Federal Register Vol. 80, No.130,

Federal Register Volume 80, Issue 130 (July 8, 2015)

Page Range38913-39375
FR Document

80_FR_130
Current View
Page and SubjectPDF
80 FR 39109 - Media Bureau Announces Incentive Auction Eligible Facilities and Deadline for Filing Pre-Auction Technical Certification FormPDF
80 FR 39123 - Office of Clinical and Preventive Services; Division of Behavioral Health; Domestic Violence Prevention InitiativePDF
80 FR 38946 - Safety Zones; Marine Events Held in the Sector Long Island Sound Captain of the Port ZonePDF
80 FR 39053 - Certain Preserved Mushrooms from Chile, India, Indonesia and the People's Republic of China: Final Results of Expedited Third Sunset Reviews of the Antidumping Duty OrdersPDF
80 FR 38941 - Safety Zones; Recurring Events in Captain of the Port Boston ZonePDF
80 FR 39054 - Pressure Sensitive Plastic Tape from Italy: Final Results of Expedited Fourth Sunset Review of the Antidumping Duty FindingPDF
80 FR 39131 - Division of Behavioral Health; Office of Clinical and Preventive Services; Methamphetamine and Suicide Prevention Initiative; Announcement Type: New-Limited CompetitionPDF
80 FR 38943 - Safety Zones; Annual Events in the Captain of the Port Buffalo ZonePDF
80 FR 39162 - Physical Security-Review of Physical Security System Designs-Standard Design Certification and Operating Reactor Licensing ApplicationsPDF
80 FR 39163 - Strategies and Guidance To Address Loss of Large Areas of the Plant Due to Explosions and FiresPDF
80 FR 39060 - Chlorinated Isocyanurates From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review; 2013-2014PDF
80 FR 39076 - Science Advisory Board (SAB); Charter RenewalPDF
80 FR 39055 - Light-Walled Rectangular Pipe and Tube from Mexico: Preliminary Results of Antidumping Duty Administrative Review; 2013-2014PDF
80 FR 39056 - Polyethylene Retail Carrier Bags From Thailand: Final Results of Antidumping Duty Administrative Review; 2013-2014PDF
80 FR 39058 - Purified Carboxymethylcellulose From Finland: Initiation and Preliminary Results of Changed Circumstances Review and Consideration of Revocation of the Antidumping Duty OrderPDF
80 FR 39104 - Notification of a Public Teleconference of the Science Advisory Board; Drinking Water CommitteePDF
80 FR 38986 - International Fisheries; Pacific Tuna Fisheries; 2015 and 2016 Commercial Fishing Restrictions for Pacific Bluefin Tuna in the Eastern Pacific OceanPDF
80 FR 39161 - Comment Request for Information Collection for the Evaluation of the Young Parents Demonstration Program, Reinstatement With ChangePDF
80 FR 39192 - Notice of Intent To Rule on Change in Use of Aeronautical Property at Louisville International Airport, Louisville, KentuckyPDF
80 FR 38966 - Revisions to the California State Implementation Plan, Butte County Air Quality Management DistrictPDF
80 FR 39117 - Notice of Agreements FiledPDF
80 FR 38913 - Special Conditions: Pratt and Whitney Canada, PW210A; Flat 30-Second and 2-Minute One Engine Inoperative RatingPDF
80 FR 39190 - Public HearingPDF
80 FR 39144 - Final Determination for Federal Acknowledgment of the Pamunkey Indian TribePDF
80 FR 39142 - Final Decision on Remand Against Federal Acknowledgment of the Duwamish Tribal OrganizationPDF
80 FR 39089 - Independent Review Panel on Military Medical Construction Standards; Notice of Federal Advisory Committee Meeting; CancellationPDF
80 FR 39139 - National Institute on Alcohol Abuse and Alcoholism; Notice of PresentationPDF
80 FR 39141 - National Cancer Institute; Notice of Closed MeetingPDF
80 FR 39140 - Center for Scientific Review; Notice of Closed MeetingPDF
80 FR 39140 - National Institute of Diabetes and Digestive and Kidney Diseases; Notice of Closed MeetingsPDF
80 FR 39141 - Office of the Director, National Institutes of Health; Notice of MeetingPDF
80 FR 39141 - National Institute on Alcohol Abuse and Alcoholism; Notice of Closed MeetingsPDF
80 FR 38944 - Safety Zone; 520 Bridge Construction, Lake Washington; Seattle, WAPDF
80 FR 39156 - Proposed Adjustments to the Aggregate Production Quotas for Schedule I and II Controlled Substances and Assessment of Annual Needs for the List I Chemicals Ephedrine, Pseudoephedrine, and Phenylpropanolamine for 2015PDF
80 FR 39118 - Commission To Eliminate Child Abuse and Neglect Fatalities; Announcement of Meeting; CorrectionPDF
80 FR 39122 - Agency Information Collection Activities; Submission to OMB for Review and Approval; Public Comment RequestPDF
80 FR 39077 - Manual for Courts-Martial; Publication of Supplementary MaterialsPDF
80 FR 39196 - Agency Information Collection Activities: Information Collection Renewal; Submission for OMB Review; Registration of Mortgage Loan OriginatorsPDF
80 FR 39165 - Submission for Review; Health Benefits Election Form, OPM 2809, 3206-0141PDF
80 FR 39194 - Agency Information Collection; Activity Under OMB Review; Reporting Required for International Civil Aviation OrganizationPDF
80 FR 39165 - Civil Service Retirement System Board of Actuaries MeetingPDF
80 FR 39193 - Agency Information Collection; Activity Under OMB Review; Submission of Audit Reports-Part 248PDF
80 FR 39194 - Agency Information Collection; Activity Under OMB Review; Report of Extension of Credit to Political CandidatesPDF
80 FR 39092 - Advanced Scientific Computing Advisory CommitteePDF
80 FR 39091 - Environmental Management Site-Specific Advisory Board, Savannah River SitePDF
80 FR 39099 - Records Governing Off-the-Record Communications; Public NoticePDF
80 FR 39095 - Tennessee Gas Pipeline Company, L.L.C.; Notice of Intent To Prepare an Environmental Impact Statement for the Planned Northeast Energy Direct Project, Request for Comments on Environmental Issues, and Notice of Public Scoping MeetingsPDF
80 FR 39094 - New England Hydropower Company, LLC; Notice of Application Tendered for Filing With the Commission and Soliciting Additional Study RequestsPDF
80 FR 39092 - Lock+TM Hydro Friends Fund XLVIII; Notice of Preliminary Permit Application Accepted for Filing and Soliciting Comments, Motions To Intervene, and Competing ApplicationsPDF
80 FR 39098 - Goose River Hydro, Inc.; Notice of Intent To File License Application, Filing of Pre-Application Document, and Approving Use of the Traditional Licensing ProcessPDF
80 FR 39093 - Columbia Gas Transmission, LLC; Notice of Intent To Prepare an Environmental Assessment for the Proposed Line 138 Abandonment and Lateral Construction Project, and Request for Comments on Environmental IssuesPDF
80 FR 39197 - List of Countries Requiring Cooperation With an International BoycottPDF
80 FR 39076 - Science Advisory Board (SAB)PDF
80 FR 39151 - Notice of Filing of Plats of Survey; ArizonaPDF
80 FR 39052 - Proposed Information Collection; Comment Request; Business and Professional Classification ReportPDF
80 FR 39151 - Notice of Public Meetings, Southwest Resource Advisory CouncilPDF
80 FR 39197 - Solicitation of Nominations for Appointment to the Advisory Committee on Disability CompensationPDF
80 FR 39152 - Information Collection Activities: Safety and Environmental Management Systems (SEMS); Proposed Collection; Comment RequestPDF
80 FR 38940 - Partnership Transactions Involving Equity Interests of a Partner; CorrectionPDF
80 FR 38941 - Partnership Transactions Involving Equity Interests of a Partner; CorrectionPDF
80 FR 39053 - Emerging Technology and Research Advisory Committee; Notice of Open MeetingPDF
80 FR 39062 - Submission for OMB Review; Comment RequestPDF
80 FR 39077 - Notice of Availability of a Draft Programmatic Environmental Assessment (PEA) of Issuance of Scientific Research and Enhancement Permits for Use of Unmanned Vehicle Systems on Protected SpeciesPDF
80 FR 39076 - Submission for OMB Review; Comment RequestPDF
80 FR 39011 - Schedule for Rating Disabilities-The Endocrine SystemPDF
80 FR 39121 - Talib Khan: Debarment OrderPDF
80 FR 39112 - Information Collections Being Submitted for Review and Approval to the Office of Management and BudgetPDF
80 FR 39111 - Information Collections Being Submitted for Review and Approval to the Office of Management and BudgetPDF
80 FR 39091 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; 2016 Main National Assessment of Educational Progress (NAEP) AdministrationPDF
80 FR 39090 - Agency Information Collection Activities; Submission to the Office of Management and Budget for Review and Approval; Comment Request; Fast Response Survey System (FRSS) 107: Programs and Services for High School English Learners 2015PDF
80 FR 38915 - Permanent Discontinuance or Interruption in Manufacturing of Certain Drug or Biological ProductsPDF
80 FR 39051 - Idaho Roadless Area Boundary Modification; Caribou-Targhee National ForestPDF
80 FR 39195 - Agency Information Collection Activities: Information Collection Renewal; Submission for OMB Review; Guidance on Stress Testing for Banking Organizations With More Than $10 Billion in Total Consolidated AssetsPDF
80 FR 39195 - Liberty Savings Bank, FSB, Whiting, Indiana; Approval of Voluntary Supervisory Conversion ApplicationPDF
80 FR 39169 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Market LLC Options FacilityPDF
80 FR 39166 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Order Granting Approval of Proposed Rule Change, as Modified by Amendment Nos. 1 and 2 Thereto, Relating to the Listing and Trading of the Shares of the PowerShares DB Optimum Yield Diversified Commodity Strategy Portfolio, PowerShares Agriculture Commodity Strategy Portfolio, PowerShares Precious Metals Commodity Strategy Portfolio, PowerShares Energy Commodity Strategy Portfolio, PowerShares Base Metals Commodity Strategy Portfolio and PowerShares Bloomberg Commodity Strategy Portfolio, Each a Series of PowerShares Actively Managed Exchange-Traded Commodity Fund TrustPDF
80 FR 39172 - Self-Regulatory Organizations; Chicago Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change To Implement CHX SNAPSMPDF
80 FR 39050 - Submission for OMB Review; Comment RequestPDF
80 FR 39059 - Information on Assertions Raised About State-Owned Airlines in Qatar and the UAEPDF
80 FR 39119 - Agency Information Collection Activities: Proposed Collection; Comment RequestPDF
80 FR 39165 - New Postal ProductPDF
80 FR 39162 - Notice of Intent To Grant Exclusive LicensePDF
80 FR 39192 - Continental Tire the Americas, LLC, Grant of Petition for Decision of Inconsequential NoncompliancePDF
80 FR 38995 - Possible Revisions To Audit Committee DisclosuresPDF
80 FR 38969 - Approval and Promulgation of Air Quality Implementation Plans; Nebraska; Update to Materials Incorporated by ReferencePDF
80 FR 39117 - Proposed Agency Information Collection Activities; Comment RequestPDF
80 FR 39089 - Defense Business Board; Notice of Federal Advisory Committee MeetingPDF
80 FR 39020 - Revisions to the California State Implementation Plan, Feather River Air Quality Management DistrictPDF
80 FR 39010 - Five-Year Review of the Oil Pipeline IndexPDF
80 FR 38959 - Revisions to the California State Implementation Plan, Feather River Air Quality Management DistrictPDF
80 FR 38951 - Approval and Promulgation of Air Quality Implementation Plans; Kansas; Update to Materials Incorporated by ReferencePDF
80 FR 39052 - Submission for OMB Review; Comment RequestPDF
80 FR 38990 - Airworthiness Directives; Technify Motors GmbH Reciprocating EnginesPDF
80 FR 38992 - Airworthiness Directives; Airbus AirplanesPDF
80 FR 39200 - Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; Short Inpatient Hospital Stays; Transition for Certain Medicare-Dependent, Small Rural Hospitals Under the Hospital Inpatient Prospective Payment SystemPDF
80 FR 38981 - S-metolachlor; Pesticide TolerancesPDF
80 FR 39062 - Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to Shallow Geohazard Survey in the Beaufort Sea, AlaskaPDF
80 FR 39100 - Pesticide Product Registration; Receipt of Applications for New Uses; Correction and Reopening of Comment PeriodPDF
80 FR 39152 - Notice of Availability of the Kremmling Field Office Record of Decision and Approved Resource Management Plan, ColoradoPDF
80 FR 39150 - Notice of Availability of the Record of Decision for the Colorado River Valley Field Office Approved Resource Management PlanPDF
80 FR 39107 - Registration Review; Draft Human Health and Ecological Risk Assessments; Notice of AvailabilityPDF
80 FR 38976 - Prohexadione Calcium; Pesticide TolerancesPDF
80 FR 39105 - Registration Review Interim Decisions; Notice of AvailabilityPDF
80 FR 39100 - Notice of Receipt of Requests To Voluntarily Cancel Certain Pesticide Registrations and Amend Registrations To Terminate Certain UsesPDF
80 FR 39045 - Accelerating Reporting Requirements for Class I RailroadsPDF
80 FR 39021 - Accounting and Reporting of Business Combinations, Security Investments, Comprehensive Income, Derivative Instruments, and Hedging ActivitiesPDF

Issue

80 130 Wednesday, July 8, 2015 Contents Agency Health Agency for Healthcare Research and Quality NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39119-39121 2015-16646 Agriculture Agriculture Department See

Forest Service

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39050-39051 2015-16649 2015-16650
Safety Enviromental Enforcement Bureau of Safety and Environmental Enforcement NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Safety and Environmental Management Systems, 39152-39156 2015-16675 Census Bureau Census Bureau NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Business and Professional Classification Report, 39052 2015-16678 Centers Medicare Centers for Medicare & Medicaid Services PROPOSED RULES Medicare Program: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs; etc., 39200-39375 2015-16577 Coast Guard Coast Guard RULES Safety Zones: 520 Bridge Construction, Lake Washington; Seattle, WA, 38944-38946 2015-16701 Annual Events in the Captain of the Port Buffalo Zone, 38943-38944 2015-16742 2015-16743 Marine Events held in the Sector Long Island Sound Captain of the Port Zone, 38946-38951 2015-16748 Recurring Events in Captain of the Port Boston Zone, 38941-38943 2015-16746 Commerce Commerce Department See

Census Bureau

See

Industry and Security Bureau

See

International Trade Administration

See

National Oceanic and Atmospheric Administration

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39052-39053 2015-16625
Comptroller Comptroller of the Currency NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Guidance on Stress Testing for Banking Organizations With More Than 10 Billion Dollars in Total Consolidated Assets, 39195-39196 2015-16655 Registration of Mortgage Loan Originators, 39196-39197 2015-16695 Voluntary Supervisory Conversion Applications: Liberty Savings Bank, FSB, Whiting, IN, 39195 2015-16654 Defense Department Defense Department NOTICES Guidance: Manual for Courts-Martial; Publication of Supplementary Materials, 39077-39089 2015-16696 Meetings: Defense Business Board, 39089 2015-16630 Independent Review Panel on Military Medical Construction Standards; Cancellation, 39089-39090 2015-16709 Drug Drug Enforcement Administration NOTICES Aggregate Production Quotas for Schedule I and II Controlled Substances: Assessment of Annual Needs for the List I Chemicals Ephedrine, Pseudoephedrine, and Phenylpropanolamine for 2015; Proposed Adjustments, 39156-39160 2015-16699 Education Department Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: 2016 Main National Assessment of Educational Progress Administration, 39091 2015-16661 Fast Response Survey System 107: Programs and Services for High School English Learners 2015, 39090 2015-16660 Employment and Training Employment and Training Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Young Parents Demonstration Program, 39161-39162 2015-16717 Energy Department Energy Department See

Federal Energy Regulatory Commission

NOTICES Charter Renewals: Advanced Scientific Computing Advisory Committee, 39092 2015-16689 Meetings: Environmental Management Site-Specific Advisory Board, Savannah River Site, 39091-39092 2015-16688
Environmental Protection Environmental Protection Agency RULES Air Quality State Implementation Plans; Approvals and Promulgations: California; Butte County Air Quality Management District; Revisions, 38966-38969 2015-16715 Feather River Air Quality Management District, CA, 38959-38966 2015-16627 Kansas; Update to Materials Incorporated by Reference, 38951-38959 2015-16626 Nebraska; Update to Materials Incorporated by Reference, 38969-38976 2015-16632 Pesticide Tolerances: Prohexadione calcium, 38976-38980 2015-16419 S-metolachlor, 38981-38986 2015-16523 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Feather River Air Quality Management District, CA, 39020-39021 2015-16629 NOTICES Meetings: Science Advisory Board Drinking Water Committee; Teleconferences, 39104-39105 2015-16721 Pesticide Product Registrations: Applications for New Uses; Corrections, 39100 2015-16519 Registration Reviews: Draft Human Health and Ecological Risk Assessments, 39107-39109 2015-16422 Interim Decisions, 39105-39107 2015-16406 Requests To Voluntarily Cancel Certain Pesticide Registrations and Amend Registrations To Terminate Certain Uses, 39100-39104 2015-16405 Federal Aviation Federal Aviation Administration RULES Special Conditions: Pratt and Whitney Canada, PW210A; Flat 30-Second and 2-Minute One Engine Inoperative Rating, 38913-38914 2015-16713 PROPOSED RULES Airworthiness Directives: Airbus Airplanes, 38992-38995 2015-16583 Technify Motors GmbH Reciprocating Engines, 38990-38992 2015-16586 NOTICES Changes in Use of Aeronautical Properties: Louisville International Airport, Louisville, KY, 39192 2015-16716 Federal Communications Federal Communications Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39111-39116 2015-16662 2015-16663 Incentive Auction Eligible Facilities and Deadline for Filing Pre-Auction Technical Certification Form, 39109-39111 2015-16754 Federal Energy Federal Energy Regulatory Commission PROPOSED RULES Oil Pipeline Index; Five-Year Review, 39010-39011 2015-16628 NOTICES Environmental Assessments; Availability, etc.: Columbia Gas Transmission, LLC; Line 138 Abandonment and Lateral Construction Project, 39093-39094 2015-16682 Environmental Impact Statements; Availability, etc.: Tennessee Gas Pipeline Co., LLC; Northeast Energy Direct Project, 39095-39098 2015-16686 Hydroelectric Applications: New England Hydropower Co., LLC, 39094-39095 2015-16685 License Applications: Goose River Hydro, Inc., 39098-39099 2015-16683 Preliminary Permit Applications: Lock Plus TM Hydro Friends Fund XLVIII, 39092-39093 2015-16684 Records Governing Off-the-Record Communications, 39099-39100 2015-16687 Federal Maritime Federal Maritime Commission NOTICES Agreements Filed, 39117 2015-16714 Federal Reserve Federal Reserve System NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39117-39118 2015-16631 Food and Drug Food and Drug Administration RULES Permanent Discontinuance or Interruption in Manufacturing of Certain Drug or Biological Products, 38915-38940 2015-16659 NOTICES Debarment Orders: Talib Khan, 39121-39122 2015-16664 Forest Forest Service NOTICES Idaho Roadless Area Boundary Modification: Caribou-Targhee National Forest, 39051-39052 2015-16657 General Services General Services Administration NOTICES Meetings: Commission to Eliminate Child Abuse and Neglect Fatalities; Corrections, 39118-39119 2015-16698 Health and Human Health and Human Services Department See

Agency for Healthcare Research and Quality

See

Centers for Medicare & Medicaid Services

See

Food and Drug Administration

See

Health Resources and Services Administration

See

Indian Health Service

See

National Institutes of Health

Health Resources Health Resources and Services Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39122-39123 2015-16697 Homeland Homeland Security Department See

Coast Guard

Indian Affairs Indian Affairs Bureau NOTICES Final Decision on Remand Against Federal Acknowledgment of the Duwamish Tribal Organization, 39142-39144 2015-16710 Final Determination for Federal Acknowledgment of the Pamunkey Indian Tribe, 39144-39150 2015-16711 Indian Health Indian Health Service NOTICES Funding Availabilities: Methamphetamine and Suicide Prevention Initiative, 39131-39139 2015-16744 Funding Availability: Domestic Violence Prevention Initiative, 39123-39131 2015-16750 Industry Industry and Security Bureau NOTICES Meetings: Emerging Technology and Research Advisory Committee, 39053 2015-16671 Interior Interior Department See

Bureau of Safety and Environmental Enforcement

See

Indian Affairs Bureau

See

Land Management Bureau

Internal Revenue Internal Revenue Service RULES Partnership Transactions Involving Equity Interests of a Partner; Corrections, 38940-38941 2015-16673 2015-16674 International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Preserved Mushrooms From Chile, India, Indonesia and the People's Republic of China, 39053-39054 2015-16747 Chlorinated Isocyanurates From the People's Republic of China, 39060-39062 2015-16733 Light-Walled Rectangular Pipe and Tube From Mexico, 39055-39056 2015-16724 Polyethylene Retail Carrier Bags From Thailand, 39056-39057 2015-16723 Pressure Sensitive Plastic Tape From Italy, 39054-39055 2015-16745 Purified Carboxymethylcellulose From Finland, 39058-39059 2015-16722 Information on Assertions Raised About State-Owned Airlines in Qatar and the UAE, 39059-39060 2015-16648 Justice Department Justice Department See

Drug Enforcement Administration

Labor Department Labor Department See

Employment and Training Administration

Land Land Management Bureau NOTICES Meetings: Southwest Resource Advisory Council, 39151 2015-16677 Plats of Surveys: Arizona, 39151-39152 2015-16679 Records of Decisions: Resource Management Plan, Colorado River Valley Field Office, 39150-39151 2015-16431 Resource Management Plans, Kremmling Field Office, CO, 39152 2015-16432 NASA National Aeronautics and Space Administration NOTICES Exclusive Licenses, 39162 2015-16641 National Highway National Highway Traffic Safety Administration NOTICES Petitions for Inconsequential Noncompliance: Continental Tire the Americas, LLC, 39192-39193 2015-16640 National Institute National Institutes of Health NOTICES Meetings: Center for Scientific Review, 39140-39141 2015-16705 2015-16706 National Cancer Institute, 39141 2015-16707 National Institute of Diabetes and Digestive and Kidney Diseases, 39140 2015-16704 National Institute on Alcohol Abuse and Alcoholism, 39141 2015-16702 National Institute on Alcohol Abuse and Alcoholism; Presentations, 39139-39140 2015-16708 Office of the Director, 39141-39142 2015-16703 National Oceanic National Oceanic and Atmospheric Administration RULES International Fisheries: Pacific Tuna Fisheries; Pacific Bluefin Tuna in the Eastern Pacific Ocean; Commercial Fishing Restrictions, 38986-38989 2015-16720 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 39062, 39076 2015-16668 2015-16670 Charter Renewals: Science Advisory Board, 39076-39077 2015-16732 Environmental Assessments; Availability, etc.: Issuance of Scientific Research and Enhancement Permits for Use of Unmanned Vehicle Systems on Protected Species, 39077 2015-16669 Meetings: Science Advisory Board, 39076 2015-16680 Takes of Marine Mammals Incidental to Specified Activities: Shallow Geohazard Survey in the Beaufort Sea, AK, 39062-39076 2015-16521 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Guidance: Physical Security; Review of Physical Security System Designs—Standard Design Certification and Operating Reactor Licensing Applications, 39162-39163 2015-16741 Strategies and Guidance to Address Loss of Large Areas of the Plant Due to Explosions and Fires, 39163-39165 2015-16736 Personnel Personnel Management Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Health Benefits Election Form, 39165 2015-16694 Meetings: Civil Service Retirement System Board of Actuaries, 39165 2015-16692 Postal Regulatory Postal Regulatory Commission NOTICES New Postal Products, 39165-39166 2015-16645 Securities Securities and Exchange Commission PROPOSED RULES Possible Revisions to Audit Committee Disclosures, 38995-39010 2015-16639 NOTICES Self-Regulatory Organizations; Proposed Rule Changes: BOX Options Exchange, LLC, 39169-39172 2015-16653 Chicago Stock Exchange, Inc., 39172-39190 2015-16651 NASDAQ Stock Market, LLC, 39166-39169 2015-16652 State Department State Department NOTICES Information on Assertions Raised About State-Owned Airlines in Qatar and the UAE, 39059-39060 2015-16648 Surface Transportation Surface Transportation Board PROPOSED RULES Accelerating Reporting Requirements for Class I Railroads, 39045-39049 2015-15407 Accounting and Reporting of Business Combinations, Security Investments, Comprehensive Income, Derivative Instruments, and Hedging Activities, 39021-39045 2015-15402 Susquehanna Susquehanna River Basin Commission NOTICES Meetings: Public Hearings, 39190-39192 2015-16712 Transportation Department Transportation Department See

Federal Aviation Administration

See

National Highway Traffic Safety Administration

See

Surface Transportation Board

See

Transportation Statistics Bureau

NOTICES Information on Assertions Raised About State-Owned Airlines in Qatar and the UAE, 39059-39060 2015-16648
Transportation Statistics Transportation Statistics Bureau NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Report of Extension of Credit to Political Candidates, 39194-39195 2015-16690 Reporting Required for International Civil Aviation Organization, 39194 2015-16693 Submission of Audit Reports—Part 248, 39193-39194 2015-16691 Treasury Treasury Department See

Comptroller of the Currency

See

Internal Revenue Service

NOTICES Lists of Countries Requiring Cooperation With an International Boycott, 39197 2015-16681
Veteran Affairs Veterans Affairs Department PROPOSED RULES Schedule for Rating Disabilities: Endocrine System, 39011-39020 2015-16666 NOTICES Requests for Nominations: Advisory Committee on Disability Compensation, 39197-39198 2015-16676 Separate Parts In This Issue Part II Health and Human Services Department, Centers for Medicare & Medicaid Services, 39200-39375 2015-16577 Reader Aids

Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.thefederalregister.org and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions.

80 130 Wednesday, July 8, 2015 Rules and Regulations DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 33 [Docket No.FAA-2015-1771; Special Conditions No. 33-016-SC] Special Conditions: Pratt and Whitney Canada, PW210A; Flat 30-Second and 2-Minute One Engine Inoperative Rating AGENCY:

Federal Aviation Administration (FAA), DOT.

ACTION:

Final special conditions.

SUMMARY:

These special conditions are issued for the Pratt and Whitney Canada PW210A engine model. This engine will have a novel or unusual design feature—an additional one engine inoperative (OEI) rating that combines the 30-second and 2-minute OEI ratings into a single rating. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.

DATES:

Effective August 7, 2015.

FOR FURTHER INFORMATION CONTACT:

For technical questions concerning these special conditions, contact Tara Fitzgerald, ANE-111, Engine and Propeller Directorate, Aircraft Certification Service, 12 New England Executive Park, Burlington, Massachusetts, 01803-5213; telephone (781) 238-7130; facsimile (781) 238-7199; email [email protected] For legal questions concerning these special conditions, contact Vincent Bennett, ANE-7, Engine and Propeller Directorate, Aircraft Certification Service, 12 New England Executive Park, Burlington, Massachusetts, 01803-5299; telephone (781) 238-7044; facsimile (781) 238-7055; email [email protected]

SUPPLEMENTARY INFORMATION:

Background

On February 14, 2013, Pratt and Whitney Canada applied for an amendment to Type Certificate No. E00083EN-E to include the new PW210A engine model. The PW210A, which is a derivative of the PW210S currently approved under E00083EN-E, is intended for rotorcraft use. For their PW210A engine model, Pratt and Whitney Canada requests an additional OEI rating that combines the 30-second and 2-minute OEI rating into a single rating to satisfy the rotorcraft requirements for increased power in OEI scenarios. This additional OEI rating is named “Flat 30-second and 2-minute OEI.”

These special conditions are necessary because the applicable airworthiness regulations do not contain adequate or appropriate safety standards for combining the requirements of the flat 30-second and 2-minute OEI rating.

Type Certification Basis

Under the provisions of § 21.101, Pratt and Whitney Canada must show that the PW210A meets the applicable provisions of 14 CFR part 33, as amended by Amendments 33-1 through 33-30. These regulations will be incorporated into Type Certificate No. E00083EN after type certification approval of the PW210A. The regulations incorporated by reference in the type certificate are commonly referred to as the “original type certification basis.” The regulations incorporated by reference in Type Certificate No. E00083NE are as follows:

Title 14 of the Code of Federal Regulations (14 CFR part 33), effective February 1, 1965, Amendments 33-1 through 33-24 and two special conditions:

33-008-SC: for on ground engine operation in auxiliary power unit (APU) mode, and 33-009-SC: for 30-minutes all engines operating (AEO) hovering power engine rating For the PW210A the certification basis is:

1. Airworthiness Standards: 14 CFR part 33, effective February 1, 1965, Amendments 33-1 through 33-30, inclusive.

2. Environmental Standards: 14 CFR part 34, effective September 10, 1990, as amended by 34-1 through 34-4 and 40 CFR part 87, effective (ICAO Annex 16, Volume II—Aircraft Engine Emissions, as amended up to and including Amendment 6).

In addition, the certification basis includes other regulations, special conditions and exemptions that are not relevant to these special conditions. Type Certificate No. E00083EN will be updated to include a complete description of the certification basis for this model engine.

If the Administrator finds that the applicable airworthiness regulations (i.e., 14 CFR part 33) do not contain adequate or appropriate safety standards for the PW210A because of a novel or unusual design feature, special conditions are prescribed under the provisions of § 21.16.

Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same or similar novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same or similar novel or unusual design feature, the special conditions would also apply to the other model under § 21.101.

Accordingly, should type certificate E00083EN be amended to include another model that incorporates the “Flat 30-second and 2-minute OEI,” the special conditions as defined would apply to models whose certification basis is amendment 33-25 or later.

The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.17(a)(2).

Novel or Unusual Design Features

The PW210A will incorporate the following novel or unusual design features: The design feature is a “Flat 30-second and 2-minute” one engine inoperative (OEI) rating. The Flat 30-second and 2-minute OEI rating represents a case where the power levels and associated operating limitations for the 30-second OEI and 2-minute OEI ratings (defined in Part 33) are the same.

Discussion

These special conditions are necessary because current part 33 regulations do not contain airworthiness standards for extending the 2-minute OEI rating for 30-seconds. These special conditions extend the time dependent requirements applicable to the 30-second OEI or 2-minute OEI to the 2.5 minutes time duration of the “Flat 30-second and 2-minute OEI” Power.

The 2.5 minutes time duration for the rating may affect the engine's structural and operational characteristics that are time dependent, such as the values for transients, time duration for stabilization to steady state, and part growth due to deformation. To address these aspects, we propose special conditions based on revised requirements of §§ 33.27, 33.87(a)(7), and 33.88(b).

The 2.5 minutes time duration for the rating affects the test conducted for the endurance test. For the 30-second OEI and 2-minute OEI the test schedule of § 33.87(f) is divided among the two ratings. We propose special conditions based on revised requirements of § 33.87(f) to ensure the test will be run for 2.5 minutes duration with no interruption.

The 2.5 minutes time duration for the rating necessitates extending the time duration requirement of § 33.28(k) applicable to the 30-second OEI rating from 30 seconds to 2.5 minutes. This requirement is for automatic availability and control of the engine for the entire duration of the rating's usage.

The 2.5 minutes time duration for the rating necessitates extending the requirements of § 33.29(c) that are applicable to 30-second OEI and 2-minute OEI ratings to the single Flat 30-second and 2-minute OEI Power rating. We propose special conditions to ensure that the instrumentation requirements normally reserved for 30-second OEI and 2-minute OEI ratings are applied to the Flat 30-second and 2-minute OEI Power rating over its whole duration. The pilot does not have to be alerted at the end of 30 seconds use of the Flat 30-second and 2-minute OEI Power rating, only after the entire 2 minutes 30 seconds has expired. Paragraph 2.(e)(3) of these special conditions states that the engine must provide means or provision of means to alert maintenance of use of the Flat 30-second and 2-minute OEI Power rating, `alert' means after the aircraft lands, so any required maintenance actions can be completed before next flight.

Applicability

As discussed above, these special conditions are applicable to the PW210A. Should Pratt and Whitney Canada apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, the special conditions would apply to that model as well.

Conclusion

This action affects only the Flat 30-second and 2-minute OEI design features on the PW210A engine model. It is not a rule of general applicability and applies only to Pratt and Whitney Canada, who requested FAA approval of this engine feature.

List of Subjects in 14 CFR Part 33

Aircraft, Engines, Aviation Safety, Reporting and Recordkeeping requirements.

The authority citation for these special conditions is as follows:

Authority:

49 U.S.C. 106(g), 40113, 44701, 44702, 44704.

The Special Conditions

Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Pratt and Whitney Canada PW210A engine model.

Flat 30-second and 2-minute OEI 1. Part 1.1 Definitions

“Rated Flat 30-second and 2-minute One Engine Inoperative (OEI) Power,” with respect to rotorcraft turbine engines, means (1) a single rating for which the shaft horsepower and associated operating limitations of the 30-second OEI and 2-minute OEI ratings are equal, and (2) the shaft horsepower is that developed under static conditions at the altitude and temperature for the hot day, and within the operating limitations established under Part 33. The rating is for continuation of flight operation after the failure or shutdown of one engine in multiengine rotorcraft, for up to three periods of use no longer than 2.5 minutes each in any one flight, and followed by mandatory inspection and prescribed maintenance action.

2. Part 33 requirements

(a) The airworthiness standards in Part 33 Amendment 30 for the 30-second OEI and 2-minute OEI ratings are applicable to the Flat 30-second and 2-minute OEI Power rating. In addition the following special conditions apply;

(b) Section 33.7 Engine ratings and operating limitations. Flat 30-second and 2-minute OEI Power rating and operating limitations are established for power, torque, rotational speed, gas temperature, and time duration.

(c) Section 33.27 Turbine, compressor, fan, and turbosupercharger rotor overspeed. The requirements of § 33.27, except that following the test, the rotor may not exhibit conditions such as cracking or distortion which preclude continued safe operation.

(d) Section 33.28 Engine controls systems. Must incorporate a means, or a provision for a means, for automatic availability and automatic control of the Flat 30-second and 2-minute OEI Power within the declared operating limitations.

(e) Section 33.29 Instrument Connection. In lieu of the requirements of 33.29(c) the PW210A must incorporate a means or a provision for a means to:

(1) Alert the pilot when the engine is at the Flat 30-second and 2-minute OEI Power level, when the event begins, and when the time interval expires;

(2) Automatically record each usage and duration of power at the Flat 30-second and 2-minute OEI Power rating;

(3) Following each flight when the Flat 30-second and 2-minute OEI Power rating is used, alert maintenance personnel in a positive manner that the engine has been operated at the Flat 30-second and 2-minute OEI Power level, and permit retrieval of the recorded data; and

(4) Enable routine verification of the proper operation of the above means.

(f) Section 33.87 Endurance test. The requirements applicable to 30-second and 2-minute OEI ratings, except for:

(1) The test of § 33.87(a)(7) for the purposes of temperature stabilization, must be run with a test period time of 2.5 minutes.

(2) The tests in § 33.87(f)(2) and (3) must be run continuously for the duration of 2.5 minutes, and

(3) The tests in § 33.87(f)(6) and (7) must be run continuously for the duration of 2.5 minutes.

(g) Section 33.88 Engine overtemperature test. The requirements of § 33.88(b) except that the test time is 5 minutes instead of 4 minutes.

Issued in Burlington, Massachusetts, on June 26, 2015. Ann C. Mollica, Acting Manager, Engine & Propeller Directorate, Aircraft Certification Service.
[FR Doc. 2015-16713 Filed 7-7-15; 8:45 am] BILLING CODE 4910-13-P
DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Parts 20, 310, 314, and 600 [Docket No. FDA-2011-N-0898] RIN 0910-AG88 Permanent Discontinuance or Interruption in Manufacturing of Certain Drug or Biological Products AGENCY:

Food and Drug Administration, HHS.

ACTION:

Final rule.

SUMMARY:

The Food and Drug Administration (FDA or the Agency) is amending its regulations to implement certain drug shortages provisions of the Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the Food and Drug Administration Safety and Innovation Act (FDASIA). The rule requires all applicants of covered approved drugs or biological products—including certain applicants of blood or blood components for transfusion and all manufacturers of covered drugs marketed without an approved application—to notify FDA electronically of a permanent discontinuance or an interruption in manufacturing of the product that is likely to lead to a meaningful disruption in supply (or a significant disruption in supply for blood or blood components) of the product in the United States.

DATES:

The rule is effective September 8, 2015.

FOR FURTHER INFORMATION CONTACT:

Jouhayna Saliba, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, rm. 6206, Silver Spring, MD 20993, 301-796-1300; or Stephen Ripley, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, rm. 7301, Silver Spring, MD 20993, 240-402-7911.

SUPPLEMENTARY INFORMATION:

Table of Contents Executive Summary Purpose of the Rule Summary of the Major Provisions of the Rule Summary of the Costs and Benefits of the Rule I. Introduction II. The Proposed Rule III. Description of the Final Rule A. Persons Subject to the Rule B. Products Covered by the Rule C. Notification of a Permanent Discontinuance or an Interruption in Manufacturing IV. Comments on the Proposed Rule A. Persons Subject to the Rule B. Products Covered by the Rule C. Notification of a Permanent Discontinuance or an Interruption in Manufacturing D. Other Issues Raised V. Legal Authority VI. Economic Analysis of Impacts A. Introduction B. Summary VII. Paperwork Reduction Act of 1995 VIII. Federalism IX. Environmental Impact X. References Executive Summary Purpose of the Rule

FDASIA (Pub. L. 112-144) significantly amended provisions in the FD&C Act related to drug shortages. Among other things, FDASIA amended section 506C of the FD&C Act (21 U.S.C. 356c) to require all manufacturers of certain drugs to notify FDA of a permanent discontinuance or an interruption in manufacturing of these drugs 6 months in advance of the permanent discontinuance or interruption in manufacturing, or as soon as practicable. FDASIA also added section 506E to the FD&C Act (21 U.S.C. 356e), requiring FDA to maintain a current list of drugs that are determined by FDA to be in shortage in the United States and to include on that public list certain information about those shortages. Finally, FDASIA permits FDA to apply section 506C to biological products by regulation and requires FDA to issue a final rule implementing certain drug shortages provisions in FDASIA by January 9, 2014. FDA believes this final rule will improve FDA's ability to identify potential drug shortages and to prevent or mitigate the impact of these shortages.

Summary of the Major Provisions of the Rule

The rule modifies FDA's regulations to implement sections 506C and 506E of the FD&C Act as amended by FDASIA. Sections 310.306, 314.81(b)(3)(iii), and 600.82 (21 CFR 310.306, 314.81(b)(3)(iii), and 600.82) require all applicants of certain approved drugs or biological products,1 including applicants of blood or blood components 2 for transfusion (“blood or blood components”) that manufacture a significant percentage of the U.S. blood supply, and all manufacturers of certain drugs marketed without an approved application (“unapproved drug manufacturers”), to notify FDA electronically of a permanent discontinuance or an interruption in manufacturing of the product that is likely to lead to a meaningful disruption in supply (for drugs and biological products other than blood or blood components) or a significant disruption in supply (for blood or blood components) of the product in the United States. Applicants 3 are required to notify FDA of a permanent discontinuance or an interruption in supply if the drug or biological product is a prescription product that is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition, including any such drug used in emergency medical care or during surgery, and excluding radiopharmaceutical products (referred to in this document as “covered” drugs or biological products). The rule requires notification to FDA at least 6 months prior to date of the permanent discontinuance or interruption in manufacturing, or, if 6 months' advance notice is not possible, as soon as practicable thereafter, but in no case later than 5 business days after the permanent discontinuance or interruption in manufacturing occurs.

1 As used throughout this document, the term “biological product” refers to a biological product licensed under section 351 of the Public Health Service Act (42 U.S.C. 262), other than a biological product that also meets the definition of a device in section 201(h) of the FD&C Act (21 U.S.C. 321(h)). This rule does not apply to biological products that also meet the definition of a device in section 201(h) of the FD&C Act.

2 As used throughout this rule, the term “blood and blood components” refers to blood and blood components for transfusion other than Source Plasma, which is outside the scope of this rule.

3 In this document, for the sake of convenience, we collectively refer to applicants holding an abbreviated new drug application (ANDA), new drug application (NDA), or biologics license application (BLA) and unapproved drug manufacturers subject to this rule as the “applicant” (although we recognize that an unapproved drug manufacturer is not an applicant). We may also individually refer to the ANDA, NDA, and BLA applicant or unapproved drug manufacturer as needed, if the context requires distinguishing between these entities.

The rule also provides that FDA will issue a noncompliance letter to an applicant for failure to notify FDA under the rule; specifies minimum information that must be included in the notification; codifies FDA's current practice of publicly disseminating information on shortages and maintaining public lists of drugs and biological products in shortage (subject to certain confidentiality protections); and defines the terms “drug shortage,” “biological product shortage,” “meaningful disruption,” “significant disruption,” “life supporting or life sustaining,” and “intended for use in the prevention or treatment of a debilitating disease or condition.”

Finally, the rule includes a technical revision to § 20.100 (21 CFR 20.100) (public disclosure regulations) to include a cross-reference to the disclosure provisions in §§ 310.306, 314.81, and 600.82; and removes § 314.91 related to reducing the 6-month notification period for “good cause,” since it is no longer applicable under section 506C of the FD&C Act as amended by FDASIA.

Summary of the Costs and Benefits of the Rule

The rule imposes annual reporting costs of up to $16,827 on those applicants affected by the rule, and up to $441,000 on FDA in review costs. Undertaking mitigation strategies, as measured by labor resources, is estimated to cost FDA between $1.85 and $5.94 million, and industry between $2.97 and $9.55 million. We also estimate annual costs for industry between $9.57 and $30.97 million associated with increasing production. Estimated total annual costs of the interactions between industry and FDA range between $14.54 and $46.92 million. Discounting over 20 years, annualized quantified benefits from avoiding the purchase of alternative products, managing product shortages, and life-years gained, would range from $30.45 million to $98.65 million using a 3 percent discount rate, and from $30.39 million to $98.42 million using a 7 percent discount rate. The public health benefits, mostly nonquantified, include the value of information that would assist FDA, manufacturers, health care providers, and patients in evaluating, mitigating, and preventing shortages of drugs and biological products that could otherwise result in delayed patient treatment or interruption in clinical trial development.

I. Introduction

Recent experience with shortages of drugs and biological products in the United States has shown the serious and immediate effects they can have on patients and health care providers. According to information from FDA's drug and biological product shortages databases, the number of drug and biological product shortages quadrupled from approximately 61 in 2005 to more than 250 shortages in 2011. Although the number of new drug shortages significantly decreased in 2012 to 117 shortages, in 2013 to 44 shortages, and stayed at 44 new shortages in 2014, drug and biological product shortages still represent an ongoing challenge to public health.4 Shortages can involve critical drugs used to treat cancer, to provide required parenteral nutrition, or to address other serious medical conditions and can delay or deny needed care for patients. Shortages can also result in providers prescribing second-line alternatives, which may be less effective or higher risk than first-line therapies.

4 Information on product shortages can be found at http://www.fda.gov/drugs/drugsafety/drugshortages/default.htm (for products regulated by the Center for Drug Evaluation and Research) and http://www.fda.gov/BiologicsBloodVaccines/SafetyAvailability/Shortages/default.htm (for products regulated by the Center for Biologics Evaluation and Research).

In response to the increasing concerns about the impact of shortages on health care in the United States, on October 31, 2011, President Obama issued Executive Order 13588 directing FDA to “take steps that will help to prevent and reduce current and future disruptions in the supply of lifesaving medicines” and noting that “one important step is ensuring that FDA and the public receive adequate advance notice of shortages whenever possible” (Ref. 1). In response to the Executive Order's directive to address the growing problem of drug shortages, FDA published an interim final rule (IFR) on December 19, 2011 (effective January 18, 2012), modifying the regulation at § 314.81 related to drug shortages (76 FR 78530).

As a result of the Executive order and IFR, early notifications to FDA of potential shortages increased from an average of 10 a month before the Executive order to approximately 60 a month in the months after the IFR. This dramatic increase in early notifications enabled FDA to work with manufacturers and other stakeholders to successfully prevent numerous shortages by using tools such as:

• Working with manufacturers to resolve manufacturing and quality issues contributing to short supply.

• Expediting FDA inspections and reviews of submissions from manufacturers to prevent and/or alleviate shortages.

• Identifying and working with manufacturers willing to initiate or increase production to cover expected gaps in supply.

• Exercising regulatory flexibility and discretion in appropriate circumstances, if this would not cause undue risk to patients.

FDA was able to prevent just under 200 drug and biological product shortages in 2011, more than 280 such shortages in 2012, 170 shortages in 2013, and 101 shortages in 2014.

In July 2012, FDASIA amended the FD&C Act to modify existing drug shortages requirements and to add new drug shortages provisions. Section 506C(i) of the FD&C Act, added by FDASIA, directs FDA to adopt a final rule to implement the drug shortages provisions. The final rule supersedes the IFR.

II. The Proposed Rule

In the Federal Register of November 4, 2013 (78 FR 65904), FDA published a proposed rule to implement certain drug shortages provisions of the FD&C Act, as amended by FDASIA.5 The preamble to the proposed rule explained that section 1001 of FDASIA made substantial changes to section 506C of the FD&C Act related to reporting and addressing “permanent discontinuances” or “interruptions in manufacturing” of certain drug products. Most significantly, section 506C of the FD&C Act as amended:

5 Section 506C(i)(4) of the FD&C Act specifies that in promulgating a regulation to implement the FD&C Act's drug shortage provisions, FDA must issue a notice of proposed rulemaking that includes the proposed rulemaking and provide a period of no less than 60 days for public comment on the proposed rule.

• Requires all manufacturers of a prescription drug that is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition, including any such drug used in emergency medical care or during surgery, and excluding radiopharmaceutical products, to notify FDA of a permanent discontinuance in the manufacture of the drug or an interruption in the manufacturing of the drug that is likely to lead to a meaningful disruption in the supply of that drug in the United States at least 6 months prior to the date of the permanent discontinuance or interruption in manufacturing, or, if that is not possible, as soon as practicable.

• Requires the manufacturer to include in the notification the reason for the permanent discontinuance or interruption in manufacturing.

• Requires FDA to issue a letter to a “person” who fails to comply with the notification requirements in section 506C.

• Defines the terms “drug,” “drug shortage,” and “meaningful disruption,” and requires FDA to define the terms “life supporting,” “life sustaining,” and “intended for use in the prevention or treatment of a debilitating disease or condition.”

• Permits FDA to apply section 506C to biological products, including vaccines and plasma-derived products and their recombinant analogs, if FDA determines the inclusion would benefit public health, taking into account existing supply reporting programs and aiming to reduce duplicative notifications.

• Requires FDA to distribute information on drug shortages to the public, to the maximum extent possible, subject to certain confidentiality protections.

In addition to modifying section 506C, FDASIA added several new drug shortage-related sections to the FD&C Act, including section 506E. Section 506E of the FD&C Act requires FDA to maintain an up-to-date list of drugs that are determined by FDA to be in shortage, including the names and the National Drug Codes (NDCs) of such drugs in shortage, the name of each manufacturer of the drug, the reason for each shortage as determined by FDA (choosing from a list of reasons enumerated in the statute), and the estimated duration of each shortage. Section 506E of the FD&C Act also includes confidentiality provisions.

The Agency proposed to implement sections 506C and 506E of the FD&C Act by amending § 314.81(b)(3)(iii) (permanent discontinuance or interruption in manufacturing of approved prescription drugs) and § 20.100 (cross-reference to disclosure provisions); adding new § 310.306 (permanent discontinuance or interruption in manufacturing of marketed prescription unapproved new drugs) and § 600.82 (permanent discontinuance or interruption in manufacturing of prescription biological products); and removing § 314.91 (reduction in the discontinuance notification period) (see 78 FR 65904).

FDA provided 60 days for public comment on the proposed rule. Based on the comments received and FDA's experience to date receiving notifications, maintaining public lists of drug and biological product shortages, and working with manufacturers and stakeholders to prevent and mitigate drug and biological product shortages, the Agency is finalizing the rule as proposed.

III. Description of the Final Rule A. Persons Subject to the Rule

Sections 310.306, 314.81(b)(3)(iii), and 600.82 require notification to FDA of a permanent discontinuance or an interruption in manufacturing of a covered drug or biological product. The following persons are subject to these notification requirements:

• All applicants with an approved NDA or ANDA for a covered drug product (§ 314.81(b)(3)(iii)).

• All applicants with an approved BLA for a covered biological product, other than blood or blood components (§ 600.82(a)(1)).

• Applicants with an approved BLA for blood or blood components, if the applicant is a manufacturer of a significant percentage of the U.S. blood supply (§ 600.82(a)(2)).

• All manufacturers of a covered drug product marketed without an approved NDA or ANDA (§ 310.306, which applies § 314.81(b)(3)(iii) in its entirety to covered drug products marketed without an approved NDA or ANDA).

Section 506C of the FD&C Act as amended by FDASIA requires a “manufacturer” to notify FDA of a permanent discontinuance or an interruption in manufacturing. The rule requires the ANDA, NDA, or BLA applicant (for approved drugs or biological products) or the unapproved drug manufacturer (for marketed, unapproved drugs) to notify FDA of a permanent discontinuance or an interruption in manufacturing.

For purposes of section 506C of the FD&C Act, under the rule an ANDA, NDA, or BLA applicant is considered the manufacturer of an approved, covered product, even if the ANDA, NDA, or BLA applicant contracts that function out to another entity. In other words, the rule makes clear that for approved, covered drugs and biological products, the ANDA, NDA, or BLA applicant bears the responsibility for reporting to FDA a permanent discontinuance or an interruption in manufacturing, whether the product is manufactured by the applicant itself or for the applicant under contract with one or more different entities. As such, the ANDA, NDA, or BLA applicant should establish a process with any relevant contract manufacturer, active pharmaceutical ingredient (API) supplier, or other non-applicant entity that ensures the applicant's compliance with this rule.

Section 506C(i)(3) of the FD&C Act, as amended by FDASIA, directs FDA to “take into account any supply reporting programs [for biological products] and . . . aim to reduce duplicative notification” in applying section 506C to biological products by regulation. Accordingly, with respect to blood or blood components, the rule applies only to applicants that are manufacturers of a “significant percentage of the United States blood supply.” As described more fully in sections III.B.2.c and III.C.1.b.ii, FDA believes that this approach with respect to blood or blood components will ensure that the Agency receives information that is essential to preventing shortages of these products, without unnecessarily duplicating existing systems and without being unduly burdensome for industry. FDA intends to consider an applicant that holds a BLA for blood or blood components to be a manufacturer of a “significant percentage” of the U.S. blood supply if the applicant manufactures 10 percent or more of the U.S. blood supply.6

6 Based on 2011 National Blood Collection and Utilization Survey (NBCUS) data, 10 percent or more of the U.S. blood supply would mean more than 1.5 million units of whole blood annually or approximately 125,000 units per month. We note, however, that these numbers may fluctuate year to year. See 2011 National Blood Collection and Utilization Survey Report, available at http://www.hhs.gov/ash/bloodsafety/nbcus/.

B. Products Covered by the Rule 1. Prescription Drug and Biological Products That Are Life Supporting, Life Sustaining, or Intended for Use in the Prevention or Treatment of a Debilitating Disease or Condition

The rule applies to all prescription drug products approved under an NDA or ANDA (§ 314.81(b)(3)(iii)), all marketed unapproved prescription drug products (§ 310.306), and all prescription biological products approved under a BLA (§ 600.82) that are:

• Life supporting; life sustaining; or intended for use in the prevention or treatment of a debilitating disease or condition, including any such product used in emergency medical care or during surgery; and

• Not radiopharmaceutical products.7

7 With respect to blood and blood components for transfusion, the reporting requirement applies only to an applicant that manufactures a significant percentage of the U.S. blood supply.

FDASIA does not define the terms “life supporting,” “life sustaining,” or “intended for use in the prevention or treatment of a debilitating disease or condition,” but instead requires FDA to define them (section 506C(i)(2) of the FD&C Act). Sections 314.81(b)(3)(iii)(f) and 600.82(f) define a “life supporting or life sustaining” drug or biological product as one that is “essential to, or that yields information that is essential to, the restoration or continuation of a bodily function important to the continuation of human life.” As explained in the preamble to the proposed rule (78 FR 65904 at 65909), this definition of “life supporting or life sustaining” is consistent with language used to describe this term in the preamble to the final rule implementing pre-FDASIA section 506C (72 FR 58993 at 58994, October 18, 2007), and in medical device regulations (see 21 CFR 821.3(g)).

The final rule defines “intended for use in the prevention or treatment of a debilitating disease or condition” to mean “intended for use in the prevention or treatment of a disease or condition associated with mortality or morbidity that has a substantial impact on day-to-day functioning” (§§ 314.81(b)(3)(iii)(f) and 600.82(f)). FDA equates “debilitating disease or condition” with “serious disease or condition” under this definition, and we have defined it according to the definition of “serious” found in § 312.300 (21 CFR 312.300), which governs expanded access to investigational new drugs. This definition of “intended for use in the prevention or treatment of a debilitating disease or condition” is also consistent with our discussion of the term in the preamble to the proposed rule implementing the pre-FDASIA section 506C (65 FR 66665 at 66666, November 7, 2000).

It is important to note that the definitions of “life supporting or life sustaining” and “intended for use in the prevention or treatment of a debilitating disease or condition” are, in important respects, different than FDA's definition of “medically necessary” as used in the context of the existing Center for Drug Evaluation and Research (CDER) Manual of Policies and Procedures (MAPP) on shortages of CDER-regulated products (CDER MAPP 4190.1 Rev. 2) (Ref. 2) and the existing Center for Biologics Evaluation and Research (CBER) Standard Operating Policy and Procedure (SOPP) on shortages of CBER-regulated products (CBER SOPP 8506) (Ref. 3). In general, FDA considers a product to be medically necessary under the internal MAPP and SOPP if there is no other product that is judged by CDER or CBER medical staff to be an appropriate substitute or there is an inadequate supply of an acceptable alternative, as determined by appropriate CDER and CBER personnel. In contrast, under this rule, an applicant is required to notify FDA of a permanent discontinuance or an interruption in manufacturing of a drug or biological product that is life supporting, life sustaining, or intended for use in the prevention or treatment of debilitating disease or condition, whether or not the product is considered “medically necessary” under the MAPP or SOPP. Under the MAPP and SOPP, FDA uses the definition of medically necessary to prioritize the Agency's response to specific shortages or potential shortages and to allocate resources appropriately.

2. Biological Products

Section 506C of the FD&C Act, as amended, states that for purposes of section 506C, the term “drug” does not include biological products as defined in section 351(i) of the Public Health Service Act, unless the Secretary of Health and Human Services (HHS) (the Secretary) applies section 506C to such products by regulation. Section 506C(i)(3) of the FD&C Act provides that FDA may, by regulation, apply section 506C to biological products, “including plasma products derived from human plasma protein and their recombinant analogs” if “the Secretary determines that such inclusion would benefit the public health,” taking into account “any [existing] supply reporting programs” and aiming to reduce “duplicative notification.” Additionally, FDA may apply section 506C of the FD&C Act to vaccines, but the Secretary must determine whether notification of a vaccine shortage to the Centers for Disease Control and Prevention (CDC) under its “vaccine shortage notification program” could satisfy a vaccine manufacturer's obligation to notify FDA of a permanent discontinuance or an interruption in manufacturing under section 506C.

As proposed, FDA is applying section 506C of the FD&C Act to all biological products, including recombinant therapeutic proteins, monoclonal antibody products, vaccines, allergenic products, plasma-derived products and their recombinant analogs, blood or blood components, and cellular and gene therapy products. Shortages of biological products can have serious negative consequences for patients who rely on these products for their treatment. FDA anticipates that early notification of a permanent discontinuance or an interruption in the manufacturing of biological products will allow the Agency to address, prevent, or mitigate a shortage of these products, greatly benefiting the public health. In addition, we have determined that requiring manufacturers of biological products to notify FDA under this rule will not duplicate the existing reporting programs of which we are aware.

a. Plasma-derived products and their recombinant analogs. Under § 600.82(a), the requirements of section 506C of the FD&C Act apply to all biological products, including plasma products derived from human plasma protein and their recombinant analogs (referred to in this document as plasma-derived products and their recombinant analogs). As explained in the preamble to the proposed rule (78 FR 65904 at 65910), with respect to plasma-derived products and their recombinant analogs, FDA recognizes that the Plasma Protein Therapeutics Association (PPTA) has developed a voluntary data system that captures the distribution and supply of five plasma product groups in the United States: Plasma-Derived Factor VIII, Recombinant Factor VIII, Immune Globulin (Ig), Albumin 5%, and Albumin 25%. The PPTA, in consultation with a third party, voluntarily submits a monthly report to FDA of aggregate distribution data for these five product groups. This information provides a picture of the total supply and distribution of these five products in any given month as compared to the last 12 months.

FDA recognizes and greatly appreciates the efforts by PPTA to provide plasma product supply information to FDA and the public. However, as described in detail in the preamble to the proposed rule (78 FR 65904 at 65910), FDA concluded that it would benefit the public health for the Agency to receive direct notification under this rule from all manufacturers of these products. Because the PPTA program does not serve the same purpose as notification under this rule, including plasma-derived products and their recombinant analogs in this rule will not duplicate the PPTA system. FDA believes that including these products within the scope of the rule is essential to FDA's efforts to identify permanent discontinuances and interruptions in manufacturing of these products, and consequently, essential to our efforts to address, prevent, or mitigate shortages of these products.

b. Vaccines. Under section 506C(i)(3)(B) of the FD&C Act, if FDA applies section 506C to vaccines, the Secretary must specifically consider whether the notification requirement may be satisfied by submitting a notification to CDC under CDC's “vaccine shortage notification program.”

CDC contracts with vaccine manufacturers as part of the Vaccines for Children (VFC) program.8 FDA recognizes that CDC includes language in its contracts with vaccine manufacturers requiring the manufacturer to notify CDC of vaccine supply issues that could affect the manufacturer's ability to fulfill its contract with CDC.9 As explained in the preamble to the proposed rule (78 FR 65904 at 65910), only certain vaccines are included under the existing CDC program, and thus, only manufacturers of certain vaccines are obligated to provide notification of supply issues to CDC. Based on information from CDC, FDA estimates that approximately 30 percent of vaccines licensed in the United States are not subject to CDC notification.

8 The VFC program is a federally funded program that provides vaccines at no cost to children and adults who might not otherwise be vaccinated because of inability to pay. VFC was created by the Omnibus Budget Reconciliation Act of 1993 as a new entitlement program to be a required part of each state's Medicaid plan. CDC buys vaccines at a discount from the manufacturers and distributes them to awardees—i.e., State health departments and certain local and territorial public health Agencies—who in turn distribute them at no charge to those private physicians' offices and public health clinics registered as VFC providers. (See http://www.cdc.gov/vaccines/programs/vfc/index.html.)

9 The Biomedical Advanced Research and Development Authority (BARDA), which is responsible for the procurement of certain vaccines related to medical countermeasures, also includes similar language in its procurement contracts. Contracts for the procurement of medical countermeasures against chemical, biological, nuclear, and radiological threat agents (e.g., smallpox and anthrax vaccines) are administered by BARDA, part of the Office of the Assistant Secretary for Preparedness and Response in the U.S. Department of Health and Human Services (HHS). (See http://www.hhs.gov/aspr.)

Moreover, even for the vaccines that are subject to CDC notification, the information collected is not adequate for purposes of this rule, because the existing CDC program does not require vaccine manufacturers to provide notice 6 months in advance of a permanent discontinuance or interruption in manufacturing. Early notice of permanent discontinuances and interruptions is critically important to the prevention of drug shortages. Although FDA and its HHS partners work together closely on vaccine supply issues, and the current framework for CDC notification is useful for contractual purposes, FDA has determined that including vaccines within the scope of this rule is necessary to fully support FDA's efforts to identify, address, prevent, or mitigate a vaccine shortage and would not be duplicative of existing notification systems.

c. Blood or blood components for transfusion. The rule applies section 506C of the FD&C Act to blood or blood components, but in a more limited manner than for other biological products (§ 600.82(a)(2)). The rule requires blood or blood component applicants (i.e., blood collection establishments subject to licensure) that manufacture a significant percentage of the U.S. blood supply to notify FDA of a permanent discontinuance or an interruption in manufacturing that is likely to lead to a “significant disruption” in the applicant's supply of blood or blood components. The rule is intended to require reporting of large-scale, permanent discontinuances, or interruptions in manufacturing of blood or blood components.

FDA anticipates that the rule will ensure that FDA receives information essential to the Agency in preventing, mitigating, or addressing shortages of blood or blood components, while avoiding duplication with existing programs that monitor local and regional supplies of blood or blood components by ABO blood group.

As explained in detail in the preamble to the proposed rule (78 FR 65904 at 65911), we are aware of two significant efforts to monitor local and regional supplies of blood or blood components: (1) America's Blood Centers (ABC) and the Blood Availability and Safety Information System (BASIS) and (2) the Interorganizational Task Force on Domestic Disasters and Acts of Terrorism (Task Force), which is managed by the AABB (formerly the American Association of Blood Banks).

The ABC and BASIS systems monitor the supply and demand of blood or blood components on a daily and weekly basis, and in the event of a national disaster. In other words, ABC and BASIS are tools for local blood centers and hospitals to track their day-to-day inventory of blood or blood components. Unlike the notifications required under this rule, ABC and BASIS are not designed to predict large-scale or nationwide disruptions in the supply of blood or blood components. Moreover, ABC and BASIS are voluntary systems, whereas the rule requires reporting.

The Task Force was formed in January 2002 to help make certain that blood collection efforts resulting from domestic disasters and acts of terrorism are managed properly, and to deliver clear and consistent messages to the public regarding the status of the U.S. blood supply. The Task Force's efforts, although critical to public health, are focused on inventory management and are not intended to predict large-scale disruptions in the supply of blood or blood components. The Task Force coordinates the movement of blood throughout the United States and appeals to the public for blood donations, but Task Force information is not sufficient for FDA in the context of predicting a permanent discontinuance or an interruption in manufacturing of these products that would have a large-scale impact.

In short, although the information already available to FDA from the ABC, BASIS, and Task Force programs is useful, the existing frameworks are voluntary, do not result in a direct notification from an applicant to FDA, and only capture short-term, day-to-day supply and distribution information. In addition, in contrast to this rule, the existing systems are not equipped to predict large-scale, significant disruptions of blood or blood components. Accordingly, FDA has determined that including blood or blood components within the scope of this rule would benefit the public health, providing information that is essential to FDA's efforts to address shortages of these products.

However, recognizing that the existing ABC, BASIS, and Task Force programs do provide certain information concerning the supply of blood or blood components, the reporting requirements apply only to applicants of blood or blood components that manufacture a significant percentage of the U.S. blood supply, and only to a permanent discontinuance of manufacture or an interruption in manufacturing that is likely to lead to a “significant disruption” in supply of that blood or blood component, as further described in sections III.A and III.C.1.

3. Scope of the Term “Product”

Under this rule, “product” refers to a specific strength, dosage form, and route of administration of a drug or biological product. For example, if Applicant X experiences an interruption in manufacturing of the 50-milligram (mg) strength of a drug product that would be subject to § 314.81(b)(3)(iii), but the 100-mg strength continues to be manufactured without delay, under the rule, Applicant X must notify FDA of the interruption in manufacturing of the 50-mg strength if the interruption is likely to lead to a meaningful disruption in the applicant's supply of the 50-mg strength.

C. Notification of a Permanent Discontinuance or an Interruption in Manufacturing 1. Notification

a. Permanent discontinuance. Section 506C of the FD&C Act requires manufacturers to notify FDA of a permanent discontinuance of manufacture of a covered drug. Sections 314.81(b)(3)(iii) and 600.82 require the applicant to report all permanent discontinuances of covered drugs and biological products to FDA. For purposes of this rule, we interpret a permanent discontinuance to be a decision by the applicant for business or other reasons to cease manufacturing and distributing the product indefinitely.

b. Interruption in manufacturing. In addition to permanent discontinuances, section 506C of the FD&C Act requires manufacturers to notify FDA of an interruption in manufacturing of a covered drug that is likely to lead to a meaningful disruption in supply of that drug in the United States. The statute defines “meaningful disruption” to mean a change in production that is reasonably likely to lead to a reduction in the supply of a drug by a manufacturer that is more than negligible and affects the ability of the manufacturer to fill orders or meet expected demand for its product; and does not include interruptions in manufacturing due to matters such as routine maintenance or insignificant changes in manufacturing so long as the manufacturer expects to resume operations in a short period of time.

i. Drugs and biological products other than blood or blood components. Sections 314.81(b)(3)(iii)(a) and 600.82(a)(1) require the applicant for a product other than blood or blood components to report to FDA an interruption in manufacturing of the drug or biological product that is likely to lead to a meaningful disruption in supply of that drug or biological product in the United States. Sections 314.81(b)(3)(iii)(f) and 600.82(f) adopt the statutory definition of “meaningful disruption in supply.”

Consistent with the statutory definition of meaningful disruption, the rule requires an applicant to report an interruption in manufacturing likely to lead to a meaningful disruption in its own supply of a covered drug or biological product. In other words, when evaluating whether an interruption in manufacturing is reportable to FDA under the rule, rather than considering the potential impact of the interruption on the market as a whole, the relevant question (regardless of how large or small the applicant's market share may be) is whether the interruption is likely to lead to a reduction in the applicant's supply of a covered drug or biological product that is more than negligible, and affects the ability of the applicant to fill its own orders or meet the expected demand of its clients for the covered product. Consistent with the statute, the rule does not require an applicant to predict the market-wide impact of an interruption in its own manufacturing, which can be difficult to accurately assess and could lead to inconsistent interpretation of the regulation, less accurate predictions, and under- or overreporting.

Under the rule, reportable discontinuances or interruptions in manufacturing of a covered drug or biological product include:

• A business decision to permanently discontinue manufacture of a covered drug or biological product.

• A delay in acquiring APIs or inactive ingredients that is likely to lead to a meaningful disruption in the applicant's supply of a covered drug or biological product while alternative API suppliers are located.

• Equipment failure or contamination affecting the quality of a covered drug or biological product that necessitates an interruption in manufacturing while the equipment is repaired or the contamination issue is addressed and that is likely to lead to a meaningful disruption in the applicant's supply of the product.

• Manufacturing shutdowns for maintenance or other routine matters, if the shutdown extends for longer than anticipated or otherwise is likely to lead to a meaningful disruption in the applicant's supply of a covered drug or biological product.

• A merger of firms or transfer of an application for a covered drug or biological product to a new firm, if the merger or transfer is likely to lead to a meaningful disruption in the applicant's supply of the product.

• An interruption in manufacturing (e.g., contamination of a manufacturing line) that in the applicant's view may not meaningfully disrupt the market-wide supply of the covered drug or biological product (for example, because the applicant holds only a small share of the market for the product), but that the applicant determines is likely to lead to a meaningful disruption in its own supply of the covered product.

Conversely, an applicant is not required, under the rule, to notify FDA if an interruption in manufacturing is not likely to lead to a meaningful disruption in the applicant's supply of the drug or biological product. For example, FDA does not need to be notified in the following circumstances:

• A scheduled shutdown of an applicant's manufacturing facility for routine maintenance, if the shutdown is anticipated and planned for in advance and, therefore, is not expected to lead to a meaningful disruption in the applicant's supply of a covered drug or biological product.

• An unexpected power outage that results in an unscheduled interruption in manufacturing of a covered drug or biological product, if the applicant expects to resume normal operations within a relatively short timeframe and does not expect to experience a meaningful disruption in its supply of the covered drug or biological product.

In either of these circumstances, if the interruption in manufacturing subsequently appears likely to lead to a meaningful disruption in the applicant's supply of the covered drug or biological product, then it would become a reportable interruption in manufacturing under the rule and the applicant must notify FDA.

The list of examples described in this document is intended to assist industry in understanding what would (or would not) be required to be reported under amended section 506C of the FD&C Act, but the list is not exhaustive. The rule requires that any permanent discontinuance or any interruption in manufacturing that is likely to lead to a meaningful disruption in the applicant's supply of a covered drug or biological product be reported to FDA, even if not specifically described in this preamble.

ii. Blood or blood components for transfusion. Section 600.82(a)(2) requires an applicant that manufactures a significant percentage of the U.S. blood supply to report to FDA an interruption in manufacturing of a blood or blood component that is likely to lead to a “significant disruption” in supply of that product in the United States. As explained in section III.A, FDA intends to consider an applicant that manufactures 10 percent or more of the U.S. blood supply to manufacture a significant percentage of the U.S. blood supply for purposes of this rule.10 Section 600.82(f) defines “significant disruption” as a change in production that is reasonably likely to lead to a reduction in the supply of blood or blood components by a manufacturer that substantially affects the ability of the manufacturer to fill orders or meet expected demand for its product; and does not include interruptions in manufacturing due to matters such as routine maintenance or insignificant changes in manufacturing so long as the manufacturer expects to resume operations in a short period of time. This definition of “significant disruption” closely follows, but is not identical to, the statutory and regulatory definition of “meaningful disruption.”

10 Based on 2011 NCBUS data, this would be more than 1.5 million units of whole blood annually or approximately 125,000 units per month. However, we note that the number may fluctuate year to year.

For purposes of the rule, FDA intends to consider an interruption in manufacturing that leads to a reduction of 20 percent or more of an applicant's own supply of blood or blood components over a 1-month period to “substantially affect” the ability of the applicant to fill orders or meet expected demand; accordingly, such an interruption would be considered a “significant disruption” in supply. Again, when determining whether an interruption in manufacturing is likely to lead to a significant disruption in supply, the blood or blood component applicant should not consider the market as a whole, but rather, should consider only its own supply of product.

The definition of “significant disruption” (interpreted to mean affecting 20 percent or more of an individual applicant's supply over a 1-month period) as applied to blood or blood components, in combination with limiting the rule only to applicants of blood or blood components that manufacture a significant percentage (10 percent or more) of the nation's blood supply, is intended to avoid duplication with existing programs to monitor the daily and weekly distribution of blood or blood components described in section III.B.2.c of this document and in the preamble to the proposed rule (78 FR 65904 at 65911). In general, existing programs maintained by ABC, BASIS, and the Task Force monitor and resolve temporary, local shortfalls of a particular ABO blood group or a particular blood component. Accordingly, the definition of “significant disruption” is intended to capture events that are likely to precipitate large-scale disruptions in an applicant's blood supply and are unlikely to be identified and corrected by the existing ABC, BASIS, and Task Force programs. The additional limitation of the rule to applicants that manufacture a significant percentage of the nation's blood supply further ensures that reporting to FDA will not unnecessarily duplicate reporting to the ABC, BASIS, and Task Force systems, but still allows FDA to receive information that is essential to the Agency in preventing large-scale shortages of these products.

Circumstances that trigger notification to FDA of a permanent discontinuance or an interruption in manufacturing of blood or blood components include the following examples. We recognize that, with the exception of the first example of a permanent discontinuance, the following interruptions are unlikely to be reasonably anticipated 6 months in advance; they would be reportable as soon as practicable, but in no case later than 5 business days after the interruption in manufacturing occurs:

• A business decision by an applicant that manufactures 10 percent or more of the nation's blood supply to permanently discontinue manufacture of blood or blood components;

• A computer system failure that causes an applicant of a blood establishment that collects 10 percent or more of the nation's blood supply to be unable to label blood for 2 weeks, resulting in a 20 percent monthly shortfall of blood for that applicant;

• An issue with blood collection bags, such that they are unavailable, causing an applicant that manufactures 10 percent or more of the nation's blood supply to experience a 20 percent monthly shortfall in normal production for that applicant;

• An issue with apheresis collection devices that causes an applicant of a blood establishment that collects 10 percent or more of the nation's blood supply to be unable to collect platelets by apheresis, resulting in a 20 percent monthly shortfall in platelet supply for that applicant;

• An explosion or fire that damages a large testing laboratory that performs blood testing for an applicant that manufactures 10 percent or more of the nation's blood supply, resulting in a 20 percent monthly shortfall of blood or blood components for that applicant.

Conversely, a covered blood or blood component applicant is not required under the rule to notify FDA if an interruption in manufacturing is not likely to lead to a significant disruption in the applicant's supply of blood or blood components. For example, FDA does not need to be notified if a covered blood or blood component applicant experiences a temporary drop in blood donations at one of its local blood donation centers, such that it is unable to fully supply its hospital customers with blood for several days, provided the donation center quickly returns to its normal donation and supply levels and the dip in blood donations is not likely to lead to a 20 percent decrease in the applicant's overall supply of blood over a 1-month period. We expect that this type of situation would be identified and resolved through the ABC, BASIS, and Task Force systems (e.g., these systems would identify the issue and locate temporary, alternative blood supplies for the applicant's customers). If such an event does lead to a significant disruption in a covered applicant's supply of blood or blood components, it must be reported to FDA under the final rule.

Again, the list of examples described in this document is intended to assist industry in understanding what must be reported under amended section 506C of the FD&C Act, but the list is not exhaustive. The rule requires any permanent discontinuance or any interruption in manufacturing that is likely to lead to a significant disruption (as defined by the rule) in a covered applicant's supply of blood or blood components to be reported to FDA, even if not specifically discussed in this preamble.

2. Timing and Submission of Notification

a. Timing of notification. Section 506C of the FD&C Act requires notification to FDA: (1) At least 6 months prior to the date of the permanent discontinuance or interruption in manufacturing or (2) if 6 months' advance notice is not possible, as soon as practicable. Consistent with the statute, §§ 314.81(b)(3)(iii)(b) and 600.82(b) require an applicant to notify FDA of a permanent discontinuance or an interruption in manufacturing at least 6 months in advance of the date of the permanent discontinuance or interruption in manufacturing; or, if 6 months' advance notice is not possible, as soon as practicable thereafter, but in no case later than 5 business days after the permanent discontinuance or interruption in manufacturing occurs.

The Agency's most powerful tool for addressing drug and biological product shortages is early notification, which provides lead time for FDA to work with manufacturers and other stakeholders to prevent a shortage or to mitigate the impact of an unavoidable shortage. As such, FDA expects that applicants would provide 6 months' advance notice whenever possible. In particular, FDA believes that an applicant will generally know of a permanent discontinuance at least 6 months in advance, and in that case, the applicant must provide notification of a permanent discontinuance to FDA at least 6 months in advance. We understand that an applicant may not reasonably be able to anticipate 6 months in advance certain interruptions in manufacturing that are likely to lead to a meaningful disruption. For example, if an applicant discovers fungal contamination that requires an immediate, temporary shutdown of its manufacturing plant for a covered product, the applicant will not be able to provide FDA with 6 months' advance notice of the interruption in manufacturing. Instead, the rule requires that the applicant notify FDA “as soon as practicable,” but in no case more than 5 business days after the interruption in manufacturing occurs. In this example, the applicant must notify FDA as soon as it reasonably anticipates that an interruption in manufacturing caused by fungal contamination is likely to result in a meaningful disruption in supply of the applicant's product. The applicant should not wait until it or its manufacturer begins rejecting or delaying fulfillment of orders for the product from available inventory (i.e., the applicant should not wait until the interruption in manufacturing actually begins to disrupt supply and affect patient access to the product).

In our experience, even if it is not possible for an applicant to notify the Agency before a permanent discontinuance or an interruption in manufacturing occurs, it should generally be possible for the applicant to provide notice within a day or two, and it should always be possible for the applicant to notify the Agency no later than 5 days after the permanent discontinuance or interruption occurs, even in the event of a natural disaster or some other catastrophic incident. Accordingly, the 5-day provision represents a date certain after which FDA would be able to take action under section 506C(f) of the FD&C Act against an applicant for failure to comply with the notification requirements (see section III.C.6 for further discussion of the consequences of failure to notify FDA). Additionally, it is important to note that an applicant that could have notified the Agency before 5 days had passed, but waited until the end of the 5-day period is in violation of the rule. Consistent with the statutory intent, whenever possible, applicants are required to provide us with advance notice, whether 6 months' advance notice, or “as soon as practicable” thereafter (e.g., 3 months' advance notice).

b. Submission of notification. Sections 314.81(b)(3)(iii)(b) and 600.82(b) require an applicant to notify FDA of a permanent discontinuance or an interruption in manufacturing electronically in a format FDA can process, review, and archive. Applicants must email notifications to [email protected] (for products regulated by CDER) or [email protected] (for products regulated by CBER). In the future, the Agency may consider creating an electronic notification portal linked to the Agency's internal drug shortages database to facilitate submission of these notifications. Unless and until this portal is created, however, email notifications will be used.

c. Reduction in notification period for “good cause.” As described in the preamble to the proposed rule (78 FR 65904 at 65915), under the pre-FDASIA section 506C(b), a manufacturer could seek, and FDA could grant, a reduction in the required 6-month advance notification period for “good cause.” The regulation at § 314.91 implemented the pre-FDASIA section 506C(b). Because section 506C of the FD&C Act as amended by FDASIA does not include an option for formally seeking a reduction in the 6-month advance notification period based on “good cause,” this rule eliminates § 314.91 in its entirety.

3. Contents of the Notification

Sections 314.81(b)(3)(iii)(c) and 600.82(c) require an applicant to include the following items in notifications submitted under section 506C(a) of the FD&C Act:

• The name of the drug or biological product subject to the notification, including the NDC for the drug or biological product (or, for a biological product that does not have an NDC, an alternative standard for identification and labeling that has been recognized as acceptable by the Center Director);

• The name of the applicant of the drug or biological product;

• Whether the notification relates to a permanent discontinuance of the drug or biological product or an interruption in manufacturing of the drug or biological product;

• A description of the reason for the permanent discontinuance or interruption in manufacturing; and

• The estimated duration of the interruption in manufacturing.

FDA requires applicants to include the minimum information listed in the initial notification to assist the Agency in complying with section 506E of the FD&C Act, which requires FDA to maintain a publicly available list of drugs in shortage, as described in section III.C.4. We recognize that the duration of an interruption in manufacturing can be difficult to accurately predict. Therefore the applicant should provide FDA with its best estimate of the expected duration of the interruption in manufacturing. If, after the initial notification is submitted, the estimated duration changes, the applicant should notify FDA of the new expected duration of the interruption in manufacturing so that FDA can respond appropriately. In addition, the applicant should include a detailed, factual description of the reason for the shortage in the notification to assist FDA in responding to the notification.

Along with the required elements of the notification, applicants are encouraged to include any other information in the notification that may assist the Agency in working with the applicant to resolve the permanent discontinuance or interruption in manufacturing. This information could include the applicant's market share, inventory on hand or in distribution channels, allocation procedures and/or plans for releasing available product, copies of communications to patients and providers regarding the shortage (e.g., Dear Healthcare Professional letters), or initial proposals to prevent or mitigate the shortage. As appropriate, the Agency will also followup with the applicant after the notification is submitted to obtain additional information and to work with the applicant to facilitate resolution of any shortage or potential shortage.

4. Public Lists of Products in Shortage

Section 506E of the FD&C Act requires FDA to maintain a publicly available list of drugs and biological products (if FDA applies section 506C of the FD&C Act to biological products by regulation) that are determined by FDA to be in shortage, including providing the names and NDCs of the drugs, the name of each manufacturer of the drug, the reason(s) for the shortage, and the estimated duration of the shortage. Section 506C(h)(2) of the FD&C Act defines “drug shortage” to mean a period of time when the demand or projected demand for the drug within the United States exceeds the supply of the drug. For purposes of section 506E of the FD&C Act, under the rule, the ANDA, NDA, or BLA applicant is considered the manufacturer of an approved drug or biological product, even if the ANDA, NDA, or BLA applicant contracts that function out to another entity.

Section 506E of the FD&C Act further requires FDA to include on the drug and biological product shortages lists the reason for the shortage, choosing from the following list of categories specified in the statute:

• Requirements relating to complying with current good manufacturing practices (CGMPs);

• Regulatory delay;

• Shortage of an active ingredient;

• Shortage of an inactive ingredient component;

• Discontinuation of the manufacture of the drug;

• Delay in shipping of the drug; and

• Demand increase in the drug.

Consistent with the statute, and with FDA's current practice, under §§ 310.306(c), 314.81(b)(3)(iii)(d), and 600.82(d), FDA will maintain publicly available lists of drugs and biological products that are determined by FDA to be in shortage, whether or not FDA has received a notification under this rule concerning the product in shortage. Sections 314.81(b)(3)(iii)(f) and 600.82(f) adopt the statutory definition of drug shortage (substituting “biological product shortage” for “drug shortage” in § 600.82(f)). As specified in the rule, the shortages lists will include the following required statutory elements for drugs or biological products in shortage: Names and NDCs (or the alternative standard for certain biological products) of the drugs or biological products, names of each applicant, reason for each shortage, and estimated duration of each shortage.

If FDA has received a notification under the rule for the drug or biological product, FDA will consider the reason for the shortage supplied by the applicant in its notification and, where applicable, other relevant information before the Agency in determining how to categorize the reason for the shortage. Consistent with the statute, the Agency, not the applicant, is responsible for determining which categorical reason best fits a particular situation. In general, FDA intends to choose the categorical reason that best fits the applicant's supplied description. To facilitate FDA's determination of the categorical reason for the shortage, under the final rule we expect applicants to supply as many details and facts as possible concerning the reason for the permanent discontinuance or interruption in manufacturing when submitting a section 506C notification. This information will also assist FDA in responding quickly to the notification. If FDA has not received a notification under the rule, but becomes aware of a shortage through other means, FDA intends to consider information before the Agency when determining and choosing the reason for the shortage to be included on the public list.

In addition to the list of statutory reasons for the shortage that FDA may choose from, the final rule also adds an eighth category, entitled “Other reason.” The Agency intends to choose “Other reason” only if none of the other listed reasons is applicable. For example, an interruption in manufacturing as a result of a natural disaster or other catastrophic loss would fall into the “Other reason” category. Moreover, although FDA may choose the “Other reason” category, the public shortages list will also include a brief summary of the reason for the shortage submitted by the applicant, thus providing additional information to the public on the cause of the shortage.

The final rule codifies, consistent with FDASIA, FDA's current practice of maintaining public lists of drugs and biological products in shortage, available on FDA's Web site at http://www.fda.gov/drugs/drugsafety/drugshortages/default.htm (for products regulated by CDER) and http://www.fda.gov/BiologicsBloodVaccines/SafetyAvailability/Shortages/default.htm (for products regulated by CBER).

The list of CDER-regulated products includes six categories of information about each drug product on the list: Company (manufacturer of product and contact information); Product (name, strength, formulation, dosage, and NDC); Availability and Estimated Shortage Duration; Related Information (includes applicant's submitted description of reason for shortage); Shortage Reason (FDA-determined reason for the shortage, chosen from the list in § 314.81(b)(3)(iii)(d)); and Date Updated (last date FDA updated the information for that particular product). The list of CBER-regulated products includes similar information in fields for Product Name, Reason for Shortage, and Status.

5. Confidentiality and Disclosure

In general, as required by sections 506C(c) and 506E of the FD&C Act, and as described in this document, FDA will publicly disclose, to the maximum extent possible, information on drug shortages, including information provided by applicants in a notification of a permanent discontinuance or an interruption in manufacturing. Sections 314.81(b)(3)(iii)(d) and 600.82(d), however, specify that FDA may choose not to make information collected under the authority of the rule available to the public on the drug or biological product shortages lists or under its general obligation to disseminate drug shortage information under section 506C(c) of the FD&C Act if the Agency determines that disclosure of such information would adversely affect the public health (such as by increasing the possibility of hoarding or other disruption of the availability of the drug or biological product to patients). These provisions closely track the statutory language in sections 506C(c) and 506E(c)(3) of the FD&C Act.

In addition, §§ 310.306(c), 314.81(b)(3)(iii)(d), and 600.82(d), as finalized, state that FDA will not provide on the public drug or biological product shortages lists or under section 506C(c) of the FD&C Act information that is protected by 18 U.S.C. 1905 or 5 U.S.C. 552(b)(4), including trade secrets and commercial or financial information that is considered confidential or privileged under § 20.61. These provisions provide appropriate protection for commercial and trade secret information protected by other Federal law and are consistent with sections 506C(d) and 506E(c)(2) of the FD&C Act, which clarify that the information provisions in sections 506C and 506E do not alter or amend 18 U.S.C. 1905 or 5 U.S.C. 552(b)(4). The final rule also implements a technical amendment to § 20.100 to include a cross-reference to §§ 310.306, 314.81, and 600.82. Section 20.100 describes, by cross-reference to other regulations, the rules on public availability of certain specific categories of information.

6. Failure To Notify

Consistent with section 506C(f) of the FD&C Act, §§ 310.306(b), 314.81(b)(iii)(3)(e), and 600.82(e), as finalized, provide that FDA will issue a noncompliance letter to an applicant (or, for a covered, unapproved drug, to a manufacturer) who fails to submit a section 506C notification as required under §§ 314.81(b)(iii)(3)(a) and 600.82(a) within the timeframe stated in §§ 314.81(b)(iii)(3)(b) and 600.82(b). It is important to note that failure to notify FDA includes failure to timely notify FDA. For example, if FDA discovers that an applicant did not notify FDA of the permanent discontinuance of a covered drug or biological product 6 months in advance, even though the applicant anticipated the permanent discontinuance 6 months in advance, FDA will issue a noncompliance letter. Similarly, if FDA determines that an applicant experienced a reportable interruption in manufacturing that it could not reasonably anticipate 6 months in advance, but the applicant failed to notify FDA “as soon as practicable,” FDA will issue a noncompliance letter. Refer to section III.C.2.a for a discussion of the required timing for section 506C notifications.

As required by section 506C(f) of the FD&C Act, the rule provides the applicant with 30 calendar days from the date of issuance of the noncompliance letter to respond to the letter. The applicant's response must set forth the basis for noncompliance and provide the required notification with the required information. Not later than 45 calendar days after the date of issuance of the noncompliance letter, FDA will make the letter and the applicant's response public, after appropriate redaction to protect any trade secret or confidential commercial information. FDA will not make the letter and the applicant's response public if FDA determines, based on the applicant's response, that the applicant had a reasonable basis for not notifying FDA as required.

IV. Comments on the Proposed Rule

The Agency received submissions from 34 commenters, including public health associations, pharmaceutical industry, hospital groups, consumer groups, and individuals. A summary of the comments contained in the submissions received and FDA's responses follow.

To make it easier to identify comments and our responses, the word “Comment,” in parentheses, appears before the comment's description, and the word “Response,” in parentheses, appears before our response. We have numbered each comment to help distinguish between different comments. Similar comments are grouped together under the same number. The number assigned to each comment is purely for organizational purposes and does not signify the comment's value or importance or the order in which comments were received.

A. Persons Subject to the Rule

(Comment 1) One comment suggested that the notification requirement should be extended to API manufacturers. The comment stated that API manufacturers are further upstream in the drug development chain and that early warning of issues at this level, before they impact manufacturers formulating the drugs, would give FDA, other manufacturers of the drug, and programs more time to prepare and prevent shortages from affecting patients.

(Response) FDA does not agree that the notification requirement should be applied to API manufacturers. While interruptions in API supply may lead to a meaningful disruption in supply of the finished drug or biological product, they do not always have this effect. Therefore, notification to FDA of disruption in API supply would be premature and would not provide information that the Agency can take definitive action on. FDA believes that the notification requirement, which is derived from section 506C of the FD&C Act, generally provides the Agency with adequate notice to allow the Agency to work with the applicant and other stakeholders to prevent a shortage. As explained in section III.A, however, it is important that the applicant establish a process with any relevant contract manufacturer, API supplier, or other non-applicant entity to ensure that the applicant complies with this rule.

(Comment 2) One comment requested clarification on how a blood establishment will know if it is subject to the reporting requirements of the rule. The comment noted that the preamble to the proposed rule (78 FR 65904 at 65908) stated that FDA intends to consider a BLA-holder for blood or blood components to be a manufacturer of a significant percentage of the U.S. blood supply if the applicant manufactures 10 percent or more of the U.S. blood supply. The comment explained that the National Blood Collection and Utilization Survey (NBCUS) supplies the best data available nationally on collection and utilization of blood in the United States, but notes that the survey is voluntary and does not occur on an annual basis. The comment stated that it is not possible for a BLA holder to know what percentage of the U.S. blood supply it is collecting. Accordingly, the comment recommended that FDA identify an annual whole blood collection number to be used as the threshold for reporting.

(Response) FDA declines to identify an annual whole blood collection number to be used as a threshold for reporting because these numbers may fluctuate year to year. Because of their coordination with other BLA holders through the ABC, BASIS, and Task Force programs, we believe that BLA holders will generally be aware of whether they manufacture a significant percentage of the U.S. blood supply. Accordingly, we do not believe there will be significant uncertainty among BLA holders about whether they are subject to the notification requirements. If an applicant is unsure of whether it is subject to the notification requirements, we recommend that the applicant contact CBER at [email protected]

(Comment 3) One comment noted that the proposed rule did not discuss the effect of the notification provision on product allocation systems. The comment explained that products with inherently limited supply have been historically put on allocation systems by manufacturers to prioritize the allocation of these products. The comment explained that these allocation systems help manage and track product supplies, curb gray market distribution, and prevent price hikes. The comment stated that section 506(D)(d) of the FD&C Act directs FDA to establish a mechanism by which health care providers and other third party organizations may report to the Agency evidence of a drug shortage. The comment requested confirmation that a notification under section 506D(d) of the FD&C Act does not extend to situations where a receiving entity (e.g., a hospital) reaches its allocation limits.

(Response) The comment is beyond the scope of this rulemaking. The final rule implements sections 506C and 506E of the FD&C Act by amending §§ 20.100 and 314.81(b)(3)(iii) and adding new §§ 310.306 and 600.82. The rule does not address section 506D of the FD&C Act. Consistent with section 506D(d), however, we do encourage patients, providers, pharmacists, and other non-applicants to communicate with FDA about potential shortages or disruptions in supply by email at [email protected] (for products regulated by CDER) or [email protected] (for products regulated by CBER), so that the Agency can take appropriate steps to address these situations.

B. Products Covered by the Rule 1. Prescription Drug and Biological Products That Are Life Supporting, Life Sustaining, or Intended for Use in the Prevention or Treatment of a Debilitating Disease or Condition

(Comment 4) In the preamble to the proposed rule (78 FR 65904 at 65909), FDA requested comment on the proposed definitions of “life supporting or life sustaining” and “intended for use in the prevention or treatment of a debilitating disease or condition” and in particular, whether the definitions might lead to “over-notification.” The majority of commenters supported the proposed definitions and agreed that they are consistent with current understanding of these terms. Some commenters noted that there might be the potential for over-notification but agreed that more information, rather than less, will enhance FDA's ability to prevent drug and biological product shortages. One comment stated that the definitions could lead to over-notification if they are broadly interpreted but noted that it is difficult to predict whether over-notification will actually occur. The comment suggested that within 1 year of implementation of the final rule, FDA can assess whether overnotification has occurred and can revise the draft guidance for industry entitled “Notification to FDA of Issues that May Result in a Prescription Drug or Biological Product Shortage” to include additional examples of products that are or are not likely to fall within the scope of products subject to the notification provision.

(Response) FDA appreciates the commenters' input. We continue to believe that the proposed definitions provide sufficient clarity without overly restricting the categories of products subject to the rule. We have therefore finalized the definitions that were proposed and believe that these definitions will result in appropriate notifications under the rule. If, however, FDA finds that over-notification has occurred, the Agency may consider further clarification in guidance or by other suitable means.

(Comment 5) Three comments stated that the proposed definitions were overly broad, potentially encompassing the majority of approved drug and biological products, and may be subject to inconsistent interpretation. Two comments recommended using definitions based on the definitions of “immediately life-threatening disease or condition” and “serious disease or condition” in § 312.300. One of those comments specifically proposed the following definitions:

• “A life supporting or life sustaining drug product means a drug product that is essential to, or yields information that is essential to, the restoration or continuation of a bodily function associated with a stage of disease in which there is a reasonable likelihood that death will occur within a matter of months or in which premature death is likely without early treatment.”

and

• “A debilitating disease or condition means a serious disease or condition associated with morbidity that has a substantial impact on day-to-day functioning. Short-lived and self-limiting morbidity will usually not be sufficient, but the morbidity need not be irreversible, provided it is persistent or recurrent. Whether a disease or condition is serious is a matter of clinical judgment, based on its impact on such factors as survival, day-to-day functioning, or the likelihood that the disease, if left untreated, will progress from a less severe condition to a more serious one.”

(Response) FDA does not believe it is appropriate to incorporate the comment's proposed definitions or alternative definitions based on the definitions set forth in § 312.300. As explained in section III.B.1, under §§ 314.81(b)(3)(iii)(f) and 600.82(f) of this final rule, FDA equates “debilitating disease or condition” with “serious disease or condition,” and we have defined “debilitating disease or condition” according to the definition of “serious disease or condition” found in § 312.300. In the Agency's view, the definitions suggested in the comment would be too restrictive and could exclude certain products, such as anesthetic products, that are critical to patient care and should appropriately be considered “life supporting or life sustaining” or “intended for use in the prevention or treatment of a debilitating disease or condition.” As noted in the previous response, FDA believes that the definitions in this final rule provide sufficient clarity without overly restricting the categories of products subject to the rule. If, following implementation of the rule, it appears that further clarification is necessary, FDA will consider what type of clarification may be beneficial and take appropriate steps.

(Comment 6) Three comments suggested that FDA should consider providing a list, in guidance or otherwise, of examples of drug products or classes of drug products that are likely to meet the definitions of “life supporting or life sustaining” or “intended for use in the prevention or treatment of a debilitating disease or condition.” The commenters suggested that such a list would provide greater clarity and facilitate compliance with the rule.

(Response) FDA does not believe it is appropriate to provide a list of products that are likely to meet the definitions of “life supporting or life sustaining” or “intended for use in the prevention or treatment of a debilitating disease or condition.” Such a list would be difficult to maintain and keep up to date as products come off the market and new products enter the market. We are also concerned that applicants and the public may misinterpret the list as an exhaustive list of all products that would be subject to the notification requirement, rather than as examples of drug products or classes of drug products that are likely to meet the definitions.

If an applicant is uncertain whether a particular discontinuance or interruption in manufacturing of a drug or biological product should be reported to FDA, we encourage the applicant to proceed with notification. It is important to note that, under section 1001(b) of FDASIA, submission of a notification will not be construed as: (1) An admission that any product that is the subject of the notification violates any provision of the FD&C Act or (2) evidence of an intention to promote or market the product for an unapproved use or indication.

(Comment 7) One comment requested that FDA recognize attention-deficit hyperactivity disorder (ADHD) as an example of a debilitating condition. The comment stated that FDA could do so by adding to the definition in the final rule a list of some debilitating diseases and conditions and including ADHD in that list.

(Response) FDA has recognized ADHD as an example of a debilitating condition. We note further that when products used to treat ADHD have gone into shortage, they have been included on FDA's drug shortages Web site. However, FDA declines to add a list of examples of debilitating conditions to the rule.

(Comment 8) One comment requested clarification that drugs used to treat a “debilitating disease or condition” include sedatives, anesthetics, analgesics, and anti-inflammatory drugs.

(Response) FDA has considered sedatives, anesthetics, analgesics, and anti-inflammatory drugs to be drugs that are intended for use in the prevention or treatment of a debilitating disease or condition.

(Comment 9) One comment suggested that the rule be modified to give FDA the option of including a statement in the approval letter for new NDAs, ANDAs, or BLAs indicating that the product is covered by the rule. The comment noted that this type of statement about the product's status would provide clarity and could be beneficial, especially to applicants entering the U.S. market for the first time.

(Response) FDA understands that including a statement in the approval letter that the product is covered by this rule would clarify that particular product's status. The Agency is concerned, however, that such action may create confusion about the status of other already-approved products where the approval letter does not include a statement regarding notification under this rule. Applicants and other stakeholders may believe that the notification requirement only applies with respect to products whose approval letter contains a statement about notification under this rule. Therefore, FDA does not think it would be appropriate to add a provision to the rule as suggested by the comment.

(Comment 10) One comment requested clarification that the definition of “medically necessary” in the drug shortage MAPP solely relates to the allocation of internal Agency staffing and resources and that it has no bearing on the scope of products subject to notification under the proposed rule or FDA's determination of an actual shortage and public notification of a shortage.

(Response) As explained in section IV.B.1 of this document and in the preamble to the proposed rule, under this rule, an applicant is required to notify FDA of a permanent discontinuance or an interruption in manufacturing of a drug or biological product that is life supporting, life sustaining, or intended for use in the prevention or treatment of debilitating disease or condition, whether or not the product is considered medically necessary under the MAPP. Under the MAPP, FDA uses the definition of medically necessary to prioritize the Agency's response to specific shortages or potential shortages and to allocate resources appropriately.

(Comment 11) One comment expressed support for the inclusion of prescription drug products marketed without an approved NDA or ANDA and noted that such products are often critical to patient care.

(Response) FDA agrees that prescription drug products marketed without approved applications are important in patient care and accordingly § 310.306 is being finalized as proposed to ensure that the Agency is notified of a permanent discontinuance or an interruption in manufacturing of such products, as appropriate.

(Comment 12) Three comments raised questions about off-label uses. One comment requested clarification that off-label indications are not included within the scope of “marketed unapproved prescription drugs.” Two comments noted that many prescription drug products used to treat children and nearly all prescription drug products used to treat neonates are not labeled for use in those populations. Accordingly, those two comments stated that the rule should require notification based on off-label uses in addition to the uses in the labeling.

(Response) Off-label uses of drug and biological products are not included within the scope of “marketed unapproved prescription drugs.” FDA is not requiring applicants to consider off-label uses when determining whether a product is a covered product for purposes of the notification requirement in section 506C of the FD&C Act and implemented in this rule. The Agency understands that off-label uses can, in certain circumstances, be an important part of patient care. In fact, as explained in the MAPP on drug shortages (CDER MAPP 4190.1 Rev. 2), FDA considers off-label uses when classifying products as medically necessary for purposes of prioritization. However, off-label uses are based on a practitioner's professional judgment about what will benefit an individual patient, and we do not believe it would be reasonable to expect applicants to take account of individual practitioners' therapeutic decisionmaking in assessing whether their products are subject to the notification requirement. We note that in many cases, though, products that would be covered by the rule if it applied based on an off-label use may nevertheless be covered products based on a labeled use, in which case the applicant would be subject to the notification requirement for that product.

2. Biological Products

(Comment 13) Many comments strongly supported applying section 506C of the FD&C Act to biological products. These comments expressed the view that early notification of a permanent discontinuance or an interruption in manufacturing of biological products would benefit the public health by facilitating prompt action on FDA's part to address, prevent, or mitigate a shortage of these products.

(Response) FDA appreciates these comments and agrees that extending the notification requirement to biological products will benefit the public health. Therefore, consistent with section 506C(i)(3), the Agency is finalizing § 600.82 as proposed.

(Comment 14) Two comments requested that the Agency make clear that biosimilars are subject to the provisions of section 506C of the FD&C Act. The comments stated that while the approval process for biosimilars is still under development, it is important that such products be included in the requirements of the final rule.

(Response) This rule applies to prescription biological products licensed under section 351 of the PHS Act,11 including prescription biosimilar biological products licensed under section 351(k) of the PHS Act, that are life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition, including any such product used in emergency medical care or during surgery, and excluding radiopharmaceutical products.

11 As noted in footnote 1 to the Executive Summary, the term “biological product” refers to a biological product licensed under section 351 of the PHS Act, other than a biological product that also meets the definition of a device in section 201(h) of the FD&C Act.

(Comment 15) One comment expressed support for the inclusion of blood or blood components for transfusion but requested clarification on how FDA will determine which blood or blood components would be exempt from the rule and how FDA plans to address shortages of products determined to be exempt. In particular, the comment sought clarification on whether the rule would apply to reagents used to cross-match platelets for transfusion. The comment stated that there have been shortages of these reagents recently, which has impacted patient care.

(Response) As explained in section III.B.2.c, the notification requirement applies only to applicants of blood or blood components for transfusion that manufacture a significant percentage of the U.S. blood supply, and only when there is a permanent discontinuance of manufacture or an interruption in manufacturing that is likely to lead to a “significant disruption” in supply of that blood or blood component. As noted in footnote 1 in the Executive Summary, the rule does not apply to biological products that meet the definition of a device in section 201(h) of the FD&C Act. Accordingly, this rule does not apply to reagents or other products that CBER regulates as devices, such as products intended for screening or confirmatory clinical laboratory testing associated with blood banking practices and other testing procedures (e.g., blood typing and compatibility testing).

(Comment 16) Two comments stated that blood and blood components should not be included in the rule. The comments cited the current systems described in the preamble to the proposed rule (78 FR 65904 at 65911) that monitor local and regional supplies of blood or blood components and coordinate during domestic disasters. The comments noted that blood and blood components do not have a history of shortages and stated that given the existing reporting systems and acknowledged successful record of planning activities in the blood community, coordination among the major blood organizations, and cooperation with FDA and HHS during and following disasters, it is not necessary to add another layer of reporting that is unlikely to provide additional security.

(Response) As explained in the preamble to the proposed rule (75 FR 65904 at 65911) and in section III.B.2.c, FDA agrees that the information available from ABC and BASIS and the efforts by the Task Force are critical to public health, and the Agency appreciates the willingness of applicants to coordinate. However, there are limitations to these existing systems. These systems are voluntary, they do not result in a direct notification from an applicant to FDA, and they only capture short-term, day-to-day supply and distribution information. In addition, the existing systems are not equipped to predict large-scale, significant disruptions of blood or blood components. We believe that including blood and blood components in the final rule will allow FDA to anticipate large-scale, significant disruptions of blood or blood components and take appropriate action. Accordingly, FDA has determined that including blood and blood components within the scope of this rule will benefit the public health by ensuring that the Agency is provided with information essential to FDA's efforts to address shortages of these products without duplicating existing programs.

(Comment 17) One comment stated that cellular and gene therapy products should not be included in the rule. The comment stated these are relatively new products and that the notification requirements are not necessary for them. The comment noted that BLA holders should be reporting to FDA, at least annually, what products are being manufactured under the license, and if an applicant is experiencing difficulty manufacturing a product, the applicant can communicate with FDA. The comment stated further that it is difficult to understand the “meaningful” process FDA would initiate if a report is received from a cellular or gene therapy manufacturer, and recommended that if cellular and gene therapy products are included in the final rule, FDA should provide a specific guidance document addressing these products.

(Response) FDA does not agree that cellular and gene therapy products should be excluded from the rule, nor do we agree that periodic distribution reporting or voluntary communication with FDA regarding manufacturing difficulties are adequate to allow the Agency to address shortages of cellular and gene therapy products. Shortages of biological products can have serious health consequences for patients who rely on these products for their treatment. Early notification of a permanent discontinuance or an interruption in the manufacturing of biological products is crucial for allowing FDA to take steps to prevent, or mitigate a shortage of these products.

The required distribution reports referred to in the comment do not provide sufficient notice for FDA to anticipate a shortage or take appropriate action to address a shortage. As explained in the preamble to the proposed rule (78 FR 65904 at 65911), under § 600.81, applicants are required to submit to CBER or CDER information about the quantity of product distributed under the license, including the quantity of product distributed to distributors. As part of the safety reporting requirement, manufacturers provide distribution data to FDA every 6 months or at other intervals as may be required by FDA. Although distribution reports submitted by applicants are helpful in the analysis of safety reporting data, these reports do not include information about a permanent discontinuance or an interruption of the manufacture of a biological product that is likely to lead to a meaningful disruption in the supply of that product. In addition, any distribution data received from the applicant at 6-month intervals may not be current. Accordingly, FDA has determined that including cellular and gene therapy products within the scope of this rule would benefit the public health by ensuring that FDA is provided with information that is essential to Agency's efforts to address shortages of these products. If, following implementation of the rule, it appears that guidance or further clarification is necessary for cellular and gene therapy products, FDA will consider what type of guidance may be beneficial and take appropriate steps in accordance with good guidance practices set out in 21 CFR 10.115.

(Comment 18) Two comments recommended that the rule not be applied to vaccines. The comments stated that, in response to the unique nature of vaccines, the CDC has successfully partnered with vaccine applicants to reduce, if not eliminate completely, impacts to public health that may arise due to a supply shortage. The comments stated that CDC continues to be in the best position to monitor and manage vaccine supply. The comments suggested that the CDC should continue to act as a confidential facilitator of critical supply information that is provided by applicants or manufacturers, to maintain these data as proprietary and confidential, and to allow CDC to use the information so that other applicants or manufacturers can fill the gap in the event of an imminent shortage. In addition, the comments noted that, for over a decade, the vaccine industry has voluntarily strived to provide FDA with the requested minimum 6-month notice when making a determination to discontinue production of a particular vaccine, where such a decision was foreseeable.

Alternatively, the comments proposed that FDA consider limiting the scope of the proposed rule to cover only non-VFC vaccines since there already are effective notification and distribution systems in place under the VFC program. The comments noted that CDC maintains a stockpile of VFC vaccines as part of its vaccine shortage notification program. Due to the CDC's regular collaboration with vaccine manufacturers, this program has proven highly successful in mitigating or completely eliminating supply disruptions.

(Response) FDA does not agree with the commenters' suggestion that the rule should not apply to vaccines or, in the alternative, should only apply to non-VFC vaccines. FDA recognizes that CDC includes language in its contracts with vaccine manufacturers requiring the manufacturer to notify CDC of vaccine supply issues that could affect the manufacturer's ability to fulfill its contract with CDC. FDA does not intend this rule to disrupt the contractual process and procedures that exist between manufacturers and CDC. However, as explained in the preamble to the proposed rule (78 FR 65904 at 65910), approximately 30 percent of vaccines licensed in the United States are not subject to CDC notification, including vaccines for rabies, yellow fever, and typhoid. Even for the vaccines that are subject to CDC notification, the information collected by CDC is not adequate for purposes of this rule. The existing CDC program does not require vaccine manufacturers to provide notice 6 months in advance of a permanent discontinuance or interruption in manufacturing. Early notice of permanent discontinuances and interruptions is critically important to prevention of drug and biological product shortages. Although FDA and its HHS partners work together on vaccine supply issues, FDA believes that including vaccines within the scope of this rule is essential to fully support FDA's efforts to identify, address, prevent, or mitigate a vaccine shortage.

(Comment 19) Two comments noted that by design, influenza vaccine is a seasonal product and consequently, is unavailable for a significant portion of each year. The comments stated that for this reason, both seasonal influenza and pandemic influenza vaccines should not be covered by the rule.

(Response) We acknowledge that some vaccines, such as those for influenza, are seasonal products by design and consequently may be unavailable for a significant portion of the year. It is important to note that “meaningful disruption” is defined as a “reduction in the supply of a drug . . . that is more than negligible and affects the ability of the manufacturer to fill orders or meet expected demand for its product.” In the case of a seasonal product, we anticipate that demand would decrease during the off-season; therefore, we would not expect that an interruption in manufacture of a seasonal product would be likely to lead to a meaningful disruption in the off-season. Accordingly, we decline to exempt vaccines intended for seasonal and pandemic use. We believe shortages of biological products, including seasonal influenza vaccines, can have serious health consequences for patients who rely on these products. Early notification of a permanent discontinuance or an interruption in the manufacturing of these products will allow FDA to promptly take steps to prevent or mitigate a shortage of these products that could otherwise result in delayed patient access.

3. Scope of the Term “Product”

(Comment 20) Two comments noted that the proposed rule would apply individually to all strengths, dosage forms, or routes of administration for a given product regardless of the supply status for other presentations and dosages of the same product. The commenters suggested that the rule should allow greater flexibility and should not apply to a product if an alternate presentation of the same therapeutic product is available.12

12 We understand the comment to mean that the rule should not apply to a particular applicant if that applicant has available the same product in a different presentation, e.g., a different strength.

(Response) FDA does not agree. As we explained in the preamble to the proposed rule (78 FR 65904 at 65912), we understand that the permanent discontinuance or interruption in manufacturing of a specific strength, dosage form, or route of administration can have a significant impact on the targeted needs of particular patients. The Agency strives to ensure the availability of appropriate treatment options for patients. We also note that shortages of a specific strength, dosage form, or route of administration may lead to a shortage of another strength, dosage form, or route of administration, thereby exacerbating difficulties in obtaining the product. Furthermore, as explained in other comments on the proposed rule (available in Docket No. FDA-2011-N-0898), requiring notification based on the status of each strength, dosage form, and route of administration helps to ensure that patients and their health care providers have the most accurate information about potential shortages, and can make treatment decisions accordingly.

If the applicant has available an alternate presentation of the same product, the applicant should include that information in the notification as a proposal to mitigate the shortage.

(Comment 21) One comment requested confirmation that notification is not required when there is a shortage of a particular “count” of product but overall the quantity of that product is not in shortage (e.g., a manufacturer is in short supply of a 50-count bottle of 10-mg pills, but there are sufficient numbers of 25-count bottles of 10-mg pills to meet patient need).

(Response) FDA would not require notification in the situation described in the example provided.

C. Notification of a Permanent Discontinuance or an Interruption in Manufacturing 1. Notification

(Comment 22) One comment expressed concern about the notification requirement as applied to blood or blood components. The comment cited the proposed rule (78 FR 65904 at 65913) and stated that monthly reporting of a decrease in any blood component produced by an affected BLA holder is overly burdensome and would result in reports that are meaningless. The comment recommended that FDA provide information and recommendations in a draft guidance to more fully explain the goals of this particular data collection.

(Response) The rule requires the notification of a permanent discontinuance or an interruption in manufacturing of blood or blood components that is likely to lead to a significant disruption in supply of the product in the United States. FDA intends to consider an interruption in manufacturing that leads to a reduction of 20 percent or more of an applicant's own supply of blood or blood components over a 1-month period to “substantially affect” the ability of the applicant to fill orders or meet expected demand. Such an interruption would be considered a significant disruption in supply. The rule does not require manufacturers to submit or report monthly data. The rule, as applied to BLA holders for blood or blood components for transfusion, is intended to capture events that are likely to precipitate large-scale disruptions in an applicant's blood supply.

(Comment 23) One comment expressed concern that the requirement that applicants report an “interruption in manufacturing” that is likely to cause a disruption in the manufacturer's own supply of a drug or biological product could keep important information from being reported to FDA. The comment explained that a manufacturer that is not experiencing “an interruption in manufacturing,” but rather is experiencing a lack of available product due to an increase in demand would not be required to notify the Agency. The comment suggested that FDA consider expanding the notification requirement to include those applicants experiencing a shortage in supply due to an increase in product demand.

(Response) FDA agrees that notification by an applicant lacking available product because of an increase in demand, and not because of an interruption in manufacturing, could be helpful in anticipating and addressing potential shortages. However, such a notification requirement is beyond the scope of section 506C of the FD&C Act implemented by the final rule. FDA does encourage applicants to communicate with FDA if there is an increase in demand that the applicant is not able to meet. We also note that if an applicant experiences an increase in demand because of another applicant's permanent discontinuance or interruption in manufacturing, FDA would expect to receive notification about the situation from the applicant that has experienced the discontinuance or interruption.

(Comment 24) Two comments recommended specific modifications to the definition of “meaningful disruption,” believing it to be unclear and potentially subject to inconsistent interpretation. First, the comments stated that terms within the definition, such as “reasonably likely,” “more than negligible,” and “short period” are insufficiently precise and recommended that the terms be removed from the definition. Second, the comments stated that, under the definition, applicants would be required to notify FDA if any products are under allocation or the demand for the product exceeds the available supply. Accordingly, the comments suggested adding language to the definition with the clarification that “meaningful disruption” means that the adverse impact to supply is unable to be remediated or minimized through allocation or other means of prioritization. Last, the comments noted that many factors could potentially affect the ability of applicants to fill orders, including some that are not within an applicant's control. The comments noted that applicants do not ultimately determine, nor can they in all cases accurately predict, volumes of orders or product demand. One of the comments accordingly recommended that FDA consider including language to clarify that the definition of “meaningful disruption” is intended to reflect situations in which the availability of a product to patients would be impacted. The comment suggested that the rule should clarify whose orders the applicant needs to be able to fill, in order to distinguish between the temporary inability to fulfill an order to a wholesaler, as opposed to the inability of a patient to obtain a prescription or receive appropriate therapy.

(Response) The final rule is being issued to implement sections 506C and 506E of the FD&C Act, consistent with section 506C(i). Section 506C(h) defines “meaningful disruption” as “a change in production that is reasonably likely to lead to a reduction in the supply of a drug by a manufacturer that is more than negligible and affects the ability of the manufacturer to fill orders or meet expected demand for its product” and that “does not include interruptions in manufacturing due to matters such as routine maintenance or insignificant changes in manufacturing so long as the manufacturer expects to resume operations in a short period of time.” The final rule adopts the statutory definition. In our view, the language used in the statute provides flexibility to accommodate the wide variety of circumstances that may result in drug or biological product shortages. If there is any uncertainty about whether a particular circumstance must be reported to FDA under the rule, we encourage applicants to submit a notification. Early notification is FDA's best tool for addressing shortages. Moreover, submission of a notification will not be construed as: (1) An admission that any product that is the subject of the notification violates any provision of the FD&C Act or (2) as evidence of an intention to promote or market the product for an unapproved use or indication.

(Comment 25) One comment noted that the preamble to the proposed rule (78 FR 65904 at 65912 and 65913) provides a number of examples of reportable discontinuances or interruptions in manufacturing of a covered drug or biological product. The comment stated that not all of the examples would result in a shortage of product to patients and may result in industry “over-reporting” events to the Agency. Accordingly, the comment requested that FDA further clarify the requisite link between the examples provided and an actual “meaningful disruption” in supply.

(Response) The list of examples provided in the preamble to the proposed rule are intended to assist applicants in understanding what must be reported under section 506C of the FD&C Act. As implemented by the final rule, section 506C requires that applicants notify FDA of a permanent discontinuance in the manufacture of a covered drug or biological product or an interruption of the manufacture of the drug or biological product that is likely to lead to a meaningful disruption in the supply of that product in the United States, and the reasons for such discontinuance or interruption. The list of examples is not intended to include only situations that will necessarily result in a meaningful disruption in supply. The list includes examples of events (i.e., permanent discontinuance and interruption in manufacturing) that are likely to lead to a meaningful disruption in supply and therefore must be reported to the Agency.

(Comment 26) One comment suggested that FDA amend the rule to require blood component manufacturers to report a decrease in donations when it is due to their own decision to close donation sites versus the natural ebb and flow of blood donation cycles. The comment stated that companies have the ability to create shortages with the purpose of increasing prices by closing donation sites.

(Response) FDA does not agree the suggested change is necessary or appropriate. As explained in the preamble to the proposed rule (78 FR 65904 at 65913), FDA need not be notified if a covered blood or blood component applicant experiences a temporary drop in blood donations at one of its local blood donation centers, such that it is unable to fully supply its hospital customers with blood for several days, provided the donation center quickly returns to its normal donation and supply levels and the dip in blood donations is not likely to lead to a 20 percent decrease in the applicant's overall supply of blood over a 1-month period. We expect that this type of situation would be identified and resolved through the existing programs that coordinate local and regional supplies of blood or blood components (e.g., these systems would identify the issue and locate temporary, alternative blood supplies for the applicant's customers). If such an event does lead to a significant disruption in a covered applicant's supply of blood or blood components, it would need to be reported to FDA under this rule.

(Comment 27) One comment noted that some of the quality issues subject to notification under the rule also would be subject to reporting under Field Alert Reports for drugs and Biological Product Deviation Reports for biological products. In an effort to avoid dual reporting requirements, the comment suggested that FDA attempt to coordinate these reports and the Agency's followup in order to minimize the burden on both FDA and applicants.

(Response) FDA recognizes that some quality issues that result in interruptions in manufacturing subject to this rule could also be subject to reporting under Field Alert Reports (FARs) for drugs and Biological Product Deviation Reports (BPDRs) for biological products. However, FARs and BPDRs are not supply reporting programs and do not serve the same purpose as notification under this rule. Applicants with approved NDAs and ANDAs are required to submit FARs to FDA if they find any significant problems with an approved drug; the purpose of the Field Alert Program is to quickly identify drug products that pose potential safety threats. Similarly, BPDRs are used by biological product manufacturers to report biological product deviations that may affect the safety, purity, or potency of a distributed product. Problems reported through FARs and BPDRs may not lead to a shortage. Moreover, we note that the timing of these reports and the information provided in them may not be adequate for FDA to address potential shortages. Therefore, we have determined that requiring manufacturers of drugs and biological products to notify FDA under this rule will not duplicate existing reporting programs and will provide the Agency with necessary information and lead time to take appropriate action to prevent or mitigate a shortage.

(Comment 28) One comment proposed that additional factors be taken into consideration and used as “filters” when manufacturers report drug and biologics shortages in order to limit the reporting of potential supply chain disruptions that are not “true drug shortage” events. The comment stated that these factors might include market dynamics and duration of supply chain shortage. With regard to market dynamics, the comment stated that FDA should consider the number of active suppliers and the percentage of the market supplied by such active suppliers. The comment stated that using this as a filter would help alert FDA to identify suppliers that are providing a significant percent of the market and that truly have the potential to create a drug shortage. For example, a market supplied by 10 active suppliers of equal market share would not likely experience a drug shortage if 1 of the active suppliers had a supply chain disruption. According to the comment, the market void could be absorbed by the nine other active suppliers via safety stock, additional production, etc. Therefore, the comment recommended the addition of a “primary suppliers” filter to separate those active suppliers who are supplying a significant percent to the market (i.e., such as 20 percent or more of the market).

In addition, the comment stated that the duration of a supply chain shortage should be taken into consideration and utilized as a filter regarding drug shortage reporting. This filter would consider the typical inventory levels carried in the retail and wholesale channels. For example, an active supplier may have a supply disruption (i.e., product out of stock) for 30 days; however, the market may not experience a drug shortage given the inventory levels in the retail and wholesale channels. Typical inventory levels within these channels could range from 30 to 60 days of supply; therefore, the comment proposed a 60-day potential supply disruption as the minimum duration for drug shortage reporting to avoid chances of inventory hoarding and artificial increases in market demand that ultimately undermine the intent of FDASIA.

(Response) FDA declines to adopt the “filters” proposed to reduce reporting under the rule. FDA does not agree that these proposed “filters” are consistent with the language or intent of FDASIA. As explained in the preamble to the proposed rule (78 FR 65904 at 65912), “meaningful disruption” means a disruption in the applicant's own supply. This interpretation avoids the problem of expecting an applicant to predict the market-wide impact of its own interruption in manufacturing, which can be difficult to assess and could lead to inconsistent interpretation and less accurate predictions.

(Comment 29) Two comments addressed the stockpile of VFC vaccines maintained by CDC as part of its vaccine shortage notification program and noted the success of the program in mitigating or completely eliminating supply disruptions. One of the comments requested that FDA permit applicants to take into consideration the existence of a CDC stockpile in assessing whether an interruption in manufacturing is reasonably likely to disrupt supply chains.

(Response) We acknowledge the importance of the stockpile of VFC vaccines maintained by CDC. CDC and HHS are required to maintain a stockpile of routinely recommended vaccines for the United States in the event of vaccine shortages or other unanticipated supply problems. The national pediatric vaccines stockpile currently maintains 14 pediatric vaccines that protect infants, children, and adolescents from 15 vaccine-preventable diseases excluding influenza.13 Where appropriate, FDA and the manufacturers work together with CDC and take into consideration the existence of a CDC stockpile in assessing the impact of supply disruptions and the likelihood of a shortage. However, for the purposes of reporting under this rule, we do not agree that applicants should be permitted to take into consideration the existence of the CDC stockpile. As explained in section III.C.1.b.i, consistent with the statutory definition of meaningful disruption, the rule requires an applicant to report an interruption in manufacturing that is likely to lead to a meaningful disruption in its own supply of a covered drug or biological product. The rule does not require an applicant to predict the market-wide impact of an interruption in its own manufacturing, which can be difficult to accurately assess and could lead to inconsistent interpretation of the regulation, less accurate predictions, and under- or overreporting.

13 See http://www.cdc.gov/phpr/documents/VacStockpileManual.pdf.

2. Timing and Submission of Notification

(Comment 30) Three comments requested clarification of when the notification “clock” would start, in other words, exactly when the notification requirement would be triggered. Two of the comments explained that at the outset, a meaningful disruption might not appear “likely” but may become “likely” as the events progress. The comments expressed concern that the Agency and the applicant may disagree about which event would trigger the notification requirement if it was not obvious to the applicant initially that a meaningful disruption would be likely. The comments suggested that the appropriate trigger to start the notification “clock” is the date on which information becomes available to the applicant from which it could be reasonably determined that a meaningful disruption is likely to occur. Another comment noted that the notification clock could begin on the date of the event causing the interruption, or on the date the applicant becomes aware that an interruption could cause a shortage. The comment cautioned that if the latter were considered the trigger, it may be difficult to determine the exact point in time.

(Response) FDA expects that an applicant will notify FDA as soon as information becomes available to the applicant from which the applicant could reasonably determine that a meaningful disruption is likely to occur. As explained in section III.C.2.a of this document and the preamble to the proposed rule (78 FR 65904 at 65914), the applicant should not wait until the interruption in manufacturing actually begins to disrupt supply and affect patient access to the product. Early notification is the Agency's best tool for addressing shortages because it provides FDA with lead time to work with stakeholders to prevent the shortage or mitigate the impact of an unavoidable shortage. Accordingly, while not required, we encourage applicants to communicate with FDA even in situations where a meaningful disruption may appear to be possible though not necessarily likely.

We understand the commenters' concern that FDA and the applicant may disagree about which event would trigger the notification requirement. FDA has sent and intends to continue sending noncompliance letters when the Agency believes an applicant failed to notify FDA as soon as practicable or within 5 business days of the discontinuance or interruption.14 If an applicant receives a noncompliance letter but believes the failure to notify was reasonable, the applicant should provide a full explanation of the circumstances in the applicant's response to the noncompliance letter. Consistent with section 506C(f)(3) of the FD&C Act, FDA will carefully consider the explanation provided in determining whether there was a reasonable basis for not notifying the Agency. If FDA determines that there was a reasonable basis for not notifying the Agency in accordance with section 506C of the FD&C Act and this rule, we will not post the noncompliance letter or the applicant's response to FDA's Web site.

14 As noted in section III.C.2.a, even if an applicant notifies FDA within 5 business days of the discontinuance or interruption, the applicant may be issued a noncompliance letter if FDA believes the applicant did not notify the Agency as soon as practicable.

(Comment 31) Several comments addressed the proposal that if 6 months' advance notice is not possible, notification must be submitted as soon as practicable thereafter, but in no case later than 5 business days after the permanent discontinuance or interruption in manufacturing occurs. Some comments expressed concern that FDA would allow an applicant to report as late as 5 days after a permanent discontinuance or interruption in manufacturing occurs. One comment stated that this would significantly weaken the rule and limit its effectiveness. The comment further stated that for an unforeseen disruption or discontinuation, FDA should require immediate notification or should outline what situations could arise that would appropriately necessitate a 5-day reporting delay. One comment expressed the view that reporting 5 days after the interruption should only be considered acceptable in rare circumstances, such as natural disaster. Another comment stated that applicants should be required to notify FDA a minimum of 6 months prior to the discontinuance or interruption, the only exception being a natural disaster or catastrophic incident. The comment stated that the proposed language is vague and lenient and creates a loophole in mandatory reporting that ultimately serves neither the public health nor that of patients, while shielding manufacturers from their own failure to plan adequately.

In contrast, some comments expressed concern that requiring notification no later than 5 business days after the discontinuance or interruption would not provide sufficient time for applicants to investigate and get a complete understanding of the issue. The comments explained that more than 5 business days may be necessary to confirm whether actions taken in response to the interruption will affect the manufacturer's ability to fill orders or meet expected demand. One comment stated that requiring notification before a full investigation has been completed is likely to lead to overreporting and less reliable information being provided to FDA. The comment stated that the “as soon as practicable” standard set forth in FDASIA provides the necessary flexibility and should not be altered by adding a 5 business day limit. One comment recommended that, if FDA believes a definite reporting timeframe is necessary, it should be no shorter than 15 days after the permanent discontinuance or interruption in manufacturing. Another comment proposed that if a timeframe is necessary, it could be extended to 15 days along with qualifying language, such as “once it can conclusively be determined that a manufacturing issue will adversely impact supply.”

(Response) FDA's most powerful tool for addressing drug and biological product shortages is early notification, which provides lead time for the Agency to work with manufacturers and other stakeholders to prevent a shortage or to mitigate the impact of unavoidable shortages. Accordingly, we expect that applicants will provide 6 months' advance notice whenever possible. FDA understands, though, that an applicant may not reasonably be able to anticipate certain interruptions in manufacturing that are likely to lead to a meaningful disruption in supply 6 months in advance. In those situations, FDA requires notification “as soon as practicable,” but in no case more than 5 business days after the interruption in manufacturing occurs. The Agency has determined that 5 business days is adequate time for an applicant to assess whether the discontinuance or interruption in manufacturing is likely to lead to a meaningful disruption. As the situation evolves, FDA expects that applicants will provide the Agency with appropriate updates that will facilitate FDA's efforts. We believe that this timeframe appropriately balances the need for early notification and the understanding that applicants may not be able to immediately assess the impact of an interruption in manufacturing.

If notification was required only when an applicant has confirmed that a meaningful disruption will occur, then it might be appropriate to provide additional time for applicants to make this determination. However, the statute requires notification when a discontinuance or interruption in manufacturing is likely to lead to a meaningful disruption. The statute takes account of the fact that there may be a degree of uncertainty about the outcome of the discontinuance or interruption. As such, we note that the qualifying language proposed by one comment (i.e., adding “once it can conclusively be determined that a manufacturing issue will adversely impact supply” to the notification requirement) would not be consistent with the statutory requirement to notify FDA when a discontinuance or interruption is likely to lead to a meaningful disruption. FDA believes it is reasonable for an applicant to make a determination about whether an interruption is likely to lead to a meaningful disruption in supply within 5 business days of the discontinuance or interruption. The Agency does not believe that 15 business days should be necessary to make such a determination, and a delay of 15 business days in notification could have a significant impact on FDA's ability to prevent or mitigate a shortage.

We note that if an applicant receives a noncompliance letter for failure to notify the Agency within 5 business days of a discontinuance or interruption in manufacturing and believes that it would not have been reasonable to expect the applicant to determine that the event was likely to lead to a meaningful disruption, such information should be provided in the applicant's response to the noncompliance letter. The Agency, in turn, will consider that information in determining whether the applicant had a reasonable basis for not notifying FDA within the required timeframe and therefore whether the noncompliance letter should not be made public.

(Comment 32) One comment suggested that the rule should specifically include “natural disaster” as a potential trigger for notification. The comment acknowledged that the preamble to the proposed rule notes that reportable interruptions in manufacturing may include natural disasters, but the commenter was concerned that the examples provided in the proposed rule were all circumstances under the control of the manufacturer.

(Response) A wide variety of situations may lead to a reportable interruption in manufacturing (including natural disasters, equipment failure, or a delay in acquiring APIs or inactive ingredients), and FDA does not believe it is necessary or appropriate to include specific examples within the regulation itself. The Agency believes that the information and examples provided in the preamble to the proposed rule are adequate to assist applicants in determining whether a given interruption in manufacturing must be reported to FDA.

(Comment 33) One comment recommended that FDA require manufacturers to provide periodic updates on actions they are taking to bring drugs that are in shortage back to the market. The comment stated that this would help FDA understand the reasons for any continued delays in delivering drugs into the supply chain and allow the Agency to work with manufacturers in a more informed manner to reduce shortages.

(Response) Once FDA is notified of a situation that might lead to a shortage, FDA is in frequent contact with the applicant to seek ways to prevent the shortage. At this time, we do not believe that requiring periodic updates would be necessary, because we do not anticipate that requiring such updates would provide information that the Agency does not already have.

(Comment 34) Two comments provided suggestions about the electronic submission of 506C notifications to FDA. One of the comments suggested that the rule should include the specific office within FDA that notifications should be sent to. The other comment noted that applicants currently submit information in a nonspecified format via email and stated that FDA should provide greater clarity on whether this practice is intended to continue once the rule goes into effect and whether FDA will be specifying a uniform process for applicants to follow when submitting notifications.

(Response) As explained in the preamble to the proposed rule (78 FR 65904 at 65915), applicants must email notifications to [email protected] (for products regulated by CDER) and [email protected] (for products regulated by CBER). In the future, the Agency may consider creating an electronic notification portal to facilitate submission of these notifications. At that time, the Agency would provide any instructions necessary to use the portal. Because we expect that such a portal would be available on FDA's Web site, we do not believe it is necessary or appropriate to include the name of a specific receiving office in the regulation itself.

3. Contents of the Notification

(Comment 35) Two comments recommended that information about mitigation be required in the notification. One of the comments suggested that FDA require the notification to include a description of the efforts by the applicant to prevent or mitigate the shortage. The other comment recommended that FDA require the notification to include a mitigation strategy or, at least, suggestions for mitigation.

(Response) FDA agrees that input from the applicant about ways to prevent or mitigate the shortage is crucial. The Agency, however, does not agree that it is appropriate to require information about mitigation to be included in the notification. We are concerned that there could be a delay in the notification if applicants are required to develop a mitigation strategy to include in the notification while also working to resolve the underlying issue. Instead, we have determined that it is appropriate to require basic information that is necessary for the Agency to take action and that the Agency is required to include in the shortages list under section 506E of the FD&C Act. We strongly encourage applicants to provide additional information, including proposals to prevent or mitigate the shortage, inventory on hand or in distribution channels, allocation procedures and/or plans for releasing available product, market share, or other information that may assist FDA.

(Comment 36) One comment suggested that FDA require the notification to indicate whether the drug or biological product is being used in an FDA- or National Cancer Institute-approved clinical trial. The comment explained that many clinical trials, especially for cancer treatments, are designed to test the safety and efficacy of the standard of care against, or in combination with, a new treatment being investigated. Accordingly, drug shortages have an impact on clinical trials, not just on patients undergoing standard treatment.

(Response) FDA understands that drug and biological product shortages may have an impact on clinical trials in addition to patients receiving standard treatment. However, we believe that requiring an applicant to state, in its notification, whether the product is currently being used in a clinical trial would require additional investigation by the applicant and would be unnecessarily burdensome. FDA updates the drug and biological product shortage lists regularly, and we encourage investigators to sign up for email updates or the RSS feed to make sure they are aware of the latest information regarding product shortages.

(Comment 37) One comment requested clarification on what information must be included in a notification provided by the manufacturer of a covered drug marketed without an approved application.

(Response) As required by § 310.306, manufacturers of a covered drug marketed without an approved application must provide the same information in a notification as do applicants under § 314.81(b)(3)(iii)(c).

4. Public Lists of Products in Shortage

(Comment 38) Two comments requested clarification about whether FDA will maintain a single list that includes shortages of both drugs and biological products.

(Response) At the present time, FDA intends to maintain separate lists of CDER-regulated and CBER-regulated products that are in shortage. The lists are available on FDA's Web site at http://www.fda.gov/drugs/drugsafety/drugshortages/default.htm (for products regulated by CDER) and http://www.fda.gov/BiologicsBloodVaccines/SafetyAvailability/Shortages/default.htm (for products regulated by CBER).

(Comment 39) One comment expressed support for the proposed addition of “other reason” to the list of statutory reasons for the shortage that FDA could choose from. The comment noted that the seven reasons outlined in FDASIA may be difficult to apply in certain situations.

(Response) FDA agrees that the categories provided in FDASIA do not necessarily cover certain quality or manufacturing problems that may result in a shortage. Therefore, the Agency is finalizing “other reason” as an additional category that the Agency may identify.

(Comment 40) Three comments requested clarification of whether FDA would include potential drug and biological product shortages in the public lists, in addition to actual shortages. The comments expressed concern that disseminating information about potential shortages could result in unintended consequences, such as hoarding.

(Response) Under section 506E of the FD&C Act, FDA maintains an up-to-date list of drugs that are determined by FDA to be in shortage in the United States. Section 506C(h)(2) of the FD&C Act defines a shortage as “a period of time when the demand or projected demand for the drug within the United States exceeds the supply of the drug.”

(Comment 41) Two comments requested clarification on the process and criteria FDA uses to determine whether there is an actual shortage and the process and criteria FDA uses to determine whether to remove a product from the shortages list.

(Response) The MAPP on shortages of CDER-regulated products (MAPP 4190.1 Rev. 2, p. 14) and SOPP on shortages of CBER-regulated Products explain in detail the process and criteria FDA uses to verify if an actual shortage exists. The MAPP (p. 17) also explains the process and criteria FDA uses to determine whether a product should be removed from the shortages list.

(Comment 42) Several comments noted that FDA is responsible for determining whether, in fact, an actual shortage exists as well as the categorical reason for the shortage that best fits the particular situation. The comments requested that FDA consult with applicants about these determinations before making the information public. One comment noted that this has been FDA's practice and requested that the Agency continue this collaborative approach. Another comment specifically requested that FDA develop a process by which the Agency shares its intended public communication prior to posting it on FDA's Web site to allow applicants the opportunity to make corrections, including those related to unintentional disclosure of confidential or proprietary information.

(Response) FDA verifies all information with the applicants prior to posting information on FDA's Web site. Applicants also review the information posted on the Web site regularly and provide updates to FDA as new information becomes available.

(Comment 43) One comment noted that the rule does not address how the estimated shortage durations are determined. The comment stated that the estimated duration of shortages of some common medications, such as injectable calcium and phosphate preparations, listed on FDA's Web site have been inaccurate, which has made it difficult to develop strategies to prioritize care for those patients most in need of these drugs. The comment also expressed concern that there are no consequences for gross underestimations of durations of shortages. The comment recommended that FDA address these issues in the final rule.

(Response) The estimated shortage duration that is provided on FDA's Web site is intended to capture the particular applicant's anticipated recovery time and is based on information provided by the applicant. FDA communicates with applicants on a daily basis and updates the Web site with estimated recovery time as information becomes available from the applicants. The Agency makes every effort to provide as much information as possible and works closely with applicants to ensure that the Web site lists the most current information.

(Comment 44) One comment expressed concern about including each presentation of a drug product (e.g., strength, dosage form, route of administration) that is determined to be in shortage in the public shortage list when alternate presentations of the same product remain available. The comment stated that section 503B of the FD&C Act (21 U.S.C. 353b) permits a compounder to begin manufacturing a drug once it is on the section 506E shortage list. As such, the comment stated that compounders may begin manufacturing a product on the list, even if there are other available presentations that would be adequate substitutes. The comment stated that compounded products raise grave public health concerns and urged FDA to provide examples of situations in which the Agency will not list a drug or biological product because a suitable substitute is available. The comment stated that such a clarification would be consistent with the public health exception to the statutory requirement for FDA to publicly disclose, to the maximum extent possible, information on drug shortages.

(Response) The Agency does not agree that withholding particular presentations of a drug from the shortage list because other presentations are available would be appropriate or beneficial to the public health. Other comments received on the proposed rule, and our own experience, indicate the importance to health care professionals of being made aware of shortages of any presentation of a given drug product to ensure that they have the most accurate information about products in shortage and can make treatment decisions accordingly. We do not think the potential risk identified by the comment outweighs the benefit to health care providers and patients of having this information. We note further that while section 503B of the FD&C Act does permit compounding of drug products listed in the drug shortages list, only the specific presentations included in the drug shortages list may be compounded. Moreover, facilities that compound under section 503B must comply with the current good manufacturing practice requirements under section 501(a)(2)(B) of the FD&C Act (21 U.S.C. 351(a)(2)(B)).

(Comment 45) One comment suggested that FDA communicate directly with physician organizations and affected specialty societies about shortages so that the impact of the shortage can be minimized.

(Response) FDA agrees that communication about products that are in shortage is essential to ensure that health care providers have the information they need to make appropriate treatment decisions. We note that in FDA's drug and biological products shortages Web pages, individuals may sign up to receive email updates of shortage information. Drug and biological product shortage updates are also available by RSS feed.

(Comment 46) One comment recommended that FDA establish a mechanism whereby physicians can receive shortage information about specific therapeutic categories via email updates, an RSS feed, or through a smartphone application. The comment stated that these targeted communications would allow physicians to receive only the information they need.

(Response) Physicians and other interested stakeholders can receive information about specific therapeutic categories or specific products via email updates and RSS feed by signing up on FDA's Web site. In addition, in March 2015, FDA launched a mobile application (app) designed to facilitate access to information about drug shortages. The app identifies current drug shortages, resolved shortages, and discontinuances of drug products. The app allows users to search by a drug's generic name or active ingredient and also by therapeutic category. The app is available for free download via iTunes (for Apple devices) and the Google Play store (for Android devices) by searching “FDA Drug Shortages.”

(Comment 47) One comment stated that it would be helpful if the information contained in FDA's Drug Shortage Web site were categorized by specific classes of drugs in shortage that are relative to a particular area of research, such as oncology. The comment stated that by categorizing the information in this way, FDA could quickly notify researchers of drug shortages in classes frequently used by researchers in a particular specialty.

(Response) FDA's Drug Shortage Web site, which was redesigned after publication of the proposed rule, currently lists products alphabetically as well as by therapeutic category. This enables health care providers and other interested parties to access information relevant to particular specialties more easily.

(Comment 48) One comment recommended that FDA include information on the shortages Web sites indicating whether the drug or biological products listed are being utilized in an FDA-approved clinical trial. The comment also stated a link should be provided to the clinicaltrials.gov Web site for each clinical trial in which the product is being used.

(Response) FDA shares the commenter's concern about the impact that drug and biological product shortages may have on clinical trials that test investigational products against the standard of care. However, the shortages Web sites as well as clinicaltrials.gov are updated regularly, and it would not be feasible, at this time, to maintain links between the products on the shortages lists and the separate Web site that lists clinical trials in which the products may be used. FDA encourages investigators and sponsors to sign up for email updates or RSS feed and to visit FDA's Web site for the most up-to-date information about drug and biological product shortages. We also encourage sponsors to discuss with the appropriate review division any contingency plans if there is a shortage of products being used in a clinical trial.

5. Confidentiality and Disclosure

(Comment 49) Two comments noted the provision in the proposed rule that “FDA may choose not to make information . . . available on the drug shortages list . . . if FDA determines that disclosure of such information would adversely affect the public health (such as by increasing the possibility of hoarding or other disruption of the availability of the drug to patients).” The comments stated that the provision presumes that FDA is uniquely qualified to determine the relative value and/or risk associated with public dissemination of information related to product supply and product shortages. The comments suggest that, at a minimum, FDA should incorporate applicants' input into the decisionmaking regarding public dissemination of information related to supply constraints.

(Response) The provision of the proposed rule referenced in the comment codifies section 506E(c)(3), which reflects Congress' intent that FDA should have the discretion not to make information public if the Agency determines that disclosure would adversely affect public health. We welcome stakeholder input on all shortage-related matters. However, consistent with the statute, it is ultimately FDA's determination whether disclosure of information would adversely affect public health.

6. Failure To Notify

(Comment 50) Three comments requested that FDA establish a process for issuing and adjudicating noncompliance letters sent to an applicant for failure to notify FDA as required by section 506C(a) of the FD&C Act. The comments expressed concern about potential disagreements between the Agency and the applicant about what constitutes timely notification and stressed the importance of a dialogue between FDA and the applicant before a noncompliance letter is issued. One comment specifically requested a process by which an applicant may appeal a decision to issue a noncompliance letter and confirmation from FDA that it will retract and remove any noncompliance letter from the Web site if the appeal is successful.

(Response) FDA believes that the process set forth in section 506C(f) of the FD&C Act (and codified in the final rule) is sufficiently clear. The Agency will send a noncompliance letter to an applicant for failure to notify FDA, which includes failure to timely notify FDA, of a permanent discontinuance or interruption in manufacture that is likely to lead to a meaningful disruption in the supply of a drug in the United States. As provided in the statute, not later than 30 calendar days following issuance, the applicant must submit a response to the noncompliance letter. If an applicant believes it received a noncompliance letter in error, the applicant should provide in its response a full explanation, including relevant dates surrounding the event in question, and any other information of which FDA should be made aware. The Agency, in turn, will consider the information provided in determining whether the noncompliance letter was issued in error or there was a reasonable basis for not notifying the Agency. If FDA determines that the original letter was issued in error or that the recipient had a reasonable basis for not notifying FDA, then the Agency will not post the noncompliance letter or response to the Web site. In light of the process and timeframes specified in section 506C(f) of the FD&C Act, FDA does not believe that a separate appeals process or any further clarification is necessary at this time.

(Comment 51) Two comments requested that FDA establish a process to ensure that no confidential or proprietary information is released when a noncompliance letter and the applicant's response is posted to FDA's Web site.

(Response) As required by section 506C(f)(3) of the FD&C Act, appropriate redactions will be made before a noncompliance letter and the applicant's response are posted to FDA's Web site. FDA has extensive experience redacting confidential and proprietary information, e.g., from NDA and BLA approval packages, before posting documents to the Web site. We believe that the systems the Agency has in place are adequate to address the redaction of noncompliance letters and any response submitted by the applicant.

(Comment 52) One comment requested confirmation that FDA intends to address the failure to notify through the noncompliance letter process and not by GMP inspections.

(Response) If an applicant fails to notify FDA as specified in the final rule, the Agency will address such failure through the process outlined in section 506C(f) of the FD&C Act and codified in this rule.

(Comment 53) One comment suggested that FDA should provide notice of noncompliance to the major news services as well as posting the information on FDA's Web site. The comment stated that in this way, consumers, distributors, and other stakeholders will have knowledge of which companies have not complied with the notification requirement.

(Response) Consistent with section 506C(f) of the FD&C Act, FDA intends to make noncompliance letters and any response to such letters public by posting them on FDA's Web site, unless FDA determines that the noncompliance letter was issued in error or, after reviewing the applicant's response, determines that the applicant had a reasonable basis for not notifying.

(Comment 54) One comment stated that FDA should be better empowered to enforce the notification requirement, potentially by being given authority to fine companies that are noncompliant.

(Response) As explained in the comment to the previous response, FDA will address noncompliance in the manner prescribed in section 506C(f) of the FD&C Act.

D. Other Issues Raised

(Comment 55) Multiple comments requested that FDA work with other Agencies and professional societies to develop treatment guidelines when drug and biological products are in shortage.

(Response) FDA does not typically develop treatment guidelines. We note that some professional societies, such as the American Society of Health-System Pharmacists, do provide treatment guidelines that interested parties may consult.

(Comment 56) Several comments stated that notification only of a permanent discontinuance or an interruption in manufacturing is not sufficient to address the drug shortage problem. The comments noted that steps need to be taken to address manufacturing problems that may lead to product shortages. The comments also suggested that, in addition to notification, there should be a plan in place to either import an equivalent drug from other countries or assign a firm to manufacture the drug.

(Response) FDA appreciates and shares the commenters' concern about the problem of drug and biological product shortages. However, these comments are beyond the scope of this rulemaking. The Agency is issuing the final rule to implement sections 506C and 506E of the FD&C Act, which require notification of a permanent discontinuance or an interruption in manufacturing of certain covered products and maintenance by FDA of a publicly available list of drugs that are determined by FDA to be in shortage. As explained in section I, consistent with FDA's authority under the FD&C Act, the Agency uses a variety of tools to prevent or mitigate drug and biological product shortages, and early notification is crucial to FDA's efforts. However, FDA does not have authority over an applicant's business decisions regarding the manufacture of particular products.

(Comment 57) One comment raised issues concerning the preliminary regulatory impact analysis and the Agency's assessment of the net benefit of the rulemaking.

(Response) Our response is provided in the full discussion of economic impacts available in Docket No. FDA-2011-N-0898 (Ref. 4) and at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

V. Legal Authority

FDA is amending its regulations to implement sections 506C and 506E of the FD&C Act as amended by FDASIA. FDA's authority for this rule also derives from section 701(a) of the FD&C Act (21 U.S.C. 371(a)).

VI. Economic Analysis of Impacts A. Introduction

FDA has examined the impacts of the final rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct Agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Agency believes that this final rule is an economically significant regulatory action as defined by Executive Order 12866.

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. The estimated per notification cost for small business entities, $227, represents a small percentage of average annual sales (up to 0.10 percent). Although the final rule does not require specific mitigation strategies, for firms that choose to implement mitigation or prevention strategies, it is possible that additional costs of $113,000 associated with implementing mitigation strategies could be significant: 2 to 7.8 percent of average annual sales for companies with fewer than 20 employees. In FDA's experience 4 to 5 small businesses entities per year have been affected by a shortage. The Agency certifies that the final rule will not have a significant economic impact on a substantial number of small entities.

Section 202(a) of the Unfunded Mandates Reform Act of 1995 requires that Agencies prepare a written statement, which includes an assessment of anticipated costs and benefits, before proposing “any rule that includes any Federal mandate that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more (adjusted annually for inflation) in any one year.” The current threshold after adjustment for inflation is $144 million, using the most current (2014) Implicit Price Deflator for the Gross Domestic Product. FDA does not expect this final rule to result in any 1-year expenditure that would meet or exceed this amount.

B. Summary

The final rule amends FDA's regulations to implement sections 506C and 506E of the FD&C Act, as amended by FDASIA. The final rule requires all applicants of covered, approved prescription drug or biological products other than blood or blood components for transfusion (referred to as blood or blood components), all applicants of blood or blood components that manufacture a significant percentage of the U.S. blood supply, and all manufacturers of covered prescription drugs marketed without an approved application, to notify FDA electronically of a permanent discontinuance or an interruption in manufacturing of the product that is likely to lead to a meaningful disruption in supply (or a significant disruption in supply for blood or blood components) of the product in the United States 6 months in advance of the permanent discontinuance or interruption in manufacturing, or, if that is not possible, as soon as practicable, but no later than 5 business days after the permanent discontinuance or interruption occurs. The final rule also describes how to submit such a notification, the information required to be included in such a notification, the consequences for failure to submit a required notification, the disclosure of shortage-related information, and the meaning of certain terms.

The final rule would impose annual costs of up to $40.54 million on those applicants or entities affected by the rule, and up to $6.38 million on FDA in preventive costs. Estimated total annual costs of the interactions between industry and FDA range between $14.54 million and $46.92 million. Discounting over 20 years, annual quantified benefits from avoiding the purchase of more expensive alternative products, managing product shortages, and life-years gained, would range from $30.45 million to $98.65 million using a 3 percent discount rate, and from $30.39 million to $98.42 million using a 7 percent discount rate. Annualized over 20 years, net benefits range between $15.90 million and $51.72 million using a 3 percent discount rate; they range between $15.85 million and $51.50 million using a 7 percent discount rate. The public health benefits, mostly non-quantified, include the value of information that would assist FDA, manufacturers, health care providers, and patients in evaluating, mitigating, and preventing shortages of drug and biological products that could otherwise result in non-fatal adverse events, errors, delayed patient treatment, or interruption in clinical trial development. The costs and benefits are summarized in table 1.

Under the current environment all notifications provide meaningful information to identify a shortage or to prevent one, but there is uncertainty whether the scope of the rule could result in notifications that do not provide information about any shortage and lead to additional costs.

The full discussion of economic impacts is available in Docket No. FDA-2011-N-0898 and at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm (Ref. 4).

Table 1—Summary of Benefits, Costs and Distributional Effects of Final Rule Category Primary
  • estimate
  • Low
  • estimate
  • High
  • estimate
  • Year
  • dollars
  • Discount
  • rate
  • (percent)
  • Period
  • covered
  • Notes
    Benefits Annualized Monetized (millions $/year) $64.545
  • $64.408
  • $30.445
  • $30.390
  • $98.645
  • $98.425
  • 2013
  • 2013
  • 3
  • 7
  • 2015-34
  • 2015-34
  • There is uncertainty surrounding these estimates because some underlying estimates came from non-representative studies.
    Annualized Quantified 3
  • 7
  • 2015-34
  • 2015-34
  • 17-55 preventable shortages per year.
    Qualitative Reduction in errors and non-fatal adverse events associated with shortages; uninterrupted patient access to drugs and biological products necessary for treatment; continued access to drugs used in clinical trial development. Costs Annualized Monetized (millions $/year) $30.731
  • $30.731
  • $14.540
  • $14.540
  • $46.921
  • $46.921
  • 2013
  • 2013
  • 3
  • 7
  • 2015-34
  • 2015-34
  • There is uncertainty about potential noise from notifications that might not provide meaningful information, but which could result in additional review costs. In addition, these estimates assume that applicants will participate in mitigation or preventive strategies.
    Annualized Quantified None estimated. Qualitative None estimated. Transfers Federal Annualized Monetized (millions $/year) None estimated. Other Annualized Monetized (millions $/year) None estimated. Effects State, Local or Tribal Gov't None. Small Business Based on the analysis small business entities covered by the final rule could incur small costs, $227 per notification or up to 0.10 percent of their average annual sales. Although the final rule would not require it, some firms may choose to incur additional costs associated with mitigation or prevention strategies. Wages No estimated effect. Growth No estimated effect.
    VII. Paperwork Reduction Act of 1995

    This final rule contains information collection requirements that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520). The title, description, and respondent description of the information collection provisions are shown in the following paragraphs with an estimate of the total reporting burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.

    Title: Permanent Discontinuance or Interruption in Manufacturing of Certain Drug or Biological Products; Final Rule

    Description: Under the final rule, applicants with an approved NDA or ANDA for a covered drug product, manufacturers of a covered drug product marketed without an approved application, and applicants with an approved BLA for a covered biological product (including certain applications of blood or blood components) must notify FDA in writing of a permanent discontinuance of the manufacture of the drug or biological product or an interruption in manufacturing of the drug or biological product that is likely to lead to a meaningful disruption in the applicant's supply (or a significant disruption for blood or blood components) of that product. The notification is required if the drug or biological product is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition, including use in emergency medical care or during surgery, and if the drug or biological product is not a radiopharmaceutical drug product.

    The final rule requires that the notification include the following information: (1) The name of the drug or biological product subject to the notification, including the NDC (or, for a biological product that does not have an NDC, an alternative standard for identification and labeling that has been recognized as acceptable by the Center Director); (2) the name of each applicant of the drug or biological product; (3) whether the notification relates to a permanent discontinuance of the drug or biological product or an interruption in manufacturing of the product; (4) a description of the reason for the permanent discontinuance or interruption in manufacturing; and (5) the estimated duration of the interruption in manufacturing.

    Under the final rule, the notification must be submitted to FDA electronically at least 6 months prior to the date of the permanent discontinuance or interruption in manufacturing. If 6 months' advance notice is not possible because the permanent discontinuance or interruption in manufacturing was unanticipated 6 months in advance, the applicant must notify FDA as soon as practicable, but in no case later than 5 business days after the permanent discontinuance or interruption in manufacturing occurs.

    If an applicant fails to submit the required notification, FDA will issue a letter informing the applicant or manufacturer of its noncompliance. The applicant must submit to FDA, not later than 30 calendar days after FDA issues the letter, a written response setting forth the basis for noncompliance and providing the required notification.

    Description of Respondents: Applicants of prescription drugs and biological products subject to an approved NDA, ANDA, or BLA, and manufacturers of prescription drug products marketed without an approved ANDA or NDA, if the product is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition, including use in emergency medical care or during surgery, and is not a radiopharmaceutical product. If the BLA applicant is a manufacturer of blood or blood components, it is only subject to this rule if it manufactures a significant percentage of the nation's blood supply.

    Burden Estimates: Based on the number of drug and biological product shortage related notifications we have seen during the past 12 months, we estimate that annually a total of approximately 75 respondents (“Number of Respondents” in table 2) will notify us of a permanent discontinuance of the manufacture of a drug or biological product or an interruption in manufacturing of a drug or biological product that is likely to lead to a meaningful disruption in the respondent's supply of that product under the final rule. We estimate that these respondents will submit annually a total of approximately 305 notifications as required under §§ 310.306, 314.81(b)(3)(iii), and 600.82. Approximately 80 of these notifications are notifications that we currently receive under OMB control number 0910-0699 for the IFR, thus we expect to receive approximately 225 new notifications under the final rule (“Total Annual Responses” in table 2).15 We estimate three notifications per respondent, because a respondent may experience multiple discontinuances or interruptions in manufacturing in a year that require notification (“No. of Responses per Respondent” in table 2). We also estimate that preparing and submitting these notifications to FDA will take approximately 2 hours per respondent (“Hours per Response” in table 2).

    15 This estimate is based on the number of new notifications we anticipate receiving under the final rule as compared to notifications we currently receive under the IFR. The IFR is our baseline for comparison for purposes of estimating the burden under the PRA, because additional notifications that we may currently receive, but that are not required under the IFR are not covered under any existing OMB control number, and thus must be captured in this PRA estimate. In contrast, the analysis of impacts of the final rule estimates the costs and benefits as compared to current practice. As a result of the use of different baselines for comparison, the estimate of new notifications under the PRA does not match the estimate of new notifications included in the final analysis of impacts.

    We base these estimates on our experience with the reporting of similar information to FDA since the issuance of the President's Executive Order 13588 of October 31, 2011 (Ref. 1), and under the interim final rule entitled “Applications for Food and Drug Administration Approval To Market a New Drug; Revision of Postmarketing Reporting Requirements—Permanent” (76 FR 78530; December 19, 2011).

    FDA estimates the burden of this collection of information as follows:

    Table 2—Estimated Reporting Burden 1 21 CFR Section Number of
  • respondents
  • Number of
  • responses per
  • respondent
  • Total annual responses Hours per
  • response
  • Total hours
    Notifications required under §§ 310.306 (unapproved drugs), 314.81(b)(3)(iii) (products approved under an NDA or ANDA), and 600.82 (products approved under a BLA) 75 3 225 2 450 1 There are no capital costs or operating and maintenance costs associated with this information collection.

    The information collection provisions of this final rule have been submitted to OMB for review, as required by section 3507(d) of the PRA. Prior to the effective date of this final rule, FDA will publish a notice in the Federal Register announcing OMB's decision to approve, modify, or disapprove the information collection provisions in this final rule. An Agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

    VIII. Federalism

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

    IX. Environmental Impact

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

    X. References

    The following references have been placed on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday, and are available electronically at http://www.regulations.gov. (FDA has verified all the Web site addresses in this reference section, but we are not responsible for any subsequent changes to the Web sites after this document publishes in the Federal Register.)

    1. Executive Order 13588, “Reducing Prescription Drug Shortages,” October 31, 2011, available at http://www.thefederalregister.org/fdsys/pkg/FR-2011-11-03/pdf/2011-28728.pdf, accessed May 2015.

    2. Center for Drug Evaluation and Research, Manual of Policies and Procedures 4190.1 Rev. 2, “Drug Shortage Management,” September 3, 2014, available at http://www.fda.gov/downloads/AboutFDA/CentersOffices/CDER/ManualofPoliciesProcedures/ucm079936.pdf, accessed May 2015.

    3. Center for Biologics Evaluation and Research, Standard Operating Policy and Procedure 8506, “Management of Shortages of CBER-Regulated Products,” April 9, 2012, available at http://www.fda.gov/biologicsbloodvaccines/guidancecomplianceregulatoryinformation/proceduressopps/ucm299304.htm, accessed May 2015.

    4. “Regulatory Impact Analysis, Regulatory Flexibility Analysis, and Unfunded Mandates Reform Act Analysis for Permanent Discontinuance or Interruption in Manufacturing of Certain Drug or Biological Products”; Final Rule, available at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/default.htm.

    List of Subjects 21 CFR Part 20

    Confidential business information, Courts, Freedom of information, Government employees.

    21 CFR Part 310

    Administrative practice and procedure, Drugs, Labeling, Medical devices, Reporting and recordkeeping requirements.

    21 CFR Part 314

    Administrative practice and procedure, Confidential business information, Drugs, Reporting and recordkeeping requirements.

    21 CFR Part 600

    Biologics, Reporting and recordkeeping requirements.

    Therefore, under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, and under authority delegated to the Commissioner of Food and Drugs, 21 CFR parts 20, 310, 314, and 600 are amended as follows:

    PART 20—PUBLIC INFORMATION 1. The authority citation for 21 CFR part 20 continues to read as follows: Authority:

    5 U.S.C. 552; 18 U.S.C. 1905; 19 U.S.C. 2531-2582; 21 U.S.C. 321-393, 1401-1403; 42 U.S.C. 241, 242, 242a, 242l, 242n, 243, 262, 263, 263b-263n, 264, 265, 300u-300u-5, 300aa-1.

    2. Revise § 20.100 by adding paragraph (c)(45) to read as follows:
    § 20.100 Applicability; cross-reference to other regulations.

    (c) * * *

    (45) Postmarket notifications of a permanent discontinuance or an interruption in manufacturing of certain drugs or biological products, in §§ 310.306, 314.81(b)(3)(iii), and 600.82 of this chapter.

    PART 310—NEW DRUGS 3. The authority citation for 21 CFR part 310 is revised to read as follows: Authority:

    21 U.S.C. 321, 331, 351, 352, 353, 355, 356c, 356e, 360b-360f, 360j, 361(a), 371, 374, 375, 379e, 379k-1; 42 U.S.C. 216, 241, 242(a), 262, 263b-263n.

    4. Add § 310.306 to subpart D to read as follows:
    § 310.306 Notification of a permanent discontinuance or an interruption in manufacturing of marketed prescription drugs for human use without approved new drug applications.

    (a) Applicability. Marketed prescription drug products that are not the subject of an approved new drug or abbreviated new drug application are subject to this section.

    (b) Notification of a permanent discontinuance or an interruption in manufacturing. The manufacturer of each product subject to this section must make the notifications required under § 314.81(b)(3)(iii) of this chapter and otherwise comply with § 314.81(b)(3)(iii) of this chapter. If the manufacturer of a product subject to this section fails to provide notification as required under § 314.81(b)(3)(iii), FDA will send a letter to the manufacturer and otherwise follow the procedures set forth under § 314.81(b)(3)(iii)(e).

    (c) Drug shortages list. FDA will include on the drug shortages list required by § 314.81(b)(3)(iii)(d) drug products that are subject to this section that it determines to be in shortage. For such drug products, FDA will provide the names of each manufacturer rather than the names of each applicant. With respect to information collected under this paragraph, FDA will observe the confidentiality and disclosure provisions set forth in § 314.81(b)(3)(iii)(d)(2).

    PART 314—APPLICATIONS FOR FDA APPROVAL TO MARKET A NEW DRUG 5. The authority citation for 21 CFR part 314 is revised to read as follows: Authority:

    21 U.S.C. 321, 331, 351, 352, 353, 355, 356, 356a, 356b, 356c, 356e, 371, 374, 379e, 379k-1.

    6. Revise § 314.81(b)(3)(iii) to read as follows:
    § 314.81 Other postmarketing reports.

    (b) * * *

    (3) * * *

    (iii) Notification of a permanent discontinuance or an interruption in manufacturing. (a) An applicant of a prescription drug product must notify FDA in writing of a permanent discontinuance of manufacture of the drug product or an interruption in manufacturing of the drug product that is likely to lead to a meaningful disruption in supply of that drug in the United States if:

    (1) The drug product is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition, including any such drug used in emergency medical care or during surgery; and

    (2) The drug product is not a radiopharmaceutical drug product.

    (b) Notifications required by paragraph (b)(3)(iii)(a) of this section must be submitted to FDA electronically in a format that FDA can process, review, and archive:

    (1) At least 6 months prior to the date of the permanent discontinuance or interruption in manufacturing; or

    (2) If 6 months' advance notice is not possible because the permanent discontinuance or interruption in manufacturing was not reasonably anticipated 6 months in advance, as soon as practicable thereafter, but in no case later than 5 business days after the permanent discontinuance or interruption in manufacturing occurs.

    (c) Notifications required by paragraph (b)(3)(iii)(a) of this section must include the following information:

    (1) The name of the drug subject to the notification, including the NDC for such drug;

    (2) The name of the applicant;

    (3) Whether the notification relates to a permanent discontinuance of the drug or an interruption in manufacturing of the drug;

    (4) A description of the reason for the permanent discontinuance or interruption in manufacturing; and

    (5) The estimated duration of the interruption in manufacturing.

    (d)(1) FDA will maintain a publicly available list of drugs that are determined by FDA to be in shortage. This drug shortages list will include the following information:

    (i) The names and NDC(s) for such drugs;

    (ii) The name of each applicant for such drugs;

    (iii) The reason for the shortage, as determined by FDA from the following categories: Requirements related to complying with good manufacturing practices; regulatory delay; shortage of an active ingredient; shortage of an inactive ingredient component; discontinuation of the manufacture of the drug; delay in shipping of the drug; demand increase for the drug; or other reason; and

    (iv) The estimated duration of the shortage.

    (2) FDA may choose not to make information collected to implement this paragraph available on the drug shortages list or available under section 506C(c) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 356c(c)) if FDA determines that disclosure of such information would adversely affect the public health (such as by increasing the possibility of hoarding or other disruption of the availability of the drug to patients). FDA will also not provide information on the public drug shortages list or under section 506C(c) of the Federal Food, Drug, and Cosmetic Act that is protected by 18 U.S.C. 1905 or 5 U.S.C. 552(b)(4), including trade secrets and commercial or financial information that is considered confidential or privileged under § 20.61 of this chapter.

    (e) If an applicant fails to submit a notification as required under paragraph (b)(3)(iii)(a) of this section and in accordance with paragraph (b)(3)(iii)(b) of this section, FDA will issue a letter to the applicant informing it of such failure.

    (1) Not later than 30 calendar days after the issuance of such a letter, the applicant must submit to FDA a written response setting forth the basis for noncompliance and providing the required notification under paragraph (b)(3)(iii)(a) of this section and including the information required under paragraph (b)(3)(iii)(c) of this section; and

    (2) Not later than 45 calendar days after the issuance of a letter under paragraph (b)(3)(iii)(e) of this section, FDA will make the letter and the applicant's response to the letter public, unless, after review of the applicant's response, FDA determines that the applicant had a reasonable basis for not notifying FDA as required under paragraph (b)(3)(iii)(a) of this section.

    (f) The following definitions of terms apply to paragraph (b)(3)(iii) of this section:

    Drug shortage or shortage means a period of time when the demand or projected demand for the drug within the United States exceeds the supply of the drug.

    Intended for use in the prevention or treatment of a debilitating disease or condition means a drug product intended for use in the prevention or treatment of a disease or condition associated with mortality or morbidity that has a substantial impact on day-to-day functioning.

    Life supporting or life sustaining means a drug product that is essential to, or that yields information that is essential to, the restoration or continuation of a bodily function important to the continuation of human life.

    Meaningful disruption means a change in production that is reasonably likely to lead to a reduction in the supply of a drug by a manufacturer that is more than negligible and affects the ability of the manufacturer to fill orders or meet expected demand for its product, and does not include interruptions in manufacturing due to matters such as routine maintenance or insignificant changes in manufacturing so long as the manufacturer expects to resume operations in a short period of time.

    § 314.91 [Removed]
    7. Remove § 314.91.
    PART 600—BIOLOGICAL PRODUCTS: GENERAL 8. The authority citation for 21 CFR part 600 is revised to read as follows: Authority:

    21 U.S.C. 321, 351, 352, 353, 355, 356c, 356e, 360, 360i, 371, 374, 379k-1; 42 U.S.C. 216, 262, 263, 263a, 264, 300aa-25.

    9. Add § 600.82 to subpart D to read as follows:
    § 600.82 Notification of a permanent discontinuance or an interruption in manufacturing.

    (a) Notification of a permanent discontinuance or an interruption in manufacturing. (1) An applicant of a biological product, other than blood or blood components for transfusion, which is licensed under section 351 of the Public Health Service Act, and which may be dispensed only under prescription under section 503(b)(1) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 353(b)(1)), must notify FDA in writing of a permanent discontinuance of manufacture of the biological product or an interruption in manufacturing of the biological product that is likely to lead to a meaningful disruption in supply of that biological product in the United States if:

    (i) The biological product is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition, including any such biological product used in emergency medical care or during surgery; and

    (ii) The biological product is not a radiopharmaceutical biological product.

    (2) An applicant of blood or blood components for transfusion, which is licensed under section 351 of the Public Health Service Act, and which may be dispensed only under prescription under section 503(b) of the Federal Food, Drug, and Cosmetic Act, must notify FDA in writing of a permanent discontinuance of manufacture of any product listed in its license or an interruption in manufacturing of any such product that is likely to lead to a significant disruption in supply of that product in the United States if:

    (i) The product is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition, including any such product used in emergency medical care or during surgery; and

    (ii) The applicant is a manufacturer of a significant percentage of the U.S. blood supply.

    (b) Submission and timing of notification. Notifications required by paragraph (a) of this section must be submitted to FDA electronically in a format that FDA can process, review, and archive:

    (1) At least 6 months prior to the date of the permanent discontinuance or interruption in manufacturing; or

    (2) If 6 months' advance notice is not possible because the permanent discontinuance or interruption in manufacturing was not reasonably anticipated 6 months in advance, as soon as practicable thereafter, but in no case later than 5 business days after such a permanent discontinuance or interruption in manufacturing occurs.

    (c) Information included in notification. Notifications required by paragraph (a) of this section must include the following information:

    (1) The name of the biological product subject to the notification, including the National Drug Code for such biological product, or an alternative standard for identification and labeling that has been recognized as acceptable by the Center Director;

    (2) The name of the applicant of the biological product;

    (3) Whether the notification relates to a permanent discontinuance of the biological product or an interruption in manufacturing of the biological product;

    (4) A description of the reason for the permanent discontinuance or interruption in manufacturing; and

    (5) The estimated duration of the interruption in manufacturing.

    (d)(1) Public list of biological product shortages. FDA will maintain a publicly available list of biological products that are determined by FDA to be in shortage. This biological product shortages list will include the following information:

    (i) The names and National Drug Codes for such biological products, or the alternative standards for identification and labeling that have been recognized as acceptable by the Center Director;

    (ii) The name of each applicant for such biological products;

    (iii) The reason for the shortage, as determined by FDA, selecting from the following categories: Requirements related to complying with good manufacturing practices; regulatory delay; shortage of an active ingredient; shortage of an inactive ingredient component; discontinuation of the manufacture of the biological product; delay in shipping of the biological product; demand increase for the biological product; or other reason; and

    (iv) The estimated duration of the shortage.

    (2) Confidentiality. FDA may choose not to make information collected to implement this paragraph available on the biological product shortages list or available under section 506C(c) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 356c(c)) if FDA determines that disclosure of such information would adversely affect the public health (such as by increasing the possibility of hoarding or other disruption of the availability of the biological product to patients). FDA will also not provide information on the public shortages list or under section 506C(c) of the Federal Food, Drug, and Cosmetic Act that is protected by 18 U.S.C. 1905 or 5 U.S.C. 552(b)(4), including trade secrets and commercial or financial information that is considered confidential or privileged under § 20.61 of this chapter.

    (e) Noncompliance letters. If an applicant fails to submit a notification as required under paragraph (a) of this section and in accordance with paragraph (b) of this section, FDA will issue a letter to the applicant informing it of such failure.

    (1) Not later than 30 calendar days after the issuance of such a letter, the applicant must submit to FDA a written response setting forth the basis for noncompliance and providing the required notification under paragraph (a) of this section and including the information required under paragraph (c) of this section; and

    (2) Not later than 45 calendar days after the issuance of a letter under this paragraph, FDA will make the letter and the applicant's response to the letter public, unless, after review of the applicant's response, FDA determines that the applicant had a reasonable basis for not notifying FDA as required under paragraph (a) of this section.

    (f) Definitions. The following definitions of terms apply to this section:

    Biological product shortage or shortage means a period of time when the demand or projected demand for the biological product within the United States exceeds the supply of the biological product.

    Intended for use in the prevention or treatment of a debilitating disease or condition means a biological product intended for use in the prevention or treatment of a disease or condition associated with mortality or morbidity that has a substantial impact on day-to-day functioning.

    Life supporting or life sustaining means a biological product that is essential to, or that yields information that is essential to, the restoration or continuation of a bodily function important to the continuation of human life.

    Meaningful disruption means a change in production that is reasonably likely to lead to a reduction in the supply of a biological product by a manufacturer that is more than negligible and affects the ability of the manufacturer to fill orders or meet expected demand for its product, and does not include interruptions in manufacturing due to matters such as routine maintenance or insignificant changes in manufacturing so long as the manufacturer expects to resume operations in a short period of time.

    Significant disruption means a change in production that is reasonably likely to lead to a reduction in the supply of blood or blood components by a manufacturer that substantially affects the ability of the manufacturer to fill orders or meet expected demand for its product, and does not include interruptions in manufacturing due to matters such as routine maintenance or insignificant changes in manufacturing so long as the manufacturer expects to resume operations in a short period of time.

    Dated: July 1, 2015. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2015-16659 Filed 7-7-15; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9722] RIN 1545-BM35 Partnership Transactions Involving Equity Interests of a Partner; Correction AGENCY:

    Internal Revenue Service (IRS), Treasury.

    ACTION:

    Correcting amendments.

    SUMMARY:

    This document contains corrections to final and temporary regulations (TD 9722) that were published in the Federal Register on June 12, 2015 (80 FR 33402). The final and temporary regulations prevent a corporate partner from avoiding corporate-level gain through transactions with a partnership involving equity interests of the partner.

    DATES:

    This correction is effective on July 2, 2015 and applicable beginning June 12, 2015.

    FOR FURTHER INFORMATION CONTACT:

    Kevin I. Babitz at (202) 317-6852 (not a toll free number).

    SUPPLEMENTARY INFORMATION: Background

    The final and temporary regulations (TD 9722) that are the subject of this correction are under sections 311(b), 336(a), and 337(d) of the Internal Revenue Code.

    Need for Correction

    As published, the final and temporary regulations (TD 9722) contain errors that may prove to be misleading and are in need of clarification.

    List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

    Correction of Publication

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

    PART 1—INCOME TAXES Paragraph 1. The authority citation for part 1 continues to read in part as follows: Authority:

    26 U.S.C. 7805 * * *

    Par. 2. Section 1.337(d)-3T is amended by revising paragraphs (c)(2)(i) and (f)(2)(ii) to read as follows:
    § 1.337(d)-3T Gain recognition upon certain partnership transactions involving a partner's stock (temporary).

    (c) * * *

    (2) * * * (i) In general. With respect to a Corporate Partner, Stock of the Corporate Partner includes the Corporate Partner's stock, or other equity interests, including options, warrants, and similar interests, in the Corporate Partner or a corporation that controls the Corporate Partner within the meaning of section 304(c), except that section 318(a)(1) and (3) shall not apply. Stock of the Corporate Partner also includes interests in any entity to the extent that the value of the interest is attributable to Stock of the Corporate Partner.

    (f) * * *

    (2) * * *

    (ii) Is not distributed to the Corporate Partner or a corporation that controls the Corporate Partner within the meaning of section 304(c), except that section 318(a)(1) and (3) shall not apply.

    § 1.732-1T [Amended]
    Par 3. Section 1.732-1T paragraph (c)(5)(ii) is amended by removing the word “Nothwithstanding” and adding in its place the word “Notwithstanding”.
    Martin V. Franks, Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).
    [FR Doc. 2015-16674 Filed 7-2-15; 4:15 pm] BILLING CODE 4830-01-P
    DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [TD 9722] RIN 1545-BM35 Partnership Transactions Involving Equity Interests of a Partner; Correction AGENCY:

    Internal Revenue Service (IRS), Treasury.

    ACTION:

    Final and temporary regulations; correction.

    SUMMARY:

    This document contains corrections to final and temporary regulations (TD 9722) that were published in the Federal Register on June 12, 2015 (80 FR 33402). The final and temporary regulations prevent a corporate partner from avoiding corporate-level gain through transactions with a partnership involving equity interests of the partner.

    DATES:

    This correction is effective on July 2, 2015 and applicable beginning June 12, 2015.

    FOR FURTHER INFORMATION CONTACT:

    Kevin I. Babitz at (202) 317-6852 (not a toll free number).

    SUPPLEMENTARY INFORMATION:

    Background

    The final and temporary regulations (TD 9722) that are the subject of this correction are under sections 311(b), 336(a), and 337(d) of the Internal Revenue Code.

    Need for Correction

    As published, the final and temporary regulations (TD 9722) contain errors that may prove to be misleading and are in need of clarification.

    Correction of Publication

    Accordingly, the final regulations (TD 9722), that are the subject of FR Doc. 2015-14405, are corrected as follows:

    1. On page 33404, in the preamble, the first column, the tenth and eleventh lines from the top of the column, the language “that controls (within the meaning of section 304(c)) the Corporate Partner.” is corrected to read “that controls the Corporate Partner within the meaning of section 304(c), except that section 318(a)(1) and (3) shall not apply (section 304(c) control).”.

    2. On page 33404, in the preamble, the first column, the eighteenth through the twentieth line from the top of the first full paragraph, the language “that controls the Corporate Partner within the meaning of section 304(c) (section 304(c) control), whereas the” is corrected to read “that possesses section 304(c) control of the Corporate Partner, whereas the”.

    Martin V. Franks, Chief, Publications and Regulations Branch, Legal Processing Division, Associate Chief Counsel (Procedure and Administration).
    [FR Doc. 2015-16673 Filed 7-2-15; 4:15 pm] BILLING CODE 4830-01-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2015-0527] Safety Zones; Recurring Events in Captain of the Port Boston Zone AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of enforcement of regulation.

    SUMMARY:

    The Coast Guard will enforce the safety zones in the Captain of the Port Boston Zone on the specified dates and times listed below. This action is necessary to ensure the protection of the maritime public and event participants from the hazards associated with these annual recurring events. Under the provisions of our regulations, no person or vessel, except for the safety vessels assisting with the event may enter the safety zones unless given permission from the COTP or the designated on-scene representative. The Coast Guard may be assisted by other Federal, State, or local law enforcement agencies in enforcing this regulation.

    DATES:

    The regulation for the safety zones described in 33 CFR 165.118 will be enforced on July 3, 2015 between 7:00 p.m. to 11:00 p.m., on July 4, 2015 from 9:00 p.m. to 11:00 p.m., on July 10, 2015 from 6:00 a.m. to 4:00 p.m., and on July 11, 2015 from 8:30 a.m. to 10:30 a.m., as listed in the table located in the Supplementary Information.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this document, call or email Mr. Mark Cutter, Coast Guard Sector Boston Waterways Management Division, telephone 617-223-4000, email [email protected]

    SUPPLEMENTARY INFORMATION:

    The Coast Guard will enforce the safety zones listed in 33 CFR 165.118 on the specified dates and times as indicated in Table 1 below.

    Table 1 7.1 City of Lynn 4th of July Celebration Fireworks • Event Type: Firework Display. • Sponsor: City of Lynn. • Date: July 3, 2015. • Time: 7:00 p.m. to 11:00 p.m. • Location: All waters of Nahant Bay, within a 350-yard radius of the fireworks barge located at position 42°27.62′ N., 070°55.58′ W. (NAD 83). 7.4 Weymouth 4th of July Celebration Fireworks • Event Type: Fireworks Display. • Sponsor: Town of Weymouth 4th of July Committee. • Date: July 3, 2015. • Time: 8:30 p.m. to 11:00 p.m. • Location: All waters of Weymouth Fore River, within a 350-yard radius of the fireworks launch site located at position 42°15.5′ N., 070°56.1′ W. (NAD 83). 7.6 Beverly Farms 4th of July Celebration Fireworks • Event Type: Fireworks Display. • Sponsor: Farms-Pride 4th of July Committee. • Date: July 4, 2015. • Time: 9:00 p.m. to 11:00 p.m. • Location: All waters of Manchester Bay within a 350-yard radius of the fireworks launch site near West Beach located at position 42°33.84′ N., 070°48.5′ W. (NAD 83). 7.7 Boston Pops Fireworks • Event Type: Fireworks Display. • Sponsor: Boston 4 Celebrations. • Date: July 4, 2015. • Time: 9:45 p.m. to 11:00 p.m. • Location: All waters of the Charles River within a 350-yard radius of the fireworks barges located in the vicinity of position 42°21.47′ N., 071°05.03′ W. (NAD 83). 7.8 City of Salem Fireworks • Event Type: Fireworks Display. • Sponsor: City of Salem. • Date: July 4, 2015. • Time: 9:45 p.m. to 10:15 p.m. • Location: All waters of Salem Harbor, within a 350-yard radius of the fireworks launch site located on Derby Wharf at position 42°31.15′ N., 070°53.13′ W. (NAD 83). 7.9 Marblehead 4th of July Fireworks • Event Type: Fireworks Display. • Sponsor: Town of Marblehead. • Date: July 4, 2015. • Time: 9:30 p.m. to 10:00 p.m. • Location: All waters of Marblehead Harbor within a 350-yard radius of the fireworks launch site located at position 42°30.34′ N., 070°50.13′ W. (NAD 83). 7.10 Plymouth 4th of July Fireworks • Event Type: Fireworks Display. • Sponsor: July 4 Plymouth, Inc. • Date: July 4th, 2015. • Time: 9:00 p.m. to 10:00 p.m. • Location: All waters of Plymouth Harbor within a 350-yard radius of the fireworks launch site located at position 42°57.3′ N., 070°38.3′ W. (NAD 83). 7.19 Swim Across America Boston • Event Type: Swim. • Sponsor: Swim Across America. • Date: July 10, 2015. • Time: 6:00 a.m. to 4:00 p.m. • Location: All waters of Boston Harbor between Rowes Warf and Little Brewster Island within the following points (NAD 83):
  • 42°21.4′ N., 071°03.0′ W.
  • 42°21.5′ N., 071°02.9′ W.
  • 42°19.8′ N., 070°53.6′ W.
  • 42°19.6′ N., 070°53.4′ W.
  • 7.21 Swim Across America Nantasket Beach • Event Type: Swim. • Sponsor: Swim Across America. • Date: July 11, 2015. • Time: 8:30 a.m. to 10:30 a.m. • Location: All waters of Massachusetts Bay near Nantasket Beach within the following points (NAD 83):
  • 42°16.7′ N., 070°51.9′ W.
  • 42°16.9′ N., 070°51.3′ W.
  • 42°16.3′ N., 070°50.5′ W.
  • 42°16.1′ N., 070°51.0′ W.
  • This document is issued under authority of 33 CFR 165.118 and 5 U.S.C. 552(a). In addition to this document in the Federal Register, the Coast Guard will provide mariners with advanced notification of enforcement periods via the Local Notice to Mariners and Broadcast Notice to Mariners. If the COTP determines that the regulated areas need not be enforced for the full duration stated in this document, a Broadcast Notice to Mariners may be used to grant general permission to enter the regulated areas.

    Dated: June 22, 2015. C.C. Gelzer, Captain, U.S. Coast Guard, Captain of the Port Boston.
    [FR Doc. 2015-16746 Filed 7-7-15; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2015-0614] Safety Zones; Annual Events in the Captain of the Port Buffalo Zone AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of enforcement of regulation.

    SUMMARY:

    At various times throughout the month of July, the Coast Guard will enforce certain safety zones located in 33 CFR 165.939. This action is necessary and intended for the safety of life and property on navigable waters during this event. During each enforcement period, no person or vessel may enter the respective safety zone without the permission of the Captain of the Port Buffalo.

    DATES:

    The regulations in 33 CFR 165.939 will be enforced on July 5, 2015 from 9:15 p.m. to 10:15 p.m. and on July 10, 2015 from 9:45 p.m. to 10:35 p.m., as specified in the Supplementary Information.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this notice, call or email LT Stephanie Pitts, Chief of Waterways Management Division, U.S. Coast Guard Marine Safety Unit Cleveland; telephone 216-937-0128, email [email protected]

    SUPPLEMENTARY INFORMATION:

    The Coast Guard will enforce the Safety Zones; Annual Events in the Captain of the Port Buffalo Zone listed in 33 CFR 165.939 for the following events:

    (1) Fairport Harbor Mardi Gras Fireworks, Fairport Harbor, OH; The safety zone listed in 33 CFR 165.939(a)(22) will be enforced from 9:15 p.m. to 10:15 p.m. on July 5, 2015.

    (2) Sheffield Lake Annual Community Days Fireworks, Sheffield Lake, OH; The safety zone listed in 33 CFR 165.939(a)(27) will be enforced from 9:45 p.m. to 10:35 p.m. on July 10, 2015.

    Pursuant to 33 CFR 165.23, entry into, transiting, or anchoring within these safety zones during an enforcement period is prohibited unless authorized by the Captain of the Port Buffalo or his designated representative. Those seeking permission to enter one of these safety zones may request permission from the Captain of Port Buffalo via channel 16, VHF-FM. Vessels and persons granted permission to enter one of these safety zones shall obey the directions of the Captain of the Port Buffalo or his designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

    This notice is issued under authority of 33 CFR 165.939 and 5 U.S.C. 552(a). In addition to this notice in the Federal Register, the Coast Guard will provide the maritime community with advance notification of these enforcement periods via Broadcast Notice to Mariners or Local Notice to Mariners. If the Captain of the Port Buffalo determines that one of these safety zones need not be enforced for the full duration stated in this notice he or she may use a Broadcast Notice to Mariners to grant general permission to enter the respective safety zone.

    Dated: June 25, 2015. B.W. Roche, Captain, U.S. Coast Guard, Captain of the Port Buffalo.
    [FR Doc. 2015-16742 Filed 7-7-15; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG-2015-0572] Safety Zones; Annual Events in the Captain of the Port Buffalo Zone AGENCY:

    Coast Guard, DHS.

    ACTION:

    Notice of enforcement of regulation.

    SUMMARY:

    At various times throughout the month of July, the Coast Guard will enforce certain safety zones located in the Captain of the Port Buffalo Zone. This action is necessary and intended for the safety of life and property on navigable waters during this event. During each enforcement period, no person or vessel may enter the respective safety zone without the permission of the Captain of the Port Buffalo.

    DATES:

    The regulations in 33 CFR 165.939 will be enforced on July 3, 2015 from 9:30 p.m. to 10:30 p.m., on July 3 from 9:45 p.m. to 11:30 p.m., on July 4, 2015 from 8:45 p.m. to 10:15 p.m., and on July 11, 2015 from 9:15 p.m. to 11 p.m., as specified in the Supplementary Information.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this document, call or email LTJG Amanda Garcia, Chief of Waterways Management, U.S. USCG Sector Buffalo; telephone 716-843-9343, email [email protected] Waterways Management Division, Coast Guard Sector Buffalo, 1 Fuhrmann Blvd., Buffalo, NY 14203; Coast Guard telephone 716-843-9343, email [email protected]

    SUPPLEMENTARY INFORMATION:

    The Coast Guard will enforce the Safety Zones; Annual Events in the Captain of the Port Buffalo Zone listed in 33 CFR 165.939 for the following events:

    (1) Salute to our Heroes, Hamlin Beach State Park, NY; The safety zone listed in 33 CFR 165.939(a)(16) will be enforced from 9:45 p.m. to 11:30 p.m. on July 3, 2015.

    (2) North Tonawanda Fireworks, North Tonawanda, NY; The safety zone listed in 33 CFR 165.939(a)(18) will be enforced from 8:45 p.m. to 10:15 p.m. on July 4, 2015.

    (3) French Festival Fireworks, Cape Vincent, NY; The safety zone listed in 33 CFR 165.939(a)(3) will be enforced from 9:15 p.m. to 11 p.m. on July 11, 2015.

    (4) Village Fireworks, Sodus Point, NY; The safety zone listed in 33 CFR 165.939(a)(14) will be enforced from 9:30 p.m. to 10:30 p.m. on July 3, 2015.

    Pursuant to 33 CFR 165.23, entry into, transiting, or anchoring within these safety zones during an enforcement period is prohibited unless authorized by the Captain of the Port Buffalo or his designated representative. Those seeking permission to enter one of these safety zones may request permission from the Captain of Port Buffalo via channel 16, VHF-FM. Vessels and persons granted permission to enter one of these safety zones shall obey the directions of the Captain of the Port Buffalo or his designated representative. While within a safety zone, all vessels shall operate at the minimum speed necessary to maintain a safe course.

    This document is issued under authority of 33 CFR 165.939 and 5 U.S.C. 552(a). In addition to this document in the Federal Register, the Coast Guard will provide the maritime community with advance notification of these enforcement periods via Broadcast Notice to Mariners or Local Notice to Mariners. If the Captain of the Port Buffalo determines that one of these safety zones need not be enforced for the full duration stated in this document he or she may use a Broadcast Notice to Mariners to grant general permission to enter the respective safety zone.

    Dated: June 25, 2015. B.W. Roche, Captain, U.S. Coast Guard, Captain of the Port Buffalo.
    [FR Doc. 2015-16743 Filed 7-7-15; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2015-0570] RIN 1625-AA00 Safety Zone; 520 Bridge Construction, Lake Washington; Seattle, WA AGENCY:

    Coast Guard, DHS.

    ACTION:

    Temporary final rule.

    SUMMARY:

    The Coast Guard is establishing a temporary safety zone on Lake Washington around the east span of the 520 Bridge in Seattle, Washington due to ongoing construction. The safety zone is necessary to ensure the safety of the maritime public and workers involved in the bridge construction when construction barges are located in the east span of the bridge. The safety zone will prohibit any person or vessel from entering or remaining in the safety zone unless authorized by the Captain of the Port or his Designated Representative.

    DATES:

    This rule is effective without actual notice from July 8, 2015 through September 4, 2015. For the purposes of enforcement, actual notice will be used from June 22, 2015 until July 8, 2015.

    ADDRESSES:

    Documents mentioned in this preamble are part of docket [USCG-2015-0570] to view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type the docket number in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rulemaking. You may also visit the Docket Management Facility in Room W12-140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this rule, call or email Ryan Griffin, Waterways Management Division, Coast Guard Sector Puget Sound; telephone (206) 217-6051, email [email protected] If you have questions on viewing or submitting material to the docket, call Barbara Hairston, Program Manager, Docket Operations, telephone (202) 366-9826.

    SUPPLEMENTARY INFORMATION:

    Table of Acronyms DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking A. Regulatory History and Information

    The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because publishing an NPRM would be impracticable, as delayed promulgation to accommodate a notice and comment period would endanger the safety of the maritime public and workers involved in the bridge construction.

    Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Delaying the effective date until 30 days after publication would be impracticable, as doing so would endanger the safety of the maritime public and workers involved in the bridge construction.

    B. Basis and Purpose

    The 520 Bridge is the longest floating bridge in the world with a span of 1.4 miles across Lake Washington supported by 33 pontoons. The 520 Bridge is being replaced in order to upgrade the bridges floating pontoons for larger ones. During the bridge replacement project the east span on the 520 Bridge will at times require construction barges to block the waterway that runs beneath that span of the bridge. As a result, the Coast Guard is establishing a temporary safety zone to ensure the safety of the maritime public and workers involved in the bridge construction when the east span is being used by construction barges.

    C. Discussion of the Final Rule

    The safety zone established in this rule encompasses all waters within 100 yards of the east span of the 520 Bridge, located on Lake Washington and is effective from June 22, 2015, through September 4, 2015, when a construction barge is present in the safety zone. Vessels wishing to enter the safety zone must request permission to do so from the Captain of the Port by contacting the Joint Harbor Operations Center at 206-217-6001 or VHF Channel 16. If permission for entry is granted, vessels must proceed at a minimum speed for safe navigation.

    D. Regulatory Analyses

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

    1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. This rule is not a significant regulatory action as the safety zone established by it is both limited in size and duration and there is an alternative route for vessels with an air draft that permits safe passage under the west span of the bridge.

    2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to transit the affected waterway during the time the safety zone is in effect. This safety zone will not have a significant economic impact on a substantial number of small entities, however, because the zone established in this rule is limited in size and duration and there is an alternative route for vessels with an air draft that permits safe passage under the west span of the bridge.

    3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT, above.

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

    4. Collection of Information

    This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

    5. Federalism

    A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

    6. Protest Activities

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

    7. Unfunded Mandates Reform Act

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

    8. Taking of Private Property

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

    9. Civil Justice Reform

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

    10. Protection of Children

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

    11. Indian Tribal Governments

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

    12. Energy Effects

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

    13. Technical Standards

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

    14. Environment

    We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule establishes a temporary safety zone and is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES.

    List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and Recordkeeping requirements, Security measures, Waterways.

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

    PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority:

    33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Department of Homeland Security Delegation No. 0170.1.

    2. Add § 165.T13-290 to read as follows:
    § 165.T13-290 Safety Zone; 520 Bridge, Lake Washington; Seattle, WA.

    (a) Location. The following area is designated as a safety zone: all waters within 100 yards of the east span of the 520 Bridge located on Lake Washington in Seattle, Washington.

    (b) Regulations. In accordance with the general regulations in 33 CFR part 165, subpart C, no person may enter the safety zone or bring or cause to be brought any vessel into the safety zone without permission of the Captain of the Port. Persons wishing to enter the safety zone must request permission from the Captain of the Port by contacting the Joint Harbor Operation Center at 206-217-6001 or VHF Channel 16. If permission for entry is granted, vessels must proceed at a minimum speed for safe navigation.

    (c) Dates. This rule is effective from June 22, 2015 through September 4, 2015 when a construction barge is present inside the safety zone.

    Dated: June 19, 2015. M. W. Raymond, Captain, U.S. Coast Guard, Captain of the Port, Puget Sound.
    [FR Doc. 2015-16701 Filed 7-7-15; 8:45 am] BILLING CODE 9110-04-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2015-0438] RIN 1625-AA00 Safety Zones; Marine Events Held in the Sector Long Island Sound Captain of the Port Zone AGENCY:

    Coast Guard, DHS.

    ACTION:

    Temporary final rule.

    SUMMARY:

    The Coast Guard is establishing thirteen safety zones for fireworks displays within the Coast Guard Sector Long Island Sound (LIS) Captain of the Port (COTP) Zone. This temporary final rule is necessary to provide for the safety of life on navigable waters during these events. Entry into, transit through, mooring or anchoring within these safety zones is prohibited unless authorized by COTP Sector Long Island Sound.

    DATES:

    This rule is effective without actual notice from 12:01 a.m. on July 8, 2015 until 10:30 p.m. on August 1, 2015. For the purposes of enforcement, actual notice will be used from the date the rule was signed, June 17, 2015, until July 8, 2015.

    ADDRESSES:

    Documents mentioned in this preamble are part of docket [USCG-2015-0438]. To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type the docket number in the “SEARCH” box and click “SEARCH.” Click on Open Docket Folder on the line associated with this rulemaking. You may also visit the Docket Management Facility in Room W12-140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this rule, contact Petty Officer Ian Fallon, Prevention Department, Coast Guard Sector Long Island Sound, telephone (203) 468-4565, email [email protected] If you have questions on viewing or submitting material to the docket, call Cheryl Collins, Program Manager, Docket Operations, telephone (202) 366-9826.

    SUPPLEMENTARY INFORMATION:

    Table of Acronyms COTP Captain of the Port DHS Department of Homeland Security FR Federal Register NPRM Notice of Proposed Rulemaking A. Regulatory History and Information

    This rulemaking establishes thirteen safety zones for thirteen fireworks displays. Each event and its corresponding regulatory history are discussed below.

    Barnum Festival, LLC (fireworks): A safety zone was established in 2014 for the Barnum Festival, LLC fireworks display by enforcing 33 CFR 165.151, Table 1, 6.1. This event has been included in this rule due to deviation from the cite date and location.

    Salute to Veterans (fireworks): A safety zone was established in 2014 for the Salute to Veterans fireworks display by enforcing 33 CFR 165.151, Table 1, 6.4. This event has been included in this rule due to deviation from the cite date and location.

    City of Stamford (fireworks): A safety zone was established in 2014 for the City of Stamford fireworks display by enforcing 33 CFR 165.151, Table 1, 7.12. This event has been included in this rule due to deviation from the cite date.

    Freeport Chamber of Commerce (fireworks): A safety zone was established in 2014 for Freeport Chamber of Commerce fireworks display when the Coast Guard issued a temporary rule entitled, “Safety Zone; Freeport Chamber of Commerce Fireworks Display; South Bay; Freeport, NY”. This rulemaking was published on June 27, 2014 in the Federal Register (79 FR 36412).

    City of Norwich (fireworks): A safety zone was established in 2014 for the City of Norwich fireworks display by enforcing 33 CFR 165.151, Table 1, 7.11. This event has been included in this rule due to deviation from the cite date and location.

    Go 4th Connetquot (fireworks): This event was previously named Connetquot River Summer Fireworks. A safety zone was established in 2014 for the Connetquot River Summer Fireworks display by enforcing 33 CFR 165.151, Table 1, 7.42. This event has been included in this rule due to deviation from the cite name and location.

    Madison Fireworks Organization (fireworks): A safety zone was established in 2014 for the Madison Fireworks Organization fireworks display by enforcing 33 CFR 165.151, Table 1, 7.38. This event has been included in this rule due from the cite date and location.

    City of Middletown (fireworks): A safety zone was established in 2014 for the City of Middletown fireworks display by enforcing 33 CFR 165.151, Table 1, 7.9. This event has been included in this rule due to deviation from the cite date and location.

    Fairfield Independence Day Celebration (fireworks): A safety zone was established in 2014 for the Fairfield Independence Day Celebration fireworks display by enforcing 33 CFR 165.151, Table 1, 7.16. This event has been included in this rule due to deviation from the cite date and location.

    City of West Haven: A safety zone was established in 2014 for the City of West Haven Fireworks display by enforcing 33 CFR 165.151, Table 1, 7.13. This event has been included in this rule due to deviation from the cite location.

    Village of Port Jefferson Independence Day Celebration (fireworks): This event was previously named Village of Port Jefferson Fourth of July Celebration Fireworks. A safety zone was established in 2014 for the Village of Port Jefferson Fourth of July Celebration Fireworks display by enforcing 33 CFR 165.151, Table 1, 7.25. This event has been included in this rule due to deviation from the cite name and location.

    Shelter Island (fireworks): A safety zone was established in 2014 for the Shelter Island fireworks display by enforcing 33 CFR 165.151, Table 1, 7.30. This event has been included in this rule due to deviation from the cite location.

    Sebonack Golf Club (fireworks): This event was previously named National Golf Links Fireworks. A safety zone was established in 2014 for the National Golf Links Fireworks display by enforcing 33 CFR 165.151, Table 1, 7.44. This event has been included in this rule due to deviation from the cite name, date and location.

    The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a NPRM with respect to this rule because doing so would be impracticable. There is insufficient time to publish a NPRM and solicit comments from the public before these events take place. Thus, waiting for a comment period to run would inhibit the Coast Guard's ability to fulfill its mission to keep the ports and waterways safe.

    Under 5 U.S.C. 553(d)(3), and for the same reasons stated in the preceding paragraph, the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register.

    B. Basis and Purpose

    The legal basis for this temporary rule is 33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5 and Department of Homeland Security Delegation No. 0170.1 which collectively authorize the Coast Guard to define regulatory safety zones.

    As discussed in the Regulatory History and Information section, thirteen fireworks displays will take place in the Coast Guard Sector LIS COTP Zone between June 26, 2015 and August 1, 2015. The COTP Long Island Sound has determined that thirteen safety zones are necessary to provide for the safety of life on navigable waterways during those events.

    Barnum Festival, LLC fireworks display will be held on Bridgeport Harbor, Bridgeport, CT.

    Salute to Veterans fireworks display will be held on Reynolds Channel off Hempstead, NY.

    City of Stamford fireworks display will be held on Fisher's Westcott Cove, Stamford, CT.

    Freeport Chamber of Commerce fireworks display will be a land launch near Guy Lombardo Marina, Freeport, NY.

    City of Norwich fireworks display will be held on the Thames River, Norwich, CT.

    Go 4th Connetquot fireworks display will be held on Great South Bay off Snapper Inn, Oakdale, NY.

    Madison Fireworks Organization fireworks will be held on Long Island Sound off Madison Beach, Madison, CT.

    City of Middletown fireworks display will be held on the Connecticut River, Middletown Harbor, Middletown, CT.

    Fairfield Independence Day Celebration fireworks display will be held on Long Island Sound off Fairfield, CT.

    City of West Haven fireworks display will be held on New Haven Harbor off Bradley Point, West Haven, CT.

    Village of Port Jefferson Independence Day Celebration will be held on Port Jefferson Harbor, Port Jefferson, NY.

    Shelter Island fireworks display will be held on Gardiner Bay, Shelter Island, NY.

    Sebonack Golf Club fireworks display will be held on Peconic Bay off Southampton, NY.

    The fireworks displays listed above will launch pyrotechnics from either a barge on a waterway or a landsite near a waterway. A regulated area, specifically a safety zone, is required for each of these fireworks displays to protect both spectators and participants from the safety hazards created by the fireworks displays, including unexpected pyrotechnics detonation and burning debris.

    C. Discussion of the Final Rule

    This rule establishes thirteen safety zones for thirteen fireworks displays. The location of these safety zones are as follows:

    Fireworks Displays Safety Zones 1 Barnum Festival, LLC Fireworks Location: All waters of Bridgeport Harbor, Bridgeport, CT within 800 feet of the land launch site located in approximate position 41°09′34″ N., 073°11′18″ W. (NAD 83). 2 Salute to Veterans Fireworks Location: All waters of Reynolds Channel off Hempstead, NY within 600 feet of the fireworks barge located in approximate position 40°35′36.87″ N., 073°35′20.72″ W. (NAD 83). 3 City of Stamford Fireworks Location: All waters of the Fisher's Westcott cove, Stamford, CT within 800 feet of the fireworks barge in approximate position 41°02′09.56″ N., 072°30′57.76″ W. (NAD 83). 4 Freeport Chamber of Commerce Fireworks Location: All waters of Guy Lombardo Marina, Freeport, NY within 300 feet of the land launch site located in approximate position 40°37′27.27″ N., 073°34′34.64″ W. (NAD 83). 5 City of Norwich Fireworks Location: All waters of the Thames River, Norwich, CT in approximate positions, 41°31′14.64″ N., 072°04′43.60″ W. (NAD 83). 6 Go 4th Connetquot Fireworks Location: All waters of Great South Bay within 600 feet of the fireworks barge at approximate position, 40°43′30.03″ N.; 073°08′40.25″ W. (NAD 83). 7 Madison Fireworks Organization Fireworks Location: All waters of Long Island Sound off Madison Beach, Madison, CT within 800 feet of the fireworks barge located in approximate position 41°16′09.04″ N., 072°36′18.30″ W. (NAD 83). 8 City of Middletown Fireworks Location: Waters of the Connecticut River, Middletown Harbor, Middletown, CT within 600 feet of the fireworks barge in approximate position, 41°33′43″ N., 072°38′32″ W. (NAD 83). 9 Fairfield Independence Day Celebration Fireworks Location: All waters of Long Island Sound, Fairfield, CT within 800 feet of the fireworks barge at approximate position, 41°08′16.92″ N.; 073°14′01.02″ W. (NAD 83). 10 City of West Haven Fireworks Location: All waters of New Haven Harbor off Bradley Point, West Haven, CT within 800 feet of the fireworks barge at approximate position, 41°15′07″ N.; 072°57′25″ W. (NAD 83). 11 Village of Port Jefferson Independence Day Celebration Location: All waters of Port Jefferson Harbor within 500 feet of the land launch at approximate position, 40°57′53.189″ N.; 073°03′09.72″ W. (NAD 83). 12 Shelter Island Fireworks Location: All waters of Gardiner's Bay, Shelter Island, NY in approximate position, 41°04′27.60″ N., 072°22′13.50″ W. (NAD 83). 13 Sebonack Golf Club Fireworks Location: All waters of Peconic Bay, Southampton, NY within 600 feet of the fireworks barge at approximate position, 40°54′49.92″ N.; 072°27′39.28″ W. (NAD 83).

    This rule prevents vessels from entering, transiting, mooring, or anchoring within areas specifically designated as safety zones and restricts vessel movement around the locations of the marine events to reduce the safety risks associated with them during the periods of enforcement unless authorized by the COTP or designated representative.

    Consistent with 33 CFR 165.7, the Coast Guard will notify the public and local mariners of this safety zone through appropriate means, which may include, but are not limited to, publication in the Federal Register, the Local Notice to Mariners, and Broadcast Notice to Mariners. The specific dates, including rain dates, for the events are listed in the regulatory text.

    D. Regulatory Analyses

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

    1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.

    The Coast Guard determined that this rulemaking is not a significant regulatory action for the following reasons: The enforcement of these safety zones will be relatively short in duration. Additionally, persons or vessels desiring to enter a safety zone may do so with permission from the COTP Sector Long Island Sound or a designated representative. Furthermore, these safety zones are designed in a way to limit impacts on vessel traffic, permitting vessels to navigate in other portions of the waterways not designated as a safety zone. Finally, to increase public awareness of these safety zones, the Coast Guard will notify the public of the enforcement of this rule via appropriate means, such as Local Notice to Mariners and Broadcast Notice to Mariners.

    2. Impact on Small Entities

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.

    This temporary final rule will affect the following entities, some of which may be small entities: The owners or operators of vessels intending to enter, transit, anchor, or moor within a safety zone during the periods of enforcement, from June 26, 2015 to August 1, 2015. However, this temporary final rule will not have a significant economic impact on a substantial number of small entities for the same reasons discussed in the REGULATORY PLANNING AND REVIEW section. Additionally, before the effective period, public notifications will be made to local mariners through appropriate means, which may include but are not limited to, the Local Notice to Mariners as well as Broadcast Notice to Mariners.

    3. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this proposed rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT, above.

    Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this proposed rule or any policy or action of the Coast Guard.

    4. Collection of Information

    This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

    5. Federalism

    A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.

    6. Protest Activities

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

    7. Unfunded Mandates Reform Act

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

    8. Taking of Private Property

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

    9. Civil Justice Reform

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

    10. Protection of Children From Environmental Health Risks

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

    11. Indian Tribal Governments

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

    12. Energy Effects

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

    13. Technical Standards

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

    14. Environment

    We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This temporary rule involves the establishment of safety zones. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. An environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.

    List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.

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

    PART 165—REGULATED NAVIGATION AREAS AND LIMITED ACCESS AREAS 1. The authority citation for part 165 continues to read as follows: Authority:

    33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.

    2. Add § 165.T01-0438 to read as follows:
    § 165.T01-0438 Safety Zones; Fireworks Displays in Captain of the Port Long Island Sound Zone.

    (a) Regulations. The general regulations contained in § 165.23 as well as the following regulations apply to the events listed in the TABLE to § 165.T01-0438.

    (b) Enforcement period. This rule will be enforced on the dates and times listed for each event in TABLE to § 165.T01-0438. If the event is delayed by inclement weather, the safety zone will be enforced on the rain date indicated in TABLE to § 165.T01-0438.

    (c) Definitions. The following definitions apply to this section: A “designated representative” is any commissioned, warrant or petty officer of the U.S. Coast Guard who has been designated by the Captain of the Port (COTP), Sector Long Island Sound, to act on his or her behalf. An “official patrol vessel” may consist of any Coast Guard, Coast Guard Auxiliary, state, or local law enforcement vessels assigned or approved by the COTP.

    (d) Operations. (1) Vessels desiring to enter or operate within a safety zone should contact the COTP or the designated representative via VHF channel 16 or by telephone at (203) 468-4401 to obtain permission to do so. Vessels given permission to enter or operate in a safety zone must comply with all directions given to them by the COTP Sector Long Island Sound or the designated on-scene representative.

    (2) Upon being hailed by an official patrol vessel or the designated representative, by siren, radio, flashing light or other means, the operator of the vessel shall proceed as directed. The designated representative may be on an official patrol vessel or may be on shore and will communicate with vessels via VHF-FM radio or loudhailer. While members of the Coast Guard Auxiliary will not serve as the designated representative, they may be present to inform vessel operators of this regulation.

    (e) Compliance. Failure to comply with a lawful direction may result in expulsion from the area, citation for failure to comply, or both.

    Table to § 165.T01-0438 Fireworks events 1 Barnum Festival, LLC Fireworks • Date: June 26, 2015. • Rain Date: June 28, 2015. • Time: 8:40 p.m. to 10:30 p.m. • Location: All waters of Bridgeport Harbor, Bridgeport CT within 800 feet of the land launch site located in approximate position 41°09′34″ N., 073°11′18″ W. (NAD 83). 2 Salute to Veterans Fireworks • Date: June 27, 2015. • Rain Date: June 28, 2015. • Time: 9:00 p.m. to 10:45 p.m. • Location: All waters of Reynolds Channel off Hempstead, NY within 600 feet of the fireworks barge located in approximate position 40°35′36.87″ N., 073°35′20.72″ W. (NAD 83). 3 City of Stamford Fireworks • Date: July 2, 2015. • Rain Date: July 3, 2015. • Time: 8:30 p.m. to 10:30 p.m. • Location: All waters of the Fisher's Westcott cove, Stamford, CT within 800 feet of the fireworks barge in approximate position 41°02′09.56″ N., 072°30′57.76″ W. (NAD 83). 4 Freeport Chamber of Commerce Fireworks • Date: July 2, 2015. • Rain Date: July 9, 2015. • Time: 8:45 p.m. to 10:00 p.m. • Location: All waters of Guy Lombardo Marina, Freeport, NY within 300 feet of the land launch site located in approximate position 40°37′27.27″ N., 073°34′34.64″ W. (NAD 83). 5 City of Norwich Fireworks • Date: July 2, 2015. • Rain Date: July 3, 2015. • Time: 9:00 p.m. to 11:00 p.m. • Location: All waters of the Thames River, Norwich, CT in approximate positions, 41°31′14.64″ N., 072°04′43.60″ W. (NAD 83). 6 Go 4th Connetquot Fireworks • Date: July 2, 2015. • Rain Date: July 3, 2015. • Time: 8:45 p.m. to 10:00 p.m. • Location: All waters of Great South Bay within 600 feet of the fireworks barge at approximate position, 40°43′30.03″ N.; 073°08′40.25″ W. (NAD 83). 7 Madison Fireworks Organization Fireworks • Date: July 3, 2015. • Rain Date: July 5, 2015. • Time: 9:00 p.m. to 10:30 p.m. • Location: All waters of Long Island Sound off Madison Beach, Madison, CT within 800 feet of the fireworks barge located in approximate position 41°16′09.04″ N., 072°36′18.30″ W. (NAD 83). 8 City of Middletown Fireworks • Date: July 3, 2015. • Rain Date: July 5, 2015. • Time: 9:00 p.m. to 10:30 p.m. • Location: Waters of the Connecticut River, Middletown Harbor, Middletown, CT within 600 feet of the fireworks barge in approximate positions, 41°33′43″ N., 072°38′32″ W. (NAD 83). 9 Fairfield Independence Day Celebration Fireworks • Date: July 3, 2015.
  • • Rain Date: July 4, 2015.
  • • Time: 8:45 p.m. to 10:45 p.m. • Location: All waters of Long Island Sound, Fairfield, CT within 800 feet of the fireworks barge at approximate position, 41°08′16.92″ N.; 073°14′01.02″ W. (NAD 83). 10 City of West Haven Fireworks • Date: July 3, 2015. • Rain Date: July 5,2015. • Time: 8:45 p.m. to 10:30 p.m. • Location: All waters of New Haven Harbor off Bradley Point, West Haven, CT within 800 feet of the fireworks barge at approximate position, 41°15′07″ N.; 072°57′25″ W. (NAD 83). 11 Village of Port Jefferson Independence Day Celebration • Date: July 4, 2015.
  • • Rain Date: July 5, 2015.
  • • Time: 8:30 p.m. to 10:30 p.m. • Location: All waters of Port Jefferson Harbor within 500 feet of the land launch at approximate position, 40°57′53.189″ N.; 073°03′09.72″ W. (NAD 83). 12 Shelter Island Fireworks • Date: July 11, 2015. • Rain Date: July 12, 2015. • Time: 9:00 p.m. to 11:00 p.m. • Location: All waters of Gardiner's Bay, Shelter Island, NY in approximate position, 41°04′27.60″ N., 072°22′13.50″ W. (NAD 83). 13 Sebonack Golf Club Fireworks • Date: July 31, 2015. • Rain Date: August 1, 2015. • Time: 8:30 p.m. to 10:30 p.m. • Location: All waters of Peconic Bay, Southampton, NY within 600 feet of the fireworks barge at approximate position, 40°54′49.92″ N.; 072°27′39.28″ W. (NAD 83).
    Dated: June 17, 2015. E.J. Cubanski, III, Captain, U.S. Coast Guard, Captain of the Port Sector Long Island Sound.
    [FR Doc. 2015-16748 Filed 7-7-15; 8:45 am] BILLING CODE 9110-04-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R07-OAR-2015-0104 FRL-9926-48-Region 7] Approval and Promulgation of Air Quality Implementation Plans; Kansas; Update to Materials Incorporated by Reference AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule; notice of administrative change.

    SUMMARY:

    Environmental Protection Agency (EPA) is updating the materials submitted by Kansas that are incorporated by reference (IBR) into the state implementation plan (SIP). EPA is also notifying the public of the correction of certain typographical errors within the IBR table. The regulations affected by this update have been previously submitted by the state agency and approved by EPA. This update affects the SIP materials that are available for public inspection at the National Archives and Records Administration (NARA), and the Regional Office.

    DATES:

    This rule is effective on July 8, 2015.

    ADDRESSES:

    SIP materials which are incorporated by reference into 40 CFR part 52 are available for inspection at the following locations: Environmental Protection Agency, Region 7, 11201 Renner Boulevard, Lenexa, Kansas 66219; or at http://www.epa.gov/region07/air/rules/fedapprv.htm; and the National Archives and Records Administration. For information on the availability of this material at NARA, call (202) 741-6030, or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    FOR FURTHER INFORMATION CONTACT:

    Jan Simpson at (913) 551-7089, or by email at [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Background

    The SIP is a living document which the state revises as necessary to address the unique air pollution problems in the state. Therefore, EPA from time to time must take action on SIP revisions containing new and/or revised regulations to make them part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference Federally-approved SIPs, as a result of consultations between EPA and the Office of Federal Register. The description of the revised SIP document, IBR procedures and “Identification of plan” format are discussed in further detail in the May 22, 1997, Federal Register document.

    On February 12, 1999, EPA published a document in the Federal Register(64 FR 7091) beginning the new IBR procedure for Kansas. On November 14, 2003 (68 FR 64532), and on April 8, 2009 (74 FR 15856), EPA published an update to the IBR material for Kansas.

    In this document, EPA is publishing an updated set of tables listing the regulatory (i.e., IBR) materials in the Kansas SIP taking into account the additions, deletions, and revisions to those materials previously submitted by the state agency and approved by EPA. We are removing the EPA Headquarters Library from paragraph (b)(3), as IBR materials are no longer available at this location. In addition, EPA has found errors in certain entries listed in 40 CFR 52.870(c) and (e), as amended in the published IBR update actions listed above, and is correcting them in this document. Table (c) revisions include:

    • Updating state effective date, Federal Register citation and removing outdated text in explanation column for 28-19-200

    • removing outdated text in explanation column for 28-19-201

    • adding text in EPA approval date column and removing outdated text in explanation column for 28-19-650

    Table (e) is being revised by:

    • Adding text in the explanation column for (7)-(39).

    II. EPA Action

    In this action, EPA is doing the following:

    A. Announcing the update to the IBR material as of December 31, 2014;

    B. Revising the entry in paragraph 52.870(b) to reflect the update and corrections;

    C. Revising certain entries in paragraphs 52.870(c) and (e) as described above;

    D. Correcting the date format in the “State effective date” or “State submittal date” and “EPA approval date” columns in paragraphs 52.870(c), (d) and (e). Dates are numerical month/day/year without additional zeros;

    E. Modifying the Federal Register citation in paragraphs 52.870(c), (d) and (e) to reflect the beginning page of the preamble as opposed to the page number of the regulatory text.

    EPA has determined that this rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3), which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). This rule simply codifies provisions which are already in effect as a matter of law in Federal and approved State programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by providing notice of the updated Kansas SIP compilation.

    Statutory and Executive Order Reviews

    In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Kansas regulations described in the amendments to 40 CFR part 52 set forth below. 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 Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves 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” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

    • 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 (Pub. L. 104-4);

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

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

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

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

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

    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).

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

    EPA has also determined that the provisions of section 307(b)(1) of the CAA pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the Kansas SIP compilations previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for this “Identification of plan” reorganization update action for the State of Kansas.

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

    Dated: April 7, 2015. Mark Hague, Acting Regional Administrator, Region 7.

    For the reasons stated in the preamble, the EPA amends 40 CFR part 52 as set forth below:

    Chapter I, title 40 of the Code of Federal Regulations is amended as follows:

    PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS 1. The authority citation for part 52 continues to read as follows: Authority:

    42 U.S.C. 7401 et seq.

    Subpart R—Kansas 2. In § 52.870 paragraphs (b), (c), (d) and (e) are revised to read as follows:
    § 52.870 Identification of plan.

    (b) Incorporation by reference. (1) Material listed in paragraphs (c) and (d) of this section with an EPA approval date prior to December 31, 2014, was approved for incorporation by reference by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Material is incorporated as it exists on the date of the approval, and notice of any change in the material will be published in the Federal Register. Entries in paragraphs (c) and (d) of this section with EPA approval dates after December 31, 2014, will be incorporated by reference in the next update to the SIP compilation.

    (2) EPA Region 7 certifies that the rules/regulations provided by EPA in the SIP compilation at the addresses in paragraph (b)(3) of this section are an exact duplicate of the officially promulgated state rules/regulations which have been approved as part of the SIP as of December 31, 2014.

    (3) Copies of the materials incorporated by reference may be inspected at the Environmental Protection Agency, Region 7, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, Kansas 66219; at the EPA, Air and Radiation Docket and Information Center, and the National Archives and Records Administration (NARA). If you wish to obtain material from the EPA Regional Office, please call (913) 551-7089. For information on the availability of this material at NARA, call (202) 741-6030, or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    (c) EPA-approved regulations.

    EPA-Approved Kansas Regulations Kansas citation Title State
  • effective
  • date
  • EPA approval date Explanation
    Kansas Department of Health and Environment Ambient Air Quality Standards and Air Pollution Control General Regulations K.A.R. 28-19-6 Statement of Policy 1/1/72 5/31/72, 37 FR 10867 Kansas revoked this rule 5/1/82. K.A.R. 28-19-8 Reporting Required 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-9 Time Schedule for Compliance 5/1/84 12/21/87, 52 FR 48265 K.A.R. 28-19-10 Circumvention of Control Regulations 1/1/71 5/31/72, 37 FR 10867 K.A.R. 28-19-11 Exceptions Due to Breakdowns or Scheduled Maintenance 1/1/74 11/8/73, 38 FR 30876 K.A.R. 28-19-12 Measurement of Emissions 1/1/71 5/31/72, 37 FR 10867 K.A.R. 28-19-13 Interference with Enjoyment of Life and Property 1/1/74 11/8/73, 38 FR 30876 K.A.R. 28-19-14 Permits Required 1/24/94 7/17/95, 60 FR 36361 K.A.R. 28-19-15 Severability 1/1/71 5/31/72, 37 FR 10867 Nonattainment Area Requirements K.A.R. 28-19-16 New Source Permit Requirements for Designated Nonattainment Areas 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-16a Definitions 10/10/97 1/11/00, 65 FR 1545 K.A.R. 28-19-16b Permit Required 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-16c Creditable Emission Reductions 10/16/89 1/16/90, 55 FR 1420 EPA deferred action on the state's current definition of the terms “building, structure, facility, or installation”; “installation”; and “reconstruction.” K.A.R. 28-19-16d Fugitive Emission Exemption 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-16e Relaxation of Existing Emission Limitations 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-16f New Source Emission Limits 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-16g Attainment and Maintenance of National Ambient Air Quality Standards 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-16h Compliance of Other Sources 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-16i Operating Requirements 10/16/89 1/16/90 55 FR 1420 K.A.R. 28-19-16j Revocation and Suspension of Permit 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-16k Notification Requirements 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-16l Failure to Construct 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-16m Compliance with Provisions of Law Required 10/16/89 1/16/90, 55 FR 1420 Attainment Area Requirements K.A.R. 28-19-17 Prevention of Significant Deterioration of Air Quality 11/22/02 2/26/03, 68 FR 8845 K.A.R. 28-19-17a through 28-19-17q revoked. Provision moved to K.A.R. 28-19-350. Stack Height Requirements K.A.R. 28-19-18 Stack Heights 5/1/88 4/20/89, 54 FR 15934 The state regulation has stack height credit. EPA has not approved that part. K.A.R. 28-19-18b Definitions 5/1/88 4/20/89, 54 FR 15934 K.A.R. 28-19-18c Methods for Determining Good Engineering Practice Stack Height 5/1/88 4/20/89, 54 FR 15934 K.A.R. 28-19-18d Fluid Modeling 5/1/88 4/20/89, 54 FR 15934 K.A.R. 28-19-18e Relaxation of Existing Emission Limitations 5/1/88 4/20/89, 54 FR 15934 K.A.R. 28-19-18f Notification Requirements 5/1/88 4/20/89, 54 FR 15934 Continuous Emission Monitoring K.A.R. 28-19-19 Continuous Emission Monitoring 6/8/92 1/12/93, 58 FR 3847 Processing Operation Emissions K.A.R. 28-19-20 Particulate Matter Emission Limitations 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-21 Additional Emission Restrictions 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-23 Hydrocarbon Emissions—Stationary Sources 12/27/72 11/8/73, 38 FR 30876 K.A.R. 28-19-24 Control of Carbon Monoxide Emissions. 1/1/72 11/8/73, 38 FR 30876 Indirect Heating Equipment Emissions K.A.R. 28-19-30 General Provisions 1/1/72 5/31/72, 37 FR 10867 K.A.R. 28-19-31 Emission Limitations 11/8/93 10/18/94, 59 FR 52425 K.A.R. 28-19-32 Exemptions—Indirect Heating Equipment 11/8/93 10/18/94, 59 FR 52425 Incinerator Emissions K.A.R. 28-19-40 General Provisions 1/1/71 5/31/72, 37 FR 10867 K.A.R. 28-19-41 Restriction of Emission 12/27/72 11/8/73, 38 FR 30876 K.A.R. 28-19-42 Performance Testing 1/1/72 11/8/73, 38 FR 30876 K.A.R. 28-19-43 Exceptions 1/1/71 5/31/72, 37 FR 10867 Air Pollution Emergencies K.A.R. 28-19-55 General Provisions 1/1/72 5/31/72, 37 FR 10867 K.A.R. 28-19-56 Episode Criteria 10/16/89 1/16/90, 55 FR 1420 K.A.R. 28-19-57 Emission Reduction Requirements 1/1/72 5/31/72, 37 FR 10867 K.A.R. 28-19-58 Emergency Episode Plans 1/1/72 5/31/72, 37 FR 10867 Volatile Organic Compound Emissions K.A.R. 28-19-61 Definitions 10/7/91 6/23/92, 57 FR 27936 K.A.R. 28-19-62 Testing Procedures 10/7/71 6/23/92, 57 FR 27936 K.A.R. 28-19-63 Automobile and Light Duty Truck Surface Coating 11/8/93 10/18/94, 59 FR 52425 K.A.R. 28-19-64 Bulk Gasoline Terminals 5/1/88 5/18/88, 53 FR 17700 K.A.R. 28-19-65 Volatile Organic Compounds (VOC) Liquid Storage in Permanent Fixed Roof Type Tanks 5/1/88 5/18/88, 53 FR 17700 K.A.R. 28-19-66 Volatile Organic Compounds (VOC) Liquid Storage in External Floating Roof Tanks 5/1/88 5/18/88, 53 FR 17700 K.A.R. 28-19-67 Petroleum Refineries 5/1/86 1/2/87, 52 FR 53 K.A.R. 28-19-68 Leaks from Petroleum Refinery Equipment 5/1/86 1/2/87, 52 FR 53 K.A.R. 28-19-69 Cutback Asphalt 5/1/88 5/18/88, 53 FR 17700 K.A.R. 28-19-70 Leaks from Gasoline Delivery Vessels and Vapor Collection Systems 5/15/98 1/11/00, 65 FR 1545 K.A.R. 28-19-71 Printing Operations 5/1/88 5/18/88, 53 FR 17700 K.A.R. 28-19-72 Gasoline Dispensing Facilities 5/1/88 5/18/88, 53 FR 17700 K.A.R. 28-19-73 Surface Coating of Miscellaneous Metal Parts and Products and Metal Furniture 6/8/92 1/12/93, 58 FR 3847 K.A.R. 28-19-74 Wool Fiberglass Manufacturing 5/1/88 5/18/88, 53 FR 17700 K.A.R. 28-19-76 Lithography Printing Operations 10/7/91 6/23/92, 57 FR 27936 K.A.R. 28-19-77 Chemical Processing Facilities That Operate Alcohol Plants or Liquid Detergent Plants 10/7/91 6/23/92, 57 FR 27936 General Provisions K.A.R. 28-19-200 General Provisions; definitions 1/2/11 2/22/11, 76 FR 9658 K.A.R. 28-19-201 General Provisions; Regulated Compounds List 10/10/97 1/11/00, 65 FR 1545 KAR 28-19-202 Annual Emissions Fee 11/15/10 1/27/14, 79 FR 4274 Paragraph (c), has not been approved as part of the SIP. K.A.R. 28-19-204 Permit Issuance and Modification; Public Participation 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-210 Calculation of Actual Emissions 11/22/93 1/11/00, 65 FR 1545 K.A.R. 28-19-212 Approved Test Methods and Emission Compliance Determination Procedures 1/23/95 7/17/95, 60 FR 36361 Construction Permits And Approvals K.A.R. 28-19-300 Applicability 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-301 Application and Issuance 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-302 Additional Provisions; Construction Permits 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-303 Additional Provisions; Construction Approvals 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-304 Fees 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-350 Prevention of Significant Deterioration (PSD) of Air Quality 12/28/12 6/20/13, 78 FR 37126 Provisions of the 2010 PM2.5 PSD-Increments, SILs and SMCs rule (75 FR 64865, October 20, 2010) relating to SILs and SMCs that were affected by the January 22, 2013, U.S. Court of Appeals decision are not SIP approved. Provisions of the 2002 NSR reform rule relating to the Clean Unit Exemption, Pollution Control Projects, and exemption from recordkeeping provisions for certain sources using the actual-to-projected-actual emissions projections test are not SIP approved. In addition, we have not approved Kansas rule incorporating EPA's 2007 revision of the definition of “chemical processing plants” (the “Ethanol Rule,” 72 FR 24060 (May 1, 2007) or EPA's 2008 “fugitive emissions rule,” 73 FR 77882 (December 19, 2008). General Permits K.A.R. 28-19-400 General Requirements 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-401 Adoption by the Secretary 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-402 Availability of Copies; Lists of Sources to Which Permits Issued 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-403 Application to Construct or Operate Pursuant to Terms of General Permits 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-404 Modification, Revocation 1/23/95 7/17/95, 60 FR 36361 Operating Permits K.A.R. 28-19-500 Applicability 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-501 Emissions Limitations and Pollution Control Equipment for Class I and Class II Operating Permits; Conditions 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-502 Identical Procedural Requirements 1/23/95 7/17/95, 60 FR 36361 Class II Operating Permits K.A.R. 28-19-540 Applicability 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-541 Application Timetable and Contents 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-542 Permit-by-Rule 9/23/05 2/8/08, 73 FR 7468 K.A.R. 28-19-543 Permit Term and Content; Operational Compliance 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-544 Modification of Sources or Operations 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-545 Application Fee 1/23/95 7/17/95, 60 FR 36361 K.A.R. 28-19-546 Annual Emission Inventory 9/23/05 2/8/08, 73 FR 7468 K.A.R. 28-19-561 Permit-by-Rule; Reciprocating Engines 9/23/05 2/8/08, 73 FR 7468 K.A.R. 28-19-562 Permit-by-Rule; Organic Solvent Evaporative Sources 9/23/05 2/8/08, 73 FR 7468 K.A.R. 28-19-563 Permit-by-Rule; Hot Mix Asphalt Facilities 9/23/05 2/8/08, 73 FR 7468 K.A.R. 28-19-564 Permit-by-Rule; Sources with Actual Emissions Less Than 50 Percent of Major Source Thresholds 10/4/02 3/26/03, 68 FR 14540 Open Burning Restrictions K.A.R. 28-19-645 Open Burning Prohibited 3/1/96 10/2/96, 61 FR 51366 K.A.R. 28-19-646 Responsibility for Open Burning 3/1/96 10/2/96, 61 FR 51366 K.A.R. 28-19-647 Exceptions to Prohibition on Open Burning 3/1/96 10/2/96, 61 FR 51366 K.A.R. 28-19-648 Agricultural Open Burning 3/1/96 10/2/96, 61 FR 51366 K.A.R. 28-19-650 Emissions Opacity Limits 1/29/99 12/12/01, 66 FR 64148 (correction). 1/11/00, 65 FR 1545 Nitrogen Oxide Emissions K.A.R. 28-19-712 Definitions 6/25/10 2/20/13, 78 FR 11751 K.A.R. 28-19-712a Applicability 6/25/10 2/20/13, 78 FR 11751 K.A.R. 28-19-712b General requirement for heavy-duty diesel vehicles 6/25/10 2/20/13, 78 FR 11751 K.A.R. 28-19-712c General requirement for load and unload locations 6/25/10 2/20/13, 78 FR 11751 K.A.R. 28-19-712d Exemptions 6/25/10 2/20/13, 78 FR 11751 K.A.R. 28-19-713 Applicability 6/25/10 2/20/13, 78 FR 11751 K.A.R. 28-19-713a Emission limitation requirements 6/25/10 2/20/13, 78 FR 11751 K.A.R. 28-19-713b Alternate emissions limit 6/25/10 2/20/13, 78 FR 11751 K.A.R. 28-19-713c Control measures and equipment 6/25/10 2/20/13, 78 FR 11751 K.A.R. 28-19-713d Compliance demonstration, monitoring, and reporting requirements 6/25/10 2/20/13, 78 FR 11751 Volatile Organic Compound Emissions K.A.R. 28-19-714 Control of Emissions from Solvent Metal Cleaning 9/1/02 10/30/02, 67 FR 66058 K.A.R. 28-19-717 Control of Volatile Organic Compound (VOC) Emissions from Commercial Bakery Ovens in Johnson and Wyandotte Counties 12/22/00 12/12/01, 66 FR 64148 K.A.R. 28-19-719 Fuel Volatility 4/27/01 2/13/02, 67 FR 6655 Conformity K.A.R. 28-19-800 General Conformity of Federal Actions 3/15/96 10/2/96, 61 FR 51366

    (d) EPA-approved State source-specific permits.

    EPA-Approved Kansas Source-Specific Permits Name of source Permit or case No. State
  • effective date
  • EPA approval date Explanation
    (1) Board of Public Utilities, Quindaro Power Station 2090048 10/20/93 10/18/94, 59 FR 52425 (2) Board of Public Utilities, Kaw Power Station 2090049 10/20/93 10/18/94, 59 FR 52425 (3) Kansas City Power and Light Company 12/5/07 12/27/11, 76 FR 80754 Certain provisions withdrawn from plan as identified in letter dated 12/1/11 from Kansas. (4) Westar Energy, Inc. 2/29/08 12/27/11, 76 FR 80759 Certain provisions withdrawn from plan as identified in letter dated 12/1/11 from Kansas.

    (e) EPA-approved nonregulatory provisions and quasi-regulatory measures.

    EPA-Approved Kansas Nonregulatory Provisions Name of nonregulatory SIP
  • provision
  • Applicable geographic or nonattainment area State submittal date EPA approval date Explanation
    (1) Implementation Plan for Attainment and Maintenance of the National Air Quality Standards Statewide 1/31/72 5/31/72, 37 FR 10867 (2) Comments on the Plan in Response to EPA Review Kansas City 3/24/72 6/22/73, 38 FR 16550 Correction notice published 3/2/76. (3) Emergency Episode Operations/Communications Manual Kansas City 4/6/72 11/8/73, 38 FR 30876 Correction notice published 3/2/76. (4) Emergency Episode Operations/Communications Manual Statewide except Kansas City 2/15/73 11/8/73, 38 FR 30876 Correction notice published 3/2/76. (5) Letter Concerning Attainment of CO Standards Kansas City 5/29/73 11/8/73, 38 FR 30876 Correction notice published 3/2/76. (6) Amendment to State Air Quality Control Law Dealing with Public Access to Emissions Data Statewide 7/27/73 11/8/73, 38 FR 30876 Correction notice published 3/2/76. (7) Analysis and Recommendations Concerning Designation of Air Quality Maintenance Areas Statewide 2/28/74 3/2/76, 41 FR 8956 [FRL 484-4]. (8) Ozone Nonattainment Plan Kansas City 9/17/79 4/3/81, 46 FR 20164 [A-7-FRL 1788-5]. (9) Ozone Nonattainment Plan Douglas County 10/22/79 4/3/81, 46 FR 20164 [A-7-FRL 1788-5]. (10) TSP Nonattainment Plan Kansas City 3/10/80 4/3/81, 46 FR 20164 [A-7-FRL 1788-5]. (11) Lead Plan Statewide 2/17/81 10/22/81, 46 FR 51742 [A-7-FRL-1938-8]. (12) CO Nonattainment Plan Wichita 4/16/81 12/15/81, 46 FR 61117 [A-7-FRL-1990-3]. (13) Air Monitoring Plan Statewide 10/16/81 1/22/82, 47 FR 3112 [A-7-FRL-2024-8]. (14) Letter and Supporting Documentation Relating to Reasonably Available Control Technology for Certain Particulate Matter Sources Kansas City 9/15/81 6/18/82, 47 FR 26387 [EPA Action KS 276; FRL 2137-6]. Correction notice published 1/12/84. (15) Letter Agreeing to Follow EPA Interim Stack Height Policy for Each PSD Permit Issued Until EPA Revises the Stack Height Regulations Statewide 6/20/84 12/11/84, 49 FR 48185 [A-7-FRL-2734-4; EPA No 1163]. (16) Letters Pertaining to Permit Fees Statewide 3/27/86, 9/15/87 12/21/87, 52 FR 48265 [FRL 3299-4]. (17) Revisions to the Ozone Attainment Plan Kansas City 7/2/86, 4/16/87, 8/18/87, 8/19/87, 1/6/88 5/18/88, 53 FR 17700 [3375-5]. (18) Revised CO Plan Wichita 3/1/85, 9/3/87 10/28/88, 53 FR 43691 [FRL-3449-1]. (19) Letter Pertaining to the Effective Date of Continuous Emission Monitoring Regulations Statewide 1/6/88 11/25/88, 53 FR 47690 [FRL-3473-9]. (20) Letters Pertaining to New Source Permit Regulations, Stack Height Regulations, and Stack Height Analysis and Negative Declarations Statewide 3/27/86, 12/7/87 1/6/88 4/20/89, 54 FR 15934 [FRL-3558-5]. (21) PM10 Plan Statewide 10/5/89, 10/16/89 1/16/90, 55 FR 1420 [FRL-3704-3]. (22) Ozone Maintenance Plan Kansas City 10/23/91 6/23/92, 57 FR 27936 [KS1-1-5439; FRL 4126-6]. (23) Letter Pertaining to PSD NOX Requirements Statewide 9/15/92 1/12/93, 58 FR 3847 [KS-2-1-5640; FRL-4552-3]. (24) Small Business Assistance Plan Statewide 1/25/94 5/12/94, 59 FR 24644 [KS-3-1-8332; FRL-4882-4]. (25) Letter Regarding Compliance Verification Methods and Schedules Pertaining to the Board of Public Utilities Power Plants Kansas City 12/11/92 10/18/94, 59 FR 52425 [KS-4-1-6508a; FRL-5079-2]. (26) Emissions Inventory Update Including a Motor Vehicle Emissions Budget Kansas City 5/11/95 4/25/96, 61 FR 18251 [KS-6-1-6985, MO-31-1-7153; FRL 5448-9]. (27) Air monitoring plan Statewide 1/6/02 8/30/02, 67 FR 55726 [KS 162-1162a; FRL-7270-4]. (28) Maintenance Plan for the 1-hour ozone standard in the Kansas portion of the Kansas City maintenance area for the second ten-year period Kansas City 1/9/03 1/13/04, 69 FR 1919 [KS 202-1202; FRL-7608-9]. (29) Revision to Maintenance Plan for the 1-hour ozone standard in the Kansas portion of the Kansas City maintenance area for the second ten-year period Kansas City 2/10/06 6/26/06, 71 FR 36213 [EPA-R07-OAR-2006-0365; FRL-8188-4]. (30) CAA 110(a)(2)(D)(i) SIP—Interstate Transport Statewide 1/7/07 3/9/07, 72 FR 10608 [EPA-R07-OAR-2007-0141; FRL-8286-3]. (31) Maintenance Plan for the 8-hour ozone standard in the Kansas portion of the Kansas City area Kansas City 5/23/07 8/9/07, 72 FR 44781 [EPA-R07-OAR-2007-0620; FRL-8450-5] This plan replaces numbers (28) and (29). (32) Section 110(a)(2) Infrastructure Requirements for the 1997 8-Hour Ozone NAAQS Statewide 1/8/08 7/20/09 7/11/11, 76 FR 40624 [EPA-R07-OAR-2011-0304; FRL-9434-3]. This action addresses the following CAA elements as applicable: 111(a)(2)(A), (B), (C), (D)(ii), (E), (F), (G), (H), (J), (K), (L) and (M). (33) Regional Haze Plan for the first implementation period Statewide 11/9/09 12/27/11, 76 FR 80754 [EPA-R07-OAR-2011-0675; FRL-9611-3]. Certain provisions withdrawn from plan as identified in letter dated 12/1/11 from Kansas. (34) Section 110(a)(2) Infrastructure Requirements for the 1997 PM2.5 NAAQS Statewide 1/08/08 6/20/13, 78 FR 37126 [EPA-R07-OAR-2013-0233; FRL-9825-6]. This action addresses the following CAA elements: 110(a)(2)(A), (B), (C), (D)(i)(II) (prongs 3 and 4), D(ii), (E), (F), (G), (H), (J), (K), (L), and (M), except as noted. (35) Section 110(a)(2) Infrastructure Requirements for the 2006 PM2.5 NAAQS Statewide 4/12/10 6/20/13, 78 FR 37126 [EPA-R07-OAR-2013-0233; FRL-9825-6]. This action addresses the following CAA elements: 110(a)(2)(A), (B), (C), (D)(i)(II) (prongs 3 and 4), D(ii), (E), (F), (G), (H), (J), (K), (L) and (M), except as noted. (36) Section 128 Declaration: Kansas Department of Health and Environment Representation and Conflicts of Interest Provisions, Kansas Revised Statutes (KSA). KSA 46-221, KSA 46-229, KSA 46-247(c) Statewide 3/19/13 6/20/13, 78 FR 37126 [EPA-R07-OAR-2013-0233; FRL-9825-6]. (37) Section 110(a)(2) infrastructure Requirements for the 2008 Pb NAAQS Statewide 1/13/12 9/15/14, 79 FR 54908 [EPA-R07-OAR-2014-0271; FRL-9916-50-Region 7]. This action addresses the following CAA elements: 110(a)(2)(A), (B), (C), (D), (E), (F), (G), (H), (J), (K), (L) and (M). (38) Section 110(a)(2) Infrastructure Requirements for the 2008 O3 NAAQS Statewide 3/19/13 10/21/14, 79 FR 62861 [EPA-R07-OAR-2014-0401; FRL-9918-19-Region 7]. This action addresses the following CAA elements: 110(a)(2)(A), (B), (C), (D)(i)(II) (prongs 3 and 4), (D)(ii), (E), (F), (G), (H), (J), (K), (L) and (M) except as noted. (39) Section 110(a)(2) Infrastructure Requirements for the 2010 NO2 NAAQS Statewide 3/19/13 10/22/14, 79 FR 63044 [EPA-R07-OAR-2014-0500; FRL-9918-11-Region 7]. This action addresses the following CAA elements: 110 (a)(2)(A), (B), (C), (D), (E), (F), (G), (H), (J), (K), (L) and (M).
    [FR Doc. 2015-16626 Filed 7-7-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R09-OAR-2015-0164; FRL-9927-76-Region 9] Revisions to the California State Implementation Plan, Feather River Air Quality Management District AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Direct final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is taking direct final action to approve revisions to the Feather River Air Quality Management District (FRAQMD or the District) portion of the California State Implementation Plan (SIP). Included in this approval are the following three SIP demonstrations from FRAQMD: 2006 Reasonably Available Control Technology (RACT) Analysis for State Implementation Plan (SIP), November 2006; Reasonably Available Control Technology State Implementation Plan Revision Negative Declaration for Control Techniques Guidelines Issued 2006-2008, June 1, 2009 and; Reasonably Available Control Technology Analysis and Negative Declarations, July 3, 2014. The first two demonstrations address the 1997 8-hour National Ambient Air Quality Standards (NAAQS) for ozone, and the third demonstration addresses the 2008 8-hour NAAQS for ozone. These submitted SIP revisions contain FRAQMD's negative declarations for volatile organic compound (VOC) source categories. We are approving the submitted SIP revisions under the Clean Air Act as amended in 1990 (CAA or the Act). We are also approving a local rule to regulate VOC emissions from gasoline dispensing facilities.

    DATES:

    This rule is effective on September 8, 2015 without further notice, unless EPA receives adverse comments by August 7, 2015. If we receive such comments, we will publish a timely withdrawal in the Federal Register to notify the public that this direct final rule will not take effect.

    ADDRESSES:

    Submit comments, identified by docket number EPA-R09-OAR-2015-0164, by one of the following methods:

    1. Federal eRulemaking Portal: www.regulations.gov. Follow the on-line instructions.

    2. Email: [email protected]

    3. Mail or deliver: Andrew Steckel (Air-4), U.S. Environmental Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901.

    Instructions: All comments will be included in the public docket without change and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Information that you consider CBI or otherwise protected should be clearly identified as such and should not be submitted through www.regulations.gov or email. www.regulations.gov is an “anonymous access” system, and EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send email directly to EPA, your email address will be automatically captured and included as part of the public comment. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses.

    Docket: Generally, documents in the docket for this action are available electronically at www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California. While all documents in the docket are listed at www.regulations.gov, some information may be publicly available only at the hard copy location (e.g., copyrighted material, large maps), and some may not be publicly available in either location (e.g., CBI). To inspect the hard copy materials, please schedule an appointment during normal business hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

    FOR FURTHER INFORMATION CONTACT:

    James Shears, EPA Region IX, (213) 244-1810, [email protected]

    SUPPLEMENTARY INFORMATION:

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

    Table of Contents I. The State's Submittal A. What documents and what rule did the state submit? B. Are there other versions of the documents and rule? C. What is the purpose of the RACT SIP submissions and the purpose of the submitted rule revisions? II. EPA's Evaluation and Action A. How is EPA evaluating the RACT SIP submissions and the rule? B. Do the RACT SIP submissions and the rule meet the evaluation criteria? C. EPA's Recommendations To Strengthen the RACT SIP and To Further Improve the Rule D. Public Comment and Final Action III. Incorporation by Reference IV. Statutory and Executive Order Reviews I. The State's Submittal. A. What documents and what rule did the state submit?

    Table 1 lists the RACT SIP documents addressed by this action with the date that each one was adopted by the local air agency and submitted to EPA by the California Air Resources Board (CARB).

    Table 1—Submitted Documents Local agency Document Adopted Submitted FRAQMD 2006 Reasonably Available Control Technology (RACT) Analysis for State Implementation Plan (SIP) (“2006 RACT SIP”) 12/4/06 7/11/07 FRAQMD Reasonably Available Control Technology State Implementation Plan Revision, Negative Declaration for Control Techniques Guidelines Issued 2006-2008 (“2009 RACT SIP”) 6/1/09 10/27/09 FRAQMD Reasonably Available Control Technology Analysis and Negative Declarations (“2014 RACT SIP”) 8/4/14 9/29/14

    The FRAQMD 2006 RACT SIP submittal became complete by operation of law on January 11, 2008, and the FRAQMD 2009 RACT SIP submittal became complete by operation of law on April 27, 2010, each pursuant to CAA section 110(k)(1)(B). On January 23, 2015, EPA determined that the submittal for the FRAQMD 2014 RACT SIP met the completeness criteria in 40 CFR part 51 Appendix V, which must be met before formal EPA review.

    For the rule submitted by the state, Table 2 lists the rule we are approving with the dates it was adopted by the local air agency and submitted to EPA by CARB.

    Table 2—Submitted Rule Local agency Rule No. Document Amended Submitted FRAQMD 3.8 Gasoline Dispensing Facilities 6/2/14 11/6/14 B. Are there other versions of these documents and the rule?

    There are no previous submitted versions of FRAQMD's 2006, 2009, and 2014 RACT SIPs. For Rule 3.8, we approved an early version: The Sutter County Rule 3.08(3.8), “Storage and Transfer of Gasoline”, on May 3, 1982 (47 FR 18856). With the formation of FRAQMD in 1991, this rule was adopted with identical language in June 1991 to apply beyond just Sutter County to the entire larger FRAQMD area.

    C. What is the purpose of the RACT SIP submissions and the submitted rule revision?

    VOCs and nitrogen oxides (NOX) help produce ground-level ozone and smog, which harm human health and the environment. Section 110(a) of the CAA requires states to submit enforceable regulations that control VOC and NOX emissions. Sections 182(b)(2) and (f) require that SIPs for ozone nonattainment areas classified as moderate or above require implementation of RACT for any source covered by an EPA Control Techniques Guidance (CTG) document and any other major stationary source of VOCs or NOX. FRAQMD is subject to this requirement as the southern part of Sutter County in FRAQMD is designated and classified as a severe ozone nonattainment area for the 1997 and 2008 8-hour NAAQS for ozone (see 40 CFR 81.305). Therefore, FRAQMD must, at a minimum, adopt RACT-level controls for all sources covered by a CTG document and for all major non-CTG stationary sources of VOCs or NOX in south Sutter County. The District adopted its 2006 RACT SIP, with negative declarations, on December 4, 2006. FRAQMD adopted its 2009 RACT SIP revision, which included negative declarations for 11 new or updated CTGs issued from 2006 to 2008, on June 1, 2009. FRAQMD adopted its 2014 RACT SIP, with negative declarations, on August 2014. No comments were received on any of the three RACT SIP demonstrations. Along with the 2014 RACT SIP adoption, FRAQMD adopted Rule 3.8 which is designed to limit VOC emissions from displaced gasoline vapors while transferring gasoline into storage tanks and transport vessels. This rule is intended to fully satisfy the CTG design criteria for Stage I vapor control systems.

    II. EPA's Evaluation and Action A. How is EPA evaluating the RACT SIP submissions and the submitted rule revision?

    FRAQMD regulates the Yuba County and Sutter County portions of the Sacramento Valley Air Basin. The southern part of Sutter County is designated and classified as a severe ozone nonattainment area for the 1997 and 2008 8-hour national ambient air quality standards (NAAQS) for ozone (40 CFR 81.305). CAA Section 182(b)(2) and (f), as well as 40 CFR 51.912(a)(1) require that SIPs for ozone nonattainment areas classified as moderate or above require implementation of RACT for any source covered by a CTG document and any other major stationary source of VOCs or NOX. Any stationary source that emits or has a potential to emit at least 25 tons per year (tpy) of VOCs or NOX in a severe ozone nonattainment area is considered a major stationary source (see CAA sections 182(b(2)) and (f) and 302(j)). Where there are no existing sources covered by a particular CTG document or no other major stationary sources of VOCs or NOX, states may, in lieu of adopting RACT requirements, adopt negative declarations certifying that there are no such sources in the relevant nonattainment area (see Memorandum from William T. Harnett to Regional Air Division Directors, (May 18, 2006), “RACT Qs & As—Reasonably Available Control Technology (RACT) Questions and Answers” page 7).

    SIP rules must be enforceable (see CAA section 110(a)(2)), must not interfere with applicable requirements concerning attainment and reasonable further progress or other CAA requirements (see CAA section 110(l)), and must not modify certain SIP control requirements in nonattainment areas without ensuring equivalent or greater emissions reductions (see CAA section 193).

    Guidance and policy documents that we used to evaluate CAA section 182 RACT SIPs for FRAQMD include the following:

    1. “Final Rule to Implement the 8-Hour Ozone National Ambient Air Quality Standard—Phase 2” (70 FR 71612; November 29, 2005).

    2. “Air Quality Designations and Classifications for the 8-Hour Ozone National Ambient Air Quality Standards; Early Action Compact Areas With Deferred Dates”—Final Rule (69 FR 23858; April 30, 2004).

    3. “State Implementation Plans, General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990” (57 FR 13498; April 16, 1992).

    4. Issues Relating to VOC Regulation Cutpoints, Deficiencies, and Deviations: Clarification to Appendix D of November 24, 1987 Federal Register, May 25, 1988, Revised January 11, 1990, U.S. EPA, Air Quality Management Division, Office of Air Quality Planning and Standards (“The Blue Book”).

    5. Guidance Document for Correcting Common VOC and Other Rule Deficiencies, August 21, 2001, U.S. EPA Region IX (the “Little Bluebook”).

    6. “State Implementation Plans; Nitrogen Oxides Supplement to the General Preamble for the Implementation of Title I of the Clean Air Act Amendments of 1990” (57 FR 55620, November 25, 1992) (“the NOX Supplement”).

    7. Memorandum from William T. Harnett to Regional Air Division Directors, (May 18, 2006), “RACT Qs & As—Reasonably Available Control Technology (RACT) Questions and Answers.”

    8. RACT SIPs, Letter dated March 9, 2006 from EPA Region IX (Andrew Steckel) to CARB (Kurt Karperos) describing Region IX's understanding of what constitutes a minimally acceptable RACT SIP.

    9. “Final Rule to Implement the 1997 8-Hour Ozone National Ambient Air Quality Standard: Classification of Areas That Were Initially Classified Under Subpart 1; Revision of the Anti-Backsliding Provisions To Address 1-Hour Contingency Measure Requirements; Deletion of Obsolete 1-Hour Standard Provision”—Final Rule (77 FR 28424; May 14, 2012).

    10. “Model Volatile Organic Compound Rules for Reasonably Available Control Technology”, EPA (June 1992).

    11. Beyond VOC RACT Requirements”, EPA (April 1995).

    12. EPA's CTGs http://www.epa.gov/glo/SIPToolkit/ctgs.html.

    13. CARB's emissions inventory database http://www.arb.ca.gov/app/emsinv/facinfo/facinfo.php

    14. FRAQMD, CARB and EPA Region IX databases of FRAQMD rules—FRAQMD: http://myairdistrict.com/index.php?Itemid=71

    CARB: http://www.arb.ca.gov/ridb.htm

    EPA: http://epa.gov/region09/air/sips/index.html

    15. Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements”—Final Rule (80 FR 12264; March 6, 2015).

    B. Does the RACT SIP submission meet the evaluation criteria?

    The 2006, 2009 and 2014 RACT SIPs each includes three elements, as described further below:

    1. Evaluations of VOC and NOX rules for sources subject to a CTG.

    2. Negative declarations where there are no facilities subject to a CTG.

    3. Negative declaration for major non-CTG sources of VOC or NOX.

    A summary of our evaluation of each element is provided below. For additional information concerning our evaluation, please refer to the Technical Support Documents (TSDs) concerning the 2006, 2009 and 2014 RACT SIPs and FRAQMD Rule 3.8, which are available in the docket for this action.

    1. Evaluations of VOC and NOX Rules for Sources Subject to a CTG

    We believe that Rule 3.8 is consistent with the relevant requirements, as well as policy and guidance regarding enforceability, RACT, and SIP relaxations. We are not aware of information suggesting that additional controls are needed to fulfill RACT.

    2. Negative Declarations Where There are no Facilities Subject to a CTG

    Negative declarations are only required for CTG source categories for which the District has no sources covered by the CTG. A negative declaration is not required for non-CTG source categories. Table 3 below lists the CTG source categories for the 2006, 2009 and 2014 RACT SIPs. The District indicated it does not currently have, nor does it anticipate sources subject to the CTGs in these categories in the future. We searched CARB's emissions inventory database to verify there are no facilities in FRAQMD that might be subject to the CTGs listed below. We concur with the District's negative declarations.

    Table 3—Negative Declarations for the 2006, 2009 and 2014 RACT SIPS CTG source category Negative declaration CTG reference document 2006 RACT SIP 2009 RACT SIP 2014 RACT SIP Aerospace EPA-453/R-97-004—Control of VOC Emissions from Coating Operations at Aerospace Manufacturing and Rework X X Automobile Coating; Metal Coil Container, & Closure; Paper & Fabric EPA-450/2-77-008—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume II Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles, and Light-Duty Trucks X X Automobile and Light-Duty Truck Assembly Coatings EPA-453/R-08-006—Control Techniques Guidelines for Automobile and Light-Duty Assembly Coatings X X Cutback Asphalt EPA-450/2-77-037—Control of Volatile Organic Emissions from Use of Cutback Asphalt X X Dry Cleaning EPA-450/3-82-009—Control of Volatile Organic Compound Emissions from Large Petroleum Dry Cleaners X X Flat Wood Paneling Coatings EPA-453/R-06-004—Control Techniques Guidelines for Flat Wood Paneling Coatings X X Fiberglass Boat Manufacturing Materials EPA-453/R-08-004—Control Techniques Guidelines for Fiberglass Boat Manufacturing Materials X X Flexible Package Printing EPA-453/R06-003—Control Techniques Guidelines for Flexible Package Printing X X Gasoline Loading Terminal EPA-450/2-77-026—Control of Hydrocarbons from Tank Truck Gasoline Loading Terminals X X Gasoline Trucks EPA-450/2-78-051—Control of Volatile Organic Compound Leaks from Gasoline Tank Trucks and Vapor Collection Systems X X Gasoline Bulk Plants EPA-450/2-77-035—Control of Volatile Organic Emissions from Gasoline Bulk Plants X X Graphic Arts Rotogravure and Flexography EPA-450/2-78-033—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume VIII: Rotogravure and Flexography X X Industrial Cleaning Solvents EPA-453/R-06-001—Control Techniques Guidelines for Industrial Cleaning Solvents X X X Large Appliance Coating EPA-450/2-77-034—Control of Volatile Organic Emissions from Existing Stationary Sources, Volume V: Surface Coating of Large Appliances X X Large Appliance Coating EPA-453/R-07-004—Control Techniques for Large Appliance Coatings X X Magnet Wire Coating EPA-450/2-77-033—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume IV: Surface Coating of Insulation of Magnet Wire X X Metal Can Coating; Metal Coil Coating EPA-450/2-77-008—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume II: Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles, and Light-Duty Trucks X X Metal Furniture EPA-450/2-77-032—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume III: Surface Coating of Metal Furniture X X Metal Furniture Coatings EPA-453/R-07-005—Control Techniques Guidelines for Metal Furniture Coatings X X Metal Parts and Products EPA-450/2-78-015—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume VI: Surface Coating of Miscellaneous Parts and Products X X Miscellaneous Industrial Adhesives EPA-453/R-08-005—Control Techniques Guidelines for Miscellaneous Industrial Adhesives X X X Miscellaneous Metal and Plastic Parts Coatings EPA-453/R-08-003—Control Techniques Guidelines for Miscellaneous Metal and Plastic Parts Coatings X X Natural Gas/Gasoline EPA-450/2-83-007—Control of VOC Equipment Leaks from Natural Gas/Gasoline Processing Plants X X Offset Lithographic Printing and Letterpress Printing EPA-453/R-06-002—Control Techniques Guidelines for Offset Lithographic Printing and Letterpress Printing X X Paper and Fabric Coating EPA-450/2-77-008—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume II: Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles, and Light-Duty Trucks X X Paper, Film, and Foil Coatings EPA-453/R-07-003—Control Techniques Guidelines for Paper, Film, and Foil Coatings X X Perchloroethylene Dry Cleaning Systems1 EPA-450/2-78-050—Control of Volatile Organic Emissions from Perchloroethylene Dry Cleaning Systems X Petroleum Liquid Storage Tanks EPA-450/2-77-036—Control of VOC Emissions from Storage of Petroleum Liquids in Fixed Roof Tanks X X Petroleum Liquid Storage Tanks EPA-450/2-78-047—Control of VOC Emissions from Petroleum Liquid Storage in External Floating Roof Tanks X X Pharmaceutical Products EPA-450/2-78-029—Control of Volatile Organic Emissions from Manufacture of Synthesized Pharmaceutical Products X X Resin Manufacturing EPA-450/3-83-008—Control of VOC Emissions from Manufacture of High-Density Polyethylene, Polypropylene, and Polystyrene Resins X X Resin Manufacturing EPA-450/3-83-006—Control of VOC Fugitive Emissions from Synthetic Organic Chemical Polymer and Resin Manufacturing Equipment X X Refineries EPA-450/2-77-025—Control of Refinery Vacuum Producing Systems, Wastewater Separators, and Process Unit Turnarounds X X Refineries EPA-450/2-78-036—Control of VOC Leaks from Petroleum Refinery Equipment X X Rubber Tire Manufacturing EPA-450/2-78-030—Control of Volatile Organic Emissions from Manufacture of Pneumatic Rubber Tires X X Ship Coatings 61 FR 44050 Shipbuilding and Ship Repair Operations (Surface Coating) X X Ship Coatings EPA-453/R-94-032—Alternative Control Technology Document—Surface Coating Operations at Shipbuilding and Ship Repair Operations (Surface Coating) X Solvent Cleaning Degreasers EPA-450/2-77-022—Control of Volatile Organic Emissions from Solvent Metal Cleaning X X Synthetic Organic Chemical Manufacturing EPA-450/3-84-015—Control of VOC Emissions from Air Oxidation Processes in Synthetic Organic Chemical Manufacturing Industry X X Synthetic Organic Chemical Manufacturing EPA-450/4-91-031—Control of VOC Emissions from Reactor Processes and Distillation Operations in Synthetic Organic Chemical Manufacturing Industry X X Wood Coating Factory Surface of Flat Wood Paneling EPA-450/2-78-032—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume VII: Factory Surface of Flat Wood Paneling X X Wood Furniture Coating EPA-453/R-96-007—Control of VOC Emissions from Wood Furniture Manufacturing Operations X X 1 This item is not a CTG because EPA exempted perchloroethylene as a VOC for purposes of ozone SIPs. 61 FR 4588 (February 7, 1996) (codified at 40 CFR 51.100(s)(1)). 3. Negative Declaration for Major Non-CTG Sources of VOC or NOX

    The 2006, 2009 and 2014 RACT SIPs each included a negative declaration for major non-CTG sources of VOC and NOX. EPA agrees that there are no major non-CTG sources of NOX or VOCs in the south Sutter County nonattainment area.

    4. Conclusion

    We find that FRAQMD's 2006, 2009, and 2014 RACT SIPs including the negative declarations and the Rule 3.8 revisions, adequately demonstrate that they satisfy RACT for the 1997 and 2008 8-hour ozone NAAQS. Our TSDs have more information on our evaluation of the three RACT SIP submissions and Rule 3.8.

    C. EPA Recommendations To Strengthen the RACT SIPs and the Rule

    Our TSD for Rule 3.8 describes additional revisions that we recommend for the next time FRAQMD modifies the rule.

    D. Public Comment and Final Action

    As authorized in section 110(k)(3) of the Act, EPA is fully approving the submitted SIP revisions because we believe they fulfill all relevant requirements. We do not think anyone will object to this approval, so we are finalizing it without proposing it in advance. However, in the Proposed Rules section of this Federal Register, we are simultaneously proposing approval of the same SIP revisions. If we receive adverse comments by August 7, 2015, we will publish a timely withdrawal in the Federal Register to notify the public that the direct final approval will not take effect and we will address the comments in a subsequent final action based on the proposal. If we do not receive timely adverse comments, the direct final approval will be effective without further notice on September 8, 2015. This will incorporate these documents and rule into the federally enforceable SIP.

    Please note that if EPA receives adverse comment on a specific provision of this SIP revision and if that provision may be severed from the remainder of the SIP revision, EPA may adopt as final those provisions of the SIP revision that are not the subject of an adverse comment.

    III. Incorporation by Reference

    In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the FRAQMD rule described in the amendments to 40 CFR 52 set forth below. EPA has made, and will continue to make, this document available electronically through www.regulations.gov and in hard copy at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

    IV. Statutory and Executive Order Reviews

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

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

    • does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 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 (Pub. L. 104-4);

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

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

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

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

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

    In addition, the SIPs and the rule are 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).

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

    Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 8, 2015. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the Proposed Rules section of today's Federal Register, rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: April 30, 2015. Jared Blumenfeld, Regional Administrator, Region IX.

    Part 52, Chapter I, Title 40 of the Code of Federal Regulations is amended as follows:

    PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority:

    42 U.S.C. 7401 et seq.

    Subpart F—California
    2. Section 52.220 is amended by adding paragraphs (c)(382)(ii)(B), (c)(457)(i)(A)(3), (c)(459) and (c)(460) to read as follows:
    § 52.220 Identification of plan.

    (c) * * *

    (382) * * *

    (ii) * * *

    (B) Feather River Air Quality Management District.

    (1) 2006 Reasonably Available Control Technology (RACT) Analysis for State Implementation Plan (SIP) (“2006 RACT SIP”) as adopted on December 4, 2006.

    (457) * * *

    (i) * * *

    (A) * * *

    (3) Rule 3.8, “Gasoline Dispensing Facilities,” amended on June 2, 2014.

    (459) The following plan revision was submitted on September 29, 2014, by the Governor's designee.

    (i) [Reserved]

    (ii) Additional Material.

    (A) Feather River Air Quality Management District.

    (1) Reasonably Available Control Technology Analysis and Negative Declarations (“2014 RACT SIP”), as adopted on August 4, 2014.

    (460) New and amended regulations for the following AQMDs were submitted on November 5, 2014 by the Governor's designee.

    (i) Incorporation by Reference.

    (A) Feather River Air Quality Management District.

    (1) Rule 3.8, “Gasoline Dispensing Facilities,” amended on June 2, 2014.

    3. Section 52.222 is amended by adding paragraph (a)(11) to read as follows:
    § 52.222 Negative declarations.

    (a) * * *

    (11) Feather River Air Quality Management District.

    CTG source category Negative declaration CTG reference document 2006 RACT SIP
  • submitted 7/11/07
  • 2009 RACT SIP
  • submitted 10/27/09
  • 2014 RACT SIP
  • submitted 9/29/14
  • Aerospace EPA-453/R-97-004—Control of VOC Emissions from Coating Operations at Aerospace Manufacturing and Rework X X Automobile Coating; Metal Coil Container, & Closure; Paper & Fabric EPA-450/2-77-008—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume II Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles, and Light-Duty Trucks X X Automobile and Light-Duty Truck Assembly Coatings EPA-453/R-08-006—Control Techniques Guidelines for Automobile and Light-Duty Assembly Coatings X X Cutback Asphalt EPA-450/2-77-037—Control of Volatile Organic Emissions from Use of Cutback Asphalt X X Dry Cleaning EPA-450/3-82-009—Control of Volatile Organic Compound Emissions from Large Petroleum Dry Cleaners X X Flat Wood Paneling Coatings EPA-453/R-06-004—Control Techniques Guidelines for Flat Wood Paneling Coatings X X Fiberglass Boat Manufacturing Materials EPA-453/R-08-004—Control Techniques Guidelines for Fiberglass Boat Manufacturing Materials X X Flexible Package Printing EPA-453/R06-003—Control Techniques Guidelines for Flexible Package Printing X X Gasoline Loading Terminal EPA-450/2-77-026—Control of Hydrocarbons from Tank Truck Gasoline Loading Terminals X X Gasoline Trucks EPA-450/2-78-051—Control of Volatile Organic Compound Leaks from Gasoline Tank Trucks and Vapor Collection Systems X X Gasoline Bulk Plants EPA-450/2-77-035—Control of Volatile Organic Emissions from Gasoline Bulk Plants X X Graphic Arts Rotogravure and Flexography EPA-450/2-78-033—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume VIII: Rotogravure and Flexography X X Industrial Cleaning Solvents EPA-453/R-06-001—Control Techniques Guidelines for Industrial Cleaning Solvents X X X Large Appliance Coating EPA-450/2-77-034—Control of Volatile Organic Emissions from Existing Stationary Sources, Volume V: Surface Coating of Large Appliances X X Large Appliance Coating EPA-453/R-07-004—Control Techniques for Large Appliance Coatings X X Magnet Wire Coating EPA-450/2-77-033—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume IV: Surface Coating of Insulation of Magnet Wire X X Metal Can Coating; Metal Coil Coating EPA-450/2-77-008—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume II: Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles, and Light-Duty Trucks X X Metal Furniture EPA-450/2-77-032—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume III: Surface Coating of Metal Furniture X X Metal Furniture Coatings EPA-453/R-07-005—Control Techniques Guidelines for Metal Furniture Coatings X X Metal Parts and Products EPA-450/2-78-015—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume VI: Surface Coating of Miscellaneous Parts and Products X X Miscellaneous Industrial Adhesives EPA-453/R-08-005—Control Techniques Guidelines for Miscellaneous Industrial Adhesives X X X Miscellaneous Metal and Plastic Parts Coatings EPA-453/R-08-003—Control Techniques Guidelines for Miscellaneous Metal and Plastic Parts Coatings X X Natural Gas/Gasoline EPA-450/2-83-007—Control of VOC Equipment Leaks from Natural Gas/Gasoline Processing Plants X X Offset Lithographic Printing and Letterpress Printing EPA-453/R-06-002—Control Techniques Guidelines for Offset Lithographic Printing and Letterpress Printing X X Paper and Fabric Coating EPA-450/2-77-008—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume II: Surface Coating of Cans, Coils, Paper, Fabrics, Automobiles, and Light-Duty Trucks X X Paper, Film, and Foil Coatings EPA-453/R-07-003—Control Techniques Guidelines for Paper, Film, and Foil Coatings X X Petroleum Liquid Storage Tanks EPA-450/2-77-036—Control of VOC Emissions from Storage of Petroleum Liquids in Fixed Roof Tanks X X Petroleum Liquid Storage Tanks EPA-450/2-78-047—Control of VOC Emissions from Petroleum Liquid Storage in External Floating Roof Tanks X X Pharmaceutical Products EPA-450/2-78-029—Control of Volatile Organic Emissions from Manufacture of Synthesized Pharmaceutical Products X X Resin Manufacturing EPA-450/3-83-008—Control of VOC Emissions from Manufacture of High-Density Polyethylene, Polypropylene, and Polystyrene Resins X X Resin Manufacturing EPA-450/3-83-006—Control of VOC Fugitive Emissions from Synthetic Organic Chemical Polymer and Resin Manufacturing Equipment X X Refineries EPA-450/2-77-025—Control of Refinery Vacuum Producing Systems, Wastewater Separators, and Process Unit Turnarounds X X Refineries EPA-450/2-78-036—Control of VOC Leaks from Petroleum Refinery Equipment X X Rubber Tire Manufacturing EPA-450/2-78-030—Control of Volatile Organic Emissions from Manufacture of Pneumatic Rubber Tires X X Ship Coatings 61 FR 44050 Shipbuilding and Ship Repair Operations (Surface Coating) X X Ship Coatings EPA-453/R-94-032—Alternative Control Technology Document—Surface Coating Operations at Shipbuilding and Ship Repair Operations (Surface Coating) X Solvent Cleaning Degreasers EPA-450/2-77-022—Control of Volatile Organic Emissions from Solvent Metal Cleaning X X Synthetic Organic Chemical Manufacturing EPA-450/3-84-015—Control of VOC Emissions from Air Oxidation Processes in Synthetic Organic Chemical Manufacturing Industry X X Synthetic Organic Chemical Manufacturing EPA-450/4-91-031—Control of VOC Emissions from Reactor Processes and Distillation Operations in Synthetic Organic Chemical Manufacturing Industry X X Wood Coating Factory Surface of Flat Wood Paneling EPA-450/2-78-032—Control of Volatile Organic Emissions from Existing Stationary Sources—Volume VII: Factory Surface of Flat Wood Paneling X X Wood Furniture Coating EPA-453/R-96-007—Control of VOC Emissions from Wood Furniture Manufacturing Operations X X
    [FR Doc. 2015-16627 Filed 7-7-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R09-OAR-2015-0037; FRL-9928-50-Region 9] Revisions to the California State Implementation Plan, Butte County Air Quality Management District AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is finalizing a limited approval and limited disapproval of revisions to the Butte County Air Quality Management District (BCAQMD) portion of the California State Implementation Plan (SIP). These revisions concern volatile organic compound (VOC), oxides of nitrogen (NOX) and particulate matter (PM) emissions from open burning. Under authority of the Clean Air Act (CAA or the Act), this action simultaneously approves a local rule that regulates these emission sources and directs BCAQMD to correct rule deficiencies.

    DATES:

    This rule is effective on August 7, 2015.

    ADDRESSES:

    The EPA has established docket number EPA-R09-OAR-2015-0037 for this action. Generally, documents in the docket for this action are available electronically at http://www.regulations.gov or in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California 94105-3901. While all documents in the docket are listed at http://www.regulations.gov, some information may be publicly available only at the hard copy location (e.g., copyrighted material, large maps, multi-volume reports), and some may not be available in either location (e.g., confidential business information (CBI)). To inspect the hard copy materials, please schedule an appointment during normal business hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

    FOR FURTHER INFORMATION CONTACT:

    Kevin Gong, EPA Region IX, (415) 972-3073, [email protected]

    SUPPLEMENTARY INFORMATION:

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

    Table of Contents I. Proposed Action II. Public Comments and EPA Responses III. EPA Action IV. Incorporation by Reference V. Statutory and Executive Order Reviews I. Proposed Action

    On February 11, 2015, in 80 FR 7555, the EPA proposed a limited approval and limited disapproval of the following rule that was submitted for incorporation into the California SIP.

    Table 1—Submitted Rule Local agency Rule No. Rule title Amended Submitted BCAQMD 300 Open Burning Requirements, Prohibitions and Exemptions 02/24/11 09/21/12

    This rule supersedes the BCAQMD rules currently in the California SIP as listed below.

    Table 2—Rules To Be Superseded Rule Title SIP approval date FR citation 301 Prohibitions on Open Burning February 3, 1987 52 FR 3226. 302 Exemptions to Rule 301 February 3, 1987 52 FR 3226. 303 Burn Permits February 3, 1987 52 FR 3226. 304 Exemptions to Rule 303 February 3, 1987 52 FR 3226. 306 Information Furnished by Permit Applicant February 3, 1987 52 FR 3226. 307 Ignition Hours February 3, 1987 52 FR 3226. 308 Notice of Intent to Ignite February 3, 1987 52 FR 3226. 309 Freedom from Debris and Moisture February 3, 1987 52 FR 3226. 310 Arrangement of Agricultural and Wood Waste February 3, 1987 52 FR 3226. 311 Drying Period February 3, 1987 52 FR 3226. 312 Wind Direction February 3, 1987 52 FR 3226. 313 Ignition Devices February 3, 1987 52 FR 3226. 314 Burning of Vines or Bushes Treated with Herbicides February 3, 1987 52 FR 3226. 315 Rice Straw Burning February 3, 1987 52 FR 3226. 316 Field Crop Ignition February 3, 1987 52 FR 3226. 317 Field Crops Harvested Prior to September 10 February 3, 1987 52 FR 3226. 318 Restriction of Burning During Poor Air Quality Conditions February 3, 1987 52 FR 3226. 320 Certificate from Department of Fish and Game February 3, 1987 52 FR 3226. 322 Special Permit February 3, 1987 52 FR 3226. 323 Range Improvement Burning February 3, 1987 52 FR 3226. 324 Burning at Disposal Sites February 3, 1987 52 FR 3226. 325 Exemption to Rule 324 February 3, 1987 52 FR 3226.

    We proposed a limited approval because we determined that Rule 300 improves the SIP and is largely consistent with the relevant CAA requirements. We simultaneously proposed a limited disapproval because some rule provisions conflict with section 110 and part D of the Act. These provisions include the following:

    1. Allowing the burning of rubbish under variance approved by hearing board in paragraphs 5.53 and 6.5.

    2. Air Pollution Control Officer discretion to waive drying time requirements in paragraph 8.2.4.

    Our proposed action contains more information on the basis for this rulemaking and on our evaluation of the submittal.

    II. Public Comments and EPA Responses

    The EPA's proposed action provided a 30-day public comment period. During this period, we received no comments.

    III. EPA Action

    No comments were submitted. Therefore, as authorized in sections 110(k)(3) and 301(a) of the Act, the EPA is finalizing a limited approval of the submitted rule. This action incorporates the submitted rule into the California SIP, including those provisions identified as deficient. As authorized under section 110(k)(3), EPA is simultaneously finalizing a limited disapproval of the rule. As a result, sanctions will be imposed unless the EPA approves subsequent SIP revisions that correct the rule deficiencies within 18 months of the effective date of this action. These sanctions will be imposed under section 179 of the Act according to 40 CFR 52.31. In addition, the EPA must promulgate a federal implementation plan (FIP) under section 110(c) unless we approve subsequent SIP revisions that correct the rule deficiencies within 24 months. Note that the submitted rule has been adopted by the BCAQMD, and the EPA's final limited disapproval does not prevent the local agency from enforcing it. The limited disapproval also does not prevent any portion of the rule from being incorporated by reference into the federally enforceable SIP as discussed in a July 9, 1992 EPA memo found at: http://www.epa.gov/nsr/ttnnsr01/gen/pdf/memo-s.pdf.

    IV. Incorporation by Reference

    In this rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the BCAQMD rules described in the amendments to 40 CFR part 52 set forth below. The EPA has made, and will continue to make, these documents available electronically through www.regulations.gov and in hard copy at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

    V. Statutory and Executive Order Reviews A. Executive Order 12866, Regulatory Planning and Review

    The Office of Management and Budget (OMB) has exempted this regulatory action from Executive Order 12866, entitled “Regulatory Planning and Review.”

    B. Paperwork Reduction Act

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

    C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions.

    This rule will not have a significant impact on a substantial number of small entities because SIP limited approvals/limited disapprovals under section 110 and subchapter I, part D of the Clean Air Act do not create any new requirements but simply approve requirements that the State is already imposing. Therefore, because this limited approval/limited disapproval action does not create any new requirements, I certify that this action will not have a significant economic impact on a substantial number of small entities.

    Moreover, due to the nature of the Federal-State relationship under the Clean Air Act, preparation of flexibility analysis would constitute Federal inquiry into the economic reasonableness of State action. The Clean Air Act forbids the EPA to base its actions concerning SIPs on such grounds. Union Electric Co., v. U.S. EPA, 427 U.S. 246, 255-66 (1976); 42 U.S.C. 7410(a)(2).

    D. Unfunded Mandates Reform Act

    Under sections 202 of the Unfunded Mandates Reform Act of 1995 (“Unfunded Mandates Act”), signed into law on March 22, 1995, the EPA must prepare a budgetary impact statement to accompany any proposed or final rule that includes a Federal mandate that may result in estimated costs to State, local, or tribal governments in the aggregate; or to the private sector, of $100 million or more. Under section 205, the EPA must select the most cost-effective and least burdensome alternative that achieves the objectives of the rule and is consistent with statutory requirements. Section 203 requires the EPA to establish a plan for informing and advising any small governments that may be significantly or uniquely impacted by the rule.

    The EPA has determined that the limited approval/limited disapproval action promulgated does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This Federal action approves pre-existing requirements under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this action.

    E. Executive Order 13132, Federalism

    Federalism (64 FR 43255, August 10, 1999) revokes and replaces Executive Orders 12612 (Federalism) and 12875 (Enhancing the Intergovernmental Partnership). Executive Order 13132 requires the EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.” Under Executive Order 13132, the EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or the EPA consults with State and local officials early in the process of developing the proposed regulation. The EPA also may not issue a regulation that has federalism implications and that preempts State law unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

    This rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely approves a State rule implementing a Federal standard, and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, the requirements of section 6 of the Executive Order do not apply to this rule.

    F. Executive Order 13175, Coordination With Indian Tribal Governments

    Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires the EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” This final rule does not have tribal implications, as specified in Executive Order 13175. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes. Thus, Executive Order 13175 does not apply to this rule.

    G. Executive Order 13045, Protection of Children From Environmental Health Risks and Safety Risks

    The EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This rule is not subject to Executive Order 13045, because it approves a State rule implementing a Federal standard.

    H. Executive Order 13211, Actions That Significantly Affect Energy Supply, Distribution, or Use

    This rule is not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

    I. National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act (NTTAA) of 1995 requires Federal agencies to evaluate existing technical standards when developing a new regulation. To comply with NTTAA, the EPA must consider and use “voluntary consensus standards” (VCS) if available and applicable when developing programs and policies unless doing so would be inconsistent with applicable law or otherwise impractical.

    The EPA believes that VCS are inapplicable to this action. This action does not require the public to perform activities conducive to the use of VCS.

    J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Population

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

    The EPA lacks the discretionary authority to address environmental justice in this rulemaking.

    K. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory Enforcement Fairness Act of 1996, generally provides that before a rule may take effect, the agency promulgating the rule must submit a rule report, which includes a copy of the rule, to each House of the Congress and to the Comptroller General of the United States. The EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. A major rule cannot take effect until 60 days after it is published in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2). This rule will be effective on August 7, 2015.

    L. Petitions for Judicial Review

    Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 8, 2015. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. This action may not be challenged later in proceedings to enforce its requirements (see section 307(b)(2)).

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Volatile organic compounds.

    Dated: May 18, 2015. Jared Blumenfeld, Regional Administrator, Region IX.

    Part 52, chapter I, title 40 of the Code of Federal Regulations is amended as follows:

    PART 52—[AMENDED] 1. The authority citation for part 52 continues to read as follows: Authority:

    42 U.S.C. 7401 et seq.

    Subpart F—California 2. Section 52.220 is amended by adding paragraphs (c)(168)(i)(A)(7) and (c)(423)(i)(G)(1) to read as follows:
    § 52.220 Identification of plan.

    (c) * * *

    (168) * * *

    (i) * * *

    (A) * * *

    (7) Previously approved on February 3, 1987 in paragraph (c)(168)(i)(A)(1) of this section and now deleted with replacement in paragraph (c)(423)(i)(G)(1) by Butte County APCD, Rule 300, as amended on February 24, 2011, Rules 301, 302, 303, 304, 306, 307, 308, 309, 310, 311, 312, 313, 314, 315, 316, 317, 318, 319, 320, 322, 323, 324 and 325.

    (423) * * *

    (i) * * *

    (G) Butte County Air Quality Management District.

    (1) Rule 300, “Open Burning Requirements, Prohibitions and Exemptions,” amended on February 24, 2011.

    [FR Doc. 2015-16715 Filed 7-7-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R07-OAR-2015-0106 FRL-9926-49-Region 7] Approval and Promulgation of Air Quality Implementation Plans; Nebraska; Update to Materials Incorporated by Reference AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule; notice of administrative change.

    SUMMARY:

    The Environmental Protection Agency (EPA) is updating the materials submitted by Nebraska that are incorporated by reference (IBR) into the state implementation plan (SIP). EPA is also notifying the public of the correction of certain typographical errors within the IBR table. The regulations affected by this update have been previously submitted by the state agency and approved by EPA. This update affects the SIP materials that are available for public inspection at the National Archives and Records Administration (NARA), and the Regional Office.

    DATES:

    This rule is effective on July 8, 2015.

    ADDRESSES:

    SIP materials which are incorporated by reference into 40 CFR part 52 are available for inspection at the following locations: Environmental Protection Agency, Region 7, 11201 Renner Boulevard, Lenexa, Kansas 66219; or at http://www.epa.gov/region07/air/rules/fedapprv.htm; and the National Archives and Records Administration. For information on the availability of this material at NARA, call (202) 741-6030, or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    FOR FURTHER INFORMATION CONTACT:

    Jan Simpson at (913) 551-7089, or by email at [email protected]

    SUPPLEMENTARY INFORMATION: I. Background

    The SIP is a living document which the state revises as necessary to address the unique air pollution problems in the state. Therefore, EPA from time to time must take action on SIP revisions containing new and/or revised regulations to make them part of the SIP. On May 22, 1997 (62 FR 27968), EPA revised the procedures for incorporating by reference Federally-approved SIPs, as a result of consultations between EPA and the Office of Federal Register (OFR). The description of the revised SIP document, IBR procedures and “Identification of plan” format are discussed in further detail in the May 22, 1997, Federal Register document.

    On February 12, 1999, EPA published a document in the Federal Register (64 FR 7091) beginning the new IBR procedure for Nebraska. On December 1, 2003, (68 FR 67045) and on July 30, 2009 (74 FR 37939), EPA published updates to the IBR material for Nebraska.

    In this document, EPA is publishing an updated set of tables listing the regulatory (i.e., IBR) materials in the Nebraska SIP taking into account the additions, deletions, and revisions to those materials previously submitted by the state agency and approved by EPA. We are removing the EPA Headquarters Library from paragraph (b)(3), as IBR materials are no longer available at this location. Table (e) revisions include:

    • Adding text in the explanation column for (6)-(27).

    II. EPA Action

    In this action, EPA is doing the following:

    A. Announcing the update to the IBR material as of December 31, 2014.

    B. Revising the entry in § 52.1420(b) to reflect the update and corrections.

    C. Revising certain entries in § 52.1420(e) as described above;

    D. Correcting the date format in the “State effective date” or “State submittal date” and “EPA approval date” columns in § 52.1420(c), (d) and (e). Dates are numerical month/day/year without additional zeros;

    E. Modifying the Federal Register citation in § 52.1420(c), (d) and (e) to reflect the beginning page of the preamble as opposed to the page number of the regulatory text.

    EPA has determined that this rule falls under the “good cause” exemption in section 553(b)(3)(B) of the Administrative Procedures Act (APA) which, upon finding “good cause,” authorizes agencies to dispense with public participation and section 553(d)(3), which allows an agency to make a rule effective immediately (thereby avoiding the 30-day delayed effective date otherwise provided for in the APA). This rule simply codifies provisions which are already in effect as a matter of law in Federal and approved State programs. Under section 553 of the APA, an agency may find good cause where procedures are “impractical, unnecessary, or contrary to the public interest.” Public comment is “unnecessary” and “contrary to the public interest” since the codification only reflects existing law. Immediate notice in the CFR benefits the public by providing notice of the updated Nebraska SIP compilation.

    Statutory and Executive Order Reviews

    In this rule, EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is finalizing the incorporation by reference of the Nebraska regulations described in the amendments to 40 CFR part 52 set forth below. 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 Act and applicable Federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, EPA's role is to approve state choices, provided that they meet the criteria of the CAA. Accordingly, this action merely approves 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” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

    • 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 (Pub. L. 104-4);

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

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

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

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

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

    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).

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

    EPA has also determined that the provisions of section 307(b)(1) of the CAA pertaining to petitions for judicial review are not applicable to this action. Prior EPA rulemaking actions for each individual component of the Nebraska SIP compilations previously afforded interested parties the opportunity to file a petition for judicial review in the United States Court of Appeals for the appropriate circuit within 60 days of such rulemaking action. Thus, EPA sees no need in this action to reopen the 60-day period for filing such petitions for judicial review for this “Identification of plan” reorganization update action for the State of Nebraska.

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

    Dated: March 13, 2015. Mark Hague, Acting Regional Administrator, Region 7. Editorial Note:

    This document was received for publication by the Office of the Federal Register on July 1, 2015.

    For the reasons stated in the preamble, the EPA amends 40 CFR part 52 as set forth below:

    PART 52—APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS 1. The authority citation for part 52 continues to read as follows: Authority:

    42 U.S.C. 7401 et seq.

    Subpart CC—Nebraska 2. In § 52.1420, paragraphs (b), (c), (d) and (e) are revised to read as follows:
    § 52.1420 Identification of Plan.

    (b) Incorporation by reference. (1) Material listed in paragraphs (c) and (d) of this section with an EPA approval date prior to December 31, 2014, was approved for incorporation by reference by the Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Material is incorporated as it exists on the date of the approval, and notice of any change in the material will be published in the Federal Register. Entries in paragraphs (c) and (d) of this section with EPA approval dates after December 31, 2014, will be incorporated by reference in the next update to the SIP compilation.

    (2) EPA Region 7 certifies that the rules/regulations provided by EPA in the SIP compilation at the addresses in paragraph (b)(3) of this section are an exact duplicate of the officially promulgated state rules/regulations which have been approved as part of the SIP as of December 31, 2014.

    (3) Copies of the materials incorporated by reference may be inspected at the Environmental Protection Agency, Region 7, Air Planning and Development Branch, 11201 Renner Boulevard, Lenexa, Kansas 66219; at the EPA, Air and Radiation Docket and Information Center, and the National Archives and Records Administration (NARA). If you wish to obtain material from the EPA Regional Office, please call (913) 551-7089. For information on the availability of this material at NARA, call (202) 741-6030, or go to: www.archives.gov/federal-register/cfr/ibr-locations.html.

    (c) EPA-approved regulations.

    EPA-Approved Nebraska Regulations Nebraska
  • citation
  • Title State effective date EPA approval date Explanation
    STATE OF NEBRASKA Department of Environmental Quality Title 129—Nebraska Air Quality Regulations 129-1 Definitions 4/1/12 8/4/14, 79 FR 45108 129-2 Definition of Major Source 3/14/06 3/22/11, 76 FR 15852 129-3 Region and Subregions: How Classified 6/26/94 1/4/95, 60 FR 372 129-4 Ambient Air Quality Standards 4/1/02, 7/10/02 7/8/03, 68 FR 40528 129-5 Operating Permit—When Required 11/20/02 9/5/03, 68 FR 52691 Section 001.02 is not SIP approved. 129-6 Emissions Reporting; When Required 11/20/02 9/5/03, 68 FR 52691 129-7 Operating Permits—Application 8/22/00 5/29/02, 67 FR 37325 129-8 Operating Permit Content 8/22/00 5/29/02, 67 FR 37325 129-9 General Operating Permits for Class I and II Sources 6/26/94 1/4/95, 60 FR 372 129-10 Operating Permits for Temporary Sources 9/7/97 1/20/00, 65 FR 3130 129-11 Operating Permits—Emergency; Defense 6/26/94 1/4/95, 60 FR 372 129-12 Operating Permit Renewal and Expiration 5/29/95 2/9/96, 61 FR 4899 129-13 Class I Operating Permit—EPA Review; Affected States Review; Class II Permit 6/26/94 1/4/95, 60 FR 372 129-14 Permits—Public Participation 2/6/08 3/22/11, 76 FR 15852 129-15 Operating Permit Modification; Reopening for Cause 2/6/08 3/22/11, 76 FR 15852 129-16 Stack Heights; Good Engineering Practice (GEP) 12/15/98 5/29/02, 67 FR 37325 129-17 Construction Permits—When Required 4/1/12 8/4/14, 79 FR 45108 Approval does not include Nebraska's revisions to sections 001.02T and 013.04T pertaining to ethanol production facilities, which were not submitted by the State. 129-19 Prevention of Significant Deterioration of Air Quality 4/1/12 8/4/14, 79 FR 45108 Provisions of the 2010 PM2.5 PSD-Increments, SILs and SMCs rule (75 FR 64865, October 20, 2010) relating to SILs and SMCs that were affected by the January 22, 2013, U.S. Court of Appeals decision are not SIP approved. 129-20 Particulate Emissions; Limitations and Standards (Exceptions Due to Breakdowns or Scheduled Maintenance: See Chapter 35) 2/7/04 3/31/05, 70 FR 16426 129-21 Controls for Transferring, Conveying, Railcar and Truck Loading at Rock Processing Operations in Cass County 7/10/02 7/8/03, 68 FR 40528 129-22 Incinerators; Emission Standards 9/7/97 1/20/00, 65 FR 3130 129-24 Sulfur Compound Emissions; Existing Sources Emission Standards 6/26/94 1/4/95, 60 FR 372 129-25 Nitrogen Oxides (Calculated as Nitrogen Dioxide); Emissions Standards for Existing Stationary Sources 9/7/97 1/20/00, 65 FR 3130 129-30 Open Fires, Prohibited; Exceptions 9/25/05 8/11/10, 75 FR 48582 129-32 Dust; Duty to Prevent Escape of 6/26/94 1/4/95, 60 FR 372 129-33 Compliance; Time Schedule for 6/26/94 1/4/95, 60 FR 372 129-34 Emission Sources; Testing; Monitoring 5/7/05 7/10/06, 71 FR 38776 129-35 Compliance; Exceptions Due to Startup, Shutdown, or Malfunction 9/7/97 1/20/00, 65 FR 3130 129-36 Control Regulations; Circumvention, When Excepted 6/26/94 1/4/95, 60 FR 372 129-37 Compliance; Responsibility 6/26/94 1/4/95, 60 FR 372 129-38 Emergency Episodes; Occurrence and Control, Contingency Plans 6/26/94 1/4/95, 60 FR 372 129-39 Visible Emissions from Diesel-powered Motor Vehicles 6/26/94 1/4/95, 60 FR 372 129-40 General Conformity 5/29/95 2/12/96, 61 FR 5297 129-41 General Provisions 12/15/98 5/29/02, 67 FR 37325 129-42 Permits-By-Rule 11/20/02, 4/8/03, 5/7/05 7/10/06, 71 FR 38776 129-43 Consolidated with Chapter 41 5/29/95 2/9/96, 61 FR 4899 129-44 Consolidated with Chapter 41 5/29/95 2/9/96, 61 FR 4899 Appendix I Emergency Emission Reductions 6/26/94 1/4/95, 60 FR 372 Appendix II Hazardous Air Pollutants (HAPS) 5/7/05 7/10/06, 71 FR 38776 Title 115—Rules of Practice and Procedure 115-1 Definitions of Terms 8/8/93 1/4/95, 60 FR 372 115-2 Filing and Correspondence 8/8/93 1/4/95, 60 FR 372 115-3 Public Records Availability 8/8/93 1/4/95, 60 FR 372 115-4 Public Records Confidentiality 8/8/93 1/4/95, 60 FR 372 115-5 Public Hearings 8/8/93 1/4/95, 60 FR 372 115-6 Voluntary Compliance 8/8/93 1/4/95, 60 FR 372 115-7 Contested Cases 8/8/93 1/4/95, 60 FR 372 115-8 Emergency Proceeding Hearings 8/8/93 1/4/95, 60 FR 372 115-9 Declaratory Rulings 8/8/93 1/4/95, 60 FR 372 115-10 Rulemaking 8/8/93 1/4/95, 60 FR 372 115-11 Variances 8/8/93 1/4/95, 60 FR 372 Lincoln-Lancaster County Air Pollution Control Program Article 1—Administration and Enforcement Section 1 Intent 5/16/95 2/14/96, 61 FR 56991 Section 2 Unlawful Acts—Permits Required 5/16/95 2/14/96, 61 FR 5699 Section 3 Violations—Hearings—Orders 5/16/95 2/14/96, 61 FR 5699 Section 4 Appeal Procedure 5/16/95 2/14/96, 61 FR 5699 Section 5 Variance 5/16/95 2/14/96, 61 FR 5699 Section 7 Compliance—Actions to Enforce—Penalties for Non-Compliance 5/16/95 2/14/96, 61 FR 5699 Section 8 Procedure for Abatement 5/16/95 2/14/96, 61 FR 5699 Section 9 Severability 5/16/95 2/14/96, 61 FR 5699 Article 2—Regulations and Standards Section 1 Definitions 8/11/98 1/20/00, 65 FR 3130 Section 2 Major Sources—Defined 8/11/98 1/20/00, 65 FR 3130 Section 4 Ambient Air Quality Standards 5/16/95 2/14/96, 61 FR 5699 Section 5 Operating Permits—When Required 8/11/98 1/20/00, 65 FR 3130 Section 6 Emissions Reporting—When Required 8/11/98 1/20/00, 65 FR 3130 Section 7 Operating Permit—Application 8/11/98 1/20/00, 65 FR 3130 Section 8 Operating Permit—Content 8/11/98 1/20/00, 65 FR 3130 Section 9 General Operating Permits for Class I and II Sources 5/16/95 2/14/96, 61 FR 5699 Section 10 Operating Permits for Temporary Services 5/16/95 2/14/96, 61 FR 5699 Section 11 Emergency Operating Permits—Defense 5/16/95 2/14/96, 61 FR 5699 Section 12 Operating Permit Renewal and Expiration 5/16/95 2/14/96, 61 FR 5699 Section 14 Permits—Public Participation 5/16/95 2/14/96, 61 FR 5699 Section 15 Operating Permit Modifications—Reopening for Cause 8/11/98 1/20/00, 65 FR 3130 Section 16 Stack—Heights—Good Engineering Practice (GEP) 5/16/95 2/14/96, 61 FR 5699 Section 17 Construction Permits—When Required 8/11/98 1/20/00, 65 FR 3130 Section 19 Prevention of Significant Deterioration of Air Quality 5/16/95 2/14/96, 61 FR 5699 Section 20 Particulate Emissions—Limitations and Standards 3/31/97 1/20/00, 65 FR 3130 Section 22 Incinerator Emissions 5/16/95 2/14/96, 61 FR 5699 Section 24 Sulfur Compound Emissions—Existing Sources—Emission Standards 5/16/95 2/14/96, 61 FR 5699 Section 25 Nitrogen Oxides (Calculated as Nitrogen Dioxide)—Emissions Standards for Existing Stationary Sources 5/16/95 2/14/96, 61 FR 5699 Section 32 Dust—Duty to Prevent Escape of 3/31/97 1/20/00, 65 FR 3130 Section 33 Compliance—Time Schedule for 5/16/95 2/14/96, 61 FR 5699 Section 34 Emission Sources—Testing—Monitoring 5/16/95 2/14/96, 61 FR 5699 Section 35 Compliance—Exceptions Due to Startup Shutdown or Malfunction 5/16/95 2/14/96, 61 FR 5699 Section 36 Control Regulations—Circumvention—When Expected 5/16/95 2/14/96, 61 FR 5699 Section 37 Compliance—Responsibility of Owner/Operator Pending Review by Director 5/16/95 2/14/96, 61 FR 5699 Section 38 Emergency Episodes—Occurrence and Control—Contingency Plans 5/16/95 2/14/96, 61 FR 5699 Appendix I Emergency Emission Reduction Regulations 5/16/95 2/14/96, 61 FR 5699 City of Omaha Chapter 41—Air Quality Control Article I—In General 41-2 Adoption of State Regulations with Exceptions 4/1/98 1/20/00, 65 FR 3130 41-4 Enforcement—Generally 5/29/95 2/14/96, 61 FR 5699 41-5 Same Health Department 5/29/95 2/14/96, 61 FR 5699 41-6 Residential Exemptions 5/29/95 2/14/96, 61 FR 5699 41-9 Penalties 5/29/95 2/14/96, 61 FR 5699 41-10 Civil Enforcement 5/29/95 2/14/96, 61 FR 5699 Article II—Permitting of Air Contaminant Sources 41-23 Prerequisite to Approval 5/29/95 2/14/96, 61 FR 5699 41-27 Signature Required; Guarantee 5/29/95 2/14/96, 61 FR 5699 41-38 Funds 5/29/95 2/14/96, 61 FR 5699 41-40 Fees—When Delinquent 5/29/95 2/14/96, 61 FR 5699 Article IV—Waste Incinerators—Division 1. Generally 41-60 Definitions 5/29/95 2/14/96, 61 FR 5699 41-61 Violations 5/29/95 2/14/96, 61 FR 5699 Article IV—Waste Incinerators—Division 2. Emissions 41-70 New or Modified Facilities 5/29/95 2/14/96, 61 FR 5699 41-71 Existing Facilities 5/29/95 2/14/96, 61 FR 5699 41-72 Emission Testing 5/29/95 2/14/96, 61 FR 5699 Article IV—Waste Incinerators—Division 3. Design 41-80 New or Modified Waste Incinerators 5/29/95 2/14/96, 61 FR 5699 41-81 Existing Incinerators 5/29/95 2/14/96, 61 FR 5699

    (d) EPA-approved state source-specific permits.

    EPA-Approved Nebraska Source-Specific Permits Name of source Permit No. State effective date EPA approval date Explanation (1) Gould, Inc 677 11/9/83 1/31/85, 50 FR 4510 (2) Asarco, Inc. 1520 6/6/96 3/20/97, 62 FR 13329 The EPA did not approve paragraph 19. (3) Nebraska Public Power District, Gerald Gentleman Station CP07-0050 5/11/10 7/6/12, 78 FR 40140 EPA has only approved the elements of the permit pertaining to NOX requirements. (4) Omaha Public Power District, Nebraska City Station CP07-0049 2/26/09 7/6/12, 78 FR 40140

    (e) EPA-approved nonregulatory provisions and quasi-regulatory measures.

    EPA-Approved Nebraska Nonregulatory Provisions Name of nonregulatory SIP provision Applicable geographic or nonattainment area State
  • submittal date
  • EPA approval date Explanation
    (1) Air Quality Implementation Plan Statewide 1/28/72 5/31/72, 37 FR 10842 (2) Confirmation That the State Does Not Have Air Quality Control Standards Based on Attorney General's Disapproval Statewide 4/25/72 5/31/72, 37 FR 10842 (3) Request for Two-Year Extension to Meet the Primary NOX Standard Omaha 1/24/72 7/27/72, 37 FR 15080 (4) Clarification of Section 11 of the State's Plan Statewide 2/16/72 7/27/72, 37 FR 15080 (5) Letters Clarifying the Application of the State's Emergency Episode Rule Omaha 10/2/72 5/14/73, 38 FR 12696 (6) Analysis of Ambient Air Quality in Standard Metropolitan Statistical Areas and Recommendations for Air Quality Maintenance Areas Omaha, Lincoln, Sioux City 5/9/74 6/2/75, 40 FR 23746 [FRL 369-8]. (7) Amended State Law (LB1029) Giving the Department of Environmental Quality Authority to Require Monitoring of Emissions, Reporting of Emissions and Release of Emissions Data Statewide 2/10/76 6/23/76, 41 FR 25898 [FRL 564-5]. (8) Air Monitoring Plan Statewide 6/19/81 10/6/81, 46 FR 49122 [A-7-FRL-1933-1]. (9) TSP Nonattainment Plan Douglas and Cass Counties 9/25/80
  • 8/9/82
  • 3/28/83, 48 FR 12715 [EPA Action NE 129; A-7-FRL 2302-8].
    (10) Plan for Intergovernmental Consultation and Coordination and for Public Notification Statewide 8/9/82 7/5/83, 48 FR 30631 [EPA Action NE 1123; A-7-FRL 2353-7]. (11) Lead Plan Statewide except Omaha 1/9/81, 8/5/81, 1/11/83 11/29/83, 48 FR 53697 [AD-FRL 2479-3; EPA Action NE 1122] The plan was approved except that portion pertaining to Omaha. (12) Lead Nonattainment Plan Omaha 7/24/84, 11/17/83, 8/1/84 1/31/85, 50 FR 4510 [NE 1418; A-7-FRL-2768-3]. (13) CO Nonattainment Plan Omaha 4/3/85 9/15/86, 51 FR 32640 [A-7-FRL-3065-7]. (14) CO Nonattainment Plan Lincoln 4/3/85 9/19/86, 51 FR 33264 [A-7-FRL-3082-8]. (15) Revised Lead Nonattainment Plan Omaha 2/2/87 8/3/87, 52 FR 28694 [A-7-FRL-3238-2]. (16) Letter Pertaining to NOX Rules and Analysis Which Certifies the Material Became Effective on February 20, 1991 Statewide 3/8/91 7/2/91, 56 FR 30335 [FRL-3968-7] State submittal date is date of the letter. (17) Small Business Assistance Program Statewide 11/12/92 8/30/93, 58 FR 45452 [NE-4-1-5861; FRL-4694-6]. (18) Class II Operating Permit Program Including Letter Committing to Submit Information to RACT/BACT/LAER Clearinghouse, Letter Regarding Availability of State Operating Permits to the EPA and Specified Emissions Limits in Permits, and Letter Regarding the Increase in New Source Review Thresholds Statewide 2/16/94 1/4/95, 60 FR 372 [NE-6-1-6445a; FRL-5115-3]. (19) Letter from City of Omaha Regarding Authority to Implement Section 112(l) and Letter from the State Regarding Rule Omissions and PSD Program Implementation Omaha, Lincoln 9/13/95, 11/9/95 2/14/96, 61 FR 5725 [NE-9-1-7220b, FRL-5409-8]. State submittal dates are dates of letters. (20) Lincoln Municipal Code, Chapter 8.06.140 and 8.06.145 City of Lincoln 2/5/99 1/20/00, 65 FR 3130 [NE 071-1071a, FRL-6521-6]. (21) Lancaster Co. Resolution 5069, Sections 12 and 13 Lancaster County 2/5/99 1/20/00, 65 FR 3130 [NE 071-1071a, FRL-6521-6]. (22) Nebraska Lead Maintenance SIP Omaha 1/18/01 4/20/01, 66 FR 20196 [Region 7 Tracking No. 0124-1124(b), FRL-6968-5]. (23) CAA 110(1)(2)(D)(i) SIP—Interstate Transport Statewide 5/18/07 12/17/07, 72 FR 71245 [EPA-R07-OAR-2007-1128, FRL-8507-1]. (24) Section 110(a)(2) Infrastructure Requirements for the 1997 8-Hour Ozone NAAQS Statewide 12/7/07 7/8/11, 76 FR 40258 [EPA-R07-OAR-2011-0310, FRL-9434-4]. This action addresses the following CAA elements as applicable: 110(a)(2)(A), (B), (C), (D)(ii), (E), (F), (G), (H), (J), (K), (L), and (M). (25) Regional haze plan for the first implementation period Statewide 6/30/11 7/6/12, 78 FR 40150 [EPA-R07-OAR-2012-0158; FRL-9689-2]. The plan was approved except for that portion pertaining to SO2 BART for Nebraska Public Power District, Gerald Gentleman Units 1 and 2, and the portion of the long- term strategy addressing the SO2 BART measures for these Units. (26) Section 110(a)(2) Infrastructure Requirements for the 2008 Pb NAAQS Statewide 10/18/11 10/21/14, 79 FR 62832 [EPA-R07-OAR-2014-0685; FRL-9918-13-Region 7]. This action addresses the following CAA elements: 110(a)(2)(A), (B), (C), (D), (E), (F), (G), (H), (J), (K), (L), and (M). (27) Section 128 Declaration: Nebraska Department of Environmental Quality Representation and Conflicts of Interest Provisions, Section 49-1493(13) of the NE Political Accountability and Disclosure Act and Chapter 2 of Title 4, NE Accountability and Disclosure Commission Statewide 8/22/13 10/21/14, 79 FR 62832 [EPA-R07-OAR-2014-0685; FRL-9918-13-Region 7]. This declaration is contained within Nebraska's 2010 Sulfur Dioxide NAAQS Infrastructure SIP submission concerning Section 110(a)(2)(E) of the CAA.
    [FR Doc. 2015-16632 Filed 7-7-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2014-0346; FRL-9927-25] Prohexadione Calcium; Pesticide Tolerances AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    This regulation establishes tolerances for residues of prohexadione calcium in or on strawberry and watercress. Inter-Regional Research Project Number 4 (IR-4) requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).

    DATES:

    This regulation is effective July 8, 2015. Objections and requests for hearings must be received on or before September 8, 2015, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

    ADDRESSES:

    The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2014-0346, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory Public Docket (OPP Docket) in the Environmental Protection Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW., Washington, DC 20460-0001. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OPP Docket is (703) 305-5805. Please review the visitor instructions and additional information about the docket available at http://www.epa.gov/dockets.

    FOR FURTHER INFORMATION CONTACT:

    Susan Lewis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address: [email protected]

    SUPPLEMENTARY INFORMATION:

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

    You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

    • Crop production (NAICS code 111).

    • Animal production (NAICS code 112).

    • Food manufacturing (NAICS code 311).

    • Pesticide manufacturing (NAICS code 32532).

    B. How can I get electronic access to other related information?

    You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

    C. How can I file an objection or hearing request?

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2014-0346 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before September 8, 2015. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

    In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2014-0346, by one of the following methods:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

    Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001.

    Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

    Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

    II. Summary of Petitioned-For Tolerance

    In the Federal Register of August 1, 2014 (79 FR 44729) (FRL-9911-67), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 4E8264) by IR-4, IR-4 Project Headquarters, Rutgers, The State University of New Jersey, 500 College Road East, Suite 201 W, Princeton, NJ 08450. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of the fungicide prohexadione calcium, calcium 3-oxido-5-oxo-4-propionylcyclohex-3-enecarboxylate, in or on strawberry at 0.3 parts per million (ppm) and watercress at 2.0 ppm. That document referenced a summary of the petition prepared by BASF Corporation, the registrant, which is available in the docket, http://www.regulations.gov. A comment was received on the notice of filing. EPA's response to these comments is discussed in Unit IV.C.

    Based upon review of the data supporting the petition, EPA has amended the tolerance for watercress from what the petitioner requested. The reason for this change is explained in Unit IV.D.

    III. Aggregate Risk Assessment and Determination of Safety

    Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue . . . .”

    Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for prohexadione calcium including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with prohexadione calcium follows.

    A. Toxicological Profile

    EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

    The most sensitive effect in the prohexadione toxicity database by oral exposure is kidney toxicity in dogs both for subchronic and chronic durations. Minor hematological changes (decreased white blood cell counts in males), and fore-stomach hyperplasia were seen only at very high doses in rodents. No dermal toxicity was observed up to the limit dose of 1,000 milligram/kilogram/day (mg/kg/day). There was no evidence of neurotoxicity in either of the neurotoxicity screening batteries up to or exceeding the limit dose.

    In rats and rabbits, no increased quantitative or qualitative pre- or postnatal susceptibility was observed. In rats, no maternal or developmental toxicity was observed up to the limit dose (1,000 mg/kg/day). Three developmental studies in rabbits are available in the toxicological database for prohexadione calcium. In one study, late abortions occurred during GD 24-29 at 200 mg/kg/day, with increased mortality in maternal animals (GD 15-24) also noted at this dose. In another rabbit developmental study, two premature deliveries (on GD 24 and 26) were noted at the highest dose tested (350 mg/kg/day) with no developmental effects observed. No maternal or developmental effects were seen in a third rabbit developmental study up to 150 mg/kg/day. In the 2-generation reproductive toxicity study with rats, parental toxicity (minimal mortality) occurred at a dose well below the dose that caused decreases in offspring body weight (3, 850 mg/kg/day).

    Prohexadione calcium is classified as not likely to be carcinogenic to humans based on lack of evidence of carcinogenicity in rats and mice.

    Specific information on the studies received and the nature of the adverse effects caused by prohexadione calcium as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in document Prohexadione Calcium. Section 3 Registration for Use on Strawberry and Watercress. Human Health Risk Assessment on pages 11-14 in docket ID number EPA-HQ-OPP-2014-0346.

    B. Toxicological Points of Departure/Levels of Concern

    Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which no adverse effects are observed (the NOAEL) and the lowest dose at which adverse effects of concern are identified (the LOAEL). Uncertainty/safety factors (U/SF) are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.

    A summary of the toxicological endpoints for prohexadione calcium used for human risk assessment is shown in the Table of this unit. Since the assessment in 2011, (November 18, 2011) (76 FR 71459) (FRL-9326-4), the Agency has reevaluated the endpoints and determined that the previously identified dermal endpoints are no longer appropriate.

    Table—Summary of Toxicological Doses and Endpoints for Prohexadione Calcium for Use in Human Health Risk Assessment Exposure/scenario Point of departure and uncertainty/safety factors RfD, PAD, LOC for risk assessment Study and toxicological effects Acute dietary (All populations) No endpoint attributable to a single dose and appropriate for the U.S. general population was seen in the prohexadione calcium toxicological database; therefore, an acute dietary point of departure for the general U.S. population was not established. Chronic dietary (All populations) NOAEL = 20 mg/kg/day
  • UFA = 10x
  • UFH = 10x
  • FQPA SF = 1x
  • Chronic RfD = cPAD = 0.20 mg/kg/day Chronic toxicity—Dog. LOAEL = 200 mg/kg/day based on histopathological changes in the kidneys (dilated basophilic tubules) and increased urinary volume and sodium concentration.
    Incidental oral short-term (1 to 30 days) and intermediate-term
  • (1 to 6 months)
  • NOAEL= 80 mg/kg/day
  • UFA = 10x
  • UFH = 10x
  • FQPA SF = 1x
  • LOC for MOE = 100 90-Day oral toxicity—Dog. LOAEL = 400 mg/kg/day based on moderate cortical areas of dilated basophilic tubules in the kidneys and decreased potassium levels.
    Dermal short-term (1 to 30 days) and intermediate-term (1 to 6 months) Short-term and intermediate-term dermal endpoints were not selected since there were no adverse dermal or systemic effects observed in the 28-day dermal study in rats. There was also no evidence of increased quantitative or qualitative pre- or postnatal sensitivity in the prohexadione calcium database. Therefore no concern for any duration of dermal exposure and no dermal endpoints are required Inhalation short-term (1 to 30 days) and intermediate-term (1 to 6 months) NOAEL= 40 mg/kg/day
  • UFA = 10x
  • UFH = 10x
  • FQPA SF = 1x
  • Inhalation assumed equivalent to oral
  • LOC for MOE = 100 Prenatal Developmental Toxicity—Rabbit. Maternal LOAEL = 200 mg/kg/day based on increased mortality, and abortions.
    Cancer (Oral, dermal, inhalation) “Not likely to be carcinogenic to humans” based upon lack of evidence of carcinogenicity in rats and mice. No evidence of carcinogenic potential, therefore, cancer risk assessment is not required. FQPA SF = Food Quality Protection Act Safety Factor. LOAEL = lowest-observed-adverse-effect-level. LOC = level of concern. mg/kg/day = milligram/kilogram/day. MOE = margin of exposure. NOAEL = no-observed-adverse-effect-level. PAD = population adjusted dose (a = acute, c = chronic). RfD = reference dose. UF = uncertainty factor. UFA = extrapolation from animal to human (interspecies). UFH = potential variation in sensitivity among members of the human population (intraspecies).
    C. Exposure Assessment

    1. Dietary exposure from food and feed uses. In evaluating dietary exposure to prohexadione calcium, EPA considered exposure under the petitioned-for tolerances as well as all existing prohexadione calcium tolerances in 40 CFR 180.547. EPA assessed dietary exposures from prohexadione calcium in food as follows:

    i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

    No such effects were identified in the toxicological studies for prohexadione calcium; therefore, a quantitative acute dietary exposure assessment is unnecessary.

    ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA Nationwide Health and Nutrition Examination Survey, What We Eat In America (NHANES/WWEIA) conducted from 2003-2008. As to residue levels in food, the chronic dietary analysis assumed Dietary Exposure Evaluation Model (DEEM) (ver. 7.81) default processing factors, 100 percent crop treated (PCT) and tolerance-level residues for all commodities.

    iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that prohexadione calcium does not pose a cancer risk to humans. Therefore, a dietary exposure assessment for the purpose of assessing cancer risk is unnecessary.

    iv. Anticipated residue and percent crop treated (PCT) information. EPA did not use anticipated residue or PCT information in the dietary assessment for prohexadione calcium. Tolerance-level residues and/or 100 PCT were assumed for all food commodities.

    2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for prohexadione calcium in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of prohexadione calcium. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm.

    Based on the Tier 1 Rice Model and Screening Concentration in Ground Water (SCI-GROW) model, the estimated drinking water concentrations (EDWCs) of prohexadione calcium for chronic exposures for non-cancer assessments are estimated to be 170 parts per billion (ppb) for surface water and 0.137 ppb for ground water.

    Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For chronic dietary risk assessment, the water concentration of value 170 ppb was used to assess the contribution to drinking water.

    3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets).

    Prohexadione calcium is currently registered for the following uses that could result in residential exposures: Residential lawns, ornamentals, athletic fields, parks, and golf courses. EPA assessed residential exposure using the following assumptions: Short-term residential handler exposures may result from adults applying prohexadione calcium to residential lawns and ornamentals. The Agency assessed inhalation exposures for adult handlers applying manually-pressurized handwand applications to bedding plants. Short-term exposure is also possible for post-application incidental oral exposures of children 1-<2 years old. The Agency assessed hand-to-mouth exposures and incidental soil ingestions from applications to turf for children. Intermediate- and long-term exposures are not expected since there are no registered or proposed uses of prohexadione calcium that result in intermediate- or long-term residential exposures. Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at http://www.epa.gov/pesticides/science/residential-exposure-sop.html.

    4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

    EPA has not found prohexadione calcium to share a common mechanism of toxicity with any other substances, and prohexadione calcium does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that prohexadione calcium does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

    D. Safety Factor for Infants and Children

    1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act Safety Factor (FQPA SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data are available to EPA support the choice of a different factor.

    2. Prenatal and postnatal sensitivity. There are no residual uncertainties for prenatal and postnatal toxicity and there is no evidence of increased qualitative or quantitative susceptibility of any kind for fetuses and offspring in both rats and rabbits.

    3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1X. That decision is based on the following findings:

    i. The toxicity database for prohexadione calcium is complete.

    ii. There is no indication that prohexadione calcium is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

    iii. There is no evidence that prohexadione calcium results in increased susceptibility in in utero rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study.

    iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT, tolerance-level residues, and DEEM (Ver 7.81) default processing factors. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to prohexadione calcium in drinking water. EPA used similarly conservative assumptions to assess post-application exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by prohexadione calcium.

    E. Aggregate Risks and Determination of Safety

    EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

    1. Acute risk. An acute aggregate risk assessment takes into account acute exposure estimates from dietary consumption of food and drinking water. No adverse effect resulting from a single oral exposure was identified and no acute dietary endpoint was selected. Therefore, prohexadione calcium is not expected to pose an acute risk.

    2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to prohexadione calcium from food and water will utilize 19% of the cPAD for children 1-2 years old, the population group receiving the greatest exposure. Based on the explanation in Unit III.C.3., regarding residential use patterns, chronic residential exposure to residues of prohexadione calcium is not expected.

    3. Short-term risk. Short-term aggregate exposure takes into account short-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

    Prohexadione calcium is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to prohexadione calcium.

    Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 14,000 for adults and 2,100 for children. Because EPA's level of concern for prohexadione calcium is a MOE of 100 or below, these MOEs are not of concern.

    4. Intermediate-term risk. Intermediate-term aggregate exposure takes into account intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

    An intermediate-term adverse effect was identified; however, prohexadione calcium is not registered for any use patterns that would result in intermediate-term residential exposure. Intermediate-term risk is assessed based on intermediate-term residential exposure plus chronic dietary exposure. Because there is no intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess intermediate-term risk), no further assessment of intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating intermediate-term risk for prohexadione calcium.

    5. Aggregate cancer risk for U.S. population. Based on the lack of evidence of carcinogenicity in two adequate rodent carcinogenicity studies, prohexadione calcium is not expected to pose a cancer risk to humans.

    6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to prohexadione calcium residues.

    IV. Other Considerations A. Analytical Enforcement Methodology

    Adequate enforcement methodology (BASF Analytical Method D9601 and 564/0) is available to enforce the tolerance expression for residues of prohexadione calcium in watercress and strawberry samples.

    The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: [email protected]

    B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

    The Codex has not established a MRL for prohexadione calcium in/on strawberries and watercress.

    C. Response to Comments

    One comment was received in response to the notice of filing of IR-4's petition. The commenter stated this use should be denied due to toxicity to bees and that all use of chemicals should be stopped. The comment primarily appears directed to the registration of the pesticide under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), but to the extent the comment is directed at the present tolerance action, the Agency understands the commenter's concerns and recognizes that some individuals believe that pesticides should be banned on agricultural crops. However, the existing legal framework provided by section 408 of FFDCA states that tolerances may be set when persons seeking such tolerances or exemptions have demonstrated that the pesticide meets the safety standard imposed by that statute. This citizen's comment appears to be directed at the underlying statute and not EPA's implementation of it; the citizen has made no contention that EPA has acted in violation of the statutory framework. As to bees the EPA will consider impacts to the environment and non-target species under the authority of FIFRA.

    D. Revisions to Petitioned-For Tolerances

    The tolerance on watercress has been revised from what was proposed in the initial petition. EPA is increasing the proposed tolerance for residues in/on watercress from 2 ppm to 4.0 ppm based on the available watercress field trial data and the OECD tolerance calculation procedure.

    V. Conclusion

    Therefore, tolerances are established for residues of prohexadione calcium, calcium 3-oxido-5-oxo-4-propionylcyclohex-3-enecarboxylate, in or on strawberry at 0.30 ppm and watercress at 4.0 ppm.

    VI. Statutory and Executive Order Reviews

    This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

    Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), do not apply.

    This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq.).

    This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

    VII. Congressional Review Act

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

    List of Subjects in 40 CFR Part 180

    Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.

    Dated: June 22, 2015. Daniel J. Rosenblatt, Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

    PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: Authority:

    21 U.S.C. 321(q), 346a and 371.

    2. In § 180.547, add alphabetically the following commodities to the table in paragraph (a) to read as follows:
    § 180.547 Prohexadione calcium; tolerances for residues.

    (a) * * *

    Commodity Parts per million *    *    *    *    * Strawberry 0.30 Watercress 4.0
    [FR Doc. 2015-16419 Filed 7-7-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2014-0284; FRL-9927-85] S-metolachlor; Pesticide Tolerances AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    This regulation establishes tolerances for residues of S-metolachlor in or on multiple commodities which are identified and discussed later in this document. Interregional Research Project Number 4 (IR-4) requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).

    DATES:

    This regulation is effective July 8, 2015. Objections and requests for hearings must be received on or before September 8, 2015, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

    ADDRESSES:

    The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2014-0284, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory Public Docket (OPP Docket) in the Environmental Protection Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW., Washington, DC 20460-0001. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OPP Docket is (703) 305-5805. Please review the visitor instructions and additional information about the docket available at http://www.epa.gov/dockets.

    FOR FURTHER INFORMATION CONTACT:

    Susan Lewis, Registration Division (7505P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address: [email protected]

    SUPPLEMENTARY INFORMATION:

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

    You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:

    • Crop production (N AICS code 111).

    • Animal production (NAICS code 112).

    • Food manufacturing (NAICS code 311).

    • Pesticide manufacturing (NAICS code 32532).

    B. How can I get electronic access to other related information?

    You may access a frequently updated electronic version of EPA's tolerance regulations at 40 CFR part 180 through the Government Printing Office's e-CFR site at http://www.ecfr.gov/cgi-bin/text-idx?&c=ecfr&tpl=/ecfrbrowse/Title40/40tab_02.tpl.

    C. How can I file an objection or hearing request?

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2014-0284 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before September 8, 2015. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

    In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2014-0284, by one of the following methods:

    Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Do not submit electronically any information you consider to be CBI or other information whose disclosure is restricted by statute.

    Mail: OPP Docket, Environmental Protection Agency Docket Center (EPA/DC), (28221T), 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001.

    Hand Delivery: To make special arrangements for hand delivery or delivery of boxed information, please follow the instructions at http://www.epa.gov/dockets/contacts.html.

    Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at http://www.epa.gov/dockets.

    II. Summary of Petitioned-For Tolerance

    In the Federal Register of December 17, 2014 (79 FR 75107) (FRL-9918-90), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 4E8248) by IR-4 500 College Road East, Suite 201 W, Princeton, NJ 08540, requests to establish a tolerance in 40 CFR part 180 for residues of S-metolachlor in or on the raw agricultural commodity lettuce at 1.5 parts per million (ppm); vegetable, cucurbit group 9 at 0.50 ppm; vegetable, fruiting, group 8-10, except tabasco pepper at 0.10 ppm; low growing berry subgroup 13-07G except cranberry at 0.40 ppm; and sunflower subgroup 20B at 0.50 ppm and the concurrent deletion of the existing tolerances for okra; vegetable, fruiting, group 8 except tabasco pepper; cucumber; melon subgroup 9A; pumpkin; squash, winter; and sunflower, seed. That document referenced a summary of the petition prepared by Syngenta Crop Protection, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

    Based upon review of the data supporting the petition, EPA has modified the levels at which some of the tolerances are being established. The reason for these changes are explained in Unit IV.C.

    III. Aggregate Risk Assessment and Determination of Safety

    Section 408(b)(2)(A)(i) of FFDCA allows EPA to establish a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the tolerance is “safe.” Section 408(b)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Section 408(b)(2)(C) of FFDCA requires EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .”

    Consistent with FFDCA section 408(b)(2)(D), and the factors specified in FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action. EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for S-metolachlor including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with S-metolachlor follows.

    A. Toxicological Profile

    EPA has evaluated the available toxicity data and considered its validity, completeness, and reliability as well as the relationship of the results of the studies to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.

    The existing toxicological database is primarily comprised of studies conducted with metolachlor. However, bridging studies indicate that the metolachlor toxicology database can be used to assess toxicity for S-metolachlor. In subchronic (metolachlor and S-metolachlor) and chronic (metolachlor) toxicity studies in dogs and rats decreased body weight and body weight (bw) gain were the most commonly observed effects. No systemic toxicity was observed in rabbits when metolachlor was administered dermally. There was no evidence of neurotoxic effects in the available toxicity studies, and there is no evidence of Immunotoxicity in the submitted mouse Immunotoxicity study.

    Prenatal developmental studies in the rat and rabbit with both metolachlor and S-metolachlor revealed no evidence of a qualitative or quantitative susceptibility in fetal animals. A 2-generation reproduction study with metolachlor in rats showed no evidence of parental or reproductive toxicity. There are no residual uncertainties with regard to pre- and/or postnatal toxicity.

    Metolachlor has been evaluated for carcinogenic effects in the mouse and the rat. Metolachlor did not cause an increase in tumors of any kind in mice. In rats, metolachlor caused an increase in benign liver tumors in rats, but this increase was seen only at the highest dose tested and was statistically significant compared to controls only in females. There was no evidence of mutagenic or cytogenetic effects in vivo or in vitro. Based on this evidence, EPA has concluded that metolachlor does not have a common mechanism of carcinogenicity with acetochlor and alachlor, compounds that are structurally similar to metolachlor. Metolachlor has been classified as a Group C, possible human carcinogen, based on liver tumors in rats at the highest dose tested (HDT).

    Taking into account the qualitatively weak evidence on carcinogenic effects and the fact that the increase in benign tumors in female rats occurs at a dose 1,500 times the chronic reference dose (cRfD), EPA has concluded that the cRfD is protective of any potential cancer effect.

    Specific information on the studies received and the nature of the adverse effects caused by S-metolachlor as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in the document “S-metolachlor—Risk Assessment for Establishment of Tolerances for New Uses on Lettuce, Low Growing Berry Subgroup 13-07G, except Cranberry; Vegetable, Cucurbit, Group 9; Sunflower subgroup 20B; Vegetable, Fruiting, Group 8-10; except Tabasco Pepper and Okra” on pp. 40 in docket ID number EPA-HQ-OPP-2014-0284.

    B. Toxicological Points of Departure/Levels of Concern

    Once a pesticide's toxicological profile is determined, EPA identifies toxicological points of departure (POD) and levels of concern to use in evaluating the risk posed by human exposure to the pesticide. For hazards that have a threshold below which there is no appreciable risk, the toxicological POD is used as the basis for derivation of reference values for risk assessment. PODs are developed based on a careful analysis of the doses in each toxicological study to determine the dose at which the NOAEL and the LOAEL are identified. Uncertainty/safety factors are used in conjunction with the POD to calculate a safe exposure level—generally referred to as a population-adjusted dose (PAD) or a reference dose (RfD)—and a safe margin of exposure (MOE). For non-threshold risks, the Agency assumes that any amount of exposure will lead to some degree of risk. Thus, the Agency estimates risk in terms of the probability of an occurrence of the adverse effect expected in a lifetime. For more information on the general principles EPA uses in risk characterization and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/factsheets/riskassess.htm.

    A summary of the toxicological endpoints for S-metolachlor used for human risk assessment is shown in Table 1 of this unit.

    Table 1—Summary of Toxicological Doses and Endpoints for S-metolachlor for Use in Human Health Risk Assessment Exposure/scenario Point of departure and uncertainty/safety
  • factors
  • RfD, PAD, LOC for risk assessment Study and toxicological effects
    Acute dietary (General population including infants and children) NOAEL = 300 mg/kg/day Acute RfD = 3.0 mg/kg/day Developmental Toxicity Study—Rat (metolachlor). UFA = 10x
  • UFH = 10x
  • FQPA SF = 1x.
  • aPAD = 3.0 mg/kg/day LOAEL = 1,000 mg/kg/day based increased incidence of death, clinical signs (clonic and/or tonic convulsions, excessive salivation, urine-stained abdominal fur and/or excessive lacrimation), and decreased body weight gain.
    Chronic dietary (All populations) NOAEL= 9.7 mg/kg/day Chronic RfD = 0.097 mg/kg/day One Year Chronic Toxicity—Dog (metolachlor). UFA = 10x
  • UFH = 10x
  • FQPA SF = 1x.
  • cPAD = 0.097 mg/kg/day LOAEL = 33 mg/kg/day based decreased body weight gain in females.
    Incidental oral short-term (1 to 30 days) NOAEL= 50 mg/kg/day LOC for MOE = 100 Developmental Toxicity Study—Rat (S-metolachlor). UFA = 10x
  • UFH = 10x
  • FQPA SF = 1x.
  • LOAEL = 500 mg/kg/day based on increased incidence of clinical signs, decreased body weight/body weight gain, food consumption and food efficiency seen in maternal animals.
    Inhalation short-term (1 to 30 days) Inhalation (or oral) study NOAEL= 50 mg/kg/day (inhalation absorption rate = 100%) LOC for MOE = 1,000 Developmental Toxicity Study—Rat (S-metolachlor). UFA = 10x
  • UFH = 10x
  • FQPA SF = 10x UFDB.
  • LOAEL = 500 mg/kg/day based on increased incidence of clinical signs, decreased body weight/body weight gain, food consumption and food efficiency seen at the LOAEL in maternal animals.
    Cancer (all routes) Metolachlor has been classified as a Group C carcinogen with risk quantitated using a non-linear RfD approach. FQPA SF = Food Quality Protection Act Safety Factor. LOAEL = lowest-observed-adverse-effect-level. LOC = level of concern. Mg/kg/day = milligram/kilogram/day. MOE = margin of exposure. NOAEL = no-observed-adverse-effect-level. PAD = population adjusted dose (a = acute, c = chronic). RfD = reference dose. UF = uncertainty factor. UFA = extrapolation from animal to human (interspecies). UFDB = to account for the absence of data or other data deficiency. UFH = potential variation in sensitivity among members of the human population (intraspecies).
    C. Exposure Assessment

    1. Dietary exposure from food and feed uses. In evaluating dietary exposure to S-metolachlor, EPA considered exposure under the petitioned-for tolerances as well as all existing S-metolachlor tolerances in 40 CFR 180.368. EPA assessed dietary exposures from S-metolachlor in food as follows:

    i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure.

    Such effects were identified for S-metolachlor. In estimating acute dietary exposure, EPA used food consumption information from the United States Department of Agriculture's (USDA) National Health and Nutrition Examination Survey/What We Eat in America, (NHANES/WWEIA). As to residue levels in food, EPA assumed tolerance level residues and 100 percent crop treated (PCT).

    ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA's NHANES/WWEIA. As to residue levels in food, EPA assumed tolerance level residues and 100 PCT.

    iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that a nonlinear RfD approach is appropriate for assessing cancer risk to S-metolachlor. Therefore, a separate quantitative cancer exposure assessment is unnecessary since the chronic dietary risk estimate will be protective of potential cancer risk.

    iv. Anticipated residue and PCT information. EPA did not use anticipated residue or PCT information in the dietary assessment for S-metolachlor. Tolerance level residues and 100 PCT were assumed for all food commodities.

    2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for S-metolachlor in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of S-metolachlor. Further information regarding EPA drinking water models used in pesticide exposure assessment can be found at http://www.epa.gov/oppefed1/models/water/index.htm.

    The Agency assessed parent metolachlor, and the metabolites CGA-51202 (metolachlor-OA), CGA-40172, and CGA-50720 together in the drinking water assessment using a total toxic residues (TTR) approach where half-lives were recalculated to collectively account for the parent and the combined residues of concern.

    Based on the Surface Water Concentration Calculator (SWCC), the Pesticide Root Zone Model Ground Water (PRZM GW), and the Screening Concentration in Ground Water (SCI-GROW), the estimated drinking water concentrations (EDWCs) of S-metolachlor and its metabolites for acute exposures are estimated to be 371 parts per billion (ppb) for surface water and 1,060 ppb for ground water, and for chronic exposures are estimated to be 43.70 ppb for surface water and 14.3 ppb in ground water.

    Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For acute dietary risk assessment, the water concentration value of 1,060 ppb was used to assess the contribution to drinking water. For chronic dietary risk assessment, the water concentration of value 43.70 ppb was used to assess the contribution to drinking water.

    3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticide, and flea and tick control on pets).

    S-metolachlor is currently registered for the following uses that could result in residential exposures: On commercial (sod farm) and residential warm-season turf grasses and other non-crop land including golf courses, sports fields, and ornamental gardens. EPA assessed residential exposure using the following assumptions: For residential handlers, short-term inhalation exposure is expected. The following scenarios were evaluated:

    • Mixing/loading/applying gardens/trees with manually-pressurized hand wand, hose-end sprayer, backpack, and sprinkler can equipment.

    • Mixing/loading/applying lawns/turf with manually-pressurized hand wand, hose-end sprayer, backpack, and sprinkler can equipment.

    For residential post-application, there is the potential for short-term incidental oral exposure for individuals exposed as a result of being in an environment that has been previously treated with S-metolachlor. The quantitative exposure/risk assessment for residential post-application exposures is based on the following scenario:

    • Hand-to-mouth incidental oral exposure of children 1-2 years old playing on turf treated with S-metolachlor.

    Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at http://www.epa.gov/pesticides/science/residential-exposure-sop.html.

    4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”

    EPA has not found S-metolachlor to share a common mechanism of toxicity with any other substances, and S-metolachlor does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that S-metolachlor does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

    D. Safety Factor for Infants and Children

    1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10×) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act Safety Factor (FQPA SF). In applying this provision, EPA either retains the default value of 10×, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

    2. Prenatal and postnatal sensitivity. There was no evidence of increased quantitative or qualitative fetal susceptibility in the prenatal developmental studies in rats and rabbits or in the reproductive toxicity study in rats, with either metolachlor or S-metolachlor. In general, significant developmental toxicity was not seen in rats or rabbits with either compound. The only effects observed in fetal animals were in the rat prenatal developmental study and included slightly decreased number of implantations per dam, decreased number of live fetuses/dam, increased number of resorptions/dam and significant decrease in mean fetal bw. These effects occurred at maternally toxic doses (1,000 milligram/kilogram/day (mg/kg/day)).

    3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1× for all scenarios except inhalation. For inhalation scenarios a 10× database uncertainty factor (UF) still applies. This decision is based on the following findings:

    i. The toxicology database for metolachlor and S-metolachlor is complete, with the exception of a required subchronic inhalation study for metolachlor. As noted above, a 10× data base UF will be applied only for assessing risk for inhalation exposure scenarios.

    ii. There is no indication that S-metolachlor is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity.

    iii. There is no evidence that S-metolachlor results in increased susceptibility in in utero rats or rabbits in the prenatal developmental studies or in young rats in the 2-generation reproduction study.

    iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to S-metolachlor in drinking water. EPA used similarly conservative assumptions to assess post-application incidental oral exposure of children 1<2 years old. These assessments will not underestimate the exposure and risks posed by S-metolachlor.

    E. Aggregate Risks and Determination of Safety

    EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

    1. Acute risk. Using the exposure assumptions discussed in this unit for acute exposure, the acute dietary exposure from food and water to S-metolachlor will occupy 6.1% of the aPAD for all infants (less than 1 year old), the population group receiving the greatest exposure.

    2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to S-metolachlor from food and water will utilize 6.8% of the cPAD for children 1-2 years old, the population group receiving the greatest exposure. Based on the explanation in Unit III.C.3., regarding residential use patterns, chronic residential exposure to residues of S-metolachlor is not expected.

    3. Short-term risk. Short-term aggregate exposure takes into account short-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

    S-metolachlor is currently registered for uses that could result in short-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term residential exposures to S-metolachlor. Potential short-term residential risk scenarios anticipated include adult inhalation handler exposure to turf via backpack sprayer and post-application incidental oral exposure of children playing on treated lawns.

    Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 10,400 for adults and 1,100 for children 1-2 years old. Because EPA's levels of concern for S-metolachlor is a MOE of 1,000 or below for inhalation scenarios (adults) and 100 or below for incidental oral scenarios (children 1-2 years old), these MOEs are not of concern.

    4. Intermediate-term risk. Intermediate-term aggregate exposure takes into account intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

    An intermediate-term adverse effect was identified; however, S-metolachlor is not registered for any use patterns that would result in intermediate-term residential exposure. Because there is no intermediate-term residential exposure and chronic dietary exposure has already been assessed under the appropriately protective cPAD (which is at least as protective as the POD used to assess intermediate-term risk), no further assessment of intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating intermediate-term risk for S-metolachlor.

    5. Aggregate cancer risk for U.S. population. As discussed in Unit III.A, the chronic dietary risk assessment is protective of any potential cancer effects. Based on the results of that assessment, EPA concludes that S-metolachlor is not expected to pose a cancer risk to humans.

    6. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to S-metolachlor residues.

    IV. Other Considerations A. Analytical Enforcement Methodology

    Adequate methodology is available for enforcing the established and recommended tolerances. PAM Vol. II, Pesticide Regulation Section 180.368, lists a gas chromatography with nitrogen-phosphorus detector (GC/NPD) method (Method I) for determining residues in/on plant commodities and a gas chromatography with mass selective detector (GC/MSD) method (Method II) for determining residues in livestock commodities. These methods determine residues of metolachlor and its metabolites as either CGA-37913 or CGA-49751 following acid hydrolysis. Adequate data are also available on the recovery of metolachlor through FDA's Multiresidue Method Testing Protocols which indicate that metolachlor is completely recovered through Method 302.

    B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

    The Codex has not established a MRL for S-metolachlor.

    C. Revisions to Petitioned-For Tolerances

    The tolerance being established for the sunflower subgroup 20B is 1.0 ppm, not 0.50 ppm as proposed. This is due to the Agency using the Organization for Economic Cooperation and Development (OECD) Tolerance Calculation procedures, which determined that a tolerance of 1.0 ppm is appropriate based on entry of the 4 field trials for pre-emergence application.

    V. Conclusion

    Therefore, tolerances are established for residues of S-metolachlor in or on lettuce at 1.5 ppm; the low growing berry subgroup 13-07G, except cranberry at 0.40 ppm; the sunflower subgroup 20B at 1.0 ppm; the vegetable, cucurbit group 9 at 0.50 ppm; and the vegetable, fruiting, group 8-10, except tabasco pepper at 0.10 ppm. Additionally, due to the establishment of the tolerances listed above, the existing tolerances for vegetable, fruiting, group 8, except tabasco pepper; cucumber; melon subgroup 9A; okra; pumpkin; squash, winter; and sunflower, seed are removed as they are unnecessary.

    VI. Statutory and Executive Order Reviews

    This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

    Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), do not apply.

    This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq.).

    This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

    VII. Congressional Review Act

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

    List of Subjects in 40 CFR Part 180

    Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.

    Dated: June 26, 2015. Susan Lewis, Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

    PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: Authority:

    21 U.S.C. 321(q), 346a and 371.

    2. In § 180.368: a. Remove the entries “Cucumber,” “Melon subgroup 9A,” “Okra,” “Pumpkin,” “Squash, winter,” “Sunflower, seed,” and “Vegetable, fruiting, group 8, except tabasco pepper,” in paragraph (a)(2). b. Add alphabetically the following commodities to the table in paragraph (a)(2).

    The amendments read as follows:

    § 180.368 Metolachlor; tolerances for residues.

    (a) * * *

    (2) * * *

    Commodity Parts per
  • million
  • *    *    *    *    * Lettuce 1.5 Low growing berry subgroup 13-07G, except cranberry 0.40 *    *    *    *    * Sunflower subgroup 20B 1.0 *    *    *    *    * Vegetable, cucurbit group 9 0.50 *    *    *    *    * Vegetable, fruiting, group 8-10, except tabasco pepper 0.10 *    *    *    *    *
    [FR Doc. 2015-16523 Filed 7-7-15; 8:45 am] BILLING CODE 6560-50-P
    DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration 50 CFR Part 300 [Docket No. 141222999-5561-02] RIN 0648-BE71 International Fisheries; Pacific Tuna Fisheries; 2015 and 2016 Commercial Fishing Restrictions for Pacific Bluefin Tuna in the Eastern Pacific Ocean AGENCY:

    National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.

    ACTION:

    Final rule.

    SUMMARY:

    The National Marine Fisheries Service (NMFS) is issuing regulations under the Tuna Conventions Act to implement Resolution C-14-06 of the Inter-American Tropical Tuna Commission (IATTC or the Commission) by establishing limits on U.S. commercial catch of Pacific bluefin tuna from waters of the IATTC Convention Area for 2015 and 2016. This action is necessary for the United States to satisfy its obligations as a member of the IATTC.

    DATES:

    The final rule is effective July 9, 2015.

    ADDRESSES:

    Copies of the Regulatory Impact Review (RIR), Environmental Assessment, and other supporting documents are available via the Federal eRulemaking Portal: http://www.regulations.gov, docket NOAA-NMFS-2014-0151, or contact with the Regional Administrator, William W. Stelle, Jr., NMFS West Coast Region, 7600 Sand Point Way NE., Bldg 1, Seattle, WA 98115-0070, or [email protected]

    FOR FURTHER INFORMATION CONTACT:

    Celia Barroso, NMFS, [email protected], 562-432-1850.

    SUPPLEMENTARY INFORMATION:

    Background

    On March 9, 2015, NMFS published a proposed rule in the Federal Register (80 FR 12375) to revise regulations at 50 CFR part 300, subpart C, to implement Resolution C-14-06, “Measures for the Conservation and Management of Bluefin Tuna in the Eastern Pacific Ocean, 2015-2016.” This resolution was adopted by the IATTC at its 88th meeting in October 2014. The public comment period was open until April 8, 2015, and NMFS accepted public comment at a hearing held at the NMFS West Coast Region Long Beach office on March 26, 2015. Additionally, NMFS solicited public comment on the proposed trip limits, which are a new management tool in U.S. West Coast management of fisheries for Pacific bluefin tuna. The proposed trip limits were based on a recommendation from the Pacific Fishery Management Council (Council) at its November 2014 meeting.

    The final rule is implemented under the authority of the Tuna Conventions Act (16 U.S.C. 951 et seq.), which directs the Secretary of Commerce, after approval by the Secretary of State, to promulgate regulations as may be necessary to implement resolutions adopted by the IATTC. This authority has been delegated to NMFS.

    The proposed rule contains additional background information, including information on the IATTC, the international obligations of the United States as an IATTC member, and the need for regulations. Additional information on changes since the proposed rule is included below.

    New Regulations

    This final rule establishes catch limits for U.S. commercial vessels that catch Pacific bluefin tuna in the Convention Area (defined as the waters of the eastern Pacific Ocean (EPO)) for 2015 and 2016. Since 1998, conservation resolutions adopted by the IATTC have further defined the Convention Area as the area bounded by the coast of the Americas, the 50° N. and 50° S. parallels, and the 150° W. meridian. In 2015, the catch limit for the entire U.S. fleet is 425 metric tons (mt) with an initial trip limit 1 of 25 mt per vessel. When NMFS anticipates that the total catch for the fleet has reached 375 mt, NMFS will impose a 2-mt trip limit for each vessel that will be in effect until the total catch for 2015 reaches 425 mt. For calendar year 2016, NMFS will announce the catch limit in a Federal Register notice; NMFS will calculate the 2016 catch limit to ensure compliance with Resolution C-14-06 (i.e., not to exceed 425 mt in either year and if catch exceeds 300 mt in 2015, then catch will be limited to 200 mt in 2016). The 2016 catch limit will be calculated as the remainder from the 2015 catch limit (i.e., how much of 425 mt was not caught) added to 175 mt, except as follows: (1) If 175 mt or less is caught in 2015, then the 2016 catch limit is 425 mt; (2) if greater than 300 mt and up to 400 mt are caught in 2015, then the catch limit in 2016 will be 200 mt; or (3) if greater than 425 mt is caught in 2015, then the catch limit in 2016 will be further reduced by the amount in excess of 425 mt (i.e., the remainder of the 600 mt limit for 2015-2016). The fishery in 2016 will also be subject to an initial 25-mt trip limit until catch is within 50 mt of the 2016 catch limit, after which a 2-mt trip limit will be imposed.

    1 This rule defines “trip limit” as the total allowable amount of a species by weight of fish that may be retained on board, transshipped, or landed during a single fishing trip.

    When NMFS determines that the catch limit is expected to be reached in 2015 or 2016 (based on landings receipts, data submitted in logbooks, and other available fishery information), NMFS will prohibit commercial fishing for, or retention of, Pacific bluefin tuna for the remainder of the calendar year. NMFS will publish a notice in the Federal Register announcing that the targeting, retaining, transshipping or landing for Pacific bluefin tuna will be prohibited on a specified effective date through the end of that calendar year. Upon that effective date, a commercial fishing vessel of the United States may not be used to target, retain on board, transship, or land Pacific bluefin tuna captured in the Convention Area during the period specified in the announcement, with the exception that any Pacific bluefin tuna already on board a fishing vessel on the effective date may be retained on board, transshipped, and/or landed, to the extent authorized by applicable laws and regulations, provided that they are landed within 14 days after the effective date.

    Catch Monitoring, Catch Limit Announcements

    NMFS will provide updates on Pacific bluefin tuna catches in the Convention Area to the public via the IATTC listserv and the West Coast Region Web site: http://www.westcoast.fisheries.noaa.gov/fisheries/migratory_species/bluefin_tuna_harvest_status.html. Additionally, NMFS will report preliminary estimates of Pacific bluefin tuna catch between monthly intervals if and when commercial catches approach the limits to help participants in the U.S. commercial fishery plan for the possibility of catch limits being reached. NMFS will notify industry when catch approaches 250 mt in 2015.

    In 2015, NMFS will publish up to two Federal Register notices after the final rule is issued, imposing inseason management measures. First, NMFS will publish a notice when the commercial 2-mt trip limit is imposed (i.e., catch is expected to reach 375 mt). Second, NMFS will publish a notice closing the entire commercial fishery when NMFS determines that the catch limit is expected to be met.

    In 2016, NMFS will publish up to three notices in the Federal Register. The first notice will announce the 2016 catch limit. A second notice will announce the 2-mt trip limit, when NMFS determines that the commercial catch is expected to be within 50 mt of the catch limit. NMFS will publish a third notice in the Federal Register when NMFS determines that the catch limit is expected to be reached.

    Public Comments and Responses

    NMFS received eight written public comments and additional comments from attendees to a public hearing held on March 26, 2015, at the NMFS West Coast Region Long Beach office. Comments received were in regard to more than one aspect of the rule and some comments were very similar; therefore, NMFS is responding to the common themes/topics. The responses are summarized below. NMFS did not receive any comments objecting to the 2-mt trip limit when catch is within 50 mt of the catch limit in either 2015 or 2016. One commenter generally supported restrictions on commercial fishing and did not express support or objections to specific measures of the proposed rule.

    Comments that were beyond the scope of this rulemaking are not addressed here. Nonetheless, some of those comments are valuable and NMFS will consider them for future management planning.

    Comment 1: The rule should not include a trip limit (e.g., an initial 20-mt trip limit proposed), or should have a higher trip limit (e.g., up to 50 mt), because it will lead to discards. In support for this point, a commenter noted that a recent record of per trip catches from one vessel exceeded the proposed trip limit. The commenter also stated that fish in excess of the trip limit that are encircled and then released would not survive; therefore, the trip limits do not promote management measures to reduce fishing mortality. Additionally, the ability of vessel operators to catch a small quantity is uncertain. If only large schools are present, the vessel operators may have to forgo catching Pacific bluefin tuna. A comment received at the public hearing also recommended a higher trip limit.

    Response: NMFS agrees that an increase in the trip limit from 20 mt to 25 mt is warranted (for an explanation of the rationale, please see the next section, Changes from the Proposed Rule). NMFS anticipates that increasing the trip limit from the proposed 20 mt to 25 mt will reduce the potential for discards while still sufficiently reducing the rate of harvest to meet the management objectives of providing access to, without exceeding, the full catch limit. Increasing the trip limit beyond 25 mt would make monitoring and timely closure more difficult. Regarding mortality of released fish, other comments received suggest vessel operators could target smaller schools and fish could survive brailing operations. NMFS is unaware of any studies that refute this anecdotal information.

    Comment 2: NMFS should adopt an initial trip limit (e.g., 20-mt trip limit) as proposed because it may alleviate derby-style fishing pressures and the potential for excess supply of Pacific bluefin tuna, and therefore, could make fishery more profitable. In particular, slowing the harvest rate could support development of a local fresh-frozen market for Pacific bluefin tuna in California, whereas large sets are only suitable for canning. Commenters also specifically supported 20 mt as the initial trip limit. The 20-mt trip limit is a good an inseason management tool to ensure that catch limits are not exceeded and reduce the potential for a fishery closure that could require discarding of incidentally caught PBF. A skilled purse seine captain can estimate the size of a set, and release fish alive during the brailing operation, if needed. One commenter suggested trip limits should only be imposed for the short-term, while the overall catch limit is so low.

    Response: NMFS agrees that the initial trip limit (e.g., 20 mt) is a useful management tool in this situation. As explained in the Response to Comment 1, NMFS is implementing an initial trip limit of 25 mt, rather than 20 mt as originally proposed, to address concerns about discards; the higher trip limit is expected to meet the management objectives, including alleviating derby-style fishing pressure. Further, the 2-mt trip limit when catch is within 50 mt of the 2015 or 2016 limit is intended to prevent discards of incidentally caught PBF in non-directed fisheries (e.g. troll and line, drift gillnet). Additionally, the catch and trip limits in this rule are only applicable to 2015 and 2016. If the IATTC adopts subsequent resolutions on the conservation and management of Pacific bluefin tuna, NMFS will evaluate whether trip limits are appropriate management measures at that time.

    Comment 3: Current monitoring and enforcement is inadequate to enforce catch and trip limits, and ensure the biennial catch limits are not exceeded. The proposed trip limit—NMFS assumes this refers to the 20-mt trip limit and not the 2-mt trip limit— incentivizes discards. Further, misreporting could undermine accurate estimates of fishing mortality. Vessel operators should be required to record discards to ensure that the United States does not exceed the catch limits. Without observer coverage, NMFS should estimate the portion of catch discarded dead and include it in the estimate of total U.S. catch of Pacific bluefin tuna. The fishery should be closely monitored to ensure the catch limit is not exceeded.

    Response: NMFS acknowledges that monitoring and enforcement of trip limits can be a problem for fisheries management, but has determined that an initial trip limit of 25 mt can be adequately monitored and enforced. Vessel operators are required to fill out logbooks, which includes all catch, whether kept or returned to sea, and to submit the logbooks to NMFS within 30 days of each landing or transshipment (see 50 CFR 660.708). All catch, including discards, will count toward the catch limits. NMFS intends to work closely with California Department of Fish and Wildlife (CDFW) and vessel operators, as it did in 2014, to monitor catches and landings to ensure limits are not exceeded. In 2014, NMFS received near real-time landings data from CDFW and vessel operators.

    Comment 4: The proposed rule fails to address an objective in ResolutionC-14-06 that only 50 percent of the total catch be comprised of fish less than 30 kilograms (kg). Furthermore, the United States should limit catches even further to 250 mt per year, a level comparable to the 30 percent reduction considered for the recreational fishery.

    Response: Regarding size limits,C-14-06 establishes a goal, but not a requirement. NMFS is promulgating this rule in accordance with the requirements of Resolution C-14-06 with additional provisions (e.g., trip limits) to be able to effectively meet the requirements of the resolution (i.e., not exceeding catch limits). ResolutionC-14-06 and this rule represent commercial catch reductions consistent with recommendations of the IATTC scientific staff (i.e., 20 to 45 percent) to aid in the rebuilding of the stock. More specifically, the catch limits in Resolution C-14-06 (i.e., an average of 300 mt per year) represent a 40 percent reduction from U.S. commercial catch limits in previous resolutions (i.e., 500 mt per year) on the conservation and management of Pacific bluefin tuna. Lastly, requiring that fishermen target and land larger fish (i.e., greater than 30 kg) could lead to discards, as well as additional harvest costs (e.g., search time for schools of larger fish).

    General Comments not Within the Scope of the Rule: NMFS received several comments outside the scope of the proposed rule regarding: Future negotiations tactics by the United States on Pacific bluefin tuna conservation and management measures in the Convention Area, recommendations for additional science needs, improvement of catch monitoring by requiring daily communication between NMFS and vessel owners, requiring full retention of Pacific bluefin tuna, objections to the current catch limit as agreed to in Resolution C-14-06, and the effects of the current fishery conditions for other species targeted by the coastal purse seiners (i.e., sardines and market squid).

    Response to General Comments not Within the Scope of the Rule: NMFS will take these comments and concerns into consideration when developing future positions at upcoming IATTC meetings, as well as developing scientific partnerships to address gaps in knowledge. Regarding daily communication between vessel operators and NMFS, there would be value in increased communication to more closely monitor the fishery. NMFS is considering developing a rule to require vessel operators to notify NMFS upon landing Pacific bluefin tuna. Nonetheless, NMFS will endeavor to promote better cooperation and communication with vessel operators to receive catch data at the time of landing. NMFS views the requirement to log all catches and a requirement to land all catch (i.e., full retention) as having the same goal: To account for all Pacific bluefin tuna caught by U.S. vessels. Vessel operators are currently required to log all catch, which would be counted toward the catch limit. As described in responses above, NMFS is implementing a higher than originally proposed trip limit to address concerns about discards. Regarding other target fisheries (e.g., sardines, market squid), at the time Resolution C-14-06 was adopted (October 2014), the U.S. delegation was unaware of the drastic reductions in the fishery for Pacific sardine that are being imposed because of the reduced biomass estimates. However, the United States would have nonetheless endeavored to make cuts consistent with IATTC scientific staff recommendations to aid in rebuilding of Pacific bluefin tuna.

    Changes From the Proposed Rule

    NMFS received a number of comments expressing concern about the potential for discards resulting from the proposal to set the initial trip limit each year at 20 mt. NMFS has concluded that a higher trip limit of 25 mt is warranted to reduce the potential for discards while still meeting the management objectives (e.g., inseason management). NMFS found that the average landing by a vessel from a trip targeting PBF during 2005 to 2014 was 30.6 mt (ranging from 0.04 mt to 75.8 mt; median is 29.2); 36 percent of these trips included landings up to 25 mt, whereas only 23 percent of the trips included landings up to 20 mt. NMFS concludes that increasing the trip limit to 25 mt will tend to reduce discards while still sufficiently reducing the rate of harvest to meet the objective of providing access to, without exceeding, the full catch limit. Consequently, NMFS is implementing trip limits as recommended by the Council, but increasing the level of the initial trip limit from 20 mt to 25 mt.

    Classification

    The NMFS Assistant Administrator has determined that this rule is consistent with the Tuna Conventions Act and other applicable laws.

    This rule was determined to be not significant for purposes of Executive Order 12866.

    Although there are no new collection-of-information requirements associated with this action that are subject to the Paperwork Reduction Act, existing collection-of-information requirements associated with the Fishery Management Plan for U.S. West Coast Fisheries for Highly Migratory Species (HMS FMP) still apply. These requirements have been approved by the Office of Management and Budget under Control Number 0648-0204. Notwithstanding any other provision of the law, no person is required to respond to, and no person shall be subject to penalty for failure to comply with, a collection-of-information subject to the requirements of the PRA, unless that collection-of-information displays a currently valid OMB control number.

    The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this action would not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here. This final rule contains a change in the trip limit that was published in the proposed action. As a result of public comments, the trip limit was increased from 20 mt to 25 mt. This change is anticipated to result in a minor economic benefit for impacted business entities. No comments were received regarding the certification. Therefore, the certification published with the proposed rule, that this rule is not expected to have a significant economic impact on a substantial number of small entities, is still valid. As a result, a regulatory flexibility analysis was not required and none was prepared.

    The Assistant Administrator for Fisheries has determined that the need to conserve Pacific bluefin tuna and comply with our international obligations constitutes good cause, under 5 U.S.C. 553(d)(3), to waive the requirement for a 30-day delay in effectiveness. Pacific bluefin tuna have migrated in significant numbers into waters off of southern California and commercial purse seine vessels have begun fishing for Pacific bluefin tuna off of the U.S West Coast. If the trip limits implemented by this rule were subject to the 30-day delay in effectiveness, and taking into account that a single trip could catch up to 75 mt, there is potential for a derby-style fishery that would result in exceeding the 425-mt catch limit for 2015 before this rule goes into effect. Although justification exists to waive the 30-day delay in effectiveness, NMFS is implementing a 7-day delay in effectiveness to provide sufficient time for any vessels currently operating to comply with the new regulations; vessels that target Pacific bluefin tuna typically complete their fishing trips within one to two days. As soon as the rule is filed, notice will be sent to inform members of the tuna-fishing industry.

    Therefore, to conserve Pacific bluefin tuna, which are overfished, and to remain in compliance with IATTC Resolution C-14-06, NMFS has determined that implementing these measures 7 days after filing with the Office of Federal Register is in the public's interest.

    List of Subjects in 50 CFR Part 300

    Administrative practice and procedure, Fish, Fisheries, Fishing, Marine resources, Reporting and recordkeeping requirements, Treaties.

    Dated: July 1, 2015. Eileen Sobeck, Assistant Administrator for Fisheries, National Marine Fisheries Service.

    For the reasons set out in the preamble, 50 CFR part 300 is amended as follows:

    PART 300—INTERNATIONAL FISHERIES REGULATIONS Subpart C—Eastern Pacific Tuna Fisheries 1. The authority citation for part 300, subpart C, continues to read as follows: Authority:

    16 U.S.C. 951 et seq.

    2. In § 300.21, add the definition for “Trip limit” in alphabetical order to read as follows:
    § 300.21 Definitions.

    Trip limit means the total allowable amount of a species by weight of fish that may be retained on board, transshipped, or landed from a single fishing trip by a vessel that harvests tuna or tuna-like species.

    3. In § 300.24, revise paragraph (u) to read as follows:
    § 300.24 Prohibitions.

    (u) Use a United States commercial fishing vessel in the Convention Area to target, retain on board, transship or land Pacific bluefin tuna in contravention of § 300.25(h)(3) and (5).

    4. In § 300.25, revise paragraph (h) to read as follows:
    § 300.25 Eastern Pacific fisheries management.

    (h) Pacific bluefin tuna commercial catch limits in the eastern Pacific Ocean for 2015-2016. The following is applicable to the U.S. commercial fishery for Pacific bluefin tuna in the Convention Area in the years 2015 and 2016.

    (1) For the calendar year 2015, all commercial fishing vessels of the United States combined may capture, retain, transship, or land no more than 425 metric tons in the Convention Area.

    (2) In 2016, NMFS will publish a notice in the Federal Register announcing the 2016 catch limit. For the calendar year 2016, all commercial fishing vessels of the United States combined may capture, retain on board, transship, or land no more than the 2016 catch limit. The 2016 catch limit is calculated by adding any amount of the 425 metric ton catch limit that was not caught in 2015, as determined by NMFS, to 175 metric tons, except as follows:

    (i) If 175 metric tons or less are caught in 2015, as determined by NMFS, then the 2016 catch limit is 425 metric tons;

    (ii) If in 2015, greater than 300 metric tons and up to 400 metric tons are caught, as determined by NMFS, then the 2016 catch limit is 200 metric tons; or

    (iii) If greater than 425 metric tons are caught in 2015, as determined by NMFS, then the 2016 catch limit is calculated by subtracting the amount caught in 2015 from 600 metric tons.

    (3) In 2015 and 2016, a 25 metric ton trip limit will be in effect until NMFS anticipates that catch will be within 50 metric tons of the catch limits, after which a 2 metric ton trip limit will be in effect upon publication of a notice in the Federal Register by NMFS.

    (4) After NMFS determines that the catch limits under paragraphs (h)(1) and (2) of this section are expected to be reached by a future date, NMFS will publish a fishing closure notice in the Federal Register announcing the effective date that additional targeting, retaining on board, transshipping or landing Pacific bluefin tuna in the Convention Area shall be prohibited as described in paragraph (h)(5) of this section.

    (5) Beginning on the date announced in the fishing closure notice published under paragraph (h)(4) of this section through the end of the calendar year, a commercial fishing vessel of the United States may not be used to target, retain on board, transship, or land Pacific bluefin tuna captured in the Convention Area, with the exception that any Pacific bluefin tuna already on board a fishing vessel on the effective date of the notice may be retained on board, transshipped, and/or landed, to the extent authorized by applicable laws and regulations, provided such Pacific bluefin tuna is landed within 14 days after the effective date published in the fishing closure notice.

    [FR Doc. 2015-16720 Filed 7-2-15; 4:15 pm] BILLING CODE 3510-22-P
    80 130 Wednesday, July 8, 2015 Proposed Rules DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2015-1383; Directorate Identifier 2015-NE-15-AD] RIN 2120-AA64 Airworthiness Directives; Technify Motors GmbH Reciprocating Engines AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for all Technify Motors GmbH TAE 125-02 reciprocating engines with a dual mass flywheel installed. This proposed AD was prompted by reports of a gearbox drive shaft breaking during starting or restarting of the engine. This proposed AD would require installation of a start phase monitoring system and associated specified software. We are proposing this AD to prevent overload and failure of the gearbox drive shaft, which could lead to failure of the engine, in-flight shutdown, and loss of control of the airplane.

    DATES:

    We must receive comments on this proposed AD by September 8, 2015.

    ADDRESSES:

    You may send comments by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    Mail: Docket Management Facility, U.S. Department of Transportation, 1200 New Jersey Avenue SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001.

    Hand Delivery: Deliver to Mail address above between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    Fax: 202-493-2251.

    For service information identified in this proposed AD, contact Technify Motors GmbH, Platanenstrasse 14, D-09356 Sankt Egidien, Germany; phone: +49 37204 696 0; fax: +49 37204 696 29125; email: [email protected]; and Diamond Aircraft Industries GmbH, N. A. Otto-Strasse 5, 2700 Wiener Neustadt, Austria; phone: +43 2622 26700; fax: +43 2622 26700 1369; email: [email protected] You may view this service information at the FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA. For information on the availability of this material at the FAA, call 781-238-7125. It is also available on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-1383.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-1383; or in person at the Docket Operations office between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the mandatory continuing airworthiness information (MCAI), the regulatory evaluation, any comments received, and other information. The address for the Docket Office (phone: 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Robert Green, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; phone: 781-238-7754; fax: 781-238-7199; email: [email protected]

    SUPPLEMENTARY INFORMATION:

    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-2015-1383; Directorate Identifier 2015-NE-15-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 based on 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 with FAA personnel concerning this proposed AD.

    Discussion

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued EASA AD 2015-0055, dated March 31, 2015 (referred to hereinafter as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:

    Cases of a broken gearbox drive shaft have been reported on aeroplanes equipped with TAE 125-02 engines that have a Dual Mass Flywheel installed.

    Investigations results showed a possible overload of the gearbox drive shaft during starting of the engine or during restarting of the engine in-flight.

    This condition, if not corrected, could lead to engine power loss during flight, possibly resulting in loss of control of the aeroplane.

    You may obtain further information by examining the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-1383.

    Related Service Information Under 1 CFR Part 51

    Technify Motors GmbH (type certificate previously held by Thielert Aircraft Engines GmbH) issued Technify Motors Service Bulletin (SB) No. SB TMG 125-1018 P1, Revision 1, dated February 5, 2015. The service information describes procedures for installing a start phase monitoring system and associated specified software mapping on particular airplane models. 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.

    Other Related Service Information

    Technify Motors GmbH has also issued Technify Motors SB No. TM TAE 000-0007, Revision 28, dated February 5, 2015; Technify Motors Installation Manual No. IM-02-02, Issue 4, Revision 2, dated January 30, 2015, with Chapter 02-IM-13-02, section 13.8.16, Revision 1, dated November 28, 2014; Technify Motors SB No. SB TMG 601-1007 P1, Revision 3, dated February 5, 2015; and Technify Motors SB No. SB TMG 651-1004 P1, Revision 2, dated February 5, 2015.

    Diamond Aircraft Industries GmbH (DAI) has issued DAI Mandatory Service Bulletin (MSB) No. 42-109/1, dated February 4, 2015; and DAI MSB No. 42-007/16, dated February 4, 2015.

    The service information describes procedures for installing a start phase monitoring system and associated specified software mapping.

    FAA's Determination and Requirements of This Proposed AD

    This product has been approved by the aviation authority of Germany, and is approved for operation in the United States. Pursuant to our bilateral agreement with the European Community, EASA has notified us of the unsafe condition described in the MCAI and service information referenced above. We are proposing this AD because we evaluated all information provided by EASA and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design. This proposed AD would require installation of specified software mapping and a start phase monitoring system.

    Costs of Compliance

    We estimate that this proposed AD affects 97 engines installed on airplanes of U.S. registry. We also estimate that it would take about 3 hours per engine to comply with this proposed AD. The average labor rate is $85 per hour. For 13 of the engines, required parts cost about $285 per engine. For 84 of the engines, required parts cost about $206 per engine. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $45,744.

    Authority for This Rulemaking

    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.

    Regulatory Findings

    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 to the extent that it justifies making a regulatory distinction, 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.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    The Proposed Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701.

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): Technify Motors GmbH (Type Certificate Previously Held by Thielert Aircraft Engines GmbH): Docket No. FAA-2015-1383; Directorate Identifier 2015-NE-15-AD. (a) Comments Due Date

    We must receive comments by September 8, 2015.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to Technify Motors GmbH TAE 125-02-99 (commercial designation CD-135, formerly Centurion 2.0) and TAE 125-02-114 (commercial designation CD-155, formerly Centurion 2.0S) reciprocating engines, with a dual mass flywheel installed.

    (d) Reason

    This AD was prompted by reports of a gearbox drive shaft breaking during starting or restarting of the engine. We are issuing this AD to prevent overload and failure of the gearbox drive shaft, which could lead to failure of the engine, in-flight shutdown, and loss of control of the airplane.

    (e) Actions and Compliance

    Comply with this AD within the compliance times specified, unless already done.

    Within 110 flight hours or at the next scheduled inspection after the effective date of this AD, whichever occurs first, install a start phase monitoring system and software mapping. Use Technify Motors Service Bulletin (SB) No. SB TM 125-1018 P1, Revision 1, dated February 5, 2015, to do the installation.

    (f) Installation Prohibition

    After the effective date of this AD, do not install onto any airplane any Technify Motors TAE 125-02-99 or TAE 125-02-114 reciprocating engine that is not equipped with a start phase monitoring system and software mapping.

    (g) Alternative Methods of Compliance (AMOCs)

    The Manager, Engine Certification Office, may approve AMOCs for this AD. Use the procedures found in 14 CFR 39.19 to make your request. You may email your request to: [email protected]

    (h) Related Information

    (1) For more information about this AD, contact Robert Green, Aerospace Engineer, Engine Certification Office, FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA 01803; phone: 781-238-7754; fax: 781-238-7199; email: [email protected]

    (2) Refer to MCAI European Aviation Safety Agency AD 2015-0055, dated March 31, 2015, for more information. You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating it in Docket No. FAA-2015-1383.

    (3) Technify Motors SB No. SB TMG 125-1018 P1, Revision 1, dated February 5, 2015; Technify Motors SB No. TM TAE 000-0007, Revision 28, dated February 5, 2015; Technify Motors Installation Manual No. IM-02-02, Issue 4, Revision 2, dated January 30, 2015, with Chapter 02-IM-13-02, section 13.8.16, Revision 1, dated November 28, 2014; Technify Motors SB No. SB TMG 601-1007 P1, Revision 3, dated February 5, 2015; and Technify Motors SB No. SB TMG 651-1004 P1, Revision 2, dated February 5, 2015, can be obtained from Technify Motors GmbH, using the contact information in paragraph (h)(5) of this proposed AD.

    (4) Diamond Aircraft Industries GmbH MSB No. 42-109/1, dated February 4, 2015; and DAI MSB No. 42-007/16, dated February 4, 2015, can be obtained from Diamond Aircraft Industries GmbH, using the contact information in paragraph (h)(5) of this proposed AD.

    (5) For Technify Motors service information identified in this proposed AD, contact Technify Motors GmbH, Platanenstrasse 14, D-09356 Sankt Egidien, Germany; phone: +49-37204-696-0; fax: +49-37204-696-55; email: [email protected] For DAI service information identified in this proposed AD, contact Diamond Aircraft Industries GmbH, N. A. Otto-Strasse 5, 2700 Wiener Neustadt, Austria; phone: +43 2622 26700; fax: +43 2622 26700 1369; email: [email protected]

    (6) You may view this service information at the FAA, Engine & Propeller Directorate, 12 New England Executive Park, Burlington, MA. For information on the availability of this material at the FAA, call 781-238-7125.

    Issued in Burlington, Massachusetts, on June 26, 2015. Ann C. Mollica, Acting Directorate Manager, Engine & Propeller Directorate, Aircraft Certification Service.
    [FR Doc. 2015-16586 Filed 7-7-15; 8:45 am] BILLING CODE 4910-13-P
    DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Part 39 [Docket No. FAA-2015-2458; Directorate Identifier 2014-NM-122-AD] RIN 2120-AA64 Airworthiness Directives; Airbus Airplanes AGENCY:

    Federal Aviation Administration (FAA), DOT.

    ACTION:

    Notice of proposed rulemaking (NPRM).

    SUMMARY:

    We propose to adopt a new airworthiness directive (AD) for all Airbus Model A318, A319, and A321 series airplanes. This proposed AD was prompted by reports of in-flight loss of fixed and hinged main landing gear (MLG) fairings, and reports of post-modification MLG fixed fairing assemblies that have wear and corrosion. This proposed AD would require, for certain airplanes, repetitive replacements of the fixed fairing upper and lower attachment studs of both the right-hand (RH) and left-hand (LH) MLG; and repetitive inspections for corrosion, wear, fatigue, cracking, and loose studs of each forward stud assembly of the fixed fairing door upper and lower forward attachment of both RH and LH MLG; and replacement if necessary. This proposed AD also provides an optional terminating modification for the repetitive replacements of the fixed fairing upper and lower attachment studs. We are proposing this AD to prevent in-flight detachment of an MLG fixed fairing and consequent damage to the airplane.

    DATES:

    We must receive comments on this proposed AD by August 24, 2015.

    ADDRESSES:

    You may send comments, using the procedures found in 14 CFR 11.43 and 11.45, by any of the following methods:

    Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the instructions for submitting comments.

    Fax: 202-493-2251.

    Mail: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590.

    Hand Delivery: U.S. Department of Transportation, Docket Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays.

    For service information identified in this proposed AD, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email [email protected]; Internet http://www.airbus.com. You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Examining the AD Docket

    You may examine the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-2458; or in person at the Docket Management Facility between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The AD docket contains this proposed AD, the regulatory evaluation, any comments received, and other information. The street address for the Docket Operations office (telephone 800-647-5527) is in the ADDRESSES section. Comments will be available in the AD docket shortly after receipt.

    FOR FURTHER INFORMATION CONTACT:

    Sanjay Ralhan, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1405; fax 425-227-1149.

    SUPPLEMENTARY INFORMATION: 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-2015-2458; Directorate Identifier 2014-NM-122-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 based on 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.

    Discussion

    The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2015-0001R1, dated January 15, 2015 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for all Model A318, A319, A320, and Model A321 series airplanes. The MCAI states:

    Several occurrences of in-flight loss of main landing gear (MLG) fixed and hinged fairings were reported. The majority of reported events occurred following scheduled maintenance activities. One result of the investigation was that a discrepancy between the drawing and the maintenance manuals was discovered. The maintenance documents were corrected to prevent mis-rigging of the MLG fixed and hinged fairings, which could induce fatigue cracking.

    Airbus issued Service Bulletin (SB) A320-52-1083, providing instructions for a one-time inspection of the MLG fixed fairing composite insert and the surrounding area, replacement of the adjustment studs at the lower forward position and adjustment to the new clearance tolerances. That SB was replaced by Airbus SB A320-52-1100 (mod 27716) introducing a re-designed location stud, rod end and location plate at the forward upper and lower leg fixed-fairing positions. Subsequently, reports were received of post-mod 27716/post-SB A320-52-1100 MLG fixed fairing assemblies with corrosion, which could also induce cracking.

    This condition, if not detected and corrected, could lead to further cases of in-flight detachment of a MLG fixed fairing, possibly resulting in injury to persons on the ground and/or damage to the aeroplane.

    To address this potential unsafe condition, EASA issued AD 2014-0096 [http://ad.easa.europa.eu/blob/easa_ad_2014_0096_superseded.pdf/AD_2014-0096_1] to require [for certain airplanes] repetitive detailed inspections (DET) of the MLG fixed fairings, and, depending on findings, accomplishment of applicable corrective actions. That [EASA] AD also prohibited installation of certain MLG fixed fairing rod end assemblies and studs as replacement parts on aeroplanes incorporating Airbus mod 27716 in production, or modified in accordance with Airbus SB A320-52-1100 (any revision) in service.

    Since EASA AD 2014-0096 was issued, Airbus developed an alternative inspection programme to meet the AD requirements. In addition, a terminating action (mod 155648) was developed, which is to be made available for in service aeroplanes through Airbus SB A320-52-1165.

    For the reasons described above, this [EASA] AD retains the requirements of EASA AD 2014-0096, which is superseded, and adds an optional terminating action for the repetitive inspections. For post-mod aeroplanes, i.e. incorporating Airbus mod 155648 in production, or modified by Airbus SB A320-52-1165 in service, the only remaining requirement is to ensure that pre-mod components are no longer installed.

    Prompted by these developments, EASA issued AD 2015-0001, retaining the requirements of EASA AD 2014-0096, which was superseded, and adding an optional terminating action for the repetitive inspections. For post-mod aeroplanes, i.e. incorporating Airbus mod 155648 in production, or modified by Airbus SB A320-52-1165 in service, the only remaining requirement is to ensure that pre-mod components are no longer installed.

    Since that [EASA] AD was issued, it was discovered that a certain plate support, Part Number (P/N) D5285600620000 as listed in Table 3 of the [EASA] AD, remains part of the post SB A320-52-1165 configuration and is therefore not affected by any prohibition of installation—paragraph (11) of the [EASA] AD. In addition, an error was detected in Table 1 of the [EASA] AD (missing P/N plate support) and paragraph (9) was found to be incorrectly worded.

    For the reasons described above, this [EASA] AD is revised to introduce the necessary corrections.

    Required actions also include, for airplanes in Airbus pre-modification 27716 and pre-Airbus Service Bulletin A320-52-1100 configuration on which certain components have been installed, repetitive replacements of the fixed fairing upper and lower attachment studs of both the RH and LH MLG. An optional terminating modification also is provided for the repetitive replacements of the fixed fairing upper and lower attachment studs. The optional terminating modification includes a resonance frequency inspection for debonding of the composite insert and delamination of the honeycomb area around the insert, and applicable corrective actions if necessary; and installation of new studs, rod ends, and location plates at the forward upper and lower leg fixed-fairing positions. An additional optional terminating modification, for airplanes in pre-modification 27716 and pre-Airbus Service Bulletin A320-52-1100 configuration, includes installation of a locking device, new studs, rod ends, and location plates at the forward upper and lower leg fixed-fairing positions.

    You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-2458.

    Related Service Information Under 1 CFR Part 51

    • Airbus has issued Service Bulletin A320-52-1100, Revision 01, dated March 12, 1999. This service information describes procedures for modification of the airplane to post-modification 27716 configuration (by replacing the location stud, rod end, and location plate at the forward upper and lower leg fixed-fairing positions of the MLG door assemblies). The modification includes a resonance frequency inspection for debonding of the composite insert and delamination of the honeycomb area around the insert, and applicable corrective actions. Corrective actions include repairing the insert. The actions in this service information are an optional terminating modification.

    • Airbus has also issued Service Bulletin A320-52-1163, dated February 4, 2014. This service information describes procedures for inspection of the fixed fairing forward attachments of the MLG door assemblies, and replacement of the fixed fairing upper and lower attachment studs of the RH and LH MLG door assemblies.

    • Airbus has issued Service Bulletin A320-52-1165, dated November 3, 2014. This service information describes procedures for replacing the fairing attachment stud assemblies of the MLG door assembly with new assemblies. The actions in this service information are an optional terminating modification.

    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 AD.

    FAA's Determination and Requirements of This Proposed AD

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

    Costs of Compliance

    We estimate that this proposed AD affects 851 airplanes of U.S. registry.

    We also estimate that it would take about 18 work-hours per product to comply with the basic inspection requirements of this proposed AD. The average labor rate is $85 per work-hour. Required parts would cost about $4,110 per product. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $4,799,640, or $5,640 per product.

    We estimate that the optional terminating modification would take about 18 work-hours and require parts costing $4,110, for a cost of $5,640 per product.

    In addition, we estimate that any necessary follow-on actions would take about 18 work-hours and require parts costing $4,110, for a cost of $5,640 per product. We have no way of determining the number of aircraft that might need these actions.

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

    Authority for This Rulemaking

    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.

    Regulatory Findings

    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.

    List of Subjects in 14 CFR Part 39

    Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.

    The Proposed Amendment

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

    PART 39—AIRWORTHINESS DIRECTIVES 1. The authority citation for part 39 continues to read as follows: Authority:

    49 U.S.C. 106(g), 40113, 44701.

    § 39.13 [Amended]
    2. The FAA amends § 39.13 by adding the following new airworthiness directive (AD): Airbus: Docket No. FAA-2015-2458; Directorate Identifier 2014-NM-122-AD. (a) Comments Due Date

    We must receive comments by August 24, 2015.

    (b) Affected ADs

    None.

    (c) Applicability

    This AD applies to the Airbus airplanes identified in paragraphs (c)(1) through (c)(4) of this AD, certificated in any category, all manufacturer serial numbers.

    (1) Airbus Model A318-111, -112, -121, and -122 airplanes.

    (2) Airbus Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes.

    (3) Airbus Model A320-211, -212, -214, -231, -232, and -233 airplanes.

    (4) Airbus Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes.

    (d) Subject

    Air Transport Association (ATA) of America Code 52, Doors.

    (e) Reason

    This AD was prompted by reports of in-flight loss of fixed and hinged main landing gear (MLG) fairings, and reports of post-modification MLG fixed fairing assemblies that have wear and corrosion. We are issuing this AD to prevent in-flight detachment of an MLG fixed fairing and consequent damage to the airplane.

    (f) Compliance

    Comply with this AD within the compliance times specified, unless already done.

    (g) Repetitive Replacements

    For airplanes in pre-modification 27716 and pre-Airbus Service Bulletin A320-52-1100 configuration, with any of the components installed that are identified in paragraphs (g)(1) through (g)(5) of this AD: At the applicable compliance time specified in paragraph (h) of this AD, replace fixed fairing upper and lower attachment studs of both right-hand (RH) and left-hand (LH) MLG, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, dated February 4, 2014. Repeat the replacements thereafter at intervals not to exceed 6,500 flight cycles.

    (1) Plate—support having part number (P/N) D5284024820000.

    (2) Plate—support having part number (P/N) D5284024820200.

    (3) Stud—adjustment having P/N D5284024420000.

    (4) Rod end assembly (lower) having P/N D5284000500000.

    (5) Rod end assembly (upper) having P/N D5284000600000.

    (h) Compliance Times for the Requirements of Paragraph (g) of this AD

    Do the initial replacement required by paragraph (g) of this AD at the latest of the times specified in paragraphs (h)(1) through (h)(4) of this AD.

    (1) Before the accumulation of 6,500 total flight cycles since the airplane's first flight.

    (2) Within 6,500 flight cycles since the last installation of a pre-modification 27716 stud on the airplane.

    (3) Within 1,500 flight cycles after the effective date of this AD.

    (4) Within 8 months after the effective date of this AD.

    (i) Repetitive Inspections

    For airplanes in post-modification 27716 or post-Airbus Service Bulletin A320-52-1100 configuration, with any of the components installed that are identified in paragraphs (i)(1), (i)(2), and (i)(3) of this AD: At the applicable compliance time specified in paragraph (j) of this AD, do a detailed inspection of the LH and RH stud assemblies of the fixed fairing door upper and lower forward attachments of both RH and LH MLG for indications of corrosion, wear, fatigue, cracking, and loose studs, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, dated February 4, 2014. Repeat the inspection thereafter at intervals not to exceed 12 months. Replacement of both RH and LH MLG forward stud assemblies on an airplane, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, dated February 4, 2014, extends the interval for the next detailed inspection to 72 months; and the inspection must be repeated thereafter at intervals not to exceed 12 months.

    (1) Stud—adjustment having P/N D5285600720000.

    (2) Rod end assembly (lower) having P/N D5285600400000.

    (3) Rod end assembly (upper) having P/N D5285600500000.

    (j) Compliance Times for the Requirements of Paragraph (i) of This AD

    Do the initial inspection required by paragraph (i) of this AD at the latest of the times specified in paragraphs (j)(1) through (j)(4) of this AD.

    (1) Before the accumulation of 72 months since the airplane's first flight.

    (2) Within 72 months since the last installation of a post-modification 27716 assembly or since accomplishment of the actions specified in Airbus Service Bulletin A320-52-1100.

    (3) Within 1,500 flight cycles after the effective date of this AD.

    (4) Within 8 months after the effective date of this AD.

    (k) Corrective Action

    If any indication of corrosion, wear, fatigue, cracking, or loose studs of any forward stud assembly is found during any inspection required by paragraph (i) of this AD, except as specified in paragraph (l) of this AD: Before further flight, replace the upper and lower fixed fairing forward attachment assemblies of the RH and LH MLG, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, dated February 4, 2014; or Airbus Service Bulletin A320-52-1165, dated November 3, 2014.

    (l) Corrective Action or Repetitive Inspections for Certain Corrosion Findings

    If any corrosion is found during any inspection required by paragraph (i) of this AD on any MLG fixed fairing forward attachment stud assembly (upper, lower, LH or RH), but the corroded stud is not loose: Do the action specified in paragraph (l)(1) or (l)(2) of this AD.

    (1) Before further flight, replace the affected assembly, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, dated February 4, 2014; or Airbus Service Bulletin A320-52-1165, dated November 3, 2014.

    (2) Within 4 months after finding corrosion, and thereafter at intervals not to exceed 4 months, do a detailed inspection for indications of corrosion, wear, fatigue, cracking, and loose studs of the forward stud assembly of the affected (RH or LH) MLG, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, dated February 4, 2014.

    (m) Corrective Action for Inspections Specified in Paragraph (l)(2) of This AD

    If any indication of wear, fatigue, cracking, or loose studs of any forward stud assembly is found during any inspection required by paragraph (l)(2) of this AD: Before further flight, replace the affected (RH or LH) MLG fixed fairing forward attachment assembly, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1163, dated February 4, 2014; or Airbus Service Bulletin A320-52-1165, dated November 3, 2014.

    (n) Terminating Action

    (1) Replacement of parts on an airplane, as required by paragraph (g), (k), or (l)(1) of this AD, does not constitute terminating action for the repetitive inspections required by paragraph (i) of this AD, except as specified in paragraph (n)(3) of this AD.

    (2) The repetitive replacements required by paragraph (g) of this AD may be terminated by modification of the airplane to post-modification 27716 configuration, including a resonance frequency inspection for debonding of the composite insert and delamination of the honeycomb area around the insert, and all applicable corrective actions, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1100, Revision 01, dated March 12, 1999, provided all applicable corrective actions are done before further flight. Thereafter, refer to paragraph (i) of this AD to determine the compliance time for the next detailed inspection required by this AD.

    (3) Modification of an airplane, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-52-1165, dated November 3, 2014, constitutes terminating action for actions required by paragraphs (g) through (m) of this AD for the airplane on which the modification is done.

    (o) Exception to Certain AD Actions

    An airplane on which Airbus Modification 155648 has been embodied in production is not affected by the requirements of paragraphs (g) and (i) of this AD, provided that no affected component, identified by part number as listed paragraphs (g)(1) through (g)(5) and (i)(1) through (i)(3) of this AD, has been installed on that airplane since first flight of the airplane.

    (p) Parts Installation Prohibition

    (1) For airplanes in pre-Airbus-Modification 27716 and pre-Airbus-Service-Bulletin A320-52-1100 configuration: No person may install a component identified in paragraphs (g)(1) through (g)(5) of this AD on any airplane after doing the actions provided in paragraph (n)(2) of this AD.

    (2) For airplanes in post-Airbus-Modification 27716 and post Airbus Service Bulletin A320-52-1100 configuration: As of the effective date of this AD, no person may install a component identified in paragraphs (g)(1) through (g)(5) of this AD on any airplane.

    (3) For airplanes in pre-Airbus-Modification 155648 and pre-Airbus-Service-Bulletin A320-52-1165 configuration: No person may install a component identified in paragraphs (g)(1) through (g)(5) and (i)(1) through (i)(3) of this AD on any airplane after doing the actions provided in paragraph (n)(3) of this AD.

    (4) For airplanes in post-Airbus-Modification 155648 and post-Airbus-Service-Bulletin A320-52-1165 configuration: As of the effective date of this AD, no person may install a component identified in (g)(1) through (g)(5) and (i)(1) through (i)(3) of this AD on any airplane.

    (q) Credit for Previous Actions

    This paragraph provides credit for optional actions provided by paragraph (n)(2) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-52-1100, dated December 7, 1998, which is not incorporated by reference in this AD.

    (r) Other FAA AD Provisions

    The following provisions also apply to this AD:

    (1) Alternative Methods of Compliance (AMOCs): The Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the International Branch, send it to ATTN: Sanjay Ralhan, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1405; fax 425-227-1149. Information may be emailed to: [email protected] Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office. The AMOC approval letter must specifically reference this AD.

    (2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA). If approved by the DOA, the approval must include the DOA-authorized signature.

    (s) Related Information

    (1) Refer to Mandatory Continuing Airworthiness Information (MCAI) EASA Airworthiness Directive 2015-0001R1, dated January 15, 2015, for related information. This MCAI may be found in the AD docket on the Internet at http://www.regulations.gov by searching for and locating Docket No. FAA-2015-2458.

    (2) For service information identified in this AD, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email [email protected]; Internet http://www.airbus.com. You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.

    Issued in Renton, Washington, on June 30, 2015. Jeffrey E. Duven, Manager, Transport Airplane Directorate, Aircraft Certification Service.
    [FR Doc. 2015-16583 Filed 7-7-15; 8:45 am] BILLING CODE 4910-13-P
    SECURITIES AND EXCHANGE COMMISSION 17 CFR Part 240 [Release No. 33-9862; 34-75344 File No. S7-13-15] RIN 3235-AL70 Possible Revisions To Audit Committee Disclosures AGENCY:

    Securities and Exchange Commission.

    ACTION:

    Concept release; request for comments.

    SUMMARY:

    The Commission is publishing this concept release to seek public comment regarding audit committee reporting requirements, with a focus on the audit committee's reporting of its responsibilities with respect to its oversight of the independent auditor. Some have expressed a view that the Commission's disclosure rules for this area may not result in disclosures about audit committees and their activities that are sufficient to help investors understand and evaluate audit committee performance, which may in turn inform those investors' investment or voting decisions. The majority of these disclosure requirements, which exist in their current form principally in Item 407 of Regulation S-K, were adopted in 1999. Since then, there have been significant changes in the role and responsibilities of audit committees arising out of, among other things, the Sarbanes-Oxley Act of 2002, enhanced listing requirements for audit committees, enhanced requirements for auditor communications with the audit committee arising out of the rules of the Public Company Accounting Oversight Board, and changes in practice, both domestically and internationally.

    DATES:

    Comments should be received on or before September 8, 2015.

    ADDRESSES:

    Comments may be submitted by any of the following methods:

    Electronic Comments

    • Use the Commission's Internet comment form (http://www.sec.gov/rules/concept.shtml); or

    • Send an email to [email protected] Please include File Number S7-13-15 on the subject line; or

    • Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

    Paper Comments

    • Send paper comments to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

    All submissions should refer to File Number S7-13-15. This file number should be included on the subject line if email is used. To help us process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Web site (http://www.sec.gov/rules/concept.shtml). Comments also are available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10:00 a.m. and 3:00 p.m. All comments received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. FOR FURTHER INFORMATION CONTACT:

    Duc Dang, Special Counsel at (202) 551-3386; Jennifer McGowan, Professional Accounting Fellow, at (202) 551-8736; Kevin Stout, Senior Associate Chief Accountant, at (202) 551-5930, Office of the Chief Accountant; or Lindsay McCord, Associate Chief Accountant, at (202) 551-3417, Division of Corporation Finance, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549.

    Table of Contents I. Introduction II. Background A. The Importance of Audit Committees B. The Impact of the Sarbanes-Oxley Act of 2002 and SRO Listing Standards on Audit Committees III. Current Audit Committee Disclosure Requirements A. Audit Committee Report and Other Disclosures About the Audit Committee B. Disclosure Requirements Regarding Preapproval of Services and Auditor Fees C. Disclosure Requirements Regarding Proposal To Ratify Selection of Independent Auditors IV. Reasons To Seek Comment on the Audit Committee Reporting Requirements A. Public Discussion of the Need for Updated Audit Committee Reporting B. Divergence in Current Audit Committee Reporting Practice C. PCAOB Standard-Setting Projects D. Initiatives in Other Jurisdictions To Enhance Audit Committee Reporting E. References to PCAOB Auditing Standards V. Focus on Audit Committee Oversight of the Auditor VI. Potential Changes to Disclosures A. Audit Committee's Oversight of the Auditor 1. Additional Information Regarding the Communications Between the Audit Committee and the Auditor 2. The Frequency With Which the Audit Committee Met With the Auditor 3. Review of and Discussion About the Auditor's Internal Quality Review and Most Recent PCAOB Inspection Report 4. Whether and How the Audit Committee Assesses, Promotes and Reinforces the Auditor's Objectivity and Professional Skepticism B. Audit Committee's Process for Appointing or Retaining the Auditor 1. How the Audit Committee Assessed the Auditor, Including the Auditor's Independence, Objectivity and Audit Quality, and the Audit Committee's Rationale for Selecting or Retaining the Auditor 2. If the Audit Committee Sought Requests for Proposal for the Independent Audit, the Process the Committee Undertook To Seek Such Proposals and the Factors They Considered in Selecting the Auditor 3. The Board of Directors' Policy, if any, for an Annual Shareholder Vote on the Selection of the Auditor, and the Audit Committee's Consideration of the Voting Results in its Evaluation and Selection of the Audit Firm C. Qualifications of the Audit Firm and Certain Members of the Engagement Team Selected By the Audit Committee 1. Disclosures of Certain Individuals on the Engagement Team 2. Audit Committee Input in Selecting the Engagement Partner 3. The Number of Years the Auditor has Audited the Company 4. Other Firms Involved in the Audit D. Location of Audit Committee Disclosures in Commission Filings E. Smaller Reporting Companies and Emerging Growth Companies VII. Additional Request for Comment Regarding Audit Committee Disclosures I. Introduction

    The Commission has a long history of promoting effective and independent audit committees. The role and responsibilities of audit committees related to oversight of the independent auditor have evolved due to changes in both the securities laws and the national securities exchanges' listing requirements related to audit committees. Today, the audit committee of a listed issuer is directly responsible for the appointment, compensation, retention and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the issuer, and the independent auditor reports directly to the audit committee.1 In addition, in connection with these oversight responsibilities, the audit committee has ultimate authority to approve all audit engagement fees and terms 2 and is responsible for resolving disagreements between management and the auditor regarding financial reporting.3

    1See Section 10A(m) of the Securities Exchange Act of 1934 (the “Exchange Act”) [15 U.S.C. 78j-1(m)]. As noted in Section II.B., audit committees of listed issuers also have responsibilities with respect to the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, or auditing matters, including procedures for the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.

    2See Release No. 34-47654, Standards Relating to Listed Company Audit Committees (Apr. 9, 2003) [68 FR 18788].

    3See Section 10A(m)(2) of the Exchange Act.

    Requirements for the audit committee's reporting to shareholders are principally contained in Item 407 of Regulation S-K,4 which have not changed substantively since 1999. As a result, some have expressed a view that the Commission's disclosure rules do not provide investors with sufficient useful information regarding the role of and responsibilities carried out by the audit committee in public companies.5 The audit committee has a vital role in oversight of auditors, and the independent audits performed by those auditors have long been recognized as important to credible and reliable financial reporting and the functioning of our capital markets.6 The reporting of additional information by the audit committee with respect to its oversight of the auditor may provide useful information to investors as they evaluate the audit committee's performance in connection with, among other things, their vote for or against directors who are members of the audit committee, the ratification of the auditor, or their investment decisions.

    4 17 CFR 229.407

    5See Audit Committee Collaboration, “Enhancing the Audit Committee Report, A Call to Action,” (Nov. 20, 2013), available at http://www.thecaq.org/reports-and-publications/enhancing-the-audit-committee-report-a-call-to-action (“A Call to Action”). This collaboration consisted of the following organizations: The National Association of Corporate Directors, Corporate Board Member/NYSE Euronext, Tapestry Networks, the Directors' Council, the Association of Audit Committee Members, Inc., and the Center for Audit Quality (“CAQ”).

    6See Release No. 33-8177, Disclosure Required by Sections 406 and 407 of the Sarbanes-Oxley Act of 2002 (Jan. 23, 2003) [68 FR 5110] (acknowledging the audit committee's vital role in financial reporting, public disclosure, and corporate governance); and Release No. 34-14970, Proposed Rules Relating to Shareholder Communications, Shareholder Participation in the Corporate Electoral Process and Corporate Governance Generally, (Jul. 18, 1978) [43FR 31945] (citing Report to Congress on the Accounting Profession and the Commission's Oversight Role, Jul. 5, 1978).

    Through this Concept Release, the Commission seeks public comment regarding the audit committee's reporting requirements, with a focus on the audit committee's reporting of its responsibilities and activities with respect to its oversight of the independent auditor. This concept release is focused on the audit committee and auditor relationship, but commenters may also provide views on other aspects of audit committee disclosures, such as those related to roles and responsibilities, audit committee qualifications, oversight of financial reporting, or oversight of internal control over financial reporting.

    II. Background A. The Importance of Audit Committees

    The audit committee plays an important role in protecting the interests of investors by assisting the board of directors in fulfilling its responsibility to oversee the integrity of a company's accounting and financial reporting processes and both internal and external audits. Since as early as 1940, the Commission, along with the auditing and corporate communities, has had a continuing interest in promoting effective and independent audit committees.7 Largely with the Commission's encouragement,8 the national securities exchanges and national securities associations (self-regulatory organizations or “SROs”) first adopted audit committee requirements in the 1970s.9 Since that time, there has been support for strong, independent audit committees, including from the National Commission on Fraudulent Financial Reporting, also known as the Treadway Commission,10 the General Accounting Office,11 and others.12

    7 In 1940, the Commission investigated the auditing practices followed by the auditors of McKesson & Robbins, Inc., and the Commission's ensuing report prompted action on auditing procedures by the auditing community. In the Matter of McKesson & Robbins, Accounting Series Release (ASR) No. 19, Exchange Act Release No. 2707 (Dec. 5, 1940).

    8 For example, in 1972, the Commission recommended that companies establish audit committees composed of outside directors. See ASR No. 123 (Mar. 23, 1972). In 1974 and 1978, the Commission adopted rules requiring disclosures about audit committees. See Release No. 34-11147, Notice of Amendments to Require Increased Disclosure of Relationships Between Registrants and Their Independent Public Accountants (Dec. 20, 1974) and Release No. 34-15384, Shareholder Communications, Shareholder Participation in Corporate Electoral Process and Corporate Governance Generally (Dec. 6, 1978).

    9See, e.g., Release No. 34-13346, In the Matter of New York Stock Exchange, Inc. (Mar. 9, 1977) [42 FR 14793] (Commission order approving NYSE rule change related to the audit committee).

    10 The Treadway Commission was sponsored by the American Institute of Certified Public Accountants, the American Accounting Association, the Financial Executives Institute (now Financial Executives International), the Institute of Internal Auditors and the National Association of Accountants (now Institute of Management Accountants). Collectively, these groups were known as the Committee of Sponsoring Organizations, or COSO. The Treadway Commission's report, the Report of the National Commission on Fraudulent Financial Reporting (October 1987), is available at www.coso.org.

    11See e.g., U.S. General Accounting Office (now Government Accountability Office), “CPA Audit Quality: Status of Actions Taken to Improve Auditing and Financial Reporting of Public Companies,” at 5 (GAO/AFMD-89-38, March 1989). The report is available at http://www.gao.gov/products/AFMD-89-38.

    12See, e.g., Preliminary Report of the American Bar Association Task Force on Corporate Responsibility (July 16, 2002) reprinted in 58 Bus. Law. 189 (2002).

    In 1998, the New York Stock Exchange (the “NYSE”) and the National Association of Securities Dealers (the “NASD”) sponsored the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees (the “Blue Ribbon Committee”). In its 1999 report, the Blue Ribbon Committee recognized the importance of audit committees and issued ten recommendations to improve their effectiveness.13 In response to these recommendations, the NYSE and the NASD, among others, revised their listing standards relating to audit committees,14 and the Commission adopted new rules requiring disclosure relating to the functioning, governance and independence of corporate audit committees.15

    13See Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees, Report and Recommendations of the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees, 54 The Business Lawyer, 1067 (1999).

    14See, e.g., Release No. 34-42231, Order Approving Proposed Rule Change by the National Association of Securities Dealers, Inc. Amending Its Audit Committee Requirements (Dec. 14, 1999) [64 FR 71523]; Release No. 34-42233, Order Approving Proposed Rule Change by the New York Stock Exchange, Inc. Amending the Exchange's Audit Committee Requirements (Dec. 14, 1999) [64 FR 71529]; Release No. 34-42232, Order Approving Proposed Rule Change by the American Stock Exchange LLC Amending the Exchange's Audit Committee Requirements (Dec. 14, 1999) [64 FR 71518]; and Release No. 34-43941, Order Approving a Proposed Rule Change by the Pacific Exchange, Inc. Relating to Audit Committee Requirements for Listed Companies (Feb. 7, 2001) [66 FR 10545].

    15See Release No. 34-42266, Audit Committee Disclosure (Dec. 22, 1999) [64 FR 73389].

    Academic literature suggests that strong corporate governance, including the composition and actions of the audit committee, has a positive effect on the quality of the audit.16 For example, some studies note that audit committee independence is associated with lower incidences of earnings management 17 and internal control problems at those issuers benefitting from independent audit committees,18 while also shielding the external auditor from management's influence.19

    16 Goh, B.W., Audit Committees, Boards of Directors, and Remediation of Material Weaknesses in Internal Control, 26 Contemporary Accounting Research 549 (2009); and Hoitash and Hoitash, The Role of Audit Committees in Managing Relationships with External Auditors After SOX: Evidence from the USA, 24 Managerial Auditing Journal 368 (2009). The positive effects of audit committee oversight are also illustrated in studies using data taken prior to the enactment of the Sarbanes-Oxley Act of 2002 when important characteristics such as the composition and actions of the audit committee were less uniform among companies. See Klein, A., Audit Committee, Board of Director Characteristics, and Earnings Management, 33 Journal of Accounting and Economics, 375 (2002); Krishnan, J., Audit Committee Quality and Internal Control: An Empirical Analysis, 80 The Accounting Review, 649 (2005); and Carcello, J and Neal. T., Audit Committee Composition and Auditor Reporting, 75 The Accounting Review, 453 (2000).

    17 Klein, A., Audit Committee, Board of Director Characteristics, and Earnings Management.

    18 Krishnan, J., Audit Committee Quality and Internal Control: An Empirical Analysis.

    19 Carcello, J. and Neal, T., Audit Committee Composition and Auditor Reporting.

    B. The Impact of the Sarbanes-Oxley Act of 2002 and SRO Listing Standards on Audit Committees

    In the early 2000's, multiple incidences of serious misconduct by corporate executives and independent auditors occurred in the financial markets raising concerns about the integrity and reliability of financial disclosures, and the adequacy of regulation and oversight of the accounting profession. This highlighted the need for strong, competent, and vigilant audit committees. In response, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) was enacted.20 Among other things, the Sarbanes-Oxley Act mandated a number of reforms to enhance corporate responsibility, enhance financial disclosures, and combat corporate and accounting fraud. The Sarbanes-Oxley Act also created a new regulatory and oversight regime for auditors of public companies, including the creation of the Public Company Accounting Oversight Board (the “PCAOB”), a nonprofit corporation, to oversee the audits of public companies in order to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports.21 During this time, the Commission also adopted significant corporate disclosure and financial reporting rules designed to improve the oversight and review processes of public companies related to their financial and other disclosures.22

    20 Pub. L. 107-204, 116 Stat. 745 (2002); 15 U.S.C. 7201 et seq.

    21 Section 101 of the Sarbanes-Oxley Act.

    22See, e.g., Release No. 33-8124, Certification of Disclosure in Companies' Quarterly and Annual Reports (Aug. 28, 2002) [67 FR 57276]; Release No. 34-47890, Improper Influence on Conduct of Audits (May, 20, 2003) [68 FR 31820]; Release No. 33-8177, Disclosure Required by Sections 406 and 407 of the Sarbanes-Oxley Act of 2002 (Jan. 23, 2003) [68 FR 5110]; Release No. 33-8182, Disclosure in Management's Discussion and Analysis About Off-Balance Sheet Arrangements and Aggregate Contractual Obligations (Jan. 28, 2003) [68 FR 5982]; Release No. 33-8183, Strengthening the Commission's Requirements Regarding Auditor Independence (Jan. 28, 2003) [68 FR 6006]; and Release No. 33-8212, Certification of Disclosure in Certain Exchange Act Reports (Mar. 21, 2003) [68 FR 15600].

    The Sarbanes-Oxley Act amended the Exchange Act to define an audit committee as “(A) a committee (or equivalent body) established by and amongst the board of directors of an issuer for the purpose of overseeing the accounting and financial reporting processes of the issuer and audits of the financial statements of the issuer; and (B) if no such committee exists with respect to an issuer, the entire board of directors of the issuer.” 23 The Sarbanes-Oxley Act and the Commission's related implementation rules strengthened and expanded the role of the audit committee in overseeing a company's financial reporting process and independent auditor.

    23See Section 3(a)(58) of the Exchange Act [15 U.S.C. 78c(a)(58)].

    For example, Exchange Act Rule 10A-3,24 which implemented Section 10A(m) of the Exchange Act, mandated that SROs prohibit the listing of any security of an issuer that does not comply with certain requirements, including:

    24 17 CFR 240.10A-3.

    • Each member of the audit committee of the issuer must be independent according to specified criteria;

    • the audit committee of each issuer must be directly responsible for the appointment, compensation, retention, and oversight of the work of any registered public accounting firm engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the issuer, and each such registered public accounting firm must report directly to the audit committee;

    • each audit committee must establish procedures for the receipt, retention, and treatment of complaints regarding accounting, internal accounting controls, or auditing matters, including procedures for the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters;

    • each audit committee must have the authority to engage independent counsel and other advisors, as it determines necessary to carry out its duties; and

    • each issuer must provide appropriate funding for the audit committee.

    The SROs also adopted additional listing requirements related to audit committees and strengthened the independence requirements for audit committee members.25

    25See Release No. 34-48745, NASD and NYSE Rulemaking: Relating to Corporate Governance (Nov. 4, 2003); NYSE Listed Company Manual, Sections 303A.02 and 303A.07(a); and NASDAQ Listing Rules 5605(a)(2) and 5605(c)(2). For example, the NYSE requires audit committees to, among other things: (i) At least annually obtain a report from the independent auditor discussing certain quality control issues and relationships with its client, (ii) meet with management and the independent auditor, as applicable, to discuss the company's annual audited and quarterly unaudited financial statements, its press releases and public earnings guidance, and its risk assessment and management policies, (iii) meet separately, periodically, with management, the internal auditors, and the independent auditors, and (iv) review with the independent auditor any audit problems or difficulties and management's response. See NYSE Listed Company Manual, Section 303A.07.

    Also, Item 407(d)(5) of Regulation S-K, which was adopted to implement Section 407 of the Sarbanes-Oxley Act, defines the term “audit committee financial expert.” This item requires issuers to disclose whether they have at least one audit committee member that satisfies that definition. The Commission defines an audit committee financial expert as a person who has:

    • An understanding of generally accepted accounting principles and financial statements;

    • the ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves;

    • experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant's financial statements, or experience actively supervising one or more persons engaged in such activities;

    • an understanding of internal control over financial reporting; and

    • an understanding of audit committee functions.26

    26 Item 407(d)(5)(ii) of Regulation S-K. Neither the NYSE nor NASDAQ use the term audit committee financial expert. However, both amended their listing standards to clarify that a member that satisfies the definition of an audit committee financial expert would also satisfy their respective listing standards that require at least one audit committee member with accounting or related financial management expertise. See Release No. 34-48745.

    In addition to the listing requirements related to audit committees, Rule 2-07 of Regulation S-X was adopted to identify specific matters that auditors are required to report to audit committees.27 Rule 2-07 requires public company auditors to report all critical accounting policies and practices, all alternative accounting treatments that have been discussed with management, and any other material written communications between the auditor and management.28

    27See Release No. 34-47265, Strengthening the Commission's Requirements Regarding Auditor Independence (Jan. 28, 2003) [68 FR 6005]; 17 CFR 210.2-07.

    28 PCAOB standards also require certain auditor communications with audit committees, as discussed in Section IV.E of this Release.

    In the adopting release for Rule 2-07, the Commission referred to cautionary advice it issued in December 2001 regarding the disclosure of those accounting policies that management believes are most critical to the preparation of the issuer's financial statements.29 These are often a subset of the accounting policies described in the issuer's financial statements. The cautionary advice indicated that “critical” accounting policies are those that are both most important to the portrayal of the issuer's financial condition and results and require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.30 As part of that release, the Commission also advised:

    29See Release No. 34-47265.

    30See Release No. 33-8040, Cautionary Advice Regarding Disclosure About Critical Accounting Policies (Dec. 12, 2001) [66 FR 65013]. See, also, Release No. 33-8350, Commission Guidance Regarding Management's Discussion and Analysis of Financial Condition and Results of Operations (Dec. 19, 2003) [68 FR 75056].

    Prior to finalizing and filing annual reports, audit committees should review the selection, application and disclosure of critical accounting policies. Consistent with auditing standards, audit committees should be apprised of the evaluative criteria used by management in their selection of the accounting principles and methods. Proactive discussions between the audit committee and the company's senior management and auditor about critical accounting policies are appropriate.31

    31 Release No. 33-8040.

    The way audit committees execute their oversight of auditors has evolved since the Sarbanes-Oxley Act. For instance, while the PCAOB does not have jurisdiction over audit committees, it collects information through its inspection program that could be useful for audit committees in overseeing their companies' auditors. Among other responsibilities, the PCAOB is required to inspect registered public accounting firms annually (for firms that regularly provide audit reports for more than 100 issuers) or triennially (for firms that regularly provide audit reports for 100 or fewer issuers).32 Consistent with the limitations of the Sarbanes-Oxley Act, the PCAOB makes certain information available publicly, such as public portions of inspection reports, disciplinary sanctions, and information in annual and special reports filed by audit firms. In addition, in part in response to audit committee members' requests, the PCAOB provides information to help audit committees better understand the PCAOB inspection process, including questions they may wish to ask their audit firms to better understand and assess the firm's inspection results and evaluate audit quality.33 The PCAOB also includes an executive summary for its general inspection reports and provides insights within Staff Audit Practice Alerts to further assist audit committee oversight of the auditor.34

    32 Section 104 of the Sarbanes-Oxley Act.

    33See http://pcaobus.org/Inspections/Documents/Inspection_Information_for_Audit_Committees.pdf.

    34See, e.g. http://pcaobus.org/Inspections/Documents/Executive_Summary_02252013_Release_2013_001.pdf, http://pcaobus.org/Standards/QandA/10-24-2013_SAPA_11.pdf at 36 and http://pcaobus.org/Standards/QandA/9-9-14_SAPA_12.pdf at page 33.

    III. Current Audit Committee Disclosure Requirements A. Audit Committee Report and Other Disclosures About the Audit Committee

    In 1999, following the recommendations from the Blue Ribbon Committee's report, the Commission adopted new rules to improve disclosure relating to the functioning, governance and independence of audit committees and to enhance the credibility of financial statements of public companies.35 These reporting requirements for audit committees 36 predate the Sarbanes-Oxley Act and the SRO listing standards, which expanded the role of the audit committee in the financial reporting process.

    35See, e.g., Release No. 34-42266 (stating that additional disclosures about a company's audit committee and its interaction with the company's auditors and management will promote investor confidence in the integrity of the financial reporting process).

    36 Audit committee reports are currently reported by issuers pursuant to the disclosure requirements of Regulation S-K and closed-end investment companies through the proxy statement requirements of Item 22(b)(16) of Schedule 14A.

    Disclosure requirements for the audit committee report are contained in Item 407 of Regulation S-K. The disclosure is only required in the proxy or information statement relating to a registrant's annual meeting where directors are elected or chosen by written consents.37 An audit committee is required to make certain statements related to its responsibilities for overseeing financial reporting, internal control, and the audit. These statements include that the audit committee has:

    37See Instruction 3 to Item 407(d) of Regulation S-K.

    • Reviewed and discussed the audited financial statements with management;

    • discussed with the independent auditor the matters required by AU sec. 380, Communication with Audit Committees;

    • received the required written communications from the independent accountant concerning independence, as required by the rules of the PCAOB, and has discussed with the independent accountant his or her independence; and

    • recommended to the board of directors that the audited financial statements be included in the company's annual report on Form 10-K (or other form of annual report) for the last fiscal year for filing with the Commission.38

    38See Item 407(d)(3) of Regulation S-K.

    The name of each member of the company's audit committee must appear below these required disclosures.

    Item 407 also requires disclosure of whether the audit committee members are independent, the number of meetings held, and certain information about member attendance at these meetings, in addition to the following:

    • Whether or not the audit committee has a charter; 39

    39See Item 407(d)(1) of Regulation S-K.

    • The circumstances surrounding any appointment of a director to the audit committee who is not independent; 40

    40See Item 407(d)(2) of Regulation S-K.

    • Whether there is a separately-designated standing audit committee or a committee performing similar functions, and the identity of each member of such committee; 41 and

    41See Item 407(d)(4) of Regulation S-K.

    • Whether or not the registrant has at least one audit committee financial expert serving on its audit committee.42

    42See Item 407(d)(5) of Regulation S-K.

    If the audit committee has a charter, the registrant should either disclose where security holders may access a current copy of the audit committee's charter or include a copy of the charter in an appendix to the registrant's proxy or information statement that is provided to security holders at least once every three fiscal years, or sooner if the charter has been materially amended since the beginning of the registrant's last fiscal year.43

    43See Item 407(d)(1) of Regulation S-K.

    B. Disclosure Requirements Regarding Preapproval of Services and Auditor Fees

    The Sarbanes-Oxley Act also enhanced the ability of audit committees to promote auditor independence. Section 202 of the Sarbanes-Oxley Act added Section 10A(i) of the Exchange Act, which gave the audit committee responsibility to preapprove all audit and permissible non-audit services provided by the independent auditor.44 In 2003, the Commission finalized its rules to implement Section 10A(i) of the Exchange Act.45 Under the rules, the audit committee is required to preapprove all permissible non-audit services and all audit, review, or attest engagements required under the securities laws. Additionally, the issuer must provide disclosure of the audit committee's preapproval policies and procedures in proxy statements related to the election of directors or the ratification of the independent public accountant.46

    44 Section 202 of the Sarbanes-Oxley Act; 15 U.S.C. 78j-1(i)(1)(A).

    45See Release No. 34-47265.

    46See Item 9(e)(5) of Schedule 14A [17 CFR 240.14a-101].

    Concurrently, the Commission adopted rules that changed both the types of fees paid to the independent auditor that must be described and the number of years for which the disclosures must be provided.47 As a result, an issuer is required to disclose the fees paid to its independent auditor for each of the two most recent fiscal years, separated into the following four categories: (1) Audit Fees, (2) Audit-Related Fees, (3) Tax Fees, and (4) All Other Fees.48 Additionally, registrants are required to describe the nature of the services provided that are categorized as Audit-Related Fees and All Other Fees. The registrant is also required to disclose the percentage of services in the Audit-Related Fees, Tax Fees, and All Other Fees captions that were approved by the audit committee pursuant to its preapproval policies and procedures.49

    47See Release No. 34-47265.

    48See Item 9(e) of Schedule 14A.

    49Id.

    C. Disclosure Requirements Regarding Proposal To Ratify Selection of Independent Auditors

    While the audit committees of listed issuers are required to appoint the issuer's auditors, many issuers solicit the approval or ratification of the independent auditors from shareholders.50 If such a proposal is solicited, the issuer must provide the information required by Item 9 of Schedule 14A. Specifically, in addition to the fee information and preapproval policies noted above, shareholders of listed issuers must receive disclosure of the following:

    50See Ernst & Young, “Audit Committee Reporting to Shareholders: Going Beyond the Minimum,” (Feb. 2013), available at http://www.ey.com/Publication/vwLUAssets/Audit_committee_reporting_to_shareholders%3A_going_beyond_the_minimum/%24FILE/Audit_committee_reporting_CF0039.pdf (noting that more than 90 percent of Fortune 100 companies seek annual shareholder ratification of the auditor chosen by the audit committee); Ernst & Young, “Let's Talk: Governance—Audit Committee Reporting to Shareholders 2014 Proxy Season Update,” (Aug. 2014), available at http://www.ey.com/Publication/vwLUAssets/ey-lets-talk-governance-august-2014/$FILE/ey-lets-talk-governance-august-2014.pdf.

    • The name of the auditor selected or being recommended for the current year;

    • the auditor for the most recently completed fiscal year, if different from the one subject to the ratification;

    • whether a representative from the auditor's firm will be present at the meeting, will have the opportunity to make a statement, and be available to respond to questions; and

    • information regarding dismissed or resigned auditors as required by Item 304(a) of Regulation S-K.51

    51 Item 9 of Schedule 14A (referring to Item 304(a) of Regulation S-K [17 CFR 229.304(a)]).

    The rules do not require issuers to provide information about the audit committee's process and reasons that lead to the selection of the independent auditor subject to the ratification solicitation.

    IV. Reasons To Seek Comment on the Audit Committee Reporting Requirements

    While current audit committee reporting requirements provide information about the role of the audit committee with respect to its oversight of the auditor, these disclosures do not describe how the audit committee executes its responsibilities. The ways in which an audit committee discharges its responsibilities can be influenced by its composition and the environment in which it operates. As discussed below, the fact that a significant number of audit committees voluntarily provide information beyond the disclosures required by our current rules raises a question of whether there may be market demand for such information.52 Similarly, during a series of roundtables attended by audit committee members from various jurisdictions, participants stated that investors and other stakeholders have requested greater transparency about audit committee activities.53 However, there appears to be limited research as to why some companies provide voluntary disclosure regarding audit committee activities and whether and how such additional information impacts investors' investment or voting decisions. For instance, variability in the nature and extent of current voluntary disclosures could, to some extent, be the result of tailoring the disclosures to a company's facts and circumstances.

    52See CAQ and Audit Analytics, “2014 Audit Committee Transparency Barometer,” (Dec. 2, 2014), available at http://www.thecaq.org/docs/reports-and-publications/2014-audit-committee-transparency-barometer.pdf?sfvrsn=2 (“Audit Committee Transparency Barometer”). In addition, a report based on a 2014 review of proxy disclosures of Fortune 100 companies noted an upward trend in voluntary disclosures by audit committees since 2012. See also Ernst & Young, “Let's Talk: Governance—Audit Committee Reporting to Shareholders 2014 Proxy Season Update,” (Aug. 2014).

    53See Federation of European Accountants, the Institute of Chartered Accountants Australia and the CAQ, “Global Observations on the Role of the Audit Committee,” (May 13, 2013), available at http://www.thecaq.org/docs/reports-and-publications/globalobservationsontheroleoftheauditcommittee.pdf?sfvrsn=2 (“Global Observations”).

    Providing additional disclosure about the audit committee's oversight of the independent auditor could further inform investors about the oversight process and provide them with useful context for audit committee decisions. It may also enable investors to differentiate between companies based on the quality of audit committee oversight, and determine whether such differences in quality of oversight may contribute to differences in performance or quality of financial reporting among companies. Therefore, the Commission is seeking feedback to better understand whether additional audit committee reporting requirements related to oversight of the auditor would be useful to investors and if so, what information would be useful.54

    54 For example, an academic paper indicates that events that negatively impact the image of a company, such as a reporting failure, have a direct impact on turnover of audit committee members, while negative disclosures alone about audit committee members appear to have limited or mixed impact on member turnover. See Kachelmeier, S. et al., Why Do Ineffective Audit Committee Members Experience Turnover? (September 18, 2013), available at http://ssrn.com/abstract=1920850.

    A. Public Discussion of the Need for Updated Audit Committee Reporting

    Investors, organizations representing audit committee members, and auditors are among those that have expressed the need for audit committees to evaluate their disclosures and consider whether improvements can be made to provide investors with relevant information that more transparently conveys the oversight responsibilities performed by the audit committee relative to an issuer's auditor. For example, a group of corporate governance and policy organizations has expressed the view that public company audit committee reporting can and should be strengthened.55 At a meeting in June of 2013, several delegates from the Audit Committee Chair Advisory Council acknowledged that “[f]rankly, we don't do a good job of communicating what we do. The public doesn't see all the work we do, quarter after quarter.” 56

    55See A Call to Action supra note 2.

    56Id. at 7, (quoting National Association of Corporate Directors (“NACD”) Summary of Proceedings, Audit Committee Chair Advisory Council, at 6 (June 19, 2013), available at http://www.nacdonline.org/Resources/Article.cfm?ItemNumber=7284). The Audit Committee Chair Advisory Council is a group of audit committee chairs, shareholder representatives, regulators and other stakeholders that discuss ways to improve communications between corporations and stakeholders, improve audit committee practices, and give voice to audit committee members.

    Investors have also increased their focus on the activities and transparency of audit committees, including those activities related to enhancing audit quality through oversight of the independent auditor. Some investors have sought greater disclosure from audit committees of a number of public companies about matters such as the responsibility of the audit committee for the appointment, compensation, and oversight of the external auditor; audit firm tenure; audit firm fee determinations; and audit committee involvement in the selection of the audit engagement partner.57 Institutional investor groups have called for additional audit committee disclosures as part of their published “good corporate governance policies.” 58

    57See A Call to Action at 6 (describing investors' increasing interest and focus on the audit committee).

    58See, e.g., Council of Institutional Investors, Policies on Corporate Governance, Section 2.13 (updated Sept. 27, 2013), available at http://www.cii.org/corp_gov_policies#BOD.

    Internationally, there appears to be interest in improving the communication coming from audit committees. For example, one of the themes that emerged at a 2013 summit hosted by the members of the Audit Committee Leadership Networks in North America and Europe was the recognition that “[r]egulators, policy-makers, and many investors would benefit from a more robust understanding of what the public company audit committee does and how it oversees the external audit firm and performs its other responsibilities.” 59

    59See A Call to Action at 7, (citing Tapestry Networks, ViewPoints, Issue 22, p.1 (May 2, 2013), available at http://www.tapestrynetworks.com/initiatives/corporate-governance/global-audit-committee-leadership-networks/upload/Tapestry_EY_ACLS_Summit_View22-May13.pdf).

    Some audit committee members, however, see additional reporting as possibly contributing to a state of “disclosure overload.” 60 Some are also skeptical whether additional reporting would be helpful to “stakeholders,” “in light of a lack of interest in audit committee reporting currently required.” 61 Others have suggested the need for principles-based reporting to allow for flexibility and to avoid a “one size fits all” approach.62 Given these varied views on the usefulness and relevance of audit committee disclosures, the Commission is seeking input on whether and how additional reporting may be useful to investors.

    60See Global Observations at 7; See also Center for Capital Markets Competitiveness, Corporate Disclosure Effectiveness: Ensuring a Balanced System that Informs and Protects Investors and Facilitates Capital Formation, (Jul. 28, 2014), available at http://www.centerforcapitalmarkets.com/wp-content/uploads/2014/07/CCMC_Disclosure_Reform_Final_7-28-20141.pdf.

    61Id.

    62Id.

    B. Divergence in Current Audit Committee Reporting Practice

    Some issuers, including their audit committees, already provide disclosures that go beyond the required disclosures.63 For example, a report by the CAQ and Audit Analytics reviewing the 2014 proxy disclosures of 1,500 Standard & Poor's (“S&P”) composite companies, including the S&P 500 (“S&P 500”) companies, the S&P MidCap 400 (“S&P MidCap”) companies, and the S&P SmallCap 600 (“S&P SmallCap”) companies noted the following:

    63See, e.g., A Call to Action at 7.

    • 83% of S&P 500, 69% of S&P MidCap, and 58% of S&P SmallCap companies discussed how non-audit services may impact auditor independence;

    • 47% of S&P 500, 42% of S&P MidCap, and 50% of S&P SmallCap companies disclosed the length of time an auditor has been engaged;

    • 13% of S&P 500, 10% of S&P MidCap, and 8% of S&P SmallCap companies discussed the audit committee's considerations of qualifications, geographic reach, and firm expertise when appointing the auditor;

    • 8% of S&P 500, 7% of S&P MidCap, and 15% of S&P SmallCap companies discussed the criteria considered when evaluating the audit firm;

    • 3% of S&P 500, 2% of S&P MidCap, and 1% of S&P SmallCap companies disclosed the significant areas addressed with the auditor;

    • 13% of S&P 500 and 1% of both S&P MidCap and S&P SmallCap companies included an explicit statement that the audit committee is involved in the selection of the audit engagement partner; and

    • 13% of S&P 500, 4% of S&P MidCap and 1% of S&P SmallCap companies discussed audit fees and their connection to audit quality.64

    64See Audit Committee Transparency Barometer.

    These additional disclosures are voluntary, not consistently provided and may vary among registrants, depending on company characteristics.65 Some audit committees may disclose only what is specifically required, for a variety of reasons, for instance, to avoid legal exposure,66 to avoid incremental associated efforts of the disclosure process, or because they do not believe such additional information would be useful to investors.

    65 According to the observations of an accounting firm, variability in reporting may also be the result of, among other things, differences in regulatory and listing requirements across jurisdictions and interest by investors and others for disclosures that go beyond the minimum. See Ernst & Young, “Enhancing audit committee transparency: Themes in audit committee disclosures in Australia, Canada, Singapore, the UK and the US” (Mar. 2015), available at http://www.ey.com/Publication/vwLUAssets/EY-Enhanced-audit-committee-transparency-themes-in-audit-committee-disclosures/$FILE/EY-Enhanced-audit-committee-transparency-themes-in-audit-committee-disclosures.pdf.

    66See NACD Summary of Proceedings, Audit Committee Chair Advisory Council, (June 19, 2013).

    C. PCAOB Standard-Setting Projects

    The PCAOB is engaged in standard-setting initiatives that could result in additional information being disclosed related to the auditor and its work. One project has been exploring a requirement that the auditor disclose, in the auditor's report, the name of the engagement partner as well as the names, locations, and extent of participation of other independent public accounting firms that took part in the audit and the locations and extent of participation of other persons not employed by the auditor that took part in the audit.67

    67See PCAOB Release No. 2013-009, Improving Transparency Through Disclosure of Engagement Partner and Certain Other Participants in Audits (Dec. 4, 2013), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket029.aspx. Similar requirements exist in other jurisdictions, including but not limited to, the European Union, United Kingdom, Australia, Sweden, China, and Taiwan. Academic research has supported that, in at least these particular jurisdictions, information about individual audit partners, over and above information about the audit firm, is relevant to financial statement users for both public and private firms. See Carcello, J. and C. Li., Cost and Benefits of Requiring an Engagement Partner Signature: Recent Experience in the United Kingdom, 88 The Accounting Review, 1511 (2013); Aobdia, D. et al., Capital Market Consequences of Individual Audit Partners, The Accounting Review, (forthcoming) available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2321333 (discussing Taiwan's mandate regarding disclosure of individual audit partners); Knechel, R. et al., Does the Identity of Engagement Partners Matter? An Analysis of Audit Partner Reporting Decisions, Contemporary Accounting Research, (forthcoming) available at https://www.caaa.ca/_files/file.php?fileid=filerSDAxJgThx&filename=file_Knechel__Vanstraelen__Zerni__Does_the_Identity_of_Engagement_Partners_Matter.pdf (discussing Sweden's disclosure requirement); Gul, F.A. et al., Do Individual Auditors Affect Audit Quality? Evidence From Archival Data, 88 The Accounting Review, 1993 (2013) (discussing China's disclosure requirement); and The Association of Chartered Certified Accountants and Macquarie University, The Drivers of Audit Quality: Views From Australian CFOs, (2014), available at http://www.accaglobal.com/content/dam/acca/global/PDF-technical/audit-publications/pol-tp-daq1(cfo)-drivers-audit-quality.pdf.

    Some investors have indicated that the engagement partner's track record compiled from the disclosure of the partner's name would be relevant in “overseeing the audit committees and determining how to cast votes on more than two thousand proposals that are presented annually to shareholders on whether to ratify the board's choice of outside auditor.” 68 Audit firms and other commenters questioned whether the auditor's report is the most appropriate place to provide this information, for example, due to potential liability concerns.69 As a result, the PCAOB is seeking further comment on whether these concerns would be sufficiently addressed by providing the information in an alternative location, outside of the auditor's report and outside of the issuer's filing.70

    68See, Reproposed Rule Comment Letter of the Council of Institutional Investors (Aug. 15, 2014), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket029Comments.aspx.

    69 Some commenters voiced the concern, for example, that the PCAOB's December 2013 reproposal on disclosure of the engagement partner and other participants in the audit may lead to the engagement partner and other participants (other independent public accounting firms and other persons not employed by the auditor) being deemed experts for purposes of liability under Section 11 of the Securities Act of 1933 (“Securities Act”). See, e.g., Reproposed Rule Comment Letters of Deloitte & Touche LLP (Feb. 3, 2014), PricewaterhouseCoopers LLP (Feb 4, 2014), Ernst & Young LLP (Feb 12, 2014), Society of Corporate Secretaries & Governance Professionals (Mar. 12, 2014), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket029Comments.aspx.

    70 PCAOB Release No. 2015-004, Supplemental Request for Comment: Rules to Require Disclosure of Certain Audit Participants on a New PCAOB Form (June 30, 2015), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket029.aspx.

    Commenters on the PCAOB's proposal have also suggested that it may be more appropriate for any requirement for proposed disclosures to be considered by the Commission, rather than the PCAOB, because having these disclosures made by the issuer, in the audit committee report or proxy statement, appears aligned with the responsibilities outlined in Section 10A(m) of the Exchange Act.71 Requiring any such disclosure by the audit committee would require Commission action because the PCAOB does not have authority over issuer disclosures.

    71See Reproposed Rule Comment Letters of Dennis R. Beresford (Jan 6, 2014), Institute of Management Accountants (Jan 21, 2014), Charles Noski (Jan 13, 2014), James L. Fuehrmeyer, Jr. (Jan 22, 2014), Audit and Assurance Services Committee of the Illinois CPA Society (Feb 3, 2014), Professional Standards Committee of the Texas Society of Certified Public Accountants (Feb 3, 2014), CAQ (Feb 3, 2014), Auditing Standards and SEC Committees of the New York State Society of Certified Public Accountants (Feb 4, 2014), PricewaterhouseCoopers LLP (Feb 4, 2014), Ernst & Young LLP (Feb 12, 2014), Crowe Horwath (Feb 12, 2014), G. Lawrence Buhl, CPA (Mar 5, 2014), U.S. Chamber of Commerce, Center for Capital Market Competitiveness (Mar 10, 2014), KPMG LLP (Mar 13, 2014), Financial Management and Assurance, U.S. Government Accountability Office (Mar 17, 2014), Robert N. Waxman, CPA (Mar 17, 2014), and CohnReznik LLP (Mar 17, 2014), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket029Comments.aspx.

    Another PCAOB initiative could result in disclosure of additional information about the audit and the auditor, including the auditor's tenure, in the auditor's report.72 Some commenters believe the disclosure of auditor tenure in the auditor's report would be useful because it could help investors evaluate the audit committee's oversight of the auditor (including its rationale for selecting or retaining the auditor) and develop a basis for shareholders to ratify the audit committee's selection of the auditor, when applicable.73 Others raised concerns about the lack of evidence correlating auditor tenure and audit quality and whether the placement of this data in the auditor's report would imply that some correlation exists.74 Some believe that issuer filings with the Commission would be a more appropriate location for this disclosure.75

    72See PCAOB Release No. 2013-005, Proposed Auditing Standards on the Auditor's Report and the Auditor's Responsibilities Regarding Other Information and Related Amendments (Aug. 13, 2013), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket034.aspx.

    73See, e.g., Proposed Rule Comment Letters of Counsel of Institutional Investors (Dec. 16, 2013), CFA Institute (Dec. 30, 2013), and Peter Clapman (Dec. 5, 2013), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket034Comments.aspx.

    74See, e.g., Proposed Rule Comment Letters of Deloitte and Touche, LLP (Dec. 11, 2013), NAREIT (Dec. 11, 2013), Tyson Foods, Inc. (Dec. 11, 2013), Nucor (Dec. 10, 2013), Williams (Dec. 4, 2013), Acuity Brands (Nov. 26, 2013), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket034Comments.aspx. Despite commenters' views, there is some academic evidence connecting auditor tenure and audit quality, which is discussed in Section VI.C.3.

    75See, e.g., Proposed Rule Comment Letters of National Association of Corporate Directors (Dec. 11, 2013) (suggesting that the Commission should consider inclusion of tenure information in proxy statements if there is sufficient investor interests), Federation of European Accountants (Dec. 11, 2013) (stating its belief that an auditor could disclose tenure if it is not already disclosed in management's report or annual financial statements), Institute of Management Accountants (Nov. 12, 2013) (objecting to inclusion in the auditor's report and noting that it may be a corporate governance matter included in the proxy statement), and BlackRock, Inc. (Oct. 30, 2013) (not objecting to the inclusion while noting that inclusion in an issuer filing may be preferable), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket034Comments.aspx.

    D. Initiatives in Other Jurisdictions To Enhance Audit Committee Reporting

    Other jurisdictions also have been exploring expanded reporting with respect to audit committees. For example, in 2012, the UK Financial Reporting Council adopted amendments to its Corporate Governance Code that require a separate section of the annual report that describes the work of the audit committee in discharging its responsibilities.76 The report now includes, among other things, the significant issues considered in relation to the financial statements and how they were addressed; how the audit committee assessed the effectiveness of the audit process; the approach to appointing the auditor and how objectivity and independence are safeguarded relative to non-audit services; as well as information on the length of tenure of the current audit firm and when a tender was last conducted.

    76 Section C.3.8 of the UK Corporate Governance Code, available at https://www.frc.org.uk/Our-Work/Codes-Standards/Corporate-governance/UK-Corporate-Governance-Code.aspx.

    The International Auditing and Assurance Standards Board (the “IAASB”) has also acknowledged the merits of enhanced disclosure around the activities of the audit committee. In connection with its efforts to develop a framework for audit quality, it has stated:

    While users are likely to conclude that the active involvement of a high-quality audit committee will have a positive impact on audit quality, there is considerable variability in the degree to which audit committees communicate to users the way they have fulfilled these responsibilities. There is potential for fuller disclosure of the activities of audit committees to benefit both actual audit quality and user perception of it. Consequently, some countries are actively exploring whether to include more information in annual reports about the activities of audit committees in relation to the external audit.77

    77 IAASB, “A Framework for Audit Quality,” p. 48 (Jan. 15, 2013), available at http://www.ifac.org/publications-resources/framework-audit-quality.

    An amendment to the Directive on Statutory Audits adopted by the European Union in April 2014 78 included measures to strengthen the independence of statutory auditors, make the audit report more informative, and strengthen audit supervision. The Directive amendment reinforces the role of the audit committee by expanding its responsibilities in ensuring the quality of the audit being performed, giving it responsibility for the auditor appointment process, and enhancing the auditor's reporting requirements to the audit committee.79 Specifically, the Directive requires that the audit committee explain to the issuer's board how the auditor contributed to the integrity of the financial statements and how the committee assessed threats to the auditor's independence and implemented appropriate safeguards, and also requires the audit committee obtain a detailed report from the auditor on the results of the audit.

    78See Directive 2014/56/EU of the European Parliament and Council of April 16, 2014, available at http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0056&from=EN.

    79Id.

    Corporate governance practices, regulations, and enforcement vary across countries.80 Therefore, the Commission is interested in understanding whether enhanced audit committee disclosures would result in benefits for U.S. investors.

    80 OECD, “Corporate Governance Factbook,” (Feb. 2014), available at http://www.oecd.org/daf/ca/CorporateGovernanceFactbook.pdf.

    E. References to PCAOB Auditing Standards

    With the Commission's approval of PCAOB Auditing Standard No. 16, Communications with Audit Committees (“AS 16”) in 2012, changes to the required audit committee communications by the auditor, among others, were incorporated within PCAOB auditing standards and superseded the prior communication requirements in AU sec. 380.81 As a result, Item 407(d) of Regulation S-K is no longer current because it references AU sec. 380. In addition to this outdated reference, there are required communications in other PCAOB standards that are not reflected in current audit committee disclosure requirements.82 Moreover, the existing audit committee report does not address the Commission's communication requirements in Rule 2-07 of Regulation S-X.

    81See Release No. 34-68453, Public Company Accounting Oversight Board; Order Granting Approval of Proposed Rules on Auditing Standard No. 16, Communications with Audit Committees, and Related and Transitional Amendments to PCAOB Standards (Dec. 17, 2012) [77 FR 75689].

    82 Appendix B to AS 16 identifies other PCAOB rules and standards that require audit committee communications, such as communications related to an audit of internal control over financial reporting that is integrated with an audit of financial statements, related party transactions, fraud considerations, and illegal acts, among others.

    The change to the communication requirements within the auditing standards without a corresponding change in the audit committee reporting requirements has resulted in divergent practices. For example, some companies' audit committee reports refer to matters required to be communicated under AS 16; others refer to matters required to be communicated under all PCAOB standards. Still others continue to refer to communications under AU sec. 380, even though AU sec. 380 has been superseded. These differences in reporting may result in confusion among readers of the audit committee reports as to whether appropriate auditor and audit committee communications have occurred and therefore, suggest a need to consider updating the audit committee disclosure requirements.

    V. Focus on Audit Committee Oversight of the Auditor

    The Commission is interested in understanding whether changes should be made to required disclosures about audit committees regarding oversight of the audit and the auditor relationship. The Commission is also interested in understanding whether this additional information would help inform investment decisions and, where applicable, voting decisions regarding the ratification of auditors and the election of directors who are members of the audit committee.

    Request for Comment

    1. Do the current audit committee reporting requirements result in disclosures that provide investors with useful information? Why or why not? Are there changes to the current audit committee disclosure requirements that the Commission should consider that would better inform investors about the audit committee's oversight of the audit and the independent auditor?

    2. Are there existing disclosure requirements in this area that should be revised, reconsidered or removed? If so, which ones? How and why should they be changed?

    3. Would investors find additional or different audit committee reporting requirements useful given the committee's strengthened and expanded role in overseeing a company's independent auditor that resulted from the Sarbanes-Oxley Act? For example, to what extent is information regarding how the audit committee discharges its responsibilities useful to investors given the nature of the requirements and likely variability in performance? Also, are there particular audit committee responsibilities for which information would be likely more or less useful and why?

    4. What, if any, are potential challenges that issuers or audit committees may face that the Commission should consider as it assesses potential changes to disclosures in this area?

    5. Are there other areas where changes to the current audit committee disclosure requirements would be desirable? If so, what are they?

    6. Should the audit committee provide disclosure of its work in other areas, for example, its oversight of the financial reporting process or the internal audit function? If so, what types of disclosures would be most useful and why?

    VI. Potential Changes to Disclosures

    The Commission is seeking comment on potential changes to required disclosures regarding an audit committee's role and responsibilities relative to the audit and the auditor, and other potential related changes. The Commission is seeking feedback on the disclosure requirements to determine the extent to which adding, removing, or modifying certain audit committee disclosures would enhance the usefulness of such disclosures for investors.

    The purpose of the disclosures discussed below would be to address the audit committee's responsibilities with respect to the appointment, compensation, retention, and oversight of the work of the registered public accounting firm and better inform investors about how the audit committee executes those responsibilities. The Commission is seeking feedback on the content and scope of the audit committee disclosures, as well as commenters' views on which of these disclosures, if any, would be most useful in conveying how the audit committee executes its oversight of the auditor and whether such enhanced disclosures would be useful to investors' investment or voting decisions.

    Such disclosures could provide information that frequently is either not readily available or inconsistently available today to investors. These disclosures could also minimize the “expectations gap” that some have expressed exists between investors and the audit committee regarding the role of the audit committee.83 In a series of roundtables organized by the CAQ, the Federation of European Accountants, and the Institute of Chartered Accountants Australia in January and February of 2013, participants noted that stakeholders' expectations are not consistent with the audit committee's actual responsibilities and how they are discharged, which results in the current expectations gap.84

    83See Global Observations.

    84Id.

    For purposes of this concept release, the Commission has categorized the specific audit committee disclosures about which the Commission is interested in receiving comment into three groups: the audit committee's oversight of the auditor, the audit committee's process for selecting the auditor, and the audit committee's consideration of the qualifications of the audit firm and certain members of the engagement team when selecting the audit firm. The Commission is also interested in receiving comments on where the audit committee disclosures should be located and whether there are specific concerns relating to smaller reporting companies 85 and emerging growth companies.86 In Section VII of this release, the Commission also asks more general questions with respect to any potential new disclosures.

    85See Rule 12b-2 of the Exchange Act [17 CFR 240.12b-2].

    86See Section 2(a)(19) of the Securities Act [15 U.S.C. 77b(a)(19)] and Section 3(a)(80) of the Exchange Act [15 U.S.C. 78c(a)(80)].

    A. Audit Committee's Oversight of the Auditor 1. Additional Information Regarding the Communications Between the Audit Committee and the Auditor

    As noted in Section III.A, the audit committee report today discloses whether certain communications have occurred. Potential additional disclosures about the communications might provide additional information about the actions the audit committee has taken during the most recently completed fiscal year to oversee the auditor and the audit. Also, as previously discussed, current requirements for the audit committee report contain an outdated reference to AU sec. 380, which was superseded by AS 16. In addition to correcting this reference, the Commission is considering whether to require additional qualitative disclosures about the nature and timing of the required communications between the audit committee and the auditor.

    For instance, the PCAOB has required that the auditor communicate with the audit committee prior to the issuance of the auditor's report.87 The disclosure rules could require the audit committee to discuss not just whether and when all of the required communications occurred, but also the audit committee's consideration of the matters discussed. Such communications and related disclosures could address, for instance, the nature of the audit committee's communications with the auditor related to items such as the auditor's overall audit strategy, timing, significant risks identified, nature and extent of specialized skill used in the audit, planned use of other independent public accounting firms or other persons, planned use of internal audit, basis for determining that the auditor can serve as principal auditor, and results of the audit, among others, and how the audit committee considered these items in its oversight of the independent auditor.

    87See paragraph 26 of AS 16.

    Request for Comment

    7. Should the Commission consider modifying any of the existing audit committee disclosure requirements regarding communications with the auditor? If so, which disclosure requirements should the Commission consider modifying and what modifications should be made?

    8. Should the Commission update the existing disclosure requirements to include all communications required by Commission rules and PCAOB standards rather than only those required by AS 16? Would expanding the requirements to encompass all required communications create difficulties for issuers or audit committees in complying with the disclosure requirements? Why or why not?

    9. Should there be disclosure about the audit committee's consideration beyond a statement that they have received and discussed the matters communicated by the auditor as required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence? If so, what should be included in the disclosure?

    10. Currently, audit committees are only required to disclose whether the required communications occurred. Are statements confirming that required communications have occurred helpful disclosure? Why or why not?

    11. Should there be disclosures regarding the nature or substance of the required communications between the auditor and the audit committee? Are there other types of communications between the audit committee and the auditor about which the Commission should consider mandating disclosure?

    12. Should such discussion be required to address all required communication topics or a subset of overarching topics related to how the auditor planned and performed the audit? For instance, should the audit committee disclose information regarding how the audit committee considered the nature of the required communications that were made under paragraphs 9 and 10 of AS 16 as it relates to significant risks identified, nature and extent of specialized skill used in the audit, planned use of the company's internal auditors, involvement by other independent public accounting firms or other persons, and the basis for determining that the auditor can serve as the principal auditor in its oversight of the independent auditor? Should the audit committee disclose how it dealt with disagreements between company management and the auditor? If so, what should be included in the disclosure? Are there other categories of the communications between auditors and the audit committee that should be considered for disclosure?

    13. For audits involving multiple locations, should the audit committee report disclose information regarding how the audit committee considered, in its oversight of the auditor, the scope of the audit, locations visited by the auditor, and the relative amount of account balances related to such locations compared to the consolidated financial statements?

    14. Communications between the auditor and the audit committee may not be limited to the items required by Commission rules and PCAOB standards. Should the audit committee report be required to disclose any information about the extent to which additional matters were discussed with the auditor? If so, what level of detail should be required?

    15. Are there benefits, costs or unintended consequences that could result from requiring disclosure that goes beyond a statement that the required discussions have occurred? How would the disclosures be used by institutional and retail investors, investment advisers, and proxy advisory firms in making voting decisions and recommendations on matters such as director elections, executive compensation, or shareholder proposals, among others?

    16. Would the potential disclosures referenced here be decision-useful to investors? If so, would it be sufficient for the disclosure to address the consideration given by the audit committee without necessarily disclosing the underlying substance? Would disclosing the substance of the communications between the audit committee and the auditor be useful to investors? Why or why not?

    17. Could these potential disclosures chill communications between the audit committee and the auditor? If so, how? Could they reveal proprietary information about the issuer or the audit methodology? If so, how?

    2. The Frequency With Which the Audit Committee Met With the Auditor

    The audit committee and auditor can determine the timing, frequency and forum (e.g., in-person or telephonically and extent of committee participation) for meetings, provided that required communications are made in accordance with PCAOB standards and Commission rules.88 Also, there are listing requirements that the audit committee meet separately and periodically with management, the internal auditor, and the independent auditor.89 Recognizing that the number of audit committee meetings is already required to be disclosed,90 requiring additional disclosure about the specific meetings with the auditor may provide additional insight into the audit committee's oversight of the auditor.

    88 AS 16 and Rule 2-07 of Regulation S-X.

    89See NYSE Listed Company Manual, Section 303A.07(E) and the Commentary to Section 303A.07(E).

    90See Item 407(b)(3) of Regulation S-K.

    Request for Comment

    18. Should there be additional disclosures required about the meetings the audit committee has had with the auditor? If so, what type of disclosures should be made and why? If not, why not?

    19. Should the audit committee report disclose the frequency with which it met privately with the auditor? Would confirmation that private conversations occurred be useful disclosure even if there are no disclosures about the topics discussed? Should there be a requirement to disclose the topics discussed?

    3. Review of and Discussion About the Auditor's Internal Quality Review and Most Recent PCAOB Inspection Report

    Pursuant to certain listing requirements, the audit committee must obtain and review a report by the independent auditor describing the firm's internal quality-control procedures,91 any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, with respect to one or more independent audits carried out by the firm.92 Audit committees not subject to these listing standards may choose to request or discuss this information with their auditors, but they are not required to do so.

    91 Paragraphs .04-.07 of PCAOB QC Section 30, Monitoring a CPA Firms Accounting and Auditing Practice, discuss the requirements related to an audit firm's internal quality-control review.

    92See NYSE Listed Company Manual, Section 303A.07(b)(iii)(A).

    Information about the results of internal quality reviews, or a PCAOB inspection of a company's audit, as well as more general inspection results, can help an audit committee in carrying out its oversight role. Inspection reports can inform an audit committee about how its auditor performed in high-risk areas across audits. As the PCAOB has stated, “[t]he [Sarbanes-Oxley] Act does not permit the [PCAOB] to make public, or otherwise to share with an audit committee, all of the information obtained by the PCAOB that could assist an audit committee in carrying out its role. . . . Beyond the public portion of an inspection report, voluntary disclosure by the inspected audit firm is an audit committee's only means of obtaining information concerning a PCAOB inspection.” 93 The PCAOB also has provided sample questions an audit committee may wish to ask auditors. Specifically, the PCAOB stated:

    93See PCAOB Release No. 2012-003, Information for Audit Committees about the PCAOB Inspection Process (Aug. 1, 2012), available at http://pcaobus.org/Inspections/Documents/Inspection_Information_for_Audit_Committees.pdf.

    [W]ithout necessarily framing discussions in terms of an inspection or an inspection report, an audit committee might benefit from having an understanding with its audit firm through which the audit committee receives timely information (both during the conduct of the inspection and when the Board has issued a final inspection report) about—

    • whether anything has come to the firm's attention suggesting the possibility that an audit opinion on the company's financial statements is not sufficiently supported, or otherwise reflecting negatively on the firm's performance on the audit, and what if anything the firm has done or plans to do about it;

    • whether a question has been raised about the fairness of the financial statements or the adequacy of the disclosures;

    • whether a question has been raised about the auditor's independence relative to the company;

    • whether any of the matters described in the public portion of an inspection report on the firm, whether or not they involve the company's audit, involve issues and audit approaches similar to those that arise or could arise in the audit of the company's financial statements;

    • to the extent any such similarity exists, whether and how the firm has become comfortable that the same or similar deficiencies either did not occur in the audit of the company's financial statements or have been remedied; and how issues described by the Board in general reports summarizing inspection results across groups of firms relate to the firm's practices, and potentially the audit of the company's financial statements, and how the firm is addressing those issues.94

    94Id. at p. 10-11.

    Disclosure could be required as to whether this type of discussion has occurred. There also could be disclosure required about the nature of any discussions held with the auditor about the results of the firm's internal quality review and most recent PCAOB inspection. These disclosures may provide transparency with respect to the extent of the audit committee's oversight of the auditor.

    Request for Comment

    20. Would disclosure about the audit committee's review and discussion of the audit firm's internal quality-control review and most recent PCAOB inspection report be useful to investors? If so, what types of disclosures should be made in this regard? Would disclosures about the nature and extent of such discussions be useful without disclosure of the specific review or inspection results? Should the disclosures include information about how the audit committee considered any deficiencies described in the PCAOB inspection report on the audit process? If not, why not?

    21. Is there a risk that the confidentiality of the nonpublic PCAOB inspection results could be undermined (e.g., if this information is sought and provided through the audit committee)? If so, what type of information could be presented that might be problematic?

    22. Should we require disclosure about how the audit committee considered the results described in PCAOB inspection reports in its oversight of the auditor? Why or why not?

    23. Are there particular issues or challenges in this area that should be considered? If so, please describe and provide data.

    4. Whether and How the Audit Committee Assesses, Promotes and Reinforces the Auditor's Objectivity and Professional Skepticism

    Through its interactions with the auditor, the audit committee may be in a position to assess, promote, and reinforce the auditor's objectivity and professional skepticism. Heightened oversight by the audit committee of the auditor's objectivity and professional skepticism should promote greater audit quality. The audit committee could disclose whether, and if so how, as part of its oversight of the auditor, it assesses, promotes, or reinforces the auditor's objectivity and professional skepticism. Additionally, the audit committee could disclose the results of its evaluation of the auditor's objectivity and professional skepticism.

    Request for Comment

    24. Would investors find disclosure about whether, and if so how, the audit committee assesses, promotes, and reinforces the auditor's objectivity and professional skepticism useful? Why or why not?

    25. What specific types of disclosures could the audit committee make in this regard? For example, should the audit committee disclose whether, and if so how, it evaluated the auditor's objectivity and professional skepticism, as well as the results of such an evaluation? Commenters are encouraged to provide examples of such disclosures.

    B. Audit Committee's Process for Appointing or Retaining the Auditor

    For listed issuers, the audit committee is responsible for appointing the auditor and deciding whether to retain an auditor.95 However, satisfying this requirement can involve a wide range of activities. In fulfilling this responsibility, the audit committee may conduct an assessment of the current auditor. It may also decide to seek requests for proposals from other auditors. Potential disclosures could provide information about the actions the audit committee took in reaching a decision about which auditor to select for the upcoming fiscal year's audit.

    95 Even for non-listed issuers, the audit committee may have a role in the selection of the auditor. See, e.g., paragraphs 4-7 of AS 16.

    1. How the Audit Committee Assessed the Auditor, Including the Auditor's Independence, Objectivity and Audit Quality, and the Audit Committee's Rationale for Selecting or Retaining the Auditor

    Disclosure about the process the audit committee undertook and the criteria used to assess the auditor and the audit committee's rationale for selecting or retaining the auditor could provide transparency into how the audit committee oversees the auditor and the rigor with which the audit committee exercises its responsibility to appoint a new, or retain an existing, auditor. In addition to the steps involved in the process to assess the auditor, disclosure also could be provided regarding the specific elements or criteria the audit committee considered during the process. Disclosures could, for example, include a description of the nature of the audit committee's involvement in evaluating and approving the auditor's compensation.

    There are also numerous ongoing efforts to identify ways to assess audit quality (“audit quality indicators”) and these efforts may result in published metrics and criteria that could be used for providing insight into audit quality.96 Audit committees may choose to use the output from these efforts to guide discussion with the auditor about audit quality. To the extent the audit committee uses such indicators or metrics in assessing the quality of the auditor and the audit, disclosure about the use and consideration of such metrics may provide useful information about the audit committee's process for assessing the auditor and determining whether to select or retain the auditor.

    96 Organizations such as the PCAOB, IAASB, and CAQ have discussed projects related to audit quality frameworks or indicators. The CAQ has published, “The CAQ Approach to Audit Quality Indicators” available at http://www.thecaq.org/docs/reports-and-publications/caq-approach-to-audit-quality-indicators-april-2014.pdf?sfvrsn=2.

    Request for Comment

    26. What types of disclosures could be made regarding the process the audit committee undertook to evaluate the external audit and performance and qualifications of the auditor, including the rationale for selecting or retaining the auditor?

    27. Should the disclosures include a description of the nature of the audit committee's involvement in approving the auditor's compensation, including how compensation is determined and evaluated? Should the disclosures include the criteria or elements the audit committee considered? Should the audit committee provide additional disclosure about the nature and extent of non-audit services and its evaluation on how such services relate to its assessment of independence and objectivity?

    28. If audit quality indicators are used in the evaluation of the auditor, should there be disclosure about the indicators used, including the nature, timing, and extent of audit quality indicators considered by the audit committee? 97 If audit quality indicators are not used in the evaluation of the auditor, what, if any, disclosures regarding the assessment of audit quality should be provided?

    97See PCAOB Release No. 2015-005, Concept Release on Audit Quality Indicators (June 30, 2015).

    2. If the Audit Committee Sought Requests for Proposal for the Independent Audit, the Process the Committee Undertook To Seek Such Proposals and the Factors They Considered in Selecting the Auditor

    The audit committee may periodically seek requests for proposals for the independent audit. Disclosures about the process the audit committee undertook, including the number of auditors that were asked to propose, information on how those auditors were selected, and the information that the audit committee used in its decision, may provide information about the audit committee's process in selecting or retaining an auditor and about the quality and qualifications of the auditor selected. Additionally, academic research is mixed as to whether companies engage in “opinion-shopping.” 98 The Commission is interested in knowing whether relevant disclosures of the audit committee's process in selecting the auditor might be useful to investors.

    98See Lennox, C., Do Companies Successfully Engage in Opinion-Shopping? Evidence from the UK, 29 Journal of Accounting and Economics, 321 (2000); and Chan, H.K. et al., A Political-Economic Analysis of Auditor Reporting and Auditor Switches, 11 Review of Accounting Studies, 21 (2006), both of which provide evidence that opinion shopping may occur. In contrast, in the United States, a study of auditor changes from the four largest U.S. accounting firms to small, not mid-market, audit firms found market reactions that support the notion of auditor changes in the post-Sarbanes-Oxley Act and PCAOB inspection era as being driven by better services. These results refute a notion of opinion shopping or shopping for lower audit fees. These authors also note that academic research in the 1980s and 1990s indicated that opinion shopping is generally unsuccessful. Chang, H. et al., Market Reaction to Auditor Switching from Big 4 to Third-Tier Small Accounting Firms, 29 Auditing: A Journal of Practice and Theory, 85 (2010).

    Request for Comment

    29. What types of disclosures could be made about requests for proposals for the audit, including the process undertaken and the factors considered in selecting the audit firm?

    30. Should there be disclosure as to whether the audit committee sought proposals for the audit (including the reason the request for proposal was made), or whether the audit committee has a policy in this regard?

    3. The Board of Directors' Policy, if any, for an Annual Shareholder Vote on the Selection of the Auditor, and the Audit Committee's Consideration of the Voting Results in its Evaluation and Selection of the Audit Firm

    In those cases where a company voluntarily seeks ratification of its auditor, requiring additional disclosure may be useful to promote informed voting decisions. The Commission is interested in feedback on potential disclosure about the board of directors' policy, if any, for annual shareholder vote on the selection of the auditor, and the audit committee's consideration of the voting results in evaluating and selecting the audit firm, including situations where the audit firm fails to achieve majority support. Such disclosure could provide useful information to shareholders as to how and why the board is seeking ratification of the auditor, as well as the implication of the shareholder vote being solicited.

    Request for Comment

    31. Would additional disclosures in this area provide meaningful additional information with respect to the selection of the auditor? If so, what types of disclosures should the Commission require to be made in this regard? For example, in addition to disclosure of whether there is a policy about shareholder ratification, should there also be disclosure of the factors the board considered in establishing the policy?

    32. If there are a significant number of votes against the ratification, and the board nevertheless proceeds with the auditor in question, should the audit committee report provide the reasons why the board determined to go forward with that auditor? If not in the audit committee report, where should this information be provided and when should it be provided?

    33. If it is determined that additional disclosure is required in this area, should voting on ratifications of independent auditors continue to be considered a “routine matter” allowing for discretionary voting by brokers on such ratifications pursuant to NYSE Rule 452? 99

    99 NYSE General Rules, Operation of Member Organizations, Rule 452 available at http://nyserules.nyse.com/nysetools/PlatformViewer.asp?SelectedNode=chp_1_2&manual=/nyse/rules/nyse-rules/.

    C. Qualifications of the Audit Firm and Certain Members of the Engagement Team Selected By the Audit Committee

    In the course of carrying out its responsibilities related to auditor oversight, an audit committee is likely to gain an understanding of the key participants in the audit, their experience, and their qualifications to perform a high-quality audit. The key participants in the audit can vary, but at a minimum include the engagement partner and engagement quality reviewer. Given this knowledge, the audit committee is in a position to evaluate the independence and qualifications of both the audit firm and key members of the engagement team, including the engagement partner, and determine whether to select or retain the auditor. Disclosures could convey the factors the audit committee considered most relevant in selecting or retaining the auditor and provide information about the auditor selected by the audit committee for the upcoming fiscal year's audit.

    1. Disclosures of Certain Individuals on the Engagement Team

    Disclosure could be provided with the name of the engagement partner, alone or with the name(s) of other key members of the audit engagement team (e.g., the engagement quality reviewer), the length of time such individual(s) have served in that role and any relevant experience.100 Regarding experience, information could be provided about the number of prior audit engagements performed and whether they were in the same industry. To the extent it is known that the individual(s) disclosed will be changing for the upcoming year's audit, that information could also be disclosed.

    100 Both the PCAOB and the IAASB have been pursuing projects that would require naming the engagement partner in the audit report. See PCAOB Release No. 2013-009; PCAOB Release No. 2015-004; and the IAASB final rule International Standard on Auditing (ISA) 700 (Revised), Forming an Opinion and Reporting on Financial Statements), including paragraph 45 of ISA 700, available at http://www.ifac.org/publications-resources/international-standard-auditing-isa-700-revised-forming-opinion-and-reporting.

    Request for Comment

    34. Would disclosure of the name of the engagement partner be useful to investors? Would disclosure of any additional members of the engagement team be useful and, if so, which? (For example, should the names of all partners who are required to rotate under SEC independence rules be disclosed? Why or why not?) Should there be other disclosures about the engagement team or others involved in the audit? If so, what additional information should be disclosed? Are there any costs to such disclosure?

    35. Are there incremental benefits to disclosing the name (such as increased accountability)? Is disclosure of the name helpful in promoting audit quality? Are current risks of potential legal liability, regulatory sanction and significant reputational costs strong enough incentives to develop a team that is capable of executing the audit in accordance with professional standards? Why or why not? In addition to disclosure of the name, there could be disclosure regarding other qualifications, such as the length of time the individual has served in that role, professional licenses, or his or her experience. What, if any, additional information should be disclosed? Why?

    36. Is the audit committee the appropriate party to provide such disclosure? If not, what other party or parties should provide the disclosure and why?

    37. Would such disclosure be more appropriately disclosed in the auditor's report? Why or why not? Would it be better disclosed in a separate filing with the PCAOB? Why or why not? If the disclosure is provided in a separate filing with the PCAOB, what information should the disclosure include?

    38. If the name of the engagement partner is available elsewhere (e.g., included in the auditor's report or a supplemental filing with the PCAOB), would investors benefit from having it also reported as part of the audit committee's disclosures? Why or why not? Also, if the name of the engagement partner is available elsewhere, should the audit committee's report refer to where the disclosure is otherwise located?

    39. If the name of the engagement partner is reported in the audit committee report, would investors benefit from this information also being available in one location for all audits?

    40. If disclosures are required and it is known that the person(s) disclosed will change for the next audit, should there be disclosure of this fact including who will, or is expected to, take on the role for the next audit? Why or why not?

    41. If there is a change in the engagement partner during the year, should this be disclosed sooner than in the next annual update? If other named individuals change during the year, should this be disclosed as well?

    42. Are there any liability implications (e.g., for engagement partners, audit committee members, the company or other participants) with respect to disclosure of participants in the audit? If so, what are these implications? Do the implications change based on where or how the disclosure is made?

    2. Audit Committee Input in Selecting the Engagement Partner

    The audit committee may provide input into an audit firm's assignment of the individual who will serve as the engagement partner for the upcoming audit. Disclosures about the involvement of the audit committee in this selection, and any input the audit committee had in the decision, may provide transparency and insight into the exercise of the audit committee's responsibilities in overseeing the auditor.

    Request for Comment

    43. Should the audit committee be required to disclose what it considered in providing input to the firm's assignment of the engagement partner? If so, what information should such disclosures contain?

    44. Should the disclosures be limited to whether the audit committee participated in the selection of the engagement partner, or should there be more detail regarding the audit committee's input?

    3. The Number of Years the Auditor Has Audited the Company

    The number of years the auditor, or its predecessor(s) in the case of merged audit firms, has audited the company may be a relevant consideration to the audit committee's determination of whether or not to engage or retain the auditor. The role of auditor tenure in audit quality has attracted significant attention over the past few years.101 Most academic research indicates that engagements with short-term tenure are relatively riskier or that audit quality is improved when auditors have time to gain expertise in the company under audit and in the related industry.102 However, some academic research suggests that both short and long tenure can have detrimental effects on audit quality.103 Audit committees may view auditor tenure as a positive or negative influence on audit quality, depending on the length of such tenure. In light of the public interest in the subject of auditor tenure, disclosure of this data could provide insight into the audit committee's overall decision to engage or retain the auditor.

    101See, e.g., PCAOB Release No. 2011-006, Concept Release on Auditor Independence and Audit Firm Rotation (Aug. 16, 2011), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket037.aspx; and PCAOB Release No. 2013-005, Proposed Auditing Standards on the Auditor's Report and the Auditor's Responsibilities Regarding Other Information and Related Amendments (Aug. 13, 2013), available at http://pcaobus.org/Rules/Rulemaking/Pages/Docket034.aspx.

    102See Myers, J. et al., Exploring the Term of the Auditor-Client Relationship and the Quality of Earnings: A Case for Mandatory Auditor Rotation? 78 The Accounting Review, 779 (2003); and Carcello, J. and Nagy, A., Audit Firm Tenure and Fraudulent Financial Reporting, 23 Auditing: A Journal of Practice and Theory, 55 (2004).

    103See, e.g., Davis, L. et al., Auditor Tenure and the Ability to Meet or Beat Earnings Forecasts, 26 Contemporary Accounting Research, 517 (2009).

    Request for Comment

    45. Should the audit committee's report include information about the length of the audit relationship? What types of disclosures could the audit committee make in this regard? Should it be just the years of auditor tenure?

    46. Should there also be disclosure as to whether and, if so, how auditor tenure was considered by the audit committee in retaining the auditor? Should there be disclosure of how tenure was considered in evaluating the auditor's independence and objectivity? Why or why not?

    47. Would disclosure of auditor tenure be more appropriately disclosed in the auditor's report? Why or why not? Would it be better disclosed somewhere else (such as in a form filed with the PCAOB)? Why or why not?

    4. Other Firms Involved in the Audit

    In many audits, especially audits of companies with multiple locations and international operations, the firm signing the auditor's report involves other affiliated accounting firms, non-affiliated accounting firms, and other third-party participants, such as tax advisors or actuaries, in the conduct of a portion of the audit work. The auditor is required to communicate to the audit committee the names, locations, and planned responsibilities of other independent public accounting firms or other persons, who are not employed by the auditor, that perform audit procedures in the current period audit. Specifically, paragraph 10 of AS 16 requires:

    As part of communicating the overall audit strategy, the auditor should communicate the following matters to the audit committee, if applicable:

    • The nature and extent of specialized skill or knowledge needed to perform the planned audit procedures or evaluate the audit results related to significant risks;

    • the extent to which the auditor plans to use the work of the company's internal auditors in an audit of financial statements;

    • the extent to which the auditor plans to use the work of internal auditors, company personnel (in addition to internal auditors), and third parties working under the direction of management or the audit committee when performing an audit of internal control over financial reporting;

    • the names, locations, and planned responsibilities of other independent public accounting firms or other persons, who are not employed by the auditor, that perform audit procedures in the current period audit; and

    Note: The term “other independent public accounting firms” in the context of this communication includes firms that perform audit procedures in the current period audit regardless of whether they otherwise have any relationship with the auditor.

    • the basis for the auditor's determination that the auditor can serve as principal auditor, if significant parts of the audit are to be performed by other auditors.104

    104 AS 16.

    After receiving the above information from the auditor, the audit committee may choose to meet with and discuss with the auditor, the other firms, or other persons who will be performing work on the audit. The audit committee is not required to disclose these communications with the auditor to investors.

    Request for Comment

    48. Should the Commission require any additional disclosures in this regard? For example, should the names of the other independent public accounting firms and other persons involved in the audit be disclosed? Should the extent of involvement by these other participants be disclosed? Why or why not?

    49. Should the names of other participants be included in the required disclosure instead of in the auditor's report? Should the names be disclosed elsewhere? If so, why? Would investors benefit from having all of the information located in the audit committee report?

    D. Location of Audit Committee Disclosures in Commission Filings

    As noted in Section III, current audit committee disclosures can appear in different places. None of the disclosures are specifically listed in the registration statement forms used for public offerings. As such, audit committee disclosures are not generally included in the prospectus delivered to investors for initial public offerings. Some of the audit committee disclosures are required in an issuer's annual report on Form 10-K filed with the Commission.105 These disclosures would be considered part of the prospectus when the registration statements incorporate an issuer's annual report by reference.106

    105 Item 10 of Form 10-K references the disclosure requirements in Items 407(d)(4) and (5) of Regulation S-K. A similar requirement is also included in Item 7(b) of Schedule 14A.

    106 In practice, many registrants provide the Items 407(d)(4) and (5) disclosures in their definitive proxy statements in reliance on General Instruction G(3) of Form 10-K. Once the definitive proxy statements are filed, the information is incorporated by reference into their Form 10-K, which is then incorporated by reference into any currently effective Form S-3 or other registration statement subsequently filed, as applicable.

    The audit committee report 107 and the disclosure of the function and number of meetings held by the audit committee 108 is not generally considered part of the prospectus in a registered offering, since it is not required by the Securities Act registration forms or the annual report on Form 10-K.109 As the audit committee disclosures may inform investors' investment decisions, the Commission solicits feedback regarding the placement of current and potential additional audit committee disclosures, including the audit committee report.

    107 Item 407(d)(3) of Regulation S-K.

    108 Item 407(b)(3) of Regulation S-K.

    109 Pursuant to Instruction 1 to Item 407(d) of Regulation S-K, the information required by Items 407(d)(1), (2), and (3) is not deemed to be soliciting material or filed with the Commission, except to the extent that a registrant specifically requests such information be treated as soliciting material or is incorporated by reference into a Securities Act registration statement.

    Request for Comment

    50. Would investors benefit from the audit committee disclosures being presented in one location? If so, where should the disclosures appear and how would investors benefit? If not, why is the existing location of the various audit committee disclosures appropriate?

    51. Should all or any of the audit committee disclosures, including the audit committee report, be included in registration statements filed pursuant to the Securities Act? If not, why not? If so, why and should the disclosure requirements be included within Securities Act registration statement forms or as a Form 10-K disclosure requirement that may then be incorporated by reference into Securities Act registration statements?

    52. With respect to the additional disclosures discussed in this release, where should they be made? If required, should they be in the audit committee report, a separate section of the proxy statement, the annual report, on the company's Web site, or elsewhere? Please provide an explanation as to why the disclosure should be made in a suggested location. If required, should the disclosure be furnished but not filed? Why or why not?

    E. Smaller Reporting Companies and Emerging Growth Companies

    Item 407(g) of Regulation S-K provides the only audit committee disclosure accommodation within Item 407 that is specific to smaller reporting companies.110 The Jumpstart Our Business Start-Ups Act (the “JOBS Act”) 111 did not change the audit committee disclosure requirements for emerging growth companies. As such, the Commission is soliciting feedback regarding the application of the current and potential audit committee disclosure requirements to smaller reporting companies and emerging growth companies.

    110 17 CFR 229.407(g).

    111 Public Law 112-106, 126 Stat. 306 (2012).

    Request for Comment

    53. Should current audit committee disclosure requirements be changed for smaller reporting companies or emerging growth companies? If so, which requirements and why? Would investors in smaller reporting companies or emerging growth companies find this information any more or less useful than similar disclosure requirements for other issuers? If so, how, and why?

    54. With respect to the additional disclosures discussed in this release, should any disclosure requirements, if adopted, apply to smaller reporting companies or emerging growth companies? If so, which requirements and why? If not, why not? Would different disclosure requirements impact the issuers (e.g., secondary market liquidity)?

    VII. Additional Request for Comment Regarding Audit Committee Disclosures

    In addition to seeking public comment on the foregoing topics for disclosure, the Commission seeks public comment in response to the following questions about the disclosures as a whole. If views of these questions would differ based on what type of disclosure is being considered, please differentiate and explain why.

    Request for Comment

    55. Should additional disclosures, such as those presented in Section VI, be required, or should they be voluntary as they are today? Should the Commission consider requiring specific disclosures, or requiring certain categories of disclosures? If so, which categories?

    56. Are there specific issuer, industry, audit committee member, or auditor characteristics that should be considered in establishing new disclosure requirements? Are there particular disclosures that should always be required and, if so, which? Are there particular disclosures that should only be required if certain conditions or characteristics are present and, if so, which disclosures and under what circumstances? Are there particular disclosures for which specificity in the requirement is important and, if so, for which disclosures and elements of disclosures should the requirements be specific?

    57. Would the disclosures prompt the audit committee to change how it oversees the auditor? If so, how?

    58. Would such disclosures provide insight into the nature, timing, and extent of the audit committee's oversight of the auditor?

    59. Would the disclosures promote audit quality? If so, how?

    60. Would the disclosures discussed herein result in boilerplate information? If so, how could the requirements be crafted to avoid boilerplate disclosure?

    61. Would any of the additional disclosures discussed in this concept release result in disclosure that is not useful to investors? Why or why not?

    62. Would additional information need to be disclosed in order to place any or all of the disclosures discussed above in the appropriate context? If so, what additional disclosures might be needed, and should they be required or discretionary?

    63. If the Commission were to proceed with requiring some or all of the disclosures proposed above, should the disclosures be made by all issuers? For example, should the disclosures be required only for those subject to the proxy rules? Should they be required for foreign private issuers? 112 Why or why not? Should there be accommodations made for certain types of companies or certain circumstances? If so, what should they be?

    112 Foreign private issuers are not subject to the proxy rules. See Rule 3a12-3(b) of the Exchange Act [17 CFR 240.3a12-3(b)].

    64. If the Commission proceeds with requiring some or all of the disclosures proposed above, should there be a requirement to update these disclosures for changes between proxy or information statements? If so, what should trigger amended disclosures? Should any such updates be made quarterly or more frequently?

    65. If the Commission proceeds with requiring some or all of the disclosures discussed above, should the disclosures be required to be provided in an interactive data format? If so, what elements of disclosure should be provided in that manner and in what format should the information be provided?

    66. The audit committee disclosure requirements may reference other documents, such as an audit committee charter. Should such documents be provided along with the required disclosures? If not, should information be provided to help locate the information referenced? Why or why not? Should information be hyperlinked? If so, are there any unintended consequences or implementation challenges that may result from information being presented in this manner?

    67. If the Commission proceeds with requiring some or all of the disclosures proposed above, under existing reporting deadlines, would there be sufficient time to prepare these disclosures? Would there be difficulties in making these disclosures?

    68. Would the additional disclosures discussed above help minimize information asymmetries that may exist between management and investors? If so, how? What other benefits may accrue from providing this information?

    69. Expanded disclosures may have direct and indirect economic impacts on market participants. What direct and indirect economic impacts would these disclosures have on market participants? Are there any unintended consequences that could result from such disclosures with respect to audit firms, individual audit partners, audit committee members, audit committees, issuers, investors, or others? For instance, could potential changes chill or overly formalize audit committee communications with auditors? Are there specific liability implications with respect to additional disclosure made by the audit committee? If so, please describe.

    70. Would other categories of disclosures about the audit committee's role relative to the auditor be useful? If so, what other categories?

    71. How should the Commission address potential changes in the auditor's report with respect to audit committee oversight of the auditor?

    72. If audit committees are required to provide disclosure that relates to information provided by the auditor (and it is not currently required to be communicated by the auditor under existing PCAOB auditing standards), would changes to PCAOB auditing standards be necessary to ensure that additional information beyond existing required communications is provided to the audit committee?

    73. Are there improvements that the Commission should consider to the reporting on the audit committee's oversight of the accounting and financial reporting process or internal audits? For instance, should the audit committee disclose how it interacts with the company's management?

    74. Should the Commission consider the potential for changes that would affect the role and responsibilities of the audit committee, such as those related to qualifications of members of the audit committee or areas for which audit committees should (or should not) be responsible? Should the audit committee disclose its role, if any, in risk governance? Should the audit committee report on other areas of oversight? For example, audit committees may be charged with overseeing treatment of complaints, cyber risks, information technology risks, or other areas. Would this disclosure distract from the report's focus on oversight of the audit function? In this regard, we note that commentators have recently indicated concern that audit committees are becoming the catch all of board committees by overseeing anything related to risk.113

    113 Michael Rapoport & Joann S. Lublin, Meet the Corporate Board's “Kitchen Junk Drawer,” Wall St. J. (Feb. 3, 2015).

    In addition to the areas for comment identified above, we are interested in any other issues that commenters may wish to address and the benefits and costs relating to investors, issuers and other market participants of revising disclosure rules pertaining to the audit committee and the audit committee report included in Commission filings. Please be as specific as possible in your discussion and analysis of any additional issues. Where possible, please provide empirical data or observations to support or illustrate your comments.

    By the Commission.

    Dated: July 1, 2015. Brent J. Fields, Secretary.
    [FR Doc. 2015-16639 Filed 7-7-15; 8:45 am] BILLING CODE 8011-01-P
    DEPARTMENT OF ENERGY Federal Energy Regulatory Commission 18 CFR Part 342 [Docket No. RM15-20-000] Five-Year Review of the Oil Pipeline Index AGENCY:

    Federal Energy Regulatory Commission.

    ACTION:

    Notice of inquiry.

    SUMMARY:

    The Federal Energy Regulatory Commission (Commission) invites comments on its proposed five-year review of the index level used to determine annual changes to oil pipeline rate ceilings. The Commission proposes an index level between the Producer Price Index for Finished Goods (PPI-FG)+2.0 percent and PPI-FG+2.4 percent for the five-year period commencing July 1, 2016. The Commission invites interested persons to submit comments regarding this proposal and any alternative methodologies for calculating the index level.

    DATES:

    Initial Comments are due August 24, 2015, and Reply Comments are due September 21, 2015.

    ADDRESSES:

    You may submit comments, identified by docket number by any of the following methods:

    Agency Web site: http://www.ferc.gov. Documents created electronically using word processing software should be filed in native applications or print-to-PDF format and not in a scanned format. All supporting workpapers must be submitted with formulas and in a spreadsheet format acceptable under the Commission's eFiling rules.

    Mail/Hand Delivery: Commenters unable to file comments electronically must mail or hand deliver an original to: Federal Energy Regulatory Commission, Office of the Secretary, 888 First Street NE., Washington, DC 20426.

    FOR FURTHER INFORMATION CONTACT:

    Monil Patel (Technical Information); Office of Energy Market Regulation; Federal Energy Regulatory Commission; 888 First Street NE.; Washington, DC 20426; (202) 502-8296; Andrew Knudsen (Legal Information); Office of the General Counsel; Federal Energy Regulatory Commission; 888 First Street NE.; Washington, DC 20426; (202) 502-6527.

    SUPPLEMENTARY INFORMATION:

    1. The Commission annually applies an index to existing oil pipeline transportation rate ceilings to establish new rate ceiling levels. The Commission reexamines this index every five years.1 In this notice of inquiry (NOI), the Commission invites comments on its proposal to use an index level between the Producer Price Index for Finished Goods 2 (PPI-FG)+2.0 percent and PPI-FG+2.4 percent for the next five years beginning July 1, 2016.3 This proposal is based upon the Kahn Methodology established in Order No. 561 and applied in subsequent five-year review proceedings.4 The Commission proposes a range because not all pipelines have filed Form No. 6 data for 2014. The Commission will select a final index level at the conclusion of this proceeding. Commenters are invited to submit comments on, and justify alternatives to, the proposed index level. In addition to inviting comments, the Commission plans to hold a conference on July 30, 2015, to discuss the issues raised by this notice. A subsequent notice will provide additional details regarding the conference.

    1 The five-year review process was established in Order No. 561. See Revisions to Oil Pipeline Regulations Pursuant to the Energy Policy Act, Order No. 561, FERC Stats. & Regs. ¶ 30,985 (1993), order on reh'g, Order No. 561-A, FERC Stats. & Regs. ¶ 31,000 (1994), aff'd, Assoc. of Oil Pipelines v. FERC, 83 F.3d 1424 (D.C. Cir. 1996).

    2 The PPI-FG represents the Producer Price Index for Finished Goods. The PPI-FG is determined and issued by the Bureau of Labor Statistics, U.S. Department of Labor.

    3 As provided by 18 CFR 342.3(d)(2) (2014), “The index will be calculated by dividing the PPI-FG for the calendar year immediately preceding the index year by the previous calendar year's PPI-FG.” Multiplying the rate ceiling on June 30 of the index year by the resulting number gives the rate ceiling for the year beginning the next day, July 1.

    4Five-Year Review of Oil Pipeline Index, 133 FERC ¶ 61,228, at PP 5-9, 60-63 (2010), order on reh'g, 135 FERC ¶ 61,172 (2011). See also Five-Year Review of Oil Pipeline Index, 102 FERC ¶ 61,195 (2003), aff'd, Flying J Inc., et al., v. FERC, 363 F.3d 495 (D.C. Cir. 2004); Five-Year Review of Oil Pipeline Index, 114 FERC ¶ 61,293 (2006).

    I. Background

    2. In Order No. 561, the Commission established an indexing methodology that allows oil pipelines to change rates based upon an annual index as opposed to making cost-of-service filings.5 In Order No. 561, the Commission committed to review the index level every five years to ensure that the index level chosen by the Commission adequately reflects changes to industry costs.6

    5 Order No. 561, FERC Stats. & Regs. ¶ 30,985 at 30,947.

    6Id.

    3. In Order No. 561 and each successive index review, the Commission calculated the index level based upon a methodology developed by Dr. Alfred E. Kahn.7 The Kahn Methodology measures changes in operating costs and capital costs on a per barrel-mile basis using FERC Form No. 6 (Form No. 6) data from the prior five-year period (for example, between 2009 and 2014 in this proceeding).8 The Kahn Methodology uses net carrier property per barrel-mile as a proxy for capital cost data. The Kahn Methodology assigns a weight to the Form No. 6 operating expenses relative to the net carrier property using an “operating ratio.” 9 The weighted operating expense and the weighted net carrier property are then added together to establish the cumulative cost change for each pipeline.10

    7 The Commission's use of the Kahn Methodology has been affirmed by the United States Court of Appeals for the District of Columbia Circuit. Assoc. of Oil Pipelines v. FERC, 83 F.3d 1424 (D.C. Cir. 1996) and Flying J Inc., et al., v. FERC, 363 F.3d 495 (D.C. Cir. 2004).

    8 Specifically, this data is drawn from the Form No. 6: Carrier Property, page 110; Accrued Depreciation, page 111; Operating Revenues and Operating Expenses, page 114; Crude and Products Barrel-Miles, page 600. To the extent this information is incomplete, alternate data reported in the Form No. 6 has been substituted.

    9 The “operating ratio” = ((Operating Expense at Year 1/Operating Revenue at Year 1) + (Operating Expense at Year 5/Operating Revenue at Year 5))/2. If the operating ratio is greater than one, then it is assigned the value of 1 in the Kahn Methodology calculations.

    10 Cumulative Cost Change = (1-operating ratio) * net plant + operating ratio * operating expenses.

    4. Once these cumulative cost changes have been calculated for each pipeline with sufficient Form No. 6 data, the Kahn Methodology culls a data set consisting of pipelines with cumulative per-barrel-mile cost changes in the middle 50 percent of all pipelines. This trimming removes statistical outliers or spurious data points that could bias the sample in either direction. For the middle 50 percent data set, the Kahn Methodology considers three different measures of central tendency. One measure is the median of each data set. Another measure, the weighted mean, calculates an average barrel-mile cost change in which each pipeline's cost change is weighted by its barrel-miles. A third measure, the un-weighted average, calculates the simple average of the percentage cost change per barrel-mile for each pipeline. A composite is calculated by taking the simple average of the median, the weighted mean, and the un-weighted mean. This composite is compared to the value of the PPI-FG index data over the same period. The index level is then set at PPI-FG plus (or minus) this differential.

    II. Commission Proposal

    5. The Commission proposes to use an index level between PPI-FG+2.0 percent and PPI-FG+2.4 percent as the index level for the five-year period commencing July 1, 2016. This proposal is based upon the Kahn Methodology as applied to Form No. 6 data from the 2009 through 2014 period. The Commission's calculations are included in Attachment A to this order.

    III. Conference and Comment Procedures

    6. The Commission invites interested persons to submit comments regarding this proposal and any alternative methodologies for calculating the index level for the five-year period commencing July 1, 2016.

    7. Initial Comments are due August 24, 2015 and Reply Comments are due September 21, 2015. Comments must refer to Docket No. RM15-20-000, and must include the name of the commenter, and if applicable, the organization represented and their address. On July 30, 2015, the Commission plans to hold a conference to discuss the issues raised by this notice. A subsequent notice will provide additional details regarding the conference.

    8. 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. All supporting workpapers must be submitted with formulas and in a spreadsheet format acceptable under the Commission's eFiling rules. Commenters filing electronically do not need to make a paper filing.

    9. 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.

    10. 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 are not required to serve copies of their comments on other commenters.

    IV. Document Availability

    11. 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.

    12. From the Commission's Home Page on the Internet, this information is available in the Commission's document management system, 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) in the docket number field.

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

    By direction of the Commission.

    Dated: June 30, 2015. Nathaniel J. Davis, Sr., Deputy Secretary.
    [FR Doc. 2015-16628 Filed 7-7-15; 8:45 am] BILLING CODE 6717-01-P
    DEPARTMENT OF VETERANS AFFAIRS 38 CFR Part 4 RIN 2900-AO44 Schedule for Rating Disabilities—The Endocrine System AGENCY:

    Department of Veterans Affairs.

    ACTION:

    Proposed rule.

    SUMMARY:

    The Department of Veterans Affairs (VA) proposes to revise the portion of the VA Schedule for Rating Disabilities (Rating Schedule) that addresses the endocrine system. The intended effects of these changes are to update medical terminology, add medical conditions not currently in the Rating Schedule, revise the criteria to reflect medical advances since the last revision in 1996, and clarify the criteria.

    DATES:

    Comments must be received by VA on or before September 8, 2015.

    ADDRESSES:

    Written comments may be submitted through www.Regulations.gov; by mail or hand-delivery to the Director, Regulations Policy and Management (02REG), Department of Veterans Affairs, 810 Vermont Avenue NW., Room 1068, Washington, DC 20420; or by fax to (202) 273-9026. Comments should indicate that they are submitted in response to “RIN 2900-AO44-Schedule for Rating Disabilities—The Endocrine System.” Copies of comments received will be available for public inspection in the Office of Regulation Policy and Management, Room 1068, between the hours of 8:00 a.m. and 4:30 p.m., Monday through Friday (except holidays). Please call (202) 461-4902 for an appointment. (This is not a toll-free number.) In addition, during the comment period, comments may be viewed online through the Federal Docket Management System (FDMS) at www.Regulations.gov

    FOR FURTHER INFORMATION CONTACT:

    Nick Olmos-Lau, M.D., FAAN, Medical Officer, Compensation Service, Veterans Benefits Administration, Department of Veterans Affairs, (211C) 810 Vermont Avenue NW., Washington, DC 20420, (202) 461-9700. (This is not a toll-free number.)

    SUPPLEMENTARY INFORMATION:

    As part of the ongoing revision of the VA Schedule for Rating Disabilities (“Rating Schedule”), VA is proposing changes to 38 CFR 4.119, Schedule of ratings-endocrine system. This section was last updated in 1996. The endocrine system is made up of multiple hormone-producing glands. Hormones are chemical messengers that control the function of many body processes. While the actual dysfunction occurs at the site of the gland, the signs and symptoms manifest in the body systems on which the specific hormones act. For diagnosis and acute management of endocrine diseases, medical professionals focus on addressing the problem within the endocrine system. However, the residual effects of an endocrine disease may manifest within multiple body systems. Therefore, in general, VA proposes specific criteria for the initial rating of endocrine diseases within § 4.119 to account for the unique functional impairments associated with attempts to bring the condition under control. Once the condition is effectively managed or has reached maximal medical outcome, VA proposes to evaluate for the residual effects of disease within the appropriate (adversely impacted) body system. For rating clarity, the most commonly impacted systems would be referenced within the specific diagnostic code (DC). By the revisions discussed herein, VA aims to update medical terminology, add medical conditions not currently in the Rating Schedule, revise the criteria to reflect medical advances, and clarify the criteria.

    In preparing this proposed revision, VA conducted a mini-summit in Washington, DC, on December 2, 2009. VA also researched current medical information and consulted with Veterans Health Administration (VHA) subject matter experts.

    DC 7900: Hyperthyroidism, Including, But Not Limited to, Graves' Disease

    VA proposes to update the title of DC 7900. Currently, this DC is titled “Hyperthyroidism.” The most common cause of hyperthyroidism is Graves' disease, an autoimmune disease that affects multiple organ systems, including the eyes and skin. “Hyperthyroidism (overactive thyroid),” Mayo Clinic, http://www.mayoclinic.com/health/hyperthyroidism/DS00344/DSECTION=causes. Given the prevalence of hyperthyroidism due to Graves' Disease, VA proposes to explicitly recognize Graves' disease under this DC by changing the title of DC 7900 from “Hyperthyroidism” to “Hyperthyroidism, including, but not limited to, Graves' disease.” This is not a substantive change, but simply an effort to increase rating efficiency. To account for less common causes of hyperthyroidism not addressed by other DCs, VA does not propose to limit this DC so that it is only applicable to Graves' disease.

    Hyperthyroidism refers to the excess synthesis or secretion of thyroid hormone. Regardless of the specific cause, the symptoms directly caused by excess thyroid hormone are the same. Therefore, VA proposes to evaluate the disability associated with excess thyroid hormone using a single set of rating criteria that reflects an earlier diagnosis and current treatment options. Medical advances have facilitated earlier diagnosis and treatment of hyperthyroidism. Treatment is directed at symptom relief and includes antithyroid medications, radioactive iodine therapy, and thyroidectomy (surgical removal of the thyroid gland). Earlier treatment has decreased the duration and severity of both acute and chronic symptoms of hyperthyroidism, as well as its disabling residual effects. Therefore, the existing evaluations of 100 and 60 percent for this condition are no longer appropriate and VA proposes to no longer assign them.

    In the majority of cases, by the time patients present with the symptoms currently reflected in the criteria for a 30 percent evaluation (tachycardia, tremor, and increased blood pressure or pulse pressure), treatment is initiated. With treatment, these symptoms generally resolve completely within three to six months. Therefore, VA proposes to evaluate hyperthyroidism at 30 percent for six months after initial diagnosis. Because symptoms generally resolve completely while the 30 percent evaluation is applicable, VA also proposes to no longer assign a 10 percent evaluation. To account for symptoms that do not resolve completely within six months, VA proposes adding a directive instructing VA personnel to “rate residuals of disease or complications of medical treatment . . . within the appropriate body system.”

    Since cardiovascular abnormalities are common in hyperthyroidism, and some persist despite treatment with antithyroid medications, VA proposes an alternative to the current approach which rates certain cardiovascular manifestations within DC 7900 but refers VA personnel to DC 7008 (hyperthyroid heart disease) if heart disease is the predominant disability (see current Note (1)). Hyperthyroidism is associated with a variety of cardiovascular problems including tachycardia, systolic hypertension, cardiac arrhythmias particularly atrial fibrillation, supraventricular tachycardia, congestive heart failure or angina among others. See Faizel Osman et al., “Cardiovascular manifestations of hyperthyroidism before and after antithyroid therapy,” 49 (1) J. Am. College of Cardiology, 71-81 (2007). In order to address more specifically cardiovascular issues related to hyperthyroidism, VA proposes to modify the existing Note (1) to state that if cardiovascular or cardiac problems related to hyperthyroidism are present separately evaluate under DC 7008.

    In order to clarify a potentially confusing element in DC 7008 that directs hyperthyroid heart disease to be part of the overall evaluation of hyperthyroidism under DC 7900, VA proposes to amend DC 7008 by directing that hyperthyroid heart disease be rated under the appropriate cardiovascular diagnostic code, depending on particular findings.

    Currently, DC 7008 states that only when atrial fibrillation is present hyperthyroidism may be evaluated either under DC 7900 or under 7010 (supraventricular arrhythmia), whichever results in a higher evaluation. As described above, the potential cardiovascular conditions related to hyperthyroidism are numerous and complex, and the current approach limits the alternatives and precludes optimal assessment in instances other than for atrial fibrillation.

    Currently, Note (2) of DC 7900 states: “If ophthalmopathy is the sole finding, evaluate as field vision, impairment of (DC 6080); diplopia (DC 6090); or impairment of central visual acuity (DC 6061-6079).” In the case of Graves' disease, which is evaluated under proposed DC 7900, eye abnormalities can occur independently and in the absence of hyperthyroidism. As such, it is not appropriate to limit evaluation of such manifestations under either DC 7900 or an appropriate DC within the eye body system. VA therefore proposes to revise current Note (2) to read: Separately evaluate eye involvement occurring as a manifestation of Graves' Disease as diplopia (DC 6090); impairment of central visual acuity (DCs 6061-6066); or under the most appropriate DCs in § 4.79.

    DC 7901: Thyroid Enlargement, Toxic

    VA proposes to update the title of DC 7901 from “Thyroid gland, toxic adenoma of” to “Thyroid enlargement, toxic.” When discussing thyroid enlargement, “toxic” is the term used by the medical community to indicate overactive thyroid function, also known as hyperthyroidism. Currently, the rating criteria accompanying this DC are identical to that accompanying current DC 7900. Therefore, rather than repeating the criteria for hyperthyroidism, VA proposes Note (1) to direct raters to evaluate toxic thyroid enlargement under proposed DC 7900 (hyperthyroidism, including, but not limited to, Graves' disease).

    An enlarged thyroid may cause a visible swelling at the base of the neck or thyroidectomy may result in disfigurement. To account for such disfigurement, VA proposes Note (2) directing VA personnel: If disfigurement of the neck is present due to thyroid disease or enlargement, separately evaluate under DC 7800 (burn scar(s) of the head, face, or neck; scar(s) of the head, face, or neck due to other causes; or other disfigurement of the head, face, or neck).

    DC 7902: Thyroid Enlargement, nontoxic

    VA proposes to change the current title of DC 7902, “Thyroid gland, nontoxic adenoma of,” to “Thyroid enlargement, nontoxic.” In the context of thyroid function, “nontoxic” means that thyroid function is normal.

    Because thyroid function is normal, the disabling effects of nontoxic thyroid enlargement are a result of disfigurement or pressure on adjacent organs. A person with this condition may experience one or both of these effects. However, under the current criteria an evaluation may only be assigned for the more disabling effect. Therefore, to better reflect the full impact of the condition, VA proposes to amend the existing criteria to account for both effects occurring simultaneously.

    When the enlarged thyroid gland compresses adjacent organs, it may produce symptoms due to pressure on anterior neck structures, including the trachea (wheezing, cough), the esophagus (dysphagia), and the recurrent laryngeal nerve (hoarseness). The severity of disabilities related to pressure on adjacent organs is best evaluated under the DC(s) within the appropriate body system. Therefore, VA proposes to edit the current note under DC 7902, which would be proposed Note (1), to clarify VA's intention to evaluate the symptoms due to pressure on adjacent organs under the appropriate diagnostic code within the appropriate body system and to delete the current phrase “if doing so would result in a higher evaluation than using this [DC].” Currently, DC 7902 provides a 20 percent evaluation when there is disfigurement of the head or neck and a 0 percent evaluation when there is no such disfigurement. Disfigurement due to an enlarged thyroid gland is not defined in the existing criteria and, therefore, is subject to individual interpretation. Objective criteria for evaluating disfigurement of the neck already exist under DC 7800 (burn scar(s) of the head, face, or neck; scar(s) of the head, face, or neck due to other causes; or other disfigurement of the head, face, or neck). Because this set of criteria covers all types of disfigurement of the neck and provides a wider range of disability compensation, VA proposes deletion of the current criteria and addition of proposed Note (2) stating that disfigurement of the neck related to nontoxic thyroid enlargement should be evaluated under DC 7800.

    The proposed notes read as follows: “Note (1): Evaluate symptoms due to pressure on adjacent organs (such as the trachea, larynx, or esophagus) under the appropriate diagnostic code(s) within the appropriate body system.” “Note (2): If disfigurement of the neck is present due to thyroid disease or enlargement, separately evaluate under DC 7800 (burn scar(s) of the head, face, or neck; scar(s) of the head, face, or neck due to other causes; or other disfigurement of the head, face, or neck).”

    DC 7903: Hypothyroidism

    Hypothyroidism is currently evaluated at levels of 100, 60, 30, and 10 percent. Severe hypothyroidism is characterized by myxedema (coma or crisis), a life-threatening form of hypothyroidism found predominantly in undiagnosed or undertreated individuals that requires inpatient hospitalization for stabilization. Medical advances in the diagnosis and treatment of hypothyroidism have decreased the incidence of myxedema to the point that myxedema coma occurs in only 0.1 percent of all cases of hypothyroidism. Erik D Schraga, MD, “Hypothyroidism and Myxedema Coma in Emergency Medicine,” Medscape Reference (Mar. 29, 2012), http://emedicine.medscape.com/article/768053-overview. Symptoms of myxedema are currently evaluated at 100 and 60 percent. However, given the severity of the condition, a 60 percent evaluation is insufficient. Therefore, VA proposes a 100 percent evaluation for all instances of hypothyroidism with myxedema. VA proposes to add a note to provide: “This evaluation shall continue for six months beyond the date that an examining physician has determined crisis stabilization. Thereafter, the residual effects of hypothyroidism shall be rated under the appropriate diagnostic code(s) within the appropriate body system(s) (e.g., eye, digestive, and mental disorders).”

    Medical management of hypothyroidism, in the absence of myxedema, results in improvement of laboratory values within a few weeks. However, alleviation of other clinical symptoms may take up to six months to resolve. See Bijay Vaidya, “Management of Hypthyroidism,” BMJ 337:a801 (2008). Therefore, VA proposes to evaluate hypothyroidism in the absence of myxedema at 30 percent for six months after initial diagnosis and would explain this in a note that would also provide that, thereafter, the residual effects of hypothyroidism shall be rated under the most appropriate diagnostic code(s) within the appropriate body system(s) (e.g., eye, digestive, and mental disorders).

    VA also proposes to add a note to provide that eye involvement associated with hypothyroidism would also be evaluated under § 4.79. Specifically, the proposed note reads: “If eye involvement, such as exophthalmos, corneal ulcer, blurred vision, or diplopia, is also present due to thyroid disease, also separately evaluate under appropriate diagnostic code(s) in § 4.79, Schedule of Ratings—Eye (such as diplopia (DC 6090) or impairment of central visual acuity (DCs 6061-6066)).”

    DC 7904: Hyperparathyroidism

    Hyperparathyroidism, DC 7904, is currently evaluated at levels of 100, 60, and 10 percent. Due to increased routine laboratory testing, hyperparathyroidism is usually diagnosed before patients develop severe disease and often before any signs or symptoms, such as kidney stones, gastrointestinal problems or weakness, are present. John I. Lew, “Surgical Management of Primary Hyperparathyroidism: State of the Art,” 89 Surgical Clinics of N. Am. 1205-25 (2009); “Hyperparathyroidism,” Mayo Clinic, http://www.mayoclinic.com/health/hyperparathyroidism/DS00396. Therefore, the existing criteria for evaluations at the 100 and 60 percent rating are no longer appropriate, and VA proposes revision of all the criteria consistent with medical advances.

    Individuals diagnosed with hyperparathyroidism, but without symptoms (asymptomatic), require annual monitoring of their serum calcium levels and creatinine clearance (renal function). Bone density monitoring is also required every one to two years. These tests help medical professionals monitor the progression of the disease and to determine when surgery is necessary. Therefore, VA proposes to evaluate asymptomatic hyperparathyroidism at 0 percent.

    Individuals with mild hyperparathyroidism may develop symptoms of hypercalcemia before surgery is determined to be necessary. Even after surgery, mild symptoms may persist. Therefore, VA proposes a 10 percent evaluation for the presence of symptoms, such as fatigue, anorexia, nausea, or constipation, despite surgery or in subjects deemed not to be candidates for surgery who require continuous medications for control.

    Potential complications of hyperparathyroidism include gastric ulcers, kidney stones, decrease kidney function, and decreased bone mass associated with fragility fractures. Early intervention through laboratory monitoring generally prevents these complications. An increase in serum calcium, decreases in creatinine clearance, and decreases in bone density are used as laboratory indicators for the worsening of disease and evaluation for surgical intervention. Therefore, VA proposes a 60 percent evaluation for hypercalcemia indicated by at least one of the following: Total Ca greater than 12mg/dL (3-3.5 mmol/L), Ionized Ca greater than 5.6 mg/dL (2-2.5 mmol/L), creatinine clearance less than 60 mL/min, bone mineral density T-score less than 2.5 (SD below mean) at any site or previous fragility fracture). Because these findings indicate that surgical or pharmacologic intervention is warranted and such intervention usually resolves symptoms, VA proposes that the 60 percent evaluation shall continue until such intervention occurs. If surgery is not indicated, the 60 percent evaluation would continue for 6 months after pharmacological treatment begins. After six months, rating would be based on residuals under the appropriate diagnostic code(s) within the appropriate body system based on examination.

    Parathyroidectomy is the treatment of choice for symptomatic hyperparathyroidism. Therefore, VA proposes a 100 percent evaluation for six months after surgical intervention for hyperparathyroidism and thereafter, an evaluation based on the residuals of hyperparathyroidism or medical treatment under the appropriate diagnostic code(s) within the appropriate body system.

    VA proposes to amend the current note under DC 7904 by numbering the note as proposed Note (4) and clarifying that the residuals of hyperparathyroidism are to be rated under the appropriate DC. The current note reads: “Following surgery or treatment, evaluate as digestive, skeletal, renal, or cardiovascular residuals or as endocrine dysfunction.” The proposed Note (4) reads: “Following surgery or other treatment, evaluate chronic residuals, such as nephrolithiasis (kidney stones), decreased renal function, fractures, vision problems, and cardiovascular complications, under the appropriate diagnostic codes.”

    DC 7905: Hypoparathyroidism

    Parathyroid hormone controls the balance of calcium in the body. When there is not enough of this hormone, the condition is known as hypoparathyroidism. The predominant symptoms of hypoparathyroidism is neuromuscular irritability, including, but not limited to, paresthesias (tingling and numbness involving fingertips, toes, or perioral area), hyperirritability, fatigue, anxiety, mood swings and/or personality disturbances, seizures, hoarseness (due to laryngospasm), wheezing and dyspnea (due to bronchospasm), muscle cramps, and electrolyte imbalances (hypomagnesemia, hypokalemia, and alkalosis).

    Currently, evaluations are assigned based on some of these symptoms. However, because many of the symptoms of parathyroid hormone deficiency are caused by an imbalance of calcium in the body (decreased extracellular ionized calcium levels and hypocalcemia), when hypoparathyroidism is treated with calcium and vitamin D supplementation, the symptoms are generally eliminated. Paul Fitzgerald, “Chapter 26. Endocrine Disorders” (2014), http://accessmedicine.mhmedical.com/content.aspx?bookid=330&Sectionid=44291028. Therefore, VA proposes new evaluation criteria that account for this treatment. Specifically, VA proposes a 100 percent evaluation for three months after initial diagnosis and, thereafter, to rate residual effects, such as nephrolithiasis (kidney stones), cataracts, decreased renal function, and congestive heart failure under the appropriate DCs.

    New DC 7906: Thyroiditis

    VA proposes to add a new DC for thyroiditis, which is inflammation of the thyroid gland. The condition most often results from an autoimmune disease (known as Hashimoto's thyroiditis), where the immune system attacks the thyroid gland.

    However, regardless of the specific cause, thyroiditis may manifest as hyperthyroidism, hypothyroidism, or with no change in thyroid function. Because hyperthyroidism and hypothyroidism would be addressed in the Rating Schedule as proposed DCs 7900 and 7903, respectively, VA proposes a note to clarify that these manifestations be rated under those DCs.

    While thyroiditis may also be present in a person with normal thyroid function, because thyroiditis increases the likelihood of developing hyperthyroidism or hypothyroidism, the thyroid function of these individuals must be monitored. This factor is not currently accounted for in the Rating Schedule. Therefore, for these individuals, VA proposes that a 0 percent evaluation for asymptomatic thyroiditis be associated with this DC.

    DC 7907: Cushing's Syndrome

    Cushing's syndrome is the result of prolonged elevation in the amount of glucocorticoid in the body. The severity of the signs and symptoms is determined by the duration and level of glucocorticoid exposure.

    Currently, evaluations for Cushing's syndrome are assigned based in part on enlargement of the adrenal gland (which produces these hormones) and the pituitary gland (which produces hormones that trigger the adrenal gland). However, glandular enlargement is not indicative of disease severity. Exogenous glucocorticoid exposure (the intake of glucocorticoids), the most common cause of Cushing's syndrome, does not involve enlargement of the pituitary or adrenal glands. Therefore, VA proposes to delete the requirement for the presence of enlargement of the pituitary or adrenal gland as one of the criteria required for 100 and 60 percent evaluations.

    The muscle weakness associated with Cushing's syndrome is a result of proximal muscle wasting and weakness caused by excess glucocorticoid hormones. This muscle wasting results in the inability to rise from a squatting position without assistance, and, in more severe cases, the inability to climb stairs or get up from a deep chair. Lynnette K. Nieman, MD, “Epidemiology and clinical manifestations of Cushing's syndrome” UpToDate (Oct. 22, 2013), http://www.uptodate.com/contents/epidemiology-and-clinical-manifestations-of-cushings-syndrome. To clarify the criteria for 100 and 60 percent evaluations, VA proposes to replace “loss of muscle strength” with the more specific criteria of “proximal upper and lower extremity muscle wasting that results in inability to rise from squatting position, climb stairs, rise from a deep chair without assistance, or raise arms.” VA also proposes to remove “weakness” from the list of criteria for a 100 percent evaluation because it is already captured with language replacing “loss of muscle strength.” With these proposed modifications, a 100 percent evaluation would be assigned for Cushing's syndrome if there is “active, progressive disease, including areas of osteoporosis, hypertension, and proximal upper and lower extremity muscle wasting that results in inability to rise from a squatting position, climb stairs, rise from a deep chair without assistance, or raise arms.” Similarly, VA proposes a 60 percent evaluation for Cushing's syndrome if there is “[p]roximal upper or lower extremity muscle wasting that results in inability to rise from a squatting position, climb stairs, rise from a deep chair without assistance, or raise arms.” VA proposes no change to the current 30 percent evaluation criteria.

    The treatment for Cushing's syndrome is determined by the glucocorticoid source. Endogenous hypercortisolism (overproduction of glucocorticoid hormones by the adrenal gland) is treated by surgical removal of the adrenal gland, medical adrenalectomy, surgical resection of a pituitary tumor, or radiation therapy of the pituitary gland. Exogenous hypercortisolism is treated via gradual reduction of the outside source, such as corticosteroid medications. Because early medical intervention has decreased the complications associated with Cushing's syndrome, VA proposes evaluations for Cushing's syndrome at the 100, 60, or 30 percent level for six months after initial diagnosis. Because treatment may not completely eliminated complications or may itself be associated with complications, after six months, VA proposes to rate residuals such as adrenal insufficiency, cardiovascular, psychiatric, skin, or skeletal complications under the appropriate diagnostic code(s) within the appropriate body system. Therefore, VA proposes to amend the note following DC 7907 to reflect the above proposed changes.

    DC 7908: Acromegaly

    Acromegaly, DC 7908, is a condition in which the pituitary gland produces excess growth hormone, usually due to a benign tumor. The excessive amount of hormone results in enlargement of various body tissues, including bone. Acromegaly is currently evaluated at levels of 100, 60, and 30 percent. VA proposes no changes in the evaluation criteria for the 100 and 60 percent levels. The current 30 percent evaluation criteria for acromegaly require that there be enlargement of acral parts or overgrowth of long bones, and an enlarged sella turcica (the depression at the base of the skull where the pituitary gland is located). VA proposes to remove “enlarged sella turcica” as one of the required criteria. Although acromegaly is generally due to a pituitary tumor (which commonly results in enlargement of the sella turcica), it occasionally arises from causes that do not produce an enlarged sella turcica. Further, enlargement of the sella turcica is not an indicator of the severity of the condition. Therefore, it is not appropriate to retain “enlarged sella turcica” as a required criterion, and VA proposes to remove it.

    DC 7909: Diabetes Insipidus

    Inadequate secretion of or a resistance to antidiuretic hormone (ADH) is the cause of diabetes insipidus (DI). ADH limits the amount of water that the kidneys allow to leave the body. A lack of or resistance to ADH causes excessive excretion of free water. This disease is characterized by polyuria (frequent urination), polydipsia (excessive thirst), and nocturia (frequent night time urination). Without treatment, dehydration and bladder enlargement commonly result. If treated, diabetes insipidus does not cause severe problems or a reduction in life expectancy. See Goldman's Cecil Medicine Chapter 232 (24th ed. 2011). The prognosis for this disease is excellent, because it is frequently transient and there are excellent medications with different means of administration to treat the condition on a chronic basis if this condition becomes permanent. Most individuals, even in emergency situations, can replace urine loss with increased fluid intake. Therefore, the reliance in the current criteria on the need for parenteral (IV) hydration is no longer appropriate, and VA proposes deletion of the current criteria.

    In its place, in order to allow the condition to become stabilized and to determine if the condition is transient or becoming permanent, VA proposes a 30 percent evaluation for three months after the initial diagnosis. Once the condition is stabilized, the need for long term medication can be assessed. Many patients are able to control their condition with oral or trans-nasal medication, while others require parenteral treatment (when oral or trans-nasal medications are either not tolerable or effective). Therefore, VA proposes a reevaluation of diabetes insipidus after the three month period. If DI has subsided, VA would rate any residuals under the appropriate diagnostic code(s) within the appropriate body system. For those DI cases with persistent polyuria or requiring continuous hormonal therapy, VA proposes a 10 percent rating.

    DC 7911: Addison's Disease (Adrenocortical Insufficiency)

    The medical community has shifted from the term “adrenal cortical hypofunction” to the term “adrenocortical insufficiency.” Therefore, for clarity and consistency with current medical terminology, VA proposes to retitle this DC “Addison's disease (adrenocortical insufficiency).” VA does not propose changes to the rating criteria and notes associated with this DC.

    DC 7912: Polyglandular Syndrome (Multiple Endocrine Neoplasia, Autoimmune Polyglandular Syndrome)

    “Pluriglandular syndrome” refers, not to a single condition, but to a group of conditions that impact multiple glands in the body. Therefore, a person is likely to be given a more specific diagnosis, rather than one with this general term. Therefore, VA proposes to include the most common forms of the condition in the title of the DC. Also, over time, the medical community has shifted from the term “pluriglandular” to “polyglandular” when referring to this condition. Therefore, to better reflect the terminology currently associated with the condition, VA proposes to update the title of DC 7912 to “Polyglandular syndrome (multiple endocrine neoplasia, autoimmune polyglandular syndrome).” The current guidance for evaluation is to evaluate according to major manifestations. VA proposes to revise the guidance to include some of the common manifestations of the syndrome. The proposed guidance reads: “Evaluate according to major manifestations to include, but not limited to, Type I diabetes mellitus, hyperthyroidism, hypothyroidism, hypoparathyroidism, or Addison's disease.”

    DC 7913: Diabetes Mellitus

    Diabetes mellitus is a complex condition that impacts individuals in a variety of ways. At this time, VA proposes only one clarifying amendment to this DC. VA proposes to clarify that the rating criteria for a 20, 40, or 60 percent rating require “one or more daily injection” of insulin. This clarifying amendment is not a substantive change but rather a clarification of VA's interpretation of this DC that an injection of insulin is required to achieve a 20, 40, 60, or 100 percent rating. To ensure that the full range of relevant factors is adequately addressed, VA is not proposing to amend the remaining rating criteria pertaining to this DC at this time. Rather, VA intends to establish a work group to specifically address this condition. Upon consideration of the work group's findings, VA will determine whether amendments to the remaining existing criteria are necessary and such amendments, if any, will be addressed in a future proposal.

    DC 7914: Neoplasm, Malignant, Any Specified Part of the Endocrine System

    VA proposes no changes at this time.

    DC 7915: Neoplasm, Benign, Any Specified Part of the Endocrine System

    VA proposes to retain the existing direction to rate this condition based on residuals of endocrine dysfunction, but separate the rating direction from the title of DC 7915.

    DC 7916: Hyperpituitarism (Prolactin Secreting Pituitary Dysfunction)

    The existing note regarding the evaluation of this condition also applies to DCs 7917 and 7918 and is given after DC 7918. Therefore, it can be overlooked with regard to the other DCs. Therefore, VA proposes to include the same note regarding the evaluation of each condition directly under each DC and to amend the current note to reflect the proposed change. The conditions would all continue to be evaluated as malignant or benign neoplasm, as appropriate, so no substantive change is being made.

    DC 7917: Hyperaldosteronism (Benign or Malignant)

    See discussion of DC 7916.

    DC 7918: Pheochromocytoma (Benign or Malignant)

    See discussion of DC 7916.

    DC 7919: C-cell Hyperplasia of the Thyroid

    Currently, this condition is rated in the same way as a malignant neoplasm. However, this does not adequately address all potential manifestations of this condition. Therefore, VA proposes to replace the existing note with one that provides as follows: “If antineoplastic therapy is required, evaluate as a malignant neoplasm under DC 7914. If a prophylactic thyroidectomy is performed (based upon genetic testing) and antineoplastic therapy is not required, evaluate as hypothyroidism under DC 7903.” These changes are in keeping with current medical information about C-cell hyperplasia.

    Technical Amendments

    VA also proposes several technical amendments. We would add a citation reference to 38 U.S.C. 1155 at the end of § 4.119, and we would update Appendix A, B, and C of part 4 to reflect the above noted proposed amendments.

    Paperwork Reduction Act

    This proposed rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

    Regulatory Flexibility Act

    The Secretary hereby certifies that this proposed rule would not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-612). This proposed rule would directly affect only individuals and would not directly affect small entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from the initial and final regulatory flexibility analysis requirements of sections 603 and 604.

    Executive Orders 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significant regulatory action” requiring review by the Office of Management and Budget (OMB), unless OMB waives such review, as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.”

    The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined to be a significant regulatory action under Executive Order 12866 because it is likely to result in a rule that may raise novel policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order. VA's impact analysis can be found as a supporting document at http://www.regulations.gov, usually within 48 hours after the rulemaking document is published. Additionally, a copy of this rulemaking and its impact analysis are available on VA's Web site at http://www.va.gov/orpm/, by following the link for “VA Regulations Published From FY 2004 Through Fiscal Year to Date.”

    Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This proposed rule would have no such effect on State, local, and tribal governments, or on the private sector.

    Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are 64.104, Pension for Non-Service-Connected Disability for Veterans, and 64.109, Veterans Compensation for Service-Connected Disability.

    Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Robert L. Nabors, II, Chief of Staff, approved this document on June 30, 2015, for publication.

    List of Subjects in 38 CFR Part 4

    Disability benefits, Pensions, Veterans.

    Dated: July 1, 2015. William F. Russo, Acting Director, Office of Regulation Policy & Management, Office of the General Counsel, Department of Veterans Affairs.

    For the reasons set out in the preamble, the Department of Veterans Affairs proposes to amend 38 CFR part 4 as set forth below:

    PART 4—SCHEDULE FOR RATING DISABILITIES Subpart B—Disability Ratings 1. The authority citation for part 4 continues to read as follows: Authority:

    38 U.S.C. 1155, unless otherwise noted.

    2. Amend § 4.104 by revising the entry for 7008 to read as follows:
    § 4.104 Schedule of ratings—cardiovascular system. Diseases of the Heart Rating * * * * * 7008 Hyperthyroid heart disease. Rate under the appropriate cardiovascular diagnostic code, depending on particular findings. * * * * *
    3. Section 4.119 is revised to read as follows: The Endocrine System
    § 4.119 Schedule of ratings—endocrine system. Rating 7900 Hyperthyroidism, including, but not limited to, Graves' disease: For six months after initial diagnosis 30 Thereafter, rate residuals of disease or complications of medical treatment within the appropriate diagnostic code(s) within the appropriate body system. Note (1): If hyperthyroid cardiovascular or cardiac disease is present, separately evaluate under DC 7008 (hyperthyroid heart disease). Note (2): Separately evaluate eye involvement occurring as a manifestation of Graves' Disease as diplopia (DC 6090); impairment of central visual acuity (DCs 6061-6066); or under the most appropriate DCs in § 4.79. 7901 Thyroid enlargement, toxic. Note (1): Evaluate symptoms of hyperthyroidism under DC 7900, hyperthyroidism, including, but not limited to, Graves' disease. Note (2): If disfigurement of the neck is present due to thyroid disease or enlargement, separately evaluate under DC 7800 (burn scar(s) of the head, face, or neck; scar(s) of the head, face, or neck due to other causes; or other disfigurement of the head, face, or neck). 7902 Thyroid enlargement, nontoxic: Note (1): Evaluate symptoms due to pressure on adjacent organs (such as the trachea, larynx, or esophagus) under the appropriate diagnostic code(s) within the appropriate body system. Note (2): If disfigurement of the neck is present due to thyroid disease or enlargement, separately evaluate under DC 7800 (burn scar(s) of the head, face, or neck; scar(s) of the head, face, or neck due to other causes; or other disfigurement of the head, face, or neck). 7903 Hypothyroidism: Hypothyroidism manifesting as myxedema (cold intolerance, muscular weakness, cardiovascular involvement (including, but not limited to hypotension, bradycardia, and pericardial effusion), and mental disturbance (including, but not limited to dementia, slowing of thought and depression)) 100 Note (1): This evaluation shall continue for six months beyond the date that an examining physician has determined crisis stabilization. Thereafter, the residual effects of hypothyroidism shall be rated under the appropriate diagnostic code(s) within the appropriate body system(s) (e.g., eye, digestive, and mental disorders). Hypothyroidism without myxedema 30 Note (2): This evaluation shall continue for six months after the initial diagnosis. Thereafter, rate residuals of disease or medical treatment under the most appropriate diagnostic code(s)under the appropriate body system (e.g., eye, digestive, mental disorders). Note (3): If eye involvement, such as exophthalmos, corneal ulcer, blurred vision, or diplopia, is also present due to thyroid disease, also separately evaluate under the appropriate diagnostic code(s) in § 4.79, Schedule of Ratings—Eye (such as diplopia (DC 6090) or impairment of central visual acuity (DCs 6061-6066)). 7904 Hyperparathyroidism For six months from date of discharge following surgery 100 Note (1): After six months, rate on residuals under the appropriate diagnostic code(s) within the appropriate body system(s) based on a VA examination. Hypercalcemia (indicated by at least one of the following: Total Ca greater than 12mg/dL (3-3.5 mmol/L), Ionized Ca greater than 5.6 mg/dL (2-2.5 mmol/L), creatinine clearance less than 60 mL/min, bone mineral density T-score less than 2.5 SD (below mean) at any site or previous fragility fracture) 60 Note (2): Where surgical intervention is indicated, this evaluation shall continue until the day of surgery, at which time the provisions pertaining to a 100 percent evaluation shall apply. Note (3): Where surgical intervention is not indicated, this evaluation shall continue for six months after pharmacologic treatment begins. After six months, rate on residuals under the appropriate diagnostic code(s) within the appropriate body system(s) based on a VA examination. Symptoms such as fatigue, anorexia, nausea, or constipation that occur despite surgery; or in individuals who are not candidates for surgery but require continuous medication for control 10 Asymptomatic 0 Note (4): Following surgery or other treatment, evaluate chronic residuals, such as nephrolithiasis (kidney stones), decreased renal function, fractures, vision problems, and cardiovascular complications, under the appropriate diagnostic codes. 7905 Hypoparathyroidism: For three months after initial diagnosis 100 Thereafter, evaluate chronic residuals, such as nephrolithiasis (kidney stones), cataracts, decreased renal function, and congestive heart failure under the appropriate diagnostic codes. 7906 Thyroiditis With normal thyroid function (euthyroid) 0 Note: Manifesting as hyperthyroidism, evaluate as hyperthyroidism, including, but not limited to, Graves' disease (DC 7900); manifesting as hypothyroidism, evaluate as hypothyroidism (DC 7903). 7907 Cushing's syndrome: As active, progressive disease, including areas of osteoporosis, hypertension, and proximal upper and lower extremity muscle wasting that results in inability to rise from squatting position, climb stairs, rise from a deep chair without assistance, or raise arms 100 Proximal upper or lower extremity muscle wasting that results in inability to rise from squatting position, climb stairs, rise from a deep chair without assistance, or raise arms 60 With striae, obesity, moon face, glucose intolerance, and vascular fragility 30 Note: The evaluations specifically indicated under this diagnostic code shall continue for six months following initial diagnosis. After six months, rate on residuals under the appropriate diagnostic code(s) within the appropriate body system(s). 7908 Acromegaly: Evidence of increased intracranial pressure (such as visual field defect), arthropathy, glucose intolerance, and either hypertension or cardiomegaly 100 Arthropathy, glucose intolerance, and hypertension 60 Enlargement of acral parts or overgrowth of long bones 30 7909 Diabetes insipidus: For three months after initial diagnosis 30 Note: Thereafter, if Diabetes insipidus has subsided, rate residuals under the appropriate diagnostic code(s) within the appropriate body system. With persistent polyuria or requiring continuous hormonal therapy 10 7911 Addison's disease (adrenalcortical insufficiency): Four or more crises during the past year 60 Three crises during the past year, or; five or more episodes during the past year 40 One or two crises during the past year, or; two to four episodes during the past year, or; weakness and fatigability, or; corticosteroid therapy required for control 20 Note (1): An Addisonian “crisis” consists of the rapid onset of peripheral vascular collapse (with acute hypotension and shock), with findings that may include: anorexia; nausea; vomiting; dehydration; profound weakness; pain in abdomen, legs, and back; fever; apathy, and depressed mentation with possible progression to coma, renal shutdown, and death. Note (2): An Addisonian “episode,” for VA purposes, is a less acute and less severe event than an Addisonian crisis and may consist of anorexia, nausea, vomiting, diarrhea, dehydration, weakness, malaise, orthostatic hypotension, or hypoglycemia, but no peripheral vascular collapse. Note (3): Tuberculous Addison's disease will be evaluated as active or inactive tuberculosis. If inactive, these evaluations are not to be combined with the graduated ratings of 50 percent or 30 percent for non-pulmonary tuberculosis specified under § 4.88b. Assign the higher rating. 7912 Polyglandular syndrome (multiple endocrine neoplasia, autoimmune polyglandular syndrome): Evaluate according to major manifestations to include, but not limited to, Type I diabetes mellitus, hyperthyroidism, hypothyroidism, hypoparathyroidism, or Addison's disease. 7913 Diabetes mellitus Requiring more than one daily injection of insulin, restricted diet, and regulation of activities (avoidance of strenuous occupational and recreational activities) with episodes of ketoacidosis or hypoglycemic reactions requiring at least three hospitalizations per year or weekly visits to a diabetic care provider, plus either progressive loss of weight and strength or complications that would be compensable if separately evaluated 100 Requiring one or more daily injection of insulin, restricted diet, and regulation of activities with episodes of ketoacidosis or hypoglycemic reactions requiring one or two hospitalizations per year or twice a month visits to a diabetic care provider, plus complications that would not be compensable if separately evaluated 60 Requiring one or more daily injection of insulin, restricted diet, and regulation of activities 40 Requiring one or more daily injection of insulin and restricted diet, or; oral hypoglycemic agent and restricted diet 20 Manageable by restricted diet only 10 Note (1): Evaluate compensable complications of diabetes separately unless they are part of the criteria used to support a 100 percent evaluation. Noncompensable complications are considered part of the diabetic process under DC 7913. Note (2): When diabetes mellitus has been conclusively diagnosed, do not request a glucose tolerance test solely for rating purposes. 7914 Neoplasm, malignant, any specified part of the endocrine system 100 Note: A rating of 100 percent shall continue beyond the cessation of any surgical, X-ray, antineoplastic chemotherapy or other therapeutic procedure. Six months after discontinuance of such treatment, the appropriate disability rating shall be determined by mandatory VA examination. Any change in evaluation based upon that or any subsequent examination shall be subject to the provisions of § 3.105(e) of this chapter. If there has been no local recurrence or metastasis, rate on residuals. 7915 Neoplasm, benign, any specified part of the endocrine system: Rate as residuals of endocrine dysfunction. 7916 Hyperpituitarism (prolactin secreting pituitary dysfunction): Note: Evaluate as malignant or benign neoplasm, as appropriate. 7917 Hyperaldosteronism (benign or malignant): Note: Evaluate as malignant or benign neoplasm, as appropriate. 7918 Pheochromocytoma (benign or malignant): Note: Evaluate as malignant or benign neoplasm as appropriate. 7919 C-cell hyperplasia of the thyroid: If antineoplastic therapy is required, evaluate as a malignant neoplasm under DC 7914. If a prophylactic thyroidectomy is performed (based upon genetic testing) and antineoplastic therapy is not required, evaluate as hypothyroidism under DC 7903. (Authority: 38 U.S.C. 1155)
    3. Amend appendix A to part 4 by revising the entries for Secs. §§ 4.104 and 4.119 to read as follows: Appendix A to Part 4—Table of Amendments and Effective Dates Since 1946 Sec. Diagnostic code No. *         *         *         *         *         *         * 4.104 7000 Evaluation July 6, 1950; evaluation September 22, 1978; evaluation January 12, 1998. *         *         *         *         *         *         * 7008 Evaluation January 12, 1998; evaluation [effective date of final rule]. *         *         *         *         *         *         * 4.119 7900 Criterion August 13, 1981; evaluation June 9, 1996; title [effective date of final rule]; evaluation [effective date of final rule]; criterion [effective date of final rule]; note [effective date of final rule]. 7901 Criterion August 13, 1981; evaluation June 9, 1996; title [effective date of final rule]; evaluation [effective date of final rule]; criterion [effective date of final rule]. 7902 Evaluation August 13, 1981; criterion June 9, 1996; title [effective date of final rule]; evaluation [effective date of final rule]; criterion [effective date of final rule]; note [effective date of final rule]. 7903 Criterion August 13, 1981; evaluation June 9, 1996; evaluation [effective date of final rule]; criterion [effective date of final rule]; note [effective date of final rule]. 7904 Criterion August 13, 1981; evaluation June 9, 1996; evaluation [effective date of final rule]; criterion [effective date of final rule]; note [effective date of final rule]. 7905 Evaluation; August 13, 1981; evaluation June 9, 1996; evaluation [effective date of final rule]; criterion [effective date of final rule]; note [effective date of final rule]. Added [effective date of final rule]. 7906 Evaluation; August 13, 1981; evaluation June 9, 1996; criterion [effective date of final rule]; note [effective date of final rule]. 7907 Criterion August 13, 1981; criterion June 9, 1996; criterion [effective date of final rule]. 7908 Evaluation August 13, 1981; criterion June 9, 1996; evaluation June 9, 1996; criterion [effective date of final rule]; note [effective date of final rule]. 7909 Removed June 9, 1996. 7910 Evaluation March 11, 1969; evaluation August 13, 1981; criterion June 9, 1996; title [effective date of final rule]. 7911 Title [effective date of final rule]. 7912 Criterion September 9, 1975; criterion August 13, 1981; criterion June 6, 1996; evaluation June 9, 1996; criterion [effective date of final rule]. 7913 Criterion March 10, 1976; criterion August 13, 1981; criterion June 9, 1996. 7914 Criterion June 9, 1996. 7915 Added June 9, 1996. 7916 Added June 9, 1996. 7917 Added June 9, 1996. 7918 Added June 9, 1996; evaluation June 9, 1996; criterion [effective date of final rule]. 7919 * * * *         *         *         *         *         *         * 4. Amend Appendix B to Part 4 by revising the entries for diagnostic codes 7900, 7901, 7902, 7911, and adding diagnostic code 7906 to read as follows: Appendix B to Part 4—Numerical Index of Disabilities Diagnostic code No. *         *         *         *         *         *         * THE ENDOCRINE SYSTEM 7900 Hyperthyroidism, including, but not limited to, Graves' disease. 7901 Thyroid enlargement, toxic. 7902 Thyroid enlargement, nontoxic. *         *         *         *         *         *         * 7906 Thyroiditis. *         *         *         *         *         *         * 7911 Addison's disease (adrenocortical insufficiency). 7912 Polyglandular syndrome (multiple endocrine neoplasia, autoimmune polyglandular syndrome). *         *         *         *         *         *         * 4. Amend appendix C by: a. Adding entries for Graves' disease. Polyglandular syndrome and Thyroiditis in alphabetical order; and b. Revising the disability entry for Thyroid gland. The additions and revision read as follows: Appendix C to Part 4—Alphabetical Index of Disabilities Diagnostic code No. *    *    *    *    * Graves' disease 7900 *    *    *    *    * Polyglandular syndrome 7912 *    *    *    *    *
  • Thyroid gland
  • Nontoxic thyroid enlargement 7902 Toxic thyroid enlargement 7901 Thyroiditis 7906 *    *    *    *    *
    [FR Doc. 2015-16666 Filed 7-7-15; 8:45 am] BILLING CODE 8320-01-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R09-OAR-2015-0164; FRL-9927-77-Region 9] Revisions to the California State Implementation Plan, Feather River Air Quality Management District AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve revisions to the Feather River Air Quality Management District (FRAQMD) portion of the California State Implementation Plan (SIP). Included in this approval are the following three SIP demonstrations from FRAQMD: 2006 Reasonably Available Control Technology (RACT) Analysis for State Implementation Plan (SIP), November 2006; Reasonably Available Control Technology State Implementation Plan Revision Negative Declaration for Control Techniques Guidelines Issued 2006-2008, June 1, 2009; and Reasonably Available Control Technology Analysis and Negative Declarations, July 3, 2014. The first two demonstrations address the 1997 8-hour National Ambient Air Quality Standards (NAAQS) for ozone, and the third demonstration addresses the 2008 8-hour NAAQS for ozone. The submitted SIPs also contain negative declarations for volatile organic compound (VOC) source categories for the years 2006, 2009 and 2014. We are proposing to approve the submitted SIP revisions under the Clean Air Act as amended in 1990 (CAA or the Act). We are also proposing to approve a local rule that regulates gasoline dispending facilities.

    DATES:

    Any comments on this proposal must arrive by August 7, 2015.

    ADDRESSES:

    Submit comments, identified by docket number EPA-R09-OAR-2015-0164, by one of the following methods:

    1. Federal eRulemaking Portal: www.regulations.gov. Follow the on-line instructions.

    2. Email: [email protected]

    3. Mail or deliver: Andrew Steckel (Air-4), U.S. Environmental Protection Agency Region IX, 75 Hawthorne Street, San Francisco, CA 94105-3901.

    Instructions: All comments will be included in the public docket without change and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Information that you consider CBI or otherwise protected should be clearly identified as such and should not be submitted through www.regulations.gov or email. www.regulations.gov is an “anonymous access” system, and EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send email directly to EPA, your email address will be automatically captured and included as part of the public comment. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses.

    Docket: Generally, documents in the docket for this action are available electronically at www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California 94105-3901. While all documents in the docket are listed at www.regulations.gov, some information may be publicly available only at the hard copy location (e.g., copyrighted material, large maps), and some may not be publicly available in either location (e.g., CBI). To inspect the hard copy materials, please schedule an appointment during normal business hours with the contact listed in the FOR FURTHER INFORMATION CONTACT section.

    FOR FURTHER INFORMATION CONTACT:

    James Shears, EPA Region IX, (213) 244-1810, [email protected].

    SUPPLEMENTARY INFORMATION:

    This proposal addresses revisions to the FRAQMD portion of the California SIP. In the rules and regulations section of the Federal Register, we are approving the three RACT SIP revisions in a direct final action without prior proposal because we believe these SIP revisions are not controversial. This proposal also addresses the following local rule: FRAQMD Rule 3.8, Gasoline Dispensing Facilities. In the Rules and Regulations section of this Federal Register, we are approving this local rule in a direct final action without prior proposal because we believe this SIP revision is not controversial. Please note that if we receive adverse comment on a specific provision of these SIP revisions or the rule, we will publish a timely withdrawal of the direct final rule and address the comments in a subsequent action. If that provision may be severed from the remainder of the SIP revisions or the rule, we may adopt as final those provisions of the SIP revisions or the rule that are not the subject of an adverse comment.

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

    Dated: April 30, 2015. Jared Blumenfeld, Regional Administrator, Region IX.
    [FR Doc. 2015-16629 Filed 7-7-15; 8:45 am] BILLING CODE 6560-50-P
    DEPARTMENT OF TRANSPORTATION Surface Transportation Board 49 CFR Part 1201 [Docket No. EP 720] Accounting and Reporting of Business Combinations, Security Investments, Comprehensive Income, Derivative Instruments, and Hedging Activities AGENCY:

    Surface Transportation Board, DOT.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Surface Transportation Board proposes to revise its regulations to update the accounting and reporting requirements under its Uniform System of Accounts (USOA) for Class I Railroads to be more consistent with current generally accepted accounting principles (GAAP) and revise the schedules and instructions for the Annual Report for Class I Railroads (R-1 or Form R-1) to better meet regulatory requirements and industry needs. The intent of the proposed revisions is to promote sound and uniform accounting and financial reporting for the types of transactions and events described herein.

    DATES:

    Comments on this proposed rulemaking are due on or before August 7, 2015; reply comments are due by September 8, 2015.

    ADDRESSES:

    Any filings submitted in this proceeding must be submitted either via the Board's e-filing format or in the traditional paper format. Any person using e-filing should attach a document and otherwise comply with the instructions found at the E-FILING link on the Board's Web site at www.stb.dot.gov. Any person submitting a filing in the traditional paper format should send an original and 10 copies and also an electronic version to: Surface Transportation Board, Attn: Docket No. EP 720, 395 E Street SW., Washington, DC 20423-0001.

    FOR FURTHER INFORMATION CONTACT:

    Pedro Ramirez at (202) 245-0333. Assistance for the hearing impaired is available through the Federal Information Relay Services (FIRS) at 1-800-877-8339.

    SUPPLEMENTARY INFORMATION:

    Introduction

    In this notice of proposed rulemaking (NPR), the Surface Transportation Board (Board) proposes to amend its USOA and Form R-1.1 The Board proposes to add new general instructions and accounts to recognize changes in the fair value of certain security investments, items of other comprehensive income, derivative instruments, and hedging activities. Additionally, the Board proposes to revise the USOA to reflect current accounting practices for business combinations by removing existing instructions for the pooling-of-interest method of accounting. The Board also seeks to revise Form R-1 to include the new accounts and the new reporting schedule proposed by this rulemaking.

    1 The Board has broad economic regulatory oversight of railroads, addressing such matters as rates, service, construction, acquisition and abandonment of rail lines, carrier mergers, and interchange of traffic among carriers (49 U.S.C. 10101-11908). The Board monitors the financial condition of railroads as part of its oversight of the rail industry. The Board prescribes a uniform accounting system for railroads to use for regulatory purposes. 49 U.S.C. 11141-43, 11161-64; 49 CFR parts 1200 and 1201. In addition, the Board requires Class I railroads to submit quarterly and annual reports containing financial and operating statistics, including employment and traffic data (49 U.S.C. 11145; 49 CFR parts 1241 through 1246 and 1248).

    The Board also solicits comments on the proposed elimination of certain schedules currently contained in Form R-1 that are not used for any regulatory or other purposes by the Board. As there may be other governmental agencies or interested parties that rely on the information in some of these schedules, we are requesting comments concerning their elimination.

    The purpose of the proposed revisions is to provide sound and uniform accounting and financial reporting for certain types of transactions and events. The Board believes that such requirements are needed because these types of transactions and events are neither specifically nor correctly addressed in the existing USOA. The new instructions, accounts, and reporting schedule would result in improved, consistent, and complete accounting and reporting.

    Background A. General

    The Interstate Commerce Act, as amended by the ICC Termination Act of 1995 (ICCTA), Public Law 104-88, 109 Stat. 803, authorizes the Board, in 49 U.S.C. 11142, to prescribe a uniform accounting system for rail carriers subject to our jurisdiction and, in 49 U.S.C. 11161, to maintain cost accounting rules for rail carriers. Sections 11142 and 11161 both require the Board to conform its accounting rules to GAAP “[t]o the maximum extent practicable.”

    In keeping with this requirement, we propose updates to the USOA to provide for: (1) Fair value presentation of certain security investments, derivative instruments and hedging activities; (2) presentation of comprehensive income and components of other comprehensive income; and (3) accounting for business combinations. The proposed revisions are based on the generally accepted accounting principles promulgated by the FASB in the following Accounting Standards Codifications (ASC): ASC 320 Investments—Debt and Equity Securities; ASC 220 Comprehensive Income; ASC 815 Derivatives and Hedging; and ASC 805 Business Combinations.1

    1 These accounting pronouncements are available at https://asc.fasb.org.

    The Board considers the requirements in ASC 320, 220, 815, and 805 to be an improvement in financial accounting and reporting practices. The Board also considers it important that its accounting requirements are consistent with the industry's general purpose financial reporting requirements. Therefore, the Board proposes to implement the principles and concepts set forth in ASC 320, 220, 815, and 805 for railroad accounting and reporting purposes effective upon issuance of a final rule in this proceeding. The Board believes that the proposed accounting and reporting changes would provide consistent accounting and reporting of changes in the fair value of security investments, derivative instruments, and hedging activities. The proposed changes would also minimize the accounting and reporting burden on railroads under the Board's jurisdiction, assist the Board in its overall monitoring effort, and improve transparency.

    To provide context for the Board's proposed changes, the key aspects of the relevant FASB pronouncements are discussed in sections B through E of this Background.

    B. Investments in Debt and Equity Securities (ASC 320)

    ASC 320 establishes standards of financial accounting and reporting for investments in equity securities that have readily determinable fair values and for all investments in debt securities. Fair value of an equity security is readily determinable if sales prices and bid-and-asked quotations are currently available on a securities exchange registered with the U.S. Securities and Exchange Commission, or publicly reported in the over-the-counter market.

    ASC 320 requires entities to classify all debt securities and selected equity securities into one of three categories: (1) Trading securities; (2) available-for-sale securities; or (3) held-to-maturity securities. Classification of the securities is based primarily on management's intent for holding a particular investment.

    Trading securities. Trading securities are debt and equity securities that are bought and held principally for the purpose of selling them in the near term, usually less than one year. These securities are held for short periods of time with the objective of generating profits from short-term differences in price.

    Available-for-sale securities. Available-for-sale securities are investments in debt and equity securities that have readily determinable fair values not classified as trading securities or held-to-maturity securities.

    Held-to-maturity securities. Held-to-maturity securities are debt securities that the entity has the positive intent and ability to hold to maturity. For debt securities held to maturity, amortized cost is a more relevant measure than fair value because that cost will be realized, absent default. Therefore, changes in the fair value of securities held to maturity are not recognized during the period the entity holds the security investment. ASC 320 states that a debt security that is available to be sold in response to changes in market interest rates, changes in the security's prepayment risk, the enterprise's need for liquidity, changes in foreign exchange risks, or other similar factors should not be included in the held-to-maturity category because the possibility of a sale indicates that the enterprise does not have a positive intent and ability to hold the security to maturity. However, under certain circumstances, a company may change its intent concerning securities originally classified as held-to-maturity, resulting in the securities' sale or reclassification without calling into question the company's intent to hold other securities to maturity.

    C. Comprehensive Income (ASC 220)

    The purpose of comprehensive income is to measure all changes in an entity's equity that result from recognized transactions and other economic events of a period other than those transactions resulting from investment by owners and distributions to owners. When paired with disclosure notes and other information in the financial statements, the reporting of comprehensive income is intended to help investors, creditors, and others assess an entity's activities and future cash flows.

    Under GAAP, comprehensive income is comprised of traditional net income and all components of other comprehensive income. “Other comprehensive income” includes revenues, expenses, gains and losses that are included in comprehensive income but not in net income. This includes foreign currency translation adjustments, unrealized holding gains and losses on available-for-sale securities, changes in pension or other post-retirement benefits, and changes in the fair value of derivative financial instruments classified as cash-flow hedges.

    GAAP requires financial statements to present comprehensive income in two parts: (1) Net income and its components (such as income from continuing operations, discontinued operations, and extraordinary items); and (2) Other Comprehensive Income and its components.

    Reclassifications of items from accumulated Other Comprehensive Income to net income must be measured and presented by income statement line item in both the statement where net income is presented and the statement where Other Comprehensive Income is presented. This accounting standard applies only to entities with items of Other Comprehensive Income. Entities without Other Comprehensive Income items are exempt from providing a statement of comprehensive income and instead should report only net income in the statement displaying the results of operations.

    D. Derivatives and Hedging (ASC 815)

    A derivative instrument is a security whose price is dependent upon or derived from one or more underlying assets. Derivative instruments represent rights or obligations that meet the definition of an asset or liability and should be reported in financial statements. For accounting purposes, a derivative instrument is a financial instrument or other contract that has all of the following characteristics:

    1. The instrument has one or more underlyings. An underlying is a specified interest rate, security price, commodity price, foreign exchange rate, index of prices or rates, or other variable. An underlying may be a price or rate of an asset or liability but is not the asset or liability itself.

    2. The instrument must have one or more notional amounts or payment provisions. A notional amount represents a quantity such as a number of currency units, shares, bushels, pounds, or other units specified in a derivative instrument. Those terms determine the amount of a contract's settlement or settlements, and, in some cases, determine whether or not a settlement is required.

    3. The instrument requires either no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have a similar response to changes in market factors.

    4. The instrument requires or permits net settlement, and can readily be settled net by a means outside the contract, or provides for delivery of an asset that puts the recipient in a position not substantially different from net settlement.

    Certain types of contracts are exempted from the requirements of ASC 815 to avoid burdening certain industries and markets. For example, normal purchases and normal sales contracts that provide for the purchase or sale of goods that will be delivered in quantities expected to be used or sold by the reporting entity over a reasonable period of time and in the normal course of business are not considered derivative instruments. This exception is commonly referred to as the normal purchases and normal sales scope exception. The exception would include typical purchases and sales of inventory items, certain insurance contracts, and employee compensation agreements. Derivative instruments that do not qualify for the normal purchases and normal sales scope exception or other exceptions provided for under the statement are reflected in the financial statements. Consequently, most futures, forwards, swaps, and option contracts meet the definition of a derivative instrument and changes in their fair value would be reflected in the financial statements.

    Accounting for a Derivative Instrument. Accounting for changes in the fair value of a derivative instrument depends upon its intended use and designation. Essentially, for certain derivative instruments not designated as hedging instruments, gain or loss is recognized as earnings in the period of change. The change in the value of the derivative instrument is reflected on the balance sheet as an asset or liability with a corresponding amount recognized in earnings. This accounting effectively provides users of the financial statements with information concerning the value of the derivative instrument as if it had been settled in the market place.

    Hedge Accounting. A hedge is an instrument's position intended to offset potential losses or gains that may be incurred by a companion investment. Entities hedge to manage risk to prices or interest rates (among other things). Provided certain criteria are met, a derivative may be specifically designated as a fair-value or cash-flow hedge. Under the rules for hedge accounting, the changes in the fair value of the derivative instrument are measured at fair value with adjustments made to the carrying amount of the items being hedged (as in a fair-value hedge) or to Other Comprehensive Income (as in a cash-flow hedge) to the extent the hedge is effective.

    1. Fair-Value Hedge. In a fair-value hedge, a derivative instrument is designated as a hedge against exposure to changes in the fair value of a recognized asset, liability, or a firm commitment.2 The change in value of the derivative instrument is recognized in earnings in the period of the change together with the offsetting gain or loss on the hedged item attributable to the risk. To the extent that a hedge is perfectly effective, it will produce the same offsetting amounts in earnings so that net income is not impacted by the hedge. However, amounts would be reflected in earnings to the extent that the hedge is not effective in offsetting the change in value of the item being hedged. Additionally, fair-value accounting results in an adjustment of the carrying amount of the hedged asset or liability. In the case of a fair-value hedge of a firm commitment, a new asset or liability is created. As a result of the hedge relationship, the new asset or liability ultimately becomes part of the carrying amount of the item being hedged.

    2 A firm commitment is an agreement with an unrelated party, binding on both parties, that is usually legally enforceable and that specifies all significant terms and includes a disincentive for nonperformance.

    2. Cash-Flow Hedge. A cash-flow hedge uses a derivative instrument to protect against the risk caused by variable prices or costs, which may cause future cash flows to be uncertain. This type of instrument protects against an anticipated or forecasted transaction that probably will occur in the future but the amount of which has not been fixed.

    In a cash-flow hedge, the effective portion of the derivative instrument's gain or loss is initially reported as a component of Other Comprehensive Income (outside net income). The ineffective portion of the gain or loss is reported in earnings immediately. Amounts in accumulated Other Comprehensive Income are reclassified into earnings in the same period during which the hedged forecasted item affects earnings.

    Documentation of Hedge Relationship. Entities must keep extensive documentation of the hedge relationship. An entity that elects to apply the special hedge accounting principles is required to document, at the inception of the hedge, the risk management objective and strategy for undertaking the hedge, including the hedge instrument, the related transaction, the nature of the risk being hedged, and how effectiveness will be determined.

    A company's documentation of its overall risk management philosophy is essential in addressing the role that derivative instruments and hedging activities play in achieving the company's risk management objectives. Concurrent designation and documentation of a hedge is critical because an entity could retroactively identify a transaction as a hedge or change a method of measuring effectiveness to achieve a desired outcome. At the inception of the hedge, formal documentation is required that identifies the hedging instrument, and specifically the hedged item or transaction, along with the nature of the risk being hedged. Entities are required to formally document how effectiveness will be assessed at the adoption of the hedge and on an ongoing basis.

    E. Business Combinations (ASC 805)

    A business combination is a transaction or other event in which one or more businesses obtain control of another business. It also includes transactions involving mergers of equals and certain acquisitions by a not-for-profit entity. ASC 805—Business Combinations requires that a business combination be accounted for by applying the acquisition method.

    The acquisition method requires the acquiring entity to recognize and measure, as of the acquisition date, the identifiable assets acquired, liabilities assumed, and any noncontrolling interest in the acquired entity. The acquiring entity must also recognize and measure goodwill (the excess of purchase price over net assets, related to the acquisition) or a gain resulting from a bargain purchase.

    Discussion

    A. General. The Board's existing USOA does not specifically address the proper accounting and reporting for changes in the fair value of certain security investments, derivative instruments, and hedging activities. Additionally, the existing USOA does not contain specific accounts to record amounts related to items of Other Comprehensive Income or provide a format to display comprehensive income in the Form R-1. The USOA's accounting for business combinations must also be revised to reflect the acquisition accounting method, as required in ASC 805.

    Without specific instructions and accounts for recording and reporting certain transactions and events, inconsistent and incomplete accounting would result. For example, if the effects of certain derivative instruments and hedging activities are not properly reported to the Board in the Form R-1, it would be difficult for the Board and others to determine the impact of derivatives on regulated carriers' financial statements and Results of Operations Statements.3 The addition of new accounts and related general instructions is intended to improve the visibility, completeness, and consistency of accounting and reporting of changes in the fair value of certain investment securities, items of Other Comprehensive Income, derivatives instruments, and hedging activities.

    3 Results of Operations Statements, also referred to as a Profit and Loss Statement, Statement of Operations, or Statement of Income, appear in the Form R-1 and reflect the profitability (i.e. revenues, expenses, gains, and losses) of a company during the year specified in the heading of the R-1 annual report. The statements do not show cash receipts or cash disbursements.

    Also, the addition of the proposed new accounts and related reporting requirements to the Form R-1 would reduce regulatory uncertainty as to the proper accounting and reporting for these items and minimize regulatory burden by reducing the potential differences in the manner in which these amounts are reported to shareholders and to the Board. Finally, the reporting of derivative instruments and hedging activities by regulated carriers would assist the Board in its overall monitoring effort as well as its ability to assess railroad industry growth and financial stability. Further, such reporting would assist the Board in identifying industry changes that may affect national transportation policy.

    B. Proposed Accounting for Trading and Available-for-Sale Type Securities. Under the Board's USOA, all types of securities are recorded at cost, and subsequent changes in the fair value of security investments are not recognized in the financial statements.

    The Board is of the view that fair-value measurement of trading and available-for-sale type securities presents relevant and useful information to existing and potential investors, creditors, regulators, and others in making credit and other decisions. Fair-value measurements would also provide useful information to the Board concerning the status of certain amounts set aside to fund future obligations.

    Therefore, the Board proposes to add language to its investment account requirements for rail carriers to permit the recognition of changes in the fair value of trading and available-for-sale types of securities due to unrealized holding gains and losses. The security investment asset accounts for railroads are: Account 702, Temporary Cash Investments; Account 721, Investments and Advances: Affiliated Companies; Account 722, Other Investments and Advances; Account 715, Sinking Funds; Account 716, Capital Funds; and Account 717, Other Funds.

    C. Proposed Accounting for Other Comprehensive Income. The existing USOA does not contain specific accounts to record amounts related to items of Other Comprehensive Income or provide a format to display comprehensive income in the Form R-1. Therefore, entities currently record items of Other Comprehensive Income in Account 606. However, as part of the proposed rule, the USOA would be revised to provide accounting for such items. Thus, the use of Account 606 in the USOA to record items of Other Comprehensive Income would no longer be appropriate. Instead, these items would be accounted for elsewhere in the USOA.

    A new equity account (Account 799, Accumulated Other Comprehensive Income) is also proposed to include the accumulated balance for items of Other Comprehensive Income. The account would require that railroads maintain supporting records for each category of Other Comprehensive Income and report such information in their Form R-1. Detailed records would be maintained so that the current period activity, year-to-date activity, and reclassification adjustments related to items of Other Comprehensive Income could be readily identified. Maintaining detailed records for items included in accumulated Other Comprehensive Income is necessary to ensure that a railroad can readily identify amounts when an item is included in net income in subsequent periods.

    As proposed, a new equity sub-account entitled Account 799.1, Other Comprehensive Income, would be established to include amounts for items of Other Comprehensive Income for the reporting year. The purpose of this account is to record the activity for items of Other Comprehensive Income during a fiscal year. At year end, the amounts recorded in sub-account 799.1 would be transferred to the new equity Account 799. Consequently, Account 799.1, as proposed, would always have a zero beginning and year-end balance. Therefore, the Board proposes not to include this account as part of the balance sheet schedules.

    To increase the prominence of items that are recorded in Other Comprehensive Income and also to improve comparability and transparency in financial statements, the Board has developed a two-statement approach. This two-statement approach includes Schedule 210, Results of Operations, and Schedule 210A, Consolidated Statement of Other Comprehensive Income. Schedule 210 would show the components of net income and total net income. Schedule 210A, which would immediately follow Schedule 210, would reflect the components of Other Comprehensive Income, a total for Other Comprehensive Income, and a total for Comprehensive Income. Schedule 210A would begin with net income.

    The proposed instructions for the Other Comprehensive Income accounts for all railroads would require that supporting records be maintained by each category of Other Comprehensive Income. This level of detail would be required to ensure that the railroad is able to identify the amounts associated with an item when it is entered into the determination of net income, and the railroad effectively moves the recognition of the item from Other Comprehensive Income to net income.

    Finally, items recognized in Other Comprehensive Income that are later recognized in net income require a reclassification adjustment in order to avoid double counting an item in both net income and Other Comprehensive Income. The proposed instructions for Accounts 799 and 799.1 would require the railroad to make reclassification adjustments directly to these accounts, as appropriate. This proposed accounting treatment for reclassification adjustments would minimize the need for creating a new account to capture amounts solely related to reclassification adjustments. Items reclassified from Other Comprehensive Income to net income would no longer be presented in footnotes to the financial statements. Further, the adjustments must be shown on the face of the financial statements where the components of net income and Other Comprehensive Income are presented; corresponding adjustments must appear in both net income and Other Comprehensive Income.

    D. Proposed Accounting for Derivatives and Hedging Activities. The Board proposes to revise the USOA to provide accounting for derivative instruments and hedging activities. The Board's existing USOA does not contain specific accounts to record changes in the fair value of derivative instruments used in hedging and non-hedging activities. The addition of new accounts and instructions would provide improved visibility and completeness of accounting and reporting of derivative instruments and hedging activities.

    Proposed General Instructions for Fair-Value and Cash-Flow Hedges. The Board proposes to add a new general instruction that would require railroads to record changes in the fair value of the derivative instrument (the effective portion of the gain or loss) designated as a cash-flow hedge to Other Comprehensive Income. The ineffective portion of the cash-flow hedge would be charged to the same income or expense account that would have been used if the hedged item had been disposed of, or otherwise settled.

    The proposed instructions would also require railroads to record changes in the fair value of a derivative instrument designated as a fair-value hedge in this account with a concurrent charge to a sub account of the asset or liability that carries the item being hedged. The ineffective portion of the fair-value hedge would be charged to the same income or expense account that would have been used if the hedged item had been disposed of, or otherwise settled.

    Proposed Accounting for Derivative Assets and Liabilities. The Board proposes to establish new asset and liability accounts that would include amounts related to the changes in the fair value of derivative instruments not designated as cash-flow or fair-value hedges. The proposed accounts are Account 713.5, Derivative Instrument Assets and Account 763.5, Derivative Instrument Liabilities. Railroads would charge Account 551, Miscellaneous Income Charges, with the corresponding amount of the change in the fair value of the derivative instruments.

    Proposed Accounting for Fair-Value and Cash-Flow Hedges. As proposed, railroads would be required to establish a new asset and liability account that would include amounts related to the changes in the fair value of derivative instruments designated as a cash-flow or fair-value hedge. The new asset account is Account 713.6, Derivative Instrument Assets-Hedges and the new liability account would be Account 763.6, Derivative Instrument Liabilities—Hedges.

    E. Proposed Changes to and Elimination of Certain Schedules to the Form R-1. The proposed accounting changes, if adopted, would require changes to existing Schedule 200, Comparative Statement of Financial Position, and Schedule 210, Results of Operations.4 The Board also would add a new Schedule 210A, entitled “Consolidated Statement of Comprehensive Income,” with instructions on the proper footnote disclosures for the Form R-1 in order to provide consistent accounting and reporting of items of Other Comprehensive Income. This proposed schedule is modeled after an income-statement approach which provides the most transparency for the components of Other Comprehensive Income and is more consistent with the overall framework of the FASB Concepts Statement. The proposed income-statement format would also avoid duplication of data already reported on other schedules. This new schedule would show the components of Other Comprehensive Income and would require the following to be contained in a footnote to the schedule:

    4 The proposed revised schedules appear in Appendix A.

    (1) Reporting of categories of Other Comprehensive Income on a net-of-tax basis, where appropriate, along with the reporting of related tax effects allocated to each component;

    (2) Reporting of accumulated Other Comprehensive Income balances at year end by category;

    (3) Reporting of fair-value hedge balances at year end by category.

    The Board concludes that the proposed reporting requirements would not be a significant reporting burden to the railroad industry since the information is already being captured by the railroads' accounting systems for internal and external reporting.

    F. Proposed Accounting for Business Combinations. FASB established ASC 805 Business Combinations requiring the acquisition method of accounting for all business combinations. This methodology is now standard practice in the accounting industry, and the Board agrees that the acquisition method better reflects the investment made in an acquired entity and has affirmed the use of this treatment in Western Coal Traffic League—Petition for Declaratory Order, FD 35506, slip op at 6-17 (STB served July 25, 2013). We propose to update the USOA to reflect this accounting treatment. We also seek comment on the application of Instruction 2-15, paragraph (d) with respect to the utilization of the pooling of interest method for transactions involving the acquisition and merger of property of subsidiaries in Instructions for Property Accounts.

    G. Elimination of Certain Schedules in Annual Report Form R-1. The Board and its predecessor, the ICC, have collected financial and accounting data from regulated railroads since the 1880's. Information from the carriers' annual reports is used in the Board's oversight and regulatory missions. Reduction of unnecessary reporting requirements has been a long-standing goal of the Board and ICC. In a policy statement issued in 1979, the ICC specified that only information needed to carry out its functions should be collected.5 Since then, reporting requirements have been eliminated for non-Class I carriers and the dollar threshold for inclusion as a Class I carrier has been raised to $250 million, indexed for inflation. Thus, significant reductions in the financial and accounting reporting burden for railroads have already been accomplished.

    5See Policy Statement on Fin. & Statistical Reporting, 44 FR 27537 (1979).

    However, we have examined the current Form R-1 filed by the Class I railroads and have determined that 15 of the 47 schedules are no longer used by the STB to perform our regulatory and oversight functions. Therefore, we are proposing to eliminate these 15 schedules from the Form R-1, as listed below:

    230 Capital Stock 339 Accrued Liability—Leased Property 340 Depreciation Base and Rates—Improvements to Road and Equipment Leased from Others 350 Depreciation Base and Rates—Road and Equipment Leased to Others 351 Accumulated Depreciation—Road and Equipment Leased to Others 416 Supporting Schedule—Road 418 Supporting Schedule—Capital Leases 460 Items in Selected Income and Retained Earnings Accounts for the Year 702 Miles of Road at Close of Year—By States and Territories (Single Track) 721 Ties Laid in Replacement 722 Ties Laid in Additional Tracks and in New Lines and Extensions 723 Rails Laid in Replacement 724 Rails Laid in Additional Tracks and in New Lines and Extensions 725 Weight of Rail 726 Summary of Track Replacements Periodic Review

    To ensure that the Board's accounting and reporting requirements reflect, to the extent practicable, current GAAP principles, the Board will conduct a periodic review of its accounting standards not less than every five years. This periodic review will be initiated through the rulemaking process, thereby affording interested parties an opportunity for notice and comment.

    Paperwork Reduction Act

    Pursuant to the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3549, and Office of Management and Budget (OMB) regulations at 5 CFR 1320.8(d)(3), the Board seeks comments regarding: (1) Whether the revisions to the collection of information proposed here are necessary for the proper performance of the functions of the Board, including whether the collection has practical utility; (2) the accuracy of the Board's burden assessment; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burdens of the collections of information on the respondents, including the use of automated collection techniques or other forms of information technology, when appropriate. Additional information related to these questions can be found in Appendix B below. The proposed information-collection revisions described in this decision are being submitted to OMB for review as required under the PRA, 5 U.S.C. 3507(d) and OMB regulations at 5 CFR 1320.11. Comments received by the Board regarding the information collection will also be forwarded to OMB for its review when the final rule is published.

    Regulatory Flexibility Act Statement

    The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, generally requires a description and analysis of new rules that would have a significant economic impact on a substantial number of small entities. In drafting a rule, an agency is required to: (1) Assess the effect that its regulation will have on small entities; (2) analyze effective alternatives that may minimize a regulation's impact; and (3) make the analysis available for public comment. Sections 601-604. In its notice of proposed rulemaking, the agency must either include an initial regulatory flexibility analysis, section 603(a), or certify that the proposed rule would not have a “significant impact on a substantial number of small entities,” section 605(b).

    Because the goal of the RFA is to reduce the cost to small entities of complying with federal regulations, the RFA requires an agency to perform a regulatory flexibility analysis of small entity impacts only when a rule directly regulates those entities. In other words, the impact must be a direct impact on small entities “whose conduct is circumscribed or mandated” by the proposed rule. White Eagle Coop. Ass'n v. Conner, 553 F.3d 467, 478, 480 (7th Cir. 2009).

    This proposal will not have a significant economic impact upon a substantial number of small entities within the meaning of the RFA. The proposed rule would affect only entities that are required to file Form R-1 reports; these reports are only required to be submitted by Class I carriers. 49 CFR 1241.1. Class I carriers are large railroads; accordingly, there will be no impact on small railroads (small entities).

    Authority.

    49 U.S.C. 11142 and 11164.

    List of Subjects in 49 CFR Part 1201

    Railroads, Uniform System of Accounts.

    Decided: June 18, 2015.

    By the Board, Acting Chairman Miller and Vice Chairman Begeman.

    Brendetta S. Jones, Clearance Clerk.

    For the reasons set forth in the preamble, the Surface Transportation Board proposes to amend part 1201 of title 49, chapter X, of the Code of Federal Regulations as follows:

    PART 1201—RAILROAD COMPANIES 1. The authority citation for part 1201 continues to read as follows: Authority:

    49 U.S.C. 11142 and 11164.

    Subpart A—Uniform System of Accounts 2. Amend Regulations Prescribed by revising paragraph (ii), item 16(c), to read as follows: List of Instructions and Accounts REGULATIONS PRESCRIBED

    (ii) * * *

    16. * * *

    (c) Cost, as applied to a marketable equity security, refers to the original cost as adjusted for unrealized holding gains and losses.

    3. Amend General Instructions by adding Instructions 1-19 and 1-20 to read as follows:

    GENERAL INSTRUCTIONS

    1-19 Accounting for Other Comprehensive Income. (a) Railroads will record items of Other Comprehensive Income in account 799.1, Other comprehensive income. Amounts included in this account will be maintained by each category of Other Comprehensive Income. Examples of categories of Other Comprehensive Income include foreign currency items, minimum pension liability adjustments, unrealized gains and losses on available-for-sale type securities and cash-flow hedge amounts.

    (b) Supporting records will be maintained for account 799 so that the company can readily identify the cumulative amount of Other Comprehensive Income for each item included in this account.

    (c) When an item of Other Comprehensive Income enters into the determination of earnings in the current or subsequent periods, a reclassification adjustment will be recorded in accounts 799 to avoid double counting of when an item included in net income was also included in Other Comprehensive Income in the same or prior period.

    1-20 Accounting for derivative instruments and hedging activities. (a) A carrier will recognize derivative instruments as either assets or liabilities in the financial statements and measure those instruments at fair value. A derivative instrument is a financial instrument or other contract with all three of the following characteristics:

    (1) The derivative instrument has one or more underlyings and a notional amount or payment provision. Those terms determine the amount of the settlement or settlements, and, in some cases, whether or not a settlement is required.

    (2) The derivative instrument requires no initial net investment or an initial net investment that is smaller than would be required for other types of contracts that would be expected to have similar responses to changes in market factors.

    (3) The derivative instrument's terms require or permit net settlement; the derivative instrument can readily be settled net by a means outside the contract; or the derivative instrument's terms provide for delivery of an asset that puts the recipient in a position not substantially different from net settlement.

    (b) The accounting for the changes in the fair value of derivative instruments depends upon their intended use and designation. Changes in the fair value of derivative instruments not designated as fair value or cash flow hedges will be recorded in account 713.5, Derivative instrument assets, or account 763.5, Derivative instrument liabilities, as appropriate, with the gains or losses charged to earnings in account 551, Miscellaneous income charges.

    (c) A derivative instrument may be specifically designated as a fair-value or cash-flow hedge. A hedge may be used to manage risk to price, interest rates, or foreign currency transactions. An entity will maintain documentation of the hedge relationship at the inception of the hedge that details the risk management objective and strategy for undertaking the hedge, the nature of the risk being hedged, and how hedge effectiveness will be determined.

    (d) If the carrier designates the derivative instrument as a fair-value hedge against exposure to changes in the fair value of a recognized asset, liability, or a firm commitment, it will record the change in fair value of the derivative instrument designated as a fair-value hedge to account 713.6, Derivative instruments assets—hedges, or account 763.6, Derivative instrument liabilities—hedges, as appropriate, with a corresponding adjustment to the sub-account of the item being hedged. The ineffective portion of the hedge transaction will be reflected in the same income or expense account that would have been used if the hedged item had been disposed of or settled. In the case of a fair-value hedge of a firm commitment, a new asset or liability is created. As a result of the hedge relationship, the new asset or liability will become part of the carrying amount of the item being hedged.

    (e) If the carrier designates the derivative instrument as a cash-flow hedge against exposure to variable cash flows of a probable forecasted transaction it will record changes in the fair value of the derivative instrument in account 713.6, Derivative instrument assets—hedges, or account 763.6, Derivative instrument liabilities—hedges, as appropriate, with a corresponding amount in account 799.1, Other comprehensive income, for the effective portion of the hedge. The ineffective portion of the hedge transaction will be reflected in the same income or expense account that would have been used if the hedged item had been disposed of or settled. Amounts recorded in Other Comprehensive Income will be reclassified into earnings in the same period or periods that the hedged forecasted item affects earnings.

    4. Amend Instructions For Property Accounts by: a. Revising paragraph (a) in Instruction 2-15; b. Removing paragraph (b) in Instruction 2-15; c. Redesignating paragraph (c) as paragraph (b) in Instruction 2-15; d. Revising the newly designated paragraph (b) in Instruction 2-15; and e. Redesignating paragraph (d) as paragraph (c) in Instruction 2-15.

    The revisions read as follows:

    INSTRUCTIONS FOR PROPERTY ACCOUNTS

    2-15 * * * (a) When a railway or portion thereof constituting an operating unit or system is acquired in a business combination, that business combination shall be recorded in the accounts in the manner stated hereunder.

    (b) Purchase:

    (1) The amount includible in account 731, Road and equipment property, shall be the cost at the date of acquisition to the purchaser of the transportation property acquired. The cost assigned the property, as well as other assets acquired, shall be the amount of the cost consideration given. Where property and other assets are acquired for other than cash, including liabilities assumed and shares of stock issued, cost shall be determined by either the fair value of the consideration given or the fair value of the assets acquired, whichever is more clearly evident. In addition to any liabilities assumed, provision shall be made for such estimated liabilities as may be necessary.

    (2) When the costs of individual units or classes of transportation property are not specified in the agreement, the cost assigned such property shall be apportioned among the appropriate primary accounts using the percentage relationship between the fair values for each class of property acquired and the total of such values.

    5. Amend Instructions For Income And Balance Sheet Accounts by revising Instruction 5-2, paragraph (a), items (2), (3), and (4) to read as follows: INSTRUCTIONS FOR INCOME AND BALANCE SHEET ACCOUNTS

    5-2 * * *

    (a) * * *

    (2) Account 702, Temporary cash investments, account 721, Investments and advances; affiliated companies, and account 722, Other investments and advances, shall be maintained in such a manner as to reflect the marketable equity portion (see definition 26) and other securities or investments.

    (3) For the purpose of determining net ledger value, the marketable equity securities in account 702 shall be considered the current portfolio and the marketable equity securities in accounts 721 and 722 (combined) shall be considered the noncurrent portfolio.

    (4) Carriers will categorize their security investments as held-to-maturity, trading, or available-for-sale. Unrealized holding gains and losses on trading type investment securities will be recorded in account 551, Miscellaneous income charges. Unrealized holding gains and losses on available-for-sale type investment securities will be recorded in account 799.1, Other comprehensive income.

    6. Amend Income Accounts—Ordinary Items by adding a sentence at the end of the list of inclusions for account 551 “Miscellaneous income charges,” paragraph (a) to read as follows: INCOME ACCOUNTS Ordinary Items
    551 Miscellaneous income charges.

    (a) * * *

    Unrealized holding gains and losses on trading type investment securities.

    7. Amend General Balance Sheet Accounts Explanations—Assets, Current Assets by: a. Adding a sentence to the end of the first paragraph in account 702 “Temporary cash investment”; b. Adding accounts 713.5 “Derivative instrument assets” and 713.6 “Derivative instrument assets-hedges.”

    The additions read as follows:

    GENERAL BALANCE SHEET ACCOUNTS EXPLANATIONS Assets Current Assets
    702 Temporary cash investments.

    * * * This account shall also include unrealized holding gains and losses on trading and available-for-sale types of security investments.

    713.5 Derivative instrument assets.

    This account shall include the amounts paid for derivative instruments, and the change in the fair value of all derivative instrument assets not designated as cash-flow or fair-value hedges. Account 551, Miscellaneous income charges, will be charged with the corresponding amount of the change in the fair value of the derivative instrument.

    713.6 Derivative instrument assets-hedges.

    (a) This account shall include the amounts paid for derivative instruments, and the change in the fair value of derivative instrument assets designated by the utility as cash-flow or fair-value hedges.

    (b) When a carrier designates a derivative instrument asset as a cash-flow hedge, it will record the change in the fair value of the derivative instrument in this account with a concurrent charge to account 799.1, Other comprehensive income, with the effective portion of the derivative's gain or loss. The ineffective portion of the cash-flow hedge will be charged to the same income or expense account that would have been used if the hedged item had been disposed of or otherwise settled.

    (c) When a carrier designates a derivative instrument as a fair-value hedge, it will record the change in the fair value of the derivative instrument in this account with a concurrent charge to a sub-account of the asset or liability that carries the item being hedged. The ineffective portion of the fair-value hedge will be charged to the same income or expense account that would have been used if the hedged item had been disposed of or otherwise settled.

    8. Amend General Balance Sheet Accounts Explanations—Assets, Special Funds by: a. In account 715 “Sinking funds,” adding two sentences to the end of paragraph (b); b. In account 716 “Capital funds,” adding a sentence to the end of paragraph (a); and c. In account 717 “Other funds,” adding Note E.

    The additions read as follows:

    GENERAL BALANCE SHEET ACCOUNTS EXPLANATIONS Assets Special Funds
    715 Sinking funds.

    (b) * * * This account shall also include unrealized holding gains and losses on trading and available-for-sale types of security investments. The cash value of life insurance policies on the lives of employees and officers to the extent that the carrier is the beneficiary of such policies shall also be included in this account.

    716 Capital funds.

    (a) * * * This account shall also include unrealized holding gains and losses on trading and available-for-sale types of security investments.

    717 Other funds.

    Note E: This account shall also include unrealized holding gains and losses on trading and available-for-sale types of security investments.

    9. Amend General Balance Sheet Accounts Explanations—Assets, Investments by: a. In account 722 “Other investments and advances,” adding two sentences to the end of paragraph (a); and b. Removing account 724 “Allowance for net unrealized loss on noncurrent marketable equity securities—Cr.”

    The addition reads as follows:

    GENERAL BALANCE SHEET ACCOUNTS EXPLANATIONS Assets Investments
    722 Other investments and advances.

    (a) * * * This account shall also include unrealized holding gains and losses on trading and available-for-sale types of security investments. Include also the offsetting entry to the recording of amortization of discount or premium on interest bearing investments.

    10. Amend General Balance Sheet Accounts Explanations—Liabilities and Shareholders' Equity, Current Liabilities by adding accounts 763.5 “Derivative instrument liabilities” and 763.6 “Derivative instrument liabilities-hedges”,to read as follows: GENERAL BALANCE SHEET ACCOUNTS EXPLANATIONS Liabilities and Shareholders' Equity Current Liabilities
    763.5 Derivative instrument liabilities.

    This account shall include the change in the fair value of all derivative instrument liabilities not designated as cash-flow or fair-value hedges. Account 551, Miscellaneous income charges, will be charged with the corresponding amount of the change in the fair value of the derivative instrument.

    763.6 Derivative instrument liabilities-hedges.

    (a) This account shall include the change in the fair value of derivative instrument liabilities designated by the carrier as cash-flow or fair-value hedges.

    (b) A carrier will record the change in the fair value of a derivative instrument liability related to a cash-flow hedge in this account, with a concurrent charge to account 799.1, Other comprehensive income, with the effective portion of the derivative instrument's gain or loss. The ineffective portion of the cash-flow hedge will be charged to the same income or expense account that would have been used if the hedged item had been disposed of or otherwise settled.

    (c) A carrier will record the change in the fair value of a derivative instrument liability related to a fair-value hedge in this account, with a concurrent charge to a sub-account of the asset or liability that carries the item being hedged. The ineffective portion of the fair-value hedge will be charged to the same income or expense account that would have been used if the hedged item had been disposed of or otherwise settled.

    11. Amend General Balance Sheet Accounts Explanations—Liabilities and Shareholders' Equity, Shareholders' Equity by: a. Removing account 798.1 “Net unrealized loss on noncurrent marketable securities”; and b. Adding account 799 “Accumulated Other Comprehensive Income.”

    The addition reads as follows:

    GENERAL BALANCE SHEET ACCOUNTS EXPLANATIONS Liabilities and Shareholders' Equity Shareholders' Equity
    799 Accumulated Other Comprehensive Income.

    (a) This account shall include revenues, expenses, gains, and losses that are properly includable in Other Comprehensive Income during the period. Examples of items of Other Comprehensive Income include foreign currency items, minimum pension liability adjustments, unrealized gains and losses on certain investments in debt and equity securities, and cash-flow hedges. Records supporting the entries to this account shall be maintained so that the carrier can furnish the amount of Other Comprehensive Income for each item included in this account.

    (b) This account shall also be debited or credited, as appropriate, with amounts of accumulated Other Comprehensive Income that have been included in the determination of net income during the period and in accumulated Other Comprehensive Income in prior periods. Separate records for each category of items will be maintained to identify the amount of the reclassification adjustments from accumulated Other Comprehensive Income to earnings made during the period.

    12. Revise the Form of General Balance Sheet Statement, Assets to read as follows: Form of General Balance Sheet Statement

    The classified form of general balance sheet statement is designed to show the financial condition of the accounting company at any specified date.

    Assets Current assets: 701. Cash. 702. Temporary cash investments. 703. Special deposits. 704. Loans and notes receivable. 705. Accounts receivable; Interline and other balances. 706. Accounts receivable; Customers. 707. Accounts receivable; Other. 708. Interest and dividends receivable. 708.5. Receivables from affiliated companies. 709. Accrued accounts receivable. 709.5. Allowance for uncollectible accounts. Net receivables. 710. Working funds. 711. Prepayments. 712. Material and supplies. 713. Other current assets. 713.5 Derivative instrument assets 713.6 Derivative instrument assets—hedges 714. Deferred income tax debits. Total current assets. Special funds: 715. Sinking funds. 716. Capital funds. 717. Other funds. Total special funds. Investments: 721. Investments and advances; affiliated companies.  Undistributed earnings from certain investments in account 751. 721.5. Adjustments; investments and advances—affiliated companies.  Net—investments and advances—affiliated companies. 722. Other investments and advances. 723. Adjustments; Other investments and advances.  Net—other investments and advances.  Total investments. Tangible property: 731. Road and equipment property. 735. Accumulated depreciation; Road and equipment property. 736. Accumulated amortization; Road and equipment property—Defense projects. Net road and equipment property. 732. Improvements on leased property. 733. Accumulated depreciation; Improvements on leased property. 734. Accumulated amortization; Improvements on leased property—Defense projects.  Net improvements on leased property.  Total carrier property. 737. Property used in other than carrier operations. 738. Accumulated depreciation; Property used in other than carrier operations.  Net—property used in other than carrier operations.  Total tangible property. Intangible property: 739. Organization expenses. Other assets and deferred debits: 741. Other assets. 743. Other deferred debits. 744. Accumulated deferred income tax debits.  Total other assets and deferred debits.  Total assets. LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: 751. Loans and notes payable. 752. Accounts payable; Interline and other balances. 753. Audited accounts and wages payable. 754. Accounts payable; Other. 755. Interest payable. 756. Dividends payable. 757. Payables to affiliated companies. 759. Accrued accounts payable. 760. Federal income taxes accrued. 761. State and other income taxes accrued. 761.5. Other taxes accrued. 762. Deferred income tax credits. 763. Other current liabilities. 763.5 Derivative instrument liabilities 763.6 Derivative instrument liabilities-hedges 764. Equipment obligations and other long-term debt due within one year.  Total current liabilities. Long-term debt due after one year: 1 765. Funded debt unmatured. 766. Equipment obligations. 766.5. Capitalized lease obligations. 767. Receivers' and trustees' securities. 768. Debt in default. 769. Accounts payable; Affiliated companies. 770.1 Unamortized debt discount. 770.2 Unamortized premium on debt.  Total long-term debt due after one year. Other long-term liabilities: 771. Accrued liability; Pension and welfare. 772. Accrued liability; Leased property. 774. Accrued liability; Casualty and other claims. 775. Other accrued liabilities. 781. Interest in default. 782. Other liabilities.  Total other long-term liabilities. Deferred credits: 783. Deferred revenues—transfers from government authorities. 784. Other deferred credits. 786. Accumulated deferred income tax credits.  Total deferred credits. Shareholders' equity: Capital stock: 791. Capital stock. 792. Liability for conversion of capital stock. 793. Discount on capital stock.  Total capital stock. Additional capital: 794. Premiums and assessments on capital stock. 795. Other capital.  Total additional capital. Retained earnings: 797. Retained earnings; Appropriated. 798. Retained earnings; Unappropriated. Total retained earnings. 798.5 Treasury stock. 799. Accumulated Other Comprehensive Income  Total shareholders' equity.  Total liabilities and shareholders' equity. 1To be divided as to “Total issued” and “Held by or for company.” 13. Amend Conversion Tables by revising General Balance Sheet Accounts conversion table to read as follows: CONVERSION TABLES General Balance Sheet Accounts Conversion Table System of accounts eff. prior to Month XX, 2015 Account title No. System of accounts eff. Month, XX, 2015 No. Account title Cash 701 701 Cash. Temporary cash investments 702 702 Temporary cash investments. Special deposits 703 703 Special deposits. Loans and notes receivable 704 704 Loans and notes receivable. 708.5 Receivables from affiliated companies. 709.5 Allowance for uncollectible accounts. Traffic, car service and other balances—dr 705 705 Accounts receivable; interline and other balances. 709.5 Allowances for uncollectible accounts. 752 Accounts payable; interline and other balances. Net balance receivable from agents and conductors 706 706 Accounts receivable; customers. Miscellaneous accounts receivable 707 707 Accounts receivable; other. 708.5 Receivables from affiliated companies. 709.5 Allowance for uncollectible accounts. Interest and dividends receivable 708 708 Interest and dividends receivable. 708.5 Receivables from affiliated companies. 709.5 Allowance for uncollectible accounts. Accrued accounts receivable 709 709 Accrued accounts receivable. Working fund advances 710 710 Working funds. Prepayments 711 711 Prepayments. Material and supplies 712 712 Material and supplies. Other current assets 713 713 Other current assets. 713.5 Derivative instrument assets 713.6 Derivative instrument assets—hedges Deferred income tax charges 714 714 Deferred income tax debits. Sinking funds 715 715 Sinking funds. Capital and other reserve funds 716 716 Capital funds. Insurance and other funds 717 717 Other funds. Investment in affiliated companies 721 721 Investments and advances; affiliated companies. Other investments 722 722 Other investments and advances. Reserve for adjustment of investment in securities—cr 723 721.5 Adjustments; investments and advances—affiliated companies. 723 Adjustments; other investments and advances. Road and equipment property 731 731 Road and equipment property. Organization expenses 71 739 Organization expenses. Improvements on leased property 732 732 Improvements on leased property. Accrued depreciation; improvements on leased property 733 733 Accumulated depreciation; improvements on leased property. Accrued depreciation; road and equipment 735 735 Accumulated depreciation; road and equipment property. Amortization of defense projects; road and equipment 736 736 Accumulated amortization; road and equipment property—defense projects. 734 Accumulated amortization; improvements on leased property—defense projects. Miscellaneous physical property 737 737 Property used in other than carrier operations. Accrued depreciation; miscellaneous physical property 738 738 Accumulated depreciation; property used in other than carrier operations. Other assets 741 741 Other assets. Unamortized discount on long-term debt 770.1 770.1 Unamortized debt discount. Other deferred charges 743 743 Other deferred debits. Accumulated deferred income tax charges 744 744 Accumulated deferred income tax debits. Liabilities Loans and notes payable 751 751 Loans and notes payable. 757 Payables to affiliated companies. Traffic, car service and other balances—cr 752 752 Accounts payable; interline and other balances. 705 Accounts receivable; interline and other balances. 709.5 Allowance for uncollectible accounts. Audited accounts and wages payable 753 753 Audited accounts and wages payable. Miscellaneous accounts payable 754 754 Accounts payable; other. 757 Payables to affiliated companies. Interest matured unpaid 755 755 Interest payable. 757 Payables to affiliated companies. Dividends matured unpaid 756 756 Dividends payable. 757 Payables to affiliated companies. Unmatured interest accrued 757 755 Interest payable. 757 Payables to affiliated companies. Unmatured dividends declared 758 756 Dividends payable. 757 Payables to affiliated companies. Accrued accounts payable 759 759 Accrued accounts payable. Federal income taxes accrued 760 760 Federal income taxes accrued. Other taxes accrued 761 711 Prepayments. 761 State and other income taxes accrued. 761.5 Other taxes accrued. Deferred income tax credits 762 762 Deferred income tax credits. Other current liabilities 763 763 Other current liabilities. 763.5 Derivative instrument liabilities 763.6 Derivative instrument liabilities—hedges Equipment obligations and other debt due within one year 764 764 Equipment obligations and other long-term debt due within 1 year. Funded debt unmatured 765 765 Funded debt unmatured. Equipment obligations 766 766 Equipment obligations. Capitalized lease obligations 766.5 766.5 Capitalized lease obligations. Receivers' and trustees' securities 767 767 Receivers' and trustees' securities. Debt in default 768 768 Debt in default. Amounts payable to affiliated companies 769 769 Accounts payable; affiliated companies. Pension and welfare reserves 771 771 Accrued liability; pension and welfare. Casualty and other reserves 774 774 Accrued liability; casualty and other claims. 775 Other accrued liabilities. Interest in default 781 781 Interest in default. Other liabilities 782 782 Other liabilities. Deferred revenues—transfers from government authorities 783 783 Deferred revenues—transfers from government authorities Unamortized premium on long-term debt 790.2 770.2 Unamortized premium on debt. Other deferred credits 784 784 Other deferred credits. Accrued liability; leased property 785 772 Accrued liability; leased property. Accumulated deferred income tax credits 786 786 Accumulated deferred income tax credits. Shareholders' Equity Capital stock issued 791 791 Capital stock. Stock liability for conversion 792 792 Liability for conversion of capital stock. Discount on capital stock 793 793 Discount on capital stock. Premiums and assessment on capital stock 794 794 Premiums and assessments on capital stock. Paid-in surplus 795 795 Other capital. Other capital surplus 796 795 Do. Retained income; appropriated 797 797 Retained earnings; appropriated. Retained income; unappropriated 798 798 Retained earnings; unappropriated. Treasury stock 798.5 798.5 Treasury stock. 799 Accumulated Other Comprehensive Income. Note:

    The following appendices will not appear in the Code of Federal Regulations.

    Appendix A BILLING CODE 4915-01-P EP08JY15.000 EP08JY15.001 EP08JY15.002 EP08JY15.003 EP08JY15.004 EP08JY15.005 EP08JY15.006 EP08JY15.007 EP08JY15.008 EP08JY15.009 EP08JY15.010 EP08JY15.011 EP08JY15.012 EP08JY15.013 EP08JY15.014 EP08JY15.015 EP08JY15.016 EP08JY15.017 EP08JY15.018 EP08JY15.019 EP08JY15.020 EP08JY15.021 EP08JY15.022 EP08JY15.023 Appendix B Information Collection

    Title: Class I Railroad Annual Report

    OMB Control Number: 2140-0009.

    Form Number: R1.

    Type of Review: Revision of a currently approved collection.

    Respondents: Class I railroads.

    Number of Respondents: 7.

    Estimated Time per Response: The railroads currently spend no more than 800 hours preparing this report, including time spent reviewing instructions; searching existing data sources; gathering and maintaining the data needed; completing and reviewing the collection of information; and converting the data from the carrier's individual accounting system to the Board's Uniform System of Accounts (USOA), which ensures that the information will be presented in a consistent format across all reporting railroads, see 49 U.S.C. 11141-43, 11161-64, 49 CFR parts 1200 and 1201. The proposed modifications would not increase the hourly burden.

    Frequency of Response: Annual.

    Total Annual Hour Burden: No more than 5,600 hours.

    Total Annual “Non-Hour Burden” Cost: Respondents are currently required to submit a signed hard copy of this report. We estimate a total annual cost for all respondents of $28. The proposed modifications would not increase the cost burden.

    Needs and Uses: Annual reports are required to be filed by Class I railroads under 49 U.S.C. 11145. The reports show operating expenses and operating statistics of the carriers. Operating expenses include costs for right-of-way and structures, equipment, train and yard operations, and general and administrative expenses. Operating statistics include such items as car-miles, revenue-ton-miles, and gross ton-miles. The reports are used by the Board, other Federal agencies, and industry groups to monitor and assess railroad industry growth, financial stability, traffic, and operations, and to identify industry changes that may affect national transportation policy. Information from this report is also entered into the Board's Uniform Rail Costing System (URCS), which is a cost measurement methodology. URCS, which was developed by the Board pursuant to 49 U.S.C. 11161, is used as a tool in rail rate proceedings, in accordance with 49 U.S.C. 10707(d), to calculate the variable costs associated with providing a particular service. The Board also uses this information to more effectively carry out other of its regulatory responsibilities, including: acting on railroad requests for authority to engage in Board-regulated financial transactions such as mergers, acquisitions of control, and consolidations, see 49 U.S.C. 11323-11324; analyzing the information that the Board obtains through the annual railroad industry waybill sample, see 49 CFR part 1244; measuring off-branch costs in railroad abandonment proceedings, in accordance with 49 CFR 1152.32(n); developing the “rail cost adjustment factors,” in accordance with 49 U.S.C. 10708; and conducting investigations and rulemakings.

    Information from certain schedules contained in these reports is compiled and published on the Board's Web site, http://www.stb.dot.gov. Information in these reports is not available from any other source.

    [FR Doc. 2015-15402 Filed 7-7-15; 8:45 am] BILLING CODE 4915-01-C
    DEPARTMENT OF TRANSPORTATION Surface Transportation Board 49 CFR Parts 1241, 1242, 1243, 1244, 1245, 1246, 1247, and 1248 [Docket No. EP 701] Accelerating Reporting Requirements for Class I Railroads AGENCY:

    Surface Transportation Board.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    The Surface Transportation Board (Board or STB) proposes to revise its regulations to accelerate the filing deadlines for eight reports submitted by Class I railroads: Schedule 250 (required under the Annual Report Form R-1); Quarterly Condensed Balance Sheet Forms (CBS); Quarterly Revenue, Expenses, and Income Reports (RE&I); Quarterly and Annual Wage Forms A&B; Quarterly Reports of Fuel Cost, Consumption, and Surcharge Revenue; Quarterly and Annual Freight Commodity Statistics Report Forms (QCS); Annual Report of Cars Loaded and Terminated (Form STB-54); and Monthly Report of Number of Employees (Form C).

    DATES:

    Comments on this proposed rulemaking are due on or before August 7, 2015; reply comments are due by September 8, 2015.

    ADDRESSES:

    Comments may be submitted either via the Board's e-filing format or in the traditional paper format. Any person using e-filing should attach a document and otherwise comply with the instructions at the E-FILING link on the Board's Web site, at http://www.stb.dot.gov. Any person submitting a filing in the traditional paper format should send an original and 10 copies to: Surface Transportation Board, Attn: Docket No. EP 701, 395 E Street SW., Washington, DC 20423-0001.

    Copies of written comments received by the Board will be posted to the Board's Web site at http://www.stb.dot.gov and will be available for viewing and self-copying in the Board's Public Docket Room, Suite 131, 395 E Street SW., Washington, DC. Copies of the comments will also be available (for a fee) by contacting the Board's Chief Records Officer at (202) 245-0238 or 395 E Street SW., Washington, DC 20423-0001.

    FOR FURTHER INFORMATION CONTACT:

    Pedro Ramirez, (202) 245-0333. Assistance for the hearing impaired is available through Federal Information Relay Service (FIRS) at (800) 877-8339.

    SUPPLEMENTARY INFORMATION:

    The Board has authority to collect financial and statistical data from Class I railroads as necessary for the economic oversight of the industry. 49 U.S.C. 721(b), 11145. To this end, the Board's regulations require Class I railroads to submit annual, quarterly, and monthly reports containing financial and operating statistics, including employment and traffic data. 49 U.S.C. 11145; 49 CFR parts 1241 through 1248. The data collected is used by the Board in various decisions as well as by other governmental agencies and interested parties in evaluating the railroad industry.

    The proposed changes to filing deadlines would further facilitate the Board's oversight of Class I railroads. Earlier reporting of financial information would also allow the Board and the public to more quickly identify and evaluate emerging trends, business conditions, and issues related to Class I railroads. The Board's decisions concerning revenue and expenses of the railroads would be based on more current information.

    Many of the current reporting deadlines have not been revised for over four decades. For example, the filing dates for Form RE&I and Form CBS have not been modified since March 16, 1972. Since then, reporting and information technology has improved, allowing data to be more easily compiled.

    Proposed Filing Deadlines. The proposed regulations would provide for more timely filing deadlines:

    (1) Schedule 250 would be required to be filed with the Annual Report Form R-1 by March 31 of the year following the report year (49 CFR 1241.11), instead of by April 30;

    (2) Quarterly Report Forms RE&I (49 CFR 1243.1), CBS (49 CFR 1243.2), and Report of Fuel Cost, Consumption, and Surcharge Revenue (49 CFR 1243.3) would be required to be filed within 15 days, instead of 30 days, after the end of each quarter;

    (3) Quarterly Wage Forms A & B would be required to be filed 15 days after the end of each quarter, instead of 30 days, and Annual Wage Forms A & B would be required to be filed 30 days after the end of each year, instead of 45 days (49 CFR 1245.2);1

    1 The form titles currently provided in 49 CFR 1245.2, “Form QRSC” and “Form ARSC” are outdated. The form titles will be updated if the Board adopts final rules in this proceeding.

    (4) Quarterly and Annual Form QCS would be required to be filed 30 days after the end of each period for which they are compiled, instead of 60 days (49 CFR 1248.5);

    (5) Form C would be required to be filed 10 days after the end of each month, instead of the current practice of 15 days (49 CFR 1246.1); 2 and

    2 The current regulations at 49 CFR 1246.1 state that these reports are due “by the end of the month to which it applies.” In practice, the Board has accepted the report 15 days after the end of the month. The form title, “Form MRRE” is also outdated. The form title will be updated if the Board adopts final rules in this proceeding.

    (6) Form STB-54 would be filed 60 days, instead of 90 days, after the end of each year (49 CFR 1247.1).

    The proposed regulations would also amend the language in 49 CFR 1245.3(b) to clarify that the number of employees reported on Forms A & B should be consistent with the number reported on Form C, pursuant to part 1246. Similarly, the proposal would amend the language in 49 CFR 1246.1 to clarify the method by which carriers arrive at the monthly average number of employees. These changes codify the current settled practice of the reporting railroads. References to the “Interstate Commerce Act” would be replaced with “part A of subtitle IV of title 49, United States Code” 3 between 49 CFR parts 1241 and 1248 to accurately describe the current controlling statute. We are also proposing to eliminate the requirement of railroads to file “duplicate” copies of reports. Because railroads currently submit their reports electronically, this eliminates the need for hard copies to be filed. We are proposing to remove this requirement, with the exception of the Annual Report Form R-1, which still requires hard copies to be filed.

    3 These are the rail provisions of the Interstate Commerce Act, as amended by the ICC Termination Act of 1995.

    Only negligible additional burdens to respondent railroads would be expected as a result of the expedited deadlines being proposed. Due to the availability of more robust financial and statistical reporting technology since the adoption of the current Class I railroad reporting requirements, the information requested should be readily available for timely filing under the proposed deadlines. In addition, it is standard practice for companies to compile and summarize accounting transactions and financial data on a monthly basis, if not more frequently. Therefore, we anticipate that more timely reporting of the required information could be accomplished with negligible additional burden on the railroads.

    Paperwork Reduction Act. Pursuant to the Paperwork Reduction Act (PRA), 44 U.S.C. 3501-3549, and Office of Management and Budget (OMB) regulations at 5 CFR 1320.8(d)(3), the Board seeks comments regarding: (1) Whether the revisions to the collections of information proposed here are necessary for the proper performance of the functions of the Board, including whether the collection has practical utility; (2) the accuracy of the Board's burden assessment; (3) ways to enhance the quality, utility, and clarity of the information collected; and (4) ways to minimize the burdens of the collections of information on the respondents, including the use of automated collection techniques or other forms of information technology, when appropriate. The proposed revisions described in this notice are being submitted to OMB for review as required under the PRA, 44 U.S.C. 3507(d) and OMB regulations at 5 CFR 1320.11. Comments received by the Board regarding the information collection will also be forwarded to OMB for its review when the final rule is published.

    Regulatory Flexibility Act Certification. Pursuant to 5 U.S.C. 605(b), the Board certifies that this action will not have a significant economic effect on a substantial number of small entities within the meaning of the Regulatory Flexibility Act. These proposed rules will provide revised reporting deadlines for financial and statistical data for Class I railroads (carriers having annual carrier operating revenues of $250 million or more as defined by 49 CFR part 1201, General Instruction 1-1(a)). Based on the Small Business Administration's regulations at 13 CFR 121.201, none of the current Class I railroads qualify as a small business (1,500 or fewer employees for line-haul railroads). Therefore, no small entities would be subject to these requirements. A copy of this decision is being provided to the Chief Counsel for Advocacy, Small Business Administration.

    This action will not significantly affect the quality of the human environment or the conservation of energy resources.

    It is ordered:

    1. Comments on this proposal are due by August 7, 2015; reply comments are due by September 8, 2015.

    2. A copy of this decision will be served upon the Chief Counsel for Advocacy, Office of Advocacy, U.S. Small Business Administration.

    3. Notice of this decision will be published in the Federal Register.

    4. This decision is effective on its service date.

    List of Subjects 49 CFR Part 1241

    Railroads, Reporting and recordkeeping requirements.

    49 CFR Part 1242

    Railroad and taxes.

    49 CFR Part 1243

    Railroads, Reporting and recordkeeping requirements.

    49 CFR Part 1244

    Freight, Railroads, Reporting and recordkeeping requirements.

    49 CFR Part 1245

    Railroad employees, Reporting and recordkeeping requirements, Wages.

    49 CFR Part 1246

    Railroad employees, Reporting and recordkeeping requirements.

    49 CFR Part 1247

    Freight, Railroads, Reporting and recordkeeping requirements.

    49 CFR Part 1248

    Freight, Railroads, Reporting and recordkeeping requirements, Statistics.

    Decided: June 18, 2015. By the Board, Acting Chairman Miller and Vice Chairman Begeman. Jeffrey Herzig, Clearance Clerk.

    For the reasons set forth in the preamble, the Surface Transportation Board proposes to amend parts 1241, 1242, 1243, 1244, 1245, 1246, 1247, and 1248 of title 49, chapter X, of the Code of Federal Regulations as follows:

    PART 1241—ANNUAL, SPECIAL, OR PERIODIC REPORTS—CARRIERS SUBJECT TO PART A OF SUBTITLE IV OF TITLE 49, UNITED STATES CODE 1. The authority citation for part 1241 continues to read as follows: Authority:

    49 U.S.C. 11145.

    2. Revise § 1241.1 to read as follows:
    § 1241.1 Common carriers.

    All common carriers subject to the provisions of part A of subtitle IV of title 49, United States Code, and the owners of all railroads engaged in interstate commerce as therein defined, are required to file in the office of the Board on or before the 31st day of March in each year, reports covering the preceding year that is being reported, giving the particulars called for in the annual reports required by the Board of said carriers and owners of railroads.

    3. Amend § 1241.11 by revising paragraph (a) to read as follows:
    § 1241.11 Annual reports of Class I railroads.

    (a) All line-haul railroad companies of Class I, as defined in part 1201 of this chapter, subject to part A of subtitle IV of title 49, United States Code, are required to file annual reports in accordance with Railroad Annual Report Form R-1. Such annual report shall be filed in duplicate in the Office of Economics, Surface Transportation Board, Washington, DC 20423-0001, on or before March 31 of the year following the year which is being reported.

    PART 1242—SEPARATION OF COMMON OPERATING EXPENSES BETWEEN FREIGHT SERVICE AND PASSENGER SERVICE FOR RAILROADS 4. The authority citation for part 1242 continues to read as follows: Authority:

    49 U.S.C. 721, 11142.

    5. Amend § 1242.00 by revising paragraph (a) to read as follows:
    § 1242.00 Separation of common operating expenses.

    (a) All Class I railroad companies including Class I switching and terminal companies subject to part A of subtitle IV of title 49, United States Code, shall separate operating expenses common to both freight service and passenger service in accordance with the regulation in this part.

    PART 1243—QUARTERLY OPERATING REPORTS—RAILROADS 6. The authority citation for part 1243 continues to read as follows: Authority:

    49 U.S.C. 721, 11145.

    7. Revise § 1243.1 to read as follows:
    § 1243.1 Revenues, expenses and income.

    All Class I railroads, except switching and terminal companies, subject to the provisions of part A of subtitle IV of title 49, United States Code, are required to compile and file quarterly reports of revenues, expenses and income in accordance with Form RE&I, and instructions thereon. Such quarterly reports shall be electronically submitted or filed in the Office of Economics, Surface Transportation Board, Washington, DC 20423-0001, within 15 days after the end of each quarter to which they relate.

    8. Revise § 1243.2 to read as follows:
    § 1243.2 Condensed balance sheet.

    All Class I railroads, except switching and terminal companies, subject to the provisions of part A of subtitle IV of title 49, United States Code, are required to compile and file quarterly reports of balance sheet items in accordance with Form CBS, and instructions thereon. Such quarterly reports shall be electronically submitted or filed with the Office of Economics, Surface Transportation Board, Washington, DC 20423-0001, within 15 days after the end of each quarter to which they relate.

    9. Revise § 1243.3 to read as follows:
    § 1243.3 Report of fuel cost, consumption, and surcharge revenue.

    All Class I railroads are required to file quarterly a Report of Fuel Cost, Consumption, and Surcharge Revenue, in accordance with the Board's reporting form. Such reports shall be electronically submitted or filed with the Office of Economics, Surface Transportation Board, Washington, DC 20423-0001, within 15 days after the end of each quarter reported.

    PART 1244—WAYBILL ANALYSIS OF TRANSPORTATION OF PROPERTY—RAILROADS 10. The authority citation for part 1244 continues to read as follows: Authority:

    49 U.S.C. 721, 10707, 11144, 11145.

    11. Revise § 1244.1(a) to read as follows:
    § 1244.1 Definitions.

    (a) Railroad-an individual railroad or terminal company subject to part A of subtitle IV of title 49, United States Code, and every receiver, trustee, executor, administrator or assignee of any such railroad. If a railroad and its railroad subsidiaries report to the Board on a consolidated basis, they would collectively be considered as a railroad.

    PART 1245—CLASSIFICATION OF RAILROAD EMPLOYEES; REPORTS OF SERVICE AND COMPENSATION 12. The authority citation for part 1245 continues to read as follows: Authority:

    49 U.S.C. 721, 11145.

    13. Revise § 1245.2 to read as follows:
    § 1245.2 Reports of railroad employees, service and compensation.

    All Class I railroads are required to file a Quarterly Report of Railroad Employees, Service, and Compensation, (Quarterly Forms A & B). In addition, such carriers shall also file an Annual Report of Railroad Employees, Service, and Compensation, (Annual Forms A & B) for each calendar year. Both reports shall be electronically submitted or filed with the Office of Economics, Surface Transportation Board, Washington, DC 20423-0001. The quarterly report shall be filed within 15 days after the end of each calendar quarter. The annual report shall be filed within 30 days after the end of each reporting year.

    14. Revise § 1245.3(b) to read as follows:
    § 1245.3 Employees; definition, service hours, and compensation.

    (b) Counting employees. Because the number of employees fluctuates, carriers are required to classify and count all of their employees on a monthly basis, consistent with the data reported in accordance with § 1246.1 of this chapter.

    PART 1246—NUMBER OF RAILROAD EMPLOYEES 15. The authority citation for part 1246 continues to read as follows: Authority:

    49 U.S.C. 721, 11145.

    16. Revise § 1246.1 to read as follows:
    § 1246.1 Monthly report of number of railroad employees.

    Each Class I railroad shall file a Monthly Report of Number of Railroad Employees (Form C) each month. The number reported should represent the average of the actual count at the beginning of the reported month and the actual count at the end of the month. The report should be electronically submitted or mailed to Office of Economics, Surface Transportation Board, Washington, DC 20423-0001, 10 days after the end of each month to which it applies.

    PART 1247—REPORT OF CARS LOADED AND CARS TERMINATED 17. The authority citation for part 1247 continues to read as follows: Authority:

    49 U.S.C. 721, 10707, 11144, 11145.

    18. Revise § 1247.1 to read as follows:
    § 1247.1 Annual Report of Cars Loaded and Cars Terminated.

    Each Class I railroad shall file Form STB-54, Annual Report of Cars Loaded and Cars Terminated, together with the accompanying certification, with the Office of Economics (OE), Surface Transportation Board, Washington, DC 20243-0001, within 60 days after the end of each reporting year. Blank forms and instructions are available on the Board's Web site (http://www.stb.dot.gov) or can be obtained by contacting OE.

    PART 1248—FREIGHT COMMODITY STATISTICS 19. The authority citation for part 1248 continues to read as follows: Authority:

    49 U.S.C. 721, 11144, and 11145.

    20. Revise § 1248.1 to read as follows:
    § 1248.1 Freight commodity statistics.

    All Class I railroads, as described in part 1201 of this chapter, subject to part A of subtitle IV of title 49, United States Code, shall compile and report freight commodity statistics on the basis of the commodity codes named in § 1248.101. Carriers shall report quarterly and annually on the basis of the 3, 4 and 5-digit commodity codes named in that section. Such reports shall be made in conformity with the outline of terms set forth in §§ 1248.2 through 1248.5, as supplemented by instructions included in the appropriate report form to be supplied to the reporting railroads.

    21. Revise § 1248.5 to read as follows:
    § 1248.5 Report forms and date of filing.

    (a) Reports required from Class I carriers by this section shall be electronically submitted or filed with the Office of Economics, Surface Transportation Board, Washington, DC 20423-0001, on forms which will be furnished to the carriers. Data required under § 1248.2 shall be filed on Form QCS on or before the 30th day succeeding the close of each period for which they are compiled.

    (b) [Reserved]

    Note to § 1248.5:

    The outline of Report Form QCS follows the tenor of the order.

    Note:

    The following appendix will not appear in the Code of Federal Regulations.

    Appendix—Collection Number 1

    Title: Class I Railroad Annual Report.

    OMB Control Number: 2140-0009.

    Form Number: R1.

    Type of Review: Revision of a currently approved collection.

    Respondents: Class I railroads.

    Number of Respondents: 7.

    Estimated Time Per Response: The railroads currently spend no more than 800 hours preparing the Annual Report Form R-1, including time spent reviewing instructions; searching existing data sources; gathering and maintaining the data needed; completing and reviewing the collection of information; and converting the data from the carrier's individual accounting system to the Board's Uniform System of Accounts (USOA), which ensures that the information will be presented in a consistent format across all reporting railroads, see 49 U.S.C. 11141-43, 11161-64, 49 CFR parts 1200 and 1201. The proposed modification would be limited to a change in the due date for the Report's Schedule 250 and would not increase the hourly burden.

    Frequency of Response: Annual.

    Total Annual Hour Burden: No more than 5,600 hours.

    Total Annual “Non-Hour Burden” Cost: Respondents are currently required to submit a signed hard copy of this report. We estimate a total annual cost for all respondents of $28. The proposed modification will not increase the cost burden.

    Needs and Uses: Annual reports are required to be filed by Class I railroads under 49 U.S.C. 11145. The reports show operating expenses and operating statistics of the carriers. Operating expenses include costs for right-of-way and structures, equipment, train and yard operations, and general and administrative expenses. Operating statistics include such items as car-miles, revenue-ton-miles, and gross ton-miles. The reports are used by the Board, other Federal agencies, and industry groups to monitor and assess railroad industry growth, financial stability, traffic, and operations, and to identify industry changes that may affect national transportation policy. The annual reports also contain multiple schedules. One of these schedules is the Schedule 250 (required under the Annual Report Form R-1). The Schedule 250 data is used to compute the rate of return on net investment (ROI) for the Class I Railroads, which is used in annual determination of railroad revenue adequacy. See 49 U.S.C. 10704(a)(3); Standards for Railroad Revenue Adequacy, 364 I.C.C. 803 (1981); Standards for Railroad Revenue Adequacy, 3 I.C.C. 2d 261 (1986); and Supplemental Reporting of Consolidated Information for Revenue Adequacy, 5 I.C.C. 2d 65 (1988). The only modification being made to the annual report is the modification of the due date for Schedule 250. Receiving this data at the earlier date would enable the Board to expedite the Board's revenue-adequacy determinations. This change in due date was made possible by the improvements in technology. No other changes to this collection are being made.

    Information from certain schedules contained in these reports is compiled and published on the Board's Web site, http://www.stb.dot.gov/stb/industry/econ_reports.html. Information in these reports is not available from any other source.

    Collection Number 2

    Title: Quarterly Report of Revenues, Expenses, and Income—Railroads (Form RE&I).

    OMB Control Number: 2140-0013.

    Form Number: None.

    Type of Review: Revision of a currently approved collection.

    Respondents: Class I railroads.

    Number of Respondents: 7.

    Estimated Time per Response: 6 hours.

    Frequency of Response: Quarterly.

    Total Annual Hour Burden: 168 hours.

    Total Annual “Non Hour Burden” Cost: No “non-hour cost” burdens associated with this collection have been identified.

    Needs and Uses: This collection is a report of railroad operating revenues, operating expenses and income items; it is a profit and loss statement, disclosing net railway operating income on a quarterly and year-to-date basis for the current and prior years. See 49 CFR 1243.1. The Board uses the information in this report to ensure competitive, efficient, and safe transportation through general oversight programs that monitor and forecast the financial and operating condition of railroads, and through regulation of railroad rate and service issues and rail restructuring proposals, including railroad mergers, consolidations, acquisitions of control, and abandonments. Information from these reports is used by the Board, other Federal agencies, and industry groups to monitor and assess industry growth and operations, detect changes in carrier financial stability, and identify trends that may affect the national transportation system. Some of the information from these reports is compiled by the Board in our quarterly Selected Earnings Data Report, which is published on the Board's Web site, http://www.stb.dot.gov. The information contained in these reports is not available from any other source.

    Collection Number 3

    Title: Quarterly Condensed Balance Sheet—Railroads (Form CBS).

    OMB Control Number: 2140-0012.

    Form Number: None.

    Type of Review: Revision of a currently approved collection.

    Respondents: Class I railroads.

    Number of Respondents: 7.

    Estimated Time per Response: 6 hours.

    Frequency of Response: Quarterly.

    Total Annual Hour Burden: 168 hours.

    Total Annual “Non-Hour Burden” Cost: No “non-hour cost” burdens associated with this collection have been identified.

    Needs and Uses: This collection shows the balance (quarterly and cumulative) for the current and prior year of the carrier's assets and liabilities, gross capital expenditures, and revenue tons carried. See 49 CFR 1243.2. The Board uses the information in this report to ensure competitive, efficient, and safe transportation through general oversight programs that monitor and forecast the financial and operating condition of railroads, and through specific regulation of railroad rate and service issues and rail restructuring proposals, including railroad mergers, consolidations, acquisitions of control, and abandonments. Information from these reports is used by the Board, other Federal agencies, and industry groups to assess industry growth and operations, detect changes in carrier financial stability, and identify trends that may affect the national transportation system. Revenue ton-miles, which are reported in these reports, are compiled and published by the Board in its quarterly Selected Earnings Data Report, which is published on the Board's Web site, http://www.stb.dot.gov. The information contained in these reports is not available from any other source.

    Collection Number 4

    Title: Report of Railroad Employees, Service and Compensation (Wage Forms A and B).

    OMB Control Number: 2140-0004.

    Form Number: None.

    Type of Review: Revision of a currently approved collection.

    Respondents: Class I railroads.

    Number of Respondents: 8.

    Estimated Time per Response: No more than 30 hours per quarterly report and 40 hours per annual summation.

    Frequency of Response: Quarterly, with an annual summation.

    Total Annual Hour Burden: No more than 1280 hours.

    Total Annual “Non-Hour Burden” Cost: No “non-hour cost” burdens associated with this collection have been identified.

    Needs and Uses: This collection shows the number of employees, service hours, and compensation, by employee group (e.g., executive, professional, maintenance-of-way and maintenance of equipment, and transportation), of the reporting railroads. See 49 CFR part 1245. The information is used by the Board to forecast labor costs and measure the efficiency of the reporting railroads. The information is also used by the Board to evaluate proposed regulated transactions that may impact rail employees, including mergers and consolidations, acquisitions of control, purchases, and abandonments. Other Federal agencies and industry groups, including the Railroad Retirement Board, Bureau of Labor Statistics, and Association of American Railroads, use the information contained in the reports to monitor railroad operations. Certain information from these reports is compiled and published on the Board's Web site, http://www.stb.dot.gov. The information contained in these reports is not available from any other source.

    Collection Number 5

    Title: Monthly Report of Number of Employees of Class I Railroads (Form C).

    OMB Control Number: 2140-0007.

    Form Number: None.

    Type of Review: Revision of a currently approved collection.

    Respondents: Class I railroads.

    Number of Respondents: 8.

    Estimated Time per Response: 1.25 hours.

    Frequency of Response: Monthly.

    Total Annual Hour Burden: 120 hours.

    Total Annual “Non-Hour Burden” Cost: No “non-hour cost” burdens associated with this collection have been identified.

    Needs and Uses: This collection shows, for each reporting carrier, the average number of employees at mid-month in the six job-classification groups that encompass all railroad employees. See 49 CFR part 1246. The information is used by the Board to forecast labor costs and measure the efficiency of the reporting railroads. The information is also used by the Board to evaluate the impact on rail employees of proposed regulated transactions, including mergers and consolidations, acquisitions of control, purchases, and abandonments. Other Federal agencies and industry groups, including the Railroad Retirement Board, Bureau of Labor Statistics, and Association of American Railroads, use the information contained in these reports to monitor railroad operations. Certain information from these reports is compiled and published on the Board's Web site, http://www.stb.dot.gov. The information contained in these reports is not available from any other source.

    Collection Number 6

    Title: Annual Report of Cars Loaded and Cars Terminated.

    OMB Control Number: 2140-0011.

    Form Number: Form STB-54.

    Type of Review: Revision of a currently approved collection.

    Number of Respondents: 7.

    Estimated Time per Response: 4 hours.

    Frequency of Response: Annual.

    Total Annual Hour Burden: 28 hours.

    Total Annual “Non Hour Burden” Cost: No “non-hour cost” burdens associated with this collection have been identified.

    Needs and Uses: This collection reports the number of cars loaded and cars terminated on the reporting carrier's line. See 49 CFR part 1247. Information in this report is entered into the Board's URCS, the uses of which are explained under Collection Number 1. There is no other source for the information contained in this report.

    Collection Number 7

    Title: Quarterly Report of Freight Commodity Statistics (Form QCS).

    OMB Control Number: 2140-0001.

    Form Number: None.

    Type of Review: Revision of a currently approved collection.

    Respondents: Class I railroads.

    Number of Respondents: 7.

    Estimated Time per Response: 217 hours.

    Frequency of Response: Quarterly, with an annual summation.

    Total Annual Hour Burden: 7,595 hours annually.

    Total Annual “Non-Hour Burden” Cost: No “non-hour cost” burdens associated with this collection have been identified.

    Needs and Uses: This collection, which is based on information contained in carload waybills used by railroads in the ordinary course of business, reports car loadings and total revenues by commodity code for each commodity that moved on the railroad during the reporting period. See 49 CFR part 1248. Information in this report is entered into the Board's URCS, the uses of which are explained under Collection Number 1. There is no other source for the information contained in this report.

    Collection Number 8

    Title: Report of Fuel Cost, Consumption, and Surcharge Revenue.

    OMB Control Number: 2140-0014.

    STB Form Number: None.

    Type of Review: Revision of a currently approved collection.

    Respondents: Class I railroads.

    Number of Respondents: 7.

    Estimated Time per Response: 1 hour.

    Frequency: Quarterly.

    Total Burden Hours (annually including all respondents): 28 hours.

    Total “Non-hour Burden” Cost: None identified.

    Needs and Uses: Under 49 U.S.C. 10702, the Surface Transportation Board has the authority to address the reasonableness of a rail carrier's practices. The proposed information collection is intended to permit the Board to monitor the current fuel surcharge practices of the Class I carriers. Failure to collect this information would impede the Board's ability to monitor the current fuel surcharge practices of Class I carriers. The Board has authority to collect information about rail costs and revenues under 49 U.S.C. 11144 and 11145.

    [FR Doc. 2015-15407 Filed 7-7-15; 8:45 am] BILLING CODE 4915-01-P
    80 130 Wednesday, July 8, 2015 Notices DEPARTMENT OF AGRICULTURE Submission for OMB Review; Comment Request July 1, 2015.

    The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding (a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

    Comments regarding this information collection received by August 7, 2015 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725-17th Street NW., Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to: [email protected] or fax (202) 395-5806 and to Departmental Clearance Office, USDA, OCIO, Mail Stop 7602, Washington, DC 20250-7602. Copies of the submission(s) may be obtained by calling (202) 720-8958.

    An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.

    Farm Service Agency

    Title: Debt Settlement Policies and Procedures.

    OMB Control Number: 0560-0146.

    Summary of Collection: The Federal Claims Collection Standards provides at 4 CFR 102, that whenever feasible, debts owed to the United States should be collected in full in one lump sum. The Debt Collection Improvement Act (DCIA) of 1996 further emphasizes, as one of its goals, to maximize collections of delinquent debt owed to the Government, by ensuring quick action is taken to enforce recovery of debts and the use of all appropriate collection tools, while ensuring that the public is fully informed of the Federal Government's debt collection policies and the debtors are fully cognizant of their financial obligations to repay amounts owed to the Federal Government. Provisions under the Federal Claims Collection Standards and the DCIA allow the debtor upon receiving a notification letter and unable to pay debt owed to the Federal Government in one lump sum, to forward a written request and financial statement to Farm Service Administration (FSA) and Commodity Credit Corporation (CCC) for establishing an agreed repayment plan in the promissory note using form CCC-279, Promissory Note.

    Need and Use of the Information: When a debtor requests to enter into an installment agreement to settle their debt, FSA will collect information on the debtor's assets, liabilities, income and expenses. Based on that information a determination can be made on whether the debtor can pay the debt in one lump sum or an installment is necessary. Without this financial information FSA/CCC would have no method of allowing debtor's to pay their debts in installments while still ensuring that the government's financial interests are protected.

    Description of Respondents: Individuals or households.

    Number of Respondents: 100.

    Frequency of Responses: Reporting: On occasion.

    Total Burden Hours: 200.

    Ruth Brown, Departmental Information Collection Clearance Officer.
    [FR Doc. 2015-16650 Filed 7-7-15; 8:45 am] BILLING CODE 3410-05-P
    DEPARTMENT OF AGRICULTURE Submission for OMB Review; Comment Request July 1, 2015.

    The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding (a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

    Comments regarding this information collection received by August 7, 2015 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725-17th Street NW., Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to: [email protected] or fax (202) 395-5806 and to Departmental Clearance Office, USDA, OCIO, Mail Stop 7602, Washington, DC 20250-7602. Copies of the submission(s) may be obtained by calling (202) 720-8958.

    An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.

    Agricultural Research Service

    Title: Meeting the Information Requirements of the Animal Welfare Act Workshop Registration Form.

    OMB Control Number: 0518-0033.

    Summary of Collection: The U.S. Department of Agriculture, National Agricultural Library (NAL), Animal Welfare Information Center conducts a workshop titled “Meeting the Information Requirements of the Animal Welfare Act.” The registration form collects information from interested parties necessary to register them for the workshop. The information includes: Workshop data preferences, signature, name, title, organization name, mailing address, phone and fax numbers and email address. The information will be collected using online and printed versions of the form. Also forms can be fax or mailed.

    Need and Use of the Information: NAL will collect information to register participants, contact them regarding schedule changes, control the number of participants due to limited resources and training space, and compile and customize class materials to meet the needs of the participants. Failure to collect the information would prohibit the delivery of the workshop and significantly inhibit NAL's ability to provide up-to-date information on the requirements of the Animal Welfare Act.

    Description of Respondents: Not-for-Profit Institutions; Business or Other for-profit; Government; State, Local, or Tribal Government.

    Number of Respondents: 200.

    Frequency of Responses: Reporting: On occasion.

    Total Burden Hours: 17.

    Ruth Brown, Departmental Information Collection Clearance Officer.
    [FR Doc. 2015-16649 Filed 7-7-15; 8:45 am] BILLING CODE 3410-03-P
    DEPARTMENT OF AGRICULTURE Forest Service Idaho Roadless Area Boundary Modification; Caribou-Targhee National Forest AGENCY:

    Forest Service, USDA.

    ACTION:

    Notice of proposed Idaho Roadless Area boundary modification; request for comment.

    SUMMARY:

    The Forest Service, U.S. Department of Agriculture (USDA), proposes to modify the West Mink Idaho Roadless Area boundary on the Caribou-Targhee National Forest to relocate and expand the Gibson Jack Trailhead. The Chief of the Forest Service proposes to modify the boundary after a 45-day public notice and opportunity to comment.

    DATES:

    Comments must be received in writing by August 24, 2015.

    ADDRESSES:

    Written comments concerning this notice should be addressed to Doug Herzog, Caribou-Targhee National Forest, 1405 Hollipark Drive, Idaho Falls, ID 83401. Comments may also be sent via email to [email protected], or via facsimile to (208) 557-5826. All comments, including names and addresses when provided, are placed in the record and are available for public inspection and copying. The public may inspect comments received at 1405 Hollipark Drive, Idaho Falls, ID 83401. Visitors are encouraged to call ahead to (208) 524-7511 to facilitate entry to the building.

    FOR FURTHER INFORMATION CONTACT:

    Doug Herzog, Forest Planner, at (208) 557-5826. Additional information concerning this boundary modification and trailhead relocation, including the proposed modified map, may be obtained on the Internet at http://www.fs.usda.gov/detail/roadless/idahoroadlessrule/?cid=stelprdb5382399 and at http://data.ecosystem-management.org/nepaweb/nepa_project_exp.php?project=44396. Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8:00 a.m. and 8:00 p.m., Eastern Standard Time, Monday through Friday.

    SUPPLEMENTARY INFORMATION: Background

    The Idaho Roadless Rule permits the Chief of the Forest Service to modify Idaho Roadless Area boundaries based on changed circumstances or public need after providing public notice and a 45-day public comment period. Pursuant to 36 CFR 294.27(b), the Forest Service proposes to modify the West Mink Roadless Area boundary, located in the Caribou-Targhee National Forest, to allow for the relocation and expansion of the Gibson Jack trailhead.

    The existing Gibson Jack trailhead outside of Pocatello, Idaho does not provide adequate parking to accommodate the trail's high level of use. Vehicles must park along the trailhead's access road on adjacent private lands. Expansion of the trailhead in its existing location is not feasible because of the presence of steep and erodible slopes. The West Mink Roadless Area surrounds the trailhead on three sides.

    A flat bench approximately 700 feet west of the existing trailhead and inside the roadless area would provide adequate space to accommodate trailhead parking and for vehicles pulling trailers. Moving the trailhead to this location requires removing 11.4 acres from the roadless area and reconstructing approximately 700 feet of a closed Forest Service road that currently serves as a non-motorized trail.

    The Forest Service also proposes to eliminate an 18.8-acre area (or “cherry stem”) that has been carved out of the same roadless area. This 18.8-acre area follows a closed Forest Service road which has since been converted to a motorized trail. The Forest Service will add these 18.8 acres to the Roadless Area and remove the previously mentioned 11.4 acres to accommodate the new trailhead, resulting in a net increase of 7.4 acres to the West Mink Roadless Area. The boundary modification would improve the area's manageability for the Caribou-Targhee National Forest. The trailhead relocation would provide improved access and safety for trail users and meet current and projected recreation demand. A map of the proposed modifications is available at: http://www.fs.usda.gov/detail/roadless/idahoroadlessrule/?cid=stelprdb5382399.

    The Forest Service prepared an environmental assessment to analyze the impacts of the trailhead relocation and roadless area boundary modifications. The Chief of the Forest Service is the responsible official for the boundary modification under the Idaho Roadless Rule. The Forest Supervisor, Caribou-Targhee National Forest, is the responsible official for the trailhead relocation project. The Forest Service will consider public comments on the proposed boundary modifications in coordination with the proposed trailhead relocation. The environmental assessment, finding of no significant impact, and draft decision notice for the trailhead relocation are available at the Caribou-Targhee National Forest Supervisor's Office, 1405 Hollipark Drive, Idaho Falls, ID 83401 or on the Internet at: www.fs.usda.gov/projects/ctnf/landmanagement/projects. The trailhead relocation project is subject to the objection process at 36 CFR part 218 and 219. Information on filing an objection on the trailhead relocation project is available at the Web site above.

    Dated: June 30, 2015. Thomas L. Tidwell Chief, Forest Service.
    [FR Doc. 2015-16657 Filed 7-7-15; 8:45 am] BILLING CODE 3411-15-P
    DEPARTMENT OF COMMERCE Census Bureau Proposed Information Collection; Comment Request; Business and Professional Classification Report AGENCY:

    U.S. Census Bureau.

    ACTION:

    Notice.

    SUMMARY:

    The Department of Commerce, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995.

    DATES:

    To ensure consideration, written comments must be submitted on or before September 8, 2015.

    ADDRESSES:

    Direct all written comments to Jennifer Jessup, Departmental Paperwork Clearance Officer, Department of Commerce, Room 6616, 14th and Constitution Avenue NW., Washington, DC 20230 (or via the Internet at [email protected]).

    FOR FURTHER INFORMATION CONTACT:

    Requests for additional information or copies of the information collection instrument(s) and instructions should be directed to Scott Handmaker, Chief, Classification Processing Branch, U.S. Census Bureau, 8K149, Washington, DC 20233, Telephone 301-763-7107; Email: [email protected]

    SUPPLEMENTARY INFORMATION:

    I. Abstract

    The Census Bureau conducts the Business and Professional Classification Report survey (SQ-CLASS) to collect information from new businesses to obtain proper industry classification for use in economic surveys and the Economic Census. The survey, conducted quarterly, samples businesses with newly assigned Employer Identification Numbers (EINs) from the Internal Revenue Service (IRS). Businesses can only be selected once for the survey. The survey collects data about a business in such areas as: Primary business activity, company structure, size, and business operations. This information is used to update the sampling frame for current business surveys, which ensures high quality economic estimates. Additionally, by ensuring proper industry classification, this survey reduces burden for the businesses in the five-year Economic Census, as the questions in the census are tailored to the industry in which the business operates.

    The major change in this survey will be the way respondents report their primary business activity. In the past, respondents provided a brief description of their primary business activity. Respondents will now choose the economic sector of their business and then select from a list of business activities. If the respondent does not see their business activity listed, then they will provide a brief description of their business activity. This is the same methodology that the Census Bureau uses in the Economic Census to assign industry classification.

    Additionally, there will no longer be a paper form on which to report. Respondents can report over the Internet or by telephone. However, we will work with the individual respondents if reporting on the Internet or by telephone presents difficulties.

    Minimal changes will be made to the wording and organization of existing questions and instructions.

    II. Method of Collection

    We will collect this information over the Internet and by telephone follow-up. Respondents will receive a letter directing them to the Internet to report their information. After two weeks, respondents will receive a reminder letter about the survey. After the due date, the Census Bureau will conduct a telephone follow-up operation for nonresponse. Throughout the survey, telephone assistance is available for respondents with questions and for those that cannot report over the Internet.

    III. Data

    OMB Control Number: 0607-0189.

    Form Number(s): SQ-CLASS.

    Type of Review: Regular submission.

    Affected Public: Business or other for profit and not-for-profit institutions.

    Estimated Number of Respondents: 52,000.

    Estimated Time per Response: 13 minutes.

    Estimated Total Annual Burden Hours: 11,267 hours.

    Estimated Total Annual Cost to Public: $0.

    Respondent's Obligation: Mandatory.

    Legal Authority: Title 13, United States Code, sections 131, 182, 193, 224, and 225.

    IV. Request for Comments

    Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility; (b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology.

    Comments submitted in response to this notice will be summarized and/or included in the request for OMB approval of this information collection; they also will become a matter of public record.

    Dated: July 2, 2015. Glenna Mickelson, Management Analyst, Office of the Chief Information Officer.
    [FR Doc. 2015-16678 Filed 7-7-15; 8:45 am] BILLING CODE 3510-07-P
    DEPARTMENT OF COMMERCE Submission for OMB Review; Comment Request

    The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).

    Agency: Bureau of Economic Analysis (BEA).

    Title: Quarterly Survey of Insurance Transactions by U.S. Insurance Companies with Foreign Persons.

    OMB Control Number: 0608-0066.

    Form Number: BE-45.

    Type of Request: Regular submission.

    Number of Responses: 2,000 annually (500 filed each quarter; 475 reporting mandatory or voluntary data, and 25 that would not report data).

    Average Hours per Response: 8 hours is the average for those reporting data and 1 hour is the average for those not reporting data, but hours may vary considerably among respondents because of differences in company size and complexity.

    Estimated Total Annual Burden Hours: 15,300.

    Needs and Uses: The Quarterly Survey of Insurance Transactions by U.S. Insurance Companies with Foreign Persons (BE-45) is a survey that collects data on U.S. trade in insurance services. The information collected on this survey will be used to formulate U.S. international economic policy and analyze the impact of that policy, and the policies of foreign countries, on international trade in services. The data are used in estimating the insurance component of the U.S. international transactions accounts (ITAs) and national income and product accounts (NIPAs).

    Affected Public: Businesses or other for-profit organizations.

    Frequency: Quarterly.

    Respondent's Obligation: Mandatory.

    This information collection request may be viewed at www.reginfo.gov. Follow the instructions to view the Department of Commerce collections currently under review by OMB.

    Written comments and recommendations for the proposed information collection should be sent within 30 days of publication of this notice to OIRA [email protected] or fax to (202) 395-5806.

    Dated: July 1, 2015. Glenna Mickelson, Management Analyst, Office of the Chief Information Officer.
    [FR Doc. 2015-16625 Filed 7-7-15; 8:45 am] BILLING CODE 3510-06-P
    DEPARTMENT OF COMMERCE Bureau of Industry and Security Emerging Technology and Research Advisory Committee; Notice of Open Meeting

    The Emerging Technology and Research Advisory Committee (ETRAC) will meet on July 23, 2015, 8:30 a.m., Room 3884, at the Herbert C. Hoover Building, 14th Street between Pennsylvania and Constitution Avenues NW., Washington, DC The Committee advises the Office of the Assistant Secretary for Export Administration on emerging technology and research activities, including those related to deemed exports.

    Agenda Thursday, July 23 Open Session 1. Welcome and Introductions 2. Opening Remarks by the Assistant Secretary for Export Administration 3. Review and discussion of new Export Control Reform Initiative Activities 4. Report on the June Conference by the Association of University Export Control Officials 5. Comments from the Public 6. Reports from ETRAC Committee members of their assigned Categories in reviewing the Export Administration Regulations 7. Report on Air Force Office of Scientific Research-recent international technologies exchange meeting & Emerging Technologies under consideration 8. Committee Administration matters

    The open session will be accessible via teleconference to 20 participants on a first come, first serve basis. To the conference, submit inquiries to Ms. Yvette Springer at [email protected], no later than July 16, 2015.

    A limited number of seats will be available for the public session. Reservations are not accepted. To the extent that time permits, members of the public may present oral statements to the Committee. The public may submit written statements at any time before or after the meeting. However, to facilitate the distribution of public presentation materials to the Committee members, the Committee suggests that presenters forward the public presentation materials prior to the meeting to Ms. Springer via email.

    For more information, call Yvette Springer at (202) 482-2813.

    Dated: July 2, 2015. Yvette Springer, Committee Liaison Officer.
    [FR Doc. 2015-16671 Filed 7-7-15; 8:45 am] BILLING CODE 3510-JT-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-337-804; A-533-813; A-560-802; A-570-851] Certain Preserved Mushrooms from Chile, India, Indonesia and the People's Republic of China: Final Results of Expedited Third Sunset Reviews of the Antidumping Duty Orders AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    As a result of these sunset reviews, the Department of Commerce (the Department) finds that revocation of the antidumping duty orders on certain preserved mushrooms (mushrooms) from Chile, India, Indonesia and the People's Republic of China (PRC) would be likely to lead to continuation or recurrence of dumping at the levels indicated in the “Final Results of Sunset Reviews” section of this notice.

    DATES:

    Effective Date: July 8, 2015.

    FOR FURTHER INFORMATION CONTACT:

    Terre Keaton Stefanova or Katherine Johnson, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street & Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-1280 or (202) 482-4929, respectively.

    SUPPLEMENTARY INFORMATION:

    Background

    On March 2, 2015, the Department published the notice of initiation of the third sunset reviews of the antidumping duty orders on mushrooms from Chile, India, Indonesia and the PRC pursuant to section 751(c) of the Tariff Act of 1930, as amended (the Act).1 On March 15, 2015, the Department received a Notice of Intent to Participate in these reviews from the following domestic producers of mushrooms: L.K. Bowman Company, a division of Hanover Foods Corporation, Monterey Mushrooms, Inc., and The Mushroom Company (formerly Mushroom Canning Company) (collectively, “the petitioners”), within the deadline specified in 19 CFR 351.218(d)(1)(i). The petitioners claimed interested party status under section 771(9)(C) of the Act, as manufacturers of a domestic like product in the United States. On April 1, 2015, we received a complete substantive response for each review from the petitioners within the 30-day deadline specified in 19 CFR 351.218(d)(3)(i).2 We received no substantive responses from any respondent interested parties. As a result, pursuant to section 751(c)(3)(B) of the Act and 19 CFR 351.218(e)(1)(ii)(C)(2), the Department conducted expedited (120-day) sunset reviews of these orders.

    1See Initiation of Five-Year (“Sunset”) Review, 80 FR 11164 (March 2, 2015).

    2See April 1, 2015, letters from the petitioners regarding Five-Year (3rd Sunset) Review of the Antidumping Duty Orders on Certain Preserved Mushrooms from Chile, India, Indonesia, and the People's Republic of China.

    Scope of the Orders

    The merchandise subject to the orders is certain preserved mushrooms. The merchandise subject to the orders is classifiable under subheadings: 2003.10.0127, 2003.10.0131, 2003.10.0137, 2003.10.0143, 2003.10.0147, 2003.10.0153, 0711.51.0000, 0711.90.4000, 2003.10.0027, 2003.10.0031, 2003.10.0037, 2003.10.0043 and 2003.10.0047 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of this order is dispositive.3

    3 A full description of the scope of the orders is contained in the memorandum to Paul Piquado, Assistant Secretary for Enforcement and Compliance, from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, “Issues and Decision Memorandum for the Final Results of the Expedited Third Sunset Reviews of the Antidumping Duty Orders on Certain Preserved Mushrooms from Chile, India, Indonesia and the People's Republic of China” (Issues and Decision Memorandum), dated concurrently with these results and hereby adopted by this notice.

    Analysis of Comments Received

    All issues raised in these reviews, including the likelihood of continuation or recurrence of dumping in the event of revocation and the magnitude of the margins likely to prevail if the orders were revoked, are addressed in the accompanying Issues and Decision Memorandum, which is hereby adopted by this notice. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at http://access.trade.gov, and to all parties in the Central Records Unit, room B8024 of the main Department of Commerce building. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly on the Internet at http://enforcement.trade.gov/frn/. The signed Issues and Decision Memorandum and the electronic version of the Issues and Decision Memorandum are identical in content.

    Final Results of Sunset Reviews

    Pursuant to sections 751(c)(1) and 752(c)(1),(2) and (3) of the Act, we determine that revocation of the antidumping duty orders on mushrooms from Chile, India, Indonesia and the PRC would be likely to lead to continuation or recurrence of dumping up to the following weighted-average margin percentages:

    Country Weighted-average margin (percent) Chile 148.51 India 243.87 Indonesia 16.24 PRC 198.63 Notification to Interested Parties

    This notice serves as the only reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

    We are issuing and publishing these results and notice in accordance with sections 751(c), 752(c), and 777(i)(1) of the Act and 19 CFR 351.218.

    Dated: June 30, 2015. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix—List of Topics Discussed in the Issues and Decision Memorandum I. Summary II. Background III. Scope of the Orders IV. History of the Orders V. Legal Framework VI. Discussion of the Issues A. Likelihood of Continuation or Recurrence of Dumping B. Magnitude of the Margins Likely to Prevail VII. Final Results of Sunset Reviews VIII. Recommendation
    [FR Doc. 2015-16747 Filed 7-7-15; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-475-059] Pressure Sensitive Plastic Tape from Italy: Final Results of Expedited Fourth Sunset Review of the Antidumping Duty Finding AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    As a result of this review, the Department of Commerce (the Department) finds that revocation of the antidumping duty finding on pressure sensitive plastic tape (PSP tape) from Italy would be likely to lead to continuation or recurrence of dumping at the levels indicated in the “Final Results of Sunset Review” section of this notice.

    DATES:

    Effective Date: July 8, 2015.

    FOR FURTHER INFORMATION CONTACT:

    Terre Keaton Stefanova, AD/CVD Operations, Office II, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street & Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-1280.

    SUPPLEMENTARY INFORMATION

    Background

    On March 2, 2015, the Department published the notice of initiation of the fourth sunset review of the antidumping finding on PSP tape from Italy pursuant to section 751(c) of the Tariff Act of 1930, as amended (the Act).1 On March 17, 2015, the Department received a notice of intent to participate in this review from the following domestic producers of PSP tape: 3M Company, Intertape Polymer Group Inc., and Shurtape Technologies LLC (collectively, the petitioners), within the deadline specified in 19 CFR 351.218(d)(1)(i). The petitioners claimed interested party status under section 771(9)(C) of the Act, as manufacturers, producers, or wholesalers of a domestic like product in the United States. On April 1, 2015, we received a complete substantive response from the petitioners within the 30-day deadline specified in 19 CFR 351.218(d)(3)(i).2 We received no substantive responses from any respondent interested parties. As a result, pursuant to section 751(c)(3)(B) of the Act and 19 CFR 351.218(e)(1)(ii)(C)(2), the Department conducted an expedited (120-day) sunset review of the finding.

    1See Initiation of Five-Year (“Sunset”) Review, 80 FR 11164 (March 2, 2015).

    2See April 1, 2015, letter from the petitioners regarding Pressure Sensitive Plastic Tape from Italy: Substantive Response to Notice of Initiation.

    Scope of the Finding

    The merchandise subject to the finding is pressure sensitive plastic tape. The merchandise subject to the finding is classifiable under subheadings 3919.90.20 and 3919.90.50 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and for customs purposes, our written description of the scope of this finding is dispositive.3

    3 A full description of the scope of the finding is contained in the memorandum to Paul Piquado, Assistant Secretary for Enforcement and Compliance, from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, “Issues and Decision Memorandum for the Final Results of the Fourth Expedited Sunset Review of the Antidumping Duty Finding on Pressure Sensitive Plastic Tape from Italy” (Issues and Decision Memorandum), dated concurrently with these results and hereby adopted by this notice.

    Analysis of Comments Received

    All issues raised in this review are addressed in the accompanying Issues and Decision Memorandum, which is hereby adopted by this notice, including the likelihood of continuation or recurrence of dumping in the event of revocation and the magnitude of the margins likely to prevail if the finding were revoked. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at http://access.trade.gov, and to all parties in the Central Records Unit, room B8024 of the main Department of Commerce building. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly on the Internet at http://enforcement.trade.gov/frn/. The signed Issues and Decision Memorandum and the electronic version of the Issues and Decision Memorandum are identical in content.

    Final Results of Sunset Review

    Pursuant to sections 751(c)(1) and 752(c)(1) and (3) of the Act, we determine that revocation of the antidumping duty finding on PSP tape from Italy would be likely to lead to continuation or recurrence of dumping, and that the magnitude of the margin of dumping likely to prevail would be 3.70 percent for all producers and exporters 4 of subject merchandise.

    4 Plasturopa-SIPA S.a.S, Autodesivitalia, S.p.A and Boston S.p.A are excluded from the finding.

    Notification to Interested Parties

    This notice serves as the only reminder to parties subject to an administrative protective order (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

    We are issuing and publishing these results and notice in accordance with sections 751(c), 752(c), and 777(i)(1) of the Act and 19 CFR 351.218.

    Dated: June 30, 2015. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix—List of Topics Discussed in the Issues and Decision Memorandum I. Summary II. Background III. Scope of the Finding IV. History of the Finding V. Legal Framework VI. Discussion of the Issues A. Likelihood of Continuation or Recurrence of Dumping B. Magnitude of the Margins of Dumping Likely to Prevail VII. Final Results of Sunset Review VIII. Recommendation
    [FR Doc. 2015-16745 Filed 7-7-15; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-201-836] Light-Walled Rectangular Pipe and Tube from Mexico: Preliminary Results of Antidumping Duty Administrative Review; 2013-2014 AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on light-walled rectangular pipe and tube (LWR pipe and tube) from Mexico. The period of review (POR) is August 1, 2013, through July 31, 2014. The review covers one producer/exporter of the subject merchandise, Perfiles y Herrajes LM, S.A. de C.V. (Perfiles).

    We preliminarily determine that sales of subject merchandise by Perfiles were made at less than normal value during the POR. Interested parties are invited to comment on these preliminary results.

    DATES:

    Effective Date: July 8, 2015.

    FOR FURTHER INFORMATION CONTACT:

    Ilissa Kabak Shefferman or Brian C. Davis, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-4684 or (202) 482-7924, respectively.

    SUPPLEMENTARY INFORMATION:

    Scope of the Order

    The merchandise that is the subject of the order is certain welded carbon-quality light-walled steel pipe and tube, of rectangular (including square) cross section, having a wall thickness of less than 4 mm. The welded carbon-quality rectangular pipe and tube subject to the order is currently classified under the Harmonized Tariff Schedule of the United States (HTSUS) subheadings 7306.61.50.00 and 7306.61.70.60. This tariff classification is provided for convenience and Customs purposes; however, the written description of the scope of the order is dispositive. A full description of the scope of the order is contained in the memorandum from Christian Marsh, Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations, to Paul Piquado, Assistant Secretary for Enforcement and Compliance, titled “Decision Memorandum for Preliminary Results of Antidumping Duty Administrative Review: Light Walled Rectangular Pipe and Tube from Mexico” (Preliminary Decision Memorandum), which is issued concurrent with and hereby adopted by this notice.

    The Preliminary Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). Access to ACCESS is available to registered users at http://access.trade.gov and is available to all parties in the Central Records Unit, Room 7046 of the main Department of Commerce building. In addition, a complete version of the Preliminary Decision Memorandum can be accessed directly on the Internet at http://enforcement.trade.gov/frn/index.html. A list of topics discussed in the Preliminary Decision Memorandum is attached as an Appendix to this notice. The signed Preliminary Decision Memorandum and the electronic versions of the Preliminary Decision Memorandum are identical in content.

    Methodology

    The Department is conducting this review in accordance with section 751(a)(2) of the Tariff Act of 1930, as amended (the Act). For a full description of the methodology underlying our conclusions, see the Preliminary Decision Memorandum.

    Preliminary Results of Review

    We preliminarily determine that, for the period August 1, 2013, through July 30, 2014, the following weighted-average dumping margin exists:

    Manufacturer/Exporter Weighted-average margin (percent) Perfiles y Herrajes, L.M. SA de CV 4.15 Disclosure and Public Comment

    The Department intends to disclose to interested parties to the proceeding any calculations performed in connection with these preliminary results of review within five days after the date of publication of this notice.1 Interested parties may submit case briefs to the Department in response to these preliminary results no later than 30 days after the publication of these preliminary results.2 Rebuttal briefs, the content of which is limited to the issues raised in the case briefs, must be filed within five days from the deadline date for the submission of case briefs.3 Parties who submit arguments in this proceeding are requested to submit with each argument: (1) A statement of the issue; (2) a brief summary of the argument; and (3) a table of authorities.4 Executive summaries should be limited to five pages total, including footnotes. Case and rebuttal briefs should be filed using ACCESS.5 In order to be properly filed, ACCESS must successfully receive an electronically-filed document in its entirety by 5 p.m. Eastern Time. Case and rebuttal briefs must be served on interested parties.6

    1See 19 CFR 351.224(b)

    2See 19 CFR 351.309(c)(1)(ii).

    3See 19 CFR 351.309(d)(1) and (2).

    4See 19 CFR 351.309(c)(2) and (d)(2).

    5See generally 19 CFR 351.303.

    6See 19 CFR 351.303(f).

    Within 30 days of the date of publication of this notice, interested parties may request a public hearing on arguments raised in the case and rebuttal briefs.7 Unless the Department specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs.8 Written argument and hearing requests should be electronically submitted to the Department via ACCESS.9 The Department's electronic records system, ACCESS, must successfully receive an electronically-filed document in its entirety by 5:00 p.m. Eastern Daylight Time within 30 days after the date of publication of this notice.10 Requests should contain: (1) The party's name, address, and telephone number; (2) the number of participants; and (3) a list of issues to be discussed. Issues raised in the hearing will be limited to those raised in the respective case briefs. Parties will be notified of the time and location of the hearing.

    7See 19 CFR 351.310(c).

    8See 19 CFR 351.310(d)(1).

    9See generally 19 CFR 351.303.

    10See 19 CFR 351.310(c).

    The Department intends to publish the final results of this administrative review, including the results of its analysis of issues addressed in any case or rebuttal brief, no later than 120 days after publication of the preliminary results, unless extended.11

    11See section 751(a)(3)(A) of the Act; 19 CFR 351.213(h).

    Assessment Rates

    Upon completion of this administrative review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries.12 If Perfiles' weighted-average dumping margin is not zero or de minimis in the final results of this review, we will calculate importer-specific assessment rates on the basis of the ratio of the total amount of antidumping duties calculated for an importer's examined sales and the total entered value of such sales in accordance with 19 CFR 351.212(b)(1). The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of this review and for future deposits of estimated duties, where applicable.

    12See 19 CFR 351.212(b)(1)

    We intend to issue liquidation instructions to CBP 15 days after publication of the final results of this review.

    Cash Deposit Requirements

    The following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for Perfiles will be that established in the final results of this administrative review (except, if the rate is zero or de minimis, no cash deposit will be required); (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or in the less-than-fair-value investigation but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will continue to be the all-others rate of 3.76 percent, which is the all-others rate established in the investigation.13 These cash deposit requirements, when imposed, shall remain in effect until further notice.

    13See Orders, 73 FR at 45404.

    Notification to Importers

    This notice also serves as a reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

    We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.213(h)(1).

    Dated: July 1, 2015. Paul Piquado, Assistant Secretary for Enforcement and Compliance. Appendix I—List of Topics Discussed in the Preliminary Decision Memorandum 1. Summary 2. Background 3. Scope of the Order 4. Comparisons to Normal Value A. Determination of Comparison Method B. Results of the Differential Pricing Analysis 5. Product Comparisons 6. Date of Sale 7. Export Price 8. Normal Value A. Home Market Viability as Comparison Market B. Level of Trade C. Sales to Affiliated Customers D. Calculation of Normal Value Based on Comparison Market Prices 9. Currency Conversion 10. Recommendation
    [FR Doc. 2015-16724 Filed 7-7-15; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-549-821] Polyethylene Retail Carrier Bags From Thailand: Final Results of Antidumping Duty Administrative Review; 2013-2014 AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    On May 7, 2015, the Department of Commerce (the Department) published the preliminary results of the administrative review of the antidumping duty order on polyethylene retail carrier bags (PRCBs) from Thailand.1 For these final results, we continue to find that subject merchandise has been sold at less than normal value by Beyond Packaging Co., Ltd. (Beyond Packaging) during the period of review (POR).

    1See Polyethylene Retail Carrier Bags from Thailand: Preliminary Results of Antidumping Duty Administrative Review and Rescission of Review in Part; 2013-2014, 80 FR 26224 (May 7, 2015) (Preliminary Results) and accompanying Preliminary Decision Memorandum, dated May 1, 2015 (Preliminary Decision Memorandum).

    DATES:

    Effective Date: July 8, 2015.

    FOR FURTHER INFORMATION CONTACT:

    Dmitry Vladimirov or Minoo Hatten, AD/CVD Operations, Office I, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-0665, and (202) 482-1690, respectively.

    SUPPLEMENTARY INFORMATION: Background

    On May 7, 2015, the Department published the Preliminary Results. The POR is August 1, 2013, through July 31, 2014. We invited interested parties to comment on the Preliminary Results. We received no comments.

    The Department conducted this administrative review in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act).

    Scope of the Order

    The merchandise subject to the antidumping duty order is PRCBs, which may be referred to as t-shirt sacks, merchandise bags, grocery bags, or checkout bags. The subject merchandise is defined as non-sealable sacks and bags with handles (including drawstrings), without zippers or integral extruded closures, with or without gussets, with or without printing, of polyethylene film having a thickness no greater than 0.035 inch (0.889 mm) and no less than 0.00035 inch (0.00889 mm), and with no length or width shorter than 6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth of the bag may be shorter than 6 inches but not longer than 40 inches (101.6 cm).

    PRCBs are typically provided without any consumer packaging and free of charge by retail establishments, e.g., grocery, drug, convenience, department, specialty retail, discount stores, and restaurants, to their customers to package and carry their purchased products. The scope of the order excludes (1) polyethylene bags that are not printed with logos or store names and that are closeable with drawstrings made of polyethylene film and (2) polyethylene bags that are packed in consumer packaging with printing that refers to specific end-uses other than packaging and carrying merchandise from retail establishments, e.g., garbage bags, lawn bags, trash-can liners.

    As a result of changes to the Harmonized Tariff Schedule of the United States (HTSUS), imports of the subject merchandise are currently classifiable under statistical category 3923.21.0085 of the HTSUS. Furthermore, although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of the order is dispositive.

    Final Results of the Review

    For the final results of this review, in accordance with sections 776(a) and (b) of the Tariff Act of 1930, as amended (the Act), we continued to rely on facts available with an adverse inference to establish a rate of 122.88 percent as the weighted-average dumping margin for Beyond Packaging. As the Department explained in the Preliminary Decision Memorandum, the 122.88 percent rate is derived from the petition in the underlying investigation, and the Department determined that for purposes of this review, the rate is corroborated, in accordance with section 776(c) of the Act.2

    2See Preliminary Decision Memorandum at 8.

    Assessment Rates

    The Department will instruct U.S. Customs and Border Protection (CBP) to apply an ad valorem assessment rate of 122.88 percent to all entries of subject merchandise during the POR which were produced and/or exported by Beyond Packaging.

    We intend to issue instructions to CBP 15 days after publication of the final results of this review.

    Cash Deposit Requirements

    The following deposit requirements will be effective upon publication of the final results of administrative review for all shipments of subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date as provided by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for Beyond Packaging will be 122.88 percent, the weighted-average dumping margin established in the final results of this administrative review; (2) for merchandise exported by manufacturers or exporters not covered in this review but covered in a prior segment of the proceeding, the cash deposit rate will continue to be the company-specific rate published for the most recently completed segment of this proceeding; (3) if the exporter is not a firm covered in this review, a prior review, or the less-than-fair-value investigation but the manufacturer is, the cash deposit rate will be the rate established for the most recently completed segment of this proceeding for the manufacturer of the merchandise; (4) if neither the exporter nor the manufacturer has its own rate, the cash deposit rate will be 4.69 percent.3 These cash deposit requirements, when imposed, shall remain in effect until further notice.

    3See Notice of Implementation of Determination Under Section 129 of the Uruguay Round Agreements Act and Partial Revocation of the Antidumping Duty Order on Polyethylene Retail Carrier Bags From Thailand, 75 FR 48940 (August 12, 2010).

    Notification to Importers

    This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

    Administrative Protective Orders

    This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a sanctionable violation.

    Notification to Interested Parties

    The Department is issuing and publishing these final results of administrative review in accordance with sections 751(a)(1), and 777(i) of the Act and 19 CFR 351.213(h).

    Dated: June 30, 2015. Paul Piquado, Assistant Secretary for Enforcement and Compliance.
    [FR Doc. 2015-16723 Filed 7-7-15; 8:45 am] BILLING CODE 3510-DS-P
    DEPARTMENT OF COMMERCE International Trade Administration [A-405-803] Purified Carboxymethylcellulose From Finland: Initiation and Preliminary Results of Changed Circumstances Review and Consideration of Revocation of the Antidumping Duty Order AGENCY:

    Enforcement and Compliance, International Trade Administration, Department of Commerce.

    SUMMARY:

    In response to a request by Ashland Specialty Ingredients, G.P. (Ashland), and pursuant to section 782(h)(2) of the Tariff Act of 1930, as amended (the Act), 19 CFR 351.222(g)(1)(i) and 19 CFR 351.221(c)(3)(ii), the Department of Commerce (the Department) is initiating a changed circumstances review (CCR) of the antidumping duty (AD) order on purified carboxymethylcellulose (CMC) from Finland. Based on the information received, we preliminarily intend to revoke the Order. 1 Interested parties are invited to comment on these preliminary results.

    1See Notice of Antidumping Duty Orders: Purified Carboxymethylcellulose from Finland, Mexico, the Netherlands and Sweden, 70 FR 39734 (July 11, 2005) (the Order).

    DATES:

    Effective Date: July 8, 2015.

    FOR FURTHER INFORMATION CONTACT:

    Victoria Cho, or Robert James, AD/CVD Operations, Office VI, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-5075 or (202) 482-0649, respectively.

    SUPPLEMENTARY INFORMATION: Background

    On July 11, 2005, the Department published in the Federal Register the AD order on CMC from Finland.2 On May 15, 2015, in accordance with sections 751(b) and 751(d)(1) of the Act, 19 CFR 351.216(b), and 19 CFR 351.222(g)(1), Ashland, the petitioner and sole domestic producer of CMC, requested revocation of the Order with respect to Finland as part of a CCR. Ashland requested that the Department conduct the CCR on an expedited basis pursuant to 19 CFR 351.221(c)(3)(ii). On June 8, 2015, CP Kelco Oy and its U.S. affiliate, CP Kelco U.S. Inc., (collectively, CP Kelco), interested parties as a U.S. importer of CMC and sole manufacturer of CMC in Finland, also requested that the outcome of Ashland's CCR request should be the revocation of the AD order on CMC from Finland, due to the lack of interest in continuation of the Order.

    2Id.

    Scope of the Order

    The merchandise covered by these orders is all purified CMC, sometimes also referred to as purified sodium CMC, polyanionic cellulose, or cellulose gum, which is a white to off-white, non-toxic, odorless, biodegradable powder, comprising sodium CMC that has been refined and purified to a minimum assay of 90 percent. Purified CMC does not include unpurified or crude CMC, CMC Fluidized Polymer Suspensions, and CMC that is cross-linked through heat treatment. Purified CMC is CMC that has undergone one or more purification operations which, at a minimum, reduce the remaining salt and other by-product portion of the product to less than ten percent.

    The merchandise subject to this order is classified in the Harmonized Tariff Schedule of the United States at subheading 3912.31.00. This tariff classification is provided for convenience and customs purposes; however, the written description of the scope of the order is dispositive.

    Initiation and Preliminary Results of Changed Circumstances Review

    Section 782(h)(2) of the Act and 19 CFR 351.222(g)(1)(i) provide that the Department may revoke an order (in whole or in part) if it determines that producers accounting for substantially all of the production of the domestic like product have no further interest in the order, in whole or in part. In addition, in the event the Department determines that expedited action is warranted, 19 CFR 351.221(c)(3)(ii) permits the Department to combine the notices of initiation and preliminary results.

    On May 15, 2015, Ashland requested that the Department conduct the CCR on an expedited basis. On June 8, 2015, CP Kelco filed a letter in support of Ashland's CCR request. Ashland stated that, as the sole U.S. producer of CMC, it accounts for substantially all of the production of the domestic like product. Ashland also stated that it has no interest in the continuation of the Order. 3

    3See Ashland's May 15, 2015, submission to the Department.

    Therefore, at the request of Ashland and in accordance with sections 751(b)(1) and 751(d)(1) of the Act, 19 CFR 351.216, 19 CFR 351.222(g)(1), and 19 CFR 351.221(c)(3)(ii), we are initiating this CCR on CMC from Finland to determine whether revocation of the Order is warranted with respect to this product. In addition, we determine that expedited action is warranted. In accordance with 19 CFR 351.222(g)(1), we find that the petitioner's affirmative statement of no interest constitutes good cause to conduct this review. Additionally, our decision to expedite this review by combining the notice of initiation and the preliminary results in a single notice pursuant to 19 CFR 351.221(c)(3)(ii), stems from the domestic industry's lack of interest in applying the Order. If the final results of this changed circumstances review result in the revocation of the Order, the Department intends that such revocation will be effective the first day of the most recent period not subject to administrative review, which