Title III of the Energy Policy and Conservation Act (42 U.S.C. 6291,et seq.;“EPCA” or, “the Act”) sets forth a variety of provisions designed to improve energy efficiency. (All references to EPCA refer to the statute as amended through the Energy Independence and Security Act of 2007 (EISA 2007), Public Law 110-140 (Dec. 19, 2007)). Part B of title III, which for editorial reasons was redesignated as Part A upon incorporation into the U.S. Code (42 U.S.C. 6291-6309), establishes the “Energy Conservation Program for Consumer Products Other Than Automobiles.” These include microwave ovens, the subject of today's notice. (42 U.S.C. 6291(1)-(2) and 6292(a)(10))

Under EPCA, this program consists essentially of four parts: (1) Testing, (2) labeling, (3) Federal energy conservation standards, and (4) certification and enforcement procedures. The testing requirements consist of test procedures that manufacturers of covered products must use (1) as the basis for certifying to DOE that their products comply with the applicable energy conservation standards adopted under EPCA, and (2) for making representations about theefficiency of those products. Similarly, DOE must use these test requirements to determine whether the products comply with any relevant standards promulgated under EPCA.

Under 42 U.S.C. 6293, EPCA sets forth the criteria and procedures DOE must follow when prescribing or amending test procedures for covered products. EPCA provides that any test procedures prescribed or amended under this section shall be reasonably designed to produce test results which measure energy efficiency, energy use or estimated annual operating cost of a covered product during a representative average use cycle or period of use and shall not be unduly burdensome to conduct. (42 U.S.C. 6293(b)(3))

In addition, if DOE determines that a test procedure amendment is warranted, it must publish proposed test procedures and offer the public an opportunity to present oral and written comments on them. (42 U.S.C. 6293(b)(2)) Finally, in any rulemaking to amend a test procedure, DOE must determine to what extent, if any, the proposed test procedure would alter the measured energy efficiency of any covered product as determined under the existing test procedure. (42 U.S.C. 6293(e)(1)) If DOE determines that the amended test procedure would alter the measured efficiency of a covered product, DOE must amend the applicable energy conservation standard accordingly. (42 U.S.C. 6293(e)(2))

EISA 2007 amended EPCA to require DOE to amend its test procedures for all covered products to integrate measures of standby mode and off mode energy consumption into the overall energy efficiency, energy consumption, or other energy descriptor, unless the current test procedure already incorporates the standby mode and off mode energy consumption, or if such integration is technically infeasible. If an integrated test procedure is technically infeasible, DOE must prescribe a separate standby mode and off mode energy use test procedure for the covered product, if a separate test is technically feasible. (42 U.S.C. 6295(gg)(2)(A)) Any such amendment must consider the most current versions of IEC Standard 62301, “Household electrical appliances—Measurement of standby power,” and IEC Standard 62087, “Methods of measurement for the power consumption of audio, video, and related equipment.”1 Id.At the time of the enactment of EISA 2007, the most current versions of these standards were IEC Standard 62301 (First Edition 2005-06) and IEC Standard 62087 (Second Edition 2008-09).

DOE's test procedure for microwave ovens is codified at appendix I to subpart B of Title 10 of the Code of Federal Regulations (CFR). The test procedure was established in an October 3, 1997 final rule that addressed active mode energy use only. 62 FR 51976.

To address standby mode and off mode energy use, DOE published a notice of proposed rulemaking (NOPR) on October 17, 2008 (hereafter referred to as the October 2008 TP NOPR), in which it proposed incorporating provisions from IEC Standard 62301 (First Edition) into the DOE active mode test procedure, as well as language to clarify application of these provisions for measuring standby mode and off mode power in microwave ovens. 73 FR 62134. DOE held a public meeting on November 14, 2008, to hear oral comments on and solicit information relevant to the October 2008 TP NOPR. Interested parties remarked upon, among other things, harmonization of standards and test procedures with those of other countries and international agencies. In particular, commenters urged DOE to consider IEC Standard 62301 (Second Edition) (or “Second Edition”), which was in the process of being drafted.

EPCA requires DOE to consider the most recent version of IEC Standard 62301. (42 U.S.C. 6295(gg)(2)(A)) After the October 2008 TP NOPR was published, DOE determined that it would consider the revised version of IEC Standard 62301, (i.e.,IEC Standard 62301 (Second Edition)), in the microwave oven test procedure rulemaking. DOE anticipated, based on review of drafts of the updated IEC Standard 62301, that the revisions could include different mode definitions. The revised version was expected in July 2009. IEC Standard 62301 (Second Edition) was not published, however, until January 27, 2011.

In order to ensure that DOE could establish test procedures for standby mode and off mode by March 31, 2011, as required by the EISA 2007 amendments to EPCA, DOE published an SNOPR on July 22, 2010 (hereafter referred to as the July 2010 TP SNOPR) proposing mode definitions based on those in the then current draft version of IEC Standard 62301 (Second Edition), designated as IEC Standard 62301 Second Edition, Committee Draft for Vote (IEC Standard 62301 (CDV)). 75 FR 42612, 42620-23 (July 22, 2010). DOE stated that it believed that those most recent mode definitions represented the best definitions available for the analysis in support of this rulemaking. 75 FR 42612, 42621. DOE held a public meeting on September 16, 2010, to hear oral comments on and solicit information relevant to the July 2010 TP SNOPR. Interested parties remarked upon, among other things, covered products, incorporation of IEC Standard 62301 (First Edition), mode definitions, and testing procedures. On October 29, 2010, the IEC released a finalized draft version of IEC Standard 62301 (Second Edition), IEC Standard 62301 (FDIS).

On March 9, 2011, DOE published an interim final rule (hereafter referred to as the March 2011 Interim Final Rule) amending the test procedures for microwave ovens. 76 FR 12825. The March 2011 Interim Final Rule incorporated by reference specific clauses from IEC Standard 62301 (First Edition) regarding test conditions and testing procedures for measuring the average standby mode and average off mode power consumption into the microwave oven test procedure. DOE also incorporated into the microwave oven test procedure definitions of “active mode,” “standby mode,” and “off mode” based on the definitions provided in IEC Standard 62301 (FDIS). DOE further adopted language to clarify the application of clauses from IEC Standard 62301 (First Edition) for measuring standby mode and off mode power in the March 2011 Interim Final rule. Specifically, DOE defined the test duration for cases in which the measured power is not stable (i.e.,varies over a cycle), recognizing that the power consumption of microwave oven displays can vary based on the displayed clock time. 76 FR 12825, 12828.

The amendments adopted in the March 2011 Interim Final Rule became effective on April 8, 2011. However, DOE noted that in order to ensure that the amended test procedure adequately addresses the EISA 2007 requirement to consider the most recent version of IEC Standard 62301, and recognizing that the IEC issued IEC Standard 62301 (Second Edition) in January of 2011, DOE issued the microwave oven test procedure as an interim final rule and offered an additional 180-day comment period to consider whether any changesshould be made to the interim final rule in light of publication of IEC Standard 62301 (Second Edition). DOE stated that it would consider these comments and, to the extent necessary, publish a final rulemaking incorporating any changes. 76 FR 12825, 12830-31. In response to the March 2011 Interim Final Rule, interested parties commented that, among other things, DOE should incorporate by reference IEC Standard 62301 (Second Edition) for optimal international harmonization, to give clarity and consistency to the regulated community and to decrease the testing burden.

Based upon the public comment, DOE decided to further analyze IEC Standard 62301 (Second Edition). DOE reviewed this latest version of the IEC standard and believes that it improves some measurements of standby mode and off mode energy use. Accordingly, DOE published a second SNOPR on November 23, 2011 (hereafter referred to as the November 2011 TP SNOPR), proposing to incorporate certain provisions of IEC Standard 62301 (Second Edition), along with clarifying language, into the DOE test procedures for microwave ovens adopted in the March 2011 Interim Final Rule. In addition, DOE proposed in the November 2011 TP SNOPR to make minor editorial changes in 10 CFR part 430, subpart B, appendix I, section 2.2.1.1 to aid the reader by presenting the electrical supply voltages consistently for microwave ovens and conventional cooking products, and also in section 1.12 to clarify the alternative use of metric units for various measurements and calculations in the conventional cooking products test procedure. 76 FR 72331 (Nov. 23, 2011).

In the course of reviewing comments on the November 2011 TP SNOPR, DOE determined that an additional SNOPR would be necessary before moving to a final rule. DOE subsequently published the additional SNOPR on May 16, 2012 (hereafter referred to as the May 2012 TP SNOPR), to address comments received on the November 2011 TP SNOPR regarding coverage of additional microwave oven product types in the DOE test procedure, and in particular, products combining a microwave oven with other appliance functionality. 77 FR 28805. Comments on this topic and other topics received in response to both the November 2011 TP SNOPR and the May 2012 TP SNOPR are addressed in today's final rule.

With respect to today's rulemaking, as noted above, EPCA requires that DOE determine whether a test procedure amendment would alter the measured efficiency of a product, thereby requiring adjustment of existing standards. (42 U.S.C. 6293(e)) Because there are currently no Federal energy conservation standards for microwave ovens (including standards for energy use in the standby and off modes), no determination is needed under these circumstances. DOE is conducting a concurrent rulemaking process to consider standby and off mode energy conservation standards and will utilize the DOE test procedure as amended by today's final rule in developing those standard levels.

Today's rule also fulfills DOE's obligation to periodically review its test procedures under 42 U.S.C. 6293(b)(1)(A). DOE anticipates that its next evaluation of this test procedure will occur in a manner consistent with the timeline set out in this provision.

The final rule amends the current DOE test procedures for microwave ovens to incorporate by reference certain provisions of IEC Standard 62301 (Second Edition) for measuring standby mode and off mode energy use. As noted in section I of today's final rule, the use of this internationally recognized standard will optimize harmonization for manufacturers, will give clarity and consistency in the test conduct, and will decrease the testing burden. The current procedures are also being amended to clarify testing requirements for supply voltage and alternative metric units.

In addition, in today's final rule DOE confirms that the microwave oven portion of a combined product is covered under the definition of “microwave oven” at 10 CFR 430.2, and is adding and clarifying definitions of certain combined products which incorporate microwave ovens and conventional cooking products. Due to a lack of data and information at this time, however, DOE is not amending its test procedures in this rule to measure standby mode and off mode energy use for the microwave portion of combined products. DOE may choose to initiate a separate rulemaking at a later date that would address standby and off mode energy use of combined products.

DOE defines “microwave oven” as a class of kitchen ranges and ovens which is a household cooking appliance consisting of a compartment designed to cook or heat food by means of microwave energy. 10 CFR 430.2 In the March 2011 Interim Final Rule, DOE determined that this regulatory definition includes all ovens equipped with microwave capability, including convection microwave ovens (i.e.,microwave ovens that incorporate convection features and possibly other means of cooking) because they are capable of cooking or heating food by means of microwave energy. 76 FR 12825, 12828-30 (March 9, 2011). In the March 2011 Interim Final Rule, DOE referred to such a product as a “combination oven”.

In the May 2012 TP SNOPR, DOE proposed that the regulatory definition of microwave oven also includes all products that combine a microwave oven with other appliance functionality. To aid in distinguishing such other “combined products” from the type of microwave oven that incorporates convection features and any other means of cooking, DOE proposed in the May 2012 TP SNOPR to use the term “convection microwave oven” to more accurately describe the latter, and to provide a definition of convection microwave oven in 10 CFR 430.2. In this definition, DOE would clarify that the microwave capability, convection features, and any other cooking means are incorporated in a single cavity. 77 FR 28805, 28808 (May 16, 2012).

DOE further proposed in the May 2012 TP SNOPR that all products that combine a microwave oven with other appliance functionality would be considered covered products, including microwave/conventional ranges, microwave/conventional ovens, microwave/conventional cooking tops, and other combined products such as microwave/refrigerator-freezer/charging stations. Regarding microwave/conventional ranges, DOE clarified that an appliance need not be free-standing to be covered as a microwave/conventional range. 77 FR 28805, 28808-09 (May 16, 2012). DOE, therefore, proposed in the May 2012 TP SNOPR to add a definition of “microwave/conventional cooking top” in 10 CFR 430.2 to state that it is a class of kitchen ranges and ovens that is a household cooking appliance consisting of a microwave oven and a conventional cooking top. Similarly, DOE proposed in the May 2012 TP SNOPR to add a definition in 10 CFR 430.2 of a “microwave/conventional oven” as a class of kitchen ranges and ovens which is a household cooking appliance consisting of a microwave oven and a conventional oven in separate compartments. DOE also proposed to clarify in the definition of microwave/conventional range that the microwave oven and conventional oven areincorporated as separate compartments. 77 FR 28805, 28809-10 (May 16, 2012).

Because each of those combined products described previously contains a microwave oven as one of its functional components, DOE proposed that the microwave oven component of these products would meet the statutory requirements as a covered product for the purposes of measuring standby mode and off mode energy use under EPCA. (42 U.S.C. 6295(gg)(2)(B)(vi)) DOE stated that it does not believe that the presence of additional appliance functionality would eliminate the statutory requirement to evaluate standby mode and off mode energy use in the microwave oven component. DOE also tentatively concluded in the May 2012 TP SNOPR that the test procedure should only measure the standby mode and off mode energy use associated with the microwave oven portion of combined products, and for that reason the proposed amendments do not require any determination as to which appliance function of a combined product with a microwave oven component represents the primary usage of the product. 77 FR 28805, 28809-10 (May 16, 2012).

Whirlpool Corporation (Whirlpool) commented in response to the May 2012 TP SNOPR that combined products should not be covered. Whirlpool noted that it produces a microwave/conventional oven in which both cavities are controlled by a single control panel. Whirlpool believes that this product should be regulated according to the primary use of the product, based on total energy consumption, which in this case would be as a conventional oven since their research indicates that the microwave oven cavity uses one-tenth of the energy annually that the conventional oven cavity does. (Whirlpool, No. 33 at p. 1; Whirlpool, No. 41 at pp. 1-2) The Association of Home Appliance Manufacturers (AHAM) also commented that the primary use of a combined product should determine how the product is regulated, whether that be as a conventional cooking product or a microwave oven. AHAM also stated that both free-standing and built-in ranges that provide microwave oven capability in one compartment and a conventional oven in a separate compartment should not be considered covered products. As a clarification, AHAM proposed that DOE define “combination oven” as “a microwave oven that incorporates means of cooking other than microwave energy, and does not mean free-standing or built-in conventional cooking tops, conventional ovens, or conventional ranges that include microwave ovens in separate cavities.” (AHAM, No. 40 at pp. 2-3)

DOE maintains its determination from the May 2012 TP SNOPR that the microwave oven component is subject to the statutory requirement for measuring standby mode and off mode energy use, and that the added conventional oven functionality, regardless of its annual energy consumption, does not exempt the microwave oven component from this requirement. Therefore, DOE determines for today's final rule that all products that incorporate microwave ovens with additional appliance functionality are covered products under the microwave oven regulatory definition, but DOE is declining to adopt a test procedure for such products at this time due to a lack of information. DOE also adopts in today's final rule regulatory definitions of several specific product types that incorporate microwave and conventional cooking functionality, either within a single cavity or in separate cavities, to aid manufacturers in determining which products are the subject of the provisions adopted in today's final rule. These definitions include the definition of “convection microwave oven” in place of the term “combination oven”, for those products that incorporate microwave and conventional cooking functionality in a single cavity. In sum, today's final rule adds the following definitions to 10 CFR 430.2:

• Convection microwave oven means a microwave oven that incorporates convection features and any other means of cooking in a single compartment.

• Microwave/conventional cooking top means a class of kitchen ranges and ovens that is a household cooking appliance consisting of a microwave oven and a conventional cooking top.

• Microwave/conventional oven means a class of kitchen ranges and ovens that is a household cooking appliance consisting of a microwave oven and a conventional oven in separate compartments.

In addition, DOE amends the definition of “microwave/conventional range” in 10 CFR 430.2 as a class of kitchen ranges and ovens that is a household cooking appliance consisting of a microwave oven and a conventional oven in separate compartments and a conventional cooking top. DOE also amends the definition of “microwave oven” to include the use of the term “convection microwave oven” in place of “combination oven.”

AHAM commented that DOE proposed to cover all products that combine microwave oven and other appliance functionality, but did not propose definitions for all of the possible combined products. According to AHAM, such an approach results in uncertainty about coverage for products that are manufactured as microwave ovens only, but later added to other appliances to create a combined product. AHAM noted that this integration may occur when the microwave oven is no longer in the manufacturer's control. Therefore, AHAM believes that DOE should not cover combined products. Should it do so, AHAM stated that a microwave oven should be classified according to its configuration as produced by the manufacturer, since a manufacturer would have no way of knowing how a stand-alone microwave oven may be later integrated into a combined product. (AHAM, No. 40 at p. 3)

DOE has determined that while combined products are covered products under the statute, it will not be promulgating a test procedure for such products at this time, due to a lack of sufficient data. DOE will clarify its position on this issue at the time of any future rulemaking regarding combined products.

The effective date of the standby and off mode test procedures for microwave ovens is February 19, 2013. DOE's amended test procedure regulations codified in 10 CFR part 430, subpart B, appendix I clarify, though, that the procedures and calculations adopted in today's final rule need not be performed to determine compliance with energy conservation standards until compliance with any final rule establishing amended energy conservation standards for microwave ovens in standby mode and off mode is required. However, as of July 17, 2013, any representations as to the standby mode and off mode energy consumption of the products that are the subject of this rulemaking must be based upon results generated under the applicable provisions of this amended test procedure. (42 U.S.C. 6293(c)(2)) In the period between February 19, 2013 and July 17, 2013, any representations as to the standby mode and off mode energy consumption of the products that are the subject of this rulemaking may be based upon results generated under the applicable provisions of either this amended test procedure or the previous test procedure, published at 10 CFR part 430, subpart B, Appendix I as contained in the 10 CFR parts 200 to 499 edition revised as of January 1, 2012.

The Republic of Korea (Korea) stated that if DOE adopted its proposals from the May 2012 TP SNOPR, manufacturers would require approximately 6 months for product development and another 6 months to demonstrate compliance with energy conservation standards and safety requirements. Therefore, Korea requested a compliance date at least a year after publication of the test procedure final rule. (Korea, No. 42, at p. 1) As noted above, use of the amended test procedure established in today's final rule will not be required to demonstrate compliance until the compliance date of any final rule establishing amended microwave oven energy conservation standards. DOE is conducting such a standards rulemaking concurrently with this test procedure rulemaking, and expects that the compliance date of any amended standards will be later than 1 year after the publication of today's final rule.

As discussed in section I of today's final rule, EPCA, as amended by EISA 2007, requires that test procedures be amended to include standby mode and off mode energy consumption, taking into consideration the most current versions of IEC Standards 62301 and 62087. (42 U.S.C. 6295(gg)(2)(A)) DOE adopted certain provisions from IEC Standard 62301 (First Edition) regarding test conditions and testing procedures for measuring the average standby mode and average off mode power consumption in the microwave oven test procedure in the March 2011 Interim Final Rule. DOE also incorporated into the microwave oven test procedure definitions of “active mode,” “standby mode,” and “off mode” based on the definitions provided in IEC Standard 62301 (FDIS), along with clarifying language for clauses incorporated by reference in the March 2011 Interim Final Rule from IEC Standard 62301 (First Edition). Specifically, these provisions measure power consumption of microwave ovens in the case that the measured power is not stable (i.e.,varies over a cycle), based on displayed clock time, and DOE defined the test duration in this case. 76 FR 12825, 12828 (Mar. 9, 2011).

Based upon the public comment received on the March 2011 Interim Final Rule, DOE published the November 2011 TP SNOPR, proposing to update its reference to IEC Standard 62301 by incorporating certain provisions of IEC Standard 62301 (Second Edition), along with clarifying language, into the DOE test procedures for microwave ovens adopted in the March 2011 Interim Final Rule.

AHAM and Whirlpool support the incorporation by reference of IEC Standard 62301 (Second Edition) in the microwave oven test procedure. (AHAM, No. 40 at p. 1; Whirlpool, No. 33 at p. 1) AHAM stated that the use of the Second Edition would allow for optimum international harmonization, provide clarity and consistency to manufacturers, and decrease test burden. (AHAM, No. 40 at p. 4)

The suitability of specific clauses from IEC Standard 62301 (Second Edition) regarding testing conditions and methodology for use in DOE's microwave oven test procedure are discussed in the following paragraphs.

Section 4, paragraph 4.4 of the Second Edition revises the power measurement accuracy provisions of the First Edition. A more comprehensive specification of required accuracy is provided in the Second Edition, which depends upon the characteristics of the power being measured. Testers using the Second Edition are required to measure the crest factor and power factor of the input power, and to calculate a maximum current ratio (MCR) (paragraph 4.4.1 of the Second Edition). The Second Edition then specifies calculations to determine the maximum permitted uncertainty in MCR. DOE noted in the November 2011 TP SNOPR, however, that the permitted uncertainty is the same or less stringent than the uncertainty specified in the First Edition, depending on the value of MCR and the power level being measured. DOE determined, however, that this change in the permitted uncertainty maintains sufficient accuracy of measurements under a full range of possible measured power levels without placing undue demands on the instrumentation. These power measurement accuracy requirements were based upon detailed technical submissions to the IEC in the development of IEC Standard 62301 (FDIS), which showed that commonly-used power measurement instruments were unable to meet the original requirements for certain types of loads. Therefore, DOE concluded in the November 2011 TP SNOPR that the incremental testing burden associated with the additional measurements and calculations is offset by the more reasonable requirements for testing equipment, while maintaining measurement accuracy deemed acceptable and practical by voting members for IEC Standard 62301 (Second Edition). For these reasons, DOE proposed in the November 2011 TP SNOPR to incorporate by reference in 10 CFR part 430, subpart B, appendix I, section 2.9.1.3 the power equipment specifications in section 4, paragraph 4.4 of IEC Standard 62301 (Second Edition). 76 FR 72332, 72339 (Nov. 23, 2011). DOE did not revise this proposal for the May 2012 TP SNOPR, and did not receive any comments on this topic in response to either notice. In today's final rule, DOE adopts these amendments to its microwave oven test procedure.

In the November 2011 TP SNOPR, DOE observed that section 5, paragraph 5.2 of IEC Standard 62301 (Second Edition) maintains the installation and setup procedures incorporated by reference in the microwave oven test procedure in the March 2011 Interim Final Rule from the First Edition. These provisions require that the appliance be prepared and set up in accordance with manufacturer's instructions, and that if no instructions are given, then the factory or “default” settings shall be used, or where there are no indications for such settings, the appliance is tested as supplied. Additionally, IEC Standard 62301 (Second Edition) adds certain clarifications to the installation and setup procedures in section 5, paragraph 5.2 of the First Edition regarding products equipped with a battery recharging circuit for an internal battery, as well as instructions for testing each relevant configuration option identified in the product's instructions for use. DOE stated in the November 2011 TP SNOPR that it is not aware of any microwave oven with an internal battery, or with a recharging circuit for such a battery. DOE also determined that a requirement to separately test each configuration option could substantially increase test burden and potentially conflicts with the requirement within the same section to set up the product in accordance with the instructions for use or, if no such instructions are available, to use the factory or “default” settings. Therefore, DOE tentatively concluded in the November 2011 TP SNOPR that the portions of the installation instructions in section 5, paragraph 5.2 of IEC Standard 62301 (Second Edition) pertaining to batteries and the requirement for the determination, classification, and testing of all modes associated with every combination of available product configuration options (which may be more numerous than the modes associated with operation at the default settings) are not appropriate for the microwave oven test procedures. Accordingly, DOE proposed in the November 2011 TP SNOPR qualifying language in the test procedureamendments at 10 CFR part 430, subpart B, appendix I, section 2.1.3 to disregard those portions of the installation instructions.Id.DOE maintained this proposal for the May 2012 TP SNOPR. No comments on this topic were submitted to DOE, and for the reasons discussed, DOE is amending the microwave oven test procedure accordingly in today's final rule.

The Second Edition also contains provisions for the power supply (section 4.3) and power-measuring instruments (section 4.4). Paragraph 4.3.2 requires that the value of the harmonic content of the voltage supply be recorded during the test and reported. As described previously, paragraph 4.4.1 requires the instrument to measure the crest factor and maximum current ratio. Paragraph 4.4.3 requires the instrument to be capable of measuring the average power or integrated total energy consumption over any operator-selected time interval. In the November 2011 TP SNOPR, DOE stated that it is aware of commercially available power measurement instruments that can perform each of these required measurements individually. However, DOE is also aware that certain industry-standard instruments, such as the Yokogawa WT210/WT230 digital power meter and possibly others, are unable to measure harmonic content or crest factor while measuring average power or total integrated energy consumption. DOE expressed concern that laboratories currently using power-measuring instruments without this capability would be required to purchase, at potentially significant expense, additional power-measuring instruments that are able to perform all these measurements simultaneously. Therefore, DOE proposed in the November 2011 TP SNOPR for 10 CFR part 430, subpart B, appendix I, sections 2.2.1.2 and 2.9.1.3 that if the power-measuring instrument is unable to perform these measurements during the actual test measurement, it would be acceptable to measure the total harmonic content, crest factor, and maximum current ratio immediately before and immediately after the actual test measurement to determine whether the requirements for the power supply and power measurement have been met. 76 FR 72332, 72339-40 (Nov. 23, 2011).

AHAM and Whirlpool support the measurement of the total harmonic content, crest factor, and maximum current ratio before and after the actual test measurement if the power measuring instrument is unable to perform these measurements during the actual test. Whirlpool commented that this provision would prevent manufacturers from being required to purchase more comprehensive and expensive test equipment. (AHAM, No. 40 at p. 4; Whirlpool, No. 33 at p. 2) DOE agrees with these commenters, and in today's final rule amends the microwave oven test procedure to include such a provision in section 2.2.1.2 of appendix I.

The other major changes in the Second Edition related to the measurement of standby mode and off mode power consumption in covered products involve measurement techniques and specification of the stability criteria required to measure that power. The Second Edition contains more detailed techniques to evaluate the stability of the power consumption and to measure the power consumption for loads with different stability characteristics. According to the Second Edition, the user is given a choice of measurement procedures, including sampling methods, average reading methods, and a direct meter reading method. For the November 2011 TP SNOPR, DOE evaluated these new methods in terms of test burden and improvement in results as compared to those methods adopted in the March 2011 Interim Final Rule, which were based on IEC Standard 62301 (First Edition).

In the March 2011 Interim Final Rule, DOE adopted provisions requiring that microwave oven standby mode and off mode power be measured using section 5, paragraph 5.3 of IEC Standard 62301 (First Edition). DOE also adopted additional specific methodology for microwave ovens in which power varies as a function of the time displayed. In particular, based on DOE's testing, DOE adopted a requirement for these microwave ovens to set the display time to 3:23 and allowing a 10-minute stabilization period prior to a 10-minute measurement period for the display time of 3:33 to 3:42, based on the average power approach of section 5, paragraph 5.3.2(a) of IEC Standard 62301 (First Edition). DOE stated that this method provides a valid measure of standby energy use for those microwave ovens with power consumption varying according to the time displayed on the clock. 76 FR 12825, 12838-40 (Mar. 9, 2011).

For the November 2011 TP SNOPR, DOE analyzed the potential impacts of referencing methodology from IEC Standard 62301 (Second Edition) rather than from the First Edition by comparing the provisions allowed by each under different scenarios of power consumption stability. Based on its analysis, DOE concluded that the use of the Second Edition would improve the accuracy and representativeness of power consumption measurements. DOE also recognized industry's overwhelming support for the Second Edition and the benefit of harmonizing with international test standards to reduce testing burden on manufacturers that sell products internationally by not requiring multiple test methods to be conducted according to different testing methods in different countries. In the narrow case of microwave ovens with power consumption that varies as a function of the clock time displayed, DOE proposed to maintain the application of clauses from IEC Standard 62301 (First Edition) for measuring standby mode power consumption during a 10-minute test period that were adopted in the March 2011 Interim Final Rule. DOE determined that, in this case, the use of the Second Edition would cause manufacturers to incur significant burden that would not be warranted by any potential improved accuracy of the measurement. 76 FR 72332, 72340-42 (Nov. 23, 2011). DOE did not revise these proposals regarding testing methodology and the use of IEC Standard 62301 in the May 2012 TP SNOPR.

AHAM and Whirlpool agreed with the existing methodology to measure standby power for microwave ovens with power consumption that varies as a function of the time displayed over a period of 10 minutes starting at a clock time of 3:33. Whirlpool, however, objected to a fixed stabilization period of 10 minutes, starting at a clock time of 3:23, prior to the start of the measurement period. Whirlpool commented that the time for the controls to reach the lowest power consumption state may be longer or shorter than 10 minutes for a particular microwave oven, and that manufacturers should be allowed to conduct the test by setting the clock sufficiently far in advance to ensure that the controls have stabilized by the start of the measurement period. (Whirlpool, No. 33 at p. 2) AHAM also stated that some microwave ovens may have a shorter stabilization period than 10 minutes, and for those products, the current methodology would have a higher test burden than an approach in which the stabilization period is defined as the number of minutes needed for the microwave oven to return to its lowest power consumption state. AHAM objected to DOE's assertion in the November 2011 TP SNOPR that a defined stabilization period would encourage manufacturers to minimize the duration of the stabilization periodin their products. According to AHAM, a fixed stabilization period would likely lead to standardization of stabilization periods, and since DOE did not observe any current stabilization periods longer than 10 minutes, manufacturers would be encouraged to increase them up to the maximum of 10 minutes. AHAM agreed, however, that the current 10-minute approach is less burdensome than measuring standby power consumption in this case using IEC Standard 62301 (Second Edition). AHAM further commented that setting the clock time to 3:23 and allowing a 10-minute stabilization period prior to the 10-minute test ensures that the test procedure is repeatable and reproducible, and minimizes test burden by not requiring independent test laboratories to determine the number of minutes needed for the microwave oven to reach its lowest power consumption state. According to AHAM, it is critical in the context of increased enforcement that third-party laboratories be able to conduct the test procedure with as little lab-to-lab variation as possible. AHAM, therefore, supports DOE's proposal to maintain the 10-minute measurement method currently provided in the test procedure. (AHAM, No. 40 at p. 5)

For the reasons discussed above, and in consideration of the comments received supporting the proposals, DOE amends the microwave oven test procedure in today's final rule by incorporating by reference the relevant paragraphs of section 5.3 of IEC Standard 62301 (Second Edition) in 10 CFR part 430, subpart B, appendix I, sections 3.1.4.1 and 3.2.4. The amendments require the use of the sampling method in section 5.3.2 of the Second Edition for standby mode and off mode power measurements, except in the case of microwave ovens with power consumption that varies as a function of the time displayed. DOE is not amending the substance of the 10-minute test method that is currently provided for these products in the microwave oven test procedure, which reference provisions from IEC Standard 62301 (First Edition). Today's final rule also adopts necessary editorial changes to appendix I to allow for the correct referencing of the Second Edition, including definitions and section numbering.

In the March 2011 Interim Final Rule, DOE adopted a definition of “standby mode” based on the definitions provided in IEC Standard 62301 (FDIS), as follows:

• “Standby mode” is the condition in which an energy-using product is connected to a mains power source and offers one or more of the following user-oriented or protective functions which may persist for an indefinite time:

• a remote switch (including remote control), internal sensor, or timer to facilitate the activation of other modes (including activation or deactivation of active mode);

• and continuous functions, including information or status displays (including clocks) or sensor-based functions. 76 FR 12825, 12834 (Mar. 9, 2011).

DOE also adopted in its amendments to the test procedure the clarification, provided as a note accompanying the definition of standby mode in IEC Standard 62301 (FDIS), that a timer is a continuous clock function (which may or may not be associated with a display) that provides regularly scheduled tasks (e.g.switching) and that operates on a continuous basis.Id.

DOE also adopted definitions of “off mode” and “active mode” based on the definitions provided in IEC Standard 62301 (FDIS), as follows:

• “Off mode” is the condition in which an energy-using product is connected to a mains power source and is not providing any standby mode or active mode function and where the mode may persist for an indefinite time. An indicator that only shows the user that the product is in the off position is included within the classification of off mode.Id.

• “Active mode(s)” is the condition in which an energy-using product is connected to a mains power source and at least one primary function is activated.Id.

In the November 2011 TP SNOPR, DOE did not propose changing these definitions in light of its proposal to reference the updated version of IEC Standard 62301, because these definitions have the same functional equivalence to those in both IEC Standard 62301 (FDIS) and IEC Standard 62301 (Second Edition). DOE did, however, propose to make non-substantive editorial changes to clarify for the reader the description of the user-oriented or protective functions associated with standby mode operation in the definition of standby mode in 10 CFR part 430, subpart B, appendix I, section 1.13. 76 FR 72332, 72343 (Nov. 23, 2011). DOE did not revise these proposals for mode definitions in the May 2012 TP SNOPR.

DOE did not receive any comments regarding these proposals, and thus amends the microwave oven test procedure in today's final rule to provide those clarifications in the definition of standby mode, which is now included as section 1.17 in 10 CFR part 430, subpart B, appendix I.

As discussed in section III.A, DOE has determined that for products combining a microwave oven with other appliance functionality, the compartment incorporating microwave cooking capability would be considered to meet the definition of a microwave oven at 10 CFR 430.2. As a result, DOE proposed in the May 2012 TP SNOPR testing procedures specifically for such combined products. In particular, DOE proposed that the standby mode and off mode power for combined products be measured according to the same methodology proposed in the November 2011 TP SNOPR for microwave ovens;i.e.,according to the provisions incorporated from IEC Standard 62301 (Second Edition), except in the case in which standby mode power consumption varies as a function of displayed time. In that case, the standby mode power would be measured for the entire product according to the method outlined in the November 2011 TP SNOPR. To determine the standby mode and off mode power associated with the microwave oven portion only, apportionment factors representing the fractional contribution of the microwave oven portion to the total standby mode and off mode power consumption would be multiplied by the overall standby mode and off mode power measurements. DOE further proposed specific standby mode apportionment factors for products that incorporate microwave ovens and conventional cooking products. The proposed amendments would also allow a manufacturer, upon submission of suitable supporting information to DOE, to use alternate apportionment values for such combined products. Manufacturers of combined products for which specific apportionment values were not provided in the test procedure would also be required to submit information as to the appropriate values for their products. 77 FR 28805, 28810-12 (May 16, 2012).

AHAM and Whirlpool objected to the method of apportionment factors for measuring standby mode and off mode energy use for combined products, stating that DOE's analysis was based on data derived from an insufficient sample size and to regulate a combined product on that basis would be arbitrary and unreasonable. (AHAM, No. 40 at pp. 1-2, 4; Whirlpool, No. 41 at pp. 1-2)Whirlpool also stated that the standby power of a combined product cannot be logically divided, and that off mode power may apply to one functional component of a combined product but not the other. (Whirlpool, No. 41 at pp. 2-3) AHAM commented that, under the apportionment approach, third-party laboratories would be unable to conduct verification testing, because they would be unable to determine how to divide standby power among the functional components. (AHAM, No. 40 at p. 2) AHAM and Whirlpool further commented that the apportionment method would, in effect, regulate the standby power of the other functional component in addition to the microwave oven portion, which is outside of the scope of this rulemaking and would be unreasonable and arbitrary. (AHAM, No. 40 at p. 3, Whirlpool, No. 41 at p. 2) According to Whirlpool, the conventional cooking component of a combined product would be subject to energy conservation standards, while other conventional cooking products would not, creating an unfair competitive advantage for manufacturers of the unregulated products.

As discussed in section III.A of this notice, DOE has decided not to adopt methodology in its microwave oven test procedure at this time for measuring the standby mode and off mode energy use of the microwave portion of combined products. Therefore, DOE does not need to further address these comments in today's final rule. DOE may choose to initiate a separate rulemaking at a later date that would address standby and off mode energy use of combined products, at which time such comments could again be raised.

DOE proposed in the November 2011 TP SNOPR to make minor editorial changes in 10 CFR part 430, subpart B, appendix I, section 2.2.1.1 to aid the reader by presenting the electrical supply voltages consistently for microwave ovens and conventional cooking products, and also in section 1.12 to clarify the alternative use of metric units for various measurements and calculations in the conventional cooking products test procedure. 76 FR 72331 (Nov. 23, 2011). DOE did not revise this proposal for the May 2012 TP SNOPR, and did not receive any comments regarding these clarifications in response to either notice. Therefore, DOE adopts these clarifications to appendix I in today's final rule, although section 1.12 is now designated as section 1.16.

EPCA requires that test procedures shall be reasonably designed to produce test results which measure energy efficiency, energy use, or estimated annual operating cost of a covered product during a representative average use cycle or period of use. Test procedures must also not be unduly burdensome to conduct. (42 U.S.C. 6293(b)(3))

In the March 2011 Interim Final Rule, DOE concluded that the amended test procedure would produce test results that measure the power consumption of covered products during a representative average use cycle as well as annual energy consumption, and that the test procedure would not be unduly burdensome to conduct. 76 FR 12825, 12840 (March 9, 2011).

The amendments to the DOE test procedures proposed in the November 2011 TP SNOPR would be based on an updated version of IEC Standard 62301, specifically IEC Standard 62301 (Second Edition). For the reasons discussed in the November 2011 TP SNOPR, DOE concluded that the proposed amended test procedures would produce test results that measure the standby mode and off mode power consumption during representative use, and that the test procedures would not be unduly burdensome to conduct. 76 FR 72332, 72344-45 (Nov. 23, 2011).

Whirlpool stated that it considers the test burden acceptable. However, Whirlpool added that this is contingent upon its comments on the following topics: (1) The exclusion of all products with multiple cavities, with one cavity having microwave capability and the other having a conventional oven, as covered products, (2) the proposed use of IEC Standard 62301 (Second Edition), (3) the measurement of total harmonic distortion before and/or after the actual test, and (4) the use of a manufacturer-determined stabilization period at the start of standby power testing for microwave ovens with clocks. (Whirlpool, No. 33 at p. 2)

For the reasons discussed in section III.A of this notice, DOE determined in today's final rule to cover all products with a microwave oven component, including products that combine a microwave oven with other appliance functionality, for the purposes of the microwave oven test procedure. However, DOE is not adopting provisions to measure the standby mode and off mode energy use of the microwave oven portion of combined products at this time.

Today's final rule also adopts amendments to the test procedure that incorporate by reference IEC Standard 62301 (Second Edition) and provisions that allow the measurement of total harmonic distortion before and/or after the actual test, which are in accordance with Whirlpool's comments. The amendments do not, however, include Whirlpool's recommendation that the stabilization period for microwave ovens with power consumption that varies as a function of the time displayed be set according to the time it takes for the product to transition to its lowest power state. DOE determined that a fixed 10-minute stabilization period prior to the start of the 10-minute measurement period for those products will provide clarity to testing laboratories and ensure repeatability and reproducibility, which will outweigh the burden of an additional few minutes of testing time.

DOE concludes that the amended test procedures for microwave ovens will produce test results that measure the standby mode and off mode power consumption during representative use, and that the test procedures will not be unduly burdensome to conduct.

Sections 6299-6305 of EPCA authorize DOE to enforce compliance with the energy and water conservation standards established for certain consumer products. (42 U.S.C. 6299-6305 (consumer products) On March 7, 2011, the Department revised, consolidated, and streamlined its existing certification, compliance, and enforcement regulations for certain consumer products and commercial and industrial equipment covered under EPCA, including microwave ovens. 76 FR 12422. These regulations are codified in 10 CFR 429.23 (conventional cooking tops, conventional ovens, microwave ovens).

The certification requirements for microwave ovens consist of a sampling plan for selection of units for testing and requirements for certification reports. Because there are no existing energy conservation standards for microwave ovens, DOE is not amending the certification reporting requirements for these products. However, because DOE adopts new metrics in today's final rule (standby mode power consumption (PSB) and off mode power consumption (POFF)) for microwave ovens, DOE additionally amends provisions in the sampling plan in 10 CFR 429.23(a)(2)(i) to include PSBand POFF.

The Office of Management and Budget has determined that test procedure rulemakings do not constitute “significant regulatory actions” under section 3(f) of Executive Order 12866, Regulatory Planning and Review, 58 FR 51735 (Oct. 4, 1993). Accordingly, this action was not subject to review under the Executive Order by the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget (OMB).

The Regulatory Flexibility Act (5 U.S.C. 601et seq.) requires preparation of a regulatory flexibility analysis (RFA) for any rule that by law must be proposed for public comment, unless the agency certifies that the rule, if promulgated, will not have a significant economic impact on a substantial number of small entities. As required by Executive Order 13272, “Proper Consideration of Small Entities in Agency Rulemaking,” 67 FR 53461 (August 16, 2002), DOE published procedures and policies on February 19, 2003, to ensure that the potential impacts of its rules on small entities are properly considered during the DOE rulemaking process. 68 FR 7990. DOE has made its procedures and policies available on the Office of the General Counsel's Web site:http://energy.gov/gc/office-general-counsel.DOE reviewed today's final rule under the provisions of the Regulatory Flexibility Act and the procedures and policies published on February 19, 2003.

In conducting this review, DOE first determined the potential number of affected small entities. The Small Business Administration (SBA) considers an entity to be a small business if, together with its affiliates, it employs fewer than the threshold number of workers specified in 13 CFR part 121 according to the North American Industry Classification System (NAICS) codes. The SBA's Table of Size Standards is available at:http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf.The threshold number for NAICS classification 335221,Household Cooking Appliance Manufacturers,which includes microwave oven manufacturers, is 750 employees. DOE surveyed the AHAM member directory to identify manufacturers of microwave ovens. In addition, as part of the appliance standards rulemaking, DOE asked interested parties and AHAM representatives within the microwave oven industry if they were aware of any small business manufacturers. DOE consulted publicly available data, purchased company reports from sources such as Dun & Bradstreet, and contacted manufacturers, where needed, to determine if they meet the SBA's definition of a small business manufacturing facility and have their manufacturing facilities located within the United States. Based on this analysis, DOE estimates that there is one small business which manufactures a product which combines a microwave oven with other appliance functionality. However, because DOE is not amending at this time the test procedures for microwave ovens to include provisions for measuring the standby mode and off mode energy use for the microwave oven portion of such combined products, DOE certifies that today's final rule would not have a significant economic impact on a substantial number of small entities. Accordingly, DOE has not prepared a regulatory flexibility analysis for this rulemaking. DOE will transmit the certification and supporting statement of factual basis to the Chief Counsel for Advocacy of the SBA for review under 5 U.S.C. 605(b).

Manufacturers of microwave ovens must certify to DOE that their products comply with any applicable energy conservation standards. In certifying compliance, manufacturers must test their products according to the DOE test procedures for microwave ovens, including any amendments adopted for those test procedures. DOE has established regulations for the certification and recordkeeping requirements for all covered consumer products and commercial equipment, including microwave ovens. (76 FR 12422 (March 7, 2011). The collection-of-information requirement for the certification and recordkeeping is subject to review and approval by OMB under the Paperwork Reduction Act (PRA). This requirement has been approved by OMB under OMB control number 1910-1400. Public reporting burden for the certification is estimated to average 20 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.

Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA, unless that collection of information displays a currently valid OMB Control Number.

In this final rule, DOE amends its test procedure for microwave ovens. DOE has determined that this rule falls into a class of actions that are categorically excluded from review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321et seq.) and DOE's implementing regulations at 10 CFR part 1021. Specifically, this rule amends an existing rule without affecting the amount, quality or distribution of energy usage, and, therefore, will not result in any environmental impacts. Thus, this rulemaking is covered by Categorical Exclusion A5 under 10 CFR part 1021, subpart D, which applies to any rulemaking that interprets or amends an existing rule without changing the environmental effect of that rule. Accordingly, neither an environmental assessment nor an environmental impact statement is required.

Executive Order 13132, “Federalism,” 64 FR 43255 (August 4, 1999) imposes certain requirements on agencies formulating and implementing policies or regulations that preempt State law or that have Federalism implications. The Executive Order requires agencies to examine the constitutional and statutory authority supporting any action that would limit the policymaking discretion of the States and to carefully assess the necessity for such actions. The Executive Order also requires agencies to have an accountable process to ensure meaningful and timely input by State and local officials in the development of regulatory policies that have Federalism implications. On March 14, 2000, DOE published a statement of policy describing the intergovernmental consultation process it will follow in the development of such regulations. 65 FR 13735. DOE examined this final rule and determined that it will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. EPCA governs and prescribes Federal preemption of State regulations as to energy conservation for the products that are the subject of today's final rule. States can petition DOE for exemption from such preemption to the extent, and based on criteria, set forth in EPCA. (42U.S.C. 6297(d)) No further action is required by Executive Order 13132.

Regarding the review of existing regulations and the promulgation of new regulations, section 3(a) of Executive Order 12988, “Civil Justice Reform,” 61 FR 4729 (Feb. 7, 1996), imposes on Federal agencies the general duty to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; (3) provide a clear legal standard for affected conduct rather than a general standard; and (4) promote simplification and burden reduction. Section 3(b) of Executive Order 12988 specifically requires that Executive agencies make every reasonable effort to ensure that the regulation: (1) Clearly specifies the preemptive effect, if any; (2) clearly specifies any effect on existing Federal law or regulation; (3) provides a clear legal standard for affected conduct while promoting simplification and burden reduction; (4) specifies the retroactive effect, if any; (5) adequately defines key terms; and (6) addresses other important issues affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of Executive Order 12988 requires Executive agencies to review regulations in light of applicable standards in sections 3(a) and 3(b) to determine whether they are met or it is unreasonable to meet one or more of them. DOE has completed the required review and determined that, to the extent permitted by law, this final rule meets the relevant standards of Executive Order 12988.

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) requires each Federal agency to assess the effects of Federal regulatory actions on State, local, and Tribal governments and the private sector. Public Law 104-4, sec. 201 (codified at 2 U.S.C. 1531). For a regulatory action resulting in a rule that may cause the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year (adjusted annually for inflation), section 202 of UMRA requires a Federal agency to publish a written statement that estimates the resulting costs, benefits, and other effects on the national economy. (2 U.S.C. 1532(a), (b)) The UMRA also requires a Federal agency to develop an effective process to permit timely input by elected officers of State, local, and Tribal governments on a proposed “significant intergovernmental mandate,” and requires an agency plan for giving notice and opportunity for timely input to potentially affected small governments before establishing any requirements that might significantly or uniquely affect small governments. On March 18, 1997, DOE published a statement of policy on its process for intergovernmental consultation under UMRA. 62 FR 12820; also available athttp://energy.gov/gc/office-general-counsel. DOE examined today's final rule according to UMRA and its statement of policy and determined that the rule contains neither an intergovernmental mandate, nor a mandate that may result in the expenditure of $100 million or more in any year, so these requirements do not apply.

Section 654 of the Treasury and General Government Appropriations Act, 1999 (Pub. L. 105-277) requires Federal agencies to issue a Family Policymaking Assessment for any rule that may affect family well-being. Today's final rule will not have any impact on the autonomy or integrity of the family as an institution. Accordingly, DOE has concluded that it is not necessary to prepare a Family Policymaking Assessment.

DOE has determined, under Executive Order 12630, “Governmental Actions and Interference with Constitutionally Protected Property Rights” 53 FR 8859 (March 18, 1988), that this regulation will not result in any takings that might require compensation under the Fifth Amendment to the U.S. Constitution.

Section 515 of the Treasury and General Government Appropriations Act, 2001 (44 U.S.C. 3516 note) provides for agencies to review most disseminations of information to the public under guidelines established by each agency pursuant to general guidelines issued by OMB. OMB's guidelines were published at 67 FR 8452 (Feb. 22, 2002), and DOE's guidelines were published at 67 FR 62446 (Oct. 7, 2002). DOE has reviewed today's final rule under the OMB and DOE guidelines and has concluded that it is consistent with applicable policies in those guidelines.

Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use,” 66 FR 28355 (May 22, 2001), requires Federal agencies to prepare and submit to OMB, a Statement of Energy Effects for any significant energy action. A “significant energy action” is defined as any action by an agency that promulgated or is expected to lead to promulgation of a final rule, and that: (1) Is a significant regulatory action under Executive Order 12866, or any successor order; and (2) is likely to have a significant adverse effect on the supply, distribution, or use of energy; or (3) is designated by the Administrator of OIRA as a significant energy action. For any significant energy action, the agency must give a detailed statement of any adverse effects on energy supply, distribution, or use if the regulation is implemented, and of reasonable alternatives to the action and their expected benefits on energy supply, distribution, and use.

Today's regulatory action is not a significant regulatory action under Executive Order 12866. Moreover, it would not have a significant adverse effect on the supply, distribution, or use of energy, nor has it been designated as a significant energy action by the Administrator of OIRA. Therefore, it is not a significant energy action, and, accordingly, DOE has not prepared a Statement of Energy Effects.

Under section 301 of the Department of Energy Organization Act (Pub. L. 95-91; 42 U.S.C. 7101), DOE must comply with section 32 of the Federal Energy Administration Act of 1974, as amended by the Federal Energy Administration Authorization Act of 1977. (15 U.S.C. 788; FEAA) Section 32 essentially provides in relevant part that, where a rule authorizes or requires use of commercial standards, the rulemaking must inform the public of the use and background of such standards. In addition, section 32(c) requires DOE to consult with the Attorney General and the Chairman of the Federal Trade Commission (FTC) concerning the impact of the commercial or industry standards on competition.

The final rule incorporates testing methods contained in the following commercial standards:

1. IEC Standard 62301, “Household electrical appliances—Measurement of standby power,” (First Edition, June 2005).

2. IEC Standard 62301, “Household electrical appliances—Measurement of standby power,” Edition 2.0, 2011-01.

DOE has evaluated these standards and is unable to conclude whether they fully comply with the requirements of section 32(b) of the FEAA,i.e.,whether they were developed in a manner that fully provides for public participation, comment, and review. DOE has consulted with the Attorney General and the Chairman of the FTC about the impact on competition of using the methods contained in these standards and has received no comments objecting to their use.

As required by 5 U.S.C. 801, DOE will report to Congress on the promulgation of today's rule before its effective date. The report will state that it has been determined that the rule is not a “major rule” as defined by 5 U.S.C. 804(2).

The Secretary of Energy has approved publication of this final rule.

For the reasons stated in the preamble, DOE amends parts 429 and 430 of Chapter II of Title 10, Code of Federal Regulations as set forth below:

a.Why is NCUA Adopting this Rule?The Board is adopting this rule to fully utilize the combined resources of NCUA and SSAs to identify FISCUs in “troubled condition” at the earliest possible juncture. The Federal Credit Union Act (the Act) requires a credit union in “troubled condition” to give NCUA notice and an opportunity to disapprove a change of credit union officials. Currently, only SSAs can make this determination for a FISCU. The rule permitseitherNCUA or an SSA to designate a FISCU in “troubled condition” for this purpose, thus expanding NCUA's opportunity to act preemptively to ensure that the officials who take control of a FISCU in “troubled condition” are qualified to address its troubles. This gives the National Credit Union Share Insurance Fund (NCUSIF) a further measure of protection against the risk of loss.

b.Statutory Framework.In 1989, Congress amended the Act to require a federally insured credit union “in troubled condition, as determined on the basis of such credit union's most recent report of condition or report of examination,”1 to notify NCUA prior to adding or replacing any individual serving as a member of the board of directors or a committee, or employedas a senior executive officer (each, an official).2

The amendment to the Act bars an insured credit union in troubled condition from adding or replacing an official if NCUA issues a Notice of Disapproval in response to a notification of a change in officials.3 NCUA may disapprove an individual when “the competence, experience, character, or integrity of the individual * * * indicates that it would not be in the best interests” of the credit union's members or the public for the individual to serve.4 The individual or the credit union may appeal the disapproval to the Board.5

c.Historical Definition of “Troubled Condition.”To implement the amendment to the Act, Congress directed NCUA to define by regulation the term “troubled condition.”6 Since 1990, NCUA has defined a natural person credit union in “troubled condition” as:

(1) A federal credit union that has been assigned a “4” or “5” composite CAMEL rating by NCUA;

(2) A FISCU that has been assigned a “4” or “5” composite CAMEL rating by its SSA;

(3) A FISCU that has been assigned a “4” or “5” composite CAMEL rating by NCUA based on core workpapers received from an SSA; or

(4) A federal credit union or FISCU that has received special assistance under sections 208 or 216 of the Act to avoid liquidation.7

In 1999, the Board adopted a separate definition of “troubled condition” for corporate credit unions to conform to the Corporate Risk Information System (“CRIS”).8 Under that definition, a corporate credit union is in “troubled condition” if:

(1) A corporate federal credit union is assigned a “4” or “5” CRIS rating by NCUA in either the Financial Risk or Risk Management composites;

(2) A corporate FISCU is assigned a “4” or “5” CRIS rating by its SSA in either the Financial Risk or Risk Management composites or, if the state has not adopted CRIS, is assigned a “4” or “5” composite CAMEL rating by its SSA;

(3) A corporate FISCU is assigned a “4” or “5” CRIS rating in either the Financial Risk or Risk Management composites by NCUA based on core workpapers received from a state that does not use either the CRIS or CAMEL rating systems; or

(4) A corporate federal credit union or corporate FISCU receives special assistance under sections 208 or 216 of the Act to avoid liquidation.9

The “troubled condition” definitions for natural person credit unions and corporate credit unions have since been incorporated by reference in other parts of NCUA's regulations.

The proposed rule defined a FISCU in “troubled condition” not just when its SSA assigns it a “4” or “5” composite CAMEL or CRIS rating, but wheneitherits SSA or NCUA assigns such a rating.10 This expanded definition was intended to enhance NCUA's ability to administer and protect the NCUSIF. Additionally, the proposed rule made technical and conforming amendments to update the rule and the cross-references to “troubled condition” that appear elsewhere in NCUA's regulations.11

NCUA received 48 comment letters in response to the proposed rule: 21 from FISCUs, 16 from state credit union leagues, 5 from state credit union regulators, 4 from credit union trade associations, and 2 from individuals. All of the commenters opposed the proposed rule, noting various concerns.

Approximately half of the commenters objected that the rule constitutes excessive federal oversight that will undermine or destabilize the dual chartering system. The Board disagrees with these conclusions. The rule's primary purpose is to help NCUA, as administrator of the NCUSIF, to minimize losses to the NCUSIF by instituting a regulatory framework that more fully utilizes state and federal resources. The rule does not supplant an SSA's authority with NCUA's, nor does it substitute NCUA's judgment for that of an SSA. Rather, the Board views it as a cooperative effort between NCUA and SSAs. Under the rule, NCUA acknowledges that SSAs are the primary regulators of FISCUs. Further, SSAs maintain all of their regulatory and supervisory authorities with no diminution of responsibilities. Accordingly, the Board believes the rule reflects its commitment to the dual chartering system and, as noted below, is consistent with federalism policymaking criteria.

Five commenters interpreted the rule as implying doubt that SSAs are qualified to assess their own FISCUs, and that NCUA's judgment is superior. A few others condemned the implication of doubt as a pretext to diminish an SSA's regulatory responsibility in favor of federal authority. The Board finds no merit in these comments. In the final rule, the Board in no way intends to diminish an SSA's role or disparage the high quality work performed by state examiners. In fact, the final rule simply levels the playing field by deferring to whichever regulator—state or federal—assigns a CAMEL 4 or 5 rating to a FISCU. In instances where an SSA rates a FISCU as a CAMEL 4 or 5 but NCUA does not, the SSA's rating prevails. In such cases, even if NCUA rates that FISCU as a CAMEL 1, 2, or 3, NCUA will defer to the SSA's CAMEL 4 or 5 rating and will classify that FISCU as being in “troubled condition.”

Additionally, the scope of the rule is limited to changes in FISCU officials and does not affect other aspects of an SSA's relationship with its credit unions.

Seventeen commenters found a lack of sufficient justification to support the rule, with eight maintaining that NCUA did not document enough cases where the discrepancy between NCUA's and an SSA's rating made a difference. From cases arising in the recent financial crisis, NCUA has learned that it must be able to respond quickly when problems are discovered in the credit unions that it insures. Failing to timely identify a credit union in “troubled condition” can have significant consequences for the NCUSIF. In some cases during the crisis, it was not possible to respond quickly enough when NCUA's CAMEL rating of a FISCU differed from the SSA's. In 4 of 8 cases since 2008 that yielded a loss to the NCUSIF, the SSA assigned a CAMEL rating that did not trigger “troubled condition” status.12

Although ratings discrepancies between NCUA and SSAs affecting whether a FISCU is deemed in “troubled condition” are not routine, they do occur. Such ratings discrepancies between NCUA and SSAs averaged 7.7 percent among regular examinations of FISCUs and on-sitesupervision contacts conducted from 2009 through 2011. More recently, NCUA has observed a significant increase in the discrepancy rate. Among regular examinations of FISCUs and on-site supervision contacts in 2012, the CAMEL rating variance between “troubled condition” and not was 10 percent through the third quarter.

When NCUA's rating is inconsistent with an SSA's, NCUA's practice is to work cooperatively with state examiners to resolve the discrepancy. Further, pursuant to NCUA policy, NCUA will not designate a FISCU to be in “troubled condition” without first making an on-site contact at that FISCU. This on-site contact will typically consist of a joint examination by NCUA and state examiners.

Eleven commenters contended that requiring an SSA to defer to NCUA's lower CAMEL rating to designate a FISCU in “troubled condition” would diminish and encroach on an SSA's authority as primary regulator. As explained above, the Board maintains that the single, narrow purpose of the rule is not an encroachment on, or diminution of, an SSA's authority over its FISCUs.

Three commenters complained that the rule is inconsistent with applicable federalism policymaking criteria, alleging that NCUA did not identify a problem of national significance to justify the rule, and did not assess its impact on the states. The Board disagrees, as explained in the discussion of Executive Order 13132 in section 4 below.

Finally, eight commenters argued that the rule is unnecessary because the Act gives NCUA other remedies to deal with issues relating to FISCU officials. Further, six commenters maintained that a FISCU's change of officials should be the exclusive province of the SSA and NCUA should have no role at all. The Board notes, however, that, in 1989, Congress granted NCUA the authority to disapprove a change of officials of an insured credit union (including a FISCU) in “troubled condition.” This Congressional action is the foundation of NCUA's position that it need not limit itself to existing “other remedies” to deal with FISCU officials and, further, that deciding who is qualified to serve as a FISCU official is not the “exclusive province” of an SSA.

Apart from the CAMEL and CRIS ratings-based criteria for “troubled condition,” the Board on its own initiative is adding language to the final rule to clarify the “troubled condition” criterion that is based on a credit union's receipt of cash assistance from NCUA. The proposed rule, like the existing rule, provided that an insured credit union is in “troubled condition” if it “has been granted assistance under section 208” of the Act.13 This incorrectly suggests that a credit union, once granted such assistance, remains in “troubled condition” even after it has satisfied its repayment obligation to NCUA. To clarify that an insured credit union is no longer in “troubled condition” once it has met this obligation, the final rule provides that an insured credit union is in “troubled condition” if it “has been granted assistance under section 208 of the [Act], 12 U.S.C. 1788, thatremains outstanding and unextinguished.”(emphasis added).

The Board has carefully considered the comments and appreciates the commenters' concerns. For the foregoing reasons, however, the Board adopts the amended definition of “troubled condition” as proposed with the addition of the substantive change described in the preceding paragraph.14

The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small entities (less than $10 million in assets). This rule enables NCUA to better administer the NCUSIF without imposing any additional regulatory burden on credit unions. It will not have a significant economic impact on a substantial number of small credit unions.

NCUA has determined that this rule will not increase paperwork requirements under the Paperwork Reduction Act of 1995 and regulations of the Office of Management and Budget.

Executive Order 13132 encourages independent regulatory agencies to consider the impact of their regulatory actions on state and local interests. NCUA, an independent regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily adheres to the fundamental federalism principles addressed by the Executive Order.

In promulgating this rule, the Board has carefully limited its scope. The rule narrowly addresses the definition of a FISCU in “troubled condition” for the sole purpose of better enabling NCUA to administer and protect the NCUSIF. The rule fully recognizes an SSA's primary regulatory and supervisory authority over its FISCUs. The rule creates a cooperative partnership between primary regulator (SSA) and insurer (NCUA) and in no way diminishes an SSA's power or authority. For these reasons, NCUA believes this rule will not have a substantial direct effect on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Accordingly, this rule does not constitute a policy that has federalism implications for purposes of the Executive Order.

NCUA has determined that the rule will not affect family well-being within the meaning of section 654 of the Treasury and General Government Appropriations Act, 1999, Public Law 105-277, 112 Stat. 2681 (1998).

The Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121) (“SBREFA”) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by Section 551 of the APA.15 The Office of Management and Budget has determined that this rule is not a “major rule” for purposes of SBREFA.

For the reasons set forth above, 12 CFR parts 700, 701, 741, 747, and 750 are amended as follows:

Section 335 of the Dodd-Frank Act1 amended the Federal Credit Union Act to make permanent an increase in the SMSIA to $250,000. In September 2010, the Board issued a final rule2 which amended the SMSIA in NCUA's part 745 share insurance regulations to conform the regulatory language to the Dodd-Frank Act statutory change. The Board is now amending § 701.37(c), which still reflects the former $100,000 SMSIA, to update it to reflect the current $250,000 SMSIA.

Generally, the Administrative Procedure Act (APA) requires a federal agency to provide the public with notice and the opportunity to comment on agency rulemakings. The amendments in this rule are non-substantive and technical. They make minor changes which are statutorily required by the Dodd-Frank Act. The APA permits an agency to forego the notice and comment period under certain circumstances, such as when a rulemaking is technical and non-substantive. NCUA finds that, in this instance, notice and public comment are unnecessary under section 553(b)(3)(B) of the APA.3 NCUA also finds good cause to dispense with the 30-day delayed effective date requirement under section 553(d)(3) of the APA.4 The rule, therefore, will be effective immediately upon publication.

The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small entities (primarily those under $10 million in assets). NCUA has determined these technical amendments will not have a significant economic impact on a substantial number of small credit unions.

The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency by rule creates a new paperwork burden on regulated entities or modifies an existing burden.5 For purposes of the PRA, a paperwork burden may take the form of either a reporting or a recordkeeping requirement, both referred to as information collections. NCUA has determined that the technical amendments in this final rule do not increase the paperwork requirements under PRA or regulations of the Office of Management and Budget.

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

NCUA has determined that this final rule will not affect family well-being within the meaning of Section 654 of the Treasury and General Government Appropriations Act, 1999.6

The Small Business Regulatory Enforcement Fairness Act of 19967 (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by Section 551 of the Administrative Procedure Act.8 NCUA has submitted this rule to the Office of Management and Budget for it to determine if the final rule is a “major rule” for purposes of SBREFA. NCUA does not believe the rule is major.

For the reasons discussed above, the NCUA Board amends 12 CFR part 701 as follows:

An FCU qualifies as a low-income credit union (LICU) under NCUA's regulations if a majority of its membership consists of “low-income members,” as defined by the Board.1 Currently, the Board defines “low-income members” as those members whose family income is 80% or less than the total median earnings for individuals for the metropolitan area where they live or national metropolitan area, whichever is greater.2

The Federal Credit Union Act provides LICUs with statutory relief and other benefits.3 Examples of such relief and benefits include:

• Exemption from the statutory cap on member business loans;

• Authorization to accept non-member deposits from any source;

• Authorization to accept secondary capital; and

• Eligibility for assistance from the Community Development Revolving Loan Fund.

All of these benefits help a LICU better serve its members and community.

Executive Order 13579 provides that independent agencies, including NCUA, should consider if they can modify, streamline, expand, or repeal existing regulations to make their programs more effective and less burdensome.4 Additionally, the Board has a policy of continually reviewing its regulations to “update, clarify and simplify existing regulations and eliminate redundant and unnecessary provisions.”5 To carry out this internal policy, NCUA identifies one-third of its existing regulations for review each year and provides notice of this review so the public may comment. NCUA reviewed the LICU rule as part of this process.

In October 2012, the Board proposed amendments to the LICU rule.6 The Board was aware that some FCUs believed the LICU designation process was too burdensome in some cases. In particular, FCUs have stated that the requirement that an FCU accept the LICU designation within 30 days of having received notice of its eligibility from NCUA is too short for some FCUs. For example, they noted that it may take an FCU longer than 30 days to fully analyze if it wishes to accept the LICU designation or to obtain approval from its board of directors. Accordingly, the October 2012 proposal extended the acceptance time period from 30 days to 90 days. The Board believes that extending the timeframe to 90 days will make it easier for an eligible FCU to accept the LICU designation, take advantage of the benefits afforded to LICUs, and better serve its members and community. Overall, the proposal provided regulatory relief to FCUs and improved the LICU designation process.

Additionally, the proposal made several minor, nonsubstantive revisions to NCUA's requirements for insurance regulation. These technical corrections are necessary to reflect current agency practice.

NCUA received 5 comments on the October 2012 proposal. The comments were universally positive, and all commenters supported extending the acceptance time period to 90 days. Several commenters also noted the extended time period will allow an FCU sufficient time to determine if the designation fits with its strategic plans.

In addition, four commenters urged NCUA to further clarify the process for designating state-chartered, low-income credit unions as LICUs and to work with state regulators to ensure the state designation process is comparable to the federal process. The Board agrees that working with state regulators in this regard is worthwhile and would benefit state-chartered credit unions and their members.

The Board is adopting the October 2012 proposed rule as a final rule without change for the same reasons it issued the October 2012 proposed rule. In short, the final rule provides FCUs with regulatory relief and improves the LICU designation process by giving eligible FCUs sufficient time to: (1) Evaluate the benefits of having the designation; (2) determine if having the designation is consistent with their strategic plans; and (3) obtain FCU board of directors' approval. The final rule also enables more eligible FCUs to accept the LICU designation to better serve their members and communities. The proposed and final rules are fully supported by those who commented.

The Board is also adopting minor, nonsubstantive technical corrections to NCUA's requirements for insurance regulation to update and conform it to current agency practice. Previously, regional directors had the delegated authority to designate FCUs as LICUs. Currently, NCUA's Office of Consumer Protection has that delegated authority. This final rule updates and amends § 741.204 to remove references to regional directors.7

The Board reiterates that NCUA plans to notify FCUs of their eligibility on a periodic basis. An FCU that does not or is not able to respond to a particular NCUA notification in a timely manner will have additional opportunities to accept the designation in the future. Additionally, an FCU may relinquish its LICU status at any time, for any reason, simply by notifying NCUA in writing that it wishes to do so. While the Board believes the LICU designation is advantageous to eligible FCUs, it notes that it is just as easy to relinquish the designation as it is to accept it. An FCU that accepts the designation only needs to accept it once, after which NCUA will not send additional notifications.

No, neither the October 2012 proposal nor this final rule creates any new regulatory burdens for FCUs. To the contrary, as mentioned above, the Board is providing regulatory relief to FCUs that qualify for the LICU designation.

The Regulatory Flexibility Act requires NCUA to prepare an analysis to describe any significant economic impact a rule may have on a substantial number of small entities (primarily those under ten million dollars in assets). This final rule makes nonsubstantive, technical amendments and extends regulatory relief to FCUs. NCUA has determined and certifies that this final rule will not have a significant economic impact on a substantial number of small credit unions.

The Paperwork Reduction Act of 1995 (PRA) applies to rulemakings in which an agency by rule creates a new paperwork burden on regulated entities or modifies an existing burden.8 For purposes of the PRA, a paperwork burden may take the form of either a reporting or a recordkeeping requirement, both referred to as information collections. As noted above, the amendments make minor, technical corrections and extend regulatory relief. The final rule does not impose or modify paperwork burdens.

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

NCUA has determined that this final rule will not affect family well-being within the meaning of Section 654 of the Treasury and General Government Appropriations Act, 1999.9

The Small Business Regulatory Enforcement Fairness Act of 199610 (SBREFA) provides generally for congressional review of agency rules. A reporting requirement is triggered in instances where NCUA issues a final rule as defined by Section 551 of the Administrative Procedure Act.11 NCUA does not believe this final rule is a “major rule” within the meaning of the relevant sections of SBREFA. NCUA has submitted the rule to the Office of Management and Budget for its determination in that regard.

For the reasons stated in the preamble, the National Credit Union Administration amends 12 CFR parts 701 and 741 as set forth below:

The Regulatory Flexibility Act, Public Law 96-354, as amended (RFA), generally requires federal agencies to determine and specially consider the impact of proposed and final rules on small entities. Since 2003, NCUA has defined “small entity” in this context as a credit union with less than $10 million in assets.1 This final rule and IRPS 13-1 redefines “small entity” as a credit union with less than $50 million in assets. The final rule also amends 12 CFR 702.103, increasing to $50 million the asset threshold used to define a “complex” credit union for determining whether risk-based net worth requirements apply, and 12 CFR 741.3(b)(5), exempting all federally insured credit unions (referred to as FICUs or credit unions) with assets of $50 million or less from interest rate risk rule requirements. To cross-reference IRPS 13-1, the final rule makes a technical amendment to 12 CFR 791.8.

On September 20, 2012, the Board issued a proposed rule and IRPS with a 30-day comment period, which the Board later extended to 60 days. The proposal increased from $10 million to $30 million the asset thresholds used to define small entity under the RFA and to determine the applicability of interest rate risk and risk-based net worth requirements, subject to review every three years.2 This increase addressed the Board's concern that various asset thresholds affecting regulatory relief for small FICUs were outdated. By proposing an increase to the applicable thresholds to $30 million, the Board intended to account for industry asset growth, consolidation, and inflation, while avoiding undue risk to the National Credit Union Share Insurance Fund (NCUSIF).

Congress enacted the RFA in 1980 and amended it with the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121. The RFA requires federal agencies to determine whether a proposed or final rule will have a significant economic impact on a substantial number of small entities.3 If so, agencies must prepare an analysis that describes the rule's impact on small entities.4 The analysis must include descriptions of any significant alternatives that minimize the impact.5 This requirement encourages federal agencies to give special consideration to the ability of smaller entities to absorb compliance burden imposed by new rules.

In IRPS 81-4, the Board initially defined “small entity” for purposes of the RFA as any credit union with less than $1 million in assets.6 IRPS 87-2 superseded IRPS 81-4 but retained the definition of “small entity” as a credit union with less than $1 million in assets.7 The Board updated the definition in 2003 to include credit unions with less than $10 million in assets.8 IRPS 87-2 and IRPS 03-2 were incorporated by reference into NCUA's rule governing the promulgation of regulations.9

When the Board updated its RFA threshold to $10 million, it noted that amendments to the Federal Credit Union Act (FCU Act) in 1998 employed a $10 million threshold for multiple new provisions.10 These new provisions addressed the use of generally accepted accounting principles and voluntary audits; prompt corrective action (PCA) for new credit unions; and assistance for small credit unions in filing net worth restoration plans.11 IRPS 03-2 set the threshold in NCUA's RFA definition consistent with the $10 million threshold in the new FCU Act provisions. The Board has not increased the RFA threshold since 2003.

The public comment period for the proposed rule and IRPS ended on November 26, 2012. NCUA received 51 comments from 52 commenters. The commenters included 19 federal credit unions, 13 state-chartered credit unions, four trade associations (representing credit unions and state credit union regulators), 15 state credit union leagues, and one individual.

Almost all commenters expressly supported the Board's efforts to relieve regulatory burden, with just over half advocating for changes to the proposed asset threshold, the criteria NCUA uses to define small entity, and/or the proposed three-year review period. In addition to resource concerns, multiple commenters drew comparisons between FICUs and non-credit union institutions with which they compete to advocate for a higher RFA threshold. The general comments on the proposal are described in detail below.

Commenters generally fell into groups that supported or advocated three different asset thresholds or ranges, including (a) $30 million; (b) $40 million to approximately $50 million; and (c) approximately $100 million to $500 million. The first group, comprised of 22 commenters, supported the rule without advocating changes. These commenters noted that raising the threshold would give them more time and resources to serve members. Seventeen of these commenters submitted similar form letters.

A second group of six commenters advocated for a threshold between $40 million and $51.5 million. Two of these commenters suggested NCUA reference the Home Mortgage Disclosure Act reporting threshold (currently $42 million) to support increasing the RFA threshold to $40 million or $50 million. One commenter suggested an increase to $45 million, noting minimal operational differences between credit unions of $30 million and $45 million. Finally, one of these six commenters suggested NCUA adopt a threshold of $51.5 million based on an industry risk assessment.

A third group, comprised of 16 commenters, suggested NCUA reference the $175 million asset threshold the Small Business Administration (SBA) uses in its small business size standards.12 Most of these commenters suggested that NCUA simply adopt the SBA's threshold for the RFA, stating that the Consumer Financial Protection Bureau and Federal Reserve Board have done so.13 These commenters alsogenerally supported the SBA's proposal to increase its size standard to $500 million and suggested that NCUA follow such an increase, if finalized.14 One of these commenters suggested NCUA weigh three different metrics, including industry percentages, loss history, and the SBA's size standard to support a threshold of $99 million. Two of these commenters acknowledged $40 million and $50 million, respectively, as minimum alternatives to the SBA threshold.

Eleven commenters thought NCUA's RFA threshold should be reviewed or automatically adjusted every 18 months, or at least more frequently than every three years, asserting that the SBA reviewed its threshold on such a schedule. The other supportive commenters (over two-thirds of all commenters) either expressed support for the three-year review period or did not mention the review period in their comments supporting the proposal. A few commenters suggested using one or more additional or alternative criteria to define small entity, including number of branches, number of employees, relative risk, and gross revenues.

One commenter stated that the RFA is bad policy for financial institutions and that smaller institutions have more risk and should be subject to equally or more stringent standards and oversight. This commenter thought the proposed rule would create a tiered regulatory system and impede consolidation and efficiency that benefits members. One commenter noted the challenge and expense of regulatory compliance but did not expressly support or oppose any aspect of the proposed rule. Finally, one commenter advocated for three groups of small credit unions: A micro small group (less than $10 million), a small group ($10 million to $30 million), and a mid-small group ($30 million to $50 million).

A few commenters made suggestions that no other commenters proposed or made suggestions on matters the Board did not address in the proposed rule. One commenter, who otherwise supported reference to the SBA's threshold, suggested NCUA use an alternative threshold of $50 million for the interest rate risk and risk-based net worth rules. Several commenters that supported reference to the SBA threshold stated that NCUA should use a separate threshold of $50 million for assistance eligibility from the Office of Small Credit Union Initiatives to avoid strain on NCUA's budget. One commenter suggested a longer period between examinations for well-run FICUs.

One commenter criticized NCUA for requiring compliance with the interest rate risk rule on the rule's September 30, 2012 effective date and stated that failing to relieve small credit unions from proposed Financial Accounting Standards Board requirements further negated the benefit of increasing the asset threshold in that rule.15 Another requested that NCUA include more discussion in the final rule's preamble of the proposed emergency liquidity rule and discuss which rules would remain unchanged by the new threshold.16 One commenter suggested removal of the term “complex” from NCUA regulations and an immediate effective date for the final rule.17

Multiple commenters stated that NCUA's complexity index from the proposed rule's preamble was not a reliable indicator of risk and would unnecessarily reduce the scope of regulatory relief and become a disincentive to diversify products and services.18 A couple commenters also requested more rigorous RFA analysis for NCUA regulations.19

The Board has carefully considered all the public comments it received in response to the proposed rule and IRPS. Recognizing the concerns and suggestions the above commenters raised, the Board has made a substantial adjustment in the final rule. The final rule and the Board's response to the public comments are discussed below.

This final rule and IRPS 13-1 amends IRPS 87-2 and partially supersedes IRPS 03-2 by changing the definition of “small entity” to include credit unions with less than $50 million in assets. Several commenters advocated for a threshold near $50 million based on industry characteristics, risk data, and the Home Mortgage Disclosure Act reporting threshold set by the Consumer Financial Protection Bureau. The Board believes increasing the RFA threshold to $50 million is reasonable and supportable. As the starting point for its analysis in the proposed rule, the Board used industry percentages for credit unions of less than $10 million in assets from 1998, when Congress established a $10 million threshold in multiple provisions of the FCU Act. Based on Call Report data from September 30, 2012, a threshold of $50 million would still approximate several of the industry percentages from 1998 that the Board referenced in the proposed rule.

As shown in the table below, FICUs with less than $50 million in assets currently represent 569.6 percent of the NCUSIF, which is very close to the percentage represented by credit unions with less than $10 million in assets in 1998 (562.0 percent).20 Further, using a $50 million threshold, the percentage of system assets and system net worth would remain within one percentage point of 1998 ratios. A $50 million threshold also makes a reasonable allowance for asset growth before the Board's next review of the threshold.

Authority for This Rulemaking

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

This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart III, section 44701, “General requirements.” Under that section, the FAA is charged with prescribing regulations promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce, including minimum safety standards for airplane propellers. This regulation is within the scope of that authority because it updates the existing regulations for airplane propellers.

Part 35 does not specifically define the term propeller critical part. Consequently, there are no requirements for design, manufacture, maintenance, or management of propeller critical parts. This rule defines and requires the identification of propeller critical parts, and establishes requirements to ensure the integrity of those parts.

On December 20, 2006, the FAA tasked the Aviation Rulemaking Advisory Committee (ARAC) to develop recommendations that would address the integrity of propeller critical parts, as well as be in harmony with similar European Aviation Safety Agency (EASA) regulations. This rule addresses those recommendations, a copy of which can be found in the docket of this rulemaking.

Propeller critical parts are not adequately addressed by current regulations. Presently, the FAA does not—

Have a specific definition for a propeller critical part, or

Require type certificate holders to identify propeller critical parts.

Consequently, propeller manufacturers are not required to provide information concerning propeller critical part design, manufacture, or maintenance.

Primary failure of certain single propeller elements (for example, blades) can result in a hazardous propeller effect. Part 35 does not specifically identify these elements as propeller critical parts. Consequently, there are no requirements for design, manufacture, maintenance, or management of propeller critical parts. EASA, however, has regulations that identify a specific definition for propeller critical part, and regulations to reduce the likelihood of propeller critical part failures. These regulations, EASA Certification Specifications for Propellers (CS-P), are CS-P 150, Propeller Safety Analysis and CS-P 160 Propeller Critical Parts Integrity. The EASA regulations specifically require propeller manufacturers to identify propeller critical parts and provide adequate information for the design, manufacture, and maintenance of those parts to ensure their integrity throughout their service life. This FAA action establishes standards equivalent to the EASA regulations, thereby simplifying airworthiness approvals for export of these parts.

We proposed to revise § 35.15(c) to require the identification of propeller critical parts, and that applicants establish the integrity of these parts using the standards in proposed § 35.16. Section 35.15(c) refers to the failure ofthese parts as primary failures of “certain single elements”. We recognize that a meaningful numerical estimate of the reliability of these parts is not possible, since over 100 million hours of service history on a part design would be needed to directly meet the probability requirements of the regulation. Current regulations accommodate this inability to provide a meaningful estimate by stating that these failures cannot be “sensibly” estimated in numerical terms.

Our proposed § 35.16 would require the development and execution of an engineering process, a manufacturing process, and a service management process for propeller critical parts. These three processes form a closed loop system that links the design intent, as defined by the engineering process, to how the part is manufactured and to how the part is maintained in service. Engineering, manufacturing, and service management function as an integrated system. This integrated systems approach recognizes that the effects of an action in one area would have an impact on the entire system. The proposed § 35.16 clarifies the wording of the EASA propeller critical parts requirement. Since the CS-P 160 use of the term “plan” might imply a requirement that a “part-specific” document would be required, the term “process” is used instead of “plan”. In this context compliance will consist of a procedures manual that describes the manufacturer's method(s) to control propeller critical parts.

The engineering, manufacturing, and service management processes should provide clear information for propeller critical part management. “Process” in the context of the proposed requirement does not mean that all the required technical information is within a single document. When relevant information exists elsewhere, the process documents may reference, for example, drawings, material specifications, and process specifications, as appropriate. These references should be clear enough to sufficiently identify the referenced document so as to allow the design history of an individual part to be traced.

The FAA published a notice of proposed rulemaking on December 1, 2011, requesting pubic comments [76 FR 74749]. The comment period closed on January 30, 2012.

The FAA received three comments. One was from a repair station, Sensenich Propeller Service, and the others were from propeller manufacturers, Hamilton Sundstrand and Hartzell Propeller. The comments requested clarification on how the rule would be applied to propeller parts being serviced, old (legacy) propellers and part 45 Identification and Registration and Marking requirements. The comments did not suggest changes to the proposal.

Sensenich Propeller Service asked would this rule require the replacement of airworthy parts that were found to have no defects. This rule would not. Nor does it require propeller manufacturers to revise manuals for existing certified propellers. This rule will result in manuals that are more informative with respect to propeller critical parts, when manuals are revised or developed for amended or new propeller certification programs.

Hamilton Sundstrand wanted to know if some sort of grandfather clause for legacy propellers was contemplated. This rule is applicable to propellers based on the propeller certification basis. Therefore, the rule will be applicable to new propellers, and may be applicable to propellers certified to earlier amendments, if the type design is changed sufficiently. See 14 CFR § 21.101 Designation of applicable regulations. The current regulations accommodate older propellers as needed.

Hartzell Propeller, Inc., requested clarification on the applicability of paragraph (c) of § 45.15 Identification and registration marking for a propeller critical part. The propeller critical parts rule does address part marking. Propellers, propeller blades, and hubs are subject to the marking requirements of §§ 45.11 and 45.13. Section 45.15 (c) is not applicable to critical propeller parts that do not have a replacement time, inspection interval, or related procedure specified in the Airworthiness Limitations Section of a manufacturer's maintenance manual or Instructions for Continued Airworthiness.

Changes to Federal regulations must undergo several economic analyses. First, Executive Order 12866 and Executive Order 13563 direct that each Federal agency shall propose or adopt a regulation only upon a reasoned determination that the benefits of the intended regulation justify its costs. Second, the Regulatory Flexibility Act of 1980 (Pub. L. 96-354) requires agencies to analyze the economic impact of regulatory changes on small entities. Third, the Trade Agreements Act (Pub. L. 96-39) prohibits agencies from setting standards that create unnecessary obstacles to the foreign commerce of the United States. In developing U.S. standards, the Trade Act requires agencies to consider international standards and, where appropriate, they be the basis of U.S. standards. Fourth, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires agencies to prepare a written assessment of the costs, benefits, and other effects of proposed or final rules that include a Federal mandate likely to result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector of $100 million or more annually (adjusted for inflation with base year of 1995). This portion of the preamble summarizes the FAA's analysis of the economic impacts of this final rule.

Department of Transportation Order DOT 2100.5 prescribes policies and procedures for simplification, analysis, and review of regulations. If the expected cost impact is so minimal that a proposed or final rule does not warrant a full evaluation, this order permits that a statement to that effect, and the basis for it to be included in the preamble if a full regulatory evaluation of the cost and benefits is not prepared. Such a determination has been made for this final rule. The reasoning for this determination follows.

Presently, airplane propeller part manufacturers must satisfy both the code of federal regulations (CFR) and the European Aviation Safety Agency (EASA) certification requirements to market their products in both the United States and Europe. Meeting two sets of certification requirements raises the cost of developing new airplane propeller parts, often with no increase in safety. In the interest of fostering international trade, lowering the cost of airplane propeller parts development, and making the certification process more efficient, the FAA, EASA, and airplane propeller part manufacturers worked to create to the maximum extent possible a single set of certification requirements accepted in both the United States and Europe. These efforts are referred to as harmonization.

Propellers contain critical parts whose primary failure can result in a hazardous propeller effect. 14 CFR part 35 does not currently identify what a propeller critical part is, and consequently, has no specific requirement(s) for their design, manufacture, maintenance, ormanagement. EASA however, has regulations that identify what propeller critical parts are, and regulations to reduce the likelihood of propeller critical part failures.

This rule will revise § 35.15 and add a new § 35.16 to part 35 with EASA's “more stringent” CS-P 150 Propeller Safety Analysis and CS-P 160 Propeller Critical Parts Integrity requirements. The FAA has concluded for the reasons previously discussed in the preamble, the adoption of these EASA requirements into the CFR is the most efficient way to harmonize these sections, and in so doing, enhance the existing level of safety.

A review of current manufacturers of airplane propeller parts certificated under part 35 has revealed that all manufacturers of such future airplane propeller parts are expected to continue their current practice of compliance under part 35 of the CFR and the EASA certification requirements. Since future certificated airplane propeller parts are expected to meet EASA's existing CS-P 150 Propeller Safety Analysis and CS-P 160 Propeller Critical Parts Integrity requirements, and this rule simply adopts the same EASA requirement, manufacturers will incur no additional cost resulting from this rule. Therefore, the FAA estimates that there are no more than minimal costs associated with this final rule.

The FAA, however, has not attempted to quantify the cost savings that may accrue from this rule, beyond noting that while it may be minimal, it contributes to a potential harmonization savings. Furthermore, we did not receive comments regarding this determination that this rule will have minimal cost with a possible cost savings to the industry.

The FAA has therefore determined this final rule is not a “significant regulatory action” as defined in section 3(f) of Executive Order 12866, and is not “significant” as defined in DOT's Regulatory Policies and Procedures.

The Regulatory Flexibility Act of 1980 (Pub. L. 96-354) (RFA) establishes “as a principle of regulatory issuance that agencies shall endeavor, consistent with the objectives of the rule and of applicable statutes, to fit regulatory and informational requirements to the scale of the businesses, organizations, and governmental jurisdictions subject to regulation. To achieve this principle, agencies are required to solicit and consider flexible regulatory proposals and to explain the rationale for their actions to assure that such proposals are given serious consideration.” The RFA covers a wide-range of small entities for profit organizations, and small governmental jurisdictions.

Agencies must perform a review to determine whether a rule will have a significant economic impact on a substantial number of small entities. If the agency determines that it will, the agency must prepare a regulatory flexibility analysis as described in the RFA.

However, if an agency determines that a rule is not expected to have a significant economic impact on a substantial number of small entities, section 605(b) of the RFA provides that the head of the agency may so certify and a regulatory flexibility analysis is not required. The certification must include a statement providing the factual basis for this determination, and the reasoning should be clear.

The FAA believes that this rule would not have a significant economic impact on a substantial number of small entities for the following reason. The net effect of the rule is minimum regulatory cost relief. The rule requires that new propeller manufacturers meet the “more stringent” European certification requirement, CS-P 150, Propeller Safety Analysis and CS-P 160, Propeller Critical Parts, rather than both the U.S. and European standards. Propeller manufacturers already meet or expect to meet this standard as well as the existing CFR requirement.

Given that this rule has minimal to no costs, could be cost-relieving, and as we received no comments on this determination for the NPRM, as the Administrator, I certify that this final rule will not have a significant economic impact on a substantial number of small entities.

The Trade Agreements Act of 1979 (Pub. L. 96-39), as amended by the Uruguay Round Agreements Act (Pub. L. 103-465), prohibits Federal agencies from establishing standards or engaging in related activities that create unnecessary obstacles to the foreign commerce of the United States. Pursuant to these Acts, the establishment of standards is not considered an unnecessary obstacle to the foreign commerce of the United States, so long as the standard has a legitimate domestic objective, such the protection of safety, and does not operate in a manner that excludes imports that meet this objective. The statute also requires consideration of international standards, and where appropriate, be the basis for U. S. standards. The FAA has assessed the potential effect of this final rule and determined that it is in accord with the Trade Agreements Act as the rule uses European standards as the basis for United States regulation.

Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) requires each Federal agency to prepare a written statement assessing the effects of any Federal mandate in a proposed or final agency rule that may result in an expenditure of $100 million or more (in 1995 dollars) in any one year by State, local, and tribal governments, in the aggregate, or by the private sector; such a mandate is deemed to be a “significant regulatory action.” The FAA currently uses an inflation-adjusted value of $143.1 million in lieu of $100 million. This final rule does not contain such a mandate; therefore, the requirements of Title II of the Act do not apply.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) requires that the FAA consider the impact of paperwork and other information collection burdens imposed on the public. According to the 1995 amendments to the Paperwork Reduction Act (5 CFR 1320.8(b)(2)(vi)), an agency may not collect or sponsor the collection of information, nor may it impose an information collection requirement unless it displays a currently valid Office of Management and Budget (OMB) control number.

This final rule will impose the following new information collection requirements. As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)), the FAA has submitted these information collection amendments to OMB for its review. Notice of OMB approval for this information collection will be published in a futureFederal Registerdocument.

Summary:On December 1, 2011, FAA published a notice of proposed rulemaking titled “Critical Parts for Airplane Propellers” (76 FR 74749). This activity contains new Paperwork Reduction Act recordkeeping requirements that were not addressed in that notice of proposed rulemaking, and which are addressed here. The rule will require that U.S. companies who manufacture critical parts for airplane propellers update their manuals to record engineering, manufacture, and maintenance processes for propeller critical parts. There are currently three U.S. companies who will be required to create or revise their manuals to include these processes.

Public comments:We received no comments on information collection

Use:This information will be used by the propeller manufacturer to show compliance with the propeller critical parts requirements. This action would define what a propeller critical part is, require the identification of propeller critical parts by the manufacturer, and establish engineering, manufacture, and maintenance processes for those parts. The need and use of the information is to ensure the continued airworthiness of propeller critical parts by requiring a system of processes to identify and manage these parts throughout their service life.

Respondents:There are five propeller manufacturers that will be affected by the new requirement. Responses were provided by two of the manufacturers who have already prepared propeller critical parts manuals and are compliant with the final rule. The information provided by the two manufacturers was used to establish the paperwork required to show compliance with the propeller critical parts requirements for the remaining three propeller manufacturers.

Frequency:The information will only need to be collected once to show compliance with the FAA propeller critical part rule § 35.16. If the information is not collected, the propeller manufacturer will not be able to obtain a type certificate for the propeller.

Annual Burden Estimate:There will be no annualized cost to the Federal Government. Industry has informed the FAA that the one-time paperwork requirement will take approximately 40 hours and consist of 18 pages per manufacturer. The FAA estimated 120 hours as the total hourly burden by taking the product of the number of affected U.S. manufacturers with the hourly burden. There will be a one-time cost of $3,555.60 per respondent which will occur on the effective date of the rule. The total cost for the three respondents is $10,666.80.

In keeping with U.S. obligations under the Convention on International Civil Aviation, it is FAA policy to conform our regulations to International Civil Aviation Organization (ICAO) Standards to the maximum extent practicable. The FAA has determined that there are no ICAO Standards that correspond to these regulations.

Executive Order 13609, Promoting International Regulatory Cooperation, promotes international regulatory cooperation to meet shared challenges involving health, safety, labor, security, environmental, and other issues and to reduce, eliminate, or prevent unnecessary differences in regulatory requirements. The FAA has analyzed this action under the policies and agency responsibilities of Executive Order 13609 and has determined that this action would have no effect on international regulatory cooperation.

FAA Order 1050.1E identifies FAA actions that are categorically excluded from preparation of an environmental assessment or environmental impact statement under the National Environmental Policy Act in the absence of extraordinary circumstances. The FAA has determined this rulemaking action qualifies for the categorical exclusion identified in paragraph Chapter 3, paragraph 312f and involves no extraordinary circumstances.

The FAA has analyzed this final rule under the principles and criteria of Executive Order 13132, Federalism. The agency determined that this action will not have a substantial direct effect on the States, or the relationship between the Federal Government and the States, or on the distribution of power and responsibilities among the various levels of government, and, therefore, does not have Federalism implications.

The FAA analyzed this final rule under Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use (May 18, 2001). The agency has determined that it is not a “significant energy action” under the executive order and it is not likely to have a significant adverse effect on the supply, distribution, or use of energy.

An electronic copy of a rulemaking document my be obtained by using the Internet—

1. Search the Federal eRulemaking Portal (http://www.regulations.gov);

2. Visit the FAA's Regulations and Policies Web page athttp://www.faa.gov/regulations_policies/or

3. Access the Government Printing Office's Web page athttp://www.gpo.gov/fdsys/.

Copies may also be obtained by sending a request (identified by notice, amendment, or docket number of this rulemaking) to the Federal Aviation Administration, Office of Rulemaking, ARM-1, 800 Independence Avenue SW., Washington, DC 20591, or by calling (202) 267-9680.

Comments received may be viewed by going tohttp://www.regulations.govand following the online instructions to search the docket number for this action. Anyone is able to search the electronic form of all comments received into any of the FAA's dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.).

The Small Business Regulatory Enforcement Fairness Act (SBREFA) of 1996 requires FAA to comply with small entity requests for information or advice about compliance with statutes and regulations within its jurisdiction. A small entity with questions regarding this document, may contact its local FAA official, or the person listed under theFOR FURTHER INFORMATION CONTACTheading at the beginning of the preamble. To find out more about SBREFA on the Internet, visithttp://www.faa.gov/regulations_policies/rulemaking/sbre_act/.

In consideration of the foregoing, the Federal Aviation Administration amends chapter I of title 14, Code of Federal Regulations as follows:

We issued a supplemental notice of proposed rulemaking (SNPRM) to amend 14 CFR part 39 to supersede airworthiness directive (AD) 2008-05-10, Amendment 39-15404 (73 FR 11347, March 3, 2008). (AD 2008-05-10 superseded AD 2007-16-13, Amendment 39-15152 (72 FR 44753, August 9, 2007); and AD 2007-16-13 superseded AD 2005-12-04, Amendment 39-14120 (70 FR 34313, June 14, 2005).) AD 2008-05-10 applies to the specified products. The SNPRM published in theFederal Registeron June 21, 2012 (77 FR 37332). The original NPRM (76 FR 52901, August 24, 2011) proposed to continue to require repetitive inspections of the shim installation between the engine strut vertical flange and bulkhead, and repair if necessary. That NPRM also proposed to continue to require, for certain airplanes, inspecting for cracking of the four critical fastener holes in the horizontal flange, and repair if necessary; and, for airplanes without conclusive records of previous inspections, performing the existing actions. Additionally, that NPRM proposed to reduce the repetitive inspection interval, add repetitive detailed inspections for cracking of the bulkhead, and repair if necessary; extend the repetitive intervals for certain airplanes by also doing repetitive ultrasonic inspections for cracking of the bulkhead, and repair if necessary; and add an option for a high frequency eddy current inspection for cracking of the critical fastener holes, and repair if necessary. The SNPRM proposed to add a terminating action for certain repetitive inspections.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal (77 FR 37332, June 21, 2012) and the FAA's response to each comment.

United Airlines (United) stated that it has 41 Model 757-200 airplanes affected by the SNPRM (77 FR 37332, June 21, 2012). United stated that, in general, it concurs with the SNPRM to mandate the inspections and modifications described in Boeing Alert Service Bulletin 757-54A0047, Revision 5, dated June 9, 2011.

UPS stated that it concurs with the reduced inspection interval specified in the SNPRM (77 FR 37332, June 21, 2012), as it provides additional opportunity beyond that required by AD 2008-05-10, Amendment 39-15404 (73 FR 11347, March 3, 2008), to find and correct any damage.

United requested that we remove the 54-month compliance time in favor of only a 9,000 airplane-cycle limit for the modification specified in paragraph (o) of the SNPRM (77 FR 37332, June 21, 2012). United stated that the 54-month compliance time does not align with current 72-month heavy check intervals at United. United stated that it understands the related bulkhead cracking to be a fatigue related failure, thus negating the need for a calendar driven modification limit. United stated it believes that the currently mandated repetitive inspection limits, in conjunction with a 9,000-airplane-cycle mandated modification limit only, would provide a safe program that would allow for a controlled implementation that minimizes the negative financial impact to operators.

We disagree with the request to change the specified compliance time. We have determined that the 54-month compliance time (grace period), as specified in Boeing Alert Service Bulletin 757-54A0047, Revision 5, dated June 9, 2011, is necessary to adequately address the identified unsafe condition. This structure has been the subject of AD 2008-05-10, Amendment 39-15404 (73 FR 11347, March 3, 2008); which superseded AD 2007-16-13, Amendment 39-15152 (72 FR 44753, August 9, 2007); which superseded AD 2005-12-04, Amendment 39-14120 (70 FR 34313, June 14, 2005). In each of these ADs, the results from the new inspection found more damage than anticipated, and more frequent and complicated inspections were needed.

In developing an appropriate compliance time for the modification specified in paragraph (o) of this AD, we considered the safety implications, the time necessary to design an acceptable modification, and normal maintenance schedules for timely accomplishment of the modification. In light of these items, we have determined that a 54-month compliance time (grace period) is appropriate. However, under the provisions of paragraph (q) of this AD, we will consider requests for approval of an extension of the compliance time if sufficient data are submitted to substantiate that the extension would provide an acceptable level of safety. We have not changed the AD in this regard.

UPS requested that the terminating action proposed in the SNPRM (77 FR 37332, June 21, 2012) be optional in lieu of continued reduced interval inspections, and the terminating action be required only if the reduced interval inspections find cracks or other damage at the fitting.

We do not agree to change the required terminating action specified in this AD because this portion of the Model 757 pylon has been the subject of AD 2008-05-10, Amendment 39-15404 (73 FR 11347, March 3, 2008); which superseded AD 2007-16-13, Amendment 39-15152 (72 FR 44753, August 9, 2007); which superseded AD 2005-12-04, Amendment 39-14120 (70 FR 34313, June 14, 2005). In each of these ADs, results from the new, more frequent, and more complicated inspections showed more damage than anticipated. Under the provisions of paragraph (q) of this AD, we will consider requests for approval of alternative methods of compliance (AMOC) if sufficient data are submitted to substantiate that continued inspections without the terminating action can mitigate the identified unsafe condition. We have not changed the AD in this regard.

Boeing requested that we specifically call out Part V of the Accomplishment Instructions of Boeing Alert Service Bulletin 757-54A0047, Revision 5, dated June 9, 2011, in paragraph (o) of the SNPRM (77 FR 37332, June 21, 2012) to prevent misinterpretation in that paragraph because it is different than all other locations in the SNPRM.

We agree to specify Part V in paragraph (o) of this AD, as requested by Boeing, since doing so will help prevent misinterpretation. We have changed paragraph (o) of this AD to specify PART V of the Accomplishment Instructions of Boeing Alert Service Bulletin 757-54A0047, Revision 5, dated June 9, 2011.

Boeing requested that we revise the header of paragraph (g) of the SNPRM (77 FR 37332, June 21, 2012), by deleting “With Reduced Repetitive Intervals and New Optional Inspection Method.” Boeing stated that there are no repetitive inspection requirements in paragraph (g) of the SNPRM.

We agree to modify the specified header, since the repetitive inspection is specified in paragraph (h) of this AD. We have removed the words “Reduced Repetitive Intervals and New Optional Inspection Interval” from the header of paragraph (g) of this AD.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously—and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the SNPRM (77 FR 37332, June 21, 2012) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the SNPRM (77 FR 37332, June 21, 2012).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of the AD.

We estimate that this AD affects 309 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this AD.

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

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

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

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

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

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

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

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM published in theFederal Registeron March 27, 2012 (77 FR 18137). That NPRM proposed to require various repetitive inspections of the MDSCD latch pin fittings, measuring the latch pin, and related investigative and corrective actions if necessary. That NPRM also proposed to require modifying the latch pin fittings and installing new latch pins and latch pin fasteners.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal (77 FR 18137, March 27, 2012) and the FAA's response to each comment.

Boeing and Thai Airways International PCL requested that we limit the applicability of the NPRM (77 FR 18137, March 27, 2012) to airplanes with a Boeing-certified MDSCD instead of airplanes identified in Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011. The commenters requested this change to ensure that airplanes modified in the future to Model 747-400 Boeing Converted Freighter (BCF) with an MDSCD installation are inspected and modified per the intent of Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011.

We partially agree with changing the applicability. The AD already provides coverage for the future Model 747-400 BCF airplanes with an MDSCD installation. That is, the applicability of the AD specifies Model 747-100, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400F, and 747SR series airplanes, certificated in any category, as identified in Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011. This service information identifies Model 747-100, 747-200B, 747-200C, 747-200F, 747-300, 747-400, and 747-400F airplanes with an MDSCD installed in production or by a Boeing-approved modification. For clarification, per the Type Certificate Data Sheet (TCDS) for those airplanes, Model 747-400 BCF and 747-400 Special Freighter (SF) airplanes remain as Model 747-400 series airplanes for documentation purposes on the TCDS and with regard to the applicability of ADs. Where Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011, specifies “all” airplanes, this means past, present, and future airplanes.

However, we found that Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011, does not currently provide a grace period for airplanes that have been modified with an MDSCD after the initial compliance time of 6 months after the effective date of this AD. Therefore, the initial compliance time specified in paragraph (g) of this AD has been modified to add a grace period for airplanes that are modified with an MDSCD after the effective date of this AD. Additionally, the initial compliance time reference to paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011, as revised by Boeing Alert Service Bulletin 747-52A2294, Revision 2, dated December 12, 2011, has been removed from paragraph (g) of this final rule.

Boeing requested that we change the service information reference in paragraphs (g), (h), (i), and (j) of the NPRM (77 FR 18137, March 27, 2012) from Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16,2011, as revised by Boeing Alert Service Bulletin 747-52A2294, Revision 2, dated December 12, 2011, to Revision 3 of that service information. (Since Revision 3 has not been published, there is no issue date.) Boeing stated that Revision 3 of Boeing Alert Service Bulletin 747-52A2294 will be a full revision that will “update the effectivity list of Model 747-400 BCF airplanes,” and will incorporate changes identified during validation, which was accomplished in March 2012. Boeing stated that Revision 3 of Boeing Alert Service Bulletin 747-52A2294 will add no new work for airplanes having previously incorporated the actions specified in Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011; or Revision 2, dated December 12, 2011.

We disagree with referencing Revision 3 of Boeing Alert Service Bulletin 747-52A2294 in this final rule. Boeing has not submitted Revision 3 of Boeing Alert Service Bulletin 747-52A2294 for FAA approval. We consider it inappropriate to delay correcting the identified unsafe condition to wait for this new service information revision. However, after Revision 3 of Boeing Alert Service Bulletin 747-52A2294 is FAA-approved and issued, operators may submit requests for approval of alternative methods of compliance (AMOCs) under the provisions of paragraph (l) of this AD to use Revision 3. We have not changed the final rule in this regard.

Boeing requested that we change paragraph (k) of the NPRM (77 FR 18137, March 27, 2012) to also give credit for actions required by paragraphs (g) and (h) of the NPRM, if those actions were performed before the effective date of the AD using Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011, as revised by Boeing Alert Service Bulletin 747-52A2294, Revision 2, dated December 12, 2011. Boeing stated that this request is related to its request to replace the service information reference in paragraphs (g), (h), (i), and (j) of the NPRM from Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011, as revised by Boeing Alert Service Bulletin 747-52A2294, Revision 2, dated December 12, 2011, to Revision 3 of that service information.

We partially agree. We agree to provide credit for Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011, before its revision by Boeing Alert Service Bulletin 747-52A2294, Revision 2, dated December 12, 2011. However, since we have not changed the AD to refer to Revision 3 of Boeing Alert Service Bulletin 747-52A2294, we disagree with specifying credit for using Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011, as revised by Boeing Alert Service Bulletin 747-52A2294, Revision 2, dated December 12, 2011. We have changed paragraph (k) of this AD to specify credit for the actions required by paragraphs (g) and (h) of this AD performed before the effective date of this AD using Boeing Alert Service Bulletin 747-52A2294, dated July 8, 2010; or Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011, before its revision by Boeing Alert Service Bulletin 747-52A2294, Revision 2, dated December 12, 2011.

Boeing requested that we modify the unsafe condition statement in the NPRM (77 FR 18137, March 27, 2012) by removing the reference to broken latch pin fittings. Boeing stated that Boeing Alert Service Bulletin 747-52A2294, dated July 8, 2010, was prompted by broken retention bolts and the subsequent migration of the latch pins rather than by the broken latch pin fittings. Boeing also stated that the service information recommends inspecting the latch pin fittings for damage, but that no broken latch pin fittings have been associated with this issue.

We agree with the commenter's request. We have changed the Summary and paragraph (e) of the AD to state that this AD was prompted by reports of broken and damaged latch pin retention bolts and subsequent migration of the latch pins of the MDSCD.

Boeing requested that we add a reference to paragraph (b) of section 25.571 of the Federal Aviation Regulations (14 CFR 25.571) to paragraph (l)(3), “Alternative Methods of Compliance (AMOCs),” of the NPRM (77 FR 18137, March 27, 2012). Boeing stated that paragraph (b) is the specific paragraph of 14 CFR 25.571, Amendment 45, that requires compliance for the Model 747 airframe beyond the original certification basis.

We find that clarification is necessary. The reference to section 25.571 of the Federal Aviation Regulations (14 CFR 25.571), Amendment 45, was included inadvertently in paragraph (l)(3) of the NPRM (77 FR 18137, March 27, 2012). Therefore, we have revised paragraph (l)(3) of this final rule to remove the reference to “14 CFR 25.571, Amendment 45.”

KLM Royal Dutch Airlines (KLM) requested that we add alternative compliance times to the NPRM (77 FR 18137, March 27, 2012) for deactivated MDSCDs. KLM stated that a deactivated MDSCD is much less susceptible to mechanical defects than an activated door. KLM suggested that an initial inspection within 6 months after the effective date of the AD, and a modification as required by paragraph (h) of the NPRM within 48 months after the effective date of the AD, would be sufficient to maintain a safe condition. KLM noted that a similar alternative was made for deactivated main entry doors in paragraph (f) of AD 2007-12-11, Amendment 39-15089 (72 FR 31984, June 11, 2007).

We agree that a deactivated MDSCD is much less susceptible to mechanical defects than an activated door. We have changed paragraphs (g) and (i) of this AD to reference an exception in new paragraph (j)(3) of this AD, which states that the repetitive inspections required by paragraphs (g) and (i) of this AD are not applicable to a deactivated MDSCD. The initial inspection required by paragraph (g) of this AD and modifications and replacements required by paragraph (h) of this AD are still applicable to a deactivated MDSCD. In addition, when the MDSCD is reactivated, the repetitive inspections required by paragraphs (g) and (i) of this AD are applicable and must be done at intervals not to exceed those specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 747-52A2294, Revision 1, dated August 16, 2011, as revised by Boeing Alert Service Bulletin 747-52A2294, Revision 2, dated December 12, 2011.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD with the changes described previously and minor editorial changes. We have determined that these minor changes:

• Αre consistent with the intent that was proposed in the NPRM (77 FR 18137, March 27, 2012) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (77 FR 18137, March 27, 2012).

We also determined that these changes will not increase the economic burden on any operator or increase the scope of the AD.

We estimate that this AD affects 77 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

We estimate the following costs to do necessary repairs and replacements that would be required based on the results of the inspection. We have no way of determining the number of aircraft that might need these repairs.

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

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

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

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

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

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

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

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2009-22-08, Amendment 39-16059 (74 FR 55763, October 29, 2009). That AD applies to the specified products. The NPRM published in theFederal Registeron August 3, 2012 (77 FR 46343). That NPRM proposed to continue to require replacing the control switches of the forward, aft, and nose cargo doors of Model 747 airplanes; and the control switches of cargo doors 1 and 2 of Model 757 airplanes. That NPRM also proposed to add airplanes to the applicability and to revise the initial compliance times for those airplanes.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal (77 FR 46343, August 3, 2012) and the FAA's response to each comment.

Boeing supported the NPRM (77 FR 46343, August 3, 2012).

American Airlines found that the NPRM (77 FR 46343, August 3, 2012) would not require additional actions for its Model 757 fleet; therefore, American Airlines had no comments concerning the NPRM.

Asiana Airlines requested that we clarify the compliance times specified in paragraph (g) of the NPRM (77 FR 46343, August 3, 2012). Specifically, Asiana Airlines requested clarification of the compliance times for Model 747 Groups 1 and 2 airplanes on which the door switches had been replaced before the effective date of AD 2009-22-08, Amendment 39-16059 (74 FR 55763, October 29, 2009), per Boeing Special Attention Service Bulletin 747-52-2286, dated September 28, 2007; and on which the certificate of airworthiness had been issued long before 72 months after the effective date of AD 2009-22-08.

We agree to provide clarification. Paragraph (g)(1) of this AD restates the compliance time from AD 2009-22-08, Amendment 39-16059 (74 FR 55763, October 29, 2009) for Groups 1 and 2 Model 747 airplanes identified in Boeing Special Attention Service Bulletin 747-52-2286, Revision 1, dated October 28, 2010. If an operator has already replaced the switches before the effective date of this AD in accordance with either Boeing Special Attention Service Bulletin 747-52-2286, dated September 28, 2007; or Boeing Special Attention Service Bulletin 747-52-2286, Revision 1, dated October 28, 2010; then no further action is necessary for compliance with paragraph (g) of this AD. No change to this AD is necessary.

We have added new paragraph (i)(3) to this final rule to allow delegation of repairs to the Boeing Commercial Airplanes Organization Designation Authorization (ODA). We have re-identified subsequent paragraphs accordingly.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD with the change described previously—and minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (77 FR 46343, August 3, 2012) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (77 FR 46343, August 3, 2012).

We estimate that this AD affects 225 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.

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

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

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

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

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

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

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

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

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

The Federal Office of Civil Aviation (FOCA), which is the aviation authority for Switzerland, has issued FOCA AD HB-2012-009, dated December 20, 2012 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

PILATUS Aircraft Ltd. has issued PILATUS PC-7 Service Bulletin No. 53-008, dated November 30, 2012. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI.

This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all information provided by the State of Design Authority and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.

We consider this AD interim action. The type certificate holder is looking at repetitive inspection intervals to be done through the maintenance program. When these intervals are established, we may take additional rulemaking action to mandate the repetitive inspections.

An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because stress corrosion cracking in the engine mount area presents a critical safety of flight condition that requires inspection to ensure that the unsafe condition is mitigated. Therefore, we determined that notice and opportunity for public comment before issuing this AD are impracticable and that good cause exists for making this amendment effective in fewer than 30 days.

This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under theADDRESSESsection. Include “Docket No. FAA-2013-0025; Directorate Identifier 2012-CE-048-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this AD. We will consider all comments received by the closing date and may amend this AD because of those comments.

We will post all comments we receive, without change, tohttp://www.regulations.gov,including any personal information you provide. We will also post a report summarizing each substantive verbal contact we receive about this AD.

We estimate that this AD will affect 15 products of U.S. registry. We also estimate that it would take about 7 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour. Required parts would cost about $0 per product.

Based on these figures, we estimate the cost of the AD on U.S. operators to be $8,925, or $595 per product.

In addition, we estimate that any necessary follow-on actions would take about 10 work-hours and require parts costing $5,000, for a cost of $5,850 per product. We have no way of determining the number of products that may need these actions.

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

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

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

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

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

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

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

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

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to include an AD that would apply to the specified products. That NPRM published in theFederal Registeron September 20, 2012 (77 FR 58325). That NPRM proposed to require installing a new relay and doing certain wiring changes of the entertainment control switch if necessary.

We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the proposal (77 FR 58325, September 20, 2012) and the FAA's response to each comment. Boeing concurred with the contents of the NPRM. American Airlines stated that it understands the basis for the proposed AD and that it does not operate any of the airplanes having serial numbers identified in the NPRM.

Aviation Partners Boeing stated that the installation of winglets per STC ST01518SE(http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgSTC.nsf/Frameset?OpenPage)does not affect accomplishment of the proposed requirements.

We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting the AD as proposed—except for minor editorial changes. We have determined that these minor changes:

• Are consistent with the intent that was proposed in the NPRM (77 FR 58325, September 20, 2012) for correcting the unsafe condition; and

• Do not add any additional burden upon the public than was already proposed in the NPRM (77 FR 58325, September 20, 2012).

We estimate that this AD affects 28 airplanes of U.S. registry.

We estimate the following costs to comply with this AD:

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

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

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

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

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

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

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

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

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

I. Background

The Federal Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. 2461 note) (FCPIA Act), as amended by the Debt Collection Improvement Act of 1996 (31 U.S.C. 3701) (DCIA), requires each federal agency to make inflation adjustments to its maximum civil money penalties and civil penalties. The formula for determining the specific adjustment of such penalties for inflation is nondiscretionary and is determined by section 5 of the FCPIA Act. The adjustment is based on the change in the cost-of-living increase, which is defined in the statute as based on the percentage change, if any, in the Consumer Price Index (CPI). The statute also states specific rules for rounding off, first-time adjustments and provides that adjusted civil money penalties and civil penalties can only be applied prospectively; that is, only to violations that occur after the date that the increase takes effect.

The changes made by this final rule increase the amount of civil money penalties, consistent with statutory authority for 24 CFR parts 28 and 30 and civil penalties consistent with 24 CFR part 180. Additionally, no amendment is necessary to civil money penalties and civil penalties found in some HUD regulations (e.g., 24 CFR parts 30.20, 30.25, and 180.671(a)(1)) because application of the statute'sformula would not result in an increase to the penalty.

Applying the statutory formula to determine the amount of the adjustment is a four-step process. The first step entails determining the inflation adjustment factor. This is done by calculating the percentage increase by which the CPI for all urban consumers (CPI-U) for the month of June of the calendar year preceding the adjustment (i.e., June 2012) exceeds the CPI-U for the month of June of the calendar year in which the amount of such civil monetary penalty was last set or adjusted. CPI-U values are available at a Department of Labor, Bureau of Labor Statistics file transfer protocol site,ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt. Once the inflation adjustment factor is determined, the second step is to calculate the inflation increase. That is done by multiplying the inflation adjustment factor by the current civil penalty amount. The third step is to round off the inflation increase according to Section 5(a) of the FCPIA Act, as amended by the DCIA. The FCPIA Act provides for a “rounding-off,” using multiples from $10 to $25,000, of the increase calculated based on the change in the CPI. See 28 U.S.C. 2461(5)(a). Once the inflation increase has been rounded, the last step is to add the rounded inflation increase to the current civil penalty amount, to obtain the new inflation-adjusted civil penalty amount. Consequently, in those instances in which the increased dollar amount is determined to be less than the applicable multiple, the existing penalty is unchanged. The first time the civil penalty amount is adjusted, the FCPIA Act limits any increase of the civil penalty to no more than 10 percent.

In § 28.10, the maximum penalties for making a false claim or written statement, as described in the regulation, is increased from $7,500 to $8,500.

In § 30.35(c)(1), the maximum penalties that the Mortgagee Review Board may impose for a series of violations identified in the regulations are increased from $7,500 to $8,500 per violation, and from $1,375,000 to $1,525,000 for all violations committed during any one-year period.

In § 30.36(c), the maximum penalty that HUD may impose upon participants in Federal Housing Administration (FHA) programs for violations identified in the regulation is increased from $6,050 to $7,050, and from $1,210,000 to a maximum of $1,335,000 for all violations committed during any one-year period.

In § 30.40(c), the maximum penalty that HUD may impose upon a mortgagee or a holder of a guarantee certificate that violates the statutory provisions concerning loan guarantees for Indian housing is increased from $7,000 to $8,000 per violation, and from $1,375,000 to a maximum of $1,525,000 for all violations committed during any one-year period.

In § 30.45(g), the maximum penalty that may be imposed upon a mortgagor of a multifamily property or upon any person in a relationship with the mortgagor, as described in the regulations, is increased from $37,500 to $42,500 per violation.

In § 30.50(c), the maximum penalty that may be imposed against a Government National Mortgage Association (GNMA) issuer or custodian for a violation of any provision of 12 U.S.C. 1723i(b) or other authorities cited in the regulations is increased from $7,500 to $8,500 per violation, and from $1,375,000 to $1,525,000 for all violations committed during any one-year period.

In § 30.60(c), the maximum penalty that HUD may impose upon any dealer or sponsored third-party originator for, among other things, falsifying statements or making false representations in violation of section 2(b)(7) of the National Housing Act (12 U.S.C. 1703(b)(7)) is increased from $7,500 to $8,500 for each violation, and from $1,375,000 to a maximum of $1,525,000 during any one-year period.

In § 30.68(c), the maximum penalty that may be imposed against any owner, any general partner of a partnership owner, or any agent, as described in the regulation, that provides a knowing and material breach of a housing assistance payments contract, is increased from $25,000 to $27,500 per violation.

In § 180.671(a)(2) and (3), the maximum penalties that the Administrative Law Judge may impose upon a respondent who is found to have engaged in a discriminatory housing practice is increased from $37,500 to $42,500, and from $65,000 to $70,000, respectively. The maximum penalty of $16,000 at § 180.671(a)(1) does not increase under the formula.

On December 17, 2008, HUD published a final rule (73 FR 76832) to amend its regulations governing hearing procedures for administrative sanction hearings pursuant to 2 CFR part 2424 and with respect to determinations by the Multifamily Participation Review Committee pursuant to 24 CFR part 200, subpart H. The final rule replaced and reorganized Part 26. As a result, the cross-references to Part 26 in § 30.90 are outdated. This final rule takes the opportunity to correct that by updating the cross-references in § 30.90(c).

In general, HUD publishes a rule for public comment before issuing a rule for effect, in accordance with HUD's regulations on rulemaking at 24 CFR part 10. Part 10, however, provides in § 10.1 for exceptions from that general rule where HUD finds good cause to omit advance notice and public participation. The good cause requirement is satisfied when the prior public procedure is “impracticable, unnecessary or contrary to the public interest.”

HUD finds that good cause exists to publish this rule for effect without first soliciting public comment because prior public comment is unnecessary. This final rule merely follows the statutory directive in the FCPIA Act allowing for periodic increases in HUD's civil money penalties and civil penalties by applying the adjustment formula established in the statute. Accordingly, because calculation of the increases is formula-driven, HUD has no discretion in updating its regulations to reflect the maximum allowable penalties derived from application of the formula. HUD emphasizes that this rule addresses only the matter of the calculation of the maximum civil money penalties or civil penalties for the respective violations described in the regulations. This rule does not address the issue of the Secretary's discretion to impose or not to impose a penalty, nor the procedures that HUD must follow in initiating a civil money penalty action, or in seeking a civil penalty in a Fair Housing Act case.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if the regulation is necessary, to select the regulatory approach that maximizes net benefits. As discussed above in this preamble, this final rule updates an incorrect cross reference and revises the civil money penalty and civil penalty regulations to make inflation adjustments required by the FCPIA Act. As a result, this rule was determined to be not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and therefore was not reviewed by the Office of Management and Budget (OMB).

The Regulatory Flexibility Act (5 U.S.C. 605(b)) generally requires an agency to conduct regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. This final rule has no economic impact on entities that are in compliance with relevant laws and HUD regulations. This final rule does not establish special procedures that would need to be complied with by small entities. All entities, small or large, could be subject to the same penalties as established by statute and implemented by this rule, but only if they violate a relevant statute or regulation and become subject to civil money penalties or civil penalties. Accordingly, the undersigned certifies that this final rule would not have a significant economic impact on a substantial number of small entities.

Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on state and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This final rule will not have federalism implications and would not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive Order.

This rule does not direct, provide for assistance or loan and mortgage insurance for, or otherwise govern, or regulate, real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction, or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy. Accordingly, under 24 CFR 50.19(c)(1), this rule is categorically excluded from environmental review under the National Environmental Policy Act of 1969 (42 U.S.C. 4321).

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments, and the private sector. This rule does not impose any federal mandates on any state, local, or tribal government, or the private sector within the meaning of UMRA.

Accordingly, for the reasons described in the preamble, HUD amends 24 CFR parts 28, 30, and 180 to read as follows:

The National Manufactured Housing Construction and Safety Standards Act of 1974 (42 U.S.C. 5401-5426) (the Act) authorizes HUD to establish the Federal Manufactured Home Construction and Safety Standards (Construction and Safety Standards), codified in 24 CFR part 3280. The Act was amended by the Manufactured Housing Improvement Act of 2000 (Pub. L. 106-569), which expanded the Act's purposes and created MHCC. Congress established MHCC to provide periodic recommendations to the Secretary to adopt or revise provisions of the Construction and Safety Standards.

In 2002, MHCC began considering revisions to the Construction and Safety Standards and, in 2003, recommended revisions to the current requirements for roof truss testing.1 Those recommendations were included in HUD's proposed rule to amend the Construction and Safety Standards, published in theFederal Registeron December 1, 2004 (69 FR 70016). After considering public comment received on the proposed rule, HUD returned the proposal on truss testing procedures to MHCC. As indicated in the preamble of HUD's final rule published in theFederal Registeron November 30, 2005 (70 FR 72024), which followed the December 1, 2004, proposed rule, HUD stated that truss testing procedures are too important a safety consideration to leave unaddressed. In returning the rule, HUD also stated that the standards had not been modified in a number of years and needed to be examined to determine whether they were adequate to protect homeowners in all geographic areas of the country. HUD's review of damage assessments following Hurricane Charley reinforced its conclusion regarding the need for the MHCC to ensure that truss testing procedures were updated and adequate to protect homeowners from roof and structural damage accompanying high wind events.

HUD requested MHCC to work expeditiously to reevaluate and resubmit new proposals for truss testing procedures. As a result, the Truss Test Task Force of MHCC's Standards Subcommittee was established. Five teleconferences of this task force were held, and the full MHCC held two teleconferences to review and vote on new truss testing procedures. HUD worked closely with MHCC throughout the review and reevaluation process, and agreed with the majority of the proposals to strengthen the truss testing procedures made by MHCC, but made editorial revisions and modified theMHCC's proposal on uplift testing. Those recommendations and modifications were included in a proposed rule published in theFederal Registeron June 16, 2010 (75 FR 34064). After careful review of the public comments received in response to the proposed rule, HUD made additional editorial and other revisions and further modified the MHCC's proposal regarding uplift testing. HUD's additional revisions in response to public comment are reflected in this final rule.

As a result of this final rule, the required truss testing procedures reflect the current industry standards and methods by which trusses are tested by truss fabricators. These procedures also provide flexibility in testing by reducing the amount of time required for the proof load test. Most importantly, they improve the performance and safety of trusses in high wind areas and high snow load areas, and ultimately reduce property damage and prevent injury and loss of life resulting from high wind events such as hurricanes and tropical storms, as well as injuries and deaths that occur from collapsed roofs under heavy loads. Table A identifies the changes made to the truss testing standards as a result of this final rule.

The public comment period on the proposed rule closed August 16, 2010, and 12 public comments were received in response to the proposed rule. Comments were submitted by suppliers of roof trusses, manufactured home producers, a Design Approval Primary Inspection Agency, and two manufactured housing trade associations. All public comments can be found and reviewed atwww.regulations.gov.

Comment:Generally, the commenters expressed various concerns about HUD's proposed changes to the roof truss testing requirements. In particular, the commenters questioned the need to requalify and retest all existing roof truss designs based on past truss performance under snow and wind loading. They also expressed concerns on significant cost increases to consumers and the estimated time (18 months) needed to requalify and retest all roof truss designs (there are approximately 1,500 existing truss designs, as estimated by a major truss supplier) currently used by manufactured home producers that would result from implementation of the proposed rule.

HUD Response:HUD agrees that the risk against truss failure in snow load areas is minimal based on past performance. As a result, the final rule limits the retesting to new truss designs in all three wind zones, and to the estimated 150 existing truss designs used in high wind areas (Wind Zones II and III) where the reliability and enhanced protection is needed to mitigate against future wind damage and to enhance wind safety in manufactured homes. HUD is also delaying implementation for 12 months to provide manufacturers sufficient time to retest existing trusses for Wind Zones II and III and minimize disruption to the availability of qualifying trusses. HUD acknowledges that wind damage to homes produced to meet its high wind standards has been reduced in wind events that have occurred since the implementation of the high wind requirements. However, while the damage to those homes has been relatively minimal, questions remain about the intensity of the windstorms and whether they were considered to be design wind events or were at lower wind speeds than required to be resisted by the standards.

Comment:Commenters also questioned the need to eliminate the inverted test procedure currently being used to assess uplift resistance of roof trusses in high wind areas. One commenter (a truss supplier) recommended that a higher factor of safety or overload of 2.0 times the design live load should be used to conduct inverted uplift roof truss testing and indicated that it would provide a close approximation to the overload proposed by HUD for the upright uplift wind test of 1.75 times the design live load.

HUD Response:HUD agrees with the commenter. As a result, the final rule allows the use of either upright or inverted testing for Wind Zones II or III, with a higher factor of safety of 2.0 for inverted testing, provided additional initial tests are used to qualify the design, and more frequent follow-up testing to verify continued truss performance under production conditions.

Comment:Commenters questioned the cost impact of increasing the overload factor of safety from 1.75 times the design live load for 12 hours to 2.0 times the design live load for 6 hours for the proof load test procedure in the proposed rule.

HUD Response:HUD recognizes this issue and, in the final rule, allows both the 2.0 overload/6 hour test and the 1.75/12 hour test to be used for evaluating roof trusses under the proof load test procedure.

Question 1:Under the proposed rule, the proof load test or the ultimate load test can be used to qualify trusses in high snow load areas. Should the more stringent and reliable ultimate load test procedure be required only to qualify roof trusses designed for use in high snow load areas, such as the North and Middle Roof Load Zones, where the risk of roof and truss failure is greater?

Comment:The commenters indicated that HUD should maintain the option to use either test method in all roof load zones and that HUD should not adopt different requirements for North and South roof load zones because of past performance history of roof trusses in high snow load areas.

HUD Response:HUD agrees with the commenters and has not specified roof load zones for which the proof load or ultimate load test procedure must be used in the final rule.

Question 2:Should the spacing between hydraulic or pneumatic cylinders for the test fixture be increased from 12 inches to 24 inches in Figures 3280.402(b)(1) and 3280.402(b)(3)? Should the distance between friction pads along the top chord of the truss of the test fixture be increased from 6 inches to 12 inches in Figure 3280.402(b)(1)? Should the distance between 1-inch straps attached around the cylinder shoe and the top chord of the truss of the test fixture be increased from 6 inches to 12 inches in Figure 3280.402(b)(3)?

Comment.The commenters indicated that the loading cylinders should be maintained at 12 inches and that the loading shoes should be 6 inches long with loading pads at each end to provide a more realistic simulation of a uniformly distributed loading upon the truss.

HUD Response:HUD agrees with the commenters that the cylinders spacing needs to be maintained at 12 inches to more closely simulate uniform loading of the truss, and the loading shoes need to be 6 inches long with loading pads at each end, and has specified these requirements in the final rule.

Question 3:Should the overload period for all wind uplift tests be increased from 1 minute to 3 hours, as is currently required for uplift tests in the standards for the inverted test procedure?

Comment:The commenters recommended that the 1-minute overload time is adequate since wind pressures are based on a 3-second peak gust.

HUD Response:HUD agrees with the commenters and a 1-minute overload time is now permitted for all uplift tests required by the final rule.

Question 4:Should a wind uplift test always be required for trusses qualified for use in Wind Zone I instead of allowing the determination to be made by a Registered Engineer or Registered Architect or independent third-party agency that is certifying the design?

Comment:The commenters indicated that a registered design professional will possess the necessary knowledge and experience to decide if a wind uplift test is needed in Wind Zone I, especially since the design load requirements are low compared to meeting the overload requirements for vertical downward snow or gravity loading.

HUD Response:HUD agrees with the commenters that a registered design professional has the knowledge and experience to determine if a wind uplift test is needed for Wind Zone I, and the final rule allows for such determinations to be made.

After considering the issues raised by the commenters and HUD's own evaluation of issues related to this final rule, HUD is making the following specific changes to the June 16, 2010, proposed rule and current roof truss testing requirements in § 3280.402 of the Construction and Safety Standards.

1. In § 3280.402(a), upon the effective date of the rule, testing procedures will be required for new roof truss designs in all three wind zones and for existing truss designs used in high wind areas (Wind Zones II and III).

2. In § 3280.402(d)(1), the proof load test (formally known as the non-destructive test procedure) contains both the proposed test method (2.0 times the design live load for 6 hours) as well as the existing non-destructive test method (1.75 times the design live load for 12 hours). Three consecutive tests of truss assemblies made with average quality materials and workmanship must meet all acceptance criteria, including new deflection limits for dead load, in order for the truss design to be acceptable.

3. In § 3280.402(d)(2), the ultimate load test procedure (2.5 times the design live load for 5 minutes) requires that two consecutive tests of truss assemblies made with average quality workmanship and materials meet all acceptance criteria, including new deflection limits for dead load, in order for the truss design to be acceptable.

4. In § 3280.402(d)(3), the final rule requires that for new truss designs to be used in Wind Zone I, when deemed necessary by a Professional Engineer or Registered Architect, at least one truss must meet all acceptance criteria and sustain 2.5 times the net design uplift load (22.5) for the inverted test procedure or 1.75 times the design uplift load (15.75) for at least 1 minute. For Wind Zone I, this results in an increase in the factor of safety from 1.75 to 2.5 for trusses tested for uplift in the inverted position, maintains the current factor of safety for uplift testing at 1.75 for trusses tested in the upright position, and reduces the period of overload testing from 3 hours to 1 minute for both test methods. For roof trusses designed to be used in Wind Zones II and III, both the currently utilized inverted test method and new upright test method may be used for conducting the wind uplift load test. However, there are different factors of safety and the number of tests required for each test procedure. For the inverted test method (load applied to the bottom chord of the truss), three consecutive tests must meet all acceptance criteria and sustain at least 2.0 times the design uplift load for 1 minute. For the upright test method (load applied to the top chord of the truss), two consecutive tests must meet all acceptance criteria and sustain 1.75 times the design live load for 1 minute.

5. In § 3280.402(e), the follow-up testing procedures and in-house quality control program requirements have been clarified for both manufacturers of roof trusses and for home manufacturers producing roof trusses for their own use. In addition, one truss test is to be conducted after the first 100 trusses have been produced, with a subsequent test for every 2,500 trusses qualified by either the proof load test procedure or by the inverted test procedure. One truss test will also be required for every 4,000 trusses produced, for trusses qualified under the ultimate load procedure or the upright uplift test procedure.

6. For consistency within 24 CFR part 3280, HUD is substituting reference to a nationally recognized testing laboratory for the reference to an independent third-party agency throughout this rule.

After reviewing the proposed recommendations for the revised truss testing procedures recommended by MHCC, HUD had concerns regarding one of MHCC's recommendations for uplift load testing. In the proposed rule published on June 16, 2010, HUD solicited comments from the public on both MHCC's recommendation as submitted to HUD, and HUD's modification of its recommendation in the proposed rule, and is further modifying MHCC's recommendation for uplift load testing.

Based on the review of comments received from the public, HUD is further modifying the recommendation from MHCC on uplift testing, because MHCC's overload provisions for uplift load tests in the inverted position were deemed to be too conservative. HUDnow agrees with MHCC that either test method, inverted or upright, should be permitted to evaluate uplift resistance of trusses designed to be used in Wind Zones II and III. However, this final rule requires that three consecutive trusses be successfully tested utilizing an overload factor of safety of 2.0 for trusses evaluated using the inverted test method. HUD's modification for upright testing is based in part on the findings of a study conducted by the National Association of Home Builders Research Center (NAHB-RC), “Comparison of Methods for Wind Uplift Load Testing of Roof Trusses for Manufactured Housing,” and the requirements of the National Fire Protection Association (NFPA) consensus process related to uplift testing. In particular, the NAHB-RC study found that trusses tested in the inverted position failed at higher loads, had smaller mid-span deflections, and experienced different fail modes than trusses tested in the upright position. This is because the difference in truss orientation results in the uplift load being applied by pulling up on the top chord of the truss in the upright position (in the manner in which the wind would apply load to the trusses), while, in the inverted position, the uplift load is applied by pushing down on the bottom chord of the truss.

The regulatory language submitted by MHCC on this section, including introductory language that has not been modified but which provides context for MHCC's language, is as follows:

Under Executive Order 12866 (Regulatory Planning and Review), a determination must be made whether a regulatory action is significant and, therefore, subject to review by the Office of Management and Budget (OMB) in accordance with the requirements of the order. Executive Order 13563 (Improving Regulations and Regulatory Review) directs executive agencies to analyze regulations that are “outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned. Executive Order 13563 also directs that, where relevant, feasible, and consistent with regulatory objectives, and to the extent permitted by law, agencies are to identify and consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public.

The Office of Management and Budget (OMB) reviewed this rule under Executive Order 12866. This rule was determined to be a “significant regulatory action,” as defined in section 3(f) of the Order (although not an economically significant regulatory action under the Order). This rule would affect costs for manufactured home manufacturers.

As discussed in this preamble, this rule would amend the required truss testing procedures of the Federal Manufactured Home Construction and Safety Standards to current industry methods and equipment in order to improve the performance and safety of trusses in high wind areas and to enhance the reliability and durability of trusses. Specifically, this rule would modify upright or inverted test procedures in high wind areas in order to prevent premature failures of trusses. This rule also would modify the current non-destructive test procedure to require a higher factor of safety and reduces the time required to conduct the test as well as the follow-up testing intervals. In response to public comments, this final rule will not require retesting of existing truss designs for manufactured housing located in Wind Zone I, which was included in the proposed rule. The final rule will only require testing of new roof truss designs to be used in Wind Zone I and only require testing for uplift resistance in Wind Zone I when required by a Professional Engineer or Registered Architect. Based on HUD's review of this final rule, HUD has determined that this final rule imposes one-time costs totaling $0.075 million and discounted production costs ranging from $4.8 million, assuming a 7 percent discount rate, to $7.4 million, assuming a 3 percent discount rate. Although difficult to predict, the discounted benefits of the rule, including prevented damage, injury and loss of life, are expected to exceed the costs imposed by this rule. Avoiding one death in the first year, for example, would offset the 30-year discounted costs by 83 percent, assuming the 3 percent discount rate, and offset the costs by 126 percent; i.e., exceed the costs, assuming the 7 percent discount rate. If one death was avoided at the end of the 30-year period, the discounted benefits from the prevented loss of life alone, not including damage prevented, would account for 35 percent of the increased costs, using a 3 percent discount rate, or 18 percent, assuming a 7 percent discount rate. Similarly, while the number and strength of high wind events make it difficult to provide an exact estimate, the benefits of the rule would offset costs if 44 percent of estimated property damage was prevented. Overall, HUD has determined that the total impact of this rule will not exceed the $100 million threshold as provided by Executive Order 12866.

The cost of this rule includes (1) a one-time retesting of existing truss designs used in Wind Zones II and III, (2) redesign costs of existing designs that do not meet the new testing requirements of this final rule, and (3) an increase in annual production costs. These costs are evaluated with respect to wind zone classifications. Wind Zone I homes have the least stringent construction standards and Wind Zone III homes have the most stringent construction standards. Approximately 90 percent of the units produced annually are constructed to Wind Zone I standards and would not be subject to the retesting requirement.

HUD estimates that there are approximately 150 truss designs in use for Wind Zones II and III, and that the cost of retesting, recertifying, and redesigning the truss designs will cost producers approximately $500 per truss design. As a result, the total cost of retesting, re-certifying, and redesigning truss designs for Wind Zones II and III is assessed to be $75,000 based on current production levels of 4,620 shipments.

In order to meet the testing standards provided by this final rule, HUD expects that 75 percent of the designs currently used for Wind Zones II and III will require modification. The increased construction cost to meet the new standards is estimated at $1.00 per truss. Based on an average of 51 trusses per transportable section in Wind Zones II and III, and 1.64 transportable sections per home, the annual increase in truss construction costs total $289,170 (7,560 transportable sections * 51 trusses per section * $1.00 increase in production cost * 75 percent of trusses produced). Over a 30-year period, the discounted value of the increase in production costs total $4.8 million, assuming a 7 percent discount rate, or $7.4 million, assuming a 3 percent discount rate.

With respect to benefits, this final rule will make manufactured housing less susceptible to wind damage and downward pressure by enhancing roof construction. The wind damage enhancements protect against high wind events such as hurricanes and tropical storms. Such damage to the manufactured home ranges from complete failure of the truss, in which the truss completely separates from the house section, to localized failure or minor separation that leads to progressive structural damage and damage from water entry. Complete failure of the truss not only destroys the home itself, but in high wind events, can result in “missile” damage to adjoining structures. Even minor localized failure can over time lead to complete failure and eventually result in “missile” damage in a later, perhaps weaker, wind event. In addition, there will be less collateral damage to housing and other structures adjacent to manufactured housing.

Quantifying the benefits of this rule, however, is difficult due to the high annual variance in frequency and force of storms. Further, there is virtually no detailed information concerning cost estimates of damaged manufactured homes from strong wind or snow events. However, it is possible to produce a reasonable, conservative estimate of property damage that could be avoided due to the requirements in this final rule. Due to the uncertainty of the occurrence and severity of natural disasters, a range of expected benefits are presented. However, the estimates below only represent a partial valuation of the expected benefits since it is not possible to estimate the damage occurring from heavy snow storms.

Based on 2008 housing data from the U.S. Postal Service2 and the Census Bureau's Survey of Manufactured Housing, newly shipped manufactured housing accounts for 0.076 percent of the total housing stock in states prone to hurricane strikes. An approximation of the damage occurring to manufactured housing totals $836,634 ($1,194,4 million * 0.076 percent). The discounted value of the annual damage over 30 years is $11.1 million, assuming a 7 percent discount rate, or $16.9 million, assuming a 3 percent discount rate. The higher standards resulting from the tests required by this final rule would prevent a portion of this damage, although the annual variability in the number and strength of high wind events makes it difficult to provide a precise estimate. In order for the benefits to exactly offset the costs imposed by this rule, 44 percent of the damage would need to be prevented This percentage should not be considered a maximum, as it does not include damage from other types of weather events, such as heavy snowfall, or prevented deaths, which is also discussed below.

In addition to the improved safety in high wind events, the increased reliability of trusses that result from this rule will also benefit areas receiving high snowfall. Homes located in high snow load areas are susceptible to collapse in heavy snow storms. The new testing standards will decrease the number of such occurrences as new trusses are designed. Although no data exists on the amount of property damage due to such events, especially to manufactured housing, it is reasonable to assume that additional benefits would accrue to owners of manufactured housing as a result of this final rule.

In addition to avoiding property damage, this rule will also prevent injuries and deaths that occur during hurricanes, tropical storms, and other high wind events; although it is difficult to estimate the number of injuries and deaths that would be prevented, it is reasonable to expect that deaths and injuries would decrease in response to this final rule. Government estimates of the value of a human life range from $6.2 million used by the Department of Transportation (DOT) to $9.1 million used by the Environmental Protection Agency (EPA). HUD uses the DOT estimate in the current analysis. Avoiding one death in the first year would offset the 30-year discounted cost by 83 percent, assuming the 3 percent discount rate, and offset the costs by 126 percent; i.e., exceed the costs, assuming the 7 percent discount rate. If one death was avoided at the end of the 30-year period, the discounted benefits from the prevented loss of life alone, not including damage prevented, would account for 35 percent of the increased costs, using a 3 percent discount rate, or 18 percent assuming a 7 percent discount rate.

In summary, this final rule will impose one-time costs totaling $75,000, and discounted production costs ranging from $4.8 million to $7.4 million. Although difficult to predict, the discounted benefits, including prevented damage and prevented injury and loss of life, are expected to exceed the costs imposed by this rule. Overall, the total impact of this rule will not exceed the threshold of $100 million as required by Executive Order 12866.

The docket file is available for public inspection in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an advance appointment to review the public comments by calling the Regulations Division at 202-402-3055 (this is not a toll-free number). Individuals with speech or hearing impairments may access this number through TTY by calling the Federal Information Relay Service at 1-800-877-8339.

A Finding of No Significant Impact with respect to the environment has been made in accordance with HUD regulations at 24 CFR part 50, which implement section 102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). That finding is available for public inspection between the hours of 8 a.m. and 5 p.m. weekdays in the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500. Due to security measures at the HUD Headquarters building, please schedule an appointment to review the finding by calling the Regulations Division at 202-708-3055 (this is not a toll-free number).

The Regulatory Flexibility Act (RFA) (5 U.S.C. 601et seq.) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements, unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. This rule would regulate establishments primarilyengaged in making manufactured homes under North American Industry Classification Standard (NAICS) 32991. The Small Business Administration's size standards define as small an establishment primarily engaged in making manufactured homes if it does not exceed 500 employees. Of the 123 manufactured home operations included under this NAICS definition, 55 are small manufacturers that fall below the small business threshold of 500 employees. The rule would apply to all of the manufacturers and would, therefore, affect a substantial number of small entities. For the reasons stated below, HUD knows of no instance in which a manufactured home manufacturer with fewer than 500 employees would be significantly affected by this rule.

HUD, with the concurrence of MHCC, conducted an economic cost impact analysis for this rule. A copy of the analysis is available for public inspection and copying between 8 a.m. and 5 p.m. weekdays at the Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW., Room 10276, Washington, DC 20410-0500. The analysis determined the average potential cost impact, based on a per-home cost, to be approximately $8, multiplied by an estimated number of 46,000 homes produced in a year, which equals about $364,000 annually. The estimated average per-home cost in Wind Zone II and Wind Zone III is $79, based on an annual production estimate of 4,600 manufactured homes. This does not represent a significant economic effect on either an industry-wide or per-unit basis.

These two relatively small increases in cost would not impose a significant burden for a small business involved in the production of homes that typically cost the purchaser between $40,000 and $100,000. Therefore, although this rule would affect a substantial number of small entities, it would not have a significant economic impact on them. Accordingly, the undersigned certifies that this rule will not have a significant economic impact on a substantial number of small entities.

Executive Order 13132 (entitled “Federalism”) prohibits an agency from promulgating a rule that has federalism implications if the rule either imposes substantial direct compliance costs on state and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive Order. This rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments nor preempt state law within the meaning of the Executive Order.

Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) (UMRA) establishes requirements for federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and on the private sector. This rule does not impose any federal mandates on any state, local, or tribal governments or the private sector within the meaning of UMRA.

The Catalog of Federal Domestic Assistance number for Manufactured Home Construction and Safety Standards is 14.171.

Accordingly, for the reasons stated in the preamble, HUD amends 24 CFR part 3280 to read as follows:

The Miami International Boat Show Operations Manager has requested temporary modifications to the operating schedules of the Venetian Causeway Bridge (West) and the Venetian Causeway Bridge (East) in Miami, Florida. These deviations will result in the bridges being allowed to open on the hour and half-hour from 7 a.m. to 9 p.m. daily, from February 11, 2013, through February 19, 2013. The Miami International Boat Show generates a high volume of vessel and vehicle traffic. In previous years, opening these bridges on demand has resulted in significant vehicle congestion and bridge mechanical failure. By opening the bridges on the hour and half-hour (rather than on demand) traffic congestion will be reduced. The temporary deviations will be effective from 7 a.m. on February 11, 2013 through 9 p.m. on February 19, 2013.

The vertical clearance, regular operating schedule, and deviation period for each bridge are set forth below.

1.Venetian Causeway Bridge (West), mile 1088.6.The vertical clearance of the Venetian Causeway Bridge (West), across the Atlantic Intracoastal Waterway is 12 feet. The normal operating schedule is set forth in 33 CFR 117.261(nn), which requires the bridge to open on signal; except that from 7 a.m. to 7 p.m., Monday through Friday, except Federal holidays, the bridge need only open on the hour and half-hour.

As a result of this temporary deviation, the Venetian Causeway Bridge (West) will only open to navigation on the hour and half-hour from 7 a.m. until 9 p.m. daily, from February 11, 2013, through February 19, 2013. At all other times the bridges will open on demand. The bridge will also continue to open as necessary, in accordance with 33 CFR 117.31.

2.Venetian Causeway Bridge (East).The vertical clearance of the Venetian Causeway Bridge (East), across Biscayne Bay is 6 feet. The normal operating schedule is set forth in 33 CFR 117.269, which requires the bridge to open on signal; except that from 7 a.m. to 7 p.m., Monday through Friday, except Federal holidays, the bridge need only open on the hour and half-hour.

As a result of this temporary deviation, the Venetian Causeway Bridge (East) will only open to navigation on the hour and half-hour from 7 a.m. until 9 p.m. daily, from February 11, 2013, through February 19, 2013. At all other times the bridges will open on demand. The bridge will also continue to open as necessary, in accordance with 33 CFR 117.31.

In accordance with 33 CFR 117.35(e), these drawbridges must return to their regular operating schedules immediately at the end of the effective period of this temporary deviation. These deviations from the operating regulations are authorized under 33 CFR 117.35.

The Coast Guard will enforce a segment of the Safety Zone; Brandon Road Lock and Dam to Lake Michigan including Des Plaines River, Chicago Sanitary and Ship Canal, Chicago River, Calumet-Saganashkee Channel, Chicago, IL, listed in 33 CFR 165.930. Specifically, the Coast Guard will enforce this safety zone between Mile Marker 296.1 to Mile Marker 296.7 on all waters of the Chicago Sanitary and Ship Canal. Enforcement will occur from 7:00 a.m. until 11:00 a.m. and 1:00 p.m. until 5:00 p.m. on February 12 through February 15, 2013.

This enforcement action is necessary because the Captain of the Port, Sector Lake Michigan has determined that the U.S. Army Corps of Engineers Electromagnetic Fields evaluation operations pose risks to life and property. Because of these risks, it is necessary to control vessel movement during the evaluation operations to prevent injury and property loss.

In accordance with the general regulations in § 165.23 of this part, entry into, transiting, mooring, laying up or anchoring within the enforced area of this safety zone by any person or vessel is prohibited unless authorized by the Captain of the Port, Sector Lake Michigan, or his or her designated representative.

This notice is issued under authority of 33 CFR 165.930 and 5 U.S.C. 552(a). In addition to this notice in theFederal Register, the Captain of the Port, Sector Lake Michigan, will also provide notice through other means, which may include, but are not limited to, Broadcast Notice to Mariners, Local Notice to Mariners, local news media, distribution in leaflet form, and on-scene oral notice.

Additionally, the Captain of the Port, Sector Lake Michigan, may notify representatives from the maritime industry through telephonic and email notifications.

For the purpose of this document, we are giving meaning to certain words or initials as follows:

(i) The words or initialsActorCAAmean or refer to the Clean Air Act, unless the context indicates otherwise.

(ii) The wordsEPA, we, usorourmean or refer to the United States Environmental Protection Agency.

(iii) The initialsSIPmean or refer to State Implementation Plan.

(iv) The wordsUtahandStatemean the State of Utah.

Under 40 CFR 51.309 of the RH program, there are numerous requirements aimed at protecting the 16 Class I areas of the Colorado Plateau. This action only addresses the requirements pertaining to programs related to fire of 40 CFR 51.309(d)(6). Pursuant to 40 CFR 51.309(d)(6), a state must show that its smoke management program and all federal or private programs for prescribed fire in the state have a mechanism in place for evaluating and addressing the degree of visibility impairment from smoke in their planning and application of burning. A state must also ensure that its prescribed fire smoke management programs have at least the following seven elements: Actions to minimize emissions, evaluation of smoke dispersion, alternatives to fire, public notification, air quality monitoring, surveillance and enforcement, and program evaluation.

States must include in their section 309 plan a statewide process for gathering the essential post-burn activity information to support emissions inventory and tracking systems. States must identify existing administrative barriers to the use of non-burning alternatives and adopt a process for continuing to identify and remove administrative barriers where feasible. The SIP must include an enhanced smoke management program, which means the smoke management program considers visibility and is based on the criteria of efficiency, economics, law, emission reduction opportunities, land management objectives, and reduction of visibility impairment. States must also adopt a process to establish annual emission goals to minimize emission increases from fire.

On December 12, 2003, the State of Utah submitted a RH SIP intended to meet all of the requirements under 40 CFR 51.309. This submittal adopted SIP section XX—Regional Hazeas well as UAC R307-204Emissions Standards: Smoke Management.The State revised the smoke management requirements of R307-204 in a May 8, 2006 submittal and then again in its September 29, 2011 submittal. The September 29, 2011 submittal supersedes and replaces the R307-204 portion of the December 12, 2003 submittal and all of the May 8, 2006 submittal. R307-204 contains provisions necessary to meet the requirements of 40 CFR 51.309(d)(6) which pertain to smoke management.

Section XX.G—Long-Term Strategy for Fire Programsof the State's RH SIP also contains provisions necessary to meet the requirements of 40 CFR 51.309(d)(6). The State originally submitted Section XX.G with its December 12, 2003 RH SIP submittal. The State resubmitted this section with subsequent SIP revisions on September 9, 2008 and May 26, 2011. Section XX.G of the May 26, 2011 submittal supersedes and replaces section XX.G of the December 12, 2003 and September 9, 2008 submittals. EPA will be taking action on the remainder of the December 12, 2003, September 9, 2008, and May 26, 2011 submittals at a later date.

On November 8, 2011, EPA published a notice of proposed rulemaking (NPR) for the State of Utah (76 FR 69217). The NPR proposed approval of the smoke management requirements adopted by the State as part of the September 29, 2011 (R307-204) and May 26, 2011 (section XX.G) SIP submittals.

EPA is approving a SIP revision submitted by the State of Utah on September 29, 2011. The September 29, 2011 revision establishes UAC R307-204. R307-204 contains smoke management requirements for land managers within the State of Utah as required by 40 CFR 51.309(d)(6) for regional haze. The September 29, 2011 submittal supersedes and replaces R307-204 submitted as part of the State's December 12, 2003 regional haze SIP. The September 29, 2011 submittal also supersedes and replaces the State's May 8, 2006 submittal of R307-204. EPA is also partially approving a SIP revision submitted by the State of Utah on May 26, 2011. Specifically, EPA is approving section XX.G of the State's RH SIP which contains the State's long-term strategy for fire programs as required by 40 CFR 51.309(d)(6). The May 26, 2011 submittal supersedes and replaces SIP revisions to section XX.G of the RH SIP submitted by the State on December 12, 2003 and September 9, 2008.

Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely approves state law as meeting Federal requirements and imposes no additional requirements beyond those imposed by state law. Accordingly, the Administrator certifies that this rule will not have a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601et seq.). Because this rule approves pre-existing requirements under state law and does not impose any additional enforceable duty beyond that required by state law, it 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).

This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175 (65 FR 67249, November 9, 2000). This action also does not have Federalism implications because it does not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action merely approves a state rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. This rule also is not subject to Executive Order 13045 “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), because it approves a state rule implementing a Federal standard.

In reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. In this context, in theabsence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a SIP submission for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews a SIP submission, to use VCS in place of a SIP submission that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply. This rule does not impose an information collection burden under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501et seq.).

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

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by March 19, 2013. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

40 CFR part 52 is amended to read as follows:

The Agency is revising the regulations on the labeling of pesticide products and devices intended solely for export. The revisions will clarify the labeling requirements and assist in compliance. Unregistered pesticide products that are intended solely for export but that are shipped between registered establishments in the United States operated by the same producer under 40 CFR 152.30(a) must comply with the labeling requirements in 40 CFR part 168.

EPA is authorized under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. 136 et seq., to regulate the sale, distribution, and use of pesticide products and devices through a licensing (registration) scheme. This action is issued under the authority of section 25(a) of FIFRA, 7 U.S.C. 136w(a), to carry out the provisions of section 17(a) of FIFRA, 7 U.S.C. 136o(a).

In addition, because it is recognized that regulations written in a clear and easily readable style can save time and effort for the federal government and for persons affected by the regulation, agencies are specifically directed to use plain language in writing or revising regulations. For example, Executive Order 12866, entitledRegulatory Planning and Review(58 FR 51735, October 4, 1993), says that regulations must be “simple and easy to understand, with the goal of minimizing uncertainty and litigation * * *” (Sec. 1, Par. (b)(12)). Executive Order 12988, entitledCivil Justice Reform(61 FR 4729, February 7, 1996), requires agencies that are reviewing existing regulations take the necessary steps to eliminate drafting errors and ambiguity, minimize potential litigation, and provide a clear legal standard for affected conduct. The Plain Writing Act of 2010, 5 U.S.C. 301 note, requires Federal agencies to use “clear government communication that the public can understand and use.” Executive Order 13563, entitledImproving Regulation and Regulatory Review(76 FR 3821, January 21, 2011), states that “[our regulatory system] must ensure that regulations are accessible, consistent, written in plain language, and easy to understand.”

You may be potentially affected by this action if you export a pesticide product, a pesticide device, or an active ingredient used in producing a pesticide. The inclusion of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document might apply to them. Potentially affected entities may include, but are not limited to: Pesticide and other agricultural chemical manufacturing (NAICS code 325320), e.g., Pesticides manufacturing, Insecticides manufacturing, Herbicides manufacturing, Fungicides manufacturing, etc.

EPA did not quantify the potential costs or benefits from these revisions, which are qualitatively discussed in this unit. EPA has determined that there are minimal costs for industry to comply with the requirement that the unregistered pesticide product or device intended solely for export that is shipped between registered establishments operated by the same producer must be labeled in compliance with 40 CFR part 168, particularly the required statement “Not Registered for Use in the United States.” This determination was made given that most of the labeling requirements for export pesticide products already appear in other existing requirements, and the burden of adding the additional statement to unregistered products or devices intended solely for export that are shipped between registered establishments operated by the same producer would be negligible. EPA believes that this labeling change may be easily accomplished using commonly available word processing software; in addition, this label change does not require label submission to or approval by EPA, and shall be phased in as part of normal business operations. As such, EPA has concluded that the per firm and industry level impact of the rule is not significant.

Benefits are derived from the additional protection of public health and the environment that may result from ensuring appropriate handling of such unregistered pesticide products as they move in commerce before they actually leave the United States. Requiring that unregistered pesticide products and devices intended solely for export that are shipped between establishments operated by the same producer be labeled according to the current regulations in § 168.65, prevents them from inadvertently entering the U.S. market and provides compliance assistance. This requirement further protects public health and the environment by ensuring safe and appropriate handling of such products as they move in commerce before they actually leave the United States.

EPA published a notice in theFederal Registerof April 6, 2011 (76 FR 18995) proposing to revise the regulations on labeling of pesticide products and devices intended solely for export. EPA proposed to include a specific indication that these requirements also apply to unregistered pesticide products intended solely for export when they are shipped between registered establishments in the United States operated by the same producer according to 40 CFR 152.30(a) before they are actually exported from the United States.

EPA has considered the comments received on the proposed rule, and provided responses in a Response to Comments document, which is available in the docket for this rule under document ID No. EPA-HQ-OPP-2009-0607-0015. Only the key comments and the Agency's responses are discussed in this rule.

1.Labeling terms.Commenters called attention to inconsistencies in the use of the terms “label,” “labeling,” and “supplemental labeling” in the proposed regulations. EPA has revised the regulatory text according to the definitions of these terms in FIFRA section 2(p) to eliminate the inconsistencies.

2.Foreign language labeling.Commenters indicated that the proposed regulations addressing foreign languages on labeling did not explicitly allow for an exception when the predominant or official language of the importing country is English. The regulatory text has been revised so that labeling text is only required to appear in a foreign language if English is not the predominant or official language in the importing country, as well as the country of final destination, if known.

3.Formulation modifications.One commenter supported EPA's proposal to remove the list of formulation modifications and allow a broader range of changes that can be made to a registered pesticide product intended solely for export while it may still beconsidered to be “registered” for purposes of section 17(a) of FIFRA, i.e. any changes that are permitted under notification or non-notification. The Pesticide Registration Manual and the Pesticide Registration Notice 98-10 provide more information and guidance on the permitted changes.

4.Human hazard and precautionary statements.One commenter disagreed with the use of “appropriate” and “inappropriate” in the description of the statements; EPA had selected those terms because a literal translation of the U.S. human health and precautionary statements might not convey the correct level of caution in the importing country. EPA has revised the regulatory text to require “true and accurate” translations of the English statements in the human hazard and precautionary statements.

5.Amplification of the phrase “Not Registered for Use in the United States.”Several commenters assumed that amplification of the phrase was required and maintained such amplification was not necessary. EPA agrees that the phrase “Not Registered for Use in the United States,” a FIFRA requirement for unregistered pesticide products, is sufficient to comply with this rule if the exporting company prefers not to use any further optional amplification. Another commenter suggested that including the phrase on device labeling would create a competitive disadvantage in the marketplace. However, EPA believes that the ability to include explanatory text such as “because pesticide devices are not required to be registered” should resolve this potential concern.

6.Shipping between registered establishments operated by the same producer.Several commenters discussed potential problems associated with the proposed requirement that when unregistered pesticide products intended solely for export are shipped between registered establishments operated by the same producer, the products are required to have labeling that complies with 40 CFR part 168. One issue raised by a commenter related to the many steps in the production process for pesticide products. One commenter suggested the new requirement be added to 40 CFR 152.30 instead of part 168 while another believed the new requirement was not even necessary. After considering the comments, EPA believes that it is more appropriate to retain the new requirement in § 168.70 instead of adding it to 40 CFR 152.30.

With the exception of the modifications discussed in the previous unit, EPA is finalizing the rule in essentially the same form as the proposed rule. This rule will clarify, restructure, add specificity to the current regulations and will also add an extra margin of safety when shipments of unregistered pesticides and devices that are intended solely for export move between registered establishments operated by the same producer prior to being exported. The regulations at 40 CFR 152.30(a) currently allow the transfer of an unregistered pesticide between registered establishments operated by the same producer, and require the transferor to follow the labeling requirements in 40 CFR part 156. EPA believes that requiring the registration status information from 40 CFR 168.70(b)(3) on the label when such products are intended solely for export at the time of the transfer will result in safer and more appropriate handling and distribution of unregistered pesticide products and devices. EPA also believes that this requirement will help to prevent unregistered pesticide products and devices intended solely for export from inadvertently entering the U.S. market.

In accordance with FIFRA section 25(a), EPA submitted a draft of this final rule to the FIFRA Scientific Advisory Panel (SAP), the Secretary of Agriculture (USDA), and appropriate Congressional Committees. The FIFRA SAP waived its review of this final rule on June 7, 2012 because this action is administrative and does not contain scientific issues that require the FIFRA SAP's consideration. USDA waived the opportunity to review the final rule on June 19, 2012 because clarification and restructuring of the current regulations are administrative actions with no scientific or policy issues.

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

This action does not impose any new significant information collection burden that would require additional review or approval by OMB under the PRA, 44 U.S.C. 3501et seq.The information collection requirements contained in the existing regulations (40 CFR 168.65), are already approved by OMB under OMB control number 2070-0027 (EPA ICR No. 0161); since there is no new significant burden, it was not necessary to amend the ICR. Burden is defined at 5 CFR 1320.3(b). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control numbers for EPA's regulations in Title 40 are displayed in theFederal Registerand are listed in 40 CFR part 9.

The RFA, 5 U.S.C. 601et seq.,generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act, 5 U.S.C. 551-553, or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201. A small business that manufactures pesticides and other agricultural chemicals as defined by NAICS code 325320 has 500 or fewer employees (based on the Small Business Administration size standards); (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field. The small entities directly regulated by this final rule are small manufacturers of pesticides which export unregistered pesticide products or devices.

After considering the economic impacts of this final rule on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. EPA has determined that the cost is minimal to comply with the requirement that an unregisteredpesticide product intended solely for export that is transferred between registered establishments under § 152.30(a) must be labeled with the statement “Not Registered for Use in the United States.” This is because existing requirements already call for labeling that includes most of the provisions in 40 CFR part 168, and the burden of adding the additional statement in that limited context would be negligible. EPA believes this labeling change may be easily accomplished using commonly available word processing software; in addition, this label change does not require label submission to or approval by EPA, and can be phased in as part of normal business operations by January 21, 2014. EPA concluded that the per firm and industry level impact of the final rule is insignificant.

EPA believes that increasing the specificity of the current regulations will minimally affect all manufacturers of pesticide products and devices intended solely for export, not just those manufacturers that are small entities. The more specific indication that “Not Registered for Use in the United States” will be required for unregistered pesticide products and devices intended solely for export that are shipped between establishments operated by the same producer; this is the identical labeling information that is already required before an unregistered pesticide product or device intended solely for export is in fact exported to another country.

This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for State, local or tribal governments or the private sector. This action imposes no enforceable duty on any State, local or tribal governments or the private sector because the action is expected to only affect producers, transporters, formulators, packagers, and exporters of unregistered pesticide products and devices intended solely for export and to not result in expenditures of $100 million or more. Since no State, local, or tribal government is known to produce, transport, formulate, package, or export unregistered pesticide products or devices, this rule is not expected to affect State, local, and tribal governments individually, much less in the aggregate. Therefore, this action is not subject to the requirements of sections 202 or 205 of UMRA.

This action is also not subject to the requirements of section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments since no small government is known to produce, transport, formulate, package, or export unregistered pesticide products or devices.

This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132 (64 FR 43255, August 10, 1999). This action contains no regulatory requirements that might affect State or local governments since no State or local government is known to produce, transport, formulate, package, or export unregistered pesticide products or devices. Thus, Executive Order 13132 does not apply to this action.

In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and the State and local governments, EPA specifically solicited comment on the proposed action from State and local officials.

This action does not have tribal implications as specified in Executive Order 13175 (65 FR 67249, November 9, 2000) because this action is expected to only affect producers, transporters, formulators, packagers, and exporters of unregistered pesticide products and devices. Since no Indian tribal government is known to produce, transport, formulate, package, or export unregistered pesticide products or devices, this action has no tribal implications. Thus, Executive Order 13175 does not apply to this action.

EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This action is not subject to Executive Order 13045 because it does not establish an environmental standard intended to mitigate health or safety risks, nor is it an “economically significant regulatory action” as defined in Executive Order 12866. The clarification and restructuring of current regulations for the export of unregistered pesticide products and devices do not present a disproportionate risk to children.

This action is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866 nor will it affect energy supply, distribution, or use.

This action does not involve technical standards that would require the consideration of voluntary consensus standards pursuant to NTTA section 12(d), Public Law No. 104-113, 12(d) (15 U.S.C. 272 note). Thus, NTTAA does not apply to this action.

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

EPA has determined that this final rule will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations because it increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population.

The clarification and restructuring of current regulations for the export of unregistered pesticide products and devices increases the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population.

Pursuant to the CRA, 5 U.S.C. 801 et seq., EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in theFederal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

This is a synopsis of the Commission'sReport and Order,adopted January 3, 2013, and released January 4, 2013. The full text of this Commission decision is available for inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street SW., Washington, DC 20554. This document may also be purchased from the Commission's duplicating contractors, Best Copy and Printing, Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20554, telephone 1-800-378-3160 or via emailwww.BCPIWEB.com.This document does not contain proposed information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. The Commission will send a copy of thisReport and Orderin a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act,see5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows: