Federal Register Vol. 80, No.140,

A. This final guidance to Federal agencies implement Sections 872 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Pub. L. 110-417, codified as amended at 41 U.S.C. 2313).

On February 18, 2010 (75 FR 7316), the Office of Management and Budget (OMB) proposed a number of changes to Title 2 of the Code of Federal Regulations (2 CFR). Since publication of the February 2010 Federal Register notice, OMB finalized the portion of the guidance at 2 CFR part 25, which includes requirements for obtaining a Universal Identifier and registering in the System for Award Management (SAM) formerly called the Central Contractor Registration system (CCR) in the Federal Register on September 14, 2010 [75 FR 55671]. Part 25 was expedited and finalized separately from the guidance being issued today because it was needed to support reporting of subawards made on or after October 1, 2010, as the next step in implementation of the Federal Funding Accountability and Transparency Act (“Transparency Act,” Pub. L. 109-282, as amended). The preamble of the Federal Register notice that finalized 2 CFR part 25 included responses to the public comments that we received on the proposed requirements related to DUNS numbers and CCR (which subsequently became SAM and is accessible at https://www.sam.gov). The remainder of this notice therefore does not address that portion of the February 2010 Federal Register notice.

Also since publication of the February 2010 Federal Register notice, OMB published final guidance at 2 CFR part 200 titled Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards on December 26, 2013 [78 FR 78589]. This final guidance streamlined the Federal government's guidance on Administrative Requirements, Cost Principles, and Audit Requirements for Federal awards and provided a governmentwide framework for grants management. Part 200 incorporated portions of the proposed guidance at part 27 regarding notices of funding opportunities, see 2 CFR 200.203. Therefore this notice does not address certain portions of part 27 that were proposed in the February 2010 Federal Register notice. Further, OMB is no longer issuing parts 27, 35, and 77 separately. The final guidance incorporates the proposed guidance at parts 27, 35, and 77 into part 200. This approach is consistent with the intent for part 200 to serve as a governmentwide framework for grants management.

The February 2010 Federal Register notice proposed changes to governmentwide guidance for nonprocurement debarment and suspension remain reflected in the final guidance at 2 CFR part 180.

B. The major elements of the proposed guidance, which are addressed in this notice, are requirements for:

• Federal awarding agencies to report information to the designated integrity and performance system about any termination of an award due to a material failure to comply with the award terms and conditions; any administrative agreement with a non-Federal entity to resolve a suspension or debarment proceeding; and any finding that a non-Federal entity is not qualified to receive a given award, if the finding is based on criteria related to the non-Federal entity's integrity or prior performance under Federal awards.

• Recipients that have Federal contract, grant, and cooperative agreement awards with a cumulative total value greater than $10,000,000 to provide information to the designated integrity and performance system about certain civil, criminal, and administrative proceedings that reached final disposition within the most recent five year period and that were connected with the award or performance of a Federal award.

• Recipients that have Federal contract, grant, and cooperative agreement awards with a cumulative total value greater than $10,000,000 are required to disclose semiannually the information about the criminal, civil, and administrative proceedings that section 872(c) describes.

• Federal awarding agencies, prior to making an award to a non-Federal entity, to determine whether that non-Federal entity is qualified to receive that particular award. In making the determination, the Federal awarding agency must take into consideration any information about the entity that is in the designated integrity and performance system.

• Notice of funding opportunities and Federal award terms and conditions to inform a non-Federal entity that it may submit comments to the designated integrity and performance system about any information that the Federal awarding agency had reported to the system about the non-Federal entity, for consideration by the Federal awarding agency in making future Federal awards to the non-Federal entity.

We received comments on these elements of the proposed guidance from four State agencies, seven Federal agencies or agency components, and three associations representing community health centers, academic institutions, and industrial firms, respectively. We considered all comments received and made some of the recommended improvements in developing the final guidance. Some of the more significant changes are to:

• Make the guidance for grants and cooperative agreements as consistent where practicable with the FAPIIS guidance in the Federal Acquisition Regulation (FAR) that applies to procurement contracts (48 CFR 9.104), thereby simplifying implementation for non-Federal entities that receive both Federal assistance and procurement awards;

• provide information on the legislative amendment to section 872, which was enacted after issuance of the proposed guidance, that requires making certain information in the designated integrity and performance system available to the public;

• provide information that must be included in a notice of funding opportunity regarding implementation of integrity and performance reporting;

• clarify the process that a Federal awarding agency follows when making a determination that a non-Federal entity is qualified to receive an award based on a review of information in the designated integrity and performance system and other sources;

• add wording to help ensure that all non-Federal entities, including applicants under programs that do not have program announcements, are fully aware of the potential effects of information about them in the designated integrity and performance system and their right to submit comments about the information; and

• add a requirement that Federal awarding agencies wait 14 calendar days after posting information to the non-public segment of the designated integrity and performance system before making the information available through the public segment of the system to be consistent with the acquisitions community's requirements.

Additional changes were made for clarity or completeness. For example, the simplified acquisition threshold set by the Federal Acquisition Regulation (FAR) at 48 CFR Subpart 2.1 (Definitions) is periodically adjusted for inflation in accordance with 41 U.S.C. 1908 and is now set at $150,000. Consequently, we updated the threshold citation throughout the guidance by including a reference to the definition available at 2 CFR 200.88. Also, several of the systems referred to in the guidance, namely the Central Contractor Registration (CCR) and the Excluded Parties List System (EPLS), have been migrated into SAM and no longer exist as stand-alone systems. Further, the General Services Administration (GSA) plans to migrate the currently designated integrity and performance system, FAPIIS, to SAM and the language describing the system in the final guidance is designed to accommodate future system changes. Additional system migrations to SAM and other central portals will make it easier for agencies and recipients to input and receive information through a central Web site.

C. The designated integrity and performance system integrates various sources of information regarding non-Federal entities to help Federal awarding agencies ensure that a thorough review of available databases with relevant information on to determine whether a recipient is qualified occurs before the issuance of Federal awards. In addition to the designated integrity and performance system, Federal awarding agencies are able to conduct matching to help determine qualification for Federal awards and payments through complementary efforts, such as the Do Not Pay working system maintained by the Department of the Treasury. While Treasury conducts matching against the Do Not Pay working system for all appropriate Federal payments, in accordance with the Improper Payments Elimination and Recovery Improvement Act of 2012, Federal awarding agencies are responsible for determining which of the Do Not Pay databases are appropriate to review for pre-award purposes. As required by 2 CFR part 180, Federal awarding agencies are required to check SAM Exclusions prior to the issuance of Federal awards, which is available directly through SAM or the Do Not Pay working system. Federal awarding agencies are not required to check the other databases that are part of the Do Not Pay working system for pre-award purposes where the Federal awarding agency has determined that the designated integrity and performance system (currently FAPIIS) and SAM provide more relevant information to making decisions on recipient qualification. As governmentwide systems continue to mature, there may be opportunities for further integration between the various systems.

D. Section 872 applies without distinguishing between for-profit and other recipients. Thus, notwithstanding 2 CFR 200.101(c) general permissive application of subparts A through E to for-profits, agencies must apply to for-profit recipients (in agencies' regulations, policies, or directly through the terms and conditions of Federal awards) the requirements reflected in this final guidance. OMB is considering governmentwide guidance to apply consistent treatment towards for-profit grant and cooperative agreement recipients, including the requirements of Section 872.

E. Since publishing the proposed guidance, Section 852 of the National Defense Authorization Act for Fiscal Year 2013 set forth additional requirements for the designated integrity and performance system to include, to the extent practicable, additional information on any parent, subsidiary, or successor entities to corporations included in the system. In order to address these additional requirements, OMB is considering publishing proposed guidance to implement Section 852 of the National Defense Authorization Act for Fiscal Year 2013.

Sections II. A through II. F of this preamble summarize the major comments and our responses. General comments that address more than one portion of the guidance are summarized in section II.A. Each of the other sections addresses comments pertaining to a specific portion of the proposed guidance.

Comment: One State agency asked when GSA will establish the specifics of the FAPIIS data system and whether the specifics will be posted for comment.

Response: GSA continues to make improvements to enable the designated integrity and performance system to collect other information for use by Federal awarding agencies that must make determinations concerning recipient qualifications. The public opportunity to comment on specific information to be collected from contractors and recipients of assistance awards is through the Paperwork Reduction Act (PRA) clearance process. The PRA clearance for procurement contracts was addressed in the Federal Register documents with the FAR changes and approved under OMB Clearance Number 9000-0174. The PRA clearance for grants and cooperative agreements was addressed in the Federal Register documents issued October 1, 2010 [75 FR 60756], February 11, 2011 [76 FR 7851], and July 3, 2014 [79 FR 38028].

Comment: One industry association and one university association asked that we implement section 872 for grants in a manner that conforms with the implementation for procurement contracts, except where justified by the substantive differences between assistance and procurement. Noting that their constituents receive contracts, as well as grants, they recommended use of identical wording of any required questions or assurances, as well as electronic entry of data through the same system.

Response: We agree that conformity to the maximum extent practicable is important for requirements that are common to both recipients of grants and contractors. The award term and condition for grants and cooperative agreements therefore requires recipients to enter certain information through SAM, the same system that contractors use for that purpose. A recipient and contractor must answer identical questions in SAM and, if applicable, must provide the same information about the types of proceedings identified in section 872.

Comment: The industry and university associations and one Federal awarding agency responded to the invitation in the February 2010 Federal Register notice to comment on a possible expansion of the scope of the designated integrity and performance system to “include recipient information from authoritative data sources not described in this guidance.” One association recommended we not expand the scope to information not related to the performance of a Federal or State contract or grant. The other strongly suggested limiting it to information related to performance under Federal awards only. The Federal awarding agency recommended building the system to allow for future expansion to include data on integrity and performance information beyond what was delineated in the proposed guidance.

Response: OMB may expand the scope of the system to include information related to integrity and performance information beyond what was delineated in the proposed guidance.

Comment: A university association suggested that we reaffirm that the term “recipient” throughout the 2 CFR guidance proposed in the February 2010 Federal Register notice means the organization receiving an award, as it usually does in the assistance community, and does not also include associated individuals. They stated that the reaffirmation was especially important as it relates to recipient qualification matters addressed in subpart A of the proposed 2 CFR part 35.

Response: As defined at 2 CFR 200.86, the term “recipient” means “a non-Federal entity that receives a Federal award directly from a Federal awarding agency to carry out an activity under a Federal program.” Thus, the term does not include individuals such as the organization's employees or other individuals who may only be involved in performance of the project or program under the award because those individuals did not receive the Federal award directly from a Federal awarding agency.

Comment: The university association also recommended that we state in the guidance that information in the designated integrity and performance system is not subject to disclosure in response to Freedom of Information Act (FOIA) requests. They noted that the Federal Register notice for the final FAR rule on section 872 stated that the question of access to the data under FOIA would be determined on a case-by-case basis.

Response: After publication of the proposed guidance, section 872 was amended to require public disclosure of information in designated integrity and performance system other than past performance reviews. Actions posted in system on or after April 15, 2011, will be available to the public, as required by section 3010 of Public Law 111-212. Agencies' disclosure of information should be consistent with all applicable statutes that limit such disclosures. For example, heightened attention should be given to whether documentation includes information that involves privacy, security, proprietary business interests, and law enforcement investigations. Only information posted after April 15, 2011 will be subject to the disclosure requirements in section 3010 of Public Law 111-212.

Comment: Two Federal awarding agencies recommended we revise the guidance in the proposed § 27.210 that the form and content of agency program announcements must adhere to those of the standard announcement format contained in the appendix to part 27. They recommended that we instead require agencies' announcements to comply with a “substantial conformance” standard that would provide greater flexibility. The agencies were particularly concerned about the wording in Section II of Subdivision 1 of the announcement format stating that agencies' announcements should conform to the numbering convention in the standard format. They noted that wording could require them to modify information systems currently used in conjunction with program announcements and associated agency guidance documents.

Response: We removed the information on format because OMB reissued final guidance on notice of funding opportunities available at 2 CFR 200.203 and Appendix I to part 200. Further, the remaining portions of the proposed guidance at part 27 are incorporated into part 200.

Comment: One Federal awarding agency noted that we should narrow the scope of the proposed guidance for paragraph E.3 of the announcement format in the appendix to part 27. The proposed guidance for that paragraph required an agency to inform potential applicants that awarding officials would consider information in designated integrity and performance system prior to making awards. The commenter noted that the guidance should exempt announcements under which a Federal awarding agency anticipated no Federal awards with Federal funding in excess of the simplified acquisition threshold above which section 872 requires Federal awarding agencies to consider information in the system.

Response: We agree and Appendix I to Part 200 reflects that information regarding the designated integrity and performance system is included in notices of funding opportunities when the Federal awarding agency anticipates that any Federal award under a notice of funding opportunity may include, over the period of performance, a total Federal share greater than the simplified acquisition threshold.

Comment: One State agency and two Federal awarding agencies sought further explanation of the differences between the three dollar thresholds related to the designated integrity and performance system—at the simplified acquisition threshold (currently $150,000); at $500,000; and at $10,000,000. One of the Federal awarding agencies suggested that implementation would be simpler if the three thresholds were the same.

Response: The three thresholds are consistent with the statutory requirements of section 872:

• $500,000—Subsection (b) of section 872 is the source of the $500,000 threshold. It essentially requires that the designated integrity and performance system contain information about each non-Federal entity: (1) That receives a Federal award of more than $500,000; and (2) about which there is a proceeding that must be reported as described in section 872. Therefore, the final guidance following this preamble states that Federal awarding agencies must include the award term and condition requiring the recipient to maintain its information in designated integrity and performance system for each Federal award where it is anticipated that the total Federal share will exceed $500,000 over the period of performance. Note that the award term and condition requires the non-Federal entity to provide the required information through the SAM (formerly CCR) and to provide the information specified in SAM.

• $10,000,000—The source of the $10,000,000 threshold is subsection (f) of section 872. Under that subsection (f) of section 872, a non-Federal entity receiving Federal awards with a total value more than $10,000,000 must submit any information about criminal, civil, and administrative proceedings that section 872 requires and update the information semiannually. Based on feedback or as necessary, OMB may revise the $10,000,000 threshold. Based on feedback, OMB may consider revising this affirmative disclosure threshold for grants and cooperative agreements to the extent legally permissible/consistent with the statute.

• $150,000—The third threshold relates to two requirements for the Federal awarding agency. The source of that threshold, which is at the simplified acquisition threshold set by the FAR at 48 CFR Subpart 2.1 and adjusted periodically to track inflation (currently $150,000), is subparagraph (e)(2)(A) of section 872, which requires the Federal awarding agency to consider information in the designated integrity and performance system before making a Federal award for more than that threshold amount. In addition to implementing that requirement, the final guidance requires the Federal awarding agency to report to the designated integrity and performance system any instance in which the Federal awarding agency does not award a grant or cooperative agreement above that threshold amount to a non-Federal entity based on a determination that the non-Federal entity is not qualified due to its prior record of integrity or performance under Federal awards. The latter requirement is analogous to the requirement for procurement contracts in paragraph (c)(5) of section 872.

Comment: An industry association and two Federal awarding agencies recommended clarifications of the term “total value” as used in relation to the integrity and performance requirements. The association recommended we adopt the FAR wording to specify that total value includes priced contract options, even if not yet executed. One Federal awarding agency suggested we clarify whether future funding obligations under a multi-year grant are included. The other Federal awarding agency noted that it was unclear whether the dollar thresholds in part 35 and the award term and condition in the appendix to part 35 were based on the Federal share of the funding or also included any recipient cost share or match.

Response: We agree with the comments and the final guidance located at part 200 is revised to provide the recommended clarifications. The final guidance clarifies that these thresholds are based on the Federal share of Federal awards and includes the value of all expected funding over the period of performance of the Federal award.

Comment: An industry association recommended that we amend the proposed section 35.275 and require Federal awarding agencies to include the award term and condition for integrity and performance reporting only in a grant or cooperative agreement with a total value expected to be greater than $500,000. The commenter noted that would be consistent with the FAR requirement for procurement contracts.

Response: We agree. The final guidance located at 2 CFR 200.210 is revised, as recommended.

Comment: One State agency asked who would determine what type of information about a recipient would be reported by the recipient, rather than the Federal awarding agency. The agency also asked when and how the recipient would be notified about its self-reporting requirements.

Response: The award term and condition in Appendix XII to 2 CFR part 200 includes the notification to the recipient that it must report certain information in order to comply with the integrity and performance reporting requirement. The details about the specific information that a recipient must provide are addressed in the guidance regarding the Entity Management area of SAM.

Comment: Four State agencies recommended clarifying the specific types of proceedings about which the proposed guidance required recipients to report to the designated integrity and performance system. Two agencies said that the proposed requirement for recipients to report on criminal, civil, and administrative proceedings was overly broad and some noted that State agencies can be parties to legal proceedings as part of their performance of grants that fund regulatory enforcement programs. One agency asked why the information was to be collected and what outcomes might result from a reported proceeding. Other questions were: Does the requirement apply to local governments or just to a recipient in the performance of its duties under an award; does a State agency have to report a fine assessed against it by another State agency; and what type of documentation must be submitted?

Response: No change was made. The governing statute, section 872, specifies the breadth of the reporting requirement. As for the purpose of collecting the information, the designated integrity and performance system gives a Federal awarding agency more information than is presently available about a potential recipient's record of performance under prior Federal awards and occurrences that may shed light on its integrity and business ethics. The information supports compliance with long-standing policy that the Federal Government protects the public interest and ensures the integrity of Federal programs by conducting business only with responsible persons.

Potential outcomes due to reported information depend on the nature of the information. A Federal awarding agency considers the information in the designated integrity and performance system about a non-Federal entity when determining that the non-Federal entity is qualified with respect to a particular Federal award. Information that the non-Federal entity is currently debarred or suspended precludes the making of the Federal award to the non-Federal entity in almost all cases, while other information may or may not lead the Federal awarding agency to determine that the non-Federal entity is not qualified for the Federal award. The Federal awarding agency also may notify other Federal awarding agencies about information in the designated integrity and performance system—e.g., he or she would refer to a debarring official information about a matter that may be a cause for debarment.

With respect to the commenters' other questions:

• A local government must report if it has a Federal award with an award term and condition making it subject to the reporting requirement. It would not be required to report solely by virtue of being a subrecipient under a Federal award to a State agency.

• The requirement is broader than proceedings related to a recipient's performance under an award. A recipient also must report about proceedings related to the making of a Federal award (e.g., a conviction for misuse of Federal appropriations to lobby for an award).

• A State agency must report a proceeding that results in a fine levied against it by another State agency if the violation or activity for which it is fined is in connection with the making of, or performance under, a Federal award.

• The recipient must provide the information about a proceeding that is required in SAM. No other documentation is required.

Comment: Two commenters made recommendations related to the proposed requirement for a recipient to report information to the designated integrity and performance system about proceedings related to State awards. One commenter recommended that the requirement be made parallel with the one for contractors in the FAR clause 52.209-7(c)(1), by requiring reporting only on proceedings related to Federal awards and not also those associated with State awards. The second commenter recommended we clarify that State funds appropriated to a State's institutions of higher education would not be a “State award” for this purpose.

Response: Due to the challenges associated with collecting State government information, the final guidance does not include the proposed requirement to collect information related to State award proceedings. Collection of information related State award proceedings may be considered in a subsequent phases of implementation. This approach is consistent with the FAR implementation of section 872 (75 FR 14059).

Comment: An industry association recommended conforming the definition of “administrative proceeding” with the definition of that term in the FAR implementation of section 872.

Response: We agree. The definition is revised to be consistent with the FAR definition in section 52.209-7 of 48 CFR part 52.

Comment: A Federal awarding agency suggested two changes related to the types of proceedings for which reporting is required. It suggested defining “conviction” analogously to 2 CFR part 180, to include any deferred prosecution agreement that included a statement of guilt on the part of the defendant. The agency also suggested eliminating vagueness from paragraph B.3.d(i) of the award term and condition in the appendix to part 35, by dropping the words “it is practical to judge” from the requirement for a recipient to report on “any other criminal, civil, or administrative proceeding if it is practical for [the recipient] to judge that it could have led to” a criminal conviction or finding of fault and liability that the recipient would have been required to report.

Response: We agree in part. We conformed the definition of “conviction” to the FAR definition, to parallel the implementation of section 872 for procurement contracts, rather than conforming it to the definition in 2 CFR part 180 that the commenter suggested. We removed the words “it is practical to judge” from the award term and condition, as recommended.

Comment: One Federal awarding agency suggested amending the proposed section 35.10 to exclude open-ended entitlements and programs under which funding is allocated in accordance with mandatory formulas from coverage under part 35. The Federal awarding agency questioned whether recipient qualification was an appropriate consideration under those programs, generally known as “mandatory programs,” and noted that they were excluded from coverage under the nonprocurement suspension and debarment guidance in 2 CFR part 180.

Response: We understand that the nature of mandatory programs could make it more difficult than it would be under other programs to make a Federal award to an alternative recipient if the Federal awarding agency determined that a recipient was not qualified, as the program still must serve the intended beneficiaries. However, section 872 does not provide for an exclusion of those programs. Moreover, it would be important to protect both the investment of Federal funding and the interests of the beneficiaries in the event that a recipient was found not to be qualified.

Comment: One Federal awarding agency expressed concern that the association in the proposed section 35.110 between an awarding official's signature of an award document and his or her determination concerning the recipient's qualification could be misinterpreted as a requirement for a certification that the recipient is qualified. The agency noted that a certification would require the awarding official to have more information than one could reasonably expect to be available to him or her.

Response: The final guidance in part 200 no longer states that an awarding official's signature represents a determination that a recipient is qualified to receive a Federal award; however, Federal awarding agencies remain responsible for reviewing a potential recipient's records to determine whether the recipient meets the minimum standards as reflected in 2 CFR 200.205.

Comment: One Federal agency questioned whether the use of the terms “qualified” and “disqualified” in this part was consistent with the use of the term “disqualified” in 2 CFR part 180. The agency suggested defining at least one of the terms to avoid unnecessary confusion.

Response: We agree in part and made revisions of two types. First, we revised the wording in a number of places within part 200 to clarify that, under this guidance, each determination by Federal awarding agency of a non-Federal entity's qualification or disqualification pertains to the specific Federal award being contemplated at that time. It is possible for a Federal awarding agency to determine that a non-Federal entity is not qualified for one award and, depending on the reasons for that first determination, qualified for another award. For example, a Federal awarding agency may determine that a non-Federal entity is: (1) Not qualified for a Federal award for a large and complex program, due to information in the designated integrity and performance system indicating an unsatisfactory record for performing under Federal awards for programs of that level of complexity; and (2) qualified for a second Federal award to carry out a simpler program. Further, Federal awarding agencies may make a Federal award to a recipient who does not fully meet these standards, if there are specific conditions that can appropriately mitigate the effects of the non-Federal entity's risk in accordance with § 200.207.

The other revisions were to replace the term “disqualified” in part 200 with “not qualified,” to remove any potential for confusion with that term as it is used and defined in 2 CFR part 180.

Comment: Two Federal awarding agencies and an association of health care centers raised questions and concerns about due process. The association expressed concern that: (1) A Federal awarding agency that determines that a non-Federal entity was not qualified for an award was not required to tell the non-Federal entity why it was not qualified; and (2) the identification of the non-Federal entity in designated integrity and performance system as a result of that determination could prevent it from receiving any Federal funding for five years. One Federal awarding agency asked if there was a process by which a non-Federal entity could appeal a Federal awarding agency's determination that it was not qualified for a Federal award, and the association and other Federal awarding agency recommended there be one.

Response: We agree in part. With respect to the first concern, we added a requirement in 2 CFR 200.212 for a Federal awarding agency to provide an explanation in the notification to a non-Federal entity about the determination that the non-Federal entity is not qualified for a Federal award.

With respect to the second concern that information in the designated integrity and performance system about a non-Federal entity could prevent it from receiving any Federal funding, we note that a Federal awarding agency's determination that a non-Federal entity is not qualified is related to a specific award that is being contemplated. As explained more fully in the response to the previous comment, that determination does not preclude the making of a different Federal award to the non-Federal entity. We revised the wording in multiple places in part 200 to clarify that connection with a specific Federal award.

On the matter of appeals of a Federal awarding agency's determination that a non-Federal entity is not qualified for a Federal award, we did not revise the guidance to require delay of individual Federal awards, to allow an opportunity for appeal after the Federal awarding agency makes the determination. A govermentwide requirement is impractical in light of the constraints under which many Federal programs operate, with firm schedules for program execution that are impelled by statute or needs for timely obligation of appropriated funds. Individual Federal awarding agencies may, if timing constraints for their programs permit, offer an opportunity for appeal or additional input to the Federal awarding agency prior to award. Also note that the commenters' concern should be addressed by the opportunities provided for the non-Federal entity's input. Sections 200.212 and 200.340 require Federal awarding agencies to notify non-Federal entities when information that may be used when Federal awarding agencies are making future funding decisions is entered into the designated performance and integrity system. Non-Federal entities whose information is entered will have the opportunity to comment on information included in the system.

We anticipate that Federal agencies' and recipients' current apprehension about the use of the designated integrity and performance system will abate over time, as they gain practical experience with the system and associated requirements. If lessons learned from the use of the designated integrity and performance system warrant further improvements to the system or clarifications to the guidance, we will carefully evaluate the existing guidance and revise the guidance, as appropriate.

Comment: Two Federal awarding agencies commented on the requirements in the proposed section 35.120 for a Federal awarding official to check SAM (formerly EPLS) and the designated integrity and performance system. One agency stated that it was important that Federal awarding agencies be required to check SAM (formerly EPLS) separately, as the designated integrity and performance system would not provide all of the information they required concerning non-Federal entities that were debarred, suspended, or otherwise excluded or disqualified from participation in covered Federal transactions. The other Federal awarding agency recommended including a table to make clear the different dollar thresholds for use of the two systems—SAM (formerly EPLS) must be checked before making any Federal covered transaction, regardless of award amount, while the requirement to check the designated integrity and performance system applies to a Federal award with a total value expected to exceed the simplified acquisition threshold.

Response: We agree in part and plan to provide further clarification to Federal awarding agencies regarding the relationship between various governmentwide systems. As discussed earlier in the preamble, GSA plans to integrate the designated integrity and performance system (currently FAPIIS) into SAM, so including a detailed chart in the final guidance outlining when a Federal awarding agency is required to check specific systems is not appropriate as the chart may become obsolete. Although a Federal awarding agency searching the current designated integrity and performance system about a potential recipient entity may receive information in response to the search, as well as information from other data systems accessed through the system, the current design does not ensure that the awarding official receives all the SAM information that he or she needs. For instance, FAPIIS does not reflect whether a non-Federal entity has an active SAM registration as required by 2 CFR part 25. As the commenters note, the awarding official also must check SAM Exclusions as required by 2 CFR part 180 prior to making a Federal award for an amount below the dollar threshold at which he or she is required to check the designated integrity and performance system. Therefore, it is imperative that a Federal awarding agency separately checks SAM prior to making an award at this time.

Comment: A Federal awarding agency noted the requirement in the proposed paragraph 35.120(a)(3)(ii) for a Federal awarding agency to check the SAM Exclusions (formerly EPLS) for potential subaward recipients if Federal approval of those subrecipients was required under the terms and conditions of the Federal award. It asked if a prime recipient was required to check the designated integrity and performance system for information about a non-Federal entity to which it intended to make a subaward.

Response: If the terms and conditions of the Federal award require the recipient to obtain Federal awarding agency approval of subawardees, the Federal awarding agency must check SAM Exclusions to verify whether a proposed subrecipient is debarred, suspended, or otherwise disqualified from the subaward. In addition, a recipient is always required under existing policy (2 CFR 180.300) to verify that a non-Federal entity to which it intends to make a subaward is not excluded or disqualified from the transaction, whether or not Federal awarding agency approval of the subrecipient is required. Unlike a Federal awarding agency, however, 2 CFR 180.300 allows recipients multiple ways in which it can do the verification, checking SAM Exclusions being just one of those ways. While only Federal awarding agencies are required to consider information available through the designated integrity and performance system for awards expected to exceed the simplified acquisition threshold, a recipient and the general public are also able to check the system for information in doing checks of subrecipients.

Comment: A State agency, noting the same requirement in the proposed paragraph 35.120(a)(3)(ii) to check SAM (formerly EPLS), asked how the process works if a recipient does not know the identity of all subrecipients at the time it receives a Federal award. It asked if the Federal award includes a term requiring verification of subrecipients and whether that delays the making of subawards.

Response: The requirement stated in the proposed guidance is not reflected in the final guidance at 2 CFR part 200; however, this requirement is not new. The existing policy located at 2 CFR 180.425, states that a Federal awarding agency must check SAM Exclusions for potential subrecipients if its approval of the subrecipients is required. When that approval is required, the Federal awarding agency can check SAM Exclusions after the prime award is made if the subrecipients' identities are not known until then.

Comment: One Federal awarding agency recommended revising 2 CFR 180.520 to require suspending and debarring officials to enter information into SAM Exclusions (formerly EPLS) within three working days of taking a suspension or debarment action, a reduction from the current five days. The Federal awarding agency noted that this change was made in the FAR, in 48 CFR 9.404, as part of the implementation of the FAPIIS requirements for procurement contracts.

Response: We agree. We made the recommended change and similarly revised 2 CFR 180.655, to establish a three-day time period for suspending and debarring officials to report information about administrative agreements to the designated integrity and performance system.

Comment: Two Federal agencies suggested revising the requirement in the proposed section 2 CFR 180.655 for a Federal suspending or debarring official to report information to the designated integrity and performance system about each administrative agreement into which the Federal Government enters with a non-Federal entity in lieu of a suspension or debarment. One Federal awarding agency recommended delaying the effective date of the requirement until a planned update to the designated integrity and performance system added the capability to accept information about administrative agreements. The other Federal awarding agency suggested adding a requirement for reporting any modifications of administrative agreements to the designated integrity and performance system.

Response: We agree and have made changes in sections 2 CFR 180.655 and 180.660 that are responsive to the recommendations. In October 2010, the designated integrity and performance system gained the capability to accept information about administrative agreements. The system specifies the information that must be reported.

Comment: A Federal awarding agency recommended deleting the requirement in the proposed section 2 CFR 180.660 for a Federal suspending or debarring official to include information about the designated integrity and performance system in each administrative agreement into which he or she enters with a non-Federal entity in lieu of a suspension or debarment action. The Federal awarding agency stated that the express purpose of an administrative agreement is to preserve the non-Federal entity's eligibility to receive a Federal award. It added that the notice of funding opportunities under which Federal awards are made are the appropriate places to inform the non-Federal entity about Federal awarding agency's consideration of information that they receive through the designated integrity and performance system, including information about administrative agreements.

Response: We agree. We removed the proposed section 180.660 from the final guidance. Due to the removal of section 180.660, section 180.665 of the guidance proposed in the February 2010 Federal Register notice has been designated as section 180.660 in the final guidance.

Comment: The same Federal awarding agency recommended deleting the requirements in the proposed paragraphs 2 CFR 180.715(h) and 180.870(b)(2)(v) for a Federal suspending or debarring official to include information about the designated integrity and performance system in each notice of a suspension or debarment action. The Federal awarding agency noted that each notice already informs the suspended or debarred entity that the action results in its being listed in SAM Exclusions (formerly EPLS), with the mandatory effect of excluding it from covered transactions. The Federal awarding agency further noted that the availability of the information to a Federal awarding agency through the designated integrity and performance system, in addition to SAM, does not alter that mandatory effect. It suggested that adding information about designated integrity and performance system to the notice of suspension or debarment therefore could only confuse the matter.

Response: We agree. We removed the proposed amendments to sections 180.715 and 180.870 from the final guidance.

This final guidance is effective for Federal awards issued on or after January 1, 2016 that meet the thresholds as described in the preamble and to existing awards that are terminated on or after January 1, 2016 due to material failure to comply with the Federal award terms and conditions. Federal awarding agencies that have formally adopted 2 CFR parts 180 and 200 in their entirety in 2 CFR will begin implementing this final guidance on January 1, 2016. Federal awarding agencies who adopted 2 CFR parts 180 and 200 through another means must work with OMB to ensure their regulations or policies are updated effective January 1, 2016. OMB will collaborate with GSA to ensure that the user guides and other guidance materials regarding the designated integrity and performance system are updated to reflect use by the Federal assistance community. Applicants and recipients will see the agencies' implementation reflected in requirements identified in notice of funding opportunities or other agency releases with application instructions, as well as in the new award term and condition in Appendix XII to 2 CFR part 200.

For the reasons stated in the preamble and under the authority of the Chief Financial Officer Act of 1990 (31 U.S.C. 503), the Office of Management and Budget amends 2 CFR parts 180 and 200 as set forth below:

Authority for This Rulemaking

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

On May 8, 2015, the FAA published in the Federal Register a supplemental notice of proposed rulemaking (SNPRM) to remove Class D airspace and Class E surface area airspace at Independence Municipal Airport, Independence, KS., (80 FR 26496). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received.

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

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

This action amends Title 14, Code of Federal Regulations (14 CFR), Part 71 by removing Class D airspace and the associated Class E surface area airspace at Independence Municipal Airport, Independence, KS, as the air traffic control tower has closed and controlled airspace is no longer needed.

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

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E. “Environmental Impacts: Policies and Procedures,” paragraph 311a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

Authority for This Rulemaking

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

On May 8, 2015, the FAA published in the Federal Register a notice of proposed rulemaking (NPRM) to establish Class E airspace extending upward from 700 feet above the surface and modify Class E surface area airspace at Bremerton National Airport, Bremerton, WA (80 FR 26497). Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal to the FAA. No comments were received. Subsequent to publication, the FAA found a typographical error in the Proposal section for the Class E surface area airspace regarding the length of extension to the southwest, and corrects it from 7 miles to 6.1 miles. Also, the geographic latitude coordinate of the airport for the Class E airspace extending upward from 700 feet above the surface is corrected from lat. 47°29′34″ to lat. 47°29′25″.

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

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

This amendment to Title 14, Code of Federal Regulations (14 CFR) part 71 modifies Class E surface area airspace and establishes Class E airspace extending upward from 700 feet above the surface at Bremerton National Airport, Bremerton, WA. Class E surface area airspace is adjusted to be defined from the Bremerton National Airport reference point versus the decommissioned Kitsap NDB, with segments extending from the 4.1-mile radius of the airport to 6.1 miles southwest, and 6.1 miles northeast of the airport. Class E airspace extending upward from 700 feet above the surface would be established extending from the 6.1-mile radius of the airport to 7.6 miles northeast of the airport, and 8.1 miles southwest of the airport. This action enhances the safety and management of controlled airspace within the NAS.

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

The FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures,” paragraph 311a. This airspace action is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exist that warrant preparation of an environmental assessment.

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

Contents I. Background II. Removal of Anti-Terrorism Controls and Text Associating Cuba With Terrorism III. Jurisdiction—Items That Are Subject to the Ear A. Items With More Than de minimis Controlled U.S. Origin Content B. Items That Are the Direct Product of U.S.-Origin National Security Technology or Software IV. Provisions Impacted by Cuba's Removal From County Group E:1 V. Provisions Being Amended To Retain Existing Cuba-Related Requirements I. Background

The United States maintains a comprehensive embargo on trade with Cuba. Pursuant to that embargo, all items that are subject to the Export Administration Regulations (EAR) require a license for export or reexport to Cuba unless authorized by a license exception. The Bureau of Industry and Security (BIS) administers export and reexport restrictions on Cuba consistent with the goals of that embargo and with relevant law. Accordingly, BIS may issue specific or general authorizations in the form of licenses or license exceptions for transactions that support the goals of United States policy while the embargo remains in effect.

On December 17, 2014, the President announced that the United States is taking steps to chart a new course in bilateral relations with Cuba and to further engage and empower the Cuban people. As one of these steps, the President directed the Secretary of State to review Cuba's designation as a State Sponsor of Terrorism and provide a report to the President within six months. Cuba was designated as a State Sponsor of Terrorism in 1982. Pursuant to Sections 6(a) and 6(j) of the Export Administration Act of 1979, as amended (EAA), State Sponsors of Terrorism are subject to anti-terrorism (AT) controls and certain other restrictions in the EAR. Once designated, a country remains a State Sponsor of Terrorism until its designation is rescinded in accordance with the relevant statutes (Section 6(j) of the EAA; Section 40 of the Arms Export Control Act of 1976, as amended; and Section 620A of the Foreign Assistance Act of 1961, as amended).

There are two possible paths to rescission of a State Sponsor of Terrorism designation under the relevant statutes. The first requires the President to submit a report to Congress before the proposed rescission would take effect certifying that (1) there has been a fundamental change in the leadership and policies of the government of the country concerned, (2) the government is not supporting acts of international terrorism, and (3) the government has provided assurances that it will not support acts of international terrorism in the future. The second path requires that the President submit a report to Congress, at least 45 days before the proposed rescission would take effect, justifying the rescission and certifying the subject government has not provided any support for international terrorism for the preceding six-month period and has given assurances that it will not support acts of international terrorism in the future. The rescission of Cuba's designation was done consistent with the second path.

On April 8, 2015, the Secretary of State completed the review requested by the President and submitted his analysis to the President recommending that Cuba should no longer be designated as a State Sponsors of Terrorism. On April 14, 2015, the President submitted to Congress the statutorily required report indicating the Administration's intent to rescind Cuba's State Sponsor of Terrorism designation, including the certification that Cuba has not provided any support for international terrorism during the previous six months; and that Cuba has provided assurances that it will not support acts of international terrorism in the future. The Secretary of State then made the final decision to rescind Cuba's designation as a State Sponsor of Terrorism, which was effective on May 29, 2015. Accordingly, this rule removes references to Cuba as a State Sponsor of Terrorism and removes anti-terrorism (AT) controls from Cuba.

However, Cuba is still subject to a comprehensive embargo and, as specified in § 746.2(a) of the EAR, a license is still required to export or reexport to Cuba any item subject to the EAR unless authorized by a license exception. Only those license exceptions listed in § 746.2(a) may be used to export or reexport to Cuba. These requirements of § 746.2(a) apply to all items subject to the EAR, including EAR99 items and items that are controlled on the Commerce Control List (CCL) only for AT reasons.

This rule removes:

• The reference to “counter-terrorism” from the licensing policy that applies to certain exports intended to provide support for the Cuban people that appears in § 746.2(b)(4)(i) (which will be redesignated as § 746.2(b)(3)(i));

• § 746.2(c), which identifies Cuba as a country whose government has repeatedly provided support for acts of international terrorism;

• the references to “terrorism” and “state sponsors of terrorism” from § 746.2(e), which describes the license requirements regarding Cuba of the U.S. Department of the Treasury, Office of Foreign Assets Control and the U.S. Department of State; and

• the word “Cuba” from the statements of anti-terrorism license requirements in Export Control Classification Numbers 1C350, 1C355, 1C395, 2A994, 2D994 and 2E994.

This rule also removes Cuba from the following provisions, which list countries that have been designated as State Sponsors of Terrorism or that have repeatedly supported acts of international terrorism: § 742.1(d); Supplement No. 2 to part 742, paragraphs (a) and (b)(1); § 750.4(b)(6)(i); and § 772.1, definition of “countries supporting international terrorism.”

Finally, this rule removes Cuba from Country Group E:1—Terrorist Supporting Countries—in Supplement No. 1 to Part 740—Country Groups. However, Cuba remains in Country Group E:2—Unilateral embargo. Cuba also remains in Country Groups D:2, D:3, and D:5. Because country groups are used to specify the countries that are subject to certain provisions of the EAR, particularly license exceptions, and to impose certain restrictions, removal of Cuba from Country Group E:1 can have effects elsewhere in the EAR as will be discussed below.

The EAR apply to items that contain more than a de minimis amount of controlled U.S.-origin content including foreign-made items located outside the United States. For most items, the de minimis level is 10 percent if the destination of the foreign-made item is in Country Group E:1 and 25 percent if the destination is elsewhere. The removal of Cuba from Country Group E:1 raises the de minimis level to 25 percent for most items destined for Cuba. Additionally, since Cuba is no longer in Country Group E:1, the 25 percent de minimis level now applies to certain foreign-made encryption items destined for Cuba that meet the criteria specified in § 734.4(b)(1)(iii) of the EAR.

With the general increase in the de minimis level to 25 percent, paragraph (b)(3) of § 746.2, which described the circumstances under which foreign made items containing an insubstantial proportion of U.S. origin content (i.e., not exceeding 20 percent) would generally be considered favorably, is no longer needed, so this rule removes that paragraph.

Foreign-made items destined for Cuba that incorporate U.S.-origin 9x515 or “600 series” .y content continue to be subject to the EAR regardless of the level of U.S.-origin content, i.e., there is no de minimis for these items when destined for Cuba. To maintain this exclusion with respect to Cuba, this rule adds Country Group E:2 to the list of destinations (Country Group E:1 and the People's Republic of China) subject to that exclusion. Since 9x515 and “600 series” .y items are “specially designed” items transferred from the United States Munitions List to the CCL, this de minimis exclusion is still warranted for countries subject to unilateral embargo. Accordingly, BIS is amending § 734.4(a)(6)(ii) to include Country Group E:2.

The EAR apply to foreign-made national security items that are the direct product of U.S.-origin national security technology and software. Such items are subject to the EAR (and require a license) if destined to a country in Country Group D:1 or E:1. This rule retains Cuba as one of the destinations that is subject to this requirement by adding Country Group E:2 to § 736.2(b)(3).

The provisions of the four license exceptions described below contain restrictions that apply to countries in Country Group E:1 or to nationals of those countries. This section describes the restrictions that will no longer apply to Cuba or Cuban nationals as a result of Cuba's removal from Country Group E:1. This rule makes no change to the text of the four license exceptions because the removal of the restrictions results from the removal of Cuba from Country Group E:1 and no changes to the text of the license exceptions are needed.

The removal of Cuba from Country Group E:1 implicates only paragraph (a) of License Exception Servicing and Replacement of Parts and Equipment (RPL) in § 740.10 because only paragraph (a), which authorizes export and reexport of one-for-one replacement parts for items previously lawfully exported, is authorized for Cuba in § 746.2 of the EAR. Since Cuba is no longer in Country Group E:1, the following exclusions to License Exception RPL, paragraph (a) no longer apply to Cuba: paragraph (a)(3)(iv), which excludes parts, components, accessories, or attachments to repair “aircraft” or commodities controlled for national security (NS) reasons; paragraph (a)(3)(v), which excludes parts, components, accessories, or attachments to repair explosives detection equipment classified under Export Control Classification Number (ECCN) 2A983 or related software classified under ECCN 2D983; and paragraph (a)(3)(vi) which excludes parts, components, accessories, or attachments to repair concealed object detection equipment classified under ECCN 2A984 or related software classified under ECCN 2D984.

Since Cuba is no longer in Country Group E:1, the following restrictions in License Exception GOV (§ 740.11) no longer apply to Cuban nationals: Paragraph (a)(2)(iv), which restricts physical or computational access by Country Group E:1 nationals to certain computers for authorized international safeguard use in connection with activities of the International Atomic Energy Agency and the European Atomic Energy Community; paragraph (d)(4), which restricts physical or computational access by Country Group E:1 nationals to certain computers for authorized international inspection and verification use in connection with the activities of the Organization for the Prohibition of Chemical Weapons; and paragraph (e)(7)(i), which precludes export, reexport or transfer (in-country) to Country Group E:1 nationals of items used to support the International Space Station. Additionally, paragraph (e)(8)(iii), which precludes return of parts for the International Space Station to destinations in Country Group E:1, no longer applies to Cuba.

Since Cuba is no longer in Country Group E:1, § 740.14(f)(1), which authorizes certain exports and reexports of encryption commodities and software subject to Encryption Items (EI) controls on the CCL by United States citizens and permanent resident aliens to destinations other than Country Group E:1, and § 740.14(f)(2), which authorizes such exports and reexports by individuals other than nationals of a country in Country Group E:1, no longer apply to Cuba or Cuban nationals. Additionally, § 740.14(g), which authorizes certain exports and reexports of technology by U.S. persons, but excludes in paragraph (g)(4) exports and reexports of encryption technology controlled in ECCN 5E002 to destinations in Country Group E:1, no longer applies to Cuba.

The removal of Cuba from Country Group E:1 implicates only paragraph (a) of License Exception Aircraft, Vessels and Spacecraft (AVS) in § 740.15 because only paragraph (a), which authorizes aircraft on temporary sojourn, is authorized for Cuba in § 746.2 of the EAR. Since Cuba is no longer in Country Group E:1, Cuba is no longer subject to the following restrictions:

• Paragraph (a)(1)(i), which prohibits use of AVS for foreign registered aircraft that were transferred to a national of a country in Country Group E:1 while in the United States;

• Paragraph (a)(1)(ii), which prohibits use of AVS for foreign registered aircraft that are departing the United States for purpose of transfer to a national of a country in Country Group E:1;

• Paragraph (a)(2)(ii), which prohibits use of AVS for U.S. registered aircraft that are not operating under an Air Carrier Operating Certificate, Commercial Operating Certificate or Air Taxi Operating Certificate from using AVS for temporary sojourns to a country in Country Group E:1;

• Paragraph (a)(3)(iv), which prohibits principal maintenance in Country Group E:1 or right to control the principal place of maintenance by a national of a country in Country Group E:1;

• Paragraph (a)(3)(v), which prohibits location of spares in a destination in Country Group E:1;

• Paragraph (a)(3)(vi), which prohibits changing the place of registration to a destination in Country Group E:1;

• Paragraph (a)(3)(vii), which prohibits transfer of technology to a national of a country in Country Group E:1;

• Paragraph (a)(3)(viii), which prohibits aircraft bearing livery, colors or logos of a national of a country in Country Group E:1; and

• Paragraph (a)(3)(ix), which prohibits flying under a flight number issued to a national of a country in Country Group E:1.

Although Cuba is removed from Country Group E:1, Cuba is still subject to a comprehensive embargo and, as specified in § 746.2(a) of the EAR, a license is still required to export or reexport to Cuba any item subject to the EAR unless authorized by a license exception. This rule makes the changes described below to retain the applicability of certain provisions and license conditions to Cuba, consistent with the embargo, that would otherwise cease as a result of Cuba's removal from Country Group E:1. While Cuba was in Country Group E:1, a separate reference to Country Group E:2 would have had no effect on exports or reexports to Cuba. With the removal of Cuba from Country Group E:1, it is necessary to explicitly link these provisions and conditions to the embargo.

Before an exporter or reexporter is able to use License Exception Technology and Software under Restriction (TSR) in § 740.6 of the EAR to export or reexport software or technology controlled for national security reasons, the exporter or reexporter must obtain a written assurance from the consignee that the software or technology transferred and its direct product will not be sent to destinations in Country Group D:1 or E:1 or released to nationals thereof. This rule retains that restriction with respect to Cuba by adding Country Group E:2 to those written assurance requirements. The need for a written assurance is appropriate for countries in Country Groups E:1 and E:2. However, until the removal of Cuba from Country Group E:1, listing both country groups would have been redundant.

Note that License Exception TSR does not authorize exports or reexports to Cuba because it is not specified in § 746.2(a)(1) of the EAR and because, by its terms, License Exception TSR is available only for destinations in Country Group B, which does not include Cuba.

Supplement No. 2 to Part 748 of the EAR describes information required to be included in license applications for certain specific situations. Paragraph (i)(2)(x) requires that technology intended to accompany any shipment to destinations in Country Group D:1 or E:1 be described in the application. Paragraph (o)(3)(i) requires applicants for licenses to export or reexport national security controlled technology to obtain a written assurance against transfer to destinations in Country Groups D:1 or E:1. This rule adds Country Group E:2 to both paragraphs to continue both requirements with respect to Cuba.

Part 758 of the EAR describes certain export clearance requirements. Section 758.1(b)(1) makes the $2,500 threshold below which most exports need not be filed in the Automated Export System (AES) inapplicable for exports to Country Group E:1 by requiring such filing for exports to Country Group E:1 regardless of value. This rule retains that requirement for exports to Cuba by adding Country Group E:2 to § 758.1(b)(1).

Section 758.2(b)(3) makes export to Country Group E:1 grounds for rejecting applications for post-departure filing in AES (i.e., authorization to file after the exporting carrier departs the port of export). This rule retains export to Cuba as a ground for rejection by adding Country Group E:2 to § 758.2(b)(3).

Supplement No. 1 to Part 736 of the EAR contains certain general orders. This rule adds General Order No. 3, which was reserved, to continue all restrictions on transactions with Cuba or Cuban nationals, by reference to Country Group E:1, that are contained in licenses issued prior to July 22, 2015. Certain licenses issued by BIS contain conditions that restrict the export, reexport, or transfer (in-country) to State Sponsors of Terrorism and countries subject to unilateral embargo by reference to Country Group E:1. Many of those restrictions were intended to apply to Cuba, not only as a State Sponsor of Terrorism but also as a country subject to unilateral embargo. However, BIS did not always list both Country Groups E:1 and E:2 in license conditions because, at the time, doing so would have been redundant. This general order applies those conditions to Country Groups E:1 and E:2. Licensees who seek authorization for transactions that are affected by General Order No. 3, may submit license applications that refer to General Order No. 3 and explain the reason for the request in Block 24 of the application. All license applications involving Cuba are reviewed pursuant to the licensing policy in § 746.2(b) of the EAR.

This rule adds a reference to Country Group E:2 to the note that immediately follows the control table in ECCN 4A003. That note states that except for destinations in Country Group E:1, no license is required for computers with an Adjusted Peak Performance not exceeding 8.0 weighted teraFLOPS. The addition of Country Group E:2 retains Cuba's status as a destination for which a license is required.

Although the Export Administration Act expired on August 20, 2001, the President, through Executive Order 13222 of August 17, 2001, 3 CFR, 2001 Comp., p. 783 (2002), as amended by Executive Order 13637 of March 8, 2013, 78 FR 16129 (March 13, 2013), and as extended by the Notice of August 7, 2014, 79 FR 46959 (August 11, 2014), has continued the Export Administration Regulations in effect under the International Emergency Economic Powers Act. BIS continues to carry out the provisions of the Export Administration Act, as appropriate and to the extent permitted by law, pursuant to Executive Order 13222 as amended by Executive Order 13637.

1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action,” although not economically significant, under section 3(f) of Executive Order 12866. Accordingly, the rule has been reviewed by the Office of Management and Budget (OMB).

2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) control number. This rule involves a collection of information approved under OMB control number 0694-0088—Simplified Network Application Processing+ System (SNAP+) and the Multipurpose Export License Application, which are the methods for submitting all license applications, commodity classification requests and similar requests to BIS. The estimated annual total burden of all of those submissions is 31,833 hours. BIS believes that this rule will have no material impact on that burden. To the extent that it has any impact, this rule is likely to reduce the burden for two reasons. First, this rule might reduce the burden because it makes some transactions, primarily temporary sojourns in Cuba of general aviation aircraft, which would otherwise require a license, eligible for a license exception. Second, because this rule raises the percentage of U.S.-origin content that a foreign-made item must have before its export from abroad to Cuba becomes subject to the EAR, it reduces the number of foreign-made items that will need a license from BIS to be exported from abroad to Cuba.

Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing the burden, to Jasmeet K. Seehra, Office of Management and Budget, by email at [email protected] or by fax to (202) 395-7285 and to William Arvin at [email protected].

3. This rule does not contain policies with Federalism implications as that term is defined under Executive Order 13132.

4. The provisions of the Administrative Procedure Act (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a delay in effective date, are inapplicable because this regulation involves a military or foreign affairs function of the United States (See 5 U.S.C. 553(a)(1)). This rule is a part of the implementation of the rescission of Cuba's designation as a State Sponsor of Terrorism, which became effective on May 29, 2015. Delay in implementing this rule to obtain public comment would undermine the foreign policy objectives that the rule is intended to implement. Further, no other law requires that a notice of proposed rulemaking and an opportunity for public comment be given for this rule. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule under 5 U.S.C. 553, or by any other law, the requirements of the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) are not applicable.

Accordingly, parts 734, 736, 740, 742, 746, 748, 750, 758, 772, and 774 of the Export Administration Regulations (15 CFR parts 730-774) are amended as follows:

In the Federal Register of April 13, 2015 (80 FR 19530), FDA solicited comments concerning the direct final rule for a 75-day period ending June 29, 2015. We stated that the effective date of the direct final rule would be on August 26, 2015, 30 days after the end of the comment period, unless FDA received any significant adverse comment during the comment period. FDA did not receive any significant adverse comments.

The Office of Management and Budget (OMB) is streamlining the Federal government's guidance on Administrative Requirements, Cost Principles, and Audit Requirements for Federal awards. In a document published in the Federal Register on December 26, 2013 (78 FR 78590), OMB adopted final guidance, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), that supersedes and streamlines requirements from OMB Circulars A-21, A-87, A-110, and A-122 (which have been placed in OMB guidances); Circulars A-89, A-102, and A-133; and the guidance in Circular A-50 on Single Audit Act follow-up. The final guidance is located in title 2 of the Code of Federal Regulations (CFR).

On December 19, 2014, OMB published a joint interim final rule in the Federal Register (79 FR 75871). OMB made technical corrections to the Uniform Guidance, and Federal awarding agencies, including VA, implemented the guidance in their respective chapters of title 2 of the CFR. VA amended title 2 of the CFR to add part 802. Section 802.101 of title 2 CFR now provides, “The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards set forth in 2 CFR part 200 shall apply to the Department of Veterans Affairs.” VA also removed parts 41 and 43 from title 38 CFR. Those parts codified OMB Circulars that were superseded by the Uniform Guidance.

Because of these changes, existing references in VA's regulations to the superseded OMB guidance documents and to parts 41 and 43 are obsolete. Accordingly, we are amending various VA regulations located in 38 CFR parts 17, 39, 48, 51, 52, 53, 59, 61, 62, and 64 to replace the obsolete references with references to the current authority. For the same reason, we are removing part 49 of title 38 CFR, which codified OMB Circular A-110, and amending VA's regulations referencing part 49 to reference 2 CFR part 200 instead.

The Secretary of Veterans Affairs finds there is good cause under the provisions of 5 U.S.C. 553(b)(B) and (d)(3) to publish this rule without prior opportunity for public comment and with an immediate effective date. This rule does not amend the substantive content of the regulations cited. We are merely making technical revisions to replace obsolete OMB references and citations in existing VA regulations because 2 CFR part 200, which VA is adopting, supersedes OMB's previous guidance. We are also deleting existing references to parts 41 and 43 of 38 CFR, which were removed from 38 CFR by the interim final rule published on December 19, 2014 (79 FR 75871), and removing part 49 of title 38 CFR and existing references to part 49, which codified OMB guidance that was superseded by the Uniform Guidance. Because these changes are merely technical, advance notice and public comment are unnecessary and we find good cause to make these necessary changes effective immediately upon publication.

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,” which requires review by 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 this Executive Order.”

The economic, interagency, budgetary, legal, and policy implications of this regulatory action have been examined, and it has been determined not to be a significant regulatory action under Executive Order 12866. 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 the 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.”

The Secretary hereby certifies that this final rule will 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) because the amendments are merely technical in nature. Therefore, pursuant to 5 U.S.C. 605(b), this final rule is exempt from the final regulatory flexibility analysis requirements of section 604.

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 final rule will have no such effect on State, local, and tribal governments, or on the private sector.

This final rule contains no provisions constituting a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521).

The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are 64.005, Grants to States for Construction of State Home Facilities; 64.024, VA Homeless Providers Grant and Per Diem Program; 64.026, Veterans State Adult Day Health Care; 64.033, VA Supportive Services for Veteran Families Program; 64.034, VA Assistance to United States Paralympic Integrated Adaptive Sports Program; 64.037, VA U.S. Paralympics Monthly Assistance Allowance Program; 64.038, Grants for the Rural Veterans Coordination Pilot; 64.100, Automobiles and Adaptive Equipment for Certain Disabled Veterans and Members of the Armed Forces; 64.201, National Cemeteries; and 64.203, State Cemetery Grants.

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, Department of Veterans Affairs, approved this document on July 7, 2015, for publication.

For the reasons set forth in the preamble, VA amends 38 CFR parts 17, 39, 48, 49, 51, 52, 53, 59, 61, 62, and 64 as follows:

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).

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.

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-2014-0354 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 21, 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-2014-0354, 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.

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 4F8263) by Syngenta Crop Protection, LLC, 410 Swing Road, P.O. Box 18300, Greensboro, NC 27419. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of the fungicide sedaxane, N-[2-[1,1′-bicyclopropyl]-2-ylphenyl]-3-(difluoromethyl)-1-methyl-1H-pyrazole-4-carboxamide, as a seed treatment for cotton, undelinted seed at 0.01 parts per million (ppm); cotton, gin byproducts at 0.01 ppm; and beet, sugar at 0.01 ppm. That document referenced a summary of the petition prepared by Syngenta Crop Protection, LLC, 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 altered the commodity name from “beet, sugar” to “beet, sugar, roots”. The reason for this change is explained in Unit IV.D.

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 sedaxane including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with sedaxane follows.

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 toxicological effects reported in the submitted animal studies such as mitochondrial disintegration and glycogen depletion in the liver are consistent with the pesticidal mode of action also being the mode of toxic action in mammals. The rat is the most sensitive species tested, and the main target tissue for sedaxane is the liver. Sedaxane also caused thyroid hypertrophy/hyperplasia. In the acute neurotoxicity (ACN) and sub-chronic neurotoxicity (SCN) studies, sedaxane caused decreased activity, decreased muscle tone, decreased rearing, and decreased grip strength. There are indications of reproductive toxicity in rats such as decreased follicle counts, but these effects did not result in reduced fertility. Offspring effects in the reproduction study occurred at the same doses causing parental effects, and do not indicate any quantitative or qualitative increase in sensitivity in rat pups. In the rat, no adverse effects in fetuses were seen in developmental toxicity studies at maternally toxic doses. In the rabbit, fetal toxicity (increased unossified sternebrae and 13th rudimentary ribs, decrease in fetal weights, increased numbers of abortions) was observed at the same doses that produced toxicity in the dams (abortions, decreased body weight gain/body weight loss, reduced food consumption, defecation), and therefore does not indicate any increased susceptibility. Sedaxane is tumorigenic in the liver in the rat and mouse, and led to tumors in the thyroid and uterus in the rat and was classified as “likely to be carcinogenic to humans.” Sedaxane was negative in the mutagenicity studies. The 28-day dermal study did not show systemic toxicity at the limit dose of 1,000 milligrams/kilogram/day (mg/kg/day). Sedaxane has low acute toxicity by the oral, dermal, and inhalation routes. It is not a dermal sensitizer, causes no skin irritation and only slight eye irritation.

Specific information on the studies received and the nature of the adverse effects caused by sedaxane 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 “Sedaxane. Human Health Risk Assessment to Support New Seed Treatment Uses on Cotton and Sugar Beet” on pages 13-20 in docket ID number EPA-HQ-OPP-2014-0354.

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 sedaxane used for human risk assessment is shown in the Table of this unit.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to sedaxane, EPA considered exposure under the petitioned-for tolerances as well as all existing sedaxane tolerances in 40 CFR 180.665. EPA assessed dietary exposures from sedaxane 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 sedaxane. In estimating acute dietary exposure, EPA used food consumption information from the United States Department of Agriculture (USDA) National Health and Nutrition Examination Survey, What We Eat in America, (NHANES/WWEIA) conducted from 2003-2008. As to residue levels in food, EPA conducted a highly conservative acute dietary assessment using tolerance-level residues and 100% crop treated assumptions for all commodities.

ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA NHANES/WWEIA conducted from 2003-2008. As to residue levels in food, EPA conducted a partially refined chronic dietary assessment using anticipated residue levels for all commodities and percent crop treated data.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that sedaxane should be classified as “Likely to be Carcinogenic to Humans” and a linear approach has been used to quantify cancer risk. Cancer risk was quantified using the same estimates as discussed in Unit III.C.1.ii., Chronic exposure. A linear low-dose extrapolation model (Q1*) = 4.64 × 10−3 (mg/kg/day)−1 was used to estimate cancer risk.

iv. Anticipated residue and percent crop treated (PCT) information.

Section 408(b)(2)(E) of FFDCA authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide residues that have been measured in food. If EPA relies on such information, EPA must require pursuant to FFDCA section 408(f)(1) that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. For the present action, EPA will issue such data call-ins as are required by FFDCA section 408(b)(2)(E) and authorized under FFDCA section 408(f)(1). Data will be required to be submitted no later than 5 years from the date of issuance of these tolerances.

Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:

• Condition a: The data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain the pesticide residue.

• Condition b: The exposure estimate does not underestimate exposure for any significant subpopulation group.

• Condition c: Data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area.

In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by FFDCA section 408(b)(2)(F), EPA may require registrants to submit data on PCT. The Agency estimated the PCT for existing uses as follows: For chronic and cancer dietary exposure assessment, 100 PCT was assumed for all commodities except for soybeans (51%), wheat (32%) and potato (67%), which incorporated average PCT estimates.

In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and the National Pesticide Use Database for the chemical/crop combination for the most recent 6-7 years. EPA uses an average PCT for chronic dietary risk analysis. The average PCT figure for each existing use is derived by combining available public and private market survey data for that use, averaging across all observations, and rounding to the nearest 5%, except for those situations in which the average PCT is less than one. In those cases, 1% is used as the average PCT and 2.5% is used as the maximum PCT. EPA uses a maximum PCT for acute dietary risk analysis. The maximum PCT figure is the highest observed maximum value reported within the recent 6 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%.

The Agency believes that the three conditions discussed in Unit III.C.1.iv. have been met. With respect to Condition a, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. The Agency is reasonably certain that the percentage of the food treated is not likely to be an underestimation. As to Conditions b and c, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available reliable information on the regional consumption of food to which sedaxane may be applied in a particular area.

2. Dietary exposure from drinking water. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for sedaxane in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of sedaxane. Drinking water accounted for 95% of the total dietary exposure to sedaxane. 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 FQPA Index Reservoir Screening Tool (FIRST) and Pesticide Root Zone Model Ground Water (PRZM GW), the estimated drinking water concentrations (EDWCs) of sedaxane for acute exposures are estimated to be 4.1 parts per billion (ppb) for surface water and 22.0 ppb for ground water, for chronic exposures and cancer assessments are estimated to be 1.2 ppb for surface water and 19.3 ppb for 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 22.0 ppb was used to assess the contribution to drinking water. For chronic and cancer dietary risk assessment, the water concentration of value 19.3 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). Sedaxane is not registered for any specific use patterns that would result in residential exposure.

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 sedaxane to share a common mechanism of toxicity with any other substances, and sedaxane does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that sedaxane 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.

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 FQPA SF. In applying this provision, EPA either retains the default value of 10X, 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 is no evidence for increased susceptibility following prenatal and/or postnatal exposures to sedaxane based on effects seen in developmental toxicity studies in rabbits or rats. In range finding and definitive developmental toxicity studies in rats, neither quantitative nor qualitative evidence of increased susceptibility of fetuses to in utero exposure to sedaxane was observed. In these studies, there were no single-dose effects. There was no evidence of increased susceptibility in a 2-generation reproduction study in rats following prenatal or postnatal exposure to sedaxane. Clear NOAELs/LOAELs were established for the developmental effects seen in rats and rabbits as well as for the offspring effects seen in the 2-generation reproduction study. The dose-response relationship for the effects of concern is well characterized. The NOAEL used for the acute dietary risk assessment (30 mg/kg/day), based on effects observed in the ACN study, is protective of the developmental and offspring effects seen in rabbits and rats (NOAELs of 100-200 mg/kg/day). In addition, there is no evidence of neuropathology or abnormalities in the development of the fetal nervous system from the available toxicity studies conducted with sedaxane.

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 sedaxane is complete.

ii. There is no indication that sedaxane is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional UFs to account for neurotoxicity. Although sedaxane caused changes in apical endpoints such as decreased activity, decreased muscle tone, decreased rearing and decreased grip strength in the ACN and SCN studies, EPA believes these effects do not support a finding that sedaxane is a neurotoxicant. The observed effects in the ACN and SCN studies were likely secondary to inhibition of mitochondrial energy production caused by sedaxane. Furthermore, there was no corroborative neuro-histopathology demonstrated in any study, even at the highest doses tested (i.e., 2,000 mg/kg/day). Therefore, based on its chemical structure, its pesticidal mode of action, and lack of evidence of neuro-histopathology in any acute and repeated-dose toxicity study, sedaxane does not demonstrate potential for neurotoxicity. Since sedaxane did not demonstrate increased susceptibility to the young or specific neurotoxicity, a developmental neurotoxicity (DNT) study is not required.

iii. As discussed in Unit III.D.2., there is no evidence that sedaxane 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 are highly conservative (acute) or only partially refined (chronic), resulting in high-end estimates of dietary food exposure. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to sedaxane in drinking water. These assessments will not underestimate the exposure and risks posed by sedaxane.

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 sedaxane will occupy 1.3% of the aPAD for all infants (<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 sedaxane from food and water will utilize 1% of the cPAD for all infants (<1 year old), the population group receiving the greatest exposure. There are no residential uses for sedaxane.

3. Short- and Intermediate-term risk. Short- and intermediate-term aggregate exposure takes into account short-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level).

A short- and intermediate-term adverse effect was identified; however, sedaxane is not registered for any use patterns that would result in short- or intermediate-term residential exposure. Short- and intermediate-term risk is assessed based on short- and intermediate-term residential exposure plus chronic dietary exposure. Because there is no short- or 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 short-term risk), no further assessment of short- and intermediate-term risk is necessary, and EPA relies on the chronic dietary risk assessment for evaluating short- and intermediate-term risk for sedaxane.

4. Aggregate cancer risk for U.S. population. The Agency has classified sedaxane as “Likely to be Carcinogenic to Humans” based on significant tumor increases in two adequate rodent carcinogenicity studies. A cancer dietary risk assessment was conducted using a linear low-dose extrapolation model (Q1*) = 4.64 × 10−3 (mg/kg/day)−1 which indicated a risk estimate to the U.S. population as 2 × 10−6. EPA generally considers cancer risks in the range of 10−6 or less to be negligible. The precision that can be assumed for cancer risk estimates is best described by rounding to the nearest integral order of magnitude on the log scale; for example, risks falling between 3 × 10−7 and 3 × 10−6 are expressed as risks in the range of 10−6. Considering the precision with which cancer hazard can be estimated, the conservativeness of low-dose linear extrapolation, and the rounding procedure described above in this unit, cancer risk should generally not be assumed to exceed the benchmark level of concern of the range of 10−6 until the calculated risk exceeds approximately 3 × 10−6. This is particularly the case where some conservatism is maintained in the exposure assessment. Based on this approach, EPA considers the risks of cancer from exposure to sedaxane to be negligible.

5. 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 sedaxane residues.

Adequate enforcement methodology (liquid chromatography/tandem mass spectrometry (LC/MS/MS)) is available to enforce the tolerance expression. A modification of the Quick, Easy, Cheap, Effective, Rugged, and Safe (QuEChERS) method was developed for the determination of residues of sedaxane (as its isomers SYN508210 and SYN508211) in/on various crops. The sedaxane isomers (SYN508210 and SYN508211) are quantitatively determined by LC/MS/MS. The validated limit of quantitation (LOQ) reported in the method is 0.005 ppm for both sedaxane isomers. A successful independent laboratory validation (ILV) study was also conducted on the modified QuEChERS method using samples of wheat green forage and wheat straw fortified with SYN508210 and SYN508211 at 0.005 and 0.05 ppm. The analytical standard for sedaxane, with an expiration date of February 28, 2018, is currently available in the EPA National Pesticide Standards Repository.

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].

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 MRLs for sedaxane.

Although the petitioner sought a tolerance for the commodity name “beet, sugar”, EPA is establishing a tolerance for “beet, sugar, roots” to be consistent with the general food and feed commodity vocabulary EPA uses for tolerances and exemptions.

Therefore, tolerances are established for residues of sedaxane, N-[2-[1,1′-bicyclopropyl]-2-ylphenyl]-3-(difluoromethyl)-1-methyl-1H-pyrazole-4-carboxamide, as a seed treatment for cotton, undelinted seed at 0.01 ppm; cotton, gin byproducts at 0.01 ppm; and beet, sugar, roots at 0.01 ppm.

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 tolerances 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).

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).

Therefore, 40 CFR chapter I is amended as follows:

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).

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.

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-2014-0232 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 21, 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-2014-0232, 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.

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 4E8241) by Interregional Research Project Number 4 (IR-4), 500 College Road East, Suite 201 W., Princeton, NJ 08540. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of the insecticide novaluron, (N-[[[3-chloro-4-[1,1,2-trifluoro-2- (trifluoromethoxy)ethoxy]phenyl]amino]carbonyl]-2,6-difluorobenzamide), in or on avocado at 0.60 parts per million (ppm); carrot at 0.05 ppm; bean at 0.60 ppm; vegetable, fruiting, group 8-10 at 1.0 ppm; fruit, pome, group 11-10 at 2.0 ppm; cherry subgroup 12-12A at 8.0 ppm; peach subgroup 12-12B at 1.9 ppm; and plum subgroup 12-12C at 1.9 ppm.

Upon approval of the petitioned-for tolerances listed above, the petition proposed to remove the following established tolerances for residues of novaluron from 40 CFR 180.598: Bean, succulent, snap at 0.60 ppm; bean, dry, seed at 0.30 ppm; cherry at 8.0 ppm; fruit, pome, group 11 at 2.0 ppm; fruit, stone, group 12, except cherry at 1.9 ppm; vegetable, fruiting, group 8 at 1.0 ppm; cocona at 1.0 ppm; African eggplant at 1.0 ppm; pea eggplant at 1.0 ppm; scarlet eggplant at 1.0 ppm; goji berry at 1.0 ppm; garden huckleberry at 1.0 ppm; martynia at 1.0 ppm; naranjilla at 1.0 ppm; okra at 1.0 ppm; roselle at 1.0 ppm; sunberry at 1.0 ppm; bush tomato at 1.0 ppm; currant tomato at 1.0 ppm; and tree tomato at 1.0 ppm. These tolerances were requested for removal because they will be superseded by establishment of the petitioned-for tolerances. That document referenced a summary of the petition prepared on behalf of IR-4 by Makhteshim-Agan of North America, Inc., the registrant, which is available in the docket, http://www.regulations.gov. Comments were 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 revised several proposed tolerances. EPA has also determined that the previously established tolerances in or on vegetable, cucurbit, group 9 and plum, prune, dried should be revised. Finally, EPA determined that establishing a tolerance on bean is not appropriate; rather, a tolerance should be established on bean, succulent and the previously established tolerance on bean, dry, seed should not be removed. The reasons for these changes are explained in Unit IV.D.

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 novaluron including exposure resulting from the tolerances established by this action. EPA's assessment of exposures and risks associated with novaluron follows.

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.

In subchronic and chronic toxicity studies, novaluron primarily produced hematotoxic effects such as methemoglobinemia, decreased hemoglobin, decreased hematocrit, decreased red blood cells (RBCs) (or erythrocytes) and increased reticulocyte counts that were associated with compensatory erythropoiesis. Increased spleen weights or hemosiderosis in the spleen were considered to be due to enhanced removal of damaged erythrocytes and not to a direct immunotoxic effect.

There was no maternal or developmental toxicity seen in the rat and rabbit developmental toxicity studies up to the limit doses. In the 2-generation reproductive toxicity study in rats, both parental and offspring toxicity (increased spleen weights) were observed at the same dose. Reproductive toxicity, including decreases in epididymal sperm counts and increased age at preputial separation in the F1 generation, was observed at a higher dose than the increased spleen weights and were consistent with the primary effects in the database.

Clinical signs of neurotoxicity (piloerection, irregular breathing), changes in functional observational battery (FOB) parameters (increased head swaying, abnormal gait), and neuropathology (sciatic and tibial nerve degeneration) were seen in the rat acute neurotoxicity study at the limit dose. However, no signs of neurotoxicity or neuropathology were observed in the subchronic neurotoxicity study in rats at similar doses or in any other subchronic or chronic toxicity study in rats, mice, or dogs. In the submitted immunotoxicity study, the only sign of potential immunotoxicity for novaluron was a decreased anti-sheep red blood cell (anti-SRBC) response at twice the limit dose in female rats. There was no evidence of carcinogenic potential in either the rat or mouse carcinogenicity studies, and there was also no concern for genotoxicity or mutagenicity.

Specific information on the studies received and the nature of the adverse effects caused by novaluron 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: “Novaluron: Human Health Risk Assessment for the Petition for the Establishment of Permanent Tolerances for Residues of Novaluron in/on Avocado; Carrot; Succulent Bean; Vegetable, Fruiting, Crop Group 8-10; Fruit, Pome, Crop Group 11-10; Cherry Subgroup 12-12A; Peach Subgroup 12-12B; and Plum Subgroup 12-12C; and Revisions to the Label to Include Uses on Greenhouse-Grown Cucumber” at pages 36-40 in docket ID number EPA-HQ-OPP-2014-0232.

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 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 novaluron used for human risk assessment is shown in Table 1 of this unit.

1. Dietary exposure from food and feed uses. In evaluating dietary exposure to novaluron, EPA considered exposure under the petitioned-for tolerances as well as all existing novaluron tolerances in 40 CFR 180.598. EPA assessed dietary exposures from novaluron 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 novaluron; 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 under the National Health and Nutrition Examination Survey, What We Eat in America (NHANES/WWEIA); 2003-2008. As to residue levels in food, EPA incorporated average field trial residues for the majority of commodities; anticipated residues (ARs) for meat, milk, hog, and poultry commodities; and average percent crop treated (PCT) data for apples, blueberries, cabbage, cauliflower, cotton, dry beans, pears, peppers, potatoes, strawberries, and tomatoes. Percent crop treated for new use (PCTn) data were incorporated for the recently registered grain sorghum and sweet corn uses. For the remaining food commodities, 100 PCT was assumed. The registered food-handling use was also incorporated into the dietary assessment. Empirical processing factors were utilized for apple juice (translated to pear and stone fruit juice), cottonseed oil, dried plums, and tomato paste and purée. Dietary Exposure Evaluation Model (DEEM) (ver. 7.81) default processing factors were used for the remaining processed commodities.

iii. Cancer. Based on the data summarized in Unit III.A., EPA has concluded that novaluron 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 PCT information. Section 408(b)(2)(E) of FFDCA authorizes EPA to use available data and information on the anticipated residue levels of pesticide residues in food and the actual levels of pesticide residues that have been measured in food. If EPA relies on such information, EPA must require pursuant to FFDCA section 408(f)(1) that data be provided 5 years after the tolerance is established, modified, or left in effect, demonstrating that the levels in food are not above the levels anticipated. For the present action, EPA will issue such data call-ins as are required by FFDCA section 408(b)(2)(E) and authorized under FFDCA section 408(f)(1). Data will be required to be submitted no later than 5 years from the date of issuance of these tolerances.

Section 408(b)(2)(F) of FFDCA states that the Agency may use data on the actual percent of food treated for assessing chronic dietary risk only if:

• Condition a: The data used are reliable and provide a valid basis to show what percentage of the food derived from such crop is likely to contain the pesticide residue.

• Condition b: The exposure estimate does not underestimate exposure for any significant subpopulation group.

• Condition c: Data are available on pesticide use and food consumption in a particular area, the exposure estimate does not understate exposure for the population in such area.

In addition, the Agency must provide for periodic evaluation of any estimates used. To provide for the periodic evaluation of the estimate of PCT as required by FFDCA section 408(b)(2)(F), EPA may require registrants to submit data on PCT.

The Agency estimated the average PCT for existing uses as follows:

Apple, 10%; blueberry, 1%; cabbage, 5%; cauliflower, 2.5%; cotton, 2.5%; dry beans, 1%; pear, 15%; pepper, 2.5%; potato, 2.5%; strawberry, 35%; and tomato, 2.5%.

In most cases, EPA uses available data from United States Department of Agriculture/National Agricultural Statistics Service (USDA/NASS), proprietary market surveys, and the National Pesticide Use Database for the chemical/crop combination for the most recent 6 to 7 years. EPA uses an average PCT for chronic dietary risk analysis. The average PCT figure for each existing use is derived by combining available public and private market survey data for that use, averaging across all observations, and rounding to the nearest 5%, except for those situations in which the average PCT is less than one. In those cases, 1% is used as the average PCT and 2.5% is used as the maximum PCT. EPA uses a maximum PCT for acute dietary risk analysis. The maximum PCT figure is the highest observed maximum value reported within the recent 6 years of available public and private market survey data for the existing use and rounded up to the nearest multiple of 5%.

The Agency estimated the PCT for new uses as follows: Grain sorghum, 2%; and sweet corn, 36%.

EPA estimates PCTn for novaluron based on the PCT of the dominant pesticide (i.e., the one with the greatest PCT) on that site over the three most recent years of available data. Comparisons are only made among pesticides of the same pesticide types (i.e., the dominant insecticide on the use site is selected for comparison with a new insecticide). The PCTs included in the analysis may be for the same pesticide or for different pesticides since the same or different pesticides may dominate for each year. Typically, EPA uses USDA/NASS as the source for raw PCT data because it is publicly available and does not have to be calculated from available data sources. When a specific use site is not surveyed by USDA/NASS, EPA uses proprietary data and calculates the estimated PCT.

This estimated PCTn, based on the average PCT of the market leader, is appropriate for use in the chronic dietary risk assessment. This method of estimating a PCT for a new use of a registered pesticide or a new pesticide produces a high-end estimate that is unlikely, in most cases, to be exceeded during the initial five years of actual use. The predominant factors that bear on whether the estimated PCTn could be exceeded are: The extent of pest pressure on the crops in question; the pest spectrum of the new pesticide in comparison with the market leaders as well as whether the market leaders are well-established for this use; and resistance concerns with the market leaders.

Novaluron specifically targets lepidopterous insects, which are not key pests of sorghum but are key pests of sweet corn. However, novaluron has a relatively narrow spectrum of pest activity when compared to the market leader insecticides. In addition, there are no resistance or pest pressure issues as indicated in Section 18 Emergency Exemption requests for use of novaluron on sorghum or sweet corn. All information currently available has been considered for novaluron use on sorghum and sweet corn, and it is the opinion of EPA that it is unlikely that actual PCT for novaluron will exceed the estimated PCT for new uses during the next five years.

The Agency believes that the three conditions discussed in Unit III.C.1.iv. have been met. With respect to Condition a, PCT estimates are derived from Federal and private market survey data, which are reliable and have a valid basis. The Agency is reasonably certain that the percentage of the food treated is not likely to be an underestimation. As to Conditions b and c, regional consumption information and consumption information for significant subpopulations is taken into account through EPA's computer-based model for evaluating the exposure of significant subpopulations including several regional groups. Use of this consumption information in EPA's risk assessment process ensures that EPA's exposure estimate does not understate exposure for any significant subpopulation group and allows the Agency to be reasonably certain that no regional population is exposed to residue levels higher than those estimated by the Agency. Other than the data available through national food consumption surveys, EPA does not have available reliable information on the regional consumption of food to which novaluron may be applied in a particular area.

2. Dietary exposure from drinking water. The residues of concern in drinking water for risk assessment purposes are novaluron, the chlorophenyl urea degradate, and the chloroaniline degradates. The estimated drinking water concentrations (EDWCs) for each of these was calculated using a molecular weight conversion and then combined for each modeled scenario. The degradates are assumed to have equal toxicity to the parent. The Agency used screening level water exposure models in the dietary exposure analysis and risk assessment for novaluron and its degradates in drinking water. These simulation models take into account data on the physical, chemical, and fate/transport characteristics of novaluron and its degradates. 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 Pesticide Root Zone Model/Exposure Analysis Modeling System (PRZM/EXAMS), the Screening Concentration in Ground Water (SCI-GROW), and Pesticide Root Zone Model Ground Water (PRZM GW) models, the combined EDWCs of novaluron, chlorophenyl urea, and chloroaniline for chronic exposures are estimated to be 16.7 ppb for surface water and 77.8 ppb for groundwater.

Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For chronic dietary risk assessment, the water concentration of value 77.8 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).

Novaluron is currently registered for the following uses that could result in residential exposures: Indoor and outdoor crack and crevice or perimeter applications in residential areas and their immediate surroundings, including homes and apartment buildings; on modes of transportation; and as a spot-on use for pets. EPA assessed residential exposure using the following assumptions:

Adult handlers were assessed for potential short-term inhalation exposures from mixing, loading, and applying novaluron via manually-pressurized hand wand and from liquid applications of novaluron to turf. Adults were also assessed for potential short-term post-application inhalation exposures to novaluron from indoor uses. For children 1 to <2 years old, short-term post-application inhalation and incidental oral exposures were assessed resulting from hand-to-mouth contact with treated residential areas, turf, and from contact with treated pets. There is also the potential for intermediate-term and long-term post-application hand-to-mouth exposures to children 1 to <2 years old from the registered pet spot-on use of novaluron. Inhalation exposures are considered negligible for this exposure scenario; therefore, the intermediate- and long-term aggregate risk estimates do not include inhalation exposures. For adults, inhalation exposure is expected to be negligible for intermediate- and long-term durations and was not included in the aggregate assessment. Additionally, a dermal endpoint has not been selected for novaluron, so dermal exposures to adults or children were not assessed.

Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at http://www.epa.gov/pesticides/trac/science/trac6a05.pdf.

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 novaluron to share a common mechanism of toxicity with any other substances, and novaluron does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that novaluron 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.

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 FQPA Safety Factor (SF). In applying this provision, EPA either retains the default value of 10X, 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. The prenatal and postnatal toxicology database for novaluron includes rat and rabbit prenatal developmental toxicity studies and a two-generation reproduction toxicity study in rats. There was no evidence of increased quantitative or qualitative susceptibility following in utero exposure to rats or rabbits in the developmental toxicity studies and no evidence of increased quantitative or qualitative susceptibility of offspring in the reproduction study. Neither maternal nor developmental toxicity was seen in the developmental studies up to the limit doses (1,000 mg/kg/day). In the 2-generation reproductive study in rats, offspring and parental toxicity (increased absolute and relative spleen weights) were similar and occurred at the same dose (74.2 mg/kg/day). Additionally, reproductive effects (decreases in epididymal sperm counts and increased age at preputial separation in the F1 generation) occurred at a higher dose than that which resulted in parental toxicity.

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 novaluron is complete.

ii. Acute and subchronic rat neurotoxicity studies were performed for novaluron. The clinical signs of neurotoxicity, changes in FOB parameters, and neuropathology were seen in the acute neurotoxicity study at the limit dose (2,000 mg/kg/day) only and were not reproduced at similar, repeated doses in the subchronic neurotoxicity study. In addition, no evidence of neuropathology was observed in subchronic and chronic toxicity studies in rats, mice, or dogs. Therefore, novaluron is not considered 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 novaluron 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 chronic dietary food exposure assessment was performed using average field trial residues, anticipated residues for livestock commodities, average PCT and PCTn data for some commodities, and empirical and default processing factors. For the remaining food commodities, 100 PCT was assumed. The registered food handling use was also incorporated into the dietary assessment. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to novaluron in drinking water. EPA used similarly conservative assumptions to assess postapplication exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by novaluron.

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, novaluron 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 novaluron from food and water will utilize 73% of the cPAD for children 1 to 2 years old, the population group receiving the greatest exposure.

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). Novaluron 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 novaluron.

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 1,560 for adults and 350 for children 1 to <2 years old. Because EPA's level of concern for novaluron is a MOE of 100 or below, these MOEs are not of concern.

4. Intermediate- and long-term risk. Intermediate- and long-term aggregate exposure takes into account intermediate- and long-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Novaluron is currently registered for uses that could result in intermediate- and long-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with intermediate- and long-term residential exposures to novaluron.

Using the exposure assumptions described in this unit for intermediate- and long-term exposures, EPA has concluded that the combined intermediate- and long-term food, water, and residential exposures result in an aggregate MOE of 530 for children 1 to <2 years old. For adults, since there is no dermal endpoint and inhalation exposure is expected to be negligible, the average dietary consumption (food and drinking water) exposure estimate is representative of intermediate- and long-term aggregate risk, and results in an MOE of 1640. Because EPA's level of concern for novaluron is a MOE of 100 or below, these MOEs are not of concern.

5. Aggregate cancer risk for U.S. population. Based on the lack of evidence of carcinogenicity in two adequate rodent carcinogenicity studies, novaluron 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 novaluron residues.

Adequate enforcement methodologies, gas chromatography/electron-capture detection (GC/ECD) and high-performance liquid chromatography/ultraviolet (HPLC/UV), are available to enforce the tolerance expression.

The methods 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].

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 established MRLs for novaluron in or on common beans (pods and/or immature seeds) at 0.7 ppm; pome fruit at 3 ppm; cucurbit vegetables at 0.2 ppm; and prunes at 3.0 ppm. EPA is establishing tolerances in or on succulent bean at 0.70 ppm; pome fruit crop group 11-10 at 3.0 ppm; cucurbit vegetable crop group 9 at 0.20 ppm; and dried prune at 3.0 ppm in order to harmonize with Codex. The Codex has additionally established a tolerance in or on fruiting vegetables other than cucurbits at 0.7 ppm and stone fruits at 7 ppm. Because EPA is recommending a tolerance in or on fruiting vegetables crop group 8-10 (1.0 ppm) that is higher than Codex, EPA cannot harmonize this tolerance. Residue data for greenhouse tomatoes supports the 1.0 ppm tolerance for the group 8-10 tolerance.

The data supporting the EPA petition result in stone fruit tolerances that are either higher (cherry subgroup 12-12A at 8.0 ppm) or much lower (peach subgroup 12-12B and plum subgroup 12-12C at 1.9 ppm) than the established Codex MRL for stone fruit at 7 ppm. EPA notes that the stone fruit tolerances are not harmonized with associated Codex MRLs on these commodities because it has been determined that the major export market for these commodities is Canada. Therefore, in order to maintain harmonization of U.S. tolerances and Canadian MRLs for these commodities, the EPA is establishing these subgroup tolerances at the levels that align with the Canadian MRLs. No Codex MRLs have been established for residues of novaluron in or on avocado or carrot.

One comment was received to the batched Notice of Filing that provided brief and general concerns about toxins and potential impacts to bees, but the commenter did not cite a specific petition within the Notice. The Agency has received similar comments from this commenter on numerous previous occasions. Refer to Federal Register 70 FR 37686 (June 30, 2005), 70 FR 1354 (January 7, 2005), 69 FR 63096-63098 (October 29, 2004) for the Agency's response to these objections.

The Agency was petitioned to establish a tolerance of novaluron in or on plum subgroup 12-12C. As a part of that request, the Agency reviewed the existing tolerance on dried prune, and determined that the tolerance should be amended from 2.6 ppm to 3.0 ppm in order to harmonize with Codex. Data were also submitted and reviewed by EPA to allow the use of novaluron in or on greenhouse-grown cucumbers. During review, the Agency determined that the existing tolerance in or on cucurbit vegetable group 9 (which includes cucumber) should be amended from 0.15 ppm to 0.20 ppm in order to harmonize with Codex.

EPA was also petitioned to establish a tolerance in or on bean at 0.60 ppm and to remove the existing tolerance in or on dry bean seed at 0.30 ppm upon approval of the proposed bean tolerance. However, the Agency determined that separate tolerances should be established in or on succulent bean and dry bean seed. Therefore, this action will not remove the existing tolerance for the use of novaluron in or on dry bean seed at 0.30 ppm, and the Agency determined that a tolerance in or on succulent bean at 0.70 ppm is appropriate in order to harmonize with the established Codex tolerance on beans. Finally, EPA revised the proposed pome fruit crop group 11-10 tolerance from 2.0 ppm to 3.0 ppm in order to harmonize with the established Codex MRL.

Therefore, tolerances are established for residues of novaluron, (N-[[[3-chloro-4-[1,1,2-trifluoro-2- (trifluoromethoxy)ethoxy]phenyl]amino]carbonyl]-2,6-difluorobenzamide), in or on avocado at 0.60 ppm; bean, succulent at 0.70 ppm; carrot at 0.05 ppm; cherry subgroup 12-12A at 8.0 ppm; fruit, pome, group 11-10 at 3.0 ppm; peach subgroup 12-12B at 1.9 ppm; plum subgroup 12-12C at 1.9 ppm; and vegetable, fruiting, group 8-10 at 1.0 ppm. This regulation additionally revises the existing tolerances in or on vegetable, cucurbit, group 9 from 0.15 ppm to 0.20 ppm; and plum, prune, dried from 2.6 ppm to 3.0 ppm. Finally, this regulation removes established tolerances in or on bean, snap, succulent; cherry; cocona; fruit, pome, group 11; fruit, stone, group 12, except cherry; eggplant, African; eggplant, pea; eggplant, scarlet; goji berry; huckleberry, garden; martynia; naranjilla; okra; roselle; sunberry; tomato, bush; tomato, currant; tomato, tree; and vegetable, fruiting, group 8.

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).

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).

Therefore, 40 CFR chapter I is amended as follows:

Background

In the 2015 annual management measures for ocean salmon fisheries (80 FR 25611, May 5, 2015), NMFS announced the commercial and recreational fisheries in the area from the U.S./Canada border to the U.S./Mexico border, beginning May 1, 2015, and 2016 salmon fisheries opening earlier than May 1, 2016. NMFS is authorized to implement inseason management actions to modify fishing seasons and quotas as necessary to provide fishing opportunity while meeting management objectives for the affected species (50 CFR 660.409). Inseason actions in the salmon fishery may be taken directly by NMFS (50 CFR 660.409(a)—Fixed inseason management provisions) or upon consultation with the Pacific Fishery Management Council (Council) and the appropriate State Directors (50 CFR 660.409(b)—Flexible inseason management provisions). The state management agencies that participated in the consultations described in this document were: Oregon Department of Fish and Wildlife (ODFW) and Washington Department of Fish and Wildlife (WDFW).

Management of the salmon fisheries is generally divided into two geographic areas: North of Cape Falcon (U.S./Canada border to Cape Falcon, OR) and south of Cape Falcon (Cape Falcon, OR, to the U.S./Mexico border). The inseason actions reported in this document affect fisheries north and south of Cape Falcon. Within the south of Cape Falcon area, the Klamath Management Zone (KMZ) extends from Humbug Mountain, OR, to Humboldt South Jetty, CA, and is divided at the Oregon/California border into the Oregon KMZ to the north and California KMZ to the south. All times mentioned refer to Pacific daylight time.

Description of action: Inseason action #14 adjusted the July quota for the commercial salmon fishery in the Oregon KMZ. Unutilized quota from June was rolled over on an impact-neutral basis to July. The adjusted July quota is 1,184 Chinook salmon.

Effective dates: Inseason action #14 took effect on July 1, 2015, and remains in effect until the end of the season.

Reason and authorization for the action: The commercial salmon fishery in the Oregon KMZ had a June quota of 1,800 Chinook salmon. The State of Oregon reported that 1,528 Chinook salmon were landed in June, leaving quota of 272 Chinook salmon unutilized. To address temporal differences in impacts to Klamath River fall and California coastal Chinook salmon stocks, the Council's Salmon Technical Team (STT) calculated the impact-neutral rollover of 272 Chinook salmon from June to July. As a result, 184 Chinook salmon were added to the July quota of 1,000 Chinook, for an adjusted quota of 1,184 Chinook salmon. After consideration of Chinook salmon landings to date and the STT's calculations, the Regional Administrator (RA) determined that it was appropriate to adjust the July quota for the commercial salmon fishery in the Oregon KMZ. This action was taken to allow access to available Chinook salmon quota, without exceeding conservation impacts to Klamath River fall and California coastal Chinook salmon stocks. Inseason action to modify quotas and/or fishing seasons is authorized by 50 CFR 660.409(b)(1)(i).

Consultation date and participants: Consultation on inseason action #14 occurred on July 9, 2015. Participants in this consultation were staff from NMFS, Council, WDFW, and ODFW.

Description of action: Inseason action #15 adjusted the landing and possession limit in the commercial salmon fishery north of Cape Falcon to 60 Chinook salmon and 50 marked coho per vessel per open period from the U.S./Canada border to Queets River, WA, or 75 Chinook salmon and 50 marked coho per vessel per open period from Queets River, WA to Cape Falcon, OR. This action superseded the landing limit set preseason at 50 Chinook salmon and 50 marked coho per vessel per open period from the U.S./Canada border to Cape Falcon, OR (80 FR 25611).

Effective dates: Inseason action #15 took effect on July 10, 2015, and remains in effect until superseded by inseason action or the end of the season.

Reason and authorization for the action: After consideration of Chinook salmon landings to date and fishery effort, the RA determined that sufficient quota remained to increase the landing and possession limit to allow access to the remaining quota without exceeding the quota that was set preseason. Inseason action to modify quotas and/or fishing seasons is authorized by 50 CFR 660.409(b)(1)(i).

Consultation date and participants: Consultation on inseason action #15 occurred on July 9, 2015. Participants in this consultation were staff from NMFS, Council, WDFW, and ODFW.

All other restrictions and regulations remain in effect as announced for the 2015 ocean salmon fisheries and 2016 salmon fisheries opening prior to May 1, 2016 (80 FR 25611, May 5, 2015).

The RA determined that the best available information indicated that Chinook salmon catch to date and fishery effort supported the above inseason actions recommended by the states of Washington and Oregon. The states manage the fisheries in state waters adjacent to the areas of the U.S. exclusive economic zone in accordance with these Federal actions. As provided by the inseason notice procedures of 50 CFR 660.411, actual notice of the described regulatory actions was given, prior to the time the action was effective, by telephone hotline numbers 206-526-6667 and 800-662-9825, and by U.S. Coast Guard Notice to Mariners broadcasts on Channel 16 VHF-FM and 2182 kHz.

The Assistant Administrator for Fisheries, NOAA (AA), finds that good cause exists for this notification to be issued without affording prior notice and opportunity for public comment under 5 U.S.C. 553(b)(B) because such notification would be impracticable. As previously noted, actual notice of the regulatory actions was provided to fishers through telephone hotline and radio notification. These actions comply with the requirements of the annual management measures for ocean salmon fisheries (80 FR 25611, May 5, 2015), the West Coast Salmon Fishery Management Plan (Salmon FMP), and regulations implementing the Salmon FMP, 50 CFR 660.409 and 660.411. Prior notice and opportunity for public comment was impracticable because NMFS and the state agencies had insufficient time to provide for prior notice and the opportunity for public comment between the time Chinook salmon catch and effort assessments and projections were developed and fisheries impacts were calculated, and the time the fishery modifications had to be implemented in order to ensure that fisheries are managed based on the best available scientific information, ensuring that conservation objectives and ESA consultation standards are not exceeded. The AA also finds good cause to waive the 30-day delay in effectiveness required under 5 U.S.C. 553(d)(3), as a delay in effectiveness of these actions would allow fishing at levels inconsistent with the goals of the Salmon FMP and the current management measures.

These actions are authorized by 50 CFR 660.409 and 660.411 and are exempt from review under Executive Order 12866.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2015 total allowable catch (TAC) of Pacific ocean perch in the West Yakutat District of the GOA is 2,014 metric tons (mt) as established by the final 2015 and 2016 harvest specifications for groundfish of the (80 FR 10250, February 25, 2015).

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator), has determined that the 2015 TAC of Pacific ocean perch in the West Yakutat District of the GOA will soon be reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 1,914 mt, and is setting aside the remaining 100 mt as bycatch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific ocean perch in the West Yakutat District of the GOA.

After the effective date of this closure the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA (AA), finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of directed fishing for Pacific ocean perch in the West Yakutat District of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of July 16, 2015.

The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.

This action is required by § 679.20 and is exempt from review under Executive Order 12866.