A.What Is Interest Rate Risk?The term “interest rate risk” (“IRR”) refers to the vulnerability of a credit union's financial condition to adverse movements in market interest rates. Although some IRR is a normal part of financial intermediation,2 it still may negatively affect a credit union's earnings, net worth, and its net economic value, which is the difference between the market value of assets and the market value of liabilities. Changes in interest rates influence a credit union's earnings by altering interest-sensitive income and expenses (e.g.,loan income and share dividends). Changes in interest rates also affect the economic value of a credit union's assets and liabilities because the present value of future cash flows and, in some cases, the cash flows themselves may change when interest rates change. IRR takes several forms: Repricing risk, yield curve risk, spread risk, basis risk, and options risk. For definitions of these risks, see section IX. of Appendix B following the final rule text below.

B.Why is NCUA Amending the Existing Rule?In the past, NCUA issued guidance on asset/liability management and IRR management inLetters to Credit Unions. 3 NCUA believes Federally-insured credit unions (“FICUs”), relying on this guidance, generally have managed their IRR adequately. However, FICUs have recently experienced increasing exposure to IRR due to changes in balance sheet composition and increased uncertainty in the financial markets. This increase has heightened the importance for FICUs to have strong policies and programs explicitly addressing the credit union's management of controls for IRR.

Therefore, it is both timely and appropriate to require certain credit unions to have a formal policy addressing IRR management and a corresponding program to effectively implement that policy. Further, it is incumbent upon NCUA, as steward of the National Credit Union Share Insurance Fund (“the Fund”), to consider a credit union's IRR management policy and implementation program as a factor in determining whether the Fund should insure its member deposits.

C.What Were the Requirements of the Proposed Rule?The existing regulation on insurability of accounts prescribes certain criteria NCUA must consider in “determining the insurability of a credit union * * * and in continuing the insurability of its accounts.” 12 CFR 741.3. Among the “factors * * * to be considered in determining whether the credit union's financial condition and policies are both safe and sound,” are the existence of written lending and investment policies.Id.§ 741.3(b)(2)-(3). IRR management policies and practices are absent from the existing factors.

In response to credit unions' increasing exposure to IRR, NCUA issued a proposed rule in March 2011 amending section 741.3(b) to require, as an additional factor in determining whether a “credit union's financial condition and policies are both safe and sound,” the existence of a written policy on IRR management and a program to effectively implement that policy (together “an IRR policy and program”). 76 FR 16570 (Mar. 24, 2011). The proposed rule set an effective date for compliance at three months after the publication of the final rule in theFederal Register.

As proposed, the rule would apply to two categories of FICUs, (a) those having more than $50 million in assets; and (b) those having assets between $10 million and $50 million whose ratio of first mortgage loans, plus investments with maturities greater than five years (thenumerator), equals or exceeds 100% of its net worth (the denominator). This ratio is known as the “Supervisory Interest Rate Risk Threshold Ratio” (“SIRRT ratio”) and is explained in section II.D. of this preamble. Conversely, the rule would not apply to FICUs with assets of less than $10 million, or to those with assets between $10 million and $50 million whose combined first mortgage loans, plus investments with maturities greater than five years, areless than100% of its net worth.

To help credit unions understand and meet NCUA's expectations for compliance with amended section 741.3(b), the proposed rule included an appendix (“Appendix B”) setting forth comprehensive guidance on developing both a written policy on IRR management and a program to effectively implement that policy.4 Appendix B acknowledges that it is not possible to establish a “one-size-fits-all” template of IRR management standards and metrics that would be appropriate for all FICUs. Rather, it recognizes that IRR management requires specialized judgments based on each credit union's business objectives and ability to withstand risk.

Appendix B leaves to each affected credit union's board of directors the obligation and responsibility to make those judgments. Yet, it also provides them a framework of five fundamental elements of an effective IRR management program: A comprehensive, written IRR policy; accountable IRR oversight by board of directors and management; appropriate IRR measurement and monitoring systems; good internal controls; and informed decision-making based on IRR measurement system results. It also provides guidelines for determining the adequacy of IRR policy and effectiveness of implementation program. The appendix also includes guidance for large credit unions with complex or high-risk balance sheets.

The proposed rule was issued with a 60-day comment period that expired on May 23, 2011. 76 FR 16570. NCUA received 48 comment letters in response—29 from Federally-insured credit unions, 13 from credit union industry trade associations, one from an association of state credit union supervisory authorities, and 5 from industry consultants. Five commenters affirmatively supported the proposed rule; 29 commenters either opposed the rule or did not state a definitive position; and 14 commenters addressed particular aspects of the rule or made suggestions for improving it. The comments on the proposed rule are addressed as follows:

A.Authority to Impose Insurability Criteria.A trade association compared the existing insurability factors requiring a lending policy and an investment policy with the proposed requirement for an IRR management policy and implementation program. This commenter distinguished between lending and investment authorities and limitations that are “specifically detailed in the Federal Credit Union Act” and the authority to require IRR management, which it contends “is a regulatory directive and is not addressed in the Act.” The suggestion that there is authority in the Act to require the existing lending and investment policies but not to require an IRR management policy and implementation program is incorrect.5 The basis for both the existing and proposed factors for insurability is safety and soundness. As section 741.3(b) itself confirms, the “financial policies and conditions” it prescribes are “factors * * * to be considered in determining whether the credit union's financial condition and policies areboth safe and sound.”

B.Regulatory Burden and Duplication.A number of commenters said that requiring an IRR management policy and implementation program as insurability criteria imposes an excessive regulatory burden on credit unions, especially in the wake of the regulatory mandates imposed as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, 12 U.S.C. 5301et seq.Emphasizing this point, some commenters protested that other financial regulators have not introduced IRR management rules.

A number of commenters also noted that mechanisms to manage credit unions' IRR already exist that are sufficient to monitor and assess shifts in IRR and to indicate when corrective action is warranted. For example, they cite interagency advisories, NCUALetters to Credit Unions,and credit union examinations themselves.Seefootnote 3 above. NCUA does not dispute the utility of these existing mechanisms, but does not agree that they are sufficient in an environment of increased risk exposure and interest rate volatility. As detailed in sections C. and D. below in this preamble, IRR exposure at credit unions is on the rise to the point that it is higher than at peer commercial banks.

It is unclear that the numerousLetters to Credit UnionsNCUA has periodically issued, providing supervisory advice and guidance on IRR management, has led to improvements in IRR management that are sufficient to meet the growing risk exposure and increasing interest rate volatility. Appendix B to the final rule is intended to complement the existing guidance by providing a framework for each credit union to develop its own definitive IRR policy and program. Accordingly, the final rule adopts as timely and prudent the proposed requirements for an IRR management policy and implementation program as additional criteria for insurability.

C.Need for Interest Rate Risk Policy and Program.A number of commenters asserted that NCUA has not demonstrated a need to require an IRR management policy and implementation program beyond the conclusion that IRR exposure has increased. One commenter contended that the past performance of credit unions in managing net interest margins following periods of rising rates suggests that an IRR management policy and implementation program is unnecessary. Recent relevant data demonstrates otherwise.

NCUA compared IRR exposure since 1996 of credit unions versus commercial banks based on growth in real estate loans as a percentage of total assets. At year-end 2010, residential mortgages accounted for 30.7% of credit union assets compared to only 18.4% at peer commercial banks. In 1996, residential mortgages as a percent of total assets for both credit unions and banks were in the 15-20% range.6 While peer institutions have retreated from booking mortgage loans, credit unions have increased residential mortgage holdings and taken on more interest rate risk in the process.

Other NCUA data show the percent of credit unions with exposure to mortgages, and the median level ofcredit union IRR exposure to net worth by asset size cohort at year-end 2010, as depicted in Table 1:

Each of these measures indicates that the risk from changing interest rates to credit unions with long-term fixed cash flows increases with asset size and the escalation occurs most significantly in the $10 million to $50 million asset cohort.

Credit unions can use sales of real estate loans originated to reduce IRR exposure on their balance sheets. In that regard, a trade association commented that credit unions' sales of first mortgage originations during the current interest rate cycle have increased from 25-30% of first mortgage loans granted to over 50%. The trade association argued that credit unions manage their net interest margin in this and other ways. The commenter noted that following a 300 basis point increase in the Fed funds rate in 1994 and a 425 basis point increase in 2004-2006, credit union net interest margins fell only by 1 basis point in 1995, by 15 basis points in 2005, and by 11 basis points in 2006.

Credit unions can manage net interest margins, for example, by means of share deposit pricing. On this point, the commenter also suggested the Federal Reserve is not expected to raise interest rates quickly. The commenter also asserted that liquidity at credit unions might allow them to offset IRR exposure due to their record levels of long-term assets by raising deposit rates more slowly. NCUA notes that in January 2012 the Federal Reserve indicated that it expected economic conditions to warrant keeping the Federal funds rate at exceptionally low levels at least through late 2014.

NCUA acknowledges the aggregate upward trend over the long term in credit unions' sales of first mortgage real estate loans that they originated. Most recently, the percentage of first mortgage real estate loans sold fell to 44.8% of loans granted year to date in the 3rd quarter of 2011, but this was from a high for the full year of 51.9% in 2010. NCUA notes that the present 44.8% level remains significantly greater than the most recent low point of 26.3% of loans sold for the year in 2007. The increase is concentrated in the largest credit unions, however. For example, the percentage of first mortgage real estate loans sold in the $10 million to $50 million asset cohort was 16.0% of first mortgage real estate loans granted at credit unions year to date in the 3rd quarter of 2011, and 14.5% of first mortgage real estate loans granted for the year in December 2007.

NCUA also acknowledges that credit unions use deposit interest rates to mitigate the impact of increases in short-term rates on their net interest margin. Understanding IRR requires taking into account the historical levels of interest rates. Short-term rates presently are 500 basis points below 2006-2007 levels, and any return even to average long-term rates is likely to stress credit unions' ability to manage such a change in the level of interest rates. Reluctance to increase deposit interest rates sufficiently in an effort to enhance earnings and mitigate interest rate risk could trigger unexpected deposit outflows and thereby increase a credit union's liquidity risk.

All these indicators of IRR exposure point to heightened risk for credit unions. While acknowledging that credit unions act in various ways to manage IRR, the consistent rise in IRR at credit unions relative to other peer institutions deserves regulatory attention and is warranted as a prerequisite for insurability.

D.Supervisory Interest Rate Risk Threshold (SIRRT).For credit unions in the asset cohort of $10 million to $50 million, the proposed and final rules rely on the SIRRT ratio as a reliable indicator of IRR concentration:

NCUA has tracked the SIRRT ratio among the population of FICUs as an aggregate percentage of their net worth from 2005 (when Call Reports started to break out investment maturities at 5 years) to September 2011. Table 2 below depicts this aggregate ratio:

As previously discussed, the percentage of residential real estate loans declined from a high point of almost 35% of assets in 2008 to 30.7% of assets in 2010. See footnote 6 above. However, this does not take into account the movement of FICU assets into long-term investments since 2008, as the growth in consumer demand for mortgage loans slowed during this recessionary period. When these elements are included, as Table 2 shows, the SIRRT ratio increased from 256.2% of net worth in 2008 to a high of 271.1% in March 2011. The ratio declined to 264.8% in September 2011. Nonetheless, since 2005, the ratio has increased from 199.1%. In sum, credit union assets that present the highest IRR exposure have increased relative to credit union net worth and have reached a significantly higher level. The IRR exposure levels depicted by the data also indicate that credit unions' net interest margin performance, as previously discussed, does not eliminate the need for an IRR policy and IRR management program.

Several commenters questioned the components of the SIRRT numerator. Some advocated limiting the maturity of first mortgages to match the 5-year maturity limit of investments. Others supported excluding adjustable rate mortgages from the numerator. One commenter argued that the numerator should distinguish between fixed-rate and variable-rate loans.

NCUA does not believe the components of the numerator of the SIRRT ratio should be changed. Adjustable rate mortgages carry modeling risk because these loans are complex. Specifically, they have periodic and lifetime caps with varying reset dates and margins that must be incorporated to reflect risk. These complex mortgages should therefore be included in the SIRRT ratio.

A number of commenters addressed the asset size thresholds for subjecting credit unions to the IRR policy and program. Of these, several favored raising the asset “floor” to $20 million and $50 million, respectively, thus excluding credit unions below the “floor.” One commenter criticized use of asset thresholds altogether, asserting that IRR may be present in credit unions regardless of asset size. One commenter agreed that small credit unions should be excluded by adhering to the $10 million asset “floor” originally proposed.

The comments on the SIRRT ratio overlook the fundamental reasons for reliance on the ratio. Net worth is the reserve of funds available to absorb the risks of a credit union, and it is therefore the best measure against which to gauge the credit union's risk exposure. A credit union where the SIRRT ratio is at or over 1:1 is exposed to IRR at a heightened level. This requires additional attention by credit unions in the $10 million to $50 million asset cohort to their IRR policy and management program in order to manage this risk. At year-end 2010 in the $10 million to $50 million asset cohort, median first mortgages to net worth (56.4%) exceeded the median for all credit unions (35.0%). Additional NCUA data also shows at year-end 2010 that for credit unions in the $10 million to $50 million asset cohort with a SIRRT ratio at or above 1:1, median first mortgages to net worth was 179.9% of net worth, and median long-term residential mortgages repricing at or longer than five years to net worth was 148.1% of net worth. By comparison, credit unions in the $10 million to $50 million asset cohort with a SIRRT ratio below 1:1 have a 2.7% ratio of median first mortgages to net worth and a 28.5% ratio of median long-term residential mortgages to net worth. NCUA therefore concludes that the SIRRT ratio effectively partitions risk.

NCUA devised the SIRRT ratio's “floor” and “ceiling” thresholds to minimize regulatory burden and at the same time ensure adequate regulatory coverage of total credit union assets. Applying the thresholds to the $10 million to $50 million asset cohort achieves both of these objectives. Moreover, the data indicates that a credit union's IRR exposure as its assets grow is likely to occur at the $10 million to $50 million asset range At year-end 2010, among the total population of FICUs, 3,184 credit unions had a SIRRT ratio equal to or exceeding 100% of their net worth, whereas 4,155 credit unions had a SIRRT ratio less than 100% of their net worth, thus minimizing regulatory burden. At the same time, applying the SIRRT ratio to the $10 million to $50 million asset cohort would have imposed the IRR policy and program requirement on 95.5% of credit union assets, or $873.6 billion out of a total of $914.4 billion in credit union assets.

NCUA reviewed data as of September 30, 2011 for purposes of the final rule. The SIRRT ratio is depicted in Table 3 for credit unions by asset cohort and it demonstrates the segregation of risk. As shown in Table 2 previously, theaggregate SIRRT ratio for all credit unions was 264.8%.

The distribution of the number of credit unions not covered and covered by the rule is depicted in Table 4 and it shows that 1,316 credit unions in the $10 to $50 Million asset cohort would not have been covered by the rule, and 54.8% of all credit unions would not have been covered by the rule.

The distribution of credit union assets not covered and covered by the rule is depicted in Table 5, which shows that 95.9% of all credit union assets would have been covered by the rule based on September 30, 2011 data.

Accordingly, the proposed $10 million “floor” and the proposed $50 million “ceiling” thresholds as applied to the SIRRT ratio continue to provide effective segregation of risk while reasonably minimizing regulatory burden.

E.Application of the Rule.Many commenters expressed concern about how the proposed rule would be applied in practice. Several observed that it would impose a “one-size-fits-all” set of IRR policies, or be used as a checklist by examiners, or viewed by examiners as a mandate, or inhibit the flexibility of credit unions, thereby allowing examiners to micro-manage them. A number of commenters were concerned that examiners would apply the rule subjectively, leading to “generic standards.” Others predicted that examiners would rely on peer data and simplified assumptions. Finally, several noted the absence from the rule of an express definition of what constitutes an “effective program.”

It is not the intent of the rule for examiners to subjectively impose unduly standardized supervisory oversight. Examiners will be expected to apply the standards within a consistent framework based on their knowledge of each credit union's operations and available resources. While the rule itself does not define what is an “effective program,” the guidance in Appendix B does. It provides that “an effective IRR management program identifies, measures, monitors, and controls IRRand is central to safe and sound credit union operations.” Further, as the preamble to the proposed rule also recognized: “it is impossible to establish specific, regulatory requirements for IRR that would be appropriate for all FICUs. IRR management involves judgment by a FICU based on its own individual mission, structure, and circumstances. Any rule must take into account the diversity of FICUs and avoid a one-size-fits-all approach. Accordingly, FICUs should devise a policy and risk management program appropriate to their own situation.” 76 FR 16571. The NCUA Board reaffirms the notion that IRR management must be individualized, while subject to regulatory oversight and prudent insurability standards.

NCUA acknowledges that using simplifying assumptions to apply the rule involves a certain degree of subjectivity, but believes this is a necessary part of the supervision process. Any assumption used to aggregate data or categorize financial instruments can be a simplifying assumption. However, NCUA does not take issue with using such assumptions or generic standards so long as these are consistent with the best practices described in the January 2010 FFIEC Advisory on Interest Rate Risk Management and take into account the size, complexity and risk exposure of the credit union. NCUA recognizes the use of peer data may be appropriate. Simplifying assumptions are part of the practice of IRR management and are an issue only when they cause either credit union management or an examiner to underestimate complexity. For example, a credit union may use simplifying assumptions in the process of modeling IRR, and these can be acceptable so long as they do not cause interest rate risk to be misstated.

To address consistency of application NCUA plans to issue guidance and training for examiners, including a questionnaire that is tailored specifically to this rule.Seefootnote 4 above. The commentary in the questionnaire emphasizes that the guidance items are not mandatory. Credit unions are encouraged to review and discuss these guidance items with their examiners.

F.Guidance on IRR Policy and Program.A number of commenters made observations about the role of the specific guidance in Appendix B to the rule. Of these, one commenter asked whether Appendix B supersedes existing guidance on IRR management. One recommended publishing Appendix B on the NCUA Web site when it is adopted. Another recommended updating theExaminers Guideto include the guidance in Appendix B.

NCUA does not intend Appendix B to supplant existing advice on specific aspects of IRR management. Existing NCUALetters to Credit Unionsaddress specific aspects of IRR such as real estate lending, liquidity, rate-sensitive funding sources, and non-maturity shares. TheseLetters to Credit Unionsare consistent with the practices set forth in Appendix B and credit unions should continue to heed the advice they give.Seefootnote 3 above. The guidance in Appendix B is also complementary to the 2010 Interagency Advisory on Interest Rate Risk Management and the 2012 Interagency Advisory on Interest Rate Risk Management, Frequently Asked Questions. NCUA will continue to issueLetters to Credit Unionsrelating to IRR management as necessary and will update theExaminers Guideaccordingly.

A number of commenters addressed technical aspects of IRR measurement methods. Of these, some said Appendix B implied a preference for the valuation of non-maturity shares at par. One said that credit unions should be free to choose their own method. One noted the selection of curves for discounting is debatable. One said a credit union offering rate is the most defensible reinvestment rate. One said that IRR measures using changes in rates might not fully reflect the level of IRR. One said that 300 basis point shocks should not be an industry standard for the rule. One said that parallel shock analysis is not realistic. One recommended semiannual IRR testing in an IRR management program.

NCUA responds to these and similar technical comments by reiterating that it does not seek to endorse certain IRR measures, measurement techniques, or assumptions over others. For example, NCUA does not prescribe valuing non-maturity shares at par but it acknowledges that such measures and the use of historical rate scenarios may provide useful information. Similarly, NCUA does not require discounting on yield curves or endorse any particular discount rate. NCUA does recommend the use of pro forma risk measurement and the discipline of utilizing relevant stress tests to better understand IRR and to be aware of the scenarios that would have the most detrimental impact on earnings, net worth, or net economic value. Base values of balance sheet instruments are as integral to stating risk exposure as stressed results. Testing should be as frequent as needed for a credit union to be fully aware of its IRR exposure and semi-annual IRR testing may not be sufficient to manage IRR.

Several more commenters made observations on the separation of credit union responsibilities with respect to IRR. Of these, two commented on the separation of risk taking and risk management. One of these recommended that NCUA provide examples to suggest appropriate separation of duties, and another one said that separation would be burdensome.

NCUA does not believe this section of Appendix B on policy, board oversight and credit union structure needs to be amended. The proposed rule suggested that credit unions should separate risk-taking and risk measurement functions “if possible”, particularly in the case of large, complex or high-risk credit unions. In the case of large, complex or high-risk credit unions, the final rule already provides an example of separating the investment function from the IRR measurement function,e.g.having the IRR measurement function report to an audit or supervisory committee. However, it is not the function of this rule to prescribe specific organizational structures.

G.Alternatives to the Proposed Rule.A number of commenters suggested that NCUA should focus on the 800 credit unions that lack an IRR policy instead of the estimated 75% of credit unions that have such policies in place. NCUA does not agree. The data introduced earlier indicates that IRR overall is at an unprecedented level; it is not limited to a small subset of credit unions.

Attempting to balance flexibility with regulatory concerns, one commenter suggested that an effective IRR program would be one that takes assets and liabilities into account, requires management reports to the board, and performs tests as directed by regulators. NCUA agrees that any rulemaking that addresses IRR should be crafted to not limit credit union flexibility, while still considering regulatory concerns. For this reason, the guidance in Appendix B is flexible. At the same time, shifting interest rates pose a core risk that could jeopardize the liquidity and solvency of credit unions. The steady increase in this exposure to interest rate changes warrants a high level of attention by management and oversight by NCUA and state supervisory authorities. The Board therefore believes that an IRR policy and an effective IRR management program must be implemented by regulation and should not be left solely to the supervisory process.

H.Effective Date and Implementation of Final Rule.The proposed rule prescribed a period of three monthsbetween publication of the final rule and its effective date for credit unions to comply with the rule's new requirements. A number of commenters urged making the acclimation period longer than three months and some recommended a phase-in period of as long as one year. In view of these comments, NCUA has reassessed the steps and the time it will take both affected credit unions and itself to acclimate to the final rule.

Balancing its concern for a timely response to interest rate risk issues against its objective to ensure careful implementation of the final rule, the Board has decided to modify the effective date of the final rule to September 30, 2012.

A.Regulatory Flexibility Act.The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small entities (primarily those credit unions with less than ten million dollars in assets). By its terms, the final rule's requirement to develop a written IRR management policy and a program to effectively implement the policy do not apply to credit unions with less than $10 million in assets. Accordingly, this final rule will not have a significant economic impact on a substantial number of small credit unions and a Regulatory Flexibility Analysis is not warranted.

B.Paperwork Reduction Act.This final rule requires certain credit unions to develop, as prerequisites for insurability of its member deposits, a written IRR management policy (“an IRR policy”) and a program to effectively implement the policy. The Paperwork Reduction Act of 1995 (“PRA”) applies to rulemakings in which an agency by rule creates a new paperwork burden on regulated entities or modifies an existing burden. 44 U.S.C. 3507(d). For purposes of the PRA, a paperwork burden may take the form of either a reporting or a recordkeeping requirement, both referred to as information collections. NCUA has determined that the requirement to develop an IRR policy creates a new information collection requirement. As required, NCUA has applied to the Office of Management and Budget (“OMB”) for approval of the information collection requirement described below.

The final rule requires two categories of credit unions to develop an IRR policy and program: those having more than $50 million in assets; and those having assets between $10 million and $50 million whose combined first mortgage loans, plus investments with maturities greater than five years, equal or exceed 100% of net worth. As of September 30, 2011, 3,246 FICUs (45% of all FICUs) fell in either of these two categories. NCUA estimates, however, that 2,446 of the affected FICUs (or approximately 75% of them) already have an IRR policy in place; they will need only to review the existing IRR policy, and make appropriate adjustments where necessary, to comply with the final rule. The other 800 affected FICUs (approximately 25% of them) will need to newly develop an IRR policy. Periodic review of an existing IRR policy should require minimal or no additional burden.

The final rule is accompanied by an Appendix setting forth comprehensive guidance on developing both an IRR policy and program. The guidance specifies eight policy items that must be addressed.Seesection II of Appendix B following rule text below. The length of an IRR management policy covering these eight policy elements will vary according to the credit union's business strategies. A credit union offering basic share accounts and short-term loans but no mortgage loans, and that makes relatively simple investments, should be able to develop a basic IRR policy in one to two hours that establishes, for example, maturity limits for loans, the minimum amount of short-term funds, and the range of permissible investments. In contrast, credit unions with more complex balance sheets, especially those containing mortgage loans and complex investments, may warrant a more comprehensive IRR management policy that requires additional time to produce.

NCUA estimates that addressing the eight policy items will each entail an equal time burden of two hours. The maximum time for all segments of an IRR policy is therefore estimated at 16 hours. In turn, the aggregate information collection burden for affected credit unions to comply with the rule is estimated 12,800 hours (800 credit unions × 16 hours).

The proposed rule noted that organizations and individuals wishing to comment on this information collection requirement should direct their comments to the Office of Information and Regulatory Affairs, OMB, Attn: Shagufta Ahmed, Room 10226, New Executive Office Building, Washington, DC 20503, with a copy to Mary Rupp, Secretary of the Board, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428.

The sole commenter in response to the proposed rule contended that the estimate of 16 hours to complete an IRR policy understates the time it takes to collect the information, establish limits and review the data. That commenter offered no alternative estimate.

NCUA considers public comments on the collection of information in:

• Evaluating whether the collection of information is necessary for the proper performance of the functions of the NCUA, including whether the information will have a practical use;

• Evaluating the accuracy of the NCUA's estimate of the burden of the collection of information, including the validity of the methodology and assumptions used;

• Enhancing the quality, usefulness, and clarity of the information to be collected; and

• Minimizing the burden of collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology;e.g.,permitting electronic submission of responses.

OMB assigned No. 3133-0184 to this rulemaking.

C.Executive Order 13132.Executive Order 13132 encourages independent regulatory agencies to consider the impact of their actions on state and local interests. In adherence to fundamental federalism principles, NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies with the Executive Order. This rule will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, this rule does not constitute a policy that has federalism implications for purposes of the executive order.

D.The Treasury and General Government Appropriations Act, 1999—Assessment of Federal Regulations and Policies on Families.The NCUA has determined that this rule will not affect family well-being within the meaning of the Treasury and General Government Appropriations Act, Pub. L. 105-277, 112 Stat. 2681 (1998).

E.Small Business Regulatory Enforcement Fairness Act.The Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by section 551 of the APA. 5 U.S.C. 551. The Office ofManagement and Budget has determined that this rule is not a major rule for purposes of SBREFA. As required by SBREFA, NCUA will file the appropriate reports with Congress and the General Accounting Office so this rule may be reviewed.

For the reasons set forth above, NCUA amends 12 CFR part 741 as follows:

Discussion

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to rescind an AD that would apply to the specified products. That NPRM published in theFederal Registeron July 19, 2011 (76 FR 42609). That NPRM proposed to rescind AD 71-13-01 (Amendment number is 39-1231; 36 FR 11512-03, June 15, 1971) for Lycoming Engines model TIO-540-A series reciprocating engines. That AD requires a one-time visual inspection of external fuel injector lines on Lycoming Engines model TIO-540-A series reciprocating engines for fuel stains, cracks, dents, and bend radii under5/8inch and, if necessary, removal from service and replacement with serviceable parts. That AD also requires installing, if necessary, fuel injector line support clamps in accordance with Lycoming Engines SB No. 335 or later version of that SB.

Since we issued AD 71-13-01 (Amendment number is 39-1231; 36 FR 11512-03, June 15, 1971), Lycoming Engines has informed us that it no longer supports SB No. 335A. They also pointed out that Lycoming Engines Mandatory SB No. 342F, dated June 4, 2010, or the Instructions for Continued Airworthiness section of the Engine Overhaul Manual is the service information that owners, operators, and certificated repair facilities must use for initial and repetitive visual inspections of external fuel lines on all affected Lycoming Engines reciprocating engines.

We incorporated by reference Lycoming Engines Mandatory SB No. 342E, dated May 18, 2004, into AD 2008-14-07 (73 FR 39574, July 10, 2008). We will supersede AD 2008-14-07 to incorporate by reference Lycoming Engines Mandatory SB No. 342F, dated June 4, 2010.

We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (76 FR 42609, July 19, 2011).

We reviewed the relevant data and determined that air safety and the public interest require rescinding the AD as proposed.

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

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

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

For the reasons discussed above, I certify that this AD:

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

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

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

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

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

The Rule

This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by updating the geographic coordinates of Selfridge Air National Guard Base and the Selfridge TACAN within Class D airspace to coincide with the FAA's aeronautical database. This is an administrative change and does not affect the boundaries, altitudes, or operating requirements of the airspace, therefore, notice and public procedures under 5 U.S.C. 553(b) are unnecessary.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace at Selfridge ANGB, Mount Clemens, MI.

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

The Rule

This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by changing the airport formerly known as Tri-City International Airport to MBS International Airport and updating the geographic coordinates within Class D airspace to coincide with the FAA's aeronautical database. This is an administrative change and does not affect the boundaries, altitudes, or operating requirements of the airspace, therefore, notice and public procedures under 5 U.S.C. 553(b) are unnecessary.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace at MBS International Airport, Saginaw, MI.

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

History

On August 10, 2011, the FAA published in theFederal Registera notice of proposed rulemaking (NPRM) to amend Class E airspace for the South Bend, IN, area, creating additional controlled airspace at Jerry Tyler Memorial Airport (76 FR 49385) Docket No. FAA-2011-0250. Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Subsequent to publication, errors was found in the name of the South Bend ILS Outer Marker and the geographic coordinates of the Gipper VORTAC. This rule will make the corrections to be in concert with the FAAs aeronautical database. Class E airspace designations are published in paragraph 6005 of FAA Order 7400.9V dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designations listed in this document will be published subsequently in the Order.

This action amends Title 14 Code of Federal Regulations (14 CFR) part 71 by amending Class E airspace extending upward from 700 feet above the surface to accommodate new standard instrument approach procedures at Jerry Tyler Memorial Airport, Niles, IN. This action is necessary for the safety and management of IFR operations at the airport. This action also corrects the name of the South Bend ILS Outer Marker to the Misha Outer Marker, and adjusts the geographic coordinates of the Gipper VORTAC in the airspace designation and regulatory text. With the exception of editorial changes and the changes described above, this action is the same as that proposed in the NPRM.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace in the South Bend, IN, area.

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

This action amends Title 14 Code of Federal Regulations (14 CFR) Part 71 by changing the airport formerly known as Jackson County-Reynolds Field to Jackson County Airport-Reynolds Field, and adjusting the geographic coordinates within Class D airspace to coincide with the FAA's aeronautical database. This is an administrative change and does not affect the boundaries, altitudes, or operating requirements of the airspace, therefore, notice and public procedures under 5 U.S.C. 553(b) are unnecessary.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the U.S. Code. Subtitle 1, Section 106, describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends controlled airspace at Jackson County Airport-Reynolds Field, Jackson, MI.

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

In theFederal Registerof April 14, 2011 (76 FR 20901), FDA issued a proposed rule seeking to amend several provisions of its general regulations to reflect the Agency's new authority and mandate regarding tobacco products under the Tobacco Control Act (Pub. L. 11-31; 123 Stat. 1776). FDA received substantive comments to its proposal from only one commenter. However, FDA does not believe that these comments warrant making any changes to the regulatory language included in the proposed rule.

Relevant portions of these comments are summarized and responded to in the relevant section(s) of this document. To make it easier to identify comments and FDA's responses, the word “Comment,” in brackets, appears before the comment's description, and the word “Response,” in brackets, appears before FDA's response. Each comment is numbered to help distinguish among different comments. The number assigned to each comment is purely for organizational purposes and does not signify the comment's value or importance.

FDA is issuing this final rule under provisions of the Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the Tobacco Control Act (21 U.S.C. 321, 331, 333, 371, 381, 387, 387a, 387c, 387f, 387j, and 387k). FDA is also issuing this final rule under section 4 of the Federal Cigarette Labeling and Advertising Act (FCLAA) (15 U.S.C. 1333) as amended by the Tobacco Control Act, and under section 3 of the Comprehensive SmokelessTobacco Health Education Act of 1986 (CSTHEA) (15 U.S.C. 4402) as amended by the Tobacco Control Act.

With this rule, FDA is finalizing several amendments to title 21 of the Code of Federal Regulations (CFR), reflecting the Agency's authority over tobacco products under the Tobacco Control Act. The amendments are described in sections III.A, III.B, and III.C of this document.

Section 1.21(a) (21 CFR 1.21(a)) states that the labeling of FDA-regulated products shall be deemed misleading if it fails to reveal facts that are: “* * * Material in light of other representations made or suggested by statement, word, design, device or any combination thereof; or [m]aterial with respect to consequences which may result from use of the article under: The conditions prescribed in such labeling or such conditions of use as are customary or usual.” With this final rule, FDA is amending § 1.21(a) to provide that tobacco product labeling also would be deemed misleading for similar failures to reveal material facts. See section 903(a) of the Tobacco Control Act (21 U.S.C. 387c(a)) (stating that a tobacco product shall be deemed to be misbranded if its labeling is false or misleading). See also section 201(n) of the FD&C Act (21 U.S.C. 321(n)).

Section 1.21(c) describes statements that are not permissible on labeling for FDA-regulated products. For example, paragraph (c)(1) explains that this regulation does not “[p]ermit a statement of differences of opinion with respect to warnings * * *” on FDA-regulated products. This final rule amends this section to state that tobacco product labeling, like the labeling of other FDA-regulated products, also may not have a statement of differences of opinion regarding the warnings on tobacco packages or advertisements. This change is in accordance with sections 201 and 204 of the Tobacco Control Act, amending the FCLAA, and the CSTHEA, respectively, as well as section 903(a) generally. FDA already has issued a final rule to implement section 201 of the Tobacco Control Act, amending 15 U.S.C. 1333. See theFederal Registerof June 22, 2011 (76 FR 36628).

Section 1.101 (21 CFR 1.101) outlines the notification and recordkeeping requirements for exports of FDA-regulated products. Section 1.101(a) pertains to all notifications and records required for FDA-regulated products that may be exported under sections 801 or 802 of the FD&C Act (21 U.S.C. 381 and 382) and section 351 of the Public Health Service Act (42 U.S.C. 262). Because section 103(l) of the Tobacco Control Act specifically amends section 801 of the FD&C Act to include “tobacco products” on the list of FDA-regulated products that may be exported under this section, this final rule amends § 1.101(a) and (b) to indicate that tobacco products exported under section 801(e)(1) of the FD&C Act also would be subject to the recordkeeping requirements of this regulation. Please note that this revision to § 1.101(b) does not alter the enforcement policy described in the advance notice of proposed rulemaking that published in theFederal Registerof June 1, 2004 (69 FR 30842). Thus, with regard to tobacco products, FDA intends to exercise enforcement discretion, as it does with exports generally, regarding the requirement for specific types of records under § 1.101(b)(2) demonstrating that the exported product is not in conflict with the foreign country's laws.

(Comment 1)—One comment requested that FDA provide notice and an opportunity to comment should it propose to end this period of enforcement discretion as it applies to tobacco products.

(Response 1)—We note, previously, that this revision does not alter our exercise of enforcement discretion, including with respect to tobacco products and additional notice and comment with respect to this issue is not necessary.

Section 7.3 (21 CFR 7.3) defines the term “product” to include all the specific items that are subject to FDA's jurisdiction. This final rule amends § 7.3 of the regulations to define “product” to also include tobacco products.

(Comment 2)—One comment stated that FDA's proposed change to § 7.3 did not take into account the fundamental differences between tobacco products and other regulated product categories and, therefore, it should be amended accordingly. This comment also requested that FDA make additional changes to part 7.

(Response 2)—FDA believes that its change to § 7.3 is necessary to ensure that tobacco products are subject to the same general requirements that apply to other FDA-regulated products. The differences between tobacco products and other regulated products do not warrant any additional changes to § 7.3. In circumstances where FDA's requirements apply solely to tobacco products, that is noted in the appropriate sections of the Agency's regulations. Further, FDA believes that the other suggested revisions to part 7 included in this comment are beyond the scope of this rulemaking.

Section 16.1(b) (21 CFR 16.1(b)) lists the statutory and regulatory provisions that provide for the opportunity for a regulatory hearing. Sections 903(a)(8)(B)(ii), 906(e)(1)(B), 910(d)(1), and 911(j) of the Tobacco Control Act all provide for the opportunity for a hearing. The final rule amends § 16.1 to include certain instances in the Tobacco Control Act where an opportunity for a hearing is provided.

(Comment 3)—One comment requested that FDA also amend part 16 (21 CFR part 16) to provide an opportunity for a regulatory hearing if FDA were to issue a Not Substantially Equivalent (NSE) determination for a tobacco product introduced between February 15, 2007, and March 22, 2011.

(Response 3)—FDA declines to adopt this change. FDA is amending part 16 to incorporate those specific circumstances in which the Tobacco Control Act expressly provides for notice and an opportunity for hearing. Section 910 of the Tobacco Control Act does not specifically provide for notice and an opportunity for hearing with respect to NSE orders; therefore, FDA declines to add section 910(a)(2)(B) to the list of circumstances that provide for a part 16 hearing.

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 will not be a significant regulatory action as defined by 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 requirements arelikely to impose a burden on a substantial number of affected small entities, the Agency anticipates that the final rule will have a significant economic impact on a substantial number of small entities and has conducted a Final Regulatory Flexibility Analysis as required under the Regulatory Flexibility Act.

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 this final rule to result in any 1-year expenditure that would meet or exceed this amount.

FDA has not quantified the benefits of this final rule. This rule will impose compliance costs on producers of tobacco products as they will be required to comply with recordkeeping requirements according to general regulations that apply to other products that FDA regulates. FDA updates the estimated costs presented in the proposed rule published in theFederal Registerof April 14, 2011, to incorporate the most recent and publicly available wage rate data. The estimated annual costs of complying with these requirements range from $71,201 to $374,991.

The Tobacco Control Act grants FDA authority to regulate tobacco products, thereby enabling FDA to assess the effects of tobacco products on the public health. The final rule ensures tobacco manufacturers adhere to the regulations that apply to other FDA-regulated products sold in the United States and exports of products that are not allowed for sale in the United States. The final rule clarifies FDA's practices and procedures with respect to voluntary recalls of tobacco products. It also guarantees that tobacco product manufacturers have the same rights as other FDA-regulated entities, where appropriate, such as the right to regulatory hearings.

FDA is unable to quantify the benefits of the amendments. Benefits will derive from FDA's enhanced ability to carry out its obligations and from clarifying certain FDA practices and procedures for tobacco product manufacturers.

Section 7.3(f) clarifies and explains FDA's practices and procedures with respect to recalls of tobacco products. FDA concludes that tobacco product manufacturers follow recall procedures consistent with current regulations and that the amendment to § 7.3(f) will not impose additional burdens on tobacco product manufacturers.1 The revision to § 16.1(b) allows for an informal hearing when FDA is considering regulatory actions or decisions related to misbranding, good manufacturing practice requirements, or withdrawal of a tobacco product. No additional costs are expected to accrue from amendments to §§ 1.21(c), 7.3(f), and 16.1(b).

Additional costs will derive from recordkeeping requirements as they relate to some tobacco product exports (§ 1.101(a) (b)). The estimated annual costs range is between $0.07 million and $0.37 million, as further explained in table 1 of this document.

Section 1.101(a)(b) pertain to recordkeeping of documentation that demonstrates that tobacco products not allowed for sale in the United States are exported in accordance with appropriate regulations. In addition, recordkeeping documents must demonstrate that: (1) The product meets the foreign purchaser's specifications, (2) the product does not conflict with the laws of the foreign country, (3) correct labeling is placed outside of the shipping package, and (4) the product is not sold or offered in the United States. These documents are required to be retained (§ 1.101(b)).

The U.S. Department of Commerce International Trade Administration (ITA) reports that the total number of (manufacturing and non-manufacturing) U.S. companies exporting tobacco products (North American Industry Classification System or NAICS code 3122) to the world in 2007 was 158, which includes 30 manufacturers and 125 non-manufacturers of tobacco products.2 Exporting manufacturers represent approximately 38 percent of all manufacturing companies reported by the 2007 Economic Census in this NAICS category (Ref. 3). FDA takes the total number of exporting manufacturing companies as a lower bound and the total number of exporting (manufacturing and non-manufacturing) companies as an upper bound for the total number of respondents that will be affected by the final rule.

In estimating the burden, FDA uses the number of responses per respondent (3), and time per response (22 hours for recordkeeping)3 from previously reported estimates relating to drugs and medical devices (August 7, 2008, 73 FR 46007). In valuing the time cost, FDA uses the 2010 median hourly wage of $17.98 for Office and Administrative Support Occupations (NAICS code 430000) in the tobacco manufacturing industry (NAICS code 312200) asreported by the Bureau of Labor Statistics (Ref. 4), plus benefits and overhead. Table 2 of this document shows that annual recordkeeping costs for all respondents are estimated to be between $0.07 million and $0.37 million.

The simplest alternative is to exempt exporters of tobacco products from the recordkeeping requirements according to general regulations that apply to other exports that FDA regulates. Under this option, there would be no immediate compliance costs or benefits. Compliance costs for exporters of tobacco products are estimated to be between $0.07 million and $0.37 million. The recordkeeping requirements for exporters of tobacco products will have the benefit of allowing FDA to carry out its obligations and to clarify practices and procedures for tobacco product manufacturers.

FDA has examined the economic implications of this final rule as required by the Regulatory Flexibility Act. If a rule will have a significant economic impact on a substantial number of small entities, the Regulatory Flexibility Act requires Agencies to analyze regulatory options that would lessen the economic effect of the rule on small entities. This analysis serves as the Final Regulatory Flexibility Analysis as required under the Regulatory Flexibility Act.

The Small Business Administration (SBA) uses different definitions of what a small entity is for different industries. Using 2009 SBA size standard definitions, a firm categorized in NAICS code 312229 (Other Tobacco Product Manufacturing) is considered small if it hires fewer than 500 employees. On the other hand, firms classified in NAICS code 312221 (Cigarette Manufacturing) are considered small if they hire fewer than 1,000 employees (Ref. 5).

The most current available data on the number of establishments by employee size have not been released for the categories listed previously in this document; thus, FDA uses data from the 2002 Economic Census (Ref. 6) to determine the number of small entities. FDA notes that the data are available at the establishment level rather than at the firm level, and assumes that the typical manufacturing establishment is roughly equivalent to the typical small manufacturing firm. Statistics on the classification of establishments by employment size show that in the year 2002, 67 to 99 percent of tobacco manufacturing entities had fewer than 1,000 employees and will be considered small by SBA. (See table 3 of this document.)

FDA also estimates the percent of small to medium-sized4 exporting companies to be 15 percent, using industry trade data for NAICS code 3122 (Tobacco Products) made available by ITA. The estimated number of affected exporting entities is determined by multiplying 0.15 by the total number of establishments. The estimates indicate that the estimated number of affected entities ranges between 2 and 14 exporters. (See table 3 of this document.)

FDA uses the total value of shipments data by employment size from the 2002 Economic Census published by the U.S. Bureau of the Census to determine the unit cost as a percent of the total value of shipment for a typical manufacturer. The analysis of the effect on small versus large entities is limited by the U.S. Bureau of the Census data restrictions imposed to safeguard the confidentially of some establishments in NAICS code 312221. Consequently, the average value of shipments is presented for all establishments in NAICS code 312221 and for establishments employing 1 to 19 and 20 to 99 employees, separately. The average cost per entity is $2,814. It is estimated that this average cost as a percent of average value of shipments for small entities may be between 0.00 and 0.31 percent (see table 4 of this document). The Agency concludes that this final rule will have a significant impact on a substantial number of small entities, but the impact is uncertain.

In this section, we discuss an alternative to reduce costs for small entities. Exempting exporters of tobacco products from recordkeeping requirements can result in an estimated annual savings of 0.02 to 0.31 percent of the cost of the value of shipments for small-sized firms. However, these recordkeeping requirements will provide evidence that tobacco product manufacturers export according to regulations that apply to other FDA-regulated products.

This final rule contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the PRA (44 U.S.C. 3501-3520). The title, description, and respondent description of the information collection provisions are given in the following paragraphs with an estimate of the annual recordkeeping 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 each collection of information.

Title:Further Amendments to General Regulations of the Food and Drug Administration to Incorporate Tobacco Product Issues—21 CFR 1.101.

Description:On June 22, 2009, the President signed the Tobacco Control Act into law. In this rule, FDA is amending certain of its general regulations to include tobacco products, where appropriate, in light of FDA's authority to regulate these products under the Tobacco Control Act. The amendments in this rulemaking will subject tobacco products to the same general requirements that apply to other FDA-regulated products, where appropriate.

This rule amends § 1.101(b), among other sections, to require persons who export human drugs, biologics, devices, animal drugs, cosmetics, and tobacco products that may not be sold in the United States to maintain records demonstrating their compliance with the requirements in section 801(e)(1) of the FD&C Act. Section 801(e)(1) requires exporters to keep records demonstrating that the exported product: (1) Meets with the foreign purchaser's specifications, (2) does not conflict with the laws of the foreign country, (3) is labeled on the outside of the shipping package that is intended for export, and (4) is not sold or offered for sale in the United States. These criteria also could be met by maintaining other documentation, such as letters from a foreign government Agency or notarized certifications from a responsible company official in the United States stating that the exported product does not conflict with the laws of the foreign country.

Description of Respondents:Manufacturers, distributors, and other persons who export tobacco products not intended for sale in the United States.

Comments:A few comments were received which were beyond the scope of this collection of information, did not address PRA issues, and were not addressed in this rule.

The Agency estimates the number of respondents and burden hours associated with the recordkeeping requirements by reviewing Agency records and using Agency expert resources, and conferring with another Federal Agency with experience and information regarding tobacco product exporters. FDA estimates that between 30 and 158 establishments could be involved in the exporting of tobacco products and, based on previous recordkeeping estimates in OMB control number 0910-0482, “Export Notification and Recordkeeping Requirements,” each establishment may have to maintain records up to 3 times per year, at a total of 22 hours per recordkeeper. The Agency estimates between 1,980 and 10,428 burden hours will be needed for tobacco product exporters to create and maintain records demonstrating compliance with section 801(e)(1) of the FD&C Act. Therefore, FDA estimates that 158 respondents will require approximately 10,428 hours to comply with the requirements of section 801(e)(1) of the FD&C Act.

The information collection provisions of this final rule have been submitted to OMB for review as required by section 3507(d) of the PRA.

Before the effective date of this final rule, FDA will publish a notice in theFederal Registerannouncing OMB's decision to approve, modify, or disapprove the information collection provisions in this final rule. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

FDA has analyzed this final rule in accordance with the principles set forth in Executive Order 13132. FDA has determined that this final rule does not contain policies that have substantial direct effects on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. Accordingly, the Agency concludes that this final ruledoes not contain policies that have federalism implications as defined in the Executive order and, consequently, a federalism summary impact statement is not required.

The following references have been placed on public display in the Division of Dockets Management (seeADDRESSES), and may be seen by interested parties between 9 a.m. and 4 p.m., Monday through Friday. (FDA has verified the Web site addresses, but FDA is not responsible for any subsequent changes to Web sites after this document publishes in theFederal Register).

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 1, 7, and 16 are amended as follows:

For the complete explanation of the background of this rule, including the rationale for the change, the authority of the Department of State (“Department”) to make the fee changes in question, and an explanation of the study that produced the fee amounts, consult the prior public notices cited in the “Background” section below.

The Department published a proposed rule in theFederal Register, 75 FR 6321, on February 9, 2010, proposing to amend sections of 22 CFR part 22. Specifically, the rule proposed changes to the Schedule of Fees for Consular Services and provided 30 days for comments from the public. In response to requests by the public for more information and a further opportunity to submit comments, the Department subsequently published a supplementary notice in theFederal Register, 75 FR 14111, on March 24, 2010 (Public Notice 6928). The supplementary notice provided a more detailed explanation of the Cost of Service Model (“CoSM”), previously referred to as the Cost of Service Study or “CoSS,” which is the activity-based costing model that the Department used to determine the proposed fees for consular services, and reopened the comment period for an additional 15 days. During this and the previous 30 day comment period, 1,797 comments were received, either by email or through the submission process atwww.regulations.gov.

The Department analyzed the 1,797 comments in the interim final rule at 75 FR 36522, on June 28, 2010 (Public Notice 7068) and does not reproduce that analysis here. Instead, the current notice addresses only the four additional comments received in the further 60 days during which the comment period for this interim final rule was open (see Analysis of Comments, below). In total, the public was given 105 days to comment on this change to the Schedule of Fees and a total of 1,801 comments were received.

This rule establishes the following fees for the categories below, as determined by the CoSM:

Administrative processing of formal renunciation of U.S. citizenship was previously a no-fee service. Under the new fee structure, the renunciant must now pay a fee for this service. The Department has decided that the renunciant should pay this fee at the visit during which he or she swears the oath of renunciation. The proposed and interim final rules referred to it as “Documentation of formal renunciation of U.S. citizenship,” at Item 8 of their respective reproductions of the Schedule of Fees. See 75 FR 36522, 36532; 75 FR 6321, 6328. This final rule makes a technical correction to the title of the service, labeling it “Administrative processing of formal renunciation of U.S. citizenship.”

Please note there are two additional clarifications the Department of State is making in this final rule. First, the Immigrant Visa application for employment-based applications is based on I-140 and I-526 petitions and also includes investor visas. The interim final rule incorrectly stated that employment-based visas are based on the I-140 petition only. Second, since publishing the interim final rule on June 28, 2010 (75 FR 36522), the Department reexamined the CoSM's inputs to the Diversity Visa Lottery Fee. Upon reexamination, it was decided that the present fee adequately accounts for the costs of processing the immigrant visa application and enhanced security. The Department, therefore, has decided it will not charge the separate Immigrant Visa Application Processing Fee or Immigrant Visa Security Surcharge toDiversity Visa Lottery selectee-applicants and will amend the Schedule of Fees to so reflect.

In the additional 60 day period since the publication of the interim final rule, four additional comments were received. Three commenters expressed concern over the fee increase for extra passport visa pages. Two of those commenters traveled frequently for work and noted that this would be an additional cost. The third commenter, an American citizen living overseas, expressed concern over the large cost to his family to receive additional visa pages. A suggestion was made by one of the commenters to waive the additional visa pages fee every other year for business people who travel frequently.

As explained in the supplementary notice, 75 FR 14111, 14113, the cost of this service includes not only the pages themselves, but the employee time spent affixing the pages into a passport, endorsing the passport, and performing a quality-control check on the expanded passport; also the costs of trained labor, supervisors, and overhead; of performing a name check of the applicant prior to providing the service; and a share of the overall costs of no-fee emergency services provided to Americans overseas—costs incorporated into and assigned across all passport book services. The Department does offer a larger passport for travelers who anticipate that they will need more visa pages. Any passport applicant may request a larger book (52 pages, instead of the standard 28 pages) at the time of application for no additional fee. Information about this option is widely available to customers both domestically and overseas. Because the Department's passport processing operations must be self-sustaining as much as possible and has accordingly set these fees at a level that will allow cost recovery, the Department is not in a position to grant a fee waiver to frequent business travelers.

The final comment was directed toward the fee increase for the passport book. The commenter stated that the fee increase influenced whether she would renew her passport book and her decision to travel abroad. The Department is aware of the financial impact this fee increase may have on individuals and businesses; however, the Department must recover its costs from the passport services it provides. The Department also maintains that the increase in passport fees is not significant in comparison with the overall costs of international travel.

The Department has adjusted the fees to ensure that sufficient resources are available to meet the costs of providing consular services in light of the CoSM's findings that the U.S. Government was not fully covering its costs for providing these consular services. Pursuant to OMB guidance, the Department endeavors to recover the cost of providing services that benefit specific individuals, as opposed to the general public.SeeOMB Circular A-25, ¶ 6(a)(1), (a)(2)(a). For this reason, the Department has adjusted the Schedule.

For a summary of the regulatory findings and analyses regarding this rulemaking, please refer to the findings and analyses published with the interim final rule, which can be found at 75 FR, at 36529, which are adopted herein. The rule became effective July 13, 2010. As noted above, the Department has considered the comments submitted in response to the interim final rule, and does not adopt them. Thus, the rule remains in effect without modification.

In addition, as noted in the interim final rule, this rule was submitted to and reviewed by OMB pursuant to E.O. 12866. The Department of State has also considered this rule in light of Executive Order 13563, dated January 18, 2011, and affirms that this regulation is consistent with the guidance therein.

Accordingly, the Interim Rule amending 22 CFR parts 22 and 51, which was published in theFederal Register, 75 FR 36522, on June 28, 2010 (Public Notice 7068), is adopted as final without change.

I. Background

The Indian Gaming Regulatory Act (IGRA) established an agency funding framework whereby gaming operations licensed by tribes pay a fee to the Commission for each gaming operation that conducts Class II or Class III gaming activity that is regulated by IGRA. 25 U.S.C. 2717(a)(1). These fees are used to fund the Commission in carrying out its statutory duties. Fees are based on the gaming operation's assessable gross revenues, which are defined as the annual total amount of money wagered, less any amounts paid out as prizes or paid for prizes awarded and less allowance for amortization of capital expenditures for structures. 25 U.S.C. 2717(a)(6). The rate of fees is established annually by the Commission and shall be payable on a quarterly basis. 25 U.S.C. 2717(a)(3). IGRA limits the total amount of fees imposed during any fiscal year to .08% of the gross gaming revenues of all gaming operations subject to regulation under IGRA. Failure of a gaming operation to pay the fees imposed by the Commission's fee schedule can be grounds for a civilenforcement action. 25 U.S.C. 2713(a)(1). The purpose of Part 514 is to establish how the NIGC sets and collects those fees, to establish a basic formula for tribes to utilize in calculating the amount of fees to pay, and to advise of the potential consequences for failure to pay the fees.

On November 18, 2010, the National Indian Gaming Commission (NIGC) issued a Notice of Inquiry and Notice of Consultation advising the public that the NIGC was conducting a comprehensive review of its regulations and requesting public comment on which of its regulations were most in need of revision, in what order the Commission should review its regulations, and the process NIGC should utilize to make revisions. 75 FR 70680. On April 4, 2011, after holding eight consultations and reviewing all comments, NIGC published a Notice of Regulatory Review Schedule (NRR) setting out a consultation schedule and process for review. 76 FR 18457. Part 514 was included in the first regulatory group reviewed pursuant to the NRR.

The Commission conducted a total of 16 tribal consultations as part of its review of Part 514. Tribal consultations were held in every region of the country and were attended by many tribal leaders or their representatives. In addition to tribal consultations, on May 10, 2011, the Commission requested public comment on a Preliminary Draft of amendments to Part 514. 76 FR 26967. After considering the comments received from the public and through tribal consultations, the Commission published a Notice of Proposed Rulemaking, proposing five amendments to Part 514: changing the fee calculation from a calendar year to a fiscal year basis; changing the payment schedule to a quarterly payment system; ensuring language is consistent with industry standards; creating a ticketing system for late fee and fee worksheet submissions; and formalizing the fingerprinting fee system. 76 FR 62684.

In response to our Notice of Proposed Rulemaking, published October 11, 2011, 76 FR 62684, we received the following comments.

Comment:One commenter noted that the proposed rule reiterates the maximum fee rate of 5% of amounts in excess of the $1.5 million of assessable gross revenue. The comment acknowledges that the proposed rule does not propose an increase in the fee rate, but states nonetheless that such an increase could have a serious effect on any Tribe's ability to retain revenues. The comment recommends that prior to any amendment in fee rates mandated by the Commission, the Commission should consult with all Tribes paying fees under IGRA.

Response:The National Indian Gaming Commission fee rate is limited by the Indian Gaming Regulatory Act (25 U.S.C. 2717) to 2.5% of the first $1.5 million of a facility's gross gaming revenue, and no more than 5% of amounts in excess of $1.5 million of a facility's gross gaming revenue. Additionally, the Native American Technical Corrections Act of 2006 (Pub. L. 109-221) mandated that fees imposed by the Commission during any fiscal year shall not exceed 0.080% of the gross gaming revenues of all gaming operations subject to regulation under IGRA.

Comment:One commenter suggested that the regulation include a definition of “gross gaming revenue,” whether as defined in GAAP or through some other internationally accepted accounting standard.

Response:The GAAP definition of “Gross Gaming Revenue,” as well as other internationally accepted standards, may provide a standard definition, but are also subject to change and may be inconsistent with the definition contained in IGRA at 25 U.S.C. 2717(a)(6). The Commission therefore declines to further define “Gross Gaming Revenue” through a regulation.

Comment:Another commenter suggests that the regulation should be changed to allow the deduction of promotional items as “amounts paid out as prizes or paid for prizes awarded.”

Response:Pursuant to IGRA, gross gaming revenue constitutes “the annual total amount of money wagered, less any amounts paid out as prizes or paid for prizes awarded and less allowance for amortization of capital expenditures for structures.” In accordance with GAAP and industry standard practices, promotional items given to patrons that are not the result of winning wagers are not considered prizes paid or prizes awarded. The Commission, therefore, declines to allow the deduction of promotional items as prizes paid or prizes awarded as it would be inconsistent with the plain language of IGRA.

Comment:One commenter stated that the computation of gross revenue example in the proposed rule does not reflect the intent of the regulation. In support of this, the commenter cited to the regulation's example that separates gross gaming revenues into two categories—money wagered and entry fees. The commenter suggests that regulation text directing tribes to “show the amount derived from each type of game” is inconsistent with the regulation and leads to confusion and potential miscalculation of fees. The Commission should review the examples and promulgate a bulletin providing guidance on the matter.

Response:Although the sub-section referenced in the comment was intended only as an example, and nothing in the regulation requires the segregation of types of games and entry fees, we have removed it from this rule. As for guidance on the computation of gross gaming revenue, the Commission intends to offer a broad array of technical assistance and training in conjunction with this rule.

The Commission also notes that it is amending Part 514 to change the term “admission fees” to “entry fees” in section 514.4(a). “Entry fee” is a term commonly used in the gaming industry and the Commission believes the clarification will eliminate concern that an “admission fee” includes admission to concerts or other non-gaming activity.

Comment:While two commenters stated their support for changing from a bi-annual submission requirement to a quarterly submission requirement, one commenter opposes the change, stating that it makes it more difficult for Tribes to calculate fees and will result in more instances of late or inaccurate quarterly statements and/or fee payments.

Response:The recommendation to maintain a bi-annual fee was not adopted. The Commission finds that changing the submission requirement back to quarterly is consistent with the requirements of the Indian Gaming Regulatory Act, 25 U.S.C. 2717(f), which states that “[t]he Commission, by a vote of not less than two of its members, shall annually adopt the rate of the fees authorized by this section which shall be payable to the Commission on a quarterly basis.” Further, this rule does not prohibit pre-payment of fees. Fee worksheets, however, must be submitted on a quarterly basis, even if the fee has been prepaid.

This rule also changes the timeframe of the fee calculation from a gaming operation's calendar year to its fiscal year. Though there were no comments in opposition to this change, it is important to note that this rule does not mandate that a tribe change its fiscal year, but rather requires that a tribe base its fee calculation on its fiscal year. Thus, if a tribe's fiscal year is based on its calendar year, there is no need to change. The Commission believes that the use of a fiscal year for calculating annual fees and completing fee worksheets will result in fewer inaccuracies in fee calculations.

Comment:The Commission is amending Part 514 to add a “ticket” system which assesses a fine for a late fee payment. The proposed Rule distinguishes between “late payments” and “failure to pay annual fees.” A payment received between one and ninety days late is a “late payment” and is subject to a late payment fine. A payment received after 90 days constitutes a “failure to pay annual fees” and subjects the tribe to a potential notice of violation (NOV) and civil fine assessment. The Chair shall consider any mitigating circumstances surrounding the late payments and, at the Chair's discretion, reduce the late fee or the civil fine due. Per federal law, any fines are payable to U.S. Treasury, not the NIGC.

The comments were overwhelmingly supportive of the proposed rule's implementation of a late payment system. There were, however two comments on how to implement the system. One commenter stated that the proposed late fee structure is too severe. According to the commenter, an assessment of 10% is too harsh, especially for a payment that may only be a few days late. Another commenter stated that the late payment penalties should start at 1% for statements/payments one to thirty days late, 2% for statements/payments thirty-one to sixty days late, 5% for statements/payments sixty-one to ninety days late, and 25% for statements/payments more than ninety days late.

Response:The Commission believes that a late-fee structure of 10%, 15%, and 20% properly emphasizes the importance of annual fees to the continued operation of the NIGC. Timely submission of fee worksheets and payments is vital to the NIGC's ability to fulfill is regulatory duties and provide technical assistance and training to the tribal gaming operations. Accordingly, any late fee must provide incentive to gaming operations to pay fees in a timely manner. The Commission is concerned that setting late fees too low could discourage timely payment. Therefore, it did not adopt the suggestions to lower the late fee percentages.

Comment:Two commenters suggested the Commission consider the inclusion of a grace period, such as no late fees for payments 1-7 days late, and/or reduce the percentage rate for a late payment of thirty days or less.

Response:The recommendation to provide a grace period before a late fee may be assessed is not adopted. The Commission is concerned that the inclusion of a grace period may have the effect of constructively pushing back the fee deadline to the point that the grace period ends. The Commission also notes that the purpose of changing the basis for fee calculation to the fiscal year is to make timely fee payments easier. Further, the Commission's use of the “mailbox rule” gives gaming operations the maximum amount of time to prepare and submit fee payments and fee worksheets. According to the mail-box rule, a submission is considered received by the Commission when it is postmarked, not when it is received by the NIGC.

Comment:One commenter asked that the NIGC consider adding language to the effect that the NIGC will take factors such as the size of the tribe's gaming operation, as well as other equitable considerations, into account when assessing late fees.

Response:The suggestion to specify that the above listed factors be considered by the Chair when assessing a late fee is not adopted. Pursuant to this rule, the Chair will take into consideration any information submitted by a tribe in its response to the notice of late fees. See 514.9(b). This information may include the size of the Tribe's gaming operation and other equitable considerations. Specifying what those considerations may be would effectively limit the factors the Chair may consider when determining whether to issue a late fee and the amount of the fee. The Commission does not want to limit what the Chair may consider.

Comment:One commenter stated that the Commission should clarify whether late fees will run concurrently with any enforcement action taken under 514.10 of the proposed rule and, if so, suggests a cap on any late fees assessed in conjunction with a NOV or enforcement action.

Response:The recommendation to further clarify the regulation is not adopted. A late fee and civil fine assessment will likely not be issued concurrently. Under this rule, the first step is to issue a notice of late fee. If the fee payment or fee worksheet is submitted within 90 days of the due date, the Chair may propose a late fee. The proposed late fee will depend on the timeliness of the submission. If, however, the fee or fee worksheet is not submitted within the initial 90 days, the lateness becomes a failure to pay and rather than a late fee, the Chair could instead issue a NOV or closure order. Even if a late fee and civil fine assessment were to issue simultaneously though, the late fee would have to be incorporated into a proposed civil fine. Pursuant to IGRA, the late fee and civil fine cannot collectively exceed the statutory limit.

Comment:One commenter stated that the regulation should require that before the NIGC can find a tribe has failed to pay its fees and issue a NOV or temporary closure order, it must issue two notices to the tribe during the initial 90 days. Another commenter recommended that the NIGC engage in consultation with a tribe before initiating the NOV process.

Response:The recommendations to require two notices or engage in consultation before a NOV or temporary closure order may be issued are not adopted. The Chair and NIGC staff will continue to work with Tribes and gaming operations to ensure that enforcement is the last option, to be used only if assistance and compliance have failed. Typically, the NIGC will have been in informal discussions with a tribe or gaming operation long before a NOV is issued. The Commission chooses not to add to the NOV requirements already mandated by IGRA and NIGC regulations.

Comment:Another commenter stated that the termproposed late feesis inaccurate and should be changed tolate fees assessed.

Response:The recommendation is not adopted. Late fees do not become final unless the recipient of the fee fails to appeal or, on appeal, the fee is upheld by the full Commission.

Comment:One commenter stated that late fees assessed are, in fact, operating expenses. The commenter suggested that if the Commission's intent is to prohibit tribes from deducting the amount of late penalty from the fee calculation, the regulation should be clarified to state as much.

Response:This rule requires late fees to be paid by the person assessed and that they not be treated as an operating expense of a gaming operation. These changes ensure that other parties willnot be responsible for the late fee. Further, the calculation of operating expenses is not relevant to the fee calculation. Fees are based on assessable gross revenues, which are defined by 25 U.S.C. 2717(a)(6) and section 514.4 of this rule as “the annual total amount of money wagered, less any amounts paid out as prizes or paid for prizes awarded and less allowance for amortization of capital expenditures for structures.” Because operating expenses are not part of the fee calculation, the suggestion to clarify the rule to prohibit tribes from deducting the late penalty from the fee calculation is not adopted.

Comment:Two commenters objected to fingerprint fees being included as a separate section of the regulation on the grounds that fees should be covered by the annual fee already collected by the Commission.

Response:This comment is not adopted. IGRA does not require the NIGC to process fingerprints and not all tribes utilize the service. The service will continue to be charged as a separate fee only to those tribes that utilize the NIGC's fingerprint processing service. The Commission believes formalizing the procedures for assessing fingerprint card processing fees in a regulation provides transparency and clarity.

The rule will not have a significant impact on a substantial number of small entities as defined under the Regulatory Flexibility Act, 5 U.S.C. 601,et seq.Moreover, Indian Tribes are not considered to be small entities for the purposes of the Regulatory Flexibility Act.

The rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. The rule does not have an effect on the economy of $100 million or more. The rule will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, local government agencies or geographic regions. Nor will the rule have a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of the enterprises, to compete with foreign based enterprises.

The Commission, as an independent regulatory agency, is exempt from compliance with the Unfunded Mandates Reform Act, 2 U.S.C. 1502(1); 2 U.S.C. 658(1).

In accordance with Executive Order 12630, the Commission has determined that the rule does not have significant takings implications. A takings implication assessment is not required.

In accordance with Executive Order 12988, the Commission has determined that the rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order.

The Commission has determined that the rule does not constitute a major federal action significantly affecting the quality of the human environment and that no detailed statement is required pursuant to the National Environmental Policy Act of 1969, 42 U.S.C. 4321,et seq.

The information collection requirements contained in this rule were previously approved by the Office of Management and Budget (OMB) as required by 44 U.S.C. 3501et seq.and assigned OMB Control Number 3141- 0007, which expired in August of 2011. The NIGC is in the process of reinstating that Control Number.

Although the rule changes the collection from bi-annually to quarterly, the proposed rule does not require any significant changes in information collection previously approved under the Paperwork Reduction Act of 1995. 44 U.S.C. 3501et seq.At the time OMB Control Number 3141-0007 was assigned, Part 514 required quarterly submissions. This was changed to a bi-annually submission requirement on August 26, 2009 without obtaining a new OMB Control Number. 74 FR 36926. Accordingly, no significant changes in information will occur since the last OMB Control Number was assigned.

The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497, 25 U.S.C. 2701et seq.,authorizes the NIGC to promulgate such regulations andguidelines as it deems appropriate to implement certain provisions of the Act. 25 U.S.C. 2706(b)(10). On November 12, 2010, the Commission issued a Notice of Inquiry (NOI) requesting comment on which of its regulations were most in need of revision, in what order the Commission should review its regulations, and the process NIGC should utilize to make revisions. The NOI was published in theFederal Registeron November 18, 2010. 75 FR 70680. The Commission's regulatory review process established a tribal consultation schedule of 33 meetings over 11 months with a description of the regulation groups to be covered at each consultation. On October 12, 2011, the Commission published a Notice of Proposed Rulemaking (NPRM) indicating its intent to repeal part 523 and requested comment through December 12, 2011. 76 FR 63236.

Part 523 applies only to gaming ordinances or resolutions enacted by Tribes prior to January 22, 1993, and not yet submitted to the Chairwoman. All comments received in response to the NOI, during tribal consultation meetings, or in response to the NPRM indicated that any ordinances or resolutions enacted prior to January 22, 1993 already have been submitted to the Chair for review. Accordingly, comments support the repeal of this part. A review of the Commission documents also did not find any ordinances or resolutions meeting the criteria of this part that require review. Because this regulation appears to be no longer necessary, the Commission removes this part.

Four tribes responded to the NPRM. Of these four, none had effective ordinances that were enacted prior to 1993. Two tribes were supportive of the rule, one had no objection, and the fourth declined comment other than to say the repeal would not affect it..

The proposed rule will not have a significant impact on a substantial number of small entities as defined under the Regulatory Flexibility Act, 5 U.S.C. 601,et seq.Moreover, Indian Tribes are not considered to be small entities for the purposes of the Regulatory Flexibility Act.

The final rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. The rule does not have an effect on the economy of $100 million or more. The rule will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, local government agencies or geographic regions, nor will the proposed rule have a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of the enterprises, to compete with foreign based enterprises.

The Commission, as an independent regulatory agency, is exempt from compliance with the Unfunded Mandates Reform Act, 2 U.S.C. 1502(1); 2 U.S.C. 658(1).

In accordance with Executive Order 12630, the Commission has determined that the final rule does not have significant takings implications. A takings implication assessment is not required.

In accordance with Executive Order 12988, the Commission has determined that the rule does not unduly burden the judicial system and meets the requirements of sections 3(a) and 3(b)(2) of the Order.

The Commission has determined that the rule does not constitute a major federal action significantly affecting the quality of the human environment and that no detailed statement is required pursuant to the National Environmental Policy Act of 1969, 42 U.S.C. 4321,et seq.

This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501et seq.This rule merely repeals a previous rule, and does not establish, or modify any information reporting or recordkeeping requirements, and therefore is not subject to the requirements of the Paperwork Reduction Act.

For the reasons stated in the preamble, and under the authority 25 U.S.C. 2701, the National Indian Gaming Commission removes and reserves 25 CFR part 523.

The Quintiles Wrightsville Beach Full and Half Marathon committee on behalf of the North Carolina Department of Transportation (NCDOT) has requested a temporary deviation from the current operating schedule for the S.R. 74 Bascule Drawbridge across the Atlantic Intracoastal Waterway (AIWW), mile 283.1, at Wrightsville Beach, NC. The requested deviation is to accommodate the 2012 Quintiles Wrightsville Beach Full and Half Marathon scheduled for Sunday, March 18, 2012. To facilitate this event, the draw of the bridge will be maintained in the closed-to-navigation position from 5 a.m. until 8 a.m.

The current operating schedule for the bridge is set out in 33 CFR 117.821(a)(4). The regulation requires the bridge to open on signal for vessels at all times except that from 7 a.m. until 7 p.m. the bridge shall open on the hour; every third and fourth Saturday in September the bridge shall remain closed from 7 a.m. until 11 a.m.; and the last Saturday of October or the first or second Saturday of November the bridge shall remain closed from 7 a.m. until 10:30 a.m. The bascule drawbridge has a vertical clearance of 20 feet above mean high water (MHW) in the closed position. Vessels that can pass through the bridge in the closed position may do so at any time.

This race is an annual event; therefore local waterway users should be familiar with the closure. To ensure that waterway users are aware of the closure, the Coast Guard will issue a Local and Broadcast Notice to Mariners to allow mariners to schedule their transits accordingly. There are no alternate routes available to vessels. Most waterway traffic consists of recreational boats with a few barges and tugs in the daytime. The bridge is able to open for emergencies.

In accordance with 33 CFR 117.35(e), the drawbridge must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Figure Eight Beach Homeowners Association, who owns and operates the Figure Eight Swing Bridge across the Atlantic Intracoastal Waterway (AIWW), North Carolina Cut, mile 278.1, at Scotts Hill, NC, has requested a temporary deviation from the current operating regulations set out in 33 CFR 117.821(a)(3), to accommodate mechanical gear replacement.

Under the current operating schedule, the draw shall open on signal for commercial vessels at all times and open on signal for pleasure vessels except need only open for pleasure vessels on the hour and half hour. Figure Eight Swing Bridge, at AIWW mile 278.1, across the North Carolina Cut in Scotts Hill, NC, has a vertical clearance in the closed position to vessels of 20 feet above mean high water. During this time of year approximately two vessels a day transits the area.

To facilitate mechanical gear replacement, the drawbridge will be maintained in the closed-to-navigation position from 10 a.m. to 3 p.m. on February 7 and 8, 2012. The mechanical gear replacement is scheduled for February 7, 2012. Under this temporary deviation, the drawbridge will remain in the closed position to vessels requiring an opening from 10 p.m. to 3 p.m. However, should weather preclude this work from taking place on February 7, 2012, the work will be re-scheduled to take place on February 8, 2012. In that case, the drawbridge will operate as normal on February 7, 2012 and the drawbridge will remain in the closed position to vessels requiring an opening from 10 a.m. to 3 p.m. on February 8, 2012.

Vessels may transit under the drawbridge while it is in the closed position. The Atlantic Intracoastal Waterway caters to a variety of vessels from tug and barge traffic to recreational vessels traveling from Florida to Maine. The Coast Guard will inform unexpected users of the waterway through our local and broadcast Notices to Mariners of the limited operating schedule for the drawbridge so that vessels can arrange their transits to minimize any impacts caused by the temporary deviation. The Atlantic Ocean is the alternate route for vessels and the bridge will not be able to open in the event of an emergency. The Coast Guard will inform the users of the waterway through our Local and Broadcast Notices to Mariners of the opening restrictions of the draw span to minimize transiting delays caused by the temporary deviation.

In accordance with 33 CFR 117.35(e), the draw must return to its regular operating schedule immediately at the end of the designated time period.

This deviation from the operating regulations is authorized under 33 CFR 117.35.

The Event Director for the New Hanover County Girl Scouts, with approval from the North Carolina Department of Transportation, owner of the drawbridge, has requested a temporary deviation from the current operating schedule to accommodate the 100 year Anniversary of the Girl Scout Program Ceremonial walk.

The Isabel S. Holmes Bridge operating regulations are set out in 33 CFR 117.829(a). However on January 10, 2012 (77 FR 1406) the Coast Guard granted a deviation from 33 CFR 117.829(a) to facilitate structural repair on the bridge. Under the current operating deviation schedule, the drawbridge will be closed to navigation from 7 a.m. on January 16, 2012 until and including 11 p.m. on April 30, 2012; except that vessel openings will be provided if at least three hours advance notice is given to the bridge tender at (910) 251-5774 or via marine radio on channel 13 VHF. The Isabel S. Holmes Bridge across the Northeast Cape Fear River, mile 1.0,a bascule lift Bridge, in Wilmington, NC, has a vertical clearance in the closed position of 40 feet, above mean high water.

Under this temporary deviation, the drawbridge will be allowed to remain in the closed-to-navigation position from 10 a.m. to noon on Saturday, March 10, 2012 to accommodate the 100 year Anniversary of the Girl Scout Program Ceremonial walk.

Vessels able to pass under the closed span may transit under the drawbridge while it is in the closed position. Mariners are advised to proceed with caution. The Coast Guard will inform users of the waterway through our local and broadcast Notices to Mariners of the limited operating schedule for the drawbridge so that vessels can arrange their transits to minimize any impacts caused by the temporary deviation. There are no alternate routes for vessels and the bridge will be able to open in the event of an emergency.

In accordance with 33 CFR 117.35(e), when applicable the draw must return to its regular operating schedule immediately at the end of the designated time period. This deviation from the operating regulations is authorized under 33 CFR 117.35.

Many veterans who are disabled due to complex chronic disease or traumatic injury may be unable to live safely and independently, or may have health care needs that exceed the capabilities of their families. Many of these veterans are placed in nursing homes. Others, with the proper support, can continue to live in a residential setting and delay, or totally avoid, the need for nursing home care. VA's community residential care program, specifically authorized by 38 U.S.C. 1730 and implemented at 38 CFR 17.61 through 17.72, has provided health care supervision to these veterans.

A medical foster home is a specific type of community residential care facility that provides home-based care to a small number of residents with serious chronic disease and disability. A medical foster home provides a greater level of care than a community residential care facility (and in this respect a medical foster home is more analogous to a nursing home), while allowing veterans to live in a home-likesetting and maintain a greater degree of independence. VA interprets 38 U.S.C. 1730 as authorizing a medical foster home program, as a subset of the community residential care program. In particular, we believe medical foster homes fit within the type of facility authorized by section 1730(f), since they provide “room and board and * * * limited personal care.”

In a document published in theFederal Registeron May 19, 2011 (76 FR 28917), VA proposed regulations to govern medical foster homes. We provided a 60 day comment period, which ended on July 18, 2011. We received one comment.

The commenter sought clarification regarding whether a veteran would “have the option of receiving approved care in their own home rather than being forced into a local nursing home” if there were no approved medical foster home in their area. The proposed rule stated in § 17.73(a) that the purpose of the medical foster home program is to “approve[] certain medical foster homes for the placement of veterans” and that placement in a medical foster home is voluntary on the part of the veteran. If the veteran is interested in this care option, VA will try to refer the veteran to a medical foster home as close to his or her residence as possible.

However, VA is aware that a medical foster home may not be located in the immediate vicinity of the veteran's residence. If a veteran is unable or unwilling to accept placement in a medical foster home that is located outside the immediate vicinity of the veteran's residence, VA offers several alternate health care programs that may better suit the veteran's needs. These alternate programs include home based primary care, where the veteran receives primary care in his home; community residential care, which provides care similar to that of the medical foster home; and nursing home care. Home Based Primary Care provides long-term primary care to chronically ill veterans in their own homes. Home Based Primary Care is appropriate for veterans with complex, chronic, and long-term conditions that would make it difficult to come to a VA facility for treatment. A VA treatment team coordinates the plan of care for each veteran and comes to the veteran's home to provide services. Home Based Primary Care provides primary care, palliative care, therapy, disease management, and coordination of care services.

The commenter noted that § 17.74(d)(3) requires the veteran to be placed in a single-occupancy bedroom, unless the veteran agrees to a multi-occupant bedroom. The commenter asked whether the spouse of a married veteran “[c]an * * * move into the home with the veteran[,] or will the couple be forced to live apart?” Nothing in the regulation would preclude the spouse of a veteran from living in the same medical foster home as the veteran. Such an arrangement would be a matter of agreement between the spouse of the veteran and the medical foster home caregiver. If the spouse of the veteran also requires medical care in addition to lodging, then the spouse of the veteran must be included in the total number of residents receiving care in the medical foster home, which § 17.73(b) limits to no more than three. The medical foster home would not be able to provide adequate care to all of its residents if the total number of residents receiving care exceeds three. If VA recommends a medical foster home that was unable to accommodate the veteran and his or her spouse, VA could provide the veteran an alternate location that would accommodate the veteran and the spouse's needs. However, any agreement between the medical foster home caregiver for the lodging and/or care of veteran's spouse in such home is beyond the scope of this rulemaking. Also, as noted above, if the option of a medical foster home does not adequately address the veteran's and the veteran's family's needs, the veteran may consider an alternate health care option. Therefore, no veteran will be “forced to live apart” from his or her spouse. Because the agreement for lodging and/or medical care for the spouse of the veteran is outside the scope of this rulemaking, except where it may impact compliance with § 17.73(b), we are not making any changes based on this comment.

The commenter also stated that, in the commenter's view, the proposed rule contained language that seemed to indicate that only elderly veterans were eligible to be placed in a medical foster home. The commenter further stated that “there are a growing number of young military veterans who are severely injured and in need of daily medical assistance” and questioned whether placement in a medical foster home would be an option for these veterans. We agree with the commenter that placement in a medical foster home should not be restricted based on the age of the veteran, and this final rulemaking does not place any such restriction. Age is referenced only in the proposed rulemaking in the supplementary information discussing § 17.73(c)(2), where we discussed the eligibility criteria for referral to a medical foster home. We had stated that one criterion is the veteran's enrollment in either the VA Home Based Primary Care or VA Spinal Cord Injury Homecare program. The proposed rule notice explained that “VA Home Based Primary Care (HBPC) is a home care program designed to meet the longitudinal, primary care needs of an aging veteran population with complex, chronic, disabling disease.” However, the HBPC program is not limited to elderly veterans. The program is designed to serve the chronically ill through the months and years before death, providing primary care, palliative care, rehabilitation, disease management and coordination of care services. The proposed rulemaking did not place any age restrictions on eligibility for placement in a medical foster home within the regulation text. We are, therefore, not making any changes based on this comment.

The proposed rule cited 38 U.S.C. 501, 1721, and as noted in specific sections as the authority for 38 CFR part 17. However, the correct authority for part 17 is 38 U.S.C. 501, and as noted in specific sections. We are amending the final rule to reflect the correct authority for part 17.

Based on the rationale set forth in the proposed rule and in this document, VA adopts the proposed rule as a final rule, with the above noted change.

Title 38 of the Code of Federal Regulations, as revised by this final rule, represents VA's implementation of its legal authority on this subject. Other than future amendments to this regulation or governing statutes, no contrary rules or procedures are authorized. All existing or subsequent VA guidance must be read to conform with this final rule if possible or, if not possible, such guidance is superseded by this rulemaking.

Executive Orders 12866 and 13563 direct agencies to assess the 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 effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significantregulatory action,” which requires review by the Office of Management and Budget (OMB), as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.

The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined and it has been determined not to be a significant regulatory action under Executive Order 12866.

The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in expenditure by State, local, or tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any given year. This final rule will have no such effect on State, local, and tribal governments, or on the private sector.

OMB assigns a control number for each collection of information it approves. Except for emergency approvals under 44 U.S.C. 3507(j), VA may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

In the proposed rule, we stated that proposed § 17.74(q) contains collection of information provisions under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521), and that we had requested public comment on those provisions in the notice published in theFederal Registeron May 19, 2011 (76 FR 28917). We did not receive any comments on the proposed collection of information, which OMB has approved without an expiration date, under control number 2900-0777. Following § 17.74(q) in this final rule, we set out an information collection approval parenthetical displaying OMB control number 2900-0777.

The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. In addition to having an effect on individuals (veterans), the final rule will have an insignificant economic impact on a few small entities. Most of the minimum standards that will be established by this rulemaking are already required by state and local regulations, and medical foster homes should already be in compliance with those regulations or with the current NFPA codes. Any additional costs for compliance with this final rule would constitute an inconsequential amount of the operational cost for most facilities. Accordingly, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are 64.005, Grants to States for Construction of State Home Facilities; 64.007, Blind Rehabilitation Centers; 64.008, Veterans Domiciliary Care; 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; 64.011, Veterans Dental Care; 64.012, Veterans Prescription Service; 64.013, Veterans Prosthetic Appliances; 64.014, Veterans State Domiciliary Care; 64.015, Veterans State Nursing Home Care; 64.016, Veterans State Hospital Care; 64.018, Sharing Specialized Medical Resources; 64.019, Veterans Rehabilitation Alcohol and Drug Dependence; 64.022, Veterans Home Based Primary Care.

The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. John R. Gingrich, Chief of Staff, Department of Veterans Affairs, approved this document on January 9, 2012, for publication.

For the reasons stated in the preamble, the Department of Veterans Affairs amends 38 CFR part 17 as follows:

I. Background

Throughout this document, whenever “we,” “us,” or “our” is used, we mean EPA. On November 16, 2011 (76 FR 70929), EPA published a notice of proposed rulemaking (NPR) for the District of Columbia. The NPR proposed approval of the District of Columbia's regional haze plan for the first implementation period, through 2018. EPA proposed to approve this revision since it assures reasonable progress toward the national goal of achieving natural visibility conditions in Class I areas for the first implementation period. This revision also meets the infrastructure requirements of 110(a)(2)(D)(i)(II) and 110 (a)(2)(J), relating to visibility protection for the 1997 8-hour ozone NAAQS and the 1997 and 2006 PM2.5NAAQS.

The revision includes a long term strategy with enforceable measures ensuring reasonable progress towards meeting the reasonable progress goals for the first planning period, through 2018. The District of Columbia's Regional Haze Plan contains the emission reductions needed to achieve the District of Columbia's share of emission reductions agreed upon through the regional planning process. Other specific requirements of the CAA and EPA's Regional Haze Rule and the rationale for EPA's proposed action are explained in the NPR and will not be restated here. No public comments were received on the NPR.

EPA is approving a revision to the District of Columbia State Implementation Plan submitted by the District of Columbia, through the District Department of the Environment (DDOE), on October 27, 2011, that addresses regional haze for the first implementation period. EPA is making a determination that the District of Columbia Regional Haze SIP contains the emission reductions needed to achieve the District of Columbia's share of emission reductions agreed upon through the regional planning process. Furthermore, the District of Columbia's Regional Haze Plan ensures that emissions from the District will not interfere with the reasonable progress goals for neighboring states' Class I areas. In addition, EPA is approving this revision because it meets the applicable visibility related requirements of the CAA section 110(a)(2) including, but not limited to 110(a)(2)(D)(i)(II) and 110(a)(2)(J), relating to visibility protection for the 1997 8-hour ozone NAAQS and the 1997 and 2006 PM2.5NAAQS.

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

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

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

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

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

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

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

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

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

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

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

The Congressional Review Act, 5 U.S.C. 801et seq.,as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. EPA will submit a report containing this action and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in theFederal Register. A major rule cannot take effect until 60 days after it is published in theFederal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by April 2, 2012. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action pertaining to the District of Columbia's Regional Haze Plan for the first implementation period, through 2018 may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

On January 18, 2011, President Obama issued Executive Order 13563, which outlined a plan to improve regulation and regulatory review (76 FR 3821, 1/21/11). Executive Order 13563 reaffirms and builds upon governing principles of contemporary regulatory review, including Executive Order 12866, “Regulatory Planning and Review,” (58 FR 51735, 10/4/1993), by requiring Federal agencies to design cost-effective, evidence-based regulations that are compatible with economic growth, job creation, and competitiveness. The President's plan recognizes that these principles should not only guide the Federal government's approach to new regulations, but to existing ones as well. To that end, Executive Order 13563 requires agencies to review existing significant rules to determine if they are outmoded, ineffective, insufficient, or excessively burdensome.

Accordingly, the Maritime Administration (MarAd) is deleting regulations 46 CFR parts 251, 252, 276, 280, 281,282, and 283. The regulations related to the ODS Program are no longer needed because they have been superseded by the Maritime Security Program established in the Maritime Security Act of 1996, Public Law 104-239. Section 3 of the Maritime Security Act of 1996 prohibits the Secretary of Transportation from entering into any new ODS contracts. Additionally, all previously awarded ODS contracts have expired and no further payments will be made. Therefore, the existing regulations do not serve any useful purpose.

The regulations governing the CDS Program are being deleted because the program has not been funded for approximately thirty years and, as a practical matter of disuse, the existing regulations are outdated. If funds were to be appropriated for CDS in the future, contracts will be awarded under new regulations or under existing or modified policies and procedures for awarding grants.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), supplemented by E.O. 13563 (76 FR 3821, January 18, 2011) and DOT policies and procedures, MarAd must determine whether a regulatory action is “significant,” and therefore subject to OMB review and the requirements of the E.O. The Order defines “significant regulatory action” as one likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal government or communities.

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another Agency.

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof.

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the E.O.

MarAd has determined that this final rule is not considered a significant regulatory action under section 3(f) of Executive Order 12866 and, therefore, was not reviewed by the Office of Management and Budget. This final rule will not result in an annual effect on the economy of $100 million or more. It also is not considered a major rule for purposes of Congressional review under Public Law 104-121. This final rule is also not significant under the Regulatory Policies and Procedures of the Department of Transportation (44 FR 11034, February 26, 1979). The costs and overall economic impact of this rulemaking are so minimal that no further analysis is necessary.

The Administrative Procedure Act (5 U.S.C. 553) provides an exception to notice and comment procedures when they are unnecessary or contrary to the public interest. MarAd finds that under 5 U.S.C. 553(b)(3)(B) good cause exists for not providing notice and comment since this final rule deletes regulations that no longer serve the public interest as a result of having been superseded or as a matter of disuse. Under 5 U.S.C. 553(d)(3), MarAd finds that, for the same reasons, good cause exists for making this rule effective less than 30 days after publication in theFederal Register.

We analyzed this rulemaking in accordance with the principles and criteria contained in E.O. 13132 (“Federalism”) and have determined that it does not have sufficient Federalism implications to warrant the preparation of a Federalism summaryimpact statement. This rule has no substantial effect on the States, or on the current Federal-State relationship, or on the current distribution of power and responsibilities among the various local officials. Nothing in this document preempts any State law or regulation. Therefore, MarAd did not consult with State and local officials because it was not necessary.

MarAd does not believe that this final rule will significantly or uniquely affect the communities of Indian tribal governments when analyzed under the principles and criteria contained in Executive Order 13175 (Consultation and Coordination with Indian Tribal Governments). Therefore, the funding and consultation requirements of this Executive Order do not apply.

The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities do not apply to this rule.

The Regulatory Flexibility Act of 1980 requires MarAd to assess whether this rule would have a significant economic impact on a substantial number of small entities and to minimize any adverse impact. The Maritime Administrator certifies that this final rule will not have a significant economic impact on a substantial number of small entities. This final rule only deletes obsolete Parts in title 46 of the CFR, which have no substantive effect on the regulated public.

We have analyzed this final rule for purposes of compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321et seq.) and have concluded that under the categorical exclusions provision in section 4.05 of Maritime Administrative Order (MAO) 600-1, “Procedures for Considering Environmental Impacts,” 50 FR 11606 (March 22, 1985), neither the preparation of an Environmental Assessment, an Environmental Impact Statement, nor a Finding of No Significant Impact for this rulemaking is required. This rulemaking has no environmental impact.

MarAd has determined that the proposed rule would not significantly affect energy supply, distribution, or use. Therefore, no Statement of Energy Effects is required.

This rule would not effect a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501et seq.), Federal agencies must obtain approval from OMB for each collection of information they conduct, sponsor, or require through regulations. This rulemaking contains no new or amended information collection or recordkeeping requirements that have been approved or require approval by the Office of Management and Budget.

The Unfunded Mandates Reform Act of 1995 requires Agencies to evaluate whether an Agency action would result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $141.3 million or more (as adjusted for inflation) in any 1 year, and if so, to take steps to minimize these unfunded mandates. This proposed rule does not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995. It does not result in costs of $141.3 million or more to either State, local, or tribal governments, in the aggregate, or to the private sector, and is the least burdensome alternative that achieves the objectives of the rule.

A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN number contained in the heading of this document can be used to cross-reference this action with the Unified Agenda.

For the reasons set forth in the preamble, and under the authority of the Merchant Marine Act of 1936, codified at 46 U.S.C. chapter 501, MarAd amends 46 CFR chapter II, subchapter C by removing parts 251, 252, 276, 280, 281, 282, and 283. All contracts for Operating-Differential Subsidy, not previously closed out, are hereby terminated, and no further payments shall be owning or payable. Parts 251, 252, 276, 280, 281 and 283, of title 46, CFR, are removed and reserved for future use by MarAd.