The Commission has requested comment on Proposed Rule 127B under the Securities Act of 1933 (“Securities Act”) in the ABS Conflicts Proposal to implement Section 621 of the Dodd-Frank Act.1 Proposed Rule 127B under the Securities Act would prohibit certain persons who create and distribute an asset-backed security, including a synthetic asset-backed security, from engaging in transactions, within one year after the date of the first closing of the sale of the asset-backed security, that would involve or result in a material conflict of interest with respect to any investor in the asset-backed security. The proposed rule also would provide exceptions from this prohibition for certain risk-mitigating hedging activities, liquidity commitments, and bona fide market-making. The ABS Conflicts Proposal was published in theFederal Registeron September 28, 2011.

The Commission originally requested that comments on the ABS Conflicts Proposal be received by December 19, 2011, including comment about any potential interplay2 between Proposed Rule 127B and the “Volcker Rule Proposal.”3 The Volcker Rule Proposal would implement Section 619 of the Dodd-Frank Act concerning prohibitions and restrictions on proprietary trading and certain interests in, and relationships with, hedge funds and private equity funds. The original comment period for the Volcker Rule Proposal was scheduled to end on January 13, 2012.

On December 13, 2011, the Commission extended the ABS Conflicts Proposal comment period from December 19, 2011 to January 13, 2012 to coincide with the end of the comment period for the Volcker Rule Proposal. The Commission extended the Volcker Rule Proposal comment period until February 13, 2012.4 In an effort to provide the public with a better opportunity to consider any potential interplay between the ABS Conflicts and Volcker Rule Proposals, the Commission is also extending the ABS Conflicts Proposal comment period until February 13, 2012.

The Commission has determined to provide the public additional time to consider simultaneously the ABS Conflicts and the Volcker Rule Proposals. This extended opportunity to submit comprehensive comments regarding the ABS Conflicts Proposal and any potential interplay with the Volcker Rule Proposal would benefit the Commission in its consideration of any final rules. Therefore, the Commission is again extending the comment period for the ABS Conflicts Proposal until February 13, 2012 to coincide with theend of the Volcker Rule Proposal comment period.

On September 27, 2007, Congress enacted FDAAA (Pub. L. 110-85). Section 914 of title IX of FDAAA added new section 505(q) to the FD&C Act (21 U.S.C. 355(q)). Section 505(q) applies to certain citizen petitions and PSAs (collectively referred to as petitions) that request FDA to take any form of action related to a pending application submitted under section 505(b)(2) or (j) of the FD&C Act (21 U.S.C. 355(b)(2) or (j)). An application submitted under section 505(b)(2) of the FD&C Act is a type of new drug application (NDA) described in that subsection and is referred to in this document as a “505(b)(2) application.” An application submitted under section 505(j) is an ANDA for a generic drug product.

Section 505(q) governs the manner in which FDA handles certain citizen petitions and PSAs that ask the Agency to take any form of action related to pending 505(b)(2) applications or ANDAs. Over the years, FDA has received numerous petitions asking the Agency not to approve a particular ANDA or 505(b)(2) application (or classes of these applications concerning a particular drug product or active ingredient) unless certain criteria set forth in the petition are met. In many cases, the petitions have raised scientific and/or legal issues relating to the standards for approval of an application. Examples include: Petitions suggesting a particular method for determining the bioequivalence of a proposed generic product to the reference listed drug (RLD) and petitions maintaining that a proposed generic product does not contain the same active ingredient as the RLD. When submitted early, such as when we are making decisions about the bioequivalence requirements for a generic drug product or before we have received the first ANDA or 505(b)(2) application for a drug product, a petition containing material information can assist us in establishing standards for these applications. However, when petitions are submitted late in the review process for challenged applications and do not raise valid scientific and/or legal issues, they may have the effect of improperly delaying the approval of an application. By enacting section 505(q), Congress indicated a desire to ensure that petitions not be used to improperly delay approval of ANDAs and 505(b)(2) applications.

Section 505(q)(1)(A) of the FD&C Act specifies that FDA must not delay approval of a pending ANDA or 505(b)(2) application because of any request to take any form of action relating to the application, unless the request is in writing and in a citizen petition submitted under § 10.30 (21 CFR 10.30) or a PSA submitted under § 10.35 (21 CFR 10.35), and the Agency determines, upon reviewing the petition, that a delay is necessary to protect the public health.

Section 505(q)(1)(F) of the FD&C Act governs the timeframe for final Agency action on a petition. Under this provision, FDA must take final Agency action on a petition not later than 180 days after the date on which the petitionis submitted. The 180-day period is not to be extended for any reason including any determination made under section 505(q)(1)(A) regarding delay of approval of an application (i.e., that delay is necessary to protect the public health), the submission of comments or supplemental information, or the consent of the petitioner. In addition, FDA may deny a petition at any point if it determines that a petition or a supplement to the petition was submitted with the primary purpose of delaying the approval of an application and the petition does not on its face raise valid scientific or regulatory issues (section 505(q)(1)(E) of the FD&C Act). FDA may issue guidance to describe the factors that will be used to determine whether a petition is submitted with the primary purpose of delaying the approval of an application (section 505(q)(1)(E) of the FD&C Act).

Section 505(q) of the FD&C Act also includes certification and verification requirements for certain documents. Under section 505(q)(1)(H) of the FD&C Act, FDA may not consider a petition for review unless the petition is in writing and signed and contains a certification that is specified in that section. In addition, we may not accept for review any supplemental information or comments on a petition unless the submission is in writing and signed and contains a specific verification (section 505(q)(1)(I) of the FD&C Act).

FDA is proposing to amend our regulations on general administrative procedures in part 10 (21 CFR part 10) to implement section 505(q) of the FD&C Act. We are proposing to add new § 10.31, which includes the following provisions:

• Proposed § 10.31(a) states that § 10.31 would encompass all citizen petitions and PSAs that request that the Agency take any action that could, if taken, delay approval of an ANDA or 505(b)(2) application (i.e., petitions and PSAs that are or may be subject to section 505(q) of the FD&C Act).

• Proposed § 10.31(b) would clarify the date of submission for petitions submitted under § 10.31.

• Proposed § 10.31(c) and (d) would codify the certification and verification requirements of section 505(q)(1)(H) and (I). Although the certification and verification requirements of section 505(q)(1)(H) and (I) include that the document be signed, we have not proposed a regulation that explicitly states that submissions under § 10.31 or § 10.35 must be signed because current § 10.20 requires that all submissions made to the Division of Dockets Management be signed.

We are also proposing minor revisions to §§ 10.20 and 10.30 to conform with the addition of proposed § 10.31.

With respect to § 10.35, administrative stay of action, we are proposing a revision to conform with the implementation of section 505(q). We are also proposing to add new § 10.35(i) to clarify that a petitioner for a stay of action may supplement, amend, or withdraw a PSA, similar to the provision for citizen petitions in current § 10.30(g).

In addition to implementing the provisions in section 505(q) of the FD&C Act, we are proposing minor technical changes to revise §§ 10.30(e)(3) and 10.35(e) to allow the Commissioner of Food and Drugs (the Commissioner) to dismiss petitions as moot.

Proposed § 10.31(b) would make clear that for a petition that could be subject to section 505(q) of the FD&C Act and submitted under proposed § 10.31, the date of submission is the date on which the petition is received by the Division of Dockets Management. Proposed § 10.31(b) also states that the petition must be submitted in accordance with §§ 10.20, 10.30, 10.31, and 10.35, the other relevant regulations regarding citizen petitions and PSAs.

We are proposing § 10.31(b) because under current § 10.20(e), the submission date for documents submitted to the Division of Dockets Management depends on how the document is submitted to FDA. Current § 10.20(e) states that all submissions to the Division of Dockets Management will be considered as submitted on the date they are postmarked or, if delivered in person during regular business hours, on the date on which they are delivered. The date considerations in current § 10.20(e) apply unless a provision in part 10, an applicableFederal Registernotice, or an order issued by an administrative law judge specifically states that the documents must be received by a specified date. Section 10.20(e) provides as an example § 10.33(g), which states that a petition for reconsideration will be considered submitted on the date received.

Under current § 10.20(e), which applies to all citizen petitions submitted to the Agency, the computation of time to respond to a citizen petition would depend on the type of delivery service by which a document is sent to the Division of Dockets Management regardless of the date on which it is actually received by the Division of Dockets Management. Therefore, it is possible for two petitions to have different submission dates even if they are received by the Division of Dockets Management on the same day. For example, if Petition A is sent by U.S. mail, postmarked May 1, 2010, and received by the Division of Dockets Management on May 5, 2010, the submission date for Petition A would be considered to be May 1, 2010 (the date of postmark). If Petition B is sent by courier and hand delivered to the Division of Dockets Management on May 5, 2010, the submission date for Petition B would be considered to be May 5, 2010.

Other part 10 regulations also relate to submission dates:

• Under § 10.35(g), a PSA is considered submitted on the day it is received by the Division of Dockets Management. Therefore, under the current regulations, a document's submission date could be different depending on whether the document is a citizen petition or a PSA.

• Under § 10.30(e), FDA is required to respond to a citizen petition within 180 days of receipt of the petition by approving the petition, denying the petition, or providing a tentative response indicating why the Agency has been unable to reach a decision; this 180-day deadline is based on the date of receipt by the Division of Dockets Management.

We believe that it is important to be clear regarding what date a petition submitted under § 10.31 will be considered to be submitted because section 505(q)(1)(F) of the FD&C Act imposes a strict deadline for FDA to respond to a petition. Under section 505(q)(1)(F) of the FD&C Act, FDA must take final Agency action on a petition subject to section 505(q) no later than 180 days after the date on which the petition is submitted. The 180-day period is not to be extended for any reason, including any determination made under section 505(q)(1)(A) of the FD&C Act regarding delay of approval of an application, the submission of comments or supplemental information, or the consent of the petitioner.

Accordingly, proposed § 10.31(b) would make clear that the date of submission for all petitions subject to § 10.31 and submitted in accordance with §§ 10.20, 10.30, 10.31, and 10.35 is the date on which a petition is receivedby the Division of Dockets Management. We are proposing a conforming change to § 10.20 to clarify that the method of calculating submission dates described in § 10.20 does not apply to petitions subject to § 10.31.

Current § 10.30 regulating citizen petitions requires that a citizen petition contain, among other things, a certification stating that the citizen petition includes all information and views on which the citizen petition relies and that it includes data and information known to the petitioner which are unfavorable to the citizen petition. Current regulations do not include a certification or verification requirement for supplements or comments to a citizen petition or comments to a PSA, and the current requirements are different than those contained in section 505(q) of the FD&C Act.

Section 505(q)(1)(H) of the FD&C Act requires that any petition subject to section 505(q) include a specified certification. Section 505(q)(1)(I) of the FD&C Act requires that any comments or supplemental information submitted to a petition subject to section 505(q) include a specified verification. We propose to add § 10.31(c) and (d) to our regulation to include the statutory requirement for the submission of a certification and/or a verification under section 505(q) and the precise language of the certification and verification.

Consistent with the specific language provided in section 505(q) of the FD&C Act, proposed § 10.31(c) provides that FDA will not consider a petition subject to § 10.31 for review unless the petition is in writing and contains the following certification: “I certify that, to my best knowledge and belief: (a) This petition includes all information and views upon which the petition relies; (b) this petition includes representative data and/or information known to the petitioner which are unfavorable to the petition; and (c) I have taken reasonable steps to ensure that any representative data and/or information which are unfavorable to the petition were disclosed to me. I further certify that the information upon which I have based the action requested herein first became known to the party on whose behalf this petition is submitted on or about the following date: ______ . If I received or expect to receive payments, including cash and other forms of consideration, to file this information or its contents, I received or expect to receive those payments from the following persons or organizations: ______ . I verify under penalty of perjury that the foregoing is true and correct as of the date of the submission of this petition.”

Proposed § 10.31(c) would require that all petitions that request that FDA take any form of action that could, if taken, delay approval of an ANDA or 505(b)(2) application (i.e., petitions that are subject to § 10.31) contain the complete certification required by § 10.31(c) to be considered for review by FDA. If the petition does not contain the complete certification, we will not review the petition.

Consistent with the specific language in section 505(q) of the FD&C Act, proposed § 10.31(d) provides that FDA will not accept for review any supplemental information or comments on a petition subject to § 10.31 unless the supplemental information or comments are in writing and contain the following verification: “I certify that, to my best knowledge and belief: (a) I have not intentionally delayed submission of this document or its contents; and (b) the information upon which I have based the action requested herein first became known to me on or about ________ .If I received or expect to receive payments, including cash and other forms of consideration, to file this information or its contents, I received or expect to receive those payments from the following persons or organizations: ________ .I verify under penalty of perjury that the foregoing is true and correct as of the date of the submission of this document.”

We are proposing one minor editorial change to the language of the verification set out in the statute. We propose to change “I verify under penalty of perjury that the foregoing is true and correct as of the date of the submission of thispetition”to “I verify under penalty of perjury that the foregoing is true and correct as of the date of the submission of thisdocument”(emphasis added). We are proposing this change because we believe that the statute contained a technical error when referring to a “petition” and that the obvious congressional intent is that this reference be to the “document” in which the verification would be contained (i.e., supplemental information or comments on a petition rather than a petition itself).

Under proposed § 10.31(d), if any supplemental information or comments that are submitted to a petition subject to § 10.31 do not include the required verification, FDA would not review the submission.

With the addition of proposed § 10.31(c) and (d), our regulation would include the precise language of the required certification and verification. We have found that petitioners occasionally alter the statutory language of the certification and verification, thereby potentially changing the meaning intended by Congress when it enacted section 505(q) of the FD&C Act. To avoid any alteration of the meaning of the certification and verification, we are proposing to require that petitioners submit the exact statutory language of the certification and verification, with the exception discussed previously in section II.B.4 of this document. Because section 505(q) of the FD&C Act and proposed § 10.31(c) set forth the exact words to be used in the certification, we will consider a certification to be deficient if every word in the petitioner's certification does not match every word of the certification provided in proposed § 10.31(c). In other words, the petitioner's certification must correspond verbatim to the certification in proposed § 10.31(c). For example, if a certification states “first became known to me” instead of “first became known to the party on whose behalf this petition is submitted,” the certification would be deficient. We believe this interpretation is required by the statutory language because section 505(q) of the FD&C Act specifies the exact text of the certification.

As with our proposed approach to the certification, we would consider a verification to be deficient if it does not exactly mirror the words of the verification under proposed § 10.31(d).

Section 505(q) of the FD&C Act and proposed § 10.31(c) also require that the petitioner provide in the certification the date on or about which the information first became known to the party. The certification in proposed § 10.31(c) includes a blank space for that information. We interpret the FD&C Act's reference to “date” to mean a month, day, and year. Therefore, we propose to consider a certification to be deficient if the petitioner has not provided the month, day, and year on orabout which the information first became known to the party on whose behalf the petition is submitted. For example, if the petitioner provides “May 2010” as the date in the certification, we would consider the certification to be deficient. The text of the certification provided in proposed § 10.31(c) includes a qualification that the petitioner learned of the information on or about the following date; therefore, we believe the certification would accommodate instances in which a petitioner may not know the exact date on which it became aware of the information.

Similarly, under proposed § 10.31(d), we are proposing that if the petitioner or commenter does not provide a month, day, and year in the verification, FDA will consider the verification to be deficient and will not review the submission.

FDA recognizes that a petition, supplement, or comment could be based on more than one type of information. Proposed § 10.31(c)(2) would require a petitioner to provide in the certification an estimated relevant date for each type of information if different types of information became known over a period of time. The petitioner must identify the information associated with the particular date. To the extent that a petitioner believes that additional clarification is appropriate, the blank space in the certification that proposed § 10.31(c) designates for the date could accommodate additional information that the petitioner believes is appropriate to explain the date that it has identified. This would be done by providing, in each case in which more than one type of information is relied on, the date followed by an identification of the information associated with that date in parentheses. Thus, for example, a petition might include the following in the space for the date:

September 21, 1995 (information about bioavailability issues with the innovator drug);

November 12, 2009 (publication of a draft bioequivalence guidance for the drug);

March 30, 2010 (information that an ANDA had been submitted).

When adding additional information, the petitioner should ensure that the words of the certification (except for information added in the blank space provided) continue to exactly match the words of the certification as provided by proposed § 10.31(c).

Similarly, proposed § 10.31(d) would require that the petitioner or commenter include in the verification each type of information and supply the date each type of information became known. The verification in proposed § 10.31(d) includes a blank space that can accommodate this information.

Under proposed § 10.31(c) and (d), it is the responsibility of the person submitting the petition, supplemental information, or comment to identify each type of information upon which it relies and to supply a date with respect to each such type of information. The failure to provide any information relied upon (and the date) in the certification or verification may result in the failure of FDA to consider that information in its analysis of the petition and would, FDA believes, foreclose the petitioner or the person submitting the supplemental information or comment from relying upon such information in judicial review of FDA's final decision.

Proposed § 10.31 would apply to all petitions that request an action that could delay the approval of a possible ANDA or 505(b)(2) application (proposed § 10.31(a)); therefore, all such petitions would be required to include the certification proposed in § 10.31(c).

Because section 505(q)(1)(A) of the FD&C Act specifically references pending ANDA or 505(b)(2) applications, we interpret section 505(q) to apply only to petitions for which, at the time the petition is submitted, at least one ANDA or 505(b)(2) application related to the subject matter of the petition is pending. If there is no related ANDA or 505(b)(2) application pending at the time that the petition is submitted, then we will not consider the provisions of section 505(q) of the FD&C Act to apply to the petition. We believe this interpretation of section 505(q) of the FD&C Act is appropriate because if no related ANDA or 505(b)(2) application is pending at the time that a petition is submitted, the references in section 505(q)(1)(A) to a pending application and delay of approval by a petition would be inapplicable. With respect to the actual submission of the certification and/or verification with a petition, we recognize that petitioners may not be aware of the existence of a pending ANDA or 505(b)(2) application and, therefore, may not know whether to submit the appropriate certification and/or verification under section 505(q) of the FD&C Act. Generally, the existence of an ANDA or a 505(b)(2) application would not be public information.1 Therefore, FDA has recommended that any petitioner challenging the approvability of an ANDA or a 505(b)(2) application include the statutory certification to avoid a situation in which a petition that is subject to section 505(q) of the FD&C Act is missing the certification and therefore cannot be reviewed by FDA under the statute. We have stated that in situations where a petitioner submits such a petition, we recommend that the petitioner withdraw the original petition and resubmit a petition that includes the required certification under section 505(q) of the FD&C Act.

We have also stated that although we may contact a petitioner to notify him or her of a missing or deficient certification, it is the responsibility of the petitioner to ensure that his or her petition complies with the applicable requirements of section 505(q) of the FD&C Act as well as all other applicable statutory and regulatory requirements. Contacting petitioners who have submitted deficient petitions represents an administrative burden for the Agency. In addition, we are concerned that our contacting such petitioners could notify the petitioner and the public that an ANDA or 505(b)(2) application for a particular drug product is pending.

By including in proposed § 10.31(a) all petitions that challenge the approvability of a possible ANDA or 505(b)(2) application, all such petitions would be required to include the certification in proposed § 10.31(c). Proposed § 10.31(a) would eliminate the need for FDA to contact a petitioner to advise him or her that the petition must include the 505(q) certification or avoid a delay in dealing with the specific issues contained in a petition because the petitioner must withdraw and resubmit the petition. In addition, we propose that any supplement or comments to a petition that is subject to proposed § 10.31 and that includes the certification in § 10.31(c) must include the verification in § 10.31(d).

Although the primary purpose of this rule is to implement section 505(q) of the FD&C Act, we are proposing to add language to § 10.30(e) to allow the Commissioner to dismiss a petition as moot. Because we are making changes to § 10.30 to implement section 505(q) of the FD&C Act, we believe it would be useful to make this minor clarifying change to the regulations. This change is technical in nature and would be applicable to citizen petitions in general, including those subject to section 505(q) of the FD&C Act. Current § 10.30(e) could be read to require that the Commissioner respond to a citizen petition by either granting or denying the requests in the citizen petition, even when circumstances have rendered the requests in the petition moot. Current § 10.30(e) does not by its terms contemplate a situation in which a petition can be dismissed as moot.

Because changes in law, facts, or circumstances occurring after a citizen petition is submitted to the Agency can render the requests contained in a petition moot, we propose to allow the Commissioner to dismiss a petition as moot in these situations. An example of a moot petition would be a petition that requests that the Agency remove a particular drug from the market for safety reasons when, at the time of the response, the drug has already been removed from the market. Another example would be where a petitioner requests a change to a regulation that has been rescinded or withdrawn since the petition was submitted. In such circumstances, it would be appropriate for the Commissioner to dismiss the petition as moot rather than to grant or deny the requests in the petition. This proposed change to our regulations is intended to clarify that, in addition to our authority to grant or deny a petition under our current regulations, the Agency can dismiss citizen petitions as moot in certain circumstances.

When a citizen petition is dismissed as moot, FDA would respond to the petitioner in writing just as we would when granting or denying a petition. We believe, however, that the Agency's justification for dismissing a petition as moot could be brief in comparison to a response granting or denying a petition, and thus would require dedication of fewer Agency resources. FDA's response dismissing a citizen petition as moot, similar to a response granting or denying a petition, would constitute final Agency action as to that citizen petition.

We are proposing a conforming change to § 10.35(b) to clarify the applicable regulations for PSAs that are subject to section 505(q) of the FD&C Act. Section 10.35(b) currently states that “a request for stay must be submitted in accordance with § 10.20 and in the following form no later than 30 days after the date of the decision involved.” We propose to add language to § 10.35(b) to provide that petitions for stay subject to § 10.31 must include the certification provided in § 10.31(c). This proposed revision would alert petitioners for stays of action that may be subject to section to 505(q) of the FD&C Act that they must also submit the certification in § 10.31(c).

Section 505(q)(1)(A) of the FD&C Act states that FDA must not delay approval of a pending ANDA or 505(b)(2) application because of any request to take any form of action relating to the application unless the request is in writing, is a citizen petition submitted under § 10.30 or a PSA submitted under § 10.35, and FDA determines, upon reviewing the petition, that a delay is necessary to protect the public health. Section 10.35(d) provides that filing a PSA, citizen petition, or other type of petition, or taking another type of action as described in § 10.35(d) will not stay or otherwise delay any administrative action by the Commissioner unless: (1) The Commissioner determines that a stay or delay is in the public interest and stays the action, (2) a statute requires that the matter be stayed, or (3) a court orders that the matter be stayed. In other words, the mere filing of any petition, including a petition under section 505(q) of the FD&C Act, would not stay or otherwise delay administrative action by FDA. SeeTMJ Implants, Inc.v.United States HHS,584 F.3d 1290, 1300 (10th Cir. 2009). A delay of an administrative action could only occur if FDA chose to take action in response to a particular submission. We are not proposing any changes to § 10.35(d) to implement section 505(q)(1)(A) of the FD&C Act because we believe that the provisions of section 505(q)(1)(A) of the FD&C Act regarding the circumstances in which FDA would stay or delay an administrative action (e.g., approval of an ANDA or 505(b)(2)) would be covered by the current language of § 10.35(d).

As explained previously in this document with respect to citizen petitions under § 10.30(e)(3), we are proposing to add a sentence to § 10.35(e) to allow the Commissioner to dismiss a petition for stay of action as moot.

In addition, we are proposing to add § 10.35(i), which would mirror § 10.30(g) governing citizen petitions and allow a petitioner who has submitted a PSA to supplement, amend, or withdraw a PSA without Agency approval and without prejudice, unless the PSA has been referred for a hearing under 21 CFR parts 12, 13, 14, or 15. Proposed § 10.35(i) would apply to all PSAs, not just PSAs subject to section 505(q) of the FD&C Act. We believe that adding this provision to allow PSAs to be amended, withdrawn, or supplemented is permitted under the FD&C Act and is appropriate to allow petitioners submitting PSAs the same procedural rights as petitioners submitting citizen petitions. By amending this regulation, we are clarifying that it is permissible to amend, withdraw, or supplement a PSA because the current regulations are not specific on this point and our current practice allows a PSA to be amended, withdrawn, or supplemented. Furthermore, under section 505(q)(1)(I) of the FD&C Act, the verification statement that applies to citizen petitions and PSAs refers to supplemental information. Therefore, in drafting this provision, Congress assumed it was possible to provide a supplement to a PSA.

FDA proposes that any final rule that may issue based on this proposal become effective 60 days after its publication in theFederal Register. FDA seeks public comment on its proposed 60-day effective date for any final rule that may issue based on this proposed rule.

This rule, if finalized, would amend §§ 10.20, 10.30, and 10.35 and add new § 10.31 in a manner consistent with the Agency's current understanding and application of these provisions. FDA is implementing certain provisions of FDAAA that govern petitions subject to section 505(q) of the FD&C Act. FDA has authority to issue regulations for the efficient administration of these provisions under section 701(a) of the FD&C Act (21 U.S.C. 371(a)).

FDA has determined under 21 CFR 25.30(h) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.

FDA has examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct Agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Agency believes that this final rule is not a significant regulatory action under Executive Order 12866.

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because the annualized compliance costs to individual industry members who submit a petition is estimated to be about $100, the Agency proposes to certify that the final rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $136 million, using the most current (2010) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect any final rule to result in any 1-year expenditure that would meet or exceed this amount.

Section 505(q) of the FD&C Act concerns the manner in which FDA handles certain citizen petitions and PSAs that request that the Agency take some action related to a pending 505(b)(2) application or 505(j) application (ANDA). Congress was concerned that some petitions may improperly delay the approval of an application if they are submitted late in the review process and do not contain valid scientific, legal, or public health issues. The provisions contained in section 505(q) of the FD&C Act are self-implementing, and FDA has operated under these requirements since FDAAA became law in September 2007. This proposed rule would codify the certification and verification requirements included in section 505(q) of the FD&C Act extend these requirements to all petitions challenging the approvability of possible ANDAs and 505(b)(2) applications, as well as those submitting supplements and comments to these petitions, clarify how FDA determines the date of submissions for citizen petitions and PSAs subject to section 505(q), and clarify that a petitioner for a PSA may supplement, amend, or withdraw a PSA in a manner similar to that provided in the provisions for citizen petitions. In addition, the proposed rule would allow the Commissioner to dismiss a citizen petition or PSA as moot in certain circumstances.

Section 505(q) of the FD&C Act was enacted in light of concerns that some citizen petitions were submitted to delay the approval of ANDAs or 505(b)(2) applications. With the enactment of FDAAA, FDA is required to take final action on a 505(q) petition within 180 days of its receipt. Further, the law requires that an expanded certification statement be included with petitions, and a verification statement be included with supplements and comments to petitions. While these requirements do not specifically preclude anyone from submitting a petition that may delay approval of an ANDA or 505(b)(2) application, the requirement that the person submitting the document reveal the date on which he or she became aware of the information contained in the petition is presumably intended to reduce this type of behavior.

The requirements contained in section 505(q) of the FD&C Act have been in effect for 3 years. FDA received 21 505(q) petitions in fiscal year (FY) 2008, 31 505(q) petitions in FY 2009, and 20 505(q) petitions in FY 2010. Over the same period, however, the number of ANDAs and 505(b)(2) applications whose approvals were delayed decreased slightly, from 2 in FY 2008 to 1 in FY 2009 and 1 in FY 2010. The sample size of only 3 years is too small to conclusively determine whether the statute has caused a reduction in the number of petitions that did not include valid scientific or legal issues whose primary purpose was to delay approval of an application. The existence of the statutory requirement that FDA take final action within 180 days of receipt of a 505(q) petition, consequently reducing delays of approval, may have had this effect by itself.

By codifying the certification and verification statements (with a minor technical change to the verification language), the proposed rule would reinforce the need for exact wording of both the certification and verification statements. Further, the proposed rule makes clear that each of these two statements requires the identification of a month, day, and year in the place of the date, as opposed to just a year or a month and year. In addition, the proposed rule would clarify that each individual type of information requires its own separate date. By providing additional clarity on the statutory requirements, this proposed rule would likely reduce the number of deficient 505(q) petitions. FDA does not have enough information to estimate this reduction in deficient 505(q) petitions, but believes it will result in lower administrative costs for both industry and FDA.

Companies involved in pharmaceutical research and manufacturing would incur labor costs due to the rule through their administrative review of the final rule and determination of their compliance responsibilities. All companies involved in this would incur some labor costs, regardless of the frequency of their submission of ANDAs or 505(b)(2) applications or citizen petitions to FDA. Census data from 2007 list 763 companies in its pharmaceutical preparation manufacturing category. FDA estimates that each company will expend about 4 hours to review the final rule and determine any changes it needs to make to its internal administrative policies due to this rule. The pharmaceutical and medicine manufacturing category of the North American Industrial Classification System (NAICS) lists the hourly wage for a manager in this category at about $54. A 35-percent adjustment to this figure for employee benefits results in total hourly compensation costs of about $73. A one-time 4-hour review for each company would result in compliance costs of almost $300 per company, and a total of about $224,000 for the industry. This equates to an annualized cost (over 5 years at a 7-percent discount rate) of about $55,000 for the entire industry. These estimates may overstate true compliance costs for review of the rule because companies that are unlikely to submit citizen petitions on even an occasional basismay not expend as much labor as those that submit petitions more often. FDA invites comment on the estimate of 4 hours of labor to review the final rule and make any adjustment to company policies.

Additional labor costs of the rule would be incurred due to the new requirement that all petitioners challenging the approvability of a possible ANDA or 505(b)(2) application for which an application is not currently pending at FDA submit the appropriate certification, as well as the requirement that any supplements or comments to these petitions include the verification. The implementation of the requirements that 505(q) petitions (concerning the approvability of a pending ANDA or 505(b)(2) application) use the new certification language and that supplements and comments to these petitions use the verification language began with the enactment of FDAAA in September 2007 and are not the subject of the proposed rule. FDA has previously estimated that the statute would result in about 28 additional certifications with petitions and 25 additional verifications with supplements or comments to petitions.

FDA received a yearly average of 32 petitions that challenged the approvability of a possible ANDA or 505(b)(2) application since the end of 2007. This number represents a very small increase over the average for the previous 4-year period. Of these 32 petitions, on average only 25 were 505(q) petitions. FDA uses the difference between these two numbers, or about seven petitions per year, as its estimate of the number of additional petitions that this proposed rule would require to comply with the 505(q) requirements for certification. FDA estimates that the additional time needed to prepare the certification language in the proposed rule at 30 minutes. The majority of this time represents the additional effort of determining the date on which the information or data included in the petition became known to the person submitting the petition. FDA uses the same pharmaceutical and medicine manufacturing category of the NAICS hourly wage for a manager (adjusted for benefits) of $73 to calculate this cost. At 30 minutes per petition, the marginal cost to prepare the additional certification language for 1 petition is estimated at $37. For the average of seven additional petitions that would need the additional language, the total cost to industry is estimated at about $250 annually.

Additional labor costs would also be incurred for the preparation of certifications for supplements and comments to petitions that challenge the approvability of ANDA applications and 505(b)(2) applications for which there is no pending application at the time of the supplement or comment submission. FDA previously estimated that it would receive about 9 verifications for every 10 certifications in the implementation of the 505(q) provision. Using this ratio, FDA estimates that this proposed rule would result in the submission of verifications amounting to 90 percent of the additional certifications that it received due to this rule. Since FDA estimated that 7 additional certifications would be submitted due to this rule, FDA estimates that 90 percent of this number, or about 6 verifications, would also be submitted as a result of this rule. At 30 minutes per petition and the same adjusted wage rate of $73/hour, the additional cost per verification is estimated at $37. The additional labor costs for the 6 verifications would total to about $220 per year.

The provision of the proposed rule that would allow a petitioner who has submitted a PSA to supplement, amend, or withdraw a PSA without Agency approval would not impose any marginal costs on industry members. These practices reflect FDA's current policy. Similarly, the provision of this proposed rule that clarifies how FDA determines the submission date for documents received by FDA's Division of Docket Management is also not expected to impose any costs on industry members.

The total one-time costs plus annual costs of this proposed rule are estimated at about $224,000, with annualized costs (one-time costs annualized over 5 years at a 7-percent discount rate plus annual costs) at about $55,000 for the entire industry (see table 1 of this document). This estimate reflects a one-time $300 per company review cost for each industry member (annualized over 5 years at a 7-percent discount rate at about $70), plus an additional $37 labor cost per certification or verification submitted.

The costs to government for oversight of this proposed rule would be low as a review of the language in an additional seven certifications included with petitions and six verifications included with supplements or comments to petitions would only require 15 minutes for each. FDA believes this cost would not be significant, and emphasizes that the FDA personnel reviewing and responding to citizen petitions spend the vast majority of the time on the substantive issues included in the documents.

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. Because of the very low costs that would be incurred by an individual company submitting a petition or supplement or comment to a petition, FDA believes that the proposed rule would not have a significant economic impact on a substantial number of small manufacturing entities.

The companies that would be affected by this proposed rule are classified in two NAICS categories by the Census Bureau. The affected industries are NAICS 325412—Pharmaceutical Preparation, and NAICS 325414—Biological Products (except diagnostic). The Small Business Administration(SBA) defines small entities in the pharmaceutical preparation category as those with less than 750 employees and defines small entities in the biological product (except diagnostic) category as those with less than 500 employees. The most recent Census of Manufactures data that offer the level of detail for establishments at or near the employee size limits as defined by SBA is from 2002. In both of these establishment size categories, large majorities of the establishments meet the criteria as small entities. Even taking into account that many of these establishments are parts of multi-establishment corporations, significant numbers of companies would still qualify as small entities. Preliminary Census data from 2007, though less detailed, show that significant numbers of establishments continue to have fewer than 100 employees across all of these categories. While FDA expects that most companies submitting petitions that challenge the approvability of an ANDA or 505(b)(2) application would be larger than the average-sized company in their industry, FDA concludes that a substantial number of companies would still qualify as small entities.

The cost analysis concluded that the annualized compliance cost of the proposed rule for a company that submitted one additional certification as a result of the rule would be just over $100. Because FDA estimates that only about seven additional certifications will be submitted due to this rule, it is doubtful that many firms will submit more than one additional certification or verification annually to those already required by section 505(q) of the FD&C Act. Using 2002 Census data, the average value of shipments for establishments in these industries with 1 to 4 employees ranged from $478,000 to $824,000 according the Census of Manufactures. Assuming that such small operations had to prepare even one additional certification or verification each year, the costs of the proposed rule would represent, at most, 0.02 percent of the annual value of shipments. For establishments with 10 or more employees, the compliance costs would represent 0.01 percent or less of the value of shipments. As stated previously, FDA concludes that this proposed rule would not have a significant economic impact on a substantial number of small entities.

This proposed rule contains collections of information that are subject to review by OMB under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520). “Collection of information” includes any request or requirement that persons obtain, maintain, retain, or report information to the Agency, or disclose information to a third party or to the public (44 U.S.C. 3502(3) and 5 CFR 1320.3(c)). The title, description, and respondent description of the information collection are shown under this section with an estimate of the annual reporting burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

FDA invites comments on these topics: (1) Whether the collection of information is necessary for proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.

Title:Amendments to Regulations on Citizen Petitions, Petitions for Stay of Action, and Submission of Documents to Dockets.

Description of Respondents:Respondents to this collection of information as it is related to citizen petitions are individuals or households, State or local governments, not-for-profit institutions, and businesses or other for-profit institutions or groups. Respondents to this collection of information as it is related to PSAs are persons who choose to file a petition for an administrative stay of action.

Description:FDA is requesting public comment on estimates of annual submissions from these respondents, as required by section 505(q) of the FD&C Act and described in this proposed rule under § 10.31(c) and (d). Section 10.31(c) of this proposed rule requires that citizen petitions and PSAs that are subject to section 505(q) include a certification to be considered for review by FDA. Section 10.31(d) requires that supplemental information or comments to such citizen petitions and PSAs include a verification to be accepted for review by FDA. This proposed rule sets forth the statutory language under section 505(q) requiring the submission of a certification and/or a verification and the precise language of the certification and verification. One of the criteria for a citizen petition or PSA to be subject to section 505(q) is that a related ANDA or 505(b)(2) application is pending at the time the citizen petition or petition for stay is submitted. Because petitioners or commenters may not be aware of the existence of a pending ANDA or 505(b)(2) application, this proposed rule requires that all petitioners challenging the approvability of a possible ANDA or 505(b)(2) application include the certification required in § 10.31(c) of this proposed rule and that petitioners and commenters submitting supplements or comments, respectively, to a citizen petition or PSA challenging the approvability of a possible ANDA or 505(b)(2) application include the verification required in section § 10.31(d) of this proposed rule.

FDA currently has OMB approval for the collection of information entitled “General Administrative Procedures: Citizen Petitions; Petition for Reconsideration or Stay of Action; Advisory Opinions” (OMB control number 0910-0183). This collection of information includes, among other things: (1) The format and procedures by which an interested person may submit to FDA, in accordance with § 10.20, a citizen petition requesting the Commissioner to issue, amend, or revoke a regulation or order, or to take or refrain from taking any other form of administrative action (§ 10.30(b)); (2) the submission of written comments on a filed citizen petition (§ 10.30(d)); (3) the submission of a supplement or amendment to or a letter to withdraw a filed citizen petition (§ 10.30(g)); (4) the format and procedures by which an interested person may request, in accordance with § 10.20, the Commissioner to stay the effective date of any administrative action (§ 10.35(b)); and (5) the submission of written comments on a filed petition for administrative stay of action (§ 10.35(c)). This information collection includes citizen petitions, PSAs, comments to petitions, supplements to citizen petitions, and letters to withdraw a citizen petition, as described previously, that are subject to section 505(q) of the FD&C Act and described in this proposed regulation.

OMB recently approved (OMB control number 0910-0679) the information collection in the guidance for industry entitled “Citizen Petitions and Petitions for Stay of Action Subject to Section 505(q) of the Federal Food, Drug, and Cosmetic Act” (see the information collection analysis at 75 FR 78249 (December 15, 2010), and the document announcing the availability of the guidance at 76 FR 33309 (June 8, 2011)).The guidance describes FDA's interpretation of section 505(q) of the FD&C Act regarding how the Agency will determine if: (1) The provisions of section 505(q) addressing the treatment of citizen petitions and petitions for stay of Agency action (collectively, petitions) apply to a particular petition and (2) a petition would delay approval of a pending ANDA or a 505(b)(2) application. The guidance also describes how FDA will interpret the provisions of section 505(q) requiring that: (1) A petition include a certification and (2) supplemental information or comments to a petition include a verification. Finally, the guidance addresses the relationship between the review of petitions and pending ANDAs and 505(b)(2) applications for which the Agency has not yet made a decision on approvability.

Thus, FDA has OMB approval under the PRA for the information collection required under section 505(q) of the FD&C Act and described in the guidance. This information collection is also described in proposed § 10.31(c) and (d).

There is, however, one proposed provision that would require the collection of information that is not already approved by OMB. Under proposed § 10.35(i), a petitioner may, under certain conditions, supplement, amend, or withdraw a PSA in writing without Agency approval and without prejudice to resubmission at any time until the Commissioner rules on the petition. This proposed provision is explained in section II of this document. FDA estimates that it will receive approximately one supplement, amendment, or withdrawal under proposed § 10.35(i) from approximately one applicant, and that it will take approximately 0.5 hour to make this submission.

The information collection provisions of this proposed rule have been submitted to OMB for review. Interested persons are requested to fax comments regarding information collection by (seeDATESsection of this document) to the Office of Information and Regulatory Affairs, OMB. To ensure that comments on the information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: (202) 395-7285, or emailed tooira_submission@omb.eop.gov.All comments should reference the title of this proposed rule and include the FDA docket number found in brackets in the heading of this document.

FDA has analyzed this proposed rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that the proposed rule, if finalized, would not contain policies that would 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. Accordingly, the Agency tentatively concludes that the proposed rule does not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

Interested persons may submit to the Division of Dockets Management (seeADDRESSES) either electronic or written comments regarding this document. 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.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 10 be amended as follows:

Section 155 of the Dodd-Frank Act directs the Secretary of the Treasury to establish by regulation, and with the approval of the Council, an assessment schedule to collect assessments from certain companies equal to the total expenses of the Office beginning on July 20, 2012. Section 155 describes these companies as:

(A) Bank holding companies having total consolidated assets of $50 billion or more; and

(B) nonbank financial companies supervised by the Board pursuant to section 113 of the Dodd-Frank Act.

Under Section 118 of the Dodd-Frank Act, the expenses of the Council are considered expenses of, and are paid by, the OFR. In addition, under Section 210 implementation expenses associated with the FDIC's orderly liquidation authorities are treated as expenses of the Council,1 and the FDIC is directed to periodically submit requests for reimbursement to the Council Chair. The total expenses for the OFR thereby include the combined expenses of the OFR, the Council, and certain expenses of the FDIC. All of these expenses are paid out of the Financial Research Fund (FRF), a fund managed by the Department of the Treasury.

The Council was established by the Dodd-Frank Act to coordinate across agencies in monitoring risks and emerging threats to U.S. financial stability. The Council is chaired by the Secretary of the Treasury and brings together all federal financial regulators, an independent member with insurance expertise appointed by the President, and state regulators. Under the Dodd-Frank Act, the Council is tasked with identifying and monitoring risks to U.S. financial stability, promoting market discipline, and responding to emerging threats to the U.S. financial system.2

The OFR was established within the Treasury Department by the Dodd-Frank Act to serve the Council, its member agencies, and the public by improving the quality, transparency, and accessibility of financial data and information, by conducting and sponsoring research related to financial stability, and by promoting best practices in risk management. Among the OFR's key tasks are:

• Measuring and analyzing factors affecting financial stability and helping FSOC member agencies to develop policies to promote it;

• Collecting needed financial data, and promoting their integrity, accuracy, and transparency for the benefit of market participants, regulators, and research communities;

• Reporting to the Congress and the public on the OFR's assessment of significant financial market developments and potential threats to financial stability; and

• Collaborating with foreign policymakers and regulators, multilateral organizations, and industry to establish global standards for data and analysis of policies that promote financial stability.

Under this proposed rule, Treasury has developed procedures to estimate, bill and collect, on an ongoing basis beginning on July 20, 2012, the total budgeted expenses of the OFR, including those estimated separately by the Council and expenses submitted by the FDIC. The aggregate of these estimated expenses would provide the basis for an assessment that the Treasury would allocate to individual companies by means of a semiannual assessment fee calculated from a schedule based on each company's total consolidated assets. For a foreign company, the assessment fee would be based on the total consolidated assets of the foreign company's combined U.S. operations.

This proposed rule outlines how the Treasury's assessment fee program would be administered, including (a) how the Treasury would determine which companies will be subject to an assessment fee, (b) how the Treasury would estimate the total expenses thatare necessary to carry out the activities to be covered by the assessment, (c) how the Treasury would determine the assessment fee for each of these companies, and (d) how the Treasury would bill and collect the assessment fee from these companies. Treasury is seeking comments on all aspects of this proposed rulemaking.

The assessment of fees for the companies described in Section 155 of the Dodd-Frank Act requires that the Treasury determine those companies that would be subject to the assessment, referred to for the purpose of this rule as the assessed companies. As described in more detail below, Treasury will work closely with the Board, to determine the population of assessed companies and the basis for fee assessments.

The determination date is the date at which assessed companies are identified. Prior to each assessment period, on the determination date, the Treasury would determine the pool of assessed companies. The determination date for the initial assessment period is anticipated to be December 31, 2011, and the initial assessment period would include part of fiscal year 2012 (July 20, 2012 to September 30, 2012) and the first half of fiscal year 2013 (October 1, 2012 to March 31, 2013). The determination date for the second assessment period, which would include the second half of fiscal year 2013 (April 1, 2013 to September 30, 2013), is anticipated to be December 31, 2012. Thereafter, the determination dates are anticipated to be the June 30 immediately preceding the first assessment period (October 1 to March 31) and the December 31 immediately preceding the second assessment period (April 1 to September 30). A company will be defined as an assessed company for an assessment period if, on the respective determination date, the company is:

• A bank holding company (other than a foreign banking organization), as defined in section 2 of the Bank Holding Company Act of 1956, that has $50 billion or more in total consolidated assets, as determined based on the average total consolidated assets (Schedule HC—Consolidated Balance Sheet) as reported on the bank holding company's four most recent Consolidated Financial Statements for Bank Holding Companies (FR Y-9C; OMB No. 7100-0128) submissions;

• A foreign banking organization that has $50 billion or more in total consolidated assets, as determined based on the average of total assets at end of period (Part 1—Capital and Asset Information for the Top-tier consolidated Foreign Banking Organization) as reported on the foreign banking organization's four most recent Capital and Asset Information for the Top-tier Consolidated Foreign Banking Organization (FR Y-7Q; OMB No. 7100-0125) submissions;3 or

• A nonbank financial company required to be supervised by the Board under section 113 of the Dodd-Frank Act, as determined by the Council.

The Treasury, in consultation with the Board, considered using only the most recent financial report filed by each bank holding company or foreign banking organization to determine whether the company has total consolidated assets of $50 billion or more. However, the Treasury was concerned that relying solely on the financial report of the most recent quarter would not always allow sufficient lead time for the company and the Treasury to prepare for a company's inclusion as an assessed company for an upcoming assessment period. For example, as a company grows and approaches the $50 billion threshold, financial reports of previous quarters may reflect total consolidated assets of slightly less than $50 billion. As the determination date approaches, the Treasury—and to some extent the company—may not be able to determine whether the financial report for the quarter immediately preceding the determination date, when filed, would report total consolidated assets of $50 billion or more. By using an average of total consolidated assets of the four most recent quarters, the Treasury and the company should have ample time to prepare for the company's inclusion in the pool.4

The Treasury would also apply the following provisions in determining which companies would be assessed companies, based upon the most recent data and information filed with or furnished to the relevant regulator.

• For tiered bank holding companies for which a holding company owns or controls, or is owned or controlled by, other holding companies, the assessed company would be the top-tier, regulated holding company.

• In situations where more than one top-tier, regulated bank holding company has a legal authority for control of a U.S. bank, each of the top-tier regulated holding companies would be designated as an assessed company.5

• In situations where a company has not filed four consecutive quarters of the financial reports referenced above for the most recent quarters (or two consecutive years for annual filers of the FR Y-7Q), such as may be true for companies that recently converted to a bank holding company, the Treasury would use, at its discretion, other financial or annual reports filed by the company, such as Securities and Exchange Commission (SEC) filings, to determine a company's total consolidated assets.

• In situations where a company does not report total consolidated assets in its public reports or where a company uses a financial reporting methodology other than U.S. GAAP to report on its U.S. operations, the Treasury would use comparable financial information that the Treasury may require from the company for this determination.

• Any company that the Treasury determines is an assessed company on the determination date would be an assessed company for the entire assessment period and would be subject to the full assessment fee for that assessment period, regardless of any changes (e.g., structural or financial) that occur during the assessment period that would otherwise affect the financial company's status as an assessed company.

• All organizational information regarding the company that would be used by the Treasury for the purpose of determining whether a company is an assessed company, including information with respect to whether a company has control over a U.S. bank, must have been filed with or furnished to the relevant regulator on or before the determination date, and the effective date of the information must have been on or before the determination date.

For each assessment period, the OFR would calculate an assessment basis reflecting an estimate of the total expenses that are necessary or appropriate to carry out the responsibilities of the OFR and the Council as defined in the Dodd-Frank Act.

The assessment basis would be determined so as to replenish the FRF at the start of each assessment period to a level equivalent to six months of budgeted operating expenses and twelve months of capital expenses6 for the OFR and FSOC, as well as covered FDIC expenses. The OFR and Council each produce an annual budget, and would independently estimate the budgetary needs appropriate to carry out their responsibilities under the Dodd-Frank Act.7 The assessment basis would be the combined total of these budgets, with adjustments made as necessary to the second semiannual assessment to meet necessary expenses.8

For the initial assessment, the assessment basis will cover operating expenses and capital expenses for the period from July 21, 2012 to September 30, 2012, covered FDIC expenses for the period from July 21, 2012 to September 30, 2013, and the first six months of operating expenses for the OFR and the FSOC for FY 2013. To smooth the transition in funding the Financial Research Fund, this assessment will be set to cover budgeted capital expenditures for only the first seven months of FY 2013 (in addition to the period from July 21, 2012 to September 30, 2012). Replenishment to the full 12-month level for capital expenditures will begin with the second assessment.

The following principles inform the Treasury's proposed implementation of Section 155:

• The assessment structure should be simple and transparent; and

• Allocation among companies should take into account differences among such companies, based on the considerations for establishing the prudential standards under section 115 of the Dodd-Frank Act as required by the Act.9

In evaluating how best to implement the Dodd-Frank Act, the Treasury believes that there is significant benefit to adopting a standard that is transparent, well-understood by market participants, and reasonably estimable. A number of different assessment schedules for assessing companies were considered, taking into account the considerations described in Section 115 of the Dodd-Frank Act. Ultimately, the Treasury concluded, in balancing the principles above, that it would be reasonable to allocate the assessment basis among assessed companies by means of an assessment fee that is based on the asset size of each assessed company.

Under the proposed rule, the Treasury would allocate the assessment basis to each assessed company in the following manner:

• An assessment fee rate would determine the semiannual assessment fee collected from each assessed company, based on the company's total assessable assets.

• Total assessable assets of each assessed company would be determined by the Treasury on the determination date, as described below.

○ For a bank holding company (other than a foreign banking organization), total assessable assets would be equal to total consolidated assets, as reported on the bank holding company's most recent FR Y-9C;

For a foreign banking organization, total assessable assets would be equal to the company's total assets of combined U.S. operations, as determined by the Treasury, based on the combined total assets of the foreign banking organization's U.S. subsidiaries as reported on the foreign banking organization's most recent financial reports.10 The applicable financialreports of foreign banking organizations used to determine the company's total assets of combined U.S. operations would include the following reports, as applicable:

• FR Y-9C, Parent Company Only Financial Statements for Large Bank Holding Companies (FR Y-9LP), or Parent Company Only Financial Statements for Small Bank Holding Companies (FR Y-9SP) for assets of bank holding companies,

• Report of Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks (FFIEC 002) for assets of U.S branches and agencies of foreign banks,

• Consolidated Reports of Condition and Income for a Bank with Domestic and Foreign Offices (FFIEC 031) for assets of commercial banks and trust companies not reported in the consolidated assets of a bank holding company,

• Consolidated Reports of Condition and Income for a Bank with Domestic Offices Only (FFIEC 041) for assets of commercial banks and trust companies not reported in the consolidated assets of a bank holding company,

• Consolidated Report of Condition and Income for Edge and Agreement Corporations (FR 2886b) for assets of Edge and agreement corporations not reported in the consolidated assets of a bank holding company,

• Financial Statements of U.S. Nonbank Subsidiaries Held by Foreign Banking Organizations (FR Y-7N/FR Y-7NS) for nonbank assets not held under a U.S. bank holding company,

• FOCUS Report, Part II (SEC1695) and FOCUS Report Part IIa (SEC1696) for Broker/Dealer assets not reported in the consolidated assets of a bank holding company;

○ For a nonbank financial company required to be supervised by the Board under section 113 of the Dodd-Frank Act, assessable assets would be calculated on the basis of reported total consolidated assets, if the nonbank financial company is a U.S. company, or on the basis of the company's total assets of combined U.S. operations, if the nonbank financial company is a foreign company;11

○ In situations where a company does not file, or has not filed, the applicable reports referenced above or in situations where a company uses a financial reporting methodology other than U.S. GAAP to report on its U.S. operations, the Treasury would use other financial or annual reports filed by the company, such as Securities and Exchange Commission (SEC) filings or any comparable financial information, that the Treasury may require from the company to determine the company's total assessable assets.

• Assessed companies would include:

○ U.S. bank holding companies having total consolidated assets of $50 billion or more;

○ Foreign banking organizations having total consolidated U.S. assets of $50 billion or more; and

○ Nonbank financial companies supervised by the Board pursuant to Section 113 of the Dodd-Frank Act.

• Eligible foreign banking organizations with $50 billion in total consolidated world-wide assets, but less than $50 billion in total assessable assets, would not be charged.

A Notice of FRF Fees (“Notice of Fees”) would be published prior to each assessment period. The Notice of Fees would incorporate an assessment fee schedule providing the rate that would be used to calculate the semiannual assessment fee for each assessed company.

Under the approach outlined in this proposed rule, the semiannual fee that an individual company would be assessed would likely vary, at least somewhat, from one assessment period to the next. A company's assessment fee would depend on the assessment basis for each period, the number of assessed companies that the Treasury determines for the period, and the relative asset size of each company within that pool of assessed companies. To determine the rate for calculating each company's semiannual assessment fee, the Treasury would first need to determine the pool of assessed companies and those companies' total assessable assets. The rate would be modified each assessment period to produce assessment fees that, when aggregated for all assessed companies, would equal the assessment basis for the respective assessment period.

Because of the role of the pool of assessed companies in determining the rate used for the assessment fee schedule, companies identified as assessed companies will have an opportunity to contest Treasury's determination. Each company that the Treasury determines is an assessed company for the assessment period would be sent a confirmation statement about two weeks after the determination date, but no later than 30 calendar days prior to the first day of an assessment period. The confirmation statement would confirm that the company had been determined by the Treasury to be an assessed company and would state the total assessable assets that the Treasury determined would be used for calculating the company's semiannual assessment. Companies may contest Treasury's determination of the company as an assessed company or the Treasury's determination of the company's total assessable assets by providing an appeal to the Treasury. Treasury must receive such notice within 14 calendar days of the date of the confirmation statement to be considered.

To contest any aspect of the confirmation statement, the company would be required to submit to the Treasury a written request for redetermination that would need to include all the pertinent facts that would be necessary for the Treasury to consider in a redetermination. If the Treasury does not receive a written request for redetermination from a company within 14 calendar days of the date of the confirmation statement, the company would be invoiced, and subsequently charged, for the semiannual assessment fee calculated from the company's total assessable assets reflected in the confirmation statement. If the Treasury receives a written request for redetermination from a company within the 14 calendar day period, the Treasury would consider the company's request and respond with the results of a redetermination no later than 14 calendar days, if the Treasury concludes that a redetermination is warranted.

After the determination date, should a company restate its submission of any financial report described in this rule in a manner that either materially increases or decreases the company's total consolidated assets or total assessable assets, the Treasury would not adjust its determination of a company as an assessed company, its determination of the company's total assessable assets, or the resulting semiannual assessment fee for the assessment period. Since this proposed rule is designed to allocate the transfers to the Treasury necessary to support the duties of the FSOC and the OFR duringeach period, changes to one company's assessment for a particular period would necessitate a change in all the other companies' assessments so that the aggregate of all assessment fees equaled the assessment basis for the period. The Treasury believes that the burden and uncertainty that such changes would bring are too high to warrant attempting to delineate a process to allow changes to the information used by the Treasury to make its determinations, or adjust the company's semiannual fee determined by the published assessment fee schedule. The Treasury does reserve the right to correct an assessment to a company if the original assessment is found to have been made based upon materially misrepresented or misstated information.

Treasury would publish the Notice of Fees about one month prior to the payment date for the assessment period, once the Treasury has assured its determination of the pool of assessed companies for the assessment period.

For the initial assessment period including the end of fiscal year 2012 (July 20, 2012 to September 30, 2012) and first half of fiscal year 2013 (October 1, 2012 to March 31, 2013), the corresponding confirmation statement would be sent to the assessed companies on the day the final rule is published and Treasury will work with the companies to verify the total assessable assets to be used for calculating the company's assessment. The corresponding Notice of Fees would be published about one month prior to the first payment, which would be due on the date the rule becomes in effect.

An assessment fee rate published prior to each assessment period would determine the semiannual assessment fee that the Treasury would collect from each assessed company based on their total assessable assets as of the determination date.

• The Treasury would publish the assessment fee rate for each assessment period as part of the Notice of Fees.

• To determine the assessment fee, a company's total assessable assets would be multiplied by the assessment fee rate. The resulting product would be the amount of the semiannual assessment fee for that company.

Prior to each assessment period, after determining the pool of assessed companies and publishing an assessment fee rate, the Treasury would calculate the assessment fee for each assessed company, send an electronic billing notification to each assessed company, and, on the payment date, initiate a direct debit to each company's account throughwww.pay.govto collect the assessment fee.

The table below shows proposed dates of the assessment billing and collection process:

The first time a company is determined an assessed company, Treasury will send, in conjunction with the confirmation statement, instructions on how to establish an account withwww.pay.govfor direct debits. As part of these instructions, each assessed company would be required to designate a deposit account and authorize the Treasury to initiate an electronic debit transaction from that account to satisfy the assessment fee by completing the FRF Assessment Fee Agreement Form (“agreement form”). The agreement form asks for contact information for the account holder, including the appropriate account (ABA) routing number. The agreement form should be completed by the date indicated in the instructions, which would be about two weeks after the confirmation statement is issued and, thereafter, maintained for all subsequent assessment periods for which the company would be subject to assessment. The agreement form authorizing an electronic debit transaction would remain in effect for all subsequent assessments unless the assessed company or account holder submits a modified agreement form to the Treasury. For the initial assessment period including the end of fiscal year 2012 (July 20, 2012 to September 30, 2012) and first half of fiscal year 2013 (October 1, 2012 to March 31, 2013), theagreement form would be sent in conjunction with the confirmation statement on the day the final rule is published and Treasury will work with the companies to complete the agreement form.

Fourteen calendar days prior to the payment date, the Treasury will issue an electronic billing notification, and on the payment date, throughwww.pay.gov,would initiate an electronic debit transaction for each assessed company.

The Regulatory Flexibility Act (RFA), 5 U.S.C. 601et. seq.,requires agencies to prepare an initial regulatory flexibility analysis (IRFA) to determine the economic impact of the proposed rule on small entities. Section 605(b) allows an agency to prepare a certification in lieu of an IRFA if the proposed rule will not have a significant economic impact on a substantial number of small entities. Pursuant to 5 USC 605(b), it is hereby certified that this proposed rule will not have a significant economic impact on a substantial number of small entities. The size standard for determining whether a bank holding company or a nonbank financial company is small is $7 million in average annual receipts. Under Section 155 of the Dodd-Frank Act, only bank holding companies with more than $50 billion in total consolidated assets or nonbank financial companies regulated by the Federal Reserve will be subject to assessment. As such, this proposed rule will not apply to small entities and a regulatory flexibility analysis is not required.

We estimate that there are certain direct costs associated with complying with these rules. On a one time basis, assessed entities would be required to set up a bank account for fund transfers and provide the required information to the Treasury Department through an information collection form. The information collection form includes bank account routing information and contact information for the individuals at the company that will be responsible for setting up the account and ensuring that funds are available on the billing date. We estimate that approximately 50 companies could be affected, and that filling out the form and submitting it to the Treasury Department would take approximately fifteen minutes. The aggregate paper work burden is estimated at 12.5 hours. We note that this represents a conservative estimate of administrative burden, as some of these companies may have already established an account for payments or collections to the U.S. government.

On a semi-annual basis, assessed companies will have the opportunity to review the confirmation statement and assessment bill. The rules do not require the companies to conduct the review, but it does permit it. We anticipate that at least some of the companies will conduct reviews, in part because the cost associated with it is very low.

The collection of information contained in this proposed rule has been submitted to the Office of Management and Budget (OMB) for review under the requirements of the Paperwork Reduction Act, 44 U.S.C. 3507(d).

Organizations and individuals desiring to submit comments concerning the collection of information in the proposed rule should direct them to: Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, or by email tooira_submission@omb.eop.gov.A copy of the comments should also be sent to Treasury at the addresses previously specified. Comments on the collection of information should be received by March 5, 2012.

Treasury specifically invites comments on: (a) Whether the proposed collection of information is necessary for the proper performance of the mission of Treasury, and whether the information will have practical utility; (b) the accuracy of the estimate of the burden of the collections of information (see below); (c) ways to enhance the quality, utility, and clarity of the information collection; (d) ways to minimize the burden of the information collection, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to maintain the information.

The information collections are included in § 150.6.

It has been determined that this regulation is a significant regulatory action as defined in Executive Order 12866 as supplemented by Executive Order 13563, in that this rule would have an annual effect on the economy of $100 million or more. Accordingly, this proposed rule has been reviewed by the Office of Management and Budget. The Regulatory Impact Assessment prepared by Treasury for this regulation is provided below.

Section 155 of the Dodd-Frank Act directs the Board to provide funding sufficient to cover the expenses of the OFR and FSOC during the two-year period following enactment. (The Dodd-Frank Act was enacted on July 21, 2010.) To provide funding after July 21, 2012, Section 155(d) of the Dodd-Frank Act directs the Secretary of the Treasury to establish by regulation, and with the approval of the FSOC, an assessment schedule for bank holding companies with total consolidated assets of $50 billion or greater and nonbank financial companies supervised by the Board.

Section 155(d) of the Dodd-Frank Act defines the population of assessed companies as bank holding companies with total consolidated assets of $50 billion or greater and nonbank financial companies supervised by the Board.

Under this definition, U.S. bank holding companies and foreign banking organizations with $50 billion or more in total worldwide consolidated assets and nonbank financial companies supervised by the Board qualify for assessment. However, under the proposed rule only U.S.-based assets from foreign banking organizations' would be used to calculate their assessments. Foreign banking organizations with less than $50 billion in U.S.-based assets would not be assessed. Based on information provided by the Board, we estimate that forty-eight bank holding companies met the criteria as assessed companies as of June 30, 2011.

Nonbank financial companies determined by the FSOC to require heightened supervision under Title I would be assessed on the basis of their total consolidated assets for U.S. entities and on the basis of total consolidated assets of U.S. operations for foreign entities, similar to bank holding companies. All such nonbank financial companies would be assessed, regardless of their level of total consolidated assets.12

When we make a finding that a petition presents substantial information indicating that listing a species may be warranted, we are required to promptly review the status of the species (status review). For the status review to be complete and based on the best available scientific and commercial information, we request information on Sierra Nevada red fox from governmental agencies, Native American tribes, the scientific community, industry, and any other interested parties. We seek information on:

(1) The species' biology, range, and population trends, including:

(a) Habitat requirements for feeding, breeding, and sheltering;

(b) Genetics and taxonomy;

(c) Historical and current range, including distribution patterns;

(d) Historical and current population levels, and current and projected trends; and

(e) Past and ongoing conservation measures for the species, its habitat, or both.

(2) The factors that are the basis for making a listing determination for a species under section 4(a) of the Act (16 U.S.C. 1531et seq.), which are:

(a) The present or threatened destruction, modification, or curtailment of its habitat or range;

(b) Overutilization for commercial, recreational, scientific, or educational purposes;

(c) Disease or predation;

(d) The inadequacy of existing regulatory mechanisms; and

(e) Other natural or manmade factors affecting its continued existence.

If, after the status review, we determine that listing Sierra Nevada red fox is warranted, we will propose critical habitat (see definition in section 3(5)(A) of the Act) under section 4 of the Act, to the maximum extent prudent and determinable at the time we propose to list the species. Therefore, we also request data and information on:

(1) What may constitute “physical or biological features essential to the conservation of the species,” within the geographical range currently occupied by the species;

(2) Where these features are currently found;

(3) Whether any of these features may require special management considerations or protection;

(4) Specific areas outside the geographical area occupied by the species that are “essential for the conservation for the species”; and

(5) What, if any, critical habitat you think we should propose for designation if the species is proposed for listing, and why such habitat meets the requirements of section 4 of the Act.

Please include sufficient information with your submission (such as scientific journal articles or other publications) to allow us to verify any scientific or commercial information you include.

Submissions merely stating support for or opposition to the action under consideration without providing supporting information, although noted, will not be considered in making a determination. Section 4(b)(1)(A) of the Act directs that determinations as to whether any species is an endangered or threatened species must be made “solely on the basis of the best scientific and commercial data available.”

You may submit your information concerning this status review by one of the methods listed inADDRESSES. If you submit information viahttp://www.regulations.gov,your entire submission—including any personal identifying information—will be posted on the Web site. If your submission is made via a hardcopy that includes personal identifying information, you may request at the top of your document that we withhold this personal identifying information from public review. However, we cannot guarantee that we will be able to do so. We willpost all hardcopy submissions onhttp://www.regulations.gov.

Information and supporting documentation that we received and used in preparing this finding is available for you to review athttp://www.regulations.gov,or by appointment during normal business hours at the U.S. Fish and Wildlife Service, Sacramento Fish and Wildlife Office (seeFOR FURTHER INFORMATION CONTACT).

Section 4(b)(3)(A) of the Act requires that we make a finding on whether a petition to list, delist, or reclassify a species presents substantial scientific or commercial information indicating that the petitioned action may be warranted. We are to base this finding on information provided in the petition, supporting information submitted with the petition, and information otherwise available in our files. To the maximum extent practicable, we are to make this finding within 90 days of our receipt of the petition and publish our notice of the finding promptly in theFederal Register.

Our standard for substantial scientific or commercial information within the Code of Federal Regulations (CFR) with regard to a 90-day petition finding is “that amount of information that would lead a reasonable person to believe that the measure proposed in the petition may be warranted” (50 CFR 424.14(b)). If we find that substantial scientific or commercial information was presented, we are required to promptly conduct a species status review, which we subsequently summarize in our 12-month finding.

On April 27, 2011, we received a petition dated April 27, 2011, from the Center for Biological Diversity, requesting that Sierra Nevada red fox be listed as endangered or threatened, and that critical habitat be designated under the Act. The petition clearly identified itself as such and included the requisite identification information for the petitioner, as required by 50 CFR 424.14(a). In a May 24, 2011, letter to the petitioner, we responded that we reviewed the information presented in the petition and determined that issuing an emergency regulation temporarily listing the species under section 4(b)(7) of the Act was not warranted. We also stated that we were required to complete a significant number of listing and critical habitat actions in Fiscal Year 2011 pursuant to court orders, judicially approved settlement agreements, and other statutory deadlines, but that we had secured funding for Fiscal Year 2011 to allow publication of a finding in theFederal Registerin early Fiscal Year 2012. This finding addresses the petition.

Sierra Nevada red fox is classified in the mammalian order Carnivora, family Canidae, and is one of 10 subspecies of red fox recognized in North America (Lariviére and Pashitschniak-Arts 1996, pp. 1-2; Aubry 1997, p. 55). The Sierra Nevada red fox can be distinguished from other red fox subspecies based on morphology, coloration, and habitat use (Roest 1977, p. 13). The Sierra Nevada red fox was first described by Merriam (1900, as cited in Roest 1977, p. 1) as the speciesVulpes necator,but was considered by Grinnellet al.(1937, p. 377) to be a subspecies of the red fox. The scientific community continues to recognize the Sierra Nevada red fox as a subspecies (Roest 1977, p. 1; Lariviére and Pashitschniak-Arts 1996, pp. 1-2; Aubry 1997, p. 55; Sachset al.2010, p. 1542). Therefore, we accept the classification of the Sierra Nevada red fox as a subspecies of the red fox.

The red fox is a relatively small canid with an elongated snout, large ears, slender legs and body, and a bushy tail with a white tip (Lariviére and Pashitschniak-Arts 1996, p. 2; Aubry 1997, p. 55). Sierra Nevada red fox is typically red, but can occur in black or silver phases (Grinnellet al.1937, p. 377; Roest 1977, p. 1), and is generally smaller than other red fox subspecies in North America (California Department of Fish and Game (CDFG) 1987, p. 3).

Historically, Sierra Nevada red fox occupied high-elevation areas of the Sierra Nevada and Cascade mountain ranges in California (Zielinskiet al.2005, p. 1389), ranging from Tulare County north to Sierra County, and from the vicinity of Lassen Peak and Mt. Shasta west to the Trinity Mountains in Trinity County (Grinnellet al.1937, p. 381). However, a recent study by Sachset al.(2010, p. 1536) indicates that the historical range of Sierra Nevada red fox includes the southern Cascade mountain range in Oregon, as far north as the Columbia River. The current distribution of Sierra Nevada red fox is believed to be restricted to two small populations: one in the vicinity of Lassen Peak (Perrine 2005, p. 105; California Natural Diversity Database (CNDDB) 2011, pp. 54-60) and the other in the vicinity of Sonora Pass (Perrineet al.2010, notes in proof; CNDDB 2011, pp. 54-60). Although its entire historical range was not surveyed, systematic surveys by Zielinskiet al.(2005, p. 62010, p1389) failed to detect Sierra Nevada red fox. The U.S. Forest Service recently conducted carnivore surveys on National Forest System lands throughout the Sierra Nevada using track plates and remotely triggered cameras, but Sierra Nevada red fox were detected only in the Lassen National Forest and Humboldt-Toiyabe National Forest (Perrineet al.2010, notes in proof and p. 8). Current population levels of Sierra Nevada red fox are unknown, but the subspecies is believed to occur at very low density (Perrineet al.2010, p. 9).

While the red fox is one of the most studied carnivores, little is known about Sierra Nevada red fox ecology (Perrineet al.2010, p. 14). Sierra Nevada red fox is one of three high-elevation montane subspecies referred to as mountain foxes (Aubry 1997, p. 55). It is found in alpine and subalpine habitats typically above 1,525 meters (m) (5,000 feet (ft)) elevation, including meadows, dense mature forests, talus (rocks accumulated at the base of a cliff, chute, or slope), and fell fields (treeless rock-strewn areas dominated by scattered plants or grasses) (Perrineet al.2010, p. 18; CNDDB 2011, pp. 1-60). Radio telemetry data indicate that Sierra Nevada red fox are most active at dusk and at night (Perrine 2005, p. 114). Habitat use by Sierra Nevada red fox varies seasonally. During the summer (generally June to November (Perrine 2005, p. 160)), they prefer barren, high-elevation habitats (Perrine 2005, p. 137) and utilize high-elevation shrub and conifer communities in proportion to their availability (Perrine 2005, p. 161). During the winter (generally November to June (Perrine 2005, p. 160)), they are associated with mature closed-canopy forest (Perrine 2005, p. 163) and preferentially select forested areas for travel, possibly to avoid deep snow (Bensonet al.2005, p. 128). A study of Sierra Nevada red fox in the vicinity of Lassen Peak suggests that the subspecies requires large home ranges averaging 2,323 hectares (ha) (5,740 acres (ac)), with individual home ranges ranging from 262 ha (647 ac) to 6,981 ha (17,250 ac) (Perrine 2005, p. 137). The Sierra Nevada red fox demonstrates seasonal elevation migration, moving to lower elevations during the winter months (Perrineet al.2010, p. 21), presumably to areas where prey are more readily available due to lower snow depths (Perrine 2005, p. 146). Sierra Nevada red fox, like other red fox in North America, appear to be opportunistic predators and foragers, with a diet primarily composed of small rodents (Perrineet al.2010, p. 24).

Little is known about Sierra Nevada red fox reproductive biology. Other red fox subspecies are predominatelymonogamous and mate over several weeks in the late winter and early spring (Aubry 1997, p. 57). The gestation period for red fox is 51 to 53 days, with birth occurring from March through May in sheltered dens. Sierra Nevada red fox have been documented to use natural openings in rock slides, talus, and riven (broken) granite as denning sites (Grinnellet al.1937, p. 394), and it is likely that earthen dens are also used (Aubry 1997, p. 58). Grinnellet al.(1937, p. 394) reports that litter size averages six pups with a range of three to nine pups; however, recent evidence suggests that litter sizes of two to three is more typical (Perrine 2005, p. 152). The pups are weaned by 8 to 10 weeks of age, begin exploring their parents' home range by 12 weeks, and disperse in the early fall when fully grown (Perrineet al.2010, pp. 14-15).

Section 4 of the Act (16 U.S.C. 1533) and its implementing regulations at 50 CFR part 424 set forth the procedures for adding a species to, or removing a species from, the Federal Lists of Endangered and Threatened Wildlife and Plants. A species may be determined to be an endangered or threatened species due to one or more of the five factors described in section 4(a)(1) of the Act:

(A) The present or threatened destruction, modification, or curtailment of its habitat or range;

(B) Overutilization for commercial, recreational, scientific, or educational purposes;

(C) Disease or predation;

(D) The inadequacy of existing regulatory mechanisms; or

(E) Other natural or manmade factors affecting its continued existence.

In considering what factors might constitute threats, we must look beyond the mere exposure of the species to the factor to determine whether the species responds to the factor in a way that causes actual impacts to the species. If there is exposure to a factor, but no response, or only a positive response, that factor is not a threat. If there is exposure and the species responds negatively, the factor may be a threat and we then attempt to determine how significant a threat it is. If the threat is significant, it may drive or contribute to the risk of extinction of the species such that the species may warrant listing as endangered or threatened as those terms are defined by the Act. This does not necessarily require empirical proof of a threat. The combination of exposure and some corroborating evidence of how the species is likely impacted could suffice. The mere identification of factors that could impact a species negatively may not be sufficient to compel a finding that listing may be warranted. The information shall contain evidence sufficient to suggest that these factors may be operative threats that act on the species to the point that the species may meet the definition of endangered or threatened under the Act.

In making this 90-day finding, we evaluated whether information regarding threats to Sierra Nevada red fox, as presented in the petition and other information available in our files, is substantial, thereby indicating that the petitioned action may be warranted. Our evaluation of this information is presented below.

The petition asserts that Sierra Nevada red fox habitat is threatened by logging, fire suppression, domestic livestock grazing, and recreation, including over-snow vehicle (OSV) (such as snowmobile) and off-road vehicle (ORV) use. The petition also states that the structural changes associated with logging and fire suppression activities could facilitate invasion by coyotes and nonnative red fox, resulting in increased competition, predation, and possible interbreeding with nonnative red fox (Center for Biological Diversity 2011, pp. 18 and 22). Predation related to logging is discussed under Factor C, while competition and interbreeding is discussed under Factor E.

The petition claims that logging has reduced the extent of old conifer forest by 82 percent within the southern Cascade mountains and by 79 percent within the eastern Cascade mountain forests, with similar reductions in the Sierra Nevada (Center for Biological Diversity 2011, p. 18). Perrine (2005, p. 137) found that Sierra Nevada red fox detections were positively associated with dense, mature, mid-elevation forests exhibiting canopy cover greater than 40 percent and trees larger than 60 centimeters (cm) (23.6 inches (in)) diameter at breast height. Winter home ranges of Sierra Nevada red fox are dominated by Sierran mixed conifer, red and white fir communities in which fox use the cavities under logs and trees, and tree wells (area of loose or no snow around the trunk of a tree), as day rest sites (Perrine 2005, p. 146; Center for Biological Diversity 2011, p. 17). The petitioners state that the removal of the large trees that form tree wells or that fall and provide cavities that Sierra Nevada red fox use as day rests, as well as the structural changes of forest complexity associated with logging, render habitats less suitable for Sierra Nevada red fox (Center for Biological Diversity 2011, pp. 17-18).

Approximately 80 percent of Sierra Nevada red fox's range occurs on National Forest System Lands (Center for Biological Diversity 2011, p. 11). Historical logging activities in the Sierra Nevada have resulted in the reduction of habitat that may be used by the Sierra Nevada red fox. Prior to logging in the Sierra Nevada, suitable forested habitat was projected to occur on 55 percent of National Forest lands, while logging reduced the suitable habitat to 13 percent of National Forest lands (SNEP 1996, p. 99). The largest extant population of Sierra Nevada red fox occurs in the vicinity of Lassen Peak within both Lassen National Park and Lassen National Forest. Lassen National Forest currently has planned fuels treatment projects that may affect approximately 19,584 ha (48,392 ac), including approximately 929 ha (2,296 ac) that contain habitat suitable for red fox (USDA Forest Service 2009, pp. 509-510). Although forested habitats utilized by Sierra Nevada red fox have historically undergone logging or fuels treatment activities, and future treatment is planned in suitable habitat that may be occupied by the fox, neither the petition nor our files contain information about potential ongoing or future threats that may occur as a result of logging activities. Although the information does not support the petitioner's assertions on this subject, we will further consider effects that logging may have on the subspecies' habitat in our status review.

The petition asserts that fire suppression activities impact the natural role of fire in developing the habitat components used by Sierra Nevada red fox (Center for Biological Diversity 2011, p. 22). The petition also states that forest openings, fell fields, and early-seral (period from disturbance to crown closure of conifer stands) post-fire habitats are important components for Sierra Nevada red fox as these areas provide habitat for a majority of the fox's prey base (Center for Biological Diversity 2011, p. 22). Finally, the petition claims that fire suppressionactivities may result in direct impacts to Sierra Nevada red fox, as well as alter and fragment the structure of the habitat. The potential for fire suppression activities to directly impact Sierra Nevada red fox individuals is addressed under Factor E below.

We do not have any information in our files, nor does the petition provide specific information, on the reduction or fragmentation of foraging habitat for Sierra Nevada red fox due to fire suppression. The petition also does not document that wildfire is necessary to create or maintain this foraging habitat. While the petition does provide general information about historical fire intervals in the Sierra Nevada, it does not provide any specific information about fire intervals or the likelihood of future fires within Sierra Nevada red fox's current range. Although the information does not support the petitioner's assertions on this subject, we will further consider effects that fire suppression activities may have on the subspecies' habitat in our status review.

The petition states that domestic livestock grazing impacts Sierra Nevada red fox foraging habitat by removing the vegetative habitat components that support their prey (Center for Biological Diversity 2011, p. 20). Because the information presented in the petition is related more closely to prey availability than Sierra Nevada red fox habitat, the threat from domestic livestock grazing will be discussed below in Factor E.

The petition asserts that recreational activities (including OSV, ORV, dirt bike activity, hiking, and camping) can degrade Sierra Nevada red fox habitat, interfere with normal behavior, and cause shifts in habitat use. The petition did not include any information on the habitat alteration other than to state that habitat degradation occurs. All recreational impacts presented in the petition are related to direct impacts to the subspecies, such as death, injury, increased competition, or behavioral changes, which are discussed under Factor E.

We do not have any information in our files, nor does the petition provide any information, on the degradation of Sierra Nevada red fox habitat due to recreation.

Although the information does not support the petitioner's assertions on this subject, we will further consider effects that recreation may have on the subspecies' habitat in our status review.

The petitioner states that Sierra Nevada red fox habitat is threatened by logging, fire suppression, domestic livestock grazing, and recreation (including OSV and ORV use). While the petition provides information about historical impacts to habitat from logging and fire suppression, it does not provide any information about current or future threats due to logging and fire suppression practices within the subspecies' range. Our files contain some information about proposed fuels treatment projects on the Lassen National Forest that would be within the subspecies' range. However, we have no information available in the petition or our files to indicate that Sierra Nevada red fox individuals or populations respond negatively to habitat impacts resulting from logging and fire suppression, nor do we have information regarding potential ongoing or future threats that may occur as a result of these activities. Although the information does not support the petitioner's assertions about activities discussed above, we will further investigate whether the present or threatened destruction, modification, or curtailment of its habitat or range is threatening the subspecies in our status review.

The petition asserts that Sierra Nevada red fox is threatened by accidental capture or poaching in California, Oregon, and Nevada, and by legal trapping in Oregon and Nevada (Center for Biological Diversity 2011, pp. 24-25).

Sierra Nevada red fox's current range is restricted to two areas of California (Perrine 2005, p. 105; CNDDB 2011, pp. 54-60), a State in which hunting for Sierra Nevada red fox is prohibited (Title 14 California Code of Regulations Section 460). California does allow hunting and trapping of other furbearing animals, and it is possible that Sierra Nevada red fox could be accidentally trapped (Center for Biological Diversity 2011, p. 25). However, neither the petition nor Service files present any evidence of incidental killing of Sierra Nevada red fox while trapping other furbearers. Trapping of Sierra Nevada red fox is allowed in the adjacent States of Oregon and Nevada; however, Sierra Nevada red fox is not known to occur in these States.

The information provided in the petition and in our files does not indicate that any impact from overutilization is occurring to Sierra Nevada red fox. However, we will further investigate overutilization for commercial, recreational, scientific, or educational purposes in our status review for this subspecies.

The petition states that Sierra Nevada red fox is threatened by salmon poisoning disease, disease transmission by domestic dogs, and increased coyote predation due to recreation activities, logging, and fire suppression activities in logged forests (Center for Biological Diversity 2011, pp. 21-28).

The petition states that Sierra Nevada red fox are threatened by salmon poisoning disease (SPD), which is found in wild populations of salmonid fish in northern California, Oregon, and Washington, but also could be spread to other areas through fish stocking, and is fatal to dogs, foxes, and other canids (Center for Biological Diversity 2011, p. 25). Salmon poisoning disease is caused byNeorickettsia helminthoeca,a bacteria that can be carried by trout and salmon. If an infected fish is ingested by a dog or other canid, the bacteria can result in fever, anorexia, vomiting, and bloody diarrhea, with a 90 percent mortality rate if untreated (Rikihisaet al.1991, p. 1928). The disease has also been detected in at least three State hatcheries and four private farms in northern California (Perrineet al.2010, p. 28).

If infected trout and salmon are present in waters within Sierra Nevada red fox's current range and Sierra Nevada red fox consume infected fish, the likelihood of red fox mortality is high (Perrineet al.2010, p. 28). The petition provides a list of 47 water bodies within the subspecies' approximate current range that were stocked with trout or salmon by CDFG between 2002 and 2006 (Center for Biological Diversity 2011, Appendix B). The petitioner indicates that potentialexposure of the Sierra Nevada red fox to infected fish is a threat to the subspecies.

The petition also claims that the risk of Sierra Nevada red fox exposure to SPD is increased by fire retardant use (Center for Biological Diversity 2011, p. 28). Fire retardants are used on National Forest lands to combat wildfires. Exposure of fish to these retardants is known to result in substantial fish kills (USFWS 2008, p. 30). While the risk is small, if fire retardants were used in an SPD-infected waterway within the current range of the subspecies, the threat of SPD to Sierra Nevada red fox would be increased by the fox foraging on dead fish.

SPD has been documented in both hatchery and wild salmonids in northern California (Perrineet al.2010, p. 28). In order to limit the spread of SPD beyond this area, CDFG does not allow salmonids from their northern California hatcheries to be stocked south of the Feather River (Beale 2011, pers. comm.). The Sierra Nevada red fox population in the Sonora Pass area is located far to the south of the Feather River, where the potential for stocking infected fish does not exist. Therefore, only the fox population in the vicinity of Lassen Peak has the potential to be impacted by SPD. Because SPD has been documented in both hatchery and wild fish populations in northern California (Perrineet al.2010, p. 28), it is likely that this disease occurs within the range of the Sierra Nevada red fox. Within the area where the disease occurs, Sierra Nevada red fox may be exposed to infected fish as the result of scavenging for dead fish, misapplication of aerial fish stocking, or the use of dead salmonids as bait for camera stations (Perrineet al.2010, p. 28).

Although salmonid mortality from the use of fire retardants could potentially increase exposure of Sierra Nevada red fox to SPD, current guidelines minimize exposure of salmonids to fire retardants. The aerial application of fire retardant by the U.S. Forest Service is governed by guidelines that provide for a 91-m (300-ft) buffer around all aquatic features (USDA Forest Service 2011a, p. 7). Additionally, based on calculations of misapplication over the past 3 years, there is a 0.42 percent chance of fire retardant being applied to aquatic features (USDA Forest Service 2011a, p. 104). Although mortality of salmonids due to fire retardant application may be high, the likelihood that fire retardant will cause the mortality of salmonids infected by SPD and that Sierra Nevada red fox will consume the dead infected fish is extremely low. Therefore, we do not anticipate that the use of fire retardants will appreciably contribute to the spread of the disease.

Given the high mortality associated with SPD disease in canids, and the potential pathways for exposure of Sierra Nevada red fox to SPD as the result of fish stocking in the Lassen National Forest area, we find that the information provided in the petition, as well as other information in our files, presents substantial scientific or commercial information indicating that the petitioned action may be warranted due to transmission of SPD. We will review the possible effects of SPD to Sierra Nevada red fox more thoroughly in our 12-month status review.

The petition asserts that exposure of Sierra Nevada red fox to domestic dogs places them at risk of attack, death, or diseases such as rabies, sarcoptic mange, canine distemper, and parvovirus (Center for Biological Diversity 2011, p. 28).

The petition asserts that the risk of domestic dog predation and disease is associated with the presence of roads and recreational sites within the subspecies' range (Center for Biological Diversity 2011, p. 22). Pierreet al.(2010, p. 28) found that road development and recreational sites within the Sierra Nevada red fox's range increases the risk of interaction with domestic pets and exposure to diseases.

Diseases commonly associated with domestic dogs have been documented in other subspecies of red fox, and can be fatal (Littleet al.1998, p. 623). Both Lassen National Park and Lassen National Forest contain recreation areas that are within the Sierra Nevada red fox's current range (Perrine 2005, p. 149; USDA Forest Service 2009, p. 510). A number of documented sightings have occurred in campgrounds, in parking areas, and along roads in Lassen National Park where Sierra Nevada red foxes have begged for food from humans (Perrine 2005, p. 28). The use of these areas by humans and their domestic dogs increases the risk of transmitting diseases such as canine distemper, rabies, and sarcoptic mange to Sierra Nevada red fox (Perrineet al.2010, p. 28), leading to a decreased level of fitness and potential mortality. In a radiotelemetry study of Sierra Nevada red fox in the Lassen Peak area, Perrine (2005, p. 141) documented mortality of three collared individuals, attributing the death of one directly to a dog attack. Given that the Sierra Nevada red fox populations are believed to be small in number and restricted to two locations (Perrine 2005, p. 105; CNDDB 2011, pp. 54-60), an outbreak of canine distemper or other lethal disease, as well as predation by domestic dogs, could have a population-level impact. Therefore, we conclude that there is substantial information in the petition and in our files to indicate that attacks and transmission of disease from domestic dogs may be a threat to Sierra Nevada red fox.

The petition claims that changes in forest structure resulting from logging, recreation, and fire suppression facilitate the movement of coyotes into the Sierra Nevada red fox's range (Center for Biological Diversity 2011, pp. 18-22). The petition further claims that increased presence of coyotes could result in increased predation upon Sierra Nevada red fox, thus potentially reducing their population and reproductive success.

The petition does not provide any information, nor do we have any in our files, to indicate that changes in forest structure resulting from logging, recreation, and fire suppression facilitate the movement of coyotes into the Sierra Nevada red fox's range. The abundance and distribution of coyotes has been demonstrated to affect the distribution of the red fox in North Dakota (Sargeantet al.1987, p. 291), and, although no predation of red fox by coyotes was observed in this study, numerous accounts of coyotes predating upon red fox have been documented (Sargeant and Allen 1989, p. 631). In the Lassen Peak area, Perrine (2005, pp. 83-84) documented range overlap of Sierra Nevada red fox and coyotes, especially in summer habitat use. As coyotes are known to prey upon foxes and occur in areas occupied by the Sierra Nevada red fox, predation of the Sierra Nevada red fox by coyotes is likely. Because the subspecies is believed to occur at a very low density (Perrineet al.2010, p. 9), predation by coyotes could significantly impact the population. Therefore, we conclude that there is substantial information in our files to indicate thatcoyote predation may be a threat to Sierra Nevada red fox. We will review the possible effects of coyote predation on Sierra Nevada red fox more thoroughly in our 12-month status review.

The petition states that Sierra Nevada red fox is threatened by SPD, disease transmission by domestic dogs, and increased coyote predation in logged forests. The information contained in the petition and in our files indicates that SPD has been found in California and has the potential to be introduced to water bodies within the subspecies' range. In addition, diseases carried by domestic dogs are known to kill red fox, and the petition provides information about the presence of Sierra Nevada red fox at recreational sites where they could interact with humans and their pets. While the Perrine (2005, pp. 1-191) study did not document the predation of Sierra Nevada red fox by coyotes, coyotes are known to kill and prey upon red fox in other areas, and there is range overlap between Sierra Nevada red fox and coyotes. In summary, we find that the information presented in the petition and in our files presents substantial information indicating that the petitioned action may be warranted due to the threat of disease or predation.

The petition asserts that Sierra Nevada red fox are threatened by inadequate regulatory mechanisms, such as the National Environmental Policy Act (NEPA; 42 U.S.C. 4321et seq.), the Sierra Nevada Forest Plan Amendment (SNFPA), the Northwest Forest Plan (NWFP), climate change initiatives, the California Endangered Species Act (CESA), as well as Oregon and California hunting regulations (Center for Biological Diversity 2011, pp. 28-32).

The petition states that NEPA requires a Federal agency to analyze the impacts of proposed activities on Sierra Nevada red fox, but does not require the agency to select an alternative with the least impacts to the subspecies, nor require the agency to mitigate project impacts (Center for Biological Diversity 2011, p. 32). The petition asserts that the SNFPA provides an outline of discretionary measures that the U.S. Forest Service may implement for the protection of Sierra Nevada red fox; however, discretionary actions are not adequate to protect Sierra Nevada red fox because National Forests are managed for multiple resource objectives (Center for Biological Diversity 2011, p. 32). Further, the petition asserts that the NWFP does not specifically address the protection of Sierra Nevada red fox, but relies on the protection of other species that may incidentally provide protection to Sierra Nevada red fox (Center for Biological Diversity 2011, p. 32).

The petition asserts that the climate change initiatives are insufficient, including California's Global Warming Solutions Act of 2006, the Clean Air Act (42 U.S.C. 7401et seq.), the Energy Policy and Conservation Act (42 U.S.C. 6201et seq.), the Clean Water Act (33 U.S.C. 1251et seq.), and the international United Nations Framework Convention on Climate Change. The petition claims that these initiatives are inadequate due to a lack of implementation (Center for Biological Diversity 2011, pp. 30-32).

The petition claims that the CESA is an inadequate regulatory mechanism because it does not provide adequate protections for Sierra Nevada red fox against logging, livestock grazing, recreation, and other human disturbance (Center for Biological Diversity 2011, p. 29). The threats of logging, livestock grazing, recreation, and other human disturbance are addressed under Factors A, C, and E. The petition also claims that the Oregon furbearer, trapping, and hunting regulations, and the California hunting regulations, provide inadequate regulatory mechanisms for Sierra Nevada red fox (Center for Biological Diversity 2011, p. 31). These State hunting and trapping regulations address overutilization for commercial or recreational purposes, and were addressed under Factor B above.

The petition provides basic information regarding a number of possible regulatory mechanisms, such as NEPA, SNFPA, NWFP and CESA. It is not clear from the information provided in the petition or available in our files that these possible regulatory mechanisms are inadequate to reduce the possible threats of disease and predation (see Factor C) or other natural or manmade factors affecting its continued existence (see Factor E).

The information provided in the petition and in our files does not indicate that any impact from the inadequacy of existing regulatory mechanisms is occurring to Sierra Nevada red fox. However, we will further investigate the inadequacy of existing regulatory mechanisms in our status review for this subspecies.

The petition asserts that the following Factor E impacts threaten Sierra Nevada red fox: Invasion of Sierra Nevada red fox habitat by coyotes and nonnative red foxes, competition with coyotes and nonnative red foxes, domestic livestock grazing, recreation, small population size, and climate change (Center for Biological Diversity 2011, pp. 18, 22-32).

The petition asserts that Sierra Nevada red fox is threatened by competition for prey with coyotes and nonnative red foxes and increased interbreeding with nonnative red foxes, both of which are facilitated by logging, fire suppression activities, and recreation (Center for Biological Diversity 2011, pp. 18, 22-32). The petition also asserts that fire suppression activities may result in the direct mortality or injury of Sierra Nevada red fox (Center for Biological Diversity 2011, p. 22).

We do not have any information in our files, nor does the petition provide specific information, on how logging, fire suppression activities, or recreation has the potential to facilitate invasion by coyote and nonnative foxes, nor is there any evidence that this facilitation has occurred. Information contained within our files does not indicate that competition with nonnative red foxes or interbreeding is a concern for Sierra Nevada red fox, as there is no indication of range overlap with any other fox species. Neither the petition nor our files contain any evidence of fire suppression activities resulting in the direct mortality of individual Sierra Nevada red foxes.

Coyotes and Sierra Nevada red fox have been documented to have overlapping summer habitat ranges in the Lassen Peak area (Perrine 2005, pp. 83-84). Winter habitat use by the fox does not correlate closely with that of the coyote (Perrine 2005, p. 83), presumably because of snow depths and competition for prey (Perrine 2005, p. 40-41), resulting in decreased preyavailability in winter months. Competition for prey between coyote and fox is potentially exacerbated by low prey availability in the area of Lassen Peak (USDA Forest Service 2009, p. 506). Sargeantet al.(1987, p. 291) determined that the distribution and abundance of red fox are affected by the distribution and abundance of coyote. Sargeant and Allen (1983, pp. 631-632) documented the interactions between coyotes and other subspecies of red fox, discovering that coyote will frequently chase foxes and kill them, often not utilizing them as prey. As there is substantial range overlap between coyotes and Sierra Nevada red fox, there is likely competition for prey items; additionally, because coyotes are known to kill red foxes, we find that the petition and information in our files present substantial information to indicate that interaction with coyotes may be a threat to Sierra Nevada red fox.

The petition states that domestic livestock grazing impacts the Sierra Nevada red fox's foraging habitat by removing the vegetative habitat components that support its prey (Center for Biological Diversity 2011, p. 20). For example, the petition cites a number of studies that found that high levels of livestock grazing can reduce the density and biomass of a number of prey species, such as rodents and birds (Center for Biological Diversity 2011, pp. 20-21). The petition also claims that the use of rodenticides associated with domestic cattle grazing may also reduce the availability of small prey species in grazed areas (Center for Biological Diversity 2011, p. 21).

The petition provides some evidence that livestock grazing may alter the availability of some prey species for Sierra Nevada red fox. While grazing may result in a decrease in populations of some prey species, grazing has been demonstrated to increase populations of other potential prey species (Ratliff 1985, as cited in Perrinet al.2010, p. 29). Therefore, there is evidence that grazing may not reduce prey availability overall, but rather cause a shift in prey species (Perrineet al.2010, p. 29). While the petition asserts rodenticide use associated with cattle grazing causes a reduction in the availability of prey for Sierra Nevada red fox, the widespread use of rodenticides on public lands as it relates to grazing has been outlawed (Perrineet al.2010, p. 29). Sierra Nevada red fox utilizes a wide variety of prey species (Perrine 2005, p. 40-41), and there is no information indicating that the use of rodenticides associated with grazing is responsible for a reduction in available prey. Therefore, the information presented in the petition and available in our files does not support the petitioner's claim that domestic livestock grazing as it relates to reduced prey may be a threat to the subspecies. However, we will further investigate the potential impacts of domestic livestock grazing in our status review for this subspecies.

The petition claims that OSV and ORV use have the potential to result in direct mortality to Sierra Nevada red fox through vehicle strikes (Center for Biological Diversity 2011, pp. 23-24). In addition, the petition asserts that noise and visual disturbance from the use of OSVs and ORVs in winter and spring disrupt mating and breeding behavior (Center for Biological Diversity 2011, pp. 23-24). The petition also claims that OSVs negatively impact the prey base of Sierra Nevada red fox by compacting subnivean (beneath the snow layer) spaces that small mammals use in the winter (Center for Biological Diversity 2011, p. 23).

Recreation areas for both OSVs and ORVs occur in the vicinity of known Sierra Nevada red fox populations in both the Lassen Peak and Sonora Pass areas (USDA Forest Service 2009, p. 510; 2011b, p. 29), and OSV and ORV use in these areas has the potential to interfere with reproduction and foraging behavior due to noise and visual disturbance (Center for Biological Diversity 2010, p. 23; USDA Forest Service 2009, p. 510; 2011b, p. 29). Additionally, according to the U.S. Department of Agriculture (USDA) Forest Service, the compaction of snow attributed to OSVs is likely to result in a decrease in subnivean species utilized as prey by the fox (USDA Forest Service 2011b, p. 29). While the response of Sierra Nevada red fox to OSVs and ORVs is largely undocumented, studies involving other mammalian species have demonstrated noise disturbance attributed to OSVs and ORVs has resulted in elevated heart rates and glucocorticoid stress levels, increased energy expenditure, interference with reproduction and foraging behavior, and direct or indirect mortality (Baker and Buthmann 2005, pp. 15-16; Center for Biological Diversity 2011, pp. 23-24; Creelet al.2002, pp. 811-812; Ourenet al.2007, pp. 16, 19). Given that populations of the Sierra Nevada red fox overlap with OSV and ORV use areas, the negative responses of other mammal species to OSVs and ORVs, and the potential reduction in the fox's winter prey base, we find the petition presents substantial information that the petitioned action may be warranted due to OSV and ORV use.

The petition asserts that the small population size of Sierra Nevada red fox magnifies the potential for extinction of the subspecies due to the other threats impacting it (Center for Biological Diversity 2011, p. 33). The petition states that the population size of Sierra Nevada red fox in the vicinity of Lassen peak is believed to consist of fewer than 50 individuals, likely as few as 15 (Center for Biological Diversity 2011, p. 33). Inherent threats related to small population size include the chance of extinction due to stochastic (random, unpredictable) events (Center for Biological Diversity 2011, p. 33), such as genetic drift, demographic fluctuations related to mating and survival, environmental conditions, and local catastrophes (Lacey 1997, p. 329).

Perrine's (2005, pp. 1-195) radiotelemetry study that covered a portion of the Lassen Peak area was limited to a sample size of five individual Sierra Nevada red foxes, which likely represented the entire fox population within the 311.5-square-kilometer (120.3-square-mile) study area (Perrine 2005, p. 135). The recently detected Sierra Nevada red fox population in the Sonora Pass area includes only three confirmed individuals to date (CNDDB 2011, pp. 54-60); however, there are no current estimates of population size. Events (such as disease outbreaks, reproductive failure, or a combination of several events) could destroy a portion of either of the two populations or an entire population. The loss of individual Sierra Nevada red fox could further increase the risk of extirpation resulting from the genetic and demographic problems inherent to small populations (Lacey 1997, pp. 329, 331). Based on theinformation presented in the petition and our files indicating that few animals exist in only two populations, paired with the risk of catastrophic events (such as disease; see Factor C), we conclude that substantial information exists to indicate that Sierra Nevada red fox could be threatened by vulnerabilities of small populations.

The petition claims that anthropogenic climate change poses a significant threat to Sierra Nevada red fox because it has already resulted in warmer and drier conditions in the Sierra Nevada and Cascade mountains (Center for Biological Diversity 2011, p. 34). The petition asserts that climate projections indicate that temperatures in the Sierra Nevada will continue to rise and there will be a decrease in snowpack (Center for Biological Diversity 2011, p. 37), thereby magnifying the other threats to Sierra Nevada red fox.

Climate change models conducted for the Sierra Nevada Ecoregion suggest that climate change may potentially have an impact on wildlife populations in the Sierra Nevada region due to changes in vegetation communities (PRBO Conservation Science 2011, p. 25). The petition presents information on projected climate change within the range of Sierra Nevada red fox, as well as speculation on the potential impact of climate change on the fox. However, the petitioner does not provide specific information regarding the impact of climate change on Sierra Nevada red fox populations. Therefore, the information presented by the petitioner and readily available in our files does not support the petitioner's claim that climate change poses a threat to Sierra Nevada red fox. However, we will further investigate the potential impacts of climate change in our status review for this subspecies.

The petition states that Sierra Nevada red fox is threatened by domestic livestock grazing, competition, OSV or ORV use, the vulnerability of small isolated populations, and climate change. The information contained in the petition and in our files indicates that competition with the coyote may result in the direct mortality of Sierra Nevada red fox, limited availability of prey, and altered habitat use by Sierra Nevada red fox. OSV or ORV use may interfere with essential behaviors, such as breeding and feeding, through disturbance and reduction in prey. Currently, the Sierra Nevada red fox is known from only two small isolated populations; therefore, small population size is a factor that may make the fox more vulnerable to other threats, such as competition, catastrophic events, or genetic or demographic problems. In summary, we find that the information presented in the petition and in our files presents substantial scientific or commercial information indicating the petitioned action may be warranted due to the threat of other natural or manmade factors affecting the subspecies' continued existence.

On the basis of our determination under section 4(b)(3)(A) of the Act, we determine that the petition presents substantial scientific or commercial information indicating that listing Sierra Nevada red fox throughout its range may be warranted. This finding is based on information provided under Factors C (disease or predation) and E (other natural or manmade factors affecting the subspecies' continued existence). Although information provided under Factors A (the present or threatened destruction, modification, or curtailment of its habitat or range), B (overutilization for commercial, recreational, scientific, or educational purposes), and D (inadequacy of existing regulatory mechanisms) does not support the petition's assertions, we will further consider information relating to these factors in the status review.

Because we have found that the petition presents substantial information indicating that listing Sierra Nevada red fox may be warranted, we are initiating a status review to determine whether listing Sierra Nevada red fox under the Act is warranted.

The petition asserts that Sierra Nevada red fox occurs in two possible distinct population segments (DPS) and implies that, as a subspecies, Sierra Nevada red fox is also endangered or threatened throughout a significant portion of its range. We conclude that the petition presents substantial information that listing the entire subspecies may be warranted. Therefore, we have not specifically evaluated whether the petition provides substantial information with respect to the two potential DPSes outlined within the petition, or the extent to which Sierra Nevada red fox is endangered or threatened throughout a significant portion of its range. An analysis of these additional entities will occur during the status review if we determine that listing of the entire subspecies is not warranted.

The “substantial information” standard for a 90-day finding differs from the Act's “best scientific and commercial data” standard that applies to a status review to determine whether a petitioned action is warranted. A 90-day finding does not constitute a status review under the Act. In a 12-month finding, we will determine whether a petitioned action is warranted after we have completed a thorough status review of the species, which is conducted following a substantial 90-day finding. Because the Act's standards for 90-day and 12-month findings are different, as described above, a substantial 90-day finding does not mean that the 12-month finding will result in a warranted finding.

A complete list of references cited is available on the Internet athttp://www.regulations.govand upon request from the Sacramento Fish and Wildlife Office (seeFOR FURTHER INFORMATION CONTACT).

The primary authors of this notice are the staff members of the Sacramento Fish and Wildlife Office.

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

The New England Fishery Management Council (Council) adopted Framework Adjustment 23 (Framework 23) on September 27, 2011, initially submitted it to NMFS on October 25, 2011, for review and approval, and submitted a revised final framework document on November 30, 2011. Framework 23 includes measures that would require the use of a turtle deflector dredge (TDD), including where, when, and to which vessels this TDD requirement would apply. Framework 23 proposes to revise the current accountability measures (AMs) related to the yellowtail flounder (YTF) annual catch limits (sub-ACLs) for the Georges Bank (GB) and Southern New England/Mid-Atlantic (SNE/MA) YTF stock areas. These modifications would only alter the months when a closure would apply and would not change the locations for these seasonal closure AMs. Framework 23 also includes a change to how scallop landings would be applied to the Northern Gulf of Maine Management (NGOM) total allowable catch (TAC) when harvested by federally NGOM-permitted vessels. Finally, Framework 23 proposes procedural changes to when and where a vessel can declare a scallop trip through vessel monitoring systems (VMS).

The Council reviewed the Framework 23 proposed rule regulations, as drafted by NMFS, and deemed them to be necessary and appropriate as specified in section 303(c) of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). This proposed rule also includes several revisions to the regulatory text that were duplicative and unnecessary, outdated, unclear, or otherwise could be improved through revision. These were not recommended by the Council, but are proposed by NMFS under the authority of section 305(d) of the Magnuson-Stevens Act, which provides that the Secretary of Commerce may promulgate regulations necessary to ensure that amendments to a fishery management plan (FMP) are carried out in accordance with the FMP. These additional measures are identified and described below.

The proposed measure would require all limited access (LA) vessels (regardless of permit category or dredge size), and limited access general category (LAGC) Individual Fishing Quota (IFQ) vessels that have a dredge with a width of 10.5 ft (3.2 m) or greater, to use a TDD in the Mid-Atlantic (west of 71 °W long.) from May through October. According to recent research indicating where sea turtle interactions most often occur, the proposed area for the TDD requirement includes the majority of overlap between the scallop fishery and expected turtle interactions in the Mid-Atlantic. The majority of takes for the scallop fishery have been loggerheads, but Kemps ridley turtles and one green sea turtle have also been observed to interact with scallop gear as well. Overall, data suggest that sea turtles are most likely to be present in areas that overlap with the scallop fishery in the Mid-Atlantic between May and October. All observed takes of sea turtles in the scallop dredge fishery have been recorded in June through October. May was included in the proposed action because, based primarily on satellite, stranding, and projected sea turtle bycatch data, sea turtles are expected to be in the Mid-Atlantic during that month as well. Several sources of satellite data recorded sea turtles in offshore waters that overlap with the scallop fishery during May, and sea surface temperature and turtle distribution information indicate that waters are warm enough to support sea turtles during that time. In addition, there have been observed sea turtle takes in both the bottom trawl and sink gillnet fisheries in May, which indicates a potential for interactions with scallop fishing during that month as well.

The TDD is designed to reduce injury and mortality of sea turtles that come into contact with scallop dredges on the sea floor by deflecting sea turtles over the dredge frame and dredge bag. The TDD includes five modifications to the standard commercial dredge frame:

(1) The cutting bar must be located in front of the depressor plate.

(2) The angle between the front edge of the cutting bar and the top of the dredge frame must be less than or equal to 45 degrees.

(3) All bale bars must be removed, except the outer bale (single or double) bars and the center support beam, leaving an otherwise unobstructed space between the cutting bar and forward bale wheels, if present. The center support beam must be less than 6 in (15.24 cm) wide. For the purpose of flaring and safe handling of the dredge, a minor appendage not to exceed 12 in (30.5 cm) in length may be attached to the outer bale bar.

(4) Struts must be spaced no more than 12 in (30.5 cm) apart from each other.

(5) The TDD must include a straight extension (“bump out”) connecting the outer bale bars to the dredge frame. This “bump out” must exceed 12 in (30.5 cm) in length.

Each element of this dredge is based on direct field research that has been conducted over several years. The combination of these modifications is designed to reduce the likelihood of a sea turtle passing under the dredge frame when the gear is on the seafloor, which could result in the sea turtle being crushed or injured. For example, the cutting bar in a standard dredge is behind and under the depressor plate, impeding a sea turtle from rising above the dredge. By moving the cutting bar in front of the dredge frame, the TDD would deflect sea turtles up and over the dredge. The angle of 45-degrees or less between the cutting bar and the top of the frame would provide a smoother transition for a sea turtle to move over the dredge, but would maintain the same overall height as a standard commercial scallop dredge. The requirement to remove the interior bale bars, with the exception of the center support bar, would create an unobstructed space for sea turtles to escape up and over the dredge, thus maximizing survival. The additional allowance for a flaring bar to be attached to the outer bale bar was identified during Council deeming of the proposed regulations at its November 2011 Council meeting. Gear operators use the flaring bar upon initial dredge deployment to position the gear correctly in the water before it descends to the sea floor. The flaring bar, a short stub (usually no longer than 12 inches (30.5 cm)) welded to the inside of the outer bale and close to the frame end, prevents the flaring line from sliding up the outer bale, assists in safely positioning the dredge once in the water. In a conventional New Bedford style dredge, operators usually run the flaring line through the space between the outer bale bar and the bale support bar closest to the outer bale bar on the side of the dredge that is closest to the vessel when the dredge is upright in the setting position. The bale support bars prevents the line from sliding up the outer bale to the gooseneck; the flaring line can only perform its function if it remains near the frame end. Because the TDD has no bale support bars that can prevent the flaring line from moving up the bale, the Council voted to include the additional allowance of a flaring bar to the outer bale bar in the TDD regulations.

Tests show that sea turtles are less likely to enter the dredge with struts spaced less than 12 inches (30.5 cm) from each other than with wider spacing of struts. Lastly, the 12 inches (30.5 cm) or greater “bump out” addresses the potential for sea turtles to get caught in the narrow corners of the dredge frame by offering a greater area for escape. Tests show that these modifications cumulatively benefit sea turtle conservation, while not compromising the structural integrity of the dredge design and scallop yield. These TDD components could be modified by future actions, if additional modifications are developed to further minimize impacts on sea turtles or additions are identified that would improve the effectiveness of these measures.

This action proposes that all LA vessels, regardless of permit category or dredge width, and all LAGC IFQ vessels that fish with dredge gear greater than or equal to 10.5 feet (3.2 m) in width in the applicable area and season would be required to use a TDD. Because the bump out modification has not been fully tested on small dredges, Framework 23 proposes to exempt LA scallop vessels that use dredges with a width less than 10.5 ft (3.2 m) from that requirement of the TDD. Thus, LA vessels with smaller dredges would only have to use a TDD with the first four modifications listed above. If an LA vessel fishes with two dredges at a time, both of which are less than 10.5 ft (3.2 m) in width, neither dredge is required to have the bump out extension, even though the combined width of both dredges is greater than 10.5 ft (3.2 m). The bump out exemption does not apply to LAGC vessels that use dredges less than 10.5 ft (3.2 m) wide because such vessels would be exempted from the requirement to use a TDD entirely, due to concerns of the financial burden that building a new dredge would have on these small day boats, which may have lower IFQ allocations. Based on the Framework 23 document, if an LAGC vessel fishes with two dredges, both of which are less than 10.5 ft (3.2 m) wide, neither dredge would be required to comply with the TDD requirements, even though the combined width of both dredges is greater than 10.5 ft (3.2 m). The Council's Framework 23 document estimated that out of the 179 active LAGC IFQ vessels, 85 vessels (47 percent) have a dredge width greater than or equal to 10.5 ft (3.2 m) and would be required to use the TDD. The remaining 94 LAGC IFQ vessels would be exempt from the TDD requirement entirely.

Due to the time it would take manufacturers to develop TDDs for the scallop fishery, this proposed measure would be effective 1 year after the effective date of Framework 23, if approved (e.g.,if Framework 23 is effective on March 1, 2012, the TDD regulations would be effective March, 1, 2013, and TDDs would be required to be used starting May 1, 2013). This delay would also give vessel operators and crew time to fish with the new dredge design before the TDD season begins.

The proposed action would revise the YTF seasonal closure AM schedules in both GB and SNE/MA such that the closures would be during months with the highest YTF catch rates, rather than being in place for consecutive months beginning at the start of the fishing year (FY). The proposed AM adjustments would still only apply to LA vessels. Table 1 compares the current SNE/MA AM schedule with that proposed under Framework 23. The major difference for SNE/MA is that the proposed closure schedule would occur in the early spring and winter first, rather than starting with the spring and summer, as under the current AM for that stock area. AMs would occur in the same FY, with the winter closures occurring at the end of the FY. For example, if the scallop fishery exceeds its FY 2011 SNE/MA sub-ACL by 7 percent, the proposed AM closure for FY 2012 would occur in March, April, and May of 2012, and February 2013. The area would not close from June 2012 through January 2013.

Tables 2 and 3 compare the current GB AM schedules with those proposed under framework 23. The GB AM schedule is still complex because the extent of the closure period depends on whether or not Closed Area II Scallop Access Area (CAII) is open in the FY following a GB sub-ACL overage. In general, the major difference is that the GB AM closures begin in the fall, when YT YTF catch rates are highest, followed by the winter months. The proposed GB schedule would begin the closures at a time of year when scallop meat weights are lowest, thus impacts on the scallop resource and fishery should be lower compared to closing the area beginning in March through the spring and summer when scallop meat weights are larger. Similar to the SNE/MA proposed schedule, all closures would occur in the same FY. For example, if the FY 2013 sub-ACL was exceeded by 3.5 percent, the resulting FY 2014 a.m. (assuming CAII is closed that year) would occur in March, August, September, October, November, and December of 2014, and in January and February of 2015. The area would be open from April through July of 2014 in FY 2014. However, if CAII was open in FY 2014, the closure would extend from September through November in FY 2014.

Fisheries in the U.S. Exclusive Economic Zone (EEZ, or Federal waters) around the U.S. Pacific Islands are managed under four archipelagic-based fishery ecosystem plans (FEP), including the American Samoa FEP, the Hawaii FEP, the Pacific Remote Islands FEP, and the Mariana FEP (covering Guam and the Commonwealth of the Northern Mariana Islands (CNMI)), and one FEP for pelagic fisheries. The FEPs were developed by the Western Pacific Fishery Management Council (Council) and implemented by NMFS under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Each FEP contains a process for the Council and NMFS to specify annual catch limits (ACLs) and accountability measures (AMs); that process is codified at 50 CFR 665.4 (76 FR 37285, June 27, 2011). The regulations require NMFS to specify, every fishing year, an ACL for each stock and stock complex of management unit species (MUS) included in an FEP, as recommended by the Council and in consideration of the best available scientific, commercial, and other information about the fishery. If an ACL is exceeded, the regulations require the Council to take action to reduce the ACL for the subsequent fishing year by the amount of the overage, or take other actions, as appropriate.

NMFS proposes to specify ACLs for bottomfish, crustacean, precious coral, and coral reef ecosystem fishery MUS in American Samoa, Guam, the CNMI, and Hawaii. NMFS based the proposed specifications on recommendations from the Council at its 152nd meeting held on October 17-19, 2011. A total of 101 ACLs are proposed: 22 in American Samoa, 27 in Guam, 22 in the CNMI, and 30 in Hawaii. The ACLs would be specified for the 2012 fishing year which begins on January 1 and ends on December 31, except for precious coral fisheries which begin on July 1 and end on June 30 the following year.

NMFS is not proposing ACLs at this time for bottomfish, crustacean, precious coral, or coral reef ecosystem MUS in the PRIA because commercial fishing is prohibited out to 50 nautical miles by Presidential Proclamation 8336 which established the Pacific Remote Island Marine National Monument (74 FR 1565, January 12, 2009), and there is no habitat to support such fisheries in the EEZ beyond the monument boundaries. The Council is separately working on a draft amendment to the relevant FEP containing fishery management measures for the Pacific Remote Islands Marine National Monument (as well as the Rose Atoll and Marianas Trench Marine National Monuments). Additionally, ACLs are not proposed for MUS that are currently subject to Federal fishing moratoria or prohibitions. They include all species of gold coral (73 FR 47098, August 13, 2008), all species of deepwater precious corals at the Westpac Bed Refugia (75 FR 2198, January 14, 2010), and the three Hawaii seamount groundfish: pelagic armorhead, alfonsin, and raftfish (75 FR 69015, November 10, 2010). The current prohibitions on fishing for these MUS serve as a functional equivalent of an ACL of zero.

NMFS is also not proposing ACLs for pelagic MUS at this time because it previously determined that pelagic species are subject to international fishery agreements or have a life cycle of approximately one year and, therefore, have statutory exceptions to the ACL requirements.

NMFS and the Council developed the proposed ACLs in accordance with the FEPs and Federal regulations. At its 152nd meeting, the Council recommended specifying the 2012 ACL for each FEP MUS as being equal to the acceptable biological catch (ABC) as recommended by the Council's Scientific and Statistical Committee (SSC) at the 108th SSC meeting held October 17-19, 2011, except for precious corals in Hawaii where the Council recommended maintaining the current harvest quotas (which are lower than the ABCs) as the ACLs. The Council did not recommend increasing catch limits to equal the SSC's ABCs on the basis that there has been no activity in the precious coral fishery for over a decade and industry lacks the capacity to exploit an increased quota. The data, methods, and procedures considered by the SSC and the Council in developing their respective fishing level recommendations are described in detail in the three environmental assessments that support this action (seeADDRESSES).

NMFS identified several technical errors in the calculation of ABC for some MUS after the Council made their recommendations. Because the ABCs were derived from control rules and formulas contained in the FEPs, NMFS corrected the technical errors in this proposed specification by recalculating the ABCs based on the corrected information. NMFS has provided the corrected proposed ACL specifications to the Council's Executive Director and Chairperson for their review and concurrence that the corrected proposed ACL specifications are consistent with the Council's recommendation to establish ACLs for precious corals in Hawaii that are equal to current harvest quotas, and to establish ACL equal to ABC for all other fisheries. The resulting corrected ACL specifications are proposed here. Descriptions of the affected MUS, technical errors, and corrected ABC and ACL values are provided in the EAs, and summarized as follows:

The pre-corrected recommended ACL for Hawaii deepwater shrimp was equal to the ABC of 544,000 lb, which was based on the application of the Tier 4 control rule: ABC = 0.91 × (maximum sustainable yield (MSY)). The most current estimate of MSY for the deepwater shrimp in Hawaii is 125 mt/yr or 275,575 lb/yr (Tagami and Ralston 1988); however, in calculating ABC, the value for exploitable biomass (271.4 mt/yr or 598,328 lb) as estimated by Ralston and Tagami, (1992) was used instead of MSY. The resulting ACL recommendation of 544,000 exceeded the estimated MSY by more than 268,000 lb. NMFS corrected the ABC by applying the correct MSY value of 125 mt/yr or 275,575 lb/yr into the Tier 4 control rule, resulting in a corrected ABC of 250,773 lb. Consistent with the Council recommendation that ACL be set equal to ABC, NMFS proposes an ACL of 250,773 lb for Hawaii deepwater shrimp in 2012.

The pre-corrected recommended ACL for CNMI deepwater shrimp was equal to the ABC of 268,000 lb, which was based on the application of the Tier 4 control rule: ABC = 0.91 × MSY. The most current estimate of MSY for the deepwater shrimp in CNMI is 137.4 mt/yr or 302,830 lb/yr (Moffitt and Polovina 1987); however, in calculating ABC, the incorrect value for MSY was used (133.8 mt/yr or 294,975 lb/yr), resulting in an ABC of 268,000 lb. NMFS corrected the ABC by applying the correct MSY value of 137.4 mt/yr or 302,830 lb/yr in the Tier 4 control rule, resulting in a corrected ABC of 275,575 lb. Consistent with the Council recommendation that ACL be set equal to ABC, NMFS proposes an ACL of 275,575 lb for CNMI deepwater shrimp in 2012.

The pre-corrected recommended ACL for Guam deepwater shrimp was equal to the ABC of 56,000 lb which was based on the application of the Tier 4 control rule: ABC = 0.91 × MSY. Themost current estimate of MSY for the deepwater shrimp in Guam is 24.1 mt/yr or 53,116 lb/yr (Moffitt and Polovina 1987); however, in calculating ABC, the incorrect value for MSY was used (27.7 mt/yr or 61,067 lb/yr), resulting in an ABC of 56,000 lb. The resulting ACL of 56,000 lb exceeded the MSY estimated by Moffitt and Polovina (1987) by over 2,800 lb. NMFS corrected the ABC by applying the correct MSY value of 24.1 mt/yr into the Tier 4 control rule, resulting in a corrected ABC of 22 mt/yr or 48,488 lb/yr. Consistent with the Council recommendation that ACL be set equal to ABC, NMFS proposes to specify an ACL of 48,488 lb for Guam deepwater shrimp in 2012.

The recommended ACLs for Hawaii deepwater pink and bamboo corals at all established and conditional beds were set equal to the current harvest quotas as specified in 50 CFR 665 (75 FR 2198, January 14, 2010), except at the Makapuu Established Bed. At this bed, the current harvest quotas for pink and bamboo corals are 2,000 kg and 500 kg, respectively, and may be taken over a two year timeframe. However, since ACLs must be specified annually, the recommended ACLs were set at one half of the current harvest quota, or 1,000 kg/yr and 250 kg/yr, respectively, and shown in Table 5.

However, the Council's recommended ACL of 17 kg for bamboo corals at the Kaena Point and Keahole Point Conditional beds exceed the ABC of 16 kg as calculated by the SSC at its 108th meeting as shown in Table 6. In accordance with the Magnuson-Stevens Act and National Standard 1, the ACL may not exceed the ABC.

The ABCs were based on the application of the Tier 4 control rule: ABC = 0.91 × MSY. In calculating ABC for pink coral at the Makapuu Established Bed, the SSC applied a revised estimate of MSY for pink coral reported in Grigg (2002). Specifically, Grigg (2002) estimated an MSY for pink coral at the Makapuu bed of 1,500 kg/year. In calculating ABC for bamboo coral at the Makapuu Established bed, the SSC relied on the MSY estimate of 285 as provided in the Hawaii FEP. Based on these MSY estimates the SSC calculated ABC for pink coral and bamboo coral at the Makapuu bed as 1,400 kg/yr and 260 kg/yr, respectively.

There are no MSY estimates for pink or bamboo coral at any conditional beds. Therefore, to calculate an MSY proxy for pink coral and bamboo coral for these beds, the SSC applied the formula provided in the Hawaii FEP which was used to set the existing harvest quotas. Specifically, the Hawaii FEP explains that the harvest quotas for pink and bamboo corals at any conditional bed is extrapolated, based on bed size, by comparison with that of the Makapuu Established Bed using the following formula:

NMFS corrected the ABCs by applying the correct bed area for Makapuu (3.60 km2) and for both Keahole Point and Kaena Point (0.24 km2) into the formula above, resulting in a corrected bamboo coral MSY proxyof 19 kg for the two latter beds. Next, NMFS applied the Tier 4 control rule (ABC = 0.91 × MSY), resulting in a corrected ABC of 17 kg. These technical corrections are consistent with the intent of the SSC and Council and represent the best available scientific information regarding Hawaii precious corals. Additionally, the technical corrections allow for the Council's recommended ACL of 17 kg for bamboo corals at the Kaena Point and Keahole Point Conditional Beds to be acceptable ACLs as they no longer exceed ABC.

Each fishing year, NMFS and local resource management agencies in American Samoa, Guam, the CNMI, and Hawaii will collect information about MUS catches and apply them toward the appropriate ACLs. Pursuant to 50 CFR 665.4, when the ACL for a stock or stock complex is projected to be reached, based on available information, NMFS must notify permit holders that fishing for that stock or stock complex will be restricted in Federal waters on a specified date. The restriction serves as the AM to prevent an ACL from being exceeded and may include, but is not limited to closure of the fishery, closure of specific areas, changes to bag limits, or restrictions in effort. However, local resource management agencies presently do not have the personnel or resources to process catch data in near-real time, so fisheries statistics are generally not available to NMFS until at least six months after the data has been collected. While the State of Hawaii has the capability to monitor and track the catch of seven preferentially-targeted bottomfish species in near-real time in comparison with previously specified ACLs (76 FR 54715, September 2, 2011), additional resources would be required to extend these capabilities to other bottomfish, crustacean, precious coral, and coral reef ecosystem MUS. Significant resources would also be required to support the establishment of in-season monitoring and tracking capabilities in American Samoa, Guam and the CNMI. Additionally, reliance on Federal logbook and reporting from Federal waters will not be sufficient in accurately monitoring and tracking catches towards the proposed ACL specifications as the majority of fishing for bottomfish, crustacean, precious coral, and coral reef ecosystem fishery MUS occurs primarily in non-Federal waters generally 0-3 nautical miles from shore. For these reasons, NMFS proposes to implement the Council's recommended AM, which requires the Council to conduct a post-season accounting of the annual catch for each stock and stock complex of MUS relative immediately after the end of the fishing year. If an ACL is exceeded, the Council would take action in accordance with 50 CFR 600.310(g) which may include a recommendation that NMFS reduce the ACL for the subsequent fishing year by the amount of the overage, or other measure, as appropriate.

NMFS will consider public comments on the proposed ACLs and AMs and will announce the final specifications as soon as possible. Regardless of the final ACL specifications and AMs, all other management measures will continue to apply in the fisheries. To be considered, comments on these proposed specifications must be received by January 18, 2012, not postmarked or otherwise transmitted by that date.

Pursuant to section 304(b)(1)(A) of the Magnuson-Stevens Act, the NMFS Assistant Administrator for Fisheries has determined that this proposed specification is consistent with the applicable western Pacific FEPs, other provisions of the Magnuson-Stevens Act, and other applicable laws, subject to further consideration after public comment.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration that these proposed specifications, if adopted, would not have a significant economic impact on a substantial number of small entities. A description of the action, why it is being considered, and the legal basis for it are contained in the preamble to this proposed specification.

NMFS based the proposed specifications on recommendations from the Western Pacific Fishery Management Council (Council) at its 152nd meeting held on October 17-19, 2011. A total of 101 ACLs are proposed: 22 in American Samoa, 27 in Guam, 22 in the CNMI, and 30 in Hawaii. The ACLs would be specified for the 2012 fishing year, which begins on January 1 and ends on December 31, except for precious coral fisheries. These measures would apply to precious coral fisheries from July 1, 2011—June 30, 2012. Some ACLs would be applied to fisheries for which there are no participants. These include certain crustacean fisheries (i.e.,deepwater shrimp and Kona crab), and all precious coral fisheries outside Hawaii.

Fishery participants should not face any adverse economic impacts as a direct result of the proposed ACLs and AMs. The Council and NMFS are not considering in-season closures in any of the fisheries to which these ACLs apply, due to the current inability of fishery management entities to conduct in-season tracking of catch in relation to the ACLs. As a result, participants in these fisheries would be able to fish throughout the entire season; in addition, the ACLs, as proposed, would not change the gear types, areas fished, effort, or participation of the fishery during the 2012 fishing season. A post-season review of the catch data would be required to determine whether any of those ACLs is exceeded. If any of the ACLs is exceeded, the Council and NMFS would take action to correct the operational issue that caused the ACL overage. NMFS cannot, however, speculate on operational measures or the magnitude of any potential overage adjustment; therefore, the environmental and socio-economic impacts of future actions, such as changes to future ACLs or AMs, would need to be evaluated separately once the required data are available.

Other alternatives that were considered but not selected called for alternative specifications for the 101 ACLs, some higher and some lower than those that were proposed. However, because in-season tracking of catch data cannot be achieved in these fisheries, in-season AMs such as a fishery closure are not possible, and fishery participants would be able to fish throughout the entire season under all alternatives considered. Therefore, the direct economic impacts to small entities during the 2012 fishing season would not likely differ among the alternatives.

As described earlier, the proposed action of specifying ACLs and AMs is expected to have little, if any, direct adverse economic impact. For fisheries with active participants, the ACLs are generally in line with or greater than the current annual yields and there should be no disproportionate economic impacts between large and small entities. Furthermore, there is likely to be no disproportionate economic impacts among the universe of vessels based on gear, home port, or vessel length. Because the proposed action would have little to no direct economic impact, NMFS has determined that this proposed rule will not have a significant economic impact on a substantial number of small entities, pursuant to the Regulatory Flexibility Act, 5 U.S.C. 605(b).

As a result, an initial regulatory flexibility analysis is not required and none has been prepared.

This proposed rule has been determined to be not significant for purposes of Executive Order 12866.