The regulations in “Subpart-Fruits and Vegetables” (7 CFR 319.56-1 through 319.56-54, referred to below as the regulations) prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world to prevent the introduction and spread of plant pests that are new to or not widely distributed within the United States.

The regulations in § 319.56-34 list specific requirements for the importation into the United States of clementines from Spain, one of which is that 200 clementines from each consignment be cut and inspected (i.e., sampled) before undergoing cold treatment. The purpose of this inspection is to detect live Mediterranean fruit flies (Ceratitis capitata,or Medfly) in any stage of development that may be present. If a single live Medfly is found in any stage of development, the entire consignment is rejected.

On December 29, 2010, we published in theFederal Register(75 FR 81942-81943, Docket No. APHIS-2010-0036) a proposal1 to amend the regulations by removing the requirement in § 319.56-34(f) that 200 fruit from each consignment be sampled by cutting before treatment and replacing it with the statement that the number of fruit to be sampled before treatment will be determined by the Animal and Plant Health Inspection Service (APHIS). We explained in the proposal that this change would give us the flexibility to raise or lower the fruit sampling rate when conditions indicate a higher or lower risk of Medfly. With this change, we stated that we would be able to adjust the sampling rate and thereby detect pests that might otherwise go undetected prior to treatment. We also stated that the actual sampling rate would continue to be included in the workplan agreed to by APHIS and the Government of Spain, which describes in detail how the regulations are implemented operationally.

We solicited comments concerning our proposal for 60 days ending February 28, 2011. We received three comments by that date. They were from the national plant protection organization (NPPO) of Spain, a domestic citrus trade association, and a group of students. All opposed our proposal to remove the set number of 200 fruit and replace it with a statement that the number of fruit to be sampled will be determined by APHIS.

Two commenters stated that our proposal contained no objective criteria on which to base increases in the sampling rate or to evaluate the risk level of Medfly. One of these commenters, the NPPO of Spain, noted that they and APHIS had signed a bilateral workplan in October 2010, in which both parties agreed that sampling 200 fruit per consignment would provide a 95 percent confidence level of detecting a 1.5 percent infestation level. The Spanish NPPO expressed concern that the lack of specific criteria in our proposed change to the regulations could be difficult to interpret and lead to disruptions in Spanish exports.

We have subsequently held discussions with the Government of Spain regarding specific confidence and infestation levels. Changes in the sampling rate to achieve agreed-upon target levels will be based on internationally recognized sampling methodologies2 and included in an annex to the bilateral workplan.

The same commenter recommended that target detection levels and sampling rates should be negotiated within the sphere of annual bilateral meetings with APHIS rather than set through rulemaking.

It was necessary for us to propose changing the regulations themselves because they require the use of a single, invariable sampling rate. With the change we are making to the regulations in this final rule, we will have the flexibility to make future adjustments to sampling rates in the context of bilateral discussions with the Government of Spain.

Another commenter noted that the current sampling rate of 200 fruit was established based on a scientific risk assessment, and that if a smaller sample is taken without conducting a similar assessment APHIS may not be able to determine the efficacy of the inspection process until Medfly are found in the channels of distribution. The commenter recommended that, for those reasons, 200 fruit per consignment be the minimum required sampling rate.

We are making no changes in response to this comment. In most ofour systems approaches for importing fruits and vegetables that involve sampling of fruit prior to export, we do not specify the sampling rate in the regulations; instead, fruit is sampled at a rate agreed upon by the NPPO of the exporting country and APHIS and contained in the bilateral workplan. This final rule will make our approach with respect to sampling clementines from Spain consistent with other systems approaches for fruits and vegetables set out in the regulations.

The scientific risk assessment that established the 200 fruit sample indicated that such a sample would give us a 95 percent confidence rate of detecting a 1.5 percent level of infestation. The risk assessment determined that such a detection rate would be sufficient to ensure that Medfly populations in the clementines were low enough to be mitigated by the subsequent required cold treatment. The sampling rate change we proposed was prompted by the desire to increase the number of fruit sampled and thus increase the confidence that we were detecting any shipments with an infestation rate of 1.5 percent or more. We anticipate using the greater flexibility provided by this final rule to allow for such increases, when conditions warrant.

In the other systems approaches in the regulations that include sampling of fruits and vegetables, we only lower the initial sampling rate after years of few or no pest detections have established a definitive record of low pest prevalence in the commodity. At some point, conditions may warrant sampling a lower number of clementines from Spain, thus providing a lower level of confidence that the sampling method is detecting all consignments of fruit with a 1.5 percent or more infestation level. For that reason, it is appropriate that the regulations provide the flexibility to reduce the sampling rate.

If we were to determine that lowering the sampling rate for Spanish clementines was warranted, we would share the data that led to our determination with our domestic stakeholders and State partners prior to finalizing any adjustments with the NPPO of Spain. After the sampling rate was lowered, we would continue to monitor inspection results closely; if detections were to increase, we would promptly return the number of fruit sampled to 200 per consignment or more, depending on conditions.

The NPPO of Spain expressed concern that an increase in the sampling rate would require more time for APHIS inspectors to sample the additional fruit, potentially resulting in costly treatment and shipping delays.

If the sampling rate is increased in order to detect infestations of Medfly that might otherwise go undetected, we estimate that the number of additional fruit to be sampled would not be so high as to cause significant delays in treating or shipping consignments of fruit. A consignment of clementines consists of one or more lots containing no more than a combined total of 200,000 boxes of clementines that are presented to an inspector for pre-treatment inspection. Under the current regulations, the percentage of sampled clementines ranges from 0.02 percent to 0.1 percent per consignment inspected. Even if inspection amounts were to be increased two or three times, the sampling rate would still be well under 1 percent of the consignment.

Another commenter asked whether we intended to establish timeframes for increasing the sampling rate and, if so, how those timeframes would be determined.

We have no plans to establish timeframes in conjunction with any changes to the clementine sampling rate. They will be changed on the basis of changing risk, as discussed earlier.

Another commenter stated that any reduction in the sampling rate may result in higher pest control costs and cause inspectors to bow to budgetary pressures by reducing inspections in an arbitrary or capricious way.

We have no indications that inspectors would approach inspections in this way due to any budgetary pressures. Inspectors authorized by APHIS are required to follow a well-defined, scientifically based inspection protocol.

Therefore, for the reasons given in the proposed rule and in this document, we are adopting the proposed rule as a final rule, without change.

This final rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

In accordance with the Regulatory Flexibility Act, we have analyzed the potential economic effects of this action on small entities. The analysis is summarized below. Copies of the full analysis are available on the Regulations.gov Web site (see footnote 1 in this document for a link to Regulations.gov) or by contacting the person listed underFOR FURTHER INFORMATION CONTACT.

A consignment of clementines consists of one or more lots containing no more than a combined total of 200,000 boxes of clementines that are presented to an inspector for pretreatment inspection. Under the regulations that require sampling of 200 clementines, the percentage of sampled clementines ranges from 0.02 percent to 0.1 percent per consignment inspected. Even if inspection amounts are increased 2 or 3 times when there is a higher pest risk, the sampling rate will still be under 1 percent of the consignment.

While this rule will help reduce the risk of pest introduction, we are unable to quantify the economic impact of decreasing the probability of introducing Medfly into the United States. Medfly introductions can be very costly to producers and to the Federal and State Governments. The mean cost of eradicating six Medfly outbreaks in 2007 was $13.54 million.

This rule will not have a significant economic effect on producers of clementines or other U.S. entities, regardless of their size or resources. As described, an adjustment in the number of fruit sampled will have a negligible effect on the number of clementines imported from Spain.

Under these circumstances, the Administrator of the Animal and Plant Health Inspection Service has determined that this action will not have a significant economic impact on a substantial number of small entities.

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

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

Accordingly, we are amending 7 CFR part 319 as follows:

The regulations in “Subpart—Fruits and Vegetables” (7 CFR 319.56-1 through 319.56-54, referred to below as the regulations) prohibit or restrict the importation of fruits and vegetables into the United States from certain parts of the world to prevent the introduction and dissemination of plant pests within the United States.

On May 24, 2011, we published in theFederal Register(76 FR 30036-30040, Docket No. APHIS-2010-0113) a proposal1 to amend the regulations by allowing fresh pitaya from Central America to be imported into the continental United States. We proposed that, as a condition of entry, the pitaya fruit must be produced in accordance with a systems approach that includes requirements for monitoring and oversight, establishment of pest-free places of production, and procedures for packing the pitaya fruit.

We solicited comments concerning our proposal for 60 days ending July 25, 2011. We did not receive any comments.

Therefore, for the reasons given in the proposed rule, we are adopting the proposed rule as a final rule, without change.

This final rule has been determined to be not significant for the purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget.

In accordance with the Regulatory Flexibility Act, we have analyzed the potential economic effects of this action on small entities. The analysis is summarized below. Copies of the full analysis are available by contacting the person listed underFOR FURTHER INFORMATION CONTACTor on the Regulations.gov Web site (see footnote 1 for a link to Regulations.gov).

This rule will allow the importation of fresh pitaya fruit into the continental United States from the Central American countries of Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama in accordance with a systems approach that includes requirements for monitoring and oversight, establishment of pest-free places of production, and procedures for packing the pitaya fruit. Entities potentially affected by the rule are U.S. pitaya fruit growers, of which most, if not all, are small entities.

Pitaya fruit is produced in Hawaii, California, and Florida, but the quantities produced, numbers of U.S. producers, quantities imported, and other factors needed to assess likely economic effects of this rule are not known. The quantity of pitaya fruit expected to be imported from Belize, Costa Rica, El Salvador, Guatemala, Honduras, and Panama is also unknown. Nicaragua estimates exporting 1,200 metric tons (60 forty-foot containers) of pitaya fruit to the continental U.S. annually, and it is thought that the other countries may ship similar or lesser amounts.

This final rule allows fresh pitaya to be imported into the United States from Central America. State and local laws and regulations regarding pitaya imported under this rule will be preempted while the fruit is in foreign commerce. Fresh fruits and vegetables are generally imported for immediate distribution and sale to the consuming public, and remain in foreign commerce until sold to the ultimate consumer. The question of when foreign commerce ceases in other cases must be addressed on a case-by-case basis. No retroactive effect will be given to this rule, and this rule will not require administrative proceedings before parties may file suit in court challenging this rule.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501et seq.), the information collection or recordkeeping requirements included in this rule have been approved by the Office of Management and Budget (OMB) under OMB control number 0579-0378.

The Animal and Plant Health Inspection Service is committed to compliance with the E-Government Act to promote the use of the Internet and other information technologies, to provide increased opportunities for citizen access to Government information and services, and for other purposes. For information pertinent to E-Government Act compliance related to this rule, please contact Mrs. Celeste Sickles, APHIS' Information Collection Coordinator, at (301) 851-2908.

Accordingly, we are amending 7 CFR part 319 as follows:

This rule has been determined to be non-significant for the purposes of Executive Order 12866 and, therefore, it has not been reviewed by the Office of Management and Budget.

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

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

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

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

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

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

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

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

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

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

This rule finalizes changes to the Common Crop Insurance Regulations (7 CFR part 457), Fresh Market Tomato (Dollar Plan) Crop Provisions that were published by FCIC on November 17, 2011, as a notice of proposed rulemaking in theFederal Registerat 76 FR 71271-71276. The public was afforded 30 days to submit comments after the regulation was published in theFederal Register.

A total of 136 comments were received from 14 commenters. The commenters were farmers, trade associations, an insurance agent, an insurance company, and other interested parties.

The public comments received regarding the proposed rule and FCIC's responses to the comments are as follows:

Comment:In regard to the definition of “acre” commenters asked for additional information regarding how unplanted acreage (e.g., field irrigation canals and furrows, or field roads for spraying and handling harvested tomatoes) should be deducted when reporting planted acres.

Response:It would not be possible to include this information in this rule because of the complexities involved. However, FCIC provides several sources of information and examples to be used by the insurance providers, agents and their producers for determining planted acreage for fresh market tomatoes. The Risk Management Agency (RMA) published Manager's Bulletin MGR-09-010 on November 18, 2009, which provided appropriate methods for determining “planted acreage.” The clarifying information and additional examples in this bulletin were incorporated into the 2010 Loss Adjustment and Standards Handbook (LASH) and is available for the insurance providers, their agents and producers to use in calculating and reporting their planted acreage.

Comment:In regard to the new “fresh market tomatoes” definition, a few commenters recommended that other types or varieties of tomatoes should be insured under this policy (greenhouse, hydroponic, heirlooms, etc.).

Response:FCIC disagrees with these recommendations to insure these other types of tomatoes. FCIC added the new definition of “fresh market tomatoes” to clarify the Fresh Market Tomato (Dollar Plan) Crop Provisions is primarily designed to insure “field grown mature green or ripe fresh market tomatoes.” These are the traditional large “round” or “globe” field grown tomatoes that account for approximately 90 percent of the fresh market tomato production. In addition, there must be standards for determining the fresh market tomatoes and the U.S. Standards for Grades of Fresh Tomatoes, and the AMS Federal Marketing Order (FMO #966) are the primary federal regulations that govern these traditional “round or globe” field grown fresh market tomatoes. These other tomatoes are not field grown and there are no such established standards for these other types or varieties of tomatoes. No change has been made.

Comment:In regard to the definitions of “harvest” and “penhookers”, some commenters recommended tomatoes that are field packed as “ripe” tomatoes, and tomatoes salvaged by penhookers should be considered a harvest.

Response:Field packed “ripe” tomatoes meet the definition of “fresh market tomatoes” so they qualify as harvested. FCIC considers all “penhooked” tomatoes as salvage value, since the penhookers pay the producer directly and should be treated separately from harvested fresh market tomatoes because they usually have less value. However, the revenue received from the penhookers must still be reported in their total dollar value of production to count. No change has been made.

Comment:Commenters recommended that field grown cherry, grape, plum or roma types of fresh market tomatoes be insured under this policy by including these types in the Special Provisions.

Response:FCIC agrees and proposed to include the cherry, grape, plum or roma types of tomatoes via the Special Provisions. This provision was left unchanged in this final rule.

Comment:Commenters recommended the calendar date for the end of the insurance period be increased to 140 days after transplanting. Under the current policy the end of the insurance period is 125 days after transplanting.

Response:No changes were proposed to section 10(f) regarding the end of the insurance period for transplanted or replanted tomatoes. FCIC only proposed to remove the provisions regarding direct seeded tomatoes. Since the public was not provided an opportunity to comment on the extension of the end of the insurance period to 145 days and the recommendation does not address a conflict or vulnerability in the crop provisions, FCIC cannot consider the recommended change. No change has been made to the final rule.

Comment:Commenters recommended raising the current replanting payments from $600 to $900 per acre.

Response:No changes were proposed to sections 12(a), 12(b), and 12(c). Since the public was not provided an opportunity to comment on an increase of replanting payments and the recommendation does not address a conflict or vulnerability in the provisions, FCIC cannot consider the recommended change. No change has been made.

Comment:Commenters recommended under “Section 14(c)(2)(i) that appraised potential production, as currently in the policy, allows up to 30 cartons that do not count against the grower if tomatoes have been picked 3 times.”

Response:FCIC disagrees with this recommendation. There is no language in the current policy that indicates there should be a 30 carton reduction in the grower's production to count if tomatoes are harvested more than three times. FCIC is revising the language in section 14(c)(2)(i) to clarify and state potential production on any fresh market tomato acreage that has not been harvested the required number of times as specified in the Special Provisions will be included in the total appraised production. This will allow flexibility for future harvest requirements for specialty tomatoes such as cherry, grape, plum or roma tomatoes.

Comment:Commenters asked for clarification on new policy wording in section 14(c)(3).

Response:FCIC is not sure what needs clarifying. Section 14(c)(3) provides the method for valuing sold harvested production and is the same type of calculation used for the Summary of Harvested Production Worksheet in the current LASH to determine the total dollar value per load. Therefore, this calculation should already be familiar to producers, agents and insurance providers.

Comment:Under Section 14(c)(4) commenters recommended unsold harvested production should not be counted as production to count if these tomatoes are “inspected and dumped” due to quality defects.

Response:The Proposed Rule makes it clear that harvested production that is damaged due to insurable causes such that it is unmarketable or unsold is not counted as production to count. This would include tomatoes that are dumped due to quality defects resulting from insured causes that render the tomato unmarketable. It is only unsold harvested production that is not damaged by an insured cause of loss is considered as production to count. No change has been made.

Comment:Under Section 14(c)(5) commenters recommended field packed/penhooked tomatoes or salvage value count as value received, for there is no picking cost involved.

Response:FCIC considers field packed tomatoes as production to count under sections 14(c)(3) and 14(c)(4) because producers do incur harvesting costs. Section 14(c)(5) clarifies penhooked tomatoes are a salvage operation and any salvage value paid to the producer by penhookers will be added to the total dollar value of production to count. Since no harvest costs are incurred for penhooked tomatoes, they do not reduce their value for the purposes of establishing the total dollar value of the production to count. No change has been made.

Comment:Commenters recommended that both Minimum Value Options (MVO I) and (MVO II) remain in the policy.

Response:As stated in the Proposed Rule, FCIC is removing the Minimum Value Option II (MVO II) provision because allowing the MVO II price to go down to zero has resulted in unfavorable loss experience and program abuse. Under the current policy there are two Minimum Value Option choices (MVO I) and (MVO II). The producer can purchase either Minimum Value Option and pay additional premium. The current 2012 MVO I reduces the Minimum Value price to $4.75 per carton while the current 2012 MVO II reduces the Minimum Value price to $1.00 per carton, from the current Minimum Value price of $6.95. Historically, producers chose MVO II and it has resulted in excessive losses because tomatoes slightly damaged due to rain are valued at the MVO II price of $1.00 per carton for claims settlement; however, producers are often able to salvage or market such production in excess of $1.00 per carton. These excess loss payments unnecessarily increase premium rates for all producers leading to overall increased program costs. Additionally, having two options adds unnecessary complexity to the program.

Therefore, this final rule eliminates the current MVO II and will offer one MVO price as specified in the Special Provisions. The Risk Management Agency will be diligent in establishing and maintaining a fair and equitable MVO price in future crop years. No change has been made.

In addition to the changes described above, FCIC has made minor editorial changes.

Good cause is shown to make this rule effective less than 30 days after publication in theFederal Register. Good cause to make a rule effective less than 30 days after publication in theFederal Registerexists when the 30 day delay in the effective date is impractical, unnecessary, or contrary to the public interest.

With respect to the provisions of this final rule, it would be contrary to public interest to delay implementation because public interest is served by improving the insurance product as follows: (1) Increasing insurance flexibility by providing coverage for specific types of tomatoes via the Special Provisions instead of by written agreement; (2) providing simplification and clarity to the Fresh Market Tomato (Dollar Plan) crop insurance program so it is easier for producers and agents to understand; and (3) only offering one Minimum Value Option that more accurately reflects the salvage value of slightly damaged tomatoes for claim purposes which addressed concerns raised about the Fresh Market Tomato claims process.

If FCIC is required to delay implementation of this rule after the date it is published, the provisions of this rule could not be implemented until the 2014 crop year. This would mean the affected producers would be without the benefits described above for an additional year.

For reasons stated above, good cause exists to make these policy changes effective less than 30 days after publication in theFederal Register.

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

The Energy Independence and Security Act of 2007 (Pub. L. 110-140) amended section 325(u)(3) of the Energy Policy and Conservation Act (EPCA) to establish energy conservation standards for all Class A external power supplies. (42 U.S.C. 6295(u)(3)) Those standards consisted of minimum efficiency levels that these products must meet during active mode (i.e. when an external power supply is in actual use) and no-load mode (i.e. when an external power supply is plugged into AC mains but its output is not connected to an electrical load). DOE added these standards to its regulations as part of a final rule that incorporated a series of statutorily-prescribed changes made by the Energy Independence and Security Act of 2007 (Pub. L. 110-140) (Dec. 19, 2007). That final rule was published on March 23, 2009. See 74 FR 12058.

Subsequently, Congress revisited elements of the no-load standards that it had prescribed for Class A external power supplies. On January 4, 2011, Congress enacted Public Law 111-360, which amended section 325(u)(3) of EPCA (42 U.S.C. 6295(u)(3)) by defining a new term—“security or life safety alarm or surveillance system”—and excluding those external power supplies used in certain security or life safety alarms or surveillance system components from the no-load mode requirements Congress had previously set. To address this change, DOE issued a technical amendment to codify verbatim in regulation these statutory changes. See 76 FR 57897 (Sept. 19, 2011).

Recently, DOE discovered that the amendatory language used in modifying the regulatory text to account for the January 2011 statutory changes to EPCA resulted in the Office of the Federal Register removing the statutory Class A external power supply standards from the regulations. Today's document addresses that error by re-inserting these pre-existing statutory standards into the regulations at 10 CFR 430.32(w)(1)(i) where they were located previously. DOE notes that, in spite of this inadvertent removal, the standards have remained in effect by virtue of their continued existence as a statutory requirement. See 42 U.S.C. 6295(u)(3)(A).

Pursuant to authority at 5 U.S.C. 553(b)(B), the DOE finds good cause to waive the requirement for prior notice and an opportunity for public comment on this rulemaking because such procedures would be unnecessary. As DOE is merely re-inserting into the Code of Federal Regulations statutory standards already applicable to these products prior notice and an opportunity for public comment would serve no useful purpose. For the same reason, DOE finds good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay in effective date and make this rule effective immediately.

For the reasons set forth in the preamble, DOE corrects 10 CFR part 430 as set forth below:

History

On December 21, 2011, the FAA published in theFederal Registera notice of proposed rulemaking (NPRM) to establish nine new RNAV routes (76 FR 79137).

Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. No comments were received.

The FAA is amending Title 14, Code of Federal Regulations (14 CFR) part 71 to establish nine new high altitude RNAV routes (Q-140, Q-142, Q-144, Q-146, Q-148, Q-150, Q-152, Q-154 and Q-156) originating in Seattle ARTCC's airspace. The proposed routes would connect the Seattle terminal area with destinations east and southeast of Seattle. This action enhances en route navigation for users, increases the efficiency of the NAS and expands the use of RNAV in the NAS.

High altitude RNAV routes are published in paragraph 2006 of FAA Order 7400.9V dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The RNAV routes listed in this document will be published subsequently in the Order.

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 Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

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

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

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

This rule amends Title 14 of the Code of Federal Regulations, Part 97 (14 CFR part 97), by establishing, amending, suspending, or revoking SIAPS, Takeoff Minimums and/or ODPS. The complete regulators description of each SIAP and its associated Takeoff Minimums or ODP for an identified airport is listed on FAA form documents which are incorporated by reference in this amendment under 5 U.S.C. 552(a), 1 CFR part 51, and 14 CFR 97.20. The applicable FAA Forms are FAA Forms 8260-3, 8260-4, 8260-5, 8260-15A, and 8260-15B when required by an entry on 8260-15A.

The large number of SIAPs, Takeoff Minimums and ODPs, in addition to their complex nature and the need for a special format make publication in theFederal Registerexpensive and impractical. Furthermore, airmen do not use the regulatory text of the SIAPs, Takeoff Minimums or ODPs, but instead refer to their depiction on charts printed by publishers of aeronautical materials. The advantages of incorporation by reference are realized and publication of the complete description of each SIAP, Takeoff Minimums and ODP listed onFAA forms is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAPs and the effective dates of the associated Takeoff Minimums and ODPs. This amendment also identifies the airport and its location, the procedure, and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP, Takeoff Minimums and ODP as contained in the transmittal. Some SIAP and Takeoff Minimums and textual ODP amendments may have been issued previously by the FAA in a Flight Data Center (FDC) Notice to Airmen (NOTAM) as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for some SIAP and Takeoff Minimums and ODP amendments may require making them effective in less than 30 days. For the remaining SIAPS and Takeoff Minimums and ODPS, an effective date at least 30 days after publication is provided.

Further, the SIAPs and Takeoff Minimums and ODPS contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these SIAPS and Takeoff Minimums and ODPs, the TERPS criteria were applied to the conditions existing or anticipated at the affected airports. Because of the close and immediate relationship between these SIAPs, Takeoff Minimums and ODPs, and safety in air commerce, I find that notice and public procedures before adopting these SIAPS, Takeoff Minimums and ODPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making some SIAPs effective in less than 30 days.

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. It, therefore—(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. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) is amended by establishing, amending, suspending, or revoking Standard Instrument Approach Procedures and/or Takeoff Minimums and/or Obstacle Departure Procedures effective at 0902 UTC on the dates specified, as follows:

This rule amends Title 14, Code of Federal Regulations, Part 97 (14 CFR part 97) by amending the referenced SIAPs. The complete regulatory description of each SIAP is listed on the appropriate FAA Form 8260, as modified by the National Flight Data Center (FDC)/Permanent Notice to Airmen (P-NOTAM), and is incorporated by reference in the amendment under 5 U.S.C. 552(a), 1 CFR part 51, and § 97.20 of Title 14 of the Code of Federal Regulations.

The large number of SIAPs, their complex nature, and the need for a special format make their verbatim publication in theFederal Registerexpensive and impractical. Further, airmen do not use the regulatory text of the SIAPs, but refer to their graphic depiction on charts printed by publishers of aeronautical materials. Thus, the advantages of incorporation by reference are realized and publication of the complete description of each SIAP contained in FAA form documents is unnecessary. This amendment provides the affected CFR sections and specifies the types of SIAP and the corresponding effective dates. This amendment also identifies the airport and its location, the procedure and the amendment number.

This amendment to 14 CFR part 97 is effective upon publication of each separate SIAP as amended in the transmittal. For safety and timeliness of change considerations, this amendment incorporates only specific changes contained for each SIAP as modified by FDC/P-NOTAMs.

The SIAPs, as modified by FDC P-NOTAM, and contained in this amendment are based on the criteria contained in the U.S. Standard for Terminal Instrument Procedures (TERPS). In developing these changes to SIAPs, the TERPS criteria were applied only to specific conditions existing at the affected airports. All SIAP amendments in this rule have been previously issued by the FAA in a FDC NOTAM as an emergency action of immediate flight safety relating directly to published aeronautical charts. The circumstances which created the need for all these SIAP amendments requires making them effective in less than 30 days.

Because of the close and immediate relationship between these SIAPs and safety in air commerce, I find that notice and public procedure before adopting these SIAPs are impracticable and contrary to the public interest and, where applicable, that good cause exists for making these SIAPs effective in less than 30 days.

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. It, therefore— (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. For the same reason, the FAA certifies that this amendment will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, pursuant to the authority delegated to me, Title 14, Code of Federal regulations, Part 97, 14 CFR part 97, is amended by amending Standard Instrument Approach Procedures, effective at 0901 UTC on the dates specified, as follows:

The final regulation (TD 9562) that is the subject of this correction is under section 881 of the Internal Revenue Code.

As published, TD 9562 contains errors that may prove to be misleading and is in need of clarification.

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendments:

Section 267(a)(1) provides that no deduction shall be allowed for any loss on the sale or exchange of property between certain related persons. Section 267(f)(2) contains an exception for a loss on the sale or exchange of property between members of a controlled group. For this purpose, “controlled group” has the meaning given to such term in section 1563(a) except that “more than 50 percent” is substituted for “at least 80 percent” each place it appears. In the case of a sale or exchange of loss property between members of a controlled group, the loss is deferred rather than disallowed. Under section 267(f)(2)(B), the loss is deferred until the property is transferred outside of the controlled group and there would be recognition of loss under consolidated return principles or until such other time as may be prescribed in regulations.

The regulations under section 267(f) provide that the timing principles for intercompany sales or exchanges between members of a consolidated group (see generally § 1.1502-13(c)(2)) apply to sales or exchanges of propertyat a loss between members of a controlled group. See § 1.267(f)-1(a)(2). The attribute redetermination rules applicable to transactions between members of a consolidated group (see § 1.1502-13(c)(1)), however, do not apply to sales or exchanges between members of a controlled group.

Although the attribute redetermination rule generally does not apply to sales or exchanges between members of a controlled group, § 1.267(f)-1(c)(1)(iv) contains a special rule with respect to losses that would have been redetermined to be a noncapital, nondeductible amount if the consolidated return attribute redetermination rule did apply. Under § 1.267(f)-1(c)(1)(iv), if an intercompany loss between members of a consolidated group would have been redetermined to be a noncapital, nondeductible amount as a result of the attribute redetermination rule applicable to consolidated groups, but is not redetermined because the sale or exchange occurred between members of a controlled group (to which the attribute redetermination rule does not apply), then the loss will be deferred. The loss is taken into account when the selling member (S) and buying member (B) are no longer in a controlled group relationship.

On April 21, 2011, the IRS and Treasury Department published a notice of proposed rulemaking (REG-118761-09) in theFederal Register(76 FR 22336). The notice included proposed regulations under section 267(f) providing guidance concerning the Federal income tax treatment of deferred losses on the sale or exchange of property between members of a controlled group, including transactions in which the member acquiring the property subsequently recognizes a corresponding gain with respect to the property. The proposed regulations provided that certain losses on the sale or exchange of property between members of a controlled group, which have been deferred, are taken into account upon the occurrence of either of two events. The deferred loss is taken into account to the extent of any corresponding gain that the member acquiring the property recognizes with respect to the property. Alternatively, the deferred loss is taken into account when the parties to the transaction cease to be in a controlled group relationship. The proposed regulations also provided that for purposes of determining whether the loss is redetermined to be a noncapital, nondeductible amount under the principles of § 1.1502-13, stock held by S, stock held by B, and stock held by all members of the consolidated group that includes S, as well as stock held by any member of a controlled group of which S is a member that was acquired from a member of S's consolidated group, must be taken into account. A public hearing was requested and held on August 3, 2011. The IRS received one formal comment in response to the notice of proposed rulemaking. The comment raised several questions with certain recommendations, which are discussed in the following paragraphs of this preamble.

The commentator suggested that the final regulations incorporate a model that allows a loss to be taken into account based on the arm's length principles contained in section 482 and the regulations thereunder. Specifically, the commentator noted that if the transaction is arm's length in nature and has substance from a business perspective, the loss should be taken into account immediately. The IRS and Treasury Department do not agree with this comment. In a transaction described in these regulations, it is assumed that the parties are acting at arm's length. Section 267(f) serves a different purpose, namely, to determine the timing of when a loss should be taken into account on a sale or exchange of property between members of a controlled group. Accordingly, the final regulations retain the model contained in the proposed regulations.

The commentator also suggested that the proposed regulations do not clearly state how to establish whether a recognized loss is redetermined to be a noncapital, nondeductible amount under the principles of § 1.1502-13. Specifically, the commentator noted that it is unclear whether the proposed regulations, as written, are intended to direct taxpayers to a § 1.1502-34 type of analysis in determining whether the loss is redetermined to be a noncapital, nondeductible amount. Under the rule, stock held by S, stock held by B, and stock held by all members of the consolidated group that includes S, as well as stock held by any member of a controlled group of which S is a member that was acquired from a member of S's consolidated group must be taken into account. After considering the comment, the IRS and Treasury Department believe that the rules in the proposed regulations, as written, are clear in that they expressly list the corporations the stock holdings of which must be taken into account. Furthermore, the IRS and Treasury Department believe that the proposed regulation is appropriately broader than the stock aggregation rule of § 1.1502-34 to account for, among other considerations, the fact that the controlled group definition is broader than the definition of a consolidated group.

In addition, the commentator questioned whether the proposed regulations were consistent with the holdings inGranite Trustv.United States,238 F.2d 670 (1st Cir. 1956), and other applicable case law. The IRS and Treasury Department believe that the rules contained in the proposed regulations and these final regulations are consistent with applicable case law. These rules are intended to address the timing for taking into account a loss on a sale of property between members of a controlled group, and do not relate to whether a liquidation otherwise results in the recognition of a loss.

These final regulations retain the rules of the proposed regulations, but make one revision to clarify the interaction of section 267(f) and § 1.1502-13 principles. The final regulations also make one modification to ensure that taxpayers cannot circumvent the purposes of the proposed regulation through issuances of target corporation stock to controlled group members.

The proposed regulations provided that a deferred loss is taken into account to the extent of any corresponding gain that the member acquiring the property recognizes with respect to the property. For example, assume S sells 30 percent of T's stock to B (a member of S's controlled group) at a loss (in a transaction that is treated as a sale or exchange for Federal income tax purposes). If T's stock appreciates after the sale and before a subsequent event that results in B's recognition of gain, the proposed regulations provided that S's deferred loss may be taken into account to the extent that B recognizes a corresponding gain.

Questions have been raised concerning whether this rule is necessary because the relevant consolidated return provisions currently allow the loss to be taken into account to the extent of the corresponding gain. The IRS and Treasury Department agree that an explicit rule is unnecessary because the timing of taking the loss into account in these circumstances is provided for under § 1.1502-13. Accordingly, the rule in the proposed regulations has been removed from the final regulations and an example has been added to § 1.267(f)-1(j) to illustrate the interaction of these final regulations and the consolidated return regulations.

In addition to this clarification, these final regulations provide that stockissued to a member of the controlled group by a target corporation is taken into account for purposes of determining whether a loss would be treated as noncapital, nondeductible amount if the rules of § 1.1502-13 applied. For example, assume FP is a foreign corporation that owns all the stock of FS, a foreign subsidiary, and all the stock of P, a domestic corporation. P owns all the stock of T. In Year 1, FS contributes cash to T in exchange for newly issued stock of T that constitutes 40 percent of T's outstanding stock. In Year 2, when the value of the T stock owned by P is less than its basis in P's hands, P sells all of its T stock to FP. In Year 3, in a transaction unrelated to the issuance of the T stock in Year 1, T converts under state law to a limited liability company that is treated as a partnership for Federal income tax purposes.

Under these final regulations, the T stock issued by T to FS is taken into account for purposes of determining whether, upon the conversion of T, P's deferred loss would be treated under the principles of § 1.1502-13 as a noncapital, nondeductible amount.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to this regulation. Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that this rule will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that these regulations primarily affect controlled groups of corporations which tend to be larger businesses. Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business. No comments were received.

The principal author of this regulation is Amie Colwell Breslow, Office of Associate Chief Counsel (Corporate). However, other personnel from the IRS and Treasury Department participated in its development.

Accordingly, 26 CFR part 1 is amended as follows:

On June 18, 2008, proposed regulations (REG-101258-08) were published in theFederal Register[73 FR 34670]. The proposed regulations contain proposed amendments to the Income Tax Regulations 26 CFR part 1, confirming that a provision in a trust, a will, or a provision of local law that specifically indicates the source out of which amounts are to be paid, permanently set aside, or used for a purpose specified in section 642(c) must have economic effect independent of income tax consequences in order to be respected for Federal tax purposes. If such provision does not have economic effect independent of income tax consequences, income distributed for a purpose specified in section 642(c) will consist of the same proportion of each class of the items of income as the total of each class bears to the total of all classes. The proposed regulations also make conforming changes in the corresponding language in the Income Tax Regulations under section 643(a)(5). The trusts and estates that are the subject of the proposed regulations include, without limitation, charitable lead trusts (CLTs) and trusts and estates making payments or permanently setting aside amounts for a charitable purpose.

The proposed regulations are based on the structure and provisions of Subchapter J (of Chapter 1, Subtitle A, of the Code) as a whole, as well as on an analysis of the existing regulations with their interrelated cross-references. The IRS and Treasury Department believe that the current regulations under §§ 1.642(c)-3(b) and 1.643(a)-5(b) require that a specific provision of the governing instrument or a provision under local law have economic effect independent of income tax consequences in order to be respected for Federal income tax purposes. To make this clearer, the proposed regulations add the principle of economic effect directly to the regulations under sections 642(c) and 643(a), rather than leaving this principle to be reached by cross-reference to other regulations.

Finally, the proposed regulations remove § 1.642(c)-3(b)(4) because the provisions of section 116 referenced therein were repealed by the Tax Reform Act of 1986 (Pub. L. 99-514).

Written comments were received on the proposed regulations. Because there were no requests to speak at the scheduled public hearing, the public hearing was cancelled. The proposed regulations, with certain changes made in response to the written comments received, are adopted as final regulations.

Commentators suggested that the clarification in the proposed regulations, that a specific provision in a governing instrument or in local law that identifies the source(s) of the amounts to be paid, permanently set aside, or used for a purpose specified in section 642(c) must have economic effect independent of income tax consequences in order for the specific provision in the governing instrument or in local law to be respected for Federal tax purposes, is an interpretation contrary to the clear language of section 642(c) and 643(a)(5) and the existing regulations.

The IRS and Treasury Department have carefully considered these arguments and the analyses suggested by the commentators. The IRS and Treasury Department continue to believe that the position clarified in the proposed regulations, requiring that a specific provision of the governing instrument or a provision under local law have economic effect independent of income tax consequences in order to be respected for Federal tax purposes, is the proper interpretation of the relevant Code provisions and is a principle that applies throughout Subchapter J.

The general rule provided in Subchapter J, which mandates that the tax character of distributions to beneficiaries consists of a pro rata portion of all types of a trust's income, appears in section 652(b) and in several different sections of the regulations under the subchapter. The onlyregulatory exception to this pro rata rule is for a specific provision in a governing instrument or a provision under local law that provides as to the tax character of distributions to beneficiaries. This exception to the pro rata rule must have the same meaning throughout the Subchapter J regulations. The chain of regulatory references from §§ 1.642(c)-3(b) and 1.643(a)-5(b), detailed in the preamble to the proposed regulations, incorporates into each of those provisions, by cross-reference to § 1.662(b)-2, “the principles contained” in § 1.652(b)-1 and, in turn, § 1.652(b)-2(a) and -2(b), which require a specific provision to have economic effect independent of income tax consequences in order to be respected. The proposed regulations confirm this uniform principle by inserting the terms of §§ 1.652(b)-1 and 1.652(b)-2(a) and -2(b) explicitly into §§ 1.642(c)-3(b) and 1.643(a)-5(b).

Moreover, section 643(a)(7) grants express regulatory authority to “prescribe such regulations as may be necessary or appropriate to carry out the purposes of this part, including regulations to prevent avoidance of such purposes.”

A commentator suggested that income ordering provisions in CLTs have economic effect independent of income tax consequences because disregarding an income ordering provision could increase a CLT's tax liability, thereby reducing the value of the trust and in turn reducing the annual unitrust payments to the charitable beneficiaries and increasing the risk that the trust's assets will be depleted before the end of the trust term. Although the general pro rata allocation rule may increase a trust's tax liability and thereby reduce the value of the trust's corpus, the effect of the payment of the trust's income tax liability is not an economic effect independent of income tax consequences as described in these regulations. Any possible reduction in the unitrust amount subsequently paid to the charitable beneficiary would be the direct result of the payment of income taxes by the unitrust. The use of an income ordering rule in a CLT, directing the tax characteristics of the unitrust or annuity payments to the charity, is primarily, if not exclusively, an attempt to minimize the tax liabilities of the trust and its remainder beneficiaries. The only effects of the use of an ordering rule are in fact dependent solely upon tax consequences: specifically, the reduced amount of tax paid and the trust's retention of the income tax savings.

Ordering provisions in CLTs will never have economic effect independent of their tax consequences because the amount paid to the charity is not dependent upon the type of income it is allocated. An annuity payment is a fixed amount from year to year, and although a unitrust amount may fluctuate annually, the amount is based upon a predetermined percentage of the trust's value.

Permitting an ordering rule with no economic effect independent of income tax consequences to supersede the pro rata allocation rule generally applicable under Subchapter J would, in effect, permit taxpayers to deviate at will from the general rule imposed throughout Subchapter J in the case of all kinds of complex trusts.

A commentator suggested that the proposed regulations are contrary to the Federal government's long standing policy to encourage charitable gifts and to benefit and protect charities.

The IRS and Treasury Department have carefully considered the merits and implications of this suggestion. The IRS and Treasury Department believe, however, that the proper interpretation of the relevant Code sections does not permit the creation of a special rule for CLTs. A CLT is treated and taxed in the same way as any other complex trust under Subchapter J. Subchapter J does not differentiate between a CLT and a different type of complex trust, and there is no provision of Subchapter J that applies exclusively and expressly to CLTs. Thus, any income tax rule applicable to a CLT will apply in the same way to every other complex trust.

A commentator requested that the proposed regulations be expanded to provide that trusts that make distributions to both charitable and noncharitable beneficiaries in the same taxable year must allocate the distributions equally to principal and income as between charitable and noncharitable beneficiaries, unless there is a provision that has economic effect independent of income tax consequences.

This request is beyond the scope of the proposed regulations and might implicate other well settled income tax rules applicable to complex trusts. Section 662 and the regulations thereunder provide the rules for distributions by complex trusts with a charitable beneficiary, and sufficiently address the commentator's concern. If the commentator believes that further guidance is needed or would be helpful to taxpayers, a request for additional guidance may be submitted for consideration to be added to the Priority Guidance Plan.

A commentator requested an example of a provision in a governing instrument that would have economic effect independent of income tax consequences. Such an example has been added to the final regulations as Example 2.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations, and because these regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Therefore, a Regulatory Flexibility Analysis is not required. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding this regulation was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business, and no comments were received.

The principal author of these proposed regulations is Melissa Liquerman, Office of the Associate Chief Counsel (Passthroughs and Special Industries).

Accordingly, 26 CFR part 1 is amended as follows:

I. TTB's Authority To Prescribe Alcohol Beverage Labeling Regulations

Section 105(e) of the Federal Alcohol Administration Act (FAA Act), codified at 27 U.S.C. 205(e), sets forth standards for regulation of the labeling of wine (containing at least 7 percent alcohol by volume), distilled spirits, and malt beverages, generally referred to as “alcohol beverage products” throughout this final rule. This section gives the Secretary of the Treasury the authority to issue regulations to prevent deception of the consumer, to provide the consumer with “adequate information” as to the identity and quality of the product, to prohibit false or misleading statements, and to provide information as to the alcohol content of the product.

Section 105(e) of the FAA Act also requires that a person obtain a certificate of label approval (COLA) for all wines, distilled spirits, or malt beverages introduced into interstate or foreign commerce before bottling the product or removing the product from customs custody, in accordance with regulations prescribed by the Secretary. The labeling provisions of the FAA Act also give the Secretary the authority to prohibit, irrespective of falsity, statements relating to age, manufacturing processes, analyses, guarantees, and scientific or irrelevant matters that are likely to mislead the consumer. In the case of malt beverages, the labeling provisions of the FAA Act apply only if the laws of the State into which the malt beverages are to be shipped impose similar requirements.

The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers the FAA Act pursuant to section 1111(d) of the Homeland Security Act of 2002, codified at 6 U.S.C. 531(d). The Secretary has delegated various authorities through Treasury Department Order 120-01 (Revised), dated January 21, 2003, to the TTB Administrator to perform the functions and duties in the administration and enforcement of this law.

In 1987, the Food and Drug Administration (FDA) and the Bureau of Alcohol, Tobacco and Firearms (ATF), TTB's predecessor agency, entered into a memorandum of understanding (published in theFederal Registerat 52 FR 45502, November 30, 1987), to clarify the enforcement responsibilities of each agency with respect to alcohol beverages. ATF agreed that “when FDA has determined that the presence of an ingredient in food products, including alcoholic beverages, poses a recognized public health problem, and that the ingredient or substance must be identified on a food product label, ATF would initiate rulemaking proceedings to promulgate labeling regulations for alcoholic beverages consistent with ATF's health policy with respect to alcoholic beverages.” TTB operates under the same memorandum of understanding with FDA.

Cochineal extract and carmine are color additives that are permitted for use in foods, including alcohol beverage products, in the United States. The FDA has listed these color additives, and the conditions for their safe use in foods, in § 73.100 of the FDA regulations (21 CFR 73.100). On January 5, 2009, FDA published a final rule in theFederal Register(74 FR 207) requiring cochineal extract and carmine to be declared by name on the labels of all food and cosmetic products containing one or both of these color additives. FDA explained that this requirement was adopted in response to reports of severe allergic reactions, including anaphylaxis, to foods containing these color additives. The FDA final rule does not require food or cosmetics labels to disclose that these color additives are derived from insects.

Accordingly, on November 3, 2010, TTB published in theFederal Registera Notice of Proposed Rulemaking, Notice No. 111, (75 FR 67669) which proposed to require cochineal extract and carmine to be listed on the labels of any alcohol beverage product containing one or both of these color additives. Specifically, TTB proposed amending §§ 4.32, 5.32, and 7.22 of Title 27 Code of Federal Regulations to require that all alcohol beverage products containing cochineal extract or carmine list the additive(s) prominently and conspicuously on the brand label or on a back label using its respective common or usual name “cochineal extract” or “carmine.” Beginning on the implementation date, an alcohol beverage product containing cochineal extract or carmine would have to bear the mandatory statement on its label at the time of its removal from bond or from customs custody. TTB sought comments on the proposal as outlined in Notice No. 111. TTB specifically sought comments from affected industry members as to whether an implementation date beginning 90 days from the date of the final rule would provide a sufficient amount of time to incorporate these changes. Commenters had until January 3, 2011, to respond to the proposed rule.

During the comment period, TTB received a request from the Distilled Spirits Council of the United States, Inc. (DISCUS), a national trade association that represents producers and marketers of distilled spirits and importers of wines sold in the United States, to extend the comment period for 60 days to allow more time to collect and review data from domestic and foreign companies regarding the issues raised in the proposed rule.

In response to this request, on December 29, 2010, TTB published in theFederal RegisterNotice No. 114 (75 FR 81949) which extended the comment period for Notice No. 111 an additional 60 days. Accordingly, the comment period for the proposal outlined in Notice No. 111 closed on March 4, 2011.

TTB received a total of six responses to TTB Notice No. 111, in addition to the request to extend the comment period discussed above. The commenters include three individuals, two trade associations (DISCUS and the International Association of Color Manufacturers (IACM)), and one alcohol beverage importer. Two of the individual commenters commented in support of TTB's proposal to require the disclosure of these color additives, which they characterize as known allergens, on alcohol beverage labels. Furthermore, none of the other commenters opposed TTB's proposal to require the disclosure of cochineal extract or carmine on alcohol beverage labels.

With regard to the number of products that would be affected by the proposed rule, the comments did not provide specific numbers. However, DISCUS stated that it believed that “several” alcohol beverage products would be affected, and the IACM stated that “few alcohol beverage products” contained cochineal extract. Based on the comments, TTB has no reason to believe that a substantial number of industry members would be affected by the proposed rule. Nonetheless, several commenters suggested modifications to the proposed rule. The following is a summary of those comments and TTB's responses.

One individual commenter supported the requirement to list cochineal extract and carmine on alcohol beverage labels, but suggested that the TTB rule should go further and require statements on labels that disclose that the additives are animal products derived from an insect. The commenter stated that while industry groups may not want to list the source of the dye for fear that consumers would find the thought of insect derivatives unappealing, vegetarians or people of certain faiths may be interested in this information so they can avoid consuming products that conflict with their beliefs.

IACM stated that it did not oppose the disclosure of cochineal extract and carmine on alcohol beverage labels. However, IACM opposed any requirement to disclose that the additives are derived from insects. IACM noted that FDA (in its proposed rule published in theFederal Registerat 71 FR 4839 on January 30, 2006) specifically stated it saw no need to require the declaration of insect originfor cochineal extract and carmine, as information on the origin of the additives was readily available to those who wanted it.

As previously noted, the FDA final rule does not require that food or cosmetics labels disclose that these color additives are derived from insects. In the preamble to its final rule, which was published in theFederal Registeron January 5, 2009 (74 FR 207), FDA explained that it did not agree with the commenters who suggested that declaring these color additives by name would provide insufficient information to consumers who choose to avoid products containing these additives. Similarly, TTB does not believe that the source of the color additives needs to be listed on the alcohol beverage label in order for consumers to have adequate information about the product. The purpose of the rule is to allow persons with sensitivities to cochineal extract or carmine the opportunity to avoid ingestion of or contact with these additives. Providing the common name of the color additives on the label will provide sufficient information to all consumers, including those with sensitivities to the additives as well as those who for other reasons wish to avoid these additives. Accordingly, TTB is not adopting this requested change in the final rule.

In their respective comments, the two trade associations and the alcohol beverage importer suggested that TTB extend the proposed 90-day implementation period in order to lessen the burden on affected industry members. IACM commented that while it does not anticipate that the proposed rule would have a substantial economic impact on color additive manufacturers, TTB should consider extending the implementation date from 90 days to 180 days after the date the final rule is published in order to reduce the burden on small companies that are already facing limited financial resources due to the sluggish economy.

DISCUS stated in its comment that the proposed 90-day implementation period would not provide sufficient time to comply with the proposed labeling requirement. DISCUS suggested that TTB adopt a phased-in approach similar to the one which implemented the sulfite labeling disclosure. For that rule, TTB's predecessor agency, ATF, provided a one year transition period to fully implement the new requirement.

The alcohol beverage importer stated in his comment that he currently imports a product that contains cochineal extract, and that he currently uses a TTB-approved label for this product that states that the product contains artificial color. He stated that although he does not oppose TTB's proposal, he is concerned about the implementation date, as he has a large supply of labels for this product. The commenter requested that the proposed labeling requirements be implemented no less than one year after the date the final rule is published, to allow more time to use up the labels. Alternatively, he requests that TTB grant him permission to use up the rest of his previously approved labels, as he believes the “artificial color” statement on the label will prevent consumers from being misled.

After careful consideration of the comments concerning the implementation period, TTB agrees that a longer transition period is appropriate. A longer implementation period will allow more time for bottlers and importers to exhaust their label stocks before the new requirements become effective. Accordingly, the requirement to disclose the presence of cochineal extract and carmine by name on the labels of any alcohol beverage product containing one or both of these color additives will become mandatory for products that are removed on or after one year from the publication of this final rule in theFederal Register. TTB believes this longer implementation period will provide sufficient time for industry members to comply with the new labeling requirement, and is the most appropriate alternative to address the concerns expressed by commenters regarding the implementation date.

Bottlers and importers may begin voluntarily complying with the requirements immediately upon publication of this final rule.

In its comment, DISCUS also requested that TTB consider permitting industry members with existing approved COLAs covering affected products to revise the labels solely to include the mandatory declaration without applying for and receiving new label approvals. DISCUS also suggested that TTB allow the addition of a separate strip or neck label that shows the mandatory declaration, instead of having to apply for and receive a new label approval.

TTB agrees with the suggestion by DISCUS that if a label is merely being changed to include the new label disclosure, without altering existing information on the label, an application for a new COLA would be unnecessary. Accordingly, by publication of this document in theFederal Register, TTB is adopting the policy that labels covered by existing approved COLAs which are revised solely to include the mandatory cochineal or carmine declaration are considered approved by TTB and do not require further approval. Bottlers and importers also do not require a new COLA to add a new neck or strip label solely to comply with the mandatory cochineal or carmine declaration. Any other changes to the label, other than those permitted in accordance with the instructions listed on the COLA application (TTB F 5100.31 or the electronic COLA submission through COLAS Online) will require the submission of a new COLA for approval.

As proposed in TTB Notice No. 111, this final rule amends §§ 4.32, 5.32(b), and 7.22(b) of the TTB regulations to require the disclosure of the presence of cochineal extract and carmine on the labels of any alcohol beverage product containing one or both of these color additives. With regard to § 7.22(b), TTB is incorporating the amendment in paragraph (b)(5) instead of (b)(8) as originally proposed, and, for clarity, TTB has made some changes from the language originally proposed in the amendments to §§ 4.32, 5.32(b)(6), and 7.22(b). The regulations permit the disclosure to appear on the front, back, neck, or strip label and require that the disclosure be displayed prominently and conspicuously.

TTB certifies under the provisions of the Regulatory Flexibility Act (5 U.S.C. 601et seq.) that the final rule will not have a significant economic impact on a substantial number of small entities. The final rule will not impose, or otherwise cause, a significant increase in reporting, recordkeeping, or other compliance burdens on a substantial number of small entities, because relatively few alcohol beverages are made using cochineal extract or carmine as color additives. Furthermore, in response to comments about allowing sufficient time to use up existing inventories of labels, the final rule provides for a one-year implementationperiod. Accordingly, a regulatory flexibility analysis is not required.

This rule is not a significant regulatory action as defined by Executive Order 12866. Therefore, a regulatory assessment is not required.

The collection of information contained in this final regulation has been reviewed and approved by the Office of Management and Budget (OMB) in accordance with the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1513-0087.

The collection of information in this regulation is in 27 CFR 4.32, 5.32, and 7.22, and involves mandatory disclosures of information on labels. This information is required to prevent deception of the consumer and to provide the consumer with adequate information as to the identity and quality of the alcohol beverage product. The likely respondents are businesses or other for-profit entities, including partnerships, associations, and corporations.

This information constitutes only a portion of the labeling information on alcohol beverages required under authority of the FAA Act and approved under control number 1513-0087.

An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a valid control number assigned by OMB.

The principal authors of this document are Lisa M. Gesser and Joanne C. Brady, Regulations and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau.

For the reasons discussed in the preamble, TTB amends 27 CFR, chapter I, parts 4, 5, and 7, as set forth below:

The Pension Benefit Guaranty Corporation (PBGC) administers the pension plan termination insurance program under title IV of the Employee Retirement Income Security Act of 1974 (ERISA). PBGC's regulation on Rules for Administrative Review of Agency Decisions (29 CFR Part 4003) provides rules governing the issuance of initial determinations by PBGC involving the matters set forth in the regulation and procedures for requesting and obtaining PBGC review of those determinations, either by appeal (a more formal proceeding) or by request for reconsideration (a less formal process), depending on the type of matter. A person that fails to exhaust administrative remedies under the regulation with respect to a determination may not be able to raise in court some legal defenses against enforcement of the determination that might otherwise have been available.

Section 4071 of ERISA authorizes PBGC to assess a penalty for failure to timely provide any notice or other material information required under ERISA sections 4001-4071 or 303(k)(4) or regulations thereunder. PBGC published policy guidance on its assessment and review of section 4071 penalties on March 3, 1992 (at 57 FR 7605), and July 18, 1995 (at 60 FR 36837).1 On January 12, 2001 (at 66 FR 2857), PBGC published a proposed rule on Assessment of and Relief from Penalties under both ERISA section 4007 (dealing with payment of premiums) and ERISA section 4071.2 Among the proposed actions was amendment of the administrative review regulation to make determinations with respect to penalties under section 4071 subject to that regulation, in the class of matters reviewable by reconsideration.3 No comments were received on the proposal.4

This final rule amends the administrative review regulation consistent with the 2001 proposal. This change will promote uniformity in PBGC's procedures for making and reviewing determinations. The provisions of the administrative review regulation will supersede any inconsistent provisions of the 1992 and 1995 penalty policy statements; in other respects, those policy statements will be unaffected.

The amendment made by this rule applies to determinations under section 4071 made on or after May 16, 2012.

PBGC has determined that this action is not a “significant regulatory action” under the criteria set forth in Executive Order 12866.

This rule is not subject to notice and comment rulemaking requirements under section 553 of the Administrative Procedure Act because it deals only with PBGC procedural rules. Because no general notice of proposed rulemaking is required, the Regulatory Flexibility Act does not apply. See 5 U.S.C. 601(2), 603, 604.

This action is associated with retrospective review and analysis in PBGC's Plan for Regulatory Review5 issued in accordance with Executive Order 13563 on “Improving Regulation and Regulatory Review.”

For the reasons given above, PBGC is amending 29 CFR part 4003 as follows.

On December 16, 2011 we published a notice of proposed rulemaking (NPRM) entitled “Anchorage Regulations: Subpart A—Special Anchorage Regulations, Newport Bay Harbor, CA” in theFederal Register(76 FR 78185). We received no comments on the proposed rule. No request for public meeting was made.

The legal basis for this rule is: 33 U.S.C. 471, 1221 through 1236, 2030, 2035, 2071; 33 CFR 1.05-1; and Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to define anchorage grounds.

This rule expands the designated special anchorage areas in Newport Bay Harbor, and removes other anchorage grounds, to align with the actual placement of existing mooring areas and reflect the way the harbor is currently used.

Due to enhanced anchorage population over the years, the mooring areas being used in Newport Bay Harbor are nominally larger than the special anchorage areas originally charted in 33 CFR 110.95. As moorings were added or overhauled, the new moorings would fall outside the existing boundaries, resulting in moorings lying outside the charted areas. Similarly, the anchorage grounds designated in 33 CFR 110.212 were originally used as temporary overflow anchorages, but are now used regularly. Harbor users have been accustomed to this placement for the last 10 years.

The Mooring Master Plan Subcommittee of the City of Newport Harbor Commission led an outreach campaign involving a series of public meetings about aligning the anchorage regulations with actual harbor use patterns, and we understand that it did not receive any opposition from the waterway users. After these public meetings, the City of Newport asked the Coast Guard to amend its anchorage regulations. The Coast Guard therefore solicited public comment on proposed changes in the NPRM mentioned above. We received no comment on the proposal.

The Coast Guard is finalizing the proposal without changes and realigning the anchorage boundaries in order to reflect the way the harbor currently is used. This rule removes § 110.212 and the three anchorage grounds found therein (anchorages C-1, C-2, C-3). The area covered by those anchorages is incorporated into the special anchorage area regulations at § 110.95. Anchorage C-1 is incorporated into area B-1 under revised § 110.95(m), and anchorages C-2 and C-3 is incorporated into area A-11 under revised § 110.95(k). An image of the anchorage areas is available in the docket.

The enlargement of the special anchorage areas does not pose any waterway or navigational hazard, or restrict harbor use in any way. The Army Corps of Engineers has been consulted and did not have any opposition. We anticipate that this rule would have no impact on fishing or boating because the amendment adjusts the lines to fit the current layout of moorings in Newport Harbor. Small craft are not restricted in the harbor. Berthing and anchoring in Newport Harbor also is regulated by Orange County ordinance and the City of Newport's municipal code. The enlargement of the special anchorages does not impact these laws; for the convenience of the reader we have included references pertaining to local municipal codes in the rule.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. The Coast Guard is realigning anchorage boundaries in order to reflect the way the harbor currently is used. The enlargement of the anchorages does not restrict harbor use in any way.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

(1) This rule may affect the following entities, some of which might be small entities: The owners or operators of commercial and recreational vessels intending to transit or anchor in the affected area.

(2) The impact to these entities will not, however, be significant since this area will encompass only a small portion of the waterway and vessels can safely navigate around the anchored vessels.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), in the NPRM we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247).The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule would not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. An “Environmental Analysis Check List” and a categorical exclusion determination supporting this determination are available in the docket where indicated underADDRESSES. This rule involves changing the size of special anchorage areas.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 110 as follows:

We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted, without change, tohttp://www.regulations.govand will include any personal information you have provided.

If you submit a comment, please include the docket number for this rulemaking (USCG-2012-0144), indicate the specific section of this document to which each comment applies, and give the reason for each suggestion or recommendation. You may submit your comments and material online, or by fax, mail or hand delivery, but please use only one of these means. If you submit a comment online viahttp://www.regulations.gov,it will be considered received by the Coast Guard when you successfully transmit the comment. If you fax, hand deliver, or mail your comment, it will be considered as having been received by the Coast Guard when it is received at the Docket Management Facility. We recommend that you include your name and a mailing address, an email address, or a phone number in the body of your document so that we can contact you if we have questions regarding your submission.

To submit your comment online, go tohttp://www.regulations.govand click on the “submit a comment” box, which will then become highlighted in blue. In the “Document Type” drop down menu select “Proposed Rules” and insert “USCG-2012-0144” in the “Keyword” box. Click “Search” then click on the balloon shape in the “Actions” column. If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81/2by 11 inches, suitable for copying and electronic filing. If you submit them by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period and may change this rule based on your comments.

To view comments, as well as documents mentioned in this preamble as being available in the docket, go tohttp://www.regulations.govand click on the “read comments” box, which will then become highlighted in blue. In the “Keyword” box insert “USCG-2012-0144” and click “Search.” Click the “Open Docket Folder” in the “Actions” column. You may also visit the Docket Management Facility in Room W12-140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. We have an agreement with the Department of Transportation to use the Docket Management Facility.

Anyone can search the electronic form of all comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the January 17, 2008, issue of theFederal Register(73 FR 3316).

We do not now plan to hold a public meeting, but you may submit a request for one using one of the four methods specified underADDRESSES. Please explain why one would be beneficial. If we determine that one would aid this rulemaking, we will hold one at a time and place announced by a later notice in theFederal Register.

The Coast Guard is issuing this interim final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because sufficient time to promulgate a notice of proposed rulemaking with a comment period and then a final rule would result in the temporary final rule not going into effect until July 2012, which would then impact two boating seasons instead of just one, and delay of the bridge rehabilitation would result in significant additional taxpayer expense.

We received the bridge owner's request for deviation on February 9, 2012. The bridge owner mistakenly believed they were required to provide only 30 days notice to the Coast Guard to implement the temporary regulation change.

The Coast Guard normally requires 30 days advance notice for temporary deviations from the drawbridge operation regulations of less than 180 days in total duration.

In this case, the total time the regulations will be temporarily changed exceeds 180 days, which requires at least 90 days notice in order to allow sufficient time for the Coast Guard to promulgate a notice of proposed rulemaking with a comment period and a final rule.

Failure to commence the rehabilitation project on April 23, 2012 will cause a significant delay to this project. The bridge rehabilitation repairs scheduled to commence April 23, 2012, include the removal and replacement of the following: The primary and secondary gear drive motors, brakes, shafts, couplings, bearings, lubrication lines, span lock motors, span lock reducers, span lock guides, receiver bushings, electrical bridge controls, bridge power and lighting, motor control center, navigation lighting, and electrical conduits and wiring.

The contractor has arranged for personnel and equipment to be available between April 2012 and May 2013 to conduct the bridge rehabilitation repairs. Should the project not commence on April 23, 2012, a significant financial loss to the bridge owner and taxpayers would result, and this bridge rehabilitation project would continue into a second recreational boating season further impacting marine interests.

As a result of the information above, the Coast Guard believes that delaying this bridge repair project would be contrary to the best interest of the general public and the marine transportation system that transit Reynolds Channel.

Under 5 U.S.C. 553(d)(3), the Coast Guard finds good cause exists, for the reasons discussed above, for making this rule effective less than 30 days after publication in theFederal Register.

The Atlantic Beach Bridge, mile 0.4, across Reynolds Channel at Lawrence, New York, has a vertical clearance in the closed position of 25 feet at mean high water and 30 feet at mean low water. The drawbridge operationregulations are listed at 33 CFR 117.799(e).

The existing drawbridge operation regulations require the draw to open on signal October 1 through May 14. From May 15 through September 30 the draw shall open on signal, except that it need only open on the hour and half hour from 4 p.m. to 7 p.m. on weekdays, and from 11 a.m. to 9 p.m. on Saturday and Sunday, Memorial Day, Independence Day, and Labor Day.

The Coast Guard received a request from the owner of the bridge, Nassau County, asking permission to temporarily change the drawbridge operation regulations to help facilitate major rehabilitation at the bridge.

During the bridge rehabilitation project only one of the two movable spans will be raised for the passage of vessel traffic when work is underway.

In order to facilitate the extensive rehabilitation required at the bridge, scheduled bridge openings will be necessary from April 23, 2012 through May 15, 2013.

The horizontal clearance of the navigable channel is 125 feet when both spans are opened. A horizontal clearance of 62.5 feet, available during single span openings, is expected to be sufficient for the anticipated vessel traffic transiting the bridge during the bridge rehabilitation period.

The owner of the bridge and the Coast Guard coordinated and discussed this rehabilitation project and the necessary temporary changes to the drawbridge regulations with the commercial and recreational waterway users that normally transit the bridge. Users of the waterway consist of oil barges and tugs as well as power and sail recreational craft. No objections were raised.

As a result of the above coordination, the drawbridge regulations will be temporarily changed from April 23, 2012 through May 15, 2013, to facilitate the bridge repairs. Based on our coordination with the waterway users it is expected that this action will meet the reasonable needs of navigation.

Because the temporary change to the operating schedule of the drawbridge will be greater than 180 days, we are issuing a temporary interim rule requesting public comment in order to both facilitate completion of the bridge rehabilitation and to have the public participate in the rulemaking process.

The Coast Guard proposes to temporarily suspend 33 CFR 117.799(e) and add a temporary paragraph (k) from April 23, 2012 through May 15, 2013, to read as follows:

From April 23, 2012 through September 30, 2012, except for the closure period identified in the following paragraph, from Monday through Friday the Atlantic Beach Bridge, mile 0.4, across Reynolds Channel, may operate a single span every two hours on the even hour between 6 a.m. and 8 p.m. and on signal between 8 p.m. and 6 a.m. On weekends and holidays the bridge shall open both spans every hour on the hour from Friday at 8 p.m. through Monday at 6 a.m.

From July 23, 2012 through July 30, 2012, the bridge may remain in the closed position between 12 a.m. and 5 a.m., daily.

From October 1, 2012 through May 15, 2013, the bridge shall operate a single span, Monday through Sunday, at 6 a.m., 12 p.m., 4 p.m., and 8 p.m. Between 8 p.m. and 6 a.m. the bridge will operate a single span on signal. During the above time period the bridge will open both spans for commercial vessel traffic at all times after at least a 48 hour advance notice is given.

We developed this interim rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analysis based on 13 of these statutes or executive orders.

This rule is not a “significant regulatory action” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Order 12866. The Office of Management and Budget has not reviewed it under that Order.

The Coast Guard determined that this rule is not a significant regulatory action because the bridge will continue to open on a set schedule that was discussed with the waterway users in advance and no objections were received.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule will have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under section 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: the owners or operators of vessels intending to transit the bridge between April 23, 2012 and May 15, 2013. The bridge will open on a set schedule that was discussed with the waterway users in advance and no objections were received.

If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (seeADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this interim final rule so that they can better evaluate its effects on them and participate in the rulemaking. If the rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact Commander (dpb), First Coast Guard District Bridge Branch, One South Street, New York, NY 10004. The telephone number is (212) 668-7165. The Coast Guard will not retaliate against small entities that question or complain about this interim rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520.).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actionsthat may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies. This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this interim rule under Department of Homeland Security Management Directive 023-01, and Commandant Instruction M16475.lD which guides the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions which do not individually or cumulatively have a significant effect on the human environment because it simply promulgates the operating regulations or procedures for drawbridges. We seek any comments or information that may lead to the discovery of a significant environmental impact from this interim rule.

Under figure 2-1, paragraph (32)(e) of the Instruction, an environmental analysis checklist and a categorical exclusion determination are not required for this rule.

For the reasons discussed in the preamble, the Coast Guard is amending 33 CFR part 117 as follows:

Regulatory Information

On February 21, 2012, we published a notice of proposed rulemaking (NPRM) entitled Safety Zone, Lake Pontchartrain, New Orleans, LA in theFederal Register(77 FR 9879). We received no comments on the proposed rule, and no requests for a public meeting. As part of this rulemaking we made available the environmental checklist showing no significant adverse environmental impacts are expected as described in the National Environmental Policy Act of 1969 (NEPA).

The Coast Guard is issuing this temporary final rule without full 30 day notice pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without full 30 day notice when the agency for good cause finds that such notice would be “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in theFederal Register. The preceding NPRM provided for a comment period and notice to the public that this safety zone would be needed for the subject air show. The air show is scheduled in conjunction with the events surrounding the War of 1812 Commemoration. The community and event sponsors have planned for the air show and are relying on the air show to take place accompanied by the necessary safety precautions provided by this safety zone. It is impracticable and unnecessary to interfere with the planned air show and surrounding events by delaying this safety zone rule for a full 30 days notice.

In conjunction with the War of 1812 Commemoration celebrations taking place in the city of New Orleans, the Coast Guard received an application request for a marine permit in support of the Blue Angels Air Show, to take place over the waters of Lake Pontchartrain. The request calls for a safety zone to be created on the lake to protect the public from the dangers inherent to an aerobatic air show. The Coast Guard determined that the safety zone is necessary to protect persons and vessels from the potential safety hazards associated with the high speed aerobatic displays of the air show participants.

The Coast Guard is establishing this safety zone at the request of the event organizers and due to Federal Aviation Administration's requirement that the area be sterile of non-participants.

No comments were received and no changes are made to the safety zone regulation as proposed.

We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on 13 of these statutes or executive orders.

This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of that Order. The Office of Management and Budget has not reviewed it under that Order. The impacts on routine navigation are expected to be minimal because the enforcement periods are short in duration. Additionally, closure of the Inner Harbor Navigation Canal entrance to Lake Pontchartrain, in support of the Seabrook Surge Barrier construction project by the Army Corps of Engineers, restricts the majority of commercial traffic. As a result, the safety zone will have minimal impact, if any, on the area which is used primarily by recreational boaters.

Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered whether this rule would have a significant economic impact on a substantial number of small entities. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.

The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

This safety zone would not have a significant economic impact on a substantial number of small entities for the following reasons. This safety zone will be activated, and thus subject to enforcement, for only 7 hours daily during the Air Show display. The small entities that may be affected include small entities engaged in the business of recreational boating in the area or other marine traffic in the area. Vessel traffic could pass safely around the safety zone.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), in the NPRM we offered to assist small entities in understanding the rule so that they could better evaluate its effects on them and participate in the rulemaking process.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on State or local governments and would either preempt State law or impose a substantial direct cost of compliance on them. We have analyzed this rule under that Order and have determined that it does not have implications for federalism.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

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

This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.

This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

We have analyzed this rule under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use. We have determined that it is not a “significant energy action” under that order because it is not a “significant regulatory action” under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy. The Administrator of the Office of Information and Regulatory Affairs has not designated it as a significant energy action. Therefore, it does not require a Statement of Energy Effects under Executive Order 13211.

The National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note) directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides Congress, through the Office of Management and Budget, with an explanation of why using these standards would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., specifications of materials, performance, design, or operation; test methods; sampling procedures; and related management systems practices) that are developed or adopted by voluntary consensus standards bodies.

This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have concluded this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves establishing a safety zone and as such is not categorically excluded, under figure 2-1, paragraph (34)(g) of the Instruction. An environmental analysis checklist and a categorical exclusion determination are available in the docket where indicated underADDRESSES.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR Part 165 as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This supplementary information section is arranged as follows:

On November 14, 2011, Illinois EPA submitted a revision to its ozone SIP. This revision consists of an amendment to 35 Ill. Adm. Code sections 218.208 (Exemptions from VOC Emission Limitations for Coating Operations for the Chicago 8-hour ozone nonattainment area) and 219.208 (Exemptions from VOC Emission Limitations for Coating Operations for the Metro-East St. Louis 8-hour ozone nonattainment area) by adding a “small container exemption” for pleasure craft surface coating operations. EPA previously approved sections 218.208(c) and 219.208(c) which specify that Illinois' surface coating VOC emission limitations shall not apply to touch-up and repair coatings used by a can, coil, vinyl, metal furniture and magnet wire coating operation, provided that the source-wide volume of such coatings used does not exceed 1 quart per 8-hour period or exceed 55 gallons/year for any rolling 12 month period. (61 FR 5511 on February 13, 1996). The SIP revision which is the subject of this action extends the exemption in sections 218.208(c) and 219.208(c) to the pleasure craft surface coating limits set out in sections 218.204(q)(5) and 219.204(q)(5). Illinois' SIP revision also amends 35 Ill. Adm. Code 218.208(e) and 219.208(e), the recordkeeping and reporting provisions, to add pleasure craft coating operations that are exempted from the limitations in 218.204(q) and 219.204(q) to the coating operations subject to recordkeeping requirements. Sections 218.208(e) and 219.208(e) contain sufficient recordkeeping requirements to establish whether these exemptions have been exceeded.

EPA is approving the State's request to add a “small container exemption” for pleasure craft surface coating operations in the Chicago and Metro-East St. Louis 8-hour ozone nonattainment areas for the reasons stated below.

EPA published the Miscellaneous Metal and Plastic Part Coatings Control Technique Guidelines (MMPPC CTG) on October 7, 2008 (73 FR 58486). Members of the pleasure craft coatings industry contacted EPA requesting reconsideration of the pleasure craft VOC limits contained in EPA's 2008 MMPPC CTG. In response, EPA issued a memorandum on June 1, 2010, titled “Control Technique Guidelines for Miscellaneous Metal and Plastic Part Coatings—Industry Request forReconsideration,” recommending that the pleasure craft industry work with State agencies during their RACT rule development process to assess what is reasonable for the specific sources regulated. EPA stated that States can use the recommendations from the MMPPC CTG to inform their own determinations as to what constitutes RACT for pleasure craft coating operations in their particular ozone nonattainment area. As stated in the memorandum, EPA will evaluate State-developed RACT rules and determine whether the submitted rules meet the RACT requirements of the Clean Air Act (CAA).

In 2010 and 2011 Illinois promulgated rules on VOC RACT emission limitations for coating operations (See November 30, 2011 proposed approval at 76 FR 74014). During that rulemaking the American Coatings Association (ACA) commented to Illinois EPA that many VOC coating regulations include a small container exemption not to exceed a liter or a quart. The ACA stated that the basis for these exemptions is to allow for small repairs and touch ups to existing coatings at the end of the painting line to avoid having to completely recoat the product, thus resulting in lower VOC emissions overall and supported a small container exemption for pleasure craft coating operations.

As a result of this comment and EPA's June 2010 memorandum discussing the CTG and the pleasure craft industry, Illinois EPA amended its small container exemptions to add the pleasure craft coating operations. These exemptions limit the quantity of touch-up and repair coatings used to a maximum quantity of 55 gallons per year of such coatings.

Illinois' approach is generally consistent with EPA's August 10, 1990, policy memorandum regarding an allowed “Exemption for Low-Use Coatings” which states that “[a] low-use exemption for specialty or other coatings may be reasonable for a source that uses small quantities for intermittent or specialty-type operations.” In this policy EPA stated that a plant-wide cutoff of 55 gallons per rolling 12-month period for all low-use coatings in the aggregate used at a facility is reasonable. Also, EPA has previously approved the small container exemption for Illinois' can, coil, vinyl, metal furniture and magnet wire coating operations.

EPA concludes that Illinois' small container exemption for pleasure craft coating operations added to 35 Ill. Adm. Code sections 218.208 and 219.208 satisfies RACT requirements of the CAA. As noted above, the exemption is for a source category identified by EPA as appropriate for state consideration and development of what is reasonable for the specific source category, the exemption may result in lower emissions because allowing higher VOC touch-up and repair coatings could result in less total coating use (and lower overall VOC emissions) and the exemption is restricted to no more than 55 gallons per year of these coatings, which is consistent with EPA's policy on exemptions for low-use coatings.

We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of thisFederal Registerpublication, we are publishing a separate document that will serve as the proposal to approve the state plan if relevant adverse written comments are filed. This rule will be effective June 15, 2012 without further notice unless we receive relevant adverse written comments by May 16, 2012. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment. If we do not receive any comments, this action will be effective June 15, 2012.

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 meeting Federal 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 state, 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 thisaction must be filed in the United States Court of Appeals for the appropriate circuit by June 15, 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. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of today'sFederal Register, rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

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

In a letter dated August 8, 2011, MDNR submitted a request to EPA to approve revisions to the State's SIP and Title V program to incorporate recent rule amendments adopted by the Missouri Air Conservation Commission. These adopted rules became effective in the Missouri Code of State Regulations on August 30, 2011. These amendments establish thresholds for GHG emissions in Missouri's PSD and Title V regulations at the same emissions thresholds and in the same time-frames as those specified by EPA in the “PSD and Title V Greenhouse Gas Tailoring; Final Rule” (75 FR 31514), hereinafter referred to as the “Tailoring Rule,” ensuring that smaller GHG sources emitting less than these thresholds will not be subject to permitting requirements for GHGs that they emit. The amendments to the SIP clarify the applicable thresholds in the Missouri SIP, address the flaw discussed in the “Limitation of Approval of Prevention of Significant Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources in State Implementation Plans Final Rule,” 75 FR 82536 (December 30, 2010) (the “PSD SIP Narrowing Rule”), and incorporate state rule changes adopted at the state level into the Federally-approved SIP.

On October 28, 2011, EPA published a proposed rulemaking to approve Missouri's SIP revision. The proposal addressed SIP revisions associated with both the Federal “tailoring rule” revisions and “NSR reform” rules.See76 FR 66882. EPA did not receive any public comments in response to the proposal. In this final rule, pursuant to section 110 of the CAA, EPA is approving these revisions into the Missouri SIP.1

This section briefly summarizes EPA's recent GHG-related actions that provide the background for this final action. More detailed discussion of the background is found in the proposal for this rulemaking, 76 FR 66882, and in the EPA rulemakings cited in the proposal. In particular, the background is contained in what we called the PSD SIP Narrowing Rule,2 and in the preambles to the actions cited therein.

EPA has recently undertaken a series of actions pertaining to the regulation of GHGs that, although for the most part are distinct from one another, establish the overall framework for this final action on the Missouri SIP. Four of these actions include, as they are commonly called, the “Endangerment Finding” and “Cause or Contribute Finding,” which EPA issued in a single final action,3 the “Johnson Memo Reconsideration,”4 the “Light-Duty Vehicle Rule,”5 and the “Tailoring Rule.” Taken together and in conjunction with the CAA, these actions established regulatory requirements for GHGs emitted from new motor vehicles and new motor vehicle engines; determined that such regulations, when they took effect on January 2, 2011, subjected GHGs emitted from stationary sources to PSD requirements; and limited the applicability of PSD requirements to GHG sources on a phased-in basis. EPA took this last action in the Tailoring Rule, which, more specifically, established appropriate GHG emission thresholds for determining the applicability of PSD requirements to GHG-emitting sources. In many states, such as Missouri, PSD is implemented through the SIP. In December 2010, EPA promulgated several rules to implement the new GHG PSD SIP program. Recognizing that some states had approved SIP PSD programs that did not apply PSD to GHGs, EPA issued a SIP Call and, for some of these states, a Federal Implementation Plan (FIP).6 Recognizing that other states had approved SIP PSD programs that do apply PSD to GHGs, but that do so for sources that emit as little as 100 or 250 tpy of GHG, and that do not limit PSD applicability to GHGs to the higher thresholds in the Tailoring Rule, EPA issued the PSD SIP Narrowing Rule. Under that rule, EPA withdrew its approval of the affected SIPs to the extent those SIPs covered GHG-emitting sources below the Tailoring Rule thresholds. EPA based its action primarily on the “error correction” provisions of CAA section 110(k)(6).

On July 27, 2010, Missouri submitted a letter to EPA, in accordance with a request to all states from EPA in the proposed Tailoring Rule, with confirmation that the State of Missouri has the authority to regulate GHGs in its PSD program. The letter also confirmed Missouri's intent to amend its air quality rules for the PSD program for GHGs to match the thresholds set in the Tailoring Rule. See the docket for this final rulemaking for a copy of Missouri's letter.

In the PSD SIP Narrowing Rule, published on December 30, 2010, EPA withdrew its approval of Missouri's SIP (among other SIPs) to the extent that the SIP applies PSD permitting requirements to GHG emissions from sources emitting at levels below those set in the Tailoring Rule.7 As a result, Missouri's current approved SIP provides the State with authority to regulate GHGs, but only at and above the Tailoring Rule thresholds; and requires new and modified sources to receive a Federal PSD permit based on GHG emissions only if they emit or have potential to emit at or above the Tailoring Rule thresholds.

The basis for this SIP revision is that limiting PSD applicability to GHG sources with the higher thresholds in the Tailoring Rule is consistent with the SIP provisions that require assurances of adequate resources, and therebyaddresses the flaw in the SIP that led to the PSD SIP Narrowing Rule. Specifically, CAA section 110(a)(2)(E) includes as a requirement for SIP approval that states provide “necessary assurances that the State * * * will have adequate personnel [and] funding * * * to carry out such [SIP].” In the Tailoring Rule, EPA established higher thresholds for PSD applicability to GHG-emitting sources, in part, because the states generally did not have adequate resources to apply PSD to GHG-emitting sources below the Tailoring Rule thresholds,8 and no state, including Missouri, asserted that it did have adequate resources to do so.9 In the PSD SIP Narrowing Rule, EPA found that the affected states, including Missouri, had a flaw in their SIP at the time they submitted their PSD programs, which was that the applicability of the PSD programs was potentially broader than the resources available to them under their SIP.10 Accordingly, for each affected state, including Missouri, EPA concluded that EPA's action in approving the SIP was in error, under CAA section 110(k)(6), and EPA rescinded its approval to the extent the PSD program applies to GHG-emitting sources below the Tailoring Rule thresholds.11 EPA recommended that states adopt a SIP revision to incorporate the Tailoring Rule thresholds, thereby (i) assuring that under state law, only sources at or above the Tailoring Rule thresholds would be subject to PSD; and (ii) avoiding confusion under the Federally approved SIP by clarifying that the SIP applies only to sources at or above the Tailoring Rule thresholds.12

Missouri's August 8, 2011, SIP submission establishes thresholds for determining which stationary sources and modification projects become subject to permitting requirements for GHG emissions under Missouri's PSD program. Specifically, the SIP revision includes changes—which are already effective in Missouri's Code of State Regulations (CSR)—revising rule 10 CSR 10-6.060(8)(A) to incorporate by reference all of the revisions of the Federal PSD rules at 40 CFR 52.21 published in the Tailoring Rule.13 These revisions specifically define the term “subject to regulation” for the PSD program and define “greenhouse gases (GHGs)” and “tpy CO2equivalent emissions (CO2e).” Additionally, the revisions to 10 CSR 10-6.060 specify the methodology for calculating an emissions increase for GHGs, the applicable thresholds for GHG emissions subject to PSD, and the schedule for when the applicability thresholds take effect.

Missouri is currently a SIP-approved State for the PSD program, and has previously incorporated EPA's 2002 NSR Reform revisions for PSD into its SIP.See71 FR 36486 (June 27, 2006).14 In that rulemaking, at the State's request, EPA did not act on the portions of Missouri's rule which reflected the vacated and remanded provisions in EPA's NSR Reform rule.15 The changes to Missouri's PSD program regulations are substantively the same as the Federal provisions amended in EPA's Tailoring Rule.

Pursuant to section 110 of the CAA, EPA is approving Missouri's August 8, 2011 revisions to the Missouri SIP, relating to PSD requirements for GHG-emitting sources. EPA has made the determination that this SIP revision is approvable because it is in accordance with the CAA and EPA regulations regarding PSD permitting for GHGs. The detailed rationale for this action is set forth in the proposed rulemaking referenced above, and in this final rule.

Since EPA is finalizing its approval of Missouri's changes to its air quality regulations to incorporate appropriate thresholds for GHG permitting applicability into Missouri's SIP, then section 52.1323(n) of 40 CFR part 52, added in EPA's PSD SIP Narrowing Rule to codify the limitation of its approval of Missouri's PSD SIP to exclude the applicability of PSD to GHG-emitting sources below the Tailoring Rule thresholds, is no longer necessary. In this action, EPA is also amending section 52.1323(n) of 40 CFR part 52 to remove this unnecessary regulatory language.

In this final rule, we are also approving MDNR's request to include as a revision to Missouri's SIP, amendments to rule 10 CSR 10-6.060 “Construction Permit Required” and 10 CSR 10-6.410 “Emission Banking and Trading.” These rules were adopted by the Missouri Air Conservation Commission on March 26, 2009, and became effective under state law on July 30, 2009. The rules were submitted to EPA for inclusion into the Missouri SIP in a letter dated November 30, 2009. The submission included comments on the rules made during the State's adoption process and the State's response to comments. Missouri submitted these revisions to align its rules with EPA's revisions to the Federal NSR program (NSR Reform), as it relates to nonattainment areas in the State. Pursuant to section 110 of the CAA, EPA is approving these SIP revisions with several exceptions. First, in today's final action, EPA is not taking action on Missouri's submittal of changes to the applicability of the PSD program to exclude ethanol production facilities from the definition of “chemical processing plants” (the Ethanol Rule) (72 FR 24060, May 1, 2007).Seeletter from James L. Kavanaugh, Director, MDNR, to EPA, April 10, 2008. Second, because Missouri has not adopted EPA's “Fugitive Emissions Rule” (73 FR 77882, Dec. 19, 2008), as it relates to NSR in nonattainment areas, today's action also does not address the Fugitive Emissions Rule.16

On October 28, 2011, EPA published a proposed rulemaking to approve Missouri's SIP revision. The proposal addressed SIP revisions associated with both the Federal “tailoring rule” revisions and “NSR reform” rules.See76 FR 66882. EPA did not receive any public comments in response to the proposal. Therefore, in this final rule, pursuant to section 110 of the CAA,EPA is approving these revisions into the Missouri SIP.17

On December 31, 2002 (67 FR 80186), EPA published final rule changes to 40 CFR parts 51 and 52, regarding the CAA's PSD and Nonattainment NSR programs (“Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NSR); Baseline Emissions Determination, Actual-to-Future-Actual Methodology, Plantwide Applicability Limitations, Clean Units, Pollution Control Projects”). On November 7, 2003 (68 FR 63021), EPA published a notice of final action on the reconsideration of the December 31, 2002, final rule changes. In that November 7, 2003, final action, EPA added the definition of “replacement unit,” and clarified an issue regarding PALs. The December 31, 2002, and the November 7, 2003, final actions are collectively referred to as the “2002 NSR Reform Rules.”

In brief, the 2002 NSR Reform Rules made changes to five areas of the NSR programs (concerning both PSD and nonattainment NSR).18 The 2002 Rules: (1) Provide a new method for determining baseline actual emissions; (2) adopt an actual-to-projected-actual methodology for determining whether a major modification has occurred; (3) allow major stationary sources to comply with plantwide applicability limits (PALs) to avoid having a significant emissions increase that triggers the requirements of the major NSR program; (4) provide a new applicability provision for emissions units that are designated clean units; and (5) exclude pollution control projects (PCPs) from the definition of “physical change or change in the method of operation.”

After the 2002 NSR Reform Rules were finalized and effective, industry, state, and environmental petitioners challenged numerous aspects of the 2002 NSR Reform Rules, along with portions of EPA's 1980 NSR Rules (45 FR 52676, August 7, 1980). On June 24, 2005, the United States Court of Appeals for the District of Columbia Circuit (DC Circuit Court) issued a decision on the challenges to the 2002 NSR Reform Rules.New Yorkv.United States,413 F.3d 3 (DC Cir. 2005). In summary, the DC Circuit Court vacated portions of the rules pertaining to clean units and PCPs, remanded a portion of the rules regarding recordkeeping,e.g.40 CFR 52.21(r)(6) and 40 CFR 51.166(r)(6), and let stand the other provisions included as part of the 2002 NSR Reform Rules.

On February 25, 2005, Missouri submitted a request to include EPA's 2002 NSR Reform Rules in attainment and unclassifiable areas in to the SIP, and EPA approved these revisions through a final rule published on June 27, 2006 (71 FR 36486).19

Pursuant to section 110 of the CAA, EPA is approving revisions to Missouri's regulations 10 CSR 10-6.060 and 10 CSR 10-6.410, as submitted on November 30, 2009, for inclusion in the Missouri SIP. EPA has determined that this SIP revision is approvable because it is in accordance with the CAA and EPA regulations implementing the NSR program, including NSR Reform. The detailed rationale for this action is set forth in the proposal for this rule, 76 FR 66882, and in this notice.

Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves the State's law as meeting Federal requirements and does not impose additional requirements beyond those imposed by the State's 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 final rule does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

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 Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 15, 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 may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended as follows:

Contents I. Executive Summary II. Background A. Current Requirements in the HMR B. Summary of Proposals in NPRM 1. Incorporation of Revised ICAO Technical Instructions Packaging Provisions 2. Testing Requirements To Simulate Packages in the Air Transport Environment III. Discussion and Resolution of Comments Submitted in Response to NPRM A. Secondary Means of Closure B. Pressure Differential Testing C. Conclusion IV. Regulatory Analyses and Notices A. Statutory/Legal Authority for This Rulemaking B. Executive Orders 12866 and 13563 and DOT Regulatory Policies and Procedures C. Executive Order 13132 D. Executive Order 13175 E. Regulatory Flexibility Act, Executive Order 13272, and DOT Regulatory Policies and Procedures F. Unfunded Mandates Reform Act G. Paperwork Reduction Act H. Regulatory Identifier Number (RIN) I. Environmental Assessment J. Privacy Act I. Executive Summary

In this final rule, PHMSA is adopting the requirement that, when transported by air, the closure of an inner packaging containing a liquid hazardous material must be secured by a secondary means of closure. A Packing Group I liquid must be further packaged in a rigid leakproof receptacle or rigid intermediate packaging containing sufficient absorbent material to absorb the entire contents of the inner packaging, before being placed in its outer package. For liquids assigned to Packing Groups II or III, however, a leakproof liner may be used where a secondary closure cannot be applied or it is impracticable to apply. These amendments are consistent with the reformatted packing instructions in the 2011-2012 edition of the International Civil Aviation Organization's Technical Instructions for the Safe Transport of Dangerous Goods by Air (ICAO Technical Instructions). Because most shippers already prepare shipments in accordance with the ICAO Technical Instructions, as a result, no new costs or benefits are anticipated.

During the rulemaking process, PHMSA, in consultation with the FAA, considered four possible alternatives to strengthen packaging requirements for air shipments of liquid hazardous materials:

Alternative 1: Harmonize with the 2011-2012 edition of the ICAO Technical Instructions by requiring that friction and screw type closures (i.e., all closure types) of inner packagings intended to contain liquids as part of a combination packaging be secured by a secondary means of closure.Under this alternative, we would adopt packaging amendments included in the 2011-2012 edition of the ICAO Technical Instructions that require friction and screw type closures of inner packagings intended to contain liquids as part of a combination packaging to be secured by a secondary means of closure. For liquids assigned to Packing Groups II or III, a leakproof liner could be used to satisfy the secondary closure requirement where it could not be applied or would be impracticable to apply. For liquids of Packing Group I, a secondary means of closure, absorbent material and a leakproof liner would be required. Alternative 1 would address most of the safety issues associated with the transportation of liquid hazardous materials by preventing releases or containing releases that do occur within the packaging. It does not address problems associated with the current pressure differential capability standard.

Alternative 2: Require enhanced pressure differential capability requirements on all inner packagings intended to contain liquids as part of a combination packaging.Current rules require that all packages transported by air and for which retention of liquids is a basic function must be capable of withstanding, without leakage, a certain pressure differential, which is usually 95 kilopascals (kPa) (§ 173.27[c]). This integrity standard applies to both specification and non-specification packaging. Under this alternative, PHMSA would require packaging manufacturers to conduct testing to confirm that a combination packaging intended for the air transportation of liquid hazardous materials is capable of withstanding the pressures encountered on board aircraft and to maintain a documented record of the test results.

Alternative 3: Adopt the provisions in both Alternatives 1 and 2.Under this alternative, PHMSA would adopt the new and revised regulatory provisions summarized in the discussion of Alternatives 1 and 2 above.

Alternative 4: Do nothing.Under this alternative, the current domestic regulatory scheme applicable to air shipment of hazardous liquids would continue in place and the U.S. standards would not be harmonized with the international community. Because most countries and international air carrier organizations have already adopted the changes in this rulemaking, a do-nothing approach could result in complications in the movement of these materials and the U.S. will not meet its obligations outlined in the Convention on International Civil Aviation—also known as the Chicago Convention. Future inconsistencies with international transport standards may result in foreign authorities refusing to accept hazardous material shipments prepared in accordance with the HMR. To successfully participate in international markets, U.S. companies would be required to conform to dual regulations. Inconsistent domestic and international regulations can also have an adverse safety impact by making it more difficult for shippers and carriers to understand and comply with all applicable requirements.

Currently under the HMR, stoppers, corks, or other such friction-type closures must be held securely, tightly, and effectively in place by positive means. See § 173.27(d). However, a screw-type closure on any packaging must only be secured to prevent the closure from loosening due to “vibration or substantial change in temperature.” We have stated in letters of clarification that a secured closure should incorporate a secondary means of maintaining a seal, such as a shrink-wrap band or heat-sealed liner. Additionally, laboratory studies conducted on behalf of PHMSA and FAA concluded that a simple application of tape on a screw-type closure prevented “back-off” under even extreme conditions.

In the May 14, 2010 [75 FR 27273] NPRM, we proposed to amend the HMR by adopting certain packaging provisions that were inclusive of what was adopted in the 2011-2012 ICAO Technical Instructions. We proposed to amend § 173.27(d) by requiring that all friction and screw type closures must be secured by a secondary means. A Packing Group I liquid would also be required to be further packaged in a rigid, leakproof receptacle or intermediate packaging containing sufficient absorbent material to absorb the entire contents of the inner packaging. We also proposed that, for liquids assigned to Packing Groups II or III, a leakproof liner or bag may be used to satisfy the secondary closure requirement where it could not be applied or it would be impracticable to apply. Additionally, we noted:

■ A liner or secondary means of positive closure should not affect an existing UN standard packaging design because it would not ordinarily be considered a new design type.

■ Liners typically must be manually inserted into a packaging before filling. Because most packaging systems can be automated or are already automated with some form of secondary closure being applied, costs and regulatory burden to shippers should be minimal.

■ The HMR and ICAO Technical Instructions already require a leakproof receptacle for most Packing Group I liquids through special provisions and packing instructions, respectively.

Lastly, because organic peroxide liquids are no longer required to be packaged with absorbent material under the newly reformatted packing instructions of the ICAO Technical Instructions, we proposed to remove the reference to Division 5.2 materials from the § 173.27(e) introductory text.

In the May 14, 2010 [75 FR 27273] NPRM, we also proposed to establish new testing standards for packaging, relative to pressure differential requirements in §§ 173.27(c) and 178.605. Some of the recommended test methods proposed were intended to provide an equivalent alternative to current HMR test requirements, and ultimately reduce the overall failure rate of packages by ensuring packaging capable of withstanding the pressure differentials and vibrations encountered in air transport.

Current HMR test requirements for air transport packaging are based on a 50-year old regulatory regime. Compared to the air transportation environment 50 years ago, today's air cargo transportation environment has become more automated, relies on a more complex cargo feeder system, and utilizes aircraft traveling longer distances without suitable airports to land in the event of an emergency.

For these reasons, DOT will continue with its comprehensive review of air packaging standards as appropriate. In this review, data will be collected on the pressure differential, vibration, ground handling characteristics, temperature fluctuations, and other environmental characteristics typically experienced by packages in air transport. This data will also be analyzed to describe the cumulative impact that today's operational environment may have on packaging systems. As a result, DOT will assess whether such review merits further action.

In response to the NPRM, we received comments from the following:

Three major trade associations (COSTHA, DGAC and AHS) who commented support the amendments proposed in the NPRM primarily due to their alignment with the ICAO Technical Instructions and the minimal economic and regulatory burden placed on their members. The bulk of their membership, however, appears to consist of large companies who most likely already comply with some or all of the proposals made in the NPRM. Additionally, these trade associations request that PHMSA, at the earliest possible date, bring any regulatory differences to the international standards bodies' attention to ensure a level playing field exists among domestic and international shippers and carriers. We will continue to propose international alignment with the HMR to the ICAO Dangerous Goods Panel when appropriate.

COSTHA, DGAC and AHS request that PHMSA consider automated closure systems as an acceptable alternative to applying a secondary means of closure to an inner packaging with a screw-type closure. In their comments, they assert because modern automated closure systems provide a consistent level of integrity, the time it takes to individually apply another means of closure (e.g., tape) is not economically viable when compared to simply using some form of secondary containment such as a leakproof liner. LabCorp also opposes the secondary means of closure requirement as it would be manually accomplished—a major burden. LabCorp and the two DOT-approved testing laboratories (High Q Testing, LLC and Lonnie Jaycox) request that PHMSA allow the use of a leakproof liner to satisfy the “impractical” secondary means of closure requirement proposed in the NPRM.

In response to comments submitted by LabCorp and the two DOT-approved testing laboratories (High Q Testing, LLC and Lonnie Jaycox), in the final rule, we are doing so and providing that for liquids of Packing Groups II and III, the use of a leakproof liner, bag or other form of secondary containment will satisfy the secondary means of closure requirement. However, Packing Group I liquids on passenger-carrying and cargo-carrying aircraft must be contained in an inner packaging with a secondary means of closure applied that is further packaged in a rigid leakproof receptacle or intermediate packaging containing sufficient absorbent material to absorb the entire contents of the inner packaging before being placed in its outer package. This requirement is consistent with current air-related § 172.102 Special provisions in the HMR (A3, A6), and Packing Instructions 360 and 361 in the ICAO Technical Instructions. Unless otherwise specified through a § 172.102 Special provision, absorbent material is not required for liquids of Packing Groups II and III. It should be noted, however, that although not required under these provisions, absorbent material would remain a requirement if included as part of an assembled package during design testing and is also permitted as an additional mitigation procedure if desired.

We accept the suggestions to “improve” upon the proposed amendments in the NPRM by allowing certain closures of high integrity (e.g., acid cap) to meet the secondary means of closure requirements of this final rule. The methods indicated in proposed § 173.27(d) are some examples of ways in which to satisfy the closure requirements and are not intended to be all-inclusive. We do not accept, however, the recommendations that successful pressure differential testing itself should satisfy the secondary means of closure or liner requirement. Some commenters state it would not be needed (and is overly redundant) if a packaging successfully meets the performance standard for pressure differential capability as proposed in the NPRM. We disagree and contend that the air transport environment is unique in that a certain amount of redundancy is necessary to maintain or enhance the safe transportation of hazardous materials.

PHMSA received comments on the pressure differential testing aspects of the NPRM from Saf-T-Pak, AHS, and CEFIC. Saf-T-Pak supports the proposalsin the NPRM to require pressure differential testing and requests that PHMSA: (1) Allow any acceptable test method that achieves the proposed goal of the rule; (2) require similar testing requirements for biological substances in § 173.199 as proposed in § 173.27; and (3) lower the duration for flexible packagings used primarily in medical and pharmaceutical industries. AHS requests that PHMSA allow reduced pressure differential capability (75 kPa) for all consumer commodities in the ORM-D-AIR hazard class. CEFIC represents national chemical federations and chemical companies in Europe. In its comments, CEFIC states that it supports global harmonization of hazardous materials transport standards and regulations, but actual testing of packagings to verify pressure differential capability as proposed in the NPRM is inconsistent with the ICAO Technical Instructions. As a result, PHMSA has elected to not adopt the pressure differential proposals published in the NPRM at this time. DOT will continue to assess the pressure differential and vibration test proposals published in the NPRM in a broader context once additional data has been collected and considered.

In this rulemaking action, PHMSA is adopting, consistent with packaging amendments made to the 2011-2012 edition of the ICAO Technical Instructions, the requirement that closures of inner packagings be secured by a secondary means of closure. The effective date of the amendments adopted in this final rule is July 1, 2012. This delayed compliance date will assist shippers in assessing their packaging stock for integrity and is consistent with amendments recently adopted under Docket HM-215K (76 FR 3308, January 19, 2011) that align the HMR with certain amendments adopted in the 2011-2012 ICAO Technical Instructions.

This final rule adopts the requirements that friction and screw type closures (i.e., all closures) of inner packagings intended to contain liquids, as part of a combination packaging, must be secured by a secondary means of closure. For liquids assigned to Packing Groups II or III, a leakproof liner may be used to satisfy the secondary closure requirement where it cannot be applied or it is impracticable to apply. For liquids of Packing Group I, a secondary means of closure, absorbent material, and a rigid and leakproof receptacle or intermediate packaging is required. We believe the amendments adopted in this final rule will achieve our objective of prescribing a cost-effective systems approach to aviation safety that provides redundancy where necessary and promotes compliance.

PHMSA and FAA will continue to focus on enforcement of the current air packaging requirements. We will also build on our efforts to better understand and characterize the environmental conditions that packages are subjected to in today's air transport system.

This final rule is published under authority of Federal hazardous materials transportation law (Federal hazmat law; 49 U.S.C. 5101 et seq.) Section 5103(b) of Federal hazmat law requires the Secretary of Transportation to prescribe regulations for the safe transportation, including security, of hazardous materials in intrastate, interstate, and foreign commerce.

This notice 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 notice is not considered a significant rule under the Regulatory Policies and Procedures of the Department of Transportation (44 FR 11034). Additionally, E.O. 13563 supplements and reaffirms E.O. 12866, stressing that, to the extent permitted by law, an agency rulemaking action must be based on benefits that justify its costs, impose the least burden, consider cumulative burdens, maximize benefits, use performance objectives, and assess available alternatives.

During the rulemaking process, PHMSA, in consultation with the FAA, considered four possible alternatives to strengthen packaging requirements for air shipments of liquid hazardous materials:

Alternative 1: Harmonize with the 2011-2012 edition of the ICAO Technical Instructions by requiring that friction and screw type closures (i.e., all closure types) of inner packagings intended to contain liquids as part of a combination packaging be secured by a secondary means of closure.Under this alternative, we would adopt packaging amendments included in the 2011-2012 edition of the ICAO Technical Instructions that require friction and screw type closures of inner packagings intended to contain liquids as part of a combination packaging to be secured by a secondary means of closure. For liquids assigned to Packing Groups II or III, a leakproof liner could be used to satisfy the secondary closure requirement where it could not be applied or would be impracticable to apply. For liquids of Packing Group I, a secondary means of closure, absorbent material and a rigid leakproof receptacle or intermediate packaging would be required. Alternative 1 would address most of the safety issues associated with the transportation of liquid hazardous materials by preventing releases or containing releases that do occur within the packaging. It does not address problems associated with the current pressure differential capability standard.

Alternative 2: Require enhanced pressure differential capability requirements on all inner packagings intended to contain liquids as part of a combination packaging.Current rules require that all packages transported by air and for which retention of liquids is a basic function must be capable of withstanding, without leakage, a certain pressure differential, which is usually 95 kilopascals (kPa) (§ 173.27[c]). This integrity standard applies to both specification and non-specification packaging. Under this alternative, PHMSA would require packaging manufacturers to conduct testing to confirm that a combination packaging intended for the air transportation of liquid hazardous materials is capable of withstanding the pressures encountered on board aircraft and to maintain a documented record of the test results.

Alternative 3: Adopt the provisions in both Alternatives 1 and 2.Under this alternative, PHMSA would adopt the new and revised regulatory provisions summarized in the discussion of Alternatives 1 and 2 above.

Alternative 4: Do nothing.Under this alternative, the current domestic regulatory scheme applicable to air shipment of hazardous liquids would continue in place and the U.S. standards would not be harmonized with the international community. Because most countries and international air carrier organizations have already adopted the changes in this rulemaking, a do-nothing approach could result in complications in the movement of these materials and the U.S. will not meet its obligations outlined in the Convention on International Civil Aviation—also known as the Chicago Convention. Future inconsistencies with international transport standards may result in foreign authorities refusing to accept hazardous material shipments prepared in accordance with the HMR. To successfully participate ininternational markets, U.S. companies would be required to conform to dual regulations. Inconsistent domestic and international regulations can also have an adverse safety impact by making it more difficult for shippers and carriers to understand and comply with all applicable requirements.

This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13132 (“Federalism”). This final rule preempts State, local and Indian tribe requirements but does not propose any regulation with substantial direct effects on the States, the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. Therefore, the consultation and funding requirements of Executive Order 13132 do not apply.

The Federal hazardous materials transportation law, 49 U.S.C. 5101-5127, contains an express preemption provision (49 U.S.C. 5125(b)) preempting State, local and Indian tribe requirements on the following subjects:

(1) The designation, description, and classification of hazardous materials;

(2) The packing, repacking, handling, labeling, marking, and placarding of hazardous materials;

(3) The preparation, execution, and use of shipping documents related to hazardous materials and requirements related to the number, contents, and placement of those documents;

(4) The written notification, recording, and reporting of the unintentional release in transportation of hazardous material; or

(5) The design, manufacture, fabrication, marking, maintenance, recondition, repair, or testing of a packaging or container represented, marked, certified, or sold as qualified for use in transporting hazardous material.

This final rule addresses covered subject items (2) and (5) described above and preempts State, local, and Indian tribe requirements not meeting the “substantively the same” standard.

Federal hazardous materials transportation law provides at 49 U.S.C. 5125(b)(2) that, if DOT issues a regulation concerning any of the covered subjects, DOT must determine and publish in theFederal Registerthe effective date of Federal preemption. The effective date may not be earlier than the 90th day following the date of issuance of the final rule and not later than two years after the date of issuance. The effective date of Federal preemption of this final rule will be 90 days from publication in theFederal Register.

This final rule has been analyzed in accordance with the principles and criteria contained in Executive Order 13175 (“Consultation and Coordination with Indian Tribal Governments”). Because this final rule does not have tribal implications and does not impose direct compliance costs, the funding and consultation requirements of Executive Order 13175 do not apply.

The Regulatory Flexibility Act (5 U.S.C. 601-611) requires each agency to analyze proposed regulations and assess their impact on small businesses and other small entities to determine whether the proposed rule is expected to have a significant impact on a substantial number of small entities. A regulatory evaluation for this final rule, which includes a detailed small business impact analysis, is in the public docket for this rulemaking. Based on the analysis in the public docket, I certify that the requirements adopted in this final rule will not have a significant economic impact on a substantial number of small entities.

This final rule has been developed in accordance with Executive Order 13272 (“Proper Consideration of Small Entities in Agency Rulemaking”) and DOT's procedures and policies to promote compliance with the Regulatory Flexibility Act to ensure potential impacts of draft rules on small entities are properly considered.

This final rule does not impose unfunded mandates under the Unfunded Mandates Reform Act of 1995. It will not result in costs of $141.3 million or more, in the aggregate, to any of the following: State, local, or Native American tribal governments, or the private sector.

Under the Paperwork Reduction Act of 1995, no person is required to respond to an information collection unless it has been approved by OMB and displays a valid OMB control number. Section 1320.8(d), title 5, Code of Federal Regulations requires that PHMSA provide interested members of the public and affected agencies an opportunity to comment on information and recordkeeping requests. This final rule does not identify a new or revised information collection request that PHMSA will be required to submit to OMB for approval.

The National Environmental Policy Act (NEPA), §§ 4321-4375, requires Federal Agencies to analyze regulatory actions to determine whether the action will have a significant impact on the human environment. The Council on Environmental Quality (CEQ) regulations require Federal Agencies to conduct an environmental review considering (1) the need for the action, (2) alternatives to the action, (3) environmental impacts of the action and alternatives, and (4) the agencies and persons consulted during the consideration process. 40 CFR 1508.9(b).

Purpose and Need.As discussed elsewhere in this preamble, PHMSA is amending requirements in the Hazardous Materials Regulations to enhance the integrity of inner packagings or receptacles of combination packagings containing liquid hazardous material by ensuring they remain intact when subjected to the reduced pressure and other forces encountered in air transportation. In order to substantially decrease the likelihood of an unintentional hazardous materials release to the environment, the amendments adopted in this final rule require that closures of inner packagings be secured by a secondary means of closure.

Alternatives:PHMSA considered four possible alternatives to strengthen packaging requirements for air shipments of liquid hazardous materials:

Alternative 1:Require that friction and screw type closures of inner packagings intended to contain liquids as part of a combination packaging to be secured by a secondary means of closure. Under this alternative, we would adopt the packaging amendments included in the 2011-2012 edition of the ICAO Technical Instructions. Specifically, we would require friction and screw type closures of inner packagings intended to contain liquids as part of a combination packaging to be secured by a secondary means of closure. For liquids assigned to Packing Groups II or III, a leakproof liner could be used to satisfy the secondary closure requirement where it could not be applied or would be impracticable to apply. For liquids of Packing Group I, a secondary means of closure, absorbent material, and a rigid and leakproof receptacle or intermediate packaging would be required. This regulatory alternative was selected. Thisalternative harmonizes domestic packaging requirements with international standards, thereby reducing confusion, promoting safety, and facilitating efficient transportation.

Alternative 2:Require enhanced pressure differential capability requirements on all inner packagings intended to contain liquids as part of a combination packaging. Current rules require that all packages transported by air and for which retention of liquids is a basic function must be capable of withstanding, without leakage, a certain pressure differential, which is usually 95 kilopascals (kPa) (§ 173.27[c]). This integrity standard applies to both specification and non-specification packaging. Under this alternative, PHMSA would require packaging manufacturers to conduct testing to confirm that a combination packaging intended for the air transportation of liquid hazardous materials is capable of withstanding the pressures encountered on board aircraft and to maintain a documented record of the test results.

Alternative 3:Adopt the provisions in both Alternatives 1 and 2. Under this alternative, PHMSA would adopt the new and revised regulatory provisions summarized in the discussion of Alternatives 1 and 2 above.

Alternative 4:Do nothing. Under this alternative, the current regulatory scheme applicable to air shipment of hazardous liquids would continue in place. We did not select this alternative because clearly-identified safety risks would not be addressed.

Analysis of Environmental Impacts.Hazardous materials are substances that may pose a threat to public safety or the environment during transportation because of their physical, chemical, or nuclear properties. The hazardous material regulatory system is a risk management system that is prevention-oriented and focused on identifying a safety hazard and reducing the probability and quantity of a hazardous material release. Releases of hazardous materials can result in explosions or fires, while radioactive, toxic, infectious, or corrosive hazardous materials can have short- or long-term exposure effects on humans or the environment.

We have reviewed the risks associated with transporting combination packages containing liquid hazardous materials by aircraft and by surface transportation to and from aircraft. The amount of liquid hazardous material contained in air-eligible combination packages to which this rulemaking applies is minimal and ranges anywhere from 0.5L to 450L. However, hazardous materials that pose the highest risk to humans and the environment are packaged in much smaller quantities when transported by aircraft, or are not authorized transportation by aircraft at all, thereby minimizing any consequences to both should a package fail and release its contents. For these reasons, we conclude the amendments adopted in this final rule will result in little or no impact on the environment.

Anyone is able to search the electronic form for all comments received into any of our dockets by the name of the individual submitting the comments (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review DOT's complete Privacy Act Statement in theFederal Registerpublished on April 11, 2000 (Volume 65, Number 70; Pages 19477-78) or you may visit “http://dms.dot.gov”.

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.

In consideration of the foregoing, 49 CFR chapter I is amended as follows: