On March 16, 2012, SIGAR published in theFederal Register(77 FR 15561) an interim final rule that establishes procedures for the public to obtain the production or disclosure of information and documents of Special Inspector General for Afghanistan Reconstruction (SIGAR) in connection with legal proceedings in which neither the United States nor the SIGAR is a party.

We provided a 30-day comment period that ended on April 16, 2012. We received no comments and will not be making any changes to the interim final rule. Based on the rationale set forth in the interim final rule, we adopt the interim final rule without change as a final rule.

As Acting Inspector General of SIGAR, I have determined under the Regulatory Flexibility Act (5 U.S.C. chapter 6) that this proposed rule will not have a significant economic impact on a substantial number of small entities because it will primarily affect SIGAR employees.

As Acting Inspector General of SIGAR, I have determined that the Paperwork Reduction Act (44 U.S.C. chapter 35) does not apply to this proposed rule, because it does not contain any information collection requirements that would require the approval of the Office of Management and Budget.

For purposes of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. chapter 25, subchapter II), this proposed rule would not significantly or uniquely affect small governments and would not result in increased expenditures by State, local, and tribal governments, or by the private sector, of $100 million or more (as adjusted for inflation) in any one year.

SIGAR has determined that this rule is not a rule as defined in 5 U.S.C. 804 and, thus, does not require review by Congress.

In promulgating this proposed rule, SIGAR has adhered to the regulatory philosophy and the applicable principles of regulation set forth in section 1 of Executive Order 12866, Regulatory Planning and Review. This rule has not been reviewed by the Office of Management and Budget under that Executive order, since it deals with agency organization, management, and personnel matters and is not in any way event deemed “significant” thereunder.

As Acting Inspector General of SIGAR, I have reviewed this proposed rule in light of section 3 of Executive Order 12988, Civil Justice Reform, and certify that it meets the applicable standards provided therein.

Accordingly, the interim final rule amending 5 CFR part 9302, which was published at 77 FR 15561 on March 16, 2012, is adopted as a final rule without change.

On May 3, 2012 (77 FR 26149), the NRC published a direct final rule amending its regulations at Title 10 of the Code of Federal Regulations (10 CFR) part 11, “Criteria and Procedures for Determining Eligibility for Access to or Control Over Special Nuclear Material,” and 10 CFR part 25, “Access Authorization.” The NRC amended its access authorization fees charged to licensees for work performed under the MAAP and the IAAP. The amended cost is the result of an increase in the review time for each application for access authorization. The formula for calculating fees remains based on current Office of Personnel Management (OPM) billing rates for personnel background investigations. The NRC designed the formula to recover the full cost of processing a request for access authorization from the licensee. The use of the fee assessment formula tied to current OPM billing rates eliminates the need for the NRC to update its access authorization fee schedules through regular rulemaking. In the direct final rule, the NRC stated that, if it received no significant adverse comments, the direct final rule would become final on June 22, 2012.

The NRC did not receive any comments on the direct final rule. Therefore, this rule will become effective as scheduled.

I. Background The Dodd-Frank Act

Title II of the Dodd-Frank Act establishes an Orderly Liquidation Authority (“OLA”) to resolve a large interconnected financial company upon a determination that its failure and resolution under otherwise applicable law would have serious adverse effects on financial stability in the United States and the use of OLA would avoid or mitigate such adverse effects. Under the process set forth in the Dodd-Frank Act, certain designated Federal agencies,2 on their own initiative or at the request of the Secretary of the Treasury (“Secretary”), may recommend that the Secretary appoint the FDIC as receiver of a financial company. Any written recommendation from the designated Federal agencies that the Secretary should appoint the FDIC as receiver for a financial company must include a number of specific findings, which are enumerated in section 203(a)(2) of the Dodd-Frank Act.3 Then,based on the written recommendation of the appropriate agencies, the Secretary, in consultation with the President, must determine whether the conditions in section 203(b) of the Dodd-Frank Act have been satisfied so that the Secretary can seek the appointment of the FDIC as receiver for the financial company.4 In making that determination, the Secretary must document any determination and retain such documentation. This procedure is very similar to the way that systemic risk determinations are made under section 13 of the Federal Deposit Insurance Act (the “FDIA”).5 Under section 201(a)(8) of the Dodd-Frank Act, a “covered financial company” is a “financial company”6 for which a determination has been made pursuant to section 203(b) of the Dodd-Frank Act but does not include an insured depository institution.

Once the Secretary makes the determination, the Secretary can seek the appointment of the FDIC as receiver of the covered financial company. If the board of directors (or similar governing body) of the company consents to the appointment, the Secretary shall appoint the FDIC as receiver. If the company's governing body does not consent, section 202 of the Dodd-Frank Act requires the Secretary to petition the United States District Court for the District of Columbia for an order authorizing the Secretary to appoint the FDIC as receiver. In determining whether to grant the petition, the court will determine whether two of the Secretary's seven determinations—that the covered financial company is in default or in danger of default and that it meets the definition of financial company under Title II—are arbitrary and capricious.7 If the court upholds the two reviewable determinations of the Secretary, the court will issue an order authorizing the Secretary to appoint the FDIC as receiver. If the court does not make a determination within twenty-four hours of receiving the Secretary's petition, then the appointment of the FDIC as receiver takes effect by operation of law.

The OLA in the Dodd-Frank Act is intended as a limited exception to bankruptcy or other applicable insolvency laws for purposes of ensuring that the resolution of a failing non-depository financial company does not have serious adverse effects on U.S. financial stability. Section 204(a) of the Dodd-Frank Act expressly provides that the purpose of the OLA is to provide the means “to liquidate failing financial companies that pose a significant risk to the financial stability of the United States in a manner that mitigates such risk and minimizes moral hazard.” Section 214(a) expressly provides that “[a]ll financial companies put into receivership under this title shall be liquidated. No taxpayer funds shall be used to prevent the liquidation of any financial company under this title.” Moreover, section 214(b) provides that “[a]ll funds expended in the liquidation of a financial company under this title shall be recovered from the disposition of assets of such financial company, or shall be the responsibility of the financial sector, through assessments.” Finally, section 214(c) provides that “[t]axpayers shall bear no losses from the exercise of any authority under this title.”

To achieve the orderly liquidation of financial companies, the FDIC is given broad authority under the Dodd-Frank Act to: transfer assets or liabilities to a bridge financial company; operate or liquidate businesses; sell assets; and resolve the liabilities of a covered financial company, just after the FDIC's appointment as receiver or as soon as conditions make this appropriate.8 This authority enables the FDIC to act immediately to sell any assets or liabilities of the covered financial company to another entity, or, if that is not possible or consistent with maximizing the value of the assets of the covered financial company, to transfer assets and liabilities to a bridge financial company established by the FDIC and sell the assets or liabilities over time while maintaining critical functions. Oftentimes, in administering a receivership, it is necessary to continue key operations, services, and transactions that will maximize the value of the firm's assets and avoid a disorderly collapse in the marketplace.

I. Overview A. Final Policy Statement

Under the final Policy Statement, the Bureau plans to disclose data associated with credit card complaints in two ways. These disclosures are intended to help provide consumers with “timely and understandable information to make responsible decisions about financial transactions” and to enhance the credit card market's ability to “operate transparently and efficiently.”1 First, the Bureau plans to issue its own periodic reports about complaint data. The Bureau has already issued three such reports.2 Second, the Bureau plans to provide public access to an electronic database containing certain fields for each unique3 complaint.4 As discussed further below, the Bureau has adjusted its plans to include certain fields in the public database in response to comments on the proposed Policy Statement published by the Bureau on December 8, 2011. The public database will initially include data from credit card complaints submitted on or after June 1, 2012.

Concurrent with the publication of this Policy Statement, the Bureau is publishing a notice in theFederal Registerseeking comment on a proposed extension of the disclosure system described in the Policy Statement to complaints about consumer financial products other than credit cards (the “Concurrent Notice”). In addition to credit cards, the Bureau's complaint-handling system (the “Complaint System”) now encompasses mortgages, bank products such as checking and savings accounts, and certain other consumer loans. The Bureau anticipates that the Complaint System will accept complaints about all consumer financial products and services within the Bureau's jurisdiction by the end of 2012. Comments in response to the Concurrent Notice are due by July 19, 2012.

In the proposed Policy Statement, the Bureau generally described how the Office of Consumer Response (“Consumer Response”) accepts and processes credit card complaints. The Bureau has since revised the Complaint System in a number of respects, in part as a result of the comments received on the proposed Policy Statement. For example, the Bureau has adjusted the permissible entries for the “issuer response category” field, as summarized in part III.D.5.

The Bureau received seventeen sets of comments in response to the proposed Policy Statement. In some cases, several organizations submitted a single comment letter. Eleven industry groups submitted a total of nine comment letters. One credit union also commented. One financial reform organization, Americans for Financial Reform (“AFR”), submitted a single set of comments on behalf of twenty-one consumer, civil rights, privacy, and open government groups. Two privacy groups that joined that set of comments also submitted their own comments, as did one open government group, which submitted 840 substantially identical comment letters from consumers.5 There was one additional consumer submission. Finally, one member of Congress commented on the proposed Policy Statement.

Almost all comments concerned the public database component of the proposed Policy Statement. Industry commenters generally opposed the public database. Although they endorsed the intended goals of the public database, many industry commenters asserted that the database would confuse consumers and unfairly damage the reputation of credit card issuers. The disclosure of issuer names in the public database was a particular focus of these comments. Some industry commenters further asserted that the Bureau lacks legal authority to disclose individual-level complaint data.

Consumer groups and consumers also endorsed the goals underlying the public database proposal. The AFR submission supported the public database, and urged the Bureau to include all narrative fields, subject to certain privacy protections. The two privacy groups that joined the AFR submission also offered their own written comments advising the Bureau to be mindful of the privacy risks associated with broader disclosure.

Many submissions included comments directed to the Bureau's process for handling credit card complaints. To the extent that these comments also relate to the Policy Statement, the Bureau addresses them below. To the extent that they relate only to the Complaint System and not to any associated impact on disclosure, the Bureau does not address them in this final Policy Statement.6 In response to such feedback, however, Consumer Response has and will continue to refine and improve its Complaint System over time.7

This section provides a summary of the comments received by subject matter. It also summarizes the Bureau's assessment of the comments by subject matter and, where applicable, describesthe resulting changes that the Bureau is making in the final Policy Statement. All such changes concern the public database. There are no changes to the proposed policy for the Bureau to issue its own complaint data reports.

One trade association commented that the Bureau should engage in a public rulemaking under the Administrative Procedures Act to provide the public with an opportunity to comment on all aspects of the initiative. One issue that the rulemaking should address, according to this commenter, is the link between the availability of complaint information and informed consumer decision-making.

The Bureau is committed to transparency and to robust engagement with the public regarding its actions. Although not required by law, the Bureau solicited and received public comment on the proposed Policy Statement. The Bureau received substantial public feedback expressing a range of viewpoints, and it has carefully considered the comments received, as described in detail below. As stated in the final Policy Statement, the Bureau plans to study the effectiveness of its policy on an ongoing basis, and plans to continue to engage with the public, including regulated entities, as it assesses the efficacy of its complaint disclosure policy.

Several trade associations commented that the Dodd-Frank Act does not authorize the Bureau to create the proposed public consumer complaint. The associations make two arguments.

First, they contend that the Dodd-Frank Act expressly delineates the circumstances and manner in which the Bureau may collect, resolve, and share consumer complaints with others. The public database is not included. By negative inference, therefore, they argue that the Dodd-Frank Act does not authorize the database.

Section 1013(b)(3) of the Dodd-Frank Act requires the Director of the Bureau to establish a unit to collect, monitor, and respond to consumer complaints regarding consumer financial products and services.8 This provision requires the Bureau to present an annual report to Congress that includes information and analysis of complaint numbers, types, and resolutions, and it authorizes the Bureau to share consumer complaint information with prudential regulators, the Federal Trade Commission, and other Federal and State agencies, subject to certain confidentially and data protection standards. According to the associations, by delineating entities with which the Bureau may share consumer complaint information,9 Congress meant such entities to be the exclusive recipients of such information.10 Furthermore, the associations argue, by specifying that the Bureau may share such information only to the extent that these specific recipients agree to protect the confidentiality of the information shared, Congress manifested its intention that this information should otherwise remain confidential.11

The associations also argue that Section 1034 of the Dodd-Frank Act, which requires the Bureau to establish “reasonable procedures to provide a timely response to consumers * * * to complaints against, or inquiries concerning, a covered person,” does not authorize the creation or publication of a public consumer complaint database that, instead of aiding complainants, enables data mining and market research.12 The associations also contend that, by directing the Bureau in Section 1034(d) to enter into agreements with other affected federal agencies to facilitate the joint resolution of complaints, Congress intended for the Bureau to handle consumer complaints in accordance with the procedures of these other agencies, which publish only aggregated complaint data.

Second, the associations argue that the Dodd-Frank Act's restrictions on publishing confidential information block the implementation of the proposed public database. They contend that Section 1022(c), which authorizes the Bureau to “monitor for risks to consumers in the offering or provision of consumer financial protects or services, including developments in markets for such products or services,”13 and to “make public such information * * * as is in the public interest,” only permits the Bureau to make the resulting information public through aggregate reporting “designed to protect confidential information.”14 By using non-aggregated formats, the associations contend, the proposed database risks compromising the confidentiality of individual complaint information.

One commenter also argues that Section 1022(c)(4) prohibits the Bureau from collecting or sharing information like zip codes or the identities of card issuers. Although Section 1022(c)(4)(A) authorizes the Bureau to “gather information from time to time regarding the organization, business conduct, markets, and activities of covered persons and service providers,” Section 1022(c)(4)(C) prohibits the Bureau from using this authority to “obtain records from covered persons and service providers participating in consumer financial services markets for purposes of gathering or analyzing the personally identifiable financial information of consumers.”15 The commenter asserts that zip codes and card issuer names constitute personally identifiable information that the Bureau may not collect or share. The same commenter cites Section 1022(c)(8), which requires the Bureau, in “collecting information from any person, publicly releasing information held by the Bureau, or requiring covered persons to publicly report information,” to “take steps to ensure that proprietary, personal, or confidential consumer information that is protected from public disclosure under Section 552(b) or 552a of title 5, United States Code, or any other provision of law, is not made public under this title.”16 The commenter asserts that this provision requires the Bureau to keep consumer complaint information confidential to the extent that any law, including but not limited to the Freedom of Information Act (“FOIA”) or the Privacy Act, requires such confidentiality. The commenter argues that credit card issuer narratives and complaint rates by zip codes constitute trade secrets of credit card issuers that the Trade Secrets Act, 18 U.S.C. 1905, prohibits the Bureau from disclosing.

The Bureau disagrees with these arguments. First, the Dodd-Frank Act expressly authorizes the disclosure addressed in the Policy Statement,which cannot, therefore, be barred by negative inference. Second, there are no applicable confidentiality restrictions that apply to the data that will be disclosed in the public database.

Section 1022 of the Dodd-Frank Act permits the Bureau, in support of its rulemaking “and other functions,” to monitor and assess risks to consumers in the offering or provision of consumer financial products or services.17 In monitoring and assessing such risks, this provision authorizes the Bureau to gather information regarding the “business conduct” of covered persons and service providers.18 The provision expressly states that “consumer complaints” are among the types of information that the Bureau may gather for this purpose.19

Not only does section 1022 permit the Bureau to gather or compile consumer complaint information, it also contemplates that the Bureau may disclose such information to the public under certain circumstances. Section 1022(c)(3)(B) states that the Bureau “may make public such information obtained by the Bureau under this section as is in the public interest, through aggregated reports or other appropriate formats designed to protect confidential information * * *”20 Although commenters focus on the fact that this subparagraph permits the Bureau to disclose consumer complaint information in aggregated reports, they ignore the fact that the subparagraph also permits the Bureau to disclose such information in a non-aggregated format as long as it protects the confidentiality of certain information in accordance with the other provisions of Section 1022(c).

Nothing in Section 1013(b)(3) suggests that Congress, in describing one database containing consumer complaint information and the manner in which its contents are to be reported to Congress or shared with other Federal or State agencies, sought to limit the Bureau's authority to disclose information to the public. Likewise, there is no reason to interpret Section 1034, which requires the Bureau to establish procedures to provide a timely “response” to consumers to their complaints, to mean that the Bureau may only disclose consumer complaint information publicly to complainants, and even then, only to the extent necessary to “respond” to their complaints.

The Bureau also disagrees that subpart D of the Bureau's Interim Final Rules on the Disclosure of Records and Information,21 which the Bureau promulgated pursuant to section 1022(c)(6), precludes the Bureau from disclosing publicly any information contained within a consumer complaint database. Commenters are correct to point out that subpart D generally restricts the authority of the Bureau to publicly disclose “confidential information,” including “confidential consumer complaint information.”22 However, such disclosure restrictions only apply to the extent that consumer complaint information is confidential in nature. The Bureau's regulations define “confidential consumer complaint information” to mean “information received or generated by the [Bureau], pursuant to [sections 1013 and 1034 of the Dodd-Frank Act], that comprises or documents consumer complaints or inquiries concerning financial institutions or consumer financial products and services and responses thereto, to the extent that such information is exempt from disclosure pursuant to 5 U.S.C. 552(b) [the FOIA].”23 Because the information to be disclosed in the public database is not exempt from disclosure under the FOIA, as discussed in more detail in part III.D.1.a below, such information does not constitute “confidential consumer complaint information.” As a result, there is no applicable rule that precludes the Bureau from making such information available to the public.

Consumer groups, privacy groups, and consumers commented that the public database would help consumers make more informed decisions and avoid “bad actors.” They also noted that consumers can draw their own conclusions from the public database. Several noted that data do not need to be fully verified or random to be of some use to outside parties. For example, the data might alert outside researchers and consumers to potentially harmful trends.

Industry commenters, by contrast, asserted that the public database would mislead consumers because its contents would be unverified, unrepresentative, lacking in context, and open to manipulation. Each of these general assertions is addressed below. Section D addresses industry comments that disclosure of particular data fields—issuer name, zip code, credit card complaint type, and discrimination fields—would be especially inappropriate or misleading.

Several trade associations commented that the Bureau should not disclose unverified data. Some argued that the Bureau should exclude complaints lacking factual foundation or legal merit. Others stated that consumer complaints were primarily statements of opinion, and not subject to objective verification. Several also argued that complaints resolved without any showing of company fault should be excluded as lacking foundation. One trade association stated that releasing unverified complaint data deprives issuers of due process. Privacy and consumer groups commented that the lack of verification presented only minimal risks to issuers because there are controls to ensure that complaints must come from actual cardholders, and issuers are given adequate time to dispute their identification.

The Bureau agrees with industry commenters that its complaint process does not provide for across the board verification of claims made in complaints. However, as it has previously indicated, the Bureau plans to specifically disclaim the accuracy of complaints when the data are made available to consumers. Outside of its own affirmative data reporting, the Bureau will allow the marketplace of ideas to determine what the data show.

While the Bureau does not validate the factual allegations of complaints, it does maintain significant controls to authenticate complaints. Issuer names are verified using card numbers and by other procedures. Each complaint is checked to ensure that it is submitted by the identified consumer or from his or her specifically authorized representative. Each submission is also reviewed to determine if it is a complaint, an inquiry, or feedback about the Bureau. Submissions in the latter two categories are not forwarded to the identified company for handling as complaints. Further, each complaint is checked to prevent duplicate submissions by a consumer who has already filed with the Bureau a complaint on the same issue. Complaints are only forwarded to companies when they contain all the required fields, including the complaint narrative, the consumer's narrative statement of his or her fair resolution, the consumer's contact information, andthe name of a card issuer within the scope of Section 1025 of the Dodd-Frank Act.

Several trade associations commented that it is inappropriate for the Bureau to publish data that is not randomly sourced. Non-random complaints, they contend, cannot provide consumers with useful information. One trade association commented that academics and researchers would not use such unreliable data.

The Bureau will inform consumers and any other public database users that the data reflect only the credit card complaints that consumers submit to the Bureau. Even though similar limitations apply to other public complaint databases, however, experience shows that outside parties have, in fact, made reasonable use of non-random complaint databases disclosed by other agencies. The trade associations did not offer any examples of misuse of currently available non-random data sets or challenge the utility of the examples cited by the Bureau. In addition to those examples, the Bureau notes that two outside companies have recently repackaged for consumer use drug and medical device data mined from the AERS and MAUDE public complaint databases maintained by the Food and Drug Administration.24

The trade associations also fail to acknowledge that consumers currently make credit card choices with little or no knowledge of consumer complaints. It is true that more robust data sets might, in theory, be assembled. Consumers would be better informed if the public database included complaint data from issuers' internal processes or even surveys of complainants and non-complainants. But that does not mean that less complete data sets worsen the status quo. So long as consumers are aware of the limitations of the data, there is little or no reason to believe that complaint data should make the market less informed and transparent.

Industry comments on representativeness also recognized that the Bureau is expressly authorized to use complaint data to set priorities in its supervision process. Some industry comments also recognized that the data could play a role with respect to other statutory obligations, such as fair lending enforcement or market monitoring. If complaint data can provide the Bureau with meaningful information, then logically they may also prove useful to consumers and other reviewers. If the data lacked such potential, Congress would not have pointed to public complaints as a basis to set important Bureau priorities.25 Furthermore, credit card issuers have told Consumer Response on numerous occasions that they learn valuable information from consumer complaints. If the data inform issuers, they have the potential to inform consumers as well.

Several trade associations commented that Bureau disclaimers about the lack of verification or representativeness will not effectively warn consumers about the limitations of the public database. The associations expressed concern that consumers and the media will inevitably see or portray the information as being endorsed by the Bureau, notwithstanding the Bureau's disclaimers. In addition, one trade group commented that the marketplace of ideas cannot prevent consumers from being misled by the public database. Another commented that the database fails to distinguish complaints of major and minor significance and that without that context, the data are open to misinterpretation.

The Bureau acknowledges the possibility that some consumers may draw (or be led to) erroneous conclusions from the data. That is true, however, for any market data. In addition, the Bureau's two-part disclosure policy—first, its own affirmative reports of data findings that it believes may inform consumers, and second, a public database that researchers and others can mine for possible data trends—is intended to minimize any consumer confusion about the scope of the Bureau's own conclusions with respect to the complaint data. The Bureau is open, however, to further suggestions from trade associations, issuers, and other concerned stakeholders on how best to provide additional context for the public database.

Several trade associations commented that third parties like debt negotiation companies could use complaint filing as a strategic tool to aid their clients. One trade association commented that outside parties may artificially inflate complaint counts for litigation purposes. Several trade associations claimed that one outside party has filed numerous fraud complaints about a single merchant, allegedly for improper purposes.

The Complaint System has a number of protections against manipulation. For one, the burden of submitting a complaint is not negligible. Consumers must affirm that the information is true to the best of their knowledge and belief. The consumer is asked for a verifiable account number. If none is provided and the consumer is unable to produce verifiable documentation of the account (such as a statement), the complaint is not pursued further. As described further at part III.D.1.b below, when an issuer offers a reasonable basis to challenge its identification, the Bureau does not plan to post the relevant complaint to the public database unless and until the correct issuer is identified. Furthermore, duplicate complaints from the same consumer are consolidated into a single complaint.

The Bureau maintains additional controls after complaints are submitted and issuers are able to alert the Bureau to any suspected manipulation. If issuers find this combined package of controls insufficient in practice, the Bureau will consider suggestions for addressing any problems identified, including enabling an issuer to flag in the public database any complaint entry that the issuer reasonably believes is not submitted in good faith by or on behalf of an individual consumer.

Several trade associations commented that the Bureau lacks authority to include issuer names in the public database or its own data reporting. The associations argue that the disclosure of this information is prohibited by Section 1022(c)(8), which requires the Bureau to take steps to protect from public disclosure confidential proprietary information that is exempt from disclosure under the FOIA. Specifically, they argue that the names of issuers are properly subject to Exemption 4 of the FOIA, which permits agencies to withhold trade secrets or confidential commercial information that businesses provide to it, and that the Bureau must, therefore, withhold from publication the names of credit card issuers cited in complaints. Courts generally hold that Exemption 4 applies when the submission of confidential commercial information is required of a business and the disclosure of such information would result in competitive harm to the business or would impair the ability ofan agency to obtain similar information in the future. The associations argue that both of these prongs—competitive harm and impairment—are satisfied with respect to the disclosure of credit card issuer names. They argue that the disclosure of issuer names would make issuers reluctant to respond (and/or reticent in responding) to consumer complaints and would cause competitive harm if the disclosed complaints unfairly or misleadingly identify them as bad actors.

The Bureau does not agree that issuer names are subject to Exemption 4. As a threshold matter, Exemption 4 does not protect the names of credit card issuers because such information does not constitute “confidential” commercial information. The identities of the credit card issuers who do business with consumers are not typically secrets kept by the credit card issuers. By and large, consumers know this information and report it to the Bureau in their complaints. Even to the extent that the true names of credit card issues are not known to consumers when they file their complaints, this information typically becomes known to consumers as part of the complaint investigation and resolution process. Information which is in the public domain is not “confidential” and is therefore not subject to Exemption 4.26

Further, even if one assumed that the names of credit card issuers constitute “confidential” commercial information, this information still does not qualify for protection under Exemption 4. To qualify for such protection, information must be likely either: “(1) To impair the Government's ability to obtain necessary information in the future; or (2) to cause substantial harm to the competitive position of the person from whom the information was obtained.”27 The Bureau concludes that the information at issue does not satisfy either prong of this test.

First, the proposed disclosure of credit card issuer names is unlikely to impair the Bureau's ability to obtain similar information in the future. As noted above, it is usually consumers who provide the Bureau with the names of credit card issuers to which their complaints pertain. The decision by consumers to submit complaints against particular credit card issuers is not likely to be affected by the Bureau's policy of disclosing the names of the issuers to which complaints apply. The Bureau also finds unavailing arguments that its proposed policy of disclosing issuer names would make issuers reluctant to participate further in the resolution of consumer complaints. Section 1034 of the Dodd-Frank Act requires issuers to respond to consumer complaints. Courts generally agree that the disclosure of information will not impede an agency's efforts to obtain such information in the future when the information is provided pursuant to statutory obligation.28

Second, the Bureau disagrees with commenters that the proposed policy of disclosing credit card issuer names is likely to cause credit card issuers substantial competitive harm. It is conceivable that consumer complaints could contain false or misleading allegations against a particular credit card issuer and that publication of the names of credit card issuers associated with such complaints could expose those issuers to unwarranted public criticism, reputational harm, and perhaps even a loss of existing or prospective customers. However, such harms can be mitigated through the use of disclaimers that warn consumers that the public database contains data reflecting unverified complaints that consumers submit to the Bureau. Even to the extent that such disclaimers are not sufficient to mitigate these harms, courts are clear that Exemption 4 is designed to protect against harms that flow from competitors' use of the released information, not from any use made by the public at large or by customers.29 Thus, even the prospect of unwarranted public criticism and harassment,30 embarrassment,31 or distortions of the disclosed information,32 are not grounds for application of Exemption 4. Moreover, any harm that arises from publishing the names of credit card issuers is one that all issuers in the industry share. Harms shared among competitors do not constitute competitive harms for purposes of Exemption 4.33

The associations also argue that FOIA Exemption 8 requires the Bureau to protect the names of issuers from disclosure. Exemption 8 authorizes Federal financial regulators to protect information relating to the examination of financial institutions. The associations contend that consumer complaints constitute confidential supervisory information and that the disclosure of these complaints would threaten the regulatory relationship between financial institutions and the Bureau.

The Bureau disagrees. As noted, Exemption 8 protects information that is “contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.”34 The scope of this exemption is broad in that it applies not only to financial institution examination, operating, or condition reports, but also to all manner of information that relates, even indirectly, to the supervision process. Notwithstanding the breadth of Exemption 8, it typically applies only to information that supervisory agencies either generate themselves or receive from regulated financial institutions or from other supervisory agencies. Exemption 8 does not typically apply to information, like credit card issuer names, that consumers supply to supervisory agencies outside of the supervisory context, except to the extent that the agencies later utilize such information for supervisory purposes.

Commenters argue otherwise by citing a 1991 FOIA request response letter that the Office of the Comptroller of the Currency (“OCC”) sent to a FOIA requester.35 In the letter, the OCC applies Exemption 8 to deny a request for the names of banks associated with consumer complaints received by the OCC. As its primary authority for its decision, the OCC cites an unpublished 1988 district court opinion inConsumers Unionv.Office of the Comptroller of the Currency. 36 In that case, the court applied the followingrationale to protect the identities of banks named in consumer complaints:

Unlike the complaint information at issue inConsumers Union,however, the information at issue here is not part of an examination report. Also, it is not presented within the context of a Bureau investigation of issuer conduct. Rather, the complaints exist in raw form as part of a database intended for public use and study. Accordingly, the Bureau does not believe thatConsumers Unionis analogous.

Consumer groups commented that the disclosure of issuer names represents a significant aspect of the Bureau's policy. They noted that other complaint databases that disclose the identity of specific companies—like NHTSA—have created pressure on companies to improve whatever metrics are measured by the public database. As a result, these groups expect the Bureau's public database to cause issuers to compete more effectively on customer service and product quality. Together with privacy and open government groups, consumer groups commented that outside groups can use the issuer data to help consumers make more informed decisions about credit card use, a factor also cited by the numerous consumers who submitted comments through the open government organization, OMB Watch.

Industry groups disputed that disclosing issuer names serves these or any policy purposes. They commented that this form of disclosure would unfairly damage issuers' reputation and competitive position. One trade association indicated that the inclusion of issuer names could implicate safety and soundness concerns, particularly in light of viral media. Another commented that disclosing issuer names would serve only as “fodder for plaintiffs' lawyers.” One noted that the public database would not take account of the size and nature of the credit card business at different financial services providers, which would cause consumer confusion. Another suggested that debt sellers would attract fewer complaints than issuers that collected their own debts.

Trade groups agreed that if issuer names were included, they should be verified. Several noted that consumers would be particularly likely to name the merchant or other partner in connection with private label or co-brand cards, and not the actual issuer. Some noted that card numbers would not be sufficient for verification because the system will accept complaints without a number, and some complaints—like declined application complaints—will arise even when there is no card number. Several trade associations argued that some complaints are really merchant disputes and that the issuer should not be named at all.

The Bureau believes that these industry comments fail to acknowledge the system controls that are in place to verify that a complaint is from a cardholder and that the issuer is properly identified. No issuer will be associated with a complaint if it offers a reasonable basis to dispute a commercial relationship with the consumer. Currently, the Complaint System provides issuers 15 days to contest issuer identity, which experience has shown to be sufficient. As noted earlier, there are also system controls to avoid double-counting duplicate complaints from the same consumer.

For many complaints, credit card account numbers provide a reliable method to verify the identity of the issuer. The Bureau agrees that some complaints may identify the issuer as the merchant or other partner associated with a co-brand or private label card. In such cases, the account number provided will not match to the name provided. As a result, the Bureau confirms the account number with the consumer, then substitutes the name of the correct issuer. The merchant or other partner is not named. The Bureau also recognizes that there are cases in which no credit card number is available to the consumer, such as declined application complaints. In these cases, the Bureau works directly with the consumer to identify the correct issuer from issuer correspondence. If the correct issuer cannot be identified in this manner, the case will be closed and no data added to the public database.

The Bureau acknowledges, as it did in connection with the proposed Policy Statement, that there are significantly varying views among stakeholders about whether this kind of data is useful to consumers. However, the Bureau continues to believe that this disclosure may allow researchers to inform consumers about potentially significant trends and patterns in the data. In addition, given that companies have made competitive use of other public databases, the Bureau anticipates that disclosure has the potential to sharpen competition over product quality and customer service.

Furthermore, as several trade associations conceded and as previously noted above, Congress itself recognized that the Bureau may properly use consumer complaint data to set supervision, enforcement, and market monitoring priorities.38 If the Bureau is able to use complaint data in this way, there is good reason to allow consumers and outside researchers to weigh the importance of complaint data in their own research, analysis, and decision-making. Outside review of this kind will also help ensure that the Bureau remains accountable for tackling the complaints that it receives.

Finally, the Bureau notes the general acceptance by consumer and industry groups that normalization can improve data utility. Thus, although trade associations uniformly opposed the release of issuer names in the public database, many recognized the importance of normalizing the data that the Bureau decides to release. Only a minority of trade groups suggested that normalization was not workable and urged that issuer names not be disclosed for this reason as well. One association suggested that normalization cover open accounts, closed accounts with a balance, accounts without a balance that closed within the last year, and prospective accounts declined within the last year. Consumer groups also recognized the importance of normalizing data, but none offered any indication of the appropriate metrics for market share. The Bureau agrees with industry commenters that, if possible, normalization should make some account for closed accounts with a balance and declined applications because these may generate complaints. The Bureau intends to work further with commenters on specific normalizationproposals, and welcomes further operational suggestions on the point.

Consumer groups commented that the Bureau should add additional location fields, such as city and census tract. Several trade associations, however, commented that zip code disclosure created risks to privacy because zip codes can be combined with other data to identify consumers, particularly in sparsely-populated rural zip codes. Trade associations also commented that zip code data may be misunderstood to imply discriminatory conduct, leading to unfounded allegations of discrimination.

The Bureau is mindful of the privacy implications of zip code disclosure. As a result, it will limit zip code disclosures to 5 digits, even if a consumer provides the full 9-digit zip code. Furthermore, as it analyzes narrative disclosure, the Bureau will account for zip code disclosures in assessing privacy risks. The Bureau will also analyze whether there are ways to disclose more granular location fields without creating privacy risks, as suggested by some commenters.

The Bureau may, as one trade group noted, investigate zip code data for indications of “improper trends.” The Bureau believes that consumers and outside researchers should have the same opportunity.

Several trade associations warned against disclosure of any data that consumers submit in the discrimination field of the complaint form. These groups commented that in light of the seriousness of such allegations, the Bureau should not disclose this field unless and until it has investigated the allegations and determined that they have factual support. In support of their position, these commenters note that some consumers who check the discrimination field on the intake form fail to include any allegations of discrimination in the narrative field.

The Bureau is continuing to refine its methods for identifying discrimination allegations from consumers that submit complaints. Accordingly, the Bureau does not plan to disclose discrimination field data in the public database at this time. In the interim, the Bureau will continue to study the conditions, if any, necessary for the appropriate disclosure of such information at the individual complaint level. The Bureau may also report discrimination data at aggregated levels in its own periodic complaint data reports.

Trade and consumer groups agreed that the Bureau could improve this data field in several respects. First, a consumer should be able to select several issues for a given complaint. Second, the issue categories should be better explained and differentiated. One trade association also commented that the Bureau should not rely on consumers for this data point.

The Bureau agrees that a consumer should be able to “tag” a complaint as implicating more than one issue. It is working to develop the required functionality. In addition, the Bureau is weighing possible improvements to the issue categories and is considering the extent to which Bureau staff should “tag” complaints as raising certain issues. The Bureau welcomes further input from stakeholders on how to improve the issue categories.

Consumer groups commented on the need to include data about the issuer's response, the consumer's assessment of that response, and the timing of each of those steps, so that a user of the public database would know how fast complaints are handled and how often an issuer response is disputed. Consumer groups also urged the addition of more resolution-related data categories, such as categories that would explain why a complaint remains unresolved.

Several trade associations commented that the “Closed without relief” issuer response category was not meaningful and should be revised. These groups claimed that the category suggests an inappropriate response even though certain complaints are appropriately closed without any form of relief, such as meritless complaints or complaints that have already been appropriately handled by means of the issuer's internal complaints process. In addition, there will be complaints appropriately closed with non-monetary relief, which, under the Bureau's current system, do not meet the monetary criteria for “Closed with relief.” As a result, trade groups expressed concern that resolution rates would be undercounted. On that basis, some trade groups asked the Bureau to restore its prior resolution-related categories: full, partial, and no resolution. Others urged that the Bureau subdivide the “Closed with relief” category into monetary and non-monetary relief subcategories.

In light of these comments, the Bureau has made several changes to the Complaint Systems' issuer response categories.39 First, where an issuer provides relief to the consumer, the issuer may categorize the complaint as either “Closed with monetary relief” or “Closed with non-monetary relief.” To qualify for the “Closed with monetary relief” category, the company's response must provide objective and verifiable monetary relief that is measurable in dollars. To qualify for “Closed with non-monetary relief,” the response must provide the consumer with objective and verifiable relief that does not meet the definition of monetary relief. These categories reduce any risk that reviewers fail to accord appropriate significance to cases that issuers close with non-monetary relief. Second, the Bureau has added a “Closed with explanation” response category, which may be used when the issuer believes that the complaint does not merit substantive relief, and instead provides a full explanation to that effect to the consumer. This category recognizes that in some instances, a thorough explanation will serve to resolve the consumer's complaint. At the same time, it allows reviewers and consumers to see in more detail how issuers, collectively and separately, resolve the complaints filed against them.40

Finally, the Bureau agrees with the commenters who urged the inclusion of relevant dates in the public database. Initially, the Bureau will be able to include the date that a complaint is sent to the Bureau and the date that the Bureau forwards it to the relevant company.41 The Bureau is currently developing the technical ability to publish other date fields including the date that a company responds. When this is feasible, the Bureau plans to include additional date fields in the public database.

History

On March 15, 2012, the FAA published in theFederal Registera Notice of Proposed Rulemaking (NPRM) to establish Class D and E airspace and amend existing Class E airspace at East Hampton, NY, to accommodate a new air traffic control tower at East Hampton Airport (77 FR 15297). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. Two positive comments were received in support of the airspace. One negative comment letter was received.

One positive response was received from the Town of East Hampton. The other positive commenter, the East Hampton Aviation Association, observed that establishment of Class D airspace would provide greater safety to IFR operations during bad weather conditions. The FAA agrees with this observation.

The negative response comment was received from the Eastern Region Helicopter Council, Inc. (ERHC). ERHC made several observations in its comment letter. The FAA does not agree with this commenter's observations or conclusion. Each of the commenter's observations are outlined and addressed below.

The ERHC observed that the purpose of Class D airspace is to protect IFR operations; that the East Hampton tower will not have radar capabilities; that the tower will not have the authority to require helicopters to fly specific arrival/departure flight paths; and that most helicopter operations already comply with the voluntary noise abatement procedures; therefore, the commenter concludes that the airspace changes are not needed.

The FAA does not agree. The protection provided by Class D airspace to IFR operations is not based on the tower's ability to use radar to provide separation. Rather, the airspace establishes higher weather minima for VFR flights, thus restricting access of VFR flights to the airspace while IFR operations are in progress.

The ERHC commented that an unintended consequence of establishing Class D airspace would be increased noise impact from helicopters that are forced to wait outside the Class D airspace during adverse weather conditions.

While the FAA agrees that one-at-a-time Special VFR operations may have the potential for creating adverse effects, separation rules for Special VFR operations in Class D airspace allow for multiple helicopters to operate in Class D airspace at the same time, as long as they operate at a safe distance from IFR operations. Use of these rules requires the helicopter operators to enter into a Letter of Agreement (LOA) with the FAA. Use of these rules will allow the helicopter operators to minimize any delays they may experience due to the airspace, as well as provide a higher level of safety to all operations in adverse weather conditions.

The ERHC observed that one purpose of establishing a tower at East Hampton Airport is for helicopter noise mitigation purposes.

The FAA does not agree. The purpose of control towers and Class D airspace is the safe and efficient use of airspace. Class D airspace provides controlled airspace to contain IFR arrival and departure operations. Further, Class D enhances safety by setting VFR weather minima specified in 14 CFR § 91.155 and the communications and other operating requirements in 14 CFR 91.129.

The Proposed Rule included a Class E surface area to be in effect when the control tower is closed. One prerequisite for the establishment of controlled airspace at the surface of an airport is the availability of hourly and special weather observations. Currently this prerequisite is only met during the dates and times when the tower will be operating. Therefore, the Class E surface area has been removed from this rule action.

The current Class E5 Airspace Areas Extending Upward from 700 feet or More Above the Surface of the Earth (E5) includes two extensions for the support of IFR approach procedures. The approaches published for East Hampton Airport have been modified since this airspace was established and these extensions are no longer required for safe IFR operations. Therefore, they are being removed as part of the rule.

Class D and E airspace designations are published in Paragraphs 5000 and 6005, respectively, of FAA Order 7400.9V dated August 9, 2011, and effective September 15, 2011, which is incorporated by reference in 14 CFR 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 establishes Class D airspace extending upward from the surface to and including 2,500 feet MSL within a 4.8-mile radius of East Hampton Airport, East Hampton, NY. Controlled airspace supports the new airport traffic control tower for continued safety and management of IFR operations at East Hampton Airport. This action also amends Class E airspace extending upward from 700 feet above the surface within a 7.3-mile radius of the airport. The geographic coordinates of the airport are adjusted to be in concert with the FAA's current aeronautical database.

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

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the 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 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 and amends controlled airspace at East Hampton Airport, East Hampton, NY.

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures,” paragraph 311a. 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:

The Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the Medical Device Amendments of 1976 (the 1976 amendments) (Pub. L. 94-295), the Safe Medical Devices Act of 1990 (SMDA) (Pub. L. 101-629), the Food and Drug Administration Modernization Act of 1997 (Pub. L. 105-115), the Medical Device User Fee and Modernization Act of 2002 (Pub. L. 107-250), and the Food and Drug Administration Amendments Act of 2007 (Pub. L. 110-85), among other amendments, established a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the FD&C Act (21 U.S.C. 360c) established three categories (classes) of devices, depending on the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three categories of devices are class I (general controls), class II (special controls), and class III (premarket approval).

Under section 513 of the FD&C Act, devices that were in commercial distribution before the enactment of the 1976 amendments, May 28, 1976 (generally referred to as preamendments devices), are classified after FDA has: (1) Received a recommendation from a device classification panel (an FDA advisory committee); (2) published the panel's recommendation for comment, along with a proposed regulation classifying the device; and (3) published a final regulation classifying the device. FDA has classified most preamendments devices under these procedures.

Devices that were not in commercial distribution prior to May 28, 1976 (generally referred to as postamendments devices), are automatically classified by section 513(f) of the FD&C Act into class III without any FDA rulemaking process. Those devices remain in class III andrequire premarket approval unless, and until, the device is reclassified into class I or II or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a predicate device that does not require premarket approval. The Agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and 21 CFR part 807.

A preamendments device that has been classified into class III may be marketed by means of premarket notification procedures (510(k) process) without submission of a PMA until FDA issues a final regulation under section 515(b) of the FD&C Act (21 U.S.C. 360e(b)) requiring premarket approval. Section 515(b)(1) of the FD&C Act establishes the requirement that a preamendments device that FDA has classified into class III is subject to premarket approval. A preamendments class III device may be commercially distributed without an approved PMA or a notice of completion of a PDP until 90 days after FDA issues a final rule requiring premarket approval for the device, or 30 months after final classification of the device under section 513 of the FD&C Act, whichever is later. Also, a preamendments device subject to the rulemaking procedure under section 515(b) of the FD&C Act is not required to have an approved investigational device exemption (IDE) (see 21 CFR part 812) contemporaneous with its interstate distribution until the date identified by FDA in the final rule requiring the submission of a PMA for the device. At that time, an IDE is required only if a PMA has not been submitted or a PDP completed.

Section 515(b)(2)(A) of the FD&C Act provides that a proceeding to issue a final rule to require premarket approval shall be initiated by publication of a notice of proposed rulemaking containing: (1) The regulation, (2) proposed findings with respect to the degree of risk of illness or injury designed to be eliminated or reduced by requiring the device to have an approved PMA or a declared completed PDP and the benefit to the public from the use of the device, (3) an opportunity for the submission of comments on the proposed rule and the proposed findings, and (4) an opportunity to request a change in the classification of the device based on new information relevant to the classification of the device.

Section 515(b)(2)(B) of the FD&C Act provides that if FDA receives a request for a change in the classification of the device within 15 days of the publication of the notice, FDA shall, within 60 days of the publication of the notice, consult with the appropriate FDA advisory committee and publish a notice denying the request for change in reclassification or announcing its intent to initiate a proceeding to reclassify the device under section 513(e) of the FD&C Act. Section 515(b)(3) of the FD&C Act provides that FDA shall, after the close of the comment period on the proposed rule and consideration of any comments received, issue a final rule to require premarket approval or publish a document terminating the proceeding together with the reasons for such termination. If FDA terminates the proceeding, FDA is required to initiate reclassification of the device under section 513(e) of the FD&C Act, unless the reason for termination is that the device is a banned device under section 516 of the FD&C Act (21 U.S.C. 360f).

When a rule to require premarket approval for a preamendments device is finalized, section 501(f)(2)(B) of the FD&C Act (21 U.S.C. 351(f)(2)(B)) requires that a PMA or notice of completion of a PDP for any such device be filed within 90 days of the date of issuance of the final rule or 30 months after the final classification of the device under section 513 of the FD&C Act, whichever is later. If a PMA or notice of completion of a PDP is not filed by the latter of the two dates, commercial distribution of the device must cease because the device would be deemed adulterated under section 501(f) of the FD&C Act.

The device may, however, be distributed for investigational use if the manufacturer, importer, or other sponsor of the device complies with the IDE regulations. If a PMA or notice of completion of a PDP is not filed by the latter of the two dates, and no IDE is in effect, the device is deemed to be adulterated within the meaning of section 501(f)(1)(A) of the FD&C Act, and subject to seizure and condemnation under section 304 of the FD&C Act (21 U.S.C. 334), if its distribution continues. Shipment of devices in interstate commerce will be subject to injunction under section 302 of the FD&C Act (21 U.S.C. 332), and the individuals responsible for such shipment will be subject to prosecution under section 303 of the FD&C Act (21 U.S.C. 333). In the past, FDA has requested that manufacturers take action to prevent the further use of devices for which no PMA has been filed and may determine that such a request is appropriate for the class III device that is the subject of this regulation.

The FD&C Act does not permit an extension of the 90-day period after issuance of a final rule within which an application or notice is required to be filed. The House Report on the 1976 amendments states that “* * * [t]he thirty month ‘grace period' afforded after classification of a device into class III * * * is sufficient time for manufacturers and importers to develop the data and conduct the investigations necessary to support an application for premarket approval” (H. Rept. 94-853, 94th Cong., 2d sess. 42 (1976)).

The SMDA added section 515(i) to the FD&C Act requiring FDA to review the classification of preamendments class III devices for which no final rule requiring the submission of PMAs has been issued, and to determine whether or not each device should be reclassified into class I or class II or remain in class III. For devices remaining in class III, the SMDA directed FDA to develop a schedule for issuing regulations to require premarket approval. The SMDA does not, however, prevent FDA from proceeding immediately to rulemaking under section 515(b) of the FD&C Act on specific devices, in the interest of public health, independent of the procedures of section 515(i). Proceeding directly to rulemaking under section 515(b) of the FD&C Act is consistent with Congress' objective in enacting section 515(i), i.e., that preamendments class III devices for which PMAs have not been previously required either be reclassified to class I or class II or be subject to the requirements of premarket approval.

In theFederal Registerof May 6, 1994 (59 FR 23731), FDA issued a notice of availability of a preamendments class III devices strategy document. The strategy document set forth FDA's plans for implementing the provisions of section 515(i) of the FD&C Act for preamendments class III devices for which FDA had not yet required premarket approval.

In theFederal Registerof August 4, 2011 (76 FR 47085), FDA published a proposed rule to require the filing under section 515(b) of the FD&C Act of a PMA or notice of completion of a PDP for the pacemaker programmer (the August 2011 proposed rule). In accordance with section 515(b)(2)(A) of the FD&C Act, FDA included in the preamble of the August 2011 proposed rule the Agency's tentative findings with respect to the degree of risk of illness or injury designed to be eliminated or reduced by requiring the devices to meet the premarket approval requirements of the FD&C Act, and the benefits to the public from use of the device. The August 2011 proposed rule also provided an opportunity forinterested persons to submit comments on the proposed rule and the Agency's findings. Under section 515(b)(2)(B) of the FD&C Act, FDA provided an opportunity for interested persons to request a change in the classification of the devices based on new information relevant to its classification. Any petition requesting a change in classification for the pacemaker programmer was required to be submitted by August 19, 2011. The comment period for the pacemaker programmer electrode closed November 2, 2011.

FDA received one comment on the August 2011 proposed rule for the pacemaker programmer. The comment was a general statement supporting the requirements for filing of a PMA for this device. The comment did not recommend any changes to the proposed rule. FDA received no petitions requesting a change in the classification of the device.

As required by section 515(b) of the FD&C Act, FDA published its findings regarding: (1) The degree of risk of illness or injury designed to be eliminated or reduced by requiring that this device have an approved PMA or a declared completed PDP and (2) the benefits to the public from the use of the device. These findings were published in the August 2011 proposed rule.

These findings are based on the reports and recommendations of the advisory committees (panels) for the classification of these devices along with information submitted in response to the 515(i) Order (April 9, 2009, 74 FR 16214), and any additional information that FDA has encountered. Additional information regarding the risks as well as classification associated with the pacemaker programmer can be found in the following proposed and final rules published in theFederal Registeron these dates: March 9, 1979 (44 FR 13373); February 5, 1980 (45 FR 7904 at 7945); and May 11, 1987 (52 FR 17732 at 17736).

Under section 515(b)(3) of the FD&C Act, FDA is adopting its findings as published in the preamble to the August 2011 proposed rule. FDA is issuing this final rule to require premarket approval of these generic types of devices for class III preamendments devices by revising part 870.

Under the final rule, a PMA or a notice of completion of a PDP is required to be filed on or before 90 days after the date of publication of the final rule in theFederal Register, for any of this class III preamendments device that were in commercial distribution before May 28, 1976, or that has been found by FDA to be substantially equivalent to such a device on or before 90 days after the date of publication of the final rule in theFederal Register. An approved PMA or a declared completed PDP is required to be in effect for any such devices on or before 180 days after FDA files the application. Any other class III preamendments device subject to this rule that was not in commercial distribution before May 28, 1976, is required to have an approved PMA or a declared completed PDP in effect before it may be marketed.

If a PMA or a notice of completion of a PDP for any of these class III preamendments devices is not filed on or before the 90th day past the effective date of this regulation, that device will be deemed adulterated under section 501(f)(1)(A) of the FD&C Act, and commercial distribution of the device must cease immediately. In the August 2011 proposed rule, FDA mistakenly said that the PMAs and PDPs should be submitted by November 2, 2011. Rather, PMAs and PDPs should be submitted by September 20, 2012. The device may, however, be distributed for investigational use, if the requirements of the IDE regulations (part 812) are met.

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

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

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. There has been only one 510(k) submission assigned to this product code within the past 15 years. Upon review of this record, the Agency determined that this was done in error, and the record has been corrected. Accordingly, it has been determined that all of the affected devices have fallen into disuse and FDA has concluded that there is little or no interest in marketing these devices in the future. Therefore, the Agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $139 million, using the most current (2011) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount.

FDA has concluded that this final rule will not have a significant economic impact. We base this determination on an analysis of registration and listing and other data for the device.

There have been no 510(k) submissions for pacemaker programmers since 1995 with the exception of one 510(k) submission cleared in 2009 for a Pacing System Analyzer cleared for use with a PMA-approved programmer. This device was inappropriately reviewed as a 510(k) submission, because this device should have been regulated under PMA. Programmers currently marketed are capable of programming all implantable cardiac devices including pacemakers and defibrillators. Because these programmers interact with products covered under several class III product codes including adaptive rate pacemakers (LWP); implantable defibrillators (LWS); cardiac resynchronization pacemakers (CRT-P, NKE); and implantable defibrillators (CRT-D, NIK), they have been entirely reviewed within the PMA program for more than a decade.

This information is summarized in table 1 of this document as follows.

Based on our review of electronic product registration and listing and other data, FDA concludes that there is currently little or no interest in marketing the affected devices and that the final rule would not have a significant economic impact.

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

This final rule refers to currently approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 812 have been approved under OMB control number 0910-0078; the collections of information in 21 CFR part 807, subpart E, have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 814, subpart B, have been approved under OMB control number 0910-0231; and the collections of information under 21 CFR part 801 have been approved under OMB control number 0910-0485.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 870 is amended as follows:

I. Background—Regulatory Authorities

The Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the Medical Device Amendments of 1976 (the 1976 amendments) (Pub. L. 94-295), the Safe Medical Devices Act of 1990 (SMDA) (Pub. L. 101-629), the Food and Drug Administration Modernization Act of 1997 (FDAMA) (Pub. L. 105-115), the Medical Device User Fee and Modernization Act of 2002 (Pub. L. 107-250), and the Food and Drug Administration Amendments Act of 2007 (Pub. L. 110-85), among other amendments, established a comprehensive system for the regulation of medical devices intended for human use. Section 513 of the FD&C Act (21 U.S.C. 360c) established three categories (classes) of devices, depending on the regulatory controls needed to provide reasonable assurance of their safety and effectiveness. The three categories of devices are class I (general controls), class II (special controls), and class III (premarket approval).

Under section 513 of the FD&C Act, devices that were in commercial distribution before the enactment of the 1976 amendments, May 28, 1976 (generally referred to as preamendmentsdevices), are classified after FDA has: (1) Received a recommendation from a device classification panel (an FDA advisory committee); (2) published the panel's recommendation for comment, along with a proposed regulation classifying the device; and (3) published a final regulation classifying the device. FDA has classified most preamendments devices under these procedures.

Devices that were not in commercial distribution prior to May 28, 1976 (generally referred to as postamendments devices) are automatically classified by section 513(f) of the FD&C Act into class III without any FDA rulemaking process. Those devices remain in class III and require premarket approval unless, and until, the device is reclassified into class I or II or FDA issues an order finding the device to be substantially equivalent, in accordance with section 513(i) of the FD&C Act, to a predicate device that does not require premarket approval. The Agency determines whether new devices are substantially equivalent to predicate devices by means of premarket notification procedures in section 510(k) of the FD&C Act (21 U.S.C. 360(k)) and part 807 (21 CFR part 807).

A preamendments device that has been classified into class III may be marketed by means of premarket notification procedures (510(k) process) without submission of a PMA until FDA issues a final regulation under section 515(b) of the FD&C Act (21 U.S.C. 360e(b)) requiring premarket approval. Section 515(b)(1) of the FD&C Act establishes the requirement that a preamendments device that FDA has classified into class III is subject to premarket approval. A preamendments class III device may be commercially distributed without an approved PMA or a notice of completion of a PDP until 90 days after FDA issues a final rule requiring premarket approval for the device, or 30 months after final classification of the device under section 513 of the FD&C Act, whichever is later. Also, a preamendments device subject to the rulemaking procedure under section 515(b) is not required to have an approved investigational device exemption (IDE) (see part 812 (21 CFR part 812)) contemporaneous with its interstate distribution until the date identified by FDA in the final rule requiring the submission of a PMA for the device. At that time, an IDE is required only if a PMA has not been submitted or a PDP completed.

Section 515(b)(2)(A) of the FD&C Act provides that a proceeding to issue a final rule to require premarket approval shall be initiated by publication of a notice of proposed rulemaking containing: (1) The regulation; (2) proposed findings with respect to the degree of risk of illness or injury designed to be eliminated or reduced by requiring the device to have an approved PMA or a declared completed PDP and the benefit to the public from the use of the device; (3) an opportunity for the submission of comments on the proposed rule and the proposed findings; and (4) an opportunity to request a change in the classification of the device based on new information relevant to the classification of the device.

Section 515(b)(2)(B) of the FD&C Act provides that if FDA receives a request for a change in the classification of the device within 15 days of the publication of the notice, FDA shall, within 60 days of the publication of the notice, consult with the appropriate FDA advisory committee and publish a notice denying the request for change in reclassification or announcing its intent to initiate a proceeding to reclassify the device under section 513(e) of the FD&C Act. Section 515(b)(3) of the FD&C Act provides that FDA shall, after the close of the comment period on the proposed rule and consideration of any comments received, issue a final rule to require premarket approval or publish a document terminating the proceeding together with the reasons for such termination. If FDA terminates the proceeding, FDA is required to initiate reclassification of the device under section 513(e) of the FD&C Act, unless the reason for termination is that the device is a banned device under section 516 of the FD&C Act (21 U.S.C. 360f).

When a rule to require premarket approval for a preamendments device is finalized, section 501(f)(2)(B) of the FD&C Act (21 U.S.C. 351(f)(2)(B)) requires that a PMA or notice of completion of a PDP for any such device be filed within 90 days of the date of issuance of the final rule or 30 months after the final classification of the device under section 513 of the FD&C Act, whichever is later. If a PMA or notice of completion of a PDP is not filed by the latter of the two dates, commercial distribution of the device must cease because the device would be deemed adulterated under section 501(f).

The device may, however, be distributed for investigational use if the manufacturer, importer, or other sponsor of the device complies with the IDE regulations. If a PMA or notice of completion of a PDP is not filed by the latter of the two dates, and no IDE is in effect, the device is deemed to be adulterated within the meaning of section 501(f)(1)(A) of the FD&C Act, and subject to seizure and condemnation under section 304 of the FD&C Act (21 U.S.C. 334), if its distribution continues. Shipment of devices in interstate commerce will be subject to injunction under section 302 of the FD&C Act (21 U.S.C. 332), and the individuals responsible for such shipment will be subject to prosecution under section 303 of the FD&C Act (21 U.S.C. 333). In the past, FDA has requested that manufacturers take action to prevent the further use of devices for which no PMA has been filed and may determine that such a request is appropriate for the class III device that is the subject of this regulation.

The FD&C Act does not permit an extension of the 90-day period after issuance of a final rule within which an application or notice is required to be filed. The House Report on the 1976 amendments states that “* * * [t]he thirty month ‘grace period' afforded after classification of a device into class III * * * is sufficient time for manufacturers and importers to develop the data and conduct the investigations necessary to support an application of premarket approval” (H. Rept. 94-853, 94th Cong., 2d sess. 42 (1976)).

The SMDA added section 515(i) to the FD&C Act requiring FDA to review the classification of preamendments class III devices for which no final rule requiring the submission of PMAs has been issued, and to determine whether or not each device should be reclassified into class I or class II or remain in class III. For devices remaining in class III, the SMDA directed FDA to develop a schedule for issuing regulations to require premarket approval. The SMDA does not, however, prevent FDA from proceeding immediately to rulemaking under section 515(b) of the FD&C Act on specific devices, in the interest of public health, independent of the procedures of section 515(i). Proceeding directly to rulemaking under section 515(b) of the FD&C Act is consistent with Congress' objective in enacting section 515(i), i.e., that preamendments class III devices for which PMAs have not been previously required either be reclassified to class I or class II or be subject to the requirements of premarket approval.

In theFederal Registerof May 6, 1994 (59 FR 23731) (the May 6, 1994, notice), FDA issued a notice of availability of a preamendments class III devices strategy document. The strategy document set forth FDA's plans for implementing the provisions of section 515(i) of the FD&C Act for preamendments class III devices for which FDA had not yet required premarket approval.

In theFederal Registerof July 27, 2011 (76 FR 44872) (the July 27, 2011, proposed rule), FDA published a proposed rule to require the filing under section 515(b) of the FD&C Act of a PMA or notice of completion of a PDP for the implantable pacemaker pulse generator. In accordance with section 515(b)(2)(A) of the FD&C Act, FDA included in the preamble of the proposed rule the Agency's tentative findings with respect to the degree of risk of illness or injury designed to be eliminated or reduced by requiring the devices to meet the premarket approval requirements of the FD&C Act, and the benefits to the public from use of the device. The July 27, 2011, proposed rule also provided an opportunity for interested persons to submit comments on the proposed rule and the Agency's findings. Under section 515(b)(2)(B) of the FD&C Act, FDA provided an opportunity for interested persons to request a change in the classification of the devices based on new information relevant to its classification. Any petition requesting a change in classification of the implantable pacemaker pulse generator was required to be submitted by August 11, 2011. The comment period for the implantable pacemaker pulse generator closed October 25, 2011.

FDA received one comment on the proposed rule for the implanted pacemaker pulse generator. The comment was a general statement supporting the requirements for filing of a PMA for this device. The comment did not recommend any changes to the proposed rule. FDA received no petitions requesting a change in the classification of the device.

As required by section 515(b) of the FD&C Act, FDA published its findings regarding: (1) The degree of risk of illness or injury designed to be eliminated or reduced by requiring that this device have an approved PMA or a declared completed PDP and (2) the benefits to the public from the use of the device. These findings were published in the July 27, 2011, proposed rule.

These findings are based on the reports and recommendations of the advisory committees (panels) for the classification of these devices along with information submitted in response to the 515(i) Order, (April 9, 2009 (74 FR 16214)), and any additional information that FDA has encountered. Additional information regarding the risks as well as classification associated with the implantable pacemaker pulse generator can be found in the following proposed and final rules published in theFederal Registeron these dates: March 9, 1979 (44 FR 13373); February 5, 1980 (45 FR 7940); and May 11, 1987 (52 FR 17732 at 17736).

Under section 515(b)(3) of the FD&C Act, FDA is adopting its findings as published in the preamble to the proposed rule. FDA is issuing this final rule to require premarket approval of these generic types of devices for class III preamendments devices by revising part 870 (21 CFR part 870).

Under the final rule, a PMA or a notice of completion of a PDP is required to be filed on or before 90 days after the date of publication of the final rule in theFederal Register, for any of these class III preamendments devices that were in commercial distribution before May 28, 1976, or that has been found by FDA to be substantially equivalent to such a device on or before 90 days after the date of publication of the final rule in theFederal Register. An approved PMA or a declared completed PDP is required to be in effect for any such devices on or before 180 days after FDA files the application. Any other class III preamendments device subject to this rule that was not in commercial distribution before May 28, 1976, is required to have an approved PMA or a declared completed PDP in effect before it may be marketed.

If a PMA or a notice of completion of a PDP for any of the class III preamendments devices is not filed on or before the 90th day past the effective date of this regulation, that device will be deemed adulterated under section 501(f)(1)(A) of the FD&C Act, and commercial distribution of the device must cease immediately. The device may, however, be distributed for investigational use, if the requirements of the IDE regulations (part 812) are met.

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

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

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. There have been no 510(k) submissions for implantable pacemaker pulse generators since 1999, and there is no record of pacemaker batteries ever being marketed. Accordingly, it has been determined that all of these devices are in a state of disuse, and FDA has concluded that there is little or no interest in marketing these devices in the future. Therefore, the Agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $139 million, using the most current (2011) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount.

FDA has concluded that this final rule will not have a significant impact. We base this determination on an analysis of our Registration and Listing, 510(k) and PMA database information.

There have been no 510(k) submissions for implantable pacemaker pulse generators since 1999, with the exception of one 510(k) submission cleared in 2001 that was erroneously coded as an implantable pacemaker pulse generator (product code DXY), but is actually for an external pacemaker. This record has been corrected. Current pacemakers have newer features and capabilities that have rendered them not substantially equivalent to the devices cleared under 510(k) prior to 1999, which are obsolete. Current pacemakers are marketed under a PMA; in some cases the product code DXY has been erroneously applied. In addition, there have been no valid 510(k) submissionsfor pacemaker batteries for implantable pacemakers, which also fall under the product code DSZ also under § 870.3610. Two 510(k) submissions have been received for DSZ devices since 1976, but they were miscoded, which has been corrected. The Agency has no record of pacemaker batteries ever being marketed.

This information is summarized in table 1 of this document as follows:

Based on our review of electronic product registration and listing and other data, FDA concludes that there is currently little or no interest in marketing the affected devices and that the final rule would not have a significant economic impact.

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

This final rule refers to currently approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 812 have been approved under OMB control number 0910-0078; the collections of information in part 807, subpart E, have been approved under OMB control number 0910-0120; the collections of information in 21 CFR part 814, subpart B, have been approved under OMB control number 0910-0231; and the collections of information under 21 CFR part 801 have been approved under OMB control number 0910-0485.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 870 is amended as follows:

On December 21, 2007, a notice of proposed rulemaking by cross-reference to temporary regulations (REG-141399-07) under section 904 of the Code and temporary regulations (TD 9371) (2007 temporary regulations) were published in theFederal Registerat 72 FR 72645 and 72 FR 72592, respectively. No written comments were received. A public hearing was not requested and none was held. This Treasury decision adopts the proposed regulation with the changes discussed in this preamble.

Section 904(f)(3) provides that if a taxpayer disposes of certain property used or held for use predominantly without the United States in a trade or business, gain is recognized on that disposition and treated as foreign source income, regardless of whether the gain would otherwise be recognized, to the extent of any overall foreign loss account in the separate category of foreign source taxable income generated by the property. Section 1.904(f)-2(d) provides separate rules for dispositions in which gain is recognized irrespective of section 904(f)(3) and dispositions in which the gain would not otherwise be recognized.

A question has arisen regarding dispositions in which gain is recognized irrespective of section 904(f)(3) and the recognized gain is otherwise treated as U.S. source income under the Code. The Treasury Department and the IRS believe that the language of section 904(f)(3)(A) is clear that gain on such dispositions is recharacterized as foreign source income only to the extent of the applicable section 904(f)(3) recapture amount. Consistent with the statutory language, the regulations clarify that this limit on recharacterization applies. The amount of gain recharacterized as foreign source is equal to the lesser of the total recognized gain or the balance in the overall foreign loss account remaining after any other overall foreign loss recapture pursuant to section 904(f)(1) has been made.

The 2007 temporary regulations provide rules coordinating the application of section 904(b), which addresses the effect of capital gains and losses on the foreign tax credit limitation, and section 904(g), which addresses overall domestic losses and the recapture of such losses. Section 1.904(g)-1T(c)(2), which defines the term domestic loss, provides that if a taxpayer has any capital gains or losses, the amount of the domestic loss is determined by taking into account adjustments under section 904(b)(2) and § 1.904(b)-1. If the taxpayer has capital gains or losses, § 1.904(g)-1T(d)(3) provides that the amount by which an overall domestic loss reduces foreign source income in a taxable year is determined in accordance with § 1.904(b)-1(h)(1)(i) and (h)(1)(iii).

The 2007 temporary regulations followed the approach of the coordination rules in § 1.904(b)-1(h), which generally provide that adjustments under section 904(b) to capital gains and losses and qualified dividend income (section 904(b) adjustments) are taken into account first before applying the overall foreign loss provisions of section 904(f). These final regulations retain that basic approach; however, they revise several provisions of the 2007 temporary regulations and add new provisions to implement the mechanics of this coordination rule.

First, §§ 1.904(g)-1(c)(2) and (d)(3) are revised regarding the calculation of an overall domestic loss. These revisions reflect the fact that the regulations under section 904(b) do not provide specific adjustments to determine U.S. source loss on a stand-alone basis, but rather define the amount of U.S. source loss that offsets foreign source taxable income under section 904(f)(5)(D) as adjusted foreign taxable income, less adjusted worldwide taxable income. The calculation of the overall domestic loss is therefore expressly coordinated with the calculation of the section 904(f)(5)(D) amount as determined under § 1.904(b)-1(h)(1)(iii).

Second, § 1.904(g)-2(b) is revised to clarify that section 904(b) adjustments must be made for capital gains and losses and qualified dividend income before determining how much U.S. source taxable income is available to recapture an overall domestic loss account. Because the regulations under section 904(b) do not provide specific adjustments to determine U.S. source taxable income on a stand-alone basis, § 1.904(g)-2(b) provides that U.S. source taxable income available to recapture an overall domestic loss account is determined following the principles of § 1.904(b)-1(h)(1)(i), which provides rules on making the section 904(b) adjustments in determining foreign source taxable income.

Third, a new step is added to the ordering rules in § 1.904(g)-3 to provide that any section 904(b) adjustments for capital gains and losses and qualified dividend income are made after determining the amount of net operating loss carryover, if any, in Step One, but before allocating losses or recapturing loss accounts in steps 3 through 7.

Finally, the regulations have been revised to clarify that coordination with the section 904(b) provisions requires adjustments not only to capital gains and losses but to qualified dividend income as well.

Other revisions have been made to the 2007 temporary regulations that have no intended substantive effect beyond improving the readability of the provisions. These include clarifying the term “section 904(f)(1) recapture amount” in § 1.904(f)-2)(c)(1) and simplifying the definitions of “separate limitation loss” and “separate limitation loss account” in § 1.904(f)-7(b)(3) and (c). The explanation for the taxable year in which an overall domestic loss is sustained in § 1.904(g)-1(a)(2) is clarified as well.

Section 1.904(g)-3(i) is reserved. The Treasury Department and the IRS will promulgate guidance addressing adjustments required under section 904(f)(3) with respect to disposition of property.

It has been determined that this Treasury decision is not a significant regulatory action as defined in Executive Order 12866. 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 the regulations do not impose a collection of information on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not apply. Pursuant to section 7805(f) of the 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.

The principal author of these regulations is Jeffrey L. Parry of the Office of Chief Counsel (International). However, other personnel from the Treasury Department and the IRS participated in their development.

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

Availability of Incorporated Standards.With the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51, OSHA is incorporating by reference into the section the standards published by the International Safety Equipment Association (ISEA) to which §§ 1910.135(b)(1), 1915.155(b)(1), 1917.93(b)(1), 1918.103(b)(1), and 1926.100(b) refer. To enforce any edition other than the editions specified by §§ 1910.135(b)(1), 1915.155(b)(1), 1917.93(b)(1), 1918.103(b)(1), and 1926.100(b), OSHA must publish a notice of change in theFederal Register, and the material must be available to the public. All approved material is available for inspection at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, telephone (202) 741-6030, or go to:http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.Also, the material is available for inspection at any OSHA Regional Office or the OSHA Docket Office (U.S. Department of Labor, 200 Constitution Ave. NW., Room N-2625, Washington, DC 20210; telephone: (202) 693-2350 (TTY number: (877) 889-5627)).

The Coast Guard is issuing this temporary 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 it would be impracticable. Due to the hazardous conditions discussed below, it is necessary to make this regulation effective immediately in order to ensure the safety of the maritime public while the named vessels are transiting.

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. It is impracticable to have a delayed effective date because some of the specified vessels are currently in Puget Sound. Immediate action is necessary to protect the public from the threat to navigational safety posed by such tactics or activities as described above.

In June 2011, Greenpeace protestors illegally boarded Cairn Energy's drilling platform off Greenland. Greenpeace has identified that both Shell and British Petroleum are possible future targets in 2012 and 2013. On February 16, 2012, the environmental advocacy organization Alaska Wilderness League made local inquiries and chartered a vessel to observe the mobile offshore drilling unit (MODU) KULLUK, which is currently undergoing retro-fit at Vigor shipyard in Seattle. On February 26, 2012, actress Lucy Lawless and six Greenpeace activists illegally boarded the drilling vessel NOBLE DISCOVERER in New Zealand. On March 16 2012, Greenpeace activists boarded the Finnish icebreaker FENNICA, a Shell-contracted vessel, and hung banners from the vessel's cranes. On May 1-4, 2012, Greenpeace activists conducted multi-faceted direct action operations aimed at delaying the transit of the Finnish icebreaker NORDICA, a Shell-contracted vessel. Activists boarded the vessel while moored, blocked the vessel with kayaks and swimmers as it got underway, and boarded the vessel while underway at sea via small boats. Further on 31 May 2012, the Greenpeace motor vessel ESPERANZA entered Elliott Bay. While the Coast Guard respects the First Amendment rights of protesters, it is clear that certain unlawful protest activity poses a danger to the life and safety of protesters, target vessels, and other legitimate waterway users. The Coast Guard must take swift action to prevent such harm.

The following vessels associated with exploratory drilling in the Arctic may be transiting into, out of, or around the Sector Puget Sound Captain of the Port (COTP) Zone from now until August 1st 2012: NOBLE DISCOVERER, KULLUK, NORDICA, FENNICA, TOISA DAUNTLESS, TOR VIKING II, HARVEY EXPLORER, HARVEY SPIRIT, HARVY SISUAQ, AIVIQ, NANUQ, GUARDSMAN, KALMATH, ARCTIC CHALLENGER, Z BIG 1, LAUREN FOSS, CORBIN FOSS, ARCTIC ENDEAVOR, POINT OLIKTOK and any towing vessel actively engaged in the towing or escorting of these vessels. Based on a recent history of unsafe demonstration tactics and vessel boardings of some of these vessels in New Zealand and Finland within the past six months, the Coast Guard finds it necessary to establish this temporary safety zone in order to allow for safe and lawful on-water protests without endangering the lives or safety of any person or vessel, and to keep the waterways unrestricted to all legitimate users.

Persons or vessels positioned in the path of the specified vessels, all of which are extremely large, and many of which transit with tow or tug assistance, would present an extremely hazardous situation. Named vessels could be forced to deviate from their routes into more shallow water, out of an established traffic scheme or International Maritime Organization established Traffic Separation Scheme, or into otherwise unsafe conditions. This could create a hazardous situation where the aforementioned vessels would be at risk of collision or grounding or break down the good order and predictability of vessel traffic flow in the Vessel Traffic Service area of operations. Additionally, persons in the water and small vessels coming within 500 yards of one of the oncoming named vessels may be injured or killed in a collision, especially since the larger of the named vessels, including those vessels in tow, may be unable to see such persons or small vessels, and would not be able to stop, reduce speed, or turn quickly enough to avoid a collision. In addition, blocking of the waterway or portions of the waterway, and maneuvering close to large vessels underway could expose other legitimate waterway users to similar risks of grounding or collision, and expose persons or vessels engaged in such tactics to collisions with other waterway users. This risk is exacerbated by areas of congestion within the Puget Sound COTP Zone. Tacoma and Seattle together comprise the 3rd largest container ship port in the United States. In addition, the Puget Sound COTP Zone has the largest ferry system in the United States. As such, persons and small vessels in Puget Sound must contend with numerous large container ships and ferries transiting Puget Sound, in addition to other waterway users such as recreational vessels, construction vessels, public vessels, and others.

In order to improve safety in light of the considerations above, the Coast Guard is establishing a temporary safety zone to restrict vessel movement around the vessels specified in theBackgroundsection of this notice. The safety zone established by this rule will prohibit any person or vessel from entering or remaining within 500 yards of the following specified vessels, unless authorized by the COTP or his Designated Representative, while in the Sector Puget Sound COTP Zone: NOBLE DISCOVERER, KULLUK, NORDICA, FENNICA, TOISA DAUNTLESS, TOR VIKING II, HARVEY EXPLORER, HARVEY SPIRIT, HARVY SISUAQ, AIVIQ, NANUQ, GUARDSMAN, KALMATH, ARCTIC CHALLENGER, TUUQ, LAUREN FOSS, CORBIN FOSS, ARCTIC ENDEAVOR, and POINT OLIKTOK. This safety zone includes any associated towing and assist vessels, and associated towing equipment, including the towline. The COTP has granted general permission for vessels to enter the outer 400 yards of the safety zone, aft of the pilot house of these vessels, or the lead towing vessel for those vessels in tow, as long as those vessels within the outer 400 yards of the safety zone operate at the minimumspeed necessary to maintain course unless required to maintain speed by the navigation rules.

It is noted that in March of 2012, the U.S. District Court for the District of Alaska issued a preliminary injunction order in a civil case between Shell Oil, Inc., and Greenpeace. This civil injunction generally requires Greenpeace to remain 500-1000 yards away from the named vessels. The Coast Guard is not required to enforce this injunction, and will not do so. This regulation is separate and distinct from the civil injunction, and is applicable to all vessels, whether or not they are acting on behalf of Greenpeace, and whether or not the persons aboard are engaged in any sort of protests or demonstration. The purpose of the present regulation is to protect the safety of all legitimate waterway users.

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, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. The Coast Guard bases this finding on the fact that the safety zone will be in place for a limited period of time and vessel traffic will be able to transit around the safety zone. Maritime traffic may also request permission to transit through the zones from the COTP, Puget Sound, or Designated Representative.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. 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 rule will affect the following entities, some of which may be small entities; the owners and operators of vessels intending to operate in the waters covered by the safety zone while it is in effect. The rule will not have a significant economic impact on a substantial number of small entities because the safety zone will be in place for a limited period of time and maritime traffic will still be able to transit around the safety zone. Maritime traffic may also request permission to transit though the zone from the COTP, Puget Sound, or Designated Representative.

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 rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in theFOR FURTHER INFORMATION CONTACT, above.

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 will not call for a 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 the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in theFOR FURTHER INFORMATION CONTACTsection to coordinate protest activities so that your message can be received without jeopardizing the safety or security of people, places, or vessels.

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 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.

This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.

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 determined that 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 an emergency safety zone for all waters encompassed within 500 yards of the Arctic drilling and support vessels. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated underADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

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

The Coast Guard will enforce the San Francisco Independence Day Fireworks Display safety zones from 9 a.m. on July 3, 2012 through 10:15 p.m. on July 4, 2012.

For Location 1, during the loading of the fireworks barges, while the barges are being towed to the display location, and until the start of the fireworks display, the safety zone applies to the navigable waters around and under the fireworks barges within a radius of 100 feet. Loading of the pyrotechnics onto the fireworks barges is scheduled to take place from 9 a.m. until 2 p.m. on July 3, 2012, and will take place at Pier 50 in San Francisco, CA. Towing of the barge from Pier 50 to the display location is scheduled to take place from 8 p.m. until 8:45 p.m. on July 4, 2012. During the 25 minute fireworks display, scheduled to take place from 9:30 p.m. until 9:55 p.m. on July 4, 2012, the fireworks barge will be located 1,000 feet off of Pier 39 in position 37°48′49″ N, 122°24′46″ W (NAD 83) for the SanFrancisco Independence Day Fireworks Display in 33 CFR 165.1191. This safety zone will be in effect from 9 a.m. on July 3, 2012 to 10:15 p.m. on July 4, 2012.

For Location 2, the fireworks will be launched from the San Francisco Municipal Pier. During the 25 minute fireworks display, scheduled to take place from 9:30 p.m. until 9:55 p.m. on July 4, 2012, the safety zone will apply to the navigable waters around and under the fireworks launch site within a radius of 1,000 feet in position 37°48′38″ N, 122°25′28″ W (NAD 83) for the San Francisco Independence Day Fireworks Display in 33 CFR 165.1191. This safety zone will be in effect from 9:30 p.m. to 10:15 p.m. on July 4, 2012.

Under the provisions of 33 CFR 165.1191, unauthorized persons or vessels are prohibited from entering into, transiting through, or anchoring in the safety zone during all applicable effective dates and times, unless authorized to do so by the PATCOM. Additionally, each person who receives notice of a lawful order or direction issued by an official patrol vessel shall obey the order or direction. The PATCOM is empowered to forbid entry into and control the regulated area. The PATCOM shall be designated by the Commander, Coast Guard Sector San Francisco. The PATCOM may, upon request, allow the transit of commercial vessels through regulated areas when it is safe to do so.This notice is issued under authority of 33 CFR 165.1191 and 5 U.S.C. 552(a). In addition to this notice in theFederal Register, the Coast Guard will provide the maritime community with extensive advance notification of the safety zone and its enforcement period via the Local Notice to Mariners.

If the Captain of the Port determines that the regulated area need not be enforced for the full duration stated in this notice, a Broadcast Notice to Mariners may be used to grant general permission to enter the regulated area.

The Coast Guard will enforce a 1,000 foot safety zone around the Berkeley Pier in position 37°51′40″ N, 122°19′19″ W (NAD 83) from 9:30 p.m. until 10:15 p.m. on July 4, 2012. Upon the commencement of the 30 minute fireworks display, scheduled to take place from 9:30 p.m. to 10 p.m. on July 4, 2012, the safety zone will encompass the navigable waters around and under the Berkeley Pier within a radius 1,000 feet in position 37°51′40″ N, 122°19′19″ W (NAD83) for the Berkeley Marina Fourth of July Fireworks display in 33 CFR 165.1191. This safety zone will be in effect from 9:30 p.m. to 10:15 p.m. on July 4, 2012.

Under the provisions of 33 CFR 165.1191, unauthorized persons or vessels are prohibited from entering into, transiting through, or anchoring in the safety zone during all applicable effective dates and times, unless authorized to do so by the PATCOM. Additionally, each person who receives notice of a lawful order or direction issued by an official patrol vessel shall obey the order or direction. The PATCOM is empowered to forbid entry into and control the regulated area. The PATCOM shall be designated by the Commander, Coast Guard Sector San Francisco. The PATCOM may, upon request, allow the transit of commercial vessels through regulated areas when it is safe to do so.

This notice is issued under authority of 33 CFR 165.1191 and 5 U.S.C. 552(a). In addition to this notice in theFederalRegister, the Coast Guard will provide the maritime community with extensive advance notification of the safety zone and its enforcement period via the Local Notice to Mariners.

If the Captain of the Port determines that the regulated area need not be enforced for the full duration stated in this notice, a Broadcast Notice to Mariners may be used to grant general permission to enter the regulated area.

The Coast Guard will enforce a 100 foot safety zone around the fireworks barge during the loading, transit, and arrival of the fireworks barge to the display location and until the start of the fireworks display. From 9 a.m. until 2 p.m. on July 4, 2012, the barge will be loading off of Pier 50 in position 37°46′28″ N, 122°23′06″ W (NAD 83). From 7 p.m. to 8:30 p.m. on July 4, 2012 the loaded barge will transit from Pier 50 to the launch site near Sausalito, CA in position 37°51′30″ N, 122°28′29″ W (NAD83). Upon the commencement of the fireworks display, scheduled to take place from 9:15 p.m. to 9:30 p.m. on July 4, 2012, the safety zone will increase in size and encompass the navigable waters around and under the fireworks barge within a radius 1,000 feet around the launch site near Sausalito, CA in position 37°51′30″ N, 122°28′29″ W (NAD83) for the City of Sausalito's Fourth of July Fireworks Display in 33 CFR 165.1191. This safety zone will be in effect from 9 a.m. to 9:45 p.m. on July 4, 2012.

Under the provisions of 33 CFR 165.1191, unauthorized persons or vessels are prohibited from entering into, transiting through, or anchoring in the safety zone during all applicable effective dates and times, unless authorized to do so by the PATCOM. Additionally, each person who receives notice of a lawful order or direction issued by an official patrol vessel shall obey the order or direction. The PATCOM is empowered to forbid entry into and control the regulated area. The PATCOM shall be designated by the Commander, Coast Guard Sector San Francisco. The PATCOM may, upon request, allow the transit of commercial vessels through regulated areas when it is safe to do so. This notice is issued under authority of 33 CFR 165.1191 and 5 U.S.C. 552(a). In addition to this notice in theFederal Register,the Coast Guard will provide the maritime community with extensive advance notification of the safety zone and its enforcement period via the Local Notice to Mariners.

If the Captain of the Port determines that the regulated area need not be enforced for the full duration stated in this notice, a Broadcast Notice to Mariners may be used to grant general permission to enter the regulated area.

The Copyright Office is issuing a statement of policy to clarify its examination practices with respect to claims in “compilation authorship,” or the selection, coordination, or arrangement of material that is otherwise separately uncopyrightable. The Office has long accepted claims of registration based on the selection, coordination, or arrangement of uncopyrightable elements, because the Copyright Act specifically states that copyrightable authorship includes compilations. 17 U.S.C. 103.

The term “compilation” is defined in the Copyright Act:

Viewed in a vacuum, it might appear thatanyorganization of preexisting material may be copyrightable. However, the Copyright Act, the legislative history and the Supreme Court's decision inFeist Publications, Inc.v.Rural Tel. Serv. Co.,499 U.S. 340, 346 (U.S. 1991), lead to a different conclusion.

InFeist,interpreting the congressional language in the section 101 definition of “compilation,” the Supreme Court found protectable compilations to be limited to “a work formed by the collection and assembling of preexisting material or data that are selected, coordinated, or arrangedin such a way thatthe resulting work as a whole constitutes an original work of authorship.”Feistat 356,quoting17 U.S.C. 101 (“compilation”) (emphasis by the Court). The Court stated:

The Court's decision inFeistclarified that some selections, coordinations, or arrangements will not qualify as works of authorship under the statutory definition of “compilation” in section 101. However, a question that was not present in the facts ofFeistand therefore not considered by the Court, is whether the selection, coordination, or arrangement of preexisting materials must relate to the section 102 categories of copyrightable subject matter.

InFeist,Rural Telephone's alphabetical directory was found deficient due to a lack of originality, i.e.,of sufficient creativity. Had the items contained in the directory (names, addresses and telephone numbers) been selected, coordinated, or arranged in a sufficiently original manner, there is no question that the resulting compilation would have fit comfortably within the category of literary works—the first category of copyrightable authorship recognized by Congress in section 102. But what if an original selection, coordination, or arrangement of preexisting material did not fall within a category of section 102 authorship? For instance, is a selection and arrangement of a series of physical movements copyrightable, if the resulting work as a whole does not fit within the categories of pantomime and choreographic works or dramatic works, or any other category?

Although theFeistdecision did not address this question, the Copyright Office concludes that the statute and relevant legislative history require that to be registrable, a compilation must fall within one or more of the categories of authorship listed in section 102. In other words, if a selection and arrangement of elements does not result in a compilation that is subject matter within one of the categories identified in section 102(a), the Copyright Office will refuse registration.

The Office arrives at this conclusion in accordance with the instruction of the Supreme Court inFeist:“the established principle that a court should give effect, if possible, to every clause and word of a statute,” citingMoskalv.United States,498 U.S. 103, 109-110 (1990). Applying this principle, the Office finds that in addition to the statutory definition of “compilation” in section 101, Congress also provided clarification about the copyrightable authorship in compilations in section 103(a) of the Copyright Act:

Section 103 makes it clear that compilation authorship is a subset of the section 102(a) categories, not a separate and distinct category. Section 103 and the definition of “compilation” in Section 101 also mark a departure from the treatment of compilations under the 1909 Act, which listed composite works and compilations as falling within the class of “books.” The 1976 Act significantly broadened the scope of compilation authorship to include certain selection, coordination, or arrangement that results in a work of authorship. But that expansion also makes it clear that not every selection, coordination, or arrangement of material is copyrightable. Only selection, coordination, or arrangement that falls within section 102 authorship is copyrightable, i.e., is selected, coordinated, or arrangedin such a waythat the resulting work as a whole constitutes an original work of authorship. Moreover, section 103 provides that compilations fall within “[t]he subject matter of copyright as specified by section 102,” and the legislative history of the 1976 Act confirms what this means: “Section 103 complements section 102: A compilation or derivative work is copyrightable if it represents an `original work of authorship'and falls within one or more of the categories listed in section 102.” H.R. Rep. 94-1476 at 57 (1976) (emphasis added).

This requirement indicates that compilation authorship is limited not only by the tripartite structure of the statutory definition of “compilation,” but that in addition, a creative selection, coordination, or arrangement mustalsoresult in one or more congressionally recognized categories of authorship.

Although the statute together with the legislative history warrant this conclusion, it is far from obvious when the statutory definition of “compilation” is read in isolation. Moreover, other portions of the legislative history have obscured this interpretation.

The legislative history states that the term “works of authorship” is said to “include” the seven categories of authorship listed in section 102 (now eight with the addition of “architectural works”), but that the listing is “illustrative and not limitative.” H.R. Rep 94-1476, at 53. If these categories of authorship are merely illustrative, may courts or the Copyright Office recognize new categories of copyrightable authorship? Given that Congress chose to include some categories of authorship in the statute, but not other categories, did Congress intend to authorize the courts or the Copyright Office to recognize authorship that Congress did not expressly include in the statute? For instance, the decision to include “pantomimes and choreographic works” as a new category of authorship that did not exist under the 1909 Act was the subject of much deliberation, including a commissioned study and hearings. Copyright Office Study for Congress. Study No. 28, “Copyright in Choreographic Works,” by Borge Varmer; Copyright Law Revision, Part 2, Discussion and Comments on Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law, House Comm. on the Judiciary (February 1963) at 8-9. Similarly, the decision not to include typeface as copyrightable authorship was a deliberate decision. H.R. Rep 94-1476, at 55. Could Congress have intended the courts or the Office to second-guess such decisions, or accept forms of authorship never considered by Congress?

Again, the answer lies in the legislative history. First, the legislative history states that “In using the phrase `original works of authorship,' rather than `all the writings of an author,' the committee's purpose was to avoid exhausting the constitutional power of Congress to legislate in this field, and to eliminate the uncertainties arising from the latter phrase.” H.R. Rep 94-1476, at 51. Thus, one goal of the illustrative nature of the categories was to prevent foreclosing the congressional creation of new categories:

This passage suggests that Congress intended the statute to be flexible as to the scope of established categories, but also that Congress also intended to retain control of the designation of entirely new categories of authorship. The legislative history goes on to state that the illustrative nature of the section 102 categories of authorship was intended to provide “sufficient flexibility to free the courts from rigid or outmoded concepts ofthe scope of particular categories.” Id.at 53 (emphasis added). The flexibility granted to the courts is limited tothe scopeof the categories designated by Congress in section 102(a). Congress did not delegate authority to the courts to create new categories of authorship. Congress reserved this option to itself.

If the federal courts do not have authority to establish new categories of subject matter, it necessarily follows that the Copyright Office also has no such authority in the absence of any clear delegation of authority to the Register of Copyrights.

Interpreting the Copyright Act as a whole, the Copyright Office issues this policy statement to announce that unless a compilation of materials results a work of authorship that falls within one or more of the eight categories of authorship listed in section 102(a) of title 17, the Office will refuse registration in such a claim.

Thus, the Office will not register a work in which the claim is in a “compilation of ideas,” or a “selection and arrangement of handtools” or a “compilation of rocks.” Neither ideas, handtools, nor rocks may be protected by copyright (although an expression of an idea, a drawing of a handtool or a photograph of rock may be copyrightable).

On the other hand, the Office would register a claim in an original compilation of the names of the author's 50 favorite restaurants. While neither a restaurant nor the name of a restaurant may be protected by copyright, a list of 50 restaurant names may constitute a literary work—a category of work specified in section 102(a)—based on the author's original selection and/or arrangement of the author's fifty favorite restaurants.

An example that has occupied the attention of the Copyright Office for quite some time involves the copyrightability of the selection and arrangement of preexisting exercises, such as yoga poses. Interpreting the statutory definition of “compilation” in isolation could lead to the conclusion that a sufficiently creative selection, coordination or arrangement of public domain yoga poses is copyrightable as a compilation of such poses or exercises. However, under the policy stated herein, a claim in a compilation of exercises or the selection and arrangement of yoga poses will be refused registration. Exercise is not a category of authorship in section 102 and thus a compilation of exercises would not be copyrightable subject matter. The Copyright Office would entertain a claim in the selection, coordination or arrangement of, for instance, photographs or drawings of exercises, but such compilation authorship would not extend to the selection, coordination or arrangement of the exercises themselves that are depicted in the photographs or drawings. Rather such a claim would be limited to selection, coordination, or arrangement of the photographs or drawings that fall within the congressionally-recognized category of authorship of pictorial, graphic and sculptural works.

As another example, Congress has stated that the subject matter of choreography does not include “social dance steps and simple routines.” H.R. Rep. 94-1476 at 54 (1976). A compilation of simple routines, social dances, or even exercises would not be registrable unless it results in a category of copyrightable authorship. A mere compilation of physical movements does not rise to the level of choreographic authorship unless it contains sufficient attributes of a work of choreography. And although a choreographic work, such as a ballet or abstract modern dance, may incorporate simple routines, social dances, or even exercise routines as elements of the overall work, the mere selection and arrangement of physical movements does not in itself support a claim of choreographic authorship.

A claim in a choreographic work must contain at least a minimum amount of original choreographic authorship. Choreographic authorship is considered, for copyright purposes, to be the composition and arrangement of a related series of dance movements and patterns organized into an integrated, coherent, and expressive whole.

Simple dance routines do not represent enough original choreographic authorship to be copyrightable.Id.Moreover, the selection, coordination or arrangement of dance steps does not transform a compilation of dance steps into a choreographic work unless the resulting work amounts to an integrated and coherent compositional whole. The Copyright Office takes the position that a selection, coordination, or arrangement of functional physical movements such as sports movements, exercises, and other ordinary motor activities alone do not represent the type of authorship intended to be protected under the copyright law as a choreographic work.

In addition to the requirement that a compilation result in a section 102(a) category of authorship, the Copyright Office finds that section 102(b) precludes certain compilations that amount to an idea, procedure, process, system, method of operation, concept, principle or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work. In the view of the Copyright Office, a selection, coordination, or arrangement of exercise movements, such as a compilation of yoga poses, may be precluded from registration as a functional system or process in cases where the particular movements and the order in which they are to be performed are said to result in improvements in one's health or physical or mental condition.See, e.g, Open Source Yoga Unityv.Choudhury,2005 WL 756558, *4, 74 U.S.P.Q.2d 1434 (N.D. Cal. 2005) (“Here, Choudhury claims that he arranged the asanas in a manner that was both aesthetically pleasing and in a way that he believes is best designed to improve the practitioner's health.”).1 While such a functional system or process may be aesthetically appealing, it is nevertheless uncopyrightable subject matter. A film or description of such an exercise routine or simple dance routine may be copyrightable, as may a compilation of photographs of such movements. However, such a copyright will not extend to the movements themselves, either individually or in combination, but only to the expressive description, depiction, or illustration of the routine that falls within a section 102(a) category of authorship.

The relationship between the definition of compilations in section 101 and the categories of authorship in section 102(a) has been overlooked even by the Copyright Office in the past. The Office has issued registration certificates that included “nature of authorship” statements such as “compilations of exercises” or “selection and arrangement of exercises.” In retrospect, and in light of the Office's closer analysis of legislative intent, theCopyright Office finds that such registrations were issued in error.

The Office recognizes that in one unreported decision, a district court concluded, albeit with misgivings, that there were triable issues of fact whether a sufficient number of individual yoga asanas were arranged in a sufficiently creative manner to warrant copyright protection. SeeOpen Source Yoga Unity,discussed above. However, that court did not consider whether section 102(a) or (b) would bar a copyright claim in such a compilation.

The Copyright Office concludes that the section 102(a) categories of copyrightable subject matter not only establish what is copyrightable, but also necessarily serve to limit copyrightable subject matter as well. Accordingly, when a compilation does not result in one or more congressionally-established categories of authorship, claims in compilation authorship will be refused.

I. Does this action apply to me?

A list of potentially affected entities is provided in theFederal Registerof April 27, 2012 (77 FR 25236) (FRL-9343-4). If you have questions regarding the applicability of this action to a particular entity, consult the technical person listed underFOR FURTHER INFORMATION CONTACT.

In the Federal Register of April 27, 2012 (77 FR 25236), EPA issued several direct final SNURs, including SNURs for seven chemical substances that are the subject of this withdrawal. These direct final rules were issued pursuant to the procedures in 40 CFR part 721, subpart D. In accordance with § 721.160(c)(3)(ii), EPA is withdrawing these rules issued for seven chemical substances which were the subject of PMNs P-10-548, P-10-550, P-10-551, P-10-552, P-10-553, P-10-554, and P-10-555 because the Agency received notice of intent to submit adverse comments. EPA intends to publish proposed SNURs for these chemical substances under separate notice and comment procedures.

For further information regarding EPA's expedited process for issuing SNURs, interested parties are directed to 40 CFR part 721, subpart D, and theFederal Registerof July 27, 1989 (54 FR 31314). The record for the direct final SNUR for these chemical substances that are being withdrawn was established at EPA-HQ-OPPT-2011-0577. That record includes information considered by the Agency in developing this rule and the notice of intent to submit adverse comments.

To access the electronic docket, please go tohttp://www.regulations.govand follow the on-line instructions to access docket ID number EPA-HQ-OPPT-2011-0577. Additional information about the Docket Facility is provided underADDRESSESin theFederal Registerof April 27, 2012 (77 FR 25236). If you have questions, consult the technical person listed underFOR FURTHER INFORMATION CONTACT.

This final rule revokes or eliminates existing regulatory requirements and does not contain any new or amended requirements. As such, the Agency has determined that this withdrawal will not have any adverse impacts, economic or otherwise. The statutory and executive order review requirements applicable to the direct final rule were discussed in theFederal Registerof April 27, 2012 (77 FR 25236). Those review requirements do not apply to this action because it is a withdrawal and does not contain any new or amended requirements.

The Congressional Review Act, 5 U.S.C. 801et seq.,generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to each House of the Congress and the Comptroller General of the United States. EPA will submit a report containing this rule 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. This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR parts 9 and 721 are amended as follows:

A list of potentially affected entities is provided in theFederal Registerof April 25, 2012 (77 FR 24613) (FRL-9345-4). If you have questions regarding the applicability of this action to a particular entity, consult the technical person listed underFOR FURTHER INFORMATION CONTACT.

In theFederal Registerof April 25, 2012 (77 FR 24613), EPA issued several direct final SNURs, including a SNUR for the chemical substances that are the subject of this withdrawal. These direct final rules were issued pursuant to the procedures in 40 CFR part 721, subpart D. In accordance with § 721.160(c)(3)(ii), EPA is withdrawing the rule issued for chemical substances identified generically as complex strontium aluminum, rare earth doped, which were the subject of PMNs P-12-22, P-12-23, P-12-24, P-12-25, and P-12-26, because the Agency received a notice of intent to submit adverse comments. Elsewhere in today'sFederal Register, EPA is proposing a SNUR for these chemical substances via notice and comment rulemaking.

For further information regarding EPA's expedited process for issuing SNURs, interested parties are directed to 40 CFR part 721, subpart D, and theFederal Registerof July 27, 1989 (54 FR 31314). The record for the direct final SNUR for these chemical substances that is being withdrawn was established at EPA-HQ-OPPT-2012-0182. That record includes information considered by the Agency in developing this rule and the notice of intent to submit adverse comments.

To access the electronic docket, please go tohttp://www.regulations.govand follow the online instructions to access docket ID number EPA-HQ-OPPT-2012-0182. Additional information about the Docket Facility is provided underADDRESSESin theFederal Registerof April 25, 2012 (77 FR 24613). If you have questions, consult the technical person listed underFOR FURTHER INFORMATION CONTACT.

This final rule revokes or eliminates an existing regulatory requirement and does not contain any new or amended requirements. As such, the Agency has determined that this withdrawal will not have any adverse impacts, economic or otherwise. The statutory and executive order review requirements applicable to the direct final rule were discussed in theFederal Registerof April 25, 2012 (77 FR 24613). Those review requirements do not apply to this action because it is a withdrawal and does not contain any new or amended requirements.

The Congressional Review Act, 5 U.S.C. 801et seq.,generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report to each House of the Congress and the Comptroller General of the United States. EPA will submit a report containing this rule 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. This rule is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR parts 9 and 721 are amended as follows:

I. General Information A. Does this action apply to me?

Entities potentially affected by this final rule include, but are not necessarily limited to, states (typically state air pollution control agencies) that control VOCs, and industries involved in the manufacture or use of refrigerants, aerosol propellants and blowing agents for insulating foams. Table 1 is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. This table lists the types of entities that the EPA is now aware of that could potentially be affected by this action. Other types of entities not listed in the table could also be affected. If you have questions regarding the applicability of this action to a particular entity, consult the person listed in the precedingFOR FURTHER INFORMATION CONTACTsection. This action has no substantial direct effects on industry because it does not impose any new mandates on these entities, but, to the contrary, removes HFO-1234ze from the regulatory definition of VOC.

The use of this compound remains subject to other restrictions under the CAA. Specifically, the use of this compound as an aerosol propellant, blowing agent, or refrigerant or any other use in which it would substitute for chlorofluorocarbons, hydrochlorofluorocarbons, or their substitutes, is subject to regulation under the Significant New Alternatives Policy (SNAP) program (CAA § 612; 40 CFR 82 subpart G). The SNAP program has issued final listings for HFO-1234ze as an acceptable foam and refrigerant substitute and as an aerosol propellant (74 FR 50129, September 30, 2009; 75 FR 34017, June 16, 2010).

The information presented in this preamble is organized as follows:

Tropospheric ozone, commonly known as smog, is formed when VOCs and nitrogen oxides (NOX) react in the atmosphere in the presence of sunlight. Because of the harmful health effects of ozone, the EPA and state governments limit the amount of VOCs that can be released into the atmosphere. The VOCs are those organic compounds of carbon which form ozone through atmospheric photochemical reactions. Different VOCs have different levels of reactivity—that is, they do not react to form ozone at the same speed or do not form ozone to the same extent. Some VOCs react slowly or form less ozone; therefore, changes in their emissions have limited effects on local or regional ozone pollution episodes. It has been the EPA's policy that organic compounds with a negligible level of reactivity should be excluded from the regulatory VOC definition so as to focus VOC control efforts on compounds that do significantly increase ozone concentrations. The EPA also believes that exempting such compounds creates an incentive for industry to use negligibly reactive compounds in place of more highly reactive compounds that are regulated as VOCs. The EPA lists compounds that it has determined to be negligibly reactive in its regulations (at 40 CFR 51.100(s)) as being excluded from the definition of VOC.

The CAA requires the regulation of VOCs for various purposes. Section 302(s) of the CAA specifies that the EPA has the authority to define the meaning of “VOC,” and hence what compounds shall be treated as VOCs for regulatory purposes. The policy of excluding negligibly reactive compounds from the VOC definition was first laid out in the “Recommended Policy on Control of Volatile Organic Compounds” (42 FR 35314, July 8, 1977) and was supplemented most recently with the “Interim Guidance on Control of Volatile Organic Compounds in Ozone State Implementation Plans” (Interim Guidance) (70 FR 54046, September 13, 2005). The EPA uses the reactivity of ethane as the threshold for determining whether a compound has negligible reactivity. Compounds that are less reactive than, or equally reactive to, ethane under certain assumed conditions may be deemed negligibly reactive and therefore suitable for exemption from the VOC definition. Compounds that are more reactive than ethane continue to be considered VOCs for regulatory purposes and therefore subject to control requirements. The selection of ethane as the threshold compound was based on a series of smog chamber experiments that underlay the 1977 policy.

The EPA has used three different metrics to compare the reactivity of a specific compound to that of ethane: (i) The reaction rate constant (known as kOH) with the hydroxyl radical (OH); (ii) the maximum incremental reactivity (MIR) on a reactivity per unit mass basis; and (iii) the MIR expressed on a reactivity per mole basis. Differences between these three metrics are discussed below.

The kOHis the reaction rate constant of the compound with the OH radical in the air. This reaction is typically the first step in a series of chemical reactions by which a compound breaks down in the air and participates in the ozone-forming process. If this step is slow, the compound will likely not form ozone at a very fast rate. The kOHvalues have long been used by the EPA as a metric of photochemical reactivity and ozone-forming activity, and they have been the basis for most of the EPA's previous exemptions of negligibly reactive compounds from the regulatory definition of VOC. The kOHmetric is inherently a molar comparison, i.e., it measures the rate at which molecules react.

The MIR values, both by mole and by mass, are a more recently developed metric of photochemical reactivity derived from a computer-based photochemical model. This metric considers the complete ozone forming activity of a compound on a single day, and not merely the first reaction step.

The MIR values for compounds are typically expressed as grams of ozone formed per gram of VOC (mass basis), but may also be expressed as grams of ozone formed per mole of VOC (molar basis). For comparing the reactivities of two compounds, using the molar MIR values considers an equal number of molecules of the two compounds. Alternatively, using the mass MIR values compares an equal mass of the two compounds, which will involve different numbers of molecules, depending on the relative molecular weights. The molar MIR comparison is consistent with the original smog chamber experiments that underlie the original selection of ethane as the threshold compound, in that these experiments compared equal molar concentrations of individual VOCs. It is also consistent with previous reactivity determinations based on kOHvalues, which are inherently molar. By contrast, the mass MIR comparison is more consistent with how MIR values and other reactivity metrics have been applied in reactivity-based emission limits, such as the national VOC emissions standards for aerosol coatings (73 FR 15604). Many other VOC regulations contain limits based upon a weight of VOC per volume of product, such as the EPA's regulations for limiting VOC emissions from architectural and industrial maintenance coatings (40 CFR part 59 subpart D). However, the fact that regulations are structured to measure VOC content by weight for ease of implementation and enforcement does not necessarily control whether VOC exemption decisions should be made on a weight basis as well.

The choice of the molar basis versus the mass basis for the ethane comparison can be significant. In some cases, a compound might be considered less reactive than ethane under the mass basis but not under the molar basis. For compounds with a molecular weight higher than that of ethane, use of the mass basis results in more VOCs being classified as less reactive than ethane than does use of the molar basis.

The EPA has considered the choice between a molar or mass basis for the comparison to ethane in past rulemakings and guidance. In the Interim Guidance, the EPA stated:

The EPA's 2005 Interim Guidance also noted that concerns have sometimes been raised about the potential impact of a VOC exemption on environmental endpoints other than ozone concentrations, including fine particle formation, air toxics exposures, stratospheric ozone depletion and climate change. The EPA has recognized, however, that there are existing regulatory and non-regulatory programs that are specifically designed to address these issues, and the EPAcontinues to believe that the impacts of VOC exemptions on environmental endpoints other than ozone formation will be adequately addressed by these programs. The VOC exemption policy is intended to facilitate attainment of the ozone NAAQS, and questions have been raised as to whether the agency has authority to use its VOC exemption policy to address concerns that are unrelated to ground-level ozone. Thus, in general, VOC exemption decisions will continue to be based solely on consideration of a compound's contribution to ozone formation. However, if the EPA determines that a particular VOC exemption is likely to result in a significant increase in the use of a compound and that the increased use would pose a significant risk to human health or the environment that would not be addressed adequately by existing programs or policies, the EPA reserves the right to exercise its judgment in deciding whether to grant an exemption.

Honeywell, Inc. submitted a petition to the EPA on December 2, 2009, requesting that HFO-1234ze (CAS 29118-24-9) be exempted from VOC control based on its low reactivity relative to ethane. The petitioner indicated that HFO-1234ze may be used in a variety of applications including as a refrigerant, an aerosol propellant, and a blowing agent for insulating foam. This molecule has diverse applications including as a blowing agent for polyurethanes, polystyrene and other polymers, and as an aerosol propellant.

Honeywell submitted several documents, including several peer-reviewed journal articles, to support its petition, and we made these available in the docket for this action. These documents contained kOHvalues and MIR reactivity rates for ethane and HFO-1234ze. This information is reproduced below in Table 2. From the data in Table 2, it can be seen that the MIR for HFO-1234ze on a grams of ozone formed per gram of VOC basis is 0.098 which is only 35 percent that for ethane at 0.28 on the same basis. However, HFO-1234ze has a higher kOHvalue than ethane, meaning that it initially reacts more quickly in the atmosphere than ethane. A molecule of HFO-1234ze is also more reactive than a molecule of ethane, as shown by the molar MIR (gO3/mole VOC) values, since equal numbers of moles have equal numbers of molecules.

Based on the mass MIR (gO3/g VOC) value for HFO-1234ze being equal to or less than that of ethane, the EPA proposed to find that HFO-1234ze is “negligibly reactive” and to exempt HFO-1234ze from the regulatory definition of VOC at 40 CFR 51.100(s). In the proposal, the EPA noted that the EPA's New Chemicals program under the Toxic Substances Control Act (TSCA) and the EPA's SNAP program under the CAA have both reviewed HFO-1234ze for potential risks to human health and the environment. After considering all relevant data currently available, the EPA was unable to find any unreasonable risks to human health or the environment from the expected use of HFO-1234ze. Based on this finding, the EPA did not find it necessary to take any actions to prevent unreasonable risk under TSCA. The SNAP program has issued determinations of acceptability for HFO-1234ze as an acceptable substitute for certain ozone depleting substances in a number of foam blowing end uses, as a refrigerant in non-mechanical heat transfer and as a propellant as stated in Section I.

There were four comments submitted to the docket during the public comment period. One comment was from the petitioning manufacturer Honeywell. One comment came from a manufacturer of products containing the compound. This commenter wrote that as a manufacturer of high quality specialty chemicals and supplies for electronic maintenance and repair, it considers HFO-1234ze to be a potential alternative to products containing higher global-warming potential compounds such as HFC-134a and HFC-152a. It further stated that in order for this product to be marketed in all parts of the U.S., it is essential that it be classified as a non-VOC. Separate comments came from two trade associations. All comments were in favor of exempting HFO-1234ze. None of the comments opposed using the gO3/g VOC basis. The one comment which addressed that issue supported the use of the MIR on a gO3/g VOC basis for granting exemptions.

The EPA is amending its definition of VOC at 40 CFR 51.100(s) to exclude HFO-1234ze as a VOC for ozone SIP and ozone control purposes. States are not obligated to exclude HFO-1234ze from control as a VOC. However, states may not take credit for controlling HFO-1234ze in their ozone control strategies.

In our October 17, 2011, proposal (76 FR 64059), we also proposed to exempt 2,3,3,3-tetrafluoropropene (also known as HFO-1234yf) from the definition of VOC. We are not taking final action on that proposal at this time.

This action is not a “significant regulatory action” under the terms ofExecutive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

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

The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions. For purposes of assessing the impacts of this notice on small entities, small entity is defined as: (1) A small business that is a small industrial entity as defined in the U.S. Small Business Administration (SBA) size standards. (See13 CFR 121.201); (2) A governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) A small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

After considering the economic impacts of this final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. This final rule will not impose any requirements on small entities.

This action contains no federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for state, local or tribal governments or the private sector. The action imposes no enforceable duty on any state, local or tribal governments, or the private sector. Therefore, this action is not subject to the requirements of sections 202 and 205 of the UMRA.

This action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments.

This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. This action addresses the exemption of a chemical compound from the VOC definition. Thus, Executive Order 13132 does not apply to this rule.

This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have substantial direct effects on tribal governments, on the relationship between the federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes as specified in Executive Order 13175. Thus, Executive Order 13175 does not apply to this rule.

This action is not subject to EO 13045 (62 FR 19885, April 23, 1997) because it is not economically significant as defined in EO 12866. While this final rule is not subject to the Executive Order, the EPA has reason to believe that ozone has a disproportionate effect on active children who play outdoors (62 FR 38856; 38859, July 18, 1997). The EPA has not identified any specific studies on whether or to what extent this chemical compound may affect children's health.

This action is not a “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. This action revises the EPA's definition of VOCs for purposes of preparing SIPs to attain the NAAQS for ozone under title I of the CAA.

Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, section 12(d), (15 U.S.C. 272 note) directs the EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures and business practices) that are developed or adopted by voluntary consensus standards bodies. The NTTAA directs the EPA to provide Congress, through OMB, explanations when the agency decides not to use available and applicable voluntary consensus standards. This action does not involve technical standards. Therefore, the EPA is not considering the use of any voluntary consensus standards.

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

The EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it will not affect the level of protection provided to human health or the environment.

The Congressional Review Act, 5 U.S.C. 801 et 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 Congress and to the Comptroller General of the United States. Section 804 exempts from section 801 the following types of rules: (1) Rules of particular application; (2) rules relating to agency management or personnel; and (3) rules of agency organization, procedure or practice that do not substantially affect the rights or obligations of non-agency parties, 5 U.S.C. 804(3). The EPA is not required to submit a rule reportregarding this action under section 801 because this is a rule of particular applicability to manufacturers and users of these specific exempt chemical compounds. This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective on July 23, 2012.

Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the District of Columbia Circuit Court within 60 days from the date the final action is published in theFederal Register. Filing a petition for review by the Administrator of this final action 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 must be final, and shall not postpone the effectiveness of such action. Thus, any petitions for review of this action related to the exemption of HFO-1234ze from the definition of VOC must be filed in the Court of Appeals for the District of Columbia Circuit within 60 days from the date final action is published in theFederal Register.

For reasons set forth in the preamble, part 51 of chapter I of title 40 of the Code of Federal Regulations is amended as follows:

This document announces that, on May 29, 2012, OMB approved, for a period of 3 years, information collection requirements contained in the Commission'sOrder,FCC 11-161, published at 76 FR 73830, November 29, 2011. The OMB Control Number is 3060-0298. The Commission publishes this notice as an announcement of the effective date rules requiring OMB approval. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email tofcc504@fcc.govor call the Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507), the FCC is notifying the public that it received OMB approval on May 29, 2012, for the information collection requirements contained in the Commission's rules at §§ 61.3(bbb)(2) and 69.3(e)(12).

Under 5 CFR 1320, an agency may not conduct or sponsor a collection of information unless it displays a current, valid OMB Control Number.

No person shall be subject to any penalty for failing to comply with a collection of information subject to the Paperwork Reduction Act that does not display a current, valid OMB Control Number. The OMB Control Number is 3060-0298.

The foregoing notice is required by the Paperwork Reduction Act of 1995, Public Law 104-13, October 1, 1995, and 44 U.S.C. 3507.

The total annual reporting burdens and costs for the respondents are as follows:

Estimated Annual Burden:7,350 responses; 20 hours to 50 hours; 215,500 hours.

Obligation to Respond:Required to obtain or retain benefits. Statutory authority for this information collection is contained in 47 U.S.C. 201, 202, 203, and 251(b)(5) of the Communications Act of 1934, as amended.

Needs and Uses:On November 18, 2011, the Commission adopted theOrder,FCC 11-161, published at 76 FR 73830, November 29, 2011, that requires or permits incumbent and competitive local exchange carriers as part of transitioning regulation of interstate and intra-state switched access rates and reciprocal compensation rates to bill-and-keep under section 251(b)(5) of the Communications Act of 1934, as amended, to file tariffs with state commissions and the FCC. This transition affects different switched access rates at specified timeframes and establishes an Access Recovery Charge by which carriers will be able to assess end uses a monthly charge to recover some or all of the revenues they are permitted to recover resulting from reductions in intercarrier compensation rates. The information collected through a carrier's tariff is used by the Commission and state commissions to determine whether services offered are just and reasonable as the Act requires. The tariffs and any supporting documentation are examined in order todetermine if the services are offered in a just and reasonable manner.