I. Background

In 2011, the NRC published the Decommissioning Planning Rule (DPR) (June 17, 2011, 76 FR 33512). The DPR applies to the operational phase of a licensed facility, and requires licensees to operate in a way to minimize spills, leaks, and other unplanned releases of radioactive contaminants into the environment. It also requires licensees to check periodically for radiological contamination throughout the site, including subsurface soil and groundwater. Subsequently, to describe and make available to the public information on methods that are acceptable to the NRC staff for implementing this part of the regulations, the NRC published for comment DG-4014, “Decommissioning Planning During Operations” (December 13, 2011, 76 FR 77431). The NRC received more than 100 comments on the draft guide resulting in modifications to the draft on which the NRC staff believes public comment is appropriate. Therefore, the NRC is issuing a revision to the draft guidance (ML12179A246) that responds to the comments on the initial version.

Many of the comments provided during the initial comment period on DG-4014 stated that more information about specific actions for different types of licensee should be included in the regulatory guide. Additionally, some of the comments also called for more information on how a licensee could determine in which category it fell and what actions it must take. Some commenters indicated that the NRC should identify conditions that would, in effect, exempt certain licensees with limited activities or inventories from the sampling requirements of the rule. One comment stated the guidance should not,de facto,impose backfit requirements on licensees, and others stated the guide should address restricted release of a site. In response to the comments received, the NRC staff has revised the draft guide.

To facilitate the understanding of the public and other stakeholders of the issues addressed in the draft guide and the procedures for the submission of comments, the NRC staff has scheduled a public Webinar from 11:30 a.m. to 4:30 p.m. (EDT) on July 12, 2012. Webinar participants will be able to view the presentation slides prepared by the NRC and electronically submit comments over the Internet. Participants must register to participate in the Webinar. Registration information may be found in the meeting notice (ML12179A347). The meeting notice is also available on the NRC's public Web site athttp://www.nrc.gov/public-involve/public-meetings/index.cfm.Additionally, the final agenda for the public Webinar and the revised draft regulatory guide will be posted no fewer than 10 days prior to the Webinar at this Web site. Those who are unable to participate via Webinar may also participate via teleconference. For details on how to participate via teleconference, please contact Sarah Achten, telephone: 301-415-6009; email:sarah.achten@nrc.gov;or T.R. Rowe, telephone: 301-415-8008; email:t.rowe@nrc.gov.

On June 15, 2012, FHFA published for comment in theFederal Registera proposed rule, and invited comments.See77 FR 36086. The comment period for the proposed rule was originally scheduled to close on July 30, 2012; but, FHFA determined to extend the comment period an additional 45 days, changing the deadline for submitting comments on the proposed rule from July 30, 2012 to September 13, 2012.

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

Communications should identify both docket numbers (FAA Docket No. FAA 2012-0617 and Airspace Docket No. 12-ANM-18) and be submitted in triplicate to the Docket Management System (seeADDRESSESsection for address and phone number). You may also submit comments through the Internet athttp://www.regulations.gov.

Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2012-0617 and Airspace Docket No. 12-ANM-18” . The postcard will be date/time stamped and returned to the commenter.

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

An electronic copy of this document may be downloaded through the Internet athttp://www.regulations.gov.Recently published rulemaking documents can also be accessed through the FAA's web page athttp://www.faa.gov/airports_airtraffic/air_traffic/publications/airspace_amendments/.

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see theADDRESSESsection for the address and phone number) between 9 a.m. and 5 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 1601 Lind Avenue SW., Renton, WA 98057.

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

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by establishing Class E airspace at Trinchera Ranch Airstrip Airport, Fort Garland, CO to accommodate aircraft using the new RNAV (GPS) standard instrument approach procedures at Trinchera Ranch Airstrip Airport. This action would enhance the safety and management of aircraft operations at the airport.

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

The FAA has determined this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation; (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under 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 this proposed rule, when promulgated, would not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

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

This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures” prior to any FAA final regulatory action.

Accordingly, pursuant to the authority delegated to me, the Federal Aviation Administration proposes to amend 14 CFR part 71 as follows:

On April 28, 2011, the Commission published in theFederal Registera notice of proposed rulemaking that would establish initial and variation margin requirements on uncleared swaps for SDs and MSPs.4 In October 2011, BCBS and IOSCO established the WGMR to develop harmonized international standards for uncleared swaps. BCBS and IOSCO recently published a consultative paper prepared by the WGMR that outlines possible margin requirements for non-centrally cleared derivatives.5 The consultative paper addresses a number of topics, including: (i) The instruments that would be subject to margin requirements; (ii) the market participants to be subject to margin requirements; (iii) initial margin and variation margin methodology; (iv) eligible collateral; (v) treatment of provided margin; (vi) treatment of inter-affiliate transactions; and vii) treatment of cross-border transactions.6

BCBS and IOSCO are requesting comment on the initial proposals set forth in the consultative paper. After reviewing and evaluating any comments received, the WGMR will issue final policy recommendations for margin requirements for non-centrally cleared derivatives.7 As part of the international effort to implement consistent global standards for margin requirements for non-centrally cleared derivatives, the CFTC will consider the final policy recommendations set forth by the WGMR when adopting its final rules for margin for uncleared swaps and may adapt its final rules to conform with the final policy recommendations set forth by BCBS and IOSCO. Accordingly, the Commission believes it is appropriate to extend the comment period for its proposed margin requirements in order to give interested parties the opportunity to comment on the consultative paper and the CFTC's proposed rule concurrently.

Therefore, the Commission is extending the comment period until September 14, 2012, for all aspects of its proposed margin rules on uncleared swaps and specifically requests quantitative data and analysis on the comparative costs and benefits of the CFTC's proposed rule and the initial proposals set forth in the consultative paper.

On July 21, 2010, President Obama signed Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”),4 which amended the CEA and established a new regulatory framework for swaps. The legislation was enacted to reduce systemic risk, increase transparency, and promote market integrity within the financial system by, among other things: (1) Providing for the registration and comprehensive regulation of swap dealers (each, an “SD”) and major swap participants (each, an “MSP”); (2) imposing clearing and trade execution requirements on standardized derivative products; (3) creating rigorous recordkeeping and data reporting regimes with respect to swaps, including real-time public reporting; and (4) enhancing the Commission's rulemaking and enforcement authorities over all registered entities, intermediaries, and swap counterparties subject to the Commission's oversight.

To implement the Dodd-Frank Act, the Commission has promulgated rules pursuant to the various new provisions of the CEA, including those specifically applicable to SDs and MSPs. Examples of such provisions include CEA section 4s(a) (governing registration of SDs and MSPs)5 and section 4s(j) (requiring SDs and MSPs to establish a comprehensive internal risk management program).6 Rules to implement other requirements in the provisions of the CEA have been proposed but not finalized. These include CEA section 4s(e) (governing capital and margin requirements for SDs and MSPs)7 and CEA section 4s(i) (relating to the timely and accurate processing and netting of swaps entered by SDs and MSPs).8

Further, the Commission approved for publication a proposed interpretive guidance and policy statement (“Cross-Border Interpretive Guidance”) on the application of the CEA's swap provisions and the implementing Commission regulations to cross-border activities and transactions.9 A brief overview of the Cross-Border Interpretive Guidance follows.

To provide greater clarity to market participants regarding their obligations under the Dodd-Frank Act, the Commission has published the Cross-Border Interpretive Guidance. Broadly speaking, the Cross-Border Interpretive Guidance sets forth the manner in which the Commission proposes to interpret section 2(i) of the CEA10 as it applies to the requirements under the Dodd-Frank Act and the Commission's regulations promulgated thereunder regarding cross-border swap activities.

Specifically, in the Cross-Border Interpretive Guidance, the Commission described the general manner in which it proposes to consider: (1) Whether a non-U.S. person's swap dealing activities are sufficient to require registration as a “swap dealer”,11 as further defined in a joint release adopted by the Commission and the SEC (collectively, the “Commissions”); (2) whether a non-U.S. person's swap positions are sufficient to require registration as a “major swap participant”,12 as further defined in a joint release adopted by the Commissions;13 and (3) the treatment of foreign branches, agencies, affiliates, and subsidiaries of U.S. SDs and of U.S. branches of non-U.S. SDs. The Cross-Border Interpretive Guidance also proposes, in certain circumstances, to permit a non-U.S. SD or non-U.S. MSP to comply with comparable and comprehensive foreign regulatory requirements in order to satisfy applicable statutory and regulatory requirements under Title VII of the Dodd-Frank Act.14 Finally, the Cross-Border Interpretive Guidance sets forth the manner in which the Commission proposes to interpret section 2(i) of the CEA as it applies to the clearing,trading, and certain reporting requirements under the Dodd-Frank Act with respect to swaps between counterparties that are not SDs or MSPs.

In order to ensure an orderly transition to the Dodd-Frank Act's regulatory regime and to provide certainty to market participants and in response to commenters' requests,15 the Commission is proposing to provide temporary exemptive relief pursuant to section 4(c) of the CEA.16 Specifically, the relief would allow non-U.S. SDs and non-U.S. MSPs17 to delay compliance with certain Entity-Level Requirements (as defined below) under the Dodd-Frank Act (and the Commission's regulations thereunder), subject to specified conditions described herein. Under the proposed relief, non-U.S. SDs and non-U.S. MSPs would be afforded additional time to prepare for the application of the Entity-Level Requirements with assurances that they would not be in violation of the CEA as a result. This would, in turn, facilitate an orderly transition to the Entity-Level Requirements of the Dodd-Frank Act regulatory regime, while minimizing undue disruptions to current market operations.

An exception to the foregoing relief from the Entity-Level Requirements relates to the Swap Data Repository (“SDR”) reporting requirement18 and part 20 of the Commission's regulations (“Large Trader Reporting”). Specifically, non-U.S. SDs and non-U.S.MSPs would be required to comply with the SDR reporting requirement for all swaps with U.S. person counterparties (“U.S. counterparties”), upon its compliance date. Under the proposed exemptive order, the reporting obligations of an SD under the Large Trader Reporting regulations would apply (or not apply) in the same manner as the SDR reporting requirements would apply (or not apply) to such SD.

However, under the proposed exemptive order, non-U.S. SDs and non-U.S. MSPs that are not affiliates or subsidiaries of a SD would be permitted to delay compliance with the SDR reporting requirement for swaps with non-U.S. counterparties. The Commission believes that this approach would facilitate such registrants' phasing in of their compliance with the SDR reporting requirement, without substantially undermining the regulatory objectives of SDR reporting. The Commission is not proposing to extend similar relief to non-U.S. SDs and non-U.S. MSPs that are affiliates or subsidiaries of a U.S. SD given the Commission's supervisory interest in data related to the swap activities of non-U.S. SDs and non-U.S. MSPs that are part of a U.S.-based affiliated group.

The Commission also proposes to grant, with respect to Transaction-Level Requirements (as defined below), temporary relief to non-U.S. SDs and non-U.S. MSPs, as well as foreign branches of U.S. SDs and U.S. MSPs, for swaps with a non-U.S. counterparty in order that they comply only with the regulations as may be required in the home jurisdiction of the non-U.S. SD or non-U.S. MSP (or in the case of foreign branches of a U.S. SD or a U.S. MSP, the foreign location of the branch).19 With respect to swaps with a U.S. counterparty, however, these registrants would be required to comply with all applicable Transaction-Level Requirements that are in effect. Given the nature of these requirements (i.e.,they may be applied on a transaction-by-transaction basis) and their importance to the protection of U.S. counterparties, the Commission would require non-U.S. SDs and non-U.S. MSPs, as well as foreign branches of U.S. SDs and U.S. MSPs, to comply with all applicable Transaction-Level Requirements with respect to such counterparties.20

The relief for non-U.S. SDs and non-U.S. MSPs (and foreign branches of U.S. SDs and U.S. MSPs with respect to Transaction-Level Requirements) would become effective on the compliance date for registration of SDs and MSPs and expire 12 months following the publication of this proposed order in theFederal Register. The Commission is committed to an orderly transition to the Dodd-Frank Act's regulatory regime. In furtherance of that objective, the Commission intends to consider extending the effectiveness of this exemptive relief at its expiration based on, among other things, whether and when substituted compliance with foreign regulatory requirements for non-U.S. persons is available.

With respect to U.S. SDs and U.S. MSPs, the Commission proposes to permit such registrants to delay compliance with certain Entity-Level Requirements under the Dodd-Frank Act (and the Commission's regulations thereunder) until January 1, 2013. Under the proposed relief, U.S. SDs and U.S. MSPs would be afforded additional time to prepare for the application of the Entity-Level Requirements so as to ensure an orderly transition, while minimizing undue disruptions to current market operations. This relief with respect to Entity-Level Requirements, however, does not extend to swap data recordkeeping, SDR reporting or Large Trader Reporting requirements. That is, U.S. SDs and U.S. MSPs would be required to comply with the swap data recordkeeping, SDR and Large Trader Reporting requirements for all swaps. Finally, the Commission reiterates that a U.S. person would be expected to apply for registration as an SD or MSP by the effective date of the Swap Definitional Rule.

Finally, the relief for U.S. SDs and U.S. MSPs (with respect to Entity-Level Requirements) would be effective until January 1, 2013. The Commission believes that allowing U.S. registrants additional time as specified is appropriate in light of the importance of implementing the Dodd-Frank Act regulatory regime as expeditiously as possible while taking due consideration of the need for U.S. registrants to effect an orderly transition to the new regulatory regime.

Under this proposal, a non-U.S. SD or non-U.S. MSP seeking relief from the specified Entity-Level Requirements must satisfy certain conditions. First, the non-U.S. person that is required to register as an SD or MSP must apply to become registered as such when registration is required. Second, within60 days of applying for registration, the non-U.S. applicant would be required to submit to the National Futures Association (“NFA”) a compliance plan addressing how it plans to comply, in good faith, with all applicable requirements under the CEA and related rules and regulations upon the effective date of the Cross-Border Interpretive Guidance.21

At a minimum, such plan would provide, for each Entity-Level and Transaction-Level Requirement, a description of: (1) Whether the non-U.S. SD or non-U.S. MSP plans to comply with each of the Entity-Level and Transaction-Level Requirements that are in effect at such time or plans to seek a comparability determination and rely on compliance with one or more of the requirements of the home jurisdiction, as applicable; and (2) to the extent that the non-U.S. SD or non-U.S. MSP would seek to comply with one or more of the requirement(s) of the home jurisdiction, a description of such requirement(s). The Commission notes that such person may modify or alter the compliance plan as appropriate, provided that they submit any such amended plan to NFA.22

The Commission further notes that the proposed relief does not limit the applicability of any CEA provision or Commission regulation to any person, entity or transaction except as provided in the proposed order. In addition, the proposed relief would not affect any effective date or compliance date set out in any specific Dodd-Frank Act rulemaking by the Commission.

Section 4(c)(1) of the CEA authorizes the Commission to “promote responsible economic or financial innovation and fair competition” by exempting any transaction or class of transaction from any of the provisions of the CEA (subject to certain exceptions) where the Commission determines that the exemption would be consistent with the public interest.23 Under section 4(c)(2) of the CEA, the Commission may not grant exemptive relief unless it determines that: (1) The exemption is appropriate for the transaction and consistent with the public interest; (2) the exemption is consistent with the purposes of the CEA; (3) the transaction will be entered into solely between “appropriate persons”;24 and (4) the exemption will not have a material adverse effect on the ability of the Commission or any contract market to discharge its regulatory or self-regulatory responsibilities under the CEA.25 The Commission may grant such an exemption by rule, regulation or order, after notice and opportunity for hearing, and may do so on application of any person or on its own initiative. In enacting section 4(c), Congress noted that the goal of the provision is to give the Commission a means of providing certainty and stability to existing and emerging markets so that financial innovation and market development can proceed in an effective and competitive manner.26

As noted earlier, the Commission is proposing to issue this relief in order to ensure an orderly transition to the Dodd-Frank Act regulatory regime and to provide greater legal certainty to market participants regarding their obligations under the CEA with respect to their cross-border activities. The proposed relief also would advance the congressional mandate concerning harmonization of international standards, consistent with section 752(a) of the Dodd-Frank Act. In that section, Congress directed that, in order to “promote effective and consistent global regulation of swaps and security-based swaps,” the Commission, “as appropriate, shall consult and coordinate with foreign regulatory authorities on the establishment of consistent international standards with respect to the regulation” of swaps and security-based swaps.27 The proposed relief, by providing U.S. and non-U.S. registrants the latitude necessary to develop and modify their compliance plans as the regulatory structure in their home jurisdiction changes, would promote greater regulatory consistency and coordination with international regulators.

The Commission emphasizes that the proposed order is temporary in duration and reserves the Commission's anti-fraud and anti-manipulation enforcement authority. As such, the Commission believes that the proposed order would be consistent with the public interest and purposes of the CEA. For similar reasons, the Commission believes that the proposed order would not have a material adverse effect on the ability of the Commission or any contract market to discharge its regulatory or self-regulatory duties under the CEA. Finally, the Commission believes that the order would be limited to appropriate persons within the meaning of section 4c(3)(K) since the SDs and MSPs eligible for the relief are likely to be financial institutions active in the swaps market.28 The Commission seeks comment on whether the proposed temporary exemptive order is consistent with the public interest and the other requirements of CEA section 4(c).

In the Cross-Border Interpretive Guidance, the Commission proposes to interpret the term “U.S. person” by reference to the extent to which swap activities or transactions involving one or more such persons have the relevant effect on U.S. commerce. Specifically, as proposed, the term “U.S. person” would include, but not be limited to: (1) Any natural person who is a resident of the United States; (2) any corporation, partnership, limited liability company, business or other trust, association, joint-stock company, fund, or any form of enterprise similar to any of the foregoing, in each case either (A) organized or incorporated under the laws of the United States29 or having its principal place of business in the United States (“legal entity”) or (B) in which the direct or indirect owners thereof are responsible for the liabilities of such entity and one or more of suchowners is a U.S. person; (3) any individual account (discretionary or not) where the beneficial owner is a U.S. person; (4) any commodity pool, pooled account, or collective investment vehicle (whether or not it is organized or incorporated in the United States) of which a majority ownership or equity interest is held, directly or indirectly, by a U.S. person(s); (5) any commodity pool, pooled account, or collective investment vehicle the operator of which would be required to register as a commodity pool operator under the CEA; (6) a pension plan for the employees, officers, or principals of a legal entity with its principal place of business inside the United States; and (7) an estate or trust, the income of which is subject to United States income tax regardless of source.

Under the interpretation of the term “U.S. person” in the Cross-Border Interpretive Guidance, a foreign branch or agency of a U.S. person would be covered by virtue of the fact that it is an extension of a U.S. person. By contrast, a foreign affiliate or subsidiary of a U.S. person would be considered a non-U.S. person. Solely for purposes of the temporary exemptive relief provided in the proposed order, the Commission adopts the interpretation of the term “U.S. person” as set forth in the Cross-Border Interpretive Guidance.

Solely for purposes of the temporary exemptive relief provided in the proposed order, the Commission incorporates the proposed categories of Entity-Level and Transaction-Level Requirements, as set forth in the Cross-Border Interpretive Guidance.

In the Cross-Border Interpretive Guidance, the Commission proposes to divide the Dodd-Frank Act requirements that would apply to SDs and MSPs into those that: (1) Apply to an SD or MSP at an entity level (i.e.,to the firm as a whole); and (2) apply at a transactional level (i.e.,to specific transactions). Specifically, the entity-level requirements under Title VII of the Dodd-Frank Act and the Commission's regulations promulgated thereunder relate to: (1) Capital adequacy; (2) chief compliance officer; (3) risk management; (4) swap data recordkeeping; (5) reporting to an SDR; and (6) physical commodity swaps reporting (collectively, the foregoing requirements are referred to herein as “Entity-Level Requirements”). The first subcategory of Entity-Level Requirements relating to capital adequacy, chief compliance officer, risk management, and swap data recordkeeping relate to risks to a firm as a whole. These requirements address and manage risks that arise from a firm's operation as an SD or MSP. Individually, they represent a key component of a firm's internal risk controls. Collectively, they constitute a firm's first line of defense against financial, operational, and compliance risks that could lead to a firm's default or failure. In short, these requirements relate to risks to a firm as a whole.

At the core of a robust internal risk controls system is the firm's capital—and particularly, how the firm identifies and manages its risk exposure arising from its portfolio of activities.30 Equally foundational to the financial integrity of a firm is an effective internal risk management process, which must be comprehensive in scope and reliant on timely and accurate data regarding its swap activities. To be effective, such system must be under the supervision of a strong and independent function. These internal controls-related requirements—namely, the requirements relating to chief compliance officer, risk management, swap data recordkeeping—are designed to serve that end.

No less important to the financial integrity of a firm is the SDR reporting requirement. SDR reporting ensures the Commission access to the information it needs to effectively supervise the risk exposure of its registrants and, thus, serves to lower their risk of failure. Given the functions of these reporting requirements, each must be applied on a firm-wide basis, across all swaps, in order to ensure that the Commission has a comprehensive and accurate picture of its activities. Otherwise, the intended benefits of these Entity-Level Requirements would be significantly compromised, if not undermined.

Each of the Entity-Level Requirements is summarized below.

Section 4s(e)(3)(A) of the CEA specifically directs the Commission to set capital requirements for SDs and MSPs that are not subject to the capital requirements of prudential regulators (hereinafter referred to as “non-bank SDs and MSPs”).31 Pursuant to section 4s(e)(3), the Commission proposed regulations, which would require non-bank SDs and MSPs to hold a minimum level of adjusted net capital (i.e.,“regulatory capital”) based on whether the non-bank SD or MSP is: (1) Also a futures commission merchant (“FCM”); (2) not an FCM, but is a non-bank subsidiary of a bank holding company; or (3) neither an FCM nor a non-bank subsidiary of a bank holding company.32

Section 4s(k) requires that each SD and MSP designate an individual to serve as its chief compliance officer (“CCO”) and specifies certain duties of the CCO.33 Pursuant to section 4s(k), the Commission recently adopted § 3.3, which requires SDs and MSPs to designate a CCO who would be responsible for administering the firm's compliance policies and procedures, reporting directly to the board of directors or a senior officer of the SD or MSP, as well as preparing and filing (with the Commission) a certified report of compliance with the CEA.34

The preamble below is designed to assist readers in understanding these proposed amendments to the Commission Rules. This preamble provides background information, a regulatory analysis of the proposed amendments, a section-by-section explanation of the proposed amendments to parts 201 and 210, and a description of the proposed amendments to the rules. The Commission encourages members of the public to comment on whether the language of the proposed amendments is sufficiently clear for users to understand, in addition to any other comments they wish to make on the proposed amendments.

If the Commission decides to proceed with this rulemaking after reviewing the comments filed in response to this notice, the proposed rule revisions will be promulgated in accordance with the applicable requirements of the Administrative Procedure Act (“APA”) (5 U.S.C. 553), and will be codified in 19 CFR Parts 201 and 210.

Section 335 of the Tariff Act of 1930 (19 U.S.C. 1335) authorizes the Commission to adopt such reasonable procedures, rules, and regulations as it deems necessary to carry out its functions and duties. This rulemaking seeks to improve provisions of the Commission's existing Rules of Practice and Procedure. The Commission proposes amendments to its rules covering investigations under section 337 of the Tariff Act of 1930 (19 U.S.C. 1337) (“section 337”) in order to increase the efficiency of its section 337 investigations.

This rulemaking was undertaken to make certain technical corrections, to clarify certain provisions, to harmonize different parts of the Commission's rules, and to address concerns that have arisen in Commission practice. The intended effect of the proposed amendments is to facilitate compliance with the Commission's Rules and improve the administration of agency proceedings.

On February 14, 2012, at 77 FR 8114, the Commission published a Plan for Retrospective Analysis of Existing Rules. This plan was issued in response to Executive Order 13579 of July 11, 2011, and established a process under which the Commission will periodically review its significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency's regulatory program more effective or less burdensome in achieving regulatory objectives. During the two years following the publication of the plan, the Commission expects toreview a number of aspects of its rules. This includes a general review of existing regulations in 19 CFR Parts 201, 207, and 210. The current notice of proposed rulemaking is consistent with the plan to ensure that the Commission's rules are effective, although it should be noted that many of the amendments proposed in this notice have been under consideration since before the plan was established.

The Commission invites the public to comment on all of these proposed rules amendments. In any comments, please consider addressing whether the language of the proposed amendments is sufficiently clear for users to understand. In addition please consider addressing how the proposed rules amendments could be improved, and offering specific constructive alternatives where appropriate.

Consistent with its ordinary practice, the Commission is issuing these proposed amendments in accordance with the applicable requirements of section 553 of the APA. This procedure entails the following steps: (1) Publication of a notice of proposed rulemaking; (2) solicitation of public comments on the proposed amendments; (3) Commission review of public comments on the proposed amendments; and (4) publication of final amendments at least thirty days prior to their effective date.

The Commission has determined that the proposed rules do not meet the criteria described in section 3(f) of Executive Order 12866 (58 FR 51735, Oct. 4, 1993) and thus do not constitute a significant regulatory action for purposes of the Executive Order.

The Regulatory Flexibility Act (5 U.S.C. 601et seq.) is inapplicable to this rulemaking because it is not one for which a notice of final rulemaking is required under 5 U.S.C. 553(b) or any other statute. Although the Commission has chosen to publish a notice of proposed rulemaking, these proposed regulations are “agency rules of procedure and practice,” and thus are exempt from the notice requirement imposed by 5 U.S.C. 553(b).

These proposed rules do not contain federalism implications warranting the preparation of a federalism summary impact statement pursuant to Executive Order 13132 (64 FR 43255, Aug. 4, 1999).

No actions are necessary under the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501et seq.) because the proposed rules will not result in expenditure in the aggregate by State, local, and tribal governments, or by the private sector, of $100,000,000 or more in any one year, and will not significantly or uniquely affect small governments, as defined in 5 U.S.C. 601(5).

The proposed rules are not major rules as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996 (5 U.S.C. 801et seq.). Moreover, they are exempt from the reporting requirements of the Contract With America Advancement Act of 1996 (Pub. L. 104-121) because they concern rules of agency organization, procedure, or practice that do not substantially affect the rights or obligations of non-agency parties.

The amendments are not subject to section 3504(h) of the Paperwork Reduction Act (44 U.S.C. 3504(h)).

Section 201.16(a) generally provides means to serve documents on parties. Section 201.16(b)(3) indicates that “When service is by mail, it is complete upon mailing of the document” for service by the parties. To eliminate confusion, the proposed rule would indicate that this is equally applicable to service by the Commission. Further, the proposed rule would clarify that overnight delivery is an option for service by the Commission. In this connection, the proposed rule would indicate that when service is by overnight delivery, it is complete upon placing/submitting the document in overnight delivery.

Section 201.16(c) generally provides for a certificate of service. The Commission proposes to amend § 201.16(c) to refer to other applicable requirements for service in § 210.4(i), in addition to the current reference to § 201.8.

Section 201.16(e) generally provides for additional days to be added to the response times when service is by overnight delivery. For example, § 201.16(e) provides ten additional days when service is by mail to a foreign country, but only provides one day for overnight delivery service regardless of when delivery occurs. The reality of overnight delivery service is that it often takes more than one day to reach certain foreign countries. The proposed rule would add five additional calendar days to the response time when overnight delivery service is to a foreign country.

Section 201.16(f) generally provides for electronic service of documents in matters before the Commission with the appropriate prior consent. Section 201.16(e) provides additional time to be added to the response times when service is by mail or overnight mail. The proposed rule would clarify that no additional time is added to the response times when service is by electronic means. The Commission expects the parties or the judges to establish a time of day by which email will be sent.

Section 210.3 provides definitions for certain terms used in Part 210. The proposed rule would supply “ancillary proceeding” as a synonym for the term “related proceeding,” using the same definition.

Section 210.4 generally provides the requirements for written submissions. Section 210.4(f)(3) sets forth a list of submissions which must be filed electronically, with true paper copies filed by noon on the next business day. The proposed rule would amend § 210.4(f)(3) by adding filings under §§ 210.38, 210.66, and 210.70 to this list.

Section 210.5 generally provides for special treatment of confidential business information in section 337 investigations. Where the Commission or the administrative law judge issues a confidential version of an order, initial determination, opinion, or other document, the time to issuance of the public version may vary. The Commission proposes to provide that the Commission (or the presiding administrative law judge, if the administrative law judge has issued the document) will issue the public version of the document within 30 days of issuance of the confidential version, unless good cause exists for extending this deadline. The administrative law judge or the Commission may extend this time by order.

Section 210.6 generally provides for the computation of time in section 337 investigations, and supplements §§ 201.14 and 201.16, which provide thegeneral rules for computation of time in proceedings before the Commission. The current rule mistakenly refers to §§ 210.14 and 210.16. The proposed rule revises § 210.6 to refer to the appropriate subsections of §§ 201.14 and 201.16. Further, the proposed rule would amend § 210.6(c) to refer to the proposed rule for § 201.16(e) to provide that the response time is enlarged by a total of 5 calendar days when service is by overnight delivery to a foreign country. In addition, the proposed rule would remove § 210.6(d) which is redundant in light of § 201.16(e).

Section 210.7 generally provides for service of process and publication of notices. The current rule mistakenly refers to § 210.6 rather than § 201.6, the rule on confidential business information. The proposed rule revises § 210.7 to refer to § 201.6 instead of § 210.6. In addition, the proposed rule puts “§ 201.6” closer in the sentence to “confidential business information” to clarify that confidential business information is defined in § 201.6. Further, the proposed rule provides for overnight service of cease and desist orders.

The current rule also mistakenly refers to § 210.7(b)(2) and (b)(1), which do not exist. The proposed rule refers instead to § 210.7(c)(2) and (c)(1), and to § 201.10 which provide for publication of notices.

Section 210.8 generally provides for the filing of the complaint and for filings by the complainant, respondents, and members of the public on the public interest issues raised by the complaint. The Commission proposes to provide that if a complainant, proposed respondent, or member of the public files a confidential submission, it shall file a public version of the submission at the same time.

Section 210.12(a) generally provides the requirements for the contents of a complaint and references § 201.8. Section 201.8, however, has been amended such that it does not apply to section 337 investigations. The Commission proposes to eliminate reference to § 201.8.

19 U.S.C. 1337(a)(1)(B)-(E) prohibit the importation, sale for importation, or sale after importation of articles covered by a valid and enforceable patent, copyright, trademark, mask work, or boat hull design related to an industry that exists or is in the process of being established within the meaning of 19 U.S.C. 1337(a)(2)-(3). 19 U.S.C. 1337(a)(1)(A)(i)-(ii) prohibit unfair methods of competition, or unfair acts in the importation or sale of articles in the United States, the effect of which is to destroy or substantially injure an industry in the United States or prevent the establishment of such an industry. The Commission proposes to amend paragraphs (a)(6)(i) and (ii) to require the complainant to plead with particularity whether it alleges a domestic industry that exists or a domestic industry that is in the process of being established. The amendment is in keeping with the Commission's fact pleading requirements and serves to provide the Commission and the public with notice of the manner in which the complainant believes it satisfies the requirements of section 337.

In addition, the Commission proposes to amend paragraph (11) to require the complainant to specify if it is requesting a general exclusion order, a limited exclusion order, and/or cease and desist orders under 19 U.S.C. 1337(d), (f), or (g). The Commission believes that this amendment serves a public notice function. The requested relief will be stated in the notice requesting public interest comments to facilitate public comment specific to the requested relief, and in the notice of investigation for public notice purposes.See75 FR 60671 (Oct. 1, 2010); 76 FR 64803 (Oct. 19, 2011).

The Commission further proposes to add a paragraph (12) to require the complainant to identify the accused products with a clear statement in plain English in order to put the public on notice of the type of products involved. For example, the caption of the investigation might refer to “certain electronic devices,” but the complaint would provide a further statement to identify the type of products involved in plain English as mobile devices, tablets, or computers. The description of the accused product will be included in theFederal Registernotice requesting public interest comments as well as the notice of investigation.

Section 210.13(b) generally sets forth the requirements for the contents of the response to the complaint, and references § 201.8. Section 201.8, however, has been amended such that it does not apply to section 337 investigations. The proposed rule would eliminate any reference to § 201.8.

Section 210.14 generally provides for amendments to the pleadings and notice of investigation. The Commission proposes to make uniform and codify its practice concerning consolidating related investigations. The proposed rule would add a new paragraph (f) to provide that the Commission may consolidate investigations, that the presiding administrative law judge may consolidate the investigations if both investigations are before the same administrative law judge, and the chief administrative law judge may consolidate investigations if the investigations are before different administrative law judges and both administrative law judges agree that consolidation is appropriate. The caption and investigation number of the consolidated investigation would be a combination of the caption and numbers of the investigations being combined. The investigation number of the lead investigation would be the first investigation number named in the consolidated caption. For example, Investigation Nos. 337-TA-xxxx and 337-TA-yyyy would be combined as 337-TA-xxxx/yyyy where xxxx is the lead investigation. The heading of § 210.14 would be amended to include consolidation of investigations.

The Commission further proposes to address the filing of substantial amendments to complaints during the pre-institution review period, a practice which has become increasingly common. Many of these amendments have attempted to significantly change the scope of the requested investigation either by naming additional proposed respondents or asserting infringement of additional patents or patent claims. Substantial amendments to complaints during the pre-institution review period complicate the Commission's ability to solicit and obtain comments concerning the public interest implications of the complaint in a timely manner, place additional demands on Commission resources to assess the amendments and/or process extensions before the conclusion of the original institution period, and can effectively reduce the 30-day period that proposed respondents normally have to review the allegations against them. The proposed rule change, which would add a new sentence at the end of rule 210.14(a), would alleviate these concerns by providing that if a complainant significantly amends a complaint prior to institution, the amendment will restart the normal 30-day process for determining whether to institute the investigation.

Section 210.14(b)(1) provides for motions to amend the complaint after an investigation has been instituted. Section 210.15 sets forth the general requirements for a motion, and § 210.15(a)(2) contains the more specific requirement that a motion to amend the complaint and notice of investigation to add proposed respondents must be served on each proposed respondent. The proposed rule would move the requirement for service on proposed respondents from § 210.15(a)(2) to § 210.14(b)(1).

Section 210.16 generally provides for default in section 337 proceedings. Section 210.16(b)(1) provides a two-step process for finding a respondent in default where the respondent has failed to appear. First, the complainant may move for an order to show cause why the respondent should not be found in default (or the administrative law judge may issue an order to show causesua sponte). Second, if the respondent fails to make the necessary showing, the administrative law judge may issue an order finding the respondent in default. In certain recent investigations, the complainant has failed to observe the two-part process outlined in § 210.16(b), and has erroneously made a motion for a finding of default, skipping the motion for an order to show cause. In order to clarify the process, the Commission proposes to separate § 210.16(b)(1) into two parts, § 210.16(b)(1)(i) and § 210.16(b)(1)(ii), directed to the show cause step and the default step, respectively.

Section 210.16(c) generally provides the means of relief against a respondent in default. Where the complainant seeks a general exclusion order, § 210.16(c)(2) requires the complainant to put notice in the motion for default or termination of the last remaining respondent that it is seeking a general exclusion order. In certain recent investigations, the complainant has failed to state at the time of requesting relief against the last remaining respondent that it was seeking a general exclusion order. In order to highlight this requirement, the Commission proposes to add headings to indicate that § 210.16(c)(1) is directed to the type of relief available and § 210.16(c)(2) is directed to general exclusion orders. The Commission further proposes to set forth the statutory requirements for a general exclusion order in a statutory default case in § 210.16(c)(2).

Section 210.17 generally addresses failures to act other than failure to appear to answer the complaint and notice of investigation pursuant to § 210.16 and 19 U.S.C. 1337(g)(1)(C). Section 210.17 provides that the administrative law judge or the Commission may draw adverse inferences for these other failures to act. The Commission proposes to provide that a respondent who appears but who later wishes to default may subsequently file a notice of its intention to default. This subsequent default will be treated the same as other failures to act in this section, and the administrative law judge or Commission may draw adverse inferences in the same manner. The Commission further proposes to retitle the section “Other Failure to Act and Default.”

Section 210.21 generally provides for termination of the investigation prior to a finding of violation of section 337 by withdrawal of the complaint, settlement agreement, or consent order. Section 210.21(b) provides that a motion for termination by reason of a settlement agreement shall contain copies of the settlement agreement, any supplemental agreements, and a statement that there are no other agreements. In certain recent investigations, the complainant has failed to supply the Commission with all the documents referenced in the settlement agreements. In order to clarify this aspect of § 210.21(b), the Commission proposes to add that the parties must provide a copy of any documents referenced in the settlement agreements because these documents are considered part of the settlement agreement.

With respect to § 210.21(c) on termination by consent order, the Commission proposes to clarify § 210.21(c)(3) by providing that consent order stipulations include a statement identifying the asserted intellectual property right or unfair trade practice that is the basis for the alleged violation of Section 337, and whether the stipulation calls for cessation of importation, distribution, sale, or other transfers (other than exportation) of subject articles in the United States and/or specific terms relating to the disposition of existing U.S. inventories of subject articles. The Commission proposes to replace the third sentence of paragraph (c)(1)(ii) to indicate that the consent order stipulation must comply with the requirements of paragraph (c)(3). The Commission further proposes to list the terms in a consent order in a new paragraph (c)(4). The Commission clarifies that, although the consent order stipulations may contain additional terms, the proposed consent order itself cannot add terms beyond what is provided for in this section, and that the Commission will not enforce any terms beyond those provided for in § 210.21(c). In addition, the Commission proposes to require that a party moving to terminate an investigation by consent order must submit a copy of any agreements with any other party, i.e., a copy of any settlement or licensing agreements.

Section 210.28 generally provides for depositions in section 337 investigations. Federal Rule of Civil Procedure 30(b)(6) provides that in its notice of deposition or subpoena, a party may name as the deponent a public or private corporation, partnership, association, government agency, or other entity and must describe with particularity the matters for examination. The organization must then designate one or more officers, directors, or managing agents or other persons who consent to testify on its behalf, and it may set out the matters on which each will testify. There is no Commission rule that requires a party to respond to a notice of deposition, e.g., of a corporate designee, within any particular period of time. This leads to last minute disputes among the parties about the scope of topics upon which the corporate designee will testify. By comparison, other discovery rules, such as § 210.30(b)(2) regarding production of documents and things, § 210.29(b)(2) regarding interrogatories, and § 210.32, as well as the ALJ Ground Rules on subpoenas duces tecum, provide for a ten day period for parties to respond and submit objections. In this connection, the Commission proposes to create a ten-day period in which parties may respond to and make objections to a notice of deposition.

In keeping with the Federal Rules of Civil Procedure, the Commission further proposes to place a limit on the number of depositions that the parties may take. Federal Rule of Civil Procedure 30(a)(2)(A)(i) provides that a maximum of 10 depositions may be taken by the plaintiffs, or by the defendants, or by the third-party defendants unless the parties have stipulated otherwise. This is the general rule for civil cases. Because Commission investigations mayinvolve multiple parties and multiple patent claims, the Commission proposes to limit the number of fact depositions taken. Specifically, the Commission proposes to limit the complainants as a group to a maximum of five fact depositions per respondent or no more than 20 fact depositions, whichever is greater, to limit the respondents as a group to a maximum of 20 fact depositions total, and if the Commission investigative attorney is a party, to limit him or her to taking a maximum of 10 fact depositions and he or she is permitted to participate in all depositions taken by any parties in the investigation. The number of depositions may be increased on written motion to the presiding administrative law judge for good cause shown.

Section 210.29 generally provides for interrogatories in section 337 investigations. In keeping with the ground rules of several of the administrative law judges, the Commission proposes to limit the number of interrogatories. Specifically, each party would be allowed to serve any other party with a maximum of 175 interrogatories, including subparts, absent stipulation by the parties or grant of a written motion by a party to the presiding administrative law judge for good cause shown.

Section 210.34(b) generally provides the steps that a person must take if he finds that he has made an unauthorized disclosure of information. The Commission proposes to amend § 210.34(b) to clarify that the rule also encompasses loss or theft of information.

Section 210.34(c) generally provides for sanctions for violation of a protective order. When a determination on sanctions is pending before the Commission, it is currently unclear from the rules whether the Commission may consider only the recommended determination on sanctions from the administrative law judge or also the orders related to the recommended determination on sanctions. The Commission proposes to clarify that the Commission may consider both the recommended determination on sanctions and also any orders related thereto. To comply with the requirements of the Office of the Federal Register, the Commission would move the text of the Note to Paragraph (c) into the body of paragraph (c). The Commission would thus redesignate the text of the Note as paragraphs (c)(1) and (c)(2). The Commission would redesignate the current body of paragraph (c), which has subparagraphs (1)-(5), as paragraph (c)(3) with subparagraphs (i)-(v).

Section 210.42 generally provides for initial determinations. Under § 210.51, an administrative law judge may set a target date for completion of an original investigation at 16 months or less by order rather than by initial determination. 73 FR 38,322 (July 7, 2008). The Commission proposes to amend section 210.42(c) to conform to § 210.51. In addition, the Commission proposes to amend section 210.42(a)(1)(i) to conform to the proposed amendment to § 210.51, which divides § 210.51(a) into subparagraphs (a)(1) and (a)(2).

The Commission further proposes to amend section 210.42(c) by dividing it into a paragraph (c)(1) for motions which may be granted by initial determination and a paragraph (c)(2) for motions which may be granted or denied by initial determination. In this connection, the Commission proposes to provide that decisions by an administrative law judge on motions for forfeiture or return of respondents' bond pursuant to section 210.50(d) or for forfeiture or return of complainant's temporary relief bond pursuant to section 210.70 shall be made as an initial determination regardless of whether the motion is granted or denied.

Section 210.43 generally provides the timing and contents of a petition for review of an initial determination of the administrative law judge to the Commission. Section 210.43(a) provides that petitions for review of initial determinations issued under § 210.42(c) that would terminate the investigation in its entirety on summary determination must be filed within 10 business days after service of the initial determination. The Commission proposes to correct a technical error. In this connection, the proposed rule would provide 10 days (i.e., 10 calendar days) rather than 10 business days. (Under § 201.14, 10 days means 10 calendar days, unless otherwise specified.)

The Commission further proposes to include a reference in § 210.43(a) and (c) to § 210.75(b)(3), in order to provide that petitions for review of enforcement initial determinations in formal enforcement proceedings are due 10 days after the service of the enforcement initial determination, and responses thereto are due 5 business days after the service of the petitions for review.See§ 210.75,infra.

The Commission proposes a further amendment that relates to attempts by parties to evade the page limits for petitions for review and responses thereto. The Commission proposes to add an express statement prohibiting such attempts to evade the page limit through reference to previously filed pleadings. The Commission notes that this does not represent a change in the substance of the rule. As such, the Commission would reiterate that all arguments not contained within the petition for review, or response thereto, are waived. Even considering the fact that investigations often include multiple patent claims and multiple parties, the Commission considers its 100 page limit to be generous, especially considering that the U.S. Court of Appeals for the Federal Circuit limits opening briefs to 14,000 words or 1,300 lines of monospaced type (approximately 60 pages of 14-point type). Federal Rule of Appellate Procedure 32(a)(7)(B)(i).

Section 210.50 generally provides for the issuance of a limited exclusion order, a general exclusion order, and/or a cease and desist order, and the posting of a bond by the respondents in the case of the issuance of an exclusion order. Section 210.50(a)(4) provides that the Commission may receive submission from the parties, interested persons, and other government agencies regarding the possible issuance of a remedy. The Commission proposes to require that if a party, interested person, or agency files a confidential version of its submission, it shall file a public version of the submission at the same time. Section 210.50(a)(4) also provides that the parties are requested to provide information relating to the statutory public interest factors within 30 days of service of the administrative law judge's recommended determination on remedy and bonding. The Commission proposes to clarify that the limit of 5 pages applies only to submissions under this paragraph, in response to the recommended determination, rather than to all submissions under this section.

Section 210.50(d) states that a motion for return or forfeiture of a bond may be made within 90 days of the expiration of the period of Presidential review. The Commission proposes to add that a motion for return or forfeiture of a bond may be made, if an appeal is taken fromthe Commission determination, within 30 days of the resolution of the appeal. The Commission further proposes to amend the rule to provide that, if the administrative law judge is no longer employed by the Commission, the motion shall be addressed to the chief administrative law judge, rather than to the Commission.

Section 210.51 generally provides that the administrative law judge shall set a target date for completion of an investigation. The Commission proposes to separate paragraph (a) into paragraph (a)(1) pertaining to original investigations and paragraph (a)(2) pertaining to formal enforcement proceedings. With respect to formal enforcement proceedings, the Commission proposes to provide that an administrative law judge may set a target date of 12 months or less by order, and a target date greater than 12 months for completion of a formal enforcement proceeding by initial determination.

Section 210.54 generally provides for service of information that supplements a complaint and pre-institution motions. The revision which became effective August 6, 2008, 73 FR 38,322 (July 7, 2008), omitted a specific reference to a motion for temporary relief, which would provide antecedent basis to the provision that the “complainant must serve non-confidential copies of both documents * * *.” The proposed rule contains an amendment to include a motion for temporary relief in that sentence in order to provide antecedent basis for the phrase “both documents.”

Section 210.56(a) generally provides for the notice that is required to accompany service copies of complaints and motions for temporary relief, and references § 201.8. Section 201.8, however, has been amended such that it does not apply to section 337 investigations. In this connection, the proposed rule would eliminate reference to § 201.8.

Section 210.58 generally provides for provisional acceptance of a motion for temporary relief filed with a complaint, and references § 201.8. Section 201.8, however, has been amended such that it does not apply to section 337 investigations. In this connection, the proposed rule would eliminate reference to § 201.8.

Section 210.59(b) and (c) generally provide for a response to a motion for temporary relief, and reference § 201.8. Section 201.8, however, has been amended such that it does not apply to section 337 investigations. In this connection, the proposed rule would eliminate reference to § 201.8.

Section 210.60 generally provides, with respect to investigations where temporary relief is sought, a designation of a more complicated temporary relief phase of the investigation. The Commission proposes to add a definition of “more complicated,” formerly codified at § 210.22, which had previously been deleted. The designation of “more complicated” no longer applies in most section 337 investigations, but may still be applicable where temporary relief is sought. The Commission further proposes to clarify that it is the temporary relief phase, and not the investigation, which is given the designation “more complicated.”

Section 210.75(b) generally provides for formal enforcement proceedings. InVastfame Camera, Ltd.v.ITC,386 F.3d 1108 (Fed. Cir. 2004), the U.S. Court of Appeals for the Federal Circuit explained that enforcement proceedings are authorized under section 337(b) in the same manner as original investigations for violation of section 337. The Commission proposes to add a sentence to § 210.75(b)(1), and to remove contrary language from § 210.75(b)(3), to clarify that formal enforcement proceedings are conducted in accordance with the laws for original investigations as set forth in 19 U.S.C. 1337 and 5 U.S.C. 554 et seq. and the rules of this Part. The Commission further proposes to provide that the administrative law judge shall issue an enforcement initial determination no later than three months before the target date for formal enforcement proceedings.

There is a parallel proposal in § 210.51 providing that a presiding administrative law judge may set a target date for completion of a formal enforcement proceeding of 12 months or less by order, or greater than 12 months by initial determination. In this connection, the Commission proposes to amend § 210.75(b)(3) to change the length of time for the Commission to determine whether to review of enforcement initial determinations from 90 days to 45 days (from service of the enforcement initial determination). The Commission further proposes to include a reference to § 210.43. There is a parallel proposal in § 210.43, revising § 210.43 to provide that petitions for review of enforcement initial determinations are due within 10 days of service of the enforcement initial determination, and responses thereto are due within 5 business days of service of petitions for review.

Section 210.76 provides for modification and rescission proceedings. The Commission proposes to codify the practice by which parties comment on the recommended determination of the administrative law judge. The Commission proposes that parties may submit comments within 10 days of service of the recommended determination, and may submit responses thereto within 5 business days from service of any comments.

The appendix provides a summary of the filing dates for petitions for review of an initial determination, the filing dates for responses thereto, and the Commission deadline for determining whether to review an initial determination. The Commission proposes to update the appendix pursuant to the proposed rules for this Part, i.e., the timing of petitions of enforcement initial determinations and responses thereto in formal enforcement proceedings, and the deadline for whether to review an enforcement initial determination. The Commission further proposes to organize the contents of the Appendix by the numerical order of the rules referred to.

The Commission proposes to add an Appendix B to summarize the deadlines for comments on recommended determinations for modification and rescission proceedings under § 210.76, and responses thereto.

Table of Contents I. What action is EPA proposing to take? II. What is the background for EPA's proposed action? A. Designation History B. Clean Air Fine Particle Implementation Rule C. Stay of the Transport Rule D. Attaining Data Determination and Finding of Attainment III. What is included in Alabama's attainment plan submittal for Jackson County? IV. What is EPA's analysis of Alabama's attainment plan submittal for Jackson County? A. Attainment Demonstration 1. Pollutants Addressed 2. Emissions Inventory Requirements 3. Modeling 4. Reasonably Available Control Measures/Reasonably Available Control Technology (RACM/RACT) 5. Reasonable Further Progress 6. Contingency Measures 7. Attainment Date B. Insignificance Determination for the Mobile Source Contribution to PM2.5and NOXEmissions V. Proposed Action VI. Statutory and Executive Order Reviews I. What action is EPA proposing to take?

EPA is proposing to approve Alabama's SIP revision for the Alabama portion of the Chattanooga Area, as submitted through the ADEM to EPA on October 7, 2009, for the purpose of demonstrating attainment of the 1997 Annual PM2.5NAAQS. Alabama's PM2.5attainment plan for Jackson County includes an analysis of RACM/RACT, an RFP plan, contingency measures, and an insignificance determination for mobile direct PM2.5and NOXemissions for transportation conformity purposes. EPA previously approved the base year emissions inventory for the Alabama portion of the Chattanooga Area on February 8, 2012 (77 FR 6469).

EPA has determined that Alabama's PM2.5attainment plan for the 1997 Annual PM2.5NAAQS for Jackson County meets the applicable requirements of the CAA and the PM2.5 Implementation Rule. Thus, EPA is proposing to approve Alabama's attainment plan for Jackson County, including the insignificance determination for direct PM2.5and NOXfor Alabama's mobile source contribution to ambient PM2.5levels in the Chattanooga Area. EPA's analysis for this proposed action is discussed in Section IV of this proposed rulemaking.

On July 18, 1997 (62 FR 38652), EPA established the 1997 PM2.5NAAQS as an annual standard of 15.0 micrograms per cubic meter (µg/m3), based on a 3-year average of annual mean PM2.5concentrations, and a 24-hour (or daily) standard of 65 µg/m3, based on a 3-year average of the 98th percentile of 24-hour concentrations. EPA established the NAAQS based on significant evidence and numerous health studies demonstrating that serious health effects are associated with exposures to PM2.5emissions.

Following promulgation of a new or revised NAAQS, EPA is required by the CAA to designate areas throughout the United States as attaining or not attaining the NAAQS; this designation process is described in section 107(d)(1) of the CAA. EPA and state air quality agencies initiated the monitoring process for the 1997 PM2.5NAAQS in 1999 and established a complete set of air quality monitors by January 2001. On January 5, 2005, EPA promulgated initial air quality designations for the 1997 PM2.5NAAQS (70 FR 944), which became effective on April 5, 2005, based on air quality monitoring data for calendar years 2001-2003.

On April 14, 2005, EPA promulgated a supplemental rule amending the Agency's initial designations (70 FR 19844) but retaining the original effective date of April 5, 2005. As a result of that supplemental rule, PM2.5nonattainment designations were in effect for 39 areas, comprising 208 counties within 20 states (and the District of Columbia) nationwide, with a combined population of about 88 million. The Alabama portion of the tri-state (Tennessee, Georgia and Alabama) Chattanooga Area, which is the subject of this proposed rulemaking, is included in the list of areas designated nonattainment for the 1997 PM2.5NAAQS. As mentioned above, the Alabama portion of the Chattanooga Area consists of a portion of Jackson County in Alabama.

On October 17, 2006, EPA strengthened the 24-hour PM2.5NAAQS to 35 µg/m3and retained the level of the Annual PM2.5NAAQS at 15.0 µg/m3.See71 FR 61144. On November 13, 2009, EPA designated areas as attainment/unclassifiable, unclassifiable or nonattainment with respect to the 2006 24-Hour PM2.5NAAQS.See74 FR 58688. Of relevance to the proposed rulemaking herein, EPA's November 2009 designation action clarified the designations for the 1997 PM2.5NAAQS by relabeling the existing designation tables to specifically identify designations made for the 1997 Annual PM2.5NAAQS and those made for the 1997 24-hour PM2.5NAAQS (i.e.,65 µg/m3). The Alabama portion of the Chattanooga Area is only designated nonattainment for the 1997 Annual PM2.5NAAQS. Accordingly, this action only pertains to that specific NAAQS.

As noted above, on April 25, 2007, EPA issued the PM2.5Implementation Rule for the 1997 PM2.5NAAQS (72 FR 20586). This rule describes the CAA framework and requirements for developing SIPs to achieve attainment in areas designated nonattainment for the 1997 PM2.5NAAQS. Such attainment plans must include a demonstration that a nonattainment area will meet the applicable NAAQS within the timeframe provided in the statute. This demonstration must include modeling that is performed in accordance with 40 CFR 51.112 (Demonstration of adequacy) and Appendix W to part 51 (Guideline on Air Quality Models) and that is consistent with EPA modeling guidance.See40 CFR 51.1007. The modeling demonstration should include supporting technical analyses and descriptions of all relevant adopted Federal, state, and local regulations and control measures that have been adopted in order to provide for attainment of the 1997 PM2.5NAAQS by the proposed attainment date.

For the 1997 PM2.5NAAQS, an attainment demonstration must show that a nonattainment area will attain the standards as expeditiously as practicable, but within 5 years of designation (i.e.,by an attainment date of no later than April 5, 2010, based on air quality data for 2007 through 2009). If the area is not expected to meet the NAAQS by April 5, 2010, a state may request to extend the attainment date by 1 to 5 years based upon the severity of the nonattainment problem or the feasibility of implementing control measures in the specific area. CAA section 172(a)(2). For EPA to approve an extension of the attainment date beyond 2010, the state must provide an analysis that is consistent with the statutory criteria for an extension and that demonstrates that the attainment date is as expeditious as practicable for the area, given the existing facts and circumstances.

For each nonattainment area, the state (or each state of a multi-state area) must demonstrate that it has adopted all RACM, including all RACT, as needed to provide for attainment of the PM2.5NAAQS in the area “as expeditiously as practicable.” The PM2.5Implementation Rule provides guidance for making these RACM/RACT determinations.Seediscussion in section IV.A.4. below. Any measures that are necessary to meet these requirements that are not already federally promulgated or in an EPA-approved part of the SIP must be submitted as part of a state's attainment plan. Any state measures in the control strategy must meet the applicable statutory and regulatory requirements, and, in particular, must be enforceable.

The PM2.5Implementation Rule also includes guidance on precursor pollutants that states must address in their attainment plans. Section 302(g) of the CAA authorizes EPA to regulate criteria pollutants and their precursors. The main chemical precursors associated with fine particle formation are sulfur dioxide (SO2), NOX, volatile organic compounds (VOC), and ammonia. However, the effect of reducing emissions of precursor pollutants that contribute to PM2.5concentrations varies by area depending upon local PM2.5composition, emission levels, and other area-specific factors. For this reason, the PM2.5Implementation Rule requires that states control the direct PM2.5and SO2emissions and also that states control the other precursor emissions that would be most effective for attaining the NAAQS within the specific area, based upon an appropriate technical demonstration.

The PM2.5Implementation Rule defines direct PM2.5emissions as “solid particles emitted directly from an air emissions source or activity, or gaseous emissions or liquid droplets from an air emissions source or activity which condense to form particulate matter at ambient temperatures. Direct PM2.5emissions include elemental carbon, directly emitted organic carbon, directly emitted sulfate, directly emitted nitrate, and other inorganic particles (including but not limited to crustal material, metals, and sea salt).”See40 CFR 51.1000.

The PM2.5Implementation Rule requires states to identify and evaluate sources of PM2.5direct emissions andPM2.5attainment plan precursors as appropriate.See40 CFR 51.1002(c). The rule requires states to address SO2as a PM2.5attainment plan precursor and to evaluate SO2for possible control measures in all PM2.5nonattainment areas. States are also required to address and evaluate reasonable controls for NOXas a PM2.5attainment plan precursor unless the state and EPA make a finding that NOXemissions from sources in the state do not significantly contribute to PM2.5concentrations in the relevant nonattainment area.

Although current scientific information shows that certain VOC emissions are precursors to the formation of secondary organic aerosol, and significant progress has been made in understanding the role of gaseous organic material in the formation of organic PM, this relationship remains complex. Further research and technical tools are needed to better characterize emissions inventories for specific VOC and to determine the extent of the contribution of specific VOC to organic PM mass. Because of these factors, the PM2.5Implementation Rule does not require states to address or evaluate controls for VOC as PM2.5attainment plan precursors unless the state or EPA makes a finding that VOC emissions from sources in the state significantly contribute to PM2.5concentrations in the relevant nonattainment area.

The PM2.5Implementation Rule describes the formation of particles related to ammonia emissions, which is a complex, nonlinear process. Though recent studies have improved our understanding of the role of ammonia in aerosol formation, further research is needed to better describe the relationship between ammonia emissions and particulate matter concentrations and the related impacts. Also, area-specific data is needed to evaluate the effectiveness of reducing ammonia emissions in reducing PM2.5concentrations in different areas and to determine where ammonia decreases may increase the acidity of particles and precipitation. For these reasons, the PM2.5Implementation Rule does not require states to address or evaluate controls for ammonia as PM2.5attainment plan precursors unless the state or EPA makes a finding that ammonia emissions from sources in the state significantly contribute to PM2.5concentrations in the relevant nonattainment area.

The presumptive inclusion of NOXand the presumptive exclusion of VOC and ammonia as attainment plan precursors can be reversed based on an acceptable technical demonstration for a particular nonattainment area by the state or EPA. The state must demonstrate that, based on the sum of available technical and scientific information, it would be appropriate for a nonattainment area to reverse the presumptive approach for a particular precursor. Such a demonstration should include information from multiple sources, such as results of speciation data analyses, air-quality modeling studies, chemical-tracer studies, emissions inventories, or special intensive measurement studies to evaluate specific atmospheric chemistry in an area.SeePM2.5Implementation Rule, 72 FR 20596.

The PM2.5Implementation Rule also provides guidance for the other elements of a state's attainment plan, including, but not limited to, emissions inventories, contingency measures, and motor-vehicle emissions budgets used for transportation conformity purposes. There are, however, three aspects of the preamble to the PM2.5Implementation Rule for which EPA received petitions requesting reconsideration. The specific guidance elements identified by petitioners pertain to the presumption that compliance with the requirements of the Clean Air Interstate Rule (CAIR) automatically satisfies the requirements for RACT or RACM for NOXor SO2emissions from electric generating unit (EGU) sources participating in regional cap and trade programs (SeePM2.5Implementation Rule, section II.F.7.); the suggestion that the economic feasibility element of a RACT determination should include consideration of whether the cost of a measure is reasonable in light of the benefits (SeePM2.5Implementation Rule, section II.F.5.); and the policy of allowing certain emission reductions from outside the nonattainment area to be credited as meeting the RFP requirement (SeePM2.5Implementation Rule, section II.G.5.). EPA has granted these petitions and intends to propose rulemaking to address these aspects of the PM2.5Implementation Rule.

EPA published CAIR on May 12, 2005, to address the interstate transport requirements of the CAA.See76 FR 70093. As originally promulgated, CAIR requires significant reductions in emissions of SO2and NOXto limit the interstate transport of these pollutants and the ozone and fine particulate matter they form in the atmosphere. In 2008, however, the D.C. Circuit remanded CAIR back to EPA.North Carolinav.EPA,550 F.3d 1176. The court found CAIR to be inconsistent with the requirements of the CAA,North Carolinav.EPA,531 F.3d 896 (D.C. Cir. 2008), but ultimately remanded the rule to EPA without vacatur because it found that “allowing CAIR to remain in effect until it is replaced by a rule consistent with [the court's] opinion would at least temporarily preserve the environmental values covered by CAIR.”North Carolinav.EPA,550 F.3d at 1178. CAIR thus remained in place following the remand and was in place and enforceable through the April 5, 2010, attainment date.

In response to the court's decision, EPA has issued a new rule to address interstate transport of NOXand SO2in the eastern United States (i.e.,the Transport Rule, also known as the Cross-State Air Pollution Rule).See76 FR 48208, August 8, 2011. In the Transport Rule, EPA finalized regulatory changes to sunset (i.e.,discontinue) CAIR and the CAIR FIPs for control periods in 2012 and beyond.See76 FR 48322.

On December 30, 2012, the DC Circuit issued an order addressing the status of the Transport Rule and CAIR in response to motions filed by numerous parties seeking a stay of the Transport Rule pending judicial review. In that order, the DC Circuit stayed the Transport Rule pending the court's resolution of the petitions for review of that rule inEME Homer Generation, L.P.v.EPA(No. 11-1302 and consolidated cases). The court also indicated that EPA is expected to continue to administer CAIR in the interim until the court rules on the petitions for review of the Transport Rule.

EPA does not believe that the circumstances set forth above preclude EPA from approving the attainment plan for the Alabama portion of the Chattanooga Area. While the monitoring data that shows the Area attained the 1997 Annual PM2.5NAAQS by the April 2010 attainment deadline was impacted by CAIR, CAIR was in place and enforceable through the 2010 attainment date that is relevant to acting on this attainment plan. Moreover, EPA's analysis conducted for the Transport Rule demonstrates that the Chattanooga Area would be able to attain the 1997 Annual PM2.5NAAQS even in the absence of either CAIR or the Transport Rule.SeeAppendix B to the Air Quality Modeling Final Rule Technical Support Document for the Cross-State Air Pollution Rule.

Most importantly, EPA notes that this action proposes approval of an attainment plan that demonstrated that the Chattanooga Area would attain the 1997 Annual PM2.5NAAQS by 2010, which the Area did. As of 2010, CAIRwas an enforceable control measure applicable to affected sources in the Area, as well as sources throughout the eastern U.S. As such, the fact that CAIR is now in place only temporarily as a result of the judicial remand of CAIR does not detract from our conclusion that the attainment plan should be approved. Further, the fact that the court has stayed the implementation of the Transport Rule at this time is not relevant because, as noted above, EPA's modeling for the Transport Rule demonstrates the Chattanooga Area would be able to attain the 1997 Annual PM2.5even in the absence of the Transport Rule. Finally, the Transport Rule, as promulgated, only addresses emissions in 2012 and beyond. As such, neither the Transport Rule itself, nor the judicial stay of the Transport Rule, is relevant to the question addressed in this proposal notice. The purpose of this action is to determine whether the attainment plan submitted by Alabama is sufficient for bringing the Area into attainment by the April 2010 attainment date, a date before the Transport Rule was even promulgated. For these reasons, neither the current status of CAIR nor the current status of the Transport Rule affects any of the criteria for proposed approval of this SIP revision.

On May 31, 2011, EPA determined that the Chattanooga Area had attaining data for the 1997 Annual PM2.5NAAQS.See76 FR 31239. That determination was based on quality-assured, quality controlled and certified ambient air monitoring data that shows the Area met the 1997 Annual PM2.5NAAQS. Furthermore, on September 8, 2011, in accordance with CAA 179(c), EPA determined that the Chattanooga Area attained the 1997 Annual PM2.5NAAQS by its applicable attainment date of April 5, 2010.See76 FR 55774. This information is mentioned here in support of EPA's determination that Alabama's attainment plan was sufficient for the Chattanooga Area to achieve attainment by no later than the required attainment date of April 5, 2010.

As discussed in the May 31, 2011, rulemaking, EPA's determination of attainment1 suspended the obligation for the State to meet planning SIP requirements for the Chattanooga Area for so long as the Area continues to attain the 1997 Annual PM2.5NAAQS.See40 CFR 51.1004(c). The State must still submit required emissions inventories consistent with applicable timelines. The suspended SIP submission obligations include the attainment demonstration (including in this case the mobile source insignificance determination submitted to satisfy transportation conformity requirements), the RACM/RACT analysis and requirements, the RFP requirements as applicable, and contingency measures. Despite the suspension of the aforementioned attainment plan requirements for the Chattanooga Area for the 1997 Annual PM2.5NAAQS, Alabama has requested that EPA take action on its planning SIP for this Area in part because the SIP submittal includes the insignificance determination for conformity purposes. Further, in September 2011, EPA agreed in a Consent Decree to take action on the State's attainment plan SIP submission, including these specific plan elements that would otherwise be suspended.

Monitoring data thus far available in the Air Quality System (AQS) database for 2011 show that this Area continues to meet the 1997 Annual PM2.5NAAQS at this time. As shown in Table 4, found later in this notice, ambient PM2.5levels in the Chattanooga Area have declined steadily since Alabama submitted its PM2.5attainment plan in 2008.

EPA understands that the State chose not to withdraw the attainment plan SIP revision for the Alabama portion of the Chattanooga Area because it includes a mobile insignificance determination for direct PM2.5and NOXemissions from mobile sources. Therefore, as mentioned above, although the SIP planning requirements for the 1997 Annual PM2.5NAAQS have been suspended for the Chattanooga Area, EPA is acting on these elements of Alabama's attainment plan for the Alabama portion of the Chattanooga Area because the State has requested it and elected not to withdraw these elements.2

Alabama's attainment plan submittal for the 1997 Annual PM2.5NAAQS covers the Alabama portion of the Chattanooga Area, which is the only portion of such Area for which the State has jurisdiction. Today's action addresses only the Alabama portion of the Chattanooga Area. However, the modeling analysis provided with Alabama's attainment plan documentation includes modeling results for the entire tri-state Area that also includes the results of Georgia's and Tennessee's demonstrations for their portions of the Area, for which the conclusions of attainment are consistent with that of Alabama's. The analysis indicates that the entire Area across the three states will attain the NAAQS, and thus supports this proposed approval action.

In accordance with section 172(c) of the CAA and the PM2.5Implementation Rule, the Alabama attainment plan for the Chattanooga Area includes: (1) An emissions inventory for the plan's base year (2002); (2) an attainment demonstration; and (3) an insignificance finding for the mobile source contribution of direct PM2.5and NOX. The attainment demonstration includes: Technical analyses that locate, identify, and quantify sources of emissions contributing to violations of the 1997 Annual PM2.5NAAQS; analyses of future-year emissions reductions and air quality improvements expected to result from national and local programs; adopted emission reduction measures with schedules for implementation; and contingency measures required under section 172(c)(9) of the CAA.See72 FR 20605.

To analyze future-year emissions reductions and air quality improvements, Alabama used regional modeling analyses developed through the Association for Southeastern Integrated Planning (ASIP). The ASIP was a collaborative modeling and technical analysis effort among the States of Alabama, Kentucky, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Virginia, and West Virginia to develop a regional assessment of the controls needed to achieve attainment of the 1997 PM2.5NAAQS and the 2008 8-hour ozone NAAQS. This regional modeling was performed in accordance with EPA's “Guidance on the Use of Models and Other Analyses for Demonstrating Attainment of Air Quality Goals for Ozone, PM2.5, and Regional Haze” (EPA-454/B-07-002, April 2007)(hereafter referred to as “EPA's Modeling Guidance”).

Consistent with CAA requirements (See, e.g.,section 172), and 40 CFR 51.1007, an attainment demonstration for a PM2.5nonattainment area must include a showing that the area will attain the 1997 PM2.5annual and 24-hour standards as expeditiously as practicable. The demonstration must also meet the requirements of 40 CFR 51.112 and Part 51, Appendix W, and include inventory data, modeling results, and emissions reduction analyses on which the state has based its projected attainment. In the case of the Chattanooga Area, the Area has already attained the 1997 PM2.5Annual NAAQS. Thus, EPA is now proposing that the attainment plan submitted by Alabama was sufficient, and EPA is proposing to approve individual components of the plan.

As discussed in section II.B. above, the PM2.5Implementation Rule requires states to identify and evaluate sources of PM2.5direct emissions and appropriate PM2.5attainment plan precursors. The rule provides that SO2is a PM2.5attainment plan precursor in all areas. The rule also sets forth the rebuttable presumptions that NOXis a PM2.5attainment plan precursor in all areas and that ammonia and VOC are not PM2.5attainment plan precursors in any areas. Neither Alabama nor the EPA has found reason to reverse any of these presumptions for the Chattanooga Area. Accordingly, Alabama's PM2.5attainment plan evaluates emissions of direct PM2.5, SO2, and NOXin Jackson County.

States are required under section 172(c)(3) of the CAA to develop comprehensive, accurate and current emissions inventories of all sources of the relevant pollutant or pollutants in the area. These inventories provide a detailed accounting of all emissions and emission sources by precursor or pollutant. In addition, inventories are used in air quality modeling to demonstrate that attainment of the 1997 PM2.5NAAQS is as expeditious as practicable and, if an attainment date extension beyond 2010 is needed, to support the need for such an extension. Emissions inventory guidance was provided in the April 1999 document, “Emissions Inventory Guidance for Implementation of Ozone and Particulate Matter NAAQS and Regional Haze Regulations” (EPA-454/R-99-006), which was updated in November 2005 (EPA-454/R-05-001) (hereafter referred to as “EPA's Emissions Inventory Guidance”). Emissions reporting requirements were provided in the 2002 Consolidated Emissions Reporting Rule (CERR) (67 FR 39602). On December 17, 2008 (73 FR 76539), EPA promulgated the Air Emissions Reporting Requirements (AERR) to update emissions reporting requirements in the CERR and to harmonize, consolidate and simplify data reporting by states.

In accordance with the AERR and EPA's Emissions Inventory Guidance, the PM2.5Implementation Rule requires states to submit inventory information on directly emitted PM2.5and the main PM2.5precursors (SO2, NOX, VOC, and ammonia) and any additional inventory information needed to support an attainment demonstration and (where applicable) an RFP plan.

PM2.5is comprised of filterable and condensable emissions. Condensable particulate matter (CPM) can comprise a significant percentage of direct PM2.5emissions from certain sources and is required to be included in national emissions inventories based on emission factors. Test Methods 201A and 202 are available for source-specific measurement of condensable emissions. However, the PM2.5Implementation Rule notes that there were issues raised by the Commenters related to availability and implementation of these test methods as well as uncertainties in existing data for condensable PM2.5. EPA thus established a transition period during which EPA could assess possible revisions to available test methods and to allow time for states to update emissions inventories as needed to fully address direct PM2.5, including condensable emissions. Because of the time required for this assessment, EPA recognized that states would be limited in how to effectively address CPM emissions and therefore established a period of transition, up to January 1, 2011, during which state submissions for PM2.5were not required to address CPM emissions. Amendments to these test methods were proposed on March 25, 2009 (74 FR 12969), and finalized on December 21, 2010 (75 FR 80118). The amendments to Method 201A added a particle-sizing device for PM2.5sampling, and the amendments to Method 202 revised the sample collection and recovery procedures of the method to reduce the formation of reaction artifacts that could lead to inaccurate measurements of CPM emissions.

The period of transition for establishing emission limits for condensable direct PM2.5ended on January 1, 2011. Under the PM2.5Implementation rule, PM2.5submissions made during the transition period are not required to address CPM emissions; however, states must address the control of direct PM2.5emissions, including condensable emissions, with any new action taken after January 1, 2011. Alabama submitted its Chattanooga Area attainment plan prior to January 1, 2011, and accordingly did not consider CPM in addressing the control of PM2.5emissions.

In July 2008, EarthJustice filed a petition requesting reconsideration of EPA's transition period for CPM emissions provided in the PM2.5Implementation Rule. In January 2009, EPA decided to allow states that have not previously addressed CPM to continue to exclude CPM for Prevention of Significant Deterioration permitting during the transition period. Today's action reflects a review of Alabama's submittal based on applicable EPA guidance as described in the PM2.5Implementation Rule and at the time of Alabama's submittal.

The 172(c)(3) emissions inventory is developed by the incorporation of data from multiple sources. States were required to develop and submit to EPA a triennial emissions inventory according to the AERR for all source categories (i.e.,point, area, nonroad mobile and on-road mobile). This inventory often forms the basis of data that are updated with more recent information and data that also is used in the attainment demonstration modeling inventory. Such was the case in the development of the 2002 emissions inventory that the State submitted as part of the attainment plan for this Area. The State based the 2002 emissions inventory on data developed with Visibility Improvement State and Tribal Association of the Southeast (VISTAS) contractors for the same ten states of the ASIP effort and submitted by the states to the 2002 National Emissions Inventory. Several iterations of the 2002 inventories were developed by VISTAS for the different emission source categories resulting from revisions and updates to the data. This resulted in version G2 of the updated data, which VISTAS and states used to represent point source emissions. Data from many databases, studies and models (e.g.,vehicle miles traveled, fuel programs, the NONROAD 2002 model data for commercial marine vessels, locomotives and Clean Air Market Division, etc.)resulted in the emissions inventory submitted by the State as part of this attainment plan. The data were developed by VISTAS according to EPA's Emissions Inventory Guidance and a quality assurance project plan that was developed through VISTAS and approved by EPA. EPA agrees that the process used to develop this emissions inventory was adequate to meet the requirements of the CAA,e.g.,CAA section 172(c)(3), and the implementing regulations.

Table 1 below shows the level of emissions, expressed in tons per year (tpy), in the Alabama portion of the Chattanooga Area for the 2002 base year by pollutant and emissions source category, as provided in the October 7, 2009, attainment plan. As stated earlier in this notice, EPA approved the base year emissions inventory for the Alabama portion of the Chattanooga Area on February 8, 2012 (77 FR 6469), as meeting the requirements of section 172(c)(3) of the CAA. The emissions inventory was approved because the State developed the emissions inventory consistent with the CAA, implementing regulations, and EPA guidance for emissions inventories.

Table 2 below shows the level of emissions projected by VISTAS and the State for the 2009 attainment year. While the projections for the two point sources in the Alabama portion of the Chattanooga Area indicated a slight increase in SO2and direct PM2.5emissions, the overall 2009 statewide emission projections for Alabama, Tennessee and Georgia indicated significant decreases in SO2emissions. The projected 2009 emissions inventories were used by VISTAS in the modeling demonstration of attainment for the Area by that year. Although the projected 2009 emissions of SO2and direct PM2.5from point sources in the Alabama portion of the Chattanooga Area indicated a slight increase from the 2002 actual emissions, the actual 2009 emissions that are now recorded in AQS show that significant reductions occurred in these pollutant emissions.

Additional emissions inventory information for the Alabama portion of the Chattanooga Area is included in Appendix 3 of Alabama's attainment SIP submittal. Emissions inventories for the Tennessee and Georgia portions of the Area are included in Appendices 1 and 2, respectively, of Alabama's attainment SIP submittal. This additional information is available in the docket for this final action (EPA-R04-OAR-2011-0084) on thewww.regulations.govWeb site.

The PM2.5attainment demonstrations must include modeling that should be developed in accordance with EPA's Modeling Guidance. A brief description of the modeling used to support Alabama's attainment demonstration follows. More detailed information can be found in Alabama's October 7, 2009, SIP revision in the docket for this proposed action (EPA-R04-OAR-2011-0084) on thewww.regulations.govWeb site.

Ambient PM2.5typically includes both primary (directly emitted) PM2.5and secondary PM2.5(e.g.,sulfates (SO4) and nitrates (NO3) formed by chemical reactions in the atmosphere). Some of the physicochemical processes leading to the formation of secondary PM2.5may take hours or days, as may some of the removal processes. Thus, some sources of secondary PM2.5may be sources outside of the nonattainment area. To model a sufficient geographic area to take these processes into account, Alabama's regional modeling domain covered an area slightly greater than the geographical area of the VISTAS/ASIP states in this attainment demonstration.

Alabama, through the ASIP and VISTAS, conducted an analysis of the major contributing components of PM2.5in the Alabama portion of the Chattanooga Area. Specifically, organic carbon (OC) and SO4account for the largest contributions. The majority of OC can be attributed to biogenic emissions and SO4to emissions of SO2. SO2emissions are primarily associated with the point source sector. Emissions sensitivity modeling for the Chattanooga Area indicated that SO2emissions reductions from EGUs in Alabama, Georgia, Tennessee, and Kentucky would have the greatest benefits for the Area. The VISTAS modeling also projects limited benefits to total ambient PM2.5from reductions of NOXemissions.SeeFigure 6-1 of the SIP Narrative of Alabama's attainment SIP submittal. EPA preliminarily agreeswith Alabama's assertion that controlling SO2from point sources is the most effective means of addressing attainment of the 1997 Annual PM2.5NAAQS in the Chattanooga Area.

The ASIP performed modeling for ozone and PM2.5for the 10 collaborating southeastern states, including Alabama. The modeling analysis is a complex technical evaluation that began with selection of the modeling system. The ASIP and/or VISTAS used the following modeling system:

•Meteorological Model:The Pennsylvania State University/National Center for Atmospheric Research Mesoscale Meteorological Model is a nonhydrostatic, prognostic meteorological model routinely used for urban- and regional-scale photochemical, ozone, PM2.5,and regional haze regulatory modeling studies.

•Emissions Model:The Sparse Matrix Operator Kernel Emissions modeling system is an emissions modeling system that generates hourly gridded speciated emission inputs of mobile, non-road mobile, area, point, fire and biogenic emission sources for photochemical grid models.

•Air Quality Model:The EPA's Models-3/Community Multiscale Air Quality (CMAQ) modeling system is a photochemical grid model capable of addressing ozone, particulate matter, visibility and acid deposition at a regional scale. The photochemical model selected for this study was CMAQ version 4.5. It was modified through VISTAS with a module for Secondary Organics Aerosols in an open and transparent manner that was also subjected to outside peer review.

CMAQ modeling of regional haze in the VISTAS region for 2002 and 2009 was carried out on a grid of 12x12 kilometer cells that covers the ten VISTAS states and states adjacent to them. This grid is nested within a larger national CMAQ modeling grid of 36x36 kilometer grid cells that covers the continental United States, portions of Canada and Mexico, and portions of the Atlantic and Pacific Oceans along the east and west coasts. Selection of a representative period of meteorology is crucial for evaluating baseline air quality conditions and projecting future changes in air quality due to changes in emissions of visibility-impairing pollutants. Based upon an in-depth statistical analysis tool referred to as Classification and Regression Tree (CART) analysis, VISTAS evaluated and compared the years 2000 through 2004 and selected calendar year 2002 as the most representative meteorological year available for conducting the CMAQ modeling.SeeGeorgia's State Implementation Plan for the Chattanooga PM2.5Nonattainment Area for Catoosa and Walker Counties, Appendix D, Chapter 4, which is Appendix 2 to the Alabama attainment plan submittal. As noted above, the VISTAS and ASIP states modeling was developed consistent with EPA's Emissions Inventory Guidance and EPA's Modeling Guidance.

VISTAS examined the model performance of the regional modeling for the areas of interest before determining whether the CMAQ model results were suitable for use in the assessment of attainment of the PM2.5NAAQS and for use in the modeling assessment. The modeling assessment predicts future levels of emissions and visibility impairment used to support the 2009 PM2.5control strategy. In keeping with the objective of the CMAQ modeling platform, the air quality model performance was evaluated using graphical and statistical assessments based on measured ozone, fine particles, and acid deposition from various monitoring networks and databases for the 2002 base year. A diverse set of statistical parameters from the EPA's Modeling Guidance was used to stress and examine the model and modeling inputs. Once the model performance of the 2002 base year was determined by VISTAS to be acceptable, the EPA model attainment test was used to assess whether attainment of the PM2.5NAAQS would be achieved in 2009.

Alabama provided the appropriate supporting documentation for all required analyses performed by the State and also provided, in appendices to their submittal as corroborating information, the final Tennessee and Georgia attainment demonstration SIPs for the Chattanooga Area. The technical analyses and modeling used to assess attainment in 2009 for the Area is consistent with the CAA, EPA's PM2.5Implementation Rule and EPA's Modeling Guidance. EPA proposes to accept the VISTAS and ASIP technical modeling to support the attainment SIP for the Area because the modeling system was chosen and simulated according to EPA's Modeling Guidance. For purposes of the Chattanooga attainment demonstration, EPA preliminarily agrees with the VISTAS model performance procedures and results, and preliminarily agrees that the CMAQ is an appropriate tool for the assessment of PM2.5for the Alabama attainment demonstration for this Area. Additional details on the ASIP and VISTAS modeling is included in Appendices 1 and 2 of the Alabama SIP, which are the final attainment demonstration SIPs for the Chattanooga Area adopted by the States of Tennessee and Georgia, respectively. Due in part to the location of the ambient PM2.5monitors and the significant pollution sources in Tennessee and Georgia, these states completed their attainment demonstration SIPs before Alabama. Because all three states relied upon the same ASIP/VISTAS modeling as the basis for the attainment demonstration for this tri-state nonattainment area, Alabama included the Tennessee and Georgia submittals as appendices to their submittal.

The modeling results were used in a relative sense in concert with observed ambient air quality data (i.e.,taking the ratio of the modeled future PM2.5concentration to the modeled present PM2.5concentration and multiplying that by a PM2.5“baseline design value”). EPA recommends using a baseline design value that is the average of the three design value periods that straddle the baseline inventory year (e.g.,the average of the 2000-2002, 2001-2003, and 2002-2004 design value periods for a 2002 baseline inventory year). This average design value best represents the baseline concentrations while taking into account the variability of meteorology and emissions (over a five-year period). This EPA attainment test approach should reduce some of the uncertainty involved with using absolute model predictions alone. Using the model in a relative sense also reduces the effects of uneven model performance and possible major biases in predicting absolute concentrations of one or more components. The ratio of future to present model predicted air quality resulted in relative reduction factors (RRF). The multiplication of the RRF by an ambient design value from the base year (i.e.,2002) provided estimates of future design values to determine if areas with monitors in the nonattainment area will comply with the 1997 Annual PM2.5NAAQS.

EPA provided guidance to states and tribes for projecting PM2.5concentrations using a “speciated modeled attainment test” (SMAT) (EPA-454/B-07-002, April 2007). Once modeling for a projection year and a base year are complete, RRFs are computed for each component of PM2.5in the modeling domain. Modeling presented by Alabama, corroborated by Tennessee and Georgia as supplemental modeling (SeeAppendices 1 and 2 of the Alabama SIP in the docket), was used to assess attainment in the entireChattanooga Area and used the following components of PM2.5: SO4, NO3, directly emitted organic particles, and directly emitted inorganic particles. Ammonia is treated as part of SO4and NO3molecules, and water is assumed to be present at a constant mass in both the base year and projection year. For each monitoring location, the RRF for a component is computed as the ratio of the projection year divided by the base year modeled concentration for a three-cell by three-cell array of modeled grid cells centered on the monitoring location.

Projection year component concentrations are estimated by multiplying the RRFs by a monitoring based base year component concentration, determined by applying measured speciation data to the monitored total PM2.5design concentration. The sum of these estimated projection year component concentrations is the estimated projection year PM2.5concentration. If future estimates of PM2.5concentrations are less than the 1997 PM2.5NAAQS, then the modeling indicates attainment of the standard.

PM2.5includes a mixture of components that can behave independently from one another (e.g.,primary vs. secondary particles) or that are related to one another in a complex way (e.g.,different secondary particles). Thus, it is appropriate to consider the predicted future concentration of PM2.5to be the sum of the predicted component concentrations.See72 FR 20608. As recommended in EPA's Modeling Guidance, Alabama divided PM2.5into its major components and noted the future effects of already implemented control strategies on each. The effect on PM2.5was estimated as a sum of the effects on individual components. Future PM2.5design values at specified monitoring sites were estimated by adding the future-year values of seven PM2.5components (mass associated with SO4, NO3, ammonium (NH4), OC, elemental carbon (EC), particle-bound water (PBW) and “other” primary inorganic particulate matter (crustal) plus passively collected mass). All future site-specific PM2.5design values were below the concentration specified in the NAAQS; therefore, the Chattanooga Area passed the SMAT evaluation. Table 3 illustrates the comparison of the designation design value for 2003 with the future model-predicted 2009 annual design values for the monitors in the nonattainment area. Compliance with the PM2.5annual NAAQS is predicted.

EPA has also developed a software package called Modeled Attainment Test Software (MATS) which will spatially interpolate data, adjust the spatial fields based on model output gradients and multiply the fields by model calculated RRFs. EPA recommended that the State provide MATS attainment test values for 2009, but the tool became available soon after Alabama had drafted its attainment plan. The State did not submit any MATS results in the Chattanooga SIP. However, the final report for the “Technical Support Document for the Association for Southeastern Integrated Planning (ASIP) Emissions and Air Quality Modeling to Support PM2.5and 8-Hour Ozone State Implementation Plans” (ASIP Report which is included in the docket) provides 2009 MATS version 1.2.1 results for the entire Chattanooga Area and the entire ASIP/VISTAS modeling domain. As shown in Table 5-1 of this document, MATS also indicates attainment of the annual PM2.5NAAQS in 2009. EPA also reviewed additional regional modeling to support the CMAQ attainment results based on the CAMx model developed and documented in the ASIP Report. Application of the modeled attainment test with the CAMx model also produced future design values in 2009 that were below the annual PM2.5NAAQS. This further supports the State's technical analysis showing that the Chattanooga Area would achieve the 1997 Annual PM2.5NAAQS in 2009.

The modeling system was chosen and simulated by VISTAS to develop a model performance evaluation of the nonattainment area which would provide the necessary assurances that an assessment of future controls demonstrated attainment. Application of the EPA modeled attainment test and the MATS indicated future design values that are less than 15.0 μg/m3and therefore consistent with attainment of the 1997 Annual PM2.5NAAQS. Finally, the Area's monitored status as having timely attained the standard further supports the modeling results.

As noted in section II.D. above, on May 31, 2011, EPA determined that the Chattanooga Area had attaining data for the 1997 Annual PM2.5NAAQS based upon data for the 3-year period 2007-2009, with a design value (i.e.,the highest 3-year average of annual mean PM2.5concentrations) of 12.7 μg/m3. EPA's review of more recent data shows that the Area also had attaining data for the 3-year period 2008-2010, with a design value of 11.1 μg/m3. These data, which have been quality-assured, certified, and recorded in EPA's AQS, are summarized in Table 4 below. In addition, monitoring data thus far available, but not yet certified, in the AQS database for 2011 show that this Area continues to meet the 1997 Annual PM2.5NAAQS. While the data that shows the Chattanooga Area attained the 1997 Annual PM2.5NAAQS by the April 2010 attainment deadline, as well as the more recent data, are impacted by CAIR, as described above in section II.C. of this notice, CAIR was enforceable though the attainment year, and EPA's modeling analysis for the Transport Rule demonstrates that the Chattanooga Area would be able to attain the 1997 Annual PM2.5NAAQS even in the absence of CAIR or the Transport Rule. Further, the continuing decrease in PM2.5concentrations in the Area also supports Alabama's determination that current emission control measures on sources were sufficient to bring the Chattanooga Area into attainment by no later than the required attainment date of April 5, 2010.

CAA section 172(c)(1) requires that each attainment plan “provide for the implementation of all reasonably available control measures as expeditiously as practicable (including such reductions in emissions from the existing sources in the area as may be obtained through the adoption, at a minimum, of reasonably available control technology), and shall provide for attainment of the national primary ambient air quality standards.” EPA interprets RACM, including RACT, under section 172 as measures that a state finds are both reasonably available and contribute to attainment as expeditiously as practicable in the nonattainment area. Thus, what constitutes RACM or RACT in a specific PM2.5nonattainment area is closely tied to the expeditious attainment demonstration of the plan.See40 CFR 51.1010; 72 FR 20586, 20612 (April 25, 2007).

States are required to evaluate RACM/RACT for direct PM2.5emissions and all of the area's attainment plan precursors.See40 CFR 51.1002(c); 72 FR 20586, 20589-97. The state must address SO2as a PM2.5attainment plan precursor and evaluate sources of SO2emissions in the state for control measures. The state must address NOXas a PM2.5attainment plan precursor and evaluate sources of NOXemissions in the state for control measures, unless the state and EPA provide an appropriate technical demonstration for a specific area showing that NOXemissions from sources in the state do not significantly contribute to PM2.5concentrations in the nonattainment area. Also, because EPA concluded that VOC and ammonia are presumptively not regulatory precursors for PM2.5, the state is not required to evaluate RACM/RACT for sources of VOC or ammonia unless there is a determination by either the state or EPA supported by an appropriate demonstration that such emissions need to be regulated for expeditious attainment of the NAAQS in the specific area.

For PM2.5attainment plans, the PM2.5Implementation Rule requires a combined approach to RACM and RACT under subpart 1 of Part D of the CAA (“Plan Requirements for Nonattainment Areas/Nonattainment Areas in General”). Subpart 1, unlike subparts 2 and 4, does not identify specific source categories for which EPA must issue control technique documents or guidelines and does not identify specific source categories for state and EPA evaluation during attainment plan development.See72 FR 20586, 20610. Rather, under subpart 1, EPA considers RACT to be part of an area's overall RACM obligation consistent with the section 172(c)(1) definition. Because the variable nature of the PM2.5problem in different nonattainment areas may require states to develop attainment plans that address widely disparate circumstances, EPA determined not only that states should have flexibility with respect to RACM/RACT controls consistent with the statute but also that in areas needing significant emission reductions RACM/RACT controls on smaller sources may be necessary to reach attainment as expeditiously as practicable.See72 FR 20586, 20612 and 20615. Thus, under the PM2.5Implementation Rule, RACT and RACM are those reasonably available measures that contribute to attainment as expeditiously as practicable in the specific nonattainment area.See40 CFR 51.1010; 72 FR 20586, 20612.

The PM2.5Implementation Rule requires that attainment plans include the list of measures that a state considered and information sufficient to show that the state met all requirements for the determination of what constitutes RACM/RACT in a specific nonattainment area.See40 CFR 51.1010(a). In addition, the rule requires that the state, in determining whether a particular emissions reduction measure or set of measures must be adopted as RACM/RACT, consider the cumulative impact of implementing the available measures and to adopt as RACM/RACT any potential measures that are reasonably available considering technological and economic feasibility if, considered collectively, they would advance the attainment date by one year or more. If a measure or measures is not necessary for expeditious attainment of the NAAQS in the area, then by definition that measure is not RACM/RACT for purposes of the 1997 PM2.5NAAQS in that area. Any measures that are necessary to meet these requirements which are not already either federally promulgated, part of the state's SIP, or otherwise creditable in SIPs must be submitted in enforceable form as part of a state's attainment plan for the area.See72 FR 20586, 20614.

Guidance provided in the PM2.5Implementation Rule for evaluating RACM/RACT level controls for an area also indicates that there could be flexibility with respect to those areas that were predicted to attain the 1997 PM2.5NAAQS within five years of designation as a result of existing national or local measures,i.e.,by April 2010 based upon monitoring data from 2007, 2008, and 2009.See72 FR 20586, 20612. In such circumstances, EPA indicated that the state may conduct a more limited RACM/RACT analysis that does not involve additional air quality modeling. Moreover, the RACM/RACT analysis for such an area could focus on a review of reasonably available measures, the estimation of potential emissions reductions, and the evaluation of the time needed to implement the measures. Thus, the PM2.5Implementation Rule guidance recommends that an analysis for those areas expected to attain within five years of designation as a nonattainment area for the 1997 PM2.5NAAQS may be less rigorous than for areas expected to attain later.

A more comprehensive discussion of the RACM/RACT requirement for PM2.5attainment plans and EPA's guidance for it can be found in the preamble to the PM2.5Implementation Rule. 72 FR 20586, 20609-20633.

Alabama's analysis appears in chapter 6 of the October 7, 2009, attainment plan submission. The State determined that controls on sources of VOC and sources of ammonia would not be necessary for expeditious attainment of the NAAQS in this area. Thus, the State determined that control of PM2.5, SO2, and NOX, are appropriate in the Chattanooga Area for purposes of attaining the 1997 PM2.5NAAQS. EPA preliminarily agrees that Alabama's determination is supported by its analysis. The State's determination with respect to which pollutants the plan should evaluate is discussed in chapter 5 of the submittal.

The Alabama portion of the Chattanooga Area is limited to one census block in Jackson County described by U.S. Census 2000 block group identifier 01-071-9503-1. As indicated in Chapter 6 of the Technical Support Document for the air quality designations promulgated by EPA on January 5, 2005, this census block was included in the Chattanooga nonattainment area to encompass the Tennessee Valley Authority's (TVA's) Widows Creek power plant, which EPA determined to be contributing to violations of the 1997 Annual PM2.5NAAQS at monitors in the nearby Tennessee and Georgia portions of the Chattanooga Area.

As was noted earlier, EPA included U.S. Census block 01-071-9503-1, in Jackson County, as part of the Chattanooga Area primarily because of emissions from the TVA Widows Creek power plant. For this reason, Alabama's consideration of RACM/RACT control measures for the Area focused on the Widows Creek facility. Alabama's RACM/RACT analysis is provided in Chapter 6 of the State's October 7, 2009, submittal. The Widows Creek facility has a title V permit which includes requirements to operate certain control devices, as well as key emission limits. The facility was also included as part of the 2011 systemwide settlement with EPA which resulted in additional requirements for the facility that either will be or are already included into the title V permit to ensure they are permanent and enforceable.See, e.g., http://www.epa.gov/compliance/resources/agreements/caa/tva-ffca.pdf.

As identified in the submittal, TVA Widows Creek has two base load units, Units 07 and 08, with rated capacities of 575 megawatts (MW) and 550 MW, respectively. The facility also has six smaller units, Units 01 through 06, which are peaking units with rated capacities of 141 MW each. The attainment year emissions for these units are shown in Table 5 below.

Alabamareviewed the control equipment installed on the EGUs at the TVA Widows Creek power plant and provided the following information in the summary of the State's analysis. Control of NOXemissions is achieved by selective catalytic reduction (SCR) controls, which were installed on Units 07 and 08 in 2003 and 2004, respectively. Control of SO2emissions is achieved by flue gas desulfurization (FGD) controls, which were installed on Units 07 and 08 in 1984 and 1977, respectively. Control of direct PM2.5emissions is achieved by electrostatic precipitator (ESP) controls on Units 01 through 07 and by FGD on Unit 08. The submittal states that the FGD installed on Unit 08 was upgraded in efficiency in 2004. Alabama concluded that these controls, and other associated requirements such as emission limits, were sufficient to comply with RACM/RACT requirements and that no further controls were needed at the facility to demonstrate timely attainment. EPA also evaluated the Widows Creek controls, and a summary of that evaluation follows the discussion below.

While Alabama did analyze existing controls at the TVA Widows Creek power plant for the purpose of its RACM/RACT evaluation, EPA disagrees with Alabama's conclusion that “CAIR equals RACT” for several reasons. These reasons are outlined below although it is not necessary for EPA to agree with Alabama's determination on that issue in order to approve the Jackson County attainment plan. In the preamble to the final PM2.5Implementation Rule, EPA indicated that in states that fulfill their CAIR SO2emission reduction requirements entirely through EGU emission reductions, compliance by EGU sources with an EPA-approved CAIR SIP or a CAIR FIP could be presumed to satisfy the SO2RACT/RACM requirements. 72 FR 20586 at 20623. EPA also established a similar rebuttable presumption with respect to NOXRACT/RACM for EGUs.Id.at 20623-24. EPA did not make any determination regarding whether RACT/RACM requirements for any particular nonattainment area were, in fact, satisfied by CAIR, but only established a presumption that could be rebutted by data demonstrating that CAIR was not sufficient to satisfy RACT/RACM with respect to a particular nonattainment area. EPA did not present technical analysis to support this presumption. Subsequent to the publication of that preamble language, the D.C. Circuit issued a decision inNRDCv.EPA,571 F.3d 1245 (D.C. Cir. 2009) holding, among other things, that EPA's similar determination, in the ozone implementation rule, that compliance with the NOXSIP Call satisfied RACT for EGUs was unlawful because it was not supported by a technical demonstration showing that the NOXSIP Call would in fact achieve greater reductions than source-by-source RACT within the nonattainment areas. Because the presumption established by EPA in the PM2.5Implementation Rule was similar, in that it was supported by reasoning but not by a technical analysis, approving a state RACT/RACM determination based on the “CAIR equals RACT” presumption would be inconsistent with the court's ruling inNRDCv.EPA.In addition, EPA received a petition for reconsideration in June of 2007 that explicitly called into question the basis for the presumption on both procedural and substantive grounds. In light of the arguments raised in that petition for reconsideration, and in light of the aforementioned court decision, EPA has granted the petition for reconsideration on this issue and intends to initiate rulemaking to propose changes to this aspect of the guidance for the PM2.5Implementation Rule. Third, CAIR itself was remanded to EPA by the U.S. Court of Appeals for the D.C. Circuit,North Carolinav.EPA,531 F.3d 896,as amended by550 F.3d 1178 (D.C. Cir. 2008). While the court found serious flaws in the rule, it decided to leave CAIR in place while EPA worked on a rule to replace it.Id. As mentioned above, in August 2011, EPA published in theFederal Registera rule to replace CAIR—the Transport Rule, also known as the Cross-State Air Pollution Rule. 76 FR 48208. EPA did not address whether compliance with the Transport Rule could, in any circumstances, satisfy any RACM/RACT requirements for any sources. The Transport Rule was subsequently stayed pending judicial review. In the order staying the Transport Rule, the court also instructed EPA to continue implementing CAIR while the Transport Rule is stayed. Thus, while CAIR currently remains in place, it is in place only temporarily and thus could not be said to satisfy the RACM/RACT requirement on a permanent basis.

As a result, the RACM/RACT analysis for EGUs must include an actual evaluation of the level of emission controls on any sources located within the nonattainment area to establish that, either individually or as a category, these sources are controlled to the degree necessary to meet the RACM/RACT level of control for the area. Given that the State developed and submitted the attainment plan before the legitimacy of the presumption in the guidance for the PM2.5Implementation Rule was called into question, EPA is independently evaluating these sources as part of acting on the attainment plan rather than relying on the statement in the SIP submittal concerning CAIR and RACT. EPA believes that if its review of the level of SO2and NOXemission controls on these sources confirms that the State's SIP already requires controls to the degree necessary to provide for expeditious attainment of the NAAQS in the area, then EPA may conclude that the sources are adequately controlled to meet the RACM/RACT requirement. In other words, so long as an actual evaluation of the EGU sources in the area demonstrates that there is a RACM/RACT level of controls, then EPA may approve the attainment plan notwithstanding the State's prior reliance on the presumption. EPA has also concluded that if the area is now attaining the 1997 PM2.5NAAQS, then this is prima facia evidence that under section 172 the level of control on the EGU sources that produced the attaining level of emissions would constitute RACM/RACT for purposes of the State's attainment plan for these NAAQS. EPA notes, however, that what constitutes RACM/RACT for the 1997 PM2.5NAAQS would not necessarily constitute RACM/RACT for other NAAQS because the determination of RACM/RACT under CAA section 172 is dependent on the attainment needs of the area.

Because the Alabama submittal relies in part on the rebuttable presumption articulated in the PM2.5Implementation Rule that “CAIR equals RACT” for utility EGUs—a presumption that EPA cannot rely on for reasons explained above—EPA has evaluated the EGUs at TVA Widows Creek for the purposes of RACM/RACT. EPA notes that Widows Creek facility is subject to a Federal Facilities Compliance Agreement (FFCA) between EPA and TVA (http://www.epa.gov/compliance/resources/agreements/caa/tva-ffca.pdf) and a Consent Decree between four states, three non-governmental organizations and TVA, entered with the United States District Court Eastern District of Tennessee at Knoxville (Alabama et al.v.Tennessee Valley Auth.,No. 3:11-cv-00170 and 171 (consolidated); available athttp://www.epa.gov/compliance/resources/decrees/civil/caa/tvacoal-fired-cd.pdf). According to the FFCA and the Consent Decree, Widows Creek Units 07 and 08 must operate their SCR, FGD and ESP controls continuously while the emission units are in operation. In addition, the six peaking units are scheduled to be retired under the FFCA and the Consent Decree, two each in 2013, 2014, and 2015. This legal requirement for the current level of controls on the EGU sources ensures that the level of controls which enabled the Area to attain the standard will remain federally enforceable.

The Widows Creek facility is also subject to emission limits applicable to the facility. As described in the facility's title V operating permit,4 Units 01 through 08 at are each subject to a particulate matter (PM) emission limit of 0.12 pounds per million British thermal units (lb/MMBtu) heat input and a NOXaveraging plan as provided in the facility's Acid Rain permit, which is included in the title V permit. Units 01 through 06 are subject to a combined SO2limit of 1.6 lb/MMBtu heat input and opacity limit of 20 percent, and Units 07 and 08 at are each subject to an SO2limit of 0.9 lb/MMBtu heat input and an opacity limit of 20 percent.

One other significant source of PM, SO2and NOXemissions, RockTenn CP, LLP (formerly Smurfit-Stone Container Corporation), Stevenson Mill, exists within the Alabama portion of the Chattanooga nonattainment area. Alabama did not evaluate this pulp and paper manufacturing facility in its RACM/RACT analysis. However, as with EPA's evaluation of RACM/RACT for EGUs, EPA has concluded that if the area is now attaining the 1997 PM2.5NAAQS, then this is prima facia evidence that under section 172 the level of control on the sources that produced the attaining level of emissions would constitute RACM/RACT for purposes of the State's attainment plan for these NAAQS. As described in RockTenn CP, LLP, Stevenson Mill's title V operating permit,5 the following emission units and controls were in place at the facility to meet various applicable emission limits for PM, SO2and NOXat the time that the Chattanooga Area achieved attainment:

• The Number 1 Power Boiler is controlled by a combination venturi-spin vane absorber and wet ESP-advance membrane up-flow system to meet SIP emission limits for PM and opacity and a Prevention of Significant Deterioration (PSD) Best Available Control Technology (BACT) emission limit for SO2.

• The Number 2 Power Boiler is controlled by a combination venturi-spin vane absorber and wet ESP-advance membrane up-flow system to meet New Source Performance Standard (NSPS) limits and PSD/BACT limits for SO2, PM, opacity, and NOX.

• The Number 1 Wood Fired Boiler is controlled by mechanical dust collectors, a wet multiple-element variable throat venture scrubber, and a polishing wet ESP to meet NSPS limits and PSD/BACT limits for SO2, PM, opacity, and NOX.

• The Number 2 Wood Fired Boiler is controlled by a multicyclone and a dry ESP to meet NSPS limits and PSD/BACT limits for SO2, PM, and NOXand a state operating permit limit for opacity.

• The Chemical Recovery System (CRS) is controlled by both a dry and a wet ESP to meet PSD/BACT limits for PM. SO2emissions from the CRS are monitored with a continuous emission monitoring system to assure compliance with NSPS limits and PSD/BACT limits. The CRS is also subject to PSD/BACT limits for NOXand a SIP limit for opacity.

EPA is proposing to approve Alabama's conclusion that the existing controls on emissions of PM2.5, SO2, andNOXat the Widows Creek facility constitute RACM/RACT for that source in the Alabama portion of the Chattanooga Area based on our analysis described above. Further, as summarized above, EPA proposes that no further controls would be required at the RockTenn facility and that existing controls there are sufficient for RACM/RACT purposes for this Area, at this time. As noted above, the most current monitoring data for this Area indicates that it is attaining the 1997 Annual PM2.5NAAQS. In addition, EPA has already made a clean data determination and a finding of attaining data for this Area confirming that it met the NAAQS by its attainment date.See76 FR 55774, September 8, 2011. EPA's guidance for the PM2.5Implementation Rule recommends that if an area is predicted through the attainment plan to attain the standards within five years after designation, then the state may submit a more limited RACM/RACT analysis and the state could elect not to do additional modeling.

In light of the fact that the Chattanooga Area attained the 1997 Annual PM2.5NAAQS by the State's projected attainment date, and that at this point in time no additional measures could be adopted to attain one year sooner, EPA proposes to conclude that the attainment plan meets the RACM/RACT requirements of the PM2.5Implementation Rule and that the level of control in the State's attainment plan constitutes RACM/RACT for purposes of the 1997 Annual PM2.5NAAQS. Because the PM2.5Implementation Rule defines RACM/RACT as that level of control that is necessary to bring an area into timely attainment, and that no additional measures could achieve attainment one year earlier, the current level of federally enforceable controls on sources located within the Area is by definition RACM/RACT for this Area for this purpose.

Our proposed approval is based upon the determination that these emission controls are in place and are, in part, the reason for the attainment of the 1997 Annual PM2.5NAAQS in the Chattanooga Area. By approving these control measures as RACM/RACT for both sources for purposes of Alabama's attainment plan, these control measures will become permanent and enforceable SIP measures to meet the requirements of the CAA and the PM2.5Implementation Rule for purposes of the 1997 Annual PM2.5NAAQS.

Section 172(c)(2) of the CAA and the PM2.5Implementation Rule require that attainment plans include a demonstration that reasonable further progress toward meeting air quality standards will be achieved through generally linear incremental improvement in air quality. For the 1997 PM2.5NAAQS, a state is required to submit a separate RFP plan for any area for which the state seeks an extension of the attainment date beyond 2010. The PM2.5Implementation Rule set forth that an area that demonstrates attainment within five years of the date of designation will be considered to have satisfied the RFP requirement and is not required to submit a separate RFP plan.See40 CFR 51.1009(b). The Alabama attainment plan submittal for the Chattanooga Area by demonstrated that the Area would attain the 1997 Annual PM2.5NAAQS by the April 5, 2010, attainment date. Accordingly, the State was not required under the PM2.5Implementation Rule to develop a specific RFP component of the attainment plan for this Area. We therefore propose to approve the State's attainment plan with respect to the RFP requirement.

In accordance with section 172(c)(9) of the CAA, the PM2.5Implementation Rule requires that PM2.5attainment plans include contingency measures.See40 CFR 51.1012 and 72 FR at 20642-20646, April 25, 2007. Contingency measures are additional measures to be implemented in the event that an area fails to meet RFP or fails to attain a standard by its attainment date. These measures must be fully adopted rules or control measures that can be implemented quickly and without additional EPA or state action if the area fails to meet RFP or fails to attain by its attainment date and should contain trigger mechanisms and an implementation schedule. In addition, they should be measures not already included in the SIP control strategy for attaining the standard and should provide for emission reductions equivalent to one year of RFP.

The Alabama attainment plan describes the contingency measures for the Chattanooga Area as being comprised of Georgia Rules for Air Quality Control Chapter 391-3-1 Rule (sss) “Multipollutant Control of Electric Steam Generating Units.” This rule requires additional controls on power plants in Georgia after the end of 2008, resulting in SO2and NOXemission reductions that were not required for demonstrating attainment of the annual PM2.5NAAQS. However, as noted in section II.C. of this proposed rulemaking, EPA made a determination, based on complete, quality-assured, quality-controlled, and certified ambient air monitoring data for the 2007-2009 monitoring period, that the Chattanooga Area attained the 1997 Annual PM2.5NAAQS by the applicable attainment date of April 5, 2010. Because EPA has determined, in accordance with CAA 179(c)(1), that the Area attained by its applicable deadline, no contingency measures for failure to attain by this date need to be implemented, and EPA action with respect to contingency measures is unnecessary and would be futile and without purpose. Furthermore, as set forth in the PM2.5Implementation Rule, areas that attained the NAAQS by the attainment date are considered to have satisfied the requirement to show RFP, and as such do not need to implement contingency measures to make further progress to attainment. Because EPA has determined that the Area has attained by the attainment date, the contingency measures submitted by Alabama are no longer necessary for the Chattanooga Area to meet RFP requirements or to attain the annual PM2.5NAAQS by the attainment date.

Alabama provided a demonstration of attainment of the 1997 Annual PM2.5NAAQS in the Chattanooga Area by no later than five years after the Area was designated nonattainment. In accordance with the PM2.5Implementation Rule, areas such as this, demonstrating that they will attain the standard by April 5, 2010, attainment deadline, are considered to have satisfied the requirement to show RFP toward attainment and need not submit a separate RFP plan. For similar reasons, such areas are also not subject under the Implementation Rule to a requirement for a mid-course review. Given that monitoring data confirm that the Chattanooga Area attained the 1997 Annual PM2.5NAAQS by the date that the State anticipated in its attainment plan, that EPA has already made an attainment determination, and that the Area continues to attain those NAAQS, EPA is proposing to approve the State's attainment date.

The CAA requires federal actions in nonattainment and maintenance areas to “conform to” the goals of SIPs.See, e.g.,CAA section 176. This means that such actions will not cause or contribute to violations of a NAAQS; worsen the severity of an existing violation; or delay timely attainment of any NAAQS or any interim milestone. Actionsinvolving Federal Highway Administration (FHWA) or Federal Transit Administration (FTA) funding or approval are subject to the transportation conformity rule (40 CFR part 93, subpart A). Under this rule, metropolitan planning organizations (MPOs) in nonattainment and maintenance areas coordinate with state air quality and transportation agencies, EPA, and the FHWA and FTA to demonstrate that their metropolitan transportation plans and transportation improvement programs (TIPs) conform to applicable SIPs. This is typically determined by showing that estimated emissions from existing and planned highway and transit systems are less than or equal to the motor vehicle emissions budgets (MVEB) contained in a SIP.

For MVEB to be approvable, they must meet, at a minimum, EPA's adequacy criteria found at 40 CFR 93.118(e)(4). In certain instances, the Transportation Conformity Rule allows areas to forgo establishment of a MVEB where it is demonstrated that the regional motor vehicle emissions for a particular pollutant or precursor are an insignificant contributor to the air quality problem in an area. The general criteria for insignificance determinations can be found in 40 CFR 93.109(f). Insignificance determinations are based on a number of factors, including the percentage of motor vehicle emissions in context of the total SIP inventory; the current state of air quality as determined by monitoring data for the relevant NAAQS; the absence of SIP motor vehicle control measures; and the historical trends and future projections of the growth of motor vehicle emissions. EPA's rationale for providing for insignificance determinations is described in the July 1, 2004, revision to the Transportation Conformity Rule at 69 FR 40004.6 Specifically, the rationale is explained on page 40061 under the subsection entitled “XXIII.B. Areas with Insignificant Motor Vehicle Emissions.” Any insignificance determination under review of EPA is subject to the budget adequacy and approval process for EPA's action on the SIP.

EPA made an insignificance finding through the transportation conformity adequacy process for NOXand directly emitted PM2.5for the Alabama portion of the Chattanooga PM2.5nonattainment area on June 18, 2010 (75 FR 34734). As a result of EPA's insignificance finding, the Alabama portion of the Chattanooga Area was no longer required to perform regional emissions analyses for either directly emitted PM2.5or NOXas part of future PM2.5conformity determinations for the 1997 Annual PM2.5NAAQS until such time that EPA reviewed and took action on the Chattanooga Area's attainment plan (the subject of today's proposed action). EPA's June 18, 2010, insignificance finding for directly emitted PM2.5and NOXthrough the adequacy process (effective on July 6, 2010) only relates to the Alabama portion of the tri-state Chattanooga Area.

When EPA makes an insignificance determination through the adequacy process for transportation conformity, EPA notes that such an adequacy determination does not imply that an insignificance determination in the SIP (i.e.,in this case the attainment plan) will ultimately be approved. In this case, consistent with EPA's adequacy review of Alabama's October 7, 2009, attainment plan and the Agency's subsequent thorough review of the entire SIP submission, EPA is proposing to approve Alabama's insignificance determination for the mobile source contribution of NOXand PM2.5emissions to the overall PM2.5emissions in the Chattanooga Area. EPA preliminarily determined that Alabama's SIP submittal meets the criteria in the transportation conformity rules for an insignificance finding for both NOXand PM2.5contribution from motor vehicles in the Alabama portion of the Chattanooga Area. That is, EPA has preliminarily determined that the SIP submittal demonstrates that, for NOXand PM2.5, regional motor vehicle emissions are an insignificant contributor to the annual PM2.5concentrations in the Alabama portion of the Area. This preliminary finding is based on the following factors:

• Tables 10.1.1-1 and 10.1.1-2 of Alabama's submittal demonstrate that the on-road NOXand PM2.5emissions in 2009 for the Alabama portion of the Area are less than 1 percent, each, of the total emissions for the Alabama portion of the Area.

• There have been no SIP requirements for motor vehicles control measures for the Alabama portion of the Area.

• According to the Chattanooga Area MPO's analysis, the projected mobile source emissions to 2035 indicate that there is no reason to expect highway motor vehicle growth that would cause a violation of the 1997 Annual PM2.5NAAQS.

• As described above, the Area has attained the 1997 Annual PM2.5standard and EPA is proposing to approve the attainment plan for the Alabama portion of the Area.

As discussed above, the Area is not currently required to perform a regional emissions analysis for the Alabama portion of the Chattanooga Area based on the adequacy determination for the finding that on-road emissions of NOXand direct PM2.5are insignificant contributors to the Area's PM2.5air quality problem. Today, EPA is proposing to approve that insignificance finding as part of the State's attainment plan for the Area. If finalized, such approval would serve to confirm that the Alabama portion of the Area is not required to perform a regional emissions analysis for either directly emitted PM2.5or NOXas a part of future PM2.5conformity determinations for the 1997 Annual PM2.5standard.7 PM2.5hot-spot analysis will continue to apply for required projects under 40 CFR 93.116 and 93.123(b) of the Transportation Conformity Rule.

Weighing all the factors for an insignificance finding, particularly the minor contribution of mobile source NOXand PM2.5, EPA has determined that the NOXand PM2.5contribution from motor vehicle emissions to the Annual PM2.5pollution problem for the Alabama portion of the Area are insignificant. If finalized, EPA's insignificance finding should be considered and specifically noted in the transportation conformity documentation that is prepared for this Area.

The insignificance determination that Alabama submitted for the Chattanooga Area was developed with projected mobile source emissions derived using the MOBILE6 motor vehicle emissions model. EPA is proposing to approve the inventory and the insignificance determination because this model was the most current model available at the time Alabama was performing its analysis. However, EPA has now issued an updated motor vehicle emissions model known as Motor Vehicle Emission Simulator or MOVES. In itsannouncement of this model, EPA established a two-year grace period for continued use of MOBILE6 in regional emissions analyses for transportation plan and TIP conformity determinations (extending to March 2, 2012),8 after which states (other than California) must use MOVES in conformity determinations for TIPs. As stated above MOBILE6.2 was the applicable mobile source emissions model that was available when this SIP was submitted. EPA's “Policy Guidance on the Use of MOVES2010 and Subsequent Minor Revisions for State Implementation Plan Development, Transportation Conformity, and Other Purposes” (http://www.epa.gov/otaq/models/moves/documents/420b12010.pdf) explains that the Clean Air Act does not require states that have already submitted SIPs to revise these SIPs simply because a new motor vehicle emissions model is now available. The guidance further states that the use of MOBILE6.2 in an already submitted SIP should not be an obstacle to approval of that SIP assuming that it is otherwise approvable because it would be unreasonable to require revision to a SIP which in this case was submitted prior to the release of MOVES. In this instance the on-road emissions of NOXand PM2.5represent such a small percentage of the inventory in the Alabama portion of the Area (less than 1 percent of the total inventory) that recalculating the on-road emissions with MOVES would not result in a change in the proposed conclusion that on-road emissions meet the insignificance criteria in the transportation conformity rule. 40 CFR 93.109(f).

EPA is proposing to approve Alabama's annual PM2.5attainment plan for the Alabama portion of the Chattanooga Area. EPA has preliminarily determined that the SIP meets applicable requirements of the CAA, as described in the PM2.5Implementation Rule. Specifically, EPA is proposing to approve Alabama's attainment demonstration, including the RACM/RACT analysis; RFP analysis; and, for transportation conformity purposes, an insignificance determination for PM2.5and NOXfor the mobile source contribution to ambient PM2.5levels for the State's portion of the Chattanooga Area. The requirement for a RFP plan is satisfied because Alabama demonstrated attainment of the 1997 PM2.5NAAQS in the Area by April 5, 2010. Also, because EPA has previously determined that the Area has attained by the attainment date, the contingency measures submitted by Alabama are no longer necessary for the Chattanooga Area to meet RFP requirements or to attain the 1997 Annual PM2.5NAAQS by the attainment date.

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

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

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

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

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

• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, October 7, 1999);

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

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

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

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

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

This document concerns the delegation of unchanged NESHAP to the Gila River Indian Community Department of Environmental Quality (GRIC) in Arizona. In the Rules section of thisFederal Register, EPA is granting GRIC the authority to implement and enforce specified NESHAP. The direct final rule also explains the procedure for future delegation of NESHAP to GRIC. EPA is taking direct final action without prior proposal because the Agency believes this action is not controversial. If we receive adverse comments, however, we will publish a timely withdrawal of the direct final rule and address the comments in a subsequent action based on this proposed rule. Please note that if we receive adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, we may adopt as final those provisions of the rule that are not the subject of an adverse comment.

We do not plan to open a second comment period, so anyone interested in commenting should do so at this time. If we do not receive adverse comments, no further activity is planned. For further information, please see the direct final action.

We will accept written comments and information during this reopened comment period on our proposed designation of revised flycatcher critical habitat that was published in theFederal Registeron August 15, 2011 (76 FR 50542). We are accepting comments regarding additional areas we are proposing as critical habitat in this document and other areas that we are considering for exclusion under section 4(b)(2) of the Act (16 U.S.C. 1531et seq.), as discussed in this document. We are also accepting comments on the amended required determinations section, the draft economic analysis, and the draft environmental assessment prepared in compliance with NEPA (42 U.S.C. 4321et seq.). We will consider information and recommendations from all interested parties. We are particularly interested in comments concerning:

(1) The reasons why we should or should not designate habitat as “critical habitat” under section 4 of the Act, including whether there are threats to the species from human activity, the degree of which can be expected to increase due to the designation, and whether that increase in threat outweighs the benefit of designation such that the designation of critical habitat is not prudent.

(2) Specific information on:

(a) The distribution of the flycatcher;

(b) The amount and distribution of flycatcher habitat;

(c) What areas that were occupied at the time of listing that contain features essential to the conservation of the species should be included in the designation and why;

(d) What areas not occupied at the time of listing that meet our criteria as being essential for the conservation of the species should be included in the designation and why;

(e) Special management considerations or protection that may be needed for the physical or biological features essential to the conservation of the species in the critical habitat areas we are proposing, including managing for the potential effects of climate change;

(f) Stream segments, many of which are highlighted in the Southwestern Willow Flycatcher Recovery Plan (Recovery Plan) (Service 2002) and included in this proposed rule, that are not now known to have flycatcher nesting territories or known to only have few nesting flycatchers that may be capable of being improved for flycatcher recovery purposes. We specifically seek information about streams within the Amargosa, Salton, Mohave, Powell, San Juan, Santa Cruz, and Hassayampa and Agua Fria Management Units. Please provide information on flycatcher distribution and abundance, habitat quality, habitat locations, habitat improvement projects, management actions needed to improve habitat, habitat quality limitations, habitat recovery potential, and any other flycatcher or flycatcher-habitat-specific information, and;

(g) Flycatcher habitat suitability for recovery in areas within the Santa Ana and San Diego Management Units in southern California, specifically in the following areas: (1) Entirety of Temescal Wash including Alberhill Creek in Riverside County; (2) entirety of Murrieta Creek in Riverside County; (3) Potrero Creek near the city of Beaumont in Riverside County; (4) Cajon Creek from Lone Pine Canyon to California State Highway 138 in San Bernardino County; and (5) Tijuana River from Dairy Mart Road to the Tijuana River Estuary in San Diego County.

(3) Land use designations and current or planned activities in the subject areas and their possible impacts on proposed critical habitat.

(4) Information on the projected and reasonably likely impacts of climate change on the flycatcher, the features essential to its conservation, and the areas proposed as revised critical habitat.

(5) Any probable economic, national security, environmental, cultural, or other relevant impacts of designating any area that may be included in the final designation; in particular, we seek information concerning any impacts on small entities, and the benefits of including or excluding areas that exhibit these impacts.

(6) Whether any specific areas we are proposing for critical habitat designation should be considered for exclusion under section 4(b)(2) of the Act, and whether the benefits of potentially excluding any specific area outweigh the benefits of including that area under section 4(b)(2) of the Act, in particular:

(a) For specific lands that we should consider for exclusion under section 4(b)(2) of the Act, please provide us management plans, conservation easements, agreements, habitat conservation plans (HCPs), or other appropriate information, which describe the commitment and assurances of protection of the physical or biological features of flycatcher critical habitat; property boundaries; flycatcher status, distribution, and abundance; and management actions to protect the physical or biological features of flycatcher habitat;

(b) For lands we evaluated and excluded from critical habitat under section 4(b)(2) of the Act in our 2005 flycatcher critical habitat designation (70 FR 60886, October 19, 2005) and lands to be newly considered for exclusion in this revision to designated critical habitat, please resubmit your request. In addition to your request, please include any updated information that pertains to the commitment and assurances of protection of flycatcher habitat; the physical or biological features of flycatcher critical habitat; property boundaries; flycatcher status, distribution, and abundance; and management actions to protect the physical or biological features of flycatcher habitat. Include the specific results of implementing these management plans since our 2005 flycatcher critical habitat designation; and

(c) Information concerning the benefits of excluding or retaining lands we identify in the proposed critical habitat rule and revisions herein under consideration for exclusion under section 4(b)(2) of the Act. We specifically seek information about the possible exclusion of Elephant Butte Reservoir; areas within the operating pool of the reservoir may be subject to exclusion under 4(b)(2) of the Act if we determine that the benefits of excluding the area due to potential impacts to water operations outweigh the benefits to the subspecies of including the area as critical habitat.

(7) Whether we could improve or modify our approach to designating critical habitat in any way to provide for greater public participation and understanding, or to better accommodate public concerns and comments.

(8) Information on the extent to which the description of economic impacts in the draft environmental analysis is complete and accurate.

(9) The likelihood of adverse social reactions to the designation of criticalhabitat, as discussed in the draft environmental assessment, and how the consequences of such reactions, if likely to occur, would relate to the conservation and regulatory benefits of the proposed revised critical habitat designation.

(10) Information on the extent to which the description and evaluation of the proposal included in the draft environmental assessment is complete and accurate.

If you submitted comments or information on the proposed revised rule (76 FR 50542) from August 15, 2011, to October 14, 2011, or since the initial comment period ended, please do not resubmit them. We will incorporate them into the public record as part of this comment period, and we will fully consider them in the preparation of our final determination. Our final determination concerning revised critical habitat will take into consideration all written comments, oral comments received during the public hearing, and any additional information we receive during both comment periods and the time between each comment period.

You may submit your comments and materials concerning the proposed revised rule, draft economic analysis, or draft environmental assessment by one of the methods listed in theADDRESSESsection. We request that you send comments only by the methods described in theADDRESSESsection.

If you submit a comment viahttp://www.regulations.gov,your entire comment—including any personal identifying information—will be posted on the Web site. We will post all hardcopy comments onhttp://www.regulations.govas well. If you submit a hardcopy comment that includes personal identifying information, you may request at the top of your document that we withhold this information from public review. However, we cannot guarantee that we will be able to do so.

Comments and materials we receive, as well as supporting documentation we used in preparing the proposed rule, draft economic analysis, and draft environmental assessment, will be available for public inspection onhttp://www.regulations.govat Docket No. FWS-R2-ES-2011-0053, or by appointment, during normal business hours, at the Arizona Ecological Services Office (seeFOR FURTHER INFORMATION CONTACT). You may obtain copies of the proposed rule, draft economic analysis, and draft environmental assessment on the Internet athttp://www.regulations.govat Docket No. FWS-R2-ES-2011-0053, or by mail from the Arizona Ecological Services Office (seeFOR FURTHER INFORMATION CONTACTsection).

It is our intent to discuss only those topics directly relevant to the designation of revised critical habitat for the flycatcher in this document. For more information on previous Federal actions concerning the flycatcher, refer to the proposed designation of revised critical habitat published in theFederal Registeron August 15, 2011 (76 FR 50542). Background information on the flycatcher can be found in the 2005 final flycatcher critical habitat rule published in theFederal Registeron October 19, 2005 (70 FR 60886); our October 12, 2004, proposed critical habitat rule (69 FR 60706); the Recovery Plan; our first flycatcher critical habitat designation, published July 22, 1997 (62 FR 39129), and corrected on August 20, 1997 (62 FR 44228); the final flycatcher listing rule (60 FR 10694, February 27, 1995); and other documents described and cited in the August 15, 2011, flycatcher critical habitat proposal (76 FR 50542). Other reports can be retrieved from the U.S. Geological Survey's (USGS) flycatcher site athttp://sbsc.wr.usgs.gov/cprs/research/projects/swwf.No new literature is being cited within this document. The current 2005 critical habitat rule remains in effect while this rulemaking process proceeds. For more information on this revised flycatcher critical habitat proposal, please go online tohttp://www.regulations.gov(at Docket No. FWS-R2-ES-2011-0053) orhttp://www.fws.gov/southwest/es/arizona/.All references cited in the August 15, 2011, flycatcher critical habitat revision proposal (76 FR 50542) can be retrieved from these Web sites. You can also contact the Arizona Ecological Services Office (seeFOR FURTHER INFORMATION CONTACT).

The flycatcher was listed as endangered on February 27, 1995 (60 FR 10694). On July 22, 1997, we published a final critical habitat designation for the flycatcher along 964 stream kilometers (km) (599 stream miles (mi)) in Arizona, California, and New Mexico (62 FR 39129). We published a correction notice on August 20, 1997, on the lateral extent of critical habitat (62 FR 44228). As a result of a 1998 lawsuit from the New Mexico Cattlegrower's Association, on October 19, 2005 (70 FR 60886), we published a revised final flycatcher critical habitat designation for portions of Arizona, California, New Mexico, Nevada, and Utah, totaling approximately 1,186 km (737 mi). River segments were designated as critical habitat in 15 of the 32 Management Units described in the Recovery Plan. We were sued by the Center for Biological Diversity over our 2005 critical habitat rule, and on July 13, 2010, we agreed to revise critical habitat. The resulting settlement left the existing critical habitat designation from 2005 in effect, and required that we deliver a proposed rule for a revised critical habitat to theFederal Registerby July 31, 2011, and a final rule by July 31, 2012. On March 22, 2012, the settlement agreement was modified to make the final rule due to theFederal Registerby December 14, 2012.

On August 15, 2011, we published a proposed rule to revise critical habitat for the flycatcher (76 FR 50542). We proposed to designate approximately 3,364 stream km (2,090 stream mi) of critical habitat, which includes various stream segments and their associated riparian areas, not exceeding the 100-year floodplain, on a combination of Federal, State, tribal, and private lands in California, Arizona, New Mexico, southern Nevada, Utah, and Colorado. We identified approximately 1,254 km (779 miles) of river habitat that we were considering for exclusion under section 4(b)(2) of the Act. That proposal had a 60-day comment period ending October 14, 2011.

Section 3 of the Act defines critical habitat as the specific areas within the geographical area occupied by a species, at the time it is listed in accordance with the Act, on which are found those physical or biological features essential to the conservation of the species and that may require special management considerations or protection, and specific areas outside the geographical area occupied by a species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. If the proposed rule is made final, section 7 of the Act will prohibit destruction or adverse modification of critical habitat by any activity funded, authorized, or carried out by any Federal agency. Federal agencies proposing actions affecting critical habitat must consult with us on the effects of their proposed actions, under section 7(a)(2) of the Act.

In this document, we are notifying the public of: (1) two changes to the proposed revision of flycatcher critical habitat, and (2) additional and revised areas that we are considering for exclusion from the final designation ofcritical habitat. We describe below the two newly proposed changes to the critical habitat designation, and we describe the additional areas being considered for exclusion in the Consideration of Impacts under Section 4(b)(2) of the Act section of this document. All other areas proposed on August 15, 2011, remain proposed for designation as critical habitat.

After assessing the overall habitat at the Ash Meadows National Wildlife Refuge in Nevada, we are proposing a reduced area there that would be designated as critical habitat. On August 15, 2011, we proposed approximately 5.7 km (3.5 miles) of Carson Slough and 100.1 km (62.2 miles) of associated unnamed riparian areas as critical habitat within the Ash Meadows National Wildlife Refuge in the Amargosa Management Unit (76 FR 50542, p. 50568). Following the proposal, we collected new information on the available habitat at Ash Meadows and reevaluated the potential for flycatcher habitat occurrence on the Refuge. We found five separate locations that are essential for flycatcher conservation. These proposed locations total about 2.4 km (1.5 miles) of stream-side riparian habitat, a reduction of about 103.4 km (64.2 mi) from the August 15, 2011, proposed revised critical habitat in the refuge. Management at these locations will be included in the overall management and restoration efforts ongoing at Ash Meadows to recover numerous endemic and listed species. Management of flycatcher critical habitat will be consistent with and complementary to management and recovery needs of the endemic species. Landscape-level improvements at Ash Meadows will continue to restore the natural hydrology, topography, and vegetation communities and provide suitable flycatcher habitat, most likely in the form of Goodding's willow (Salix gooddingii) and leather-leaf ash (Fraxinus velutina). Both tree species are known to be used by flycatchers during migration and sometimes for nesting. The current areas proposed for critical habitat are expected to provide long-term native plant species communities that will support flycatcher habitat.

We also propose to designate one additional area that occurs in the Santa Cruz Management Unit, Pima County, Arizona, within the Gila Recovery Unit. This change would lengthen, both upstream and downstream, the segment of Cienega Creek that is proposed for designation as revised critical habitat. We are also proposing to designate as critical habitat two short segments of Empire Gulch, a tributary to the headwaters of Cienega Creek. The new segments of Cienega Creek and Empire Gulch identified in this document constitute an addition of 10.9 km to the areas we proposed for flycatcher critical habitat and the description below supplements the description of the Santa Cruz Management Unit in the August 15, 2011, proposal (76 FR 50542, p. 50574). No change is being identified for the proposed segment of the Santa Cruz River, also included within this Management Unit.

Based on the changes to the proposed critical habitat area discussed below, Table 1 provides an updated accounting of the total areas we are proposing as revised critical habitat. This information revises Table 2 of the August 15, 2011 proposal (76 FR 50542, pp. 50561-50562). These data also reflect minor corrections in the accounting and mapping of some proposed segments, and present total areas (in hectares and acres) in addition to stream lengths reported in the proposed rule. We are currently proposing a total of 3,400 stream km (2,113 stream mi) encompassing 215,551 hectares (ha) (532,636 acres (ac)). This is a net increase of approximately 36 stream km (23 stream mi) from our August 15, 2011, proposal (76 FR 50542).

Updated information and further evaluation led us to modify the areas we are proposing as critical habitat on the Ash Meadows National Wildlife Refuge (see Changes from Previously Proposed Critical Habitat). These new areas replace the areas (Carson Slough and the unnamed riparian areas) that were identified in the proposed rule (76 FR 50542, p. 50568). We are proposing as critical habitat five areas on the Ash Meadows National Wildlife Refuge in Nye County, Nevada: Soda Spring segment (0.5 km, 0.3 miles; 1.2 ha, 3.0 ac); Lower Fairbanks segment (0.8 km, 0.5 mi; 2.3 ha, 5.8 ac); Crystal Reservoir segment (0.5 km, 0.3 mi; 11.7 ha, 28.9ac); North Tubbs segment (0.2 km, 0.1 mi; 0.3 ha, 0.7 ac); and South Tubbs segment (0.4 km, 0.2 mi; 0.8 ha, 1.9 ac). These areas were not known to be occupied at the time of listing. These segments, together with the other segments in the Amargosa Management Unit (stream segments of the Amargosa River (12.3 km, 7.7 mi) and Willow Creek (3.5 km, 2.2 mi) in Inyo and San Bernardino Counties, California), are essential for flycatcher conservation because they are anticipated to provide habitat for metapopulation stability, gene connectivity through this portion of the flycatcher's range, protection against catastrophic population loss, and population growth and colonization potential. As a result, these river segments and associated flycatcher habitat are anticipated to support the strategy, rationale, and science of flycatcher conservation in order to meet territory and habitat-related recovery goals.

We received clarifying information that the proposed critical habitat segment on Cienega Creek did not include the location of a previously known flycatcher breeding territory as well as other recent flycatcher detections and habitat information. We also received new information about a breeding flycatcher and quality habitat along Empire Gulch (a tributary to the headwaters of Cienega Creek) from 2011 flycatcher surveys. Because of the limited information we have for flycatchers in the Santa Cruz Management Unit, these were important observations. As a result, this revision to proposed critical habitat extends the length of proposed flycatcher critical habitat on Cienega Creek, both upstream and downstream of the segment we identified on August 15, 2011 (76 FR 50542, p. 50574), and adds two short segments of Empire Gulch to the proposed revised critical habitat designation.

The new proposed Cienega Creek segment occurs within the boundary of the Bureau of Land Management's Las Cienegas National Conservation Area. We are extending the flycatcher critical habitat that we are proposing for Cienega Creek upstream and downstream from the original 7.0-km (4.4-mi) segment we proposed on August 15, 2011 (76 FR 50542, p. 50574), to a new 17.9-km (11.1-mi) segment. This new area includes the location of a previously detected flycatcher territory area, locations used by migratory flycatchers, and areas that may develop into future breeding habitat.

We were also provided new information during the comment period about a breeding flycatcher detected on Empire Gulch (a tributary to the headwaters of Cienega Creek) and habitat that may support breeding and migrating flycatchers. As a result, we are proposing to designate as critical habitat one isolated 0.4-km (0.3-mi) upper segment of Empire Gulch and a second 1.3-km (0.8-mi) lower segment of Empire Gulch that connects to Cienega Creek. Both of these segments are within the Las Cienegas National Conservation Area.

Neither of these newly proposed segments on Cienega Creek nor those on Empire Gulch were known to be occupied at the time of listing; however, they are believed to be essential for flycatcher conservation because of their ability to develop and sustain flycatcher habitat and territories to help meet recovery goals in this Management Unit. As noted earlier in this document (see Public Comments), we are specifically seeking information about flycatchers and stream segments within the Santa Cruz Management Unit. Both the Santa Cruz River and Cienega Creek segments were identified in the Recovery Plan as areas with substantial recovery value. The addition of the short segments of Empire Gulch is based upon flycatcher detections in 2011, and the fact that they are immediately adjacent to areas identified in the Recovery Plan. These segments are anticipated to provide flycatcher habitat for metapopulation stability, gene connectivity through this portion of the flycatcher's range, protection against catastrophic population loss, and population growth and colonization potential. As a result, these stream segments and associated flycatcher habitat are anticipated to support the strategy, rationale, and science of flycatcher conservation in order to meet territory and habitat-related recovery goals.

Section 4(b)(2) of the Act requires that we designate or revise critical habitat based upon the best scientific data available, after taking into consideration the economic impact, impact on national security, or any other relevant impact of specifying any particular area as critical habitat. We may exclude an area from critical habitat if we determine that the benefits of excluding the area outweigh the benefits of including the area as critical habitat, provided such exclusion will not result in the extinction of the species.

When considering the benefits of inclusion for an area, we consider the additional regulatory benefits that area would receive from the protection from adverse modification or destruction as a result of actions with a Federal nexus (activities conducted, funded, permitted, or authorized by Federal agencies), the educational benefits of mapping areas containing essential features that aid in the recovery of the listed species, and any benefits that may result from designation due to State or Federal laws that may apply to critical habitat.

When identifying the benefits of exclusion, we consider, among other things, whether exclusion of a specific area is likely to result in conservation; the continuation, strengthening, or encouragement of partnerships; or implementation of a management plan that provides equal or more conservation than a critical habitat designation would provide; avoid disproportionate economic impacts resulting from the designation of critical habitat; or avoid potential conflicts with national security issues or other environmental issues. In the case of the flycatcher, the benefits of critical habitat include public awareness of the presence of flycatchers and the importance of habitat protection, and, where a Federal nexus exists, increased habitat protection for flycatchers due to protection from adverse modification or destruction of critical habitat. In practice, situations with a Federal nexus exist primarily on Federal lands or for projects carried out, authorized, or funded by Federal agencies.

We have not proposed to exclude any areas from critical habitat under section 4(b)(2) of the Act, but we did identify a number of areas we are considering for exclusion from the final revised critical habitat designation. We are now considering excluding an additional 211.0 km (131.1 mi) of proposed critical habitat, bringing the overall total of areas considered for exclusions, after revisions to one other unit, to 1,451.5 km (901.9 mi) encompassing approximately 135,587 ha (335,043 ac). We have included a list in Table 2 and descriptions of the additional areas we are considering for exclusion beyond those already identified in the August 15, 2011, proposed rule (76 FR 50542, pp. 50581-50594). The additional areas are being considered for exclusion based on other relevant impacts, and the list below is organized by Recovery Unit and Management Unit. The finaldecision on whether to exclude any areas will be based on the best commercial and scientific data available at the time of the final designation, including information obtained during the comment period and information about the economic impact of designation. Accordingly, we have prepared a draft economic analysis and draft environmental assessment concerning the proposed critical habitat designation, which is available for review and comment (seeADDRESSES).

The following areas, listed in Table 2 and described below, are being considered for exclusion from our final critical habitat designation, amending those areas described in the August 15, 2011, proposed rule (76 FR 50542, pp. 50581-50594).

Newhall Land and Farming Company (Newhall) controls land holdings and interests along a portion of the Santa Clara River (18.5 km, 11.5 mi) and Castaic Creek (4.8 km, 3.0 mi) confluence proposed as flycatcher critical habitat in Ventura County, California. Newhall has existing and proposed conservation easements for these lands. Some of the effects of nearby commercial and industrial development have been reduced and minimized by implementing conservation measures established through planning documents and section 7 biological opinions issued by the Service. Of the 655 ha (1,619 ac) of Newhall land within the proposed flycatcher critical habitat designation, 119 ha (293 ac) are currently within an existing or pending conservation easement, while the remaining acreage occurs within future or pending conservation easements. We will evaluate the conservation easements, management actions, commitments, and assurances associated with these lands for potential exclusion from the final revised designation of flycatcher critical habitat under section 4(b)(2) of the Act.

Lower Colorado River Multi-Species Conservation Plan (LCR MSCP), National Wildlife Refuges

In the August 15, 2011, proposed rule (76 FR 50542, p. 50590), we described the reasons for considering excluding the areas within the LCR MSCP. The flycatcher is a key species in the LCR MSCP, where the permittees will create and maintain 1,639 ha (4,050 ac) of flycatcher habitat over the 50-year life of the permit and habitat conservation plan (2005 to 2055). Additional research, management, monitoring, and protection of flycatchers and flycatcher habitat from fire, nest predators, and brood parasites will occur. In our description of this plan, we explained how the LCR MSCP works in conjunction with the four National Wildlife Refuges (Bill Williams, Havasu, Cibola, and Imperial) along this stretch of the Colorado River for management of flycatcher habitat. We intended to include these National Wildlife Refuges as part of the areas being considered for exclusion from the final critical habitat designation because of the management and protections provided by the LCR MSCP. However, we inadvertently omitted these areas from the areas calculated in Table 4 of the proposed rule (76 FR 50542, August 15, 2011, p. 50583). We are now providing notice that the areas being considered for exclusion within the LCR MSCP do include the National Wildlife Refuges as listed above in Table 2. The refuges occur within the Bill Williams Management Unit, Arizona; the Hoover to Parker Dam Management Unit, Arizona and California; and the Parker Dam to Southerly International Border Management Unit, Arizona and California.

The Pinal Creek Group, represented by Freeport McMoRan, is actively implementing the Water Quality Assurance Revolving Fund Remedial Action Program required by the Arizona Department of Environmental Quality Consent Order issued in April 1998 along lower Pinal Creek in Gila County, Arizona. These actions occur throughout the proposed 5.7 km (3.5 mi) of proposed flycatcher critical habitat. The primary purpose of this Remedial Action Program is the monitoring, extraction, and treatment of contaminated Pinal Creek groundwater. Implementation of these remedial projects has resulted in improved abundance, distribution, and quality of riparian habitat for flycatchers.

The extraction, treatment, and discharge of Pinal Creek groundwater onto the surface of the Pinal Creek bed and associated land management actions have been the primary actions that have helped establish and maintain increased abundance of riparian vegetation. The goal of the habitat mitigation and monitoring plan associated with the Remedial Action Program is the maintenance and long-term restoration of riparian habitat, dominated by native tree species. In addition to a more constant surface water and elevated groundwater table available to grow riparian plants, cattle grazing pressure on vegetation has been limited within the Pinal Creek area through fencing and modification of previous grazing strategies. Cattle grazing is now eliminated during the growing season (April through October). Also, nonnative plant management has reduced the occurrence of flammable plants and the potential impacts of wildfire. Much of these lands are also fenced properties that limit both public access and actions that could impact vegetation. From 1999 to 2007, these actions resulted in a 130 percent increase in total riparian vegetation volume within the 117-ha (290-ac) mitigation area. We will coordinate with the Pinal Creek Group and Freeport-McMoRan and examine what flycatcher conservation actions, management plans, and commitments and assurances occur on these lands to consider Pinal Creek for exclusion from the final revised designation of flycatcher critical habitat under section 4(b)(2) of the Act.

In the August 15, 2011, proposed rule (76 FR 50542, p. 50593), we described the reasons for considering excluding non-federal lands within the San Luis Valley Partnership. However, the total stream miles (159.4 km (99.0 mi)) listed in the proposed rule as being considered for exclusion in the San Luis Valley mistakenly included Federal lands along the Rio Grande. We are not considering excluding those Federal lands (18.4 km (11.4 mi)) on the Alamosa National Wildlife Refuge along the Rio Grande. So only non-Federal lands totaling 141.0 km (87.6 mi) along the Rio Grande and 69.8 km (43.4 mi) along the Conejos River are being considered for exclusion in the San Luis Valley Management Unit.

As one element of the private land conservation efforts, a collection of San Luis Valley, Colorado, towns, cities, counties, Federal agencies, and the State of Colorado are developing an HCP for the San Luis Valley. Public review and completion of the HCP is anticipated to overlap the rulemaking timeframe for this flycatcher critical habitat revision. The HCP as proposed would cover nearly 1.2 million ha (3 million ac) and 400 km (250 mi) of riparian habitat that could be used by the flycatcher and other riparian and aquatic-based species. The acreage covered by the regional HCP encompasses the entire Colorado portion of the San Luis Valley Management Unit, as described in the Recovery Plan, and extends well beyond the two stream segments along the Rio Grande and Conejos Rivers proposed as flycatcher critical habitat.

The San Luis Valley Regional HCP, if finalized before the completion of the final rule, could be the support for an exclusion under section 4(b)(2) of the Act. We are considering excluding the proposed segments of the Rio Grande and Conejos River in the San Luis Valley Management Unit (excluding the Alamosa NWR) from the final designation of revised flycatcher critical habitat.

The Elephant Butte Irrigation District (EBID), El Paso County Water Improvement District No. 1 (EP#1), and United States Section of the International Boundary and Water Commission (IBWC) are planning restoration of riparian habitat along the Rio Grande in New Mexico from Percha Dam to American Dam, a portion of which, from Caballo Dam to Ft. Selden, has been proposed as critical habitat. The EBID and EP#1 manage the water from the Rio Grande in Elephant Butte Reservoir for beneficial use (including use for agricultural and municipal needs), and the IBWC is responsible for maintaining levees and channel and floodway management along this section of the lower Rio Grande (termed the Rio Grande Canalization Project). EBID, EP#1, the Audubon Society, and IBWC are establishing an agreement for a water transaction program that would provide water in the Rio Grande to a number of riparian sites for which IBWC has committed restoration plans. Through restoration plan and other commitments documented in a 2011 biological assessment, this partnership will conduct a variety of flycatcher and flycatcher habitat management actions in this area.

The restoration plan includes up to 30 riparian restoration sites, of which about 8 are specifically designed to create flycatcher habitat on at least 21 ha (53 ac) and as many as 42 ha (105 ac), and to include management of saltcedar that is intermixed with cottonwood, willow, mesquite, and arrowweed to maximize potential value for nesting or migratory flycatchers. These sites are to be restored by 2019. The restoration plan also calls for discontinuing mowing willows along the river for the benefit of flycatchers and planting willows in other areas where hydrological conditions are favorable. Restoration efforts will also physically reconnect old river channels and lower incised banks to the main river channel where appropriate. These efforts should result in additional flycatcher habitat beyond the minimum restoration sites. The restoration plan has established collaborative relationships between the EBID, EP#1, IBWC, Audubon Society, and Service to benefit the flycatcher, including monitoring for flycatcher presence and habitat condition throughout the reach. Because of the commitment to a comprehensive flycatcher management plan, development and agreements on the water transaction program and overall restoration plan, we will consider excluding the Lower Rio Grande segment from the final designation of revised flycatcher critical habitat under section 4(b)(2) of the Act.

The purpose of the draft economic analysis is to identify and analyze the potential economic impacts associated with the proposed flycatcher critical habitat revision. The draft economic analysis describes the economic impacts of all potential conservation efforts for the flycatcher; some of these costs will likely be incurred regardless of whether we designate critical habitat. The economic impact of the proposed critical habitat designation is analyzed by comparing scenarios both “with critical habitat” and “without critical habitat.” The “without critical habitat” scenario represents the baseline for the analysis, considering protections already in place for the species (e.g., under the Federal listing and other Federal, State, and local regulations). The baseline, therefore, represents the costs incurred regardless of whether critical habitat is designated. The “with critical habitat” scenario describes the incremental impacts associated specifically with the designation of critical habitat for the species. The incremental conservation efforts and associated impacts are those not expected to occur absent the designation of critical habitat for the species. In other words, the incremental costs are those attributable solely to the designation of critical habitat, above and beyond the baseline costs; these are the costs we may consider in the final designation of critical habitat when evaluating the benefits of excluding particular areas under section 4(b)(2) of the Act. The analysis looks retrospectively at baseline impacts incurred since the species was listed, and forecasts both baseline and incremental impacts likely to occur if we finalize the proposed revised critical habitat designation. For a further description of the methodology of the analysis, see Chapter 2, “Framework for the Analysis,” of the draft economic analysis.

The draft economic analysis provides estimated costs of the foreseeable potential economic impacts of the proposed critical habitat designation for the flycatcher over the next 20 years (2012-2031) which, for most parts of the analysis, was determined to be the appropriate period for analysis. This is because limited planning information is available for most activities to forecast activity levels for projects beyond a 20-year timeframe. The draft economic analysis estimates impacts to water management activities, however, over a 30-year period (2012-2041).

The draft economic analysis estimates economic impacts of flycatcher conservation efforts associated with the following categories of economic activity: (1) Water management activities; (2) livestock grazing; (3) residential and related development; (4) tribal activities; (5) transportation; (6) mining and oil and gas development; and (7) recreation activities. The total potential incremental economic impacts for all of the categories in areas proposed as revised critical habitat over the next 20 years range from $11 million to $19 million ($940,000 to $1.7 million annualized), assuming a 7 percent discount rate. A very brief summary of the estimated impacts within each category is provided below. Please refer to the draft economic analysis for a comprehensive discussion of the potential impacts.

Our analysis suggests that transportation activities, such as road and bridge construction and maintenance, may experience the largest impacts. Transportation projects were more difficult to forecast, resulting in potential overstatement of the impacts. Our impact estimates were based on an increased level of consultation activity (and resulting project modifications for flycatcher conservation efforts) that is higher than the historical record of past activities. Transportation agencies at the Federal, State, and local level could incur costs associated with monitoring and education activities, fencing, habitat restoration and creation, timing restrictions, and administrative activities. Incremental impacts may reach $5.8 million over 20 years.

Impacts to water management activities may be the next largest of any of the affected economic activities; however, the majority of the impact of conservation efforts to protect flycatcher will occur even if critical habitat is not designated (they are baseline impacts). All but two of the major dams and reservoirs within flycatcher proposed revised critical habitat, the Hansen Dam and the Mohave Dam, are located along river segments where the species' presence is either currently addressed, or otherwise well known to project proponents and managing agencies. Associated impacts in these areas are therefore assumed to be baseline, where most conservation activities and associated costs will occur regardless of whether critical habitat is designated. An exception is Luna Lake in the San Francisco Management Unit; although flycatcher territories have been detected in the area, Luna Lake does not have existing management plans for the flycatcher, and species occupancy may not be well known. Therefore, we assume that forecasted water management activity costs there are incremental.

Incremental impacts over the next 30 years (assuming a 7 percent discount rate) range from $1.4 million to $9.6 million. These incremental impacts include the costs of conservation efforts associated with section 7 consultations or the development of HCPs, as well as administrative efforts to consider potential adverse modification of habitat as part of future section 7 consultations.

Impacts to grazing activities are likely to be smaller relative to water and transportation activities, but are anticipated to affect a broader geographic area. Grazing currently occurs in 27 of the 29 Management Units that include proposed revised critical habitat. As a result, some impacts may be experienced in most units. On Federal lands, reductions in grazing allotments are possible depending on the specific conditionswithin the unit. The estimated potential, present value incremental costs range from $2.2 million to $3.5 million over the 20-year time period of the analysis. Impacts include the administrative costs of consultation with the Service, the lost value of grazing permits associated with reductions in authorized Animal Unit-Months, costs of constructing and maintaining fencing, and costs of cowbird trapping.

Residential and related development activities are likely to be smaller in magnitude than grazing impacts; however estimated impacts are concentrated over a smaller geographic area. Nearly all impacts to development activities are estimated to occur in the California Management Units. Areas likely to see the greatest development pressure include Santa Barbara, Ventura, Los Angeles, Riverside, San Bernardino, and San Diego Counties, California, and Mohave County, Arizona.

Because the proposed revised critical habitat is located within the 100-year floodplain, the Federal Emergency Management Agency will regulate real estate development in any critical habitat we eventually designate. As a result, additional restrictions may be imposed by individual or local jurisdictions. The restrictions or regulations may require flood control facilities or other special engineering, often making development in floodways impractical and prohibitively expensive. Due to existing development restrictions, lands within proposed critical habitat that can be feasibly developed would be limited to areas where real estate demand is high enough to justify the costs associated with developing the floodplain.

Incremental impacts to residential development are estimated at $810,000 over 20 years. These are related to reduced land value associated with the need to set aside land on-site for the flycatcher; the need to implement additional project modifications, such as cowbird trapping, fencing, monitoring, and habitat management; time delays; and administrative costs. Because of the availability of alternative lands that would not be designated as critical habitat in these regions, these costs are likely to be borne by existing landowners in the form of reduced value for their existing properties. The estimated impacts would be felt immediately, in 2012, upon promulgation of the final rule, and reflect the change in the future, productive use of the properties.

Incremental impacts to tribal activities of approximately $660,000 are estimated to be associated with administrative impacts over the 20-year time frame of the analysis. However, tribal concerns focus on the potential impact that the designation could have on their ability to make use of natural resources, including water rights, on their sovereign lands. The absence of some cost information related to potential impacts of flycatcher critical habitat on tribal lands results in a probable underestimate of future costs to tribal entities. Lands belonging to 20 Tribes included within the boundaries of proposed revised critical habitat are under consideration for exclusion from the final designation.

In 2005, potential impacts to oil and gas development were not identified as a significant issue and thus were not considered in the previous economic analysis. However, proposed revised critical habitat in the San Juan Management Unit in San Juan County, Utah, and La Plata County, Colorado, generated concern, because this area serves as a highly-developed source of oil and natural gas, with hundreds of existing wells. Due to the level of existing protections in riparian areas required by, or agreed to by, oil and gas developers and land and resource managers, no project modification costs are expected as a result of the designation of revised flycatcher critical habitat. However, baseline administrative costs of $33,000 for one formal and six informal consultations are expected due to limited oil and gas activities, including seismic studies and pipeline construction and maintenance. In addition to baseline costs, the analysis forecasts $11,000 in incremental administrative costs to consider adverse modification as part of these consultations.

While few active mineral mining activities occur within the proposed revised critical habitat, the mining industry has expressed concern that water use by existing or potential mining operations could be affected by flycatcher conservation activities, particularly the designation of critical habitat. There are currently no data that indicate whether existing or future diversions of water for mining activities (including groundwater pumping) reduce stream flow or modify hydrologic conditions to the degree that adversely impacts the flycatcher and its riparian habitat. As such, the analysis does not quantify the probability or extent to which water use for mining purposes would need to be curtailed or modified to remedy impacts to flycatcher. Additionally, impacts to extractive mining operations, such as sand and gravel pits, that cause direct habitat loss may occur as the result of critical habitat designation. However, project modification costs associated with these operations are uncertain due to the limited consultation history, and, as a result, our analysis is unable to forecast economic impacts for mining activities.

Incremental impacts to recreational activities are unlikely to result from the designation. In the baseline, activities may be affected at Lake Isabella and Lake Roosevelt; however, baseline economic impacts in these areas are likely to be limited to $1.9 million over 20 years. In addition, management activities at a picnic site in the San Bernardino National Forest results in present value baseline costs of $40,100.

The purpose of the draft environmental assessment, prepared pursuant to the NEPA, is to identify and disclose the environmental consequences resulting from the proposed action of designating revised critical habitat for the flycatcher (please see further NEPA discussion below). In the draft environmental assessment, three alternatives are evaluated: Alternative A, the proposed rule with exclusion areas; Alternative B, proposed rule without exclusion areas; and the no action alternative that would leave the 2005 designated critical habitat in place. Under Alternative A, stream segments identified as being considered for exclusion could potentially be excluded in the final rule based on economic impact, national security, or other relevant impacts. The no action alternative is required by NEPA for comparison to the other alternatives analyzed in the draft environmental assessment. SeeADDRESSESfor information on how to obtain a copy of the draft environmental assessment.

As we stated earlier, we are soliciting data and comments from the public on the draft economic analysis and draft environmental assessment, as well as all aspects of the proposed rule and our amended required determinations. We may revise the proposed rule or supporting documents to incorporate or address information we receive during the public comment period. In particular, we may exclude an area from critical habitat if we determine that the benefits of excluding the area outweighthe benefits of including the area, provided the exclusion will not result in the extinction of this species.

In our August 15, 2011, proposed rule (76 FR 50542, pp. 50594-50596), we indicated that we would defer our determination of compliance with several statutes and executive orders until the information concerning potential economic impacts of the designation and potential effects on landowners and stakeholders became available in the draft economic analysis. We have now made use of the draft economic analysis data to make these determinations. In this document, we affirm the information in our August 15, 2011, proposed rule concerning E.O. 13132 (Federalism), E.O. 12988 (Civil Justice Reform), the Unfunded Mandates Reform Act (2 U.S.C. 1501et seq.), the Paperwork Reduction Act of 1995 (44 U.S.C. 3501et seq.), and the President's memorandum of April 29, 1994, “Government-to-Government Relations with Native American Tribal Governments” (59 FR 22951). However, based on the draft economic analysis data, we are amending our required determination concerning the Regulatory Flexibility Act (5 U.S.C. 601et seq.). We are also updating our determinations concerning E.O. 12630 (Takings), E.O. 13211 (Energy, Supply, Distribution, and Use), and the National Environmental Policy Act (42 U.S.C. 4321et seq.).

Under the Regulatory Flexibility Act (RFA; 5 U.S.C. 601et seq.), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA; 5 U.S.C. 801et seq.), whenever an agency is required to publish a notice of rulemaking for any proposed or final rule, it must prepare and make available for public comment a regulatory flexibility analysis that describes the effects of the rule on small entities (i.e., small businesses, small organizations, and small government jurisdictions). However, no regulatory flexibility analysis is required if the head of the agency certifies the rule will not have a significant economic impact on a substantial number of small entities. The SBREFA amended the RFA to require Federal agencies to provide a certification statement of the factual basis for certifying that the rule will not have a significant economic impact on a substantial number of small entities. Based on our draft economic analysis of the proposed designation, we provide our analysis for determining whether the proposed rule would result in a significant economic impact on a substantial number of small entities.

According to the Small Business Administration, small entities include small organizations such as independent nonprofit organizations; small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents; and small businesses (13 CFR 121.201). Small businesses include manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, retail and service businesses with less than $5 million in annual sales, general and heavy construction businesses with less than $27.5 million in annual business, special trade contractors doing less than $11.5 million in annual business, and agricultural businesses with annual sales less than $750,000. To determine if potential economic impacts to these small entities are significant, we considered the types of activities that might trigger regulatory impacts under this designation as well as types of project modifications that may result. In general, the term “significant economic impact” is meant to apply to a typical small business firm's business operations.

To determine if the proposed designation of critical habitat for the flycatcher would affect a substantial number of small entities, we considered the number of small entities affected within particular types of economic activities, such as (1) transportation; (2) water management; (3) livestock grazing; and (4) residential and commercial development. Other activities analyzed in the economic analysis, in particular, impacts to mining and recreation, found no incremental impacts and so were not further analyzed for effects on small entities. In order to determine whether it is appropriate for our agency to certify that this proposed rule would not have a significant economic impact on a substantial number of small entities, we considered each industry or category individually. In estimating the numbers of small entities potentially affected, we also considered whether their activities have any Federal involvement. Critical habitat designation will not directly affect activities that do not have any Federal involvement; designation of critical habitat only affects activities conducted, funded, permitted, or authorized by Federal agencies. In areas where the flycatcher is present, Federal agencies already are required to consult with us under section 7 of the Act on activities they fund, permit, or implement that may affect the species. If we finalize the proposed revised critical habitat designation, consultations to avoid the destruction or adverse modification of critical habitat would be incorporated into the existing consultation process.

In the draft economic analysis, we evaluated the potential economic effects on small entities resulting from implementation of conservation actions related to the proposed revised designation of critical habitat for the flycatcher. Please refer to Appendix A in the draft economic analysis of the proposed critical habitat designation for a more detailed discussion of potential economic impacts. Our analysis of the five industries with possible incremental impacts on small business was based on the proportion of small entities affected within each industry and the annualized costs per entity as a percent of annual revenues. The following summary highlights the results of our analysis:

(1) For water management, we estimated that 1 small entity could be affected, representing 0.07 percent of the 1,350 small entities in the study area. The annualized effects represent 0.01 to 0.08 percent of the annual revenues of that one entity.

(2) For livestock grazing and residential and commercial development, the analysis distinguishes between entities expected to bear project modification costs with administrative costs and those expected to bear only administrative costs because the expected magnitude of impacts differs significantly across the two groups. We estimated three small grazing entities could be affected by both project modification and administrative costs, representing 0.49 percent of the 517 small entities in the study area. The annualized impacts per small entity in this group are expected to range from 0.24 percent to 0.43 percent of annual revenues. A further 29 small grazing entities may incur some minor administrative costs associated with informal consultations and technical assistance efforts, representing approximately 5.6 percent of small grazing entities across the study area. Annualized impacts per small entity for this group of 29 are estimated at 0.12 percent of annual revenues.

(3) We estimated 1 small entity in the residential and commercial development industry could be affected by land value loss and administrative costs, representing less than 0.01 percent of the 76,516 small entities in the study area. The annualized effects represent 5.72 percent of the annual revenues of that entity. We estimated 6small residential and commercial development entities could experience administrative costs only, representing less than 0.01 percent of the small entities in the study area. The annualized effects per small entity for this group represent 0.05 percent of annual revenues.

(4) For transportation, we forecast some administrative costs associated with roads that may be managed by county or city governments. Using GIS data to identify where roads cross the proposed revised critical habitat designation, the analysis forecasts informal and technical assistance efforts in 4 counties out of the 49 counties in the study area. Of these counties, 3 counties, or 75 percent, have populations falling below 50,000 and therefore are considered small. Third-party administrative costs for these three counties represent between 0 and 0.06 percent of the respective county's annual revenues.

(5) For oil and gas development, we estimated 7 small entities could be affected, representing 2.3 percent of the 300 small entities in the study area. The annualized effects per small entity represent less than 0.01 percent of annual revenues.

None of the impacts rises to a level of a significant economic impact on a substantial number of small entities. We did estimate a substantial number of small livestock grazing entities (5.6 percent) could be impacted due to potential additional administrative costs. However, the impacts are not significant because they represent only 0.12 percent of the estimated annual revenues of those small entities. Alternately, we estimated an economic impact of 5.72 percent of annual revenues for one small entity in the residential development industry based on forecasted land value loss and administrative costs. However, this entity represents a very small percentage of small entities (less than 0.01 percent) in the development industry that will be affected. So although there is one industry (livestock grazing) with a substantial number of entities affected, and one industry (residential development) that has a small entity with potentially substantial impacts, there are no industries with significant economic impacts on a substantial number of small entities.

In summary, we have considered whether the proposed designation of revised critical habitat for the flycatcher would result in a significant economic impact on a substantial number of small entities. Information for this analysis was gathered from the Small Business Administration, stakeholders, and the Service. We have estimated the number of small entities that may be impacted in each industry affected by the proposed critical habitat designation. For the above reasons and based on currently available information, we certify that, if promulgated, the proposed critical habitat designation will not have a significant economic impact on a substantial number of small business entities. Therefore, an initial regulatory flexibility analysis is not required.

Executive Order (E.O.) 12866 provides that the Office of Information and Regulatory Affairs (OIRA) will review all significant rules. The OIRA has determined that this rule is not significant. E.O. 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.

In this document, we affirm the information in our proposed rule concerning E.O. 12630 (Takings), having reviewed the preliminary assessment and the draft economic assessment, and prepared a Takings Implication Assessment. Although there may be some costs likely to be borne by existing landowners in the form of reduced value for their existing properties, these impacts are not expected to be significant, and therefore will not result in a significant takings implication.

We stated in our August 15, 2011, proposed rule that the proposed revised designation is not expected to significantly affect energy supplies, distribution, or use because there are no pipelines, distribution facilities, power grid stations, etc. within the boundaries of proposed revised critical habitat. However, the San Juan Management Unit in San Juan County, Utah, and La Plata County, Colorado is expected to sustain limited oil and gas activities, including seismic studies and pipeline construction and maintenance. Our draft economic analysis reflects that we do not expect these activities to incur any project modification costs, but the analysis does estimate that over the next 20 years, there will be about $11,000 in incremental administrative costs to consider adverse modification as part of consultations on these activities. We do not consider these costs to be significant. Therefore, we affirm that this action is not a significant energy action and no Statement of Energy Effects is required.

It is our position that, outside the jurisdiction of the U.S. Court of Appeals for the Tenth Circuit, we do not need to prepare environmental analyses pursuant to NEPA in connection with designating critical habitat under the Act. We published a notice outlining our reasons for this determination in theFederal Registeron October 25, 1983 (48 FR 49244). This position was upheld by the U.S. Court of Appeals for the Ninth Circuit (Douglas Countyv.Babbitt,48 F.3d 1495 (9th Cir. 1995), cert. denied 516 U.S. 1042 (1996)). However, because the range of the flycatcher includes States within the Tenth Circuit and under the Tenth Circuit ruling inCatron County Board of Commissionersv.U.S. Fish and Wildlife Service,75 F.3d 1429 (10th Cir. 1996), we have undertaken a NEPA analysis and drafted an environmental assessment for the proposed critical habitat designation.

We have completed a draft environmental assessment, and it is now available for public review and comment (seeADDRESSES). The draft environmental assessment found that the designation of critical habitat for the southwestern willow flycatcher would not have direct impacts on the environment; designation is not expected to impose land use restrictions or prohibit land use activities. However, the designation of critical habitat could: (1) Increase the number of additional section 7 consultations for proposed projects within designated critical habitat; (2) increase the number of reinitiated section 7 consultations for ongoing projects within designated critical habitat; (3) maintain the southwestern willow flycatcher's primary constituent elements; (4) increase the likelihood of greater expenditures of time and Federal fundsto develop measures to prevent both adverse effects to the species and adverse modification to critical habitat; and (5) indirectly increase the likelihood of greater expenditure of non-Federal funds by project proponents to complete section 7 consultations and to develop reasonable and prudent alternatives (to avoid adverse modification of critical habitat by Federal agencies) that maintain critical habitat. Such an increase might occur where there is a Federal nexus to actions within areas with no known flycatcher territories, or from the addition of adverse modification analyses to jeopardy consultations in known flycatcher habitat.

Based on comments we received in preparing the previous critical habitat designation in 2005, internal scoping within the Service, a review of the previous consultation history of the species, and a review of public comments we received on the August 15, 2011, proposed rule, the Service analyzed the potential impacts of critical habitat designation on the following resources and resource management types: land use and management; fish, wildlife, and plants (including endangered and threatened species); fire management; water resources (including water management projects and groundwater pumping); livestock grazing; construction and development; tribal trust resources; soils and mineral resources; recreation; socioeconomics; and environmental justice.

The primary purpose of preparing an environmental assessment under NEPA is to determine whether a proposed action would have significant impacts on the human environment. If significant impacts may result from a proposed action, then an environmental impact statement is required (40 CFR 1502.3). Whether a proposed action exceeds a threshold of significance is determined by analyzing the context and the intensity of the proposed action (40 CFR 1508.27). The draft environmental assessment found that the impacts of the proposed critical habitat designation would be minor and not rise to a significant level, so preparation of an environmental impact statement is not required.

The primary authors of this notice are the staff members of the Arizona Ecological Services Office and the Southwest Regional Office, U.S. Fish and Wildlife Service.

Accordingly, we propose to further amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as proposed to be amended at 76 FR 50542, August 15, 2011, as follows: