Effective June 6, 2010, the Secretary of Agriculture (Secretary) implemented within USDA a reorganization of the Office of Communications (OC), led by the Director of OC. This rulemaking amends USDA's delegations of authority at 7 CFR 2.36 principally to reflect this reorganization. Under the reorganized structure, the Director of OC assumes responsibility for USDA's strategic communications planning process. The Director of OC provides Departmental executive leadership in developing and implementing USDA's communications strategies for the Secretary and the agencies, including oversight of creative elements, production, and communications products.

This rule also amends the delegations of authority at 7 CFR 2.36 to reflect that the Director of OC is delegated authority, when required under the National Incident Management System (NIMS), to establish and administer a Joint Information Center (JIC) to provide a structure for developing and delivering incident-related coordinated messages.

This rule relates to internal agency management. Therefore, pursuant to 5 U.S.C. 553(a)(2), notice of proposed rulemaking and opportunity for comment are not required, and this rule may be made effective less than 30 days after publication in theFederal Register. Further, because this rule relates to internal agency management, it is exempt from the provisions of Executive Order 12866. Finally, this action is not a rule as defined by the Regulatory Flexibility Act, 5 U.S.C. 601et seq,and is, therefore, exempt from the provisions of the Act. Accordingly, as authorized by 5 U.S.C. 808, this rule may be made effective upon publication. This rule contains no information collection or recordkeeping requirements under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501et seq).

Accordingly, Subtitle A of Title 7 of the Code of Federal Regulations is amended as set forth below:

This rule relates to internal agency management. Therefore, pursuant to 5 U.S.C. 553(a)(2), notice of proposed rulemaking and opportunity for comment are not required, and this rule may be made effective less than 30 days after publication in theFederal Register. Further, because this rule relates to internal agency management, it is exempt from the provisions of Executive Order No. 12866. Finally, this action is not a rule as defined by the Regulatory Flexibility Act, 5 U.S.C. 601et seq.,and is, therefore, exempt from the provisions of the Act. Accordingly, as authorized by 5 U.S.C. 808, this rule may be made effective upon publication.

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

Accordingly, Subtitle A of Title 7 of the Code of Federal Regulations is amended as set forth below:

This action is governed by Section 608c(16)(A) of the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act” and issued under Marketing Order Nos. 916 and 917, both as amended (7 CFR parts 916 and 917), regulating the handling of nectarines and peaches grown in California, respectively, hereinafter referred to as the “orders.”

USDA is issuing this rule in conformance with Executive Order 12866.

This final rule to terminate the orders has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

This rule terminates Marketing Order 916—the nectarine order—and the peach provisions of Marketing Order 917—the fresh pear and peach order—as well as the pertinent rules and regulations issued thereunder. USDA believes that termination of these programs is appropriate because the programs are no longer favored by industry growers.

The orders authorize regulation of the handling of nectarines and fresh pears and peaches grown in California. Sections 916.64 and 917.61 of the orders require USDA to conduct continuance referenda among growers of these fruits every four years to ascertain continuing support for the orders and their programs. These sections further require USDA to terminate the orders if it finds that the provisions of the orders no longer tend to effectuate the declared policy of the Act. Section 608c(16)(A) of the Act requires USDA to terminate or suspend the operation of any order whenever the order or any provision thereof obstructs or does not tend to effectuate the declared policy of the Act. Finally, USDA is required to notify Congress of the intended terminations not later than 60 days before the date the orders would be terminated.

Continuance referenda were conducted among growers of California nectarines and fresh pears and peaches in January and February 2011. Less than two-thirds of participating growers, by number and production volume, voted in favor of continuing the nectarine and peach orders. By contrast, more than 94 percent of pear growers voted to continue the pear order provisions.

Grower support for the programs was similar in the last referenda, which were conducted in 2003. USDA conducted public listening sessions following the referenda and found that the nectarine and peach orders might continue to benefit the industries if modifications were made to the programs. Subsequently, several revisions were made to the orders and the handling regulations over the last several years. Continuance referendum requirements were suspended for 2007 because the orders had just been amended, and the industries wanted to operate the amended orders for a period of time before voting again on continuance.

Nevertheless, the results of the most recent referenda, as well as feedback from the industries over the last few years, suggest that the nectarine and peach programs no longer meet industry needs and that the benefits of such programs no longer outweigh costs to handlers and growers. USDA believes that the referendum results and industry feedback support termination of the programs.

As stated earlier, pear growers in the most recent referendum, as well as in previous referenda, supported continuance of the pear order provisions, which have been suspended since 1994 (59 FR 10055; March 3, 1994). USDA does not intend to terminate the pear order provisions at this time. The remainder of this document pertains to the termination of the nectarine and peach order provisions only.

The nectarine order has been in effect since 1958, and the peach order since 1939. Operating under the management umbrella of the California Tree Fruit Agreement (CTFA), the orders have provided the California fresh tree fruit industries with authority for grade, size, quality, maturity, pack, and container regulations, as well as the authority for mandatory inspection. The orders also authorize production research and marketing research and development projects, as well as the necessary reporting, recordkeeping, and assessment functions required for operation.

Based on the referendum results and other pertinent factors, USDA suspended the orders' handling regulations on April 19, 2011 (76 FR 21615). The suspended handling regulations consist of minimum quality and inspection requirements for nectarines and peaches marked with the “California Well Matured” label, which is available for use only by handlers complying with prescribed quality and maturity requirements under the orders. As well, all reporting and assessment requirements were suspended.

Originally established to maintain the orderly marketing of California tree fruit, the quality regulations under the order evolved over the years to reflect industry trends. The “California Well Matured” label was developed to define standards for premium quality fruit harvested and packed at its peak to satisfy customer demands. Working with the Federal and Federal-State Inspection Programs, the Nectarine Administrative Committee and Peach Commodity Committee (committees), which administer the day-to-day operations of the programs, recommended variety-specific size and maturity standards that were incorporated into the regulations. These standards helped ensure that the industry marketed and shipped the highest quality fruit, which in turn supported increased returns to growers and handlers. A “utility grade” was defined to allow for the movement of a certain percentage of lesser quality fruit to markets where it could be sold without undermining the industry's overall marketing goals.

Funded through assessments paid by handlers, the committees sponsored production research programs to address grower needs such as pesticide use and development of new fruit varieties. As well, post-harvest handling concerns, such as container and pack configuration, were addressed through committee-funded research. Assessment funds were also used to fund market research and development projects, promoting California tree fruit in both domestic and international markets.

In recent years, changes in the industry led the committees to reduce the number of programs they supported through the orders. Because many customers now establish their own quality standards, the committees felt it was no longer essential to mandate inspection and certification of packed fruit to marketing order standards. During the last few years, only those handlers wishing to use the “California Well Matured” label were required to obtain inspection and certification. With the consolidation of many smaller farms, larger companies have undertaken their own research and promotion programs, thus minimizing the desirability of committee-funded generic programs.

The industries proposed several amendments to the orders, which were effectuated in 2006 and 2007 (71 FR 41345; July 21, 2006). The amendments modernized the orders to streamline administration of the programs. The district boundaries within the regulated production areas were redefined, and the committee structures and nomination procedures were modified to provide greater opportunities for participation in committee activities by industry members.

Despite USDA efforts to help refine the programs over the past several years, growers have continued to express their belief that the programs no longer meet their needs. These referendum results demonstrate a lack of grower support needed to carry out the objectives of the Act. Thus, it has been determined that the provisions of the orders no longer tend to effectuate the declared policy of the Act and should be terminated.

Specifically, part 916, regulating the handling of nectarines grown in California is removed from the Code of Federal Regulations. In part 917, which regulates the handling of both pears and peaches, §§ 916.8, 917.22, 917.150, 917.258, 917.259, 917.442, and 917.459, which relate solely to peaches, are removed. §§ 917.4, 917.5, 917.6, 917.15, 917.20, 917.24, 917.25, 917.26, 917.28, 917.29, 917.34, 917.35, 917.37, 917.100, 917.119, and 917.143 are revised to remove references to peaches and to conform to removal of other sections. In some sections of part 917, language relating to the regulation of pears is currently suspended. Such suspensions are lifted to facilitate revision of these sections. Finally, the remaining provisions and administrative rules and regulations under part 917 are suspended indefinitely.

Pursuant to the requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this rule on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 97 California nectarine and peach handlers subject to regulation under the orders covering nectarines and peaches grown in California, and about 447 growers of these fruits in California. Small agricultural service firms, which include handlers, are defined by the Small Business Administration (SBA)(13 CFR 121.201) as those having annual receipts of less than $7,000,000, and small agricultural growers are defined as those having annual receipts of less than $750,000. A majority of these handlers and growers may be classified as small entities.

For the 2010 marketing season, the committees' staff estimated that the average handler price received was $10.50 per container or container equivalent of nectarines or peaches. A handler would have to ship at least 666,667 containers to have annual receipts of $7,000,000. Given data on shipments maintained by the committees' staff and the average handler price received during the 2010 season, the committees' staff estimates that approximately 46 percent of handlers in the industry would be considered small entities.

For the 2010 marketing season, the committees' staff estimated the average grower price received was $5.50 per container or container equivalent for nectarines and peaches. A grower would have to produce at least 136,364 containers of nectarines and peaches to have annual receipts of $750,000. Given data maintained by the committees' staff and the average grower price received during the 2010 season, the committees' staff estimates that more than 80 percent of the growers within the industry would be considered small entities.

This rule terminates the Federal marketing orders for nectarines and peaches grown in California, and the rules and regulations issued thereunder. USDA believes that the orders no longer meet the needs of growers and handlers. The results of recent grower referenda and experience with the industries support order terminations.

Sections 916.64 and 917.61 of the orders provide that USDA shall terminate or suspend any or all provisions of the orders when a finding is made that the orders do not tend to effectuate the declared policy of the Act. Furthermore, § 608c(16)(A) of the Act provides that USDA shall terminate or suspend the operation of any order whenever the order or provision thereof obstructs or does not tend to effectuate the declared policy of the Act. An additional provision requires that Congress be notified not later than 60 days before the date the orders would be terminated.

Although marketing order requirements are applied to handlers, the costs of such requirements are often passed on to growers. Termination of the orders, and the resulting regulatory relaxation, would therefore be expected to reduce costs for both handlers and growers.

As an alternative to this rule, AMS considered not terminating the nectarine and peach order provisions. In that case, the industries could have recommended further refinements to the orders and the handling regulations in order to meet current marketing needs. However, such changes made to the programs over the last several years have failed to improve the programs enough to warrant continuing grower support. Therefore, this alternative was rejected, and AMS recommended that the programs be terminated.

In accordance with the Paperwork Reduction Act of 1995, (44 U.S.C. Chapter 35), the information collection requirements being terminated were approved previously by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0189, Generic Fruit Crops. Termination of the reporting requirements under the orders would reduce the reporting and recordkeeping burden on California nectarine and peach handlers by 339.45 hours, and should further reduce industry expenses. Since handlers would no longer be required to file forms with the Committee, this final rule does not impose any additional reporting or recordkeeping requirements on either small or large entities.

On February 25, 2011, AMS published a notice and request for comments regarding the request for OMB approval of a new information collection for nectarine and peach handlers (76 FR 10555). Five new forms were proposed for the collection of industry information that would have facilitated administration of the orders. Such information collection would have increased the annual reporting burden for industry handlers by 2,878.70 hours. The request for OMB approval of the new information collection has been withdrawn.

As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

In addition, USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule.

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

The grower referendum was well publicized in the production area, and referendum ballots were mailed to all known growers of nectarines and peaches in California. As well, all interested persons have been invited to attend the committees' meetings over the years and participate in discussions regarding the programs developed under the orders.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at:http://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide.Any questions about the compliance guide should be sent to Laurel May at the previously mentioned address in theFOR FURTHER INFORMATION CONTACTsection.

A proposed rule inviting comments regarding the termination of nectarines and peaches was published in theFederal Registeron June 2, 2011 (75 FR 31888). The rule was made available by the Committees to handlers and producers. In addition the rule was made available through the Internet by the USDA and the office of theFederal Register. The rule provided a 15 day comment period which ended on June 17, 2011. No comments were received.

Based on the foregoing, and pursuant to § 608c(16)(A) of the Act and §§ 916.64 and 917.61 of the orders, USDA is terminating the orders, as they do not tend to effectuate the declared policy of the Act. USDA hereby appoints a Trustee Oversight Committee to conclude and liquidate the affairs of the Committee, and to continue in that capacity until discharged by USDA. The appointed Committee members are Russ Tavlan (Vice Chairman), Mike Reimer, Mark Bybee, and Rick Jackson (Chairman) of the Peach Commodity Committee and Casey Jones, Rick Jackson, Jeff Bolt (Vice Chairman) and Rod Milton (Chairman) of the Nectarine Administrative Committee, as trustees they will oversee this liquidation.

Section 8c(16)(A) of the Act requires USDA to notify Congress at least 60 days before terminating a Federal marketing order program. USDA notified Congress on July 5, 2011 of its intention to terminate this marketing order.

It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in theFederal Register(5 U.S.C. 553) because (1) This action relieves restrictions on handlers by terminating the requirements of the nectarine and peach orders, (2) A proposed rule inviting comments regarding the termination of nectarines and Peaches was published in theFederal Registeron June 2, 2011 (75 FR 31888) and no comments were received, (3) all handling regulations have been suspended under the order for nectarineand peaches since April 19, 2011, and (4) no useful purpose would be served by delaying the effective date.

For the reasons set forth in the preamble, 7 CFR part 916 is removed and 7 CFR part 917 is amended as follows:

Discussion

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD No. 2010-0117-E, dated June 16, 2010, to correct an unsafe condition for the specified Eurocopter model helicopters. EASA advises that the equipment manufacturer (Goodrich) has identified two servocontrol production batches as noncompliant with swaging of the end fitting ball joints on main rotor servocontrols. EASA states that investigations have revealed that the swaging load applied to the ball joints in these two batches was 1.3 metric tons, instead of the specified 13 metric tons, which could lead the ball joints to slip in service. The slipping of the ball joint of the servocontrol lower end fitting does not significantly affect the service life of the end fitting. However, the slipping of the ball joint of the servocontrol upper end fitting can lead to a significant reduction in the service life of the end fitting. This condition, if not corrected, could lead to failure of the upper end fitting ball joint of a main rotor servocontrol and result in loss of control of the helicopter.

We refer to flight hours as hours time-in-service (TIS).

Eurocopter has issued an Emergency Alert Service Bulletin (EASB), dated June 15, 2010, with two numbers: No. 67.00.40 for FAA type-certificated Models AS332C, L, L1, and L2 and for Models AS332C1, B, B1, F1, M, and M1 that are not FAA type certificated, and No. 67.00.27 for Models AS532AC, AL, SC, UC, UE, UL, A2, and U2 that are not FAA type certificated. The EASB specifies checking and restoring conformity of the affected end fitting ball joints of the servocontrols. The EASB contains Appendix 1 and 2, Goodrich Service Bulletins No. SC7203-67-31-02 and No. SC7221-67-39-02, both dated May 11, 2010, which specify the process for comforming each affected servocontrol. EASA classified this EASB as mandatory and issued Emergency AD No. 2010-0117-E, dated June 16, 2010, to ensure the continued airworthiness of these helicopters.

These helicopters have been approved by the aviation authority of France and are approved for operation in the United States. Pursuant to our bilateral agreement with France, EASA, their technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA and determined theunsafe condition exists and is likely to exist or develop on other helicopters of these same type designs.

Eurocopter states that there are currently no helicopters with the affected part installed in the United States. However, this rule is necessary to ensure that the described unsafe condition is addressed in the event this part is installed on any helicopter in the future.

There are no costs of compliance assuming that there are no helicopters on the U.S. Registry with the affected part installed as represented by the manufacturer.

This unsafe condition is likely to exist or develop on other helicopters of these same type designs. Therefore, this AD is being issued to prevent failure of the upper end fitting ball joints of the main rotor servocontrols, failure of the upper end fittings, and loss of control of the helicopter. Since there are currently no U.S. registered helicopters with the affected part installed, we have determined that notice and opportunity for prior public comment before issuing this AD are unnecessary and that good cause exists for making this amendment effective in less than 30 days.

This AD requires:

• Within 15 hours TIS, unless accomplished previously, using a feeler gage, measuring the lateral play between the outer ring of the ball joint and each of the two faces of the upper end fitting.

• If the lateral play is greater than or equal to 1 millimeter (MM) (0.04 inch) and the servocontrol has accumulated 825 or more hours TIS, replacing it with an airworthy servocontrol before further flight.

• If the lateral play is greater than or equal to 1 mm (0.04 inch) and the servocontrol has accumulated less than 825 hours TIS, on or before the servocontrol accumulates 825 hours TIS, replacing it with an airworthy servocontrol.

• If the lateral play is less than 1 mm (0.04 inch), thereafter, at intervals not to exceed 300 hours TIS, repeating the inspection. At each 300-hour TIS inspection, if the lateral play is greater than or equal to 1 mm (0.04 inch), within 525 hours TIS, replacing the servocontrol with an airworthy servocontrol.

• Replacing the servocontrol with an airworthy servocontrol that is not included in the AD applicability or that is modified with a letter “R” after the S/N constitutes terminating action for the requirements of this AD.

Because these affected parts have an unlimited operational fatigue life with no previous fatigue inspections required, the replacement criteria of this AD assumes that the affected servocontrols found to have greater than or equal to 1 MM of lateral play have already been operated for at least 825 hours TIS with this fatigue damage and must be replaced at 825 hours TIS or if they have already accumulated 825 or more hours TIS, within 15 hours TIS of the effective date of this AD. However, if a subsequent 300-hour TIS repetitive inspection required by this AD reveals lateral play of 1 MM or greater, those affected servocontrols may be operated an additional 525 hours TIS because the previous 300-hours TIS inspection established the new baseline for the 825 hours TIS thereby allowing an additional 525 hours TIS before replacement.

This AD is a final rule that involves requirements that affect flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to submit any written data, views, or arguments regarding this AD. Send your comments to an address listed underADDRESSES. Include FAA Docket No. “FAA-2011-0939; Directorate Identifier 2010-SW-067-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD. We will consider all comments received by the closing date and may amend the AD in light 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 with FAA personnel concerning this AD. Using the search function of the docket Web site, you can find and read the comments to any of our dockets, including the name of the individual who sent the comment. You may review the DOT's complete Privacy Act Statement in theFederal Registerpublished on April 11, 2000 (65 FR 19477 78).

We have determined that notice and prior public comment are unnecessary in promulgating this regulation; therefore, it can be issued immediately to correct an unsafe condition in aircraft because none of the model helicopters that are registered in the United States have the affected part installed. We have also determined that this regulation is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the AD docket.

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.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

On July 8, 2011, the FAA issued Emergency AD 2011-15-51 for the specified model helicopters, which requires inspecting certain servos to determine whether the shaft turns independently of the nut or the clevis assembly. If the shaft turns independently, the AD requires replacing the servo with an airworthy servo. If the shaft does not turn independently, the AD requires inspecting to determine the condition of the lock washers. If at least one lock washer is not bent flush against a flat surface of the nut and at least one tab of the lock washer is not bent flush against a flat surface of the clevis assembly, the AD requires replacing the servo with an airworthy servo. If any tab of the lock washer is not bent flush against either a flat surface of the nut or clevis assembly, the AD requires bending the tab flush against a flat surface. The AD also requires reidentifying the servo by metal-impression stamping or by vibro-etching “67.01” onto the modification plate. Also, the AD requires before installing a servo with a part number or serial number identified in this AD, not identified by “67-01” on the modification plate, inspecting and reidentifying it by following the requirements of this AD. That action was prompted by a report that a quality escape by a supplier has occurred and certain servos may have a loose nut,shaft, and clevis assembly due to improper lock-washer installation. An investigation after an accident revealed the clevis nut on the servo was loose. This condition, if not corrected, could result in a malfunction of a servo in the flight control system and subsequent loss of control of the helicopter.

Transport Canada, the airworthiness authority for Canada, notified the FAA that an unsafe condition may exist on these helicopter models. Transport Canada advises that a quality escape by a supplier has occurred, and a number of servos may have a loose nut, shaft, and clevis assembly. Transport Canada states in its AD that the loose connection is due to improper lock-washer installation, which is not traceable or identifiable except by inspection. The authority also states a disconnect of the affected parts may lead to loss of control of the helicopter.

Bell has issued Alert Service Bulletin (ASB) 407-11-96 and 427-11-35, both dated June 29, 2011, which specify the part numbers and serial numbers of the affected servos and refer to ASB 407-05-70, Revision A, dated November 10, 2005; ASB 427-05-12, Revision A, dated November 14, 2005; with HR Textron Service Bulletin (SB) 41011300-67-01, Revision 2, dated November 9, 2005; HR Textron SB 41011400-67-01, Revision 2, dated November 9, 2005; and HR Textron SB 41011700-67-01, Revision 2, dated November 9, 2005, attached. The ASBs also specify reidentifying the servos with a “67-01” on the modification plate indicating the inspection procedures were followed.

Transport Canada classified the ASBs as mandatory and issued AD No. CF-2011-17, dated June 30, 2011, to ensure the continued airworthiness of these helicopters.

This helicopter model is manufactured in Canada and is type certificated for operation in the United States under the provisions of 14 CFR 21.29 and the applicable bilateral agreement. Pursuant to the applicable bilateral agreement, Transport Canada has kept us informed of the situation described above. We have examined the findings of Transport Canada, reviewed all available information, and determined that AD action is necessary for helicopters of this type design that are certificated for operation in the United States.

Since the unsafe condition described is likely to exist or develop on other Bell Model 407 and 427 helicopters of these same type designs, the FAA issued Emergency AD 2011-15-51 to prevent a malfunction of a servo in the flight control system and subsequent loss of control of the helicopter. The AD requires before further flight for certain affected servos and within 25 hours time-in-service for certain other affected servos, identified by a serial number, retracting the boot and inspecting the servo as follows:

• Applying only hand pressure, determining whether the nut, shaft, or clevis assembly turns independently. If the shaft turns independently of the nut or the clevis assembly, before further flight, replacing the servo with an airworthy servo.

• If the shaft does not turn independently, inspecting to determine whether at least one tab of a lock washer is bent flush against a flat surface of the nut and at least one tab of the lock washer is bent flush against a flat surface of the clevis assembly.

• If at least one lock washer tab is not aligned and bent flush with a flat surface of the nut and at least one lock washer tab is not aligned and bent flush with a flat surface of the clevis assembly, before further flight, replacing the servo with an airworthy servo.

• If any tab of the lock washer is not bent flush against either a flat surface of the nut or clevis assembly, bend the tab flush against a flat surface.

• Reidentifying the servo by metal-impression stamping or by vibro-etching “67.01” onto the modification plate.

• Before installing a servo with a P/N and S/N identified in this AD, not identified by “67-01” on the modification plate, inspecting it by following the requirements of this AD.

This AD differs from the Transport Canada AD in that we do not require that the servo be returned to the manufacturer. Also, we do not limit the applicability to specific serial-numbered helicopters. We have specified the inspection requirements rather than referring to the applicable service bulletins. The AD requires that the servo be replaced before further flight, and the Transport Canada AD refers to the ASB, which requires that the servo be replaced within 300 hours time-in-service.

The short compliance time involved is required because the previously described critical unsafe condition can adversely affect the controllability of the helicopter. Therefore, inspecting the servos for specified conditions and replacing any affected servo, as necessary, are required before further flight, and this AD must be issued immediately.

Since it was found that immediate corrective action was required, notice and opportunity for prior public comment thereon were impracticable and contrary to the public interest, and good cause existed to make the AD effective immediately by individual letters issued on July 8, 2011, to all known U.S. owners and operators of Bell Model 407 and 427 helicopters. These conditions still exist, and the AD is hereby published in theFederal Registeras an amendment to 14 CFR 39.13 to make it effective to all persons.

We estimate that this AD will affect 582 helicopters of U.S. registry, and inspecting or replacing an affected servo will take about 2 work hours to inspect and 2 work hours to replace per helicopter at an average labor rate of $85 per work hour. Required parts will cost about $33,000 per helicopter. Based on these figures, we estimate the total cost impact of the AD on U.S. operators to be $164,940, assuming 2 servos are replaced on the entire fleet.

This AD is a final rule that involves requirements that affect flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to submit any written data, views, or arguments regarding this AD. Send your comments to an address listed underADDRESSES. Include “Docket No. FAA-2011-1035; Directorate Identifier 2011-SW-038-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD. We will consider all comments received by the closing date and may amend the AD in light 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 with FAA personnel concerning this AD. Using the search function of our docket Web site, you can find and read the comments to any of our dockets, including the name of the individual who sent the comment. You may review the DOT's complete Privacy Act Statement in theFederal Registerpublished on April 11, 2000 (65 FR 19477-78).

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

For the reasons discussed above, I certify that the 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); and

3. 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.

We prepared an economic evaluation of the estimated costs to comply with this AD. See the AD docket to examine the economic evaluation.

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.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

Discussion

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD No. 2010-0030, dated February 26, 2010, to correct an unsafe condition for the Eurocopter Model EC225LP helicopters. EASA reports that on several newly-produced helicopters, some screws and nuts that attach the frames of the pilot's and co-pilot's seats to the floor were missing. Further investigation has shown that some of the cup washers that need to be used in installing the countersunk head screws, which attach the pilot's and co-pilot's seat frames to the floor, were missing. EASA states that this condition, if not corrected, reduces the seat attachments strength, and it could result in no longer retaining the seats in place in the event of an emergency or hard landing.

We refer to flight hours as hours time-in-service.

Eurocopter has issued Alert Service Bulletin No. 53A020, Revision 0, dated February 17, 2010 (ASB), which specifies checking for the presence of screws and nuts on each side of the pilot's and co-pilot's seat mount. If one screw or one nut is missing, the ASB specifies removing the affected seat, checking for cup washers, and performing the specified corrective action to return the seat to conformity.

This helicopter has been approved by the aviation authority of France and is approved for operation in the United States. Pursuant to our bilateral agreement with France, EASA, their technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other helicopters of this same type designs.

There are no helicopters of this type currently registered in the United States. However, this rule is necessary to ensure that the described unsafe condition is addressed if any of these helicopters are placed on the U.S. Registry in the future.

There are no costs of compliance since there are no helicopters of this type design on the U.S. Registry.

Since there are currently no affected U.S. registered helicopters, we have determined that notice and opportunity for prior public comment before issuing this AD are unnecessary and that good cause exists for making this amendment effective in less than 30 days.

This unsafe condition is likely to exist or develop on other helicopters of the same type design that may become registered in the United States. Therefore, this AD is being issued to require, within 85 hours time-in-service (TIS), unless accomplished previously, inspecting for the presence of 4 screws and 4 nuts on each side of the copilot's seat mount and 1 screw and 1 nut on each side of the pilot's seat mount. If any screw, nut, or cup washer is missing, this AD requires removing the seat and mount and, before further flight, counter sinking the hole and installing airworthy parts and replacing the mount and seat. The actions must be done by following specified portions of the ASB described previously.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under theADDRESSES. Include “Docket No. FAA-2011-1074; Directorate Identifier 2010 SW 028 AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

We will post all comments we receive, without change, tohttp://www.regulations.gov,including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this AD. Using the search function of the docket web site, you can find and read the comments to any of our dockets, including the name of the individual who sent the comment. You may review the DOT's complete Privacy Act Statement in theFederal Registerpublished on April 11, 2000 (65 FR 19477 78).

We have determined that notice and prior public comment are unnecessary in promulgating this regulation; therefore, it can be issued immediately to correct an unsafe condition in aircraft since none of these model helicopters are registered in the United States. We have also determined that this regulation is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would be significant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the AD docket.

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.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

This amendment adopts a new AD for Sikorsky Model S-92A helicopters. This action requires making pen and ink changes, inserting a copy of this AD, or inserting certain temporary revisions into the Limitations section of the RFM limiting the maximum groundspeed for a normal landing or takeoff to 50 knots for helicopters with a certain serial-numbered actuator installed. The temporary revisions to the Limitations section of the RFM also require replacing the actuators if the landing exceeds the 50 knot rolling groundspeed before further flight or before towing the helicopter; rolling ground taxi operations are permitted. Replacing the affected actuator with a modified actuator is terminating action for the requirements of this AD. The manufacturer states that it anticipates retrofitting the fleet with a modified actuator within 3 years. This amendment is prompted by a report that certain actuators were manufacturedwith a down-lock pin that does not meet the specified minimum hardness requirements, which could lead to a landing gear collapse following a roll-on landing that exceeds 50 knots. These actions are intended to prevent a landing gear collapse and subsequent loss of control of the helicopter.

We have reviewed Sikorsky Alert Service Bulletin No. 92-32-001, dated May 2, 2008 (ASB), which describes the unsafe condition, its cause, and the temporary operating restrictions intended to mitigate the unsafe condition until modified actuators are available. The ASB references and includes Embraer Liebherr Eqiupamentos do Brasil Service Bulletin No. 2392-0850-32-02 Change No. 1, dated May 15, 2008, which specifies procedures for replacing the down-lock key in the affected actuators.

This unsafe condition is likely to exist or develop on other helicopters of the same type design. Therefore, this AD is being issued to limit the maximum rolling groundspeed for a normal landing or takeoff to 50 knots rolling groundspeed. If the limitation is exceeded on landing, the actuator must be replaced with a modified actuator before further flight or towing operation; rolling ground taxi operations are permitted. This AD requires making pen and ink changes, inserting a copy of this AD, or inserting the following temporary revisions into the Limitations section of the RFM: SA S92A-RFM-000, Revision 2; SA S92A-RFM-002, Revision 6; SA S92A-RFM-003, Revision 5; SA S92A-RFM-004, Revision 5; SA S92A-RFM-005, Revision 4; or SA S92A-RFM-006, Revision 3; all approved on January 7, 2011. Instead of limiting the groundspeed, replacing each actuator without the modification letter “B” stamped on the nameplate with an airworthy modified actuator with a letter “B” stamped on the nameplate constitutes terminating action for the requirements of this AD.

The short compliance time of before further flight is required because the previously described critical unsafe condition can adversely affect the structural integrity and controllability of the helicopter. Therefore, limiting the maximum groundspeed for normal landing or takeoff to 50 knots to reduce the likelihood of a landing gear collapse is required before further flight and this AD must be issued immediately.

Since a situation exists that requires the immediate adoption of this regulation, it is found that notice and opportunity for prior public comment hereon are impracticable and that good cause exists for making this amendment effective in less than 30 days.

We estimate that this AD will affect 42 helicopters. It will take a minimal amount of time to make the limitation changes. If the operator replaces an affected actuator with a modified actuator, it will take about 8 work hours at an average labor rate of $85 per work hour. Required parts will cost about $7,841 per helicopter. Based on these figures, we estimate the total cost impact of the AD on U.S. operators to be $357,882, assuming all the helicopter operators install modified actuators.

This AD is a final rule that involves requirements that affect flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to submit any written data, views, or arguments regarding this AD. Send your comments to an address listed underADDRESSES. Include “Docket No. FAA-2011-0792; Directorate Identifier 2009-SW-19-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD. We will consider all comments received by the closing date and may amend the AD in light 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 with FAA personnel concerning this AD. Using the search function of our docket Web site, you can find and read the comments to any of our dockets, including the name of the individual who sent the comment. You may review the DOT's complete Privacy Act Statement in theFederal Registerpublished on April 11, 2000 (65 FR 19477-78).

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

For the reasons discussed above, I certify that the 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); and

3. 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.

We prepared an economic evaluation of the estimated costs to comply with this AD. See the AD docket to examine the economic evaluation.

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.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

We issued a Notice of Proposed Rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to Erickson Air-Crane Model S-64F helicopters on September 3, 2010. That NPRM was published in theFederal Registeron September 16, 2010 (75 FR 56487). That NPRM proposed to require, at specified intervals, certain visual inspections of the swashplate for a crack. Also, the AD proposed, at specified intervals a fluorescent-penetrant inspection (FPI) of the swashplate for a crack. If a crack is found, that NPRM proposed, before further flight, replacing the swashplate with an airworthy swashplate.

We gave the public an opportunity to participate in developing this AD. We received no comment on the NPRM or on our determination of the cost to the public. Therefore, based on our review and evaluation of the available data, we have determined that air safety and the public interest require adopting the AD as proposed.

We estimate that this AD will affect 7 helicopters of U.S. registry and will take about:

• .5 hour for the visual inspection;

• 1 hour for the 10-power or higher magnifying glass inspection;

• 35 hours for the 1,000-hour FPI; and

• 32 hours to replace a swashplate at an average labor rate of $85 per work hour.

Required parts will cost about $25,000 per helicopter. Based on these figures, we estimate the cost of this AD on U.S. operators is $229,145, assuming 40 15-hour visual inspections; 4 150-hour 10-power magnifying glass inspections; 1 1000-hour FPI and 1 swashplate replacement for each helicopter for the entire fleet of S-64F helicopters for each year.

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

For the reasons discussed above, I certify that the 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); and

3. 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, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA AD 2009-0023, dated February 20, 2009, to correct an unsafe condition for the Eurocopter Model EC225LP helicopters. EASA advises that two fatigue cracks were discovered in the dome fairing attachment on the dome fairing support due to the loss of the tightening torque of the screws which secure the assembly. Since then, Eurocopter has developed a modification (MOD) which includes installation of redesigned parts with “modified geometrics” in the main rotor hub area.

Eurocopter has issued Emergency Alert Service Bulletin No. 05A005, Revision 1, dated February 3, 2009 (EASB 05A005), which applies to FAA type-certificated Model EC225LP helicopters and non-FAA type certificated Model EC725AP military helicopters. Eurocopter also issued Service Bulletin No. 62-007, Revision 1, dated July 10, 2009, which applies to FAA type-certificated Model EC225LP helicopters, and specifies reinforcing the cone restrainer support, MOD 0743718. EASB 05A005 specifies checking the dome fairing support for a crack and readjusting the tightening torque of the dome fairing-to-dome fairing support attachment screws. If a crack is found, the EASB specifies complying with MOD 0743718 before resuming flight. Eurocopter states that installing this MOD exempts the operator from the monitoring requirements. They also state that this MOD reinforces the coning stop support and improves the dome fairing support attachment on the coning stop support. The EASA classified this service information as mandatory and issued EASA AD No. 2009-0023, dated February 20, 2009, to ensure the continued airworthiness of these helicopters.

This helicopter model has been approved by the aviation authority of France and is approved for operation in the United States. Pursuant to our bilateral agreement with France, EASA, their technical representative, has notified us of the unsafe condition described in the EASA AD. We are issuing this AD because we evaluated all information provided by EASA and determined an unsafe condition exists and is likely to exist or develop on other helicopters of the same type design.

There are no products of this type currently registered in the United States. However, this rule is necessary to ensure that the described unsafe condition is addressed if any of these products are placed on the U.S. Registry in the future.

This AD differs from the EASA AD in that we:

• Use “hours time-in-service” rather than “flight hours.”

• Do not impose a calendar date compliance time.

• Use the term “inspect” rather than “check.”

There are no costs of compliance since there are no helicopters of this type design on the U.S. Registry.

Since there are currently no affected U.S. registered helicopters, we have determined that notice and opportunity for prior public comment before issuing this AD are unnecessary and that good cause exists for making this amendment effective in less than 30 days.

This unsafe condition is likely to exist or develop on other helicopters of the same type design registered in the United States. Therefore, this AD is being issued to prevent loss of the dome fairing in flight, causing damage to the helicopter and injury to people on the ground. This AD requires inspecting for a crack in the dome fairing support at the dome fairing attachment points. If a crack is found, this AD requires replacing the dome fairing support and the associated coning stop support assembly before further flight. If no crack is found, this AD requires repetitive inspections and retorquing the screws securing the dome fairing support to the dome fairing at specified intervals. This AD is prompted by the discovery of two fatigue cracks in the dome fairing attachment on the dome fairing support. Accomplishing Eurocopter MOD 0743718 constitutes terminating action for the requirements of this AD.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under theADDRESSES. Include “Docket No. FAA-2011-1033; Directorate Identifier 2009-SW-43-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

We will post all comments we receive, without change, tohttp://www.regulations.gov, including any personal information you provide. We will also post a report summarizing each substantive verbal contact with FAA personnel concerning this AD. Using the search function of the docket web site, you can find and read the comments to any of our dockets, including the name of the individual who sent the comment. You may review the DOT's complete Privacy Act Statement in theFederal Registerpublished on April 11, 2000 (65 FR 19477-78).

We have determined that notice and prior public comment are unnecessary in promulgating this regulation; therefore, it can be issued immediately to correct an unsafe condition in aircraft since none of these model helicopters are registered in the United States. We have also determined that this regulation is not a “significant regulatory action” under Executive Order 12866. It has been determined further that this action involves an emergency regulation under DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979). If it is determined that this emergency regulation otherwise would besignificant under DOT Regulatory Policies and Procedures, a final regulatory evaluation will be prepared and placed in the AD docket.

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.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2011-35, dated August 29, 2011 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

The action includes inspecting for any cracks. The corrective action is replacing the forward lug of the MLG upper member with a new forward lug if any crack is found. You may obtain further information by examining the MCAI in the AD docket.

Bombardier has issued Alert Service Bulletin 215-A548, dated July 15, 2011; Alert Service Bulletin 215-A4451, dated July 15, 2011; Alert Service Bulletin 215-A547, dated July 8, 2011; and Alert Service Bulletin 215-A4450, dated July 8, 2011. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with the State of Design Authority, we have been notified of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all pertinent information and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

We have reviewed the MCAI and related service information and, in general, agree with their substance. But we might have found it necessary to use different words from those in the MCAI to ensure the AD is clear for U.S. operators and is enforceable. In making these changes, we do not intend to differ substantively from the information provided in the MCAI and related service information.

We might also have required different actions in this AD from those in the MCAI in order to follow FAA policies. Any such differences are highlighted in a Note within the AD.

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because multiple cracks were reported on the forward lug of the upper member of the MLG. An investigation determined the cause to be fatigue cracking at the base of the step radium with multiple initiation sites. The fatigue cracking could adversely affect the structural integrity of the MLG during takeoff or landing. Therefore, we determined that notice and opportunity for public comment before issuing this AD are impracticable and that good cause exists for making this amendment effective in fewer than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under theADDRESSESsection. Include “Docket No. FAA-2011-1096; Directorate Identifier 2011-NM-185-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

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

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

For the reasons discussed above, I certify this AD:

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); and

3. 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.

We prepared a regulatory evaluation of the estimated costs to comply with this AD and placed it in the AD docket.

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

Based on the European Aviation Safety Agency (EASA) AD No. 2009-0198 E, dated September 16, 2009, we issued Emergency AD 2009-19-51, to all known U.S. owners and operators of Agusta Model AB139 and AW139 helicopters. We then issued a Final rule; request for comments for AD 2009-19-51, Amendment 39-16129, on January 11, 2010 (75 FR 3615, January 22, 2010). That AD requires inspecting the tailboom panels for debonding and if the debonding area exceeds a certain limit, repairing the tailboom. That action was prompted by a Model AW139 helicopter tailboom bending and collapsing during taxiing. That condition, if not corrected, could result in failure of a tailboom and subsequent loss of control of the helicopter.

Since issuing AD 2009-19-51, we have determined that additional inspections are needed on certain tailboom configurations. This determination was based on findings from the previous inspections required by AD 2009-19-51. Also, the manufacturer has introduced tailboom reinforcement structural retro modification (MOD), part number (P/N) 3G5309P01812, to reinforce the structure of the tailboom.

After reports of debonding of fuselage tailboom panels, EASA, which is the Technical Agent for the Member States of the European Union, issued the following ADs to correct an unsafe condition for the specified Agusta model helicopters:

• No. 2009-0234-E, dated October 28, 2009, introduced additional inspections of the tailboom panels.

• No. 2009-0234-E R1, dated October 29, 2009, added some serial numbers.

• No. 2011-0019, dated February 3, 2011, limits the applicability only to those helicopters with tailboom assemblies that have not been modified according to MOD, P/N 3G5309P01812, and requires modifying the tailboom assemblies with MOD, P/N 3G5309P01812, and to contact Agusta if there is an area of debond that exceeds the specified limits.

Agusta has issued Alert Bollettino Tecnico (ABT) No. 139-195, Revision B, dated February 2, 2010, which supersedes ABT No. 139-193 and No. 139-194, both dated September 3, 2009. Based on findings from the inspections specified in ABT No. 139-193 and No. 139-194 on specific tailboom configurations, the revised ABT specifies a tighter inspection schedule and more frequent tapping inspections on two specific areas. The revised ABT retains the 50-flight hour tapping inspection specified by the superseded ABTs for inspecting the affected tailboom panels for signs of debonding and contacting the manufacturer for repair instructions. EASA classified the revised ABT as mandatory and issued AD No. 2009-0234-E, dated October 28, 2009, and subsequently 2009-0234-E R1, dated October 29, 2009, and 2011-0019 dated February 3, 2011, to ensure the continued airworthiness of these helicopters.

These helicopters have been approved by the aviation authority of Italy and are approved for operation in the United States. Pursuant to our bilateral agreement with Italy, EASA, their technical representative, has notified us of the unsafe condition described in AD 2011-0019. We are issuing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely toexist or develop on other helicopters of these same type designs.

We refer to flight hours as hours time-in-service (TIS). Also, we do not require you to contact the manufacturer. Finally, we require the inspection on both sides of the tailboom, and the EASA AD only requires the inspection on the right side of the tailboom. We do not require a specific part-numbered platform to do the inspections, and the EASA AD requires using Platform (CG-07-00), P/N 2004-5007-B or approved equivalent.

The comment period for AD 2009-19-51 closed on March 23, 2010. We have considered the two comments received from one commenter.

The commenter states that Agusta ABT No. 139-195, Revision A, dated October 27, 2009, supersedes ABT No. 139-193 and 139-194, and recommends referencing ABT 139-195 in the AD. The commenter also recommends relocating Note 1 because the current location in the AD can cause confusion.

We agree with the commenter, but ABT No. 139-195 has been revised to Revision B. Therefore, we reference ABT 139-195, Revision B, dated February 2, 2010, in this superseding AD. The comment about relocating Note 1 is not adopted because the ABT is referenced in the accomplishment instructions of this AD rather than in a Note.

This unsafe condition is likely to exist or develop on other helicopters of the same type design. Therefore, this AD is being issued to detect damage in the tailboom to prevent failure of a tailboom and subsequent loss of control of a helicopter. This AD requires a daily check of each tailboom panel to detect outer skin bulging or deformation of the tailboom. This AD allows a pilot holding at least a private pilot certificate to perform this check because it involves only a visual check for outer skin bulging or deformation of the tailboom and does not require the use of tools and can be performed equally well by a pilot or a mechanic. If there is bulging or deformation on a skin panel, this AD requires a mechanic to use an aluminum hammer, P/N 109-3101-58-2, to tap inspect the area around the bulge or deformation for debonding. This AD also requires tap inspecting the tailboom panels for debonding at 25-hour TIS intervals in certain areas on three part-numbered tail assemblies with certain serial numbers and at 50-hour TIS intervals for all affected tail assemblies except those that are required to be inspected within this 25-hour TIS interval. If there is any debonding that is not within the acceptable limits, before further flight, installing tailboom structural reinforcement MOD, P/N 3G5309P01812, is required. If there is any debonding that is within the acceptable limits, before further flight, repairing the tailboom is required. Modifying the tailboom per MOD, P/N 3G5309P01812, is terminating action for the requirements of this AD.

The short compliance time involved is required because the previously described critical unsafe condition can adversely affect the controllability and structural integrity of the helicopter. Therefore, because a daily check of the tailboom panels for outer skin bulgings or deformation and the tailboom panel inspections for debonding at 25-hour and 50-hour TIS is a very short time interval, this AD must be issued immediately.

Since a situation exists that requires the immediate adoption of this regulation, it is found that notice and opportunity for prior public comment hereon are impracticable, and that good cause exists for making this amendment effective in less than 30 days.

We estimate that this AD will affect about 76 helicopters. We also estimate that it will take a minimal amount of time to do the daily check and about 2 work-hours per recurring inspection per helicopter to inspect the tailboom panels for debonding. The average labor rate is $85 per work-hour. Installing MOD, P/N 3G5309P01812, would require 192 work-hours at a parts cost of $52,300. Based on these figures, assuming there are 12 recurring inspections and 8 tailboom modifications, we estimate the cost of this AD on U.S. operators is $704,000.

This AD is a final rule that involves requirements that affect flight safety and was not preceded by notice and an opportunity for public comment; however, we invite you to submit any written data, views, or arguments regarding this AD. Send your comments to an address listed underADDRESSES. Include “Docket No. FAA-2011-1034; Directorate Identifier 2011-SW-014-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of the AD. We will consider all comments received by the closing date and may amend the AD in light 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 with FAA personnel concerning this AD. Using the search function of the docket web site, you can find and read the comments to any of our dockets, including the name of the individual who sent the comment. You may review the DOT's complete Privacy Act Statement in theFederal Registerpublished on April 11, 2000 (65 FR 19477-78).

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

For the reasons discussed above, I certify that the 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 to the extent that it justifies making a regulatory distinction; 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.

We prepared an economic evaluation of the estimated costs to comply with this AD. See the AD docket to examine the economic evaluation.

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 regulationis 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.

Accordingly, pursuant to the authority delegated to me by the Administrator, the Federal Aviation Administration amends part 39 of the Federal Aviation Regulations (14 CFR part 39) as follows:

Background TTB Authority

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. The FAA Act requires that these regulations, among other things, prohibit consumer deception and the use of misleading statements on labels, and ensure that labels provide the consumer with adequate information as to the identity and quality of the product. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the regulations promulgated under the FAA Act.

Part 4 of the TTB regulations (27 CFR part 4) sets forth the standards promulgated under the FAA Act for the labeling and advertising of wine. Section 4.23 of the TTB regulations (27 CFR 4.23) sets forth rules for varietal (grape type) labeling. Paragraph (a) of that section sets forth the general rule that the names of one or more grape varieties may be used as the type designation of a grape wine only if the wine is labeled with an appellation of origin as defined in § 4.25 (27 CFR 4.25). Under paragraphs (b) and (c), a wine bottler may use the name of a single grape variety on a label as the type designation of a wine if not less than 75 percent of the wine (or 51 percent in certain limited circumstances) is derived from grapes of that variety grown in the labeled appellation of origin area. Under paragraph (d), a bottler may use two or more grape variety names as the type designation of a wine if all the grapes used to make the wine are of the labeled varieties and if the percentage of the wine derived from each grape variety is shown on the label (and with additional rules in the case of multicounty and multistate appellations of origin). Paragraph (e) of § 4.23 provides that only a grape variety name approved by the TTB Administrator may be used as a type designation for an American wine and states that a list of approved grape variety names appears in subpart J of part 4.

Within subpart J of part 4, the list of prime grape variety names and their synonyms approved for use as type designations for American wines appears in § 4.91 (27 CFR 4.91). Alternative grape variety names temporarily authorized for use are listed in § 4.92 (27 CFR 4.92). Finally, § 4.93 (27 CFR 4.93) sets forth rules for the approval of grape variety names.

Section 4.93 provides that any interested person may petition the Administrator for the approval of a grape variety name and that the petition should provide evidence of the following:

• That the new grape variety is accepted;

• That the name for identifying the grape variety is valid;

• That the variety is used or will be used in winemaking; and

• That the variety is grown and used in the United States.

Section 4.93 further provides that documentation submitted with the petition may include:

• A reference to the publication of the name of the variety in a scientific or professional journal of horticulture or a published report by a professional, scientific, or winegrowers' organization;

• A reference to a plant patent, if patented; and

• Information pertaining to the commercial potential of the variety, such as the acreage planted and its location or market studies.

Section 4.93 also places certain eligibility restrictions on the approval of grape variety names. TTB will not approve a name:

• If it has previously been used for a different grape variety;

• If it contains a term or name found to be misleading under § 4.39 (27 CFR 4.39); or

• If it contains the term “Riesling.”

Typically, if TTB determines that the evidence submitted with a petition supports approval of the grape variety name, TTB will send a letter of approval to the petitioner advising the petitioner that TTB will propose to add the grape variety name to the list of approved grape variety names in § 4.91 at a later date. After one or more approvals have been issued, a notice of proposed rulemaking will be prepared for publication in theFederal Registerproposing to add the name(s) to the § 4.91 list, with opportunity for public comment. In the event that one or more comments or other information demonstrate the inappropriateness of an approval action, TTB will determine not to add the grape variety name in question to the list and will advise the original petitioner that the name is no longer approved.

On January 20, 2011, TTB published Notice No. 116 in theFederal Register(76 FR 3573) proposing to add a number of grape variety names to the list of approved names in § 4.91, either as a grape variety not already listed or as a synonym for an existing listed name. Most of the name proposals were based on petitions that TTB had received and approved, and the evidence that had been submitted in support of each petitioned for name is summarized in the preamble to Notice No. 116. These names, on which TTB solicited comments, are as follows:

TTB also invited comments on three petitioned-for grape names that TTB did not approve by letter—Canaiolo Nero, Moscato Greco, and Princess. In addition, TTB requested comments on a petition requesting that two grape variety names currently listed in § 4.91 as separate varieties—Petite Sirah and Durif—be recognized as synonyms. The petitions for these grape names are also summarized in the preamble to Notice No. 116.

TTB also proposed to reformat the § 4.91 grape list to include separate entries for synonyms of existing entries so that readers can more readily find a particular name. When Notice No. 116 was published, the list was structured as an alphabetical list of prime grape names, with any synonym appearing only in parenthesis after the prime grape name. For example, the name “Black Malvoisie” was only listed in § 4.91 as a synonym after the prime name, “Cinsaut.” A reader trying to determine if “Black Malvoisie” is an approved grape variety name might not see it in an alphabetical list that set forth “Cinsaut” at the beginning of the line where the “Black Malvoisie” synonym appears.

TTB also believes the current format suggests that synonyms are in some way not as valid as grape names as prime names when, in fact, every name in § 4.91, whether a prime name or a synonym, is equally acceptable for use as a type designation for an American wine. TTB therefore proposed in Notice No. 116 to eliminate the word “prime” from the heading of § 4.91, as well as from the second sentence of the introductory text of that section, and to list each synonym in the same way as a prime name. As a result, § 4.91 would simply set forth a list of grape names that have been approved as type designations for American wines, followed, in parentheses, by any approved synonyms for that name.

Finally, TTB proposed to correct a technical error in § 4.91, that is, the misspelling of the grape name “Agawam” as “Agwam.” In addition to correcting this error, TTB proposed to allow the use of the misspelling “Agwam” for a period of one year after publication of the final rule so that anyone holding a COLA with the misspelling has sufficient time to obtain new labels.

TTB received 35 comments in response to Notice No. 116, most of them generally supportive of the proposed amendments. Of these, 28 specifically support the proposal to recognize Petite Sirah and Durif as synonyms. Many of the latter are identical letters that cite the DNA research, summarized in Notice No. 116, of Dr. Carole Meredith at the University of California at Davis (UC Davis) into the identity of the Petite Sirah grape variety. They also cite as additional evidence two publications that recognize the names “Petite Sirah” and “Durif” as synonyms. One commenter expresses concern about new clones being required to be marketed as “Durif,” a name he notes has little market presence. In response to the last comment, TTB notes that the proposal to recognize the names as synonymous will not require that clones be marketed as “Durif”; in fact, the reverse is true: The proposal will allow growers and vintners to use the names interchangeably.

TTB received two comments specifically in favor of the proposal to recognize Blaufränkisch as a synonym for Lemberger/Limberger, both commenters stating that they are growers of the variety.

TTB received a comment from Cornell University objecting to the proposed name for the new listing of the grape variety Geneva Red 7, which was bred at Cornell. The commenter, a Cornell plant varieties and germplasm licensing associate, states that Cornell does not approve of the name “Geneva Red 7,” but does approve of the name “Geneva Red.” TTB notes, however, that the name evidence in the petition for Geneva Red 7 included bulletins published by Cornell and a page from UC Davis's National Grape Registry. Both of these publications use the names “Geneva Red 7” and “GR 7”; neither uses the name “Geneva Red.” Further, TTB did not propose the name “GR 7” because it did not believe consumers would recognize that name as a grape variety name. Although TTB understands the interest of Cornell in the determination of what name should be used for a grape variety developed under its auspices, § 4.93 requires some evidence to establish the validity of the name. Of course, TTB would be willing to reconsider this matter following receipt of a petition under § 4.93 with appropriate evidence supporting use of the name “Geneva Red.”

One comment objects to including in the list grape varieties that are not cultivated widely enough for their names to be meaningful to consumers. The commenter states that varieties such as Sauvignon gris, Valvin Muscat, and Cabernet Diane are recent, only marginally planted hybrid varieties that have been given names which will lead the public into believing they areVitis viniferavarieties. This commenter does, however, express approval of the listing ofVitis viniferavariety names such as Auxerrois or Grüner Veltliner, grapes that the commenter describes as widely accepted internationally.

TTB does not agree with the suggestion that a grape variety must be widely cultivated to merit inclusion in the list of approved grape names in § 4.91. Section 4.93 merely provides in this regard that the variety must be “grown and used in the United States” without specifying the extent which such growth and use must exist. With regard to hybrid varieties, TTB notes that they have a place in the U.S. wine industry, are popular in areas of the country where the climate makes the cultivation ofVitis viniferavarieties challenging, and are not per se outside the scope of approval under § 4.93. TTB therefore sees no reason to exclude from § 4.91 hybrid grape variety names that otherwise meet the standard for approval under § 4.93.

Additionally, TTB does not agree that the names Sauvignon gris, Valvin Muscat, and Cabernet Diane are misleading. Sauvignon gris, a pink-skinned mutation of the Sauvignon blanc variety is, in fact, aVitis viniferagrape. Moreover, TTB notes that Valvin Muscat was developed from a crossing of Muscat Ottonel and Muscat du Moulin, while Cabernet Diane was bred from a cross of Cabernet Sauvignon and Norton. Because these latter grapes were developed fromVitis viniferavarieties and share both part of the name and some of the varietal characteristics of those grapes, TTB finds that they are not misleading.

Another commenter opined that some of the proposed names seem either “self-indulgent or outright silly for a wine varietal,” citing the name “Princess” as an example. TTB notes that § 4.93 does not provide for disapproval of a name because it appears to be self-indulgent or silly. So long as the name is a valid identifier of the grape variety, TTB believes that the decision whether to include it on a wine label or in a wine advertisement is a subjective matter that is best left to the wine industry.

Finally, one commenter favored recognizing Primitivo as a synonym for Zinfandel. Another commenter objected to the varietal (grape type) labeling regulations contained in § 4.23, which allow a varietal designation on a label if 75 percent (or 51 percent in the case of wine made fromVitis labruscavarieties) of the wine is derived from thelabeled grape variety; this commenter believes these percentages are too low and are misleading to consumers. Because neither of these issues was raised in Notice No. 116 for public comment, TTB believes that it would be inappropriate to include the suggested changes in this final rule document.

After careful review of the comments discussed above, TTB has determined that it is appropriate to adopt the proposed regulatory changes contained in Notice No. 116. In addition, TTB notes that with the removal of the word “prime” from § 4.91, it would also be appropriate to remove the word “prime” from § 4.92, the list of alternative grape variety names temporarily authorized for use. Accordingly, this document removes the word “prime” wherever it appears in § 4.92.

TTB certifies under the provisions of the Regulatory Flexibility Act (5 U.S.C. 601et seq.) that this final rule will not have a significant economic impact on a substantial number of small entities. The decision of a grape grower to petition for a grape variety name approval, or the decision of a wine bottler to use an approved name on a label or in an advertisement, is entirely at the discretion of the grower or bottler. This regulation does not impose any new reporting, recordkeeping, or other administrative requirements. Accordingly, a regulatory flexibility analysis is not required.

This final rule is not a significant regulatory action as defined by Executive Order 12866. Therefore, it requires no regulatory assessment.

Jennifer Berry of the Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, drafted this document.

For the reasons discussed in the preamble, TTB amends 27 CFR part 4 as set forth below:

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), 27 U.S.C. 205(e), authorizes the Secretary of the Treasury to prescribe regulations for the labeling of wine, distilled spirits, and malt beverages. The FAA Act provides that these regulations should, among other things, prohibit consumer deception and the use of misleading statements on labels, and ensure that labels provide the consumer with adequate information as to the identity and quality of the product. The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the regulations promulgated under the FAA Act.

Part 4 of the TTB regulations (27 CFR part 4) provides for the establishment of definitive viticultural areas and the use of their names as appellations of origin on wine labels and in wine advertisements. Part 9 of the TTB regulations (27 CFR part 9) sets forth standards for the preparation, submission, and approval of petitions for the establishment or modification of American viticultural areas and lists the approved American viticultural areas.

Section 4.25(e)(1)(i) of the TTB regulations (27 CFR 4.25(e)(1)(i)) defines a viticultural area for American wine as a delimited grape-growing region having distinguishing features as described in part 9 of the regulations and a name and a delineated boundary as established in part 9 of the regulations. These designations allow vintners and consumers to attribute a given quality, reputation, or other characteristic of a wine made from grapes grown in an area to its geographic origin. The establishment of viticultural areas allows vintners to describe more accurately the origin of their wines to consumers and helps consumers to identify wines they may purchase. Establishment of a viticultural area is neither an approval nor an endorsement by TTB of the wine produced in that area.

Section 4.25(e)(2) of the TTB regulations outlines the procedure for proposing an American viticultural area and provides that any interested party may petition TTB to establish a grape-growing region as a viticultural area. Section 9.12 of the TTB regulations prescribes standards for petitions for the establishment or modification of American viticultural areas. Such petitions must include the following:

• Evidence that the area within the viticultural area boundary is nationally or locally known by the viticultural area name specified in the petition;

• An explanation of the basis for defining the boundary of the viticultural area;

• A narrative description of the features of the viticultural area that affect viticulture, such as climate, geology, soils, physical features, and elevation, that make it distinctive and distinguish it from adjacent areas outside the viticultural area boundary;

• A copy of the appropriate United States Geological Survey (USGS) map(s) showing the location of the viticultural area, with the boundary of the viticultural area clearly drawn thereon; and

• A detailed narrative description of the viticultural area boundary based on USGS map markings.

Sara Schorske of Compliance Service of America prepared and submitted a petition on her own behalf and on behalf of local wine industry members to establish the 4,600-acre Pine Mountain-Mayacmas American viticultural area in northern California.Located approximately 90 miles north of San Francisco and 5 miles north-northeast of Cloverdale, the proposed viticultural area surrounds much of Pine Mountain, which rises to the east of U.S. 101 and the Russian River, to the north of that river's Big Sulphur Creek tributary, and to the immediate west of the Mayacmas Mountains. Approximately two-thirds of the proposed viticultural area lies in the extreme southern portion of Mendocino County, with the remaining one-third located in the extreme northern portion of Sonoma County.

According to the petition and the written boundary description, the proposed viticultural area is totally within the multicounty North Coast viticultural area (27 CFR 9.30) and overlaps the northernmost portions of the Alexander Valley viticultural area (27 CFR 9.53) and the Northern Sonoma viticultural area (27 CFR 9.70). The proposed area currently has 230 acres of commercial vineyards, the petition states, with another 150 acres under development.

The petition states that the distinguishing features of the proposed viticultural area include its mountainous soils, steep topography with high elevations, and a growing season climate that contrasts with the climate of the Alexander Valley floor below. Also, the petition notes that vineyards within the proposed viticultural area generally are smaller than the vineyards found on the Alexander Valley floor.

The supporting evidence presented in the petition is summarized below.

According to the petition, the “Pine Mountain-Mayacmas” name combines the names of the major geographical features found within the proposed viticultural area and serves to locate the proposed area within northern California. As shown on the provided USGS maps, the proposed viticultural area surrounds Pine Mountain, a 3,000-foot peak located on the western flank of the Mayacmas Mountains in northern Sonoma and southern Mendocino Counties.

The northern portion of the 1998 USGS Asti, California, quadrangle map shows Pine Mountain rising to 3,000 feet in southern Mendocino County, near the Sonoma County line. Also, as shown on the Asti map, Pine Mountain Road climbs from the Cloverdale area and marks a portion of the proposed viticultural area's southern boundary.

The October 2000 edition of the California State Automobile Association's Mendocino and Sonoma Coast road map shows the Mayacamas Mountains running north-northwest approximately from Mount St. Helena, and continuing through the Pine Mountain region to Lake Mendocino. A 1956 regional map produced by the State of California Division of Forestry, as provided with the petition, shows Pine Mountain located northeast of Cloverdale.

The 1982 publication, “Cloverdale Then & Now—Being a History of Cloverdale, California, Its Environs, and Families,” refers to the Pine Mountain junction and the Pine Mountain toll road in discussing the early roads of the region (page 3). This publication also includes a 1942 picture of homesteaders Hubert and George Smith on Pine Mountain (page 6). A 1985 article in the Redwood Rancher, “The Early Wineries of the Cloverdale Area,” by William Cordtz, discusses the grape growing of Mrs. Emily Preston in the late 1800s. The article states that the Preston Winery “was on Pine Mountain immediately north of the present U.S. 101 bridge north of Cloverdale.”

The petition also notes that the Pine Mountain Mineral Water Company bottled water from springs located on Pine Mountain for more than 50 years, until the mid-1900s. A copy of one of the company's bottle labels included with the petition prominently displays the “Pine Mountain” name with a tall mountain in the background and springs in the foreground.

As noted in the petition and as shown on USGS maps, the Mayacmas Mountain range covers portions of Mendocino, Sonoma, Napa, and Lake Counties. The Mayacmas Mountain range separates Lake County from Mendocino, Sonoma, and Napa Counties, and, the petition states, that range defines the northern side of the Alexander Valley. According to the petition, the mountains were named for the Mayacmas Indians. Although the name is sometimes spelled “Mayacamas” or “Maacama,” “Mayacmas” is the spelling used on USGS maps.

Noting that the name “Pine Mountain” is commonly used throughout the United States, the petition states that the use of “Mayacmas” in the proposed viticultural area's name acts as a geographic modifier that pinpoints the proposed viticultural area's northern California location. The petitioners believe that “California” is not an appropriate geographical modifier for the viticultural area's name because there are other Pine Mountains in California. The USGS Geographical Names Information System (GNIS), for example, lists 21 additional “Pine Mountains” in California.

The petition also notes that the Mayacmas Mountains “are closely associated with winegrowing” because the range is home to many vineyards and wineries. The Mayacmas range, the petition states, divides the grape growing regions of Ukiah and Clear Lake, and borders the Alexander Valley viticultural area as well as the Napa Valley (27 CFR 9.23) and Sonoma Valley (27 CFR 9.29) viticultural areas. The petition states that “Mayacmas is an ideal modifier” to distinguish the proposed viticultural area “from other places with similar names” and will “help consumers easily ascertain its general location.”

According to the petition, the proposed 4,600-acre viticultural area encompasses those portions of Pine Mountain and the mountain's lower slopes that are suitable for viticulture. The petition states that the boundary was drawn in consideration of the mountain's varying steepness, water availability, and solar orientation.

The petition notes that within the proposed viticultural area, vineyard development is generally limited to small, 5- to 20-acre plots of flat or gently sloping ground found within the proposed area's mountainous terrain. Size-limiting factors for these mountain vineyard operations, the petition explains, include the need for tractor use and economical erosion control. The mountain vineyards' patchwork arrangement, the petition continues, contrasts to the larger vineyards, some of 100 acres or more, found on the floor of the nearby Alexander Valley.

The petition states that the south and southwest sides of Pine Mountain, which are included within the boundary line for the proposed viticultural area, have favorable growing season solar orientation as compared to the less sunny sides of the mountain outside the proposed boundary line, noting that successful viticulture depends partially on a favorable solar orientation to provide adequate growing season sunshine and heat accumulation. The below table summarizes the rationale for the proposed viticultural area boundary line as described in the petition:

The history of grape-growing and winemaking in the Pine Mountain region goes back to the 19th century, according to the petition. The 1877 “Thompson Historical Atlas Map of Sonoma County” lists several grape growers with vineyards on or near Pine Mountain. The petition states that these included George Allen's 2-acre vineyard on the slopes of Pine Mountain, J.G. Rains' 10-acre vineyard, Clay Worth's 6-acre vineyard at the base of Pine Mountain, and Wellington Appleton, who owned 144 acres on the mountain's western slopes.

About 1910, the petition states, Steve Ratto developed a vineyard and winery at the 1,700-foot elevation of Pine Mountain, and that site is located inside the southwest portion of the boundary line of the proposed viticultural area. That winery site is shown on a 1956 State of California Division of Forestry map for the region that was included with the petition. The petition notes that remnants of the old winery building are still visible and that modern vineyards are on the site as well.

The petition also describes the large vineyard and winery operation of Hartwell and Emily Preston. The Preston Ranch, dating back to 1869, came to include over 1,500 acres of land, with a 10-acre vineyard, an oak cooperage, and a large winery and wine cellar. An October 29, 1874, article in the Russian River Flag newspaper lauded Preston's “Fruit and Wine Ranch,” and noted that it stretched from the eastern bank of the Russian River to the slopes of Pine Mountain. Reports from the time state that Preston harvested 40 tons of grapes from his vineyards in 1889. Much of the Preston winery's output was used in the various patent medicines prescribed by Emily Preston, a well-known faith healer of the time. According to the USGS Cloverdale Quadrangle map and an additional map included with the petition, the former Preston vineyard lies approximately one mile outside of the western boundary line of the proposed viticultural area.

Differences in topography, climate, and soils distinguish the proposed viticultural area from the surrounding areas, according to the petition.

The proposed viticultural area has a higher elevation and steeper terrain than the Alexander Valley to the southwest of the proposed viticultural area. Elevations within the proposed viticultural area begin at 1,600 feet and rise to the 3,000-foot summit of Pine Mountain. The terrain within the proposed viticultural area is generally steep and mountainous, with patches of flatter ground within this steep terrain allowing for the development of areas of small, 5- to 20-acre vineyards.

In contrast, to the west and south, the Alexander Valley floor rises from about 260 feet in elevation at the Russian River and continues easterly and upward to the foothills of Pine Mountain and the Mayacmas Mountains. This flatter, lower terrain allows for the development of larger vineyards, some 100 acres or more, with different viticultural characteristics than those found in the small mountain vineyards. Areas to the north and east of the proposed viticultural area, while similar in elevation and steepness, lack the flatter patches of ground and water resources needed for vineyard development.

The distinctive growing season climatic factors of the proposed viticultural area include limited marine fog cover, abundant sunshine, mild diurnal temperature changes, significant wind, and heavy winter rainfall, according to the petition. Quoting local growers, the petition states that the cooler spring climate of Pine Mountain delays the start of vine growth by about 2 weeks, as compared to valley vineyards. The petition also notes that the proposed viticultural area's growing season climate is cooler during the day, warmer at night, windier, and wetter than the surrounding lower elevation grape growing areas.

In support of these conclusions, the petitioners gathered climatic data from six regional weather stations located within and in areas surrounding the proposed viticultural area. These were: Cloverdale (southwest of Pine Mountain at 333 feet), Hopland East (north-northwest of Pine Mountain at 1,160 feet), Hopland West (northwest of Pine Mountain at 1,200 feet), Sanel Valley (north-northwest of Pine Mountain at 525 feet), Alexander Valley (at the Seghesio Vineyards valley weather station, south-southwest of Pine Mountain at 350 feet), and Pine Mountain (at the Seghesio Vineyards mountain weather station, within the proposed viticultural area boundary line at 2,600 feet in elevation).

Fog:Despite the later start of the grape growing season at the higher elevations of the proposed viticultural area, the differing elevation-based fog patterns found on Pine Mountain allow grape growth within the proposed viticultural area to catch up with the earlier start of the valley vineyards, according to local growers. The petition states that the heavy fog that frequently blankets the surrounding valley floors fails to rise to the 1,600-foot minimum elevation of the proposed viticultural area boundary line. The petition describes the mountain as a sunny island floating above the fog, and the petition included pictorial documentation of this phenomenon.

The petition states that the proposed viticultural area averages 3 to 4 hours more sunlight per day than the Alexander Valley during the growing season. While the valley remains blanketed under a heavy fog layer until late morning and then again later in the afternoon, the higher Pine Mountain elevations routinely bask in sunshine all day long. The extra sunlight and resulting longer daily period of warmth found on the higher slopes of Pine Mountain allow grapes to develop quickly and mature around the same time as those grown in valley floor vineyards.

Temperatures:During the growing season, daytime high temperatures within the proposed viticultural area areconsistently cooler, and overnight temperatures are consistently warmer, than those found on the Alexander Valley floor, according to the petition. The petition includes temperature data gathered by local grape grower John Copeland, who gathered hourly temperature readings at several sites within the proposed viticultural area prior to planting his vineyards there. The petitioners combined Mr. Copeland's data and that of the valley weather stations noted above to document the diurnal temperature differences between the proposed area and the lower valley floor. The average temperature differences between the higher elevations on Pine Mountain and the lower elevations on the Alexander Valley floor are shown in the table below:

The petition states that nights are warmer on the slopes of Pine Mountain mainly because cool night mountain air, being heavier than warm air, drains off the mountain into the valley below. This downward nocturnal air flow leaves the slopes of Pine Mountain relatively warmer as compared to the cooler valley. In addition, the petition explains that the marine inversion, a summer coastal phenomenon, results from a layer of cool, heavy, and moist marine air and fog that slips beneath the layer of warmer air. This cool, foggy air blankets the Alexander Valley floor and does not mix with the lighter, warm air above it on the mountain slopes. This phenomenon, the petition continues, inverts the normal mountainous air temperature pattern of cooler temperatures above and warmer temperatures below.

Wind:The proposed viticultural area climate includes stronger and more frequent winds than those found in the valley below, the petition explains. The petition states that local growers report that Pine Mountain vineyards are naturally free of mildew, a vineyard malady commonly found in areas with more stagnant air.

Precipitation:The petition notes that the proposed viticultural area receives 30 to 60 percent more rainfall than the valley below. Southern storms often stall over Pine Mountain and the Mayacmas range, dropping more rain than in other areas. Pine Mountain also receives some upper elevation-based snow, something not encountered on the Alexander Valley floor below, the petition explains.

According to the petition, the mountain soils within the proposed viticultural area are significantly different from the alluvial valley soils found at lower elevations outside the proposed area. The petition documents these differences using United States Department of Agriculture online soil maps for Mendocino and Sonoma Counties.

However, as the petition notes, the two county soil maps use different soils names since the two counties' soil surveys were conducted years apart using different name protocols. Specifically, the Sonoma County Soil Survey shows that the portion of the proposed viticultural area that lies within that county falls within the Los Gatos-Hennecke-Maymen association, with the Los Gatos soils series the predominant soil type. The Mendocino County Soil Survey, however, shows that the portion of the proposed viticultural area within that county falls within the Maymen-Estel-Snook association.

To show that the soils within the proposed viticultural area are generally the same in each county, the petition also provides descriptions of the physical characteristics of the proposed viticultural area soils. The petition describes the parent materials of the proposed viticultural area soils as fractured shale and weathered sandstone. The petition notes that soils within the proposed viticultural area are mountainous types, which are generally steep, shallow to moderately deep, and very well to excessively well-drained. Also, these mountain soils include large amounts of sand and gravel. Pine Mountain soils are generally less than 3 feet in depth, the petition continues, with more than half at depths of 12 inches or less. In contrast, soils found on the Alexander Valley floor and in other lower elevation areas outside the proposed viticultural area are deeper, less well-drained alluvial soils.

The Sonoma County portion of the proposed viticultural area lies almost entirely within the northern portion of the established Alexander Valley viticultural area, which, in turn, lies within the northern portion of the established Northern Sonoma viticultural area. The Alexander Valley and Northern Sonoma viticultural areas both lie totally within the North Coast viticultural area. While located in whole or in part within these existing viticultural areas, the petitioners believe that the proposed viticultural area is distinguishable from those viticultural areas.

For example, the petition states that the 76,034-acre Alexander Valley viticultural area largely consists of lower elevation valley floor along the Russian River, with vineyards located below 600 feet, while the proposed viticultural area largely consists of mountainous terrain located above 1,600 feet. Further, as noted above, the petition includes climatic data documenting the differing valley and mountain growing season temperatures, wind, and fog patterns found in this region.

In addition, the petition notes that the 349,833-acre Northern Sonoma viticultural area extends 40 miles south from the Mendocino-Sonoma County line to the southernmost reaches of the Russian River Valley viticultural area (27 CFR 9.66) southwest of Sebastopol. In addition to the Russian River Valley and Alexander Valley viticultural areas, the large Northern Sonoma viticultural area includes the Knights Valley (27 CFR 9.76), Chalk Hill (27 CFR 9.52), Green Valley of Russian River Valley (27 CFR 9.57), and Dry Creek Valley (27 CFR 9.64) viticultural areas with their differing microclimates and terrains. According to the petition, the diversity within the Northern Sonoma viticultural area as a whole stands in contrast to the uniform climate and terrain found within the proposed viticultural area.

The established North Coast viticultural area lies north and northwest of San Francisco, and includes all of Sonoma County and portions of Mendocino, Napa, Lake, Solano, and Marin Counties. This very large viticultural area's distinguishing features include its distinctive coastal climate and topography. Although the proposed viticultural area has a somewhat similar climate, the petition notes, the proposed viticultural area is small, is limited to higher elevations,and is less foggy than the general North Coast viticultural area climate.

The original Treasury Decision, T.D. ATF-187, establishing the more than 60,000-acre Alexander Valley viticultural area, was published in theFederal Register(49 FR 42719) on October 24, 1984. In the discussion of geographical features, T.D. ATF-187 relied on the geographical features of the valley floor and specifically excluded the mountainous area to the east, primarily because these areas were determined to have geographical features different from those in the established viticultural area. T.D. ATF-187 stated that the mountainous area has an average rainfall of 30 to 70 inches, temperatures of 54 to 58 degrees Fahrenheit, and a frost-free season of 230 to 270 days, but that the valley floor has an average rainfall of 25 to 50 inches, temperatures of 54 to 60 degrees Fahrenheit, and a frost-free season of 240 to 260 days. Regarding soils, T.D. ATF-187 stated that the mountainous area to the east is characterized primarily by the Goulding-Toomes-Guenoc and Henneke-Maymen associations, but the valley floor is characterized by the Yolo-Cortina-Pleasanton association. TTB notes that the temperature and frost-free season data concerning the valley and the mountainous areas, though different, are not so different as to be considered significantly different.

The area within the Alexander Valley viticultural area that also overlaps the proposed viticultural area was added in Treasury Decision (T.D.) ATF-233, published in theFederal Register(51 FR 30352) on August 26, 1986. In discussing the proposal to add approximately 1,536 acres to the existing Alexander Valley viticultural area “at elevations between 1,600 feet and 2,400 feet above sea level on Pine Mountain,” T.D. ATF-233 recognized that “the land in the area shares similar geological history, topographical features, soils, and climatic conditions as adjoining land within the previously established boundary of the [Alexander Valley] viticultural area.”

However, the petition provides more detailed evidence regarding the geographical features that distinguish the entire proposed viticultural area (including the overlap area) from the greater portion of the Alexander Valley viticultural area. That evidence details the significant differences between the areas in comparable night and day temperatures, rainfall, and soils. The petitioner also included evidence that the proposed viticultural area climate includes stronger and more frequent winds than those found in the valley below.

The Alexander Valley viticultural area is entirely within the Northern Sonoma viticultural area, and the area of overlap created by the proposed viticultural area is the same with respect to both the Northern Sonoma and the Alexander Valley viticultural areas. In addition, TTB notes that the name recognition for the Northern Sonoma viticultural area does not extend into the portion of the proposed viticultural area that is outside the boundary line for the Alexander Valley viticultural area. Historically, the outer boundaries of four viticultural areas (Alexander Valley, Dry Creek Valley, Russian River Valley, and Knights Valley) have been used to define the boundary of the Northern Sonoma viticultural area.

T.D. ATF-204, published in theFederal Register(50 FR 20560) on May 17 1985, established the Northern Sonoma viticultural area and includes the following statement:

TTB also notes that the Northern Sonoma viticultural area boundary has been adjusted twice to keep it coterminous with the outer boundaries of the four viticultural areas mentioned in T.D. ATF-204 (see T.D. ATF-233, published in theFederal Registeron August 26, 1986, 51 FR 30352, and T.D. ATF-300, published in theFederal Registeron August 9, 1990, 55 FR 32400).

In addition to what was previously stated in this document concerning the North Coast viticultural area, TTB notes that this viticultural area, which was established by T.D. ATF-145 (published in theFederal Registerat 48 FR 42973 on September 21, 1983), encompasses approximately 40 established viticultural areas, as well as the proposed viticultural area, in northern California. In the “Geographical Features” portion of the preamble, T.D. ATF-145 states that climate is the major factor in distinguishing the North Coast viticultural area from surrounding areas, that all the areas within the North Coast viticultural area receive marine air, and that most of them also receive fog. T.D. ATF-145 also states that “[d]ue to the enormous size of the North Coast, variations exist in climatic features such as temperature, rainfall and fog intrusion.”

The proposed viticultural area exhibits the basic geographical feature of the North Coast viticultural area: Marine air that results in greater amounts of rain. However, the geographical features of the proposed viticultural area are much more uniform in than those of the North Coast viticultural area. In this regard, T.D. ATF-145 specifically notes that “approval of this viticultural area does not preclude approval of additional areas, either wholly contained with the North Coast, or partially overlapping the North Coast” and that “smaller viticultural areas tend to be more uniform in their geographical and climatic characteristics * * *.”

In Notice No. 105, published in theFederal Register(75 FR 29686) on May 27, 2010, TTB described the petitioners' rationale for the proposed establishment of the Pine Mountain-Mayacmas viticultural area and requested comments on the proposal on or before July 26, 2010. TTB specifically invited comments regarding: (1) Whether the petition contains sufficient evidence regarding the distinguishing features of the proposed viticultural area; (2) whether the evidence submitted warrants the establishment of the proposed viticultural area within the existing North Coast viticultural area and portions of the Alexander Valley and Northern Sonoma viticultural areas; (3) whether the approval of the proposed viticultural area with the overlap with the Alexander Valley viticultural area is appropriate and/or whether the Alexander Valley and Northern Sonoma viticultural areas should be curtailed to avoid the overlap or expanded to encompass the new area; and (4) the appropriateness of the proposed “Pine Mountain-Mayacmas” name, including its spelling, viticultural significance, and potential conflicts with currently used brand names.

On July 16, 2010, TTB received a letter request from attorney Richard Mendelson on behalf of the Napa Valley Vintners (NVV), a wine industry trade association, which requested a 45-day extension of the comment period for Notice No. 105 to allow the NVV to complete and thoroughly vet its comments on the proposed viticultural area. In response to that request, on July 26, 2010, TTB published in theFederal Register(75 FR 43446) Notice No. 107 to extend the comment period for Notice No. 105 to September 9, 2010.

During the course of the original and extended comment period on Notice No. 105, TTB received and posted 85 comments from 70 groups and individuals. Commenters included 36 industry members and 34 non-industry individuals. Of the commenters, 52 supported and 18 opposed the establishment of the Pine Mountain-Mayacmas viticultural area with the proposed name and boundary line. The comments in opposition to the proposal as published raised three issues that could warrant a change in the regulatory text proposed in Notice No. 105: (1) The appropriateness of the proposed Pine Mountain-Mayacmas name; (2) the viticultural significance of a suggested modified name for the proposed viticultural area; and (3) the inclusion of additional acreage within the boundary of the viticultural area.

With regard to the appropriateness of the Pine Mountain-Mayacmas name, some commenters questioned the “Mayacmas” portion of the name because it is associated with the four counties of Napa, Sonoma, Lake, and Mendocino in northern California rather than only the area within the proposed viticultural area boundary. TTB notes that “Mayacmas” refers to the Mayacmas Range, which is the mountain range that extends generally north from San Pablo Bay and divides the Napa Valley viticultural area from the Sonoma Valley viticultural area. The Mayacmas Range is a significant landform for both valleys. The following comments in response to Notice No. 105 stated opposition to the Pine Mountain-Mayacmas name: Nos. 41, 43, 44, 45, 48, 50, 53, 55, 56, 57, 59, 60, 63, 65, 76, 78, 79, 81, and 82 (comments 45 and 78 were submitted by the same commenter).

In response to comments opposing the “Mayacmas” modifier, the “Cloverdale Peak” geographical modifier was proposed in comment 62 by Barry Hoffner, a representative for the Pine Mountain vineyard owners. In comment 62, Mr. Hoffner describes the Pine Mountain growers as a unified group of 13 vineyard owners along the Sonoma-Mendocino boundary line, northeast of the town of Cloverdale. In comment 62, Mr. Hoffner explains that when opposition to the “Mayacmas” portion of the proposed “Pine Mountain-Mayacmas” name was expressed in some comments, the growers decided, after careful consideration and meetings with other industry groups, to propose to change the name of the proposed viticultural area to “Pine Mountain-Cloverdale Peak.” Cloverdale Peak is a mountain landform that adjoins Pine Mountain and has similar elevations. Comment 62 emphasizes that the combination of the “Pine Mountain” and “Cloverdale Peak” names more accurately describes the geographical location of the proposed viticultural area and would effectively address the industry opposition relating to its name.

Comment 68, submitted by Sara Schorske of Compliance Service of America (and the originator of the Pine Mountain-Mayacmas viticultural area petition), expresses support for the “Cloverdale Peak” name change proposed in comment 62 and states that it would provide better information for consumers by providing a more unique and specific geographical indicator for “Pine Mountain.” Comment 68 also provides substantiating documentation for the change, which includes various references in the petition and its exhibits to Cloverdale and its historical and current association with Pine Mountain. Comment 68 further states that Pine Mountain and Cloverdale Peak are neighboring peaks in the same range and that a portion of the Cloverdale Peak landform is already included within the proposed boundary line.

According to comment 68, Cloverdale Peak is identified on the Highland Springs USGS quadrangle map. Cloverdale Peak Road extends from Hopland to the western slope of Cloverdale Peak, and thehttp://www.trails.comWeb site identifies Cloverdale Peak as a hiking and recreational destination. In addition, as noted in comment 70, submitted by the NVV, Cloverdale Peak Road begins near the center of the proposed viticultural area and runs northward through the area.

A number of commenters subsequently supported the use of the “Cloverdale Peak” name instead of “Mayacmas.” Comments submitted in response to Notice No. 105 that specifically supported the name change to “Pine Mountain-Cloverdale Peak” were as follows: Nos. 61, 62, 68, 69, 70, 71, 72, 73, 74, 75, 77, and 80. The comments supporting the proposed name change were submitted by individuals, vineyard and winery owners, industry association groups, and United States Congressman Mike Thompson.

The NVV (comments 64 and 70) also endorsed the modified “Pine Mountain-Cloverdale Peak” name. Comments from other industry groups include the Pine Mountain growers (comments 46 and 62) and the Mount Veeder Appellation Council (comments 63 and 72), each of which submitted a second comment supporting the proposed name change to “Pine Mountain-Cloverdale Peak.” The Sonoma County Winegrape Commission (comment 61) and the Mendocino Winegrape and Wine Commission (comment 71) supported the original Pine Mountain-Mayacmas name, and the Lake County Winegrape Commission (comment 59) and the Spring Mountain District Association (comment 76) opposed the original Pine Mountain-Mayacmas name. None of these four industry groups commented on the proposed name change to Pine Mountain-Cloverdale Peak.

The comments supporting a modification of the name of the viticultural area also gave rise to the companion issue of the viticultural significance of the modified name. The following comments support the viticultural significance of the full “Pine Mountain-Cloverdale Peak” name because it better describes the location of the proposed viticultural area and reduces the likelihood of consumer confusion as compared to the originally proposed “Mayacmas” name: Nos. 61, 62, 68, 70, 71, 75, 77, and 80.

Finally, two commenters proposed altering the boundary line proposed in Notice No. 105. After expressing support for the “Pine Mountain-Cloverdale Peak” name change, comment 68 also proposes expanding the northwest portion of the boundary line to include more of the Cloverdale Peak landform and altering the boundary line to pass through the summit of Cloverdale Peak; this expansion would add 500 acres to the proposed viticultural area.

According to comment 68, the elevations in the proposed 500-acre expansion area that includes the summit of Cloverdale Peak are consistent with the originally proposed Pine Mountain-Mayacmas viticultural area: The Pine Mountain area has elevations between 1,600 and 3,000 feet, and the Cloverdale Peak area is located between 1,800 and 3,000 feet, with a 2,400-foot elevation low point between the two mountain landforms. The comment also suggests that similar climatic factors exist in bothareas because the elevations of the two regions are similar. Comment 68 further claims that the soils in the proposed Cloverdale Peak expansion area are generally the same as in the Pine Mountain area, with a less than 2 percent addition of other soils, and that both mountain landforms have upland soils naturally occurring under brush or forest cover. TTB notes that comment 68 did not include any supporting documents or data relating to the geographical features of the proposed expansion area and their similarity to the distinguishing features of the proposed viticultural area. Comment 68 also states that there are currently no vineyards or wineries located within the proposed 500-acre expansion of the proposed viticultural area.

An additional boundary line change was proposed in response to Notice No. 105. A commenter proposed in comments 58 and 67 that an additional 40 acres along the southwestern portion of the proposed viticultural area be included within the boundary line to include his vineyards, although no name or geographical features evidence was submitted in support of this proposed boundary line modification.

In addition, the Mendocino Winegrape and Wine Commission made TTB aware in comment 71 that the proposed boundary line in Notice No. 105 created a small overlap with the Mendocino viticultural area at the western portion of the proposed viticultural area.

TTB reviewed all comments received in response to Notice No. 105 with reference to the original petition materials. Because of the potential impact on label holders if TTB adopted any of the changes proposed in the comments, TTB determined that it was appropriate to re-open the comment period on Notice No. 105 for the purpose of obtaining further public comment on the three issues outlined above that were raised in response to Notice No. 105 and that affected the original proposal before taking any further regulatory action on this matter.

In Notice No. 112, published in theFederal Register(75 FR 78944) on December 17, 2010, TTB specifically invited comments on the use of “Cloverdale Peak” as a geographical name in conjunction with “Pine Mountain” to form the “Pine Mountain-Cloverdale Peak” viticultural area name. TTB also invited comments on the viticultural significance of the full “Pine Mountain-Cloverdale Peak” name and on the viticultural significance of “Pine Mountain-Cloverdale,” “Cloverdale Peak,” and “Cloverdale” standing alone. In addition, TTB invited comments on whether the boundary line should be expanded as suggested in the comments posted in response to Notice No. 105. The comment period for Notice No. 112 closed on February 15, 2011.

TTB received five comments in response to Notice No. 112, all of which support changing the name of the proposed viticultural area to “Pine Mountain-Cloverdale Peak.” Two comments, Nos. 88 and 89, also specifically comment on the viticultural significance of the entire name “Pine Mountain-Cloverdale Peak” as opposed to “Pine Mountain-Cloverdale,” which the commenters state could be confusing or misleading for consumers because the city of Cloverdale is outside the boundary line of the proposed viticultural area. In addition, three comments support the 500-acre expansion of the proposed viticultural area to include the summit of Cloverdale Peak. The commenters' reasons for supporting this proposed expansion include the area's viticultural distinctiveness and local name recognition (comment 86) and the avoidance of potential consumer confusion (comments 87 and 89).

TTB carefully considered the comments received in response to Notice Nos. 105 and 112 and reviewed all petition evidence and subsequent documentation received in support of, or in opposition to, the proposed viticultural area.

TTB agrees with the public comments that the “Mayacmas” portion of the proposed name could be misleading or confusing for consumers due to the length of the Mayacmas Range, which extends beyond the Pine Mountain region, and TTB therefore believes that “Mayacmas” is an inappropriate name for this viticultural area. After reviewing the public comments as well as the evidence provided in support of the alternate “Cloverdale Peak” name, TTB agrees that the proposed “Pine Mountain-Cloverdale Peak” name is appropriate for the viticultural area because it more accurately and specifically describes the location of the viticultural area. TTB notes that the proposed modified “Pine Mountain-Cloverdale Peak” name received significant public support, and the modified name was not opposed by any commenters during the original and re-opened comment periods.

TTB declines to accept the proposed boundary line change to include the summit of Cloverdale Peak within the proposed Pine Mountain-Cloverdale Peak viticultural area. Although some comments assert that the inclusion of the Cloverdale Peak summit within the viticultural area will reduce the likelihood of consumer confusion relating to the location of the proposed “Pine Mountain-Cloverdale Peak” viticultural area, TTB notes the following:

• As noted in comment 68, a portion of the Cloverdale Peak landform is already included within the boundary line proposed in the petition, so the “Cloverdale Peak” geographical name accurately identifies the location of the proposed viticultural area;

• The contention that the proposed expansion area shares the same distinguishing features as the petitioned-for area is contrary to statements in the petition that areas to the north and west of the proposed boundary line are unsuitable for viticulture due to steep terrain or inadequate sun and heat;

• None of the comments supporting the proposed expansion contain sufficient supporting evidence or data to establish that the proposed expansion area shares the same distinguishing features as the originally petitioned-for viticultural area; and

• As conceded in comment 68, there are currently no vineyards or wineries located within the proposed expansion area, with the result that the area cannot be considered a “grape-growing region,” which is part of the definition of an American viticultural area in 27 CFR 4.25(e)(1)(i). TTB further notes that the expansion of the boundary line in this way would be incompatible with the “area in which viticulture exists” principle contained in 27 CFR 9.12(a)(1), which was adopted subsequent to the filing of the Pine Mountain-Mayacmas petition (see T.D. TTB-90, published in theFederal Registerat 76 FR 3489 on January 20, 2011).

Thus, for the above reasons, TTB concludes that the boundary line proposed in Notice No. 105 should not be altered to add the proposed 500-acre Cloverdale Peak summit expansion area.

TTB does not believe that it would be appropriate to adjust the proposed boundary line in response to comments 58 and 67. Those comments requested a boundary line change to include one person's vineyards, which are located southwest of the proposed boundary line. This additional acreage has elevations below 1,600 feet and as low as 1,200 feet. Such lower elevations arenot consistent with the proposed viticultural area's elevations, which are above 1,600 feet. TTB notes that the proposed viticultural area's distinguishing features are largely based upon its high elevation and mountainous topography, and the commenter did not present any evidence in support of his contention that the same distinguishing features in the viticultural area exist in the proposed expansion area.

As noted above, the Mendocino Winegrape and Wine Commission pointed out in comment 71 that the proposed boundary line in Notice No. 105 created a small overlap with the Mendocino viticultural area in the western region of the proposed viticultural area. TTB believes that this overlap, which involves approximately 30 acres, was inadvertent and should not be included within the boundary line in question.

Finally, TTB adds that it specifically solicited comments in Notice No. 105 regarding whether the petition contained sufficient evidence to warrant the establishment of the proposed viticultural area within the existing North Coast viticultural area and portions of the Alexander Valley and Northern Sonoma viticultural areas. TTB also invited comments about whether the approval of the proposed viticultural area with the overlap with the Alexander Valley viticultural area is appropriate and/or whether the Alexander Valley and Northern Sonoma viticultural areas should be curtailed to avoid the overlap or expanded to encompass the new area.

Although some supporting comments state that the proposed viticultural area is sufficiently distinct from the floor of the Alexander Valley to warrant the creation of a new viticultural area and concur with the evidence presented in the petition, TTB notes that no comments oppose the inclusion of part of the proposed Pine Mountain-Cloverdale Peak viticultural area within the Alexander Valley viticultural area. In addition, no comments specifically address the partial overlap of the proposed viticultural area with the Northern Sonoma viticultural area and the inclusion of the proposed viticultural area within the North Coast viticultural area.

After careful review of the petition and the comments received in response to Notice Nos. 105 and 112, TTB finds that the evidence submitted supports the establishment of the proposed viticultural area, subject to the following alterations to the proposal in Notice No. 105:

• The name of the viticultural area should be “Pine Mountain-Cloverdale Peak,” as was proposed by the petitioners in response to comments to Notice No. 105; and

• The boundary line for the viticultural area should be modified to avoid the inadvertent overlap with the Mendocino viticultural area that was created by the boundary line proposed in Notice No. 105.

With regard to the partial overlap between the proposed viticultural area and the Alexander Valley and Northern Sonoma viticultural areas, as stated above, the evidence set forth in the petition shows that there are detailed, significant differences between the topography, climate, and soils of the entire proposed viticultural area (including the overlap area) and such features of the greater portion of the Alexander Valley viticultural area. This evidence raises concerns that there may be insufficient similarity between the distinguishing features of the overlap area and distinguishing features of the rest of the Alexander Valley viticultural area. However, considering the possible alternatives, the strength of the evidence presented in support of the similarity of the distinguishing features within the proposed viticultural area, and the fact that the overlap area was specifically added to the Alexander Valley viticultural area by T.D. ATF-233, TTB believes that the establishment of the proposed viticultural area as described above is the best alternative for achieving the objectives of establishing viticultural areas set forth in the definition paragraph earlier in this document.

TTB has further determined that only the full name of the viticultural area, “Pine Mountain-Cloverdale Peak,” is viticulturally significant as a result of the establishment of this new viticultural area because “Pine Mountain” is a commonly used geographic name for multiple locations within the United States, and, as noted in the comments to Notice No. 105, the names of “Pine Mountain-Cloverdale” or “Cloverdale” alone are geographically inaccurate and could cause consumers to erroneously associate the viticultural area with the nearby city of Cloverdale, which is not within the proposed boundary line.

Accordingly, under the authority of the Federal Alcohol Administration Act and part 4 of the TTB regulations, TTB establishes the “Pine Mountain-Cloverdale Peak” viticultural area in Mendocino County and Sonoma County, California, effective 30 days from the date of publication of this document.

See the narrative boundary description of the viticultural area in the regulatory text published at the end of this document.

The maps for determining the boundary of the viticultural area are listed below in the regulatory text.

Part 4 of the TTB regulations prohibits any label reference on a wine that indicates or implies an origin other than the wine's true place of origin. With the establishment of this viticultural area, its name, “Pine Mountain-Cloverdale Peak,” is recognized as a name of viticultural significance under 27 CFR 4.39(i)(3). The text of the new regulation clarifies this point.

Once this final rule becomes effective, wine bottlers using “Pine Mountain-Cloverdale Peak” in a brand name, including a trademark, or in another label reference as to the origin of the wine, will have to ensure that the product is eligible to use “Pine Mountain-Cloverdale Peak” as an appellation of origin. The establishment of the Pine Mountain-Cloverdale Peak viticultural area will not affect the boundary line of any existing viticultural areas, and any wineries using Alexander Valley, Northern Sonoma, or North Coast as an appellation of origin or in a brand name for wines made from grapes grown within a portion of the Pine Mountain-Cloverdale Peak viticultural area that overlaps one of those viticultural areas will not be affected by the establishment of this new viticultural area.

For a wine to be labeled with a viticultural area name or with a brand name that includes a viticultural area name or other term identified as being viticulturally significant in part 9 of the TTB regulations, at least 85 percent of the wine must be derived from grapes grown within the area represented by that name or other term, and the wine must meet the other conditions listed in 27 CFR 4.25(e)(3). If the wine is not eligible for labeling with the viticultural area name or other viticulturally significant term and that name or term appears in the brand name, then the label is not in compliance and the bottler must change the brand name and obtain approval of a new label. Similarly, if the viticultural area name or other term of viticultural significance appears in another reference on the label in a misleading manner, the bottlerwould have to obtain approval of a new label.

Different rules apply if a wine has a brand name containing a viticultural area name or other viticulturally significant term that was used as a brand name on a label approved before July 7, 1986. See 27 CFR 4.39(i)(2) for details.

TTB certifies that this regulation will not have a significant economic impact on a substantial number of small entities. This regulation imposes no new reporting, recordkeeping, or other administrative requirement. Any benefit derived from the use of a viticultural area name is the result of a proprietor's efforts and consumer acceptance of wines from that area. Therefore, no regulatory flexibility analysis is required.

This rule is not a significant regulatory action as defined by Executive Order 12866. Therefore, it requires no regulatory assessment.

Elisabeth C. Kann of the Regulations and Rulings Division drafted this notice.

For the reasons discussed in the preamble, TTB amends title 27, chapter I, part 9, Code of Federal Regulations, as follows:

A. Background

On August 30, 2010, the Department published a Notice of Proposed Rulemaking in theFederal Register(75 FR 53172) that would update the existing procedure governing the filing and processing of applications for administrative exemptions from the prohibited transaction provisions of ERISA, the Code, and FERSA, and invited written comments from the public concerning its contents. These comments are available for review athttp://www.regulations.govand also under “Public Comments” on the “Laws & Regulations” page of the Department's Employee Benefits Security Administration (EBSA) Web site athttp://www.dol.gov/ebsa.

The final rule contained in this document revises the prohibited transaction exemption procedure to reflect changes in the Department's exemption practices since the previous exemption procedure was issued in 1990 (the 1990 Exemption Procedure). Among other things, key elements of the exemption policies and guidance previously found in ERISA Technical Release 85-1 and the 1995 Exemption Publication have been consolidated within the text of a unitary, comprehensive final regulation. Adoption of this updated procedure should also promote the prompt and efficient consideration of all exemption applications by clarifying the types of information and documentation generally required for a complete filing, by affording expanded opportunities for the electronic submission of information and comments relating to an exemption, and by providing plan participants and other interested persons with a more thorough understanding of the exemption under consideration.

The exemption procedure contained in this document (and codified at 29 CFR part 2570, subpart B) consists of 23 discrete sections (§ 2570.30 through § 2570.52), arranged by topic and generally reflecting the chronological order of steps involved in processing an exemption application. Set forth below is a summary of those aspects of the proposed rule on which the Department received comments, and the Department's response to those comments. Individuals interested in obtaining information concerning the content of the proposed rule not discussed herein should refer to the Notice of Proposed Rulemaking at 75 FR 53172.

Section 2570.30(b) of the proposed rule stated that “the Department may conditionally or unconditionally exempt any fiduciary or transaction, or class of fiduciaries or transactions, from all or part of the restrictions imposed by section 406 of ERISA and the corresponding restrictions of the Code and FERSA.” One commenter suggested that this formulation was too restrictive because, under the foregoing statutes, the Department has the authority to exempt not only fiduciaries engaged in prohibited transactions, but parties in interest (or disqualified persons under the Code) as well. Accordingly, the commenter requested that the Department broaden the scope of section 2570.30(b) to include “parties in interest.”

The Department notes that section 2570.30(b) of the proposed rule simply restated the statutory language found at section 408(a) of ERISA concerning the scope of the Department's authority to grant administrative exemptions from the prohibited transaction provisions of ERISA. Because section 408(a) of the Act provides the Department with the authority to grant exemptions for “any fiduciary or transaction, or class of fiduciaries or transactions,” the Department also has the authority to provide exemptive relief to non-fiduciary parties in interest who engage in plan transactions. Therefore, it is unnecessary to adopt the commenter's suggested amendment. In this regard, the Department notes that, consistent with the legislative history of the Act,1 the Department has routinely granted exemptive relief to non-fiduciary parties in interest and disqualified persons, and will continue to exercise its authority, as appropriate.

Section 2570.31 of the proposed rule defines the following terms for purposes of the exemption procedure regulation: affiliate, class exemption, Department, exemption transaction, individual exemption, party in interest, pooled fund, qualified appraisal report, qualified independent appraiser, and qualified independent fiduciary.

Definition of “Affiliate”—Section 2570.31(a) of the proposed rule specifically defined the term “affiliate” to include any employee or officer of the person who is highly compensated or “[h]as direct or indirect authority, responsibility, or control regarding the custody, management, or disposition of plan assets * * * ” One commenter expressed the view that the language of this definition should be clarified so that the term “plan assets” would refer only to those plan assets involved in the exemption transaction. The commenter stated that, absent such a modification, a person could be deemed to be an affiliate if he or she had responsibility with respect to the assets of any plan, without regard to whether the authority or control relates to the plan at issue or the plan assets at issue.

In response to the commenter's suggestion, the Department has modified the definition of “affiliate” at section 2570.31(a) to clarify that the term applies to any employee or officer of the person who has direct or indirect authority, responsibility, or control regarding the custody, management, or disposition of plan assets involved in the subject exemption transaction. In addition, the Department, on its own motion, has further modified the term “affiliate” to clarify the scope and meaning of the term “control” that is contained within that definition.

Nature and Extent of Independence of Qualified Independent Appraisers and Fiduciaries—Two commenters objected to the definition of a “qualified independent fiduciary” (section 2570.31(j) of the proposed rule), which requires that a person serving in such capacity be “independent of and unrelated to any party in interest engaging in the exemption transaction and its affiliates.” One of the commenters also expressed a similar reservation with respect to the definition of a “qualified independent appraiser” (section 2570.31(i) of the proposed rule). One commenter opined that the words “independent of” and “unrelated to” are not defined in the proposed rule, particularly with respect to employees of the independent fiduciary who are related to employees of the party in interest (spouses, children, in-laws, etc.), and therefore should be deleted in the interests of clarity. Another commenter took the position that, if the Department's actual purpose in utilizing the foregoing language was to bar a qualified independent fiduciary from being an affiliate of the party in interest engaging in the transaction, then the Department should revise and simplify the text of section 2570.31(j) of the final rule accordingly.

As noted previously, the purpose of including these definitions in the proposed rule was to emphasize that any independent fiduciary or appraiser retained in connection with an exemption transaction must not only be “qualified” (i.e.,knowledgeable as to its duties and responsibilities under ERISA and knowledgeable as to the subject transaction and the markets, if any, where such transactions normally occur) to serve in that capacity, but also free from any relationships with the party in interest or its affiliates that could improperly affect its judgment. Because such relationships may be relevant to the Department's determination as to whether an appraiser or fiduciary is independent, the Department has not adopted the suggestions of the commenters for modifying these definitions.

Standards for Measuring Compensation Received By Qualified Independent Appraisers and Fiduciaries—Several commenters indicated that the Department's use of the word “income” in the definitions in sections 2570.31(i) and (j) (and also in sections 2570.34(c)(7) and (d)(8)) to describe the overall annual compensation received by qualified independent appraisers and fiduciaries is problematic. Two of these commenters expressed the view that substitution of the word “revenues” for income would be less susceptible to misinterpretation and more consistent with prior Departmental practice. One of the commenters also suggested that the text of section 2570.34(d)(8) be modified to reflect the substitution of the word “revenues” in place of the word “income.” Another commenter agreed with this view, and pointed out that the term “income” as a definitional term lends itself to a variety of interpretations—gross income, taxable income, etc. Similarly, another commenter suggested the substitution of the term “gross revenue” in lieu of the term “income” with respect to the compensation received by qualified independent appraisers. In general, the Department concurs, and has modified sections 2570.31(i) and (j) and sections 2570.34(c)(7) and (d)(8) in the final rule by substituting, where appropriate, the term “revenue” for the term “income.”

In defining the terms “qualified independent appraiser” (section 2570.31(i)) and “qualified independent fiduciary” (section 2570.31(j)), the proposed rule provided that, in each instance, the determination as to the independence of the appraiser or fiduciary would be made “on the basis of all relevant facts and circumstances.” The definition of a “qualified independent fiduciary” further provided that, “[a]s a general matter, an independent fiduciary retained in connection with an exemption transaction must not receive more than ade minimisamount of compensation (including amounts received for preparing fiduciary reports and other related duties) from the parties in interest to the transaction or their affiliates. For purposes of determining whether the compensation received by the fiduciary isde minimis,all compensation received by the fiduciary is taken into account. Suchde minimisamount will ordinarily constitute 1% or less of the annual income of the qualified independent fiduciary. In all events, the burden is on the applicant to demonstrate the independence of the fiduciary.” The definition of a “qualified independent appraiser” under the proposed rule described the compensation to be received by such appraisers in virtually identical terms.

The Department received a number of comments objecting to the content of the foregoing definitions under the proposed rule. Two commenters suggested that ade minimisor percentage test bears, at best, a narrow relationship to any duty or commitment to impartially perform independent fiduciary responsibilities under ERISA, and does not take into account the complexity, risk, expertise, or expenditure of time that such a commitment may entail. One commenter expressed the view that inserting the proposedde minimisand 1% standards in the text of a final regulation would mean that any firm that provides independent fiduciary services and whose compensation exceeds such thresholds is presumptively subject to improper influence from a party in interest to the exemption transaction. Two commenters further expressed the view that, if the 1% andde minimisaspects of the proposed rule were ultimately adopted, plan fiduciaries and officials required to retain independent fiduciaries and appraisers in connection with complex exemption transactions would inevitably limit their selections to a handful of large banking, fiduciary, or valuation firms whose compensation would satisfy the foregoing standards, thus reducing the overall level of competition for such services. By way of example, one commenter posited a complex exemption transaction which could reasonably be expected to command an independent fiduciary fee of $150,000 in a given year to be paid by a party in interest to the exemption transaction; the commenter concluded that, under the proposed rule, only firms with annual revenues of $15,000,000 or more would be presumptively independent of the party in interest.

One commenter emphasized the negative effect that thede minimisstandard would have upon smaller fiduciary and valuation firms, opining that smaller firms often possess greater expertise and objectivity with respect to evaluating exemption transactions than their larger institutional counterparts, and often provide their services to plans at less expense as a result of lower overhead costs. Two commenters expressed the view that the reduced competition resulting from the adoption of a 1% benchmark would likely have the undesirable effect of driving up the costs of engaging an independent fiduciary for exemption transactions; one of these commenters also ventured that such a provision might cause plans, rather than parties in interest, to pay the fees of such a fiduciary. Another commenter opined that the proposed compensation limitations in the proposed rule would make it especially difficult for newly-established independent fiduciary firms with few, if any, conflict of interest or affiliation problems to compete for significant assignments with respect to exemption transactions. This commenter further stated that this market access problem for new firms would persist even if the Department had specified a higher compensation threshold (e.g.,5%) in connection with the proposedde minimisstandard.

Several commenters stated that the 1% compensation threshold for independent fiduciaries contained in the proposed rule is substantially lower than the percentage guidelines often utilized by the Department in past administrative exemptions (and in other ERISA contexts) for evaluating whether fiduciaries have a relationship with a party in interest that renders them susceptible to inappropriate influences or pressures. Two commenters specifically noted that the Department has, in past individual exemptions, permitted independent fiduciaries to derive as much as 5% of their compensation from parties in interest involved in the exemption transaction. Several commenters stated that there are currently only a small number of firms that perform an independent fiduciary role in connection with complex exemption transactions, and that the restrictions on compensation contained in the proposed rule would tend to deter such firms from accepting these types of engagements in the future. One commenter also stated that the proposedde minimis/1% benchmark does not account for the fact that an independent fiduciary's fee arrangement often requires that a significant portion of the fiduciary's compensation is used to pay outside lawyers, actuaries, and other consultants for services that enable the fiduciary to meet its duties to the plan.

Accordingly, several commenters expressed the opinion that the Department should consider alternatives in the final rule to the 1% andde minimiscompensation standards for defining and evaluating the independence of fiduciaries and appraisers retained in connection with exemption transactions. In this connection, one commenter suggested that the Department should consider its proposed regulation relating to the definition of “adequate consideration” under section 3(18) of ERISA (see 53 FR16732, proposed May 17, 1988), which enumerated various criteria for determining whether a plan fiduciary has made a good faith determination of the fair market value of an asset (other than a security for which there is a generally recognized market). One of the proposed criteria would require that the relevant fiduciary be independent of all parties to the transaction (other than the plan) and that the assessment of the independence of the fiduciary should be made in light of all relevant facts and circumstances. In this regard, the commenter noted that none of the proposed criteria made any references to amounts or percentages of compensation received by a fiduciary from a party in interest.

While expressing various concerns about the possible effects of an express limitation on qualified independent fiduciary compensation, another commenter nevertheless acknowledged that a fiduciary whose compensation from parties in interest with respect to a proposed transaction represents a significant portion of the fiduciary's revenues can be, or can be perceived to be, susceptible to improper influence in carrying out its fiduciary duties. Accordingly, this commenter suggested the deletion of the Department's language at section 2570.31(j) in the proposed rule concerningde minimisamounts and the 1% compensation standard, and substituting a number of factors that the Department would utilize in evaluating the independence of a fiduciary. These factors would include the complexity of the exemption transaction, the amount of plan assets involved in the exemption transaction (expressed in both absolute terms and as a percentage of the plan's total assets), and the expected duration of the fiduciary's engagement.

In response to these comments, the Department wishes to point out that, in defining the terms “qualified independent appraiser” and “qualified independent fiduciary”, the proposed rule provided that, in each instance, the final determination as to the independence of the appraiser or fiduciary is made “on the basis of all relevant facts and circumstances.” The Department also notes that the references to the one percent standard for compensation received by appraisers and fiduciaries in connection with an exemption transaction was not intended as an absolute limit with respect to compensation received by such persons from parties in interest.

Thus, the Department concurs that this provision should be clarified. In this regard, the Department notes that the percentage of an appraiser's or fiduciary's annual revenue derived from a party in interest (or its affiliates) to an exemption transaction is an important factor in determining whether such person is, in fact, independent of the party in interest engaging in the covered transaction. The Department also continues to believe that the percentage of an appraiser's or fiduciary's annual revenue that is attributable to a party in interest should be ade minimisamount. Accordingly, absent facts and circumstances demonstrating a lack of independence, the Department will operate according to the presumption that such appraiser or fiduciary will be independent if the revenues it receives or is projected to receive, within the current federal income tax year, from parties in interest (and their affiliates) to the transaction are not more than 2% of such appraiser's or fiduciary's annual revenues based upon its prior income tax year. Although the presumption does not apply when the aforementioned percentage exceeds 2%, an appraiser or fiduciary nonetheless may be considered independent based upon other facts and circumstances provided that the appraiser or fiduciary receives or is projected to receive revenues that are not more than 5% within the current federal income tax year, from parties in interest (and their affiliates) to the transaction based upon its prior income tax year.

Accordingly, it is the Department's view that the language contained in sections 2570.31(i) and (j) in the final rule provides the Department with sufficient flexibility to take into account any and all relevant facts and circumstances that may have a bearing on its assessment of the qualifications and independence of appraisers and fiduciaries. In this connection, the Department further notes that the previously referenced factors cited by the commenter may be taken into account under this “facts and circumstances” standard.

Section 2570.33 describes exemption applications that the Department will not ordinarily consider, such as applications involving a transaction or transactions that are the subject of an investigation under the reporting, disclosure and fiduciary responsibility provisions in parts 1 or 4 of subtitle B of Title I of ERISA. In connection with the application content provisions of the exemption regulation, one commenter suggested that the Department modify the language of the final rule to ensure the confidentiality of information disclosed in an application (or in any amendments or supplements thereto).2 In support of its view, the commenter stated that investigations by EBSA are confidential, and that the EBSA Enforcement Manual makes information about current enforcement proceedings subject to strict confidentiality (except with respect to other governmental agencies). The commenter also argued that, absent an amendment excluding this information from public access, certain applicants affected by the application content requirements could be stigmatized or might be deterred from applying for exemptive relief from the Department.

The Department does not concur that the final rule should be modified to address the commenter's concerns with respect to preserving the confidentiality of certain information submitted as part of an exemption application. Because such information comprises part of the record in support of an exemption, it enables the public to understand the basis for the Department's decision. Section 2570.51(a) of both the 1990 Exemption Procedure and the proposed rule stipulates that “[t]he administrative record of each exemption application will be open to public inspection and copying.” Thus, the Department will not process exemption applications containing such designations unless the claim of confidentiality and privilege is withdrawn or the Department determines that the designated information is not material to the exemption request. Accordingly, in order to provide further clarity, the Department has redesignated paragraph(c) of section 2570.33 as paragraph (d), and a new paragraph (c) describing the Department's policy on claims of confidentiality has been inserted.

Disclosure of Compensation Received by Qualified Independent Appraisers and Fiduciaries—Section 2570.34(d)(8) of the proposed rule would have required that any statement provided by a qualified independent fiduciary in support of an exemption application include, among other things, a representation “disclosing the percentage of such fiduciary's current income that was derived from any party in interest involved in the transaction or its affiliates; in general, such percentage shall be computed by comparing, in fractional form: (i) The amount of the fiduciary's projected personal or business income for the current federal income tax year that will be derived from the party in interest or its affiliates (expressed as a numerator); and (ii) The fiduciary's gross personal or business income (excluding fixed, non-discretionary retirement income) for the prior federal income tax year (expressed as a denominator).” Section 2570.34(c)(7) of the proposed rule contained similar requirements for the content of statements submitted by a qualified independent appraiser in support of an exemption application.

One commenter suggested that this provision be amended in the final rule to expressly state that, in instances where a qualified independent fiduciary provides its services to a plan through a specialized unit which is the subsidiary or affiliate of a larger business organization, the fiduciary's revenues (the denominator of the fraction described in this subsection) should be based solely upon the revenues of the specialized unit and not the larger organization. The commenter stated that, because the purpose of examining the proportion of the independent fiduciary's compensation derived from parties in interest is to determine the fiduciary's lack of susceptibility from undue influence, the revenues of the specialized unit should be the proper focus of such an inquiry.

In addition, the commenter offered the view that the time frames contained in the foregoing denominator should reflect the greater of (i) The prior federal income tax year's income or (ii) the qualified independent fiduciary's good faith estimate of the current year's income. In the commenter's view, the relationship between the compensation in connection with the transaction in question and the current financial state of the business is as least as relevant as data that may be as much as a year old when the calculation is made.

Because, as previously noted, the focus of this provision is on the revenues generated by the independent fiduciary, the Department believes no further changes to the language of this provision are necessary. Further, the Department declines to adopt the commenter's suggested modification of the content of the denominator (as described at section 2570.34(d)(8)) with respect to the relevant time frame for computing the revenues received by an independent fiduciary from all sources. The Department is of the view that the formula described in the final rule affords greater objectivity and certainty in determining such amounts.

Specialized Statements—Section 2570.34(c) requires that a qualified independent appraiser act solely on behalf of the plan in preparing statements submitted in support of an application for exemption. In the Department's view, any appraiser retained to perform an asset valuation on behalf of a plan must discharge its responsibilities in an independent and impartial manner. In this regard, the Department expects the qualified independent appraiser's determination to be unbiased, fair, and objective, and to be made in good faith and based on a detailed analysis of the prevailing circumstances then known to the appraiser. The same general standards of professional conduct also apply, as appropriate, to statements prepared by other third party experts under section 2570.34(e).

Disclosure of party in interest investments—Under section 2570.35(a)(16), as it appeared in the 1990 Exemption Procedure, the extent of applicant disclosure of plan investments with a party in interest was limited to whether or not the assets of the affected plans(s) were invested in loans to any party in interest involved in the exemption transaction, property leased to any such party in interest, or securities issued by any party in interest involved in the exemption transaction. Where such investments existed, the applicant was required to include an additional statement detailing the nature and extent of these investments, and whether a statutory or administrative exemption covered such investments.

In the proposed rule, the Department proposed an amendment to this provision that would have required an applicant to disclose whether or not the assets of the affected plan(s) had been invested directly or indirectly in any other transactions (e.g.,securities lending or extensions of credit), whether exempt or non-exempt, with the party in interest involved in the exemption transaction. Accordingly, such disclosure would not have been limited to plan investments in loans or leases involving the party in interest, or securities issued by the party in interest. In cases where any such investments existed, the applicant would have been required to provide the Department with additional information describing, among other things: (1) The type of investment to which the statement pertains; (2) The aggregate fair market value of all investments of this type as reflected in the plan's most recent annual report; (3) The approximate percentage of the fair market value of the plan's total assets as shown in such annual report that is represented by all investments of this type; and (4) The applicable statutory or administrative exemption covering these investments (if any).

One commenter expressed the view that this proposed revision, which requires an exemption applicant to disclose all direct or indirect investments of a plan with the party in interest (regardless of whether such investments were exempt or non-exempt under the terms of ERISA) was “overbroad” and would be “extraordinarily burdensome” for applicants. The commenter stated that, for a plan with $10 billion in assets, there could be literally thousands of transactions with or through a party in interest that would be required to be disclosed under this revised provision, regardless of how relevant these transactions might be to the exemption under consideration. The commenter questioned whether the disclosure of these transactions (and the costs associated with such disclosure) would result in a more efficient exemption process, and added that it desired to see a continuation of the Department's existing practice of inquiring during the pendency of the exemption application about other relationships and transactions concerning a plan's investments with a party in interest.

After consideration of the comment, the Department generally concurs with the concerns expressed by the commenter that compliance with the disclosure requirements described in the proposed revision to section 2570.35(a)(16) may pose practical difficulties for some prohibited transaction exemption applicants. Thepurpose of this disclosure provision (as explained in the preamble of the 1990 Exemption Procedure) is to enable the Department to determine whether the exemption transaction, in conjunction with other plan investments involving parties in interest, would unduly concentrate the plan's assets in certain investments and parties so as to raise questions under the fiduciary responsibility provisions of ERISA. Accordingly, the Department has determined to modify the language in the final rule by reverting to the existing requirement, contained in the 1990 Exemption Procedure, which requires an applicant for an individual exemption to disclose information regarding any plan investments in loans to, property leased to, or securities issued by, any party in interest involved in the exemption transaction. In addition, it is noted that section 2570.35(a)(16) of the final rule does not preclude the Department from requesting, during the pendency of the exemption application, additional information from the applicant.

Retroactive exemptions—In the proposed rule, the Department added a new section 2570.35(d) to provide guidance to applicants who are seeking retroactive relief for past prohibited transactions. This new subsection incorporates the standards for retroactive exemptions that were described by the Department in ERISA Technical Release 85-1 (January 22, 1985). The Department believes that the inclusion of these standards as part of an updated and comprehensive exemption procedure regulation will provide greater clarity to applicants for retroactive relief, thereby facilitating the prompt evaluation of such applications. Among other things, the new subsection reaffirms that, as a general matter, the Department will consider granting retroactive relief for transactions already consummated only if the safeguards necessary for the grant of a prospective exemption were in place at the time of the consummated transaction. In this regard, an applicant should provide evidence that it acted in good faith at the time of the subject transaction by taking reasonable and appropriate steps to protect the plan from abuse and unnecessary risk. The new subsection also enumerates a variety of objective factors that the Department ordinarily takes into account when evaluating whether the conduct of the applicant at the time of a previously consummated transaction satisfies the good faith standard.

One commenter expressed concern about the practical effect of one of these factors (section 2570.35(d)(2)(v)), under which the Department would take into account whether “the applicant has submitted evidence that the plan fiduciary did not engage in an act or transaction knowing that such act or transaction was prohibited under section 406 of ERISA and/or section 4975 of the Code. In this regard, the Department will accord appropriate weight to the submission of a contemporaneous, reasoned legal opinion of counsel, upon which the plan fiduciary relied in good faith before entering the act or transaction * * *.”

The commenter posited a situation in which, during the pendency of an application for prospective exemptive relief, certain exigencies (such as a change in the tax laws) create an incentive for a party in interest to immediately consummate the proposed transaction, despite the absence of administrative relief from the Department at that point in time. The commenter expressed the view that in such circumstances, where an applicant subsequently amends its application to obtain retroactive relief for a past prohibited transaction, the Department should adopt an accommodating posture with respect to those exigent circumstances that might induce a party in interest to a transaction to engage in that transaction prior to receiving a final grant of exemption.

The Department notes that the good faith factors enumerated under section 2570.35(d) do not constitute an exclusive or an exhaustive list of the criteria that the Department may consider in evaluating an application for a retroactive exemption. The determination of whether a fiduciary has acted in good faith will be based upon a review of the totality of facts and circumstances surrounding a past prohibited transaction (including the exigencies of the transaction) before determining whether a retroactive exemption is warranted. In this connection, the applicant for a retroactive exemption must demonstrate that the safeguards necessary for the grant of a prospective transaction were in place at the time that the transaction was consummated. Accordingly, the Department has determined that no modifications to section 2570.35(d)(2)(v) are warranted.

Section 2570.37(a) of the proposed rule required that an exemption applicant promptly notify the Department if, during the pendency of an exemption application, any material fact or representation contained in the application changes or is inaccurate. This section also required that, during the pendency of the exemption application, the applicant promptly notify the Department concerning any material fact or representation that had been omitted from the application. The determination whether, under the totality of the facts and circumstances, a particular statement contained in (or omitted from) an exemption application constitutes a material fact or representation is made by the Department.

One commenter interpreted the phrase “during the pendency of the application” contained in paragraph (a) of section 2570.37 to mean the period “under which the application/exemption is in force.” With this interpretation in mind, the commenter expressed the view that changes to the facts underlying the original grant of an exemption (such as the size of a company, its business affiliations, lines of business, etc.) occur all of the time. As a consequence, the commenter opined that if a party in interest to a covered transaction fails to report any changes at all to the facts and representations underlying a granted exemption, such exemption may automatically become invalid. Accordingly, the commenter proposed that the Department should limit the changes that need to be reported to the Department to those occurring prior to the granting of an exemption.

The Department does not concur with the commenter's interpretation of the words “during the pendency of the application”. The applicable timeframe covered by section 2570.37(a) is the period between the submission of an exemption application and the point at which final administrative action is taken by the Department with respect to the application. In the case of a granted exemption involving a one-time transaction that has been consummated in accordance with the terms and conditions of the exemption, subsequent events do not affect the validity of the exemptive relief granted by the Department. In instances where the Department has granted an exemption for a transaction which is continuing in nature (e.g.,a lease), section 2570.49(d) of the procedure would apply. This provision stipulates that “[f]or transactions that are continuing in nature, an exemption ceases to be effective if, during the continuation of the transaction, there arematerial[emphasis added] changes to the original facts and representations underlying such exemption or if one or more of the exemption's conditions cease to be met.” The materiality of such changes is determined by theDepartment in light of the totality of the surrounding facts and circumstances.3 Accordingly, after considering this comment, the Department has determined not to modify the language of section 2570.37(a) in the final rule. However, in the interests of clarity, the Department has, on its own motion, deleted paragraph (d) of section 2570.37 in the final rule.

The 1990 Exemption Procedure stipulated that the Department would attempt to schedule a conference concerning a tentative denial letter at a mutually convenient date and time during the 45-day period following the later of (1) The date the Department received the applicant's request for a conference, or (2) the date the Department notified the applicant, after reviewing additional information submitted pursuant to section 2570.39, that it was not prepared to propose the requested exemption. The Department's proposal (at section 2570.40) would have replaced this 1990 rule by substituting a simplified procedure in order to facilitate the prompt and efficient scheduling of such conferences. The Department has largely retained the proposed language of this conference provision in the final rule, except for certain technical clarifications. In instances where the applicant has requested a conference and stated an intent to submit additional information in support of the application, the Department generally will schedule a conference for a date and time that occurs within 20 days after the date on which the Department has provided notification to the applicant that it remains unprepared to propose the requested exemption based upon the additional information submitted by the applicant. Alternatively, in instances where the applicant requests a conference without expressing an intent to submit additional information pursuant to section 2570.39, the Department generally will schedule a conference for a date and time that occurs within 40 days after the date of the issuance of the tentative denial letter.

The Department, on its own motion, has made technical corrections to section 2570.40 in the final rule to clarify how the rule would apply where an exemption applicant, within 20 days of receiving a tentative denial letter, requests a conference and expresses an intent to submit additional written information, but fails to provide such information within 40 days from receipt of the tentative denial letter.

To address this situation, the Department has inserted a new paragraph (f) in section 2570.40. This new paragraph specifies that, where an applicant has requested a conference and expressed an intent to submit additional information pursuant to section 2570.39(b), but has failed to furnish such information within 40 days from the date of the tentative denial letter, the Department will generally schedule a conference for a date and time occurring within 60 days after the date of the issuance of the tentative denial letter. As part of this technical correction, the Department also has redesignated sections 2570.40(f) and (g) of the proposed rule, respectively, as sections 2570.40(g) and (h) of the final rule.

In addition, the Department has made an additional technical correction to the text of section 2570.41 of the final rule by deleting the reference in paragraph (b) to “section 2570.40(e)” and substituting “section 2570.40.”

The Department, on its own motion, has made a technical refinement to this section of the final rule by adding a new paragraph (e), which clarifies that the Department possesses the sole discretion to determine the materiality of any fact or representation which underlies an administrative exemption.

Under Executive Order 12866 (58 FR 51735), the Department must determine whether a regulatory action is “significant” and therefore subject to review by the Office of Management and Budget (OMB). Section 3(f) of the Executive Order defines a “significant regulatory action” as an action that is likely to result in a rule (1) Having an annual effect on the economy of $100 million or more, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local or tribal governments or communities (also referred to as “economically significant”); (2) creating serious inconsistency or otherwise interfering with an action taken or planned by another agency; (3) materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) raising novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. Pursuant to the terms of the Executive Order, it has been determined that this action is not “significant” within the meaning of section 3(f) of the Executive Order and therefore is not subject to review by OMB.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) (PRA 95), the Department submitted the information collection request (ICR) included in the Notice of Proposed Rulemaking to OMB for review and clearance at the time the proposed rule was published in theFederal Registeron August 30, 2010 (75 FR 53172). OMB approved the final amendment under OMB control number 1210-0160, on October 17, 2011. The approval will expire on October 31, 2014.

The Department solicited comments concerning the ICR in connection with the Notice of Proposed Rulemaking. The Department received no comments addressing its burden estimates; therefore, no substantive changes have been made in the final rule that would affect the Department's earlier burden estimates.

The paperwork burden estimates are summarized as follows:

Type of Review:New collection.

Agency:Employee Benefits Security Administration, Department of Labor.

Title:Final Rule for Prohibited Transaction Exemption Procedures.

OMB Number:1210-0060.

Affected Public:Business or other for-profit; not-for-profit institutions.

Respondents:56.

Responses:22,995.

Frequency of Response:Occasionally.

Estimated Total Annual Burden Hours:2,564.

Estimated Total Annual Burden Cost:$1,547,013.

The Regulatory Flexibility Act (5 U.S.C. 601et seq.) (RFA) imposes certain requirements with respect to Federal rules that are subject to the notice and comment requirements of section 553(b) of the Administrative Procedure Act (5 U.S.C. 551et seq.) and which are likely to have a significant economic impact on a substantial number of small entities. Unless the head of an agency certifies that a final rule is not likely to have a significant economic impact on a substantial number of small entities, section 603 ofthe RFA requires that the agency present an initial regulatory flexibility analysis at the time of the publication of the notice of proposed rulemaking describing the impact of the rule on small entities and seeking public comment on such impact.

For purposes of the RFA, the Department continues to consider a small entity to be an employee benefit plan with fewer than 100 participants.4 Further, while some large employers may have small plans, in general small employers maintain most small plans. Thus, the Department believes that assessing the impact of this final rule on small plans is an appropriate substitute for evaluating the effect on small entities. The definition of small entity considered appropriate for this purpose differs, however, from a definition of small business that is based on size standards promulgated by the Small Business Administration (SBA) (13 CFR 121.201) pursuant to the Small Business Act (15 U.S.C. 631et seq.). The Department requested comments on the appropriateness of the size standard used in evaluating the impact of the rule on small entities but did not receive any comments.

By this standard, the Department estimates that nearly half the requests for exemptions are from small plans. Thus, of the approximately 613,000 ERISA-covered small plans, the Department estimates that 28 small plans (.000046% of small plans) file prohibited transaction exemption applications each year. The Department does not consider this to be a substantial number of small entities. Therefore, based on the foregoing, pursuant to section 605(b) of RFA, the Assistant Secretary of the Employee Benefits Security Administration hereby certifies that the final rule will not have a significant economic impact on a substantial number of small entities. The Department invited public comments on its certification and the potential impact of the rule on small entities at the proposed rule stage and did not receive any comments.

The final rule being issued here is subject to the provisions of the Congressional Review Act provisions of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801et seq.) and will be transmitted to Congress and the Comptroller General for review.

For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), the final rule does not include any federal mandate that may result in expenditures by State, local, or tribal governments, or impose an annual burden exceeding $100 million or more, adjusted for inflation, on the private sector.

Executive Order 13132 (August 4, 1999) outlines fundamental principles of federalism and requires federal agencies to adhere to specific criteria in the process of their formulation and implementation of policies that have substantial direct effects on the States, or the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. This final rule does not have federalism implications, because it has no 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. Section 514 of ERISA provides, with certain exceptions specifically enumerated, that the provisions of Titles I and IV of ERISA supersede any and all laws of the States as they relate to any employee benefit plan covered under ERISA. The requirements implemented in the rule do not alter the fundamental provisions of the statute with respect to employee benefit plans, and as such would have no implications for the States or the relationship or distribution of power between the national government and the States.

For the reasons set forth in the preamble, the Department amends subchapter G, part 2570 of chapter XXV of title 29 of the Code of Federal Regulations as follows:

Regulations governing the herring fishery are found at 50 CFR part 648. The regulations require annual specification of the overfishing limit, acceptable biological catch, annual catch limit (ACL), optimum yield, domestic harvest and processing, U.S. at-sea processing, border transfer, and sub-ACLs for each management area. The 2011 Domestic Annual Harvest is 91,200 metric tons (mt); the 2011 sub-ACL allocated to Area 1A is 26,546 mt, and 0 mt of the sub-ACL is set aside for research (75 FR 48874, August 12, 2010).

Section § 648.201 requires the Administrator, Northeast Region, NMFS (Regional Administrator), to monitor the herring fishery in each of the four management areas designated in the Fishery Management Plan for the herring fishery and, based on dealer reports, state data, and other available information, to determine when the harvest of herring is projected to reach 95 percent of the management area sub-ACL. When such a determination is made, NMFS must publish notification in theFederal Registerand prohibit herring vessel permit holders from fishing for, catching, possessing, transferring, or landing more than 2,000 lb (907.2 kg) of herring per calendar day in or from the specified management area for the remainder of the closure period. Transiting of Area 1A with more than 2,000 lb (907.2 kg) of herring on board is allowed under the conditions described below.

The Regional Administrator has determined, based upon dealer reports and other available information that 95 percent of the total herring sub-ACL allocated to Area 1A for 2011 is projected to be harvested. This projection takes into consideration an additional 3,000 mt that will be allocated to Area 1A, effective November 1, 2011 from an under-harvest in the New Brunswick weir fishery. Therefore, effective 0001 hr local time, October 27, 2011, federally permitted vessels may not fish for, catch, possess, transfer, or land more than 2,000 lb (907.2 kg) of herring in or from Area 1A per calendar day through December 31, 2011. Vessels may transit through Area 1A with more than 2,000 lb (907.2 kg) of herring on board, provided such herring was not caught in Area 1A and provided all fishing gear aboard is stowed and not available for immediate use as required by § 648.23(b). Effective 0001 hr, October 27, 2011, federally permitted dealers are also advised that they may not purchase herring from federally permitted herring vessels that harvest more than 2,000 lb (907.2 kg) of herring from Area 1A through 2400 hr local time, December 31, 2011.

This action is required by 50 CFR part 648 and is exempt from review under Executive Order 12866.

NMFS finds good cause pursuant to 5 U.S.C. 553(b)(B) to waive prior notice and the opportunity for public comment because it would be contrary to the public interest. This action closes the herring fishery for Management Area 1A until January 1, 2012, under current regulations. The regulations at § 648.201(a) require such action to ensure that herring vessels do not exceed the 2011 sub-ACL allocated to Area 1A. The herring fishery opened for the 2011 fishing year on January 1, 2011. Data indicating the herring fleet will have landed at least 95 percent of the 2011 sub-ACL allocated to Area 1A have only recently become available. If implementation of this closure is delayed to solicit prior public comment, the sub-ACL for Area 1A for this fishing year can be exceeded, thereby undermining the conservation objectives of the FMP. NMFS further finds, pursuant to 5 U.S.C 553(d)(3), good cause to waive the 30-day delayed effectiveness period for the reasons stated above.

NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The Magnuson-Stevens Fishery Conservation and Management Act requires that conservation and management measures prevent overfishing. The 2011 octopus overfishing level in the BSAI is 528 metric tons (mt) and the acceptable biological catch (ABC) is 396 mt as established by the final 2011 and 2012 harvest specifications for groundfish in the BSAI (76 FR 11139, March 1, 2011). NMFS closed directed fishing for octopus on January 13, 2011 (76 FR 3044, January 19, 2011) and prohibited retention of octopus on September 1, 2011 (76 FR 55276, September 7, 2011).

As of October 15, 2011, approximately 530 mt of octopus has been harvested in the BSAI. Vessels using pot gear have significant incidental catch of octopus and have taken the vast majority of octopus in the BSAI. Substantial fishing effort by vessels using pot gear is being directed at remaining amounts of Pacific cod in the BSAI. If vessels using pot gear were allowed to continue fishing for Pacific cod in the BSAI then further incidental catch of octopus would occur.

The Regional Administrator has determined, in accordance with § 679.20(d)(3), that prohibiting directed fishing for Pacific cod by vessels using pot gear in BSAI is necessary to prevent further incidental catch of octopus by the Pacific cod sector.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion, would delay prohibiting directed fishing for Pacific cod by vessels using pot gear in the BSAI and allow further incidental catch of octopus by the Pacific cod sector. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of October 20, 2011.

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

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