Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under theADDRESSESsection. Include “Docket No. FAA-2011-1259; Directorate Identifier 2011-NM-181-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

We have received reports of corrosion damage on the outer diameter chrome surface of the horizontal stabilizer pivot pins. Micro cracks in the chrome plating of the pivot pin, some of which extended into the base metal, were also reported. This condition, if not corrected, could result in a fractured horizontal stabilizer pivot pin, which may cause excessive horizontal stabilizer freeplay and structural damage significant enough to result in loss of control of the airplane.

We reviewed Boeing Alert Service Bulletin 777-55A0018, dated July 27, 2011. The service information describes procedures for replacing the inner and outer pivot pins of the horizontal stabilizer with new or reworked pivot pins, including replacing the spacer with a new spacer or with one that has been determined to be without corrosion damage or other irregularities.

That service bulletin describes procedures for doing repetitive detailed inspections for cracks, corrosion damage, or other irregularities of the outer and inner pivot pins after their replacement, and doing corrective actions if necessary. That service bulletin also describes procedures for doing repetitive ultrasonic inspections for cracks of the outer pivot pins after their replacement, and doing corrective actions if necessary. Corrective actions include replacing any pivot pin having cracking, corrosion damage, or other irregularities, with a new or serviceable pivot pin.

The compliance time for replacing the inner and outer pivot pins is the later of: (1) Before the accumulation of 16,000 total flight cycles, or within 3,000 days after the issuance of the original certificate of airworthiness or the original export certificate (whichever occurs first); and (2) within 750 days“after the original issue date of this service bulletin.” The first post-replacement inspection is within 32,000 flight cycles or 6,000 days (whichever occurs first after the pin replacement). The repetitive inspection interval is 16,000 flight cycles or 3,000 days (whichever occurs first); or 12,000 flight cycles or 3,000 days (whichever occurs first); depending on airplane group.

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

This proposed AD would require accomplishing the actions specified in the service information described previously.

We estimate that this proposed AD affects 155 airplanes of U.S. registry.

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

We estimate the following costs to do any necessary replacements that would be required based on the results of the proposed inspections. We have no way of determining the number of aircraft that might need these replacements.

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

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

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

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

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

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

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

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

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

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the captionADDRESSES. Include the Docket No. “FAA-2011-1285, Directorate Identifier 2010-SW-073-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

You may examine the docket that contains the proposed AD, any comments, and other information in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The Docket Operations office (telephone (800) 647-5527) is located in Room W12-140 on the ground floor of the West Building at the street address stated in theADDRESSESsection. Comments will be available in the AD docket shortly after receipt.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued Emergency AD No. 2010-0216-E, dated October 21, 2010 (corrected October 29, 2010), to correct an unsafe condition for Eurocopter Deutschland Model BO-105A, BO-105C, BO-105D, BO-105LS A-1, BO-105LS A-3, and BO-105S helicopters, all variants (except CB-5 and DBS-5, which are military models.) EASA advises that during an inspection on a BO-105 helicopter, debonding was found on the erosion protective shell of a main rotor blade, and it was determined that the debonding was caused by incorrect installation of the erosion protective shell. In addition, EASA states that an incident occurred where a second BO-105 helicopter lost its erosion protective shell during flight. EASA advises that this condition, if not detected, could result in loss of the main rotor blade erosion protective shell during flight, leading to an unbalanced main rotor and high vibrations, which could result in damage to the tail boom or tail rotor, loss of tail rotor control, and loss of control of the helicopter.

Eurocopter Deutschland has issued Emergency Alert Service Bulletin No. BO105-10-124, dated July 14, 2010, for the Model BO105 helicopter, with a main rotor blade, part number (P/N) 105-15103, 105-15141, 105-15141V001, 105-15143, 105-15150, 105-15150V001, 105-15152, 105-81013, 105-87214, 1120-15101, or 1120-15103, where the main rotor blade erosion protective shell was replaced between September 2006 and March 2010. Eurocopter Deutschland also issued Emergency Alert Service Bulletin BO105LS-10-12 for the Model BO105LS A-3 helicopter, dated July 14, 2010, with a main rotor blade, part P/N 105-15141, where the main rotor blade erosion protective shell was replaced between September 2006 and March 2010. Both Emergency Alert Service Bulletins specified a one-time inspection of the main rotor blades within the next 50 flight hours to determine if debonding of the main rotor blade erosion protective shell has occurred. Both Service Bulletins exclude helicopters from this inspection if each main rotor blade was inspected at the last 600 flight hour inspection and no debonding was detected during the inspection.

In response to the incident where the helicopter lost its main rotor blade erosion protective shell during flight, Eurocopter Deutschland has issued Emergency Alert Service Bulletin No. BO105-10-124, Revision 1, dated October 18, 2010, and Emergency Alert Service Bulletin BO105LS-10-12, Revision 1, dated October 20, 2010. These Service Bulletins specify the same inspection requirements as the original Service Bulletins, but revise the inspection compliance time from 50 flight hours to 10 flight hours. EASA classified these Service Bulletins as mandatory, and issued EASA Emergency AD No. 2010-0216-E, dated October 21, 2010 (corrected October 29, 2010) to ensure the continued airworthiness of these helicopters.

These products have been approved by the aviation authority of Germany and are approved for operation in the United States. Pursuant to our bilateral agreement with Germany, EASA, their technical representative, has notified us of the unsafe condition described in their AD. We are proposing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other products of these same type designs. This proposed AD would require a one-time inspection of each main rotor blade for debonding of the main rotor blade erosion protective shell within 50 hours time-in-service (TIS), for helicopters with a main rotor blade, P/N 105-15103, 105-15141, 105-15141V001, 105-15143, 105-15150, 105-15150V001, 105-15152, 105-81013, 105-87214, 1120-15101, or 1120-15103, where the main rotor blade erosion protective shell was replaced between September 2006 and March 2010. If debonding is detected during the inspection, before further flight, you would be required to replace the main rotor blade with an airworthy main rotor blade.

The differences between this proposed AD and the EASA AD are:

• This proposed AD uses the term “hours time-in-service” to describe compliance times, and the EASA AD uses “flight hours.”

• The EASA AD allows compliance within “10 flight hours, or 4 flight cycles, or 4 weeks, whichever occurs first,” and this proposed AD would require compliance within 50 hours TIS.

• The EASA AD allows you to replace the main rotor blade erosion protective shell if debonding is detected, and this proposed AD would require you to replace the main rotor blade with an airworthy main rotor blade if debonding is detected.

• The EASA AD is applicable to the Model BO-105D helicopter, and this proposed AD does not include this model because it does not have a type-certificate in the U.S.

We estimate that this proposed AD would affect 97 helicopters of U.S. registry. We estimate that it would take about 1.0 work-hour per helicopter to do the inspection, at an average labor rate of $85 per work hour. Based on these figures, we estimate the cost of the proposed AD on U.S. operators to be $8,245, or $85 per product. If debonding is found, we estimate that it would take about 2 work-hours to replace the main rotor blade, and required parts would cost $114,182, for a cost of $114,352. We have no way of determining how many operators would incur these costs.

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

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

1. Is not a “significant regulatory action” under Executive Order 12866;

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

3. Will not affect intrastate aviation in Alaska to the extent that a regulatory distinction is required; and

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

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

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

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

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

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

Communications should identify both docket numbers (FAA Docket No. FAA-2011-1193 and Airspace Docket No. 11-ANM-14) and be submitted in triplicate to the Docket Management Facility (seeADDRESSESsection for address and phone number). You may also submit comments through the Internet athttp://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2011-1193 and Airspace Docket No. 11-ANM-14.” The postcard will be date/time stamped and returned to the commenter.

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

An electronic copy of this document may be downloaded through the Internet athttp://www.regulations.gov.Recently published rulemaking documents can also be accessed through the FAA's web page athttp://www.faa.gov,or theFederal Register's Web page athttp://www.gpoaccess.gov/fr/index.html.

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

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

The FAA is proposing an amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 to modify RNAV route T-288 by adding a new segment between the Rapid City, SD VORTAC and the Gillette, WY VOR/DME. The modification would enhance the efficiency and safety of the NAS by supplementing the existing VOR Federal airway structure and providing alternative routing in the event of navigation aid (NAVAID) outages. The minimum IFR altitude in the area varies between 7,000 feet MSL and 9,300 feet MSL; however, the radar coverage in that area is not reliable below 12,000 feet MSL to 13,000 feet MSL. When NAVAID outages occur, due to the existing route and NAVAID structure, it is difficult to route aircraft between the Gillette VOR/DME and the Rapid City VORTAC. In this situation, aircraft flying at lower altitudes must climb up to be within radar coverage in order to get a more direct route to/from the VOR/DME and VORTAC. This is especially important during winter months because pilots encountering icing conditions at the higher altitudes need to descend, but are then lost from radar coverage. The proposed T-288 modification would alleviate this situation as well as enhance the NAS efficiency by adding an RNAV route option.

Low altitude RNAV routes are published in paragraph 6011 of FAA Order 7400.9V, dated August 9, 2011 and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The RNAV route listed in this document would be published subsequently in the Order.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it expands RNAV route coverage to enhance the safe and efficient flow of traffic in the western United States.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures,” paragraph 311a and 311b. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

On July 15, 2011, as part of the Administration's ongoing Export Control Reform Initiative, the Bureau of Industry and Security (BIS) published a proposed rule (76 FR 41958) (“the July 15 proposed rule”) that set forth a framework for how articles the President determines, in accordance with section 38(f) of the Arms Export Control Act (AECA) (22 U.S.C. 2778(f)), would no longer warrant control on the United States Munitions List (USML) and, instead, would be controlled on the Commerce Control List (CCL). The July 15 proposed rule also contained a proposal by BIS describing how military vehicles and related articles in USML Category VII that no longer warrant control under the USML would be controlled on the CCL.

On November 7, 2011 (76 FR 68675), BIS published a proposed rule describing how aircraft and related items determined by the President to no longer warrant control under the USML would be controlled on the CCL. In that proposed rule, BIS also made several changes and additions to the framework proposed in the July 15 proposed rule.

BIS plans to publish additional proposed rules describing how surface vessels and related articles (currently controlled under USML Category VI) and submersibles, submarines, and related articles (currently controlled by USML Category VI or XX) that the President determines no longer warrant control on the USML would be controlled on the CCL.

BIS also plans to publish a proposed rule describing how the new controls described in this and similar notices would be implemented, such as through the use of “grandfather” clauses and additional exceptions. The goal of such provisions would be to give exporters sufficient time to implement the final versions of such changes and to avoid, to the extent possible, situations where transactions would require licenses from both the State Department and the Commerce Department.

Following the structure of the July 15 and November 7 proposed rules, which describe the “export control reform initiative framework” for controlling on the CCL articles that the President determines no longer warrant control on the USML, this proposed rule describes BIS's proposal for how another group of items—gas turbine engines and related articles for military vessels, vehicles, and aircraft that are controlled by USML Categories VI, VII, and VIII, respectively—would be controlled on the CCL. The changes described in this proposed rule and the State Department's proposed amendment to the USML, which would move those items that would be retained on the USML into Category XIX (currently reserved), are based on a review of Categories VI, VII, and VIII by the Defense Department, which worked with the Departments of State and Commerce in preparing the proposed amendments. The review was focused on identifying the types of military gas turbine engines and related articles now controlled by these USML categories that are either: (i) Inherently military and otherwise warrant control on the USML, or (ii) if they are a type common to civil applications, possess parameters or characteristics that provide a critical military or intelligence advantage to the United States, and are almost exclusively available from the United States. If an article satisfies either or both of those criteria, the article would remain on the USML. If an article does not satisfy either criterion, but is nonetheless a type of article that is, as a result of differences in form and fit, “specially designed” for military applications, then it is identified in one of the new ECCNs in this proposed rule. Finally, if an article does not satisfy either of the two criteria and is not found to be “specially designed” for military applications, the article is not affected by this rule because such items already are not on the USML. The licensing policies and other EAR-specific controls for such items that are also described in this proposed rule would enhance our national security by: (i) Allowing for greater interoperability with our NATO, and other, allies while maintaining and expanding robust controls that, in some instances, would include prohibitions on exports or reexports destined for other countries or intended for proscribed end-users and end-uses; (ii) enhancing our defense industrial base by, for example, reducing the current incentives for foreign companies to design out or avoid U.S.-origin ITAR-controlled content, particularly with respect to generic, unspecified parts and components; and (iii) permitting the U.S. Government to focus its resources on controlling, monitoring, investigating, analyzing, and, if need be, prohibiting exports and reexports of more significant items to destinations, end users, and end uses of greater concern than our NATO allies and other multi-regime partners.

Pursuant to section 38(f) of the AECA, the President shall review the USML “to determine what items, if any, no longer warrant export controls under” the AECA. The President must report the results of the review to Congress and wait 30 days before removing any such items from the USML. The report must “describe the nature of any controls to be imposed on that item under any other provision of law.” 22 U.S.C. 2778(f)(1). This proposed rule describes how certain military gas turbine engines and related articles in USML Categories VI, VII, and VIII would be controlled by the EAR and identified on the CCL, if the President determines that the articles no longer warrant control on the USML.

In the July 15 proposed rule, BIS proposed creating a series of new ECCNs to control items that: (i) Would be moved from the USML to the CCL or (ii) are listed on the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies Munitions List (Wassenaar Arrangement Munitions List or WAML) and are already controlled elsewhere on the CCL. The proposed rule referred to this series as the “600 series” because the third character in each of the new ECCNs would be a “6.” The first two characters of the 600 series ECCNs serve the same function as described for any other ECCN in § 738.2 of the EAR. The first character is a digit in the range 0 through 9 that identifies the Category on the CCL in which the ECCN is located. The second character is a letter in the range A through E that identifies the product group within a CCL Category. In the 600 series, the third character is the number 6. With few exceptions, the final two characters identify the WAML category that covers items that are the same or similar to items in a particular 600 series ECCN.

This proposed rule contains an exception to the general approach of tracking the numbering structure of the WAML. BIS believes that it will be easier for industry to identify and comply with controls on USML gas turbine engines and related items if they are combined into one category, regardless of the end item for which the engines are designed or modified. The suffix “019” was used in the proposed ECCNs to track the new Category XIX that would be used to control gas turbine engines that would remain on the USML. The Administration, however, encourages the public to comment about whether it would be easier and more convenient for industry if the controls on gas turbine engines remained in the categories of the end items into which the engines are installed. Thus, for example, BIS is soliciting public comments on whether it would be preferable to have gas turbine engines for 600 series-controlled military aircraft in the same ECCN 9A610 as such aircraft, or in new ECCN 9A619, which is specific to gas turbine engines. Similarly, the State Department, in its proposed rule, asks comments on whether it would be preferable for controls on USML aircraft engines to remain in USML Category VIII(b) or for such engines to be placed in a new USML Category XIX.

BIS will publish additionalFederal Registernotices containing proposed amendments to the CCL that will describe proposed controls for additional categories of articles the President determines no longer warrant control under the USML. The State Department will publish, concurrently, proposed amendments to the USML that correspond to the BIS notices. BIS will also publish proposed rules to further align the CCL with the WAML and the Missile Technology Control Regime Equipment, Software and Technology Annex.

In addition to the proposals mentioned above, this proposed rule would make the following modifications to the July 15 proposed rule:

• Addition of new Category 9 (600 series) items to proposed Supplement No. 4 to Part 740; and

• Addition of the new Category 9 (600 series) ECCNs to § 742.6(a)(1).

These modifications are described in the section “Scope of this Proposed Rule.”

Similarly, BIS will consider comments on the July 15 proposals only for the specific paragraph, note, and ECCNs referenced above, and only within the context of this proposed rule's modifications to them.

This proposed rule would create five new 600 series ECCNs in CCL Category 9—9A619, 9B619, 9C619, 9D619, and 9E619—that would control military gas turbine engines and related articles that the President determines no longer warrant control under USML CategoryVI, VII, or VIII. Consistent with the regulatory construct identified in the July 15 proposed rule, this rule also would move military trainer aircraft turbo prop engines and related items currently classified under ECCN 9A018.a.2 or .a.3, 9D018, or 9E018 to new ECCN 9A619, 9D619, or 9E619. As part of the proposed changes, these three 018 ECCNs would cross-reference the new classifications in the 600 series. As noted in the July 15 proposed rule, moving items from 018 ECCNs to the appropriate 600 series ECCNs would consolidate WAML and formerly USML items into one series of ECCNs.

The proposed changes are discussed in more detail, below.

Certain military gas turbine engines and related articles that the President determines no longer warrant control in USML Category VI, VII, or VIII would be controlled under proposed new ECCNs 9A619, 9B619, 9C619, 9D619, and 9E619.

Paragraphs .a through .d of ECCN 9A619 would control, respectively: (i) Gas turbine engines “specially designed” for military use that would not be controlled under proposed USML Category XIX; (ii) digital engine controls (e.g.Full Authority Digital Engine Controls (FADEC) and Digital Electronic Engine Controls (DEEC)) “specially designed” for gas turbine engines in ECCN 9A619; (iii) hot section components and related cooled components “specially designed” for gas turbine engines in ECCN 9A619; and (iv) engine monitoring systems for gas turbine engines and components in ECCN 9A619. All such items would be “components,” as that term is defined in the July 15 proposed rule, because they are items that are useful only when used in conjunction with an “end item.” The definition distinguishes between two types of “components”: “major components” and “minor components.” A “major component” includes any assembled element which forms a portion of an “end item” without which the end item is inoperable. A “minor component” includes any assembled element of a “major component.”

Paragraphs .e through .w would be reserved for possible future use. Paragraph .x would consist of “parts,” “components,” “accessories and attachments” (including certain unfinished products that have reached a stage in manufacturing where they are clearly identifiable as commodities controlled by paragraph .x) that are “specially designed” for a commodity in ECCN 9A619 (other than ECCN 9A619.c) or a defense article in proposed USML Category XIX and not elsewhere specified in the CCL or on the USML. Paragraph .y would consist of eight specific types of commodities that, if “specially designed” for a commodity subject to control in ECCN 9A619 or a defense article in proposed USML Category XIX, warrant less strict controls because they have little or no military significance. Commodities listed in paragraph .y would be subject to antiterrorism (AT Column 1) controls, which currently impose a license requirement for five countries. A license also would be required, in accordance with the July 15 proposed rule, if commodities listed in paragraph .y were destined to the People's Republic of China for a military end use as described in § 744.21 of the EAR.

Although including all military gas turbine engines transferred from the USML, or from an existing 018 ECCN, in a single 600 series ECCN (i.e.,ECCN 9A619) would deviate slightly from the WAML numbering approach, BIS believes that it would be more efficient to list all 600 series controls for engines and related items in one ECCN. New ECCN 9A619 would correspond to a new USML Category XIX that the State Department is proposing, which would control USML-controlled engines and related articles. When BIS publishes this rule in final form, BIS will add cross references to proposed new ECCN 9A619 to the new military ground vehicle ECCN (i.e.,ECCN 0A606) described in its July 15 proposed rule and to the new military aircraft ECCN (i.e.,ECCN 9A610) described in its November 7 proposed rule. Subsequent rules in this series (e.g.,the rules that would address military surface vessels, submersibles and related articles) would contain cross references to new ECCN 9A610, as appropriate. BIS encourages the submission of comments on its proposal to consolidate all military gas turbine engines that would be transferred from the USML to the CCL into a single ECCN (ECCN 9A619), as opposed to listing such engines in separate ECCNs that would control military vehicles, vessels (both surface and submersible), and aircraft, respectively, transferred from the USML to the CCL. Similarly, the State Department, in its proposed rule, asks for comments on whether it would be preferable for controls on USML aircraft engines to remain in USML Category VIII(b) or for such engines to be placed in a new USML Category XIX.

ECCN 9B619.a would control test, inspection, and production “equipment” “specially designed” for the “development,” “production,” repair, overhaul or refurbishment of military gas turbine engines and related commodities enumerated in ECCN 9A619 (except for items in 9A619.y) or in USML Category XIX, and “parts,” “components,” “accessories and attachments” “specially designed” therefor. ECCN 9B619.b would control equipment, cells, or stands “specially designed” for testing, analysis and fault isolation of engines, systems, “parts,” “components,” “accessories and attachments” specified in ECCN 9A619 or in Category XIX on the USML. ECCN 9B619.y would control test, inspection and production “equipment” “specially designed” for the “development” or “production” of military gas turbine engines and related commodities in ECCN 9A619 (except for 9A619.y) or in USML Category XIX and “parts,” “components,” “accessories and attachments” “specially designed” therefor, as follows: bearing puller (see ECCN 9B619.y.1). Paragraphs .c through .x and paragraphs .y.2 through y.98 would be reserved for possible future use.

ECCN 9C619.a would control materials “specially designed” for military gas turbine engines and related commodities enumerated in ECCN 9A619 (except 9A619.y) that are not specified elsewhere in the CCL, such as in Category 1, or on the USML. Paragraphs .b through .x of ECCN 9C619 would be reserved for possible future use. USML subcategory XIII(f) would continue to control structural materials “specifically designed, developed, configured, modified, or adapted for defense articles.” The State Department plans to publish a proposal that would make USML Category XIII(f) a positive list of controlled structural materials. BIS plans to then publish corresponding amendments to its controls on materials “specially designed” for articles in the relevant 600 series ECCN and corresponding USML category.

ECCN 9D619.a would control “software” “specially designed” for the “development,” “production,” operation, or maintenance of commodities controlled by ECCN 9A619 (except 9A619.y), 9B619 (except 9B619.y), or 9C619 (except 9C619.y). Paragraphs .b through .x of ECCN 9D619 would be reserved for possible future use. ECCN 9D619.y would control specific “software” “specially designed” for the “development,” “production,” operation, or maintenance of commodities controlled by ECCN 9A619, 9B619, or 9C619, as follows: specific “software” “specially designed” for the “development,” “production,” operation or maintenance of commodities controlled by ECCN 9A619.y, 9B619.y, or 9C619.y (see ECCN9D619.y.1). ECCN 9D619 also would contain a note indicating that it controls “software,” not specified elsewhere on the CCL, that is “specially designed” for the “development,” “production,” operation, or maintenance of commodities enumerated in ECCN 9A619, 9B619, or 9C619, even if such “software” is also related to an article on the USML, as specified in USML Category XIX(g).

ECCN 9E619.a would control “technology” “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul, or refurbishment of military gas turbine engines and related items controlled by ECCN 9A619 (except 9A619.y), 9B619 (except 9B619.y), 9C619 (except 9C619.y), or 9D619 (except 9D619.y). Paragraphs .b through .x of ECCN 9E619 would be reserved for possible future use. ECCN 9E619.y would control specific “technology” “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul, or refurbishment of military gas turbine engines and related items controlled by ECCN 9A619, 9B619, 9C619, or 9D619, as follows: specific “technology” “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul, or refurbishment of items controlled by 9A619.y, 9B619.y, 9C619.y, or 9D619.y (see ECCN 9E619.y.1). ECCN 9E619 also would contain a note indicating that it controls “technology,” not specified elsewhere on the CCL, that is “required” for the “development,” “production,” operation, installation, maintenance, repair, overhaul, or refurbishment of items enumerated in ECCN 9A619, 9B619, 9C619, or 9D619, even if such “technology” is also related to an article on the USML, as specified in Category XIX(g).

In addition, ECCNs 9A619, 9B619, 9C619, 9D619, and 9E619 would each contain a special paragraph designated “.y.99.” Paragraph .y.99 would control any item that meets all of following criteria: (i) The item is not listed on the CCL; (ii) the item was previously determined to be subject to the EAR in an applicable commodity jurisdiction determination issued by the U.S. Department of State; and (iii) the item would otherwise be controlled under one of these Category 9 (600 series) ECCNs because, for example, the item was “specially designed” for a military use. Items in these .y.99 paragraphs would be subject to antiterrorism controls.

This proposed rule also would move military trainer aircraft turbo prop engines and parts and components therefor currently controlled under ECCN 9A018.a.2 or .a.3 to new 600 series ECCN 9A619. In addition, related software and technology currently controlled under ECCNs 9D018 and 9E018 would be moved to new 600 series ECCNs 9D619 and 9E619, respectively. Other items currently controlled under ECCN 9A018 (except ground transport vehicles controlled under ECCN 9A018.b) would be moved to new 600 series ECCN 9A610 by the military aircraft proposed rule that BIS published on November 7, 2011. The July 15 proposed rule published by BIS would move ground transport vehicles currently controlled under ECCN 9A018.b to new 600 series ECCN 0A606. In conjunction with the establishment of the new ECCN 9X619 entries, and consistent with the July 15 proposed rule's statement that 018 entries would remain in the CCL for a time, but only for cross-reference purposes, this rule would amend ECCNs 9A018, 9D018, and 9E018 to remove all language except cross references to the new 600 series ECCNs that cover the items currently in those 018 ECCNs. ECCN 9A018 would refer to ECCN 0A606 for ground transport vehicles (for items currently controlled under ECCN 9A018.b), to ECCN 9A610 for aircraft related commodities (i.e.,for items currently controlled under ECCN 9A018.a.1, .a.3, .c, .d, .e, and .f), and to ECCN 9A619 gas turbine aircraft engines (for military trainer aircraft turbo prop engines and parts and components therefore currently controlled under ECCN 9A018.a.2 or .a.3). Similarly, ECCN 9D018 would refer to new ECCNs 0D606, 9D610, and 9D619 for related software, and ECCN 9E018 would refer to ECCNs 0E606, 9E610, and 9E619 for related technology.

Certain software and technology related to parts and components covered by .x items paragraphs of 600 series ECCNs warrant more restrictive license exception applicability than other software and technology currently on the CCL. The November 7 proposed rule published by BIS would create a new Supplement No. 4 to part 740 (600 Series Items Subject to Limits Regarding License Exceptions GOV and STA) that would identify 600 series items that may not be exported, reexported, or transferred (in-country) pursuant to License Exceptions STA (§ 740.20 of the EAR) or GOV (§ 740.11 of the EAR). The supplement would be structured to identify by CCL category the items for which license exception applicability is limited.

This proposed rule would include in new Supplement No. 4 to part 740 nine types of parts and components that would be classified under new ECCN 9A619.x and would state that License Exception STA (§ 740.20 of the EAR) may not be used to export, reexport, or transfer (in-country) any software classified under ECCN 9D619 or technology classified under ECCN 9E619—other than “build-to-print technology”—for the production or development of any types of the listed ECCN 9A619.x parts and components. Further, the supplement would state that License Exception GOV, other than the paragraphs that authorize shipments to U.S. government agencies for official use or U.S. government personnel for personal use or official use (§ 740.11(b)(2)(i) and (b)(2)(ii) of the EAR), is not available for the export or reexport of software and technology (other than “build-to-print technology”) for the production or development of the ECCN 9A619.x parts and components listed in the supplement. Similar restrictions would apply to 9D619 software and 9E619 technology for seven additional types of parts and components classified under new ECCN 9A619.x; however, the scope of these restrictions would also apply to any affected “build-to-print” technology controlled under ECCN 9E619.

In this regard, note that the November 7 proposed rule published by BIS would add a new definition for “build-to-print technology” to § 772.1 that would define the term as it would be used in new Supplement No. 4 to part 740. Furthermore, the November 7 proposed rule would amend the License Exception STA provisions by adding a new note to § 740.20(c)(1) and revising § 740.2(a)(13) to clarify License Exception STA eligibility for end items and all other 600 series items. In the July 15 proposed rule, the export of a 600 series item is eligible for License Exception STA if, at the time of export, reexport or transfer (in-country), the item is destined for ultimate end use by the armed forces, police, paramilitary, law enforcement, customs and border protection, correctional, fire, or search and rescue agencies of a government in one of the STA-36 countries. The November 7 proposed rule would make 600 series items eligible for License Exception STA for such uses and also when exported, reexported, or transferred for the production or development of an item for ultimate end use by an STA-36 country government agency, by the United StatesGovernment, or by a person in the United States.

As discussed in further detail below, the July 15 proposed rule stated that one reason for control for items classified in the 600 series is Regional Stability (specifically, RS Column 1). Items classified under proposed ECCN 9A619, other than ECCN 9A619.y items, as well as related technology and software classified under ECCNs 9D619 and 9E619, would be controlled for this reason, among others. Correspondingly, this proposed rule would revise § 742.6 of the EAR to apply the RS Column 1 licensing policy to commodities classified under ECCN 9A619, 9B619, 9C619 (except paragraphs .y of those ECCNs), and to related software and technology classified under ECCNs 9D619 and 9E619. Note that the proposed rule on military aircraft and related items that BIS published on November 7, 2011, would amend the RS Column 1 licensing policy to impose a general policy of denial for “600 series” items if the destination is subject to a United States arms embargo.

As referenced above, the purpose of the July 15 proposed rule is to establish within the EAR the framework for controlling on the CCL articles that the President determines no longer warrant control on the USML. To facilitate that goal, the July 15 proposed rule contains definitions and concepts that are meant to be applied across Categories. However, as BIS undertakes rulemakings to move specific types of articles from the USML to the CCL, if and after the President determines that such articles no longer warrant control under the USML, there may be unforeseen issues or complications that require BIS to reexamine those definitions and concepts. The comment period for the July 15 proposed rule closed on September 13, 2011. In the November 7 proposed rule, BIS proposed several changes to those definitions and concepts. The comment period for the November 7 proposed rule will close on December 22, 2011.

To the extent that this rule's proposals affect any provision in the July 15 proposed rule or the July 15 proposed rule's provisions affect this proposed rule, BIS will consider comments on those provisions so long as they are within the context of the changes proposed in this rule. For example, BIS will consider comments on how the movement of military gas turbine engines and related items from the USML to the CCL affects a definition, restriction, or provision that was contained in the July 15 proposed rule. BIS will also consider comments on the impact of a definition of a term in the July 15 proposed rule when that term is used in this proposed rule. BIS will not consider comments of a general nature regarding the July 15 proposed rule that are submitted in response to this rulemaking. BIS will follow a similar approach to comments received concerning the other proposed USML to CCL rules published in this series.

BIS believes that the following provisions of the July 15 proposed rule and the November 7 proposed rule on aircraft and related items are among those that could affect the itemscovered by this proposed rule:

•De minimisprovisions in § 734.4;

• Restrictions on use of license exceptions in §§ 740.2, 740.10, 740.11, and 740.20;

• Change to national security licensing policy in § 742.4;

• Addition of 600 series items to Supplement No. 2 to Part 744—List of Items Subject to the Military End-Use Requirement of § 744.21; and

• Definitions of terms in § 772.1.

BIS believes that the following provisions of this proposed rule are among those that could affect the provisions of the July 15 and November 7 proposed rules:

• Additional 600 series items identified in proposed Supplement No. 4 to part 740; and

• Additional 600 series items identified in the RS Column licensing policy described in § 742.6.

BIS believes that the principal effect of this rule will be to provide greater flexibility for exports and reexports to NATO member countries and other multiple-regime-member countries of items the President determines no longer warrant control on the United States Munitions List. This greater flexibility will be in the form of: Application of the EAR'sde minimisthreshold principle for items constituting less than ade minimisamount of controlled U.S.-origin content in foreign made items; availability of license exceptions, particularly License Exceptions RPL and STA; elimination of the requirements for manufacturing license agreements and technical assistance agreements in connection with exports of technology; and a reduction in, or elimination of, exporter and manufacturer registration requirements and associated registration fees. Some of these specific effects are discussed in more detail below.

Section 734.3 of the EAR provides,inter alia,that under certain conditions items made outside the United States that incorporate items subject to the EAR are not subject to the EAR if they do not exceed a “de minimis”percentage of controlled U.S.-origin content. Depending on the destination, thede minimispercentage can be either 10 percent or 25 percent. If the July 15 proposed rule's amendments at § 734.4 of the EAR are adopted, the new ECCNs 9A619, 9B619, 9C619, 9D619 and 9E619 proposed in this rule would be subject to thede minimisprovisions set forth in the July 15 proposed rule, because they would be “600 series” ECCNs. Foreign-made items incorporating items controlled under the new ECCNs would become eligible forde minimistreatment at the 10 percent level (i.e.,a foreign-made item is not subject to the EAR, forde minimispurposes, if the value of its U.S.-origin controlled content does not exceed 10 percent of foreign-made item's value). The AECA does not permit the ITAR to have ade minimistreatment for these USML-listed items, regardless of the significance or insignificance of the U.S.-origin content or the percentage of U.S.-origin content in the foreign-made item (i.e.,USML-listed items remain subject to the ITAR when they are incorporated abroad into a foreign-made item, regardless of either of these factors). In addition, foreign-made items that incorporateanyitems that are currently classified under an 018 ECCN and that are moved to a new 600 series ECCN would be subject to the EAR if those foreign-made items contained more than 10 percent U.S.-origin controlled content, regardless of the destination and regardless of the proportion of the U.S.-origin controlled content accounted for by the former 018 ECCN items.

Based on the July 15 rule's proposals, foreign-made items that contain controlled U.S.-origin content classified under non-600 series ECCNs, as well as 600 series ECCNs, would potentially have to be evaluated in two stages to determine whether they would qualify forde minimistreatment. First, the value of the 600 series ECCN content would have to be calculated. If the value of the 600 series ECCN content exceeds 10 percent of the value of the foreign-made item, the item would not qualify forde minimistreatment and would be subject to the EAR. However, if the value of the 600 series ECCN content does not exceed 10 percent of the valueof the foreign-made item, then the value of all of the controlled U.S. origin content (including both non-600 series and 600 series ECCN content) would have to be calculated to determine whether the foreign-made item's total U.S. origin controlled content exceeds thede minimispercentage (either 10 percent or 25 percent) applicable to the country of destination. BIS is reviewing comments the public submitted with respect to this proposal and plans to publish another proposed rule that addresses these comments and other related issues.

The July 15 proposed rule would impose certain limits for 600 series items moving from existing 018 controls on the CCL. BIS believes that, even with the July 15 and November 7 proposed restrictions on the use of license exceptions for 600 series items, the restrictions on those items currently on the USML would be reduced, particularly with respect to exports to NATO members and multiple-regime member countries, if those items are moved from the USML to proposed ECCN 9A619. BIS also believes that, in practice, the movement of items from 018 ECCNs to the 600 series ECCNs would have little effect on license exception availability for those items because existing restrictions or the terms of the license exceptions themselves already preclude most transactions that would be precluded by the July 15 and November 7 proposed amendments to § 740.2 of the EAR. However, BIS is aware of two situations (the use of License Exceptions GOV and STA) in which the movement of items from an 018 ECCN to a new 600 series ECCN could, in practice, impose greater limits on the use of license exceptions than currently is the case.

First, the July 15 proposed rule would limit the use of License Exception GOV for 600 series commodities to situations in which the United States Government is the consignee and end user or to situations in which the consignee or end user is the government of a country listed in § 740.20(c)(1). Currently, commodities classified under an 018 ECCN may be exported under any provision of License Exception GOV to any destination authorized by that provision if all of the conditions of that provision are met and nothing else in the EAR precludes such shipment.

Second, the July 15 proposed rule would (i) Limit the use of License Exception STA for “end items” in 600 series ECCNs to those end items for which a specific request for License Exception STA eligibility (filed in conjunction with a license application) has been approved and (ii) require that the end item be for ultimate end use by a foreign government agency of a type specified in the July 15 proposed rule. In this regard, note that, for the purpose of this proposed rule, military gas turbine engines and related items enumerated in proposed ECCN 9A619 are “components,” rather than “end items.” The July 15 proposed rule also would limit exports of 600 series parts, components, accessories, and attachments under License Exception STA for ultimate end use by the same set of end users. Neither restriction currently applies to the use of License Exception STA for commodities classified under an 018 ECCN. In addition, the July 15 proposed rule would limit the shipment of 600 series ECCN items under License Exception STA to destinations listed in § 740.20(c)(1). Currently, commodities classified under an 018 ECCN may be shipped under License Exception STA to destinations listed in § 740.20(c)(1) or (c)(2).

The Administration has stated, since the beginning of the Export Control Reform Initiative, that the reforms will be consistent with the obligations of the United States to the multilateral export control regimes. Accordingly, the Administration will, in this and subsequent proposed rules, exercise its national discretion to implement, clarify, and, to the extent feasible, align its controls with those of the regimes. Although including all military gas turbine engines transferred from the USML, or from an existing 018 ECCN, in a single 600 series ECCN (i.e.,ECCN 9A619) would deviate slightly from the WAML numbering approach, BIS believes that it would be more efficient to list all 600 series controls for engines and related items in one ECCN. If, however, the commenters disagree and would prefer that controls on engines be in the same USML, or CCL, Category as the “end-item” (such as an aircraft, vehicle, or vessel) for which they were designed or modified, BIS would consider any comments submitted to that effect, along with any comments submitted in favor of consolidating all 600 series controls for gas turbine engines and related items in a single CCL Category. In addition, proposed ECCN 9A619 would correspond to a new USML Category XIX that the State Department would propose, which would control USML-controlled engines and related articles. The proposed ECCN 9A619 tracks, to the extent possible, the wording of the WAML pertaining to military gas turbine engines and related items not subject to the ITAR. It also implements in 9A619.x the controls in WAML category 16 for forgings, castings, and other unfinished products; in 9B619.a the controls in WAML category 18 for production equipment; in 9D619 the applicable controls in WAML category 21 for software; and in 9E619 the applicable controls in WAML category 22 for technology.

Pursuant to the framework identified in the July 15 proposed rule, commodities classified under ECCN 9A619 (other than ECCN 9A619.y), along with related test inspection and production equipment, materials, software, and technology classified under ECCN 9B619, 9C619, 9D619 or 9E619 (except items classified under the .y paragraphs of these ECCNs), would be subject to the licensing policies that apply to items controlled for national security reasons, as described in § 742.4(b)(1)—specifically, NS Column 1 controls. All commodities in ECCN 9A619 (other than those identified in 9A619.y, which are controlled for AT Column 1 anti-terrorism reasons only and may also be subject to the prohibitions described in Part 744), along with related test, inspection and production equipment, materials, software and technology classified under ECCN 9B619, 9C619, 9D619 or 9E619 (except items classified under the .y paragraphs of these ECCNs), would be subject to the regional stability licensing policies set forth in § 742.6(a)(1)—specifically, RS Column 1.

The July 15 proposed rule would change § 742.4 to apply a general policy of denial to 600 series items for destinations that are subject to a United States arms embargo. That policy would apply to all items controlled for national security (NS) reasons under this proposed rule. The November 7 proposed rule would expand that general policy of denial to include 600 series items subject to the licensing policies that apply to items controlled for regional stability reasons, as described in § 742.6(b)(1)—specifically, RS Column 1. While this change might seem redundant for the items affected by this proposed rule, it ensures that a general denial policy would apply to any 600 series items that are controlled for missile technology (MT) and regional stability (RS) reasons, but not for national security (NS) reasons (as would be the case for certain items affected by the aircraft rule).

The Administration recognizes that some items that would fall within the scope of the proposed new ECCNs will have been subject to commodity jurisdiction (CJ) determinations issued by the United States Department of State. The State Department will have either determined that the item was subject to the jurisdiction of the ITAR or that it was not. (See 22 CFR 120.3 and 120.4). Under this proposed rule, items that the State Department determined to be not subject to the ITAR and that are not described on the CCL would be subject to the AT-only controls of the “.y99” paragraph of a 600 series ECCN if they would otherwise be within the scope of the ECCN. Thus, for example, ECCN 9A619.x would control any part, component, accessory, or attachment not specifically identified in the USML or elsewhere in the ECCN if it was “specially designed” for a gas turbine engine controlled by either ECCN 9A619 or USML Category XIX. However, any part, component, accessory or attachment that was determined by commodity jurisdiction determination not to have been subject to the ITAR and is (as defined) “specially designed” for a gas turbine engine controlled under ECCN 9A619 or USML Category XIX would be controlled under 9A619.y.99 if it is not identified elsewhere on the CCL. If the item was identified or, as a matter of law or the result of a subsequent commodity classification (“CCATS”) determination by Commerce, controlled by another legacy ECCN, such as 9A991.c, that ECCN would continue to apply to the item. This general approach will, pending public comment, be repeated in subsequent proposed rules pertaining to other categories of items.

If, however, the State Department had made a commodity jurisdiction determination that a particular item was subject to the jurisdiction of ITAR but that item is not described on the final, implemented version of a revised USML category, a new commodity jurisdiction determination would not be required unless there is doubt about the application of the new USML category to the item. (See 22 CFR 120.4). Thus, unless there are doubts about the jurisdictional status of a particular item, exporters and reexporters would be entitled to rely on the revised USML categories when making jurisdictional determinations, notwithstanding past commodity jurisdiction determinations that, under the previous version of the USML, the item was ITAR controlled.

Finally, if the State Department had made a commodity jurisdiction determination that a particular article was subject to the jurisdiction of the ITAR and that article remains in the revised USML, then the article would remain subject to the jurisdiction of the ITAR.

•Supplement No. 4 to Part 740—Additional new Category 9 (600 series) ECCNs listed.

•Section 742.6—ECCNs 9A619, 9B619, 9C619, 9D619 and 9E619 are added to § 742.6(a)(1) to impose an RS Column 1 license requirement and licensing policy, including a general policy of denial in Section 742.6(b)(1) for applications to export or reexport “600 series” items to destinations that are subject to a United States arms embargo.

•Supplement No. 1 to part 774—Adds ECCNs 9A619, 9B619, 9C619, 9D619 and 9E619.

BIS seeks comments on this proposed rule. BIS will consider all comments received on or before January 20, 2012. All comments (including any personally identifying information or information for which a claim of confidentially is asserted either in those comments or their transmittal emails) will be made available for public inspection and copying. Parties who wish to comment anonymously may do so by submitting their comments viahttp://www.Regulations.gov,leaving the fields that would identify the commenter blank and including no identifying information in the comment itself.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as extended by the Notice of August 12, 2011, 76 FR 50661 (August 16, 2011), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act. BIS continues to carry out the provisions of the Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222.

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute 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 rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget (OMB).

2. Notwithstanding any other provision of law, no person is required to respond to, nor is subject to a penalty for failure to comply with, a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501et seq.) (PRA), unless that collection of information displays a currently valid OMB control number. This proposed rule would affect two approved collections: Simplified Network Application Processing + System (control number 0694-0088), which includes, among other things, license applications, and License Exceptions and Exclusions (0694-0137).

As stated in the proposed rules published at 76 FR 41958 (July 15, 2011) and 76 FR 68675 (November 7, 2011), BIS believes that the combined effect of all rules to be published adding items to EAR that would be removed from the ITAR as part of the administration's Export Control Reform Initiative would increase the number of license applications to be submitted to BIS by approximately 16,000 annually, resulting in an increase in burden hours of 5,067 (16,000 transactions at 17 minutes each) under control number 0694-0088.

Some items formerly on the USML would become eligible for License Exception STA under this rule. Other such items may become eligible for License Exception STA upon approval of a request submitted in conjunction with a license application. As stated in the July 15 and November 7 proposed rules, BIS believes that the increased use of License Exception STA resulting from the combined effect of all rules to be published adding items to EAR that would be removed from the ITAR as part of the administration's Export Control Reform Initiative would increase the burden associated with control number 0694-0137 by about 23,858 hours (20,450 transactions @ 1 hour and 10 minutes each).

BIS expects that this increase in burden would be more than offset by a reduction in burden hours associated with approved collections related to the ITAR. This proposed rule addresses controls on military gas turbine enginesand related parts, components, production equipment, materials, software, and technology. The largest impact of the proposed rule would be with respect to exporters of parts and components because, under the proposed rule, most U.S. and foreign military gas turbine engines currently in service would continue to be subject to the ITAR. Because, with few exceptions, the ITAR allows exemptions from license requirements only for exports to Canada, most exports to integrators for U.S. government equipment and most exports of routine maintenance parts and components for our NATO and other close allies require State Department authorization. In addition, the exports necessary to produce parts and components for defense articles in the inventories of the United States and its NATO and other close allies require State Department authorizations. Under the EAR, as proposed, a small number of low level parts would not require a license to most destinations. Most other parts, components, accessories, and attachments would become eligible for export to NATO and other close allies under License Exception STA. Use of License Exception STA imposes a paperwork and compliance burden because, for example, exporters must furnish information about the item being exported to the consignee and obtain from the consignee an acknowledgement and commitment to comply with the EAR. It is, however, the Administration's understanding that complying with the requirements of STA is likely to be less burdensome than applying for licenses. For example, under License Exception STA, a single consignee statement can apply to an unlimited number of products, need not have an expiration date and need not be submitted to the government in advance for approval. Suppliers with regular customers can tailor a single statement and assurance to match their business relationship rather than applying repeatedly for licenses with every purchase order to supply allied and, in some cases, U.S. forces with routine replacement parts and components.

Even in situations in which a license would be required under the EAR, the burden likely will be reduced compared to the license requirement of the ITAR. In particular, license applications for exports of technology controlled by ECCN 9E619 are likely to be less complex and burdensome than the authorizations required to export ITAR-controlled technology,i.e.,Manufacturing License Agreements and Technical Assistance Agreements.

3. This rule does not contain policies with Federalism implications as that term is defined under E.O. 13132.

4. The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601et seq.,generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to the notice and comment rulemaking requirements under the Administrative Procedure Act (5 U.S.C. 553) or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Under section 605(b) of the RFA, however, if the head of an agency certifies that a rule will not have a significant impact on a substantial number of small entities, the statute does not require the agency to prepare a regulatory flexibility analysis. Pursuant to section 605(b), the Chief Counsel for Regulation, Department of Commerce, certified to the Chief Counsel for Advocacy, Small Business Administration that this proposed rule, if promulgated, will not have a significant impact on a substantial number of small entities for the reasons explained below. Consequently, BIS has not prepared a regulatory flexibility analysis. A summary of the factual basis for the certification is provided below.

The Bureau of Industry and Security (BIS) does not collect data on the size of entities that apply for and are issued export licenses. Although BIS is unable to estimate the exact number of small entities that would be affected by this rule, it acknowledges that this rule would affect some unknown number.

This proposed rule is part of the Administration's Export Control Reform Initiative. Under that initiative, the United States Munitions List (22 CFR part 121) (USML) would be revised to be a “positive” list,i.e.,a list that does not use generic, catch-all controls on any part, component, accessory, attachment, or end item that was in any way specifically modified for a defense article, regardless of the article's military or intelligence significance or non-military applications. At the same time, articles that are determined to no longer warrant control on the USML would become controlled on the Commerce Control List (CCL). Such items, along with certain military items that currently are on the CCL, would be identified in specific Export Control Classification Numbers (ECCNs) known as the “600 series” ECCNs. In addition, some items currently on the Commerce Control List would move from existing ECCNs to the new 600 series ECCNs. In practice, the greatest impact of this rule on small entities would likely be reduced administrative costs and reduced delay for exports of items that are now on the USML but would become subject to the EAR. This rule focuses on military gas turbine engines and related articles currently controlled under USML Categories VI, VII, and VIII. Most operational military gas turbine engines currently in active inventory would remain on the USML. However, parts and components, which are more likely to be produced by small businesses than are complete engines, would in many cases become subject to the EAR. In addition, officials of the Department of State have informed BIS that license applications for such parts and components are a high percentage of the license applications for USML articles review by that department. Changing the jurisdictional status of USML items would reduce the burden on small entities (and other entities as well) through: (i) Elimination of some license requirements, (ii) greater availability of license exceptions, (iii) simpler license application procedures, and (iv) reduced, or eliminated, registration fees.

In addition, parts and components controlled under the ITAR remain under ITAR control when incorporated into foreign-made items, regardless of the significance or insignificance of the item. This discourages foreign buyers from incorporating such U.S. content. The availability ofde minimistreatment under the EAR may reduce the incentive for foreign manufacturers to refrain from purchasing U.S.-origin parts and components.

Eight types of parts and components, identified in ECCN 9A619.y, would be designated immediately as parts and components that, even if specially designed for a military use, have little or no military significance. These parts and components, which under the ITAR require a license to nearly all destinations, would, under the EAR, require a license to only five destinations and, if destined for a military end use, to the People's Republic of China.

Many exports and reexports of the USML articles that would be placed on the CCL by this rule, particularly parts and components, would become eligible for license exceptions that apply to shipments to United States Government agencies, shipments valued at less than $1,500, parts and components being exported for use as replacement parts, temporary exports, and LicenseException Strategic Trade Authorization (STA), reducing the number of licenses that exporters of these items would need. License Exceptions under the EAR would allow suppliers to send routine replacement parts and low level parts to NATO and other close allies and export control regime partners for use by those governments and for use by contractors building equipment for those governments or for the United States government without having to obtain export licenses. Under License Exception STA, the exporter would need to furnish information about the item being exported to the consignee and obtain a statement from the consignee that, among other things, would commit the consignee to comply with the EAR and other applicable U.S. laws. Because such statements and obligations can apply to an unlimited number of transactions and have no expiration date, they would impose a net reduction in burden on transactions that the government routinely approves through the license application process that the License Exception STA statements would replace.

Even for exports and reexports for which a license would be required, the process would be simpler and less costly under the EAR. When a USML article is moved to the CCL, the number of destinations for which a license is required would remain unchanged. However, the burden on the license applicant would decrease because the licensing procedure for CCL items is simpler and more flexible that the license procedure for UMSL articles.

Under the USML licensing procedure, an applicant must include a purchase order or contract with its application. There is no such requirement under the CCL licensing procedure. This difference gives the CCL applicant at least two advantages. First, the applicant has a way of determining whether the U.S. government will authorize the transaction before it enters into potentially lengthy, complex and expensive sales presentations or contract negotiations. Under the USML procedure, the applicant must caveat all sales presentations with a reference to the need for government approval and is more likely to engage in substantial effort and expense only to find that the government will reject the application. Second, a CCL license applicant need not limit its application to the quantity or value of one purchase order or contract. It may apply for a license to cover all of its expected exports or reexports to a specified consignee over the life of a license (normally two years, but maybe longer if circumstances warrant a longer period), thus reducing the total number of licenses for which the applicant must apply.

In addition, many applicants exporting or reexporting items that this rule would transfer from the USML to the CCL would realize cost savings through the elimination of some or all registration fees currently assessed under the USML's licensing procedure. Currently, USML applicants must pay to use the USML licensing procedure even if they never actually are authorized to export. Registration fees for manufacturers and exporters of articles on the USML start at $2,500 per year, increase to $2,750 for organizations applying for one to ten licenses per year and further increases to $2,750 plus $250 per license application (subject to a maximum of three percent of total application value) for those who need to apply for more than ten licenses per year. There are no registration or application processing fees for applications to export items listed on the CCL. Once the ITAR-controlled items that are the subject to this rulemaking become subject to the EAR, entities currently applying for licenses from the Department of State would find their registration fees reduced if the number of ITAR licenses those entities need declines. If an entity's entire product line is moved to the CCL, its ITAR registration and registration fee requirement would be eliminated entirely.

De minimistreatment under the EAR would become available for all items that this rule would transfer from the USML to the CCL. Items subject to the ITAR remain subject to the ITAR when they are incorporated abroad into a foreign-made product, regardless of the percentage of U.S content in that foreign made product. Foreign-made products incorporating items that this rule would move to the CCL would be subject to the EAR only if their total controlled U.S.-origin content exceeds 10 percent. Because including small amounts of U.S.-origin content would not subject foreign-made products to the EAR, foreign manufacturers would have less incentive to refrain from purchasing such U.S.-origin parts and components, a development that potentially would mean greater sales for U.S. suppliers, including small entities.

For items currently on the CCL that would be moved from existing ECCNs to the new 600 series, license exception availability would be narrowed somewhat and the applicablede minimisthreshold for foreign-made products containing those items would in some cases be reduced from 25 percent to 10 percent. However, BIS believes that increased burden imposed by those actions will be offset substantially by the reduction in burden attributable to the moving of items from the USML to CCL and the compliance benefits associated with the consolidation of all WAML items subject to the EAR in one series of ECCNs.

BIS is unable to determine the precise number of small entities that would be affected by this rule. Based on the facts and conclusions set forth above, BIS believes that any burdens imposed by this rule would be offset by a reduction in the number of items that would require a license, increased opportunities for use of license exceptions for exports to certain countries, simpler export license applications, reduced or eliminated registration fees and application of ade minimisthreshold for foreign-made items incorporating U.S.-origin parts and components, which would reduce the incentive for foreign buyers to design out or avoid U.S.-origin content. For these reasons, the Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this rule, if adopted in final form, would not have a significant economic impact on a substantial number of small entities.

For the reasons stated in the preamble, parts 740, 742, and 774 of the Export Administration Regulations (15 CFR parts 740-774) are proposed to be amended as follows:

On July 15, 2011, as part of the Administration's ongoing Export Control Reform Initiative, the Bureau of Industry and Security (BIS) published a proposed rule (76 FR 41958) that set forth a framework for how articles the President determines, in accordance with section 38(f) of the Arms Export Control Act (AECA) (22 U.S.C. 2778(f)), would no longer warrant control on the United States Munitions List (USML) would be controlled on the Commerce Control List (CCL). In that proposed rule, BIS also described its proposal for how military vehicles and related articles in USML Category VII that no longer warrant controls under the USML would be controlled on the CCL. On November 7, 2011, BIS published a proposed rule (76 FR 68675)) that sets forth how aircraft and related items the President determines to no longer warrant control on the USML would be controlled on the CCL (herein, the aircraft proposed rule). In that proposed rule, BIS made several changes and additions to the framework proposed in the July 15 proposed rule. Following the structure of the July 15 proposed rule, as modified by the rule published on November 7, this proposed rule describes BIS's revised proposal for how various military vehicles and related articles that are controlled by USML Category VII would be controlled on the CCL.

The changes described in this proposed rule and the State Department's proposed amendment to Category VII of the USML are based on a review of Category VII by the Defense Department, which worked with the Departments of State and Commerce in preparing the proposed amendments. The review was focused on identifying the types of articles that are now controlled by USML Category VII that either (i) Are inherently military and otherwise warrant control on the USML, or (ii) if of a type common to civil vehicles, possess parameters or characteristics that provide a critical military or intelligence advantage to the United States and that are almost exclusively available from the United States. For articles that satisfy one or both of those criteria, the review resulted in the article's remaining on the USML. An article that did not satisfy either standard but was nonetheless a type of article that is, as a result of differences in form and fit, “specially designed” for military applications, would be identified in the new ECCNs proposed in this notice.

The license requirements and other EAR-specific controls for such items also described in this notice would enhance national security by (i) Allowing for greater interoperability with our NATO and other allies while still maintaining and expanding robust controls and, in some cases, prohibitions on exports or reexports to other countries and for proscribed end users and end uses; (ii) enhancing our defense industrial base by, for example, reducing the current incentives for foreign companies to design out or avoid U.S.-origin ITAR-controlled content, particularly with respect to generic, unspecified parts and components; and (iii) permitting the U.S. Government to focus its resources on controlling, monitoring, investigating, analyzing, and, if need be, prohibiting exports and reexports of more significant items to destinations, end uses, and end users of greater concern than our NATO allies and other multi-regime partners.

Pursuant to section 38(f) of the AECA, the President shall review the USML “to determine what items, if any, no longer warrant export controls under” theAECA. The President must report the results of the review to Congress and wait 30 days before removing any such items from the USML. The report must “describe the nature of any controls to be imposed on that item under any other provision of law.” 22 U.S.C. 2778(f)(1). This proposed rule describes how certain military vehicles and related articles in USML Category VII would be controlled by the EAR and its CCL if the President determines that the articles no longer warrant control on the USML.

In the July 15 proposed rule, BIS proposed creating a series of new ECCNs to control articles that would be moved from the USML to the CCL or that are Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies Munitions List (WAML) items already controlled elsewhere on the CCL. The proposed rule referred to this series as the “600 series” because the third character in each of the new ECCNs would be a “6.” The first two characters of the 600 series ECCNs serve the same function as any other ECCN as described in § 738.2 of the EAR. The first character is a digit in the range 0 through 9 that identifies the Category on the CCL in which the ECCN is located. The second character is a letter in the range A through E that identifies the product group within a CCL Category. In the 600 series, the third character is the number 6. With few exceptions, the final two characters identify the WAML category that covers items that are the same or similar to items in a particular 600 series ECCN.

The July 15 proposed rule specifically proposed creating five new “600 series” ECCNs (0A606, 0B606, 0C606, 0D606 and 0E606). This proposed rule re-proposes, with certain changes, those ECCNs based on review of the public comments on the July 15 proposed rule and on further deliberations by BIS, the Department of Defense and the Department of State.

BIS will publish additionalFederal Registernotices containing proposed amendments to the CCL that will describe proposed controls for additional categories of articles the President determines no longer warrant control under the USML. The State Department will publish concurrently proposed amendments to the USML that correspond to the BIS notices. BIS will also publish proposed rules to further align the CCL with the WAML and the Missile Technology Control Regime Equipment, Software and Technology Annex.

The comment period for the July 15 proposed rule ended on September 13, 2011. Some of the comments that BIS received concerned exclusively the text of the proposed new ECCN 0A606, 0B606, 0C606, 0D606 and 0E606. BIS has adopted some of the recommendations in those comments and incorporated them into this proposed rule. BIS will continue to consider some of those comments and will make a decision whether or not to adopt their recommendations in any final rule concerning those new ECCNs.

Two commenters recommended removing the modifier “non-combat” from the description of military support vehicles in 0A606.b.5 so that any combat vehicles that are not described in the USML will not inadvertently become EAR99. One commenter offered the additional rationale that that the distinction between combat and non-combat military vehicles is not always clear. Some vehicles such as tow trucks and ambulances may have armor and be used in combat zones.

BIS has not adopted this recommendation exactly as proposed, but has modified proposed ECCN 0A606 in a way that it believes would address the concerns of these commenters. As modified, ECCN 0A606 would apply explicitly to military vehicles not listed in Category VII of the USML. BIS believes that the explicit requirement that a military vehicles not be on the USML in order to be classified under 0A606 reduces the likelihood that a reader would conclude that vehicles not classified under 0A606 are EAR99. The modified ECCN 0A606 also does not use the phrase “non-combat,” which eliminates the need to make decisions as to whether a particular military vehicle is also a combat vehicle.

These same commenters in Comment 1 recommending adding the phrase “not on the USML” to 0A606.x and .y because, absent such a statement, unwary readers might conclude that parts and components not elsewhere in paragraphs .x or .y are EAR99 when they might in fact be listed on the ITAR. Another commenter noted that exclusions in some of the items listed in paragraph .y might lead readers to conclude that the excluded item is EAR99. This commenter also recommended language making clear that items in paragraph .y are not those that are not listed on the ITAR.

BIS agrees and has included the phrase “not elsewhere specified on the USML or CCL” in both paragraphs .x and .y.

Two commenters recommended listing the ECCN paragraphs to which a control applies (or does not apply) in the “Control(s)” column within an ECCN rather than in the “Country Chart” column.

The structure that these commenters recommended is already used throughout the CCL. BIS has used it for this proposed rule and expects to use for other proposed rules relating to control of items that the President determines no longer warrant control on the United States Munitions List.

One commenter noted that a number of parts and components currently controlled by 9A018 would, under the proposed text of ECCN 0A606 and the proposed definition of “specially designed,” move to new ECCN 0A606.x, which would make them ineligible for License Exception LVS because proposed ECCN 0A606 allows that license exception for 0A606.a, .b and .c only. This commenter also stated that the new definition of specially designed would require it to obtain licenses for exports to Country Group B countries.

BIS acknowledges that this is an unintentional consequence of ECCN 0A606 and has revised this ECCN to make License Exception LVS, which allows limited value shipments to Country Group B, available for all commodities classified under proposed ECCN 0A606 including those currently found in ECCN 9A018. BIS notes that License Exception GBS, which authorizes shipments to Country Group B without value limits, currently is not available for commodities classified under ECCN 9A018. Thus the movement of items from ECCN 9A018 to 0A606 does not affect eligibility for exports under License Exception GBS.

One commenter recommended that regional stability controls not apply to ECCN 0A606.a. The commenter noted that the items that would be classified under that proposed paragraph currently are classified under 0A018.aand not subject to any regional stability reason for control. The commenter stated that it is not aware of any compelling reason for a change in policy for these items.

BIS acknowledges that some commodities currently classified under 0A018.a (therefore not subject to a regional stability reason for control) and other commodities currently classified under 9A018.b (therefore subject to the regional stability column 2 reason for control) would, under the July 15 rule, be classified under ECCN 0A606 and therefore would be subject to the regional stability column 1 (RS 1) reason for control. However, BIS believes that the impact of this change on the public would be both reasonable and justified in light of the nature of the commodities that would be affected, and is not proposing any changes to ECCN 0A606 as proposed in the July 15 rule.

Currently ECCN 0A018.a and 9A018.b are subject to the national security column 1 (NS 1) reason for control. Both the NS1 and RS 1 reasons for control impose a license requirement for all destinations other than Canada. However, licensing policy for the two reasons are different. The national security licensing policy is focused on risk of diversion to Country Group D:1 destinations. The RS 1 licensing policy is focused on preventing enhancement of military capabilities that would alter or destabilize a region's stability contrary to the interests of the United States. All commodities that would be subject to the RS 1 reason for control in proposed ECCN 0A606 are inherently military and, therefore, any export of these items can be expected to enhance some country's military capability. Because of this inherently military nature, BIS believes that application of the more comprehensive RS 1 licensing policy in addition to the more traditional NS 1 licensing policy is justified.

One commenter recommended that 0A606.x be limited to specific “parts,” “components,” “accessories and attachments” that are “specially designed” for a commodity subject to control in this ECCN or a defense article in USML Category VII that has military application with no civil equivalent. That commenter provided an illustrative list of items that, in its opinion, have military application with no civil equivalent. That list consisted of:

• Weapon systems (including mounting. targeting. and stabilization systems);

• Sensor systems (other than collision avoidance or parking sensors systems); and

• Communication systems (other than communication systems designed to work with civil communication systems).

This commenter also recommended that paragraph .y be made into an illustrative list of items that have little or no military significance or no civil equivalent and that the list in paragraph .y should include only items with military significance. Items with no military significance should be EAR99.

The purpose of the controls in a .y paragraph is to create a specific, clear, and exclusive list of parts and components that are so militarily insignificant that they do not warrant NS1 or RS1 controls, even if those parts or components are “specially designed” for a defense article on the USML or for an item in another paragraph of the ECCN that includes that .y paragraph. Turning such a list into an illustrative list would create significant doubts among exporters and government officials regarding precisely which items were subject to its controls. Thus, BIS did not accept this recommendation.

One commenter recommended that paragraph .x be either a positive list of parts and components that are militarily significant or a list of the characteristics that make a part militarily significant.

As described in the State Department's proposed rule amending USML Category VII (which is being published simultaneously with this proposed rule), paragraph (g) for Category VII, which has historically contained a catch-all control for all parts, components, accessories, or attachments “specifically designed or modified” in any way for a defense article in Category VII, would be replaced by a positive list of parts, components, accessories, and attachments that would be controlled by the proposed revised paragraph VII(g). Thus, this proposed amendment is consistent with the Administration's goal of creating, to the extent possible, positive lists of controlled items—i.e.,controlling items without using broad, design-intent based catch-all controls over generic types of items such as “parts” and “components.” However, another Administration objective is to make sure that items “specially designed” for defense articles that are now USML controlled items but that would not be USML controlled items after any proposed jurisdictional changes not fall out of export controls completely. This is why the proposed .x controls in each of the new 600 series ECCNs control all parts, components, accessories, and attachments “specially designed” for a defense article in the corresponding USML category or that ECCN. Thus, BIS rejected this recommendation.

Three commenters proposed function tests for identifying items to be included in 0A606 paragraph .y as follows:

The same commenter in Comment 7 recommended that if paragraph .x cannot to be made into a positive list, certain items should be added to paragraph .y. These items are common (in function) to items widely used in civilian vehicles. They include gauges such as speedometers; instrument panels/clusters; vehicle/engine sensors; vehicle engine monitoring sensors and displays such as check engine lights and their associated sensors; electronic braking systems; multiplexing systems to limit vehicle wiring; tire pressure monitoring systems; and data relating to tires (not including run-flats). Although these items might have to be modified for a particular military vehicle, such modifications typically relate fit and are similar to the types of modifications that are made for civilian vehicles.

This commenter also stated that the proposed rule did not set forth any criteria by which BIS selected items for paragraph .y and the selection was arbitrary. The commenter noted five possible characteristics that the BIS proposed 0A606.y items appeared to have in common. Those characteristics are: (1) The items are widely used in civilian and military vehicles alike; (2) without these products, many military and civilian vehicles could not function at all; (3) they do not include offensive weaponry, armor, threat detection systems, or military command, control, and communications systems; (4) they do not include items that control or monitor offensive weaponry, armor, threat detection systems, or military command control and communications systems; and (5) they are available from foreign sources in many locations around the world. The commenter stated that it thinks such would be good criteria for limiting the reason for control to antiterrorism.

This commenter also suggested that BIS's selection of items for paragraph .y appears to equate complexity and the age of a technology with military significance. The commenter pointed out that no electronic parts are inparagraph .y. This commenter also noted that multilateral regimes do not require that the United States control non-significant parts and the end-use and end-user license requirements provide adequate control for parts that have no military significance.

One commenter asked why 0A606.y did not include exhaust pipes. This commenter stated that exhaust pipes consist mainly of metal tubing that is bent to fit a particular model of vehicle. As such, they appear to be classified under 0A606.x. However, exhaust pipes serve the function of keeping poisonous gases away from the passenger compartment on both civilian and military vehicles.

One commenter recommended that wheels be added to 0A606.y, stating that wheels have no more military significance than bearings, axles and blackout lights, all of which were in 0A606.y of the proposed rule.

These commenters are, in effect, proposing a function test for inclusion in paragraph 0A606.y,i.e.,items that differ only in form or fit from items that perform a function that is common to both military and civilian vehicles but that must be adapted in form or fit to a military vehicle should be controlled at no more than the antiterrorism reason for control. BIS believes that this recommendation is relevant to all ECCNs that would become part of this phase of the Export Control Reform Initiative. BIS will continue to review the concept underlying this recommendation and encourages further comment on appropriate criteria for determining which items classified under 600 series ECCNs should be limited to the AT reason for control. BIS will also continue to review the specific items proposed for inclusion in 0A606.y by these commenters. BIS also notes that, at least in some instances, exhaust systems for military vehicles perform additional functions than those typically performed by civilian vehicle exhaust systems. Some military exhaust systems are designed and built to facilitate deep water fording or to reduce emission of thermal radiation, thereby making the vehicle less detectable by opposing forces. Thus, exhaust systems are notper seitems that, even if specially designed for a military application would have little or no military significance.

One commenter stated that bearings should be EAR99 rather than 0A606.y. This same commenter also stated that gears have about the same level of military significance as bearings and that gears should be in 0A606.y

Bearings that are not otherwise identified in the CCL, such as in ECCN 2A001, and that are not “specially designed” for a military vehicle controlled on the USML or CCL would be EAR99 bearings. The fact that there are significant controls on some types of bearings in the CCL indicates that bearings are notper sethe types of items that would have little or no military significance even if specially designed for a military end item. With respect to “gears,” BIS proposed excluding from controls in its definition of “specially designed” single unassembled parts that are commonly used in civil applications. As indicated above, BIS is reviewing the public comments on this aspect of the proposed definition and will address this point in a second proposed rule pertaining to the definition of specially designed.

One commenter questioned why blackout lights were included in proposed ECCN 0A606.y, which applies to items of little or no military significance and also in proposed Interpretation 8, which, among other things, identifies features that give a vehicle military characteristics.

This proposed rule would amend proposed 0A606.y to remove blackout lights and would remove Interpretation 8 in its entirety. Controls on blackout lights are currently the subject of deliberations by the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual Use Goods and Technologies. Changing controls on blackout lights at this time would be premature. Therefore this proposed rule would not include blackout lights in paragraph .y of ECCN 0A606. Blackout lights that are specially designed parts, components, accessories or attachments for a commodity enumerated in ECCN 0A606 (other than 0A606.b) or a defense article enumerated in USML Category VII classified under ECCN 0A606.x unless specified elsewhere on the CCL or the USML.

Some commenters recommended that a paragraph .y (or a note) be included in ECCNs 0B606, 0C606, 0D606 and 0E606 to cover test, inspection and production equipment; materials; software; and technology that applies to commodities in 0A606.y

BIS agrees with this comment. This proposed rule would apply this limitation to proposed ECCNs 0B606, 0C606, 0D606 and 0E606.

Two commenters noted that software for the development, production or use of 0A606.y commodity item should be controlled at the AT level.

BIS agrees with this comment and proposes to apply AT controls for development, production, operation or maintenance software.

One commenter recommended that to promote the adaption of commercial products for use in U.S. military vehicles, the Department of Commerce should limit the controls on form, fit and function data that is necessary to provide military insignificant items for military vehicles to the antiterrorism reason for control only unless that information relates to certain sensitive items. Specifically this commenter recommended adding a note to ECCN 0A606 providing that: “The form, fit, and function information necessary to design, modify, adapt, and configure parts and components listed in ECCN 0A606.y as having little or no military significance is controlled only for AT reasons. To the extent the form, fit, and function information relates to vehicle weapons; armor; threat detection systems; or military command, control, and communications systems, that information is controlled to the extent and in the same manner as `technology' or `technical data' concerning such item is controlled by the EAR or ITAR, respectively.”

This comment, although directed at 0A606, applies to all the 600 series ECCNs that would be created in the Export Control Reform Initiative. BIS is not making the recommended changes at this time but will continue to consider the recommendation and may propose changes, if warranted. BIS encourages additional comments on this issue.

This rule would remove § 770.2(h)Interpretation 8: Ground vehicles.BIS believes that the text that this rule proposes for ECCN 0A606 when read with the proposed State Department revisions to Category VII of the USMLare sufficiently precise to make Interpretation 8 unnecessary.

Following the pattern announced in the July 15 proposed rule, each of the five ECCNs noted above would contain a new paragraph designated “.y.99” to cover items that would otherwise fall within the scope of one of the ECCNs because, for example, they were “specially designed” for a military use, but which (i) Had been previously determined by the Department of State to be subject to the EAR and (ii) were not listed on the CCL. Items in these .y.99 paragraphs would be subject to antiterrorism controls.

Again, following the pattern announced in the aircraft proposed rule, the United Nations reason for control would be removed from the “License Requirements” section of each of the five ECCNs listed above. The policy of denying applications for licenses to export or reexport 600 series items to destinations that are subject to a United Nations arms embargo would be implemented in connection with the national security reason for control (proposed by the July 15 proposed rule) and with the regional stability reason for control (proposed by the aircraft proposed rule). Because the EAR as proposed relies on the national security and regional stability reasons for control to implement United Nations arms embargoes with respect to 600 series items on the CCL, a reference to the United Nations in these ECCNs has no legal effect and is likely to engender public confusion by suggesting the existence of a separate United Nations arms embargo licensing requirements and licensing policy section in the EAR. Such a section does not exist.

The references to other 600 series items in the same CCL category and product group would be removed from the “Related Controls” paragraphs of each of the five ECCNs noted above to conform to the practice prevailing throughout the CCL. Using the five product groups to describe items that differ in function but that are related to other items in the same CCL category has been an organizing principle of the EAR since at least 1966. Related Controls paragraphs alert readers to items that are similar to the items in a given ECCN but that are subject to the export control jurisdiction of another agency or appear in a different ECCN.

The words under the “Controls” and “Country Chart” columns in the “Reasons for Control” paragraph of each ECCN would be revised to conform to the pattern prevailing throughout the CCL wherein the ECCN paragraphs to which a control apply are listed the “Controls” column rather than in the “Country Chart” column as was the case in the July 15 proposed rule. This change is stylistic only, and would not affect any license requirements.

This rule proposes a new version of ECCN 0A606 that differs in a number of respects from the proposed ECCN 0A606 in the July 15 proposed rule. Those differences and the reasons therefor are as follows.

The heading would be revised from “Ground Vehicles, `Parts' and `Components' as follows” to “Ground vehicles and related commodities, as follows (See List of Items Controlled)” to reflect the fact that some of the items listed in the entry are accessories, attachments, forgings, castings and other unfinished products that are not, as defined, “parts” or “components” of the ground vehicles that would be classified under proposed ECCN 0A606.

This proposed rule would add a new sentence to the STA paragraph in the License Exception section to explicitly state that items in 0A606.x are not subject to the requirement for a determination as described in § 740.20(g) before being exported or reexported under License Exception STA. Such determinations are not needed because item in paragraph .x are, by definition, parts and components and are not “end items.” BIS regards this proposal as an additional statement of a principle set forth in the July 15 proposed rule and is not a substantive change.

The EAR Country Chart Column designators in the License Requirements section would apply national security (NS column 2), regional stability (RS column 2) to 0A606.b, certain unarmed all-wheel drive off-road vehicles derived from civilian vehicles that provide ballistic protection to level III (National Institute of Justice standard 0108.01, September 1985) or better and parts and components that provide such protection. As proposed in the July 15 proposed rule, all other paragraphs of this ECCN, except paragraph .y, would be subject to the NS column 1 and RS column 1 reason for control, and the entire ECCN would be subject to the anti-terrorism reason for control. Applying NS column 2 and RS column 2 reasons for control to the armored off-road vehicles in 0A606.b would allow armored SUVs that are used for personal protection to be exported to most NATO member countries along with Australia, Japan and New Zealand without a license. Any risk that such vehicles exported to such destinations would be employed in a military use inimical to the United States or its allies is minimal.

As revised, proposed new ECCN 0A606 would include deep water fording kits “specially designed” for ground vehicles controlled by 0A606.a or USML Category VII, and self-launching bridge components not enumerated in USML Category VII(g) “specially designed” for deployment by ground vehicles enumerated in USML Category VII or 0A606. Such items are specifically identified in WAML Category 6. Because a goal of the effort of the reform effort is to more clearly align the U.S. Government's controls with the controls of the multilateral regimes, these controls are specifically listed in the new 0A606.

This proposed rule would add a note to paragraph .x providing that forgings, castings and certain other unfinished products that have reached a stage in manufacture where they are clearly identifiable as commodities controlled by 0A606.x are controlled by that paragraph. Adding this note serves to better align the controls over 600 series military articles with the controls in the WAML, which controls in its Category 16 such forgings and castings. This proposed note also would better align the requirements of ECCN 0A606 with the controls on forgings and castings now in the ITAR (22 CFR 121.10). BIS encourages comments on whether the proposed controls on forgings and castings in the new 0A606.x are clear.

Also, the proposed new ECCN would not include in paragraph .y blackout lights, which were included in paragraph .y of the July 15 proposed rule because the subject of appropriate controls over blackout lights is a topic under consideration by the Wassenaar Arrangements on Export Controls for Conventional Arms and Dual-Use Goods and Technologies. Blackout lights that are specially designed parts, components, accessories or attachments for a commodity enumerated in ECCN 0A606 (other than 0A606.b) or a defense article enumerated in USML Category VII classified under ECCN 0A606.x unless specified elsewhere on the CCL or the USML.

Finally, the proposed new ECCN 0A606 would not include military vehicle gas turbine engines because controls on gas turbine engines and related items for military aircraft, ships, and vehicles are addressed in another proposed rule which, would create a proposed ECCN 9A619. Although this numbering deviates slightly from the WAML numbering approach, BIS believes that it would be more efficientto list all 600 series controls for gas turbine engines and related items in one ECCN. The anticipated new ECCN will correspond to a new USML Category XIX that the State Department would propose creating to control USML-controlled gas turbine engines and related articles.

This rule proposes a new version of ECCN 0B606 that differs in a number of respects from the ECCN 0B606 in the July 15 proposed rule.

The heading would be changed from “Test, inspection, and production `equipment' and related commodities `specially designed' for the `development' or `production' of commodities enumerated in ECCN 0A606” to “Test, inspection, and production `equipment' and related commodities `specially designed' for the `development' or `production' of commodities enumerated in ECCN 0A606 or USML Category VII (See List of Items Controlled).” This text more accurately reflects the scope of this proposed ECCN.

The four specific commodities that were listed in paragraphs .a, .b .c and .d in the July 15 proposed rule: (i) Armor plate drilling machines, other than radial drilling machines, (ii) armor plate planing machines, (iii) armor plate quenching presses; and (iv) tank turret bearing grinding machines are included as a note to paragraph .a in this proposed rule. Paragraph .a, as a whole, would apply more broadly in this proposed rule to test, inspection, and production “equipment” “specially designed” for the “production” or “development” of commodities enumerated in ECCN 0A606 (except for 0A606.y) or in USML Category VII, and “parts,” “components,” “accessories and attachments” “specially designed” therefor. Paragraph .b would apply more broadly in this proposed rule to environmental test facilities “specially designed” for the certification, qualification, or testing of commodities enumerated in ECCN 0A606 (except for 0A606.b or 0A606.y) or in USML Category VII, and “equipment” “specially designed” therefor. This specifically identifies as controlled in U.S. export control law such items, which are identified in WAML Category 18.

Paragraphs .c through .x would be reserved for future use.

The “Items” paragraph in the “List of Items Controlled” section would be in the form of a list rather than just a reference to the ECCN heading as was the case in the July 15 proposed rule. Paragraph .a of that list would enumerate materials “specially designed” for the “development” or “production” of commodities enumerated in ECCN 0A606 (other than 0A606.b or 0A606.y) or USML Category VII, not elsewhere specified in the USML or the CCL. Two notes following paragraph .a would make clear that materials enumerated elsewhere on the CCL are subject to the controls of the CCL in which they are enumerated and materials specially designed for vehicles enumerated in ECCN 0A606 or in USML Category VII are subject to ECCN 0C606 unless such materials are identified in USML Category VII(g).

The term “use” would be replaced with the term “operation and maintenance” because the latter more accurately describes the software functions of concern.

The term “use” would be replaced with the term “operation, installation, maintenance, repair or overhaul” because the latter is a more accurate description of the technology of concern.

All comments must be in writing and submitted via one or more of the methods listed under theADDRESSEScaption to this notice. All comments (including any personal identifiable information) will be available for public inspection and copying. Anyone wishing to comment anonymously may do so by submitting their comment via regulations.gov and leaving the fields for information that would identify the commenter for identifying information blank.

As referenced above, the purpose of the July 15 proposed rule was to set up the framework to support the transfer of items from the USML to the CCL. To facilitate that goal, the July 15 proposed rule contained definitions and concepts that were meant to be applied across Categories. However, as BIS undertakes rulemakings to move specific categories of items from the USML to the CCL, there may be unforeseen issues or complications that may require BIS to reexamine those definitions and concepts. The comment period for the July 15 proposed rule closed on September 13, 2011. In the aircraft proposed rule, BIS proposed several changes to those definitions and concepts. The comment period for the aircraft proposed rule will close on December 22, 2011.

To the extent that this rule's proposals affect any provision in either of those proposed rules or any provision in either of those proposed rules affect this proposed rule, BIS will consider comments on those provisions so long as they are in the context of the changes proposed in this rule.

BIS believes that the following aspects of the July 15 proposed rule and the aircraft proposed rule are among those that could affect this proposed rule:

•De minimisprovisions in § 734.4;

• Definitions of terms in § 772.1;

• Restrictions on use of license exceptions in §§ 740.2, 740.10, 740.11, and 740.20 (including restrictions proposed by the November 7, 2011, proposed rule that would apply to items outside the scope of that rule);

• Change to national security licensing policy in § 742.4;

• Requirement to request authorization to use License Exception STA for end items in 600 series ECCNs and procedures for submitting such requests in §§ 740.2, 740.20, 748.8 and Supp. No. 2 to part 748;

• Licensing policy in § 742.4(b)(1)(ii);

• Addition of 600 series items to Supplement No. 2 to Part 744—List of Items Subject to the Military End-Use Requirement of § 744.21; and

• Addition of U.S. arms embargo policy regarding 600 series items set forth in § 742.4(b)(1)(ii) (national security) of the July 15 proposed rule to § 742.6(b)(1) (regional stability) of this proposed rule.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as extended by the Notice of August 12, 2011, 76 FR 50661 (August 16, 2011), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act. BIS continues to carry out the provisions of the Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222.

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distribute 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 rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget (OMB).

2. Notwithstanding any other provision of law, no person is required to respond to, nor is subject to a penalty for failure to comply with, a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501et seq.) (PRA), unless that collection of information displays a currently valid OMB control number. This proposed rule would affect two approved collections: Simplified Network Application Processing + System (control number 0694-0088), which includes, among other things, license applications, and License Exceptions and Exclusions (0694-0137).

As stated in the proposed rule published at 76 FR 41958 (July 15, 2011), BIS believes that the combined effect of all rules to be published adding items to EAR that are being removed from the ITAR as part of the administration's Export Control Reform Initiative will increase the number of license applications to be submitted to BIS by approximately 16,000 annually, resulting in an increase in burden hours of 5,067 (16,000 transactions at 17 minutes each) under control number 0694-0088.

Some items formerly on the USML will become eligible for License Exception STA under this rule. Other such items may become eligible for License Exception STA upon approval of a request submitted in conjunction with a license application. As stated in the July 15 proposed rule, BIS believes that the increased use of License Exception STA resulting from combined effect of all rules to be published adding items to EAR that are being removed from the ITAR as part of the administration's Export Control Reform Initiative will increase the burden associated with control number 0694-0137 by about 23,858 hours (20,450 transactions @1 hour and 10 minutes each).

BIS expects that this increase in burden would be more than offset by a reduction in burden hours associated with approved collections related to the ITAR. This proposed rule addresses controls on military vehicles and related parts, components, production equipment, materials, software, and technology. The largest impact of the proposed rule would be with respect to exporters of parts and components because, under the proposed rule, most U.S. and foreign military vehicles currently in service would continue to be subject to the ITAR. Because, with few exceptions, the ITAR allows exemptions from license requirements only for exports to Canada, most exports to integrators for U.S. government equipment and most exports of routine maintenance parts and components for our NATO and other close allies require State Department authorization. In addition, the exports necessary to produce parts and components for defense articles in the inventories of the United States and its NATO and other close allies require State Department authorizations. Under the EAR, as proposed, a small number of low level parts would not require a license to most destinations. Most other parts, components, accessories, and attachments would become eligible for export to NATO and other close allies under License Exception STA. Use of License Exception STA imposes a paperwork and compliance burden because, for example, exporters must furnish information about the item being exported to the consignee and obtain from the consignee and acknowledgement and commitment to comply with the EAR. It is, however, the Administration's understanding that complying with the burdens of STA is likely to be less burdensome than applying for licenses. For example, under License Exception STA, a single consignee statement can apply to an unlimited number of products, need not have an expiration date, and need not be submitted to the government in advance for approval. Suppliers with regular customers can tailor a single statement and assurance to match their business relationship rather than applying repeatedly for licenses with every purchase order to supply allied and, in some cases, U.S. forces with routine replacement parts and components.

Even in situations in which a license would be required under the EAR, the burden is likely to be reduced compared to the license requirement of the ITAR. In particular, license applications for exports of technology controlled by ECCN 0E606 are likely to be less complex and burdensome than the authorizations required to export ITAR-controlled technology,i.e.,Manufacturing License Agreements and Technical Assistance Agreements.

3. This rule does not contain policies with Federalism implications as that term is defined under E.O. 13132.

4. The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601et seq.,generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to the notice and comment rulemaking requirements under the Administrative Procedure Act (5 U.S.C. 553) or any other statute, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Under section 605(b) of the RFA, however, if the head of an agency certifies that a rule will not have a significant impact on a substantial number of small entities, the statute does not require the agency to prepare a regulatory flexibility analysis. Pursuant to section 605(b), the Chief Counsel for Regulations, Department of Commerce, submitted a memorandum to the Chief Counsel for Advocacy, Small Business Administration, certifying that proposed rule published on July 15, 2011, will not have a significant impact on a substantial number of small entities.

This proposed rule re-proposes with certain changes, 5 ECCNs that were proposed in the July 15, 2011 rule. The changes proposed in this rule do not impact the original certification. Consequently, BIS has not prepared a regulatory flexibility analysis. A summary of the factual basis for the certification, which also takes into consideration the changes to the five proposed ECCNs in this rule, is provided below.

The Bureau of Industry and Security (BIS) does not collect data on the size of entities that apply for and are issued export licenses. Although BIS is unable to estimate the exact number of small entities that would be affected by this rule, it acknowledges that this rule would affect some unknown number.

This proposed rule is part of the Administration's Export Control Reform Initiative. Under that initiative, the United States Munitions List (22 CFR part 121) (USML) would be revised to be a “positive” list,i.e.,a list that does not use generic, catch-all controls on any part, component, accessory, attachment, or end item that was in any way specifically modified for a defense article, regardless of the article's military or intelligence significance or non-military applications. At the same time, articles that are determined to no longer warrant control on the USML would become controlled on theCommerce Control List (CCL). Such items, along with certain military items that currently are on the CCL, will be identified in specific Export Control Classification Numbers (ECCNs) known as the “600 series” ECCNs. In addition, some items currently on the Commerce Control List would move from existing ECCNs to the new 600 series ECCNs. In practice, the greatest impact of this rule on small entities would likely be reduced administrative costs and reduced delay for exports of items that are now on the USML but would become subject to the EAR. This rule focuses on Category VII articles, which are tanks and military vehicles and related parts, components, production equipment, software, and technology. Most operational tanks and military vehicles currently in active inventory would remain on the USML. However, parts and components, which are more likely to be produced by small businesses than are complete vehicles, would in many cases become subject to the EAR. In addition, officials of the Department of State have informed BIS that license applications for such parts and components are a high percentage of the license applications for USML articles review by that department.

Changing the jurisdictional status of Category VII items would reduce the burden on small entities (and other entities as well) through elimination of some license requirements, greater availability of license exceptions, simpler license application procedures, and reduced (or eliminated) registration fees.

In addition, parts and components controlled under the ITAR remain under ITAR control when incorporated into foreign-made items, regardless of the significance or insignificance of the item, discouraging foreign buyers from incorporating such U.S. content. The availability ofde minimistreatment under the EAR may reduce the incentive for foreign manufacturers to avoid purchasing U.S.-origin parts and components.

Fourteen types of parts and components, identified in ECCN 0A606.y, would be designated immediately as parts and components that, even if specially designed for a military use, have little or no military significance. These parts and components, which under the ITAR require a license to nearly all destinations, would, under the EAR, require a license to only five destinations and, if destined for a military end use, the People's Republic of China.

Many exports and reexports of Category VII articles that would be placed on the CCL by this rule, particularly parts and components, would become eligible for license exceptions that apply to shipments to United States Government agencies, shipments valued at less than $1,500, parts and components being exported for use as replacement parts, temporary exports, and License Exception Strategic Trade Authorization (STA), reducing the number of licenses that exporters of these items would need. License Exceptions under the EAR would allow suppliers to send routine replacement parts and low level parts to NATO and other close allies and export control regime partners for use by those governments and for use by contractors building equipment for those governments or for the United States government without having to obtain export licenses. Under License Exception STA, the exporter would need to furnish information about the item being exported to the consignee and obtain a statement from the consignee that, among other things, would commit the consignee to comply with the EAR and other applicable U.S. laws. Because such statements and obligations can apply to an unlimited number of transactions and have no expiration date, they would impose a net reduction in burden on transactions that the government routinely approves through the license application process that the License Exception STA statements would replace.

Even for exports and reexports in which a license would be required, the process would be simpler and less costly under the EAR. When a USML Category VII article is moved to the CCL, the number of destinations for which a license is required would remain unchanged. However, the burden on the license applicant would decrease because the licensing procedure for CCL items is simpler and more flexible that the license procedure for USML articles.

Under the USML licensing procedure, an applicant must include a purchase order or contract with its application. There is no such requirement under the CCL licensing procedure. This difference gives the CCL applicant at least two advantages. First, the applicant has a way of determining whether the U.S. government will authorize the transaction before it enters into potentially lengthy, complex and expensive sales presentations or contract negotiations. Under the USML procedure, the applicant will need to caveat all sales presentations with a reference to the need for government approval and is more likely to have to engage in substantial effort and expense only to find that the government will reject the application. Second, a CCL license applicant need not limit its application to the quantity or value of one purchase order or contract. It may apply for a license to cover all of its expected exports or reexports to a particular consignee over the life of a license (normally two years, but may be longer if circumstances warrant a longer period), reducing the total number of licenses for which the applicant must apply.

In addition, many applicants exporting or reexporting items that this rule would transfer from the USML to the CCL would realize cost savings through the elimination of some or all registration fees currently assessed under the USML's licensing procedure. Currently, USML applicants must pay to use the USML licensing procedure even if they never actually are authorized to export. Registration fees for manufacturers and exporters of articles on the USML start at $2,500 per year, increase to $2,750 for organizations applying for one to ten licenses per year and further increases to $2,750 plus $250 per license application (subject to a maximum of three percent of total application value) for those who need to apply for more than ten licenses per year. There are no registration or application processing fees for applications to export items listed on the CCL. Once the Category VII items that are the subject to this rulemaking are moved from the USML to the CCL, entities currently applying for licenses from the Department of State would find their registration fees reduced if the number of USML licenses those entities need declines. If an entity's entire product line is moved to the CCL, then its ITAR registration and registration fee requirement would be eliminated.

De minimistreatment under the EAR would become available for all items that this rule would transfer from the USML to the CCL. Items subject to the ITAR remain subject to the ITAR when they are incorporated abroad into a foreign-made product regardless of the percentage of U.S. content in that foreign made product. Foreign-made products that incorporate items that this rule would move to the CCL would be subject to the EAR only if their total controlled U.S.-origin content exceeded 10 percent. Because including small amounts of U.S.-origin content would not subject foreign-made products to the EAR, foreign manufacturers would have less incentive to avoid such U.S.-origin parts and components, a development that potentially would mean greater sales for U.S. suppliers, including small entities.

For items currently on the CCL that would be moved from existing ECCNs to the new 600 series, license exception availability would be narrowed somewhat and the applicablede minimisthreshold for foreign-made products containing those items would in some cases be reduced from 25 percent to 10 percent. However, BIS believes that increased burden imposed by those actions will be offset substantially by the reduction in burden attributable to the moving of items from the USML to CCL and the compliance benefits associated with the consolidation of all WAML items subject to the EAR in one series of ECCNs.

BIS is unable to determine the precise number of small entities that would be affected by this rule. Based on the facts and conclusions set forth above, BIS believes that any burdens imposed by this rule would be offset by the a reduction in the number of items that would require a license, increased opportunities for use of license exceptions for exports to certain countries, simpler export license applications, reduced or eliminated registration fees, and application of ade minimisthreshold for foreign-made items incorporating U.S.-origin parts and components, which would reduce the incentive for foreign buyers to design out or avoid U.S.-origin content. For these reasons, the Chief Counsel for Regulations of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that this rule, if adopted in final form, would not have a significant economic impact on a substantial number of small entities.

a. Test, inspection, and production “equipment” “specially designed” for the “production” or “development” of commodities enumerated in ECCN 0A606 (except for 0A606.y) or in USML Category VII, and “parts,” “components,” “accessories and attachments” “specially designed” therefor.

b. Environmental test facilities “specially designed” for the certification, qualification, or testing of commodities enumerated in ECCN 0A606 (except for 0A606.b or 0A606.y) or in USML Category VII, and “equipment” “specially designed” therefor.

c. through x. [RESERVED]

y. Specific test, inspection, and production “equipment” “specially designed” for the “production” or “development” of commodities enumerated in ECCN 0A606 (except for 0A606.y) or in USML Category VII, and “parts,” “components,” “accessories and attachments” “specially designed” therefor, as follows:

y.1. through y.98 [RESERVED]

8. In Supplement No. 1 to part 774, Category 0, add Export Control Classification Number 0C606 between Export Control Classification Numbers 0C201 and the product group header that reads “D. Software”

9. In Supplement No. 1 to part 774, Category 0, add Export Control Classification Number 0D606 between Export Control Classification Numbers 0D001 and 0D999 to read as follows:

10. In Supplement No. 1 to part 774, Category 0, add Export Control Classification Number 0E606 between Export Control Classification Numbers 0E018 and 0E918 to read as follows:

I. Background

In theFederal Registerof September 9, 2011 (76 FR 55835), FDA issued an ANPRM to obtain information related to the regulation of non-face-to-face sale and distribution of tobacco products and the advertising, promotion, and marketing of tobacco products. FDA took this action as part of its implementation of the Family Smoking Prevention and Tobacco Control Act (Pub. L. 111-31, 123 Stat. 1776). FDA requested comments, data, research, or other information related to non-face-to-face sale and distribution of tobacco products; the advertising, promotion, and marketing of such products; and the advertising of tobacco products via the Internet, email, direct mail, telephone, smart phones, and other communication technologies that can be directed to specific recipients. FDA intends to use the information submitted in response to the ANPRM to inform its regulation of the sale and distribution of tobacco products through a non-face-to-face exchange and the advertising, promotion, and marketing of tobacco products. FDA provided a 90-day comment period (i.e.,until December 8, 2011) for the ANPRM.

FDA has received a request to extend the comment period. The request stated that additional time is needed to coordinate factual information and policy positions with a large number of States on several of the questions in the ANPRM. The request noted that their comments will be more thorough and of more assistance to FDA if more time is available to develop them.

FDA has considered the request and is extending the comment period an additional 6 weeks, until January 19, 2012. We believe that the additional time will provide interested parties sufficient time to submit comments on the ANPRM.

Interested persons may submit to the Division of Dockets Management (seeADDRESSES) either electronic or written comments regarding this ANPRM. It is only necessary to send one set of comments. It is no longer necessary to send two copies of mailed comments. Identify comments with the docket number found in brackets in the heading of this document. Received comments may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday.

The Directorate of Defense Trade Controls (DDTC), U.S. Department of State, administers the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130). The items subject to the jurisdiction of the ITAR,i.e.,“defense articles,” are identified on the ITAR's U.S. Munitions List (USML) (22 CFR 121.1). With few exceptions, items not subject to the export control jurisdiction of the ITAR are subject to the jurisdiction of the Export Administration Regulations (“EAR,” 15 CFR parts 730-774, which includes the Commerce Control List in part 774), administered by the Bureau of Industry and Security (BIS), U.S. Department of Commerce. Both the ITAR and the EAR impose license requirements on exports and reexports. Items not subject to the ITAR or to the exclusive licensing jurisdiction of any other set of regulations are subject to the EAR.

The Departments of State and Commerce described in their respective Advance Notices of Proposed Rulemaking (ANPRM) in December 2010 the Administration's plan to make the USML and the CCL positive, tiered, and aligned so that eventually they can be combined into a single control list (see “Commerce Control List: Revising Descriptions of Items and Foreign Availability,” 75 FR 76664 (December 9, 2010) and “Revision to the United States Munitions List,” 75 FR 76935 (December 10, 2010)). The notices also called for the establishment of a “bright line” between the USML and the CCL to reduce government and industry uncertainty regarding export jurisdiction by clarifying whether particular items are subject to the jurisdiction of the ITAR or the EAR. While these remain the Administration's ultimate Export Control Reform objectives, their concurrent implementation would be problematic in the near term. In order to more quickly reach the national security objectives of greater interoperability with our allies, enhancing our defense industrial base, and permitting the U.S. Government to focus its resources on controlling and monitoring the export and reexport of more significant items to destinations, end uses, and end users of greater concern than our NATO and other multi-regime partners, the Administration has decided, as an interim step, to propose and implement revisions to both the USML and the CCL that are more positive, but not yet tiered.

Specifically, based in part on a review of the comments received in response to the December 2010 notices, the Administration has determined that fundamentally altering the structure of the USML by tiering and aligning them on a category-by-category basis would significantly disrupt the export control compliance systems and procedures of exporters and reexporters. For example, until the entire USML was revised and became final, some USML categories would follow the legacy numbering and control structures while the newly revised categories would follow a completely different numbering structure. In order to allow for the national security benefits to flow from re-aligning the jurisdictional status of defense articles that no longer warrant control on the USML on a category-by-category basis while minimizing the impact on exporters' internal control and jurisdictional and classification marking systems, the Administration plans to proceed with building positive lists now and afterward return to structural changes.

This proposed rule establishes USML Category XIX to cover gas turbine engines and associated equipment currently covered in Categories VI, VII, and VIII. The USML identifies engine subcategories in all three of these categories, but there has been confusion concerning the controls in Category VI (which currently lists only “naval nuclear propulsion plants,” leading exporters to question whether other types of propulsion systems are controlled as “components” in Category VI(f)), Category VII (which controls both diesel and gas turbine engines under the same general term “engines” in Category VII(f)), and Category VIII (which controls “military aircraft engines” but not reciprocating engines). The intent of this change is to make clear that gas turbine engines for surface vessels, vehicles, and aircraft that meet certain objective parameters are controlled on the USML.

The most significant aspect of this more positive, but not yet tiered, proposed USML category is that it does not contain controls on all generic parts, components, accessories, and attachments that are in any way specifically designed or modified for a defense article, regardless of their significance to maintaining a military advantage for the United States. Rather, it contains a list of specific types of parts, components, accessories, and attachments that continue to warrant control on the USML. All other parts, components, accessories, and attachments will become subject to the new 600 series controls in the CCL to be published separately by the Department of Commerce. The Administration has also proposed revisions to the jurisdictional status of certain militarily less significant end items that do not warrant USML control, but the primary impact of this proposed rule will be with respect to current USML controls on parts, components, accessories, and attachments that no longer warrant USML control.

Although one of the goals of the export control reform initiative is to describe USML controls without using design intent criteria, a few of the controls in the proposed revision nonetheless use the term “specially designed.” It is, therefore, necessary for the Department to define the term. Two proposed definitions have been published to date.

The Department first provided a draft definition for “specially designed” in the December 2010 ANPRM (75 FR 76935) and noted the term would be used minimally in the USML, and then only to remain consistent with the Wassenaar Arrangement or other multilateral regime obligation or when no other reasonable option exists to describe the control without using the term. The draft definition provided at that time is as follows: “For the purposes of this Subchapter, the term “specially designed” means that the end-item, equipment, accessory, attachment, system, component, or part (see ITAR § 121.8) has properties that (i) Distinguish it for certain predetermined purposes, (ii) are directly related to the functioning of a defense article, and (iii) are used exclusively or predominantly in or with a defense article identified on the USML.”

The Department of Commerce subsequently published on July 15, 2011, for public comment the Administration's proposed definition of “specially designed” that would be common to the CCL and the USML. The public provided more than 40 comments on that proposed definition on or before the September 13 deadline for comments. The Departments of State, Commerce, and Defense are now reviewing those comments and related issues, and the Departments of State and Commerce plan to publish for public comment another proposed rule on a definition of “specially designed” that would be common to the USML and the CCL. In the interim, and for the purpose of evaluation of this proposed rule, reviewers should use the definition provided in the December ANPRM.

As the U.S. Government works through the proposed revisions to the USML, some solutions have been adopted that were determined to be the best of available options. With the thought that multiple perspectives would be beneficial to the USML revision process, the Department welcomes the assistance of users of the lists and requests input on the following:

(1) A key goal of this rulemaking is to ensure the USML and the CCL together control all the items that meet Wassenaar Arrangement commitments embodied in the Munitions List. To that end, the public is asked to identify any potential lack of coverage brought about by the proposed rules for engines for vessels of war, military vehicles, and military aircraft contained in this notice and the new ECCNs published separately by the Department of Commerce when reviewed together.

(2) The assumption behind the creation of a single category for items that are part of systems controlled in several categories is that the consolidation of these items sharing essentially the same technology will clarify which engines and related items are controlled, will simplify the regulations as a whole, and will lead to more effective controls over engines with national security concerns. We ask the public to specifically address this assumption, and to provide its opinion on whether the creation of a new category, as opposed to retaining controls in various categories, would be easier for users of the list.

The Department of State is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules implementing this function are exempt from § 553 (Rulemaking) and § 554 (Adjudications) of the Administrative Procedure Act. Although the Department is of the opinion that this rule is exempt from the rulemaking provisions of the APA, the Department is publishing this rule with a 45-day provision for public comment and without prejudice to its determination that controlling the import and export of defense services is a foreign affairs function. As noted above, and also without prejudice to the Department position that this rulemaking is not subject to the APA, the Department previously published a related Advance Notice of Proposed Rulemaking (RIN 1400-AC78), and accepted comments for 60 days.

Since this proposed amendment is not subject to 5 U.S.C. 553, it does not require analysis under the Regulatory Flexibility Act.

This proposed amendment does not involve a mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This proposed amendment has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996.

This proposed amendment will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this proposed amendment does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this proposed amendment.

The Department is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules governing the conduct of this function are exempt from the requirements of Executive Order 12866. However, the Department has reviewed the proposed rule to ensure its consistency with the regulatory philosophy and principles set forth in the Executive Order.

The Department of State has reviewed the proposed amendment in light of sections 3(a) and 3(b) (2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

The Department of State has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not pre-empt tribal law. Accordingly, the requirement of Executive Order 13175 does not apply to this rulemaking.

The Department of State has considered this rule in light of Executive Order 13563, dated January 18, 2011, and affirms that this regulation is consistent with the guidance therein.

This proposed amendment does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. chapter 35.

Accordingly, for the reasons set forth above, Title 22, Chapter I, Subchapter M, part 121 is proposed to be amended as follows:

On December 10, 2010, the Department published as a proposed rule a revised Category VII that included tiering (75 FR 76930). As discussed below, the tiering of the categories has been postponed. In this regard, this revision differs from the earlier one. Because the differences between the two proposed versions of Category VII are considerable, the Department will not provide an assessment of public comments received from the first proposed rule, but welcomes comments on this proposed rule from all parties. If you submitted comments in response to the December 2010 rulemaking, please re-submit your comments, if they are still appropriate.

The Directorate of Defense Trade Controls (DDTC), U.S. Department of State, administers the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120-130). The items subject to the jurisdiction of the ITAR, i.e., “defense articles,” are identified on the ITAR's U.S. Munitions List (USML) (22 CFR 121.1). With few exceptions, items not subject to the export control jurisdiction of the ITAR are subject to the jurisdiction of the Export Administration Regulations (“EAR,” 15 CFR parts 730-774, which includes the Commerce Control List in part 774), administered by the Bureau of Industry and Security (BIS), U.S. Department of Commerce. Both the ITAR and the EAR impose license requirements on exports and reexports. Items not subject to the ITAR or to the exclusive licensing jurisdiction of any other set of regulations are subject to the EAR.

The Departments of State and Commerce described in their respective Advanced Notices of Proposed Rulemaking (ANPRM) in December 2010 the Administration's plan to make the USML and the CCL positive, tiered, and aligned so that eventually they can be combined into a single control list (see “Commerce Control List: Revising Descriptions of Items and Foreign Availability,” 75 FR 76664 (Dec. 9, 2010) and “Revision to the United States Munitions List,” 75 FR 76935 (Dec. 10, 2010)). The notices also called for the establishment of a “bright line” between the USML and the CCL to reduce government and industry uncertainty regarding export jurisdiction by clarifying whether particular items are subject to the jurisdiction of the ITAR or the EAR. While these remain the Administration's ultimate Export Control Reform objectives, their concurrent implementation would be problematic in the near term. In order to more quickly reach the national security objectives of greater interoperability with our allies, enhancing our defense industrial base, and permitting the U.S. Government to focus its resources on controlling and monitoring the export and re-export of more significant items to destinations, end uses, and end users of greater concern than our NATO and other multi-regime partners, the Administration has decided, as an interim step, to propose and implement revisions to both the USML and the CCL that are more positive, but not yet tiered.

Specifically, based in part on a review of the comments received in response to the December 2010 notices, the Administration has determined that fundamentally altering the structure of the USML by tiering and aligning them on a category-by-category basis would significantly disrupt the export control compliance systems and procedures of exporters and reexporters. For example, until the entire USML was revised and became final, some USML categories would follow the legacy numbering and control structures while the newly revised categories would follow a completely different numbering structure. In order to allow for the national security benefits to flow from re-aligning the jurisdictional status of defense articles that no longer warrant control on the USML on a category-by-category basis while minimizing the impact on exporters' internal control and jurisdictional and classification marking systems, the Administration plans to proceed with building positive lists now and afterward return to structural changes.

This proposed rule revises USML Category VII, Ground Vehicles, to establish a clear “bright line” between the USML and the CCL for the control of military ground vehicles. The proposed revision narrows the types of ground vehicle controlled on the USML to only those that warrant control under the stringent requirements of the Arms Export Control Act. Changes include the removal of most unarmored and unarmed military vehicles, trucks, trailers, and trains (unless “specially designed” as firing platforms for weapons above .50 caliber), and armored vehicles (either unarmed or with inoperable weapons) manufacturedbefore 1956. Also, this revision removes gas turbine engines designed for ground vehicles from inclusion in this category. Gas turbine engines for articles controlled in this category will likely be included in proposed Category XIX, which will be the subject of a separate notice.

This proposed rule also would remove from reserved status § 121.4 and define therein “ground vehicles” for purposes of the revised USML Category VII.

The most significant aspect of this more positive, but not yet tiered, proposed USML category is that it does not contain controls on all generic parts, components, accessories, and attachments that are specifically designed or modified for a defense article, regardless of their significance to maintaining a military advantage for the United States. Rather, it contains a positive list of specific types of parts, components, accessories, and attachments that continue to warrant control on the USML. All other parts, components, accessories, and attachments will become subject to the new 600 series controls in Category 0 of the CCL that we anticipate will be published separately by the Department of Commerce. The Administration has also proposed revisions to the jurisdictional status of certain militarily less significant end items that do not warrant USML control, but the primary impact of this proposed rule will be with respect to current USML controls on parts, components, accessories, and attachments that no longer warrant USML control.

Although one of the goals of the export control reform initiative is to describe USML controls without using design intent criteria, a few of the controls in the proposed revision nonetheless use the term “specially designed.” It is, therefore, necessary for the Department to define the term. Two definitions have been proposed to date.

The Department first provided a draft definition for “specially designed” in the December 2010 ANPRM (75 FR 76935) and noted the term would be used minimally in the USML, and then only to remain consistent with the Wassenaar Arrangement or other multilateral regime obligations, or when no other reasonable option exists to describe the control without using the term. The draft definition provided at that time is as follows: “For the purposes of this Subchapter, the term “specially designed” means that the end-item, equipment, accessory, attachment, system, component, or part (see ITAR § 121.8) has properties that (i) Distinguish it for certain predetermined purposes, (ii) are directly related to the functioning of a defense article, and (iii) are used exclusively or predominantly in or with a defense article identified on the USML.”

The Department of Commerce subsequently published on July 15, 2011, for public comment the Administration's proposed definition of “specially designed” that would be common to the CCL and the USML. The public provided more than 40 comments on that proposed definition on or before the September 13 deadline for comments. The Departments of State, Commerce, and Defense are now reviewing those comments and related issues, but based on a preliminary evaluation of the comments and other considerations, the Departments of State and Commerce plan to publish for public comment another proposed rule on a definition of “specially designed” that would be common to the USML and the CCL. For the purpose of evaluation of this proposed rule, reviewers should use the definition provided in the December 2010 ANPRM.

As the U.S. Government works through the proposed revisions to the USML, some solutions have been adopted that were determined to be the best of available options. With the thought that multiple perspectives would be beneficial to the USML revision process, the Department welcomes the assistance of users of the lists and requests input on the following:

(1) A key goal of this rulemaking is to ensure the USML and the CCL together control all the items that meet Wassenaar Arrangement commitments embodied in Munitions List Category 6 (ML 6). To that end, the public is asked to identify any potential lack of coverage brought about by the proposed rules for Category VII contained in this FRN and the new Category 0 ECCNs published separately by the Department of Commerce, when reviewed together.

(2) This amendment removes from the USML unarmed but armored military vehicles manufactured prior to 1956. The rationale is to discontinue controlling on the USML vehicles of almost no military significance. Armored military vehicles manufactured after 1955 would be maintained on the USML. We ask the public to comment on the efficacy of splitting jurisdiction for these vehicles between the USML and the CCL.

The Department of State is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules implementing this function are exempt from § 553 (Rulemaking) and § 554 (Adjudications) of the Administrative Procedure Act. Although the Department is of the opinion that this rule is exempt from the rulemaking provisions of the APA, the Department is publishing this rule with a 45-day provision for public comment and without prejudice to its determination that controlling the import and export of defense services is a foreign affairs function. As noted above, and also without prejudice to the Department position that this rulemaking is not subject to the APA, the Department previously published a related Advance Notice of Proposed Rulemaking (RIN 1400-AC78) and a related Notice of Proposed Rulemaking (RIN 1400-AC77), and accepted comments for 60 days in response to both notices.

Since this proposed amendment is not subject to 5 U.S.C. 553, it does not require analysis under the Regulatory Flexibility Act.

This proposed amendment does not involve a mandate that will result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995.

This proposed amendment has been found not to be a major rule within the meaning of the Small Business Regulatory Enforcement Fairness Act of 1996.

This proposed amendment will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this proposed amendment does not have sufficientfederalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this proposed amendment.

The Department is of the opinion that controlling the import and export of defense articles and services is a foreign affairs function of the United States Government and that rules governing the conduct of this function are exempt from the requirements of Executive Order 12866. However, the Department has reviewed the proposed rule to ensure its consistency with the regulatory philosophy and principles set forth in the Executive Order.

The Department of State has reviewed the proposed amendment in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.

The Department of State has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not pre-empt tribal law. Accordingly, the requirement of Executive Order 13175 does not apply to this rulemaking.

The Department of State has considered this rule in light of Executive Order 13563, dated January 18, 2011, and affirms that this regulation is consistent with the guidance therein.

This proposed amendment does not impose any new reporting or recordkeeping requirements subject to the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

Accordingly, for the reasons set forth above, Title 22, Chapter I, Subchapter M, part 121 is proposed to be amended as follows:

A notice of proposal to create a new system of records (Public Notice XXXX) is published elsewhere in theFederal Register. The proposed system, Risk Analysis and Management (RAM) Records, State-78, will support the vetting of directors, officers, or other employees of organizations who apply for Department of State contracts, grants, cooperative agreements, or other funding. The information collected from these organizations and individuals is specifically used to conduct screening to ensure that Department funds are not used to provide support to entities or individuals deemed to be a risk to U.S. national security interests. The records may contain criminal investigation records, investigatory material for law enforcement purposes, and confidential source information.

The Department of State proposes to amend 22 CFR part 171 to exempt portions of the Risk Analysis and Management Records system of records from subsections (c)(3) and (4), (d), (e)(1), (2), and (3), (e)(4)(G), (H), and (I), (e)(5) and (8), (f), (g), and (h) of the Privacy Act of 1974, as amended (5 U.S.C. 552a), pursuant to 5 U.S.C. 552 a (j)(2) and from subsections (c)(3),(d), (e)(1), (e)(4)(G), (H), and (I), and (f) of the Privacy Act pursuant to 5 U.S.C. 552a (k)(1), (k)(2), and (k)(5).

Title 22, part 171 covering certain records in State-78 is proposed to be amended as follows:

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

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its program includes, among other things, “a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of this Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to this Act.” See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior (Secretary) conditionally approved the Arkansas program effective November 21, 1980. You can find background information on the Arkansas program, including the Secretary's findings, the disposition of comments, and the conditions of approval of the Arkansas program in the November 21, 1980,Federal Register(45 FR 77003). You can find later actions on the Arkansas program at 30 CFR 904.10, 904.12, 904.15.

The Abandoned Mine Land Reclamation Program was established by Title IV of the Act in response to concerns over extensive environmental damage caused by past coal mining activities. The program is funded by a reclamation fee collected on each ton of coal that is produced. The money collected is used to finance the reclamation of abandoned coal mines and for other authorized activities. Section 405 of the Act allows States and Indian Tribes to assume exclusive responsibility for reclamation activity within the State or on Indian lands if they develop and submit to the Secretary of the Interior for approval, a program (often referred to as a plan) for the reclamation of abandoned coal mines. On the basis of these criteria, the Secretary of the Interior approved the Arkansas plan on May 2, 1983. You can find background information on the Arkansas plan, including the Secretary's findings, the disposition of comments, and the approval of the plan in the May 2, 1983,Federal Register(48 FR 19710). You can find later actions concerning the Arkansas plan at 30 CFR 904.25 and 904.26.

By letter dated August 26, 2011 (Administrative Record No. AR-571.06), Arkansas submitted a proposed amendment to its program and plan pursuant to SMCRA. Arkansas submitted the amendment in response to a September 30, 2009 (Administrative Record No. AR-571), letter from OSM in accordance with 30 CFR 732.17(c). Arkansas is also making substantial changes to other sections of its regulatory program and its abandoned mine land plan on its own initiative. The full text of the program amendment is available for you to read at thelocations listed above underADDRESSESor athttp://www.regulations.gov.

Arkansas proposes to revise every section title throughout its code by replacing “Section” with “Reg.20.” and by deleting the title dates. Arkansas also plans to replace the references to “Section” with “Reg.20.,” replace the word “Director” with “Department,” and replace the word “Chapter” with “Code” throughout their regulations.

Arkansas proposes to revise substantial portions of their regulatory program and abandoned mine land plan, make grammatical changes, correct punctuation, revise dates, and add citations. The Arkansas regulations that contain substantive changes are listed in the table below.

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

Under the provisions of 30 CFR 884.15(a), we are requesting comments on whether the amendment satisfies the applicable State reclamation plan approval criteria of 30 CFR 884.14. If we approve the amendment, it will become part of the Arkansas plan.

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

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

Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifyinginformation from public review, we cannot guarantee that we will be able to do so.

If you wish to speak at the public hearing, contact the person listed underFOR FURTHER INFORMATION CONTACTby 4 p.m., c.s.t. on December 21, 2011. If you are disabled and need reasonable accommodations to attend a public hearing, contact the person listed underFOR FURTHER INFORMATION CONTACT. We will arrange the location and time of the hearing with those persons requesting the hearing. If no one requests an opportunity to speak, we will not hold a hearing.

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

If only one person requests an opportunity to speak, we may hold a public meeting rather than a public hearing. If you wish to meet with us to discuss the amendment, please request a meeting by contacting the person listed underFOR FURTHER INFORMATION CONTACT. All such meetings are open to the public and, if possible, we will post notices of meetings at the locations listed underADDRESSES. We will make a written summary of each meeting a part of the administrative record.

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

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

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its State program includes, among other things, “a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of this Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to this Act.” See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Colorado program on December 15, 1980. You can find background information on the Colorado program, including the Secretary's findings, the disposition of comments, and the conditions of approval of the Colorado program in the December 15, 1980,Federal Register(45 FR 82173). You can also find later actions concerning Colorado's program and program amendments at 30 CFR 906.10, 906.15, 906.16, and 906.30.

By letter dated April 8, 2011, Colorado sent us a proposed amendment to its approved regulatory program (Administrative Record Docket ID No. OSM-2011-0002) under SMCRA (30 U.S.C. 1201et seq.). Colorado submitted the amendment to address all required rule changes OSM identified by letters to Colorado dated April 4, 2008, and October 2, 2009, under 30 CFR 732.17(c). These included changes to Colorado's rules for valid existing rights and ownership and control. The amendment also includes changes made at Colorado's own initiative. The full text of the program amendment is available for you to read at the locations listed above underADDRESSES.

Specifically, Colorado proposes substantive revisions to the Colorado Code of Regulations at 2 CCR 407-2 Rules 1.07 (Procedures for Valid Existing Rights Determinations), 2.01 (General Requirements for Permits), 2.02 (General Requirements for Coal Exploration), 2.03 (Application for Permit for Surface Coal Mining and Reclamation Operations: Minimum Requirements for Legal, Financial, Compliance, and Related Information), 2.04 (Application for Permit for Surface Coal Mining and Reclamation Operations: Minimum Requirements for Information on Environmental Resources), 2.05 (Application for Permit for Surface Coal Mining and Reclamation Operations: Minimum Requirements for Operation and Reclamation Plans), 2.07 (Public Participation and Approval of Permit Applications), 2.08 (Permit Review, Revisions and Renewals and Transfer, Sale and Assignment), 2.11 (Challenging Ownership or Control Listings and Findings), 4.03 (Roads), 4.05 (Hydrologic Balance), 4.06 (Topsoil), 4.07 (Sealing of Drilled Holes and Underground Openings), 4.08 (Use of Explosives), 4.14 (Backfilling and Grading), 4.15 (Revegetation), 4.16 (Postmining Land Use), 4.20 (Subsidence Control), 4.25 (Operations on Prime Farmland), 5.03 (Enforcement), and 5.06 (Alternative Enforcement). Additionally, Colorado proposes revisions to and additions of definitions supporting those proposed rule changes.

As a result of comments received during the comment period, we identified concerns with regard to Colorado's Statement of Basis, Purpose, and Specific Statutory Authority (SBPSA) document that is incorporated with 2 CCR 407-2 by reference. We notified Colorado of our concerns by letter dated September 19, 2011 (Administrative Record No. OSM-2011-0002-0008). Colorado responded in a letter dated September 22, 2011, by submitting a revised amendment proposal (Administrative Record No. OSM-2011-0002-0009). The full text of the revised program amendment is also available for you to read at the locations listed above underADDRESSES.

In response to our concerns, Colorado made the following change to its April 8, 2011, amendment proposal. Specifically, OSM expressed concerns regarding language in the SBPSA related to 2 CCR 407-2 Rule 1.04(111)(d). Colorado proposes additional language to clarify that Colorado would not usurp the authority of the United States Forest Service by exercising jurisdiction over a National Forest System Road.

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

Send your written comments to OSM at the addresses given above. Your comments should be specific, pertain only to the issues proposed in this rulemaking, and include explanations in support of your recommended change(s). We appreciate any and all comments, but those most useful and likely to influence decisions on the final regulations will be those that either involve personal experience or include citations to and analyses of SMCRA, its legislative history, its implementing regulations, case law, other pertinent State or Federal laws or regulations, technical literature, or other relevant publications.

We will not consider or respond to your comments when developing the final rule if they are received after the close of the comment period (seeDates). We will make every attempt to log all comments into the administrative record, but comments delivered to an address other than the Denver Field Division may not be logged in.

Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.

If you wish to speak at the public hearing, contact the person listed underFOR FURTHER INFORMATION CONTACTby 4 p.m., mountain standard time on December 21, 2011. If you are disabled and need reasonable accommodations to attend a public hearing, contact the person listed underFOR FURTHER INFORMATION CONTACT. We will arrange the location and time of the hearing with those persons requesting the hearing. If no one requests an opportunity to speak, we will not hold the hearing.

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

If only one person requests an opportunity to speak, we may hold a public meeting rather than a public hearing. If you wish to meet with us to discuss the amendment, please request a meeting by contacting the person listed underFOR FURTHER INFORMATION CONTACT. All such meetings are open to the public; if possible, we will post notices of meetings at the locations listed underADDRESSES. We will make a written summary of each meeting a part of the administrative record.

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

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

Section 503(a) of the Act permits a State to assume primacy for the regulation of surface coal mining and reclamation operations on non-Federal and non-Indian lands within its borders by demonstrating that its State program includes, among other things, “a State law which provides for the regulation of surface coal mining and reclamation operations in accordance with the requirements of this Act * * *; and rules and regulations consistent with regulations issued by the Secretary pursuant to this Act.” See 30 U.S.C. 1253(a)(1) and (7). On the basis of these criteria, the Secretary of the Interior conditionally approved the Montana program on April 1, 1980. You can find background information on the Montana program, including the Secretary's findings, the disposition of comments, and conditions of approval of the Montana program in the April 1, 1980,Federal Register(45 FR 21560). You can also find later actions concerning Montana's program and program amendments at 30 CFR 926.15, 926.16, and 926.30.

By letter dated August 19, 2011, Montana sent us a proposed amendment to its program (Administrative Record No. MT-31-01) under SMCRA (30 U.S.C. 1201et seq.). Montana sent the amendment in response to Senate Bill 292, which was passed by the 2011 Montana Legislature. Senate Bill 292 amended both the Montana Strip and Underground Mine Reclamation Act (MSUMRA) and the Montana Water Quality Act.

Specifically, Montana proposes to revise the Montana Code Annotated (MCA) Section 82-4-203, Definitions, by adding a reference to the definition of hydrologic balance within the definition of (4) “Approximate original contour,” and by adding definitions of (27) “In situ coal gasification,” and (44) “Recovery fluid.” Other changes are non-substantive recodifications. OSM does not have jurisdiction over proposed changes to Montana's Water Quality Act (Title 75, Chapter 5 of MCA). The full text of the program amendment is available for you to read at the locations listed above underADDRESSES.

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

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

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

Public Availability of Comments

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

If you wish to speak at the public hearing, contact the person listed underFOR FURTHER INFORMATION CONTACTby 4 p.m., m.s.t. on December 21, 2011. If you are disabled and need reasonable accommodations to attend a public hearing, contact the person listed underFOR FURTHER INFORMATION CONTACT. We will arrange the location and time of the hearing with those persons requesting the hearing. If no one requests an opportunity to speak, we will not hold the hearing.

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

If only one person requests an opportunity to speak, we may hold a public meeting rather than a public hearing. If you wish to meet with us to discuss the amendment, please request a meeting by contacting the person listed underFOR FURTHER INFORMATION CONTACT. All such meetings are open to the public; if possible, we will post notices of meetings at the locations listed underADDRESSES. We will make a written summary of each meeting a part of the administrative record.

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

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

Throughout this document, “we,” “us” and “our” refer to EPA.

On May 11, 2010 (75 FR 26102), we finalized a limited approval and limited disapproval of San Joaquin Valley Unified Air Pollution Control District (“SJVUAPCD” or “District”) Rules 2020 (Exemptions) and 2201 (New and Modified Stationary Source Review Rule), which were submitted to EPA by the California Air Resources Board (CARB) to satisfy certain applicable requirements under the Clean Air Act (CAA or “Act”). These rules strengthened the SIP, but contained deficiencies in enforceability that prevented full approval. Both rules contained references to California Health and Safety Code (CH&SC) under circumstances where the State law has not been submitted to EPA for approval into the SIP and thereby unacceptably ambiguous.

In our May 11, 2010 final rule, we explained that the District could remedy these deficiencies by replacing the references to the CH&SC with an unambiguous description of the agricultural sources covered by the permitting exemption in Rule 2020 and the applicability of the offset requirement to agricultural sources in Rule 2201, or by submitting the State law provisions as a SIP revision. See 75 FR at 26106 (May 11, 2010). EPA is now proposing action on CARB's submittal of new versions of Rules 2020 and 2201, which the District amended to resolve the deficiencies we identified in our May 11, 2010 final rule.

In a separate interim final action, published in the Rules section in today'sFederal Register,we are deferring sanctions that would otherwise apply to the SJVUAPCD based on EPA's May 11, 2010 limited approval and limited disapproval action on previous versions of District Rules 2020 and 2201.

In addition to addressing these deficiencies, we are also proposing to approve revisions to Rule 2201 that address the 1997 p.m.2.5standard. These revisions ensure that new major sources of PM2.5, and major modifications at existing major PM2.5sources, will undergo pre-construction review that requires permit applicants to apply Lowest Achievable Emission Rate (LAER) and provide emission offsets.

Table 1 lists the rules on which we are proposing action with the dates that they were revised by the District and submitted to EPA by CARB.

On October 25, 2011, we found that the submittal of District Rule 2020 and Rule 2201 met the completeness criteria in 40 CFR part 51, appendix V, which must be met before formal EPA review.

As discussed above, we approved versions of Rule 2020 and Rule 2201 into the SIP on May 11, 2010 (75 FR 26102). The amended versions of Rule 2020, adopted by the District on August 18, 2011 and submitted to us by CARB on September 28, 2011, and of Rule 2201, adopted by the District on April 21, 2011 and submitted to us by CARB on May 19, 2011, are the only revisions to the rule that the District has adopted since our 2010 limited approval.

Section 110(a) of the CAA requires states to submit regulations that control volatile organic compounds, nitrogen oxides, particulate matter, and other air pollutants which harm human health and the environment. Permitting rules were developed as part of the local air district's programs to control these pollutants.

The purpose of District Rule 2020 (“Exemptions”) is to specify emission units that are not required to obtain an Authority to Construct or Permit to Operate. Rule 2020 also specifies the recordkeeping requirements to verify such exemptions and outlines the compliance schedule for emission units that lose the exemption.

The purpose of District Rule 2201 (“New and Modified Stationary Source Review Rule”) is to provide for the review of new and modified stationary sources of air pollution and to provide mechanisms including control technology requirements and emission trade-offs by which Authorities to Construct such sources may be granted, without interfering with the attainment or maintenance of ambient air quality standards. District Rule 2201 is also intended to provide for no net increase in emissions above specified thresholds from new and modified stationary sources of all nonattainment pollutants and their precursors.

The rules that are the subject of this proposed action amend rules on which EPA has previously taken limited approval and limited disapproval action. EPA previously took limited approval/limited disapproval action on the rules because, while they met most of the statutory and regulatory requirements for SIPs regarding minor NSR, major nonattainment NSR, and enforceability of permit conditions, they also contained certain unacceptably ambiguous provisions which prevented full approval. Therefore, we have focused our review on the changes in the rules that the District adopted to remedy the deficiencies that we identified as well as those that the District has newly introduced into the rules.

The relevant statutory provisions for our review of the submitted rules include CAA sections 110(a), 110(l), 172(c)(5) and 40 CFR 51.160-165. Section 110(a) requires that SIP rules be enforceable, while section 110(l) precludes EPA approval of SIP revisions that would interfere with any applicable requirement concerning attainment and reasonable further progress or any other applicable requirement of the Act. Section 172(c)(5) requires SIPs with nonattainment areas to require permits for the construction and operation of new or modified major stationary sources in accordance with section 173, which establishes, among other requirements, a control technology requirement of “lowest achievable emission rate” (LAER) and an emissions offset requirement for such new or modified stationary sources.

Title 40, part 51, section 165 of title 40 of the Code of Federal Regulations (40 CFR 51.165) establishes more specific requirements for NSR SIPs to satisfy the requirements of sections 172(c)(5) and 173. With respect to PM2.5and its precursors, those requirements, among others, include a new “major source” threshold of 100 tons per year, “major modification” thresholds of 10 tons per year (direct PM2.5) or 40 tons per year for precursors NOXand SO2, and an offset ratio of at least 1:1. See 73 FR 28321 (May 16, 2008).

EPA found Rule 2020 deficient because the permitting exemption for agricultural sources relied on a cross-reference to CH&SC Section 42301.16, which is not approved in the SIP and allows permitting authorities to expand the universe of exempted sources if certain findings are made in a public hearing, which would change the permit exemption threshold without requiring SIP approval. To address this deficiency, the District revised Rule 2020 by replacing the statutory reference to CH&SC section 42301.16 with a clear description of the sources covered by the exemption.

In addition to resolving the deficiency, the District also added an exemption for wind machines, and a definition of “wind machine,” to Rule 2020. A wind machine consists of a large fan mounted on a tower and powered by an internal combustion engine and used only on the coldest winter nights to provide frost protection for certain type of crops (like citrus) when temperatures are forecast to drop below 28° F. Annual usage varies naturally with the frequency and duration of cold spells in the San Joaquin Valley during any given winter; however, the District estimates average annual use of any given wind machine at 35 hours per year. Emissions per unit vary depending upon the size of the engine used to power the fans and the fuel used to power the engine, among other factors, but can reasonably be estimated at approximately 15 pounds per day of NOX.1

We recognize that, when the applicable frost warnings occur, the number of wind machines that operate all night long in certain parts of the valley can number in the thousands, and that NOXemissions during those particular nights are not necessarily insignificant from the standpoint of PM10and PM2.5formation, particularly in the San Joaquin Valley. Nonetheless, we conclude that the permitting exemption for the wind machines is acceptable because wind machines are not subject to any prohibitory District rule,2 because no controls would approach any reasonable threshold of cost-effectiveness given the very limited use of the machines and the low emissions per unit, and because neither the EPA-approved San Joaquin Valley PM10maintenance plan nor the EPA-approved PM2.5attainment plan relies on emissions reductions from this particular episodic source of emissions.

EPA found Rule 2201 deficient because the offset exemption for minor agricultural sources was ambiguous because it relied on a cross-reference to the CH&SC, rather than explicitly delineating the exemption within the rule itself. The District remedied this deficiency by replacing the CH&SC references with a clear description of the applicability of the offset requirement to agricultural sources.

The District also added requirements to Rule 2201 to address the 1997 p.m.2.5standard. We have reviewed the PM2.5provisions of the rule, including permitting thresholds, Best Available Control Technology (which in California is the same as Federal LAER), and emission offset requirements (including ratios based on distance from the new or modified emission unit), and found that they satisfy the CAA requirements for NSR for new and modified major stationary sources of PM2.5.3

CAA section 110(l) precludes EPA from approving SIP revisions that would interfere with any applicablerequirement concerning attainment and reasonable further progress (RFP) or any other applicable requirement of the Act. EPA has evaluated amended Rules 2020 and 2201 and concluded that they would not interfere with attainment and RFP for any of the NAAQS, and would not interfere with any other applicable requirement of the Act. First, amended Rule 2201 does not relax the SIP in any aspect; rather, the amended rule strengthens the SIP by applying NSR requirements to new or modified major sources of PM2.5. Second, while amended Rule 2020 contains a new exemption for wind machines, this exemption would not lead to an increase in emissions because, as explained above, wind machines would not be subject to any particular controls under the NSR rule even if no such exemption were in effect because no control device would be considered cost-effective. Lastly, as noted above, neither the EPA-approved San Joaquin Valley PM10maintenance plan nor the EPA-approved PM2.5attainment plan relies on emissions reductions from this particular episodic source of emissions. Thus, we find the SIP revisions acceptable under CAA section 110(l).

EPA's technical support document (TSD) for this rulemaking has more information about these rules, including our evaluation and recommendation to approve them into the SIP.

Because EPA believes the submitted rules fulfill all relevant requirements, we are proposing to fully approve them as revisions to the SIP pursuant to section 110(k)(3) of the Act. Specifically, we are proposing to approve SJVUAPCD Rule 2020 (“Exemptions”), as amended by the District on August 18, 2011 and submitted by CARB on September 28, 2011; and SJVUAPCD Rule 2201 (“New and Modified Stationary Source Review Rule”), as amended by the District on April 21, 2011 and submitted by CARB on May 19, 2011, as revisions to the California SIP. In so doing, we conclude that the District has remedied deficiencies that EPA had identified in previous versions of the rules and that other changes made by the District to the rules meet the applicable NSR requirements of the Act and our regulations.

We will accept comments from the public on this proposal for the next 30 days. Unless we receive convincing new information during the comment period, we intend to publish a final approval action that will incorporate these rule(s) into the federally enforceable SIP.

Under the Clean Air Act, 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 Clean Air Act. 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 Clean Air Act; and

• Does not provide EPA with the discretionary authority to address disproportionate human health or environmental effects with practical, appropriate, 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.

Throughout this document, “we,” “us” and “our” refer to EPA.

Table 1 lists the rule addressed by this proposal with the dates that it was adopted by the local air agency and submitted by the California Air Resources Board.

On February 4, 2010, EPA determined that the submittal for FRAQMD Rule 2.33 met the completeness criteria in 40 CFR part 51 Appendix V, which must be met before formal EPA review.

There are no previous versions of Rule 2.33.

NOXhelps produce ground-level ozone, smog and particulate matter, which harm human health and the environment. Section 110(a) of the CAA requires States to submit regulations that control NOXemissions. Rule 3.22 regulates emissions of NOX, volatile organic compounds (VOCs) and carbon monoxide (CO) from internal combustion engines with a rated brake horse power of 50 or greater. EPA's technical support document (TSD) has more information about this rule.

Generally, SIP rules must be enforceable (see section 110(a) of the Act), must require Reasonably Available Control Technology (RACT) for each category of sources covered by a Control Techniques Guidelines (CTG) document as well as each NOXor VOC major source in ozone nonattainment areas classified as moderate or above (see sections 182(b)(2) and 182(f)), and must not relax existing requirements in violation of CAA sections 110(l) and 193. Nonattainment areas must also implement Reasonably Available Control Measures (RACM), including such reductions in emissions from existing sources in the area as may be obtained through the adoption, at a minimum, of RACT, as expeditiously as practicable for nonattainment areas (see CAA section 172(c)(1)). Although the FRAQMD regulates an ozone nonattainment area classified as severe for the 8-hour ozone NAAQS (40 CFR 81.305), Rule 3.22 does not need to fulfill RACT for NOXbecause there are no major sources that are subject to this rule in the ozone nonattainment portion of the FRAQMD. Guidance and policy documents that we use to evaluate enforceability and RACT requirements consistently include the following:

1. “State Implementation Plans; Nitrogen Oxides Supplement to the General Preamble; Clean Air Act Amendments of 1990 Implementation of Title I; Proposed Rule,” (the NOXSupplement), 57 FR 55620, November 25, 1992.

2. “Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations,” EPA, May 25, 1988 (the Bluebook).

3. “Guidance Document for Correcting Common VOC & Other Rule Deficiencies,” EPA Region 9, August 21, 2001 (the Little Bluebook).

4. “Alternative Control Techniques Document—NOXEmissions from Stationary Reciprocating Internal Combustion Engines,” EPA, July 1993.

5. “Determination of Reasonably Available Control Technology and Best Available Retrofit Control Technology for Stationary Spark-Ignited Internal Combustion Engines,” California Air Resources Board, November 2001.

Rule 3.22 improves the SIP by establishing more stringent emission limits and by clarifying monitoring, recording and recordkeeping provisions. The rule is largely consistent with the relevant policy and guidance regarding enforceability, RACT and SIP relaxations. Rule provisions which do not meet the evaluation criteria are summarized below and discussed further in the TSD.

The following provision conflicts with section 110 and part D of the Act and prevent full approval of the SIP revision. Section G.1.g allows for alternate testing without including sufficient QA/QC requirements to demonstrate compliance. This undermines enforceability of the rule which contradicts CAA requirements for enforceability.

The TSD describes additional rule revisions that we recommend for thenext time the local agency modifies the rule.

As authorized in sections 110(k)(3) and 301(a) of the Act, EPA is proposing a limited approval of the submitted rule to improve the SIP. If finalized, this action would incorporate the submitted rule into the SIP, including those provisions identified as deficient. This approval is limited because EPA is simultaneously proposing a limited disapproval of the rule under section 110(k)(3). Neither sanctions nor a Federal Implementation Plan (FIP) would be imposed should EPA finalize this limited disapproval. Sanctions would not be imposed under CAA 179(b) because the submittal of FRAQMD Rule 2.33 is discretionary (i.e.,not required to be included in the SIP), and EPA would not promulgate a FIP in this instance under CAA 110(c)(1) because the disapproval does not reveal a deficiency in the SIP for the area that such a FIP must correct. Specifically, the FRAQMD SIP does not rely on emissions reductions from Rule 2.33, and the rule is not subject to CAA section 182 RACT requirements for ozone because the rule does not apply to any major stationary source of NOXor VOC or any source covered by a CTG document. Accordingly, the failure of the FRAQMD to adopt revisions to Rule 2.33 would not adversely affect the SIP's compliance with the CAA's mandated requirements, such as the requirements for section 182 ozone RACT, reasonable further progress, and attainment demonstrations.

Note that the submitted rule has been adopted by the FRAQMD, and EPA's final limited disapproval would not prevent the local agency from enforcing it. The limited disapproval also would not prevent any portion of the rule from being incorporated by reference into the federally enforceable SIP as discussed in a July 9, 1992 EPA memo found at:http://www.epa.gov/nsr/ttnnsr01/gen/pdf/memo-s.pdf.

We will accept comments from the public on the proposed limited approval and limited disapproval for the next 30 days.

The Office of Management and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled “Regulatory Planning and Review.”

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

The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions.

This rule will not have a significant impact on a substantial number of small entities because SIP approvals or disapprovals under section 110 and subchapter I, part D of the Clean Air Act do not create any new requirements but simply approve or disapprove requirements that the State is already imposing. Therefore, because the proposed Federal SIP limited approval/limited disapproval does not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities.

Moreover, due to the nature of the Federal-State relationship under the Clean Air Act, preparation of flexibility analysis would constitute Federal inquiry into the economic reasonableness of State action. The Clean Air Act forbids EPA to base its actions concerning SIPs on such grounds.Union Electric Co.,v.U.S. EPA,427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

Under sections 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated costs to State, local, or tribal governments in the aggregate; or to the private sector, of $100 million or more. Under section 205, EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

EPA has determined that the limited approval/limited disapproval action proposed does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This Federal action proposes to approve and disapprove pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action.

Federalism(64 FR 43255, August 10, 1999) revokes and replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing the Intergovernmental Partnership). Executive Order 13132 requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely proposes to approve or disapprove a State rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This proposed rule does not have tribal implications, as specified in Executive Order 13175. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. Thus, Executive Order 13175 does not apply to this rule.

EPA specifically solicits additional comment on this proposed rule from tribal officials.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045, because it proposes to approve a State rule implementing a Federal standard.

This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

Section 12 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

The EPA believes that VCS are inapplicable to this action. Today's action does not require the public to perform activities conducive to the use of VCS.

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

EPA lacks the discretionary authority to address environmental justice in this rulemaking.

In the “Rules and Regulations” Section of today'sFederal Register, we are publishing a direct final Notice of Deletion for SMPA Superfund Site without prior Notice of Intent for Deletion because EPA views this as a noncontroversial revision and anticipates no adverse comments. We have explained our reason for this deletion in the preamble to the direct final Notice of Deletion, and those reasons are incorporated herein. If we receive no adverse comment(s) on this deletion action, we will not take further action on this Notice of Intent for Deletion. If we receive adverse comment(s), we will withdraw the direct final Notice of Deletion and it will not take effect. We will, as appropriate, address all public comments in a subsequent final Notice of Deletion based on this Notice of Intent for Deletion. We will not institute a second comment period on this Notice of Intent for Deletion. Any parties interested in commenting must do so at this time.

For additional information, see the direct final Notice of Deletion which is located in the Rules section of thisFederal Register.