Federal Register Vol. 80, No.121,

The Animal Welfare Act (AWA, 7 U.S.C. 2131 et seq.) authorizes the Secretary of Agriculture to promulgate standards and other requirements governing research facilities. The Secretary has delegated the responsibility for enforcing the AWA to the Administrator of the Animal and Plant Health Inspection Service (APHIS). Within APHIS, the responsibility for administering the AWA has been delegated to the Deputy Administrator for Animal Care.

Regulations and standards promulgated under the AWA are contained in title 9 of the Code of Federal Regulations, parts 1, 2, and 3 (referred to collectively below as the AWA regulations). Part 1 contains definitions of terms used within parts 2 and 3. Part 2 contains licensing and registration regulations, regulations specific to research facilities, and regulations governing veterinary care, animal identification, recordkeeping, access for inspection, confiscation of animals, and handling, among other requirements. Within part 2, subpart C contains the regulations specific to research facilities.

The regulations in paragraph (a) of § 2.36 require that the reporting facility be the segment of the research facility, or that department, agency, or instrumentality of the United States, that uses or intends to use live animals in research, tests, experiments, or for teaching. Each reporting facility is required to submit an annual report1 to the Animal Care Regional Director for the State where the facility is located on or before December 1 of each calendar year. The annual report has to be signed and certified by the chief executive officer or institutional official and cover the previous Federal fiscal year.

Under § 2.36, the annual report is required to assure that professionally acceptable standards governing the care, treatment, and use of animals, including appropriate use of anesthetic, analgesic, and tranquilizing drugs, were used prior to, during, and following actual procedures, and that each principal investigator has considered alternatives to painful procedures. The annual report is also required to assure that the facility is adhering to the standards and regulations under the AWA. Exceptions to the standards and regulations are required to be attached to the annual report as a summary that includes a brief explanation as well as the species and number of animals affected.

In addition, the regulations require the annual report to state the location of all facilities where animals were housed or used in actual research, testing, teaching, or experimentation, or held for these purposes.

The regulations also require the annual report to include the common names and numbers of animals involved in procedures for which: (1) No pain, distress, or use of pain-relieving drugs was involved; (2) appropriate anesthetic, analgesic, or tranquilizing drugs were provided where there was accompanying pain or distress to the animals; or (3) pain and distress was involved and the use of appropriate anesthetic, analgesic, or tranquilizing drugs for relief would have adversely affected the procedures, results, or interpretation of the teaching, research, experiments, surgery, or tests. An explanation of the procedures producing pain or distress in these animals and the reasons such drugs were not used is required to be attached to the annual report.

Lastly, the annual report is required under the regulations to include the common names and numbers of animals being bred, conditioned, or held for use in teaching, testing, research, experiments, or surgery, but not yet used for such purposes.

APHIS received a petition from the National Anti-Vivisection Society (referred to below as NAVS) dated December 15, 2014. In the petition, NAVS stated that the online Animal Care Information System 2 and the APHIS annual report provide an insufficient level of detail about animals used for research. NAVS requested that we amend the AWA reporting regulations to require research facilities to provide us with information about how animals are being used for research and experimentation and that we publish this information in the annual report of research facilities. NAVS also requested that APHIS replace the current reporting form 3 used by research facilities with a template 4 comparable to that used by Member States of the European Union (EU), which provides an accounting of the numbers and types of animals, and for what specific research, testing, and educational purposes the animals are being used.

We are making this petition available to the public and soliciting comments to help determine what action, if any, to take in response to this request. The petition and any comments submitted are available for review as indicated under ADDRESSES above. We welcome all comments on the issues outlined in the petition. In particular, we invite responses to the following questions:

1. Should APHIS amend the regulations to require research facilities that use animals for teaching, testing, and experimentation to provide specific information about how regulated animals are used (for example, for safety testing, teaching purposes, or disease research)? Would reporting this information improve animal welfare? If so, how?

2. If research facilities were required to report the purposes of their animal research activities, what types of information should be provided, and why?

3. What might be the effects, if any, on research facilities if they are required to collect and report this additional information?

4. Does the annual reporting form currently required to be used by research facilities capture sufficient information? If not, what information is missing?

We encourage the submission of scientific data, studies, or research to support your comments and position. We also invite data on the costs and benefits associated with any recommendations. We will consider all comments we receive.

This second decennial review of regulations began when the Board issued its first EGRPRA notice on May 22, 2014, covering the two categories of “Applications and Reporting” and “Powers and Activities.” 1 The second notice followed, covering the three categories of “Agency Programs,” “Capital,” and “Consumer Protection,” which was published on December 19, 2014.2

Congress enacted EGRPRA 3 as part of an effort to minimize unnecessary government regulation of financial institutions consistent with safety and soundness, consumer protection, and other public policy goals. Under EGRPRA, the appropriate federal banking agencies (Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, and Federal Deposit Insurance Corporation; herein Agencies 4 ) and the Federal Financial Institutions Examination Council (FFIEC) must review their regulations to identify outdated, unnecessary, or unduly burdensome requirements imposed on insured depository institutions. The Agencies are required, jointly or individually, to categorize regulations by type, such as “consumer regulations” or “safety and soundness” regulations. Once the categories have been established, the Agencies must provide notice and ask for public comment on one or more of these regulatory categories.

NCUA is not technically required to participate in the EGRPRA review process, since NCUA is not an “appropriate Federal banking agency” as specified in EGRPRA. In keeping with the spirit of the law, however, the Board has once again elected to participate in the review process. Thus, NCUA has participated along with the Agencies in the planning process, but has developed its own regulatory categories that are comparable with those developed by the Agencies. Because of the unique circumstances of federally insured credit unions and their members, the Board is issuing a separate notice from the Agencies. NCUA's notice is consistent and comparable with the Agencies' notice, except on issues that are unique to credit unions. One such unique issue, corporate credit unions, is included in this third notice.

In accordance with the objectives of EGRPRA, the Board asks the public to identify areas of its regulations that are outdated, unnecessary, or unduly burdensome. In addition to this third notice, the Board will issue one more notice for comment later on during 2015. The EGRPRA review supplements and complements the reviews of regulations that NCUA conducts under other laws and its internal policies.5

As the Board noted in its initial EGRPRA notice, the creation of the Consumer Financial Protection Bureau (CFPB) resulted in the transfer to it of responsibility for certain consumer protection rules that had previously been the responsibility of the Agencies and/or NCUA, such as Regulation Z and rules governing consumer privacy. Because the CFPB is not covered by EGRPRA or required to participate in this regulatory review process, the Agencies and NCUA excluded certain consumer protection regulations from the scope of the current review.6

EGRPRA contemplates a two-part regulatory response. First, NCUA will publish in the Federal Register a summary of the comments received, identifying and discussing the significant issues raised. Second, the law directs the Agencies to “eliminate unnecessary regulations to the extent that such action is appropriate.” As was done during the initial decennial review process, the Board anticipates that it will prepare its response separately from the Agencies, but at around the same time.

EGRPRA further requires the FFIEC to submit a report to the Congress within 30 days after NCUA and the Agencies publish the comment summary and analysis in the Federal Register. This report must summarize any significant issues raised by the public comments and the relative merits of those issues. The report also must analyze whether the appropriate federal financial regulator involved is able to address the regulatory burdens associated with the issues by regulation, or whether the burdens must be addressed by legislation. The FFIEC report submitted to Congress following the initial decennial EGRPRA review included an Agency section discussing banking sector issues and a separate section devoted to NCUA and credit union issues. It is likely that the FFIEC will follow a similar approach in this second decennial EGRPRA review and report process.

The regulatory review contemplated by EGRPRA provides a significant opportunity for the public and the Board to consider groups of related regulations and identify possibilities for streamlining. The EGRPRA review's overall focus on the totality of regulations will offer a new perspective in identifying opportunities to reduce regulatory burden. For example, the EGRPRA review may facilitate the identification of regulatory requirements that are no longer consistent with the way business is conducted and that therefore might be eliminated. Of course, reducing regulatory burden must be consistent with ensuring the continued safety and soundness of federally insured credit unions and appropriate consumer protections.

EGRPRA also recognizes that burden reduction must be consistent with NCUA's statutory mandates, many of which currently require certain regulations. One of the significant aspects of the EGRPRA review program is the recognition that effective burden reduction in certain areas may require legislative change. The Board will be soliciting comment on, and reviewing the comments and regulations carefully for, the relationship among burden reduction, regulatory requirements, and statutory mandates. This will be a key aspect of the report to Congress.

The Board views the approach of considering the relationship of regulatory and statutory change on regulatory burden, in concert with EGRPRA's provisions calling for grouping regulations by type, to provide the potential for particularly effective burden reduction. The Board believes the EGRPRA review can also significantly contribute to its on-going efforts to reduce regulatory burden. Since 1987, a formally adopted NCUA policy has required the Board to review each of its regulations at least once every three years with a view toward eliminating, simplifying, or otherwise easing the burden of each regulation.7 Further, the Board addresses the issue of regulatory burden every time it proposes and adopts a rule. Under the Paperwork Reduction Act of 1995,8 the Regulatory Flexibility Act,9 and internal agency policies, NCUA examines each rulemaking to minimize the burdens it might impose on the industry and considers various alternatives.

The Board is particularly sensitive to the impact of agency rules on small institutions. In 2013, the Board formally increased the threshold for meeting the “small” classification to having assets of $50 million or less.10 The Board is cognizant that each new or amended regulation has the potential for requiring significant expenditures of time, effort, and money to achieve compliance, and also that this burden can be particularly difficult for institutions of smaller asset size, with fewer resources available.

EGRPRA contemplates the categorization of regulations by “type.” During the initial decennial review, the Board developed and published for comment ten categories for NCUA's rules, including some that had been issued jointly with the Agencies. The Board believes these initial categories worked well for the purpose of presenting a framework for the review and so has retained them for this second review.11 The categories, in alphabetical order, are: Agency Programs; Applications and Reporting; Capital; Consumer Protection; Corporate Credit Unions; Directors, Officers and Employees; Money Laundering; Powers and Activities; Rules of Procedure; and Safety and Soundness. As noted above, some of the rules in the consumer protection category are now under CFPB's jurisdiction and administration, and those affected rules have been eliminated. Any rules adopted for the first time since 2006 have been included in the appropriate category.12 Rules still in proposed form are not included in this review; commenters may be sure that comments submitted directly in response to proposed rules will be given due consideration within that process.

As the Board noted during the initial decennial review, although there are other possible ways of categorizing its rules, these ten categories “are logical groupings that are not so broad such that the number of regulations presented in any one category would overwhelm potential commenters. The categories also reflect recognized areas of industry interest and specialization or are particularly critical to the health of the credit union system.” As was also noted during the initial review, some regulations, such as lending, pertain to more than one category and are included in all applicable categories.

The Board remains convinced that publishing its rules for public comment separately from the Agencies is the most effective method for achieving EGRPRA's burden reduction goals for federally insured credit unions. Owing to differences in the credit union system as compared to the banking system, there is not a direct, category by category, correlation between NCUA's rules and those of the Agencies. For example, credit unions deal with issues such as membership, credit union service organizations, and corporate credit unions, all of which are unique to credit union operations. Similarly, certain categories identified by the Agencies have limited or no applicability in the credit union sector, such as community reinvestment, international operations, and securities. The categories developed by the Board and the Agencies reflect these differences. The Board intends to maintain comparability with the Agencies' notices to the extent there is overlap or similarity in the issues and the categories.

After the conclusion of the comment period for each EGRPRA notice published in the Federal Register, the Board will review the comments it has received and decide whether further action is appropriate with respect to the categories of regulations included in that notice.

The Board has prepared two charts to assist public understanding of the organization of its review. The first chart, set forth at Section V.A. below, presents the three categories of regulations on which NCUA is requesting burden reduction recommendations in this notice. The three categories are shown in the left column. In the middle column are the subject matters that fall within the categories and in the far right column are the regulatory citations. The second chart, set forth at Section V.B. below, presents the remaining two categories in alphabetical order in a similar format.

The Board seeks public comment on regulations within the following three categories—“Corporate Credit Unions,” “Directors, Officers, and Employees,” and “Money Laundering”— that may impose outdated, unnecessary, or unduly burdensome regulatory requirements on federally insured credit unions. Comments that cite particular provisions or language, and provide reasons why such provisions should be changed, would be most helpful to NCUA's review efforts. Suggested alternative provisions or language, where appropriate, would also be helpful. If the implementation of a comment would require modifying a statute that underlies the regulation, the comment should, if possible, identify the needed statutory change.

Specific issues for commenters to consider. While all comments related to any aspect of the EGRPRA review are welcome, the Board specifically invites comment on the following issues:

• Need and purpose of the regulations. Do the regulations in these categories fulfill current needs? Has industry or other circumstances changed since a regulation was written such that the regulation is no longer necessary? Have there been shifts within the industry or consumer actions that suggest a re-focus of the underlying regulations? Do any of the regulations in these categories impose burdens not required by their authorizing statutes?

• Need for statutory change. Do the statutes impose unnecessary requirements? Are any of the statutory requirements underlying these categories redundant, conflicting or otherwise unduly burdensome? If so, how should the statutes be amended?

• Overarching approaches/flexibility of the regulatory standards. Generally, is there a different approach to regulating that the Board could use that would achieve statutory goals while imposing less burden? Do any of the regulations in these categories or the statutes underlying them impose unnecessarily inflexible requirements?

• Effect of the regulations on competition. Do any of the regulations in these categories or the statutes underlying them create competitive disadvantages for credit unions compared to another part of the financial services industry? If so, how should these regulations be amended?

• Reporting, recordkeeping and disclosure requirements. Do any of the regulations in these categories or the statutes underlying them impose particularly burdensome reporting, recordkeeping or disclosure requirements? Are any of these requirements similar enough in purpose and use so that they could be consolidated? What, if any, of these requirements could be fulfilled electronically to reduce their burden? Please provide specific recommendations.

• Consistency and redundancy. Do any of the regulations in these categories impose inconsistent or redundant regulatory requirements that are not warranted by the circumstances?

• Clarity. Are the regulations in these categories and the underlying statutes drafted in clear and easily understood language? Are there specific regulations or underlying statutes that need clarification?

• Scope of rules. Is the scope of each rule in these categories consistent with the intent of the underlying statute(s)? Could we amend the scope of a rule to clarify its applicability or to reduce the burden, while remaining faithful to statutory intent? If so, specify which regulation(s) should be clarified.

• Burden on small insured institutions. The Board has a particular interest in minimizing burden on small insured credit unions (those with less than $50 million in assets). NCUA solicits comment on whether any regulations within these categories should be continued without change, amended or rescinded in order to minimize any significant economic impact the regulations may have on a substantial number of small federally insured credit unions.

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2015-1984; Directorate Identifier 2015-NM-022-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

On December 27, 2004, we issued AD 2005-01-09, Amendment 39-13933 (70 FR 1340, January 7, 2005), for certain The Boeing Company Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, and 747SR series airplanes. AD 2005-01-09 requires a one-time inspection for discrepancies of the frame web and inner chords on the forward edge frame of the number 5 main entry door cutout, and corrective action if necessary. AD 2005-01-09 resulted from a report of cracking of the frame web and inner chords on the forward edge frame of the number 5 main entry door. We issued AD 2005-01-09 to find and fix discrepancies of the frame web and inner chords, which could result in cracking, subsequent severing of the frame, and consequent rapid depressurization of the airplane.

Since we issued AD 2005-01-09, Amendment 39-13933 (70 FR 1340, January 7, 2005), additional cracking was found in the same area after completion of the one-time detailed inspection required by AD 2005-01-09.

We reviewed and approved Boeing Alert Service Bulletin 747-53A2494, Revision 1, dated January 9, 2015. The service information describes procedures for a one-time detailed inspection and repetitive surface high frequency eddy current inspections of the Station 2231 frame inner chords (forward and aft), and repair of discrepancies. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this NPRM.

On August 16, 2013, we issued AD 2013-17-08, Amendment 39-17572 (78 FR 57053, September 17, 2013), for certain The Boeing Company Model 747-100, 747-100B, 747-100B SUD, 747-200B, 747-200C, 747-200F, 747-300, 747-400, 747-400D, 747-400F, and 747SR series airplanes. AD 2013-17-08 requires repetitive inspections to find cracking of the web, strap, inner chords, inner chord angle of the forward edge frame of the number 5 main entry door cutouts; the frame segment between stringers 16 and 31; repair if necessary; and repetitive inspections for cracking of repairs. AD 2013-17-08 resulted from multiple reports of cracking outside of the previous inspection areas and a report of a crack that initiated at the aft edge of the inner chord rather than initiating at a fastener location. We issued AD 2013-17-08 to detect and correct such cracks, which could cause damage to the adjacent body structure and could result in depressurization of the airplane in flight.

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of the same type design.

Although this proposed AD does not explicitly restate the requirements of AD 2005-01-09, Amendment 39-13933 (70 FR 1340, January 7, 2005), this proposed AD would retain all of the requirements. Those requirements are referenced in the service information identified previously, which, in turn, is referenced in paragraph (g) of this proposed AD. This proposed AD would require accomplishing the actions specified in the service information described previously, except as discussed under “Difference Between this Proposed AD and the Service Bulletin.” Refer to this service information for information on the procedures and compliance times.

Although Boeing Alert Service Bulletin 747-53A2494, Revision 1, dated January 9, 2015, specifies that operators may contact the manufacturer for disposition of certain repair conditions, this proposed AD would require repairing those conditions in one of the following ways:

• In accordance with a method that we approve; or

• Using data that meet the certification basis of the airplane, and that have been approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) whom we have authorized to make those findings.

We estimate that this proposed AD affects 174 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

We have received no definitive data that would enable us to provide a cost estimate for the on-condition actions specified in this proposed 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 proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 the proposed regulation:

(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 proposes to amend 14 CFR part 39 as follows:

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposal. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2015-1983; Directorate Identifier 2015-NM-020-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD because of those comments.

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

We received a report of a crack on the forward leg of the left front spar lower chord at wing buttock line (WBL) 177. The front spar lower chord was removed, repaired, and reinstalled. Upon additional inspection of the repaired spar chord installation, cracks were also discovered on the lower wing skin at three fastener holes common to the nacelle outboard side load fitting at WBL 198.6. These cracks were identified on an airplane that had accumulated 57,617 total flight cycles. Metallurgical analysis of the chord determined that cracks initiated at fastener holes and were propagated by operating load fatigue. The analysis found no anomalies that could have contributed to the cracking. Fatigue cracking of the forward leg of the left front spar lower chord, inspar skin, and lower wing skin common to the nacelle outboard side load fitting, if not corrected, could adversely affect the structural integrity of the wing.

We reviewed Boeing Alert Service Bulletin 737-57A1323, dated December 5, 2014. The service information describes procedures for repetitive inspections for cracks on the left and right wing front spar lower chord, inspar skin, and wing skin and corrective action if necessary. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this NPRM.

We are proposing this AD because we evaluated all the relevant information and determined the unsafe condition described previously is likely to exist or develop in other products of these same type designs.

This proposed AD would require accomplishing the actions specified in the service information described previously, except as discussed under “Differences Between this Proposed AD and the Service Information.” Refer to this service information for details on the procedures and compliance times.

The phrase “corrective actions” is used in this proposed AD. “Corrective actions” are actions that correct or address any condition found. Corrective actions in an AD could include, for example, repairs.

Boeing Alert Service Bulletin 737-57A1323, dated December 5, 2014, specifies to contact the manufacturer for instructions on how to repair certain conditions, but this proposed AD would require repairing those conditions in one of the following ways:

• In accordance with a method that we approve; or

• Using data that meet the certification basis of the airplane, and that have been approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) whom we have authorized to make those findings.

For Group 2 and 3 airplanes identified in Boeing Alert Service Bulletin 737-57A1323, dated December 5, 2014, paragraph (h) of this proposed AD specifies repeating the detailed inspection for cracks on the left and right wing front spar lower chord and inspar skin inspection, except in areas repaired in accordance with the procedures specified in paragraph (k) of this AD.

The FAA worked in conjunction with industry, under the Airworthiness Directive Implementation Aviation Rulemaking Committee (ARC), to enhance the AD system. One enhancement was a new process for annotating which steps in the service information are required for compliance with an AD. Differentiating these steps from other tasks in the service information is expected to improve an owner's/operator's understanding of crucial AD requirements and help provide consistent judgment in AD compliance. The steps identified as RC (required for compliance) in any service information identified previously have a direct effect on detecting, preventing, resolving, or eliminating an identified unsafe condition.

For service information that contains steps that are labeled as Required for Compliance (RC), the following provisions apply: (1) The steps labeled as RC, including substeps under an RC step and any figures identified in an RC step, must be done to comply with the AD, and an AMOC is required for any deviations to RC steps, including substeps and identified figures; and (2) steps not labeled as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an AMOC, provided the RC steps, including substeps and identified figures, can still be done as specified, and the airplane can be put back in an airworthy condition.

We estimate that this proposed AD affects 331 airplanes of U.S. registry.

We estimate the following costs to comply with this proposed AD:

We have received no definitive data that would enable us to provide cost estimates for the actions specified for the Group 1 airplane in this proposed AD.

We also have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this proposed 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 determined that this proposed AD would not have federalism implications under Executive Order 13132. This proposed AD would 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 this proposed regulation:

(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 proposes to amend 14 CFR part 39 as follows:

Authority for This Rulemaking

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

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2015-1622/Airspace Docket No. 15-AWP-9.” The postcard will be date/time stamped and returned to the commenter.

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

You may review the public docket containing the proposal, any comments received, and any final disposition in person in the Dockets Office (see the ADDRESSES section for the address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except federal holidays. An informal docket may also be examined during normal business hours at the Northwest Mountain Regional Office of the Federal Aviation Administration, Air Traffic Organization, Western Service Center, Operations Support Group, 1601 Lind Avenue SW., Renton, WA 98057.

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

This document proposes to amend FAA Order 7400.9Y, Airspace Designations and Reporting Points, dated August 6, 2014, and effective September 15, 2014. FAA Order 7400.9Y is publicly available as listed in the ADDRESSES section of this proposed rule. FAA Order 7400.9Y lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

The FAA is proposing an amendment to Title 14 Code of Federal Regulations (14 CFR) Part 71 by modifying Class D airspace, Class E surface area airspace, and Class E airspace extending upward from 700 feet above the surface at Stockton Metropolitan Airport, Stockton, CA. Decommissioning of the Manteca VOR/DME and subsequent review of the airspace revealed that airspace redesign is necessary for the safety and management of IFR operations for standard instrument approach procedures at the airport. The Class D and Class E surface areas would be expanded to within a 4.5-mile radius of Stockton Metropolitan Airport. The Class D extension to the southeast would be removed as it is no longer required for aircraft arriving and departing under IFR operations. Class E airspace extending upward from 700 feet above the surface would be modified to within a 7-mile radius of Stockton Metropolitan Airport.

Class D and Class E airspace designations are published in paragraph 5000, 6002, and 6005, respectively, of FAA Order 7400.9Y, dated August 6, 2014, and effective September 15, 2014, which is incorporated by reference in 14 CFR 71.1. The Class D and Class E airspace designations listed in this document will be published subsequently in the Order.

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

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

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

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part, A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish Class E airspace at the Iron Mountain VOR/DME navigation aid, Iron Mountain, MI.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2015-1871/Airspace Docket No. 15-AGL-10.” The postcard will be date/time stamped and returned to the commenter.

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

You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the office of the Central Service Center, 2601 Meacham Blvd., Fort Worth, TX 76137.

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

This document proposes to amend FAA Order 7400.9Y, Airspace Designations and Reporting Points, dated August 6, 2014, and effective September 15, 2014. FAA Order 7400.9Y is publicly available as listed in the ADDRESSES section of this proposed rule. FAA Order 7400.9Y lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action proposes to amend Title 14, Code of Federal Regulations (14 CFR), Part 71 by establishing Class E airspace extending upward from 1,200 feet above the surface at the Iron Mountain VOR/DME navigation aid, Iron Mountain, MI. This action would contain aircraft while in IFR conditions under control of Minneapolis ARTCC by safely vectoring aircraft from en route airspace to terminal areas.

Class E airspace areas are published in Paragraph 6006 of FAA Order 7400.9Y, August 6, 2014, and effective September 15, 2014, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document would be published subsequently in the Order.

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

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

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

Authority for This Rulemaking

The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would establish controlled airspace at the Newberry VOR/DME navigation aid, Newberry, MI.

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2015-1869/Airspace Docket No. 15-AGL-9.” The postcard will be date/time stamped and returned to the commenter.

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

You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the office of the Central Service Center, 2601 Meacham Blvd., Fort Worth, TX 76137.

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

This document proposes to amend FAA Order 7400.9Y, Airspace Designations and Reporting Points, dated August 6, 2014, and effective September 15, 2014. FAA Order 7400.9Y is publicly available as listed in the ADDRESSES section of this proposed rule. FAA Order 7400.9Y lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action proposes to amend Title 14, Code of Federal Regulations (14 CFR), Part 71 by establishing Class E en route domestic airspace extending upward from 1,200 feet above the surface at the Newberry VOR/DME navigation aid, Newberry, MI. This action would contain aircraft while in IFR conditions under control of Minneapolis ARTCC by safely vectoring aircraft from en route airspace to terminal areas.

Class E airspace areas are published in Paragraph 6006 of FAA Order 7400.9Y, August 6, 2014, and effective September 15, 2014, which is incorporated by reference in 14 CFR 71.1. The Class E airspace designation listed in this document would be published subsequently in the Order.

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

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

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

Authority for This Rulemaking

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

Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments, as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal. Communications should identify both docket numbers and be submitted in triplicate to the address listed above. Commenters wishing the FAA to acknowledge receipt of their comments on this notice must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to Docket No. FAA-2015-1649/Airspace Docket No. 15-AGL-6.” The postcard will be date/time stamped and returned to the commenter.

An electronic copy of this document may be downloaded through the Internet at http://www.regulations.gov. Recently published rulemaking documents can also be accessed through the FAA's Web page at http://www.faa.gov/airports_airtraffic/air_traffic/publications/airspace_amendments/. You may review the public docket containing the proposal, any comments received and any final disposition in person in the Dockets Office (see ADDRESSES section for address and phone number) between 9:00 a.m. and 5:00 p.m., Monday through Friday, except Federal holidays. An informal docket may also be examined during normal business hours at the office of the Central Service Center, 2601 Meacham Blvd., Fort Worth, TX 76137.

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

This document proposes to amend FAA Order 7400.9Y, Airspace Designations and Reporting Points, dated August 6, 2014, and effective September 15, 2014. FAA Order 7400.9Y is publicly available as listed in the ADDRESSES section of this proposed rule. FAA Order 7400.9Y lists Class A, B, C, D, and E airspace areas, air traffic service routes, and reporting points.

This action proposes to amend Title 14, Code of Federal Regulations (14 CFR), Part 71 by modifying Class D and E airspace in the Columbus, OH, area. Decommissioning of the Dan Scott NDB navigation aid and cancellation of the NDB approach at Ohio State University Airport has made this action necessary. Class E airspace designated as an extension to Class D would be removed as it is no longer required. Class E airspace extending upward from 700 feet above the surface at Port Columbus International Airport would be reconfigured due to the Dan Scott NDB decommissioning. The geographic coordinates of Ohio State University Airport and Port Columbus International Airport would be updated to coincide with the FAAs aeronautical database.

Class D and E airspace designations are published in Paragraph 5000, 6004, and 6005, respectively, of FAA Order 7400.9Y, dated August 6, 2014, and effective September 15, 2014, which is incorporated by reference in 14 CFR 71.1. The Class D and E airspace designations listed in this document will be published subsequently in the Order.

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

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

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

I. Summary of the Proposed Rule

The Gramm-Leach-Bliley Act (GLBA) 1 mandates that financial institutions provide their customers with initial and annual notices regarding their privacy policies. If financial institutions share certain customer information with particular types of third parties, the institutions are also required to provide an opportunity to opt out of the sharing. The Commission issued its rule implementing these provisions in 2000.2 The Dodd-Frank Wall Street Reform and Consumer Protection Act transferred GLBA privacy notice rulemaking authority, in part, to the Bureau; however, the Commission retains rulemaking authority over any financial institution that is a motor vehicle dealer predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both, as described in Section 1029 of the Dodd-Frank Act, 12 U.S.C. 5519 (hereafter, motor vehicle dealers).

The Commission proposes to revise its Privacy Rule, 16 CFR part 313, in two ways. First, in light of the transfer of rulemaking authority for certain financial institutions to the Bureau, the Commission proposes to revise the explanation of the scope of the Rule and to tailor the examples provided in the Rule's Definitions section describing entities over which the Commission has retained rulemaking authority. The Commission believes that revising these provisions will eliminate extraneous information, clarify the Rule's applicability, and reduce confusion as to entities covered by the Rule. The Rule also retains several examples explaining the types of entities covered by the Safeguards Rule, 16 CFR part 314. Second, the Commission proposes to provide an alternative means for covered motor vehicle dealers to fulfill their obligation under the Privacy Rule to provide notice of their privacy policies. Under the proposal, motor vehicle dealers that do not engage in certain types of information-sharing activities would no longer be required to mail an annual privacy notice if they clearly and conspicuously convey, as part of another mandated or legally permissible notice or disclosure, that their privacy notice is available on their publicly accessible Web site. This proposed revision is consistent with changes made in an October 28, 2014, rulemaking by the Bureau, which has rulemaking authority over depository institutions and many non-depository institutions.3

The Commission believes that the proposed changes are consistent with those issued by the Bureau, and will help avoid consumer confusion and ensure that the requirements for motor vehicle dealers covered by the Rule are consistent with the GLBA's privacy provisions for other financial institutions. Such changes may also streamline the flow of information to consumers, while easing the burden on motor vehicle dealers of providing annual notices. The Commission invites comment on the proposed rule revisions generally and on the specific issues outlined throughout Section IV. In addition, the Commission requests comment on whether, and the extent to which, the FTC's Privacy Rule applicable to motor vehicle dealers should be consistent with the rule adopted by the Bureau, or if there are elements that should differ.

The Commission seeks comment on the proposal through August 17, 2015.

The GLBA was enacted in 1999.4 The GLBA, among other things, provides a framework for regulating the privacy practices of a broad range of entities. The GLBA requires that financial institutions provide their customers with initial and annual notices regarding their privacy policies, and allow their customers to opt out of sharing their information with certain nonaffiliated third parties. Covered entities include, for example, payday lenders, mortgage brokers, check cashers, debt collectors, real estate appraisers, certain motor vehicle dealers and remittance transfer providers.

Rulemaking authority to implement the GLBA's privacy provisions was initially spread among many agencies. The Federal Reserve Board (Board), the Office of Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS) jointly adopted final rules to implement the notice requirements of the GLBA in 2000.5 The Commission, the National Credit Union Administration (NCUA), Securities and Exchange Commission (SEC), and Commodity Futures Trading Commission (CFTC) were part of the same interagency process, but issued their rules separately.6 In 2009, all these agencies issued a joint final rule with a model form that financial institutions could use, at their option, to provide the required initial and annual privacy disclosures.7

In 2011, the Dodd-Frank Act 8 transferred the GLBA's privacy notice rulemaking authority from the Board, NCUA, OCC, OTS, the FDIC, and the Commission (in part) to the Bureau. The Bureau then restated the implementing regulations in Regulation P, 12 CFR part 1016, in late 2011 (Regulation P).9 However, under the Dodd-Frank Act, the Commission retained rulemaking authority for motor vehicle dealers described in section 1029 of the Dodd-Frank Act, 12 U.S.C. 5519. Thus, in 2012, the Commission issued a notice that it was retaining the implementing regulations governing privacy notices for motor vehicles dealers, at 16 CFR part 313.10

Despite the transfer of general rulemaking authority for the Privacy Rule to the CFPB, the Commission and other agencies retained their existing enforcement authority under the GLBA.11 In addition, the SEC and CFTC retained rulemaking authority with respect to securities and futures-related companies, respectively.12 Accordingly, as part of this rulemaking process, the Commission has consulted and coordinated, or offered to consult, with those agencies who have rulemaking and/or enforcement authority under the GLBA, including the Bureau, SEC, CFTC and the National Association of Insurance Commissioners (NAIC).13

As noted, the GLBA and the FTC Privacy Rule require that certain covered motor vehicle dealers provide consumers with notices describing their privacy policies. Section 503 of the GLBA and 16 CFR 313.4 require covered entities to provide an initial notice of these policies, and then “provide a clear and conspicuous notice to customers that accurately reflects [their] privacy policies and practices not less than annually during the continuation of the customer relationship.” 14

Section 502 of the GLBA and 16 CFR 313.6(a)(6) require that initial and annual notices inform customers of their right to opt out of the sharing of nonpublic personal information with some types of nonaffiliated third parties. For example, a customer has the right to opt out of allowing a motor vehicle dealer to sell her name and address to a nonaffiliated auto insurance company. On the other hand, a motor vehicle dealer is not required to allow consumers to opt out of the dealer's sharing involving third-party service providers, joint marketing arrangements, maintenance and servicing of accounts, securitization, law enforcement and compliance, reporting to consumer reporting agencies, and certain other activities that are specified in the statute and regulation.15 If a motor vehicle dealer limits its sharing to uses that do not trigger opt-out rights, it may provide an annual privacy notice to its customers that does not include information regarding opt-out rights.

Motor vehicle dealers also may include in the annual privacy notice information about certain consumer opt-out rights related to affiliate sharing under the FCRA. First, section 603(d)(2)(A)(iii) of the FCRA allows the sharing of a consumer's information among affiliates, but only if the consumer is notified of such sharing and is given an opportunity to opt out.16 Section 503(c)(4) of the GLBA and the Privacy Rule generally require motor vehicle dealers to incorporate any notifications and opt-out disclosures provided pursuant to section 603(d)(2)(A)(iii) of the FCRA into their initial and annual privacy notices.17

Second, section 624 of the FCRA and 16 CFR 680 (the Affiliate Marketing Rule) provide that an affiliate of a motor vehicle dealer that receives certain information 18 about a consumer from the dealer may not use that information for marketing purposes, unless the consumer is provided with an opportunity to opt out of that use.19 This requirement governs the use of information by an affiliate, not the sharing of information among affiliates, and thus is distinct from the affiliate sharing opt-out discussed above. The Affiliate Marketing Rule permits (but does not require) motor vehicle dealers to incorporate any opt-out disclosures provided under section 624 of the FCRA and the Affiliate Marketing Rule into the initial and annual privacy notices required by the GLBA.20

Finally, § 313.6(a)(8) of the Privacy Rule requires that the notices also briefly describe how motor vehicle dealers protect the nonpublic personal information they collect and maintain.

In December 2011, the Bureau issued a Request for Information seeking specific suggestions for streamlining regulations that were transferred to the Bureau from other Federal agencies (Streamlining RFI), including the annual privacy notice requirement.21

The Bureau received numerous comments from industry urging the Bureau to eliminate or reduce the annual notice requirement.22 Industry argued that most customers ignore annual privacy notices; the content of the disclosures provides little benefit when customers have no right to opt out of information sharing; current distribution of the notices imposes significant costs; and other methods of delivery could effectively convey the information to customers at a lower cost. Industry commenters suggested that the Bureau eliminate or ease the annual notice requirement if businesses' privacy policies have not changed and they do not share nonpublic personal information beyond the exceptions allowed by the GLBA.23 Consumer advocacy groups highlighted the benefit customers receive from printed annual privacy notices, which may remind customers of privacy rights that they may not have exercised previously.24

In November of 2013, the Bureau published a study assessing the effects of certain deposit regulations on financial institutions' operations.25 This study provided operational insights from seven banks about their annual privacy notices. All seven participants provided the annual notice as a separate mailing, which resulted in higher costs for postage, materials, and labor than if the notice were mailed with other material. Some of these participants separately mailed their notices to ensure that their disclosures are “clear and conspicuous,” 26 even though 2009 guidance from the eight agencies promulgating the model privacy form explained that a separate mailing is not required.27 As a result of its Streamlining RFI, study, and its outreach to industry and consumer groups, in May 2014, the Bureau issued a proposed rule to amend its Regulation P to allow financial institutions to notify consumers that a privacy notice was available online, in certain enumerated circumstances. The comment period closed on July 14, 2014. As noted above, the Bureau finalized its rulemaking in October 2014.28

The Commission adopted the scope and definitions in the existing Privacy Rule at a time when it had rulemaking authority for the Privacy Rule over a broader group of non-bank “financial institutions” as defined by the GLBA. While the Dodd-Frank Act did not change the Commission's enforcement authority for the privacy notice obligations of the GLBA, the Dodd-Frank Act amended the Commission's rulemaking authority under the GLBA such that its Privacy Rule only applies to motor vehicle dealers. For other types of financial institutions over which the Commission has enforcement authority under the GLBA, the Commission now enforces the Bureau's Regulation P. The amendments in the Dodd-Frank Act necessitate certain technical revisions to the Privacy Rule to ensure that the regulation is consistent with the text of the amended GLBA.29 Specifically, the Commission proposes to modify the Scope and Definitions section of the Privacy Rule to provide clearer guidance to financial institutions that are covered motor vehicle dealers.

Although the Dodd-Frank Act altered the Commission's rulemaking authority with respect to the Privacy Rule, it did not alter the Commission's rulemaking authority for the GLBA's Standards for Safeguarding Customer Information, at 16 CFR part 314 (the Safeguards Rule). For the Safeguards Rule, the Commission continues to have rulemaking authority over a broad range of non-bank financial institutions. The Safeguards Rule, however, incorporates by reference the definitions contained in the Privacy Rule, including all of the examples of financial institutions listed in the existing Privacy Rule.30 Accordingly, the Commission proposes to change the Privacy Rule definitions to make clear that, for the purpose of the Privacy Rule, the only examples applicable in the definitions are those related to motor vehicle dealers; for the purpose of the Safeguards Rule, however, all existing examples in the Privacy Rule continue to apply.

The Commission also proposes changes to the Privacy Rule provisions governing how motor vehicle dealers should deliver annual privacy notices. These changes are consistent with changes adopted by the Bureau for those financial institutions subject to the Bureau's rulemaking authority. Under certain limited circumstances, these changes to the Privacy Rule would allow motor vehicle dealers to convey clearly and conspicuously—through another mandated or legally permissible notice or disclosure—that their privacy notice is available on their Web site (hereafter, the alternative delivery method).31 If, however, a motor vehicle dealer has made changes to its privacy practices or shares its customers' nonpublic personal information with nonaffiliated third parties, the dealer generally could not avail itself of this alternative delivery method.32

The Commission anticipates that use of the alternative delivery method that meets the requirements discussed below could inform customers of their motor vehicle dealer's privacy policies effectively and at a lower cost than the current widespread method of mailing annual privacy notices. The cost savings could benefit both consumers and businesses.33

The Commission has also considered the potential impact of its proposed rule change on consumer privacy. The proposal would not affect the actual collection or use of consumers' nonpublic personal information by motor vehicle dealers, and consumers would continue to get the information and opt-out rights they are entitled to under the statute. Moreover, the proposal would enable consumers to review a motor vehicle dealer's policy at her own convenience any time during the year. For example, a motor vehicle dealer choosing to use the alternative method would have to post the privacy notice continuously on its Web site, thus enabling consumers to access the privacy notice throughout the year rather than having to wait for an annual mailing.

Section 313.1(b) outlines the scope of the Privacy Rule. The existing Rule describes the types of entities to which the Privacy Rule was applicable prior to the enactment of the Dodd-Frank Act. Those entities included—but were not limited to—financial institutions such as “payday” lenders, mortgage brokers, check cashers, and tax preparation firms, but did not include entities that were subject to the rulemaking authority of another agency.34 With the exception of motor vehicle dealers, the entities formerly subject to 16 CFR part 313 are now subject to the Bureau's Regulation P.35

The Commission seeks to revise the Privacy Rule to make clear that it applies only to motor vehicle dealers. Accordingly, the Commission proposes to revise § 313.1(b) to remove examples of entities to which the FTC's Privacy Rule no longer applies. The Commission also proposes to remove the reference in the Privacy Rule's scope to “other persons.” Although the Commission continues to have enforcement authority over “other persons” covered by the CFPB's rule, the Commission no longer has rulemaking authority for the Privacy Rule over “other persons.” In addition, the Commission proposes to eliminate from § 313.1(b) the note indicating that: (1) The Privacy Rule does not modify, limit, or supersede the standards under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and (2) if a financial institution that is an institution of higher education is in compliance with the Federal Educational Rights and Privacy Act (FERPA) and its implementing regulations, such institution shall be deemed in compliance with 16 CFR part 313. The Commission believes it unlikely that this note is applicable to motor vehicle dealers but requests comment as to whether motor vehicle dealers ever engage in practices that require them to comply with HIPAA or FERPA. In addition, the Commission invites general comment on the proposed changes to the description of the scope of the Privacy Rule.

The Definitions section of the Privacy Rule includes a number of examples designed to provide guidance regarding the scope of terms used in the Privacy Rule. The Commission proposes to revise these definitions so that they provide accurate guidance regarding the Rule's scope. Specifically, the Commission proposes to revise § 313.3 to make clear that certain examples in five definitions are not applicable to motor vehicle dealers for purposes of the Privacy Rule but continue to apply for purposes of the Safeguards Rule. Similarly, the Commission proposes to revise the definition of “you,” which currently includes entities to which the Privacy Rule no longer applies.

First, for purposes of the Privacy Rule, proposed § 313.3(e)(2) no longer includes, as examples of “consumers,” those consumers seeking financial advisory services 36 or consumers with which the financial institution has a relationship related to a trust.37 The examples are retained for purposes of the Safeguards Rule, 16 CFR part 314.

Second, for purposes of the Privacy Rule, proposed § 313.3(i)(2) no longer includes, as examples of a “continuing relationship” with a customer, a relationship in which the financial institution holds an investment product for the consumer; 38 enters into an agreement to arrange or broker a home mortgage loan; 39 provides financial, investment, or economic advisory services to a consumer; 40 provides tax preparation or credit counseling services; 41 provides career counseling for seeking employment with a financial institution or a financial, accounting or audit department of a company; 42 purchases an account, on which the consumer has an obligation, from another financial institution; 43 or provides real estate settlement services.44 The examples are retained for purposes of the Safeguards Rule.

Third, for purposes of the Privacy Rule, proposed § 313.3(i)(2) no longer includes, as examples of “no continuing relationship” with a customer, a relationship in which the financial institution sells airline tickets 45 or sells checks for a personal checking account.46 The examples are retained for purposes of the Safeguards Rule.

Fourth, for purposes of the Privacy Rule, proposed § 313.3(k)(2) no longer includes, as examples of “financial institutions,” retailers that extend credit by issuing their own credit cards to consumers; career counselors specializing in finance, accounting or audit employment; businesses that print and sell checks; businesses that regularly wire money to and from consumers; check cashing businesses; accountants or other tax preparation services that are in the business of completing tax returns; businesses that operate travel services in connection with financial services; businesses providing real estate settlement services; mortgage brokers, or investment advisory companies and credit counseling services.47 The examples are retained for purposes of the Safeguards Rule.

Fifth, for purposes of the Privacy Rule, proposed § 313.3(k)(5) no longer includes as examples of “entities that are not significantly engaged in financial activities,” retailers that only extend credit via occasional “lay away” and deferred payment plans; merchants that allow individuals to “run a tab”; or grocery stores that allow individuals to cash checks or write checks for a higher amount than a purchase and obtain cash back.48 The examples are retained for purposes of the Safeguards Rule. The Commission invites comment regarding whether any of the examples that the Commission proposes to eliminate for purposes of the Privacy Rule are applicable to motor vehicle dealers. The Commission also seeks comment regarding the examples that remain for purposes of the Privacy Rule in the definitions of proposed § 313.3 and the applicability of such examples to motor vehicle dealers.

The existing Privacy Rule generally defines “you” as a financial institution over which the Commission has enforcement jurisdiction under the GLBA. Because this definition refers to the Commission's enforcement authority rather than its rulemaking authority, the definition is overbroad in light of the amendments to the GLBA discussed above. Therefore, the Commission proposes to revise the definition of “you” so that for purposes of the Privacy Rule it applies to only those entities over which the Commission has rulemaking authority. For purposes of the Safeguards Rule, the definition of “you” remains unchanged.

The Commission requests comment on the proposed changes to the definition of “you.” The Commission notes that the purpose of the changes to the Privacy Rule scope and definitions serve solely to conform the Privacy Rule to the revisions in the Dodd-Frank Act as to the scope of the Commission's rulemaking authority. These changes do not reflect any change in the Commission's authority to enforce the Privacy Rule or Regulation P.

Section 313.9(a) of the Rule requires that motor vehicle dealers provide initial and annual privacy notices so that each consumer “can reasonably be expected” to receive actual notice in writing or, if the consumer agrees, electronically. Section 313.9(b) provides examples of delivery methods that would result in reasonable expectation of actual notice, including hand delivery and delivery by mail. The examples also include posting on a Web site for customers who: (1) Conduct transactions electronically, and (2) acknowledge receipt of the notice as a necessary step to obtaining a particular financial product or service.49 Section 313.9(c) further allows delivery of the annual notice through a Web site, but only if a customer uses the dealer's Web site to access financial products and services and consents to receive notices at the Web site.50 Below, the Commission describes proposed changes to § 313.9(c) that would allow motor vehicle dealers to utilize an alternative delivery method for the annual notices. In some circumstances, motor vehicle dealers could substitute their annual privacy notices with a clear and conspicuous disclosure—as part of an account statement, coupon book, or other legally-required or permitted notice or disclosure—stating that their privacy notice is available on their Web site and will be mailed to the customer on request. As required by the GLBA, this substitute disclosure would have to be provided at least annually.

The Commission seeks information concerning the effect on customer privacy rights if motor vehicle dealers were to use the alternative delivery method rather than their current delivery methods. Relatedly, the Commission requests comment on how often customers currently read annual privacy notices under the Privacy Rule and how frequently the notices would be read if they were provided pursuant to the proposed alternative delivery method. The Commission further requests comment on whether the proposed alternative delivery method would be effective in reducing the burden on motor vehicle dealers of mailing hard copy privacy notices. In particular, the Commission requests information regarding how many annual privacy notices motor vehicle dealers provide.

Lastly, the Commission notes that the current Rule prescribes certain circumstances under which motor vehicle dealers can provide privacy notices electronically or via online posting. For example, the Rule allows covered entities to provide notices electronically if the consumer agrees or to provide notice online if the consumer is required to acknowledge receipt of the notice. See 16 CFR 313.9. The Commission invites comment regarding how often privacy notices are delivered electronically or posted online under the existing Rule and whether companies that currently provide notices electronically will likely experience cost savings under the proposed new rule requirements.

Proposed § 313.9(c)(2)(i) describes the circumstances under which a motor vehicle dealer may use the alternative delivery method summarized above.51

Proposed § 313.9(c)(2)(i)(A) would set forth the first condition for using the alternative delivery method: That the motor vehicle dealer must not share the customer's information with nonaffiliated third parties in a manner that triggers the opt-out requirement under the GLBA. Thus, for example, a motor vehicle dealer may use the alternative delivery method if it shares the customer's information with nonaffiliated third parties as permitted by §§ 313.13 (for joint marketing), 313.14 (for processing and servicing transactions), and 313.15 (with consent, or for security purposes, fraud prevention, legal purposes or fiduciary purposes). It may not use the alternative delivery method, for example, if it shares the customer's nonpublic personal information with a nonaffiliated insurance company for marketing purposes. The Commission believes the alternative delivery method will generally reduce the burden of compliance for motor vehicle dealers, while still mandating the use of the current delivery method to ensure that customers have direct notice of their opt-out rights, where they exist.

The Commission invites comment on the number of motor vehicle dealers that would not be able to take advantage of the alternative delivery method because they share data with nonaffiliated third parties. The Commission further invites comment on whether customers with opt-out rights pursuant to the Privacy Rule should continue to receive the annual privacy notice pursuant to the current delivery method or if motor vehicle dealers should be able to utilize the proposed alternative delivery method for such customers.

Proposed § 313.9(c)(2)(i)(B) would set forth the second condition for using the alternative delivery method for the annual privacy notice: That the motor vehicle dealer not include on its annual notice an opt-out under section 603(d)(2)(A)(iii) of the FCRA.52 As discussed above, FCRA section 603(d)(2)(A)(iii) allows sharing of certain consumer information with affiliates, but only if the motor vehicle dealer provides the consumer with notice and an opportunity to opt out of the information sharing. Although this is a requirement of the FCRA, section 503(b)(4) of the GLBA and § 313.6(a)(7) of the Privacy Rule require a motor vehicle dealer's privacy notice to include any opt-out rights provided under section 603(d)(2)(A)(iii) of the FCRA. Accordingly, to the extent that a motor vehicle dealer shares customer information with affiliates for marketing purposes, thus triggering the obligation to include an opt-out pursuant to FCRA section 603(d)(2)(A)(iii), the motor vehicle dealer cannot take advantage of the alternative delivery method.53 As noted above, the Commission believes that directly reminding consumers of any opt-out rights at least annually will be important for consumers. This is true regardless whether the opt-out right is provided under the GLBA or the FCRA.

The Commission invites comment on the extent to which different motor vehicle dealers provide a FCRA section 603(d)(2)(A)(iii) opt-out and thus would be precluded from using the proposed alternative delivery method. The Commission further invites comment as to whether customers with opt-out rights under this section of the FCRA benefit from receiving the annual privacy notice pursuant to the current delivery method or could receive the notice via the proposed alternative delivery method.

Proposed § 313.9(c)(2)(i)(C) would contain the third condition for using the alternative delivery method, related to the requirements of section 624 of the FCRA 54 and the Affiliate Marketing Rule, 16 CFR part 680. FCRA section 624, as implemented by the Affiliate Marketing Rule, provides that a person may not use certain information about a consumer that it receives from an affiliate to market to that consumer unless the consumer receives notice and the opportunity to opt out of such marketing.55

In contrast to the FCRA section 603(d)(2)(A)(iii) notice and opt-out right concerning affiliate sharing, which is generally required to be included on the GLBA annual privacy notice, the FCRA section 624 (and Affiliate Marketing Rule) notice and opt-out right concerning marketing by affiliates is not required to be included on that notice. However, the Affiliate Marketing Rule notice and opt-out right may be included on the privacy notice.56

The Commission proposes—under § 313.9(c)(2)(i)(C)—that a motor vehicle dealer that is required to provide a notice and opt out under the Affiliate Marketing Rule may use the alternative delivery method, provided that the motor vehicle dealer has previously satisfied the Affiliate Marketing Rule requirements or does not use the annual privacy notice as the sole means of providing notice to customers of that opt-out right.57 Alternatively, the motor vehicle dealer could continue to use the current delivery method and include the Affiliate Marketing opt-out on the annual privacy notice, with no separate notice required.

The Commission invites comment on the extent to which motor vehicle dealers include the Affiliate Marketing Rule opt-out on their Privacy Rule privacy notices and thus would be precluded from using the proposed alternative delivery method. The Commission further invites comment on whether imposing this condition on using the alternative delivery method is beneficial to consumers.

Proposed § 313.9(c)(2)(i)(D) would present the fourth condition for using the alternative delivery method: That the substantive information a motor vehicle dealer is required to convey on its annual privacy notice has not changed since the immediately previous privacy notice (whether initial, annual, or revised) to the customer.58 The Commission believes that the current delivery method is likely less useful if the customer has already received a privacy notice, and the motor vehicle dealer's sharing practices remain generally unchanged since that previous notice. Proposed § 313.9(c)(2)(i)(D) lists the specific disclosures of the privacy notice that must not change in order for a motor vehicle dealer to take advantage of the alternative delivery method. They are:

• The categories of nonpublic personal information that the motor vehicle dealer collects (§ 313.6(a)(1) and (a)(4));

• the categories of nonpublic personal information that the motor vehicle dealer discloses (§ 313.6(a)(2));

• the categories of affiliates and nonaffiliated third parties to whom the motor vehicle dealer discloses nonpublic personal information, other than to parties that administer or enforce transactions, service or process financial products, or maintain or service accounts, under § 313.14 and to parties for security, fraud prevention, legal purposes, or similar purposes under § 313.15 (§ 313.6(a)(3));

• if the motor vehicle dealer discloses nonpublic personal information to a nonaffiliated third party for joint marketing as set forth under § 313.13, a separate statement of the categories of information disclosed and the categories of third parties to whom the disclosures were made (§ 313.6(a)(5));

• the motor vehicle dealer's policies and practices with respect to protecting the confidentiality and security of nonpublic personal information (§ 313.6(a)(8)); and

• the description of the purpose for sharing with service providers and other entities that conduct fraud prevention, security, or similar services (§ 313.6(a)(9)).

The Commission emphasizes that a motor vehicle dealer would be precluded from using the alternative delivery method only if it made substantive changes to the information disclosed on the previous written notice sent to the consumer. Stylistic changes in the wording of the notice that do not denote a change in practices would not prevent a motor vehicle dealer from using the alternative delivery method. Nor would the proposed section prohibit a motor vehicle dealer from using the alternative delivery method if the dealer eliminated categories of information it disclosed or categories of third parties to whom it disclosed information. Any other substantive change to its information sharing practices would preclude use of the alternative delivery method; however, the motor vehicle dealer could use the alternative delivery method to meet its next annual privacy notice requirement if it first sent a revised privacy notice pursuant to the standard delivery requirements.

The Commission invites comment about the effect on customers of conditioning availability of the alternative delivery method on there being no change from the previous year's notice. The Commission further invites comment on how often motor vehicle dealers change their privacy notice such that they would be precluded from using the proposed alternative delivery method. Lastly, the Commission invites comment on the extent to which a motor vehicle dealer's changing its data security policy should preclude it, like financial institutions covered by Regulation P, from using the proposed alternative delivery method.

The last condition for use of the alternative delivery method, which would be set forth in proposed § 313.9(c)(2)(i)(E), requires that the motor vehicle dealer use the model privacy form for its annual privacy notice. Currently, the Privacy Rule does not require use of the model notice because the statute under which it was promulgated only required that regulators give financial institutions the option to use such a model notice.59

However, the Commission proposes to permit use of the alternative delivery method only if a motor vehicle dealer uses the model privacy form for its annual privacy notice. This approach would likely incentivize use of the model notice, which consumer research has shown to be effective in communicating information.60 The Commission does not believe that the one-time burden of creating a model notice will place an undue burden on motor vehicles dealers, who will likely be able to save costs by not sending annual privacy notices.

The Commission notes that the model form accommodates information that may be required by state or international law, as applicable, in a box called “Other important information.” 61 Accordingly, the Commission expects that a motor vehicle dealer that has additional privacy disclosure obligations pursuant to state or international law would still be able to use the model form in order to take advantage of the proposed alternative delivery method. The Commission invites comment on related state or international law requirements and their interaction with the model privacy notice, as well as the proposed condition on the alternative delivery method in general.

The Commission contemplates that adoption of the model privacy form may require changes to the wording and layout of the privacy notice, but not to the information conveyed. Thus, adoption of the model notice would not constitute a change to the prior year's notice that would preclude use of the alternative delivery method under proposed § 313.9(c)(2)(i)(D).62 The Commission solicits comment on this issue. The Commission further invites comment on the extent to which motor vehicle dealers currently use the model privacy notice, and if they do not, whether they would choose to adopt it in order to take advantage of the proposed alternative delivery method. Lastly, the Commission invites comment on the benefit to customers of receiving the model privacy notice rather than a privacy notice in a non-standard format.

Finally, the Commission generally invites comment on the conditions in proposed § 313.9(c)(2)(i)(A) through (E) and whether any of those conditions should not be required or whether other conditions should be added.

Proposed § 313.9(c)(2)(ii) sets forth the mechanics of the alternative delivery method for annual notices.

Proposed § 313.9(c)(2)(ii)(A) would set forth the first component of the alternative delivery method: that a motor vehicle dealer inform the customer of the availability of the annual privacy notice on its Web site. Under this proposed subsection, a motor vehicle dealer must clearly and conspicuously convey, not less than annually—on an account statement, coupon book, or notice or disclosure the institution is required or expressly permitted to use under any other provision of law—three pieces of information: (1) That its privacy notice has not changed, (2) that the notice is available on its Web site, and (3) that a hard copy of the notice will be mailed to customers if they call to request one.

Proposed § 313.9(c)(2)(ii)(A) states that this notice must be “clear and conspicuous,” which is defined as meaning “reasonably understandable” and “designed to call attention to the nature and significance of the information.” 63 The Commission believes that the existing examples in § 313.3(b)(2)(i) and (ii) for the “reasonably understandable” and “designed to call attention” requirements likely would provide sufficient guidance on ways to make the notice clear and conspicuous. For example, the Rule states that, if the notice is combined with other information, it must contain “distinctive type size, style, and graphic devices, such as shading or sidebars.” 64

Although the Commission proposes to require that motor vehicle dealers convey this “notice of availability” not less than annually, they may elect to convey it more often (e.g., quarterly or monthly). The Commission invites comment on whether the approach used for notice of availability for motor vehicle dealers should differ from that for the financial institutions covered by Regulation P. In particular, the Commission is interested in comment on: (1) Whether the proposed example notice of availability would make the alternative delivery method more feasible for motor vehicle dealers to implement, (2) whether the illustrative elements not specifically required by the Rule should be so required, and (3) whether the proposed language would be effective in informing customers of the availability of the privacy notice.

As noted, proposed § 313.9(c)(2)(ii)(A) would require the notice of availability to be conveyed on an account statement, coupon book, or notice or disclosure the motor vehicle dealer is required or expressly and specifically permitted to issue under any other provision of law. An account statement would include periodic statements or billing statements. A coupon book refers to a book of payment coupons typically included with an installment loan. The Commission believes customers are likely to read account statements or coupon books that directly concern the status of their account.

A “notice or disclosure the institution is required or expressly and specifically permitted to issue under any other provision of law” would include disclosures that are expressly and specifically permitted by law, even if not required. This language builds on the language used in the Affiliate Marketing Rule, which provides that “a notice required by this subpart may be coordinated and consolidated with any other notice or disclosure required to be issued under any other provision of law. . . .” 65 The Commission notes that a notice of availability would not satisfy the proposed rule requirement if included on advertising materials that were neither required nor specifically permitted by law. The Commission invites comment on the benefits and costs of requiring the notice of availability to be included on an account statement, coupon book, or document required or expressly and specifically permitted under any other provision of law. The Commission further requests comment as to the best documents on which to place the notice of availability, particularly in light of what consumers are likely to read.

The Commission further notes that where two or more motor vehicle dealers provide a joint privacy notice pursuant to § 313.9(f), the proposal would require each motor vehicle dealer to separately provide the notice of availability. The Commission invites comment on how often motor vehicle dealers jointly provide privacy notices and whether the proposed alternative delivery method would be feasible for such jointly issued notices.

Proposed § 313.9(c)(2)(ii)(A) also would require the institution to state on the notice of availability that its privacy policy has not changed, which, as discussed in detail below, is a condition that a dealer must satisfy in order to be able to use the alternative delivery method. This proposed requirement can help customers assess whether they are interested in reading the policy. This statement would always be accurate if the alternative delivery method is used correctly, since a motor vehicle dealer could not use the alternative delivery method if its annual privacy notice had changed.

The proposal would further require that the statement include a specific web address that takes customers directly to the page where the privacy notice is available. The section also would require that the web address conveyed on the notice of availability provide the customer with direct access to the page that contains the privacy notice, so that the customer need not click on any additional links.

Next, proposed § 313.9(c)(2)(ii)(A) would require that the notice of availability include a telephone number that a customer can call to request a hard copy of the annual privacy notice. This number need not be a dedicated number established for this purpose alone. This requirement is intended to assist customers who do not have internet access or would prefer to receive a hard copy of the privacy notice. The Commission encourages motor vehicle dealers that already maintain a toll-free number to use that number in the statement required by § 313.9(c)(2)(ii)(A), to simplify the process for a customer to call and request a mailed copy of the privacy notice.

As an alternative, the Commission invites comment on whether the approach used for notice of availability for motor vehicle dealers should differ from that for the financial institutions covered by Regulation P. Specifically, the Commission seeks comment on the advantages and disadvantages of requiring motor vehicle dealers to provide a dedicated telephone number for privacy notice requests so that customers can easily request a hard copy of the notice without navigating a complicated automated telephone menu. The Commission also invites comment on whether it should require a dedicated toll-free number for this purpose.

Proposed § 313.9(c)(2)(ii)(B) would set forth the second component of the alternative delivery method: that the motor vehicle dealer post its current privacy notice continuously and in a clear and conspicuous manner on a page of the institution's Web site on which the only content is the privacy notice. The Commission believes that, were the notice included on a page with other content, such as other disclosures or promotions for products, that content could detract from the prominence of the notice and make it less likely that a customer would actually read it.66 The Commission believes that this requirement is feasible for most motor vehicle dealers, and for a motor vehicle dealer that does not currently post its annual notice on its Web site, creating a specific page for this purpose is a one-time process that could be implemented without significant cost.

This section would further require that the Web page that contains the privacy notice be accessible to the customer without requiring the customer to provide any information such as a login name or password or agree to any conditions to access the page. This provision is intended to make accessing the privacy notice on an institution's Web site as simple and straightforward as possible.

The Commission invites comment regarding the prevalence of motor vehicle dealers that currently maintain Web sites, whether they currently post the Privacy Rule notice on those Web sites, and if they do not, how costly it would be to do so. The Commission additionally seeks comment on whether motor vehicle dealers provide different privacy notices for different groups of customers, such that posting multiple privacy notices on the dealer's Web site may create confusion as to which is the relevant privacy notice that is applicable to a particular customer. The Commission seeks comment on the relative benefit or harm to customers of accessing the privacy notice on a motor vehicle dealer's Web site as proposed. Lastly, the Commission invites comment as to whether motor vehicle dealers should be required to provide specific reminder information to a consumer about that consumer's previously established preferences—for example, whether the consumer has already opted out—via a login and password-protected section of the Web site.

Proposed § 313.9(c)(2)(ii)(C) would set forth the third component of the alternative delivery method: That the motor vehicle dealer mail its current privacy notice to those customers who request it by telephone within ten calendar days of such request. The Commission proposes this requirement to assist customers without internet access and customers with internet access who would prefer to receive a hard copy of the notice. This requirement makes clear that a motor vehicle dealer may not, for example, wait to mail the privacy notice with another document, such as a quarterly statement. Motor vehicle dealers may not charge the customer for delivering the annual notice, given that delivery of the annual notice is required by statute and regulation.

The Commission invites comment on the cost associated with mailing privacy notices on request, and whether mailing of the privacy notice within ten calendar days of a request is feasible for motor vehicle dealers. The Commission further requests comment on whether requiring mailing within ten calendar days is sufficient to ensure that customers receive privacy notices in a timely manner.

Proposed § 313.9(c)(2)(iii) would provide an example of a notice of availability that satisfies § 313.9(c)(2)(ii)(A). The Commission intends this example to provide clear guidance on permissible content for the notice of availability to facilitate compliance. The content of the example notice of availability in proposed § 313.9(c)(2)(iii) draws from language in the existing model privacy notice in Part 313, App. A, which was previously subject to consumer testing.67 The proposed example would include the heading “Privacy Notice” in boldface (or otherwise emphasized) on the notice of availability. The proposed example further would state that Federal law requires the motor vehicle dealer to tell customers how it collects, shares, and protects their personal information; this language mirrors the “Why” box on the model privacy notices.68 The remaining portion of the proposed example would inform customers that the motor vehicle dealer's privacy notice has not changed, the address of the Web site at which customers can access the privacy notice, and the telephone number to call to request a free copy of the notice. The Commission notes that the proposed example contains certain elements that would satisfy proposed § 313.9(c)(2), but other language and formatting techniques could also satisfy that section. These elements include titling the notice of availability “Privacy Notice,” including a statement that “Federal law requires the motor vehicle dealer to tell customers how it collects, shares, and protects their personal information,” and stating that getting a copy of the notice is “free” to the consumer.

The Commission invites comment on whether the proposed example notice of availability for motor vehicle dealers should differ from that for financial institutions covered by Regulation P. In particular, the Commission is interested in comment on: (1) Whether the proposed example notice of availability would make the alternative delivery method more feasible for motor vehicle dealers to implement, (2) whether the elements not specifically required by the rule should be so required, and (3) whether the proposed language would be effective in informing customers of the availability of the privacy notice.

The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act of 1996, requires each agency to consider the potential impact of its regulations on small entities, including small businesses, small governmental units, and small not-for-profit organizations. The RFA generally requires an agency to conduct an initial regulatory flexibility analysis (IRFA) and a final regulatory flexibility analysis (FRFA) 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.69

An IRFA is not required here because the proposal, if adopted, would not have a significant economic impact on a substantial number of small entities. The Commission does not expect the proposal to impose costs on small entities. All methods of compliance under current law will remain available to small entities if the proposal is adopted. Thus, a small entity that is in compliance with current law need not take any different or additional action if the proposal is adopted. In addition, as discussed above, the Commission believes that the proposed alternative method would allow many motor vehicle dealers to reduce their costs.

Accordingly, the Commission certifies that this proposal, if adopted, would not have a significant economic impact on a substantial number of small entities.

Under the Paperwork Reduction Act of 1995 (PRA),70 Federal agencies are generally required to seek Office of Management and Budget (OMB) approval for information collection requirements prior to implementation. Under the PRA, the Commission may not conduct or sponsor, and, notwithstanding any other provision of law, a person is not required to respond to an information collection, unless the information collection displays a valid control number assigned by OMB.

This proposal would amend 16 CFR part 313. The collections of information related to the Privacy Rule have been previously reviewed and approved by OMB in accordance with the PRA and assigned OMB Control Number 3084-0121.71

As explained below, the proposed amendments do not modify or add to information collection requirements that were previously approved by OMB. Under this proposal, a motor vehicle dealer will be permitted, but not required, to use an alternative delivery method for the annual privacy notice if:

• It does not share information with nonaffiliated third parties other than for purposes covered by the exclusions allowed under the Privacy Rule;

• It does not include on its annual privacy notice an opt-out under section 603(d)(2)(A)(iii) of the FCRA;

• The annual privacy notice is not the only method used to satisfy the requirements of section 624 of the FCRA and 16 CFR part 680, if applicable;

• Certain information it is required to convey on its annual privacy notice has not changed since it provided the immediately prior privacy notice; and

• It uses the Privacy Rule model privacy form for its annual privacy notice.

Under the proposed alternative delivery method, the motor vehicle dealer would have to:

• Convey at least annually on another notice or disclosure that its privacy notice is available on its Web site and will be mailed upon request to a specified telephone number. Among other things, the dealer would have to include a specific web address that takes the customer directly to the privacy notice;

• Post its current privacy notice continuously on a page of its Web site that contains only the privacy notice, without requiring a login or any conditions to access the page; and

• Mail its current privacy notice to customers who request it by telephone within ten calendar days of such request.

Under the existing clearance, the FTC has attributed to itself the estimated burden regarding all motor vehicle dealers and then shares equally the remaining estimated PRA burden with the Bureau for other types of financial institutions for which both agencies have enforcement authority regarding the GLBA Privacy Rule.72

1. Pursuant to section 215 of the Federal Power Act (FPA),1 the Commission proposes to approve revisions to the Transmission Operations (TOP) and Interconnection Reliability Operations and Coordination (IRO) Reliability Standards, developed by the North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization (ERO). The Commission believes that the proposed TOP and IRO Reliability Standards improve on the currently-effective standards by providing a more precise set of Reliability Standards addressing operating responsibilities and improving the delineation of responsibilities between applicable entities. The Commission also believes that the revised TOP Reliability Standards eliminate gaps and ambiguities in the currently-effective TOP requirements and improve efficiency by incorporating the necessary requirements from the eight currently-effective TOP Reliability Standards into three cohesive, comprehensive Reliability Standards. Further, the Commission believes that the proposed standards clarify and improve upon the currently-effective TOP and IRO Reliability Standards by designating requirements in the proposed standards that apply to transmission operators for the TOP standards and reliability coordinators for the IRO standards. Thus, the Commission proposes to find that there are benefits to clarifying and bringing efficiencies to the TOP and IRO Reliability Standards, consistent with the Commission's policy promoting increased efficiencies in Reliability Standards and reducing requirements that are either redundant with other currently-effective requirements or have little reliability benefit.2

2. The Commission also proposes to find that NERC has adequately addressed the concerns raised by the Commission in the Notice of Proposed Rulemaking (Remand NOPR) issued in November 2013.3 In the Remand NOPR, the Commission proposed to remand an earlier version of proposed TOP and IRO Standards due to concerns regarding the proposed treatment of system operating limits (SOLs) and interconnection reliability operating limits (IROLs) and concerns about outage coordination. Further, the Commission proposes to approve the definitions for operational planning analysis and real-time assessment, and the violation severity level and violation risk factor assignments.

3. While proposing to approve the TOP and IRO Reliability Standards, below the Commission seeks clarifying comments addressing four issues: (A) Possible inconsistencies in identifying IROLs; (B) monitoring of non-bulk electric system facilities; (C) removal of the load-serving entity as an applicable entity for proposed Reliability Standard TOP-001-3; and (D) data exchange capabilities. Based on comments and information received on these issues, the Commission may issue directives as appropriate.

4. Section 215 of the FPA requires a Commission-certified ERO to develop mandatory and enforceable Reliability Standards, which are subject to Commission review and approval. Once approved, the Reliability Standards are enforced by the ERO, subject to Commission oversight, or by the Commission independently. On March 16, 2007, the Commission issued Order No. 693, approving 83 of the 107 initial Reliability Standards filed by NERC, including the existing TOP and IRO Reliability Standards.4 In addition, in Order No. 748, the Commission approved revisions to the IRO Reliability Standards.5

5. On April 16, 2013, in Docket No. RM13-14-000, NERC submitted for Commission approval three revised TOP Reliability Standards to replace the eight currently-effective TOP standards.6 Additionally, on April 16, 2013, in Docket No. RM13-15-000, NERC submitted for Commission approval four revised IRO Reliability Standards to replace six currently-effective IRO Reliability Standards. On November 21, 2013, the Commission issued the Remand NOPR in which the Commission expressed concern that NERC had “removed critical reliability aspects that are included in the currently-effective standards without adequately addressing these aspects in the proposed standards.” 7 The Commission identified two main concerns and asked for clarification and comment on a number of other issues. Among other things, the Commission expressed concern that the proposed TOP Reliability Standards did not require transmission operators to plan and operate within all SOLs, which is a requirement in the currently-effective standards. In addition, the Commission expressed concern that the proposed IRO Reliability Standards did not require outage coordination.

6. On December 20, 2013, NERC filed a motion requesting that the Commission defer action, until January 31, 2015, to allow NERC time to consider the reliability concerns raised by the Commission in the Remand NOPR. The Commission granted that motion on January 14, 2014.8 In response to the Remand NOPR, NERC initiated Project 2014-03 to develop further revisions to the TOP and IRO Reliability Standards.

7. On March 18, 2015, as supplemented on May 12, 2015, NERC submitted a petition seeking approval of two sets of Reliability Standards to replace the currently-effective TOP and IRO Reliability Standards. NERC states that the proposed TOP Reliability Standards generally address real-time operations and planning for next-day operations, and apply primarily to the responsibilities and authorities of transmission operators, with certain requirements applying to the roles and responsibilities of the balancing authority. NERC adds that the proposed IRO Reliability Standards set forth the responsibility and authority of reliability coordinators to provide for reliable operations. According to NERC, reliability coordinators have an essential role in ensuring reliable operations, as they are the functional entities with the highest level of authority and have the wide-area view of the bulk electric system.9

8. NERC states that the proposed Reliability Standards include improvements over the currently effective TOP and IRO Reliability Standards in key areas such as: (1) Operating within SOLs and IROLs; (2) outage coordination; (3) situational awareness; (4) improved clarity and content in foundational definitions; and (5) requirements for operational reliability data.

9. NERC states that the proposed TOP and IRO Reliability Standards address the coordinated efforts to plan and reliably operate the bulk electric system under both normal and abnormal conditions. NERC states that the proposed Reliability Standards provide a comprehensive framework for reliable operations, with important improvements to ensure the bulk electric system is operated within pre-established limits while enhancing situational awareness and strengthening operations planning. NERC explains that the proposed Reliability Standards establish or revise requirements for operations planning, system monitoring, real-time actions, coordination between applicable entities, and operational reliability data. According to NERC, the proposed Reliability Standards help to ensure that reliability coordinators and transmission operators work together, and with other functional entities, to operate the bulk electric system within SOLs and IROLs.10 Further, NERC explains that SOLs and IROLs are vital concepts in the Reliability Standards because they establish acceptable performance criteria both pre- and post-contingency to maintain reliable bulk electric system operations. NERC states that when any facility rating or stability limit is exceeded, or expected to be exceeded, these conditions should be mitigated to avoid the possibility of further deteriorating system conditions and the potential for a cascading event. In addition, NERC states that the standard drafting team developed a white paper on SOL definition and exceedance criteria which clarified the team's position on establishing and exceeding SOLs, and on implementing operating plans to mitigate exceedances. The SOL white paper explains the links between relevant reliability standards and reliability concepts to establish a common understanding necessary for developing effective operating plans to mitigate SOL exceedances.11

10. NERC states that it reviewed the report on the Arizona-Southern California Outages on September 8, 2011, Causes and Recommendations (“2011 Southwest Outage Blackout Report”) that includes findings and recommendations applicable to transmission operators, balancing authorities and reliability coordinators, and provides explanations of how the proposed Reliability Standards address the reliability issues identified following the 2011 Southwest Outage Blackout Report. Further, NERC states that it addressed outstanding Commission directives relevant to the proposed TOP and IRO Reliability Standards.

11. NERC proposes three TOP Reliability Standards to replace the existing suite of TOP standards. The proposed TOP Reliability Standards generally address real-time operations and planning for next-day operations, and apply primarily to the responsibilities and authorities of transmission operators. Among other things, NERC states that the proposed revisions to the TOP Reliability Standards help ensure that transmission operators plan and operate within all SOLs.

12. NERC proposes Reliability Standard TOP-001-3 (Transmission Operations), which contains twenty requirements. The purpose of proposed Reliability Standard TOP-001-3 is to prevent instability, uncontrolled separation, or cascading outages that adversely affect the reliability of the interconnection, by ensuring prompt action to prevent or mitigate such occurrences. According to NERC, the proposed standard achieves this reliability goal by providing appropriate entities with the authority to take actions, or direct the actions of others, to maintain reliability during real-time operations. NERC explains that the standard includes real-time monitoring and real-time assessment requirements to preserve reliability and ensure that applicable entities identify and address all SOL exceedances.

13. Requirements R1 and R2 require each transmission operator and balancing authority to explicitly and affirmatively act to address the reliability of its area through its own actions or by issuing operating instructions. In contrast, NERC notes that the obligation to act in currently effective Reliability Standard TOP-001-1a is implied, but not an explicit requirement. Requirements R3 and R4 together provide that each applicable entity must comply with each operating instruction issued by its transmission operator, unless doing so would violate safety, equipment, regulatory, or statutory requirements or the action cannot be physically implemented, and require an applicable entity to notify the transmission operator if it is unable to comply with the transmission operator's operating instruction. Similarly, Requirements R5 and R6 require the same actions of applicable entities with respect to an operating instruction issued by a balancing authority.

14. Requirement R7 requires each transmission operator to assist other transmission operators within its reliability coordinator area, and Requirement R8 requires a transmission operator to inform applicable entities of the transmission operator's actual or expected operations that result in, or could result in, an emergency.

15. Requirements R9, R16, and R17 address outage coordination of monitoring and control equipment. Requirement R9 provides that each balancing authority and transmission operator must notify its reliability coordinator and known impacted interconnected entities of all planned outages, and unplanned outages of 30 minutes or more, for telemetering and control equipment, monitoring and assessment capabilities, and associated communication channels between the affected entities. Requirements R16 and R17 state that each transmission operator and balancing authority must provide its system operators with the authority to approve planned outages and maintenance.

16. Requirement R10 addresses transmission operator monitoring obligations to help ensure that transmission operators have the necessary situational awareness to maintain reliable operations. Requirement R10 provides that each transmission operator must take certain steps for determining SOL exceedances within its transmission operator area. NERC explains that Requirement R10 addresses the Commission's concerns that the TOP and IRO Reliability Standards, that were the subject of the Remand NOPR, did not have sufficient requirements for real-time monitoring. Requirement R11 is the equivalent of Requirement R10 for balancing authorities.

17. Requirement R12 provides that each transmission operator must not operate outside of any identified IROL for a continuous duration exceeding its associated IROL Tv. NERC states that this requirement will provide consistency with the reliability coordinators requirements contained in currently-effective Reliability Standard IRO-009-1.12 Requirement R13 provides that each transmission operator must ensure that a real-time assessment is performed at least once every 30 minutes. The revised definition of “real-time assessment” includes additional specificity regarding various inputs for the assessment and how that information may be provided through third-party services, which may provide smaller entities an efficient method for compliance. Requirement R14 provides that each transmission operator must initiate its operating plan to mitigate a SOL exceedance identified as part of its real-time monitoring or real-time assessment.13

18. Requirement R15 provides that each transmission operator must inform its reliability coordinator of actions taken to return the system to within limits when a SOL has been exceeded. Requirement R18 provides that each transmission operator must operate to the most limiting parameter in instances where there is a difference in SOLs. Requirements R19 and R20 provide that each transmission operator and balancing authority must have data exchange capabilities with the entities from which it needs data in order to maintain reliability in its area.

19. In addition, NERC states that it removed the load-serving entity (LSE) function from proposed TOP-001-3, Requirements R3 through R6 due to the November 2014 NERC Board of Trustees action to remove the LSE as a functional entity from NERC's Rules of Procedure.14 On May 12, 2015, NERC supplemented its filing with additional explanation for the removal of the LSE function.

20. Proposed Reliability Standard TOP-002-4 contains seven requirements relating to operations planning for transmission operators and balancing authorities. NERC explains that the proposed standard addresses next-day planning and provides for the necessary notifications and coordination between various functional entities. NERC adds that the revised definition of “operational planning analysis” specifies the scope and inputs required for next-day analyses. According to NERC, the proposed standard also improves coordination of next-day operations by requiring transmission operators and balancing authorities to provide operating plans to their reliability coordinators.

21. Proposed Requirements R1 through R3 and R6 apply to transmission operators, and proposed Requirements R4, R5, and R7 apply to balancing authorities. Requirement R1 requires each transmission operator to have an operational planning analysis that will allow it to assess whether its planned operations for the next day within its transmission operator area will exceed any of its SOLs. Requirement R2 requires each transmission operator to have operating plans for next-day operations to address potential SOL exceedances identified in the operational planning analysis performed pursuant to Requirement R1. Requirement R4 requires each balancing authority to have operating plans for the next day that address expected generation resource commitment and dispatch, interchange scheduling, demand patterns, and capacity and energy reserve requirements, including deliverability capability. Requirements R3 and R5 require each transmission operator and balancing authority, respectively, to notify the entities identified in their operating plan as to their roles in that plan. Requirements R6 and R7 require each transmission operator and balancing authority to provide its operating plan to its reliability coordinator.

22. Proposed Reliability Standard TOP-003-3 (Operational Reliability Data) establishes requirements for the provision of information and data needed by the transmission operator and balancing authority for reliable operations. The purpose of proposed Reliability Standard TOP-003-3 is to ensure that transmission operators and balancing authorities have the data needed to fulfill their operational and planning responsibilities. The proposed Reliability Standard consists of five Requirements, including requirements for balancing authorities and transmission operators to maintain and distribute to relevant entities data specifications needed to perform various analyses and assessments. The proposed Reliability Standard also requires entities receiving data specifications to respond according to mutually agreed upon parameters including format and security protocols.

23. Requirement R1 requires each transmission operator to maintain a documented specification for the data necessary, including non-bulk electric system and external network data, for it to perform its operational planning analysis, real-time monitoring, and real-time assessments. Requirement R2 requires each balancing authority to maintain a documented specification for the data necessary for it to perform its analysis functions and real-time monitoring. Requirements R3 and R4 require each transmission operator and balancing authority to distribute its data specification to the entities that have the necessary data. Requirement R5 requires each applicable entity receiving a data specification pursuant to Requirement R3 or R4 to satisfy the obligations of the documented data specification.

24. In response to the Commission's concerns in the Remand NOPR with regard to the need for including external networks and sub-100 kV facilities in the operational planning analysis conducted by transmission operators, NERC explains that proposed Reliability Standard TOP-003-3 requires each applicable entity to develop a data specification that would cover its data needs for monitoring and analysis purposes, including non-bulk electric system data and external network data deemed necessary by the transmission operator to support its operational planning analyses, real-time monitoring, and real-time assessments. With respect to sub-100 kV facilities, NERC determined that any sub-100 kV elements that are necessary for reliable operation of the bulk electric system would be included as bulk electric system facilities through the exception process provided in Appendix 5C to the NERC Rules of Procedure. NERC explains that the exception process provides the means for transmission operators and reliability coordinators to include elements in the bulk electric system that are necessary for the reliable operation of the interconnected transmission system but were not identified in the bulk electric system definition. Accordingly, NERC concludes that it is not necessary to include non-bulk electric system monitoring in Reliability Standard TOP-001-3. In addition, NERC explains that proposed Reliability Standard TOP-001-3, Requirement R10 requires transmission operators to monitor bulk electric system facilities within their transmission operator area, and to obtain information deemed necessary by the transmission operator about such bulk electric system facilities located outside of the transmission operator area when determining SOL exceedances.

25. NERC adds that when non-bulk electric facilities have no impact on the bulk electric system, but are needed for completing system models, the Commission-approved Reliability Standard FAC-001-2, Requirement R3 addresses the issue. This Reliability Standard requires the reliability coordinator to include in its methodology its entire reliability coordinator area and critical modeling details from other reliability coordinator areas that would affect the facility under study. In addition, the reliability coordinator must include details of system models used to determine SOLs.

26. The proposed IRO Reliability Standards, which complement the proposed TOP Standards, are designed to ensure that the bulk electric system is planned and operated in a coordinated manner to perform reliably under normal and abnormal conditions. The proposed IRO Reliability Standards set forth the responsibility and authority of reliability coordinators to provide for reliable operations. NERC states that in the proposed IRO Reliability Standards reliability coordinators must continue to monitor SOLs in addition to their obligation in the currently effective Reliability Standards to monitor and analyze IROLs. These obligations require reliability coordinators to have the wide-area view necessary for situational awareness and provide them the ability to respond to system conditions that have the potential to negatively affect reliable operations.

27. Proposed Reliability Standard IRO-001-4 (Reliability Coordination—Responsibilities) contains requirements relating to the reliability coordinator's overall responsibility for reliable operation within the reliability coordinator area. Requirement R1 provides that each reliability coordinator must act to address the reliability of its reliability coordinator area through direct actions or by issuing operating instructions. Requirement R2 provides that each applicable entity must comply with its reliability coordinator's operating instructions unless compliance cannot be implemented or would violate safety, equipment, regulatory, or statutory requirements. Requirement R3 provides that applicable entities must inform the reliability coordinator if they are unable to perform an operating instruction issued by its reliability coordinator.

28. Proposed Reliability Standard IRO-002-4 (Reliability Coordination—Monitoring and Analysis) contains requirements relating to capabilities for monitoring and analysis of real-time operating data. The purpose of the proposed Reliability Standard is to provide system operators with the capabilities necessary to monitor and analyze data needed to perform reliability functions. Requirement R1 requires each reliability coordinator to have data exchange capabilities with its balancing authorities, transmission operators, and other entities as it deems necessary, for it to perform operational planning analyses, real-time monitoring, and real-time assessments. Requirement R2 provides that each reliability coordinator must provide its system operators with the authority to approve planned outages and maintenance of its telecommunication, monitoring, and analysis capabilities. Requirement R3 provides that each reliability coordinator must monitor facilities, the status of special protection systems and non-bulk electric system facilities identified as necessary within its reliability coordinator area and neighboring reliability coordinator areas, to identify any SOL or IROL exceedances. Requirement R4 provides that each reliability coordinator must have monitoring systems that provide information used by the reliability coordinator's operating personnel, with particular emphasis to alarm management and awareness systems, automated data transfers, and synchronized information systems, over a redundant infrastructure.

29. Proposed Reliability Standard IRO-008-2 (Reliability Coordinator Operational Analyses and Real-time Assessments) contains requirements for reliability coordinators to conduct next-day analyses and assessments of operating conditions in real-time to help prevent instability, uncontrolled separation, or cascading. NERC states that the proposed definitions of operational planning analysis and real-time assessment are integral components of proposed Reliability Standard IRO-008-2 because they specify the scope and inputs for next-day analysis and real-time assessments of operating conditions in real-time. Furthermore, NERC states that proposed Reliability Standard IRO-008-2 enhances next-day operations planning by specifying requirements for coordination of the reliability coordinator's operating plan to address potential SOL and IROL exceedances.

30. Requirement R1 provides that each reliability coordinator must perform an operational planning analysis that will allow it to assess whether the planned operations for the next day will exceed SOLs and IROLs. Requirement R2 requires each reliability coordinator to have a coordinated operating plan for next-day operations to address potential SOL and IROL exceedances identified as a result of its operating planning analysis. Requirement R3 provides that each reliability coordinator must notify impacted entities identified in its operating plan as to their role in the plan. Requirement R4 states that each reliability coordinator must ensure that a real-time assessment is performed at least once every 30 minutes. Requirement R5 provides that each reliability coordinator must notify impacted transmission operators and balancing authorities within its reliability coordinator area and other impacted reliability coordinators when a real-time assessment indicates an actual or expected condition that results in, or could result in, a SOL or IROL exceedance. Further, Requirement R6 provides that each reliability coordinator must notify impacted entities when a SOL or IROL exceedance has been prevented or mitigated.

31. Proposed Reliability Standard IRO-010-2 (Reliability Coordinator Data Specification and Collection) provides a mechanism for a reliability coordinator to obtain the information and data it needs for reliable operations and to help prevent instability, uncontrolled separation, or cascading outages. According to NERC, proposed Reliability Standard IRO-010-2 reflects recommendations from the 2011 Southwest Outage Blackout Report, including more clearly identifying necessary data and information to be included in a reliability coordinator's data specification. Requirement R1 provides that the reliability coordinator must maintain a documented specification for the data, including non-bulk electric system and external network data, necessary for it to perform its operational planning analyses, real-time monitoring, and real-time assessments. Requirement R2 provides that the reliability coordinator must distribute its data specification to entities that have the required data. Requirement R3 provides that applicable entities receiving a data specification must satisfy the obligations of the documented specification using a mutually-agreeable format, process for resolving data conflicts, and security protocol.

32. Proposed Reliability Standard IRO-014-3 (Coordination among Reliability Coordinators) contains requirements for coordination for interconnected operations at the reliability coordinator level. The purpose of the proposed Reliability Standard is to ensure that each reliability coordinator's operations are coordinated such that they will not adversely affect other reliability coordinator areas and to preserve the reliability benefits of interconnected operations. Requirement R1 requires each reliability coordinator to have and implement operating procedures, processes, or plans for activities that require notification or coordination of actions that may affect adjacent reliability coordinator areas. Requirement R2 requires each reliability coordinator to maintain its operating procedures, processes, or plans through annual reviews and updates, with no more than 15 months passing between reviews. Requirement R3 requires each reliability coordinator to notify other impacted reliability coordinators upon identification of an expected or actual emergency. Requirement R4 specifies that, if the reliability coordinators disagree on the existence of an emergency, each must operate as though an emergency exists. Requirement R5 states that a reliability coordinator that identifies an emergency must develop an action plan to resolve the emergency, and Requirement R6 requires impacted reliability coordinators to implement the action plan. Under Requirement R7, a reliability coordinator must assist another reliability coordinator if the requesting reliability coordinator has implemented its emergency procedures.

33. NERC states that proposed Reliability Standard IRO-017-1 (Outage Coordination) is a new Reliability Standard designed to ensure that outages are properly coordinated in the operations planning time horizon and near-term transmission planning horizon. According to NERC, the requirements in the proposed Reliability Standard, which span both time horizons, provide the necessary requirements for effective coordination of planned outages to support reliable operations.

34. NERC notes that in the Remand NOPR the Commission identified coordination of outages as a critical reliability function that should be performed by the reliability coordinator that was not adequately addressed. NERC explains that proposed Reliability Standard IRO-017-1 addresses the Commission's Remand NOPR concerns by requiring each reliability coordinator to develop, implement and maintain an outage coordination process for generation and transmission outages. NERC also explains that each transmission operator and balancing authority would then be required to perform the functions specified in its reliability coordinator's process. Further, NERC states that each planning coordinator and transmission planner will provide its planning assessment to relevant reliability coordinators and work together to solve any issues or conflicts with planned outages among the applicable entities. Additionally, NERC states that proposed Reliability Standard IRO-014-3, Requirement R1, Part 1.4 requires reliability coordinators to coordinate with adjacent reliability coordinators the exchange of planned and unplanned outage information to support operational planning analyses and real-time assessments in their operating procedures, processes, or plans.

35. Proposed Reliability Standard IRO-017-1 has four requirements. Requirement R1 provides that each reliability coordinator must develop, implement, and maintain an outage coordination process for generation and transmission outages. Requirement R2 provides that each transmission operator and balancing authority must perform the functions specified in its reliability coordinator's outage coordination process. Requirement R3 provides that each planning coordinator and transmission planner must provide its planning assessment to impacted reliability coordinators. Requirement R4 requires each planning coordinator and transmission planner to jointly develop solutions with its respective reliability coordinators for identified issues or conflicts with planned outages in its planning assessment for the near-term transmission planning horizon.

36. NERC also proposes revised definitions for “operational planning analysis” and “real-time assessment.” 15 NERC contends that the proposed definitions provide significant additional detail compared to the currently effective definitions to enhance the consistency and the reliability benefit of operational planning analysis and real-time assessments.16 NERC states that the additional specificity reflected in the proposed definitions addresses concerns raised in the Remand NOPR and includes several inputs that were identified as recommendations in the 2011 Southwest Outage Blackout Report, which, in turn, will enhance situational awareness.

37. The proposed NERC Glossary term “Operating Instruction” defines the scope of commands that are covered by the proposed TOP and IRO Reliability Standards. NERC explains that the revisions in the proposed definitions are intended to ensure that operational planning analyses and real-time assessments contain sufficient details to result in an appropriate level of situational awareness for next-day planning and real-time operations, respectively.

38. NERC proposes that, for all standards except proposed Reliability Standards TOP-003-3 and IRO-010-2, the effective date will be the first day of the first calendar quarter twelve months after Commission approval. The twelve month implementation period for all of the standards except TOP-003-3 and IRO-010-2 is intended to allow time for entities to update processes and train operators on the revised requirements. All of the Requirements in proposed TOP-003-3 and IRO-010-2 except TOP-003-3, Requirements R5 and IRO-010-2, Requirement R3 would become effective three months earlier, in order to provide recipients of data requests from their reliability coordinators, transmission operators, and/or balancing authorities time to respond to the requests for data.

39. According to NERC's implementation plan, for proposed TOP-003-3, all requirements except Requirement R5 will become effective on the first day of the first calendar quarter nine months after the date that the standard is approved. For proposed IRO-010-2, Requirements R1 and R2 would become effective on the first day of the first calendar quarter that is nine months after the date that the standard is approved. Requirement R3 would become effective on the first day of the first calendar quarter twelve months after the date that the standard is approved. NERC states that the reason for the difference in effective dates for proposed TOP-003-3 and IRO-010-2 is to allow applicable entities to have time to properly respond to the data specification requests.

40. Pursuant to section 215(d) of the FPA, we propose to approve NERC's proposed revisions to the TOP and IRO Reliability Standards as just, reasonable, not unduly discriminatory or preferential, and in the public interest. We believe that NERC's approach of consolidating requirements and removing redundancies generally has merit and is consistent with Commission policy promoting increased efficiencies in Reliability Standards and reducing requirements that are either redundant with other currently effective requirements or have little reliability benefit.17

41. We agree with NERC that the proposed TOP and IRO Reliability Standards would improve reliability by defining an appropriate division of responsibilities between reliability coordinators and transmission operators.18 Specifically, NERC states that the proposed TOP Reliability Standards will be improved by eliminating multiple TOP standards, resulting in a more concise set of standards. Thus, we believe that NERC's TOP proposal would reduce redundancy and more clearly delineate responsibilities between applicable entities. In addition, we believe that the proposed Reliability Standards provide a comprehensive framework as well as important improvements to ensure that the bulk electric system is operated within pre-established limits while enhancing situational awareness and strengthening operations planning. We believe that the proposed TOP and IRO Reliability Standards address the coordinated efforts to plan and reliably operate the bulk electric system under both normal and abnormal conditions.

42. For these reasons, we propose to approve NERC's revisions to the TOP and IRO Reliability Standards. We also discuss below: (A) Concerns raised in the Remand NOPR plus possible inconsistencies of identifying IROLs; (B) other reliability issues including (1) monitoring of non-bulk electric system facilities; (2) removal of the load-serving entity function from proposed Reliability Standard TOP-001-3; and (3) data exchange capabilities.

43. We propose to find that NERC has adequately addressed the concerns raised by the Commission in the Remand NOPR with respect to the treatment of SOLs in the proposed TOP Reliability Standards. In the Remand NOPR, the Commission expressed concern that the proposed TOP standards did not have a requirement “for transmission operators to plan and operate within all SOLs. Without a requirement to plan and operate within all SOLs in the proposed standards and by limiting non-IROL SOLs to only those identified by the transmission operator internal to its area, system reliability is reduced and negative consequences can occur outside of the transmission operator's internal area.” 19 The Commission noted that “non-IROL SOLs that appear to be excluded from the proposed standard are non-IROL SOLs that are in a transmission operator's area that impact another transmission operator's area or more than one transmission operator's area.” 20

44. The Commission believes that the proposed TOP Reliability Standards address the Commission's Remand NOPR concerns by requiring transmission operators to plan and operate within all SOLs, and to monitor and assess SOL conditions within and outside a transmission operator's area. Specifically, proposed Reliability Standard TOP-001-3, Requirement R14 requires each transmission operator to initiate its operating plan to mitigate a SOL exceedance identified as part of its real-time monitoring or real-time assessment. Proposed Reliability Standard TOP-001-3, Requirement R10 requires each transmission operator to monitor facilities within its transmission operator area as well as certain facilities outside of its transmission operator area to determine SOL exceedances within its transmission operator area during the real-time operations time horizon. In addition, proposed Reliability Standard TOP-001-3, Requirement R15 requires that each transmission operator inform its reliability coordinator of actions taken to resolve a SOL exceedance.21 To address the concerns of operational planning, proposed Reliability Standard TOP-002-4, Requirement R1 requires each transmission operator to have an operational planning analysis to assess whether its next-day planned operations will exceed any of its SOLs within its area, and Requirement R2 requires the transmission operator to have a next-day operating plan(s) to address any potential SOLs exceedances identified in its operational planning analysis.22

45. Further, proposed Reliability Standard IRO-008-2, Requirements R1, R2, R3, R5, and R6 require reliability coordinators to plan and operate within SOLs and IROLs, which we believe work in tandem with the proposed TOP Standards and address the Commission's concern that the previously-proposed Reliability Standards limited “non-IROL SOLs” to only those internally identified by the transmission operator. Specific to operational planning, proposed Reliability Standard IRO-008-2, Requirement R1 requires the reliability coordinator to have an operational planning analysis to assess whether its next-day planned operations will exceed SOLs and IROLs within its wide area, and Requirement R2 requires the reliability coordinator to have a coordinated next-day operating plan(s) to address potential SOLs and IROLs exceedances identified in its operational planning analysis while considering the next-day operating plan(s) provided by its transmission operators and balancing authorities.23 Requirement R3 requires the reliability coordinator to notify impacted entities identified in its operating plan cited in Requirement R2 as to their role in such plan(s). The Commission believes that the consideration of the transmission operators' and balancing authorities' operating plans by the reliability coordinator in its own operating plan provides the necessary situational awareness of all SOLs, internal and external to the transmission operator or balancing authority.

46. In the Remand NOPR, the Commission raised the concern that the then-proposed version of the TOP/IRO Standards did not consider the possibility that additional SOLs could develop or occur in the same-day or real-time operational time horizon, and therefore would pose an operational risk to the interconnected transmission network.24 To address this concern, Reliability Standard IRO-008-2, Requirement R5 requires each reliability coordinator to notify impacted transmission operators and balancing authorities within its reliability coordinator area and other impacted reliability coordinators when results of a real-time assessment indicate actual or expected conditions that could result in SOL or IROL exceedances, and Requirement R6 requires reliability coordinator notification to impacted transmission operators, balancing authorities and other impacted reliability coordinators when any SOLs or IROLs have been prevented or mitigated.25

47. Likewise, based on NERC's explanation, we believe that the proposed Reliability Standards in the immediate proceeding are designed to improve system performance by giving reliability coordinators the authority to direct actions to prevent or mitigate instances of exceeding IROLs. This delineation of responsibilities between reliability coordinators and transmission operators is appropriate because the primary decision-making authority for mitigating IROL exceedances is assigned to reliability coordinators while transmission operators have the primary responsibility for mitigating SOL exceedances.26 To further support the reliability coordinator's primary responsibility for IROLs to prevent instability, uncontrolled separation, or cascading, proposed Reliability Standard TOP-001-3, Requirement R12 requires that a transmission operator must not operate outside of any identified IROLs for a continuous duration exceeding its associated IROL Tv.27

48. In addition, NERC explains that the proposed Reliability Standard IRO-014-3 contains requirements for coordination of interconnection operations at the reliability coordinator level and ensures that each reliability coordinator's operations are coordinated such that they will not adversely affect other reliability coordinators' areas.28 Proposed Reliability Standard IRO-014-3 requires the reliability coordinator to have and implement operating procedures, processes, or plans for activities that require notification or coordination of actions that may affect adjacent reliability coordinators' areas.

49. Furthermore, the Commission believes the revised definitions of operational planning analysis and real-time assessment are critical components of the proposed TOP and IRO Reliability Standards and, together with the definitions of SOLs, IROLs and operating plans, work to ensure that reliability coordinators, transmission operators and balancing authorities plan and operate the bulk electric system within all SOLs and IROLs to prevent instability, uncontrolled separation, or cascading. In addition, the revised definitions of operational planning analysis and real-time assessment address other concerns raised in the Remand NOPR as well as multiple recommendations in the 2011 Southwest Outage Blackout Report.29 For example, the definition of operational planning analysis is used in proposed Reliability Standards TOP-002-4, TOP-003-3, IRO-002-4, IRO-008-2, IRO-010-2, and IRO-014-3 to ensure a consistent approach to operations planning for the reliability coordinators, transmission operators and balancing authorities.30 Further, the proposed revised operational planning analysis definition adds additional detail and clarity, including the evaluation of pre- and post-contingency conditions as well as the evaluation of multiple applicable inputs that are absent in the currently-effective definition.

50. Likewise, the definition of real-time assessment is used in the following proposed Reliability Standards: TOP-001-3; TOP-003-3; IRO-002-4; IRO-008-2; IRO-010-2; and IRO-014-3 to ensure a consistent approach to the real-time operation of the Bulk Power System for the reliability coordinators, transmission operators and balancing authorities.31 The proposed revised real-time assessment definition is the same type of evaluation as the operational planning analysis with the exception that real-time assessment uses real-time data to assess existing conditions and operational planning analysis uses projected system conditions to assess anticipated system conditions.

51. The Commission does note, however, that in Exhibit E (SOL White Paper) of NERC's petition, NERC states that with regard to the SOL concept, the SOL White Paper brings “clarity and consistency to the notion of establishing SOLs, exceeding SOLs, and implementing Operating Plans to mitigate SOL exceedances.” 32 The Commission further notes that IROLs, as defined by NERC, are a subset of SOLs that, if violated, could lead to instability, uncontrolled separation, or cascading outages that adversely impact the reliability of the bulk electric system.33 The Commission agrees with NERC that clarity and consistency are important with respect to establishing and implementing operating plans to mitigate SOL and IROL exceedances. However, the Commission notes that in its 2015 State of Reliability report, NERC states that the Western Interconnection reliability coordinator definition of an IROL has additional criteria that may not exist in other reliability coordinator areas.34 Based on this information, it is unclear whether NERC regions apply a consistent approach to identifying IROLs. Accordingly, the Commission seeks comment on (1) identification of all regional differences or variances in the formulation of IROLs, (2) the potential reliability impacts of such differences or variations, and (3) the value of providing a uniform approach or methodology to defining and identifying IROLs.

52. We believe, too, that NERC has addressed the concerns raised in the Remand NOPR with respect to the IRO standards regarding planned outage coordination. In the Remand NOPR, the Commission expressed concern with NERC's proposal because Reliability Standards IRO-008-1, Requirement R3 and IRO-010-1a (subjects of the proposed remand and now withdrawn by NERC) did not require the coordination of outages, noting that outage coordination is a critical reliability function that should be performed by the reliability coordinator.35

53. With respect to proposed Reliability Standard IRO-017-1, submitted by NERC for approval in the immediate proceeding, Requirement R1 requires each reliability coordinator to develop, implement and maintain an outage coordination process for generation and transmission outages within its reliability coordinator area. Under Requirement R2, each transmission operator and balancing authority, in turn, would perform the functions specified in its reliability coordinator's outage coordination process. Further, Requirement R3 requires each planning coordinator and transmission planner to provide its planning assessment to the relevant reliability coordinators and to work together to solve any issues or conflicts with planned outages among the applicable entities under Requirement R4. Additionally, proposed Reliability Standard IRO-014-3, Requirement R1, Part 1.4 requires reliability coordinators to include the exchange of planned and unplanned outage information to support operational planning analyses and real-time assessments in the operating procedures, processes, and plans for activities that require coordination with adjacent reliability coordinators. Further, the proposed revised definitions of operational planning analysis and real-time assessments require that these evaluations of system conditions include transmission and generation outages. We believe that these proposed standards and revised definitions adequately address our concerns with respect to outage coordination as outlined in the Remand NOPR.

54. While proposing to approve the TOP and IRO Reliability Standards, the Commission seeks clarifying comments addressing three additional issues: (1) Monitoring of non-bulk electric system facilities; (2) removal of the load-serving entity as an applicable entity for proposed Reliability Standard TOP-001-3; and (3) data exchange capabilities. Based on comments and information received on these issues, the Commission may issue directives as appropriate.

55. NERC explains how the proposed Reliability Standards address the recommendations in the 2011 Southwest Outage Blackout Report, in particular with respect to Finding 17 concerning the impact of sub-100 kV facilities on the reliability of the interconnected transmission network. Finding 17 states:

Recommendation 17 states:

NERC states that proposed Reliability Standard IRO-002-4, Requirement R3 addresses monitoring of non-bulk electric system facilities by requiring each reliability coordinator to monitor facilities and necessary non-bulk electric system facilities in order to identify SOL and IROL exceedances within its reliability coordinator area.36 In addition, NERC states that proposed Reliability Standards IRO-010-2, Requirement R1.1 and TOP-003-3, Requirement R1.1 address non-bulk electric system data by specifically requiring reliability coordinators and transmission operators to incorporate any non-bulk-electric system data as deemed necessary into their operational planning analyses, real-time monitoring, and real-time assessments.37

56. However, NERC explains that the standard drafting team concluded it is unnecessary to include non-bulk electric system monitoring in proposed Reliability Standard TOP-001-3, Requirement R10 for the transmission operator, in a similar fashion as proposed Reliability Standard IRO-002-4, Requirement R3 for the reliability coordinator. Instead, the standard drafting team determined that any non-bulk electric system facility elements that are necessary for reliable operation of the bulk electric system would be included in the bulk electric system through the exception process provided in Appendix 5C to the NERC Rules of Procedure. NERC states that the exception process provides the means for transmission operators and reliability coordinators to include elements in the bulk electric system that are necessary for the reliable operation of the interconnected transmission system but not identified in the bulk electric system definition.38

57. We propose to find that NERC has adequately addressed the 2011 Southwest Outage Blackout Report recommendation in connection with sub-100 kV facilities for proposed Reliability Standards IRO-002-4, Requirement R3, IRO-010-2, Requirement R1.1 and TOP-003-3, Requirement R1.1. In doing so, we rely primarily on the proposed responsibility of the reliability coordinator to monitor such facilities to the extent necessary.

58. However, the transmission operator may have a more granular perspective than the reliability coordinator of its necessary non-bulk electric system facilities to monitor in order to identify SOL and IROL exceedances, and it is not clear whether or how the transmission operator would communicate any insight it may have to the reliability coordinator to ensure monitoring of all necessary facilities. Thus, the Commission seeks comment on how NERC will ensure that the reliability coordinator will receive information from the transmission operator regarding which non-bulk electric system facilities should be monitored. Further, as stated above, Recommendation 17 states “. . . to ensure that all facilities that can adversely impact BPS reliability are either designated as part of the BES or otherwise incorporated into planning and operations studies and actively monitored and alarmed in [real-time contingency analysis] systems.” (emphasis added.) Including such non-bulk electric system facilities in the definition of bulk electric system through the Rules of Procedure exception process could be an option to address any potential gaps for monitoring facilities. However, there may be potential efficiencies gained by using a more expedited method to include non-bulk electric system that requires monitoring. Thus, the Commission seeks comments on whether the exception process should be used exclusively in all cases.

59. Alternatively, we seek comment regarding whether this concern should be addressed through a review process of the transmission operators' systems to determine if there are important non-bulk-electric system facilities that require monitoring. For example, Commission staff could work with NERC, Regional Entities and applicable entities to review their system modeling and perform an analysis to identify non-bulk electric system facilities that need monitoring. Accordingly, we seek comment from NERC and other interested persons on these alternatives.

60. Proposed Reliability Standard TOP-001-3, Requirement R3 requires that each balancing authority, generator operator and distribution provider shall comply with each operating instruction issued by its transmission operator, and proposed Reliability Standard TOP-001-3, Requirement R4 requires that each balancing authority, generator operator and distribution provider inform its transmission operator of its inability to comply with an operating instruction. Proposed Reliability Standard TOP-001-3, Requirement R5 requires that each transmission operator, generator operator and distribution provider shall comply with each operating instruction issued by its balancing authority, and proposed Reliability Standard TOP-001-3, Requirement R6 requires that each transmission operator, generator operator and distribution provider inform its balancing authority of its inability to comply with an operating instruction.39

61. In its petition, NERC states that, during the standard drafting process, the load-serving entity function was removed from proposed Reliability Standard TOP-001-3, Requirements R3 through R6. NERC explains that the removal of the load-serving entity as an applicable entity was based on the November 2014 NERC Board of Trustees action to remove load-serving entity as a functional entity from NERC's Rules of Procedure.40 Since that time, the Commission has issued an order in Docket No. RR15-4-000 that denied, without prejudice, NERC's proposal to remove the load-serving entity as a functional entity under NERC's Risk Based Registration petition and directed NERC to submit a compliance filing to address this issue.41

62. On May 12, 2015, NERC supplemented its initial petition with additional explanation for the removal of the load-serving entity function from proposed Reliability Standard TOP-001-3. NERC explains that the proposed standard gives transmission operators and balancing authorities the authority to direct the actions of certain other functional entities by issuing an operating instruction to maintain reliability during real-time operations. According to NERC, load-serving entities are not included in the list of entities that must comply with a transmission operator's or balancing authority's operating instructions. NERC contends that the exclusion is justified because none of the functions performed by load-serving entities, as described in the NERC Functional Model, necessitate that load-serving entities be subject to a requirement to comply with such operating instructions to ensure that a transmission operator or balancing authority can maintain reliability.42 NERC adds that a load-serving entity does not own or operate bulk electric system facilities or equipment or the facilities or equipment used to serve end-use customers and its NERC Functional Model tasks are limited in scope. As indicated by the NERC Functional Model, the load-serving entity does not play a role in shedding load in real-time.

63. NERC also explains in its supplemental filing that the standard drafting team did not identify any circumstances under which a transmission operator or balancing authority would need to issue an operating instruction to a load-serving entity to prevent instability, uncontrolled separation, or cascading outages. NERC contends that, with respect to the load-serving entity's role as a provider of information to other functional entities, that role is primarily carried out ahead of real-time and would not be the subject of an operating instruction. Additionally, NERC states that the load-serving entity's real-time role with respect to voluntary load curtailment does not necessitate requiring load-serving entities to comply with operating instructions issued by a transmission operator or balancing authority. In order to maintain reliability in their areas and prevent instability, uncontrolled separation, or cascading outages, there may be circumstances under which transmission operators and balancing authorities need to shed load. NERC states that such action is implemented in real-time to address imminent or existing reliability issues such as an exceedance of an IROL or SOL, or a voltage problem. According to NERC, due to the urgent nature of these circumstances, the reliability coordinator, balancing authority, or transmission operator may issue operating instructions directly to the distribution provider for physical implementation of load shedding (except when this can be accomplished directly by the transmission operator).43

64. NERC proposes the removal of the load-serving entity function from proposed Reliability Standard, TOP-001-3, Requirements R3 through R6, as a recipient of an operating instruction from a transmission operator or balancing authority. However, the Commission notes that the issuance and compliance of operating instructions under proposed Reliability Standard TOP-001-3 is not limited to the real-time operations time horizon only.44

65. Further, if a transmission operator or balancing authority would issue an operating instruction to a load-serving entity such as to carry out interruptible load curtailments, it is not clear what entity would respond to this operating instruction if the load-serving entity is removed from proposed TOP-001-3, Requirements R3 through R6.45

66. The Commission notes that NERC is required to make a compliance filing in July 2015 in Docket No. RR15-4-000. The Commission's decision on that filing will guide any action in this proceeding.

67. In Order No. 808, the Commission approved Reliability Standards COM-001-2 (Communications) and COM-002-4 (Operating Personnel Communications Protocols).46 In Order No. 808, the Commission explained that it had raised concerns in the underlying NOPR proposing to approve these COM Reliability Standards (COM NOPR) whether COM-001-2 addresses “facilities that directly exchange or transfer data.” 47 In response to the COM NOPR, NERC and other commenters clarified that Reliability Standard COM-001-2, which covers communications capability requirements, is not intended to address data exchanges or transfers.48 As the Commission noted in Order No. 808, NERC maintained that Reliability Standard COM-001-2 need not include requirements regarding data exchange capability, “because such capability is covered under other existing or proposed standards.” 49 The Commission did not make any determinations regarding facilities used for data exchange capability in Order No. 808 and, based on NERC's explanation in its supplemental filing, the Commission stated that it would address these issues in this TOP and IRO rulemaking proceeding.50

68. In general, it appears that facilities for data exchange capabilities are addressed in NERC's proposal. For example, proposed Reliability Standard TOP-001-3, Requirements R19 and R20 require some form of “data exchange capabilities” for the transmission operator and balancing authority, respectively. Similarly, proposed Reliability Standard IRO-002-4, Requirement R1 requires some form of “data exchange capabilities” for the reliability coordinator. However, we seek additional explanation from NERC regarding how it addresses data exchange capabilities in the TOP and IRO Reliability Standards in the following areas: (a) Redundancy and diverse routing; and (b) testing of the alternate or less frequently used data exchange capability.

69. The terms “redundant” and “diverse routing” of data exchange capabilities appear in Reliability Standard COM-001-1, where the reliability coordinator, transmission operator and balancing authority are required to have telecommunication facilities that are “redundant” and “diversely routed” to maintain Bulk-Power System reliability.51 NERC added two definitions (Interpersonal Communication and Alternative Interpersonal Communication) to Reliability Standard COM-001-2 that addressed redundant and diverse routing of communications between persons and proposed to eliminate the need to use phrases such as “redundant and diversely routed” that it described as ambiguous.52 With respect to the data exchange capabilities, NERC stated that several proposed or existing standards “provided the necessary mandatory Requirements to ensure proper data exchange is occurring.” 53 NERC also asserted that four proposed IRO and TOP standards “include specific coverage related to data exchange,” and “collectively require data exchange capability” for reliability coordinators, transmission operators, balancing authorities, generator operators, and distribution providers.54

70. In Order No. 808, the Commission approved NERC's definition of the terms Interpersonal Communication and Alternative Interpersonal Communication. NERC defines Interpersonal Communication as “[a]ny medium that allows two or more individuals to interact, consult, or exchange information.” NERC defines Alternative Interpersonal Communication as “[a]ny Interpersonal Communication that is able to serve as a substitute for, and does not utilize the same infrastructure (medium) as, Interpersonal Communication used for day-to-day operation.” 55 Reliability Standard COM-001-2, Requirements R1 through R6 require that reliability coordinators, transmission operators, and balancing authorities have Interpersonal Communication capabilities and Alternative Interpersonal Communication capabilities in place with other defined entities (e.g., other interconnected transmission operators). In its COM Petition, NERC maintained that the defined terms make clear that an entity's communication capability must be redundant and that each of the capabilities must not utilize the same medium, while eliminating the need to use ambiguous phrases such as “redundant and diversely routed” (as used in the prior version of the standard governing communications capability).56

71. As noted above, NERC indicated in its response to the COM NOPR that Reliability Standard COM-001-2 need not include requirements regarding data exchange capability because such capability is or would be covered by other existing or proposed standards. Specifically, NERC explained that data exchange is addressed by the currently enforceable Reliability Standards IRO-010-1a and IRO-014-1. In addition, NERC stated that data exchange transfer capabilities are directly addressed in proposed Reliability Standard TOP-001-3, as well as in proposed Reliability Standard IRO-002-4, Requirement R1. NERC also stated that the data itself is covered in proposed Reliability Standard IRO-010-2 and proposed Reliability Standard TOP-003-3.57

72. In the petition in this proceeding, NERC states that in proposed Reliability Standard TOP-001-3, “Requirements R19 and R20 provide that each Transmission Operator (Requirement R19) and Balancing Authority (Requirement R20) must have data exchange capabilities with the entities from which it needs data in order to maintain reliability in its area.” 58 NERC states that Requirements R19 and R20 are consistent with proposed Reliability Standard IRO-002-4, Requirement R1, which provides that each reliability coordinator must have data exchange capabilities with its balancing authorities, transmission operators, and other entities it deems necessary. Requirements R19 and R20 state:

Reliability Standard IRO-002-4 Requirement R1 states:

In addition, NERC states that IRO-002-4, Requirement R4 requires “each Reliability Coordinator must have monitoring systems . . . over a redundant infrastructure.” 59

73. The Commission agrees that proposed Reliability Standard TOP-001-3, Requirements R19 and R20 require some form of “data exchange capabilities” for the transmission operator and balancing authority, respectively, and that proposed Reliability Standard TOP-003-3 addresses the operational data itself needed by the transmission operator and balancing authority. In addition, the Commission agrees that Reliability Standard IRO-002-4, Requirement R1 requires “data exchange capabilities” for the reliability coordinator and that proposed Reliability Standard IRO-010-2 addresses the operational data needed by the reliability coordinator. Further, the Commission agrees that proposed Reliability Standard IRO-002-4 Requirement R4 requires a redundant infrastructure for system monitoring. However, it is not clear whether redundancy and diverse routing of data exchange capabilities (or an equally effective alternative that eliminates the ambiguity of “redundancy” and “diversely routed”) are adequately addressed in proposed Reliability Standards TOP-001-3 and IRO-002-4 for the reliability coordinator, transmission operator, and balancing authority.

74. Unlike the approach taken with COM-001-2, which requires redundancy and use of a diverse medium through the definitions of Interpersonal Communication and Alternative Interpersonal Communication, proposed Reliability Standards TOP-001-3 and IRO-002-4 do not appear to address redundancy and diverse routing of data exchange capabilities. While Reliability Standard IRO-002-4, Requirement R4 requires reliability coordinators to have a redundant infrastructure for system monitoring, it is not clear whether this requirement addresses redundancy and diverse routing of other forms of data exchange capabilities. For example, a redundant infrastructure used for system monitoring could be a subset of the total data exchange capabilities used by reliability coordinators and not include redundant infrastructure for capabilities such as control of equipment or real-time assessments. The Commission seeks explanation or clarification from NERC whether and how the proposed Reliability Standards in the immediate proceeding address redundancy and diverse routing or an equally effective alternative to redundancy and diverse routing. Further, if NERC or others believe that redundancy and diverse routing are not addressed, we seek comment on whether there are associated reliability risks of the interconnected transmission network for any failure of data exchange capabilities that are not redundant and diversely routed.

75. Reliability Standard COM-001-2, Requirement R9 (approved in Order No. 808) requires each reliability coordinator, transmission operator and balancing authority to test its Alternative Interpersonal Communication capability at least once each calendar month and to initiate action to repair or designate a replacement Alternative Interpersonal Communication capability.60

76. As noted above, proposed Reliability Standards TOP-001-3, Requirements R19 and R20 and IRO-002-4, Requirement R1 address primary data exchange capabilities of the transmission operator, balancing authority and reliability coordinator, respectively. However, the proposed TOP and IRO Reliability Standards do not appear to address testing requirements of alternative or less frequently used data exchange capabilities.

77. The Commission is concerned that the proposed TOP and IRO Reliability Standards do not appear to address testing requirements for alternative or less frequently used mediums for data exchange to ensure they would properly function in the event that the primary or more frequently used data exchange capabilities failed. The Commission seeks comment on whether and how the TOP and IRO Reliability Standards address the testing of alternative or less frequently used data exchange capabilities for the transmission operator, balancing authority and reliability coordinator. If NERC or others believe that testing requirements for alternative or less frequently used mediums for data exchange is not necessary, we seek comment on why it is not necessary.

78. The collection of information contained in this Notice of Proposed Rulemaking is subject to review by the Office of Management and Budget (OMB) regulations under section 3507(d) of the Paperwork Reduction Act of 1995 (PRA).61 OMB's regulations require approval of certain informational collection requirements imposed by agency rules.62 Upon approval of a collection(s) of information, OMB will assign an OMB control number and an expiration date. Respondents subject to the filing requirements of a rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number.

79. We solicit comments on the need for this information, whether the information will have practical utility, the accuracy of the burden estimates, ways to enhance the quality, utility, and clarity of the information to be collected or retained, and any suggested methods for minimizing respondents' burden, including the use of automated information techniques. Specifically, the Commission asks that any revised burden or cost estimates submitted by commenters be supported by sufficient detail to understand how the estimates are generated.

Public Reporting Burden: The Commission proposes to approve revisions to the Transmission Operations and Interconnection Reliability Operations and Coordination Reliability Standards. These revisions will impose new or revised, or retire requirements for the balancing authority, transmission operator, generator operator, distribution provider, generator owner, load-serving entity, purchasing-selling entity, transmission service provider, interchange authority, transmission owner, reliability coordinator, planning coordinator, and transmission planner functions. The Commission based its paperwork burden estimates on the NERC compliance registry as of May 15, 2015. According to the registry, there are 11 reliability coordinators, 99 balancing authorities, 450 distribution providers, 839 generator operators, 80 purchasing-selling entities, 446 load-serving entities, 886 generator owners, 320 transmission owners, 24 interchange authorities, 75 transmission service providers, 68 planning coordinators, 175 transmission planners and 171 transmission operators. The estimates are based on the change in burden from the current standards to the proposed. Not all entity types would experience an increase in burden, which is reflected by absence of those entities from the chart below.

Collectively, the proposed TOP and IRO Reliability Standards along with revised definitions provide for certain enhancements over the currently-effective TOP and IRO Reliability Standards.63 For example, the revised definitions of operational planning analysis and real-time assessment, which are applicable to multiple proposed TOP and IRO Reliability Standards, were enhanced and provide significant additional detail over the currently-effective definitions such as including inputs that were identified as contributing to past outages on the bulk electric system.64 As another example, the new proposed Reliability Standard IRO-017-1 establishes operational planning requirements for each reliability coordinator to implement an outage coordination process for its area that address a reliability gap identified in the Southwest Outage Blackout Report and in the Remand NOPR.65 The Commission estimates the annual reporting burden and cost as follows:

Title: FERC-725Z, Mandatory Reliability Standards: IRO Reliability Standards, and FERC-725A, Mandatory Reliability Standards for the Bulk-Power System

Action: Proposed Changes to Collections.

OMB Control Nos: 1902-0276 (FERC-725Z); 1902-0244(FERC-725A)

Respondents: Business or other for-profit and not-for-profit institutions.

Frequency of Responses: On-going.

80. Necessity of the Information and Internal review: The Commission has reviewed the requirements pertaining to the proposed Reliability Standards TOP-001-3, TOP-002-4, TOP-003-3, IRO-001-4, IRO-002-4, IRO-008-2, IRO-010-2, IRO-014-3, and IRO-017-1 and made a determination that the proposed requirements of these standards are necessary to implement section 215 of the FPA. These requirements conform to the Commission's plan for efficient information collection, communication and management within the energy industry. The Commission has assured itself, by means of its internal review, that there is specific, objective support for the burden estimates associated with the information requirements.

81. Interested persons may obtain information on the reporting requirements by contacting the Federal Energy Regulatory Commission, Office of the Executive Director, 888 First Street NE., Washington, DC 20426 [Attention: Ellen Brown, email: [email protected], phone: (202) 502-8663, fax: (202) 273-0873].

82. Comments concerning the information collections proposed in this NOPR and the associated burden estimates, should be sent to the Commission in this docket and may also be sent to the Office of Management and Budget, Office of Information and Regulatory Affairs [Attention: Desk Officer for the Federal Energy Regulatory Commission]. For security reasons, comments should be sent by email to OMB at the following email address: [email protected]. Please reference OMB Control Nos. 1902-0276 (FERC-725Z) and 1902-0244 (FERC-725A)) in your submission.

83. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.69 The Commission has categorically excluded certain actions from this requirement as not having a significant effect on the human environment. Included in the exclusion are rules that are clarifying, corrective, or procedural or that do not substantially change the effect of the regulations being amended.70 The actions approved herein fall within this categorical exclusion in the Commission's regulations.

84. The Regulatory Flexibility Act of 1980 (RFA) generally requires a description and analysis of Proposed Rules that will have significant economic impact on a substantial number of small entities.71 The Small Business Administration's (SBA) Office of Size Standards develops the numerical definition of a small business.72 The SBA revised its size standard for electric utilities (effective January 22, 2014) to a standard based on the number of employees, including affiliates (from a standard based on megawatt hours).73 Proposed Reliability Standards TOP-001-3, TOP-002-4, TOP-003-3, IRO-001-4, IRO-002-4, IRO-008-2, IRO-010-2, IRO-014-3, and IRO-017-1 are expected to impose an additional burden on 196 entities (reliability coordinators, transmission operators, balancing authorities, transmission service providers, and planning authorities). Comparison of the applicable entities with the Commission's small business data indicates that approximately 82 of these entities are small entities that will be affected by the proposed Reliability Standards.74 As discussed above, proposed Reliability Standards TOP-001-3, TOP-002-4, TOP-003-3, IRO-001-4, IRO-002-4, IRO-008-2, IRO-010-2, IRO-014-3, and IRO-017-1 will serve to enhance reliability by imposing mandatory requirements for operations planning, system monitoring, real-time actions, coordination between applicable entities, and operational reliability data. The Commission estimates that each of the small entities to whom the proposed Reliability Standards TOP-001-3, TOP-002-4, TOP-003-3, IRO-001-4, IRO-002-4, IRO-008-2, IRO-010-2, IRO-014-3, and IRO-017-1 applies will incur costs of approximately $147,364 (annual ongoing) per entity. The Commission does not consider the estimated costs to have a significant economic impact on a substantial number of small entities. The Commission seeks comment on this proposal.

85. The Commission invites interested persons to submit comments on the matters and issues proposed in this notice to be adopted, including any related matters or alternative proposals that commenters may wish to discuss. Comments are due August 24, 2015. Comments must refer to Docket No. RM15-16-000, and must include the commenter's name, the organization they represent, if applicable, and their address in their comments.

86. The Commission encourages comments to be filed electronically via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing formats. Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format. Commenters filing electronically do not need to make a paper filing.

87. Commenters that are not able to file comments electronically must send an original of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE., Washington, DC 20426.

88. All comments will be placed in the Commission's public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. Commenters on this proposal are not required to serve copies of their comments on other commenters.

89. In addition to publishing the full text of this document in the Federal Register, the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through the Commission's Home Page (http://www.ferc.gov) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, Washington, DC 20426.

90. From the Commission's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number of this document, excluding the last three digits, in the docket number field.

91. User assistance is available for eLibrary and the Commission's Web site during normal business hours from the Commission's Online Support at 202-502-6652 (toll free at 1-866-208-3676) or email at [email protected], or the Public Reference Room at (202) 502-8371, TTY (202) 502-8659. Email the Public Reference Room at [email protected].

1. Pursuant to section 215 of the Federal Power Act (FPA),1 the Commission proposes to approve Reliability Standards and definitions of terms submitted in three related petitions by the North American Electric Reliability Corporation (NERC), the Commission-approved Electric Reliability Organization (ERO). In particular, the Commission proposes to approve Reliability Standards EOP-011-1 (Emergency Operations) and PRC-010-1 (Undervoltage Load Shedding). NERC explains that the proposed Reliability Standards consolidate, streamline, and clarify the existing requirements of certain currently-effective Emergency Preparedness and Operations (EOP) and Protection and Control (PRC) standards. The Commission also proposes to approve NERC's revised definition of the term “Remedial Action Scheme” as set forth in the NERC Glossary of Terms Used in Reliability Standards (NERC Glossary), and modifications of specified Reliability Standards to incorporate the revised definition. Further, the Commission proposes to approve assigned violation risk factors and violation severity levels, proposed implementation plans, and the retirement of certain currently-effective Reliability Standards. The Commission discusses concerns regarding several of NERC's proposals and, depending on the comments provided in response, the Commission may direct NERC to develop further modifications to address the concerns and possibly delay the retirement of one currently-effective standard.

2. Section 215 of the FPA requires a Commission-certified ERO to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval.2 Once approved, the Reliability Standards may be enforced by the ERO subject to Commission oversight or by the Commission independently. In 2006, the Commission certified NERC as the ERO pursuant to FPA section 215.3

3. On March 16, 2007, the Commission issued Order No. 693, approving 83 of the 107 Reliability Standards filed by NERC, including initial versions of EOP-001, EOP-002, and EOP-003.4 In addition, the Commission directed NERC to develop certain modifications to the EOP standards. In Order No. 693, the Commission also approved several Undervoltage Load Shedding (UVLS)-related Reliability Standards, including PRC-010-0, PRC-021-1 and PRC-022-1.5 Also, the Commission directed NERC to modify Reliability Standard PRC-010-0 to develop an “integrated and coordinated” approach to all protection systems.6 In Order No. 693, the Commission approved the NERC Glossary, including NERC's currently-effective Special Protection System and Remedial Action Scheme definitions.

4. NERC submitted three related petitions that we address together in this notice of proposed rulemaking (NOPR).7

5. On December 29, 2014, NERC submitted a petition seeking Commission approval of proposed Reliability Standard EOP-011-1 and a revised definition of “Energy Emergency.” NERC explains that proposed Reliability Standard EOP-011-1 consolidates the requirements in three existing Reliability Standards: EOP-001-2.1b, EOP-002-3.1 and EOP-003-2 “into a single Reliability Standard that clarifies the critical requirements for Emergency Operations while ensuring strong communication and coordination across the functional entities.” 8 NERC seeks retirement of Reliability Standards EOP-001-2.1b, EOP-002-3.1 and EOP-003-2, as well as the approval of the associated implementation plan and violation risk factors and violation severity levels for Reliability Standard EOP-011-1 detailed in the petition. NERC also asserts that proposed Reliability Standard EOP-011-1 satisfies seven Commission directives set forth in Order No. 693.9

6. NERC states that the purpose of proposed Reliability Standard EOP-011-1 is “to address the effects of operating Emergencies by ensuring each Transmission Operator and Balancing Authority has developed Operating Plans to mitigate operating Emergencies, and that those plans are coordinated within a Reliability Coordinator area.” 10 NERC notes that Requirements R2 and R6 of the proposed Reliability Standard incorporate Attachment 1, which describes three energy emergency levels used by the reliability coordinator and the process for communicating the condition of a balancing authority experiencing an energy emergency.11

7. Proposed Reliability Standard EOP-011-1 includes six requirements, and is applicable to balancing authorities, reliability coordinators and transmission operators. Requirements R1 and R2 require transmission operators and balancing authorities to develop, maintain and implement reliability coordinator-reviewed operating plans to mitigate operating, capacity and energy emergencies.12 Requirement R1 specifies elements for the plans “as applicable,” which is intended to provide flexibility to account for regional differences and pre-existing emergency mitigation methods. NERC states that the requirement for transmission operators and balancing authorities to maintain operating plans includes the expectation that the plans are current and up-to-date.13

8. Requirement R3 requires reliability coordinators to review the operating plans submitted by transmission operators and balancing authorities and is designed to ensure that there is appropriate coordination of reliability risks identified in the operating plans. In reviewing operating plans, reliability coordinators shall consider compatibility, coordination and inter-dependency with other entity operating plans and notify transmission operators and balancing authorities if revisions to their operating plans are necessary.14

9. Requirement R4 requires transmission operators and balancing authorities to resolve any issues identified by the reliability coordinator and resubmit their revised operating plans within a time period specified by the reliability coordinator. Requirement R5 requires each reliability coordinator to notify balancing authorities and transmission operators in its area, and neighboring reliability coordinators, within thirty minutes of receiving an emergency notification. Requirement R6 requires a reliability coordinator with a balancing authority experiencing a potential or actual energy emergency to declare an energy emergency alert in accordance with Attachment 1.

10. Proposed Reliability Standard EOP-011-1 also includes the following revised definition of Energy Emergency:

NERC explains that the proposed revised definition is intended to clarify that an energy emergency is not limited to a load-serving entity and, based on a review of the impact on the body of NERC Reliability Standards, “does not change the reliability intent of other requirements of Definitions.” 15

11. On February 6, 2015, NERC submitted a petition seeking approval of proposed Reliability Standard PRC-010-1 (Undervoltage Load Shedding), approval of a revised definition of Undervoltage Load Shedding Program (UVLS Program) for inclusion in the NERC Glossary, the implementation plan for the proposed Reliability Standard and the associated violation risk factors and violation severity levels and retirement of four PRC Reliability Standards.16

12. In its petition, NERC states that proposed Reliability Standard PRC-010-1 is a single, comprehensive standard that addresses the same reliability principles outlined in the four currently-effective UVLS-related Reliability Standards.17 NERC explains that the purpose of proposed Reliability Standard PRC-010-1 is to “establish an integrated and coordinated approach to the design, evaluation, and reliable operation of Undervoltage Load Shedding Programs” as directed by the Commission in Order No. 693.18 Also, according to NERC, proposed Reliability Standard PRC-010-1 replaces the applicability to and involvement of “Regional Reliability Organization” in Reliability Standards PRC-020-1 and PRC-021-1 and consolidates the four currently-effective UVLS-Related Standards into one comprehensive standard. NERC states that proposed Reliability Standard PRC-010-1 “reflects consideration of the 2003 Blackout Report recommendations,” 19 particularly, Recommendation 21 for NERC to “make more effective and wider use of system protection measures” 20 and Recommendation 21C that “NERC determine the goals and principles needed to establish an integrated approach to relay protection for generators and transmission lines, as well as of UFLS and UVLS programs.” 21

13. Proposed Reliability Standard PRC-010-1 incorporates a proposed definition of UVLS Program, which reads:

NERC explains that “to ensure that the applicability of the proposed Reliability Standard covers undervoltage-based load shedding systems whose performance has an impact on system reliability, a UVLS Program must mitigate risk of one or more of the following: Voltage instability, voltage collapse, or Cascading impacting the Bulk Electric System. By focusing on the enumerated risks, the definition is meant to exclude locally-applied relays that are not designed to mitigate wide-area voltage collapse.” 22 NERC states that the proposed UVLS Program definition “clearly identifies and separates centrally controlled undervoltage-based load shedding, which is now addressed by the proposed definition of Remedial Action Scheme.” 23

14. Proposed Reliability Standard PRC-010-1 applies to planning coordinators and transmission planners because “either may be responsible for designing and coordinating the UVLS Program . . . [and] also applies to Distribution Providers and Transmission Owners responsible for the ownership, operation and control of UVLS equipment as required by the UVLS Program established by the Transmission Planner or Planning Coordinator.” 24 NERC explains that the planning coordinator or transmission planner that establishes a UVLS Program is responsible for identifying the UVLS equipment and the necessary distribution provider and transmission owner (referred to as “UVLS entities” in the Applicability section) that performs the required actions.

15. NERC states that proposed Reliability Standard PRC-010-1 “applies only after an entity has determined the need for a UVLS Program as a result of its own planning studies.” 25 NERC explains that the eight requirements in proposed Reliability Standard PRC-010-1 meet four primary objectives: (1) The proposed standard requires applicable entities to evaluate a UVLS Program's effectiveness prior to implementation, including coordination with other protection systems and generator voltage ride-through capabilities; (2) applicable entities must comply with UVLS program specifications and implementation schedule; (3) applicable entities must perform periodic assessment and performance analysis; and (4) applicable entities must maintain and share UVLS Program data.

16. Proposed Requirement R1 requires each planning coordinator or transmission planner that is developing a UVLS Program to evaluate the viability and effectiveness of its program before implementation to confirm its effectiveness in resolving the undervoltage conditions for which it was designed, and that it is integrated through coordination with generator ride-through capabilities and other protection and control systems. Also, the planning coordinator or transmission planner must provide the UVLS Program specifications and implementation schedule to the applicable UVLS entities. Requirement R2 requires UVLS entities to meet the UVLS Program's specifications and implementation schedule provided by the planning coordinator or transmission planner or address any necessary corrective actions in accordance with Requirement R5.

17. Requirement R3 requires each planning coordinator or transmission planner to perform periodic comprehensive assessments at least every 60 calendar months to ensure continued effectiveness of the UVLS program, including whether the program resolves identified undervoltage issues and that it is integrated and coordinated with generator voltage ride-through capabilities and other specified protection and control systems. Requirement R4 requires each planning coordinator or transmission planner to commence a timely assessment of a voltage excursion subject to the UVLS Program, within twelve calendar months of the event, to evaluate whether the UVLS Program resolved the undervoltage issues associated with the event. Requirement R5 requires a planning coordinator or transmission planner to develop a corrective action plan for any program deficiencies identified during an assessment performed under either Requirement R3 or R4, and provide an implementation schedule to UVLS entities within three calendar months of its completion.

18. Pursuant to Requirement R6, a planning coordinator must update the data necessary to model its UVLS Program for use in event analyses and program assessments at least each calendar year. Requirement R7 requires each UVLS entity to provide data to its planning coordinator, according to the planning coordinator's format and schedule, to support maintenance of the UVLS Program database. Requirement R8 requires a planning coordinator to provide its UVLS Program database to other planning coordinators and transmission planners within its Interconnection, and other functional entities with a reliability need, within thirty calendar days of a written request.

19. NERC proposes that PRC-010-1 and the revised definition of UVLS Program shall become effective on the first day of the first calendar quarter that is twelve (12) months after the date that the standard and definition are approved by the Commission. NERC also proposes to retire PRC-010-0, PRC-020-1, PRC-021-1, and PRC-022-1 at midnight of the day immediately prior to the effective date of PRC-010-1.26 Further, NERC explains that proposed Reliability Standard PRC-010-1 addresses reliability obligations that are set forth in Requirements R2, R4 and R7 of currently-effective Reliability Standard EOP-003-2.27 Since NERC has proposed to retire EOP-003-2 in the petition seeking approval of proposed Reliability Standard EOP-011-1 (Docket No. RM15-7-00, discussed above), concurrent Commission action on the two petitions will prevent a possible reliability gap.

20. On February 3, 2015, NERC submitted a petition seeking approval of a proposed revised definition of Remedial Action Scheme in the NERC Glossary. In addition, NERC seeks approval of modified Reliability Standards that incorporate the new definition of Remedial Action Scheme and eliminate use of the term Special Protection System.28 NERC states that the defined terms Special Protection System and Remedial Action Scheme are currently used interchangeably throughout the NERC Regions and in various Reliability Standards. NERC explains that “[a]lthough these defined terms share a common definition in the NERC Glossary of Terms today, their use and application have been inconsistent as a result of a lack of granularity in the definition and varied regional uses of the terms. The proposed revisions add clarity and granularity that will allow for proper identification of Remedial Action Schemes and a more consistent application of related Reliability Standards.” 29

21. NERC states that the revised definition of Remedial Action Scheme consists of a “core” definition, including a list of objectives and a separate list of exclusions for certain schemes or systems not intended to be covered by the revised definition.30 NERC explains that it is proposing a broad definition because of “all the possible scenarios an entity may develop” for its Remedial Action Scheme and a “very specific, narrow definition may unintentionally exclude schemes that should be covered.” 31 Accordingly, NERC proposes the following revised “core” definition of Remedial Action Scheme:

The definition then lists fourteen exclusions, describing specific schemes and systems that do not constitute a Remedial Action Scheme, because each is either a protection function, a control function, a combination of both, or used for system reconfiguration.32

22. In the implementation plan, NERC proposes an effective date for the revised Reliability Standards and the revised definition of “Remedial Action Scheme” on the first day of the first calendar quarter that is twelve months after Commission approval.33 NERC also proposes that for entities with existing schemes that become newly classified as “Remedial Action Schemes” resulting from the application of the revised definition, the entities will have additional time of up to twenty-four months from the effective date to be fully compliant with all applicable Reliability Standards.34 Further, NERC asks the Commission to take final action concurrently with the NERC petition on proposed Reliability Standard PRC-010-1 (Docket No. RM15-12-000) because “[t]he proposed definitions of UVLS Program and Remedial Action Scheme in each project have been coordinated to cover centrally controlled UVLS as a Remedial Action Scheme. Final action by the Commission is needed contemporaneously on both petitions to facilitate implementation and avoid a gap in coverage of centrally controlled UVLS.” 35

23. Pursuant to section 215(d) of the FPA, the Commission proposes to approve as just, reasonable, not unduly discriminatory or preferential, and in the public interest the proposed Reliability Standards and NERC Glossary definitions set forth in NERC's three petitions pertaining to EOP-011-1, PRC-010-1 and a revised definition of Remedial Action Scheme. As discussed below, the Commission believes that the modified Reliability Standards provide greater clarity, and the consolidated EOP and PRC standards will provide additional efficiencies for responsible entities.

24. Pursuant to section 215(d) of the FPA, we propose to approve proposed Reliability Standard EOP-011-1 and the proposed new Energy Emergency definition, as well as the proposed violation risk factors and violation severity levels and implementation plan. We agree with NERC that proposed EOP-011-1 consolidates and reorganizes previously approved standards, and proposes modifications based on current operating practices and experience. We believe that the Reliability Standard enhances reliability by requiring that actions necessary to mitigate capacity and energy emergencies are focused in single operating plans, and ensures communication and coordination among relevant entities during emergency operations. Also, we are satisfied that the NERC petition adequately addresses the relevant Order No. 693 directives.36

25. Pursuant to section 215 of the FPA, we propose to approve proposed Reliability Standard PRC-010-1 as just, reasonable, not unduly discriminatory or preferential and in the public interest. We also propose to approve the proposed, revised definition of UVLS Program for inclusion in the NERC Glossary, the implementation plan and the associated violation risk factors and violation severity levels. Likewise, we propose to approve the retirement of PRC-010-0, PRC-020-1 and PRC-021-1.37 However, for the reasons explained below, we are concerned whether it is appropriate to retire PRC-022-1, as NERC requests, before an acceptable replacement Reliability Standard is in place to address the potential misoperation of UVLS equipment.

26. The Commission agrees with NERC that proposed Reliability Standard PRC-010-1 will improve system reliability by establishing an integrated and coordinated approach to the design, evaluation and reliable operation of UVLS Programs, and therefore satisfies the Commission's directive issued in Order No. 693.38 We also propose to approve the proposed UVLS Program definition and agree that it “clearly identifies and separates centrally controlled undervoltage-based load shedding, which is now addressed by the proposed definition of Remedial Action Scheme.” 39

27. In the “Guidelines for UVLS Program Definition,” NERC provides an example of a “BES subsystem,” in the diagram below, illustrating a UVLS system that would not be included in the definition of UVLS Program if the consequences of the contingency do not impact the BES.40 The Commission seeks clarification whether this example illustrates a centrally controlled UVLS and would therefore be considered a Remedial Action Scheme.41 The Commission also seeks clarification regarding the use of the term “BES subsystem,” since the term is not defined in the NERC Glossary. Depending on the response from NERC and others, a directive for further modification may be appropriate to ensure that the UVLS standards and related NERC guidance are consistent with the Commission-approved definition of “bulk electric system.” 42

28. NERC proposes to retire Reliability Standard PRC-022-1, which requires transmission operators, load-serving entities and distribution providers to analyze and document all UVLS operations and misoperations. Requirement R1.5 of this Reliability Standard requires that an applicable entity's analysis and documentation should include “[f]or any Misoperation, a Corrective Action Plan to avoid future Misoperations of a similar nature.” Proposed Reliability Standard PRC-010-1, Requirement R5 addresses deficiencies in UVLS Programs that a planning coordinator or transmission planner identifies during assessments performed in accordance with either Requirement R3 (periodic UVLS Program effectiveness evaluations) or Requirement R4 (evaluations to assess UVLS Program responses to voltage excursions), and requires the entities to develop a Corrective Action Plan to address the deficiencies.

29. NERC correctly states that “[w]hen a UVLS Program does not function as expected and designed during a voltage excursion event, this presents a risk to system reliability.” 43 However, we are not persuaded that proposed Reliability Standard PRC-010-1, Requirement R4 is an adequate replacement for currently-effective PRC-022-1, which contains requirements specifically addressing misoperations. Accordingly, we propose to deny NERC's proposal to retire currently-effective Reliability Standard PRC-022-1 concurrent with the effective date of proposed PRC-010-1. Rather, we propose that Reliability Standard PRC-022-1 remain in effect until an acceptable replacement standard is approved and implemented.44

30. Pursuant to section 215(d) of the FPA, the Commission proposes to approve the proposed definition of Remedial Action Scheme, the proposed exclusions, the proposed Reliability Standards and proposed implementation plan, as just, reasonable, not unduly discriminatory or preferential, and in the public interest. We are persuaded that the use of a broad, core definition with a wide scope, accompanied by a list of specific exclusions will help avoid confusion and achieve a uniform understanding across all the Regional Entities of the proper classification of what schemes and systems constitute a Remedial Action Scheme. We agree with NERC that the proposed definition will improve reliability by eliminating ambiguity and promoting the proper, consistent identification of Remedial Action Schemes and more consistency in the application of related Reliability Standards.45

31. The collection of information contained in this Notice of Proposed Rulemaking is subject to review by the Office of Management and Budget (OMB) regulations under section 3507(d) of the Paperwork Reduction Act of 1995 (PRA).46 OMB's regulations require approval of certain informational collection requirements imposed by agency rules.47 Upon approval of a collection(s) of information, OMB will assign an OMB control number and an expiration date. Respondents subject to the filing requirements of a rule will not be penalized for failing to respond to these collections of information unless the collections of information display a valid OMB control number.

32. We solicit comments on the need for this information, whether the information will have practical utility, the accuracy of the burden estimates, ways to enhance the quality, utility, and clarity of the information to be collected or retained, and any suggested methods for minimizing respondents' burden, including the use of automated information techniques. Specifically, the Commission asks that any revised burden or cost estimates submitted by commenters be supported by sufficient detail to understand how the estimates are generated.

33. Public Reporting Burden: As of May 2015, there are 99 balancing authorities, 15 reliability coordinators and 171 transmission operators registered with NERC. These registered entities will have to comply with 6-8 new requirements in the proposed Reliability Standard EOP-011-1. As proposed, each registered balancing authority will have to comply with Requirements R2, R4, and, under certain circumstances, R5. Each reliability coordinator will have to comply with Requirements R1 and its subparts, R2 and its subparts, R3 and its subparts, R5 and R6. Each transmission operator will have to comply with Requirements R1 and its subparts and R4.

34. Proposed Reliability Standard EOP-011-1 replaces a combined total of 40 requirements or subparts that are found in Reliability Standards EOP-001-2.1b, EOP-002-3.1 and EOP-003-2. These three Reliability Standards are proposed to be retired, concurrent with the effective date of proposed Reliability Standard EOP-011-1. Accordingly, the requirements in proposed Reliability Standard EOP-011-1 do not create any new burdens for applicable balancing authorities or transmission operators because the requirements in Reliability Standard EOP-011-1 are already burdens or tasks imposed on this set of registered entities by Reliability Standards EOP-001-2.1b, EOP-002-3.1 and EOP-003-2 under FERC-725A (1902-0244).

35. Proposed Reliability Standard EOP-011-1 requires reliability coordinators to perform the additional tasks of reviewing, correcting, and coordinating their balancing authorities' and transmission operators' operating procedures for emergency conditions. The Commission estimates that these tasks will add approximately 1,500 man-hours per year for each reliability coordinator as described in detail in the following table:

36. Public Reporting Burden: As of May 2015, there are 450 registered distribution providers and 175 transmission planners that are not overlapping in their registration with the distribution provider registration. We estimate that five percent of all distribution providers (23) and transmission planners (9) have under voltage load shedding programs that fall under the proposed Reliability Standard. The proposed Reliability Standard is applicable to planning coordinators and transmission planners, distribution providers and transmission owners. However, only distribution providers and transmission owners would be responsible for the incremental compliance burden under proposed Reliability Standard PRC-010-1, Requirement R2, as described in detail in the following table:

37. Public Reporting Burden: The Commission approved the definition of Special Protection System (Remedial Action Scheme) in Order No. 693. We propose to approve a revision to the previously approved definition. The proposed revisions to the Remedial Action Scheme definition and proposed Reliability Standards are not expected to result in changes to the scope of systems covered by the proposed Reliability Standards and other Reliability Standards that include the term Remedial Action Scheme. Therefore, the Commission does not expect the proposed revisions to affect applicable entities' current reporting burden.

FERC-725G4, Mandatory Reliability Standards: Reliability Standard PRC-010-1 (Undervoltage Load Shedding).

FERC-725S, Mandatory Reliability Standards: Reliability Standard EOP-011-1 (Emergency Operations).

Action: Proposed Collection of Information.

OMB Control No: OMB Control No. 1902-0270 (FERC-725S); OMB Control No. 1902-TBD (FERC-725G4).

Respondents: Business or other for-profit and not-for-profit institutions.

Frequency of Responses: One time and on-going.

Necessity of the Information: The proposed approval of the proposed Reliability Standards implements the Congressional mandate of the Energy Policy Act of 2005 to develop mandatory and enforceable Reliability Standards to better ensure the reliability of the nation's Bulk-Power System. Specifically, the proposed Reliability Standards consolidate, streamline and clarify the existing requirements of certain currently-effective Emergency Preparedness and Operations and Protection and Control Reliability Standards.

38. Internal review: The Commission has reviewed the requirements pertaining to proposed Reliability Standards PRC-010-1 and EOP-011-1 and made a determination that the proposed requirements of these Reliability Standards are necessary to implement section 215 of the FPA. These requirements conform to the Commission's plan for efficient information collection, communication and management within the energy industry. The Commission has assured itself, by means of its internal review, that there is specific, objective support for the burden estimates associated with the information requirements.

39. Interested persons may obtain information on the reporting requirements by contacting the Federal Energy Regulatory Commission, Office of the Executive Director, 888 First Street NE., Washington, DC 20426 [Attention: Ellen Brown, email: [email protected], phone: (202) 502-8663, fax: (202) 273-0873].

40. Comments concerning the information collections proposed in this NOPR and the associated burden estimates, should be sent to the Commission in this docket and may also be sent to the Office of Management and Budget, Office of Information and Regulatory Affairs [Attention: Desk Officer for the Federal Energy Regulatory Commission]. For security reasons, comments should be sent by email to OMB at the following email address: [email protected]. Please reference the docket numbers of this Notice of Proposed Rulemaking (Docket Nos. RM15-13-000, RM15-12-000, and RM15-7-000) in your submission.

41. The Regulatory Flexibility Act of 1980 (RFA) 53 generally requires a description and analysis of Proposed Rules that will have significant economic impact on a substantial number of small entities. The immediate rulemaking proposes action on three separate, but related, NERC petitions. As discussed above, the consolidated EOP standard and consolidated PRC standards are intended to provide additional efficiencies for responsible entities. Thus, the Commission estimates that the rulemaking will impose only a minimal additional burden on responsible entities, as described below. Proposed Reliability Standard EOP-011-1 is expected to impose an additional burden on 11 entities (reliability coordinators). The remaining 270 entities (balancing authorities and transmission operators and a combination thereof) will maintain the existing levels of burden. Comparison of the applicable entities with FERC's small business data indicates that approximately 7 of the 11 entities are small entities affected by this proposed Reliability Standard.54

42. On average, each small entity affected may have a one-time cost of $92,387, representing a one-time review of the program for each entity, consisting of 1,500 man-hours at $66.35/hour (for engineers) and $30.66/hour (for record clerks), as explained above in the information collection statement. Proposed Reliability Standard PRC-010-1 is expected to impose an additional burden on 26 entities (distribution providers and transmission planners or a combination thereof). Comparison of the applicable entities with FERC's small business data indicates that approximately 8 are small entities affected by this proposed Reliability Standard.

43. On average, each small entity affected may have a cost of $1,906, representing a one-time review of the program for each entity, consisting of 96 man-hours at $66.35/hour (for engineers) and $30.66/hour (for record clerks), as explained above in the information collection statement. The Commission estimates that the modified definition of the term Remedial Action Scheme and related modifications to Reliability Standards will have no cost impact on applicable entities, including any small entities.

44. The Commission estimates that the combined impact of proposed Reliability Standards EOP-011-1 and PRC-010-1 in this NOPR would impose an additional burden on a total of 47 entities. Further, the Commission estimates that 15 respondents are small entities affected by these proposed Reliability Standards. On average, each small entity affected may have a cost of $92,387 and $1,906 (EOP-011-1 and PRC-010-1 respectively), representing a one-time review of the program for each entity. The Commission does not consider these costs to be a significant economic impact on small entities. Accordingly, the Commission certifies that this rulemaking will not have a significant economic impact on a substantial number of small entities. The Commission seeks comment on this certification.

45. The Commission is required to prepare an Environmental Assessment or an Environmental Impact Statement for any action that may have a significant adverse effect on the human environment.55 The Commission has categorically excluded certain actions from this requirement as not having a significant effect on the human environment. Included in the exclusion are rules that are clarifying, corrective, or procedural or that do not substantially change the effect of the regulations being amended.56 The actions proposed herein fall within this categorical exclusion in the Commission's regulations.

46. The Commission invites interested persons to submit comments on the matters and issues proposed in this notice to be adopted, including any related matters or alternative proposals that commenters may wish to discuss. Comments are due August 24, 2015. Comments must refer to Docket Nos. RM15-13-000, RM15-12-000, and RM15-7-000, and must include the commenter's name, the organization they represent, if applicable, and address.

47. The Commission encourages comments to be filed electronically via the eFiling link on the Commission's Web site at http://www.ferc.gov. The Commission accepts most standard word processing formats. Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format. Commenters filing electronically do not need to make a paper filing.

48. Commenters that are not able to file comments electronically must send an original of their comments to: Federal Energy Regulatory Commission, Secretary of the Commission, 888 First Street NE., Washington, DC 20426.

49. All comments will be placed in the Commission's public files and may be viewed, printed, or downloaded remotely as described in the Document Availability section below. Commenters on this proposal are not required to serve copies of their comments on other commenters.

50. In addition to publishing the full text of this document in the Federal Register, the Commission provides all interested persons an opportunity to view and/or print the contents of this document via the Internet through the Commission's Home Page (http://www.ferc.gov) and in the Commission's Public Reference Room during normal business hours (8:30 a.m. to 5:00 p.m. Eastern time) at 888 First Street NE., Room 2A, Washington, DC 20426.

51. From the Commission's Home Page on the Internet, this information is available on eLibrary. The full text of this document is available on eLibrary in PDF and Microsoft Word format for viewing, printing, and/or downloading. To access this document in eLibrary, type the docket number excluding the last three digits of this document in the docket number field.

52. User assistance is available for eLibrary and the Commission's Web site during normal business hours from the Commission's Online Support at (202) 502-6652 (toll free at 1-866-208-3676) or email at [email protected], or the Public Reference Room at (202) 502-8371, TTY (202) 502-8659. Email the Public Reference Room at [email protected].

Paperwork Reduction Act

The collection of information contained in § 1.148-1 has been reviewed and approved by the Office of Management and Budget in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) under control number 1545-1347. The collection of information in this proposed regulation is in § 1.148-1(f)(2)(ii) which contains a requirement that the issuer obtain certifications and supporting documentation regarding the underwriter's sales of the issuer's bonds. The collection of information in § 1.148-1(f)(2)(ii) is an increase in the total annual burden under control number 1545-1347. The respondents are issuers of tax-exempt bonds that wish to use the alternative method in § 1.148-1(f)(2)(ii).

Estimated total annual recordkeeping burden: 52,276 hours.

Estimated average annual burden hours per respondent: 4 hours.

Estimated number of respondents: 12,546.

Estimated annual frequency of responses: 20,910.

Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of the Treasury, Office of Information and Regulatory Affairs, Washington, DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:CAR:MP:T:T:SP, Washington DC 20224. Comments on the collection of information should be received by August 24, 2015.

Comments are sought on whether the proposed collection of information is necessary for the proper performance of the IRS, including whether the information will have practical utility;

The accuracy of the estimated burden associated with the proposed collection of information;

How the quality, utility, and clarity of the information to be collected may be enhanced;

How the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques and other forms of information technology; and

Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of service to provide information.

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

Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally tax returns and tax return information are confidential, as required by section 6103.

This document contains proposed amendments to the Income Tax Regulations (26 CFR part 1) on the arbitrage investment restrictions under section 148 of the Code. On June 18, 1993, the Department of the Treasury (Treasury Department) and the IRS published comprehensive final regulations in the Federal Register (TD 8476, 58 FR 33510) on the arbitrage investment restrictions and related provisions for tax-exempt bonds under sections 103, 148, 149, and 150. Since that time, those final regulations have been amended in certain limited respects (the regulations issued in 1993 and the amendments thereto are collectively referred to as the Existing Regulations).

A notice of proposed rulemaking was published in the Federal Register (78 FR 56842; REG-148659-07) on September 16, 2013 (the 2013 Proposed Regulations), which proposes amendments to the Existing Regulations to address market developments, simplify certain provisions, address certain technical issues, and make the regulations more administrable. One significant change in the 2013 Proposed Regulations addresses the definition of issue price. Comments were received, and a public hearing was held on February 5, 2014. After considering the comments and the statements made at the public hearing, the Treasury Department and the IRS have decided to withdraw § 1.148-1(f) of the 2013 Proposed Regulations relating to issue price and to propose new regulations. This document (the Proposed Regulations) contains the re-proposed definition of issue price. The Treasury Department and the IRS will address the remaining provisions contained in the 2013 Proposed Regulations at a later time.

For purposes of the arbitrage investment restrictions, section 148(h) provides that yield on an issue is to be determined on the basis of the issue price (within the meaning of sections 1273 and 1274). The reason for using issue price (rather than sales proceeds less the costs of issuance) to determine yield for purposes of section 148(h) is to ensure that issuers bear the costs of issuance, rather than recover these costs through arbitrage profits. See H. Rep. No. 99-426, at 517 (1985). Congress thought that this requirement would encourage issuers to scrutinize costs of issuance more closely and would encourage better targeting of the federal subsidy associated with tax-exempt bonds. Id., at 517-518. The issue price definition under the Existing Regulations generally follows the issue price definition used for computing original issue discount on debt instruments under sections 1273 and 1274, with certain modifications. The definition under the Existing Regulations provides that generally the issue price of bonds that are publicly offered is the first price at which a substantial amount of the bonds is sold to the public. However, the issue price definition in the Existing Regulations defines substantial amount as ten percent and applies a reasonable expectations standard (rather than a standard based on actual sales) for determining the issue price of bonds that are publicly offered. Specifically, the issue price of bonds for which a bona fide public offering is made is determined as of the sale date based on reasonable expectations regarding the initial offering price. The issue prices of bonds with different payment and credit terms are determined separately. Notice 2010-35, published May 10, 2010 (2010-19 IRB 660), provides that the arbitrage definition of issue price also applies to other tax-advantaged bond programs, including Build America Bonds under section 54AA and other Qualified Tax Credit Bonds under section 54A.

The definition of issue price in the 2013 Proposed Regulations differs significantly from that in the Existing Regulations. Consistent with section 148(h), the 2013 Proposed Regulations retain the rule that issue price generally will be determined under the rules of sections 1273 and 1274. The 2013 Proposed Regulations parallel the language in the existing section 1273 regulations by providing that the issue price of tax-exempt bonds issued for money is the first price at which a substantial amount of the bonds is sold to the public. The 2013 Proposed Regulations provide a safe harbor under which an issuer may treat the first price at which a minimum of 25 percent of the bonds in an issue (with the same credit and payment terms) actually is sold to the public as the issue price, provided that all orders at this price received from the public during the offering period are filled (to the extent that the public orders at such price do not exceed the amount of bonds sold). Thus, the 2013 Proposed Regulations base the determination of issue price on actual sales prices instead of reasonably expected sales at initial public offering prices. The 2013 Proposed Regulations also remove the definition of a “substantial amount” as ten percent.

The 2013 Proposed Regulations define the term “public” to mean any person other than an “underwriter.” The 2013 Proposed Regulations define the term “underwriter” to mean any person that purchases bonds from the issuer for the purpose of effecting the original distribution of the bonds or otherwise participates directly or indirectly in the original distribution. An underwriter includes a lead underwriter and any member of a syndicate that contractually agrees to participate in the underwriting of the bonds for the issuer. A securities dealer (whether or not a member of the issuer's underwriting syndicate) that purchases bonds (whether or not from the issuer) for the purpose of effecting the original distribution of the bonds is also treated as an underwriter for this purpose. An underwriter generally includes a party related to an underwriter. A person that holds bonds for investment is not an underwriter with respect to those bonds.

A number of comments were received on the 2013 Proposed Regulations issue price definition. In general, the commenters requested the withdrawal of the portion of the 2013 Proposed Regulations relating to the definition or the re-proposal of the definition using the existing reasonable expectations test regarding the initial public offering price, with certain clarifications. Commenters pointed out that issue price must be determined as of the sale date to provide certainty that the bonds will qualify as tax-exempt and meet state or local requirements for debt issuance. The sale date is the date when the syndicate or sole underwriter in contractual privity with the issuer signs the agreement to buy the bonds from the issuer and when the terms of the bond issue are set. Commenters expressed concern about insufficient sales of bonds preventing a timely determination of issue price on the sale date. The commenters noted that the syndicate or sole underwriter in contractual privity purchases the bonds from the issuer, so the syndicate or sole underwriter, rather than the issuer, will bear the risk of any market fluctuations after the sale date. Because the issuer neither bears this risk nor receives any further proceeds, any later change in price is not a factor that affects the costs of issuance paid by the issuer. In addition, later sales prices could reflect changes in the market, whereas the purpose of using issue price is to preclude recovery of issuance costs through arbitrage profits. See H. Rep. No. 99-426, at 517.

In general, the lower the issue price for the bonds bearing a stated interest rate, the higher the yield. Economically, the issuer should want to receive the highest price for the bonds and pay the lowest yield. This aligns with the purpose of the arbitrage provisions to minimize arbitrage investment benefits and remove incentives to issue more tax-exempt bonds, and thus to limit the federal revenue cost of the tax subsidy for tax-exempt bonds. Many of the commenters stated, however, that the use of actual sales prices likely would result in lower bond offering prices so as to ensure that each issue would meet the 25 percent threshold in the safe harbor in the 2013 Proposed Regulations as of the sale date of the bonds. The commenters pointed to unsold bonds in particular maturities of an overall tax-exempt bond issue that includes a series of bonds with separate maturities and issue prices as the particular impediment to meeting an actual sale requirement as of the sale date. These lower bond prices would reduce proceeds and increase borrowing costs for issuers, increase bond yields for arbitrage purposes, and increase federal tax subsidies.

In addition, commenters suggested that the definition of underwriter in the 2013 Proposed Regulations was unduly broad and ambiguous. In particular, commenters expressed concern that the 2013 Proposed Regulations effectively required the issuer to obtain price information from dealers that are not in a contractual relationship with the issuer or underwriting syndicate. The commenters also expressed concern that the proposed definition of underwriter necessitated determining a dealer's intent for buying bonds because whether a dealer was an underwriter depended upon whether the dealer purchased bonds with “the purpose of effecting the original distribution of the bonds.”

In response to the comments received, the Treasury Department and the IRS are re-proposing an amended definition of issue price for tax-exempt bonds. Consistent with section 148(h), the Proposed Regulations retain the rule that issue price generally will be determined under the rules of sections 1273 and 1274. The Proposed Regulations also parallel the language in the existing section 1273 regulations and the Existing Regulations by providing that the issue price of bonds issued for money is the first price at which a substantial amount of the bonds is sold to the public. This rule uses actual sales to determine issue price and is consistent with section 1273. The Proposed Regulations retain the rule in the Existing Regulations that ten percent is a substantial amount.

The Proposed Regulations also retain the rule for tax-exempt bonds that the issue prices of bonds with different payment and credit terms are determined separately. Tax-exempt bond issues often include bonds with different payment and credit terms that generally sell at different prices. In response to commenters' concerns regarding the need for certainty with respect to the determination of issue price of the issue as of the sale date and that less than a substantial amount of particular bonds included within an issue may be sold by that time, the Proposed Regulations provide an alternative method of determining issue price for bonds a substantial amount of which is not sold pursuant to orders received from the public as of the sale date. Under this alternative method, an issuer may treat the initial offering price to the public as the issue price, provided certain requirements are met.

In particular, the alternative method requires that the underwriters fill all orders at the initial offering price placed by the public and received by the underwriters on or before the sale date (to the extent the orders do not exceed the amount of bonds to be sold) and do not fill any order received by the underwriters on or before the sale date at a price higher than the initial offering price. Further, the alternative method requires the lead underwriter (or sole underwriter, if applicable) to provide certification with respect to certain matters under the alternative method, including a certification that no underwriter will fill an order received from the public after the sale date and before the issue date at a price higher than the initial offering price, except if the higher price is the result of a market change for those bonds after the sale date (for example, due to a change in interest rates), and that it will provide the issuer with supporting documentation for the matters covered by the certifications.

Documentation of the initial offering price may include a copy of the pricing wire (or equivalent communication). Documentation of bonds for which an underwriter filled an order placed by the public after the sale date and before the issue date at a price higher than the initial offering price includes both pricing information (amounts, prices, and sale dates) and information regarding the corresponding market change, such as proof of the values of a broad-based index of municipal bond interest rates on bonds similar to the type and credit rating of the bonds being sold. The issuer must not know or have reason to know, after exercising due diligence, that the certifications are false.

The Treasury Department and the IRS recognize that, under syndicate agreements among underwriters and MSRB rules, underwriters are free to sell bonds after the bond purchase agreement is signed at a fair and reasonable price different from the initial offering price. The alternative method allows the use of initial offering price as the issue price in circumstances in which bonds are sold after the sale date and before the issue date at a higher price, provided that the higher price results from a market change for those bonds after the sale date. Based on available data, the Treasury Department and the IRS believe that the frequency of sales by underwriters at higher prices between the sale date and the issue date is limited. Thus, the burden, in effect, of requiring underwriters to maintain initial public offering prices for unsold bonds until the issue date absent justification for higher prices based on market changes should be limited. The Treasury Department and the IRS request comments on other safeguards or alternative approaches to ensure that the prices obtained by underwriters in actual sales of bonds to the public between the sale date and the issue date are consistent with use of initial offering prices to the public as of the sale date as a simplifying assumption for issue price determinations in the alternative method.

The Proposed Regulations define “public” for purposes of determining the issue price of tax-exempt bonds as any person other than an underwriter or a related party to an underwriter. The Proposed Regulations define “underwriter” to include (i) any person that contractually agrees to participate in the initial sale of the bonds to the public by entering into a contract with the issuer or into a contract with a lead underwriter to form an underwriting syndicate and (ii) any person that, on or before the sale date, directly or indirectly enters into a contract or other arrangement to sell the bonds with any of the foregoing (for example, a retail distribution contract between a member of an underwriting syndicate or selling group and another dealer that is not in the syndicate or selling group).

The Proposed Regulations remove as unnecessary a rule in the Existing Regulations expressly stating that the issue price does not change if part of the issue is later sold at a different price. The Treasury Department and the IRS intend no substantive change by the removal.

In accordance with section 6001, the issuer should maintain documentation in its books and records to support its issue price determinations. This documentation includes the specific certifications and documentation required to determine issue price under the alternative method, as well as documentation to support issue price determinations under the general rule. For example, under the general rule, an issuer should include in its books and records any certification from the lead (or sole) underwriter regarding the first price at which a substantial amount of the bonds were sold to the public and reasonable supporting documentation for this price.

The Proposed Regulations are proposed to apply prospectively to bonds that are sold on or after the date that is 90 days after publication of the Treasury decision adopting these rules as final regulations in the Federal Register. In addition, issuers may rely upon the Proposed Regulations with respect to bonds that are sold on or after June 24, 2015, and before the date that is 90 days after publication of the Treasury decision adopting these rules as final regulations in the Federal Register.

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It has also been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. Chapter 5) does not apply.

It is hereby certified that these Proposed Regulations, if adopted, would not have a significant economic impact on a substantial number of small entities. Therefore, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. This certification is based generally on the fact that any effect on small entities by these rules generally flows from section 148 of the Code.

Section 148(h) of the Code requires the yield on an issue of bonds to be determined on the basis of issue price (within the meaning of sections 1273 and 1274). Under section 1273, the issue price is the first price at which a substantial amount of the bonds were sold to the public. Section 1.148-1(f)(2)(ii) of the Proposed Regulations gives effect to the statute by requiring the issuer to obtain certifications and documentation regarding sales of the bonds from the underwriter of the bonds, which is the party that sells the bonds to the public. This information will be used to support the issue price of the bonds for audit and other purposes. Any economic impact of obtaining this information is minimal because most of the information already is provided to issuers by the underwriters under existing industry practices. Accordingly, these proposed changes do not add to the impact on small entities imposed by the statutory provision. Pursuant to section 7805(f) of the Code, this notice of proposed rulemaking has been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business.

Before these Proposed Regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the “Addresses” heading. The IRS and the Treasury Department request comments on all aspects of the proposed rules. All comments that are submitted by the public will be available for public inspection and copying at www.regulations.gov or upon request.

A public hearing has been scheduled for October 28, 2015, at 10:00 a.m., in the IRS Auditorium, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC. Due to building security procedures, visitors must enter at the Constitution Avenue entrance. In addition, all visitors must present photo identification to enter the building. Because of access restrictions, visitors will not be admitted beyond the immediate entrance area more than 15 minutes before the hearing starts. For more information about having your name placed on the building access list to attend the hearing, see the FOR FURTHER INFORMATION CONTACT section of this preamble.

The rules of 26 CFR 601.601(a)(3) apply to the hearing. Persons who wish to present oral comments at the hearing must submit written or electronic comments and an outline of the topics to be discussed and the time to be devoted to each topic by September 22, 2015. Such persons should submit a signed paper original and eight (8) copies or an electronic copy. A period of 10 minutes will be allotted to each person for making comments. An agenda showing the scheduling of the speakers will be prepared after the deadline for receiving outlines has passed. Copies of the agenda will be available free of charge at the hearing.

The principal authors of these regulations are Johanna Som de Cerff and Lewis Bell, Office of Associate Chief Counsel (Financial Institutions and Products), IRS. However, other personnel from the IRS and the Treasury Department participated in their development.

Accordingly, under the authority of 26 U.S.C. 7805, § 1.148-1(f) of the notice of proposed rulemaking (REG-148659-07) that was published in the Federal Register on September 16, 2013 (78 FR 56842), is withdrawn.

Accordingly, 26 CFR part 1 is proposed to be amended as follows:

The VA is correcting and clarifying its proposed rule on Per Diem Paid to States for Care of Eligible Veterans in State Homes that published June 17, 2015, in the Federal Register at 80 FR 34794.

On page 34809, second column, in paragraph (c)(1) of § 51.30, remove “(except increases described in the first sentence of § 51.20(d)(2) of this part)” and replace it with “(except increases described in the first sentence of this section).”

In revising Subpart B—Obtaining Recognition and Certification for Per Diem Payments, the VA inadvertently left out instructions for § 51.41. This section is not changing and will remain in the CFR if this proposed rule is adopted.

In the Final Rules Section of this Federal Register, EPA is approving the State's SIP submittal as a direct final rule without prior proposal because the Agency views this as a noncontroversial submittal and anticipates no adverse comments. A detailed rationale for the approval is set forth in the direct final rule. If no adverse comments are received in response to this rule, no further activity is contemplated. If EPA receives adverse comments, the direct final rule will be withdrawn and all public comments received will be addressed in a subsequent final rule based on this proposed rule. EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment.

For additional information, see the direct final rule which is located in the Rules Section of this Federal Register.

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

When submitting comments, remember to:

1. Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date, and page number).

2. Follow directions—EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.

3. Explain why you agree or disagree; suggest alternatives and substitute language for your requested changes.

4. Describe any assumptions and provide any technical information and/or data that you used.

5. If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

6. Provide specific examples to illustrate your concerns, and suggest alternatives.

7. Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

8. Make sure to submit your comments by the comment period deadline identified.

This rulemaking addresses submissions from the Michigan Department of Environmental Management (MDEQ). The state submitted its infrastructure SIP for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS, as well as state board requirements under section 128 for incorporation into the SIP, on July 10, 2014.

Under sections 110(a)(1) and (2) of the CAA, states are required to submit infrastructure SIPs to ensure that their SIPs provide for implementation, maintenance, and enforcement of the NAAQS, including the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS. These submissions must contain any revisions needed for meeting the applicable SIP requirements of section 110(a)(2), or certifications that their existing SIPs for the NAAQS already meet those requirements.

EPA highlighted this statutory requirement in an October 2, 2007, guidance document entitled “Guidance on SIP Elements Required Under Sections 110(a)(1) and (2) for the 1997 8-hour Ozone and PM2.5 National Ambient Air Quality Standards” (2007 Memo) and has issued additional guidance documents, the most recent on September 13, 2013, “Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act Sections 110(a)(1) and (2)” (2013 Memo). The SIP submissions referenced in this rulemaking pertain to the applicable requirements of section 110(a)(1) and (2), and address the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS. To the extent that the prevention of significant deterioration (PSD) program is non-NAAQS specific, a narrow evaluation of other NAAQS will be included in the appropriate sections.

EPA is acting upon the SIP submissions from MDEQ that address the infrastructure requirements of CAA sections 110(a)(1) and 110(a)(2) for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS. The requirement for states to make a SIP submission of this type arises out of CAA section 110(a)(1). Pursuant to section 110(a)(1), states must make SIP submissions “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” and these SIP submissions are to provide for the “implementation, maintenance, and enforcement” of such NAAQS. The statute directly imposes on states the duty to make these SIP submissions, and the requirement to make the submissions is not conditioned upon EPA's taking any action other than promulgating a new or revised NAAQS. Section 110(a)(2) includes a list of specific elements that “[e]ach such plan” submission must address.

EPA has historically referred to these SIP submissions made for the purpose of satisfying the requirements of CAA section 110(a)(1) and 110(a)(2) as “infrastructure SIP” submissions. Although the term “infrastructure SIP” does not appear in the CAA, EPA uses the term to distinguish this particular type of SIP submission from submissions that are intended to satisfy other SIP requirements under the CAA, such as “nonattainment SIP” or “attainment plan SIP” submissions to address the nonattainment planning requirements of part D of title I of the CAA, “regional haze SIP” submissions required by EPA rule to address the visibility protection requirements of CAA section 169A, and nonattainment new source review (NNSR) permit program submissions to address the permit requirements of CAA, title I, part D.

This rulemaking will not cover three substantive areas that are not integral to acting on a state's infrastructure SIP submission: (i) Existing provisions related to excess emissions during periods of start-up, shutdown, or malfunction at sources, that may be contrary to the CAA and EPA's policies addressing such excess emissions (SSM); (ii) existing provisions related to “director's variance” or “director's discretion” that purport to permit revisions to SIP-approved emissions limits with limited public process or without requiring further approval by EPA, that may be contrary to the CAA (director's discretion); and, (iii) existing provisions for PSD programs that may be inconsistent with current requirements of EPA's “Final New Source Review (NSR) Improvement Rule,” 67 FR 80186 (December 31, 2002), as amended by 72 FR 32526 (June 13, 2007) (NSR Reform). Instead, EPA has the authority to address each one of these substantive areas in separate rulemakings. A detailed history, interpretation, and rationale as they relate to infrastructure SIP requirements can be found in EPA's May 13, 2014, proposed rule entitled, “Infrastructure SIP Requirements for the 2008 Lead NAAQS” in the section, “What is the scope of this rulemaking?” (see 79 FR 27241 at 27242-27245).

EPA's guidance for these infrastructure SIP submissions is embodied in the 2007 Memo. Specifically, attachment A of that memorandum (Required Section 110 SIP Elements) identifies the statutory elements that states need to submit in order to satisfy the requirements for an infrastructure SIP submission. EPA issued additional guidance documents, the most recent being the 2013 Memo, which further clarifies aspects of infrastructure SIPs that are not NAAQS specific.

As noted in the 2013 Memo, pursuant to section 110(a), states must provide reasonable notice and opportunity for public hearing for all infrastructure SIP submissions. MDEQ provided the opportunity for public comment for these submittals that ended on May 7, 2014. Additionally, MDEQ provided an opportunity for a public hearing. The state received comments and responded to them. EPA is also soliciting comment on our evaluation of the state's infrastructure SIP submission in this notice of proposed rulemaking. MDEQ provided detailed synopses of how various components of its SIP meet each of the requirements in section 110(a)(2) for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS, as applicable. The following review evaluates the state's submissions.

This section requires SIPs to include enforceable emission limits and other control measures, means or techniques, schedules for compliance, and other related matters. EPA has long interpreted emission limits and control measures for attaining the standards as being due when nonattainment planning requirements are due.1 In the context of an infrastructure SIP, EPA is not evaluating the existing SIP provisions for this purpose. Instead, EPA is only evaluating whether the state's SIP has basic structural provisions for the implementation of the NAAQS.

The Michigan Natural Resources and Environmental Protection Act, 1994 PA 451, as amended (Act 451), sections 324.5503 and 324.5512, provide the Director of MDEQ with the authority to regulate the discharge of air pollutants, and to promulgate rules to establish standards for emissions for ambient air quality and for emissions. To maintain the 2008 ozone NAAQS, Michigan implements controls and emission limits for nitrogen oxide (NOX), a precursor of ozone, in Michigan Administrative Code sections R 336.1801 through R 336.1834; and controls and emission limits for volatile organic compounds (VOC), also a precursor of ozone, in sections R 336.1601 through R 336.1661 and R 336.1701 through R 336.1710. The NOX controls in sections R 336.1801 through R 336.1834 also help to maintain the 2010 NO2 NAAQS. To maintain the 2010 SO2 NAAQS, Michigan implements SO2 controls and emission limits in sections R 336.1401 through R 336.1420. To maintain the 2012 PM2.5 NAAQS, Michigan implements controls and emission limits for particulate matter sources in sections R 336.1301 through R 336.1374. EPA proposes that Michigan has met the infrastructure SIP requirements of section 110(a)(2)(A) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

As previously noted, EPA is not proposing to approve or disapprove any existing state provisions or rules related to SSM or director's discretion in the context of section 110(a)(2)(A).

This section requires SIPs to include provisions to provide for establishing and operating ambient air quality monitors, collecting and analyzing ambient air quality data, and making these data available to EPA upon request. This review of the annual monitoring plan includes EPA's determination that the state: (i) Monitors air quality at appropriate locations throughout the state using EPA-approved Federal Reference Methods or Federal Equivalent Method monitors; (ii) submits data to EPA's Air Quality System (AQS) in a timely manner; and, (iii) provides EPA Regional Offices with prior notification of any planned changes to monitoring sites or the network plan.

MDEQ's authority to promulgate rules to establish ambient air quality standard are found in Michigan Compiled laws (MCL) 324.5503 and MCL 324.5512. MDEQ continues to operate an air monitoring network; EPA approved the state's 2015 Annual Air Monitoring Network Plan on October 31, 2014, including the plan for ozone, NO2, SO2, and PM2.5. MDEQ enters air monitoring data into AQS, and the state provides EPA with prior notification when changes to its monitoring network or plan are being considered. EPA proposes that Michigan has met the infrastructure SIP requirements of section 110(a)(2)(B) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

States are required to include a program providing for enforcement of all SIP measures and the regulation of construction of new or modified stationary sources to meet NSR requirements under PSD and NNSR programs. Part C of the CAA (sections 160-169B) addresses PSD, while part D of the CAA (sections 171-193) addresses NNSR requirements.

The evaluation of each state's submission addressing the infrastructure SIP requirements of section 110(a)(2)(C) covers: (i) Enforcement of SIP measures; (ii) PSD provisions that explicitly identify NOX as a precursor to ozone in the PSD program; (iii) identification of precursors to PM2.5 and identification of PM2.5 and PM10 2 condensables in the PSD program; (iv) PM2.5 increments in the PSD program; and, (v) greenhouse gas (GHG) permitting and the “Tailoring Rule.” 3

MDEQ maintains an enforcement program to ensure compliance with SIP requirements. Part 55 of Act 451, MCL 324.5501 through 324.5542, gives MDEQ the authority to enforce emission limits and other control measures in rules, permits, and orders. In addition, MCL 324.5530 authorizes the Michigan Attorney General to commence a civil service action for appropriate relief for violations of or failure to comply with Part 55 of Act 451. The Clean Corporate Citizen Program is authorized through MCL 324.1401 through 324.1429. EPA proposes that Michigan has met the enforcement of SIP measures requirements of section 110(a)(2)(C) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

EPA's “Final Rule to Implement the 8-Hour Ozone National Ambient Air Quality Standard—Phase 2; Final Rule to Implement Certain Aspects of the 1990 Amendments Relating to New Source Review and Prevention of Significant Deterioration as They Apply in Carbon Monoxide, Particulate Matter, and Ozone NAAQS; Final Rule for Reformulated Gasoline” (Phase 2 Rule) was published on November 29, 2005 (see 70 FR 71612). Among other requirements, the Phase 2 Rule obligated states to revise their PSD programs to explicitly identify NOX as a precursor to ozone (70 FR 71612 at 71679, 71699-71700). This requirement was codified in 40 CFR 51.166.

The Phase 2 Rule required that states submit SIP revisions incorporating the requirements of the rule, including those identifying NOX as a precursor to ozone, by June 15, 2007 (see 70 FR 71612 at 71683, November 29, 2005).

EPA approved revisions to Michigan's PSD SIP reflecting these requirements on April 4, 2014 (see 79 FR 18802), and therefore proposes that Michigan has met the set of infrastructure SIP requirements of section 110(a)(2)(C) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

On May 16, 2008 (see 73 FR 28321), EPA issued the Final Rule on the “Implementation of the New Source Review (NSR) Program for Particulate Matter Less than 2.5 Micrometers (PM2.5)” (2008 NSR Rule). The 2008 NSR Rule finalized several new requirements for SIPs to address sources that emit direct PM2.5 and other pollutants that contribute to secondary PM2.5 formation. One of these requirements is for NSR permits to address pollutants responsible for the secondary formation of PM2.5, otherwise known as precursors. In the 2008 rule, EPA identified precursors to PM2.5 for the PSD program to be SO2 and NOX (unless the state demonstrates to the Administrator's satisfaction or EPA demonstrates that NOX emissions in an area are not a significant contributor to that area's ambient PM2.5 concentrations). The 2008 NSR Rule also specifies that VOCs are not considered to be precursors to PM2.5 in the PSD program unless the state demonstrates to the Administrator's satisfaction or EPA demonstrates that emissions of VOCs in an area are significant contributors to that area's ambient PM2.5 concentrations.

The explicit references to SO2, NOX, and VOCs as they pertain to secondary PM2.5 formation are codified at 40 CFR 51.166(b)(49)(i)(b) and 40 CFR 52.21(b)(50)(i)(b). As part of identifying pollutants that are precursors to PM2.5, the 2008 NSR Rule also required states to revise the definition of “significant” as it relates to a net emissions increase or the potential of a source to emit pollutants. Specifically, 40 CFR 51.166(b)(23)(i) and 40 CFR 52.21(b)(23)(i) define “significant” for PM2.5 to mean the following emissions rates: 10 tons per year (tpy) of direct PM2.5; 40 tpy of SO2; and 40 tpy of NOX (unless the state demonstrates to the Administrator's satisfaction or EPA demonstrates that NOX emissions in an area are not a significant contributor to that area's ambient PM2.5 concentrations). The deadline for states to submit SIP revisions to their PSD programs incorporating these changes was May 16, 2011 (see 73 FR 28321 at 28341).4

The 2008 NSR Rule did not require states to immediately account for gases that could condense to form particulate matter, known as condensables, in PM2.5 and PM10 emission limits in NSR permits. Instead, EPA determined that states had to account for PM2.5 and PM10 condensables for applicability determinations and in establishing emissions limitations for PM2.5 and PM10 in PSD permits beginning on or after January 1, 2011. This requirement is codified in 40 CFR 51.166(b)(49)(i)(a) and 40 CFR 52.21(b)(50)(i)(a). Revisions to states' PSD programs incorporating the inclusion of condensables were required be submitted to EPA by May 16, 2011 (see 73 FR 28321 at 28341).

EPA approved revisions to Michigan's PSD SIP reflecting these requirements on April 4, 2014 (see 79 FR 18802), and therefore proposes that Michigan has met this set of infrastructure SIP requirements of section 110(a)(2)(C) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

On October 20, 2010, EPA issued the final rule on the “Prevention of Significant Deterioration (PSD) for Particulate Matter Less Than 2.5 Micrometers (PM2.5)—Increments, Significant Impact Levels (SILs) and Significant Monitoring Concentration (SMC)” (2010 NSR Rule). This rule established several components for making PSD permitting determinations for PM2.5, including a system of “increments” which is the mechanism used to estimate significant deterioration of ambient air quality for a pollutant. These increments are codified in 40 CFR 51.166(c) and 40 CFR 52.21(c), and are included in the table below.

The 2010 NSR Rule also established a new “major source baseline date” for PM2.5 as October 20, 2010, and a new trigger date for PM2.5 as October 20, 2011. These revisions are codified in 40 CFR 51.166(b)(14)(i)(c) and (b)(14)(ii)(c), and 40 CFR 52.21(b)(14)(i)(c) and (b)(14)(ii)(c). Lastly, the 2010 NSR Rule revised the definition of “baseline area” to include a level of significance of 0.3 micrograms per cubic meter, annual average, for PM2.5. This change is codified in 40 CFR 51.166(b)(15)(i) and 40 CFR 52.21(b)(15)(i).

On April 4, 2014 (79 FR 18802), EPA finalized approval of the applicable infrastructure SIP PSD revisions; therefore, we are proposing that Michigan has met this set of infrastructure SIP requirements of section 110(a)(2)(C) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

With respect to Elements C and J, EPA interprets the CAA to require each state to make an infrastructure SIP submission for a new or revised NAAQS that demonstrates that the air agency has a complete PSD permitting program meeting the current requirements for all regulated NSR pollutants. The requirements of Element D(i)(II) may also be satisfied by demonstrating the air agency has a complete PSD permitting program correctly addressing all regulated NSR pollutants. Michigan has shown that it currently has a PSD program in place that covers all regulated NSR pollutants, including GHGs.

On June 23, 2014, the United States Supreme Court issued a decision addressing the application of PSD permitting requirements to GHG emissions. Utility Air Regulatory Group v. Environmental Protection Agency, 134 S.Ct. 2427. The Supreme Court said that the EPA may not treat GHGs as an air pollutant for purposes of determining whether a source is a major source required to obtain a PSD permit. The Court also said that the EPA could continue to require that PSD permits, otherwise required based on emissions of pollutants other than GHGs, contain limitations on GHG emissions based on the application of Best Available Control Technology (BACT).

In order to act consistently with its understanding of the Court's decision pending further judicial action to effectuate the decision, the EPA is not continuing to apply EPA regulations that would require that SIPs include permitting requirements that the Supreme Court found impermissible. Specifically, EPA is not applying the requirement that a state's SIP-approved PSD program require that sources obtain PSD permits when GHGs are the only pollutant (i) that the source emits or has the potential to emit above the major source thresholds, or (ii) for which there is a significant emissions increase and a significant net emissions increase from a modification (e.g. 40 CFR 51.166(b)(48)(v)).

EPA anticipates a need to revise Federal PSD rules in light of the Supreme Court opinion. In addition, EPA anticipates that many states will revise their existing SIP-approved PSD programs in light of the Supreme Court's decision. The timing and content of subsequent EPA actions with respect to the EPA regulations and state PSD program approvals are expected to be informed by additional legal process before the United States Court of Appeals for the District of Columbia Circuit. At this juncture, EPA is not expecting states to have revised their PSD programs for purposes of infrastructure SIP submissions and is only evaluating such submissions to assure that the state's program correctly addresses GHGs consistent with the Supreme Court's decision.

At present, EPA is proposing that Michigan's SIP is sufficient to satisfy Elements C, D(i)(II), and J with respect to GHGs because the PSD permitting program previously approved by EPA into the SIP continues to require that PSD permits (otherwise required based on emissions of pollutants other than GHGs) contain limitations on GHG emissions based on the application of BACT. Although the approved Michigan PSD permitting program may currently contain provisions that are no longer necessary in light of the Supreme Court decision, this does not render the infrastructure SIP submission inadequate to satisfy Elements C, (D)(i)(II), and J. The SIP contains the necessary PSD requirements at this time, and the application of those requirements is not impeded by the presence of other previously-approved provisions regarding the permitting of sources of GHGs that EPA does not consider necessary at this time in light of the Supreme Court decision.

For the purposes of the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS infrastructure SIPs, EPA reiterates that NSR Reform regulations are not within the scope of these actions. Therefore, we are not taking action on existing NSR Reform regulations for Michigan. EPA approved Michigan's minor NSR program on May 6, 1980 (see 45 FR 29790); and since that date, MDEQ and EPA have relied on the existing minor NSR program to ensure that new and modified sources not captured by the major NSR permitting programs do not interfere with attainment and maintenance of the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

Certain sub-elements in this section overlap with elements of section 110(a)(2)(D)(i), section 110(a)(2)(E) and section 110(a)(2)(J). These links will be discussed in the appropriate areas below.

Section 110(a)(2)(D)(i)(I) requires SIPs to include provisions prohibiting any source or other type of emissions activity in one state from contributing significantly to nonattainment, or interfering with maintenance, of the NAAQS in another state.

On February 17, 2012, EPA promulgated designations for the 2010 NO2 NAAQS, stating for the entire country that, “The EPA is designating areas as “unclassifiable/attainment” to mean that available information does not indicate that the air quality in these areas exceeds the 2010 NO2 NAAQS” (see 77 FR 9532). For comparison purposes, EPA examined the design values 5 from NO2 monitors in Michigan and surrounding states. The highest design value based on data collected between 2011 and 2013 was 44 ppb at a monitor in Detroit, MI, compared to the standard which is 100 ppb for the 2010 NO2 NAAQS. Additionally, Michigan has SIP approved rules that limit NOX emissions, including rules in Michigan Administrative Code sections R 336.1801 through R 336.1834. EPA believes that, in conjunction with the continued implementation of the state's SIP-approved PSD and NNSR regulations, these low monitored values of NO2 will continue in and around Michigan. In other words, the NO2 emissions from Michigan are not expected to cause or contribute to a violation of the 2010 NO2 NAAQS in another state, and these emissions are not likely to interfere with the maintenance of the 2010 NO2 NAAQS in another state. Therefore, EPA proposes that Michigan has met transport prongs 1 and 2 related to section 110(a)(2)(D)(i)(I) for the 2010 NO2 NAAQS. Michigan, as noted in its July 11, 2014, clarification letter, did not make submittals pertaining to section 110(a)(2)(D)(i)(I) for the 2008 ozone, 2010 SO2, and 2012 PM2.5 NAAQS.

Section 110(a)(2)(D)(i)(II) requires that SIPs include provisions prohibiting any source or other type of emissions activity in one state from interfering with measures required to prevent significant deterioration of air quality or to protect visibility in another state.

EPA notes that Michigan's satisfaction of the applicable infrastructure SIP PSD requirements for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS have been detailed in the section addressing section 110(a)(2)(C). EPA further notes that the proposed actions in that section related to PSD are consistent with the proposed actions related to PSD for section 110(a)(2)(D)(i)(II), and they are reiterated below.

EPA has previously approved revisions to Michigan's SIP that meet certain requirements obligated by the Phase 2 Rule and the 2008 NSR Rule. These revisions included provisions that: Explicitly identify NOX as a precursor to ozone, explicitly identify SO2 and NOX as precursors to PM2.5, and regulate condensable PM2.5 and PM10 in applicability determinations and establishing emissions limits. EPA has also previously approved revisions to Michigan's SIP that incorporate the PM2.5 increments and the associated implementation regulations including the major source baseline date, trigger date, and level of significance for PM2.5 per the 2010 NSR Rule. EPA is proposing that Michigan's SIP contains provisions that adequately address the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

States also have an obligation to ensure that sources located in nonattainment areas do not interfere with a neighboring state's PSD program. One way that this requirement can be satisfied is through an NNSR program consistent with the CAA that addresses any pollutants for which there is a designated nonattainment area within the state.

Michigan's EPA-approved NNSR regulations found in Part 2 of the SIP, specifically in Michigan Administrative Code sections R 336.1220 and R 336.1221, are consistent with 40 CFR 51.165, or 40 CFR part 51, appendix S. Therefore, EPA proposes that Michigan has met all of the applicable PSD requirements for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS for transport prong 3 related to section 110(a)(2)(D)(i)(II).

With regard to the applicable requirements for visibility protection of section 110(a)(2)(D)(i)(II), states are subject to visibility and regional haze program requirements under part C of the CAA (which includes sections 169A and 169B). The 2013 Memo states that these requirements can be satisfied by an approved SIP addressing reasonably attributable visibility impairment, if required, or an approved SIP addressing regional haze.

In today's rulemaking, EPA is not proposing to approve or disapprove Michigan's satisfaction of the visibility protection requirements of section 110(a)(2)(D)(i)(II), transport prong 4, for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS. Instead, EPA will evaluate Michigan's compliance with these requirements in a separate rulemaking.6

Section 110(a)(2)(D)(ii) requires that each SIP contains adequate provisions requiring compliance with the applicable requirements of sections 126 and 115 (relating to interstate and international pollution abatement, respectively).

Section 126(a) requires new or modified sources to notify neighboring states of potential impacts from the source. The statute does not specify the method by which the source should provide the notification. States with SIP-approved PSD programs must have a provision requiring such notification by new or modified sources. A lack of such a requirement in state rules would be grounds for disapproval of this element.

Michigan has provisions in its EPA-approved PSD program in Michigan Administrative Code section R 336.2817 requiring new or modified sources to notify neighboring states of potential negative air quality impacts, and has referenced this program as having adequate provisions to meet the requirements of section 126(a). EPA is proposing that Michigan has met the infrastructure SIP requirements of section 126(a). Michigan does not have any obligations under any other subsection of section 126, nor does it have any pending obligations under section 115. EPA, therefore, is proposing that Michigan has met all applicable infrastructure SIP requirements of section 110(a)(2)(D)(ii) for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

This section requires each state to provide for adequate personnel, funding, and legal authority under state law to carry out its SIP, and related issues. Section 110(a)(2)(E)(ii) also requires each state to comply with the requirements respecting state boards under section 128.

MDEQ's SIP program is funded through 105 and 103 grants and matching funds from the state's General Fund. As discussed in earlier sections, MDEQ has the legal authority to carry out the Michigan SIP under Act 451 and the Executive Reorganization Order 2011-1. Michigan's PSD regulations provide adequate resources to permit GHG sources. EPA proposes that Michigan has met the infrastructure SIP requirements of this portion of section 110(a)(2)(E) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

Section 110(a)(2)(E) also requires that each SIP contains provisions that comply with the state board requirements of section 128 of the CAA. That provision contains two explicit requirements: (i) That any board or body which approves permits or enforcement orders under this chapter shall have at least a majority of members who represent the public interest and do not derive any significant portion of their income from persons subject to permits and enforcement orders under this chapter, and (ii) that any potential conflicts of interest by members of such board or body or the head of an executive agency with similar powers be adequately disclosed.

On July 10, 2014, MDEQ submitted rules from the Civil Service Rule at 2-8.3(a)(1) for incorporation into the SIP, pursuant to section 128 of the CAA. MDEQ does not have a state board. The authority to approve air permits and enforcement orders rest with the MDEQ Director and his designee. These authorities are found in MCL 324.5503, MCL 324.301(b), Executive Order No. 1995-18, and delegation letter from the MDEQ Director to the Air Quality Division chief and supervisors. Therefore, section 128(a)(1) of the CAA is not applicable in Michigan.

Under section 128(a)(2), the head of the executive agency with the power to approve enforcement orders or permits must adequately disclose any potential conflicts of interest. The Civil Service Rule 2-8.3(a)(1) contains provisions that adequately satisfy the requirements of section 128(a)(2). This provision requires that “At least annually, an employee shall disclose to the employee's appointing authority all personal or financial interests of the employee or members of the employee's immediate family in any business or entity with which the employee has direct contact while performing official duties as a classified employee” (Civil Service Rule 2-8.3(a)(1)). The Civil Service Rule 1-9.1 subjects the MDEQ Director and designees to this provision. Therefore, when evaluated together in the context of section 128(a)(2), the director of MDEQ or his/her designee must fully disclose any potential conflicts of interest relating to permits or enforcement orders under the CAA. As a result, we are proposing to approve Civil Service Rule 2-8.3(a)(1) into the SIP. On July 10, 2014, MDEQ requested that these rules satisfy not only the applicable requirements of section 128 of the CAA, but that they satisfy any applicable requirements of section 110(a)(2)(E) for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS. Therefore, EPA is proposing that MDEQ has satisfied the applicable infrastructure SIP requirements for this section of 110(a)(2)(E) for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

States must establish a system to monitor emissions from stationary sources and submit periodic emissions reports. Each plan shall also require the installation, maintenance, and replacement of equipment, and the implementation of other necessary steps, by owners or operators of stationary sources to monitor emissions from such sources. The state plan shall also require periodic reports on the nature and amounts of emissions and emissions-related data from such sources, and correlation of such reports by each state agency with any emission limitations or standards established pursuant to this chapter. Lastly, the reports shall be available at reasonable times for public inspection.

MDEQ implements a stationary source monitoring program under the authority of MCL 324.5512 and MCL 324.5503 of Act 451. Additional emissions testing, sampling, and reporting requirements are found in Michigan Administrative Code sections R 336.201 through R 336.202 and R 336.2011 through R 336.2199. Emissions data is submitted to EPA through the National Emissions Inventory system and is available to the public online and upon request. EPA proposes that Michigan has satisfied the infrastructure SIP requirements of section 110(a)(2)(F) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

This section requires that a plan provide for authority that is analogous to what is provided in section 303 of the CAA, and adequate contingency plans to implement such authority. The 2013 Memo states that infrastructure SIP submissions should specify authority, rested in an appropriate official, to restrain any source from causing or contributing to emissions which present an imminent and substantial endangerment to public health or welfare, or the environment.

MDEQ has the authority to require immediate discontinuation of air contamination discharges that constitute an imminent and substantial endangerment to public health, safety, welfare, or the environment under MCL 324.5518 of Act 451. MCL 324.5530 provides for civil action by the Michigan Attorney General for a violation as just described. EPA proposes that Michigan has met the applicable infrastructure SIP requirements of section 110(a)(2)(G) related to authority to implement measures to restrain sources from causing or contributing to emissions which present an imminent and substantial endangerment to public health or welfare, or the environment with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

This section requires states to have the authority to revise their SIPs in response to changes in the NAAQS, availability of improved methods for attaining the NAAQS, or to an EPA finding that the SIP is substantially inadequate.

MDEQ continues to update and implement needed revisions to Michigan's SIP as necessary to meet ambient air quality standards. Authority for MDEQ to adopt emissions standards and compliance schedules is found at MCL 324.5512 and MCL 324.5503 of Act 451. EPA proposes that Michigan has met the infrastructure SIP requirements of section 110(a)(2)(H) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

The CAA requires that each plan or plan revision for an area designated as a nonattainment area meet the applicable requirements of part D of the CAA. Part D relates to nonattainment areas.

EPA has determined that section 110(a)(2)(I) is not applicable to the infrastructure SIP process. Instead, EPA takes action on part D attainment plans through separate processes.

The evaluation of the submissions from Michigan with respect to the requirements of section 110(a)(2)(J) is described below.

States must provide a process for consultation with local governments and Federal Land Managers (FLMs) carrying out NAAQS implementation requirements.

Michigan actively participates in the regional planning efforts that include business, community groups, state rule developers, representatives from the FLMs, and other affected stakeholders. Michigan Administrative Code section R 336.2816 requires that FLMs are provided with notification of permit applications that may impact class I areas. Additionally, Michigan is an active member of the Lake Michigan Air Directors Consortium, which consists of collaboration with the States of Illinois, Wisconsin, Indiana, Minnesota, and Ohio. EPA proposes that Michigan has met the infrastructure SIP requirements of this portion of section 110(a)(2)(J) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

Section 110(a)(2)(J) also requires states to notify the public if NAAQS are exceeded in an area and must enhance public awareness of measures that can be taken to prevent exceedances.

MDEQ notifies the public if there are NAAQS exceedances and of any public health hazards associated with those exceedances through CleanAirAction!, AirNow, and EnviroFlash as well as posting on its Web site. MDEQ published an annual air quality report comparing Michigan monitors to the NAAQS. EPA proposes that Michigan has met the infrastructure SIP requirements of this portion of section 110(a)(2)(J) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

States must meet applicable requirements of section 110(a)(2)(C) related to PSD. MDEQ's PSD program in the context of infrastructure SIPs has already been discussed in the paragraphs addressing section 110(a)(2)(C) and 110(a)(2)(D)(i)(II), and EPA notes that the proposed actions for those sections are consistent with the proposed actions for this portion of section 110(a)(2)(J). Therefore, EPA proposes that Michigan has met all of the infrastructure SIP requirements for PSD associated with section 110(a)(2)(D)(J) for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

With regard to the applicable requirements for visibility protection, states are subject to visibility and regional haze program requirements under part C of the CAA (which includes sections 169A and 169B). In the event of the establishment of a new NAAQS, however, the visibility and regional haze program requirements under part C do not change. Thus, we find that there is no new visibility obligation “triggered” under section 110(a)(2)(J) when a new NAAQS becomes effective. In other words, the visibility protection requirements of section 110(a)(2)(J) are not germane to infrastructure SIPs for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

SIPs must provide for performing air quality modeling for predicting effects on air quality of emissions of any NAAQS pollutant and submission of such data to EPA upon request.

MDEQ continues to review the potential impact of major, and some minor, new and modified sources using computer models. Michigan's rules regarding air quality modeling are contained in Michigan Administrative Code sections R 336.1240 and R 336.1241. These modeling data are available to EPA or other interested parties upon request. EPA proposes that Michigan has met the infrastructure SIP requirements of section 110(a)(2)(K) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

This section requires that SIPs mandate that each major stationary source pay permitting fees to cover the cost of reviewing, approving, implementing, and enforcing a permit.

MDEQ implements and operates the title V permit program, which EPA approved on December 4, 2001 (66 FR 62969); revisions to the program were approved on November 10, 2003 (68 FR 63735). MDEQ's authority to levy and collect an annual air quality fee from fee-subject facilities is found in section 324.5522 of Act 451. EPA proposes that Michigan has met the infrastructure SIP requirements of section 110(a)(2)(L) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

States must consult with and allow participation from local political subdivisions affected by the SIP.

MDEQ regularly works with local political subdivisions for attainment planning purposes and actively participates in regional planning organizations. Rulemaking is subject to notice, comment, and hearing requirements under the Michigan Administrative Procedures Act, 1969 PA 306 and is authorized in MCL 324.5512. EPA proposes that Michigan has met the infrastructure SIP requirements of section 110(a)(2)(M) with respect to the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS.

EPA is proposing to approve most elements of submissions from MDEQ certifying that its current SIP is sufficient to meet the required infrastructure elements under sections 110(a)(1) and (2) for the 2008 ozone, 2010 NO2, 2010 SO2, and 2012 PM2.5 NAAQS. In addition, EPA is proposing to approve a submission from Michigan intended to meet the state board requirements of section 128, specifically the Civil Service Rule 2-8.3(a)(1).

EPA's proposed actions for the state's satisfaction of infrastructure SIP requirements, by element of section 110(a)(2) are contained in the table below.

In this rule, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the Michigan Civil Service Commission Rule 2-8.3(a)(1) entitled “Disclosure,” effective October 1, 2013. The EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and/or in hard copy at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

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

• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);

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

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

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

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

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

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

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

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

In addition, the SIP is not approved to apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction. In those areas of Indian country, the rule does not have tribal implications and will not impose substantial direct costs on tribal governments or preempt tribal law as specified by Executive Order 13175 (65 FR 67249, November 9, 2000).

I. What Action is EPA Taking?

Section 25(a)(2)(B) of FIFRA requires the EPA Administrator to provide the Secretary of USDA with a copy of any draft final rule at least 30 days before signing it in final form for publication in the Federal Register. Similarly, FIFRA section 21(b) requires the EPA Administrator to provide the Secretary of HHS with a copy of any draft final rule pertaining to a public health pesticide at least 30 days before publishing it in the Federal Register. The draft final rule is not available to the public until after it has been signed by EPA. If either Secretary comments in writing regarding the draft final rule within 15 days after receiving it, the EPA Administrator shall include the comments of the Secretary, if requested by the Secretary, and the EPA Administrator's response to those comments with the final rule that publishes in the Federal Register. If either Secretary does not comment in writing within 15 days after receiving the draft final rule, the EPA Administrator may sign the final rule for publication in the Federal Register any time after the 15-day period.

No. This document is merely a notification of submission to the Secretaries of USDA and HHS. As such, none of the regulatory assessment requirements apply to this document.

The Agency included in the May 29, 2015 proposed rule a list of those who may be potentially affected by this action.

EPA issued a proposed rule in the Federal Register of May 29, 2015, that was concerning Banda de Lupinus albus doce (BLAD), in or on all food commodities. EPA inadvertently listed a government agency incorrectly.

The preamble for FR Doc. 2015-12530 published in the Federal Register of May 29, 2015 (80 FR 30640) (FRL-9927-02) is corrected as follows:

1. On page 30640, second column, under the heading ENVIRONMENTAL PROTECTION AGENCY, line 4, correct Banda de Lupinus albus doce BLAD to read Banda de Lupinus albus doce (BLAD).

2. On page 30641, second column, paragraph 3, line 3, Federal Drug Administration is corrected to read: Food and Drug Administration.

No. For a detailed discussion concerning the statutory and executive order review, refer to Unit VII. of the May 29, 2015 proposed rule.