness requirements. Therefore, the Lancaster Area attained the 1997 annual PM2.5NAAQS by its attainment date.

Table 4 shows the PM2.5design values for each monitor in the York Area for the years 2007-2009. All 2007-2009 design values are below 15.0 μg/m3and all monitors meet the data completeness requirements. Therefore, the York Area attained the 1997 annual PM2.5NAAQS by its attainment date.

Table 5 shows the PM2.5design values for each monitor in the Reading Area for the years 2007-2009. All 2007-2009 design values are below 15.0 μg/m3and all monitors meet the data completeness requirements. Therefore, the Reading Area attained the 1997 annual PM2.5NAAQS by its attainment date.

EPA is determining that the Harrisburg, Johnstown, Lancaster, York, and Reading Areas have attained the 1997 annual PM2.5NAAQS by the applicable attainment date of April 5, 2010. Therefore, EPA has met the requirement pursuant to the CAA section 179(c) to make a determination based on the Areas' air quality data that the Areas attained the standard by the attainment date. Also, since the Harrisburg, Johnstown, Lancaster, York, and Reading Areas have attained the 1997 annual PM2.5NAAQS by the applicable attainment date, the Areas are not subject to the consequences of failure to attain.

These actions do not constitute a redesignation to attainment under section 107(d)(3) of the CAA. The designation status of the Harrisburg, Johnstown, Lancaster, York, and Reading Areas will remain nonattainment for the 1997 annual PM2.5NAAQS until such time as EPA determines that the areas meet the CAA requirements for redesignation to attainment. Further, these actions do not involve approving maintenance plans for the Areas as required under section 175A of the CAA, nor do they find that the Areas have met all other requirements for redesignation. The designation status of the Harrisburg, Johnstown, Lancaster, York, and Reading Areas will remain nonattainment for the 1997 annual PM2.5NAAQS until such time as EPA determines that the Areas meet the CAA requirements for redesignation to attainment and take action to redesignate the Harrisburg, Johnstown, Lancaster, York, and Reading Areas.

Pursuant to section 179(c) of the CAA, EPA is determining that the Harrisburg, Johnstown, Lancaster, York, and Reading Areas attained the 1997 annual PM2.5NAAQS by the applicable attainment date of April 5, 2010. EPA is publishing this rule without prior proposal because the Agency views this as a noncontroversial action and anticipates no adverse comment.However, in the “Proposed Rules” section of today'sFederal Register, EPA is publishing a separate document that will serve as the proposal to determine these areas attained the 1997 annual PM2.5NAAQS by the applicable attainment date if adverse comments are filed. This rule will be effective on September 27, 2011 without further notice unless EPA receives adverse comment by August 29, 2011. If EPA receives adverse comment, EPA will publish a timely withdrawal in theFederal Registerinforming the public that the rule will not take effect. EPA will address all public comments in a subsequent final rule based on the proposed rule. EPA will not institute a second comment period on this action. Any parties interested in commenting must do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of these rules and if that provision may be severed from the remainder of the rules, EPA may adopt as final those provisions of the rules that are not the subject of an adverse comment.

This action merely makes attainment determinations based on air quality data and does not impose any additional requirements. For that reason, this action:

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 12866 (58 FR 51735, October 4, 1993);

• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501et seq.);

• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601et seq.);

• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);

• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);

• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);

• Is not subject to requirements of Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and

• Does not provide EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).

In addition these PM2.5NAAQS attainment determinations do not have Tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on Tribal governments or preempt Tribal law.

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

Under section 307(b)(1) of the CAA, petitions for judicial review of these actions must be filed in the United States Court of Appeals for the appropriate circuit by September 27, 2011. Filing a petition for reconsideration by the Administrator of these final rules does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to these direct final rules are encouraged to file a comment in response to the parallel notice of proposed rulemaking for these actions published in the proposed rules section of today'sFederal Register, rather than file an immediate petition for judicial review of these direct final rules, so that EPA can withdraw these direct final rules and address the comment in the proposed rulemakings. These actions, to determine that the Harrisburg, Johnstown, Lancaster, York, and Reading Areas attained the 1997 annual PM2.5NAAQS by the applicable attainment date of April 5, 2010, may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

EPA Region 6 is publishing this direct final Notice of Deletion for the State Marine of Port Arthur (SMPA) Superfund Site (Site), from the National Priorities List (NPL). The NPL constitutes Appendix B of 40 CFR part 300 which is the Oil and Hazardous Substances Pollution Contingency Plan (NCP), which EPA promulgated pursuant to Section 105 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended. EPA maintains the NPL as the list of sites that appear to present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). As described in § 300.425(e)(3) of the NCP, sites deleted from the NPL remain eligible for Fund-financed remedial action if future conditions warrant such actions.

Because EPA considers this action to be noncontroversial and routine, this action will be effective September 27, 2011 unless EPA receives adverse comments by August 29, 2011. Along with this direct final Notice of Deletion, EPA is co-publishing a Notice of Intent for Deletion in the “Proposed Rules” section of theFederal Register. If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely withdrawal of this direct final Notice of Deletion before the effective date of the deletion and the deletion will not take effect. EPA, will as appropriate, prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent for Deletion and the comments already received. There will be no additional opportunity to comment.

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the SMPA Superfund Site and demonstrates how it meets the deletion criteria. Section V discusses EPA's action to delete the Site from the NPL unless adverse comments are received during the public comment period.

The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), EPA will consider, in consultation with the State, whether any of the following criteria have been met:

i. Responsible parties or other persons have implemented all appropriate response actions required;

ii. All appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or

iii. The remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures is not appropriate.

Pursuant to CERCLA section 121(c) and the NCP, EPA conducts five-year reviews to ensure the continued protectiveness of remedial actions where hazardous substances, pollutants, or contaminants remain at a site above levels that allow for unlimited use and unrestricted exposure. EPA conducts such five-year reviews even if a site is deleted from the NPL. EPA may initiate further action to ensure continued protectiveness at a deleted site if new information becomes available that indicates it is appropriate. Whenever there is a significant release from a site deleted from the NPL, the deleted site may be restored to the NPL without application of the hazard ranking system.

The following procedures apply to the deletion of all areas and media within the SMPA Superfund Site:

1. EPA has consulted with the state of Texas prior to developing this direct final Notice of Deletion and the Notice of Intent for Deletion co-published in the “Proposed Rules” section of theFederal Register.

2. EPA has provided the state 30 working days for review of this notice and the parallel Notice of Intent for Deletion prior to their publication today, and the state, through the Texas Commission on Environmental Quality, has concurred on this deletion of the Site from the NPL.

3. Concurrently with the publication of this direct final Notice of Deletion, a notice of the availability of the parallel Notice of Intent for Deletion is being published in a major local newspaper, The Port Arthur News. The newspaper announces the 30-day public comment period concerning the Notice of Intent for Deletion of the Site from the NPL.

4. The EPA placed copies of documents supporting the deletion in the deletion docket and made these items available for public inspection and copying at the Site information repositories identified above.

5. If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely notice of withdrawal of this direct final Notice of Deletion before its effective date and will prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent for Deletion and the comments already received.

Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for further response actions, should future conditions warrant such actions.

The following information provides EPA's rationale for deleting the SMPA Superfund Site from the NPL. A map of the Site, including the aerial extent of the Site proposed for deletion, is available in the deletion docket:

The SMPA Superfund Site (Site, CERCLIS ID—TXD099801102), a former barge-cleaning operation and municipal landfill, occupied a 17-acre industrial tract of land located approximately 4.5 miles east-northeast of the City of Port Arthur on Old Yacht Club Road on Pleasure Islet. Pleasure Islet is a peninsula located approximately 0.5 miles southwest of the mouth of the Neches River. The Site is bordered by the Palmer Barge Line Superfund Site to the north, by Old Yacht Club Road to the west, by undeveloped property to the south, and Sabine Lake to the east.

Pleasure Islet is a manmade landmass consisting of dredge spoils generated during the construction and maintenance of the Sabine-Neches canal, also called the Intercoastal Waterway. The canal was constructed between 1898 and approximately 1920 in the vicinity of Sabine Lake and the Neches River, between the current Site location and the mainland. Between 1955 and 1957, a portion of the canal along the western side of Pleasure Islet was abandoned, and a new canal was cut along the eastern and southern sides of Pleasure Islet. Pleasure Islet was created when a land bridge was constructed across the abandoned portions of the canal, between the northern tip of Pleasure Island and the mainland. Vehicle access to the Site is limited to a single dirt road starting at the western Site border along Old Yacht Club Road.

Ownership of Pleasure Islet was transferred from the State of Texas to the City of Port Arthur, Texas, in 1955. Development of the islet and the Site began after 1957, following construction of the land bridge across the abandoned portions of the Sabine-Neches Canal. In approximately 1963, the City of Port Arthur began municipal landfill operations in the northern and central portions of the islet. Initially, the landfill consisted of a burn pit in which wastes were incinerated. By December 1969, burn operations were discontinued, and the landfill was used solely for disposal of wastes. Between 1969 and 1972, landfill disposal operations expanded to include the central and northern portions of the Site and the property north of the Site. Between 1972 and 1974, disposal activities were generally concentrated in the northern parts of the islet. In December 1974, the City of Port Arthur closed the landfill in accordance with Texas Department of Health regulations, which required covering the entire landfill with approximately two feet of fine-grained fill material. The cover material is believed to be dredge spoils that originated on the islet. Site operations began about 1973 under the names of State Welding and Marine Works and the Golden Triangle Shipyard. The construction of wastewater impoundments in the northwestern portion of the Site was also reported. The impoundments were reportedly unlined earthen dike areas approximately two acres in size used to store oil and wastewater from barge-cleaning operations. Inspection reports indicate that wastewater from barge-cleaning operations was directed to two aboveground storage tanks and then pumped to the wastewater impoundments. Some of the oil from the tanks was diverted to an old ship, located on the land, that was used as an oil/water separator. Oil from the separator was collected for reuse, potentially on the Site. The Site included the locations of the former wastewater impoundments, waste water treatment facility, tar burn area, above ground storage tank area, maintenance shed area, distillation column, the former location of the Lauren Refining Company Tank Farm area, non-source areas of the Site, sediments, and ground water. The Site is currently being operated by the owner as an industrial property for metal scrapping activities.

The surface water migration pathway was scored as part of the Hazard Ranking System Documentation Record. EPA determined that the Site warranted further investigation to assess the nature and extent of the human health and environmental risks associated with the Site's previous barge-cleaning and landfill activities. The site was proposed to be included on the NPL on March 6, 1998 (63 FR 11340) and made final July 28, 1998 (63 FR 40182).

The EPA's Time Critical Removal Action, completed in August 2001, consisted of the removal and off-site disposal of waste materials, water treatment, oil and water separation, and stabilization and off-site disposal of sludge materials. This Removal Action addressed the materials that posed a risk to human health and ecological receptors.

The investigations of the Site included the locations of the former wastewater impoundments, waste water treatment facility, tar burn area, above ground storage tank area, maintenance shed area, Lauren Refining Company tank farm area, non-source areas of the Site, ground water, and the sediments of Sabine Lake.

The objectives of the Remedial Investigation (RI) for the Site were to:

• To determine the nature and extent of contamination known or suspected on-site and off-site locations, and

• To assess the potential human health and ecological risks associated with the Site.

The objectives of the Supplemental Remedial Investigation (SRI) for the Site were to:

• Collect and analyze sediment samples to determine if contaminants in Sabine Lake sediments posed an unacceptable risk to benthic organisms.

• Collect and analyze subsurface soil samples from the wastewater impoundment area to determine if contaminants in the impoundment soil could serve as a potential source of contamination to the ground water and eventually to benthic organisms in the sediments of Sabine Lake.

• Collect and analyze subsurface soil samples from the wastewater impoundment area to determine if contaminants in the impoundment soil posed an unacceptable risk to future onsite construction workers.

• Install and develop monitoring wells at two of the soil boring locations in the wastewater impoundment area for associated ground water sampling.

• Collect and analyze ground water samples to determine if Site ground water is a current or potentially future source of contamination to benthic organisms in Sabine Lake.

• Store, analyze, and properly dispose of any investigation-derived waste that is produced during field activities in support of the Supplemental Remedial Investigation.

The RI scope of work focused on collecting additional information not obtained during previous investigations. The 2001 RI investigation consisted of two sampling events. The first sampling event consisted of collecting sediment samples from off-site locations in Sabine Lake. The second sampling event consisted of collecting soil and ground water samples from on-site locations. The following tasks were completed during the RI:

• Completion of five shallow and six deep borings ranging in depths from 4.0 to 9.0 and 25.0 to 60.0 feet below the ground's surface (bgs), respectively.

• Installation of six ground water monitoring wells.

• Collection of surface soil samples from 87 locations ranging in depth from 0.0 to 6.0 inches bgs.

• Collection of intertidal samples from nine locations ranging in depth from 0.0 to 6.0 inches bgs.

• Collection of sediment samples from 46 locations ranging in depth from 0.0 to 6.0 feet bgs.

The RI analytical results were compared to commercial/industrial protective concentration levels (PCLs) established by the Texas Risk Reduction Program, and where appropriate, to background levels for the Site's contaminants of concern (COCs).

The most frequently detected COCs for all sediment samples collected were metals including arsenic, lead, and mercury. For intertidal sediments, six metals (antimony, arsenic, cadmium, lead, mercury, and selenium) and one semi-volatile organic compound (SVOC, pentachlorophenol) exceeded their respective PCLs. Constituents thatexceeded PCLs for nearshore sediments included six metals (arsenic, barium, beryllium, cadmium, lead, and mercury) and one SVOC (3,3 dichlorobenzidine). Only arsenic, lead, and mercury exceeded PCLs for off-shore sediments.

The most frequently detected COCs for soils were metals including antimony, arsenic, barium, lead, mercury, and silver. These metals consistently exceeded theGwSoil PCL (i.e.,the soil-to-ground water leaching of COCs to ground water). Based on the distribution of these constituents, their occurrence is most likely a result of the former incineration and landfill operations. In general, the metals were widely distributed across the Site and not limited to the Site's source areas.

Isolated detections of the SVOCs (benzo[a]pyrene, benzo[a]anthracene, benzo[a]fluoranthene, and pentachlorophenol) were reported at relatively low concentrations for on-site soils. Because the SVOC exceedances were only detected at isolated locations, impact from operations on the Site appeared minimal.

Nine constituents including eight metals (antimony, arsenic, barium, beryllium, lead, manganese, silver, and thallium) and one SVOC (pentachlorophenol) exceededGwSoilIngPCLs (Exposure pathway: soil-to-ground water leaching COCs to ground water). Based on a preliminary comparison of ground water analytical results to Class 3 ground water criteria, no constituents exceeded Class 3 ground water PCLs and it is unrealistic to assume any beneficial use of the shallow ground water. The State of Texas defines ground water resources based on water quality and sustainable well yield. A Class 3 ground water bearing unit is not capable of producing greater than a 150 gallon/day ground water flow with a Total Dissolved Solids content less than 10,000 milligrams/liter.

The SRI included an investigation of the former wastewater impoundments to determine if waste materials were still present that could be a source of contamination to the Sabine Lake sediments. Soil samples were analyzed for metals and SVOCs. The SRI also included the installation of ground water monitoring wells downgradient of the former wastewater impoundments and the collection of sediments samples from Sabine Lake. These samples were also analyzed for metals and SVOCs.

The screening level ecological risk assessment indicates that selenium concentrations in the Site sediments from the SRI may pose a risk to benthic invertebrates; however, the selenium concentrations are within one order of magnitude of the primary effects screening level. Furthermore, results from the soils and ground water data do not indicate that a selenium pathway exists from the Site to the sediments as the potential source of selenium contamination. Therefore, the EPA has determined that no Remedial Action is warranted for the Site soils to prevent contamination of the Site sediments. Based on selenium concentrations in the sediments, no Remedial Action is warranted for the Site sediments to protect ecological receptors.

Based on the results of the Baseline Human Health Risk Assessment (BHHRA) and Screening Level Ecological Risk Assessment (SLERA), the EPA's Selected Remedy for the SMPA Superfund Site, identified in the April 2007 Record of Decision, was “No Further Action is Necessary.” Institutional controls will be required to ensure that the current and future use of the Site remains for industrial or commercial purposes. The “No Further is Action Necessary” remedy is based on an industrial/commercial land use scenario.

The Remedial Action Objectives (RAOs) for the Site are based on the future redevelopment of the Site for industrial/commercial land use and protecting future industrial/construction workers and ecological receptors. The RAOs for the Site were:

• Prevent exposure to contaminated soil/sediment via ingestion, inhalation, or dermal contact that would result in an excess carcinogenic risk of 1.0 × 10−5or a Hazard Index of 1.0.

• Prevent exposure of contaminated soil/sediment to aquatic or terrestrial organisms via direct contact or indirect ingestion of bioaccumulative chemicals that would result in a Hazard Quotient of 1.0.

• Prevent or minimize migration of soil contaminants to ground water.

• Prevent or minimize further migration of soil and sediment contaminants to surface water that could result in exceedance of ambient water quality criteria.

Based on the results of the BHHRA and SLERA, the EPA's Selected Remedy for the SMPA Superfund Site was “No Further Action is Necessary.” The EPA has obtained a Restrictive Covenant from the landowner indicating that the future use of the property is restricted to commercial/industrial purposes. The Restrictive Covenant was filed in the appropriate property records at the County Clerk's office in Jefferson County on March 25, 2011.

The cleanup goals, accomplished by the 2001 Time Critical Removal Action, included the removal, treatment, and off-site disposal of the liquids and sludges in the above ground storage tanks and drums. There were no cleanup goals selected in the Record of Decision.

Since remaining conditions at the Site will not allow for unlimited use and unrestricted exposure, a Five-Year Review must be conducted for the Site to ensure that future Site development is consistent with the industrial cleanup standards for which the remedy is based and that conditions remain protective of human health and the environment. As part of the Five-Year Review, sediment sampling and monitoring will be considered in Sabine Lake adjacent to the Site to ensure that the remedy remains protective of ecological receptors. The EPA will conduct a statutory review before April 2012.

Public participation activities have been satisfied as required in CERCLA Section 113(k), 42 U.S.C. 9613(k) and CERCLA Section 117, 42 U.S.C. 9617. Documents in the deletion docket which the EPA relied on for recommendation for the deletion from the NPL are available to the public in the information repositories, and a notice of availability of the Notice of Intent for Deletion has been published in The Port Arthur News to satisfy public participation procedures required by 40 CFR 300.425(e)(4).

In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. The EPA, in consultation with the State of Texas (through the Texas Commission on Environmental Quality), has determined that based on the results of the BHHRA and SLERA and the completion of the EPA's Time Critical Removal Action that addressed contamination at the Site that posed a risk to human health and the environment, the EPA's Selected Remedy for the SMPA Superfund Site was “No Further Action is Necessary.” The EPA has implemented all appropriate response actions required; no further response action by responsible parties is appropriate; and the RI, SRI, BHHRA, and SLERA haveshown that the release poses no significant threat to public health or the environment under a commercial/industrial land use scenario and, therefore, the taking of additional remedial measures is not appropriate. EPA received a letter, dated May 25, 2011, from the State of Texas, through the Texas Commission on Environmental Quality, concurring on the deletion of the SMPA Superfund Site from the NPL.

The EPA, with concurrence of the State of Texas, through the Texas Commission on Environmental Quality, has determined that all appropriate response actions under CERCLA, other than Five-Year Reviews, have been completed. Therefore, EPA is deleting the SMPA Superfund Site from the NPL.

Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication. This action will be effective September 27, 2011 unless EPA receives adverse comments by August 29, 2011. If adverse comments are received within the 30-day public comment period, EPA will publish a timely withdrawal of this direct final notice of deletion before the effective date of the deletion and it will not take effect. EPA will prepare a response to comments and continue with the deletion process on the basis of the notice of intent to delete and the comments already received. There will be no additional opportunity to comment.

For the reasons set out in this document, 40 CFR part 300 is amended as follows:

EPA Region 6 is publishing this direct final Notice of Deletion for the Palmer Barge Line (PBL) Superfund Site (Site), from the National Priorities List (NPL). The NPL constitutes Appendix B of 40 CFR part 300 which is the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), which EPA promulgated pursuant to Section 105 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) of 1980, as amended. EPA maintains the NPL as the list of sites that appear to present a significant risk to public health, welfare, or the environment. Sites on the NPL may be the subject of remedial actions financed by the Hazardous Substance Superfund (Fund). As described in § 300.425(e)(3) of the NCP, a site deleted from the NPL remains eligible for Fund-financed remedial action if future conditions warrant such actions.

Because EPA considers this action to be noncontroversial and routine, this action will be effective September 27, 2011 unless EPA receives adverse comments by August 29, 2011. Along with this direct final Notice of Deletion, EPA is co-publishing a Notice of Intent for Deletion in the “Proposed Rules” section of theFederal Register. If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely withdrawal of this direct final Notice of Deletion before the effective date of the deletion and the deletion will not take effect. EPA, will as appropriate, prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent for Deletion and the comments already received. There will be no additional opportunity to comment.

Section II of this document explains the criteria for deleting sites from the NPL. Section III discusses procedures that EPA is using for this action. Section IV discusses the PBL Superfund Site and demonstrates how it meets the deletion criteria. Section V discusses EPA's action to delete the Site from the NPL unless adverse comments are received during the public comment period.

The NCP establishes the criteria that EPA uses to delete sites from the NPL. In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. In making such a determination pursuant to 40 CFR 300.425(e), EPA will consider, in consultation with the State, whether any of the following criteria have been met:

i. Responsible parties or other persons have implemented all appropriate response actions required;

ii. All appropriate Fund-financed response under CERCLA has been implemented, and no further response action by responsible parties is appropriate; or

iii. The remedial investigation has shown that the release poses no significant threat to public health or the environment and, therefore, the taking of remedial measures is not appropriate.

Pursuant to CERCLA section 121(c) and the NCP, EPA conducts five-year reviews to ensure the continued protectiveness of remedial actions where hazardous substances, pollutants, or contaminants remain at a site above levels that allow for unlimited use and unrestricted exposure. EPA conducts such five-year reviews even if a site is deleted from the NPL. EPA may initiate further action to ensure continued protectiveness at a deleted site if new information becomes available that indicates it is appropriate. Whenever there is a significant release from a site deleted from the NPL, the deleted site may be restored to the NPL without application of the hazard ranking system.

The following procedures apply to all areas and media within the PBL Superfund Site:

(1) EPA has consulted with the state of Texas prior to developing this direct final Notice of Deletion and the Notice of Intent for Deletion co-published in the “Proposed Rules” section of theFederal Register.

(2) EPA has provided the state 30 working days for review of this notice and the parallel Notice of Intent for Deletion prior to their publication today, and the state, through the Texas Commission on Environmental Quality, has concurred on this deletion of the Site from the NPL.

(3) Concurrently with the publication of this direct final Notice of Deletion, a notice of the availability of the parallel Notice of Intent for Deletion is being published in a major local newspaper, The Port Arthur News. The newspaper announces the 30-day public comment period concerning the Notice of Intent for Deletion of the Site from the NPL.

(4) The EPA placed copies of documents supporting the deletion in the deletion docket and made these items available for public inspection and copying at the Site information repositories identified above.

(5) If adverse comments are received within the 30-day public comment period on this deletion action, EPA will publish a timely notice of withdrawal of this direct final Notice of Deletion before its effective date and will prepare a response to comments and continue with the deletion process on the basis of the Notice of Intent for Deletion and the comments already received.

Deletion of a site from the NPL does not itself create, alter, or revoke any individual's rights or obligations. Deletion of a site from the NPL does not in any way alter EPA's right to take enforcement actions, as appropriate. The NPL is designed primarily for informational purposes and to assist EPA management. Section 300.425(e)(3) of the NCP states that the deletion of a site from the NPL does not preclude eligibility for further response actions, should future conditions warrant such actions.

The following information provides EPA's rationale for deleting the PBL Superfund Site from the NPL. A map of the Site, including the aerial extent of the Site proposed for deletion, is available in the deletion docket:

The PBL Superfund Site (Site, CERCLIS ID—TXD068104561), a former barge-cleaning operation, encompasses approximately 17 acres and is located approximately 4.5 miles east-northeast of the City of Port Arthur on Old Yacht Club Road on Pleasure Islet. Pleasure Islet is a peninsula located approximately 0.5 miles southwest ofthe mouth of the Neches River. The Site is bordered by vacant property to the north, by Old Yacht Club Road to the west, by the State Marine of Port Arthur Superfund Site to the south, and Sabine Lake to the east.

Pleasure Islet is a manmade landmass consisting of dredge spoils generated during the construction and maintenance of the Sabine-Neches canal, also called the Intercoastal Waterway. The canal was constructed between 1898 and approximately 1920 in the vicinity of Sabine Lake and the Neches River, between the current Site location and the mainland. Between 1955 and 1957, a portion of the canal along the western side of Pleasure Islet was abandoned, and a new canal was cut along the eastern and southern sides of Pleasure Islet. Pleasure Islet was created when a land bridge was constructed across the abandoned portions of the canal, between the northern tip of Pleasure Island and the mainland. Vehicle access to the Site is limited to a single dirt road starting at the western Site border along Old Yacht Club Road.

The Site, along with the adjacent properties to the north and south, were used as a Municipal Landfill for the City of Port Arthur from 1956 to 1987. Although disposal at the landfill has long since ceased and the landfill contents have been covered with dredged sediments, the contents are still present on the Site in the subsurface soils.

In April 1982, John Palmer, President of Palmer Barge Line Inc. purchased approximately 17 acres from the City of Port Arthur, for the purpose of servicing and maintaining barges and marine vessels. The company ceased operations on the property in July 1997.

During operation, the typical activities performed at the Site included cleaning, degassing, maintenance, and inspection of barges and other marine equipment. Cleaning operations included the removal of sludge and other residual material by pressure steaming the vessel holds, engines and boilers. Engines were degreased and accumulations of sludges were removed. Degassing activities involved the removal of explosive vapors from vessel holds using nitrogen or boiler exhaust. Maintenance and inspection activities included the replacement and/or repair of valves, engine repairs, and line leak repairs followed by pressure tests. A flare was located on-site to burn excess gases and liquids produced during facility operations.

The surface water migration pathway was scored as part of the Hazard Ranking System Documentation Record. The EPA determined that the Site warranted further investigation to assess the nature and extent of the human health and environmental risks associated with the Site's previous barge-cleaning and inspection activities. The Site was proposed to be included on the NPL on May 11, 2000 (65FR30489), and made final on July 27, 2000 (65FR46096).

EPA conducted a Time Critical Removal Action in August 2000 that addressed the source materials stored on-site. Removal activities included waste removal, water treatment, oil/water separation, and sludge stabilization. Approximately 250,000 gallons of water were treated on-site; 500 cubic yards of sludge were stabilized; and 100,000 gallons of oil/styrene were separated and removed from the Site.

The investigations of the Site included the wastewater aboveground storage tank (AST), boiler house ASTs, open top slop tanks area, horizontal ASTs, twelve ASTs area, flare area, area east of flare in the center of the Site, ground water, and sediments of Sabine Lake.

On September 30, 2002, the EPA issued an Administrative Order on Consent (AOC) to the potentially responsible parties (PRPs) to conduct a Remedial Investigation and Feasibility Study (RI/FS). The objectives of the RI/FS were to characterize the nature and extent of constituents of concern in soil, ground water, and surface water and sediments of Sabine Lake.

Constituents detected in soil samples included metals, semivolatile organic compounds (SVOCs), volatile organic compounds (VOCs), polychlorinated biphenyls (PCBs), and pesticides. Several samples containing above background concentrations of metals and SVOCs were from samples collected in soil that contained municipal waste, indicating that some constituents present may not be due to activities from the barge cleaning operation.

There is no current or anticipated future use of the shallow groundwater at the Site. The shallow groundwater at the Site is not considered a potential drinking water source. The shallow groundwater resulted from the dredging activities that formed the isle where the former PBL Superfund Site is located. Ground water samples collected from permanent ground water monitoring wells installed downgradient of the Site did not contain significant concentrations of these Site-related constituents above risk-based levels.

Constituents detected in the sediments of Sabine Lake included polycyclic aromatic hydrocarbons and metals. Many of the constituents found in the soil at the Site were not detected in sediment samples. Surface water samples contained only metals at low concentrations.

The human health risk assessment concluded that contaminants were present in site soils and sediments that presented an unacceptable risk to on-site workers and off-site recreational anglers. The screening level ecological risk assessment concluded that site contaminants did not present an unacceptable risk to ecological receptors.

A total of four alternatives were developed for the Site during the Feasibility Study. The EPA chose excavation and off-site disposal as the Selected Remedy for the contaminated soils at the Site.

Based on the results of the Baseline Human Health Risk Assessment (BHHRA) and Screening Level Ecological Risk Assessment (SLERA), the EPA's Selected Remedy for the PBL Superfund Site, identified in the September 2005 Record of Decision, was “Excavation and Off-Site Disposal.” The Selected Remedy consisted of the following components:

• Excavation of approximately 1,204 cubic yards of the upper two feet of soil that exceed human health and ecological risk-based levels at each of the response areas.

• Confirmation sampling for constituents of potential concern at each of the response areas.

• Backfilling of excavated areas with clean soil.

• Off-site disposal of the excavated soils at a permitted disposal facility.

• Implementation of institutional controls to restrict future land use only for industrial purposes. The ICs shall be a restrictive covenant by the property owner recorded in the real property records of Jefferson County, Texas.

• Abandonment of five existing ground water monitoring wells.

• Wastewater AST sludge removal and decontamination and off-site disposal.

The Remedial Action Objectives (RAOs) for the Site are based on the following:

• The reasonable anticipated land use scenario is based on the future redevelopment of the Site for industrial or commercial use, consistent withcurrent Site use and surrounding land use.

• Potential ecological risks were considered for Site soils to prevent exposure to ecological receptors and prevent surface runoff of contaminants to Sabine Lake sediments.

The RAOs for the Site were:

• Prevent direct contact, ingestion, and inhalation of surface soils that exceed human health risk-based levels, based on an industrial worker scenario, for the chemicals of concern (COCs).

• Prevent off-site migration of COCs to Sabine Lake sediments that exceed human health and ecological risk-based levels for the COCs.

• Prevent exposure to Site soils that may pose a risk to ecological receptors.

On May 7, 2007, the EPA issued a Unilateral Administrative Order (UAO) for Remedial Design and Remedial Action to the PRPs. The UAO became effective on June 6, 2007. The Final Remedial Design/Remedial Action Work Plan was approved by the EPA on August 2, 2007. A total of 181 tons of contaminated soils were excavated and disposed at a permitted disposal facility. Each response area was then backfilled with clean soil. The Record of Decision (ROD) required the collection of confirmation samples, including analyses for the constituents of potential concern, at each of the response areas. Analytical results were used to determine horizontal limits of impacted media in each of the response areas. If constituents were found to contain concentrations in excess of the remediation goals (RG), step-out samples were analyzed for those constituents. Additional step-out samples were collected and analyzed when the step-out samples exceeded the RG. This process continued until sample results for perimeter samples were below the RG, indicating horizontal delineation had been achieved according to the requirements of the ROD. Additionally, approximately 78,340 pounds of oil were skimmed from the 10,000-barrel AST and recycled for fuel blending, and approximately 854,886 pounds of the remaining sludge material within the AST were incinerated. As required by the 2005 ROD, five permanent ground water monitoring wells were plugged and abandoned.

An institutional control (IC) in the form of Restrictive Covenant by the property owner, to the benefit of the State of Texas and the United States Government, was filed in the appropriate property records at the County Clerk's office in Jefferson County on March 25, 2011. This IC ensures that future site use remains commercial/industrial.

The EPA chose a 1.0 × 10−5target cleanup goal based on exposure to COCs that exceeded those levels at surface soils. The COCs and the selected soil cleanup goals achieved for the Human Health Risk Areas were:

• Aldrin—1.1 milligrams/kilogram (mg/kg).

• Benzo(a)pyrene—2.3 mg/kg.

• Benzo(a)anthracene—23.0 mg/kg.

• Dieldrin—1.2 mg/kg.

• Heptachlor Epoxide—2.1 mg/kg.

• Naphthalene—210.0 mg/kg.

• Pentachlorophenol—100.0 mg/kg.

• Lead—800.0 mg/kg.

The COCs and the selected soil cleanup goals achieved for ecological receptors were:

• 4,4′-DDD—0.0864 mg/kg.

• 4,4′-DDE—0.0864 mg/kg.

• 4,4′-DDT—0.0865 mg/kg.

• Butyl benzyl phthalate—5.37 mg/kg.

• Lead, total—497.0 mg/kg.

• Methoxychlor—0.09 mg/kg.

Since the Selected Remedy would result in hazardous substances remaining on-site above levels that allow for unlimited use and unrestricted exposure, a Five-Year Review will be conducted no less often than every five years from initiation of the Remedial Action to ensure that the remedy is, or will continue to be, protective of human health and the environment. The first Five-Year Review will be conducted before September 2012.

Public participation activities have been satisfied as required in CERCLA Section 113(k), 42 U.S.C. 9613(k) and CERCLA Section 117, 42 U.S.C. 9617. Documents in the deletion docket which the EPA relied on for recommendation for the deletion from the NPL are available to the public in the information repositories, and a notice of availability of the Notice of Intent for Deletion has been published in The Port Arthur News to satisfy public participation procedures required by 40 CFR 300.425(e)(4).

In accordance with 40 CFR 300.425(e), sites may be deleted from the NPL where no further response is appropriate. The EPA has determined that the criteria for deletion have been met. The EPA has implemented all appropriate response actions required and no further response action by responsible parties is appropriate. EPA received a letter, dated May 26, 2011, from the State of Texas, through the Texas Commission on Environmental Quality, concurring on the deletion of PBL Superfund Site from the NPL.

The EPA, with concurrence of the State of Texas, through the Texas Commission on Environmental Quality, has determined that all appropriate response actions under CERCLA, other than Five-Year Reviews, have been completed. Therefore, EPA is deleting the PBL Superfund Site from the NPL.

Because EPA considers this action to be noncontroversial and routine, EPA is taking it without prior publication. This action will be effective September 27, 2011 unless EPA receives adverse comments by August 29, 2011. If adverse comments are received within the 30-day public comment period, EPA will publish a timely withdrawal of this direct final notice of deletion before the effective date of the deletion and it will not take effect. EPA will prepare a response to comments and continue with the deletion process on the basis of the notice of intent to delete and the comments already received. There will be no additional opportunity to comment.

For the reasons set out in this document, 40 CFR part 300 is amended as follows:

On June 14, 2010, NHTSA issued a final rule which amended the electrical shock protection requirements of Federal Motor Vehicle Safety Standard (FMVSS) No. 305, “Electric-powered vehicles; electrolyte spillage and electrical shock protection,” to facilitate the development and introduction of fuel cell vehicles, a type of electric-powered vehicle, and the next generation of hybrid and battery electric powered vehicles (75 FR 33515, NHTSA Docket No. 2010-0021). The final rule revised the agency's standard regulating electrolyte spillage and electrical shock protection for electric-powered vehicles to align it more closely with the April 2005 version of the Society of Automotive Engineers (SAE) J1766—“Recommended Practice for Electric and Hybrid Electric Vehicle Battery Systems Crash Integrity Testing.”

This rule also provided greater flexibility by allowing manufacturers to meet the requirements of FMVSS No. 305 by designing their electrically powered vehicles so that, in the event of a crash, the electric energy storage, conversion, and propulsion systems are either electrically isolated from the vehicle's chassis or their voltage is below specified levels considered safe from electric shock hazards. Since the physiological impacts of direct current (DC) are less than those of alternating current (AC), the final rule specified lower electrical isolation requirements for certain DC components (100 ohms/volt) than for AC components (500 ohms/volt).

In addition, the final rule included new definitions, made changes to existing definitions of terms used in the standard, changed the energy storage/conversion device retention requirements, specified a low voltage option for achieving electrical safety, and required monitoring of the isolation resistance of DC high voltage sources that comply with the 100 ohms/volt electrical isolation requirement. The agency also established an effective date on September 1 in the year after the final rule was published (or September 1, 2011) with optional early compliance.

Subsequently, NHTSA received petitions for reconsideration of the June 14, 2010 final rule from the Alliance of Automobile Manufacturers (Alliance),1 Technical Affairs Committee of the Association of International Automobile Manufacturers, Inc. (AIAM)2 and Honda Motor Co., Ltd. (Honda). Ford Motor Company (Ford) also presented an analysis to the agency in support of the Alliance's petition for reconsideration regarding the issue of electric energy storage system state-of-charge prior to the crash tests specified in the standard.3 In addition, on December 21, 2010, the Alliance, AIAM, and Honda submitted a joint letter as supplementary information to their petitions for reconsideration stating their support for the definitions used in the draft documents on electrical safety for a forthcoming global technical regulation (GTR) on hydrogen fuel cell vehicle safety.

The petitioners generally sought increased clarity by raising issuesregarding the definitions, test specifications, and performance requirements in this rule. Specifically, the petitioners raised questions regarding the applicability and scope of the standard, the definitions of terms used, the electric energy storage/conversion system retention requirements, the electrical isolation requirements, the requirements and test specifications for electrical isolation monitoring systems, the electric energy storage device state-of-charge, the protective barrier as a compliance option for electrical safety, and the use of alternative gas for testing hydrogen fuel cell vehicles.

This document responds to all the petitions for reconsideration of the June 14, 2010 final rule. Specifically, this final rule makes the following changes to the June 14, 2010 final rule:

• Revises the “Application” section to indicate that the standard applies only to vehicles that use high voltage electrical components for propulsion power rather than to any vehicle that has high voltage electrical components.

• Clarifies the definitions used in the June 14, 2010 final rule for electrical isolation, electric energy storage/conversion system, electric energy storage device, propulsion system, and high voltage source.

• Adds further clarity by including new definitions for automatic disconnect, electric energy storage/conversion device, electrical chassis, and electric power train.

• Revises the application of retention requirements from energy storage/conversion “systems” to energy storage/conversion “devices.”

• Clarifies the electric energy storage/conversion device retention requirements to indicate that during and after the test, the device(s) shall remain attached to the vehicle by at least one component anchorage, bracket, or any structure that transfers loads from the device to the vehicle structure and those located outside the occupant compartment shall not enter the occupant compartment.

• Clarifies the electrical safety requirements to specify that AC high voltage sources with electrical isolation monitoring require 500 ohms/volt electrical isolation.

• Specifies the voltage measurement locations for high voltage sources with and without automatic disconnects in the test procedures for determining electrical safety.

• Revises the electrical isolation monitoring requirement by deleting the term “continuous” in “continuous monitoring” and including a range in resistance of the external resistor selected in the test procedure to evaluate the performance of the monitoring system.

• Clarifies the specification for the state-of-charge of electric energy storage devices before the crash tests to be at the maximum state-of-charge in accordance with the vehicle manufacturer's recommended charging procedures, as stated in the vehicle owner's manual or on a label permanently affixed to the vehicle, or at 95 percent of the maximum capacity of the electric energy storage device if no such recommendation is made.

• Revises the regulatory text and Figures 1-5 to utilize the new terms added to the definitions section.

After reviewing the petitions for reconsideration, NHTSA is responding to each issue raised by the petitioners as follows.

The June 14, 2010 final rule defined the scope of FMVSS No. 305 by stating the following in paragraph S3 Application:

Both the Alliance and the AIAM noted that in section “S3 Application” of the final rule, the agency omitted the word “propulsion” and that this was not consistent with the language in the NPRM.4 Both organizations argued that the omission of the word “propulsion” could be interpreted to encompass all electrical systems that are not within the scope of FMVSS No. 305 (e.g.high intensity discharge (HID) headlamps, engine ignition systems, fuel injectors,etc).

The Alliance proposed that the scope be remedied by adding the word “propulsion” in the application section, S3. The AIAM indicated in its petition that it supported the language proposed by the Alliance. The language proposed by the Alliance is as follows:

NHTSA's Response:We agree with the Alliance that by omitting the word “propulsion” in S3 of the final rule, the standard encompasses vehicles and electrical systems that were not intended for application of FMVSS No. 305. Since the agency is not aware of any cases of injuries/fatalities from shock in non-electrically powered vehicles with other high voltage components such as HID headlamps, ignition systems, or fuel injectors, this final rule adopts the language for S3 Application as proposed by the Alliance. This new version of the regulatory text ensures that FMVSS No. 305 will not extend to the aforementioned vehicles and vehicle components for which the standard was not intended to apply.

The June 14, 2010 final rule adopted new definitions into FMVSS No. 305. In a joint letter submitted by the Alliance, AIAM, and Honda, the organizations acknowledged that while the current FMVSS No. 305 definitions were based on SAE J1766, the subsequent promulgation of FMVSS No. 305 and the development of an international GTR on hydrogen fuel cell vehicle safety have largely rendered aspects of the SAE standard obsolete. The organizations requested that the agency incorporate, into FMVSS No. 305, the definitions contained in the draft electrical safety requirements developed by the Electric Safety (ELSA) working group in September 2010 as part of the draft GTR. Given this request from the aforementioned organizations, the rapid development of technology in electrical and fuel cell vehicles resulting in numerous changes in terminology and their associated definitions, and significant uncertainty among the relevant stakeholders as to the proper interpretation of many of the definitions adopted by the June 14, 2010 final rule, today's final rule seeks to clarify and update many of the definitions through additional language and/or adopting similar language from the draft ELSA electrical safety document (henceforth referred to as the ELSA document) where appropriate.5 In the followingsections, we will address each of the definitions added or amended by today's final rule in turn.

One appropriate area for adopting similar language from the ELSA document is the definition for “automatic disconnect.” Since the June 14, 2010 final rule did not define “automatic disconnect,” the agency is concerned that it may result in ambiguity regarding the location of voltage measurements taken pursuant to paragraph S7.6.1 (as further discussed later in this document). Therefore, today's final rule includes a definition for automatic disconnect, derived from the ELSA document, which states that “automatic disconnect” means a device that when triggered, conductively separates a high voltage source from the electric power train or the rest of the electric power train.

In the final rule, we defined “Electrical isolation” as “the electrical resistance between the vehicle high voltage source and any vehicle conductive structure.” The Alliance stated that the definition for “electrical isolation” as defined in the final rule could present difficulties because “any vehicle conductive structure” could be interpreted to include the high voltage source itself, and a high voltage source cannot be isolated from itself. The Alliance, therefore, petitioned to revise the definition so that the electrical isolation is between the vehicle high voltage source and the “vehicle chassis electricity-conducting structure.”

NHTSA's Response:The agency agrees that that the language “any conductive structure” should be clarified to indicate which vehicle components are required to be isolated from the high voltage source. However, we decline to adopt the Alliance's proposed term, “vehicle chassis electricity-conducting structure,” since it also lacks sufficient clarification on which vehicle components will be included by this term. For example, it is unclear whether the term includes other conducting structures in the vehicle such as the enclosures of high voltage sources. To address this issue, this final rule clarifies what the high voltage source is electrically isolated from by including a definition for a new term that has been proposed in the draft ELSA document. Based on the language of the ELSA document, a definition for “electrical chassis” is included in today's final rule as follows:

Since this definition of electrical chassis includes vehicle designs with multiple electrical chassis, this final rule clarifies the definition of electrical isolation to mean the electrical resistance between a given high voltage source and any electrical chassis of the vehicle. Further, in order to be consistent with the manner in which electrical isolation is determined in S7.6.6 and S7.6.7 of the electrical isolation test procedure and with the units of electrical isolation specified in S5.3(a), today's final rule also clarifies the definition of electrical isolation of a high voltage source to mean the electrical isolation resistance of the high voltage source divided by the working voltage of the high voltage source. Applying these corrections, along with the new definition of electrical chassis, today's final rule amends the definition for electrical isolation to read as follows:

The agency believes the changes made in today's final rule address the Alliance's concern about the broad term “any vehicle conductive structure.” Specifically, this definition ensures that the term “vehicle conductive structure” is not construed to include the high voltage source itself as the new definition for “electrical chassis” explicitly excludes high voltage sources. In addition, the use of these definitions more closely aligns FMVSS No. 305 with the definitions proposed by the ELSA working group and clarifies what types of components would be considered part of the chassis. For example, under these definitions, the electrical chassis includes the enclosures of the high voltage sources which are conductively linked to other conductive parts of the vehicle whose electrical potential is taken as a reference.

Before the NPRM in this current rulemaking, FMVSS No. 305 contained a definition for the term “Battery system component.” In the NPRM, the agency proposed replacing the definition of “Battery system component” with “Energy storage system.” The agency changed the definition in the final rule after considering the joint Alliance/AIAM comment to the NPRM to include “energy conversion system” as part of the definition for “Energy storage system.” In their comment, the Alliance/AIAM stated that fuel cell systems were conversion systems and should also comply with the retention requirements. NHTSA agreed and redefined “Energy storage system” as “Electric energy storage/conversion/power generating system.” The term “power generating system” was also included to align FMVSS No. 305 more closely with the terminology used in SAE J1766. Thus, the June 14, 2010 final rule defined “Electric Energy Storage/Conversion/Power Generating System” as follows:

We received multiple petitions requesting that the agency reconsider the “Electric energy storage/conversion/power generating system” definition. The Alliance stated that this definition is overly broad and includes energy storage systems beyond those used for propulsion power. The Alliance recommended that the definition be modified to utilize the following text: Electric energy storage/conversion/power generating system “means the electric energy sources for the propulsionsystem comprising, but not limited to, the vehicle's high voltage battery system * * *” (emphasis in original).

The AIAM and Honda had further concerns about the definition. The AIAM stated that the definition is not used consistently throughout the standard or even within the definition itself. For example, the AIAM noted that the last sentence of the definition for electrical energy storage/conversion/power generating system (which refers to hydrogen system components of fuel cell vehicles) is only applicable to the electric energy storage or conversion system parts of the definition and not to the power generating system portion. Honda stated that the combined definition may cause confusion to the reader.

Further, both the AIAM and Honda stated that various requirements inFMVSS No. 305 apply only to portions of the electric energy storage/conversion/power generating system definition, creating confusion regarding the applicability of various requirements in the standard. The AIAM and Honda refer to fuel cell modules as an example of this potential confusion. They noted that the retention requirements in S5.2, as written, are applicable only to the electric energy storage system and electric energy conversion system but are not applicable to the electric power generating system. According to SAE J1766 (April, 2005), the term “power generating system components” is defined as “the components comprising the high voltage power generating system in an Electric, Fuel Cell or Hybrid vehicle. These include, but are not limited to, generators, fuel cell modules, DC/DC converters and interconnects.” The AIAM and Honda stated that if the SAE definition is used to determine the meaning of “power generating system” for purposes of S5.2 retention requirements, it could be concluded that fuel cell modules are exempt because S5.2 does not list “power generating system” as requiring compliance with the retention requirements. The AIAM and Honda do not believe that the agency intended to exclude fuel cell modules from the retention requirements, considering the potential occupant injury risk in a crash if fuel cell modules became unattached. For clarity, both the AIAM and Honda petitioned that the terms “Electric energy storage system,” “Electric energy conversion system” and “Electric power generating system” be defined separately.

NHTSA's Response:We agree with petitioners that the “Electric energy storage/conversion/power generating system” definition should be clarified in order to avoid confusion as to the applicability of various requirements in FMVSS No. 305. In order to accomplish this task, today's final rule utilizes three separate definitions. First, it renames and makes adjustments to the language in the “Electric energy storage/conversion/power generating system” definition in order to reference the components that comprise the entire “Electric energy storage/conversion system.” Second, today's final rule also adds a new definition for “Electric energy storage/conversion device” in order to help distinguish the instances in which the various requirements of FMVSS No. 305 are to apply to an entire system as opposed to only component devices. Finally, this rule also retains the “Electric energy storage device” definition with minor revisions in order to clarify the instances in which the test specifications of this rule apply to the electric energy storage devices alone.

The agency also agrees with the Alliance petition that the definition for “electric energy storage/conversion/power generating system” should be specific to systems used for vehicle propulsion in order to distinguish them from other electric energy storage systems such as the auxiliary battery that is present on many hybrid/electric vehicles and is currently not subject to the retention requirements since it is typically of low mass and does not pose a safety hazard in the existing fleet. Thus, we have made the appropriate modifications to the three aforementioned definitions to indicate that the devices or components covered by each definition are used for vehicle propulsion.

In order to further add clarity to this definition, this final rule removes the reference to the term, “power generating systems,” from the June 14, 2010 final rule definition of “Electric energy storage/conversion/power generating system.” As “power generating systems” was included in the June 14, 2010 final rule definition in order to more closely align FMVSS No. 305 with the (now obsolete) SAE Standard J1766, the agency believes that there is no longer a purpose for including “power generating systems” in the “Electric energy storage/conversion/power generating system” definition. Thus, today's final rule simply defines “Electric energy storage/conversion system.”

In addition, we agree with the AIAM that the last sentence of the “Electric energy storage/conversion/power generating system” definition in the June 14, 2010 final rule can cause confusion. We believe that the last sentence of that definition, which states that “[h]ydrogen system components of fuel cell vehicles, such as the hydrogen tanks and hydrogen tubes, are not included in the electric energy storage/conversion system,” is superfluous. Thus, in further advancing the goal of clarity in the “Electric energy storage/conversion system” definition, we have deleted the aforementioned sentence. Under the definition in today's final rule, fuel cells are a type of energy conversion system and the agency will continue to refer to high voltage batteries, capacitors, and fuel cell systems as “energy storage/conversion systems.”

Thus, the final rule defines “Electric energy storage/conversion system” as follows:

Additionally, today's final rule adds a new definition for “Electric energy storage/conversion device.” We take note that the retention requirements of S5.2 of the June 14, 2010 final rule apply to all components that fall under the broader “Electric energy storage/conversion system” definition and that petitioners asked for clarification to the “Electric energy storage/conversion system” definition, in part, to clarify the specific components that will be subject to the retention requirements of paragraph S5.2. As further discussed later in this document, petitioners are concerned that “energy storage/conversion systems” can include interconnects and venting systems that are typically of low mass and need not be included in the retention requirements because they are not a safety risk. Thus, to make this distinction, today's final rule modifies paragraph S5.2 to utilize the definition for “electric energy storage/conversion device” and defines this term as follows:

Today's final rule also retains and amends the definition of “Electric energy storage device” from the June 14, 2010 final rule. The June 14, 2010 final rule defined “Electric energy storage device” as follows:

The term, “Electric energy storage device,” is used in the regulatory text to specify the state of charge of electric energy storage devices before the vehicle crash test. While closely related to the term “Electric energy storage/conversion device,” it does not encompass conversion devices such as fuel cell stacks. Today's final rule makes minor revisions to this definition in order to add clarity and consistency with the two other definitions discussed in this section by specifying that the electric energy storage devices under consideration are used for vehicle propulsion. Thus, the definition of electric energy storage device in today's final rule is amended as follows:

Paragraphs S1 and S2 of today's final rule have also been amended to reflect these new definitions.

The June 14, 2010 final rule included a definition of “high voltage source” which is reproduced below:

The Alliance stated that in common usage, a “voltage source” is a component capable of generating or storing electrical potential energy. It argued that under the current definition, connectors and wiring could be construed as voltage sources even though they are not capable of generating or storing electrical energy. The Alliance petitioned that the definition of “high voltage source” be revised to include “any electric component that is capable of generating or storing a voltage greater than 30 VAC or 60 VDC.”

NHTSA's Response:We agree with the Alliance that the current definition of “high voltage source” should be clarified. However, we cannot agree with the petitioner's proposal to limit the definition of high voltage sources to only those components that are capable of generating or storing electrical energy. Through the definition included in the June 14, 2010 final rule, the agency did intend to apply the electrical safety requirements to high voltage components, including wiring and connectors that are part of the vehicle's electric power train to ensure comprehensive electric shock protection.

However, we acknowledge that the definition in the June 14, 2010 final rule may not sufficiently distinguish the components included by the “high voltage source” definition from those that are not included. To clarify our intent today's final rule defines a high voltage source as “any electric componentcontained in the electric power train or conductively connected to the electric power trainthat has a working voltage greater than 30 VAC or 60 VDC (emphasis added).”

To further clarify this new definition, today's final rule adds a definition for “electric power train” stating that it refers to “an assembly of electrically connected components which includes, but is not limited to, electric energy storage/conversion systems and propulsion systems.” The definition of “electrical energy storage/conversion system” is updated as described above. Further, today's final rule makes minor revisions to the definition of “propulsion system” to mean “an assembly of electric or electro-mechanical components or circuits that propel the vehicle using the energy that is supplied by a high voltage source. This includes, but is not limited to, electric motors, inverters/converters, electronic controllers, and associated wire harnesses and connectors, and coupling systems for charging rechargeable energy storage systems.”

These definitions adopt similar language from the Definitions and the General sections of the ELSA document in order to both address the Alliance, AIAM and Honda's suggestion that the agency adopt the ELSA definitions where appropriate and to more clearly define the components that are included under the definition of “high voltage source.”

In the NPRM, NHTSA proposed adjusting the “Battery retention” requirements of paragraph S5.2 to properly reflect the additional energy storage devices that the updated standard intended to cover. The adjustment to paragraph S5.2 accomplished this goal by proposing to replace the word “battery” with the words “energy storage device” in S5.2 and adjust other portions of the regulatory text accordingly.

In the final rule, we amended the regulatory text based on the considerations in the NPRM and in response to additional information from a March 9, 2009 interpretation request from Hyundai. Hyundai stated that the requirements of S5.2 allowed a battery module located outside the passenger compartment to become dislodged as long as it does not enter the occupant compartment, while a module that is located within the occupant compartment must simply remain in the location in which it is installed. Hyundai stated that this may not properly address the intent of the standard in some circumstances.6 It argued that in vehicles such as sport utility vehicles (SUV) or station wagons, a battery module located inside the occupant compartment that moves during impact due to the deformation of the floor but remains firmly attached to its mounting, would technically fail the retention requirement even though it would not pose a projectile hazard.

The agency elected to respond to Hyundai's interpretation request in the June 14, 2010 final rule because the NPRM in this rulemaking had already proposed to amend the language of S5.2. Thus, in the final rule, the agency responded to that interpretation request stating

Accordingly, the June 14, 2010 final rule revised the regulatory text to read as follows:

In its petition for reconsideration of the June 14, 2010 final rule, the Alliance stated that the final rule's specification that all component anchorages, shall remain attached to the vehicle structure at all attachment locations is an overly broad requirement that goes beyond the intent of assuring that battery system components do not become separated from the vehicle. The Alliance stated that this language could be interpreted as prohibiting a plastic tie-wrap used to position a wiring harness to the vehicle from severing in a crash, a requirement that is neither practicable nor necessary.

The Alliance and the AIAM further stated that some electric energy storage/conversion systems, especially those which are located in the engine compartment are protected from serious damage resulting from the collision by absorbing the energy into deforming or even breaking component mountings. The Alliance stated that this was analogous to other energy management strategies, such as allowing steeringcolumns mountings to deform and break to keep the steering column away from the driver of a vehicle during a severe crash. The Alliance stated that a battery pack could be mounted to the vehicle at a dozen attachment points, and the fact that one of these attachments severs during a crash test would be inconsequential to the secure attachment of the battery pack to the vehicle, yet violate the language of the final rule. The AIAM stated that these system retention provisions may, in some respects, be unnecessarily design restrictive and potentially contrary to the interests of safety because rather than broadly mandating that the battery remain attached to the vehicle, the regulatory text places undue emphasis on the condition of individual anchorages, brackets and structures.

Both the AIAM and Honda further argued that the intent of S5.2 was to ensure that the battery modules would not become unattached and become flying projectiles in a crash or subsequent rollover. Each referenced the September 27, 2000 final rule establishing FMVSS No. 3058 where the agency stated, “We note that the intent of the proposed requirements in S5.2 was to ensure that the battery modules would not become unattached and become flying projectiles in a crash or subsequent rollover.” The AIAM stated that this regulatory goal is best served by a requirement that broadly focuses on the overall condition of the battery module (whether it remains attached to the vehicle and has not intruded into the passenger compartment) rather than the condition of the individual anchorages.

Finally, the AIAM and Honda also stated that there are many smaller components that paragraph S5.2 in the June 14, 2010 final rule applies to, such as ducts or vents, which may become unattached. They argued that the occupant injury risk from such components of the energy storage/conversion system is very low, given their small mass and that there are no comparable requirements for internal combustion engine (ICE) vehicles. The AIAM and Honda stated that in order to exclude low mass components of the energy storage/conversion system, such as ducts and vents, the retention requirements should apply only to energy storage/conversion devices rather than to energy storage/conversion systems.

Each of the petitioners had different strategies for amending the requirements for electric energy storage/conversion system retention. The Alliance petitioned that in order to avoid unnecessary design limitations while achieving protection from both physical damage and electrical shock, the following language be adopted for S5.2 of FMVSS No. 305:

The AIAM petitioned the agency to amend S5.2 to read as follows:

Honda petitioned to amend S5.2 as follows:

NHTSA's Response:We agree with the comments from the Alliance, AIAM, and Honda suggesting that the changes to the retention requirement in the June 14, 2010 final rule may be overly broad. We acknowledge that increased crash protection for energy storage/conversion systems can be achieved through the deformation or breaking of certain component mounting/anchorages to absorb the crash energy. We further acknowledge that the language in the June 14, 2010 final rule can be construed to include plastic tie-wraps used to position a wiring harness which are not consequential towards the overall condition of the energy storage/conversion systems.

However, we decline to adopt the regulatory text proposed by petitioners because we are concerned with ensuring that the final standard is clear and objective. Thus, the agency does not believe that the proposed language changes from the AIAM and the Alliance are appropriate as they require that the electric energy storage/conversion devices remain attached without offering any specifics on how the agency would distinguish between a device that has “remained attached” and one that has not. The regulatory text proposed by Honda offers more information on what constitutes “remaining attached” by indicating that the electric energy storage/conversion device must remain attached via “anchorages, brackets, or structures that transfer loads from the device(s) to the vehicle.” However, this approach remains unclear as it does not specify how many anchorages, brackets, or structures that transfer load must remain attached.

Thus, today's final rule addresses the considerations of ensuring adequate crash protection, creating an objective standard, and enabling industry designs that utilize anchorages to redirect crash forces by establishing regulatory text which requires that the electric energy storage/conversion devices remain attached to the vehicle by at least one component anchorage, bracket, or any structure that transfer loads from the component to the vehicle structure. Using this regulatory text, the agency can afford the manufacturers the maximum amount of flexibility to utilize the anchorages as a method for redirecting crash forces in their vehicle designs while still ensuring that electric energy storage/conversion devices do not become projectiles which can potentially injure vehicle occupants. Further, the additional regulatory text adds clarity and objectivity to the standard by specifying how the agency will distinguish between devices that have remained attached versus those that have not. Namely, the additional text clarifies that this standard only requires that the electric energy storage/conversion devices maintain a connection to the vehicle structure at one or more load transferring point after it is tested in accordance with the test procedures in S6.

However, since we are not requiring all component anchorages to remain attached to the vehicle at all attachment locations, we believe that the June 14, 2010 final rule's conclusion that there is no need to treat devices inside the occupant compartment differently from those outside the occupant compartment is no longer accurate. While we agree with petitioners that the intent of the retention requirement, as specified in the 2000 final rule, was to ensure that battery modules would not become unattached and become flying projectiles in a crash or subsequent rollover, this is not the only purpose of the retention requirement. One of the purposes of FMVSS No. 305 is to reduce deaths and injuries during and after a crash that occur from the intrusion of electric energy storage/conversion devices into the occupant compartment.In the June 14, 2010 final rule, the S5.2 requirement that all component anchorages remain attached to the vehicle structure at all attachment locations ensured that the energy storage/conversion system would not significantly intrude into the occupant compartment.

We recognize that, with the new regulatory text for S5.2 in today's final rule, there may be an increased potential for electric energy storage/conversion devices to partially detach from the vehicle structure and intrude into the occupant compartment. To address this, we are reintroducing the requirement that any electric energy storage/conversion device located outside the occupant compartment not intrude into the occupant compartment. However, we decline to use the term “passenger compartment airspace” as suggested by the Alliance. A similar term “occupant compartment air space” was defined by the agency in an interpretation letter9 of FMVSS No. 302, “Flammability of interior materials.” Since FMVSS No. 305 addresses safety from electrolyte spillage, electric shock, and intrusion of the energy storage system, and does not address fire safety, the presence of airspace is not relevant and we believe that “occupant compartment” is the more appropriate term for paragraph S5.2.

We also agree with Honda and the AIAM that the language of the June 14, 2010 final rule could be interpreted as unintentionally requiring low mass components, such as ducts and vents, to remain attached to the electric energy storage/conversion systems. As previously discussed, today's final rule adds a new definition for “electric energy storage/conversion device,” which includes a high voltage battery or battery pack, capacitor modules, fuel cell stacks, and rechargeable energy storage devices used for vehicle propulsion, but does not include low mass components, such as ducts, vents, and wiring harnesses. As the retention requirements of the final rule are amended in today's final rule to apply to the electric energy storage/conversion device rather than to the system, these changes address the concerns raised by the AIAM and Honda by ensuring that the retention requirements do not apply to low mass components.

In conclusion, the regulatory text in paragraph S5.2 has been amended to read as follows:

Paragraph S5.3 of the June 14, 2010 final rule requires that each high voltage source in a vehicle must meet the electrical isolation requirements of subparagraph (a) or the voltage level requirements of subparagraph (b) after each test. The subsections state:

The Alliance stated that it believes that the agency has inadvertently written the electrical safety requirements in the final rule in a way that would permit compliance with S5.3(a)(2) as the sole basis for complying with S5.3 in total. It noted that S5.3 states that the vehicle must meet the electrical isolation requirements of subparagraph (a) or the voltage requirements of subparagraph (b). It further noted that if subparagraph (a) is chosen, the language permits compliance to either subparagraph (1) or subparagraph (2), and if subparagraph (2) is chosen, there are no isolation requirements specified for AC high voltage sources. The Alliance requested clarification on whether the agency intended to require 500 ohms/volt isolation for AC sources in subparagraph (a) in both the subsidiary options of subparagraph (a).

NHTSA's Response:NHTSA agrees with the Alliance that the regulatory text in S5.3(a) could be interpreted to imply that for a vehicle with continuous monitoring of electrical isolation, only the DC high voltage components need to meet the 100 ohms/volt electrical isolation and that there are no requirements for AC high voltage components. This was clearly not the intent. We are amending the regulatory text of S5.3(a) to indicate that the electrical isolation between a given high voltage source and any electrical chassis of the vehicle must be greater or equal to one of the following: (1) 500 ohms/volt for an AC high voltage source, or (2) 500 ohms/volt for a DC high voltage source without electrical isolation monitoring, or (3) 100 ohms/volt for a DC high voltage source with electrical isolation monitoring during vehicle operation. In order to further clarify paragraph S5.3, we have included references to specific portions of the test procedures that apply to the electrical safety requirements. In addition, the term “vehicle chassis electricity conducting structure” in S5.3 has been replaced by the term “electrical chassis” to maintain consistency with the changes discussed earlier in this document. In conclusion, today's final rule amends paragraph S5.3 as follows:

The Alliance also stated in its petition that S5.3(b) of the final rule adopted a low-voltage option for providing electrical isolation, while S7.7 specifies the procedure for measuring the voltage. The Alliance petitioned that, for purposes of clarity, the language currently specified in S7.6.1 regarding voltage measurement locations for the electrical isolation option be added to S7.7 for the low-voltage option.

NHTSA's Response:The agency agrees with the Alliance that the procedure to measure the voltage in S7.6.1 should be added to S7.7 for thepurposes of improving clarity. However, we believe S7.6.1 needs to be modified to utilize the new definitions adopted above and to clarify the measurement procedure before its contents are added to S7.7. The test procedures in paragraph S7.6.1 of the June 14, 2010 final rule states:

As previously discussed, today's final rule has adopted new definitions for “electric power train” and “electrical chassis.” Therefore, all instances of the term “traction-system” in S7.6.1 are replaced by the term “electric power train” and all instances of the term “vehicle chassis electricity-conducting structure,” are replaced by the term “electrical chassis.” This final rule also amends the definition for “high voltage source” to include electric components contained in the electric power train and those connected to it. For high voltage sources contained within the electric power train, the regulatory text of S7.6.1 and S7.7 have been amended to indicate that the electrical isolation measurement is made from the side of the automatic disconnect that is connected to “the rest of the electric powertrain.” In addition, the regulatory text of the June 14, 2010 final rule S7.6.1 indicates that the “automatic disconnect” only applies to high voltage sources within the vehicle's energy storage/conversion/power generating system. We believe that this regulatory text may be misconstrued, since the intent of the agency was that the specifications for the electrical isolation measurement locations with respect to the automatic disconnects in S7.6.1 apply to each high voltage source with automatic disconnects. Therefore, the regulatory text of S7.6.1 in today's final rule is modified as follows and incorporated into S7.7 as requested by the Alliance:

However, to ensure consistency and clarity of terminology, today's final rule also revises the first sentence in S7.6.1 to indicate that the electric energy storage/conversion system (rather than the high voltage source) is connected to the vehicle's propulsion system to enable the propulsion system to be energized when the vehicle ignition is in the “on” position. A similar clarification is made in S7.2 by replacing “high voltage system” (which is not defined in the regulatory text) with “electric energy storage/conversion system” and “propulsion motors” with “propulsion system.”

While the NPRM did not propose a requirement for electrical isolation monitoring, we acknowledged in the NPRM that the petitioner for rulemaking requested that FMVSS No. 305 allow for DC high voltage sources to meet a 100 ohms/volt electrical isolation requirement when coupled with electrical isolation monitoring. In the final rule, based on our analysis of comments on the NPRM, we required that each DC high voltage source meet 500 ohms/volt electrical isolation for vehicles without continuous electrical isolation monitoring but allowed DC high voltage sources to meet 100 ohms/volt electrical isolation if the vehicle had continuous monitoring of electrical isolation during vehicle operation. We required that the system must monitor its own readiness and provide a warning display that must be clearly visible from the driver's designated seating position for loss of isolation when tested according to the test procedure in S8.

The agency stated its belief that electrical isolation monitoring is especially needed for electrical components whose electrical isolation may degrade over time such as fuel cell stacks in fuel cell vehicles where the coolant may increase in conductivity during vehicle service and thereby result in a reduction of electrical isolation. Since it is anticipated that the 100 ohms/volt electrical isolation requirement for DC high voltage components would likely be exercised for the fuel cell stacks and other such electrical components whose isolation may degrade over time, we included the need for isolation monitoring of these components in the final rule.

In its petitions for reconsideration, Honda stated that the level of protection against electric shock should be judged by the absolute value of electrical isolation resistance. Honda argued that whether or not the vehicle is equipped with an isolation monitor has no relation to the possibility of electric shock resulting from touching the high voltage bus after a crash. Honda proposed removing entire sections of S5.4 and S8 related to isolation monitoring systems. Honda noted that the 2009 SAE J257810 and the 2009 ISO 6469-311 draft standards do not require electrical isolation monitoring for electrical components with 100 ohms/volt electrical isolation and requested that the electrical isolation monitoring requirements be removed to resolve the differences between the FMVSS No. 305 and the SAE/ISO standards.

Honda requested that if NHTSA decides not to remove the electrical isolation monitoring requirement, it instead permit periodic electrical isolation monitoring systems such as those that do not monitor the electrical isolation during start-up of vehicle/system (until main contactor is connected). Honda stated that the 2010 draft of ISO 6469-3 and the 2006 draft of ISO 23273-3 permit both continuous and periodic electrical isolation measurements during vehicle operation and that “periodic” systems would also detect a failure in isolation and appropriately warn the driver. Therefore, Honda proposed FMVSS No. 305 include the words “or periodic” after the word, “continuous” in S5.3, S5.4 and S8.

Further, Honda stated that the electrical isolation monitoring system only monitors the entire system during normal vehicle operation and is not capable of independently monitoring each high voltage source. Therefore, Honda requested that the agency clarify that the electrical isolation monitoring system will not be required to independently monitor each high voltage source by deleting the words “For each continuously monitored DChigh voltage source,” from the regulatory text in S5.4.

Finally, Honda stated that the test procedure to determine the operation of isolation monitoring systems does not allow flexibility in selecting the resistor that is inserted between the positive terminal of the high voltage source and the vehicle chassis electric conducting structure. Honda noted that, as prescribed, S8(4) requires inserting a resistor with resistance equal to the calculated result 1/(1/(95 times the working voltage of the high voltage source)—1/Ri) and does not allow any flexibility. Honda petitioned to allow any higher resistor to be used in the test procedure to determine if the isolation monitoring system is operating correctly arguing that the stringency of the test would not be compromised since higher resistance would provide a worse case condition.

NHTSA's Response—While we agree with Honda that isolation monitoring is intended to identify the possibility of deteriorated isolation that occurs over time during the normal service life of the vehicle and that an isolation monitor is not intended to guard against the possibility of electric shock resulting from touching a high voltage source after a crash, we do not agree that the requirement for electrical isolation monitoring should be deleted from the standard. The requirement that DC high voltage sources be monitored during vehicle operation with an isolation monitoring system that displays a warning for loss of electrical isolation is similar to the air bag readiness indicator required by FMVSS No. 208, “Occupant crash protection.” Neither the electrical isolation warning display nor the air bag readiness indicator provides protection during or after a crash. However, these indicators serve to provide the driver information that the related system may not be in proper working condition. Electrical isolation monitoring addresses a relevant safety concern because electric vehicles that use the 100 ohms/volt electrical isolation option to comply with the electrical safety requirements may likely be powered by fuel cells which have coolant that can deteriorate the electrical isolation over time. The agency made the decision to require electrical isolation monitoring based on careful analysis of the electrical safety concerns associated with providing adequate electrical shock protection both during vehicle operation and following a crash.

We also note that the electrical isolation and the electrical isolation monitoring requirements in the June 14, 2010 final rule were consistent with the joint Alliance/AIAM comments to the NPRM and SAE J1766. The standards referred to by Honda in its petition (SAE J2578 and ISO 6469-3) are draft documents that may be subject to change. For example, the 2009 draft of ISO 6469-3 does not require electrical isolation monitoring while the 2010 version makes provisions for continuous and periodic electrical isolation monitoring. As the aforementioned voluntary standards are still in flux regarding requiring electrical isolation monitoring, and as the agency believes that electrical isolation monitoring addresses an important safety concern by warning the driver of a possible degradation in electrical isolation, we are denying Honda's petition to remove the electrical isolation monitoring requirements from S5.4 and S8.

However, we agree with Honda's petition that the term “continuous” in the electrical isolation monitoring system requirement should be clarified. Since the standard provides a test procedure and performance criteria for assessing the operation of the electrical isolation monitoring system, we believe there is no need to specify the type of monitoring system. The only requirement contained in today's final rule is that the monitoring systems meet the performance criteria in S5.4 when tested according to the procedure in S8. Therefore, rather than adding the additional term “or periodic,” as suggested by Honda, we are deleting the specification for the monitoring system to be “continuous” in S5.3, S5.4, and S8 to address its concern. We are also modifying the regulatory text of S5.4 slightly to improve clarity.

We agree with Honda that electrical isolation monitoring systems may only monitor the whole vehicle system. However, the regulatory requirements in S5.4 only apply to those DC high voltage sources that manufacturers have chosen to certify to the 100 ohms/volt electrical isolation requirement and do not comply with the 500 ohms/volt electrical isolation requirement. Therefore, the test procedure in S8 evaluates the performance of the monitoring system for each DC high voltage source that is certified to 100 ohms/volt electrical isolation. The procedures in S8 are intended to test for the condition when electrical isolation of each DC high voltage source (certified to the 100 ohms/volt requirement) falls below 100 ohms/volt. Therefore, we do not grant Honda's request to remove the phrase “For each continuously monitored DC high voltage source” from the regulatory text in S5.4.

Finally, Honda also petitioned for flexibility in the use of any higher resistor in the test procedure to determine if the isolation monitoring system is operating correctly. It argued that allowing a higher resistance would not compromise the stringency of the requirements since it would provide for a worse case condition. In the June 14, 2010 final rule, the resistance of the external resistor applied in the test procedure detailed in S8 is calculated such that the combined electrical isolation resistance of the high voltage source and the external resistor results in electrical isolation of 95 ohms/volt which is 95 percent of the required electrical isolation. The electrical isolation monitor is required to display a warning when the electrical isolation falls to 95 ohms/volt. If the resistance of the external resistor applied in the test is greater than that specified in S8, as requested by Honda, then we agree that the combined electrical isolation for which the monitoring system will need to display a warning may be greater than 100 ohms/volt, thereby making the requirement more stringent.

The final rule requires 100 ohms/volt electrical isolation for monitored DC high voltage sources. For compliance purposes, we are assessing the operation of the monitoring system when the electrical isolation falls just below the required value. The final rule does not preclude manufacturers from having the isolation monitor warning display come on at a higher value than the minimum electrical isolation of 100 ohms/volt. Therefore, we do not believe it is necessary to grant Honda's request to change S8(4) to include an external resistor of higher resistance than that specified by the calculation.

However, we do see merit in including some flexibility in the resistance of the external resistor selected to evaluate the electrical isolation monitoring system such that it is easy for the testing personnel to select an off-the-shelf resistor instead of having to build a resistor to meet the exact computed resistance of the external resistor. Therefore, we are specifying that the resistance of the external resistor be such that the combined electrical isolation is greater or equal to 95 ohms/volt but less than 100 ohms/volt. This will allow the agency to test the operation of the monitoring system when the electrical isolation falls just below the required 100 ohms/volt, and will provide manufacturers additional flexibility in selecting resistors for testing.

In the June 14, 2010 final rule, we required that prior to the crash test, the electric energy storage device be at themaximum state-of-charge recommended by the manufacturer, as stated in the vehicle owner's manual or on a label that is permanently affixed to the vehicle; or if the manufacturer has made no recommendation in the owner's manual or on a label permanently affixed to the vehicle, at a state-of-charge of not less than 95 percent of the maximum capacity of the electric energy storage device; or if the electric energy storage device(s) is/are rechargeable only by an energy source on the vehicle, at any state-of-charge within the normal operating voltage defined by the vehicle manufacturer. These state-of-charge provisions in the June 14, 2010 final rule were substantively identical to the original FMVSS No. 305 that existed before the NPRM in this rulemaking.

In its petition asking the agency to reconsider these provisions, the Alliance requested that FMVSS No. 305 be amended to allow testing at “any state-of-charge which allows the normal operation of the power train as recommended by the manufacturer.” In support of this request, the Alliance stated that the United Nations Economic Commission for Europe (UNECE) draft regulations (ECE R.94 and 95)12 already propose to permit testing of electric vehicles at any state-of-charge. The Alliance stated that this proposed change would (1) allow for systems with external charging capability to be tested at lower state-of-charge (similar to hybrid electric vehicles), (2) result in reduced facility/test personnel risk (similar to the current use of stoddard in fuel systems), and (3) further provide an opportunity for harmonization with UNECE regulations. Thus, the Alliance argued that in the interest of safety in the testing environment and harmonization, the UNECE allowance on state-of-charge should be adopted.

Ford also offered comments regarding the state-of-charge and the FMVSS No. 305 test conditions. Ford stated that state-of-charge does not affect the energy storage/conversion system mass, electrolyte volume or containment capability and does not affect electrical isolation. Ford presented theoretical examples of systems suffering loss of electrical isolation during the crash test prescribed in the standard. Using the electrical isolation test procedure outlined in the standard, Ford demonstrated that the loss in electrical isolation was detected when the system was energized at 95 percent and 5 percent of the maximum state-of-charge. Ford agreed with the Alliance that the lower state-of-charge would reduce potential risk to test personnel similar to the use of substitute liquids and gases in other FMVSSs.

In addition, Honda's petition stated that the state-of-charge testing requirements should be amended to address new technologies such as plug in hybrid electric vehicles (PHEVs) which will become common in the near future. Honda noted that the regulatory text indicates that if the manufacturer of vehicles (such as PHEVs) recommends a specific maximum state-of-charge, the test would be conducted at the specified maximum state-of-charge. However, if the manufacturer has no recommendation, the test would be conducted at a state-of-charge of not less than 95 percent of the maximum capacity of the electric energy storage device.

Honda argued that the state-of-charge for an electric energy storage device can vary due to environmental conditions such as temperature or service life and that it will not be recommending a specific state-of-charge in the owner's manual or on the label affixed to the vehicle because the electric energy storage device is charged appropriately by an off-board and/or on-board charger recommended by the manufacturer. Thus, Honda petitioned to have the regulatory text of S7.1 changed from “recommended by the manufacturer, as stated in the vehicle owner's manual or on a label that is permanently affixed to the vehicle” to “in accordance with the vehicle manufacturer's recommended charging procedures.” For those manufacturers that make no recommendation, Honda further petitioned to have the regulatory text of S7.1(b) changed from “made no recommendation in the owner's manual or on a label permanently affixed to the vehicle” to “made no recommendation for charging procedures.”

NHTSA's Response:NHTSA does not agree with the Alliance and Ford that the electric energy storage device should be at any state-of-charge that allows for the normal operation of the power train as recommended by the manufacturer. Specifying the state-of-charge provides a uniform way of testing and ensures all electric powered motor vehicles are tested in a similar manner.

We agree with Ford that the electrical isolation resistance measurement remains unchanged for different operating voltages and that loss in electrical isolation can be detected by the method outlined in the standard for different states of charge. However, we are concerned that certain electric components, such as capacitor networks within the electric power train may not be tested to their design limits when tested at a lower state-of-charge. When the vehicle crash test is conducted at the maximum state-of-charge, there is potential for some of the capacitor voltages to reach their design limits which may result in an electric short and hence cause a loss in electrical isolation. This potential safety hazard may not occur when the vehicle is tested at a lower state-of-charge which results in a lower energy test condition. We also do not agree with petitioners that testing at lower state-of-charge to evaluate electrical safety is similar to fuel system integrity testing with stoddard fluid in gasoline powered vehicles and nitrogen in compressed natural gas vehicles. While use of stoddard fluids and nitrogen do not change the performance of the fuel containers during and after the test, using lower state-of-charge may not evaluate certain electrical components at their design limits.

We further note that the December 2010 draft of SAE J2929—“Electric and Hybrid Vehicle Propulsion Battery System Safety Standard for Lithium-Based Rechargeable Cells,” requires the battery state-of-charge to be at the maximum possible during normal vehicle operation before the battery system is tested for mechanical shock hazard in a vehicle pursuant to FMVSS No. 305. While the draft SAE J2929 test applies to different safety concerns, it does involve the same crash tests as this standard and utilizes similar state-of-charge requirements. Therefore, the agency's position on the state-of-charge of the energy storage/conversion system prior to the crash test is consistent with the future voluntary industry standard for battery systems. We are therefore denying the petition from the Alliance and Ford to conduct the crash test at any state-of-charge which allows the normal operation of the power train as recommended by the manufacturer.

However, we agree with Honda that the maximum state-of-charge may vary based on environmental conditions such as the age of the battery, temperature and service life for today's battery technologies. Thus, having the label specify the maximum state-of-charge in the owner's manual or a label permanently affixed to the vehicle may not provide consumers the information they need to recharge their vehicle throughout the vehicle's life. However, manufacturers will likely provide information to consumers on the proper charging procedures to achievemaximum range, as suggested by Honda. Therefore, we are modifying the regulatory text to indicate that the maximum state-of-charge in accordance with the vehicle manufacturer's recommended charging procedure, as stated in the vehicle owner's manual or on a label that is permanently affixed to the vehicle, will be used. In the case where no such recommendation is provided in the owner's manual or on a label permanently affixed to the vehicle, the test will be conducted with the electric energy storage/conversion device charged to 95 percent of its rated capacity.

The June 14, 2010 final rule did not include a physical barrier compliance option for electrical safety since it was beyond the scope of the rulemaking. In addition, the agency stated in the final rule that it was uncertain whether indirect contact failure modes would be sufficiently accounted for by the protective barrier compliance option and noted that it had initiated a research program to better understand the issues.

In its petition for reconsideration, the Alliance disagreed with the agency's concern that the physical barrier option may not appropriately address electrical shock from indirect contact. The Alliance stated its belief that the test procedure for the protective barrier compliance option is equally valid for assessing both direct and indirect contact. It stated that the basic premise of the protective barrier compliance option is that if a person cannot contact high voltage sources, then there is little chance of injury from such sources.

The Alliance further stated that there is worldwide recognition and acceptance of the barrier option as a means for providing electrical safety, and updating FMVSS No. 305, as requested, would be a key enabler facilitating the introduction of all forms of electric-powered vehicles into the U.S. mainstream vehicle fleet. It argued that such vehicle technologies are vital to achieving the current Administration's energy and emissions goals. The Alliance further stated that given the urgent need for the barrier option and the fact that the barrier option in the draft GTR language (the ELSA document) is fully accepted by the international community, it is not necessary to delay a rulemaking proposal. Accordingly, the Alliance requested that NHTSA initiate a new rulemaking to incorporate the barrier option into FMVSS No. 305, and to complete this rulemaking with an urgency that is consistent with the national priorities to improve energy independence and reduced emissions.

NHTSA's Response:Our position on the requested physical barrier option has not substantively changed since the June 14, 2010 final rule. As noted in the June 14, 2010 final rule, NHTSA is doing research to evaluate the suitability of including the protective barrier option in FMVSS No. 305. NHTSA is aware that other countries have adopted a similar option in their regulations for electrical safety, but that does not eliminate the need for the agency to obtain the necessary supporting research to fully understand the consequences of adding this option as a means for providing electrical safety in FMVSS No. 305. Prior to changing any safety standard, NHTSA must first ensure that the proposed requirement provides an adequate level of safety and does not create an inadvertent safety risk to the motoring public, or first responders responding to the scene of a crash. Upon completion of the agency's research, NHTSA will make a decision whether to include physical barriers as an option for providing electrical safety in FMVSS No. 305. If the agency decides that a proposal for the protective barrier compliance option has merit, it will propose performance requirements, as well as a test procedure, at that time.

The June 14, 2010 final rule also did not include a provision for testing hydrogen fuel cell vehicles using an inert gas, such as helium. When testing with an inert gas, the fuel cell stacks are not energized and consequently will not generate any electrical energy from which to measure electrical output. The final rule stated that the agency was researching potential crash test procedures for testing fuel cell vehicles, but would not address this issue as part of the June 14, 2010 final rule.

Petitions for reconsideration from the AIAM and Honda requested the agency to expedite this research so that a decision can be made in the near future for testing hydrogen fuel cell vehicles with helium-filled fuel containers. The organizations noted that fuel cell vehicles will be required to comply with FMVSS No. 305 by September 1, 2011. They argued that testing for those vehicles will then have to be conducted using hydrogen gas in accordance with the current regulation, if no changes are made. The AIAM and Honda further stated that other FMVSS crash test procedures (i.e.FMVSS Nos. 208, “Occupant crash protection,” 214, “Side impact crash protection,” 301, “Fuel system integrity,” and 303, “Fuel system integrity of compressed natural gas vehicles”) require filling the fuel tank with alternative fuel to ensure safety during and after the crash test and the use of gasoline, diesel, and compressed natural gas in such tests is prohibited. The organizations requested that the test procedure for FMVSS No. 305 be aligned with the procedures of other existing crash-related regulations. Both organizations further reiterated their original comments to the NPRM that current Japanese regulations require the use of helium gas in crash tests, and prohibit the use of hydrogen.

NHTSA's Response—As noted in the June 14, 2010 final rule, the agency has ongoing research in developing a test procedure for evaluating the electrical safety of fuel cell vehicles with an inert gas and inactive fuel cells and the agency's position has not substantively changed since then. When an inert gas is used instead of hydrogen in fuel cell vehicles, some of the electrical components of the electric power train may be rendered inactive. Currently, the agency has not developed a test procedure to test the electrical safety of all high voltage sources accurately when an inert gas is used during testing of fuel cell vehicles. We note that while the Japanese regulation and the ELSA document permit the use of helium gas in crash tests of hydrogen powered vehicles, both the Japanese regulation and the ELSA document do not specify a test procedure to evaluate the electrical safety of such vehicles when an inert gas is used in place of hydrogen.

Therefore, the agency believes further work is needed to resolve the identified issues in testing hydrogen fuel cell vehicles. While there are currently no explicit provisions for using an alternative gas in lieu of hydrogen, comparable to the fuel system integrity standards for gasoline or compressed natural gas powered vehicles, the test procedures in an FMVSS are those that the agency will use to determine compliance to the particular standard. Manufacturers are not prohibited from using other test procedures for compliance certification and may elect to conduct crash tests of hydrogen fuel cell vehicles with a less volatile gas such as helium.

Although the NPRM sought comment on whether or not the requested low-energy compliance option for electrical safety should be included, it did not include this option in the proposed rule. After carefully considering thecomments received, the agency did not include the low-energy compliance option in the June 14, 2010 final rule as we remained unconvinced that the option was necessary and that it would adequately address the safety concerns of FMVSS No. 305. In its petition for reconsideration, the Alliance stated its continued belief that the low-energy option has merit and should be included in FMVSS No. 305. However, the Alliance also recognized that more research may be required in order to fully understand the safety implications of this option. Given the available information on the low-energy compliance option for electrical safety has not significantly changed, NHTSA's position on the low-energy compliance option remains as expressed in the June 14, 2010 final rule.

NHTSA has considered the impact of this rulemaking action under Executive Order 12866, Executive Order 13563, and the Department of Transportation's regulatory policies and procedures. This rulemaking document was not reviewed by the Office of Management and Budget under E.O. 12866, “Regulatory Planning and Review.” It is not considered to be significant under E.O. 12866 or the Department's Regulatory Policies and Procedures (44 FR 11034; February 26, 1979). NHTSA has determined that the effects of this final rule are minor and that a regulatory evaluation is not needed to support the subject rulemaking. Today's final rule only makes slight changes to the regulatory text of the June 14, 2010 final rule to add clarification and does not impose significant costs beyond those already required by the June 14, 2010 final rule.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601et seq.,as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996), whenever an agency is required to publish a notice of proposed rulemaking or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e.,small businesses, small organizations, and small governmental jurisdictions). No regulatory flexibility analysis is required if the head of an agency certifies the rule will not have a significant economic impact on a substantial number of small entities. SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide a statement of the factual basis for certifying that a rule will not have a significant economic impact on a substantial number of small entities.

NHTSA has considered the effects of this final rule under the Regulatory Flexibility Act. I certify that this final rule does not have a significant economic impact on a substantial number of small entities. Any small manufacturers that might be affected by this final rule are already subject to the requirements of FMVSS No. 305. Further, the agency believes the testing associated with the requirements added by this final rule are not substantial and to some extent are already being voluntarily borne by the manufacturers pursuant to SAE J1766, SAE J2578, ECE regulations, and other voluntary industry standards. Therefore, the impacts on any small businesses affected by this rulemaking would not be substantial.

NHTSA has examined today's final rule pursuant to Executive Order 13132 (64 FR 43255; Aug. 10, 1999) and concluded that no additional consultation with States, local governments, or their representatives is mandated beyond the rulemaking process. The agency has concluded that the final rule does not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. The final rule does 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.” Today's final rule does not impose substantial additional requirements. Instead, it clarifies the existing requirements from the June 14, 2010 final rule.

NHTSA rules can have preemptive effect in two ways. First, the National Traffic and Motor Vehicle Safety Act contains an express preemption provision:

The express preemption provision described above is subject to a savings clause under which “[c]ompliance with a motor vehicle safety standard prescribed under this chapter does not exempt a person from liability at common law.” 49 U.S.C. 30103(e). Pursuant to this provision, State common law tort causes of action against motor vehicle manufacturers that might otherwise be preempted by the express preemption provision are generally preserved. However, the Supreme Court has recognized the possibility, in some instances, of implied preemption of State common law tort causes of action by virtue of NHTSA's rules—even if not expressly preempted.

This second way that NHTSA rules can preempt is dependent upon the existence of an actual conflict between an FMVSS and the higher standard that would effectively be imposed on motor vehicle manufacturers if someone obtained a State common law tort judgment against the manufacturer—notwithstanding the manufacturer's compliance with the NHTSA standard. Because most NHTSA standards established by an FMVSS are minimum standards, a State common law tort cause of action that seeks to impose a higher standard on motor vehicle manufacturers will generally not be preempted. However, if and when such a conflict does exist—for example, when the standard at issue is both a minimum and a maximum standard—the State common law tort cause of action is impliedly preempted. SeeGeierv.American Honda Motor Co.,529 U.S. 861 (2000).

Pursuant to Executive Order 13132, NHTSA has considered whether this rule could or should preempt State common law causes of action. The agency's ability to announce its conclusion regarding the preemptive effect of one of its rules reduces the likelihood that preemption will be an issue in any subsequent tort litigation.

To this end, the agency has examined the nature (e.g.,the language and structure of the regulatory text) and objectives of today's rule and finds that this rule merely clarifies the requirements and definitions contained in the June 14, 2010 final rule. As such, NHTSA does not intend that this rule preempt state tort law that would effectively impose a higher standard onmotor vehicle manufacturers than that established by today's rule. Additionally, in the June 14, 2010 final rule, the agency did not assert preemption. Establishment of a higher standard by means of State tort law would not conflict with the exemption announced here. Without any conflict, there could not be any implied preemption of a State common law tort cause of action.

NHTSA has analyzed this rulemaking action for the purposes of the National Environmental Policy Act. The agency has determined that implementation of this action will not have any significant impact on the quality of the human environment.

When promulgating a regulation, agencies are required under Executive Order 12988 to make every reasonable effort to ensure that the regulation, as appropriate: (1) Specifies in clear language the preemptive effect; (2) specifies in clear language the effect on existing Federal law or regulation, including all provisions repealed, circumscribed, displaced, impaired, or modified; (3) provides a clear legal standard for affected conduct rather than a general standard, while promoting simplification and burden reduction; (4) specifies in clear language the retroactive effect; (5) specifies whether administrative proceedings are to be required before parties may file suit in court; (6) explicitly or implicitly defines key terms; and (7) addresses other important issues affecting clarity and general draftsmanship of regulations.

Pursuant to this Order, NHTSA notes as follows. The preemptive effect of today's final rule is discussed above. NHTSA notes further that there is no requirement that individuals submit a petition for reconsideration or pursue other administrative proceeding before they may file suit in court.

Please note that anyone is able to search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,etc.). You may review DOT's complete Privacy Act Statement in theFederal Registerpublished on April 11, 2000 (65 FR 19477-78), or online athttp://www.dot.gov/privacy.html.

Under the Paperwork Reduction Act of 1995 (PRA), a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid OMB control number. There are no information collection requirements associated with this final rule.

Under the National Technology Transfer and Advancement Act of 1995 (NTTAA) (Pub. L. 104-113), “all Federal agencies and departments shall use technical standards that are developed or adopted by voluntary consensus standards bodies, using such technical standards as a means to carry out policy objectives or activities determined by the agencies and departments.” Voluntary consensus standards are technical standards (e.g.,materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies, such as the Society of Automotive Engineers (SAE). The NTTAA directs us to provide Congress, through OMB, explanations when we decide not to use available and applicable voluntary consensus standards. FMVSS No. 305 has historically drawn largely from SAE J1766. Prior to this update, FMVSS No. 305 was based on the April 2005 version of SAE J1766. However, today's final rule has made certain amendments to the standard to reflect the development of new voluntary consensus standards that have superseded SAE J1766. Thus, today's final rule makes revisions to the June 14, 2010 final rule that updated FMVSS No. 305.

The Unfunded Mandates Reform Act of 1995 requires agencies to prepare a written assessment of the costs, benefits and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local or Tribal governments, in the aggregate, or by the private sector, of more than $100 million annually (adjusted for inflation with base year of 1995). Today's final rule, which clarifies the June 14, 2010 final rule, will not result in expenditures by State, local or Tribal governments, in the aggregate, or by the private sector in excess of $100 million annually.

Executive Order 12866 requires each agency to write all rules in plain language. Application of the principles of plain language includes consideration of the following questions:

• Have we organized the material to suit the public's needs?

• Are the requirements in the rule clearly stated?

• Does the rule contain technical language or jargon that isn't clear?

• Would a different format (grouping and order of sections, use of headings, paragraphing) make the rule easier to understand?

• Would more (but shorter) sections be better?

• Could we improve clarity by adding tables, lists, or diagrams?

• What else could we do to make the rule easier to understand?

If you have any responses to these questions, please notify the agency in writing.

The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading at the beginning of this document to find this action in the Unified Agenda.

In consideration of the foregoing, NHTSA amends 49 CFR part 571 as follows:

Under its New Car Assessment Program (NCAP), the National Highway Traffic Safety Administration (NHTSA) subjects vehicles to frontal crash, side crash, and rollover resistance tests and, based on the results, assigns safety ratings to the tested vehicles. The ratings are expressed in terms of a 5-star rating system, with five stars being the highest rating and one star the lowest. The ratings would enable consumers to consider and assess the relative safety of vehicles before deciding which new vehicle they want to purchase. The labels would also provide an incentive for vehicle manufacturers to make voluntary improvements in the safety of their vehicles beyond the minimum levels of performance required by the Federal motor vehicle safety standards.

The following overview describes two separate, on-going efforts to improve the NCAP program: (1) Requiring that the NCAP information be placed on labels on new passenger vehicles and (2) upgrading the NCAP information, most significantly by introducing an overall safety rating.

In 2005, Congress enacted the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU).1 Section 10307 required new passenger vehicles to be labeled with either the safety ratings it had received under NCAP or a statement that the vehicle had not been rated under NCAP. The ratings must be displayed on its new vehicle price sticker, known as the Monroney label. The Monroney label is required by Federal law2 and is affixed to the side window showing the price of the vehicle and the options installed. The Monroney label on all light vehicles is required to show, among other things:

• The manufacturer's suggested retail price (MSRP) of the base vehicle;

• The MSRP of each accessory and each item of optional equipment installed on the particular vehicle;

• The transportation charges for delivery of the vehicle from the manufacturer to the dealer; and

• The total MSRP of all of the above.

SAFETEA-LU also required that the safety rating information be presented in a legible, visible, and prominent fashion, and that the safety rating area of the Monroney label meet minimum size requirements3 and specified a statement to be provided if no safety rating information is available for a particular vehicle model.4

In addition to the MSRP and safety ratings information, Congress has also permitted the information from two other Federal programs to appear on the Monroney label. The Energy Policy Conservation Act (EPCA) requires that the Environmental Protection Agency (EPA) issue regulations requiring vehicle manufacturers to attach a prominently placed label that provides information on:

• The vehicle's fuel economy;

• The estimated annual fuel cost of operating the vehicle;

• The range of fuel economy of comparable vehicles by all manufacturers; and

• A statement that a booklet is available from the dealer to compare the fuel economy of other vehicles manufactured by all manufacturers for the model year.5

In 2007, Congress amended the Energy Independence Security Act (EISA) by, among other things, mandating that NHTSA issue a rule requiring that greenhouse gas emissions as well as new fuel economy information be placed on labels affixed to new vehicles.6 Pursuant to EISA, NHTSA and EPA published a final rule to revise substantially the fuel economy labeling requirements.7

Finally, the Motor Vehicle Information and Cost Savings Act requires that information on domestic and foreign content be provided on new vehicle labels.8

On September 12, 2006, the agency published a final rule implementing the NCAP safety labeling requirements of SAFETEA-LU by establishing a new regulation, 49 CFR 575.301,Vehicle Labeling of Safety Rating Information, 9 that required vehicle manufacturers to incorporate a distinct safety rating label into the Monroney label.

The final rule provided that:

(1) New passenger automobiles manufactured on or after September 1, 2007, must display specified NCAP information on a safety rating label that is part of their Monroney label;

(2) The specified information must include a graphical depiction of the number of stars achieved by a vehicle for each safety test;

(3) Information describing the nature and meaning of the test data, and references tohttp://www.safercar.govand NHTSA's toll-free hotline number for additional vehicle safety information, must be placed on the label;

(4) The label must be legible and visible with a minimum length of 41/2inches and a minimum height of 31/2inches or cover at least 8 percent of the total area of the Monroney label, whichever is larger;

(5) Ratings must be placed on new vehicles manufactured 30 or more days after the manufacturer receives notification from NHTSA of NCAP ratings for those vehicles.

In its discretion, the agency decided to require that the label indicate the existence of events that occurred during NCAP testing and that produced safety concerns, but are not reflected in the resulting NCAP ratings. The final rule also required that the agency's toll-free-hotline number appear on the label and adopted specifications for such matters as the wording and arrangement of some of the messages and the font sizes that apply in various areas of the label.

On July 11, 2008, the agency published a final decision notice in which it described the NCAP enhancements it was adopting.10 These enhancements include:

• For the frontal crash program—modifying the frontal NCAP rating system to reflect updated test dummies, expanded injury criteria, and the inclusion of all body regions that are covered by Federal Motor Vehicle Safety Standard (FMVSS) No. 208;

• For the side crash program—modifying the side NCAP rating system to reflect new side impact test dummies, new injury criteria, the inclusion of nearly all of the body regions that are covered by FMVSS No. 214, as well as a new side pole crash test using a small female crash test dummy;

• A new overall vehicle score based on frontal crash, side crash, and rollover resistance test results; and

• A new program that will provide consumers with information concerning the availability of advanced crash avoidance technologies that meet NHTSA's performance criteria and that have been shown to reduce crashes.

The final decision notice did not announce any changes to the NCAP rollover resistance testing and rating system.

The enhancements to NCAP took effect in the 2011 model year. The associated safety ratings are based on the test protocols and rating system in the July 2008 notice.

On March 9, 2010, NHTSA published in theFederal Register(75 FR 10740) (Docket No. NHTSA-2010-0025) a notice of proposed rulemaking (NPRM) to revise the agency's regulation on vehicle labeling of safety rating information to reflect the enhancements to the NCAP program, particularly the addition of the overall vehicle score.

The major proposals in the NPRM included:

(1) Beginning with model year 2011, safety rating labels on new passenger vehicles that are manufactured on or after September 1, 2010 would be required to include, as the first item of safety information in the safety rating label, an overall vehicle score based on a vehicle's frontal crash, side crash, and rollover resistance ratings. The agency would allow early compliance for model year 2011 vehicles that are manufactured before September 1, 2010;

(2) Language describing the nature and meaning of the NCAP test data used to generate vehicle safety ratings and a referral tohttp://www.safercar.govfor additional vehicle safety information in the safety rating label would be revised slightly and, in some cases, relocated in the safety rating label;

(3) Safety concerns identified as a result of NCAP testing would need to be displayed in the overall vehicle score area of the safety rating label and in the appropriate area of the safety rating label to which the safety concern applies (frontal, side, or rollover); and

(4) The proposed regulation applying to model year 2011 and later vehicles (manufactured on or after September 1, 2010) would be designated as 49 CFR 575.302. The existing regulation, with minor conforming amendments, would continue to be at 49 CFR 575.301.

In a proposal published on September 23, 2010 to implement EISA's CAFE/greenhouse gas labeling requirements,11 NHTSA noted the Advocates for Highway and Auto Safety (Advocates) and Robert Bosch LLC (Bosch) raised questions about the agency's interpretation, announced in the September 2006 final rule,12 that SAFETEA-LU's specification of a minimum size for the label indicated that the agency did not have any discretion to specify a larger minimum size. The Advocates and Bosch argued that the statutory specification merely established a floor on the discretion of the agency to specify a minimum size. The agency stated in the 2010 proposal that it was re-examining its interpretation.

In response to the NPRM, NHTSA received comments from 8 organizations representing motor vehicle manufacturers and their associations, automotive suppliers, as well as consumer and dealer groups. The motor vehicle manufacturer associations included: the Alliance of Automobile Manufacturers (Alliance) and the Technical Affairs Committee of the Association of International Automobile Manufacturers (AIAM).13 Vehicle manufacturers included: Honda Motor Co., Ltd. (Honda), Nissan Motor Co., Ltd. (Nissan), and Volvo Car Corporation (Volvo). Bosch was the single automotive supplier that provided comments. Consumer and dealer groups included the Advocates and the National Automobile Dealers Association (NADA), respectively.

Vehicle manufacturers and their associations were generally supportive of the proposals in the NPRM for revising the Monroney label content to reflect the new program; however, they mainly expressed concern over the proposed amount of lead time for meeting the new requirements and other logistical challenges. Bosch strongly supported the inclusion of collision mitigation (active safety) rating information on the Monroney label.

The Advocates expressed concerns about the presentation of information and safety concerns on the vehicle disclosure label, and consumer understanding of the NCAP star safety ratings. Specifically, the Advocates urged NHTSA to increase the size of the label beyond the minimum requirement set forth in the statute, and include for consumers, what it considered to be, essential information, such as a brief statement explaining factual information and context about the safety concern warning on the vehicle and a legend conveying the association of star ratings and risk of injuries to the occupants in a particular vehicle. Also, the Advocates agreed that NHTSA should conduct research to understand better any potential tradeoffs consumers may make among the four sections currently included on the Monroney label and whether the amount of space dedicated to each of the four sections as well as the location of those four sections affect the attention consumers give the sections.

Contrary to the Advocates' suggestion regarding the label size, NADA favored limiting the overall size of the Monroney label to minimize potential field-of-vision obstruction for new vehicle drivers. Also, NADA discussed the importance of providing consumers with ratings from all three NCAP test modes and the overall vehicle score and consistent rating information at the point of sale. NADA also offered comments in the areas of program transition and consumer education.

The changes from the NPRM are summarized in this section and explained in detail in the next section of the preamble. Today's final rule essentially adopts the provisions of the NPRM with some minor adjustments.

• The following text, “Safety concern: Visithttp://www.safercar.govor call 1-888-327-4236 for more details” (preceded by the safety concern symbol depicted in figure 4 to § 575.302 and ending with a period) is only required in the overall vehicle score area of the label. This mitigates space concerns in cases where a vehicle receives a safety concern in more than one crash test area.

• The adopted language states that frontal crash ratings and the overall vehicle score should only be compared to other vehicles of “similar size and weight,” rather than of “similar weight class.”

• To minimize consumer confusion at the point of sale, the agency believes that it is critical that the final rule for the safety rating label, which includes the overall vehicle score, be published in time for placement of the revised safety rating label on model year 2012 vehicles. The final rule for the fuel economy/greenhouse gas emissions label was published in theFederal Registeron July 6, 2011. The agency believes that the consumer research testing of the entire Monroney label will be more effective if the fuel economy/greenhouse gas emissions portion and the safety rating portion of the Monroney label are finalized. Thus, the agency chose to postpone the consumer research until revision to both portions of the Monroney label is finalized.

• The agency has slightly modified explanatory language that will be required in the side crash area of the safety rating label to make clear that the ratings reflect risks involved in a real-world side impact crash, rather than risks associated with the two crash tests that are used to determine the side crash ratings.

• Finally, the final rule extends the compliance date of the revised safety rating labels from September 1, 2010 to January 31, 2012 for the model year 2012 and beyond, in order to provide sufficient lead time for vehicle manufacturers to prepare for the implementation of the revised labels. Passenger vehicles manufactured on or after January 31, 2012 will be required to have the new safety rating label, and early compliance will be permitted for model year 2012 vehicles that are manufactured before January 31, 2012, provided that the ratings placed on the safety rating label are derived from vehicle testing conducted by NHTSA under the enhanced NCAP testing and rating program.

The majority of the proposed amendments in the NPRM dealt with label content. The NPRM also discussed: whether to include crash avoidance technology information on the label, the agency's process for rating notification, timing, consumer education and proposed compliance date.14 In the following sections, we describe the public comments in these areas and explain the agency's response.

NHTSA proposed that all changes to the safety rating label proposed in the NPRM would apply to safety rating labels in the Monroney labels of passenger vehicles with a gross vehicle weight rating (GVWR) of 4,536 kilograms (10,000 pounds) or less. It was further proposed that vehicles that have a Monroney label and that have been rated in at least one area under NCAP would need to display those ratings. The phrase “not rated” would be used in other areas. Also, the phrase “to be rated” may be used if the manufacturer has received written notification from NHTSA that the vehicle has been chosen for NCAP testing. As an alternative, vehicles that display a Monroney label and that have not been rated under NCAP would be required to include in their Monroney label a smaller vehicle safety rating label, which indicates that the vehicle has not been rated.

One commenter, NADA, urged NHTSA to make sure that if a vehicle is tested for any of the three NCAP modes that it be tested for all of the modes so that all information on the label, including the overall vehicle score, is provided. Failure to have complete information on the label is confusing and limits a label's utility for purposes of making vehicle comparisons, the organization said. As an alternative, it suggested there should be three label options. One would have the overall vehicle score section and would be used when tests have been conducted and information for all three test modes can be displayed along with the overall vehicle score. The second would be similar to the current label and would be used in cases where less than the complete set of NCAP tests has been completed. The third would be used for untested vehicles.

NADA further objected to the use of the phrase “to be rated” since it considered it confusing, and said the phrase “not rated” should suffice.

Agency Response:The agency agrees that NCAP is more effective when all possible ratings for a vehicle are available and displayed on the safety rating label for that vehicle and on the agency's Web site,http://www.safercar.gov.The agency has made a concerted effort in recent years to assure that vehicles tested under NCAP undergo all relevant tests. It has also worked towards ensuring that all testing occurs in a narrow window of time so that all of the test results and ratings become available simultaneously. These two efforts have minimized incomplete information on the safety rating labels and on the Web site.

During the 2011 model year, as NCAP transitions from the previous testing and rating system to the enhanced system, there may be more situations than the agency would like in which only partial ratings are available for vehicles. This is due largely to the fact that some rollover resistance ratings in many cases carry over from the previous model year, since there has been no change to the rollover testing and rating system, while no crash ratings will carry over because all model year (MY) 2011 vehicles need to be crash tested and safety rated using the enhanced NCAP testing and rating system. The agency fully expects that within a few years, all vehicles rated under NCAP will have complete ratings.

The agency believes NADA's suggestion for three different label options, with each option geared to the amount of ratings information available for a given vehicle, would not be used by manufacturers because of the practical and cost considerations involved. Two label options are already available to manufacturers in the current regulation and will be available under this final rule. One contains areas for all possible NCAP ratings. The other may be used if no ratings have beendeveloped for a vehicle. The latter is smaller and simply states, “This vehicle has not been rated by the government for overall vehicle score, frontal crash, side crash, or rollover risk.” This seems to be comparable with the third option suggested by NADA.

The use of these two label options along with either of the phrases “to be rated” or “not rated” in the appropriate circumstances helps to keep safety in the minds of consumers as they shop for new vehicles. The phrase “to be rated,” in particular, which NADA suggested be dropped as an option for manufacturers, communicates to a consumer interested in a particular vehicle, but also interested in safety, that safety information will be available for that vehicle at some future time. Presumably some consumers may wait to purchase a new vehicle until safety information for that vehicle is available. Without the “to be rated” designation and “not rated” in its place, consumers might drop the vehicle from consideration.

For these reasons, the agency has decided to continue with the two label options that are currently in the regulation and the allowable use of the phrases “to be rated” for instances when ratings are not yet, but will be, available and “not rated” for when a vehicle has not been, and will not be, tested and rated for that model year.

The NPRM proposed modifying the safety rating label to incorporate a new area of the label for the overall vehicle score. This area would be located immediately below the heading area and would be the first item of safety information. The format of the remainder of the safety rating label would be very similar to the current safety rating label, except that language explaining the 5-star rating system and other language indicating that NHTSA is the source of the safety information contained in the safety rating label would now be incorporated into the footer area of the label, rather than be displayed in its own area of the label. As is currently the case, the areas of the label whose background is light in color—overall vehicle score, frontal, side, and rollover—would continue to be required to be separated from each other by a dark line that is a minimum of 3 points in width. The NPRM also proposed to require, whenever a safety concern arises in any rating category, that the safety concern symbol and related statement also be included in the overall vehicle score area of the safety rating label.

While offering general support for the content and layout of the proposed label revisions, the Alliance expressed concern that there may not be sufficient space on the label to accommodate safety concerns in more than one of the areas in which safety ratings are provided. This is because the text, “Safety concern: Visithttp://www.safercar.govor call 1-888-327-4236 for more details” (preceded by the safety concern symbol depicted in figure 4 to § 575.302 and ending with a period) would be required in each of the areas in which a safety concern is noted as well as in the overall vehicle score portion of the label. The Alliance suggested that this could be easily addressed by requiring the safety concern text only in the overall vehicle score area of the label while continuing to require only the safety concern symbol in those ratings areas of the label where the safety concern occurred.

Honda stated its testing of the proposed label layout indicated that “the content of the proposed label does not fit into the proposed minimum text box using the prescribed font sizes while maintaining the required one-eighth inch white space margin.” Honda also stated that the overall vehicle score should be “sufficiently distinctive” from the three supporting ratings categories for two reasons. First, presenting the overall vehicle score in a distinctive way would help to discourage comparisons between the current and new label. Second, the company said the visual presentation of the overall vehicle score should make clear to consumers that it represents a combination of the frontal, side, and rollover ratings. Both of these concerns “could be addressed by enlarging the font size of the overall vehicle score and affiliated star ratings,” the company said.

Honda submitted a mock up of its vision of a revised label in which the font size for the overall vehicle score would be enlarged and the frontal, side, and rollover ratings would consist of one line, with no distinct ratings that apply to the driver and passenger.15 The company said the proposed label it submitted is consistent with what the company sees as the need for the overall vehicle score to be more prominently displayed. The company also stated that by limiting the ratings in specific areas to one line (as opposed to the two in the current label), would allow additional space to address the company's concern that there is not enough label space to include all of the information that is proposed. The extra label space would accommodate any future additions to the label, such as advanced crash avoidance technology ratings, the company stated.

Agency Response:In drafting the NPRM, the agency did not factor in situations in which a safety concern could be identified in more than one relevant crash area. Therefore, the agency agrees with the Alliance that for the safety rating label to accommodate the text “Safety concern: Visithttp://www.safercar.govor call 1-888-327-4236 for more details” (preceded by the safety concern symbol depicted in figure 4 to § 575.302 and ending with a period) in the overall vehicle score area of the label and in one or more of the areas (frontal crash, side crash, or rollover) in which a safety concern is identified, additional label space will be required.

The agency also finds merit in the Alliance's proposed solution. The most important function of the text is to refer consumers tohttp://www.safercar.govfor more detailed information on the safety concern or concerns. This need can be adequately met by having the text only in the overall vehicle score area. While there may have been additional value in also having the text in the area or areas reflecting the type of test in which the safety concern arose, doing so is not necessary, particularly in light of the space limitations of the safety ratings label under the current interpretation of SAFETEA-LU. The safety concern symbol will be required both in the area (or areas) of the label for the type of test in which the safety concern occurred as well as in the overall vehicle score area. However, the text, “Safety concern: Visithttp://www.safercar.govor call 1-888-327-4236 for more details” (preceded by the safety concern symbol depicted in figure 4 to § 575.302 and ending with a period) will only be required in the overall vehicle score area. We believe that limiting the text to the overall vehicle score area of the label will also help address Honda's concern about available space on the label.

The agency is not adopting Honda's suggestion to make the overall vehicle score area of the safety rating label more prominent. NHTSA recognizes that the context within which the prominence of the safety ratings information can be assessed includes not simply the safety rating label itself, but also the entire Monroney label, which contains other competing types of information and methods of presentation. Within the context of the safety ratings label itself, the overall vehicle score area already has a degree of prominence because itis the first item of safety information in the revised safety rating label.

In addition, the agency believes that there is less of a need at this point to distinguish the current safety rating label from the revised label. Because the revised safety rating label contained in this final rule was not yet available, ratings based on the enhanced NCAP testing and rating system have been displayed on MY 2011 vehicles using the current label. As a result, the overall vehicle score has not been displayed on MY 2011 vehicles thus far even though ratings under the enhanced NCAP testing and rating system are available. This means that when the revised safety rating label goes into effect on January 31, 2012, safety ratings on MY 2011 and MY 2012 vehicles on dealers lots will all be based on the enhanced NCAP testing and ratings system, whether the ratings appear on the current or revised safety rating label. The only difference will be that vehicles with the revised safety rating label will display the overall vehicle score, while vehicles with the current safety rating label will not.

The answer to any consumer's concern as to why the overall vehicle score appears on some labels and not others will be simple. The overall vehicle score applies to all identical makes and models in the same model year. If a MY 2012 vehicle has not been changed from the MY 2011 version of the vehicle, the same NCAP ratings will apply to both model year vehicles, including the overall vehicle score that will appear on the safety rating label of the MY 2012 version of the vehicle.

Furthermore, while the agency wants consumers to be aware of and use the overall vehicle score as a quick and easy measure of relative overall vehicle safety, it does not want that to occur in such a way that it diverts attention from the other safety ratings on the label. There will be situations in which a vehicle gets an overall vehicle score that is higher than one or more of the individual ratings that appear in other portions of the safety rating label. Some consumers may be as interested or more interested in those ratings as in the overall vehicle score. Parents, for example, may be very interested in the rear seat side crash rating because they know their children will be traveling primarily in the rear seat of their vehicle.

For vehicle tests for which NHTSA reports a safety concern as part of the star rating, the NPRM proposed requiring a symbol consisting of an exclamation point inside a triangle (safety concern symbol) to be depicted as a superscript to the star rating, and the same symbol to be depicted at the bottom of the relevant area along with the words “Safety Concern: Visithttp://www.safercar.govor call 1-888-327-4236 for more details.”

The Advocates commended NHTSA for including the safety concern symbol and the accompanying reference tohttp://www.safercar.govand the agency's hotline in the area of the label to which a safety concern applies. The Advocates said that a “brief, but specific statement as to the nature of the safety concern” should also be provided. The organization provided examples such as, “door openings,” “doors unable to open after crash test,” and “doors opened during side impact compliance test.” This is warranted, the Advocates suggested, because at the point of sale consumers will generally not have access tohttp://www.safercar.govor the agency's hotline. Consumers will, in some situations at least, ignore the safety concern symbol, the Advocates added.

NADA objected to the use of the safety concern symbol stating that “dealers surveyed continue to suggest that these symbols can raise unnecessary questions for prospective purchasers.” The association asked that only the footnote, “Visithttp://www.safercar.govfor more safety information on this vehicle,” be required if, and when, necessary.

Honda stated that having safety concerns expressed in both the overall vehicle score area of the label and the rating category in which the safety concern occurred “may mislead consumers into believing a vehicle with a single safety concern has two safety concerns.” Honda stated, “* * * we propose that only the safety concern symbol be included as superscript to the overall rating when it is applicable, without the accompanying text. We suggest that the text explaining the safety concern would only be printed as necessary in the frontal crash, side crash or rollover area(s), along with the safety concern symbol as superscript to the relevant rating area.”

Agency Response:We are denying the request to add explanatory language to the safety concern symbol. The Advocates' suggestion demonstrates the delicate balance that exists between the amount of information that could go on the label and the amount of space available under the current interpretation of the minimum size language in SAFETEA-LU. It also raises the issue of how much information on the label consumers have the ability to digest. The safety rating label is intended to provide consumers with easy to access and understandable information at the point of sale as to the relative safety of the vehicle(s) they are considering for purchase. The Web sitehttp://www.safercar.govand the agency's hotline, noted on the safety rating label, are intended to assure that consumers who want more detailed information relating to the safety of a vehicle, such as the type of information addressed in the Advocates' comments, can take the time and do more thorough research on the safety of the vehicle(s) in which they are interested. We believe the current safety rating label could not reasonably accommodate such detailed information, particularly in cases where more than one safety concern exists, as mentioned by Honda.

While we acknowledge that some consumers may choose to ignore the safety concern symbol, as suggested by the Advocates, we believe that such a symbol will cause other consumers to question their dealer, or pause long enough to obtain more information on the agency's Web site, before purchasing a vehicle with a safety concern symbol on its safety rating label. This was evidenced by NADA's comments suggesting that the safety concern symbol raises questions with consumers.

We disagree that the consumer questions raised by the safety concern symbol are “unnecessary,” as suggested by NADA. NCAP is a consumer information program and its purpose is to provide consumers with safety information relating to vehicles. This information includes safety concerns identified during testing of vehicles under NCAP. Information available throughhttp://www.safercar.govand the agency's hotline is provided to help dealers in need of assistance in explaining the safety concern to a potential vehicle purchaser.

In response to Honda's concern about multiple safety concern symbols confusing consumers, the agency's decision earlier in this notice to limit to the overall vehicle score area of the label language referring a consumer to eitherhttp://www.safercar.govor the agency's hotline for further information about a safety concern will help consumers understand that there are not multiple safety concerns involved.

The NPRM proposed that the language “Shouldonlybe compared to other vehicles of similar weight class” be in both the frontal crash area and overall vehicle score area of the safety rating label.

NADA asked whether this phrase can be used for all crash modes. If so, it said the phrase should be moved to the footer area of the label and rewritten to read, “onlycompare these ratings to those for16 similar vehicles.” If the phrase cannot be used for all crash modes, the association suggested that it be kept in the rating sections that apply but be rewritten to read, “onlycompare this rating to the same for17 similar vehicles.”

Agency Response:The type of qualifying language referred to in NADA's comments previously applied only to frontal crash ratings because the frontal crash test involves crashing a vehicle into a stationary barrier. For this type of test, the weight of the vehicle is a factor in how well the vehicle performs in the test. Since the frontal crash rating is a component used in determining the overall vehicle score, the same type of language was proposed in the NPRM for the overall vehicle score area of the safety rating label. Such language is not necessary for the side crash ratings because vehicle weight is less of an influence on injury outcome and side crash ratings can be compared with one another. The same is true of rollover safety ratings. All vehicles are put through the same dynamic maneuver during a rollover resistance test. The probability of the vehicle rolling over if it is involved in a single-vehicle crash is unrelated to the weight of the vehicle.

Therefore, today's final rule requires that the following language be in both the overall vehicle score and frontal crash areas of the safety rating label: “Shouldonlybe compared to other vehicles of similar size and weight.” We note that the agency decided to retain language from the current safety rating label rather than adopt the proposed language, “* * * of similar weight class.” The term “weight class,” as defined in the regulation18 governing Vehicle Identification Numbers, includes weight ranges that are too broad and not necessarily appropriate for NCAP weight range comparisons. In the NCAP frontal crash test ratings and overall vehicle score, vehicles whose weights are no more than 114 kg (250 pounds) apart should be compared as to their relative safety. We are also not adopting NADA's alternatively proposed language, “onlycompare this rating to the same for similar vehicles,” since it is not clear how to identify a similar vehicle.

The modified safety rating label proposed in the NPRM did not differ significantly from the current label. The main difference is that the NPRM label included a new area at the top of the label for reporting a vehicle's overall vehicle score. For other sections of the safety rating label, the NPRM merely proposed revising the language describing the nature and meaning of the vehicle crash safety information that is displayed in the frontal crash and side crash areas of the safety rating label.

Honda commented that the current safety rating label and the revised label are not visually distinctive enough to prevent consumers from believing that the labels are the same and comparing the old and new ratings. The company suggested that the ratings on the revised label be expressed as a single series of stars for each of the four ratings categories. Under this approach, the company said, it would not be possible for consumers to compare the current and new frontal and side ratings.

Agency Response:The agency believes that the proposed label and the current label are sufficiently distinctive. The fact that the proposed label contains the overall vehicle score, while the current safety rating label does not, provides a sufficient basis for consumers to distinguish between the two labels. Honda's concern about consumers believing the current and revised safety rating label are the same should be mitigated because, as explained previously, the new ratings are already being displayed on the current label. (See further discussion in “Labeling Before and After NCAP Testing.”)

NHTSA decided against Honda's suggestion to use a single series of stars in each of the ratings areas—frontal crash, side crash, and rollover. As will be discussed further in this final rule, NHTSA's consumer research indicated that consumers want crash ratings for individual seating positions, which requires separate star ratings on the safety rating label for each rating area.

The NPRM did not propose including advanced crash avoidance technology information on the safety rating label at this time. As discussed in the NPRM, to do so would require a rulemaking every time the agency wanted to add to the list of advanced crash avoidance technologies in the program, and there is also limited space available on the safety rating label under the current interpretation of SAFETEA-LU.

Bosch expressed concern over the absence of advanced crash avoidance technology information on the safety ratings label. It suggested that studies around the world have demonstrated the benefit of these technologies. The absence of information on these technologies from the safety rating label will undercut the agency's goal of creating market forces to drive the inclusion of these technologies in more and more vehicles, the company said. It further suggested that it will be inconsistent and confusing to consumers to have crash avoidance technology information on the Web site,http://www.safercar.gov,and not on the safety rating label.

Bosch said, at a minimum, that basic information indicating the availability of advanced crash avoidance technologies should be on the safety rating label either as a list or by using a check box. It indicated its strong preference that such information use the same 5-star ratings approach used for frontal and side crash and rollover resistance ratings with advanced crash avoidance technology ratings based on driving tests that assess system performance.

The company said few consumers usehttp://www.safercar.govto conduct safety research before making vehicle purchasing decisions. Bosch further stated that the need to go through rulemaking to change the safety rating label whenever a new technology is added to the list of technologies in the NCAP program would not occur frequently and therefore would not be an “undue burden.” Bosch said that since SAFETEA-LU (Pub. L. 109-59) prescribes only the minimum size of the safety rating label, the safety rating label could be made larger to accommodate crash avoidance technology information.19 The company submitted a proposed safety rating label that includes crash avoidance technology information at the top of the label followed by the information contained in the NPRM.

In addition to the written comments it submitted, Bosch met with NHTSA staff on April 30, 201020 to discuss their recommended approach for communicating the availability ofadvanced safety technologies on the rating labeling portion of the Monroney label. Bosch suggested that if NHTSA uses more general crash avoidance technology on the Monroney label, such as “collision mitigation” rather than “collision warning,” this would eliminate any need for frequent revisions of the label as crash avoidance technologies progress. Bosch indicated that it strongly supports the incorporation of crash avoidance technologies on the Monroney label because it does not believe including crash avoidance technologies onhttp://www.safercar.govalone provides sufficient consumer awareness of the technologies and their safety importance. Furthermore, it indicated that consumer awareness of crash avoidance technologies and consumer demand for them is crucial to having vehicle manufacturers incorporate the technologies into their vehicles.

On July 15, 2010,21 Bosch also requested a meeting with NHTSA to present the results of research it had conducted to study new car buyers' information gathering processes and the impact of government listing of collision mitigation technologies on purchasing decisions. The research involved an Internet-based survey of 500 recent and soon-to-be new car buyers broken into two groups, one of which was presented with a sample window sticker that included what was portrayed as a government listing of collision mitigation features. The other was presented with a sample window sticker without such information. Bosch found that 58 percent of the group that was presented with a government listing of optional collision mitigation features, specifically lane departure warning and forward collision warning, indicated they would purchase a vehicle equipped with this equipment. Only about 45 percent of the group that was not presented with a government listing of this equipment indicated they would purchase a vehicle with this equipment. Based on these results and others from its survey, the company said that government recognition of collision mitigation systems increases the value of collision mitigation technologies to new car buyers.

Volvo also expressed concern that “advanced safety systems” information was excluded from the proposed label. It suggested that an area for this information be provided on the label or that manufacturers be allowed to affix an optional separate label to the vehicle to provide information about these systems. The company suggested that if the information were allowed on the label, its size could be reduced to facilitate its incorporation into available space. The company also suggested that consumers would benefit from a NHTSA rating system for these systems.

NADA said it appreciated NHTSA's reasons for not requiring advanced crash avoidance technology information on the label. It urged NHTSA to include a line in the header that would say, “Seehttp://www.safercar.gov 22 for this vehicle's crash avoidance features.” It also asked that NHTSA urge manufacturers to include crash avoidance features in the description of standard and optional components found elsewhere on the Monroney label.

Agency Response:While the idea of a 5-Star rating system based on dynamic testing of advanced crash avoidance technologies, as suggested by Bosch and Volvo, is an appealing concept, the agency's experience has shown that developing testing protocols and rating systems is a lengthy and detailed process involving the gathering and analysis of data and conducting carefully designed and executed research. The creation and dissemination of advanced crash avoidance technology information on the agency'shttp://www.safercar.govWeb site is the first step in providing consumers with information about these technologies and their potential to avoid crashes and thus save lives and prevent injuries. Recently, thehttp://www.safercar.govWeb site was upgraded to support the enhanced NCAP program and it receives approximately 146,000 visitors per month. We have found this to be an effective platform for sharing information with the public and it can also be amended and updated with minimal difficulty. Conducting a formal rulemaking to amend the Monroney label is a far more burdensome process, even if technologies were grouped in generic categories such as “collision mitigation.” Furthermore, the agency is proceeding very deliberately in the advanced crash avoidance technologies area, promoting only three technologies that meet carefully considered criteria, and doing so within the limits of currently available resources. As more and more advanced crash avoidance technologies with demonstrated effectiveness become available, the agency will consider what additional steps are appropriate to take in providing consumers with information about the benefits of these technologies. For now, however, we believe that the approach taken is appropriate for their current state of the development.

As to the suggestion by Bosch that the safety rating label should be made larger to accommodate information not proposed in the NPRM, we simply note that the jurisdiction over the Monroney label is shared by the U.S. Environmental Protection Agency (EPA), NHTSA, and the U.S. Department of Justice (DOJ). NHTSA cannot unilaterally take space on the Monroney label.

NHTSA does not believe it is appropriate to use government sanctioned labels to promote advanced crash avoidance technologies as suggested by Volvo. There is nothing, however, to prevent a manufacturer, a dealer or even a supplier, such as Bosch, from developing materials that can be made available in showrooms and that promote the fact that there are advanced crash avoidance technologies on a vehicle that meet NHTSA's performance criteria and that have been shown to reduce crashes. In fact, the advertisement can be in the form of a pop-up tent display on a vehicle, window cling, or a separate label, as long as it does not cover the Monroney label. NHTSA has provided guidelines for promoting advanced crash avoidance technologies. Manufacturers may access the agency's guidelines viahttp://www.safercar.gov. 23

The agency is not adopting NADA's suggestion to include language on the safety rating label that points consumers tohttp://www.safercar.govfor information about a vehicle's advanced crash avoidance technologies. This is primarily due to the limited amount of space on the safety rating label, especially under the current interpretation of SAFETEA-LU.

Finally, in response to NADA's request for NHTSA to urge manufacturers to “include crash avoidance features in the description of standard and optional components found elsewhere on the Monroney label,” we are not persuaded by the need to do so. The agency has selected three technologies—Electronic Stability Control (ESC), Forward Collision Warning (FCW), and Lane Departure Warning (LDW), to include in NCAP's advanced crash avoidance technologies program. One of the criteria it used in determining which technologies to include in the program is whether there is data that demonstrates the effectiveness of a technology inreducing crashes. Each of the three technologies selected has been shown to be effective in reducing crashes. Other advanced technologies do not yet meet this criterion. Rather than have the agency urge manufacturers to list advanced crash avoidance technologies that have not yet been shown to be effective, the primary challenge for the agency is to educate the public as to the effectiveness of the three technologies in the NCAP advanced crash avoidance technologies program so that the public will understand the value of these technologies no matter where they are listed.

The NPRM estimated the cost of the existing label to be less than $0.15 per vehicle and the requirements proposed in the NPRM would result in minor costs as they would simply require redesign of that label.

Volvo disagreed with the agency's cost assessment. It said that for a manufacturer its size, the cost (per vehicle) increases to approximately $0.45, which is a 67 percent increase, and represents “a significant economic consideration for a relatively small vehicle manufacturer.”

Honda said it is not able to print more than one label format at a time. It said the header and footer portion of safety rating labels must be pre-printed on label stock to accommodate the white text on a dark background specified by NHTSA for these areas. It indicated that the vehicle specific ratings are then printed on each safety rating label, specific to individual vehicle identification numbers (VINs), along with other information for that vehicle on remaining portions of the Monroney label. Monroney label printers are located at each of the company's six North American production facilities, as well as at importation ports, the company said.

Volvo further stated:

Honda offered two possible solutions for preventing manufacturers from “incurring unnecessary and exorbitant costs during the transition period from the 2010 to the 2011 model year.” The first approach would be to delay application of the new NCAP label area until manufacturers have completed their fleet transition to the first model year in which the new label would be required. Honda suggested this would be the most flexible solution since it “would allow each OEM to select a transition date prior to the end of the (calendar year) that best suits their business needs.” The second solution Honda proposed would allow manufacturers to apply the revised label format to all vehicles manufactured on or after September 1st of the first year the new label is required, regardless of model year. For example, if a manufacturer continued to build model year 2010 vehicles after the date on which revised labels are required, Honda said, “the NCAP information would require a label to state the following:

The company said this approach may help to alleviate confusion that could arise among consumers when there are two identical vehicles on the lot, one from the previous model year, one from the model year in which the revised safety rating label is required, and the ratings for the two vehicles differ because of the two different ratings systems.

Agency Response:The changes to the safety rating label are necessary to be reflective of the enhanced program. We recognize that the cost impacts to manufacturers can vary depending upon their label-producing methods and operations. So, the costs Volvo may incur may be different than other manufacturers. We note that the original safety rating label was mandated by Congress, and the agency believes it is necessary to update the safety rating label whenever there are substantial changes to NCAP. Other than the addition of the overall vehicle score information, changes to the current label and content are minimal. Hence, the agency believes it has done everything possible to minimize the one-time cost impact on manufacturers due to the transition from one safety rating label format to another while continuing to fulfill the mandate of Congress to make NCAP safety ratings available to consumers on the safety rating label at the point of sale.

The agency believes that any limitations on Honda's limited label printing flexibility has been minimized by the fact that the new safety rating label will not be required until January 31, 2012, not September 1, 2010, as originally envisioned by the agency. This should help with the transition to the new safety rating label.

In the NPRM, the agency stated that it does not and will not require manufacturers to reprint Monroney labels for vehicles that were produced prior to the agency's notification of new NCAP test results. However, the agency indicated that manufacturers are allowed to voluntarily re-label vehicles, should they choose, by replacing the entire Monroney label (not just the safety rating label with the NCAP information).

NADA suggested NHTSA require manufacturers to send out replacement Monroney labels for vehicles already on dealer lots when manufacturers receive the results of new NCAP tests. It suggested that this will avoid consumer confusion in situations where two same make and similarly equipped model vehicles on the same lot can have two different labels, one on the vehicle that arrived before the enhanced NCAP tests and ratings, and one that arrived afterward. This will be especially important during the transition to the new label, the association said.

Agency Response:The agency will not require manufacturers to send out replacement Monroney labels to dealers. Whether a manufacturer chooses to send out replacement Monroney labels is a business decision for the individual manufacturer. The transition to the revised safety rating label is a one-time event, and the impact it has on individual manufacturers will vary depending on when they begin manufacturing new model year vehicles. For some manufacturers, there may be only a small number of unsold vehicles with current safety rating labels on dealer lots as of the date when the revised safety rating label is required.

As previously discussed, the situation has already been ameliorated somewhat by the fact that MY 2011 vehicles have already begun displaying ratings based on the enhanced NCAP rating system in the current safety rating label. So, while there may be situations in which there will be the same model year, make and model vehicles on a dealer's lot with different labels, there will not likely be the same make and model vehicles from different model years with different ratings. The only difference that will occur will be that one vehicle will not have the overall vehicle score while the other version will. So when consumers raise questions about it, the satisfactoryanswer will be that the overall vehicle score applies to both vehicles because they are identical.

In the NPRM, the agency requested comments on whether its planned follow-up consumer testing for the safety section of the label should include all four items that might appear on the Monroney label (price, safety, fuel economy/greenhouse gas emissions, and domestic content) to help the agency understand better any potential tradeoffs consumers may make among those items and whether the relative amount of space dedicated to each of the four items and the different ways in which these items are presented affects the attention consumers give the items, especially the safety information. The agency also solicited public comments on the benefits the public would receive from a coordinated approach to any revision of the Monroney label among the three agencies with authority over the different sections (DOJ for price information, EPA/NHTSA for fuel economy/greenhouse gas emissions, and NHTSA for safety and domestic content), and whether those benefits would outweigh any delays that might occur to achieve comprehensive and coordinated revisions to parts of the Monroney label. Furthermore, the agency requested comments on effective approaches for communicating safety ratings to consumers with particular interest in data to substantiate the effectiveness of recommended approaches.

In response to the NPRM, the Advocates agreed the agency should conduct research to understand better possible tradeoffs consumers make among price, safety, fuel economy/greenhouse gas emissions, and domestic content, and whether the amount of space dedicated to each of the four items affects consumers' attention to those items.24 In addition to the size of the area dedicated to an information item, the research should also consider the location on the label of the items and font sizes used to communicate types of information, the organization said. Smaller font size could be interpreted as indicating information of lesser importance, the Advocates said. The organization restated its position from previous comments that the Automobile Information Disclosure Act, 15 U.S.C. 1231-1233, sets a minimum size for the safety label, but does not prohibit the agency from creating a label larger than the minimum requirements.

Honda questioned whether the agency had asked consumers in the previous survey to compare different sample labels (i.e.,one sample label with star ratings for each seating position and another sample with a single-line rating for each rating category).” It stated that this approach would have yielded information about how effective the star rating by seat position strategy would have been. Honda stated that “in any survey the questions should be designed to help filter out the effects of the survey environment being removed from the conditions being studied. Specifically, it is to be expected that when you ask a person `would you like more information or less information' at the same perceived cost most people would opt more information. However, when you ask people to make comparisons between different presentations of information to answer specific questions, you can gather actionable results. In this case, it may have been more valuable to have asked survey participants to compare the current and variations of the proposed ratings areas. If participants were able to compare the current ratings to the proposed ratings, it would have been more possible to conclude that the information should have been presented differently to discourage that type of comparison.”

Agency Response:As indicated in the NPRM, the agency agrees that comprehensive consumer research on the entire Monroney label, including the safety rating label, is desirable. Such research would be a complicated process because of the variety of information involved and the fact that three government agencies—NHTSA, DOJ, and EPA share jurisdiction over all or part of the Monroney label. Now that the fuel economy/greenhouse gas emissions portion of the Monroney label is finalized and NHTSA is revising the safety rating portion of the Monroney label with this final rule to reflect changes in the enhanced NCAP testing and rating program, the agency will conduct comprehensive consumer market research that will consider the location and size of the safety rating label and compare with other areas of the Monroney label (including color, font sizes and potential tradeoffs used to communicate types of information). In addition, we will explore adding the advanced crash avoidance safety information to the safety rating label. Initiation of the planned consumer market research is anticipated to begin five months after the publication of this final rule. The timeline for the qualitative and quantitative research phases is detailed in the following tables.

In response to Honda's question, we note that participants in the agency's previous survey were provided with a sample of the current label, as well as various proposed label samples. Participants overwhelmingly preferred the label concept that provided safety rating information for each seating position, rather than a combined driver and passenger seating position rating.25

Noting that it has long objected to the star rating system, the Advocates said that, based on conversations and consumer calls, few people understand what the star ratings represent or how they should be interpreted. The organization suggested that each safety rating label should at least include a legend that provides risk information for consumers. Advocates suggested including in the label the star rating risk charts for each of the rating categories that may be found onhttp://www.safercar.govand elsewhere.

Agency Response:The agency's experience and consumer research it has conducted indicates that the star rating system is an effective way to communicate vehicle safety information to consumers. NHTSA notes again that it has stated that it is re-examining its interpretation about the size of the NCAP label. However, including the star rating risk charts in the safety rating label would require label space far beyond not only what has been thought to be available, but also what would likely be available under any realistic expansion of the label beyond its current size. Thus, the agency cannot agree to either of these suggestions. However, it does make the star rating risk information available onhttp://www.safercar.gov.

In the NPRM, the agency proposed adding a new area of the label called the “Overall Vehicle Score.” The agency also proposed that the overall vehicle score area be placed immediately below the heading area of the label as the first item of safety information. In this area, the vehicle's overall vehicle star rating would be displayed.

As mentioned in the previous section, Advocates expressed concerns regarding the lack of consumer understanding of the agency's star rating system. Advocates suggested that the average consumer would not understand how a single star rating (the overall vehicle score) can represent all the various types of injuries that are subject to each of the NCAP test modes (i.e.,frontal, side and rollover) and “how these already aggregate ratings can then be further combined in a single overall rating intended to represent the complete safety status of the vehicle.” Advocates further stated that this generic rating provides “no specific guidance and information on key vehicle performance safety characteristics.” The organization said NHTSA must also develop a risk table for the overall vehicle score and include that table on all labels that provide consumers with vehicle star ratings.

Agency Response:The purpose of the overall vehicle score, as well as the entire safety rating label, is to provide consumers with an easy to access and understand indication of a vehicle's relative safety,i.e.,how the vehicle compares to other similar vehicles. While a consumer who has visited, and becomes familiar with information on, the Web sitehttp://www.safercar.govmay have a fuller understanding of the star ratings that appear on a safety rating label, our whole purpose in using a star rating system is to simplify detailed technical information to the consumer in an easy-to-understand format.

We make more detailed information available onhttp://www.safercar.govwhere we describe how the overall vehicle score is the weighted average of a vehicle's frontal crash, side crash, and rollover scores. Risk curves are used in the determination of safety ratings in each of these areas. We further describe how the overall vehicle score reflects how well a vehicle compares to the overall vehicle scores of representative vehicles in the fleet. While the agency believes that the overall vehicle score is a good measure of a vehicle's relative overall safety, we will continue to periodically review our data to see if the enhanced program can be further refined to provide additional useful vehicle safety information to consumers.

Recent changes in the side NCAP program include new test dummies for the two seating positions in the movabledeformable barrier (MDB) test, a new oblique pole test with a small female crash test dummy in the driver position, and additional injury criteria for both the MDB and the new oblique pole tests. As a result of these changes, the agency proposed that the statement at the bottom of the Side Crash area of the safety rating label read “Based on the risk of injury in side impact tests” to illustrate that ratings are obtained from both the side MDB and new oblique pole tests.

Honda commented on what it called “an anomaly in the description of the various ratings.” Referring to the statement, “based on the risk of injury in side impact tests,” Honda said, “While the description of the side impact rating accurately reflects that the ratings are based on two distinct tests, it is still a forecast of the risk of injury in a single side impact crash event.”

Agency Response:The agency agrees with Honda's observation and has changed the language to state “Based on the risk of injury in a side impact.”

The NPRM stated that the safety rating information must be presented in a legible, visible, and prominent fashion and cover at least 8 percent of the total area of the Monroney label26 or an area with a minimum of 41/2inches in length and 31/2inches in height on the Monroney label, whichever is larger.

NADA reiterated its “long expressed concerns” about the size and location of the Monroney label because it believes that the label obstructs the driver's field of vision and therefore may raise concerns under state laws that govern the operation of motor vehicles when visibility is obstructed. The association urged NHTSA to encourage manufacturers to minimize the overall size of their Monroney labels for these reasons.

Agency Response:The agency is aware of NADA's visibility concerns. However, the Monroney label is required by Congress. As previously mentioned, it is shared with two other organizations (EPA and DOJ) and the information it contains goes beyond the safety rating label section of the Monroney label. Even if the agency were to attempt to restrict the size of the Monroney label, it could not unilaterally affect such a change because of the involvement of other agencies that regulate the label content. Other than NADA's comments on this rulemaking and others, the agency is not aware of any concern on the part of the states as to the size and location of the Monroney label. Therefore, there will be no effort at this time to reduce, or increase, the size of the Monroney label.

The NPRM proposed that model year 2011 and later vehicles manufactured on or after September 1, 2010, would be required to have the new safety rating labels. As is the case in the current labeling program, manufacturers would be required to place the new Government 5-Star safety ratings on the Monroney label of new vehicles 30 days after receiving notification of NCAP test results from NHTSA. The NPRM proposed to permit early compliance for model year 2011 vehicles manufactured before September 1, 2010, provided the ratings placed on the safety rating label were derived from vehicle testing conducted using the updated NCAP testing criteria adopted on July 11, 2008.27

The Alliance called for a minimum of six months lead time before requiring the new label, citing the “significant programming and validation” required. It indicated that such lead time is consistent with that provided for other new or revised labels.

Nissan also requested six months of lead time to allow for “significant modifications to the current process Nissan uses to print Monroney labels.” Nissan said that the addition of the overall vehicle score and the ability to identify a safety concern in the overall vehicle score area of the label requires software changes and other changes to business tools involved.

Nissan also indicated there will be a temporary need to be able to print two differently formatted Monroney labels, those used under the previous safety rating program and those used under the revised program. Nissan stated it does not currently have the ability to do this. The company asked that the agency allow companies to voluntarily use the proposed new text in the label header, footer, and other areas in labels that are printed for the old ratings program in the time leading up to when the revised safety rating label will be required. Nissan stated that “Although this would not alleviate all of the challenges related to printing two different labels at the same time, it would help streamline the amount of work necessary to move to the new label requirements and help limit the amount of investment directed at changes that do not provide long-term benefits.” The company further said that past EPA and NHTSA changes to the Monroney label have provided enough lead time to allow manufacturers to implement the changes.

Volvo also expressed concern that identical model year vehicles could end up having different Monroney labels on them. The company pointed out that in January 2010, Volvo released two 2011 model year vehicles for sale. Had the new safety rating label gone into effect as of September 1, 2010 as originally proposed, those vehicles would have had different safety rating labels, depending on when they were manufactured, even though they are the same model year, make and model. It suggested that these situations would cause significant consumer confusion at the point of sale. “Although Volvo has some flexibility to quickly adapt to the proposed changes, it is both economically and logistically prohibitive to retrofit a new Monroney label and affix it to these vehicles,” Volvo said.

The AIAM stated that the amount of time given to manufacturers to comply with the new labeling requirements should be six months from the date of issuance of the final rule since manufacturers will not know the details of the new requirements for certain until then. It suggested that manufacturers will need to make several programming and process changes to revise labels so that they conform to the new requirements.

Agency Response:The agency has carefully considered the comments to the NPRM and has adjusted the implementation date to January 31, 2012, for the new label. We believe this will address lead time concerns expressed by the Alliance and Nissan. With respect to Volvo's concern about possibly having two different safety rating labels (i.e.,the current and the revised), on identical model year vehicles, the agency has provided the option for manufacturers to start using the revised safety rating label format on model year 2012 vehicles manufactured before January 31, 2012. If this option is used, the manufacturer will have to place the words “not rated” in the section of the label for overall vehicle score as well as in any other sections of the label for which NCAP ratings under the enhanced ratings program are not available. If a model year 2012 vehicle is slated to be tested and rated under the enhanced NCAP such that all NCAP ratings for which space is provided on the revised safety ratings label will eventually be available, the manufacturer is allowed to use the words “to be rated” on the safety rating label where appropriate.

NHTSA has considered the impact of this rulemaking under Executive Orders 12866 and 13563 and the Department of Transportation's regulatory policies and procedures. The agency has considered carefully under Executive Order 13563 seven principles of summary disclosure as a regulatory tool when drafting this rulemaking document. This action has been determined to be “non-significant” under the Department of Transportation's regulatory policies and procedures. The agency has concluded that the impacts of the amendments in this final rule will be so minimal that preparation of a full regulatory evaluation is not be required.

This final rule requires vehicle manufacturers to add to the existing safety rating label the new overall vehicle score rating the agency has added to the NCAP program, and to make minor modifications to the safety rating label. The agency has considered and concluded that the one-time redesign cost and the cost of redesign to replace “Not Rated” or “To Be Rated” with stars each time a vehicle is rated all to be minor. The cost of the existing label is estimated to be less than $0.15 per vehicle, and, under today's final rule, the label will remain the same size. Given these considerations, any effects on costs will be trivial.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601et seq.,as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996), whenever an agency is required to publish a rulemaking notice for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effect of the rule on small entities (i.e.,small businesses, small organizations, and small governmental jurisdictions). The Small Business Administration's regulations at 13 CFR part 121 define a small business, in part, as a business entity “which operates primarily within the United States.” (13 CFR 121.105(a)). No regulatory flexibility analysis is required if the head of an agency certifies the rule will not have a significant economic impact on a substantial number of small entities. SBREFA amended the Regulatory Flexibility Act to require Federal agencies to provide a statement of the factual basis for certifying that a rule will not have a significant economic impact on a substantial number of small entities.

NHTSA has considered the effects of this final rule under the Regulatory Flexibility Act. There are four small motor vehicle manufacturers in the United States building vehicles that will be affected by this rule. I certify that this final rule will not have a significant economic impact on a substantial number of small entities. The rationale for this certification is that the agency does not believe that this proposal adds a significant economic cost to a motor vehicle. The cost of the existing label is estimated to be less than $0.15 per vehicle. The requirements in today's document will result in minor costs as it will merely require redesign of that label.

Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501et seq.) (PRA), a person is not required to respond to a collection of information by a Federal agency unless the collection displays a valid Office of Management and Budget (OMB) control number. For the following reasons, NHTSA concludes that this rulemaking will not impose any new collection of information requirements for which a 5 CFR part 1320 clearance must be obtained. As described previously, this rule will require vehicle manufacturers to include on the existing safety rating labels, the overall vehicle score rating information by NCAP. This final rule details how NHTSA describes the appearance of the label, and specifies to the vehicle manufacturers, in both individual letters to the manufacturers and on the NHTSA's 5-Star safety ratings Web site (http://www.safercar.gov), the information specific to a particular motor vehicle make and model that the vehicle manufacturer must place on the Monroney label.

Because NHTSA will specify the format of the safety rating label, and the information each vehicle manufacturer must include on the label, this “collection of information” falls within the exception described in 5 CFR Section 1320.3(c)(2) which states in part: “The public disclosure of information originally supplied by the Federal government to the recipient for the purpose of disclosure to the public is not included within this definition.”

The Government 5-Star safety ratings are created by NHTSA. This final rule requires vehicle manufacturers to take the Government 5-Star safety ratings (which NHTSA will provide to each manufacturer) and report them on the Monroney labels, thus disclosing them to potential customers (i.e.,the public). For this reason, this final rule will impose a “collection of information” requirement for which 5 CFR part 1320 approval need not be obtained.

NHTSA has analyzed this final rule for the purposes of the National Environmental Policy Act and has determined that the rule will not have any significant impact on the quality of the human environment.

The agency has analyzed this final rule in accordance with the principles and criteria contained in Executive Order 13132 and has determined that it does not have sufficient federalism implications to warrant consultation with State and local officials or the preparation of a federalism summary impact statement. This final rule will have no substantial effects on the States, on the current Federal-State relationship, or on the current distribution of power and responsibilities among the various local officials.

This final rule will not have any retroactive effect. Parties are not required to exhaust administrative remedies before filing suit in court.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 104-113, section 12(d) (15 U.S.C. 272) directs NHTSA to use voluntary consensus standards in regulatory activities unless doing so would be inconsistent with applicable law or would otherwise be impractical. Voluntary consensus standards are technical standards (e.g.,materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies, such as the Society of Automotive Engineers (SAE). The agency searched for, but did not find any, voluntary consensus standards relevant to this final rule.

This final rule will not impose any unfunded mandates under the Unfunded Mandates Reform Act (UMRA) of 1995. This rule will not result in costs of $100 million or more to either State, local, or Tribal governments, in the aggregate, or to the private sector. Thus, this rule is notsubject to the requirements of sections 202 and 205 of the UMRA.

Anyone is able to search the electronic form of all comments or petitions received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union,etc.). You may review DOT's complete Privacy Act Statement in theFederal Registerpublished on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visithttp://www.regulations.gov.

In consideration of the foregoing, 49 CFR part 575 is amended to read as follows: