On January 18, 2011, the President issued Executive Order 13563, “Improving Regulation and Regulatory Review,” to ensure that Federal regulations seek more affordable, less intrusive means to achieve policy goals, and that agencies give careful consideration to the benefits and costs of those regulations. To that end, the Executive Order requires, among other things, that:

• Agencies propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs; and that agencies tailor regulations to impose the least burden on society, consistent with obtaining the regulatory objectives, taking into account, among other things, and to the extent practicable, the costs of cumulative regulations; and that agencies, consistent with applicable law, select, in choosing among alternative regulatory approaches, those approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity).

• The regulatory process encourages public participation and an open exchange of views, with an opportunity for the public to comment.

• Agencies coordinate, simplify, and harmonize regulations to reduce costs and promote certainty for businesses and the public.

• Agencies consider low-cost approaches that reduce burdens and maintain flexibility.

• Regulations be guided by objective scientific evidence.

At the time of issuance of the Executive Order, the Department took two immediate steps to launch its retrospective review of existing regulatory and reporting requirements.First,the Department issued a Request for Information (RFI) seeking public comment on how best to review its existing regulations and to identify whether any of its existing regulations should be modified, streamlined, expanded, or repealed.Second,the Department created a link on the Web page of DOE's Office of the General Counsel to an email in-box atRegulatory.Review@hq.doe.gov, which interested parties can use to identify to DOE—on a continuing basis—regulations that may be in need of review.

Additionally, and based on comments received through the RFI, the Department developed a plan for the periodic review of its existing regulations and reporting obligations. That plan was released in August 2011 and can be accessed athttp://www.whitehouse.gov/21stcenturygov/actions/21st-century-regulatory-system.

The Department is committed to maintaining a consistent culture of retrospective review and analysis. Its plan sets forth a process for identifying significant rules that are obsolete, unnecessary, unjustified, excessively burdensome, or counterproductive. Once such rules have been identified, DOE will, after considering public input on any proposed change, determine what action is necessary or appropriate. Moreover, DOE's initial identification of rules meriting review does not represent the completion of the retrospective review process. Instead, DOE will continually engage in review of its rules to determine whether there are burdens on the public that can be avoided by amending or rescinding existing requirements. To that end, while the Department is always open to receiving information about the impact of its regulations, it is publishing today's RFI to solicit public input again.

While the Department promulgates rules in accordance with the law and to the best of its analytic capability, it is difficult to be certain of the consequences of a rule, including its costs and benefits, until it has been tested. Because knowledge about thefull effects of a rule is widely dispersed in society, members of the public are likely to have useful information and perspectives on the benefits and burdens of existing requirements and how regulatory obligations may be updated, streamlined, revised, or repealed to better achieve regulatory objectives, while minimizing regulatory burdens. Interested parties may also be well-positioned to identify those rules that are most in need of review and, thus, assist the Department in prioritizing and properly tailoring its retrospective review process. In short, engaging the public in an open, transparent process is a crucial step in DOE's review of its existing regulations.

The following list of questions represents an attempt by the Department to assist in the formulation of comments and is not intended to restrict the issues that may be addressed. In addressing these questions or others, DOE requests that commenters identify with specificity the regulation or reporting requirement at issue, providing legal citation where available. The Department also requests that the submitter provide, in as much detail as possible, an explanation why a regulation or reporting requirement should be modified, streamlined, expanded, or repealed, as well as specific suggestions of ways the Department can better achieve its regulatory objectives.

(1) How can the Department best promote meaningful periodic reviews of its existing rules and how can it best identify those rules that might be modified, streamlined, expanded, or repealed?

(2) What factors should the agency consider in selecting and prioritizing rules and reporting requirements for review?

(3) Are there regulations that are or have become unnecessary, ineffective, or ill advised and, if so, what are they? Are there rules that can simply be repealed without impairing the Department's regulatory programs and, if so, what are they?

(4) Are there rules or reporting requirements that have become outdated and, if so, how can they be modernized to accomplish their regulatory objectives better?

(5) Are there rules that are still necessary, but have not operated as well as expected such that a modified, stronger, or slightly different approach is justified?

(6) Does the Department currently collect information that it does not need or use effectively to achieve regulatory objectives?

(7) Are there regulations, reporting requirements, or regulatory processes that are unnecessarily complicated or could be streamlined to achieve regulatory objectives in more efficient ways?

(8) Are there rules or reporting requirements that have been overtaken by technological developments? Can new technologies be leveraged to modify, streamline, or do away with existing regulatory or reporting requirements?

(9) How can the Department best obtain and consider accurate, objective information and data about the costs, burdens, and benefits of existing regulations? Are there existing sources of data the Department can use to evaluate the post-promulgation effects of regulations over time? We invite interested parties to provide data that may be in their possession that documents the costs, burdens, and benefits of existing requirements.

(10) Are there regulations that are working well that can be expanded or used as a model to fill gaps in other DOE regulatory programs?

The Department notes that this RFI is issued solely for information and program-planning purposes. While responses to this RFI do not bind DOE to any further actions related to the response, all submissions will be made publically available onhttp://www.regulations.gov.

Executive Order 12866

The Office of Management and Budget (OMB) has determined that this rule is non-significant for the purpose of Executive Order 12866 and, therefore, it has not been reviewed by OMB.

Pursuant to the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the collections of information in this rule have been approved by OMB under control number 0563-0053 through March 31, 2012. However, FCIC is creating a new package for the information collection requirements necessary for administering 7 CFR, part 400, subpart U.

Accordingly, in accordance with the Paperwork Reduction Act of 1995, RMA is seeking comments from all interested individuals and organizations on a new information collection request associated with 7 CFR, part 400, subpart U—Ineligibility for Programs under the Federal Crop Insurance Act.

You may submit comments, identified by Docket ID No. FCIC-11-0009, by going to the Federal eRulemaking Portal:http://www.regulations.gov. Follow the instructions for submitting comments.

Title:7 CFR, part 400, subpart U—Ineligibility for Programs under the Federal Crop Insurance Act.

OMB Control Number:0563—NEW.

Type of Request:New.

Abstract:The following mandates require FCIC to identify persons who are ineligible to participate in the Federal crop insurance program administered under the Federal Crop Insurance Act.

(1) Section 1764 of the Food Security Act of 1985 (Pub. L. 99-198);

(2) 21 U.S.C., Chapter 13;

(3) Section 14211 of the Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246);

(4) Executive Order 12549; and

(5) 7 U.S.C. 1515.

The FCIC and Approved Insurance Providers (AIPs) use the information collected to determine whether persons seeking to obtain Federal crop insurance coverage are ineligible for such coverage according to the aforementioned mandates. The purpose of collecting the information is to ensure persons that are ineligible for benefits under the Federal crop insurance program are accurately identified as such and do not obtain benefits to which they are not eligible.

FCIC and RMA do not obtain information used to identify a person as ineligible for benefits under the Federal crop insurance program directly from the ineligible person. AIPs notify RMA of persons with a delinquent debt electronically through a secure automated system. RMA (1) Sends written notification to the person informing them they are ineligible for benefits under the Federal crop insurance program; and (2) places that person on the RMA Ineligible Tracking System until the person regains eligibility for such benefits.

RMAs Office of General Counsel notifies RMA in writing of persons convicted of controlled substance violations. RMA (1) Sends written notification to the person informing them they are ineligible for benefits under the Federal crop insurance program; and (2) places that person on RMAs Ineligible Tracking System until the person regains eligibility for such benefits.

Persons debarred, suspended or disqualified by RMA are (1) Notified, in writing, they are ineligible for benefits under the Federal crop insurance program; and (2) placed on RMAs Ineligible Tracking System until the person regains eligibility for such benefits.

Information identifying persons who are ineligible for benefits under the Federal crop insurance program is made available to all AIPs through RMAs Ineligible Tracking System. The Ineligible Tracking System is an electronic system, maintained by RMA, which identifies persons who are ineligible to participate in the Federal crop insurance program. The information must be made available to all AIPs to ensure ineligible persons cannot circumvent the mandates by switching from one AIP to another.

In addition, information identifying persons who are debarred, suspended or disqualified by RMA is provided to the General Services Administration to be included in the Excluded Parties List System, an electronic system maintained by the General Services Administration that provides current information about persons who are excluded or disqualified from covered transactions.

Estimate of burden:Reporting burden for the collection and transmission of information by AIPs is estimated to average 15 minutes per response.

Respondents:Approved Insurance Providers.

Estimated number of respondents:16 AIPs.

Estimated number of forms per respondent:All information is obtained electronically from AIPs.

Estimated total annual responses:5,792 total from all respondents.

Estimated total annual respondent burden:1,448 total from all respondents.

We are requesting comments on all aspects of this information collection to help us to:

(1) Evaluate whether the collection of information is necessary for the proper performance of the functions of the agencies, including whether the information will have practical utility;

(2) Evaluate the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used;

(3) Enhance the quality, utility and clarity of the information to be collected; and

(4) Minimize the burden of the collection of information on those who are to respond.

All comments in response to this notice, including names and addresses when provided, will be a matter of public record. Comments will be summarized and included in the request for OMB approval.

FCIC is committed to complying with the E-Government Act of 2002, 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.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

It has been determined under section 1(a) of Executive Order 13132,Federalism, that this rule does not have sufficient implications to warrant consultation with the States. The provisions contained in this rule will not have a substantial direct effect on States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications.

FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Program requirements for the Federal crop insurance program are the same for all producers regardless of the size of their farming operation. However, FCIC does waive certain administrative fees for limited resource farmers to help ensure that small entities are given the same opportunities as large entities to obtain crop insurance. This regulation provides the rules regarding ineligibility for crop insurance under the Act based on actions or inactions of the producer, such as violations of the Controlled Substance Act, debarment from Federal Government programs, and failure to pay premiums and administrative fees when due. As such, all producers are treated equally under this regulation. A Regulatory Flexibility Analysis has not been prepared since this regulation does not have an unduly burdening impact on small entities, and therefore, this regulation is exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605).

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. See the Notice related to 7 CFR part 3015, subpart V, published at 48 FR 29115, June 24, 1983.

This proposed rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith.

This action is not expected to have a significant economic impact on the quality of the human environment, health, or safety. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is needed.

FCIC proposes to revise 7 CFR part 400 by revising subpart U—Ineligibility for Programs Under the Federal Crop Insurance Act to eliminate redundancies, improve clarity, remove or update obsolete references, and simplify the regulations regarding ineligibility for Federal crop insurance. The rule will also reflect the provisions of the Controlled Substances Act and the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The Controlled Substance Act provides that persons convicted of possession or trafficking of controlled substances are ineligible for certain Federal benefits, including crop insurance. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 provides that persons who are not a United States citizen, United States non-citizen national, or a qualified alien are ineligible for certain Federal benefits, including crop insurance.

The proposed rule also incorporates the provisions formally contained in 7 CFR part 400, subpart F into subpart U for efficiency and ease of use. Accordingly, subpart F will be removed and reserved.

Last, 7 CFR part 400, subpart C was promulgated in 1992 to allow certain crop insurance policies to be cancelled when producers applied for crop insurance believing they were required to obtain such crop insurance in order to participate in certain Commodity Credit Corporation disaster payment programs, but subsequently determined that such crop insurance was not a prerequisite. Amendments to the Federal Crop Insurance Act and the authorization and implementation of the Noninsured Crop Assistance Program have made the provisions of subpart C obsolete. Accordingly, this rule will remove and reserve subpart C. The provisions will be effective for the 2013 and succeeding crop years.

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation proposes to amend 7 CFR part 400 as follows:

Executive Order 12866

The Office of Management and Budget (OMB) has determined that this rule is non-significant for the purpose of Executive Order 12866 and, therefore, it has not been reviewed by OMB.

Pursuant to the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), the collections of information in this rule have been approved by OMB under control number 0563-0053.

FCIC is committed to complying with the E-Government Act of 2002, 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.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

It has been determined under section 1(a) of Executive Order 13132, Federalism, that this rule does not have sufficient implications to warrant consultation with the States. The provisions contained in this rule will not have a substantial direct effect on States, or on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

This rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications.

FCIC certifies that this regulation will not have a significant economic impact on a substantial number of small entities. Program requirements for the Federal crop insurance program are the same for all producers regardless of the size of their farming operation. For instance, all producers are required to submit an application and acreage report to establish their insurance guarantees and compute premium amounts, and all producers are required to submit a notice of loss and production information to determine the amount of an indemnity payment in the event of an insured cause of crop loss. Whether a producer has 10 acres or 1000 acres, there is no difference in the kind of information collected. To ensure crop insurance is available to small entities, the Federal Crop Insurance Act authorizes FCIC to waive collection of administrative fees from limited resource farmers. FCIC believes this waiver helps to ensure that small entities are given the same opportunities as large entities to manage their risks through the use of crop insurance. A Regulatory Flexibility Analysis has not been prepared since this regulation does not have an impact on small entities, and therefore, this regulation is exempt from the provisions of the Regulatory Flexibility Act (5 U.S.C. 605).

This program is listed in the Catalog of Federal Domestic Assistance under No. 10.450.

This program is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. See the Notice related to 7 CFR part 3015, subpart V, published at 48 FR 29115, June 24, 1983.

This proposed rule has been reviewed in accordance with Executive Order 12988 on civil justice reform. The provisions of this rule will not have a retroactive effect. The provisions of this rule will preempt State and local laws to the extent such State and local laws are inconsistent herewith. With respect to any direct action taken by FCIC or action by FCIC to require the insurance provider to take specific action under the terms of the crop insurance policy, the administrative appeal provisions published at 7 CFR part 11 or 7 CFR part 400, subpart J for the informal review process of good farming practices as applicable, must be exhausted before any action against FCIC may be brought.

This action is not expected to have a significant economic impact on the quality of the human environment, health, or safety. Therefore, neither an Environmental Assessment nor an Environmental Impact Statement is needed.

FCIC proposes to revise 7 CFR part 457, Common Crop Insurance Regulations, by revising § 457.133, Prune Crop Insurance Provisions, to be effective for the 2013 and succeeding crop years. Several requests have been made for changes to improve the coverage offered, address program integrity issues, and improve clarity of the Prune Crop Insurance Provisions.

The proposed changes to § 457.133 are as follows:

1. FCIC proposes to remove the paragraph immediately preceding section 1 which refers to the order of priority in the event of a conflict. This same information is contained in the Basic Provisions. Therefore, it is duplicative and should be removed in the Crop Provisions.

2. Section 1—FCIC proposes to remove the definitions of “market price for standard prunes” and “substandard prunes.” These terms and definitions are no longer needed with the proposedremoval of quality adjustment for substandard prunes in section 11(e).

FCIC proposes to revise the definition of “standard prunes” to replace the phrase “grading standards” with the phrase “grade standards.” The term “grade standards,” rather than “grading standards,” is consistent with terminology in other Crop Provisions administered by FCIC and is a more accurate term.

3. Section 3—FCIC proposes to revise paragraphs (a) and (b) to remove the phrase “varietal group” and replace it with the word “type” everywhere it appears. Varietal groups are typically identified in the Special Provisions. However, prunes are not categorized by varietal group in the Special Provisions, rather they are categorized by type. Therefore, using the word “type” is more appropriate.

FCIC proposes to redesignate section 3(c) as section 3(d) and designate the undesignated paragraph following section 3(b) as section 3(c). FCIC proposes to revise newly designated section 3(c) to add provisions to specify how yields will be reduced if an event or action occurs that may reduce the yield potential based on when the situation is reported. The current provision states that the insurance provider will reduce the yield used to establish the insured's production guarantee, but does not tell when or how. The proposed section 3(c)(1) states that if a situation that may reduce the insured's yield is reported before the beginning of the insurance period, the yield used to establish the insured's production guarantee will be reduced for the current crop year regardless of whether the situation was due to an insured or uninsured cause of loss. The proposed section 3(c)(2) states that if a situation that may reduce the insured's yield is reported after the beginning of the insurance period and the insured notifies the insurance provider by the production reporting date, the yield used to establish the insured's production guarantee will be reduced for the current crop year only if the potential reduction in the yield used to establish the insured's production guarantee is due to an uninsured cause of loss. The proposed section 3(c)(3) states that if a situation that may reduce the insured's yield is reported after the beginning of the insurance period and the insured fails to notify the insurance provider by the production reporting date, an amount equal to the reduction in the yield will be added to the production to count calculated in section 11(c) due to uninsured causes and the insurance provider will reduce the yield used to establish the insured's production guarantee for the subsequent crop year.

FCIC also proposes to revise newly designated section 3(c) to remove the list of possible situations that affect yield and instead refer back to section 3(b), which contains the same information. This eliminates redundancy and is consistent with other perennial Crop Provisions, such as apples, grapes, and stonefruit.

4. Section 6—FCIC proposes to revise section 6(c) by removing the requirements for the insured crop to be grown on tree varieties that were commercially available at set out and tree varieties that are adapted to the area because these provisions have created confusion as to which varieties meet these requirements. FCIC proposes to add a requirement for the insured crop to be grown on trees that are listed in the Special Provisions. This provision will eliminate any confusion as to which varieties are insurable because insurable varieties will be listed in the Special Provisions. FCIC proposes to remove the requirement for trees to be irrigated because insurable practices are listed in the Special Provisions.

5. Section 8—FCIC proposes to revise section 8(a) to state that the year of application coverage begins on March 1. FCIC proposes to revise section 8(c) to remove the phrase “Notwithstanding paragraph (a)(1) of this section.” These changes will allow continuous coverage of the citrus fruit from year to year with no gaps in coverage. This proposed change is consistent with other perennial Crop Provisions, such as apples and grapes.

6. Section 9—FCIC proposes to add provisions in section 9(a) that allow insects and disease to be insurable causes of loss unless damage is due to insufficient or improper application of control measures. FCIC proposes to remove the provisions in section 9(b)(1) that excludes insects and disease from insurability unless adverse weather prevents the proper application of control measures or causes properly applied control measures to be ineffective or causes disease or insect infestation for which no effective control mechanism is available. This will make insects and disease a presumed insurable cause of loss unless one of the stated conditions exists as opposed to a presumed uninsurable cause of loss unless one of the stated conditions exists.

7. Section 10—FCIC proposes to add a new section 10(a) to clarify the insured must leave representative samples for appraisal purposes in accordance with the Basic Provisions. The rest of the provisions are proposed to be redesignated.

8. Section 11—FCIC proposes to revise section 11(b) to remove the phrase “varietal group” and replace it with the word “type” everywhere it appears. As stated above, varietal groups are typically identified in the Special Provisions. However, prunes are not categorized by varietal group in the Special Provisions, rather they are categorized by type. Therefore, using the word “type” is more appropriate.

FCIC proposes to revise the settlement of claim examples in section 11(b). FCIC proposes to revise the example by changing the term “varietal group” to “type” everywhere it appears in the example for reasons stated above. FCIC proposes to revise the example to illustrate the correct rounding of decimals and to identify units consistently. FCIC also proposes to revise the introductory paragraph of the second part of the example to clarify that information contained in the second part of the example is in addition to the information contained in the first part of the example. These changes are proposed to improve accuracy and readability of the example.

FCIC proposes to revise section 11(c) to replace the phrase “grade substandard or better” with the phrase “meet the definition of standard prunes.” The phrase “grade substandard or better” is no longer applicable with the proposed removal of quality adjustment for substandard prunes in section 11(e).

FCIC proposes to remove section 11(e) which removes the provisions regarding quality adjustment for substandard prunes. The calculation used to determine the quality adjustment factor was the value per ton of substandard prunes divided by the market price per ton for standard prunes. In addition, there was a statement on the Special Provisions that reduced the value per ton by the harvest cost per ton prior to calculating the quality adjustment factor. The value per ton of substandard prunes is a value published by the Prune Bargaining Association (PBA). In recent years, PBA has either not published a substandard price or has published a price that is near or below zero. In some instances, PBA's value per ton for substandard prunes was so low that when the harvest cost per ton specified in the Special Provisions was deducted from the value per ton, the result was less than zero. When the value of substandard prunes is less than or equal to zero, substandard prune production does not count as production to count for claims purposes. The quality adjustmentprocedure was burdensome to the producer and the insurance provider who had to wait until the PBA published prices to settle claims and it generally had little to no effect on indemnities so the quality adjustment procedures are being removed from the policy. As proposed, only counting as production to count those prunes that meet the specified standards will take into consideration the quality of the prunes.

Accordingly, as set forth in the preamble, the Federal Crop Insurance Corporation proposes to amend 7 CFR part 457 effective for the 2013 and succeeding crop years to read as follows:

Background Introduction

The Federal Meat Inspection Act (FMIA) (21 U.S.C. 601et seq.) and the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451et seq.) direct the Secretary of Agriculture to maintain meat and poultry product inspection programs designed to assure consumers that meat and poultry products distributed to them (including imports) are safe, wholesome, not adulterated, and properly marked, labeled, and packaged. Section 2 of the FMIA (21 U.S.C. 602) and section 2 of the PPIA (21 U.S.C. 451) state that unwholesome, adulterated, or misbranded meat or meat food products and poultry or poultry food products are injurious to the public welfare; destroy markets for wholesome, not adulterated, and properly marked, labeled, and packaged products; and result in sundry losses to producers and processors of meat and poultry products, as well as injury to consumers. Therefore, Congress has granted to the Secretary broad authority to protect consumers' health and welfare.

Section 7(d) of the FMIA (21 U.S.C. 607(d)) states: “No article subject to this title shall be sold or offered for sale by any person, firm, or corporation, in commerce, under any name or other marking or labeling which is false or misleading, or in any container of amisleading form or size, but established trade names and other marking and labeling and containers which are not false or misleading and which are approved by the Secretary are permitted.” The PPIA contains similar language in section 8(c) (21 U.S.C. 457(c)).

The Department's longstanding interpretation of these provisions is that they require that the Secretary of Agriculture or his or her representative approve all labels to be used on federally inspected and passed, and imported, meat and poultry products before the products are distributed in commerce. Without approved labels, meat and poultry products may not be sold, offered for sale, or otherwise distributed in commerce.

These prior label approval provisions also apply to establishments that do business solely within designated States (see 21 U.S.C. 451 and 602). A State is designated if it does not have, or is not effectively enforcing, with respect to establishments within its jurisdiction at which livestock or poultry are slaughtered, or at which their carcasses or products are prepared for use as human food solely for distribution within such State, requirements at least equal to those contained in titles I and IV of the FMIA and specified sections of the PPIA (21 U.S.C. 454(c)(1) and 661(c)(1)). Once a State is designated, the inspection requirements of the FMIA and PPIA apply to establishments that slaughter livestock and poultry, and prepare or process meat or poultry products, solely for distribution within the State.

There are up to eight features required on most meat and poultry labels. The mandatory features are designed to ensure that meat and poultry products are accurately and truthfully labeled, and that they provide the necessary product information for consumers to make an informed purchasing decision. These required features of meat and poultry product labels must appear on the immediate containers of domestic products (9 CFR part 317, subpart A, and 9 CFR part 381, subpart N) and imported products (9 CFR part 327 and 9 CFR part 381, subpart T). The meat inspection regulations define an “immediate container” as the receptacle or other covering in which any product is directly contained or wholly or partially enclosed (9 CFR 301.2). The poultry products inspection regulations define an “immediate container” as any consumer package or any other container in which poultry products, not consumer packaged, are packed (9 CFR 381.1(b)).

The required features include: (1) The standardized, common or usual, or descriptive name, of the product (9 CFR 317.2(e) and 381.117); (2) an ingredients statement containing the common or usual name of each ingredient of the product listed in descending order of predominance (9 CFR 317.2(f) and 381.118); (3) the name and place of business of the manufacturer, packer, or distributor (9 CFR 317.2(g) and 381.122); (4) an accurate statement of the net quantity of contents (9 CFR 317.2(h) and 381.121); (5) the inspection legend, including the number of the official establishment (9 CFR 317.2(i) and 381.123); (6) a safe handling statement if the product is perishable;e.g.,“Keep Frozen” or “Keep Refrigerated” (9 CFR 317.2(k) and 381.125(a)); (7) nutrition labeling for applicable meat and poultry products;1 and (8) safe handling instructions if the meat or poultry component of the product is not ready-to-eat (9 CFR 317.2(l) and 381.125(b)). In addition, imported meat and poultry products must bear the country of origin under the product name in accordance with 9 CFR 327.14(b)(1) and 381.205(a).

These mandatory features must be prominently and informatively displayed on the principal display panel, the information panel, or other surface of the product label. The first six features described above, including the labeling of country of origin for imported products in accordance with 9 CFR 327.14 and 381.205, have been required by the meat and poultry inspection regulations for decades. FSIS implemented regulations that require the nutrition labeling of cooked or heat-treated multi-ingredient meat and poultry products and the display of safe handling instructions in 1993 and 1994, respectively. Therefore, industry has had a significant amount of experience complying with the regulations for all required label features.

The regulations contain other provisions to ensure that no statement, word, picture, design, or device that is false or misleading in any particular, or that conveys any false impression, or that gives any false indication of origin, identity, or quality, appears in any marking or other labeling (9 CFR 317.8 and 381.129). Pursuant to the authority contained in section 7(e) of the FMIA (21 U.S.C. 607(e)) and section 8(d) of the PPIA (21 U.S.C. 457(d)), the Administrator, FSIS, may withhold the use of any marking or labeling that is false or misleading, within the meaning of the FMIA or the PPIA and the implementing regulations.

In order to ensure that meat and poultry products comply with the FMIA and PPIA and their implementing regulations, FSIS conducts a prior approval program for labels that are to be used on federally inspected meat and poultry products and imported products (see 9 CFR 317.4, 317.5, 327.14, 381.132, 381.133, 381.134, and 381.205).

Under the current program, FSIS evaluates sketches of labels for approval. A “sketch label” is a printer's proof or other version that clearly shows all required label features, size, location, and indication of final color. To obtain sketch label approval, domestic meat and poultry establishments and certified foreign establishments, or their representatives, submit sketch labels to FSIS for evaluation, except when the label is generically approved by the Agency under 9 CFR 317.5 or 381.133.

Meat and poultry establishments and certified foreign establishments submit sketch labels accompanied by FSIS Form 7234-1 (01/08/2008), “Application for Approval of Labels, Marking or Device,” to the Agency for evaluation. In addition to the required label information, any special claims or statements that the establishment intends to make (e.g.,quality claims, animal production raising claims, product origin claims, or nutrient content claims) must be included on the label, along with documentation supporting the claim. The label application must contain the basic information about the establishment and the product, including:

1. Establishment number;

2. Product name;

3. Product formulation;

4. Processing procedures and handling information;

4. Firm name and address;

5. Total available labeling space of the container;

6. Size of the principal display panel; and

7. The Hazard Analysis and Critical Control Point category under which the establishment is producing the meat or poultry product.

All such information is evaluated by a technical labeling policy expert in FSIS, who is responsible for verifying that sketch labels comply with the applicable requirements. A “final label”does not have to be submitted to the Agency for evaluation and approval. Since July 1, 1996, meat and poultry establishments and certified foreign establishments have been responsible for ensuring that the labels that they apply to their meat and poultry products comply with Federal regulations. All labels are subject to FSIS verification for compliance with Agency regulations to ensure that they are accurate, truthful, and not misleading. The management of the official establishment or establishment certified under a foreign inspection system must maintain a copy of all labels and labeling used, along with the product formulation and processing procedures. Such records must be made available to any duly authorized representative of the Secretary upon request.

Generic label approval refers to the prior approval of labels or modifications to labels by the Agency without submitting such labels to FSIS for sketch approval. Generic label approval requires that all mandatory label features be in conformance with FSIS regulations (9 CFR 317.5(a)(1) and 381.133(a)(1)). Although such labels are not submitted to FSIS for approval, they are deemed to be approved and, therefore, may be applied to product in accordance with the Agency's prior label approval system.

In 1983, FSIS estimated that it evaluated approximately 130,000 label submissions a year. That year, the Agency promulgated regulations that granted limited label approval authority to the Inspector-In-Charge (IIC) at official establishments and provided generic approval to limited types of labels (e.g.,labels for raw, single ingredient meat and poultry products) (48 FR 11410, March 18, 1983). This generic approval did not extend to the labels of the products of certified foreign establishments. The rulemaking was intended to reduce the number of labels and other labeling submitted for evaluation by FSIS and to lessen the paperwork burden on official establishments. The general goal was to improve the efficiency of the label approval system by streamlining the review process.

Even with the changes made by the rule, however, the number of labels and other labeling submitted to the Agency continued to grow. During fiscal year 1991, the Agency processed approximately 167,500 labels. Of these, 87,500 were final labels, and 60,000 were sketch labels that were approved. Approximately 20,000 labels were not approved. The Agency did not maintain records on the number of temporary approvals or other types of labeling (e.g.,insert labeling applied at retail) that were evaluated and acted upon by the Agency.

On March 25, 1992, FSIS published an Advance Notice of Proposed Rulemaking (ANPRM) (57 FR 10300, Mar. 25, 1992) on the Agency's prior label approval system. The ANPRM presented two options for making additional changes to the prior label approval system: (1) Revise the system by significantly reducing the scope of review through expansion of the categories of generically approved labels and replacing the general requirement of FSIS approval of sketch and final labels with one for sketch labels only; or (2) replace the system with a system in which all labels are generically approved and used without prior submission to FSIS for evaluation and approval.

On November 23, 1993, FSIS published a proposed rule (58 FR 62014) to amend the Federal meat and poultry products inspection regulations by expanding the types of generically approved labels authorized for use on meat and poultry products by official establishments in the United States and foreign establishments certified under foreign inspection systems. The rule was proposed as a first step in the gradual streamlining and modernization of the label approval system. In the proposal, the Agency sought comment on a long-term plan to implement a system in which all labels are generically approved. After reviewing the comments received in response to the proposed rule, and in light of FSIS's ongoing reassessment of its labeling policies, FSIS decided to proceed with a gradual streamlining and modernization of the label approval system.

On December 29, 1995 (effective July 1, 1996), FSIS published a final rule titled “Prior Label Approval System” (60 FR 67334). The implementing regulations, 9 CFR 317.5 and 381.133, outline the types of labels and modifications to labels that are deemed to be approved without submission to FSIS, provided that the label displays all mandatory label features in conformance with applicable Federal regulations.

FSIS permits official establishments and foreign establishments certified by officials of foreign inspection systems to use the following generically approved labeling without the submission of sketches for evaluation and approval by FSIS:

1. Labels for a product that has a standard of identity or composition as specified in 9 CFR part 319 or part 381, subpart P, or is consistent with an informal standard that the Agency has laid out in the Food Standards and Labeling Policy Book; does not bear any special claims, such as quality claims, nutrient content claims, health claims, negative claims, geographical origin claims (except as provided by 9 CFR 317.5(b)(9)(xxv) and 381.133 (b)(9)(xxviii)), or guarantees; and is not a product that is not domestic and labeled in a foreign language;

2. Labels for raw, single-ingredient products (such as beef steak, lamb chops, chicken legs, or turkey breasts) that do not bear special claims, such as quality claims, nutrient content claims, health claims, negative claims, geographical origin claims, or guarantees, and are not products that are not domestic and labeled with a foreign language;

3. Labels for containers of meat and meat food products and poultry products sold under contract specifications to Federal Government agencies when such product is not offered for sale to the general public, provided that the contract specifications include specific requirements with respect to labeling that is made available to the IIC;

4. Labels for shipping containers that contain fully labeled immediate containers, provided that the outside container's labels comply with 9 CFR 316.13 or 381.127;

5. Labels for products not intended for human food, provided that they comply with 9 CFR part 325 or 9 CFR 381.152(c) and 381.193; and labels for poultry heads and feet for export for processing as human food if they comply with 9 CFR 381.190(b);

6. Meat and poultry inspection legends that comply with 9 CFR parts 312 and 316, and 9 CFR part 381, subpart M;

7. Inserts, tags, liners, posters, and like devices containing printed or graphic matter and for use on, or to be placed within, containers and coverings of products, provided such devices contain no reference to product and bear no misleading feature;

8. Labels for consumer test products not intended for sale; and

9. Labels that were previously approved by FSIS as sketch labels, and the final labels were prepared without modification or with the following modifications:

a. All features of the label are proportionately enlarged or reduced, provided that all minimum size requirements specified in applicableregulations are met, and the label is legible;

b. A substitution of any unit of measurement with its abbreviation or the substitution of any abbreviation with its unit of measurement,e.g.,“lb.” for “pound,” or “oz.” for “ounce,” or of the word “pound” for “lb.” or “ounce” for “oz.”;

c. A master or stock label that has been approved from which the name and address of the distributor are omitted, and such name and address are applied before being used (in such case, the words “prepared for” or similar statement must be shown together with the blank space reserved for the insertion of the name and address when such labels are offered for approval);

d. Wrappers or other covers bearing pictorial designs, emblematic designs, or illustrations,e.g.,floral arrangements, illustrations of animals, fireworks, etc., are used with approved labels (the use of such designs will not make necessary the application of labeling not otherwise required);

e. A change in the language or the arrangement of directions pertaining to the opening of containers or the serving of the product;

f. The addition, deletion, or amendment of a dated or undated coupon, a cents-off statement, cooking instructions, packer product code information, or UPC product code information;

g. Any change in the name or address of the packer, manufacturer, or distributor that appears in the signature line;

h. Any change in net weight, provided the size of the net weight statement complies with 9 CFR 317.2 or 381.121;

i. The addition, deletion, or amendment of recipe suggestions for the product;

j. Any change in punctuation;

k. Newly assigned or revised establishment numbers for a particular establishment for which use of the label has been approved by FSIS;

l. The addition or deletion of open dating information;

m. A change in the type of packaging material on which the label is printed;

n. Brand name changes, provided that there are no design changes, the brand name does not use a term that connotes quality or other product characteristics, the brand name has no geographic significance, and the brand name does not affect the name of the product;

o. The deletion of the word “new” on new product labels;

p. The addition, deletion, or amendment of special handling statements, such as “Keep Refrigerated” or “Keep Frozen,” provided that the change is consistent with 9 CFR 317.2(k) or 381.125(a);

q. The addition of safe handling instructions as required by 9 CFR 317.2(l) and 381.125(b);

r. Changes reflecting a change in the quantity of an ingredient shown in the formula without a change in the order of predominance shown on the label, provided that the change in quantity of ingredients complies with any minimum or maximum limits for the use of such ingredients prescribed in 9 CFR parts 318, 319, 424, subpart C, and 381, subpart P;

s. Changes in the color of the label, provided that sufficient contrast and legibility remain;

t. The addition, deletion, or substitution of the official USDA grade shield on labels of poultry products;

u. A change in the product vignette, provided the change does not affect mandatory label information or misrepresent the content of the package;

v. A change in an establishment number by a corporation or parent company for an establishment under its ownership;

w. Changes in nutrition labeling that only involve quantitative adjustments to the nutrition labeling information, except for serving sizes, provided the nutrition labeling information maintains its accuracy and consistency;

x. Deletion of any claim, and the deletion of non-mandatory features or non-mandatory information;

y. The addition or deletion of a direct translation of the English language into a foreign language for products marked “for export only”; and

z. A country of origin statement on any product label described in 9 CFR 317.8(b)(40) and 381.129(f) that complies with the requirements in these paragraphs.

With the implementation of the 1995 final rule on July 1, 1996, FSIS transferred the responsibility for maintaining labeling records from IICs to official establishments in the United States and to foreign establishments certified by officials of a foreign inspection system. Each record must include a copy of the labeling, the product formulation, and processing procedures (9 CFR 320.1(b)(11)). This transfer of responsibility was done to be consistent with the record keeping requirements of other production related areas,e.g.,Sanitation (9 CFR 416.16) and Hazard Analysis and Critical Control Point (HACCP) Systems (9 CFR 417.5). For example, establishments are required to maintain copies of their HACCP plan, hazard analysis, records documenting the monitoring of critical control points, and sanitation operating procedures. These records must be made available to FSIS personnel upon request. Establishments are required to maintain records for product formulation and labeling similar to HACCP and Sanitation Standard Operating Procedure (SOP) records because establishments are responsible for ensuring the accuracy of all final labels applied to product.

To facilitate Agency verification of compliance with regulatory labeling requirements, FSIS requires that establishments make labeling records available to any authorized USDA official upon request (9 CFR 320.4). The Agency published FSIS Directive 7221.1, Amendment 1, titled “Prior Labeling Approval,” on August 19, 1996, to provide instructions to Federal inspectors on their responsibilities in verifying that the modifications to the FSIS food labeling prior approval program regulations were implemented effectively and without disruption of the inspection process.

As part of the 1995 final rule, FSIS stated that it intended to proceed with the gradual streamlining and modernization of the prior label approval system. FSIS anticipated making additional changes after it completed an assessment of the modified system.

FSIS announced that it would sample labels applied by establishments under the generic label approval regulations to assess compliance with the FMIA and the PPIA (9 CFR 317.5(a)(2) and 381.133(a)(2)). To effect this sampling, the Agency issued FSIS Directive 7221.1, Amendment 1, which instituted a nationally directed surveillance plan. Following implementation of the surveillance plan, FSIS assessed whether establishments were applying the generic label regulations correctly. The Agency brought label discrepancies to the attention of establishments for correction when it found them.

The Agency has used its surveillance to assess compliance trends and to determine whether any new labeling regulations or guidance materials are needed. FSIS assembled a taskforce of employees to: (1) Develop criteria and methods to select labels for sampling; (2) develop the appropriate compliance activity to respond to labeling errors; (3) develop tracking and reporting systems; and (4) design and implement a survey of the effects of the limited generic approvals.

The results of a survey2 showed that 685 of the 1,107 establishmentsoperating at the time of the survey (193 establishments that were selected to be surveyed were no longer operating) used generically approved labels. Of the 1,513 labels that inspection program personnel submitted to FSIS headquarters, 538 were in compliance with all Federal regulations and policies, 896 had minor labeling errors (for example, insufficient spacing around the declaration of net weight or an error in the name of the manufacturer, packer, or distributor) that were not of public health or economic significance, and 79 had labeling errors that could not be granted a temporary approval without modification (e.g.,an incomplete product name). Sections 317.4(f) and 381.132(f) of Title 9 of the CFR provide for the temporary use of final labels that may be deficient under the following conditions: (1) The product label does not misrepresent the product; (2) the use of the label does not present any potential health, safety, or dietary problems to the consumer; (3) denial of use would create an undue economic hardship; and (4) an unfair competitive advantage would not result from the granting of the temporary approval.

Although 79 of the 1,513 labels that were surveyed had deficiencies that could not be granted temporary approval without modification (e.g.,through the use of pressure sensitive stickers to correct label features not in compliance with Federal regulations), FSIS concluded that the survey showed that the great majority of establishments surveyed could effectively use generically approved labels without first submitting sketch labels to FSIS for evaluation and approval. Furthermore, the Agency concluded that the results showed enough acceptable compliance by establishments for FSIS to confirm that the gradual implementation of generic label provisions under the 1995 final rule was effective.

In the years since the survey was conducted and the last major change to the generic label regulations was made, the Agency has emphasized the importance of providing guidance and outreach to industry, trade groups, and consumers. FSIS has posted most of its labeling policy information on the Agency's Web site to increase accessibility to industry, particularly small businesses. The Labeling and Consumer Protection Reference Center was launched as a Web page in February 1999. The Web page includes a PowerPoint presentation titled “Labeling 101,” which is used by the Agency as a teaching tool at workshops on meat and poultry label requirements. In addition, FSIS has on its Web page guidance on animal production claims and on nutrition labeling, a glossary of meat and poultry labeling terms, the Food Standards and Labeling Policy Book, and questions and answers on various topics, such as irradiation and the labeling of ingredients. The Web page also includes FSIS Form 7234-1, Application for Approval of Labels, Marking and Device, and detailed instructions to assist establishments in preparing label applications for submission to FSIS. In addition, the Agency's labeling policy Web page contains a guidebook that provides information on FSIS labeling requirements, including generic approval. Due to these efforts, and because no other evidence has been submitted to FSIS to suggest that generically approved labeling cannot be successfully applied, FSIS has concluded that expanding the types of labeling that is generically approved is appropriate at this time.

The provisions of the generic label regulations appear to be comprehensive. However, in practical application, they are restrictive regarding the types of labels and labeling changes that are considered by the Agency to be approved without submitting such labeling to the Agency. For example, the label for a non-standardized product, such as a pepperoni pizza (bearing no special statements or claims) that was sketch approved by FSIS would need to be resubmitted for sketch approval if the establishment makes a minor formula change that affects the order of predominance in the ingredients statement. This need to resubmit exists because the generic label regulations only provide for changes to the product formula for non-standardized meat or poultry products that have been sketch approved if the order of predominance in the ingredients statement does not change. Consequently, the current label regulations require industry to submit for approval a significant amount of labeling that the Agency believes could successfully be generically approved. Expanding the types of labels that can be generically approved would lessen the burden on industry to submit labels to the Agency, while allowing the Agency to better focus on, and direct its resources to, other consumer protection and food safety activities.

FSIS is proposing to amend the meat and poultry products inspection regulations (9 CFR 317.5 and 381.133) to expand the circumstances in which the labels of meat and poultry products will be deemed to be generically approved by FSIS. If adopted, the new generic label regulations for meat and poultry will be placed in a new part 412 in Title 9. The Agency is proposing to combine the regulations that provide for the approval of labels for meat products and for poultry products (9 CFR 317.4 and 381.132) into part 412. This proposal, if adopted, will modernize the regulations by expanding the types of labels that FSIS considers generically approved without prior submission to the Agency. This rulemaking will also streamline the regulations by placing all the label approval regulations for meat and poultry products in one part in Title 9.

Under the proposed rule, establishments that apply generically approved labels without prior submission to the Agency will have the responsibility of ensuring that all basic required label features (i.e.,product name, safe handling statement, ingredients statement, address line, net weight, legend, safe handling instructions, nutrition labeling for multi-ingredient products, as well as the country of origin and mark of inspection of the foreign system for imported products) appear on their meat or poultry product labels in accordance with Federal regulations.

If this proposal is adopted, FSIS will require establishments to submit for evaluation only certain types of labeling,e.g.,labels for temporary approval, labels for products produced under religious exemption, labels for export with labeling deviations, and claims and special statements intended for use on labels. FSIS will continue to require the submission of such labels and special statements and claims because they are more likely to present significant policy issues that have health or economic significance. Examples of labeling that will need to be submitted for evaluation and approval before use if this proposal is adopted are: (1) Labels for chicken produced under Buddhist exemption; (2) labels for beef intestine produced for export to China that identify the product as “beef casings,” and (3) labels for temporary use that do not list all ingredients in the correct order of predominance.

Examples of special statements and claims for use on labels are: (1) Claims relating a product's nutrient content to a health or a disease condition; (2) statements that identify a product as “organic” or containing organicingredients; (3) claims regarding meat and poultry production practices; (4) claims that are undefined in FSIS regulations, such as “gluten free;” and (5) instructional or disclaimer statements concerning pathogens,e.g.,“for cooking only” or “not tested forE. coliO157:H7;” and (6) statements that identify a product as “natural.” A special statement or claim may be submitted to the Agency for approval in the context of a final label; however, FSIS will not evaluate the mandatory features (e.g.,handling statement and net weight) that are generically approved by the Agency. FSIS will only evaluate the special statement or claim that is presented on the label.

Under the proposal, statements on labels that are defined in FSIS's regulations or policy guidance,e.g.,a statement that characterizes a product's nutrient content, such as “low fat;” that has geographical significance, such as “Italian Style;” or that makes a country of origin statement on the label of any meat or poultry product “covered commodity,” will not need to be submitted to FSIS for evaluation. Similarly, if this proposal is adopted, FSIS will not view the addition of an allergen statement (e.g.,“contains soy”) applied in accordance with the Food Allergen Labeling and Consumer Protection Act as a special statement or claim that requires sketch approval. The application of statements of this type are clearly prescribed in an FSIS compliance policy guide (http://www.fsis.usda.gov/Regulations_&_Policies/Labeling_Allergens/index.asp).

Through its prior label approval system, FSIS is aware that most establishments are voluntarily applying allergen statements to meat and poultry product labels in accordance with the Agency's compliance policy guide on the use of statements of this type.3 FSIS plans to continue to monitor the application of allergen statements, but as long as the Agency continues to observe the widespread application of allergen statements on a voluntary basis, FSIS will not initiate rulemaking to make allergen statements a required label feature. FSIS intends to continue to use its post-market surveillance activities to ensure that labels containing statements of this type are not false or misleading and comply with all applicable Federal regulations.

The proposed rule will affect several other sections in the meat and poultry inspection regulations that reference label approval or generically approved labels. 9 CFR 317.8(b)(32)(ii) requires the submission of labels bearing calendar dates,e.g.,“sell by date.” FSIS is proposing to amend this section by removing the reference to 9 CFR 317.4 for submitting labels for approval because FSIS no longer believes that labels with these types of phrases need to be submitted before use. The use of phrases relating to calendar dates is prescribed in FSIS regulations, and industry has been applying these types of labeling statements for years.

FSIS is proposing to revise the recordkeeping requirements for product labels, formulation, and processing procedures that are described in 9 CFR 320.1(b)(11) by removing the references to 9 CFR 317.4 and 317.5 and replacing them with a reference to the new label approval regulations for meat and poultry found in 9 CFR part 412.

9 CFR 327.14(c) in FSIS's regulations on meat imports references label approval by FSIS in accordance with 9 CFR part 317. FSIS is proposing to revise 9 CFR 327.14(c) to reference the new label approval regulations in 9 CFR part 412.

FSIS is proposing to remove the reference to 9 CFR 317.4 in 9 CFR 331.3(e) and to replace it with a reference to 9 CFR part 412. The Agency is also proposing replace the outdated references to the “Labels and Packaging Staff, Meat and Poultry Inspection” in these regulations with “FSIS labeling program at headquarters.”

In regard to the poultry label regulations and the use of the term “fresh,” FSIS is proposing to amend 9 CFR 381.129(b)(6)(i) to remove the reference to the current generic label regulations. Because the requirements for the use of the term “fresh” are prescribed in FSIS's regulations, and the term has been used by industry for a number of years, FSIS does not consider it any longer to be a special statement or claim. Therefore, under the proposed rule, establishments will be able to use the term on labels without submitting the labels for evaluation, provided the use of this term is consistent with the provisions of 9 CFR 381.129(b)(6)(i).

Similar to the meat inspection regulations, 9 CFR 381.129(c)(2) requires the approval of phrases with regard to calendar dates on poultry products. FSIS is proposing to amend this regulation by removing the reference to 9 CFR 381.132 for label approval because FSIS considers it no longer necessary to require pre-market approval of the labels on which these types of phrases appear. The use of phrases relating to calendar dates is prescribed in FSIS poultry regulations, and FSIS published several years ago a comprehensive set of guidance material on poultry dating (http://www.fsis.usda.gov/PDF/Labeling_Guide_on_Poultry_Food_Dating.pdf). Thus, ample guidance exists for manufacturers to ensure that the labels on which such information is placed are truthful and not misleading without the need to submit such labels to FSIS first for pre-market evaluation.

FSIS is proposing to eliminate the requirement that any label bearing the USDA approved quality control system logo, and any wording or explanation with respect to the logo, be approved. The logo is illustrated clearly in the regulations, and its use is prescribed as well. As such, FSIS does not believe that labels bearing the logo need to be submitted for approval. If this proposal is adopted, 9 CFR 318.4(f) and 381.145(f) will be amended to remove the references to “parts 316 and 317 of this chapter” and “subparts M and N,” respectively.

FSIS is proposing to revise the recordkeeping requirements for product labels, formulation, and processing procedures described in 9 CFR 381.175(b)(6) to remove the references to 9 CFR 381.132 and 381.133. These references will be replaced with a reference to the new label approval regulations found in 9 CFR part 412.

For the same reason, FSIS is proposing to replace the references to 9 CFR 381.132 and 381.133, which discuss the approval of marks and other labeling for use on immediate containers of imported products, in 9 CFR 381.205(c) with a reference to 9 CFR part 412.

The Agency is also proposing to amend 9 CFR 381.222(d)(1) to remove the reference to 9 CFR 381.132 for label approval and to replace it with a reference to 9 CFR part 412. As with 9 CFR 331.3(e) and 331.3(e)(1), the Agency is proposing to replace the outdated references to the “Labels and Packaging Staff, Meat and Poultry Inspection” in 9 CFR 381.222(d)(2) and (3) with one to the “FSIS labeling program at headquarters.”

In regard to other FSIS regulations, FSIS is proposing to amend footnote 3 in the table of approved substances (9 CFR 424.21(c)) to replace the old references for label approval to 9 CFR 317.4 and 381.32 (which should have actually been 9 CFR 381.132) with a reference to 9 CFR part 412.

Finally, FSIS is proposing to amend 9 CFR 424.22(c)(4), which discusses the need for the approval of labels of irradiated meat and poultry products, by removing the references for label approval in 9 CFR 317.4 and subparts M and N in part 381. Because the requirements for the labels of irradiatedproducts are prescribed in FSIS's regulations, and the term has been used by industry for a number of years, FSIS no longer considers it to be a special statement or claim that requires submitting such labels for approval.

FSIS considered several options in developing this proposed rule. The first option FSIS considered was to maintain the current prior label approval system. Under this option, FSIS would not modernize its regulations by increasing the types of labels that the Agency considers generically approved and would not streamline its regulations by combining the label approval regulations for meat and poultry into one location in Title 9. Under this option, establishments and certified foreign establishments would not have to change any procedures and could continue to apply certain types of generically approved labels as provided for in the regulations. Therefore, FSIS would not need to allocate its resources to conduct rulemaking.

However, there are several major disadvantages to this option. First, the option would not be consistent with the Agency's commitment to enable manufacturers to make decisions and assume more responsibility concerning whether products that they produce are compliant with FSIS labeling regulations. Our current generic label rule was intended to reduce the number of labels and other labeling that are submitted for evaluation by FSIS and to lessen the paperwork burden on official establishments. The goal was to improve efficiency by streamlining the label evaluation and approval process. Streamlining and modernizing the prior label approval process is important to the Agency so that it can better focus on and direct its resources to other consumer protection and food safety activities.

Second, the regulations for the mandatory label features have been in place for decades, and FSIS believes that, as a result of its verification activities, establishments and certified foreign establishments can effectively apply labels with the mandatory label features without submitting them for approval to the Agency. Consequently, under this option, industry would continue to need to submit a significant number of labels for evaluation and approval because parts of the generic label regulations are unnecessarily restrictive. Specifically, the regulations require establishments to submit labels for evaluation that do not present policy issues from the standpoint of food safety, health, economic adulteration, or misbranding.

The second option that FSIS considered was: (1) Amending its regulations so that all labels, including labels for temporary approval and labels bearing claims, would be considered generically approved by the Agency; and (2) streamlining its regulations by combining the label approval regulations for meat and poultry in one location in Title 9. The primary advantages of this option are that it would streamline the Agency's label approval regulations and eliminate the burden on industry to submit labels to the Agency for approval. However, a major disadvantage of this option is that it would likely result in misbranded products in the marketplace. While the results of the generic labeling survey showed success in establishments applying certain types of labels (e.g.,the mandatory features that have been required by the meat and poultry inspection regulations for decades), the results of the survey cannot be used to support the generic approval of all labels because certain types of labels,e.g.,labels with special statements and claims, present significant policy issues and are not defined in FSIS regulations. Consequently, establishments may not be familiar with the Agency's requirements for the support or application of certain special statements or claims, which could result in increased labeling errors and misbranded product.

Industry is familiar with the requirements for mandatory label features, but the Agency believes that it needs to continue to provide pre-market evaluation and approval of certain types of labels (e.g.,temporary approvals and labels for product produced under a religious exemption). Further, FSIS needs to continue to provide pre-market evaluation and approval of special label statements and claims (e.g.,animal production raising claims and “natural”) that present significant and evolving policy issues. The pre-market evaluation and approval of certain types of labels, and special statements and claims intended for use on labels, are needed for the Agency to verify that all labels are accurate, truthful, and not misleading before products enter commerce.

The third option FSIS considered was to: (1) Expand the types of labels that would be subject to generic approval; and (2) streamline its regulations by combining the label approval regulations for meat and poultry in one location in Title 9 of the CFR. Under this option, FSIS would expand the types of labels that the Agency considers generically approved (i.e.,any labels that bear mandatory features without special statements or claims). The Agency would continue to require the submission of certain types of label,e.g.,labels for temporary approval, labels for export products with label deviations, and products produced under religious exemptions.

Under this option, Federal establishments and certified foreign establishments would be responsible for ensuring that the basic required features on labels are applied in accordance with all applicable regulations. Temporary approvals, labels for export products that deviate from domestic labeling requirements, and labels for products produced under religious exemption, however, would represent exceptions that FSIS would need to evaluate on a case by case basis. Therefore, these limited types of labels would have to be submitted to FSIS for evaluation and approval before use. In addition, manufacturers would be required to submit special statements and claims intended to be used on labels to the Agency for approval under this option.

A major advantage of the third option is that establishments would be responsible for developing labels that include the basic mandatory features (i.e.,product name, safe handling statement, ingredients statement, signature line, net weight, legend, safe handling instructions, and nutrition labeling) in accordance with Federal regulations. This option would thus allow Agency personnel to focus their efforts on evaluating claims or special statements that have consumer safety or economic implications and on labels that cannot be generically approved,e.g.,requests for temporary approval to use labeling that is deficient in some manner. It would substantially reduce the types of labels that would need to be submitted to the Agency, thus reducing, although not entirely eliminating, the burden for industry to submit labels to FSIS for approval.

FSIS would continue to perform verification and post-market surveillance activities in commerce to ensure that meat and poultry product labels comply with all applicable regulations. Specifically, FSIS would select samples of generically approved labels from the records maintained by official establishments and establishments certified under foreign inspection systems, in accordance with part 327 and part 381, subpart T, to determine compliance with label requirements. If the Agency found that an establishment is using a false or misleading label, it would institute the proceedings prescribed in 9 CFR 500.8to revoke the approval for the label. FSIS's surveillance activities would ensure that the consumer is protected under this option.

Therefore, FSIS concludes that the third option is the most feasible for rulemaking. It is an approach that will effectively enhance implementation of a generic label system that imposes less burden on industry. It promotes effective use of Agency resources. The option will not adversely affect consumer protection because FSIS will continue to evaluate labeling,e.g.,special statements and claims and requests for temporary approval, that have consumer safety or economic implications. Moreover, FSIS will continue its verification and compliance activities to ensure that establishments are labeling their products in conformance with Agency regulations. Finally, it will streamline FSIS regulations by putting the meat and poultry prior label approval regulations in one part in Title 9.

We invite public comment on these options as well as on other options not discussed above.

Executive Orders (EOs) 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if a regulation is necessary, to select the regulatory approach that maximizes net benefits (including potential economic, environmental, public health and safety, and other advantages, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This action has been reviewed for compliance with EOs 12866 and 13563.

This rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of EO 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget.

The Agency has determined that this proposed rule maximizes net benefits to consumers and establishments by expanding the types of labels that are approved generically under the FMIA and the PPIA.

The purpose of the proposed rule is to expand the circumstances in which the labels of meat and poultry products will be deemed to be generically approved by FSIS and to combine the regulations that provide for the generic approval of labels for meat products into a new part 412 in Title 9, Chapter III, of the CFR. The proposed rule is the next step in the Agency's gradual streamlining and modernizing of the prior label approval system.

This rulemaking's intent is to reduce the number of labels evaluated by FSIS that only bear basic features (e.g.,product name, ingredients statement, net weight) and to reduce the amount of paperwork filed by establishments with FSIS. If finalized, these actions will improve the efficiency of the label approval system by streamlining the evaluation process for specific types of labels and making the label approval system more convenient and cost-effective for industry. As for consumers, this new process will enhance market efficiency by promoting a faster introduction of new products into the marketplace to meet demand while not negatively affecting consumer protection from misbranded product.

In 1983, when FSIS established limited types of generically approved labels, the Agency evaluated 130,000 labels. In 1991, the number of labels evaluated peaked at 167,500 labels. The 1995 final rule that amended the prior label approval system expanded the types of labels and label changes that may be applied in accordance with the generic label regulations. As a result, the number of labels evaluated by FSIS decreased by 74 percent to 43,255 in 2003, as depicted in Figure 1. From 2003 to 2010, the number of labels evaluated per year averaged 57,457, with a minimum of 43,255 (2003) and a maximum of 66,061 (2010).

Under the current prior label approval system, FSIS evaluates and approves meat and poultry labels for temporary or sketch approval. Labels are not approved when they do not comply with Federal regulations, or when they have claims and special statements that are not substantiated or supported with sufficient documentation. As depicted in Figure 2, sketch labels make up over 50 percent of the volume of labels evaluated and approved by FSIS, whilethe approval of temporary labels makes up only about 9 percent of the total volume.

During 2003-2010, FSIS reviewed and evaluated a total of 459,656 labels. As depicted in Figure 3, the number of labels reviewed and evaluated by FSIS LPDD increased 53 percent, from 43,255 labels in 2003 to 66,061 labels in 2010. Each year the number of labels increased, except between 2004 and 2005, when labels decreased 4 percent, from 56,344 labels to 54,100 labels, but then increased 4 percent to 56,102 labels in 2006.

When looking at the data of the Agency approval of Temporary Labels (See Table 1), we find that the approval level was at 13 percent in 2003 (5,831 labels approved), which then declined to 6 percent in 2010 (4,101 labels approved). The approval level was at its lowest in 2010 (6.2%), when the Agency approved 4,101 labels out of 66,061 labels. Since 2003, the Agency has approved 45 percent more sketch labels and 30 percent fewer temporary labels.

Examining the data closer, the number of sketch labels approved increased 64 percent, from 21,693 labels in 2008 to 35,588 labels in 2009, while the number not approved remains the same and the number of temporary slightly increased. The number of labels not approved has climbed steadily from 2003, when it was at its lowest at 11,554 labels unapproved, to its high of 24,495 labels not approved in 2010. Between 2005 and 2007, as the number of sketch label approvals leveled off in the 32,000 range, the number of labels not approved increased 30 percent, from 16,269 labels to 21,250. FSIS attributes this increase in labels not approved to the increase in special claims, statements that were not substantiated, and sketch labels that Agency personnel could not approve as modified because the labels contained several errors or major discrepancies. During this timeframe, FSIS placed much of its labeling guidance on its Web site and conducted many labeling workshops.

Based on the Agency's Performance Based Inspection System databases, in 2011, there were about 6,099 Federal establishments. FSIS estimates that there were approximately 266,061 approved meat and poultry product labels used by these establishments. FSIS evaluated 66,061 of them in 2010; the remaining 200,000 were approved under the Prior Label Approval System because they met the standards for generic approval.

There are about 12 firms that submit labels to LPDD on behalf of Federal establishments. These firms provide label courier service, information, and training to their clients on FSIS labeling policies. All of the firms in this industry are small, usually having one to four employees. Many of these firms now offer consulting services, such as ensuring that import and export labels to be reviewed for compliance with USDA regulations receive expedited service and providing label outsourcing, in which a firm handles all of an establishment's food labeling needs.

If adopted, the proposed rule will continue the streamlining and modernization of the Agency's prior label approval system. The proposed rule will permit establishments to realize an estimated cost savings of a minimum of $8.7 million (discounted over a 10-year period) for generically approving about 584,486 additional labels over a 10-year period at about $25 per label submission.4 In the absence of the proposed rule, establishments will not realize any cost savings because Federal regulations will continue to require establishments to submit a significant number of labels to LPDD for evaluation.5 Establishments will also realize an increase in the number of generically approved labels over a 10-year period under the proposed rule.

Because fewer labels will need to be submitted to the Agency for evaluation, establishments will realize a cost savings because they will no longer need to incur costs to have certain types of labels evaluated by FSIS.

The proposed rule should reduce the number of labels submitted to FSIS for evaluation and enable the Agency to reallocate the staff hours saved from evaluating fewer labels towards the development of labeling policy, the evaluation of new and novel labeling policy issues, and involvement in other food safety and consumer protection activities. The proposed rule would streamline the approval process by amending the regulations to provide that, except in certain specified circumstances, the label of a meat or poultry product is deemed to be approved generically.

Table 3 shows the chronological progression of streamlining and modernizing the prior label approval system through various rulemakings.

If this proposed rule becomes final, in the year before the effective date of the rule FSIS will continue to review 66,061 labels because of the lag time between the publication of the rule and industry compliance with it. In years 1-10, FSIS will experience a 69 percent reduction in the volume of labels submitted for evaluation.

Currently, FSIS employs eleven labeling policy experts to evaluate labels.6 FSIS staff members are organized into teams based on special claims or issues, such as amenability, organic, or country of origin,7 and evaluate labeling four hours per day, five days a week, at a cost of $10,360 per week. FSIS assumes that it will evaluate labels and labeling for one hour per day, five days a week, as a result of the reduction in the volume of labels or labeling submitted to FSIS. Thus, the proposed rule would permit the Agency to realize an estimated discounted cost savings of $2.9 million over 10 years8 from evaluating labels because FSIS is expected to review a total of 261,070 labels under the proposed rule as compared with 846,096 under the current system.9 This cost savings from fewer staff hours being allocated towards label evaluation can be redirected towards other food safety and consumer protection activities.

The proposed rule would not impose any new costs on meat and poultry establishments that submit labels for review to FSIS and it minimizes the regulatory burden on establishments that submit labels for review. The proposed rule does not change the requirement that establishments maintain copies of all labeling records, along with the product formulations and a description of the processing procedures used to formulate the products in accordance with 9 CFR 320.2 and part 381, subpart Q. These labeling records must be made available to any authorized Agency official within 24 hours upon request.

The proposed rule also does not impose any additional cost burden on establishments because first, establishments are already applying generically approved labels and maintaining all labeling records, and second, establishments are experienced in submitting labels to FSIS for evaluation. If this proposal is adopted, establishments will continue label production, once the labels are approved by FSIS. The cost of label design and products is not a part of this proposed rule.

If this proposed rule is adopted, it will be net beneficial because it will streamline the generic label approval process, while imposing no additional cost burden on establishments. FSIS estimates that establishments will realize a discounted cost savings of $8.7 million as a result of their ability to generically approve an additional 584,486 labels over a 10-year period. Furthermore, the Agency will realize a discounted cost savings of $2.9 million for evaluating 584,486 fewer labels over a 10-year period. This cost savings in fewer staff hours being spent evaluating labels can be redirected towards other Agency initiatives. Therefore, the net benefit derived from the proposed rule is $11.6 million ($8.7 million in establishment savings plus $2.9 million in Agency savings), discounted at 7 percent, over a 10-year period.

The FSIS Administrator has determined that this proposed rule would not have a significant impact on a substantial number of small entities, as defined by the Regulatory FlexibilityAct (5 U.S.C. 601). The proposed changes will affect those entities in the United States that submit labels for review to FSIS. There are 6,099 meat and poultry establishments that could possibly be affected by this proposed rule since all are eligible to submit labels for review and 12 small label consulting firms that are involved in various labeling activities, such as submitting labels to FSIS for evaluation on the behalf of meat and poultry establishments. Of the 6,099 establishments, there are about 2,616 small federally inspected establishments (with more than 10 but less than 500 employees) and 3,103 very small establishments (with fewer than 10 employees) based on HACCP Classification. Therefore, a total of 5,719 small and very small establishments could be possibly affected by this rule. These small and very small establishments, like the large establishments, would be permitted to generically approved labels as long as there are no special claims. Small entities would not be disadvantaged because the proposed rule would minimize the regulatory burden on all establishments. The proposed rule would not have a significant impact on a substantial number of label consulting firms. Since the expanded use of generically approved labels in 1995, these firms have modified their consulting services to specialize in certain policy areas,e.g.,the production and labeling of organic products and animal production raising practices. Therefore, the Agency believes that the proposed rule will not have a significant economic impact on a substantial number of small entities (establishments and labeling consulting firms).

In making its determination, the Agency considered two alternatives to the proposed rule: the status quo and making all labels candidates for generic labeling. Keeping the status quo would mean that the Agency would continue to commit limited resources to a process that establishments can assume, if the proper guidance was available. Therefore the Agency rejects this alternative. The second alternative, making all labels generically approved, would mean that some products may be misbranded because of misleading statement and claims on the labels. Therefore the Agency rejects this alternative as well.

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

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501,et seq.), the information collection requirement associated with this proposed rule on prior labeling has been submitted for approval to OMB.

Title:Marking, Labeling, and Packaging of Meat, Poultry, and Egg Products.

OMB No.:0583-0092.

Expiration Date of Approval:

Type of Request:Revision of a currently approved information collection.

Abstract:FSIS has been delegated the authority to exercise the functions of the Secretary as specified in the Federal Meat Inspection Act (FMIA) (21 U.S.C. 601,et seq.), the Poultry Products Inspection Act (PPIA) (21 U.S.C. 451,et seq.), and the Egg Products Inspection Act (EPIA) (21 U.S.C. 1031,et seq.).

FSIS protects the public by verifying that meat, poultry, and egg products are safe, wholesome, unadulterated, and properly labeled and packaged. FSIS is requesting a revision of a currently approved information collection addressing paperwork requirements specified in the regulations related to marking, labeling, and packaging of meat, poultry, and egg products.

FSIS is proposing to expand the circumstances in which FSIS will generically approve the labels of meat and poultry products. Under this proposed rule, more official and foreign establishments would be able to use the generic approval of product labels that would also result in a reduced number of regular label approvals. Hence, FSIS is requesting a revision of the Marking, Labeling, and Packaging of Meat, Poultry, and Egg Products information collection. The total number of hours for this information collection will decrease 31,091 hours because of the increased use of generic labeling.

Estimate of Burden:FSIS estimates that it will take establishments on the average of 0.33 hours per response.

Respondents:Official establishments, plants, and foreign establishments.

Estimated Number of Respondents:6,418.

Estimated Number of Responses per Respondent:45.7.

Estimated Total Annual Burden on Respondents:97,176 hours.

Copies of this information collection assessment can be obtained from John O'Connell, Paperwork Reduction Act Coordinator, Food Safety and Inspection Service, USDA, 1400 Independence Avenue SW., Room 6083, South Building, Washington, DC 20250.

Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of FSIS's functions, including whether the information will have practical utility; (b) the accuracy of FSIS's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

Comments may be sent to both John O'Connell, Paperwork Reduction Act Coordinator, at the address provided above, and the Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20253. To be most effective, comments should be sent to OMB within 60 days of the publication date of this proposed rule.

FSIS and USDA are committed to achieving the purposes of the E-Government Act (44 U.S.C. 3601,et seq.) by, among other things, promoting the use of the Internet and other information technologies and providing increased opportunities for citizen access to Government information and services, and for other purposes.

FSIS believes that by proceeding with this rulemaking, the Agency could potentially accept the electronic submission of requests for the evaluation of claims or special statements, which will significantly streamline the approval process.

The expected environmental effects:The use of labels by meat and poultry product establishments that have been deemed to be generically approved by FSIS is an activity that will not have a significant individual or cumulative effect on the human environment. Therefore, this proposed rule is appropriately subject to the categorical exclusion from the preparation of an environmental assessment or environmental impact statement provided under 7 CFR 1b.4(6) of the U.S. Department of Agriculture regulations.

This final rule has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications.

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, or audiotape) should contact USDA's Target Center at (202) 720-2600 (voice and TTY).

To file a written complaint of discrimination, write USDA, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW., Washington, DC 20250-9410 or call (202) 720-5964 (voice and TTY). USDA is an equal opportunity provider and employer.

FSIS will announce this proposed rule online through the FSIS Web page located athttp://www.fsis.usda.gov/regulations_&_policies/ProposedRules/index.asp.

FSIS will also make copies of thisFederal Registerpublication available through the FSIS Constituent Update, which is used to provide information regarding FSIS policies, procedures, regulations,Federal Registernotices, FSIS public meetings, and other types of information that could affect or would be of interest to constituents and stakeholders. The Update is communicated via Listserv, a free electronic mail subscription service for industry, trade groups, consumer interest groups, health professionals, and other individuals who have asked to be included. The Update is also available on the FSIS Web page. In addition, FSIS offers an electronic mail subscription service which provides automatic and customized access to selected food safety news and information. This service is available athttp://www.fsis.usda.gov/News_&_Events/Email_Subscription/. Options range from recalls to export information to regulations, directives and notices. Customers can add or delete subscriptions themselves, and have the option to password protect their accounts.

For the reasons discussed in the preamble, FSIS is proposing to amend 9 CFR, Chapter III, as follows:

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act or Act)1 established the Bureau and, on July 21, 2011, transferred to the Bureau rulemaking authority under Federal consumer financial laws previously vested in seven other Federal agencies.2 Accordingly, the Bureau assumed responsibility over the various regulations that these agencies had issued under this rulemaking authority.3

In the coming weeks, the Bureau will republish the prior agencies' regulations implementing fourteen consumer laws4 (the “inherited regulations”) as regulations of the Bureau, which will be codified in Chapter X of Title 12 of the Code of Federal Regulations. These republished regulations will incorporate only technical changes and will not impose new substantive obligations. The technical changes reflect the transfer of authority to the Bureau and certain other amendments made by the Dodd-Frank Act to the underlying statutes.

The inherited regulations serve important public policy purposes and provide key protections to consumers, as discussed further below. But the Bureau believes there may be opportunities to streamline the inherited regulations by updating, modifying, or eliminating outdated, unduly burdensome, or unnecessary provisions. With this document, the Bureau is seeking specific suggestions from the public for the highest priority areas for streamlining.5

Temporary regulations in the Rules and Regulations section of this issue of theFederal Registeramend the Income Tax Regulations (26 CFR part 1) relating to section 1275. The temporary regulations provide that the coupon bond method described in § 1.1275-7(d) applies to Treasury Inflation-Protected Securities (TIPS) issued with more than a de minimis amount of premium. The temporary regulations apply to TIPS issued on or after April 8, 2011. The text of the temporary regulations also serves as the text of these proposed regulations. In addition to comments on the text of the temporary regulations, the IRS and the Treasury Department request comments on whether the rules in the temporary regulations should be extended to other types of inflation-indexed debt instruments.

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

Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. The IRS and the Treasury Department specifically request comments on the clarity of the proposed rule and how it may be made easier to understand. All comments will be available for public inspection and copying.

A public hearing has been scheduled for March 28, 2012, beginning at 10 a.m. in the IRS Auditorium, Internal Revenue Building, 1111 Constitution Avenue NW., Washington, DC. Due to building security procedures, visitors must enter through the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter thebuilding. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 30 minutes before the hearing starts. For information about having your name placed on the building access list to attend the hearing, see theFOR FURTHER INFORMATION CONTACTsection of this preamble.

The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit written or electronic comments by March 5, 2012 and submit an outline of the topics to be discussed and the time to be devoted to each topic (signed original and eight (8) copies) by March 7, 2012. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.

The principal author of these regulations is William E. Blanchard, Office of Associate Chief Counsel (Financial Institutions and Products). However, other personnel from the IRS and the Treasury Department participated in their development.

Accordingly, 26 CFR part 1 is proposed to be amended as follows:

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) allows 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 and submission 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 forproposing 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 (27 CFR 9.12) 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 proposed 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 proposed viticultural area;

• A narrative description of the features of the proposed 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 proposed viticultural area, with the boundary of the proposed viticultural area clearly drawn thereon; and

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

TTB received a petition from consulting geographer Patrick Shabram, on behalf of himself and Anselmo Vineyards of Inwood Valley, California, proposing the establishment of the “Inwood Valley” American viticultural area. As described in the petition, the proposed viticultural area contains 28,298 acres, 60 of which are dedicated to 4 commercially-producing vineyards, with 14 additional acres planned for viticultural development. The distinguishing features of the proposed viticultural area include geology, topography, climate, native vegetation, and soil. According to the petition, the proposed Inwood Valley viticultural area, located in rural, southern Shasta County in north-central California, would not overlap, or otherwise involve, any existing or proposed viticultural areas.

Unless otherwise noted, all information, evidence, and data described or contained in the following sections is from the petition and its supporting exhibits.

“Inwood” is the name of a small, rural community located within the proposed Inwood Valley viticultural area, as shown on the USGS Inwood quadrangle map. The Inwood community is located along California State Highway 44 (“Northern California” map, American Automobile Association, 2007), and Inwood Road is the primary road running through the Inwood Valley area.

According to TTB's research using the U.S. Board on Geographic Names, Geographic Names Information System (GNIS), the name “Inwood” is used in three contexts within the boundary of the proposed Inwood Valley viticultural area: a community, a school, and a cemetery. According to the GNIS, “Inwood” and “Inwood Hill” are geographical name uses found in nine U.S. states, but the GNIS contains no references to the use of the name “Inwood Valley” in the United States. Residents use “Inwood Valley” as a geographical descriptor for the area, and the “Inwood Valley” name is part of the business name for at least one local business, the Inwood Valley Counseling Services.

In addition, local grape growers and winemakers use the terms “Inwood Valley” and “Inwood” to describe their vineyard locations. For example, Anselmo Vineyards is “nestled in the rolling hills of Inwood Valley,” according to the Web site of Seven Hills Land and Cattle Ranch (previously named Inwood Ranch and Vineyards (http://www.bar7h.com/)), and another winery, the Lassen Peak Winery, states on its Web site that it is located in the “Inwood area of Shingletown” (http://www.lassenpeakwinery.com/2801.html). TTB notes that the town of Shingletown is adjacent to the southern portion of the proposed boundary line.

Viticulture in the Inwood Valley region predates Prohibition. In 1864, Elijah Boots planted the first vines in the area (“Matson Vineyards beyond Elderberries,” Earl Bloor, Edible Shasta-Butte, 2008, page 23), and wild mission grapes, which are evidence of the 1864 plantings, are still found in one of the Inwood Valley vineyards. After a long hiatus, viticulture was re-established in the Inwood Valley region in the latter half of the twentieth century; 10 acres of merlot grapes were planted at the Inwood Ranch and Vineyards in the late 1970s, and the Lassen Peak Winery planted vines in 1982.

The east-west trending valley known as “Inwood Valley” has a unique climate that contrasts with the surrounding areas. The valley is located in a transition zone between the eastern high elevations around Lassen Peak and the western low elevations of the Redding Basin and the Sacramento Valley floor. Higher elevation ridges to the north and south of Inwood Valley also surround the proposed viticultural area. The mixed conifer forest vegetation to the east of the proposed boundary line gradually transitions westerly through the proposed Inwood Valley viticultural area to the grasslands and blue oak woodlands located to the west outside of the proposed boundary line. The diverse soil types in the proposed viticultural area also reflect the transitional nature of the region, although they all contain mostly volcanic parent materials, which is in marked contrast to the primarily sedimentary parent material in soils located to the west of the proposed viticultural area.

The proposed boundary line is generally based on elevation and soil types, and it uses identifiable features on USGS maps rather than contour lines, which are difficult to follow on the relevant maps. Using the distinguishing features described below as a basis, the proposed viticultural area includes those areas in the Inwood Valley region that are located above 1,000 feet and below 3,000 feet.

The distinguishing features of the proposed Inwood Valley viticultural area include geology, topography, climate, native vegetation, and soil. The transitional nature of the region is evidenced by the contrast between the distinguishing features of the proposed Inwood Valley viticultural area and the same types of features in the areas to the east and west of the proposed viticultural area, with additional topographical differences along and outside of the surrounding ridges to the north and south.

The geology of the proposed Inwood Valley viticultural area is dominated by volcanic lava flow and pyroclastic deposits associated with past eruptions that formed the Tuscan Formation, which is a subset of the Cascade Range Province. The lava flows occurred beginning around 4 million years ago and continued through geologically recent times. The Tuscan Formation overlies the Chico Formation, which is composed of Cretaceous sedimentary rock that was created when the area was under water. The Chico Formation is exposed along some tributary depressions and in Bear Creek Canyon, which is located within the proposed viticultural area. The Tuscan Formation is overlain in places by porous Quaternary basalt and andesite lava flows, although it is also exposed inmany locations within the proposed viticultural area.

The Tuscan Formation is made of highly permeable rock, which holds large amounts of water and serves as a natural aquifer for the greater Sacramento Valley region. Some areas of the Tuscan Formation are exposed at its higher eastern elevations, which serve as recharging points for the aquifer's underground water flows. As a result, the exposure of the Tuscan Formation in some locations in the proposed Inwood Valley viticultural area creates an unusually large number of springs in the Inwood Valley region, which provide an important agricultural resource for area vineyards.

To the west of the proposed Inwood Valley viticultural area, basalt flows overlie Tuscan Formation materials that flowed into the lower Redding Basin. The underlying geology is dominated by the Red Bluff Formation, characterized by older, thin sedimentary deposits (Pleistocene) (“Bear Creek Watershed Assessment,” ENPLAN, Jan. 2006). In his geographic analysis submitted in support of the petition, Mr. Shabram explains that this geological distinction demonstrates a significant difference between the Inwood Valley region and the Redding Basin to the west, into which Bear Creek flows before joining the Sacramento River.

The higher elevation Cascade Range lies to the east of the proposed Inwood Valley viticultural area.

The proposed Inwood Valley viticultural area is a unique valley landform that lies in a vertical transition zone. Most of the Inwood Valley region is located at elevations around 2,000 feet, according to the USGS maps. The proposed Inwood Valley viticultural area is part of the large Bear Creek watershed, which has east-to-west elevations between 6,740 and 370 feet, ranging from the Cascade Range down to the Sacramento River.

As shown on the USGS maps, elevations in the Inwood Valley region descend east-to-west as the valley runs from the Cascade Range to the Redding Basin. There are steep terrain and higher elevations to the east of the proposed Inwood Valley viticultural area toward the 10,335-foot Lassen Peak in the Cascade Range. The low, flat Redding Basin, at only 564 feet in elevation, is to the west of the proposed Inwood Valley viticultural area.

The 1,000- to 3,000-foot elevations of the proposed Inwood Valley viticultural area distinguish it viticulturally from the surrounding areas. Above 3,000 feet in elevation, the terrain ascends steeply to the Cascade Range in the east, according to USGS maps. Along the high eastern portion of the boundary line of the proposed Inwood Valley viticultural area is a 3,471-foot unnamed peak in the Cascade Range, according to the USGS maps. The steep terrain, high elevation, and concomitant low temperatures in this region render it unsuitable for viticulture. Farther to the west, the lower and flatter elevations outside of the proposed Inwood Valley viticultural area around Redding contrast to the approximately 900-1,000 feet elevations that define much of the western portion of the proposed viticultural area boundary line.

To the north and south of the Inwood Valley region, ridges at higher elevations form natural boundaries between the Bear Creek watershed and other watersheds. The steep terrain along these ridges is generally unsuitable for viticulture.

The growing season data in the petition for the proposed Inwood Valley viticultural area is measured according to the Winkler climate classification system (“General Viticulture,” Albert J. Winkler, University of California Press, 1974, pp. 61-64).1 In the proposed Inwood Valley viticultural area, growing season temperatures range from 2,700 to 3,400 GDD units, according to 1978-99 data from vineyard owner Michael Boehlert at Lassen Peak Winery. The temperatures of the proposed Inwood Valley viticultural area are a combination of regions ll and lll, which are cooler than the region V temperatures to the west, and they are warmer than the much cooler mountainous regions to the east and the cooler ridges to the immediate north and south. Beyond the adjacent ridges, the surrounding valleys to the north and south of the proposed Inwood Valley viticultural area have region IV growing season temperatures, which are warmer than the proposed viticultural area.

Mr. Shabram explains that growing season temperatures in the proposed Inwood Valley viticultural area are greatly influenced by the valley's east-west funnel shape and consistent winds, as well as by its proximity to higher, cooler elevations on three sides. In addition, a reduction in solar radiation in the early and late months of the growing season results from the narrow valley floor and high flanking ridgelines that obscure the sun. Beyond the north and south ridgelines are small valleys with varying climatic influences and different watersheds.

A cooling pattern of nighttime mountain breezes also significantly affects the growing season temperatures of the proposed Inwood Valley viticultural area. In the evening, cold, heavy air drains downward into the valley, primarily from the Cascade Range to the east and, to a lesser extent, from the north and south ridgelines. The funnel of air that moves down slope through the valley intensifies the cooling effect of the surrounding air drainage. The nighttime cooling effect is most predominant in the summer months as it buffers the effect of the warm western wind pattern from the Redding Basin. The nighttime down slope wind speeds, moving east-to-west through Inwood Valley, vary from 5 to 7 miles per hour, according to Mr. Boehlert.

To the east of the proposed Inwood Valley viticultural area, temperatures decrease as the elevation increases. The 5,677-foot elevation Manzanita Lake, located in the Cascade Range, is approximately 20 miles east of Inwood Valley (“Northern California Map”). Mr. Shabram states that the region to the east of the proposed viticultural area is not conducive to viticulture based on mean temperatures that are above 50 degrees Fahrenheit only 4 months per year.

To the south of the proposed Inwood Valley viticultural area, near Volta Powerhouse, temperatures yield 3,965 GDD units, a high region IV growing season, according to data from Lassen Peak Winery.

The Redding Basin lies to the west of the proposed Inwood Valley viticultural area, which is an area known for hot days and warm nights during the growing season. The lower elevations of the Redding Basin result in higher temperatures as compared to the Inwood Valley region. The Redding Basin averages a hot region V growing season at 4,564 GDD units, according to data from the Western Regional Climate Center (WRCC).

The 3,000-foot elevation Bear Creek Ridge lies to the north of the proposed Inwood Valley viticultural area. The petition provides two 2008 region IV heat summation totals for the area near Whitmore, also to the north of the proposed viticultural area: 3,642 and3,941 GDD units. These temperatures indicate warmer growing season temperatures than the Inwood Valley region.

The table below shows the annual and growing season precipitation averages for the proposed Inwood Valley viticultural area and surrounding areas; the information in the table is based on years of data collection from the WRCC and Inwood Valley residents.

The table indicates that the average precipitation in the proposed Inwood Valley viticultural area is 56.6 inches annually, with an average of 14.2 inches of precipitation during the growing season. As shown in the table, the proposed Inwood Valley viticultural area is wetter, both annually and during the growing season, than all of the surrounding areas listed in the table. For example, the Inwood Valley region on average receives 10.8 inches more precipitation annually than Shingletown and 28.6 inches more precipitation annually than Burney, which are located to the south and north of the proposed Inwood Valley viticultural area, respectively. In addition, according to the table, the growing season precipitation average in the proposed Inwood Valley viticultural area—a viticulturally important factor—is approximately 2 inches more than Shingletown and 7 inches more than Burney.

The vegetation within the proposed Inwood Valley viticultural area further reflects the distinctiveness of the region as a transition zone between the cooler climate at higher elevations to the east and the warmer climate at lower elevations to the west. Vegetation differences are significant in foothill environments as variations in native vegetation closely reflect shifts in elevation and climate.

Sierra mixed conifer dominates the eastern section of the Bear Creek watershed, and grasslands and blue oak foothill pine woodland dominate the western section (“WHR Vegetation Classification” map, Bear Creek Watershed Assessment). The middle part of the Bear Creek watershed defines the viticulturally unique transition area of the Inwood Valley region. Blue oak and ponderosa pine woodland and mountain hardwoods dominate the valley region, with some mixed chaparral and pockets of annual grasses. According to Mr. Shabram, the variety of vegetation in this region contributes to the viticultural distinctiveness of the proposed Inwood Valley viticultural area because it results in a more varied organic composition of the soils in the area as contrasted to the surrounding regions, which contain more homogenous vegetation.

The cool climate to the east of the proposed Inwood Valley viticultural area results in different natural vegetation. To the east of the proposed viticultural area, the blue oak and valley oak vegetation of the Inwood Valley area transitions to mixed conifer and lodgepole pine forests, eventually transitioning to tundra at the higher elevations of the Cascade Range. At the opposite end of the valley, in the lower elevation Redding Basin to the west of the proposed Inwood Valley viticultural area, are annual grasses and foothill woodland vegetation, including some foothill pine and blue oak.

To the south of the proposed Inwood Valley viticultural area, as the terrain changes from the lower Inwood Valley elevations to the higher Shingletown elevations, the vegetation transitions from mixed woodland and ponderosa forest to the complete dominance of ponderosa pine forests. Variations in vegetation are less apparent to the north of the proposed Inwood Valley viticultural area due to the well-exposed, southern facing slopes on Bear Creek Ridge, which increase the amount of warming solar radiation and moderate the cooling temperatures normally expected at higher elevations. According to Mr. Shabram, this exposure has a drying effect that would favor grasses, montane chaparral, and woodland over mixed pine forests.

There are 27 different soil series within the proposed Inwood Valley viticultural area. The diversity in soil series results from volcanic activity that created various volcanic parent materials, the exposure of Cretaceous sedimentary parent materials, and the transitional and varied nature of the vegetation in the region. Despite this diversity, however, the top 5 soil series in the area cover approximately 71.4 percent of the proposed viticultural area, and all of the soils within the proposed boundary line are generally moderately well-drained and share a similar color and texture.

According to Mr. Shabram, the soil types of the proposed Inwood Valley viticultural area are distinguishable from the soils of the surrounding regions. For example, the mostly volcanic parent materials of the Inwood Valley region soils are in marked contrast to the primarily sedimentary parent material in soils found in Redding, to the west of the proposed viticultural area. In addition, according to Mr. Shabram, none of the deep alluvial deposits found to the west and southwest of the proposed Inwood Valley viticultural area in the Redding Basin and Sacramento Valley floor are found within Inwood Valley. Mr. Shabram further notes that the varied organic composition of the soils in the proposed viticultural area reflects the unique climate and the distinctively transitional vegetation of the Inwood Valley region, particularly as compared to the surrounding regions.

The dominant soil type in the proposed Inwood Valley viticultural area is the Aiken series, which accounts for nearly 25 percent of the soil in the area, as well as the majority of the area currently planted to vineyards. Aiken soils are derived from basic volcanic rock, with conifers and mixedhardwoods (particularly Ponderosa pine) contributing to the organic component of the soil. Generally located on gently rolling, broad, tabular slopes, Aiken soils cover most of the Inwood Valley floor as well as portions of the Shingletown Ridge in the southeastern portion of the proposed viticultural area. In the western portion of the proposed viticultural area, Guenoc series soil is increasingly present, along with small pockets of Toomes loam, Aiken loam, and Anita clay.

In contrast, soils to the west of the proposed viticultural area are dominated by Guenoc and Toomes series soils; there are no Aiken soils located in this region. Guenoc series soils are formed from weathered igneous parent material, particularly basaltic rock, and include organic influences of annual grasses and foothill woodland vegetation. Toomes soils are shallow soils typically consisting of well- to excessively well-drained gravelly loam, with volcanic parent materials and annual grasses as organic influences.

The areas to the east and southeast of the proposed viticultural area are dominated by Cohasset, Windy, and McCarthy loams, all of which are generally found at high elevations (above 5,600 feet), are influenced by conifers, and are indicative of the elevations and volcanic parent material in the area.

The soils along the ridges and in the adjacent valleys to the north and south of the proposed viticultural area are highly variable. The adjacent valley to the north lacks the Aiken loams found in the floor of Inwood Valley. Although some Aiken series soils are present in pockets in areas to the southeast of the proposed viticultural area, those soils are adjacent to Cohasset series soils, indicating that the soils in those areas are subject to different climactic and vegetative influences.

TTB concludes that the petition to establish the 28,298-acre Inwood Valley viticultural area merits consideration and public comment, as invited in this notice.

See the narrative boundary description of the petitioned-for viticultural area in the proposed regulatory text published at the end of this notice.

The petitioner provided the required maps, and TTB lists them below in the proposed 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. If TTB establishes this proposed viticultural area, its name, “Inwood Valley,” will be recognized as a name of viticultural significance under 27 CFR 4.39(i)(3). The text of the proposed regulation clarifies this point. Consequently, wine bottlers using “Inwood Valley” 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 the viticultural area name as an appellation of origin. TTB does not believe that “Inwood,” standing alone, should have viticultural significance if the new area is established because of the widespread use of “Inwood” as a geographical name, as noted earlier in this preamble. Accordingly, the proposed part 9 regulatory text set forth in this document specifies only the full “Inwood Valley” name as a term of viticultural significance for purposes of part 4 of the TTB regulations.

If this proposed regulatory text is adopted as a final rule, wine bottlers using “Inwood Valley” 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 “Inwood Valley” as an appellation of origin.

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 viticulturally significant term appears in another reference on the label in a misleading manner, the bottler would 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 term of viticultural significance 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 invites comments from interested members of the public on whether we should establish the proposed Inwood Valley viticultural area. TTB is also interested in receiving comments on the sufficiency and accuracy of the name, boundary, geology, topography, climate, and other information submitted in support of the petition. Please provide any available specific information in support of your comments.

Because of the potential impact of the establishment of the proposed Inwood Valley viticultural area on wine labels that include the term “Inwood Valley” as discussed above under Impact on Current Wine Labels, TTB is also interested in comments as to whether there will be a conflict between the proposed viticulturally significant term and currently used brand names. If a commenter believes that a conflict will arise, the comment should describe the nature of that conflict, including any anticipated negative economic impact that approval of the proposed viticultural area will have on an existing viticultural enterprise. TTB is also interested in receiving suggestions for ways to avoid conflicts, for example, by adopting a modified or different name for the viticultural area.

Although TTB believes that only the full “Inwood Valley” name should be considered to have viticultural significance upon establishment of the proposed new viticultural area, TTB also invites comments from those who believe that “Inwood” standing alone should have viticultural significance upon establishment of the viticultural area. Comments in this regard should include documentation or other information regarding whether the use of “Inwood” on a label of a wine derived from grapes grown outside the proposed viticultural area could cause consumers and vintners to attribute to the wine in question the quality, reputation, or other characteristic of wine made from grapes grown in the proposed viticultural area.

You may submit comments on this notice by using one of the following three methods:

•Federal e-Rulemaking Portal:You may send comments via the online comment form posted with this notice within Docket No. TTB-2011-0011 on “Regulations.gov,” the Federal e-rulemaking portal, athttp://www.regulations.gov.A direct link to that docket is available under Notice No. 125 on the TTB Web site at http://www.ttb.gov/wine/wine_rulemaking.shtml.Supplemental files may be attached to comments submitted via Regulations.gov. For complete instructions on how to use Regulations.gov, visit the site and click on “User Guide” under “How to Use this Site.”

•U.S. Mail:You may send comments via postal mail to the Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044-4412.

•Hand Delivery/Courier:You may hand-carry your comments or have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Suite 200-E, Washington, DC 20005.

Please submit your comments by the closing date shown above in this notice. Your comments must reference Notice No. 125 and include your name and mailing address. Your comments also must be made in English, be legible, and be written in language acceptable for public disclosure. TTB does not acknowledge receipt of comments, and it considers all comments as originals.

If you are commenting on behalf of an association, business, or other entity, your comment must include the entity's name as well as your name and position title. If you comment via Regulations.gov, please enter the entity's name in the “Organization” blank of the online comment form. If you comment via postal mail, please submit your entity's comment on letterhead.

You may also write to the Administrator before the comment closing date to ask for a public hearing. The Administrator reserves the right to determine whether to hold a public hearing.

All submitted comments and attachments are part of the public record and subject to disclosure. Do not enclose any material in your comments that you consider to be confidential or inappropriate for public disclosure.

TTB will post, and you may view, copies of this notice, selected supporting materials, and any online or mailed comments we receive about this proposal within Docket No. TTB-2011-0011 on the Federal e-rulemaking portal, Regulations.gov, athttp://www.regulations.gov.A direct link to that docket is available on the TTB Web site athttp://www.ttb.gov/wine/wine_rulemaking.shtmlunder Notice No. 125. You may also reach the relevant docket through the Regulations.gov search page athttp://www.regulations.gov.For instructions on how to use Regulations.gov, visit the site and click on “User Guide” under “How to Use this Site.”

All posted comments will display the commenter's name, organization (if any), city, and State, and, in the case of mailed comments, all address information, including e-mail addresses. TTB may omit voluminous attachments or material that it considers unsuitable for posting.

You also may view copies of this notice, all related petitions, maps and other supporting materials, and any electronic or mailed comments TTB receives about this proposal by appointment at the TTB Information Resource Center, 1310 G Street NW., Washington, DC 20005. You may also obtain copies at 20 cents per 8.5- x 11-inch page. Contact TTB's information specialist at the above address or by telephone at 202-453-2270 to schedule an appointment or to request copies of comments or other materials.

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

This proposed 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 proposes to amend title 27, chapter I, part 9, Code of Federal Regulations, as follows:

Chapter 51 of the Internal Revenue Code of 1986 (IRC), 26 U.S.C. chapter 51, contains excise tax and related provisions concerning distilled spirits, wines, and beer used for beverage purposes and distilled spirits used for nonbeverage purposes. Section 5001 of the IRC (26 U.S.C. 5001) imposes an excise tax on distilled spirits at a rate of $13.50 per proof gallon. Under section 5006(a) of the IRC (26 U.S.C. 5006(a)) the excise tax on distilled spirits is generally determined at the time the distilled spirits are withdrawn from the bonded premises of a distilled spirits plant (DSP). However, section 5214(a) of the IRC (26 U.S.C. 5214(a)), authorizes the withdrawal of distilled spirits for specified purposes free of tax or without payment of tax, subject to regulations prescribed by the Secretary of the Treasury (the Secretary).

Within chapter 51 of the IRC, subchapter B sets forth qualification requirements for DSPs. Section 5171 (26 U.S.C. 5171) concerns the establishment of DSPs and provides: (1) In subsection (a), that operations as a distiller, warehouseman, or processor may be conducted only on the bonded premises of a DSP by a person who is qualified under subchapter B; (2) in subsection(b), that a DSP may be established only by a person who intends to conduct at the DSP operations as a distiller, as a warehouseman, or as both; (3) in subsection (c), that each person shall, before commencing operations at a DSP, make application to the Secretary for, and receive notice of, the registration of the DSP; and (4) in subsection (d), that each person required to file an application for registration under subsection (c) whose distilled spirits operations are not required to be covered by a basic permit under the Federal Alcohol Administration Act (27 U.S.C. 203 and 204) shall, before commencing those operations, apply for and obtain a permit from the Secretary to engage in those operations (the terms of subsection (d) apply to persons who engage in operations involving distilled spirits for industrial, such as nonbeverage, use). Section 5181 contains special requirements for the establishment of DSPs solely for the purpose of producing, processing, and storing, and for using and distributing, distilled spirits to be used exclusively for fuel use; such DSPs are commonly referred to as alcohol fuel plants (AFPs).

Section 5207 of the IRC (26 U.S.C. 5207) specifies the records that every DSP proprietor must keep, in a form and manner as prescribed by the Secretary by regulation. The required records relate to production, storage, denaturation, and processing activities, and may include other information regarding those or other activities as required by regulation. Section 5207 also provides that each person required to keep those records must provide reports containing information regarding his or her operations at the time and in the form and manner as the Secretary prescribes by regulation.

The provisions of chapter 51 of the IRC, as well as the provisions of the Federal Alcohol Administration Act (FAA Act), are administered by TTB.

The regulations promulgated under the IRC concerning distilled spirits plants are contained in part 19 of title 27 of the Code of Federal Regulations (27 CFR part 19). Those regulations are also administered by TTB.

Under the part 19 regulations, a person may establish a DSP either to produce (distill) spirits or to store (warehouse) spirits, or both, and a DSP so established may also process spirits. While a DSP may engage in all three operations, § 19.72 provides, consistent with section 5171(b) of the IRC, that a person may not establish a DSP solely for the processing of spirits (which includes the denaturing of spirits). The part 19 regulations include, in subpart V, provisions regarding records and reports pertaining to DSP operations. Those provisions include § 19.632, which sets forth requirements for completing and submitting monthly operations reports to TTB. This regulation requires the submission of four monthly operations reports on the following forms: TTB F 5110.40, Monthly Report of Production Operations; TTB F 5110.11, Monthly Report of Storage Operations; TTB F 5110.28, Monthly Report of Processing Operations; and TTB F 5110.43, Monthly Report of Processing (Denaturing) Operations. Section 19.632 further provides that the DSP proprietor must submit these monthly reports, either in paper format or electronically, not later than the 15th day of the month following the close of the reporting period.

Consistent with the instructions for completing TTB F 5110.11, a plant reporting storage operations may be required to file up to four monthly storage reports—for all domestic spirits, spirits from Puerto Rico, spirits from the U.S. Virgin Islands, and for all other imported spirits.

TTB is proposing changes to the distilled spirits operations reporting requirements to improve TTB's ability to effectively monitor the operations of the distilled spirits industry, and to address the concerns and desires of the distilled spirits industry, particularly small distillers, for improved reporting requirements. TTB's proposed changes are the result of an internal review of the current reporting process and reflect changes within the distilled spirits industry. Under the current reporting process, each DSP may be required to submit as many as seven operational reports monthly. These include a production report, up to four storage reports, a processing report, and a denaturing report (if applicable). DSPs currently submit an average of 28.4 operational reports per year. TTB's review indicates that the number of operational reports currently being submitted to TTB is beyond what is necessary to effectively monitor the industry in order to adequately protect the revenue.

Further, TTB has determined that the data it needs to monitor the industry could be more efficiently and effectively reported. For example, inventories currently may be accounted for in up to seven separate reports, depending on the operations of the DSP, and receipts of spirits in bond from outside the DSP are not distinguished from receipts of spirits transferred between accounts within the plant. In addition, some data currently being reported are not used or analyzed. Improvement to the current reporting system would allow TTB to better identify reporting errors and make it easier for TTB to reconcile the data with other submissions, such as excise tax returns. These changes would improve the efficiency of operations within TTB.

Changes in the distilled spirits industry over the past three decades have resulted in the need for TTB to receive information and data that better reflect industry activities and that better reveal potential risks to the revenue. Particularly, changes resulting from the demand for alcohol for fuel use have dramatically expanded the number of plants in the industrial alcohol segment of the industry, and new “craft” or “artisan” distilling operations have greatly increased the number of small DSPs in the beverage alcohol segment of the industry.

Additionally, TTB has observed a growing separation of the industrial alcohol and alcohol fuel industry from the beverage industry; however, current reporting is not sufficient to properly monitor these different types of DSP activities. For example, while a DSP may be permitted to use spirits for either beverage purposes under an FAA Act Basic Permit, or industrial purposes under an IRC Operating Permit, or both, current reports are insufficient for tracking spirits transferred in bond between permitted plants under subpart P of part 19 of the TTB regulations. Additionally, while DSPs which hold both beverage and industrial permits are allowed to move spirits between the DSP's own beverage and industrial accounts, current reports do not sufficiently track the transfer of these spirits between internal accounts. As a result of recent audits and/or investigations, TTB found that a number of plants authorized to produce or warehouse industrial spirits had begun to market spirits into the beverage distilling and bottling industries. For example, TTB determined that one plant, qualified only as a producer of industrial spirits, was producing spirits for beverage use and shipping those spirits to a number of beverage alcohol bottlers. Under the current reporting system such transfers are difficult to identify, trace, and reconcile, making taxable and nontaxable removals difficult to distinguish. TTB believes that the current reporting process can be improved to better protect the revenue.

TTB is proposing to require DSPs to submit up to two separate operations reports in place of the possible seven reports currently required. One report would cover operations involving distilled spirits for beverage use, and the other report would cover operations involving spirits for industrial use. DSPs would be required to complete one or both reports depending on the distilled spirits operations they are qualified to conduct under their TTB permit(s).

TTB believes that its proposed changes to the current DSP operations reporting process would significantly reduce the reporting burden on industry members, result in greater efficiencies for TTB, and improve TTB's ability to monitor the distilled spirits industry and protect the revenue. TTB's analysis indicates that TTB can monitor the industry and protect the revenue by revising the information being reported in a more efficient format.

TTB is also proposing to reduce the number of monthly operations reports submitted by industry members, by providing for quarterly reporting in lieu of monthly reporting for industry members that submit quarterly tax returns, and to realign the information being reported without adding any new recordkeeping or data reporting requirements.

TTB is proposing to amend 27 CFR 19.632, which sets forth requirements for completing and submitting monthly operations reports to TTB, by replacing the current four report forms used by DSPs to report their operations with two proposed report forms that would be submitted on a monthly or quarterly basis. Specifically, TTB is proposing to separate the reporting of beverage alcohol operations from the reporting of industrial alcohol operations as described in greater detail below. This format change would result in limiting the number of required reports per month or per quarter to no more than two, and for many DSPs, the requirement may be only one report per month or per quarter.

As mentioned above, TTB is also proposing to change the monthly reporting requirement to quarterly reporting for those industry members that file quarterly excise tax returns under § 19.235. Section 19.235 generally provides that a DSP proprietor may file quarterly tax returns if the proprietor was not liable for more than $50,000 in distilled spirits excise taxes in the preceding calendar year, and reasonably expects not to be liable for more than $50,000 in distilled spirits excise taxes for the current calendar year. TTB estimates that over 75 percent of registered DSPs qualify for quarterly excise tax payment and filing; under the proposed changes in this notice, these same DSPs would also file operations reports on a quarterly basis. If DSP proprietors eligible for quarterly excise tax payments and returns actually file quarterly operations reports instead of monthly operations reports, this would correspondingly reduce the reporting burden on these smaller DSP proprietors, as well as the administrative burden on TTB.

TTB proposes to consolidate the information and data collected in four current forms (TTB F 5110.40, Monthly Report of Production Operations; TTB F 5110.11, Monthly Report of Storage Operations; TTB F 5110.28, Monthly Report of Processing Operations; and TTB F 5110.43, Monthly Report of Processing (Denaturing) Operations) into two forms. The two proposed forms would be titled, TTB F 5110.77, Distilled Spirits Plant Operations Report—Beverage (Nonindustrial) Alcohol and TTB F 5110.78, Distilled Spirits Plant Operations Report—Industrial Alcohol.

The proposed new forms would not require a DSP to report the level of detailed activity in the production, storage, and processing accounts that the current forms require. A DSP would be required to report the proof gallons of spirits in inventory at the plant as either produced, received, or removed during the reporting period.

Part I of the proposed beverage (nonindustrial) alcohol report form, TTB F 5110.77, would show beginning and ending balances of inventory for the reporting period. The current forms show only the beginning balance of inventory. Part II of the proposed form would summarize all production and redistillation activities for the reporting period; this section corresponds to the current Monthly Report of Production Operations. Part III would total alcohol and spirits received, and Part IV would summarize all removals. Parts V and VI of the proposed form would document the receipts and removals in greater detail. Parts III-VI correspond to the current Monthly Report of Storage Operations and Monthly Report of Processing Operations. Part VII would document materials used in the production of spirits. The remaining parts of the proposed form, Parts VIII-X, would cover, respectively, receipts of distilled spirits for redistillation, receipts of wine, and receipts of flavors. Parts VII-X correspond to various sections of the current Monthly Report of Production Operations.

Under the current reporting procedures for storage operations, separate monthly reports on TTB F 5110.11 are required for domestic, imported, Puerto Rican, and U.S. Virgin Islands spirits. Under this proposed regulatory change, separate monthly reports for storage operations based on the origin of the spirits would no longer be necessary.

The proposed report form for industrial alcohol operations, TTB F 5110.78, would document beginning and ending balances of inventory within Part I. Part II of the proposed form would cover all production and redistillation activities. Receipts and removals would be recorded under Parts III and IV of the proposed form, respectively, with additional details provided in Parts V and VI. Part VII of the proposed form would cover materials used in production. The remaining parts of the proposed form would show redistillation operations—relating to receipt and use of spirits, denatured spirits, and articles—(Part VIII), alcohol for fuel use operations (Part IX), and denatured alcohol operations (Part X). The proposed industrial alcohol form mainly corresponds to the current Monthly Report of Processing (Denaturing) Operations.

Under this regulatory proposal, DSPs conducting both beverage and industrial alcohol operations would be required to submit no more than two forms per month or per quarter, as described above, to report all activities.

TTB invites comments on this proposed rulemaking from all interested parties. Since TTB desires to implement these new reporting requirements as soon as possible, TTB is particularly interested in comments regarding the length of time that industry members would need in order to transition their business procedures to be able to comply with the proposed reporting requirements.

Please submit your comments by the closing date shown above in this notice. All comments must reference Notice No. 124 and must include your name and mailing address. Your comments also must be made in English, be legible, andbe written in language acceptable for public disclosure. TTB does not acknowledge receipt of comments, and considers all comments as originals.

You may submit comments on this notice by using one of the following three methods:

•Federal e-Rulemaking Portal:You may send comments via the online comment form associated with this notice in Docket No. TTB-2011-0010 on “Regulations.gov,” the Federal e-rulemaking portal, athttp://www.regulations.gov.A link to the Regulations.gov comment form for this proposal is available under Notice No. 124 on the TTB Web site athttp://www.ttb.gov/regulations_laws/all_rulemaking.shtml.Supplemental files may be attached to comments submitted via Regulations.gov. For information on how to use Regulations.gov, click on the site's Help or FAQ tabs.

•U.S. Mail:You may send comments via postal mail to the Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, P.O. Box 14412, Washington, DC 20044-4412.

•Hand Delivery/Courier:You may hand-carry your comments or have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Suite 200-E, Washington, DC 20005.

If you are commenting on behalf of an association, business, or other entity, your comment must include the entity's name as well as your name and position title. If you comment via Regulations.gov, please include the entity's name in the “Organization” blank of the comment form. If you comment via postal mail, please submit your entity's comment on letterhead.

You may also write to the Administrator before the comment closing date to ask for a public hearing. The Administrator reserves the right to determine whether to hold a public hearing.

All submitted comments and attachments are part of the public record and are subject to public disclosure. Do not enclose any material in your comments that you consider to be confidential or that is inappropriate for public disclosure.

On the Federal e-rulemaking portal, Regulations.gov, TTB will post, and the public may view, copies of this notice, copies of the two proposed forms, and any electronic or mailed comments TTB receives about this proposal. You may view the Regulations.gov docket containing this notice and the posted comments received on it through the Regulations.gov search page athttp://www.regulations.gov.

All posted comments will display the commenter's name, organization (if any), city, and State, and, in the case of mailed comments, all address information, including email addresses. TTB may omit voluminous attachments or material that TTB considers unsuitable for posting.

You and other members of the public may view copies of this notice, copies of the two proposed forms, and any electronic or mailed comments TTB receives about this proposal by appointment at the TTB Information Resource Center, 1310 G Street NW., Washington, DC 20220. You may also obtain copies at 20 cents per 8.5- x 11-inch page. Contact TTB's information specialist at the above address or by telephone at 202-453-2270 to schedule an appointment or to request copies of comments or other materials.

It has been determined that this proposed rule is not a significant regulatory action as defined in Executive Order 12866. Therefore, a regulatory assessment is not required.

Pursuant to the requirements of the Regulatory Flexibility Act (5 U.S.C. Chapter 6) TTB certifies that this notice of proposed rulemaking will not have a significant economic impact on a substantial number of small entities. The changes being proposed do not create any additional requirements on small businesses and would only have the effect of lessening current reporting requirements. Accordingly, a regulatory flexibility analysis is not required.

Currently, there are four collections of information approved by the Office of Management and Budget (OMB) that cover both recordkeeping and reporting of DSP operations. These collections of information, approved in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3504(h)), are associated with control numbers 1513-0047, 1513-0039, 1513-0041, and 1513-0049. The specific regulatory section in this proposed rule that contains collections of information is 27 CFR 19.632 and it concerns only reporting of DSP operations; TTB is not proposing to change the recordkeeping requirements currently associated with these four control numbers. Consistent with the proposed regulatory change, TTB intends to replace the four existing collections of information with two new collections of information: (1) Distilled Spirits Plant Operations Recordkeeping Requirements, and (2) Distilled Spirits Plant Operations Reporting Requirements. These two new collections of information have been submitted to OMB for approval. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.

The proposed amendments to § 19.632, which would affect only reporting requirements, would decrease the number of operational reports that DSP proprietors are required to submit to TTB. Currently, there are four types of reports that proprietors may be required to submit, and each of these reports must be submitted on a monthly basis. In place of these requirements, the proposed amendments would provide for proprietors to submit one or two reports on a monthly or quarterly basis. The proposed amendments would replace the four current reports with an industrial report and a beverage (nonindustrial) report. Proprietors that are qualified to conduct either industrial or beverage operations would only be required to complete one of the respective reports, while proprietors qualified to conduct both types of operations would be required to complete both reports. In addition, the proposed amendments would require proprietors to submit required reports quarterly, rather than monthly, if they pay excise taxes and file excise tax returns quarterly in accordance with 27 CFR 19.235.

Based on the current number of permitted DSPs, TTB estimates that, as a result of the proposed regulatory amendments (and reflecting the estimated number of monthly and quarterly filers), the total annual burden for the distilled spirits operations reporting, for each report, will be as follows:

•Estimated total annual reporting burden:8,592 hours.

•Estimated average annual burden hours per respondent:13.68 hours.

•Estimated number of respondents:150 reporting monthly; 478 reporting quarterly.

•Estimated annual frequency of responses:12 for monthly reporting; 4 for quarterly reporting.

Distilled spirits operations recordkeeping requirements would notbe changed as a result of the proposed regulatory amendments. TTB estimates that the total annual burden for distilled spirits operations recordkeeping, are as follows:

•Estimated total annual recordkeeping burden:1 hour.

•Estimated number of respondents:628.

•Estimated annual frequency of responses:1.

Comments on the two collections of information submitted to OMB should be sent to OMB to Office of Management and Budget, Attention: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503. A copy should also be sent to the Alcohol and Tobacco Tax and Trade Bureau by any of the methods previously described. Because OMB must complete its review of the collection of information between 30 and 60 days after publication, comments on the information collection should be submitted not later than January 4, 2012. Comments are specifically requested concerning:

• Whether the two collections of information submitted to OMB are necessary for the proper performance of the functions of the Alcohol and Tobacco Tax and Trade Bureau, including whether the information will have practical utility;

• The accuracy of the estimated burdens associated with the two collections of information submitted to OMB;

• How to enhance the quality, utility, and clarity of the information to be collected;

• How to minimize the burden of complying with the proposed revisions of the collections of information, including the application of automated collection techniques or other forms of information technology; and

• Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.

Rita D. Butler of the Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, drafted this document.

For the reasons explained in the preamble, TTB proposes to amend 27 CFR part 19 as set forth below:

Copies of this Federal Register notice:Electronic copies of thisFederal Registernotice are available athttp://www.regulations.gov.This notice, as well as news releases and other relevant information, also are available at OSHA's Web page athttp://www.osha.gov.

This action is part of a rulemaking project instituted by the Occupational Safety and Health Administration (“OSHA” or “the Agency”) to update OSHA standards that reference or include language from outdated standards published by standards developing organizations (“SDO standards”) (69 FR 68283). A SDO standard referenced in OSHA's Acetylene Standard (29 CFR 1910.102) is among the SDO standards that the Agency identified for revision.

OSHA adopted the original Acetylene Standard in 1974 pursuant to Section 6(a) of the Occupational Safety and Health Act of 1970 (OSH Act; 29 U.S.C. 651, 655). This section allowed OSHA, during the first two years after passage of the OSH Act, to adopt existing Federal and national consensus standards as OSHA safety and health standards, including the Acetylene Standard.

On August, 11, 2009, OSHA published a direct final rule (DFR) and an accompanying notice of proposed rulemaking (NPRM) that updated references to recognize the latest edition of the Compressed Gas Association standard, CGA G-1-2003, in the Acetylene Standard.See74 FR 40442 and 74 FR 40450, respectively. OSHA received no adverse comments on the DFR, and it became effective on November 9, 2009.See74 FR 57883.

The Compressed Gas Association published a new edition of CGA G-1 in June 2009. OSHA did not include the CGA G-1-2009 in the DFR because that edition was not available to OSHA prior to publication of the DFR. However, three of the eight comments received on the DFR (Exs. OSHA-2008-0034-0017, -0010, and -0022) recommended that the Agency reference CGA G-1-2009 instead of the 2003 edition. This NPRM would remove CGA G-1-2003 from the existing Acetylene Standard and replace it with CGA G-1-2009.

In a direct final rulemaking, an agency publishes a DFR in theFederal Registeralong with a statement that the rule will become effective unless the agency receives a significant adverse comment within a specified period. An agency uses direct final rulemaking when it anticipates the rule will be non-controversial. The agency concurrently publishes a proposed rule that is essentially identical to the DFR. If the agency receives no significant adverse comments in response to the DFR, the rule goes into effect. If, however, the agency receives significant adverse comment within the specified period, the agency withdraws the DFR andtreats the comments as submissions on the proposed rule.

OSHA is using a DFR in this rulemaking because it expects the rule to: Be noncontroversial; provide protection to employees that is at least equivalent to the protection afforded to them by the outdated standard; and impose no significant new compliance costs on employers (69 FR 68283, 68285). OSHA used DFRs previously to update or, when appropriate, revoke references to outdated national SDO standards in OSHA rules (see, e.g.,69 FR 68283, 70 FR 76979, and 71 FR 80843).

For purposes of this rulemaking, a significant adverse comment is one that explains why the rule would be inappropriate, including challenges to the rule's underlying premise or approach. In determining whether a comment necessitates withdrawal of the DFR, OSHA will consider whether the comment raises an issue serious enough to warrant a substantive response in a notice-and-comment process. OSHA will not consider a comment recommending an addition to the rule to be a significant adverse comment unless the comment states why the DFR would be ineffective without the addition. If OSHA receives a timely significant adverse comment, the Agency will publish aFederal Registernotice withdrawing the DFR no later than February 3, 2012.

OSHA preliminarily determined that updating and replacing the SDO standard in the Acetylene Standard is appropriate for direct final rulemaking. First, the revision made to the Acetylene Standard will not compromise the safety of employees, and instead enhances employee protection. As described below, the revision will make the requirements of OSHA's Acetylene Standard consistent with current industry practices, thereby eliminating confusion and clarifying employer obligations, which will increase employee safety by encouraging compliance. Furthermore, bringing the Acetylene Standard in line with industry practice will not produce additional costs for employers, and may reduce compliance costs. Finally, the revision is non-controversial because it merely updates the SDO standard referenced in the rule to the most current version of that standard.

This NPRM is the companion document to a direct final rule (DFR) also published in today'sFederal Register.If OSHA receives no significant adverse comment on the DFR, it will publish aFederal Registerdocument confirming the effective date of the DFR and withdrawing this NPRM. The confirmation may include minor stylistic or technical corrections to the DFR. For the purpose of judicial review, OSHA considers the date that it confirms the effective date of the DFR to be the date of issuance. However, if OSHA receives significant adverse comment on the DFR, it will publish a timely withdrawal of the DFR and proceed with this NPRM, which addresses.

OSHA requests comments on all issues related to this rulemaking, including economic or other regulatory impacts of this action on the regulated community. OSHA will consider all of the comments, and the comments will become part of the record.

the same revisions to the Acetylene Standard.

This NPRM would update the SDO standard referenced in paragraph 1910.102(a) of the Acetylene Standard. To ensure that employers have access to the latest safety requirements for managing acetylene, this NPRM would adopt the requirements specified in the most recent, 2009, edition of the SDO standard, CGA G-1-2009. The following discussion provides a summary of the revisions OSHA is proposing for paragraph (a) of the Acetylene Standard.

For paragraph (a) of § 1910.102 (Cylinders), this NPRM would replace the reference to the 2003 edition of CGA Pamphlet G-1 (“Acetylene”) (Ex. OSHA-2008-0034-0006) with the most recent (2009) edition of that standard, also entitled “Acetylene” (Ex. OSHA-2011-0183-0003). In reviewing CGA G1-2009, the Agency prepared a side-by-side comparison of the 2009 and 2003 editions (Ex. OSHA-2011-0183-0004). OSHA found minor changes to the titles of CGA reports referenced in paragraph 4 of section 3.2 (Physical and chemical properties) and section 4.2 (Valves); these changes are not substantive. In section 4.5 (Marking and labeling), CGA also provides additional guidance clarifying Department of Transportation labeling regulations, and labeling requirements for transporting acetylene in Canada. The Agency preliminarily determined that this information provides guidance only, and, therefore, would impose no additional burden on employers. Lastly, OSHA identified an addition to the note in section 5.2 (Rules for storing acetylene) that designates as “in service” single cylinders of acetylene and oxygen located at a work station (e.g.,chained to a wall or building column, secured on a cylinder cart). The Agency preliminarily determined that this change is consistent with current industry practice, and, consequently, would not increase employers' burden.1

OSHA believes that the provisions of CGA G-1-2009 are consistent with the usual and customary practice of employers in the industry, and preliminarily determined that incorporating CGA G-1-2009 into paragraph (a) of § 1910.102 would not add compliance burden for employers. OSHA invites the public to comment on whether the revisions proposed for the Acetylene Standard represent current industry practice.

The purpose of the Occupational Safety and Health Act of 1970 (29 U.S.C. 651et seq.), is “to assure so far as possible every working man and woman in the nation safe and healthful working conditions and to preserve our human resources.” 29 U.S.C. 651(b). To achieve this goal, Congress authorized the Secretary of Labor to promulgate and enforce occupational safety and health standards. 29 U.S.C. 655(b), 654(b). A safety or health standard is a standard “which requires conditions, or the adoption or use of one or more practices, means, methods, operations, or processes, reasonably necessary or appropriate to provide safe or healthful employment or places of employment.” 29 U.S.C. 652(8). A standard is reasonably necessary or appropriate within the meaning of Section 652(8) when a significant risk of material harm exists in the workplace and the standard would substantially reduce or eliminate that workplace risk.

This NPRM would not reduce the employee protections put into place by the standard OSHA is proposing to update under this rulemaking. Instead, OSHA believes this rulemaking likely would enhance employee safety by clarifying employer obligations. Therefore, it is unnecessary to determine significant risk, or the extent to which this rule would reduce that risk, as typically is required byIndustrial Union Department, AFL-CIO v.American Petroleum Institute(448 U.S. 607 (1980)).

The proposed standard would not be “economically significant” as specified by Executive Order 12866, or a “major rule” under Section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (“SBREFA”; 5 U.S.C. 804). The DFR resulting from this proposed rule would not impose significant additional costs on any private-sector or public-sector entity, and does not meet any of the criteria for an economically significant or major rule specified by Executive Order 12866 and the relevant statutes. OSHA developed this proposal with attention to the approaches to rulemaking outlined in Executive Orders 12866 and 13563.

This NPRM simply proposes to update a reference to an outdated SDO standard in OSHA's Acetylene Standard. The Agency preliminarily concludes that the revisions will not impose any additional costs on employers because it believes that the updated SDO standard represents the usual and customary practice of employers in the industry. Consequently, the proposal imposes no costs on employers. Therefore, OSHA certifies that this rulemaking would not have a significant economic impact on a substantial number of small entities. Accordingly, the Agency is not preparing a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 601et seq.).

Neither the existing nor updated SDO standard addressed by this NPRM contain collection of information requirements. Therefore, this NPRM does not impose or remove any information-collection requirements for purposes of the Paperwork Reduction Act of 1995, 44 U.S.C. 3501et seq.and 5 CFR part 1320. Accordingly, the Agency does not have to prepare an Information Collection Request in association with this rulemaking.

Members of the public may respond to this paperwork determination by sending their written comments to the Office of Information and Regulatory Affairs, Attn: OSHA Desk Officer (RIN 1218-AC08), Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503. The Agency encourages commenters to submit these comments to the rulemaking docket, along with their comments on other parts of the NPRM. For instructions on submitting these comments and accessing the docket, see the sections of thisFederal Registernotice titledDATESandADDRESSES.However, OSHA will not consider any comment received on this paperwork determination to be a “significant adverse comment” as specified under Section II (“Direct Final Rulemaking”) of this notice.

To make inquiries, or to request other information, contact Mr. Todd Owen, Directorate of Standards and Guidance, OSHA, Room N-3609, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210; telephone (202) 693-2222.

OSHA reviewed this NPRM in accordance with the Executive Order on Federalism (Executive Order 13132, 64 FR 43255, August 10, 1999), which requires that Federal agencies, to the extent possible, refrain from limiting State policy options, consult with States prior to taking any actions that would restrict State policy options, and take such actions only when clear constitutional authority exists and the problem is national in scope.

Under Section 18 of the Occupational Safety and Health Act of 1970 (“OSH Act”; U.S.C. 651et seq.), Congress expressly provides that States may adopt, with Federal approval, a plan for the development and enforcement of occupational safety and health standards; OSHA refers to States that obtain Federal approval for such a plan as “State Plan States.” 29 U.S.C. 667. Occupational safety and health standards developed by State Plan States must be at least as effective in providing safe and healthful employment and places of employment as the Federal standards. Subject to these requirements, State Plan States are free to develop and enforce their own requirements for occupational safety and health standards. While OSHA drafted this NPRM to protect employees in every State, Section 18(c)(2) of the Act permits State Plan States and Territories to develop and enforce their own standards for acetylene operations provided these requirements are at least as effective in providing safe and healthful employment and places of employment as the final requirements that result from this proposal.

In summary, this NPRM complies with Executive Order 13132. In States without OSHA-approved State Plans, any standard developed from this NPRM would limit State policy options in the same manner as every standard promulgated by OSHA. In States with OSHA-approved State Plans, this rulemaking would not significantly limit State policy options.

When Federal OSHA promulgates a new standard or a more stringent amendment to an existing standard, the 27 States or U.S. Territories with their own OSHA-approved occupational safety and health plans (“State Plan States”) must amend their standards to reflect the new standard or amendment, or show OSHA why such action is unnecessary (e.g.,if an existing State standard covering this area is already “at least as effective” as the new Federal standard or amendment). 29 CFR 1953.5(a). The State standard must be “at least as effective” as the final Federal rule, and must be completed within six months of the publication date of the final Federal rule. 29 CFR 1953.5(a). When OSHA promulgates a new standard or amendment that does not impose additional or more stringent requirements than the existing standard, State Plan States are not required to amend their standards, although OSHA may encourage them to do so.

While this proposed rule does not impose any additional or more stringent requirements on employers than the existing Acetylene Standard, OSHA believes that the provisions of this proposal would provide employers with critical, updated information and methods that will help protect their employees from the hazards found in workplaces engaged in acetylene operations. Therefore, if adopted as proposed, OSHA will encourage the State Plan States to adopt comparable provisions within six months of publication of the final rule. The 27 States and territories with OSHA-approved State Plans are: Alaska, Arizona, California, Connecticut, Hawaii, Illinois, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, Nevada, New Mexico, New Jersey, New York, North Carolina, Oregon, Puerto Rico, South Carolina, Tennessee, Utah, Vermont, Virginia, Virgin Islands, Washington, and Wyoming. Connecticut, Illinois, New Jersey, New York, and the Virgin Islands have OSHA-approved State Plans that apply to State and local government employees only.

OSHA reviewed this NPRM in accordance with the Unfunded Mandates Reform Act of 1995 (“UMRA”; 2 U.S.C. 1501et seq.) and Executive Order 12875 (56 FR 58093). As discussed above in Section IV.B (“Final Economic Analysis andRegulatory Flexibility Act Certification”) of this notice, the Agency determined that this NPRM would not impose additional costs on any private-sector or public-sector entity. Accordingly, this NPRM requires no additional expenditures by either public or private employers.

As noted above under Section IV.E (“State Plan States”) of this notice, the Agency's standards do not apply to State and local governments except in States that have elected voluntarily to adopt a State Plan approved by the Agency. Consequently, this NPRM would not meet the definition of a “Federal intergovernmental mandate” (SeeSection 421(5) of the UMRA (2 U.S.C. 658(5))). Therefore, for the purposes of the UMRA, the Agency certifies that this NPRM does not mandate that State, local, or tribal governments adopt new, unfunded regulatory obligations, or increase expenditures by the private sector of more than $100 million in any year.

OSHA requests comments on all issues concerning this NPRM. The Agency also welcomes comments on its determination that this NPRM would have no negative economic or other regulatory impacts on employers, and will increase employee protection. If OSHA receives no significant adverse comment, it will publish aFederal Registerdocument confirming the effective date of the companion DFR and withdrawing this NPRM. Such confirmation may include minor stylistic or technical corrections to the document. For a full discussion of what constitutes a significant adverse comment, see Section II (“Direct Final Rulemaking”) of this notice.

The Agency will withdraw the DFR if it receives significant adverse comment on the amendments contained in it, and proceed with this NPRM by addressing the comment(s) and publishing a new final rule. The comment period for this NPRM runs concurrently with that of the DFR. Therefore, OSHA will treat any comments received under this NPRM as comments regarding the DFR. Similarly, OSHA will consider a significant adverse comment submitted to the DFR as a comment to this NPRM; the Agency will consider such a comment in developing a subsequent final rule.

OSHA will post comments received without revision tohttp://www.regulations.gov, including any personal information provided. Accordingly, OSHA cautions commenters about submitting personal information such as Social Security numbers and birth dates.

David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210, authorized the preparation of this notice. The Agency is issuing this notice under Sections 4, 6, and 8 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 653, 655, 657), Secretary of Labor's Order 4-2010 (75 FR 55355), and 29 CFR part 1911.

For the reasons discussed in the preamble, the Occupational Safety and Health Administration is proposing to amend 29 CFR part 1910 as set forth below:

The Architectural and Transportation Barriers Compliance Board (Access Board) is reopening until February 2, 2012, the comment period for the notice entitled “Accessibility Guidelines for Pedestrian Facilities in the Public Right-of-Way,” that appeared in theFederal Registeron July 26, 2011 (76 FR 44664). In that notice, the Access Board proposed guidelines for accessible public rights-of-way and requested comments by November 23, 2011.

On the day the comment period ended, the Access Board received a request from the National Association of Counties, the National League of Cities and the U.S. Conference of Mayors to extend the comment period for at least 90 days to provide local governments with additional time to review and more fully assess the proposed rule. In addition, just prior to the closing of the comment period, the American Council of Engineering Companies requested an unspecified extension of the comment period. Although the Access Board has already provided a 120-day comment period and has held two public hearings on the proposed rule, the Board will provide additional time for the public to submit comments on this proposed rule. The new comment period ends on February 2, 2012.

On May 28, 2009, TDEC submitted a revision to EPA for approval into the Tennessee SIP to adopt Federal requirements for NSR permitting.1 Tennessee's SIP revision makes changes to Tennessee's Air Quality Regulations, Chapter 1200-03-09—Construction and Operating Permits, Rule Number .01—Construction Permit, .02—Operating Permits, and .03—General Provisionsto adopt PSD and NNSR requirements related to the implementation of the Phase II Rule.2 First, the proposed revision addresses requirements promulgated in the Phase II Rule. In summary, the May 28, 2009, SIP revision addresses the Ozone Implementation NSR Update requirements for Tennessee to: (1) Specifically recognize that nitrogen oxides (NOX) emissions are ozone precursors; (2) adopt NNSR provisions for major stationary source thresholds for sources in certain classes of nonattainment areas for 8-hour ozone, carbon monoxide and particulate matter with a nominal aerodynamic diameter less than or equal to 10 microns (PM10); (3) address changes to offset ratios for marginal, moderate, serious, severe, and extreme ozone nonattainment areas; and (4) address changes to provisions addressing offset requirements for facilities that shut down or curtail operation. Tennessee's May 28, 2009 submittal adopts these provisions promulgated in the Phase II Rule. In addition, May 28, 2009, SIP revision includes updates to the Tennessee PSD and NNSR permitting regulations regarding the adoption of CCT definitions at 1200-03-09.01. Lastly, the SIP revision includes clarifying changes and corrections to its rules at 1200-3-9-.01, 1200-3-9-.02 and 1200-3-9-.03. All changes in the proposed SIP revision are necessary to comply with Federal regulations related to Tennessee's NSR permitting program. Pursuant to section 110 of the CAA, EPA is proposing to approve all the aforementioned changes into the Tennessee SIP.

Tennessee's May 28, 2009, submittal also included the removal of provisions for clean units (CU) and pollution control projects (PCP) from the State's PSD and NNSR regulations that were vacated by the United States Court of Appeals for the District of Columbia Circuit (DC Circuit Court)3 to be consistent with the Federal regulations. EPA did not approve revisions into Tennessee's federally-approved SIP regarding the provisions for CU and PCP. Therefore, no action related to the provisions of CU and PCP is necessary.

The CAA NSR program is a preconstruction review and permitting program applicable to certain new and modified stationary sources of air pollutants regulated under the CAA. The program includes a combination of air quality planning and air pollution control technology requirements. The CAA NSR program is composed of three separate programs: PSD, NNSR, and Minor NSR. PSD is established in Part C of title I of the CAA and applies in areas that meet the NAAQS “attainment areas” as well as areas where there is insufficient information to determine if the area meets the NAAQS—“unclassifiable areas.” The NNSR program is established in Part D of title I of the CAA and applies in areas that are not in attainment of the NAAQS—“nonattainment areas.” The minor NSR program addresses construction or modification activities that do not qualify as “major” and applies regardless of the designation of the area in which a source is located. Together, these programs are referred to as NSR programs. EPA regulations governing the implementation of these programs are contained in 40 Code of Federal Regulations (CFR) parts 51.165, 51.166, 52.21, 52.24, and part 51, Appendix S.

Section 109 of the CAA requires EPA to promulgate a primary NAAQS to protect public health and a secondary NAAQS to protect public welfare. OnceEPA sets those standards, states must develop, adopt, and submit a SIP to EPA for approval that includes emission limitations and other control measures to attain and maintain the NAAQS.SeeCAA section 110. Each SIP is also required to include a preconstruction review program for the construction and modification of any stationary source of air pollution to assure the maintenance of the NAAQS. The May 28, 2009, SIP submittal changes Tennessee's PSD and NNSR programs.

Today's proposed action on the Tennessee SIP relates in part to EPA's Phase II Rule. 70 FR 71612 (November 29, 2005). In the Phase II Rule, EPA made a number of changes including: recognizing NOXas an ozone precursor for PSD purposes; changes to the NNSR rules establishing major stationary thresholds (marginal, moderate, serious, severe, and extreme NAA classifications) and significant emission rates for the 8-hour ozone, PM10 and carbon monoxide NAAQS; revised the criteria for crediting emission reductions credits from operation shutdowns and curtailments as offsets, and changes to offset ratios for marginal, moderate, serious, severe, and extreme ozone NAA. EPA finalized regulations to address permit requirements for the 1997 8-hour ozone NAAQS to implement the NSR program by specifically identifying NOXas an ozone precursor.

On July 18, 1997, EPA promulgated a revised 8-hour ozone NAAQS of 0.08 parts permillion—also referred to as the 1997 8-hour ozone NAAQS. On April 30, 2004, EPA designated areas as attainment, nonattainment and unclassifiable for the 1997 8-hour ozone NAAQS. As part of the framework to implement the 1997 8-hour ozone NAAQS, EPA promulgated an implementation rule in two phases. Phase I of EPA's 1997 8-hour ozone implementation rule (Phase I Rule), published on April 30, 2004, effective on June 15, 2004, provided the implementation requirements for designating areas under subpart 1 and subpart 2 of the CAA (69 FR 23951).

On November 29, 2005, EPA promulgated the second phase for implementation provisions related to the 1997 8-hour ozone NAAQS—also known as the Phase II Rule (70 FR 71612). The Phase II Rule addressed control and planning requirements as they applied to areas designated nonattainment for the 1997 8-hour ozone NAAQS such as reasonably available control technology, reasonably available control measures, reasonable further progress, modeling and attainment demonstrations and NSR, and the impact to reformulated gas for the 1997 8-hour ozone NAAQS transition. The Phase II Rule requirements include, among other changes, a provision stating that NOXis an ozone precursor. 70 FR 71612, 71679. In the Phase II Rule, EPA stated as follows:

As was discussed earlier, the Phase II Rule made changes to Federal regulations at 40 CFR 51.165 and 51.166 (which governs the NNSR and PSD permitting programs respectively). Pursuant to these requirements, states were required to submit SIP revisions adopting the relevant Federal requirements of the Phase II Rule (at 40 CFR 51.165 and 51.166) into their SIP no later than June 15, 2007. On May 28, 2009, Tennessee submitted a SIP revision (the subject of this action) to adopt the relevant provisions at 40 CFR 51.165 and 51.166 into the Tennessee SIP to be consistent with Federal regulations for NSR permitting purposes promulgated in the Phase II Rule.

Tennessee currently has a SIP-approved NSR program for new and modified stationary sources. TDEC's PSD preconstruction rules are found in Rule 1200-3-9-.01(4) and apply to major stationary sources or modifications constructed in areas designated attainment as required under part C of title I of the CAA with respect to the NAAQS. TDEC's Rule 1200-3-9-.01(5) includes permitting requirements for sources in and impacting nonattainment areas. Today, EPA is proposing to approve changes to Tennessee's rules at 1200-3-9-.01(4) and at 1200-3-9-.01(5) to update the State's existing NSR program to be consistent with Federal NSR regulations, amended in the Phase II Rule (at 40 CFR 51.165 and 51.166). Lastly, EPA is proposing to approve Tennessee's clarifying changes and corrections to its rules at 1200-3-9-.01, 1200-3-9-.02 and 1200-3-9-.03. More detail is provided below regarding EPA's analysis of the changes to Tennessee's SIP as provided in the May 28, 2009, SIP revision.

Tennessee's May 28, 2009, SIP revision included changes to the State's PSD and NNSR programs to address EPA's Phase II Rule. As part of its review of the Tennessee submittal, EPA performed a line-by-line review of the proposed revision including the provision which differs from the Federal rules, and determined that they are consistent with the program requirements for NSR, set forth at 40 CFR 51.165 and 51.166. States may meet the requirements of 40 CFR part 51 and the Phase II Rules with alternative but equivalent regulations. Tennessee adopted the Federal PSD and NNSR rules amended in the Phase II Rules with minor NNSR variations.

Specifically, with regards to the permit requirements for NNSR NOXas an ozone precursor, Tennessee's SIP revision did not specifically include the NNSR provisions at 40 CFR 51.165(a)(1)(v)(E) and 51.165(a)(1)(x)(C).SeePhase II Rule at 70 FR 71612 (November 29, 2005). The Federal regulations at 40 CFR 51.165(a)(1)(v)(E) and (a)(1)(x)(C) relate to applying the same volatile organic compound (VOC) emission requirements for significant net emissions and emission rates (respectively) to NOXemissions of major stationary sources and major modifications. However, Tennessee's NSR program has equivalent provisions that address both of the aforementioned Phase II Rule requirements. Tennessee's existing SIP includes the definition of “ozone precursor” at 1200-03-09-.01(5)(b)1(xxxiii). Ozone precursor is defined in Tennessee's SIP as VOC and/or NOX. Also, Tennessee's SIP defines “regulated NSR pollutant” as “VOC and/or nitrogen oxides compound (1200-03-09-.01(5)(b)(1)(xlix).” Tennessee's definition for “major modification” (at 1200-03-09-.01(5)(b)1(v)) states that “any significant emissions increase from any emissions units or emission increase at a major stationary source that is significant for volatile organic compounds and/or nitrogen oxides shall be considered significant for ozone.”

In addition, Tennessee's May 28, 2009, SIP revision does not explicitly include the Phase II Rule provision at 51.165(a)(1)(iv)(A)(2) which addresses the applicability of NOXas an ozoneprecursor to major stationary source emission thresholds in nonattainment areas (based on classifications).4 However, EPA believes that Tennessee's SIP already covers the requirement of 51.165(a)(1)(iv)(A)(2) because: (1) The definition of a “major stationary source” (1200-03-09-.01(5)(b)(1)(iv)) in the Tennessee SIP addresses major stationary source thresholds for NOXfor moderate nonattainment areas (which was the highest nonattainment classification in the State), and (2) Tennessee's SIP recognizes NOXas a regulated NSR pollutant.

EPA has preliminarily determined that the rules adopted by Tennessee in the May 28, 2009, SIP revision are at least as stringent as the Federal program. Therefore, EPA has preliminarily determined that Tennessee's May 28, 2009, SIP revision is consistent with the NSR permit program requirements set forth at 40 CFR 51.165 and 51.166.

In addition to adopting the Federal rules consistent with the Phase II Rule, Tennessee's SIP revision also includes changes that were promulgated by EPA in a portion of the 1992 WEPCO Rule (Wisconsin Electric Power Co.v.Reilly,893 F.2d 901 (7th Cir. 1990)) on July 21, 1992 (57 FR 32314). The portion of the WEPCO Rule relevant to today's proposal, regards the establishment of CCT and re-powering projects and the applicability of NSR requirements to such projects. As part of the WEPCO Rule, EPA established definitions for CCT, CCT demonstration project, temporary CCT demonstration project, and re-powering. In addition, the rule exempted CCT demonstration projects (that constitute re-powering) from PSD requirements (major modification) as long as the projects do not cause an increase in potential to emit of a regulated NSR pollutant emitted by the unit.

Tennessee's May 28, 2009, SIP submittal revised Tennessee's NSR regulations at 1200-03-09-.01 to adopt the CCT and repowering definitions promulgated as part of the WEPCO Rule and now found at 40 CFR 51.165(a)(1)(xxii)-(xxiv) and 51.166(b)(33)-(36) as well as modify the definition of “major modification” to exempt “clean coal technology demonstration projects” (consistent with 51.165(a)(1)(v)(C)(9) and 51.166(b)(2)(iii)((i)-(j).EPA has preliminarily determined that the rule changes made by Tennessee are consistent with the current Federal regulations at 40 CFR 51.165 and 51.166.

In addition to the adoption of specific Federal regulations mentioned above, TDEC is also making clarifying changes and corrections to its SIP for portions of Rules 1200-3-9-.01, 1200-3-9-.02 and 1200-03-09-.03. As a result of the removal of all references to the “clean units” language (due to the vacatur), Tennessee, were appropriate, replaced the terms “clean units” or “clean” with the terms “new emission units” or “new” at Rule 1200-3-9-.01 consistent with the hybrid test applicability provision amended in the 2002 NSR Reform Rule. 67 FR 8018 at 80260). In addition, Tennessee is correcting a typographical error for the definition of “major stationary source” at Rule 1200-3-0-.01(5)(b)(i)1(iv)(II) by removing the “s” from the word “items” between the word “under and before numerical (“iv).” For rule 1200-3-9-.02—“Operating Permits,” Tennessee is revising paragraph (1) to clarify the timeframe and conditions for an air contaminant source (constructed or modified in accordance with Rule 1200-3-9-.01) to apply for an operating permit. Additionally, Tennessee is also correcting a typographical error at Paragraph 1 of Rule 1200-3-9-.03(1) which describes the authority of the State to requests an early timeframe for sources to comply with emission regulations stipulated in the Tennessee SIP. This correction at 1200-03-09-.03 replaces the word “data” with “date.”

EPA is proposing to approve Tennessee's May 28, 2009, SIP revision adopting Federal regulations amended in the Phase II Rule (including recognition of NOXas an ozone precursor) into the Tennessee SIP. Additionally, EPA is proposing to approve Tennessee's changes to its PSD and NNSR permitting regulations regarding the addition of CCT requirements (established in a portion of EPA's WEPCO Rule) at 1200-03-09.01; and the clarifying changes and correction to Tennessee's NSR rule. EPA has made the preliminary determination that this SIP revision is approvable because it is in accordance with the CAA and EPA regulations regarding NSR permitting.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this proposed action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:

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

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

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

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

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

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

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

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

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

In addition, this proposed rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

This proposal addresses the following local rules: PCAPCD Rule 218, Architectural Coatings and Rule 234, Automotive Refinishing Operations. In the Rules and Regulations section of thisFederal Register, we are approving these local rules in a direct final action without prior proposal because we believe these SIP revisions are not controversial. If we receive adverse comments, however, we will publish a timely withdrawal of the direct final rule and address the comments in subsequent action based on this proposed rule. Please note that if we receive adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, we may adopt as final those provisions of the rule that are not the subject of an adverse comment.

We do not plan to open a second comment period, so anyone interested in commenting should do so at this time. If we do not receive adverse comments, no further activity is planned. For further information, please see the direct final action.

On December 14, 2010, we published a proposed rule (75 FR 77801) to list the dunes sagebrush lizard, a lizard known from southeastern New Mexico and adjacent west Texas, as endangered under the Endangered Species Act of 1973, as amended (Act) (16 U.S.C. 1531et seq.). For a description of previous Federal actions concerning the dunes sagebrush lizard (formerly known as the sand dunes lizard), please refer to the proposed rule. In addition to the original comment period associated with the publication of the proposed rule, we held two public meetings in April 2011 and reopened the comment period to accept additional public comments (76 FR 19304, April 7, 2011). That comment period closed on May 9, 2011.

Section 4(b)(6) of the Act requires that we take one of three actions within 1 year of a proposed listing: (1) Finalize the proposed listing; (2) withdraw the proposed listing; or (3) extend the final determination by not more than 6 months, if there is substantial disagreement regarding the sufficiency or accuracy of the available data relevant to the determination, for the purposes of soliciting additional data.

Since the publication of the proposed rule, there has been substantial disagreement regarding the interpretation of the limited surveys used to determine the dunes sagebrush lizard's status and trends. This has led to a significant disagreement regarding the current conservation status of the species in New Mexico and Texas. In addition, there was sparse information on the dunes sagebrush lizard's presence in Texas, leading to substantial disagreement on the accuracy of our analysis of the status of the lizard in Texas.

Therefore, in consideration of the disagreements surrounding the lizard's status, we are extending the final determination for 6 months in order to solicit information that will help to clarify these issues.

We will accept written comments and information during this reopened comment period on our proposed listing for the dunes sagebrush lizard that was published in theFederal Registeron December 14, 2010 (75 FR 77801). We will consider information and recommendations from all interested parties. We intend that any final action resulting from this proposal be as accurate as possible and based on the best available scientific and commercial data.

Therefore, in consideration of the disagreements surrounding the lizard's status, we are extending the final determination for 6 months in order to solicit information that will help to clarify these issues. We are particularly interested in new information regarding:

(1) Population estimates of the dunes sagebrush lizard in New Mexico and Texas.

(2) Data that quantify the current amount of habitat and the loss of habitat.

(3) Survey information, including maps, throughout the dunes sagebrush lizard's range, especially for Texas.

In addition to our request for new information, we are also reopening the comment period to ensure the public has full access to and an opportunity to comment on all the available information we have received since the second comment period closed. We have received new survey information for the lizard in New Mexico and Texas and an unsolicited peer review study on our proposed rule. We are soliciting input from concerned governmental agencies, the scientific community, industry, or any other interested party concerning the proposed rule in light of this additional information.

If you previously submitted comments or information on the proposed rule, please do not resubmit them. We have incorporated them into the public record, and we will fully consider them in the preparation of our final determination. Our final determination concerning this proposed listing will take into consideration all written comments and any additional information we received.

You may submit your comments and materials concerning the proposed rule by one of the methods listed inADDRESSES. We request that you send comments only by the methods described inADDRESSES.

If you submit a comment viahttp://www.regulations.gov, your entire comment—including any personal identifying information—will be posted on the Web site. We will post all hardcopy comments onhttp://www.regulations.govas well. If you submit a hardcopy comment that includes personal identifying information, you may request at the top of your document that we withhold this information from public review. However, we cannot guarantee that we will be able to do so.

Comments and materials we receive, as well as supporting documentation weused in preparing the proposed rule, will be available for public inspection onhttp://www.regulations.govat Docket No. FWS-R2-ES-2010-0041, or by appointment, during normal business hours, at the U.S. Fish and Wildlife Service, New Mexico Ecological Services Field Office (seeFOR FURTHER INFORMATION CONTACT). You may obtain copies of the proposed rule on the Internet athttp://www.regulations.govat Docket No. FWS-R2-ES-2010-0041, or by mail from the New Mexico Ecological Services Field Office (seeFOR FURTHER INFORMATION CONTACT).

The primary authors of this notice are the staff of the U.S. Fish and Wildlife Service.

The authority for this action is the Endangered Species Act of 1973, as amended (16 U.S.C. 1531et seq.).