Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under theADDRESSESsection. Include “Docket No. FAA-2011-1128; Directorate Identifier 2011-CE-031-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

On March 28, 2011, we issued AD 2011-07-13, amendment 39-16650 (76 FR 18376, April 4, 2011), for all CPAC, Inc. (type certificate formerly held by Commander Aircraft Corporation, Gulfstream Aerospace Corporation, and Rockwell International) Models 112, 112B, 112TC, 112TCA, 114, 114A, 114B, and 114TC airplanes. That AD requires a one-time inspection of the elevator spar for cracks and, if any crack is found, either replace with a serviceable elevator spar that is found free of cracks or repair/modify the elevator spar with an FAA-approved method. That AD also requires reporting to the FAA the results of the inspection. That AD was prompted by reports of a total of nine elevator spar cracks across seven of the affected airplanes, including a crack of 2.35 inches just below the outboard hinge of the right-hand elevator. We issued that AD to prevent structural failure of the elevator spar due to such cracking, which could result in separation of the elevator from the airplane with consequent loss of control.

We considered AD 2011-07-13, amendment 39-16650 (76 FR 18376, April 4, 2011), an interim action while we evaluated the data submitted from the reports of the one-time inspection to determine if repetitive inspections are necessary and if a terminating action could be implemented.

Since we issued AD 2011-07-13, amendment 39-16650 (76 FR 18376, April 4, 2011), using the data collected through the reporting requirement, we have determined that there is a need for continued repetitive inspections.

The data indicated that approximately 25 percent of the airplanes inspected have cracked elevator spars, with Model 114 airplanes indicating almost 46 percent of the airplanes having cracks. There does not appear to be a clear correlation between the discovery of a crack and hours time-in-service (TIS) on the airplane.

Therefore, the data indicate that cracks are very prevalent and could appear on any airplane regardless of the hours TIS. Thus, we were unable to determine terminating action to address the unsafe condition. The continued repetitive inspections will help us understand the root cause of thecracking and develop a terminating action.

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

We have approved an alternative method of compliance (AMOC) to AD 2011-07-13 that offers an alternative method of inspection. You may find this AMOC at regulations.gov, Docket No. FAA-2011-0302 and Docket No. FAA-2011-1128.

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

This proposed AD would retain all of the requirements of AD 2011-07-13, amendment 39-16650 (76 FR 18376, April 4, 2011), and make the one-time inspection repetitive.

We consider this proposed AD interim action. We continue to evaluate the reported data and repair procedures to determine a possible terminating action. Based on this determination, we may initiate further rulemaking action if needed to address the unsafe condition identified in this proposed AD.

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

We estimate the following costs to comply with this proposed AD:

Currently, there is no FAA-approved repair/modification for a cracked elevator spar. Further flight is prohibited until the repair/modification is submitted to the FAA and FAA-approved. Therefore, at this time, the FAA has no way of determining the costs associated with the repair/modification of cracks found in the elevator spar.

We estimate the following costs to do any replacement that would be required based on the results of the proposed inspection. We have no way of determining the number of aircraft that might need this replacement:

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

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

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

For the reasons discussed above, I certify that the proposed regulation:

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

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

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

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

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

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.

Communications should identify both docket numbers (FAA Docket No. FAA 2011-1023 and Airspace Docket No. 11-AWP-15) and be submitted in triplicate to the Docket Management System (seeADDRESSESsection for address and phone number). You may also submit comments through the Internet athttp://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2011-1023 and Airspace Docket No. 11-AWP-15”. The postcard will be date/time stamped and returned to the commenter.

All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.

An electronic copy of this document may be downloaded through the Internet athttp://www.regulations.gov.Recently published rulemaking documents can also be accessed through the FAA's Web page athttp://www.faa.gov/airports_airtraffic/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see theADDRESSESsection for the address and phone number) between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 1601 Lind Avenue, SW., Renton, WA 98057.

Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking, (202) 267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by modifying Class E airspace at Show Low Regional Airport, Show Low, AZ. A minor adjustment to the boundary approach would be made for the airspace extending upward from 1,200 feet above the surface to further accommodate aircraft using RNAV (GPS) standard instrument approach procedures at Show Low Regional Airport. This action would enhance the safety and management of IFR operations at the airport.

Class E airspace designations are published in paragraph 6005, of FAA Order 7400.9V, dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document will be published subsequently in this Order.

The FAA has determined this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation; (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under DOT Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3)does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified this proposed rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, section 106, describes the authority for the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in subtitle VII, part A, subpart I, section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it modifies controlled airspace at Show Low Regional Airport, Show Low, AZ.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

In theFederal Registerof July 26, 2011 (76 FR 44506), we published a notice, stating that the Commission had received a submission from John L. Branum, Attorney at Law, on behalf of Bettsy Bumpas (“petitioner”), dated May 9, 2011, requesting that we initiate rulemaking to require torch fuel and lamp oil to be packaged in containers that are not see-through. The notice explained that we were docketing the request as a petition under the Poison Prevention Packaging Act (“PPPA”). 15 U.S.C. 1471-1477.

The PPPA authorizes the Commission to issue requirements that certain household substances must be sold in child-resistant containers. 15 U.S.C. 1471-1477. Child-resistant packaging requirements currently apply to torch fuel and lamp oil. (More specifically, the child-resistant packaging requirements apply to “kindling and/or illuminating preparations,” which includes “cigarette lighter fuel, charcoal lighter fuel, camping equipment fuel, torch fuel, and fuel for decorative and functional lanterns, which contain 10 percent or more by weight of petroleum distillates and have a viscosity of less than 100 Saybolt universal seconds at 100[deg] Fahrenheit.” 16 CFR 1700.14(7)). The PPPA does not authorize the Commission to prescribe specific packaging designs for household substances. 15 U.S.C. 1472(d). However, in the case of ahousehold substance for which special packaging (i.e.,child-resistant packaging), is required, the Commission may prohibit the packaging of such substance in packages that it determines are unnecessarily attractive to children.Id.Therefore, in order to issuea rule requiring that torch fuel and lamp oil not be sold in see-through containers, the Commission would need to determine that the packaging is “unnecessarily attractive” to children.

The petitioner asserts that certain petroleum distillates, including torch fuel and lamp oil, as currently packaged, resemble juice. The petitioner notes that because young children enjoy the taste of juice and are accustomed to drinking it regularly, packaging petroleum distillates in clear plastic bottles causes needless danger, as children may mistake it for juice.

The petitioner states that “the New Jersey Poison Information and Education System stated in June 2008 that four people were hospitalized, one was critically ill, and one killed due to torch oil being mistaken for apple juice.” The petitioner also states that “from 2002 through 2009 the Annual Report of the American Association of Poison Control Centers' National Data System has chronicled the exposure of many young children to lamp oils, which includes torch fuels.” The petitioner's son died after ingesting torch fuel from a clear plastic bottle.

While torch fuel and lamp oil already are subject to child-resistant packaging and labeling requirements under the PPPA and the Federal Hazardous Substances Act, the petitioner asserts that additional special packaging is necessary. Specifically, the petitioner requests that the CPSC initiate rulemaking “that would require manufacturers of [torch fuel and lamp oils] to package the product in containers that make it impossible to see the product when in the container.” The petitioner notes that this could be accomplished “by packaging the fuel in a solid container or opaque plastic child-resistant container or a metal container.”

The notice that we published in theFederal Registerof July 26, 2011 (76 FR 44506) stated that we invited comments on the petition, and it informed interested parties how to obtain a copy of the petition. The notice indicated that the comment period would close on September 26, 2011.

Recently, counsel representing the petitioner contacted the Commission to request an extension of the comment period. We note that the docket for this proceeding, as of September 28, 2011, contains nearly 260 comments. Thus, given the interest in this subject, we are reopening the comment period for any interested parties until November 16, 2011.

Interested parties may obtain a copy of the petition by writing or calling the Office of the Secretary, U.S. Consumer Product Safety Commission, Room 820, 4330 East West Highway, Bethesda, MD 20814; telephone (301) 504-7923.

Copies of the petition are also available for inspection from 8:30 a.m. to 5 p.m., Monday through Friday, in the Commission's Public Reading Room, Room 419, 4330 East West Highway, Bethesda, MD, or from our Web site at:http://www.cpsc.gov.

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, “a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of this Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to this Act.” See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Iowa program effective April 10, 1981. You can find background information on the Iowa program, including the Secretary's findings, the disposition of comments, and the conditions of approval, in the January 21, 1981,Federal Register(46 FR 5885). You can also find later actions concerning the Iowa program and program amendments at 30 CFR 915.10, 915.15, and 915.16.

Iowa uses a system of coal mining regulations that adopt the Federal regulations under SMCRA that are in effect up to a specific date. They note in their regulations, variations from the Federal regulations, primarily in reference to agency names, responsible officials, and other provisions to reflect Iowa law. The approved Iowa program is structured this way.

By letter dated August 25, 2011 (Administrative Record No. IA-451), the Iowa Department of Agriculture and Land Stewardship, Division of Soil Conservation (IDSC) sent us amendments to its Program under SMCRA (30 U.S.C. 1201et seq.) to satisfy ownership and control requirements and to update other provisions. Below is a summary of the changes proposed by Iowa. The full text of the program amendment is available for you to read at the locations listed above underADDRESSESor athttp://www.regulations.gov.

Iowa proposes to amend its adoption by reference regulations by updating dates of Federal regulations adopted to July 1, 2010, adding citations in its ownership and control requirement sections, and making other changes, all listed in the table below.

I. Background on the Montana Program II. Description of the Proposed Amendment III. Public Comment Procedures IV. Procedural Determinations I. Background on the Montana Program

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its State program includes, among other things, “a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of this Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to this Act .” See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Montana program on April 1, 1980. You can find background information on the Montana program, including the Secretary's findings, the disposition of comments, and conditions of approval of the Montana program in the April 1, 1980,Federal Register(45 FR 21560). You can also find later actions concerning Montana's program and program amendments at 30 CFR 926.15 and 926.30.

By letter dated June 7, 2011, Montana sent us a proposed amendment to its program (Administrative Record Docket ID No. OSM-2011-0011) under SMCRA (30 U.S.C. 1201et seq.). Montana submitted the amendment to include changes made to the MSUMRA as a result of the Montana Legislature's 2011 passage of a Senate Bill relating to coal beneficiation. Under the Senate Bill, a “coal beneficiation plant” means a commercial facility where coal is subject to coal preparation that is not operated, owned, or controlled by the mine operator providing the coal.

Specifically, Montana proposes to amend the MSUMRA to (1) differentiate a coal beneficiation plant from a coal preparation plant by way of ownership, control, or operation by someone other than the mine operator of the mine providing the coal; and (2) clarify that a “coal preparation plant” means a facility “in connection with a strip-mine or underground coal mine” and the term does not mean “a facility where coal is prepared and then converted into another energy form or to a gaseous or liquid hydrocarbon; or a coal beneficiation plant.” As a result of these changes, the Department of Environmental Quality would no longer have regulatory authority through MSUMRA over facilities that meet the definition of a “coal beneficiation plant.” The full text of the program amendment is available for you to read at the locations listed above underADDRESSES.

Under the provisions of 30 CFR 732.17(h), we are seeking your comments on whether the amendment satisfies the applicable program approval criteria of 30 CFR 732.15. If we approve the amendment, it will become part of the Montana program.

If you submit written comments, they should be specific, confined to issues pertinent to the proposed regulations, and explain the reason for any recommended change(s). We appreciate any and all comments, but those most useful and likely to influence decisions on the final regulations will be those that either involve personal experience or include citations to and analyses of SMCRA, its legislative history, its implementing regulations, case law, other pertinent Tribal or Federal laws or regulations, technical literature, or other relevant publications.

We cannot ensure that comments received after the close of the comment period (seeDATES) or sent to an address other than those listed above (seeADDRESSES) will be included in the docket for this rulemaking and considered.

Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available in the electronic docket for this rulemaking athttp://www.regulations.gov.While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.

If you wish to speak at the public hearing, contact the person listed underFOR FURTHER INFORMATION CONTACTby 4 p.m., m.d.t. on November 1, 2011. If you are disabled and need reasonable accommodations to attend a public hearing, contact the person listed underFOR FURTHER INFORMATION CONTACT. We will arrange the location and time of the hearing with those persons requesting the hearing. If no one requests an opportunity to speak, we will not hold the hearing.

To assist the transcriber and ensure an accurate record, we request, if possible, that each person who speaks at a public hearing provide us with a written copy of his or her comments. The public hearing will continue on the specified date until everyone scheduled to speak has been given an opportunity to be heard. If you are in the audience and have not been scheduled to speak and wish to do so, you will be allowed to speak after those who have been scheduled. We will end the hearing after everyone scheduled to speak and others present in the audience who wish to speak, have been heard.

If there is limited interest in participation in a public hearing, we may hold a public meeting rather than a public hearing. If you wish to meet with us to discuss the amendment, please request a meeting by contacting the person listed underFOR FURTHER INFORMATION CONTACT. All such meetings will be open to the public and, if possible we will post notices of meetings at the locations listed underADDRESSES. We will make a writtensummary of each meeting a part of the Administrative Record.

This rule is exempted from review by the Office of Management and Budget (OMB) under Executive Order 12866 (Regulatory Planning and Review).

When a State submits a program amendment to OSM for review, our regulations at 30 CFR 732.17(h) require us to publish a notice in theFederal Registerindicating receipt of the proposed amendment, its text or a summary of its terms, and an opportunity for public comment. We conclude our review of the proposed amendment after the close of the public comment period and determine whether the amendment should be approved, approved in part, or not approved. At that time, we will also make the determinations and certifications required by the various laws and executive orders governing the rulemaking process and include them in the final rule.

I. Background on the Montana Program II. Description of the Proposed Amendment III. Public Comment Procedures IV. Procedural Determinations I. Background on the Montana Program

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its State program includes, among other things, “a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of this Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to this Act.” See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Montana program on April 1, 1980. You can find background information on the Montana program, including the Secretary's findings, the disposition of comments, and conditions of approval of the Montana program in the April 1, 1980,Federal Register(45 FR 21560). You can also find later actions concerning Montana's program and program amendments at 30 CFR 926.15 and 926.30.

By letter dated July 20, 2011, Montana sent us a proposed amendment to its program (Administrative Record Docket ID No. OSM-2011-0012) under SMCRA (30 U.S.C. 1201et seq.). Montana submitted the amendment to include changes made to the MSUMRA as a result of the 2011 Montana Legislature passage of Senate Bill 286 relating to coal prospecting.

Specifically, Montana proposes to amend the MSUMRA to modify the coal prospecting procedures to allow for a new type of coal prospecting permit (shortened prospecting permitting process) with expedited timeframes when prospecting is conducted to determine the location, quantity, and quality of coal that is (1) outside an areadesignated as unsuitable, (2) does not remove more than 250 tons, and (3) does not substantially disturb the natural land surface. The effect of the modified procedures cause MSUMRA to have three tiers of prospecting regulation, rather than the currently approved two tiers. The full text of the program amendment is available for you to read at the locations listed above underADDRESSES.

Under the provisions of 30 CFR 732.17(h), we are seeking your comments on whether the amendment satisfies the applicable program approval criteria of 30 CFR 732.15. If we approve the amendment, it will become part of the Montana program.

If you submit written comments, they should be specific, confined to issues pertinent to the proposed regulations, and explain the reason for any recommended change(s). We appreciate any and all comments, but those most useful and likely to influence decisions on the final regulations will be those that either involve personal experience or include citations to and analyses of SMCRA, its legislative history, its implementing regulations, case law, other pertinent State or Federal laws or regulations, technical literature, or other relevant publications.

We cannot ensure that comments received after the close of the comment period (seeDATES) or sent to an address other than those listed above (seeADDRESSES) will be included in the docket for this rulemaking and considered.

Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available in the electronic docket for this rulemaking athttp://www.regulations.gov.While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.

If you wish to speak at the public hearing, contact the person listed underFOR FURTHER INFORMATION CONTACTby 4 p.m., m.d.t. on November 1, 2011. If you are disabled and need reasonable accommodations to attend a public hearing, contact the person listed underFOR FURTHER INFORMATION CONTACT. We will arrange the location and time of the hearing with those persons requesting the hearing. If no one requests an opportunity to speak, we will not hold the hearing.

To assist the transcriber and ensure an accurate record, we request, if possible, that each person who speaks at a public hearing provide us with a written copy of his or her comments. The public hearing will continue on the specified date until everyone scheduled to speak has been given an opportunity to be heard. If you are in the audience and have not been scheduled to speak and wish to do so, you will be allowed to speak after those who have been scheduled. We will end the hearing after everyone scheduled to speak and others present in the audience who wish to speak, have been heard.

If there is limited interest in participation in a public hearing, we may hold a public meeting rather than a public hearing. If you wish to meet with us to discuss the amendment, please request a meeting by contacting the person listed underFOR FURTHER INFORMATION CONTACT. All such meetings will be open to the public and, if possible we will post notices of meetings at the locations listed underADDRESSES. We will make a written summary of each meeting a part of the Administrative Record.

This rule is exempted from review by the Office of Management and Budget (OMB) under Executive Order 12866 (Regulatory Planning and Review).

When a State submits a program amendment to OSM for review, our regulations at 30 CFR 732.17(h) require us to publish a notice in theFederal Registerindicating receipt of the proposed amendment, its text or a summary of its terms, and an opportunity for public comment. We conclude our review of the proposed amendment after the close of the public comment period and determine whether the amendment should be approved, approved in part, or not approved. At that time, we will also make the determinations and certifications required by the various laws and executive orders governing the rulemaking process and include them in the final rule.

On February 7, 2011 (76 FR 6587), we published a proposed rule that was in response to a required program amendment codified in the Federal regulations. The submission included information that Pennsylvania had submitted to demonstrate that sufficient funds exist to guarantee coverage of the full cost of land reclamation at all sites originally permitted and bonded under the now-defunct alternative bonding system. Pennsylvania requested that the program amendment be removed based on the information provided.

On June 13, 2011, (Administrative Record Number PA 802.80), we received additional information from Pennsylvania regarding recent developments involving one permit that was transferred to another company, resulting in the posting of full-cost bond in an amount to cover the land reclamation obligation. Included with this submission is the mining permit, Part C (Authorization to Mine), and the calculation sheet documenting the bond amount.

We are reopening and extending the comment period to incorporate subsequent information that we received from Pennsylvania regarding one permit involving land reclamation obligations.

Under the provisions of 30 CFR 732.17(h), we are seeking your comments on whether the submission satisfies the applicable program approval criteria of 30 CFR 732.15. If we approve the amendment, it will become part of the Pennsylvania program.

Before including your address, phone number, e-mail address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you may ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so. We cannot ensure that comments received after the close of the comment period (seeDATES) or sent to an address other than those listed above (seeADDRESSES) will be included in the docket for this rulemaking and considered.

If you submit written comments, they should be specific, confined to issues pertinent to the proposed regulations, and explain the reason for any recommended change(s). We would appreciate all comments relating to this specific issue, but those most useful and likely to influence decisions on the final rule will be those that either involve personal experience or include citations to and analysis of the Surface Mining Control and Reclamation Act of 1977, its legislative history, its implementing regulations, case law, other State or Federal laws and regulations, data, technical literature, or other relevant publications.

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 international terrorism.”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

Reports on the international transportation and receipt of monetary instruments are among those authorized by the BSA.4 Pursuant to this authority, FinCEN has issued regulations requiring that a form be filed reporting the international transportation, mail, or shipment of currency or other monetary instruments in an aggregate amount that exceeds $10,000.5 The regulations, initially issued in 1972, are currently found at 31 CFR 1010.340, and the definition of “monetary instrument” is at 31 CFR 1010.100(dd).

The term “monetary instrument” is defined in the BSA to include currency and a variety of bearer negotiable instruments, securities, and similar items, but does not specifically include any types of prepaid access devices.6 Nevertheless, FinCEN has regulatory authority to expand the definition of monetary instruments to include items deemed to be “similar materials” to coins and currency of a foreign country, travelers' checks, bearer negotiable instruments, bearer investment securities, bearer securities, and stock on which title is passed on delivery.7 Pursuant to this authority, FinCEN is proposing to amend the definition of “monetary instrument” for purposes of the international transport of currency and monetary instrument reporting (“CMIR”) requirement at 31 CFR 1010.340 to includetangibleprepaid access devices.

On May 22, 2009, when FinCEN regulations still referred to stored value rather than prepaid access, the President signed the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 (“CARD Act”).8 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.”9 The CARD Act authorizes “regulations regarding international transport” of prepaid access devices, including “reporting requirements pursuant to Section 5316 of title 31, United States Code.”

Pursuant to the BSA and CARD Act, FinCEN published the Notice of Proposed Rulemaking—Definitions and Other Regulations Relating to Prepaid Access on June 28, 2010 (“Prepaid Access NPRM”),10 and, on July 29, 2011, issued a Final Rule entitled “Definitions and Other Regulations Relating to Prepaid Access” (the “Prepaid Access Final Rule”).11 The Final Rule contains definitions of “prepaid access”12 and related terms and imposes registration, reporting, record-keeping, and anti-money laundering program requirements on providers and sellers of prepaid access. While the Final Rule does not address reporting requirements for prepaid access with respect to the international transport of monetary instruments pursuant to 31 CFR 1010.340 because it's provisions provide definitions and requirements for money services businesses, it does provide the necessary first step before this rule could be proposed by creating a regulatory framework and definition of prepaid access.

Congress enacted the requirements of the CARD Act because of the potential to substitute prepaid access for cash and other monetary instruments as a means to smuggle the proceeds of illegal activity into and out of the United States, as various reports and cases have suggested.13 In a May 13, 2009 statement, Senator Collins, introducing the amendment that added Section 503 to the CARD Act, stated:

The 2007 National Money Laundering Strategy stated that prepaid access is “* * * an emerging cash alternative for both legitimate consumers and money launderers alike.”15 A U.S. Immigration and Customs Enforcement official cited a case example where

This proposal addresses the money laundering and terrorist financing vulnerabilities illustrated by these examples.

The proposal is consistent with the legislative history of the definition of monetary instrument and the border reporting requirement. When Congress enacted the BSA, it defined “monetary instrument” for purposes of the international transport reporting requirement to mean:

The Treasury Department was a key proponent of the BSA, as part of which it advocated for a border reporting requirement for monetary instruments to include “U.S. currency orits equivalent,such as foreign currency, travelers checks,and other items which can pass freely by delivery,” (emphasis added) in order to remove a potential loophole in the reporting regime.18

The definition was amended when Congress revised and restated Title 31 of the United States Code by deleting the phrase “or the equivalent thereof” and substituting the phrase “or similar material.”19 Congress expressly stated that this change was not intended to make a substantive change to the meaning and was done only for clarity.20 With this change, Congress articulated a preference for the phrase “similar material,” signaling that it more clearly explained the intent of the provision than the phrase “the equivalent thereof” in the original text.

Based on this legislative history, it is clear that Congress was concerned with persons transferring monetary value anonymously across international borders, particularly in connection with criminal activity. Clearly, such activity at the time of enactment was primarily accomplished through the use of currency and other substitutes for currency, such as bearer negotiable instruments or securities. Accordingly, the definition contains a list of such substitutes for currency identified for this purpose. However, the definition is not limited to the listed items, but is expressly expanded to include other “similar material.”

The authority to extend these reports toitems similar to U.S. currencyis consistent with the legislative purpose behind BSA reporting—facilitating the traceability of currency and its equivalents and eliminating anonymous international flows of money. FinCEN believes it is reasonable to conclude that items that can be used to accomplish the same anonymous transfer of monetary value Congress sought to reach are items properly within the scope of the term “monetary instrument.” Moreover, FinCEN finds that this interpretation is consistent with the purpose of the BSA to address gaps in the ability to trace the flow of currency and its equivalents through reporting requirements that are highly useful in criminal, tax, or regulatory investigations or proceedings, or in the conduct of intelligence or counterintelligence matters, including analysis to protect against international terrorism.21

Prepaid access devices are “similar material” to the items listed in the definition of a monetary instrument in 31 U.S.C. 5312(b)(3), “travelers checks, bearer negotiable instruments, bearer investment securities, bearer securities, and stock with title passing upon delivery,” in that they can be used as a substitute for currency, the funds they provide access to are accessible by the bearer of the device, and they can be transferred from person to person without a record of the chain of title. In particular they are similar to traveler's checks and bearer negotiable instruments such as cashier's and certified checks.

Although a traveler's check has the formal characteristics of a negotiable instrument,22 it is used and accepted as ready cash because payment is guaranteed by the issuer, who has already received the value of the funds represented on the face of the check. Those funds are held in an account specifically for that purpose, although the account is not one established by the purchaser.23 Traveler's checks are purchased from the issuer in advance of use and in amounts corresponding to specific denominations of United States or foreign currency.

Under the Uniform Commercial Code (the “UCC”), a negotiable instrument is an unconditional order or promise to pay a fixed or determinable amount of money to bearer or to order that is payable on demand or at a definite time.24 Rights and obligations contained in a negotiable instrument can be altered by endorsement. The ordinary manner in which the payee of a check endorses that check is by placing his or her signature on the back of it. An endorsement may be made after a specific direction (“pay to Dolly Madison” or “for deposit only”), called a qualified or restricted endorsement, or with no qualifying or restricting language, thereby making it payable to the holder, called a blank endorsement. A blank endorsement creates a bearer negotiable instrument, which is payable to whomever possesses it, just like most tangible prepaid access devices. Once endorsed in blank, a negotiable instrument can be transferred without any record of transfer.

Common negotiable instruments include cashier's and certified checks. A cashier's check represents funds paid by the purchaser to a bank, as represented by the face value. The check is issued and certified by the bank on the bank's own account (not that of the purchaser).25 The check will state the name of both purchaser and payee but because it is a negotiable instrument, it can be transformed into a bearer negotiable instrument by a blank endorsement. A cashier's check does not depend on a private account and, therefore, is received as cash. Certifiedchecks are similar in that the face value of the check represents funds paid by the purchaser to a bank, which is guaranteed for payment and can be converted into a bearer negotiable instrument.26

These instruments are similar to tangible prepaid access devices in that they are issued based on funds already received by the issuer, which is intended to facilitate immediate payment. The promises or orders underlying them are guaranteed for payment, giving them enhanced liquidity—the quintessential purpose of these instruments—enabling them to be treated as a substitute for cash. As bearer instruments, they are payable to whomever has possession, allowing transfers to be made with no record of the chain of ownership. Tangible prepaid access devices serve the identical purpose. In this context prepaid access devices serve as ready cash or the value of cash, and as a means of payment, are intended to provide the same (or superior) certainty as the bearer instruments listed in the definition of monetary instrument. The funds represented by prepaid access devices are payable to or readily usable by the bearer of the device, with no record necessary to track the chain of ownership. Consequently, FinCEN believes that prepaid access devices are “similar material” to those bearer instruments that are included in the definition of monetary instruments.

Under the Prepaid Access Final Rule, FinCEN regulations define the term “prepaid access” very broadly to mean “[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.”27 While the devices or vehicles that can provide access to prepaid funds are potentially limitless, this proposal is narrowly focused on tangible prepaid access devices transported, mailed, or shipped across the border of the United States.

Pursuant to FinCEN's authority under 31 U.S.C. 5312, FinCEN proposes to amend 31 CFR 1010.100 by revising the definition of “monetary instrument” as that term is used for purposes of complying with the CMIR requirement at § 1010.340. In particular, the proposed revisions would add prepaid access devices to the BSA definition of monetary instrument by revising 31 CFR 1010.100(dd)(2) and add a new 31 CFR 1010.100(dd)(3) that would incorporate the exclusions for warehouse receipts and bills of lading, currently found at 31 CFR 1010.100(dd)(2), as well as adding exclusions for credit and debit cards. The proposed revisions to 31 CFR 1010.100(dd) would: (a) Expand the definition to includetangibleprepaid access devices; (b) limit the application of the expanded definition to tangible prepaid access only for purposes of the CMIR reporting requirement at § 1010.340; (c) establish that the value of any such prepaid access device would be determined by the amount of the funds available through the device at the time of physical transportation, mail or shipment into or out of the United States; and (d) clarify that credit cards and debit cards are not a form of monetary instrument for BSA purposes.

The proposed revision to 31 CFR 1010.100(dd)(2) would provide that, for purposes of the CMIR regulations issued pursuant to 31 U.S.C. 5316, the definition of monetary instrument includes tangible prepaid access devices.

The proposed inclusion of “tangible prepaid access devices” within “monetary instrument” is limited in scope to CMIR filing obligations found at 31 CFR 1010.340 and related BSA rules involving the definitions, penalty, seizure, and enforcement provisions that refer to those obligations. This proposed regulation is not intended to extend to tangible prepaid access devices the record keeping and other reporting requirements applicable to monetary instruments under other provisions of the BSA regulations.

The term “tangible prepaid access device” is defined at 31 CFR 1010.100(dd)(2) to mean “any physical item that can be transported, mailed, or shipped into or out of the United States and the use of which is dedicated to obtaining access to prepaid funds or the value of funds by the possessor in any manner without regard to whom the prepaid access is issued.” This definition includes the predominant forms of prepaid devices such as general-use prepaid cards, gift cards, store cards, payroll cards, and government benefit cards. It also includes cell phones and other tangible devices to the extent that they themselves, or an item built into or attached to them, provide access to prepaid funds or the value of funds by being readable by a device employed for the purpose by merchants. The proposed definition does not reach intangible vehicles for accessing prepaid funds or the value of funds, such as codes and PINs. It also does not reach tangible items that may be incidental to obtaining access to intangible prepaid access, such as laptop computers, Web-enabled cell phones, or other devices that are not dedicated to accessing specific prepaid funds.

The proposed revision to 31 CFR 1010.100(dd)(2) would also provide that the point in time at which the value of a tangible prepaid access device is measured is the time at which it crosses into or out of the United States. For purposes of complying with the CMIR reporting requirement at § 1010.340, the proposed definition would establish that the balance available through any such access device as a monetary instrument “at the time of the physical transportation, mail, or shipment into or out of the United States” would be the reportable value. In cases of mail or shipment, there is a presumption that the value available through the device remains the same throughout the period of shipment.

The proposed revisions clarify that credit and debit cards are not a form of monetary instrument for BSA purposes. For this purpose the proposed definition adopts the definition of credit card used in the consumer credit protection law28 and Truth-In-Lending Act regulations (Regulation Z),29 which define the term to mean any card, plate, coupon book, or other credit device existing for the purpose of obtaining money, property, labor, or services on credit. With respect to debit cards, the proposed definition adopts the portion of the definition of debit card used in the consumer credit protection law,30 which defines the term to mean any card, or other payment code or device, issued or approved for use through a payment card network to debit an individual's asset account (regardless of the purpose for which the account is established), whether authorization is based on signature, PIN, or other means. The proposed definition would not adopt the rest of the debit card definition in the consumer credit protection law that goes on to include general-use prepaid cards and exclude paper checks.31 Debit cards associated with a bank account are not includedwithin the meaning of the term monetary instrument.

The proposed regulation would add new 31 CFR 1010.340(c)(10) to exclude from the reporting requirement the international transportation, mail, or shipment of tangible prepaid access devices by a business or its agent offering such products prior to their delivery to a seller for sale to the public. This provision mirrors the exclusion for a traveler's check issuer or its agent found at 31 CFR 1010.340(c)(7). The phrase “[a] business participating in the offering of tangible prepaid access devices or its agent” is intended to include all of the participants in a prepaid access program and their agents, if any. The proposed rule is only intended to capture tangible prepaid access devices that have been purchased for use, loaded with funds, and “activated” by whatever process a particular prepaid program requires for loaded funds to be made available for use.

A. There may be obstacles to law enforcement identifying prepaid access devices and verifying the available balance. Branded open loop prepaid access devices can be indistinguishable from credit and debit cards, making it difficult for border agents and other law enforcement authorities to identify prepaid access devices. Various impediments, such as the Right to Financial Privacy Act32 or state privacy laws involving individuals' bank records, may make it difficult to determine the available balance of an underlying prepaid access device, since the value is not generally indicated on its face.33 Further, where the prepaid access device takes a novel form (not a card or chip), law enforcement may not be prepared with a device to read the available balance. Moreover, since a holder of certain prepaid access devices may experience difficulties in retrieving records concerning the prepaid access device, a declaration concerning available balance may be unintentionally inaccurate. The holder may also not be directly responsible for adding value to the prepaid program, which could also result in a declaration concerning the available balance being unintentionally inaccurate. FinCEN requests comment on these and any other potential obstacles to law enforcement identifying prepaid access devices and verifying the accessible value, including suggestions as to how they may be addressed.

B. Prepaid access devices vary in form and function, including closed loop cards that can be used only at a specific store or merchant, or for a specific service, and cannot be used at ATMs to access cash. These cards typically bear no information identifying the cardholder, so they can be used by anyone who possesses the card. Although their limited functionality may mitigate their potential use as a money laundering device as they cannot be used as a cash access device, they might be sold outright for cash. Should these closed loop cards continue to be subject to a border declaration obligation as proposed? Should other types of lower-risk prepaid access devices that are not considered prepaid programs under the final prepaid rule be excluded from the definition of monetary instruments, such as government-funded, limited-value, or payroll cards?

C. Branded open loop reloadable cards are the prepaid access device most similar to debit cards, some allowing both cash access via ATMs and the ability to conduct transactions at a physical point of sale or online. Currently, in the United States, debit cards and open loop prepaid access cards that bear a global network brand (e.g.,MasterCard and Visa), are exclusively issued by depository institutions. Depository institutions are already subject to a full slate of anti-money laundering (“AML”) obligations, including a customer identification program rule.34 Consequently, these cards may bear the name, embossed on the front of the card, of the person to whom the card has been issued in the same manner as a debit or credit card. Should branded open loop reloadable prepaid cards with the name of the person to whom the card has been issued embossed on the front of the card be subject to border declaration as monetary instruments?

D. Certain prepaid access programs, whether open or closed loop, allow value to be added remotely to the funds accessible via the card or other device. The effect is that someone other than the holder can add value to the funds available to the holder. This is a typical arrangement, for example, when parents give a prepaid access card to a child away at school or when migrant laborers use a prepaid access device to provide financial support to family members who remain in the home country. In these circumstances, a prepaid access card or device may cross the border out of or into the United States without an available balance, but may later, when funds are added to the prepaid access device, be able to access value. Should the border declaration obligation be associated with the value immediately available to a prepaid access device at the time the device enters or leaves the country or should the declaration obligation apply to the potential maximum value available via the prepaid access device?

E. Payment technology is a fast moving industry, with new programs and access devices and methods constantly in development. There may soon be the potential for a code or password, or object not typically associated with payment system access (e.g.,cell phone or key fob), to be brought into or taken out of the United States and used to access cash drawn from a prepaid access program either via an ATM or otherwise. Should the border declaration apply to codes, passwords, and other intangibles as well as to any tangible object that is dedicated to accessing prepaid funds? Should it only apply to cards, or also to cell phones, key fobs, or other tangible objects that include a device that enables them to function in a similar manner to “swiping” a magnetic stripe card?

F. FinCEN also specifically requests comments identifying any additional costs associated with the completion of the CMIR form as a result of this proposed rule.

G. FinCEN requests comment regarding whether it is appropriate to exempt, in proposed 31 CFR 1010.340(c)(10), the international transport mail or shipment by a prepaid access business or its agents of tangible prepaid access devices prior to their delivery to a seller for sale to the public. This provision would parallel the exemption for traveler's checks found at 31 CFR 1010.340(c)(7).

H. FinCEN requests comment on whether devices that require a PIN number for a point of sale or for ATM use should be excluded as intangible prepaid access.

When an agency issues a rulemaking proposal, the Regulatory Flexibility Act (RFA) requires the agency to “prepare and make available for public comment an initial regulatory flexibility analysis” that will “describe the impact of the proposed rule on small entities.” (5 U.S.C. 603(a)). Section 605 of the RFA allows an agency to certify a rule, in lieu of preparing an analysis, if the proposed rulemaking is not expected to have asignificant economic impact on a substantial number of small entities.

The proposed rule will apply to all persons, a term that includes individuals and entities of all sizes, if they conduct a reportable action under the rule. The proposed rule is targeted at obtaining reports from individuals transporting over $10,000 in currency, tangible prepaid access devices, or other monetary instruments into or out of the United States. FinCEN estimates that the number of reports filed by small entities will be few and not impact a substantial number of those entities.35

FinCEN estimates that the proposed rule will result in a total of 8,000 annual reports.36 The majority of these reports will be filed by individuals. FinCEN estimates that each report will take 11 minutes to complete. FinCEN does not believe that this proposed rule will have a significant economic impact on a substantial number of small entities.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. 605) and the reasons stated above, it is hereby certified that this proposed rule will not have a significant economic impact on a substantial number of small entities. Accordingly, a regulatory flexibility analysis is not required. FinCEN invites comments on the impact of this proposed rule on small entities.

The collection of information contained in this proposed rule has been submitted to the Office of Management and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Under the Paperwork Reduction Act, an agency may not conduct or sponsor, and an individual is not required to respond to, a collection of information unless it displays a valid OMB control number. Comments on the information collection should be sent to the Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Office of Management and Budget, Paperwork Reduction Project (1506), Washington, DC 20503, or by the Internet tooira_submission@omb.eop.govwith a copy to the Financial Crimes Enforcement Network by mail or as part of the comments through the Internet. Comments are welcome and must be received by December 16, 2011.

Report of International Transportation of Currency or Monetary Instruments (31 CFR 1010.340).Office of Management and Budget Control Number: 1506-0014. (FinCEN Form 105)

This information is required to be provided pursuant to 31 U.S.C. 5316(a). Information collected on the CMIR is made available, in accordance with strict safeguards, to appropriate criminal law enforcement and regulatory personnel in the official performance of their duties. The information collected is of use in investigations involving international and domestic money laundering, tax evasion, fraud, and other financial crimes. The collection of information is mandatory. Records required to be retained under the Bank Secrecy Act must be retained for five years. In 2009, OMB approved FinCEN for 51,333 hours under OMB control number 1506-0014. The collection of reports on the international transportation of prepaid devices will add to the estimated burden by 1,467 hours.37 However, the actual annual reporting activity since 2009 (36,667 hours) has been notably less than the amount approved by OMB in 2009 (51,333 hours). To accommodate for this difference and provide a more accurate estimate going forward, FinCEN is reducing the overall burden for this collection by 7,333 hours. Therefore, as proposed, the net reduction to the overall approved burden under OMB Control Number 1506-0014 is 5,866 hours.

Description of Respondents:Individuals, business or other for-profit institutions, and not-for-profit institutions involved in the international transport of monetary instruments.

Estimated Number of Respondents:The rule decreases the number of reports by 32,000.

Estimated Average Annual Burden Hours per Respondent:The estimated average annual burden associated with the reporting requirement in 31 CFR 1020.340 is 11 minutes.

Estimated Total Annual Recordkeeping Burden:45,467 hours.

Request for Comments:FinCEN specifically invite comments on: (a) Whether the proposed recordkeeping requirements are necessary for the proper performance of the mission of the FinCEN, and whether the information shall have practical utility; (b) the accuracy of FinCEN's estimate of the burden of the proposed recordkeeping requirement; (c) ways to enhance the quality, utility, and clarity of the information required, and (d) how the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques or other forms of information technology.

Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. This rule is not a significant regulatory action. Accordingly, a formal review by the Office of Management and Budget is not required.

Section 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), Public Law 104-4 (March 22, 1995), requires that an agency prepare a budgetary impact statement before promulgating a rule that may result in expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year. If a budgetary impact statement is required, section 205 of the Unfunded Mandates Act also requires an agency to identify and consider a reasonable number of regulatory alternatives before promulgating a rule. FinCEN has determined that it is not required to prepare a written statement under section 202.

For the reasons stated in the preamble, FinCEN proposes to amend 31 CFR part 1010 as follows:

This document proposes to correct an erroneous reference in special rules governing certain information obtained under the Clean Air Act (40 CFR part 2, subpart B). We have published a direct final rule making this correction in the “Rules and Regulations” section of thisFederal Registerbecause we view this as a noncontroversial action and anticipate no adverse comment. We have explained our reasons for this action in the preamble to the direct final rule.

If we receive no adverse comment, we will not take further action on this proposed rule. If the EPA receives adverse comment, we will withdraw the direct final rule and it will not take effect. We would address all public comments in any subsequent final rule based on this proposed rule.

We do not intend to institute a second comment period on this action. Any parties interested in commenting must do so by the comment deadline listed in theDATESsection of this document. For further information, please see the information provided in theADDRESSESsection of this document.

Regulated Entities.Entities potentially affected by this proposed action include those listed in Table 1 of this preamble:

Table 1 of this preamble is not intended to be exhaustive, but rather provides a guide for readers regarding facilities likely to be affected by this action and 40 CFR part 98. Table 1 of this preamble lists the types of facilities that the EPA is now aware could be potentially affected by this action. Other types of facilities not listed in the table could also be affected. To determine whether your facility is affected by this action, you should carefully examine the applicability criteria found in 40 CFR part 98, subpart A, and other subparts as necessary. If you have questions regarding the applicability of this action to a particular facility, consult the person listed in the precedingFOR FURTHER INFORMATION CONTACTsection.

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

The correction to 40 CFR part 2 would not impose any information collection burden.

The RFA generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of the amendments on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. After considering the economic impacts of today's proposed correction to the citation in 40 CFR part 2 on small entities, I certify that this action would not have a significant economic impact on a substantial number of small entities. In determining whether a rule has asignificant economic impact on a substantial number of small entities, the impact of concern is any significant adverse economic impact on small entities, since the primary purpose of the regulatory flexibility analyses is to identify and address regulatory alternatives “which minimize any significant economic impact of the rule on small entities.” 5 U.S.C. 603 and 604. Thus, an agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, or otherwise has a positive economic effect on all of the small entities subject to the rule.

This proposed rule would not impose any new requirement on small entities that are not currently required by Part 98. The amendment to 40 CFR part 2 is administrative in nature. Therefore, this rule would not have a significant economic impact on a substantial number of small entities.

This action contains no federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for state, local, or Tribal governments or the private sector. The action would impose no enforceable duty on any state, local or Tribal governments or the private sector. Therefore, this action is not subject to the requirements of sections 202 or 205 of the UMRA. This action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. The correction in this proposed rule revises a citation reference in one section of 40 CFR part 2, subpart B to confirm the original intention of the reference by correcting the citation to statutory authority.

This proposed change to 40 CFR part 2 would not have federalism implications. It would not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. However, for a more detailed discussion about how Part 98 relates to existing state programs, please see Section II of the preamble to the final part 98 rule (74 FR 56266).

The correction to 40 CFR part 2 is administrative in nature and would apply to data reported under Part 98 by facilities that directly emit GHGs or supply fuel or chemicals that may emit GHGs when used. Part 98 does not apply to governmental entities unless the government entity owns a facility that directly emits GHGs above threshold levels such as large stationary combustion sources or landfills, so relatively few government facilities would be affected. The change to 40 CFR part 2 also would not limit the power of states or local governments to collect GHG data or regulate GHG emissions. Thus, Executive Order 13132 does not apply to this action.

This action is not expected to have Tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because this action is administrative in nature and would not impose any new requirements on Tribes. Thus, Executive Order 13175 does not apply to this action.

The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it would not establish an environmental standard intended to mitigate health or safety risks.

This action is not a “significant energy action” as defined in Executive Order 13211 (66 FR 28355, May 22, 2001), because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The amendments to 40 CFR part 2 are administrative in nature and therefore would not have any adverse impacts on energy supply, distribution, or use.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note) directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g.,materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs the EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

This proposed change to 40 CFR part 2 is administrative in nature and would not involve technical standards. Therefore, the EPA did not consider the use of any voluntary consensus standards.

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

The EPA has determined that the proposed action would not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because the correction noted would not affect the level of protection provided to human health or the environment. The change to 40 CFR part 2 is administrative in nature and therefore would not affect the level of protection provided to human health or the environment.

I. General Information A. Does this action apply to me?

Entities potentially affected by this proposed rule include, but are not necessarily limited to, states (typically state air pollution control agencies) that control VOCs, and industries involved in the manufacture or use of refrigerants, aerosol propellants, and blowing agents for insulating foams.

This proposed rule is applicable to all manufacturers, distributors, and users of these chemical compounds. The use of these compounds is subject to restrictions under the CAA and the Toxic Substances Control Act (TSCA). Specifically, the use of these compounds as aerosol propellants, blowing agents, or refrigerants, or any other use in which they would substitute for chlorofluorocarbons, hydrochlorofluorocarbons, or theirsubstitutes, is subject to restrictions under the Significant New Alternatives Policy (SNAP) program (CAA § 612; 40 CFR 82 subpart G). The SNAP program has issued a final approval for HFO-1234yf as a substitute for use in the motor vehicle air conditioning end-use as a replacement for ozone depleting substances (76 FR 17488, March 29, 2011), and final approvals for HFO-1234ze as a suitable foam and refrigerant substitute and as a propellant (74 FR 50129, September 30, 2009; 75 FR 34017, June 16, 2010). Furthermore, HFO-1234yf is subject to a Significant New Use Rule (SNUR) under TSCA. (75 FR 65987, October 27, 2010). The implications of these other regulations are discussed in more detail in Section III.

Submitting CBI:Do not submit this information to the EPA throughhttp://www.regulations.govor e-mail. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to the EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

Public Hearing:To request a public hearing or information pertaining to a public hearing on this document, contact Ms. Pamela S. Long, Air Quality Policy Division, Mail code C504-01, U.S. Environmental Protection Agency, Research Triangle Park, NC 27711, telephone (919) 541-0641, facsimile number (919) 541-5509, e-mail address:long.pam@epa.gov.

The information presented in this preamble is organized as follows:

Tropospheric ozone, commonly known as smog, is formed when VOCs and nitrogen oxides (NOX) react in the atmosphere in the presence of sunlight. Because of the harmful health effects of ozone, the EPA and state governments limit the amount of VOCs that can be released into the atmosphere. The VOCs are those organic compounds of carbon which form ozone through atmospheric photochemical reactions. Different VOCs have different levels of reactivity—that is, they do not react to form ozone at the same speed or do not form ozone to the same extent. Some VOCs react slowly, or form less ozone; therefore, changes in their emissions have limited effects on local or regional ozone pollution episodes. It has been the EPA's policy that organic compounds with a negligible level of reactivity should be excluded from the regulatory definition of VOC so as to focus VOC control efforts on compounds that do significantly increase ozone concentrations. The EPA also believes that exempting such compounds creates an incentive for industry to use negligibly reactive compounds in place of more highly reactive compounds that are regulated as VOCs. The EPA lists these negligibly reactive compounds in its regulations (at 40 CFR 51.100(s)) and excludes them from the definition of VOC.

The CAA requires the regulation of VOCs for various purposes. Section 302(s) of the CAA specifies that the EPA has the authority to define the meaning of “VOC,” and hence what compounds shall be treated as VOCs for regulatory purposes. The policy of excluding negligibly reactive compounds from the VOC definition was first laid out in the “Recommended Policy on Control of Volatile Organic Compounds” (42 FR 35314, July 8, 1977) and was supplemented most recently with the “Interim Guidance on Control of Volatile Organic Compounds in Ozone State Implementation Plans” (Interim Guidance) (70 FR 54046, September 13, 2005). The EPA uses the reactivity of ethane as the threshold for determining whether a compound has negligible reactivity. Compounds that are less reactive than, or equally reactive to, ethane under certain assumed conditions may be deemed negligibly reactive and therefore suitable for exemption from the regulatory definition of VOC. Compounds that are more reactive than ethane continue to be considered VOCs for regulatory purposes and therefore subject to control requirements. The selection of ethane as the threshold compound was based on a series of smog chamber experiments that underlay the 1977 policy.

The EPA has used three different metrics to compare the reactivity of a specific compound to that of ethane: (i) the reaction rate constant (known as kOH) with the hydroxyl radical (OH); (ii) the maximum incremental reactivities (MIR) of ethane and the compound in question expressed on a reactivity per unit mass basis; and (iii) the MIR of ethane and the compound in question expressed on a reactivity per mole basis. Differences between these three metrics are discussed below.

The kOHis the reaction rate constant of the compound with the OH radical in the air. This reaction is typically the first step in a series of chemical reactions by which a compound breaks down in the air and participates in the ozone-forming process. If this step is slow, the compound will likely not form ozone at a very fast rate. The kOHvalues have long been used by the EPA as a measure of photochemical reactivity and ozone-forming activity, and they have been the basis for most of the EPA's previous exemptions of negligibly reactive compounds from the regulatory definition of VOC. The kOHmetric is inherently a molar comparison,i.e.,it measures the rate at which molecules react.

The MIR values, both by mole and by mass, are a more recently developed measure of photochemical reactivity derived from a computer-based photochemical model. Thismeasurement considers the complete ozone forming activity of a compound, not merely the first reaction step. Further explanation of the MIR metric can be found in: W. P. L. Carter, “Development of Ozone Reactivity Scales for Volatile Organic Compositions,” Journal of the Air & Waste Management Association, Vol. 44, 881-899, July 1994.

The MIR values for compounds are typically expressed as grams of ozone formed per gram of VOC (mass basis), but may also be expressed as grams of ozone formed per mole of VOC (molar basis). For comparing the reactivities of two compounds, using the molar MIR values considers an equal number of molecules of the two compounds. Alternatively, using the mass MIR values compares an equal mass of the two compounds, which will involve different numbers of molecules, depending on the relative molecular weights. The molar MIR comparison is consistent with the original smog chamber experiments that underlie the original selection of ethane as the threshold compound and compared equal molar concentrations of individual VOCs. It is also consistent with previous reactivity determinations based on inherently molar kOHvalues. By contrast, the mass MIR comparison is more consistent with how MIR values and other reactivity metrics have been applied in reactivity-based emission limits, such as the national VOC emissions standards for aerosol coatings (73 FR 15604). Many other VOC regulations contain limits based upon a weight of VOC per volume of product, such as the EPA's regulations for limiting VOC emissions from architectural and industrial maintenance coatings (65 FR 7736). However, the fact that regulations are structured to measure VOC content by weight for ease of implementation and enforcement does not necessarily control whether VOC exemption decisions should be made on a weight basis as well.

The choice of the molar basis versus the mass basis for the ethane comparison can be significant. Given the relatively low molecular weight of ethane, use of the mass basis tends to result in more VOCs being classified as “negligibly reactive” than in the case of the molar basis. In some cases, a compound might be considered less reactive than ethane and eligible for VOC exemption under the mass basis but not under the molar basis. The compounds considered in this proposal, HFO-1234yf and HFO-1234ze, fall into this category, where the molar MIR value is greater than that of ethane, but the mass MIR value is equal to or less than that of ethane. However, for both compounds, both MIR values fall in the lower portion of the very wide range of VOC reactivities.

The EPA has considered the choice between a molar or mass basis for the comparison to ethane in past rulemakings and guidance. Most recently, in the Interim Guidance, the EPA stated:

In this action, the EPA is proposing to exempt these compounds using the comparison to ethane on the mass basis MIR value, because MIR values are available for these compounds and the EPA believes that this comparison is appropriate.

The EPA's 2005 Interim Guidance also notes that concerns have sometimes been raised about the potential impact of a VOC exemption on environmental endpoints other than ozone concentrations, including fine particle formation, air toxics exposures, stratospheric ozone depletion, and climate change. The EPA has recognized, however, that there are existing regulatory and non-regulatory programs that are specifically designed to address these issues, and the agency continues to believe that the impacts of VOC exemptions on environmental endpoints other than ozone formation will be adequately addressed by these programs. The VOC exemption policy is intended to facilitate attainment of the ozone NAAQS, and questions have been raised as to whether the agency has authority to use its VOC exemption policy to address concerns that are unrelated to ground-level ozone. Thus, in general, VOC exemption decisions will continue to be based solely on consideration of a compound's contribution to ozone formation. However, if the agency determines that a particular VOC exemption is likely to result in a significant increase in the use of a compound and that the increased use would pose a significant risk to human health or the environment that would not be addressed adequately by existing programs or policies, the EPA reserves the right to exercise its judgment in deciding whether to grant an exemption.

In this case, the agency has examined available information on the risks to human health and the environment and applicability of other regulatory programs; that information for the two compounds considered here is discussed further in Section III.

Honeywell, Inc. submitted a petition to the EPA on June 29, 2009, requesting that HFO-1234yf (CAS 754-12-1) be exempted from VOC control based on its low reactivity relative to ethane. The petitioner indicated that HFO-1234yf may be used as a refrigerant for refrigeration and air-conditioning. Honeywell also indicated that it expects HFO-1234yf to be widely used as a replacement for HFC-134a in motor vehicle air-conditioners (MVAC), and that HFO-1234yf has been specifically developed for this purpose. Honeywell argues that as a replacement for use in motor vehicle air conditioners there will be an environmental advantage in that the global warming potential (GWP) of HFO-1234yf is 4, which is substantially lower than the GWP for HFC-134a (100-year GWP = 1430) which HFO-1234yf is designed to replace. Honeywell submitted several documents, including several peer-reviewed journal articles, to support this petition that have been added to the docket for this action.

Honeywell, Inc. also submitted a petition to the EPA on December 2, 2009, requesting that HFO-1234ze (CAS 29118-24-9) be exempted from VOC control based on its low reactivity relative to ethane. The petitioner indicated that HFO-1234ze may be used in a variety of applications including as a refrigerant, an aerosol propellant, and a blowing agent for insulating foam. Honeywell submitted several documents, including several peer-reviewed journal articles, to support its petition, all of which have been added to the docket for this action.

Consistent with the Interim Guidance, the EPA's proposed responses to the petitions are based on a consideration of the contribution that each chemical makes to tropospheric ozone formation based on a comparison of reactivity metrics, and our assessment that existing programs or policies already adequately address the possibility that granting each petition would pose a significant risk to human health or the environment. We also believe that themuch lower global warming potential of HFO-1234yf compared to the compound HFC-134a for which it will substitute, as described in Section III.B, is an additional reason to approve the HFO-1234yf petition in particular, given that applying the Interim Guidance itself supports such approval. Information on these topics is given below.

Table 1 presents three reactivity metrics for ethane (the benchmark compound) and for HFO-1234yf and HFO-1234ze which are proposed for exemption from the VOC definition in this proposed rule.

From the data in Table 1, it can be seen that HFO-1234yf has a higher kOHvalue than ethane, meaning that it initially reacts more quickly in the atmosphere than ethane. A molecule of HFO-1234yf is also more reactive than a molecule of ethane, as shown by the molar MIR (g O3/mole VOC) values, because equal numbers of moles have equal numbers of molecules. However, a gram of HFO-1234yf has the same reactivity as a gram of ethane. This is because HFO-1234yf has a molecular weight (114) that is more than three times that of ethane (molecular weight 30), and thus requires less than a third the number of molecules of HFO-1234yf per gram than the number of molecules of ethane per gram.

From the data in Table 1, it also can be seen that HFO-1234ze has a higher kOHvalue than ethane, meaning that it initially reacts more quickly in the atmosphere than ethane. A molecule of HFO-1234ze is also more reactive than a molecule of ethane, as shown by the molar MIR (g O3/mole VOC) values, since equal numbers of moles have equal numbers of molecules. However, a gram of HFO-1234ze is less reactive, or creates less ozone on the day of its emission to the atmosphere, than a gram of ethane. This is because HFO-1234ze has a molecular weight (114) that is more than three times that of ethane (molecular weight 30), and thus requires less than a third the number of molecules of HFO-1234ze per gram than the number of molecules of ethane needed per gram.

Thus, for both of the petitions submitted by Honeywell, the data supports the contention that the reactivity of the compound in the petition is equal to or lower than that of ethane on a mass MIR basis.

We anticipate that one of these compounds, HFO-1234yf, will be used in automobiles as a replacement for the current refrigerant HFC-134a, which is the only use for which HFO-1234yf has been approved to date under the SNAP program. Given this one-for-one substitution situation, it is informative to compare the ozone forming potential of HFO-1234yf to that of HFC-134a, which has a gram MIR of only 0.0007 and thus contributes very little to ozone formation. The EPA has considered the results of a recent peer-reviewed study of the increase in ozone that may occur as result of the substitution of HFO-1234yf for HFC-134a.1 Based on air quality modeling, this study found that if HFO-1234yf was used in all automobiles but not in any other application, the incremental amount of ozone formed from its degradation in the atmosphere was only 0.01% of total ozone formed during the simulation due to emissions from all sources. This portion of ozone formation due to automobiles is slightly more than the current baseline, where the refrigerant used is HCF-134a.2 Thus, the additional information from this study shows that, under the assumptions used in the air quality modeling, the use of HFO-1234yf would produce more ozone than continued use of HFC-134a, but the increase is unlikely to have a significant impact on local air quality. One of the assumptions used in the modeling was that the substitution of one refrigerant for the other would not affect meteorological conditions that also influence ozone formation.

However, as stated in Section II.A, HFO-1234yf has a much lower GWP than HFC-134a. Global warming is predicted to exacerbate high ozone concentrations3,4 , so directionally the lower GWP of HFO-1234yf will offset at least some of the ozone increase predicted by the modeling that assumed identical meteorological conditions. The EPA believes the very small increase in ozone concentrations that may result from encouraging the use of HFO-1234yf via an exemption from thedefinition of VOC does not constitute a sufficient reason to depart from the Interim Guidance's reliance on MIR comparisons to ethane as the basis for approving VOC exemption requests.

In summary, for both HFO-1234yf and HFO-1234ze, the EPA believes that these chemicals qualify as negligibly reactive with respect to their contribution to tropospheric ozone formation.

Additionally, we examined and present available information on the likelihood of risk to human health or the environment from increased use of the chemicals considered here. We believe that current regulation of these compounds under other EPA programs adequately protects human health and the environment.

The only currently known or potential uses for the chemicals being considered here are as substitutes for stratospheric ozone-depleting substances (ODS), and any such use is regulated under the SNAP program. Under SNAP, the EPA reviews all new substitutes for ODS and allows their use in specific applications where the overall risks to human health and the environment associated with their use are comparable to or less than those of other compounds used in the same manner.

After reviewing available information and public comments regarding its safety, health, and environmental risks and benefits under the SNAP program, the EPA issued a final approval on March 29, 2011 (76 FR 174888) for HFO-1234yf as an acceptable ODS substitute for use in MVAC, subject to specific use conditions, in place of CFC-12 and HFC-134a.5 The use conditions in the SNAP approval have the effect of making it illegal to use HFO-1234yf in the air conditioning systems of heavy-duty trucks, refrigerated transport, or off-road vehicles such as agricultural or construction equipment. The use restrictions also have the effect of making use of the compound other than by manufacturers of automobiles and light-duty trucks or by commercial automotive service centers either illegal or highly unlikely.6

In the SNAP review, the EPA found that the use of HFO-1234yf in new passenger vehicle and light-duty truck MVAC systems, subject to the use conditions, does not present a significantly greater risk to human health and the environment compared to the currently approved MVAC alternatives. In summary, the EPA's SNAP review reached the following conclusions in support of this finding.

• Substituting HFO-1234yf for HFC-134a is environmentally beneficial from a climate change perspective as the global warming potential of HFO-1234yf is much lower (100 year GWP of 4 for HFO-1234yf vs. 100 year GWP of 1430 for HFC-134a). The EPA received a petition on May 7, 2010, (with a follow up petition on November 16, 2010) from the Natural Resources Defense Council, the Institute for Governance & Sustainable Development, and the Environmental Investigation Agency (a non-governmental organization) asking the EPA to remove HFC-134a from the list of acceptable substitutes under the SNAP program for use in motor vehicle air conditioners. The petitioners cited this difference in GWP as a reason for the EPA to approve their request.

• The use conditions of the final SNAP approval for HFO-1234yf provide protection against potential safety hazards related to the flammability of the compound, including potential exposure to hydrogen fluoride arising from thermal decomposition during a fire.

• Like HFC-134a, HFO-1234yf is not an ODS, so the substitution of the latter for the former will not affect stratospheric ozone concentrations.

• HFO-1234yf will not create significant impacts on ground level ozone or on local air quality.7

• The production of triflouroacetic acid from the atmospheric degradation of HFO-1234yf does not pose a significant risk of aquatic toxicity or ecosystem impacts.

• When used in accordance with the SNAP use restrictions, HFO-1234yf does not result in significantly greater risks to human health than the use of other available or potentially available substitutes.

The EPA conclusion in the final SNAP action regarding human health risks of HFO-1234yf was based on an extensive risk assessment and review of public comments. The EPA also noted that under the TSCA, the EPA had recently performed a pre-manufacture review for HFO-1234yf and adopted the SNUR (75 FR 65987, Oct. 27, 2010). The SNUR for HFO-1234yf requires reporting of additional information to the EPA before sale may begin for uses beyond air conditioning in new automobiles or commercial servicing of new automobiles built using HFO-1234yf,i.e.,the EPA must be given 90-days notice before HFO-1234yf products can be sold directly to consumers for the purpose of servicing, maintenance, and disposal. During these 90 days, the EPA can take further action to stop that marketing. This precautionary step was taken because of certain animal data indicating toxicity, and the possibility that home mechanics might accidentally expose themselves. Auto plant workers and repair shop professionals were expected to avoid exposure through work practices.8

Under the SNUR, the agency will: (a) Receive a Significant New Use Notice, or SNUN, of any person's intent to manufacture, import, or process HFO-1234yf for sale directly to consumers; (b) have an opportunity to review and evaluate data submitted with the SNUN; and (c) be able to regulate HFO-1234yf consumer products, if warranted. Any other potential applications beyond air conditioning in new automobiles or commercial servicing of new automobiles built using HFO-1234yf that may lead to significant exposures will also trigger the requirement for a SNUN, and would likely trigger further review under SNAP. The EPA believes these processes will provide adequate opportunity to address any health effects issues associated with possible increased use of HFO-1234yf.

The EPA's SNAP program has also issued determinations of acceptability for HFO-1234ze as an acceptable substitute for certain ODS in a number of foam blowing end uses, as a refrigerant in non-mechanical heat transfer, and as a propellant as stated in Section I. In this action, the EPA noted that HFO-1234ze is not ozonedepleting, the GWP for HFO-1234ze is significantly lower than the GWPs for the ozone-depleting substances it will replace, HFO-1234ze is not flammable, and the toxicity risks of HFO-1234ze are low. For these reasons, the EPA found that HFO-1234ze will not pose a greater overall risk to human health and the environment than the other substitutes acceptable in these end uses.

In summary, for both HFO-1234yf and HFO-1234ze, the EPA believes that (a) these chemicals qualify as negligibly reactive with respect to their contribution to tropospheric ozone formation, and (b) any non-tropospheric ozone related risks associated with potential increased use are adequately addressed by other existing programs and policies. We also believe that the much lower global warming potential of HFO-1234yf compared to the compound HFC-134a for which it will substitute, as described in Section III.B, is an additional reason to approve the HFO-1234yf petition in particular, given that applying the Interim Guidance itself supports such approval. We invite the public to submit comments and additional information relevant to the issue of these compounds' overall risks and benefits to human health and the environment, and on whether such information should be considered in connection with the decision to grant an exemption from the regulatory definition of VOC.

The EPA is responding to the petitions by proposing to revise its definition of VOC at 40 CFR 51.100(s) to add HFO-1234yf and HFO-1234ze to the list of compounds that are exempt from the regulatory definition of VOC because they are negligibly reactive on the basis that they are less reactive than ethane on a mass MIR basis. If an entity uses or produces any of these two compounds and is subject to the EPA regulations limiting the use of VOC in a product, limiting the VOC emissions from a facility, or otherwise controlling the use of VOC for purposes related to attaining the ozone NAAQS, then these two compounds will not be counted as a VOC in determining whether these regulatory obligations have been met. This action may also affect whether any of these two compounds are considered as VOCs for state regulatory purposes to reduce ozone formation, if a state relies on the EPA's definition of VOC. States are not obligated to exclude from control as a VOC those compounds that the EPA has found to be negligibly reactive. However, if this action is made final, states may not take credit for controlling these compounds in their ozone control strategies.

Under Executive Order (EO) 12866 (58 FR 51735, October 4, 1993), this action is treated as a significant regulatory action because some may view it as raising novel legal or policy issues arising out of legal mandates. Accordingly, the EPA submitted this action to the Office of Management and Budget (OMB) for review under EO 12866 and 13563 (76 FR 3821, January 21, 2011) and any changes made in response to OMB recommendations have been documented in the docket for this action.

This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501et seq.Burden is defined at 5 CFR 1320.3(b). It does not contain any recordkeeping or reporting requirement.

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the proposed rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this notice on small entities, small entity is defined as: (1) A small business that is a small industrial entity as defined in the U.S. Small Business Administration (SBA) size standards. (See 13 CFR 121.); (2) A governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) A small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of this proposed rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This proposed rule will not impose any requirements on small entities.

We continue to be interested in the potential impacts of the proposed rule on small entities and welcome comments on issues related to such impacts.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for state, local, or Tribal governments or the private sector. The action imposes no enforceable duty on any state, local or Tribal governments, or the private sector. Therefore, this action is not subject to the requirements of sections 202 and 205 of the UMRA.

This action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This action addresses the exemption of a set of chemical compounds from the VOC definition. Thus, Executive Order 13132 does not apply to this rule. In the spirit of Executive Order 13132, and consistent with the EPA policy to promote communications between the EPA and state and local governments, the EPA specifically solicits comment on this proposed rule from state and local officials.

This action does not have Tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have substantial direct effects on Tribal governments, 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, as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

Although Executive Order 13175 does not apply to this proposed rule, the EPA specifically solicits additional comment on this proposed rule from Tribal officials.

This action is not subject to EO 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in EO 12866. While this proposed rule is not subject to the Executive Order, the EPA has reason to believe that ozone has a disproportionate effect on active children who play outdoors (62 FR 38856; 38859, July 18, 1997). The EPA has not identified any specific studies on whether or to what extent these chemical compounds may affect children's health. The EPA has placed the available data regarding the health effects of HFO-1234yf in Docket No. EPA-HQ-OAR-2003-0032 which is the docket for the SNUR for this compound.

The public is invited to submit comments or identify peer-reviewed studies and data, of which the EPA may not be aware, that assess results of early life exposure to the chemical compounds herein.

This action is not a “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action proposes to revise the EPA's definition of VOCs for purposes of preparing SIPs to attain the NAAQS for ozone under title I of the CAA.

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 note) directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g.,materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs the EPA to provide Congress, through OMB, explanations when the agency decides not to use available and applicable voluntary consensus standards. This rulemaking does not involve technical standards. Therefore, the EPA is not considering the use of any voluntary consensus standards.

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

The EPA has determined that this proposed rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it will not affect the level of protection provided to human health or the environment.

For reasons set forth in the preamble, part 51 of chapter I of title 40 of the Code of Federal Regulations is proposed to be amended as follows:

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

Section 110(a) of the Clean Air Act (CAA) requires each state to develop a state implementation plan (SIP) that provides for the implementation, maintenance, and enforcement of the national ambient air quality standards (NAAQS). We establish NAAQS under section 109 of the CAA. Currently, the NAAQS address six criteria pollutants: Carbon monoxide, nitrogen dioxide, ozone, lead, particulate matter, and sulfur dioxide.

SIPs can be extensive, containing state regulations or other enforceable measures and various types of supporting information, such as emissions inventories, monitoring networks, and modeling demonstrations. The “good neighbor” provisions in section 110(a)(2)(D)(i) require each SIP to prohibit emissions that adversely affect another State in the ways contemplated in the statute. Section 110(a)(2)(D)(i) contains four distinct requirements related to the impacts of interstate transport. The SIP must prevent sources in the State from emitting pollutants in amounts which will: (1) Contribute significantly to nonattainment of the NAAQS in other States; (2) interfere with maintenance of the NAAQS in other States; (3) interfere with provisions to prevent significant deterioration of air quality in other States; or (4) interfere with efforts to protect visibility in other States. It should be noted that this proposed rulemaking action addresses only those portions of Oklahoma's May 1, 2007, and April 5, 2011, submittals, which address the 110(a)(2)(D)(i)(I) requirements relating to significant contribution to nonattainment or interference with maintenance in another State with respect to the 1997 ozone and 1997 and 2006 PM2.5NAAQS. At this time, EPA is not taking action on any additional requirements of section 110(a)(2)(D)(i) or on any other portions of Oklahoma's May 1, 2007, and April 5, 2011, submittals.1

Within 3 years of our promulgation of a new or revised NAAQS, States are required to update or revise the SIP and submit the revisions to us for approval and incorporation into the Federally enforceable SIP (CAA 110(a)(1)). These plans should address, among other things the requirements of Section 110(a)(2)(D)(i). In 1997, we revised the NAAQS for ozone and particulate matter. For ozone we established new 8-hour standards of 0.08 parts per million (62 FR 38856). For particulate matter weestablished new annual average and 24-hour standards for fine particles, using particulate matter less than 2.5 microns (PM2.5) as the indicator (62 FR 38652). In 2006, we revised the PM2.5NAAQS by decreasing the level of the 24-hour standard from 65 micrograms per cubic meter (μg/m3) to 35 μg/m3. We retained the annual PM2.5NAAQS of 15 μg/m3. This action is being taken in response to the promulgation of these NAAQS.

On May 1, 2007, the State of Oklahoma submitted a SIP revision to address the requirements of CAA section 110(a)(2)(D)(i)(I) for the 1997 ozone and PM2.5NAAQS. On December 5, 2007, the State submitted supplemental information.2 On April 5, 2011, the State submitted a letter certifying that their SIP meets the requirements of CAA section 110(a)(2), including 110(a)(2)(D)(i)(I) for the 2006 PM2.5NAAQS. The submittals document the State's assessments that Oklahoma emissions will not contribute significantly to nonattainment, or interfere with maintenance, in any other State for the 1997 ozone, 1997 PM2.5and 2006 PM2.5NAAQS. The submittals are available electronically through thehttp://www.regulations.govWeb site (Docket No. EPA-R06-OAR-2007-0314).

Consistent with EPA guidance at the time and EPA's approach in the Clean Air Interstate Rule (CAIR), the State's May 1, 2007, submittal focused primarily on whether emissions from Oklahoma sources significantly contribute to nonattainment of the 1997 ozone and PM2.5NAAQS in other states.3 The State did not evaluate whether Oklahoma emissions interfere with maintenance of these NAAQS in other states separately from significant contribution to nonattainment in other states. Instead, the state presumed that if Oklahoma sources were not significantly contributing to violations of the NAAQS in other states, then no further specific evaluation was necessary for purposes of the interfere with maintenance element of section 110(a)(2)(D). However, CAIR was remanded to EPA, in part because the court found that EPA had not correctly addressed whether emissions from sources in a state interfere with maintenance of the standards in other states.4 Therefore, EPA must evaluate the May 1, 2007, Oklahoma submittal in light of the decision of the court.

On August 2, 2010, we proposed the “Cross State Air Pollution Rule” (CSAPR or Transport Rule) for State emissions that contribute significantly to nonattainment in, or interfere with maintenance by, downwind states for the 1997 ozone, 1997 PM2.5and 2006 PM2.5NAAQS (75 FR 45210). The proposal responded to the court remand of CAIR in part by independently analyzing whether a state's emissions interfere with maintenance of the 1997 ozone, 1997 PM2.5and 2006 PM2.5NAAQS. We proposed to include Oklahoma in the CSAPR for the 1997 ozone NAAQS. Our analysis for the proposal identified Oklahoma emissions as significantly contributing to nonattainment and interfering with maintenance of the 1997 ozone NAAQS in the Dallas/Fort Worth, Texas area. Furthermore, our analysis in the proposed CSAPR also found that Oklahoma emissions did not significantly contribute to nonattainment or interfere with maintenance of the 1997 and 2006 PM2.5NAAQS. The comment period for this proposed rule closed on October 1, 2010.

In the final CSAPR, published in theFederal Registeron August 8, 2011, EPA made a final determination that Oklahoma does not significantly contribute to nonattainment and interfere with maintenance with respect to the 1997 and 2006 PM2.5NAAQS in other states (76 FR 48208). However, EPA's analysis in the final CSAPR also demonstrated that six states, including Oklahoma, should be required to reduce ozone-season NOx emissions to reduce ozone impacts at certain locations identified as maintenance receptors that were not identified in the modeling conducted for the proposal. This analysis conducted for the final CSAPR found Oklahoma emissions interfering with maintenance of the 1997 ozone NAAQS in Allegan County, Michigan, but not significantly contributing to nonattainment of the 1997 ozone NAAQS in any other state. In the proposed and final CSAPR, EPA explicitly gave independent meaning to the “interfere with maintenance” prong of section 110(a)(2)(D)(i)(I) by evaluating contributions to identified maintenance receptors that may have difficulty maintaining the NAAQS in the future. EPA found in the final CSAPR analysis that Oklahoma emissions contribute to maintenance problems at the Allegan County, Michigan maintenance receptor, and absent the Allegan County maintenance receptor Oklahoma would not be covered by the CSAPR ozone-season program. Based on this analysis, we published a supplemental notice of proposed rulemaking (SNPR) to implement the ozone-season NOx program in the final CSAPR as the FIP for Oklahoma to address emissions identified as interfering with maintenance with respect to the 1997 ozone NAAQS (July 11, 2011, 76 FR 40662). In the SNPR, EPA took comment on whether there were errors in the Agency's application of the CSAPR methodologies with respect to Oklahoma and the 1997 ozone NAAQS, and did not take comment on any aspect of the final CSAPR. The comment period for this rule closed on August 22, 2011.

The methodology used to analyze the impact of Oklahoma emissions with respect to the 1997 ozone NAAQS is described in detail in the preamble to the final CSAPR and in the Technical Support Documents entitled “Air Quality Modeling Final Rule TSD” and “Significant Contribution and State Emission Budgets Final Rule TSD”. These documents can be found in the electronic docket for the CSAPR and are available through thehttp://www.regulations.govWeb site (Docket No. EPA-HQ-OAR-2009-0491).

In this notice, EPA is proposing to take action on the basis of determinations that have been or will be made in other final agency actions that were taken after providing a full opportunity for notice and comment. Therefore, in this notice, EPA is taking comment only on its conclusions that the determinations with respect to Oklahoma made in the final CSAPR and the determination with respect to Oklahoma that will be made in final action on the SNPR provide a basis for the actions proposed in this notice. EPA provided an opportunity for public comment, in the SNPR, on its proposed determination that Oklahoma interferes with maintenance of the 1997 ozone NAAQS because it is linked to an ozone maintenance receptor identified in the modeling for the final CSAPR. EPA is not taking additional comment on that proposed determination. EPA also provided an ample opportunity to comment, during the CSAPR rulemaking, on the determinations madein the final CSAPR on Oklahoma's significant contribution to nonattainment or interference with maintenance with respect to the 1997 and the 2006 PM2.5NAAQS. EPA is not taking comment on these or any other determinations made in the final CSAPR, or reopening any aspect of CSAPR or the SNPR for public comment. EPA is also not taking comment on any aspect of the final CSAPR, including the methodology used to identify maintenance receptors or the methodology used to identify Oklahoma's specific contribution or interference with maintenance. EPA received numerous comments on the proposed CSAPR and on the associated Notices of Data Availability, and the SNPR, and considered, (or, in the case of the SNPR, is considering), all comments received during the comment periods for these actions.

In this action, EPA is taking comment only on its conclusions that the final CSAPR and the SNPR provide a basis for proposing: (1) Disapproval, and in the alternative proposing approval, for the portion of the Oklahoma SIP revision addressing the interference with maintenance requirement for the 1997 ozone NAAQS; (2) approval of the portion of the Oklahoma SIP revision addressing the significant contribution to nonattainment requirements for the 1997 ozone NAAQS; and (3) approval of the portion of the Oklahoma SIP revision that addresses the significant contribution to nonattainment or interference with maintenance requirements for the 1997 PM2.5NAAQS and the 2006 PM2.5NAAQS.

We are proposing to disapprove and, in the alternative, proposing to approve the portion of the SIP revision submitted on May 1, 2007, to address the interference with maintenance requirement for the 1997 8-hour ozone NAAQS. We intend that our final action (disapproval or approval) will be based on final action for Oklahoma in the supplemental Cross State Air Pollution rule discussed above. We intend to disapprove this portion of the SIP revision if, in the final supplemental CASPR rule, we finalize our determination that Oklahoma emissions are interfering with maintenance of the 1997 ozone NAAQS. EPA is in the course of reviewing and preparing responses to the comments submitted on the SNPR regarding EPA's modeling and the adjustments made to its technical analyses for the final CSAPR. If this review alternatively indicates that Oklahoma should not be subject to and covered by the final supplemental rule, EPA will take final action to approve this portion of Oklahoma's SIP revision for the transport element of 110(a)(2)(D)(i)(I) that Oklahoma emissions are not interfering with maintenance of the 1997 ozone NAAQS. As discussed previously, we are not reopening for comment the analyses done for the final CSAPR nor the SNPR.

We are proposing to approve the portion of the SIP revision submitted on May 1, 2007, to address the significant contribution to nonattainment requirement for the 1997 8-hour ozone NAAQS. Our proposal is based on our determination concluded within the final CSAPR that Oklahoma emissions do not contribute significantly to nonattainment of the 1997 ozone NAAQS. As discussed previously, we are not reopening for comment the analyses done for the final CSAPR nor the SNPR.

We are proposing to approve the portions of the SIP revisions submitted on May 1, 2007, and April 5, 2011, to address the significant contribution to nonattainment or interference with maintenance requirements for the 1997 PM2.5NAAQS and the 2006 PM2.5NAAQS. Our proposal is based on our determination concluded within the final Cross State Air Pollution rule that Oklahoma emissions do not contribute significantly to nonattainment, or interfere with maintenance for the 1997 PM2.5NAAQS and the 2006 PM2.5NAAQS. As discussed previously, we are not reopening for comment the analyses done for the final CSAPR nor the SNPR.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations and disapprove. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to act on state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law.

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

This proposed action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501et seq,because this proposed SIP action under section 110 of the CAA will not in-and-of itself create any new information collection burdens but simply approves or disapproves certain State requirements for inclusion into the SIP. Burden is defined at 5 CFR 1320.3(b).

The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of today's proposed rule on small entities, I certify that this action will not have a significant impact on a substantial number of small entities. This rule does not impose any requirements or create impacts on small entities. This proposed SIP action under section 110 of the CAA will not in-and-of itself create any new requirements but simply approves or disapproves certain State requirements for inclusion into the SIP. Accordingly, it affords no opportunity for EPA to fashion for small entities less burdensome compliance or reporting requirements or timetables or exemptions from all or part of the rule.The fact that the CAA prescribes that various consequences (e.g.,emission limitations) may or will flow from this action does not mean that EPA either can or must conduct a regulatory flexibility analysis for this action. Therefore, this action will not have a significant economic impact on a substantial number of small entities.

We continue to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for State, local, or tribal governments or the private sector. EPA has determined that the proposed disapproval action does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This action proposes to approve or disapprove pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action.

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

This proposed action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely approves or disapproves certain State requirements for inclusion into the SIP and does not alter the relationship or the distribution of power and responsibilities established in the CAA. Thus, Executive Order 13132 does not apply to this action.

This proposed action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP submittals EPA is proposing to approve or disapprove would not 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. Thus, Executive Order 13175 does not apply to this action. Consistent with EPA policy, EPA nonetheless is offering consultation to Tribes regarding this rulemaking action. EPA will respond to relevant comments in the final rulemaking action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This proposed action is not subject to Executive Order 13045 because it is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). This proposed SIP action under section 110 of the CAA will not in-and-of itself create any new regulations but simply approves or disapproves certain State requirements for inclusion into the SIP.

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

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

The EPA believes that this proposed action is not subject to requirements of Section 12(d) of NTTAA because application of those requirements would be inconsistent with the CAA.

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

EPA lacks the discretionary authority to address environmental justice in this proposed action. In reviewing SIP submissions, EPA's role is to approve or disapprove state choices, based on the criteria of the CAA. Accordingly, this action merely proposes to approve or disapprove certain State requirements for inclusion into the SIP under section 110 of the CAA and will not in-and-of itself create any new requirements. Accordingly, it 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.