Federal Register Vol. 80, No.183,

Please refer to Docket ID NRC-2011-0018 or Docket ID NRC-2011-0015 when contacting the NRC about the availability of information for this supplemental proposed rule or the draft regulatory guide, respectively. You may obtain publicly-available information related to this action by any of the following methods:

• Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2011-0018 for the supplemental proposed rule and Docket ID NRC-2011-0015 for the revised draft regulatory guide.

• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at http://www.nrc.gov/reading-rm/adams.html. To begin the search, select “ADAMS Public Documents” and then select “Begin Web-based ADAMS Search.” For problems with ADAMS, please contact the NRC's Public Document Room (PDR) reference staff at 1-800-397-4209, 301-415-4737, or by email to [email protected]. The ADAMS accession number for each document referenced (if it is available in ADAMS) is provided the first time that it is mentioned in the SUPPLEMENTARY INFORMATION section. In addition, for the convenience of the reader, instructions about obtaining materials related to this rulemaking are provided in Section XV, “Availability of Documents,” of this document.

• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.

Please include the appropriate NRC Docket ID NRC-2011-0018 (supplemental proposed rule) or NRC-2011-0015 (draft regulatory guide) in your comment submission.

The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at http://www.regulations.gov as well as enter the comment submissions into ADAMS, and the NRC does not routinely edit comment submissions to remove identifying or contact information.

If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment submissions into ADAMS.

On August 8, 2005, President Bush signed into law the Energy Policy Act of 2005 (EPAct), Public Law 109-58, 119 Stat. 594 (2005). Section 653 of the EPAct amended the AEA by adding Section 161A, “Use of Firearms by Security Personnel” (42 U.S.C. 2201a). Section 161A of the AEA provides the NRC with authority to permit a licensee's or certificate holder's security personnel to transfer, receive, possess, transport, import, and use weapons, devices, ammunition, or other firearms, notwithstanding State, local, and certain Federal firearms laws (and implementing regulations) that may prohibit or restrict these actions (preemption authority). Additionally, Section 161A authorized the Commission to permit the security personnel of licensees and certificate holders to obtain enhanced weapons, such as machine guns, short-barreled shotguns, and short-barreled rifles (enhanced weapons).

Section 161A requires the Commission to designate the classes of facilities, radioactive material, and other property eligible to apply for preemption authority or enhanced weapon authority. Section 161A also mandates that all security personnel that receive, possess, transport, import, or use a weapon, ammunition, or a device otherwise prohibited by State, local, or certain Federal laws, including regulations, as provided by Section 161A.b. (42 U.S.C. 2201a(b)), shall be subject to a fingerprint-based background check by the U.S. Attorney General and a firearms background check against the Federal Bureau of Investigation's (FBI) National Instant Criminal Background Check System (NICS).

Section 161A.d. of the AEA provides that the Commission shall, with the approval of the Attorney General, develop and promulgate guidelines for the implementation of this statute. On September 11, 2009, the NRC, with the approval of the Attorney General, published Firearms Guidelines in the Federal Register (74 FR 46800). These guidelines allow NRC licensees and certificate holders to apply for preemption authority only (hereafter referred to as stand-alone preemption authority) or combined preemption and enhanced weapons authority (hereafter referred to as enhanced weapons authority). The statute also includes provisions for firearms background checks for those who apply for Section 161A authorities (stand-alone preemption authority or enhanced weapons authority).

The Firearms Guidelines permit the NRC to designate applicable classes of facilities and to approve application for Section 161A authority via both orders and regulations. Following publication of the Firearms Guidelines, the NRC received requests from several licensees to obtain stand-alone preemption authority via order (i.e., prior to the NRC's issuance of the final enhanced weapons rule). During its review of these licensee requests, the NRC staff identified implementation issues related to the firearms background checks for these licensees. The NRC staff and the U.S. Department of Justice (DOJ) staff developed a revision to the Firearms Guidelines to address these issues. The principal change in the revised Firearms Guidelines was to limit the scope of the firearms background check requirement to only those licensees that apply to the NRC for Section 161A authority. The NRC, with the approval of the Attorney General, published the revised Firearms Guidelines in the Federal Register (79 FR 36100; June 25, 2014). Both the 2009 Firearms Guidelines and the 2014 Firearms Guidelines are available at http://www.regulations.gov under Docket ID NRC-2008-0465.

In parallel with the development of the 2009 Firearms Guidelines, the NRC initiated a rulemaking that would implement the new authorities and provisions in Section 161A of the AEA. On October 26, 2006, the NRC published proposed regulations in the Federal Register (71 FR 62664, “Power Reactor Security Requirements”) to implement the provisions of Section 161A as one component of a larger proposed amendment to its regulations under parts 50, 72, and 73 of Title 10 of the Code of Federal Regulations (10 CFR). These proposed implementing regulations were consistent to the extent possible with discussions between the NRC and the DOJ on the implementation of the statute.

The NRC had proposed that the provisions of Section 161A would apply only to power reactor facilities including both operating and decommissioning power reactors and Category I Strategic Special Nuclear Material (Cat. I SSNM) facilities (i.e., facilities possessing or using formula quantities or greater of strategic special nuclear material). This structure was proposed to permit these two highest-risk classes of licensed facilities to apply to the NRC for Section 161A authority. The NRC had also indicated that it would consider making Section 161A authority available to additional classes of facilities, radioactive material, or other property (including ISFSIs) in a separate, future rulemaking.

On February 3, 2011, the NRC published in the Federal Register a new proposed rule, “Enhanced Weapons, Firearms Background Checks and Security Event Notifications” (76 FR 6200), referred to as the Enhanced Weapons rulemaking, that reflected the approved 2009 Firearms Guidelines. The 2011 proposed rule would implement the provisions of Section 161A and would make several changes to the security event notification requirements in 10 CFR part 73 to address imminent attacks or threats against power reactors as well as suspicious events that could be indicative of potential preoperational reconnaissance, surveillance, or challenges to security systems by adversaries. The public was provided 180 days to review and comment on the February 2011 proposed rule and associated guidance.

Subsequent to the publication of the 2011 proposed rule, the NRC received requests from 10 licensees (located on 8 separate sites) to obtain stand-alone preemption authority. In response to the requests, the NRC issued designation order EA-13-092 (78 FR 35984) on June 14, 2013. Order EA-13-092 designated the 10 licensees as part of an interim class of licensed facilities eligible to apply for stand-alone preemption authority under Section 161A of the AEA, contained direction related to completing firearms background checks for security personnel whose official duties require access to covered weapons, and contained direction for the licensees on submitting applications and supporting information to obtain preemption authority via a confirmatory order. Subsequent to the NRC's issuance of Order EA-13-092, two licensees (located at the same site) withdrew their applications for Section 161A preemption authority. The NRC staff is currently reviewing the remaining applications for preemption authority.

On January 10, 2013, the NRC published a supplemental proposed rule (78 FR 2214) to add at-reactor ISFSIs as a class of designated facilities under § 73.18(c) that would be eligible to apply for Section 161A authority. Including at-reactor ISFSIs in the proposed rulemaking would ensure a consistent transition from the orders to the final implementing regulations for reactor licensees and any ISFSIs co-located at the reactor site. When a reactor facility and an ISFSI share a common security guard force, as is the case for at-reactor ISFSIs, the NRC staff recognizes that it may be expedient for both facilities at the site to have stand-alone preemption authority if the licensee or certificate holder applies for it and is approved. In the supplemental proposed rule, the NRC indicated that other classes of facilities and activities (e.g., away-from-reactor ISFSIs and transportation of spent nuclear fuel) would be addressed in a separate, future rulemaking (as originally discussed in the October 2006 proposed rule). The public was provided 45 days to review and comment on the January 2013 supplemental proposed rule.

Section 161A of the AEA provides the NRC with the authority to permit a licensee or certificate holder's security personnel to transfer, receive, possess, transport, import, and use, weapons, devices, ammunition or other firearms notwithstanding State, local, and certain Federal firearms laws (and any implementing regulations) that may prohibit or restrict these actions. The arsenal of weapons includes, for example, machine guns, semi-automatic assault weapons, and large-capacity ammunition feeding devices (i.e., magazines). As indicated in the February 2011 proposed rule, an NRC licensee or certificate holder interested in obtaining Section 161A authority (either combined enhanced weapons authority and preemption authority or stand-alone preemption authority) may voluntarily apply to the NRC to take advantage of this new authority. For the purposes of the proposed Enhanced Weapons rulemaking, the term “certificate holder” refers only to entitles holding a 10 CFR part 76 certificate of compliance, not to entities holding a 10 CFR part 72 certificate of compliance. However, the NRC notes that there are currently no existing 10 CFR part 76 certificate holders because on February 2, 2015, the NRC terminated the 10 CFR part 76 certificate of compliance for the United States Enrichment Corporation's Paducah Gaseous Diffusion Plant (ADAMS Package Accession No. ML14318A331). While there are no existing 10 CFR part 76 certificate holders, the NRC is proposing to include such holders in this supplemental proposed rule so that the scope of the Firearms Guidelines and the NRC's corresponding implementing regulations continue to be consistent.

Licensees and certificate holders falling within the Commission-designated classes of facilities, radioactive material, or other property would be eligible to apply for Section 161A authority and would be required to complete the firearms background check requirements mandated by Section 161A and the Firearms Guidelines. The background checks would be required for security personnel whose official duties require access to covered weapons.

The 2009 Firearms Guidelines provided that the security personnel for all licensees and certificate holders that fall within the designated eligible classes of facilities must undergo firearms background checks, whether or not a particular licensee or certificate holder intends to seek preemption authority. However, under the revised 2014 Firearms Guidelines, the requirement for background checks would apply to only those licensees and certificate holders who apply for Section 161A authority. Other changes to the Firearms Guidelines included the removal of the definition of “standard weapon” and the removal of references to standard weapons in the definitions of “covered weapon” and “enhanced weapon.” There were also minor conforming and clarifying editorial changes throughout the revised 2014 Firearms Guidelines.

In the February 2011 proposed rule that would implement the NRC's authority under Section 161A of the AEA, the NRC proposed amendments to 10 CFR part 73 by adding new definitions, processes for obtaining enhanced weapons, requirements for firearms background checks, and security event notification requirements for stolen or lost enhanced weapons. This supplemental proposed rule continues the proposed changes from the February 2011 proposed rule and the January 2013 supplemental proposed rule and supplements or modifies the following existing or proposed regulations in 10 CFR part 73:

• Section 73.2, “Definitions.”

• Proposed § 73.18, “Authorization for use of enhanced weapons and preemption of firearms laws.”

• Proposed § 73.19, “Firearms background checks for armed security personnel.”

• Section 73.51, “Requirements for the physical protection of stored spent nuclear fuel and high-level radioactive waste.”

This supplemental proposed rule would make the following changes to the proposed requirements of 10 CFR part 73:

• Require firearms background checks only for those licensees and certificate holders who have applied for Section 161A authority and only for security personnel whose official duties require access to covered weapons.

• Require periodic firearms background checks at least once every 5 years. Previously the maximum periodicity was proposed to be at least once every 3 years. However, licensees and certificate holders would continue to be able to conduct periodic firearms background checks at a periodicity of less than every 5 years, at their discretion.

• Conform the process for conducting firearms background checks and applying for preemption authority to the updated requirements specified in the revised 2014 Firearms Guidelines (e.g., removal of the proposed 30-day and 180-day milestones in conducting firearms background checks).

• Remove the definition of “standard weapon” and remove the references to standard weapon from the definitions of “covered weapon” and “enhanced weapon,” per the revised 2014 Firearms Guidelines.

• Revise the definitions of “combined enhanced weapons authority and preemption authority,” “covered weapon,” and “stand-alone preemption authority” as conforming changes.

Separately, the NRC would make several clarifying and corrective changes to the process for obtaining stand-alone preemption authority and the requirements for firearms background checks, based upon language approved by the Commission in the designation orders and confirmatory orders issued by the NRC subsequent to the publication of the February 2011 proposed rule.

The NRC would also make several additional changes to clarify the agency's review and acceptance criteria for evaluating applications for stand-alone preemption authority, based upon lessons learned by the NRC staff in reviewing existing applications for preemption authority, including developing confirmatory orders to those licensees requesting Section 161A authority, and comments received in response to prior versions of this proposed rule. Furthermore, to ensure consistency between processes, the NRC would also make corresponding changes to the proposed process for obtaining enhanced weapons authority.

In the Staff Requirements Memorandum (SRM) to SECY-12-0125, “Staff Requirements—Interim Actions to Execute Commission Preemption Authority Under Section 161A of the Atomic Energy Act of 1954, as Amended” (ADAMS Accession No. ML12326A653), the Commission directed the NRC staff to include in the final rule a plan “to sunset the interim designation order and the confirmatory orders.” Accordingly, the NRC has developed a plan to sunset these orders and is taking advantage of this supplemental proposed rule to include new language in §§ 73.18 and 73.19 to accomplish the Commission's direction. The NRC is proposing new paragraphs in §§ 73.18 and 73.19 to indicate that NRC approvals of Section 161A authority via confirmatory order would remain valid after issuance of a final rule. However, the licensees who received orders granting preemption authority prior to issuance of a final rule would be subject to the implementing regulations in §§ 73.18 and 73.19, in lieu of the requirements specified in the confirmatory orders (i.e., the requirements of the orders would be superseded in their entirety by the requirements in the final rule). The licensees who receive these confirmatory orders would be required, within 60 days of the effective date of the final rule, to update their applicable procedures, instructions, and training to reflect the final rule's requirements. These licensees would be required to notify the NRC, within 70 days of the effective date of the final rule, when they have completed these actions. Once the NRC receives this notification and inspects the licensee's transition actions, the NRC would rescind the orders.

The Commission would rescind its designation of licensed facilities as part of an interim class of facilities eligible to apply for preemption authority prior to issuance of a final rule once the Enhanced Weapons rule is implemented. The Commission would designate the permanent classes of facilities eligible to apply for Section 161A authority in § 73.18(c) of the rule. All of the facilities issued a designation order would be included in the final rule's list of designated facilities (i.e., power reactor facilities, Cat. I SSNM facilities, and at-reactor ISFSIs). Accordingly, the firearms background check requirements contained in these designation orders would be replaced in their entirety by the requirements in § 73.19.

At this time, the NRC is only seeking comments on the revisions proposed by this supplemental proposed rule. The NRC will address public comments on the February 2011 proposed rule, the January 2013 supplemental proposed rule, and this supplemental proposed rule in the final rule.

The following paragraphs describe the specific changes proposed by this supplemental proposed rule.

The proposed new definitions for the terms Combined enhanced weapons authority and preemption authority, Covered weapon, and Stand-alone preemption authority would be revised to reflect the revised 2014 Firearms Guidelines. The proposed new definition for the term Standard weapon would be removed to reflect the revised 2014 Firearms Guidelines with conforming, editorial changes made to the proposed definition for the term Enhanced weapon.

In paragraph (d), the NRC would set forth the requirements and process for licensees and certificate holders who are included within the classes of facilities, radioactive material, and other property specified in § 73.18(c)(1) and desire to voluntarily apply for stand-alone preemption authority under Section 161A of the AEA. The application would require initial information describing the licensee's or certificate holder's request for preemption authority, its purposes and objectives for requesting this authority, and a description of its Firearms Background Check Plan, including training for security personnel on the background check disqualifying conditions and notification requirements. Firearms background checks would only be required for security personnel whose official duties require access to covered weapons, of licensees or certificate holders who apply for Section 161A authority. Licensees and certificate holders would be required to submit their applications in writing and under oath or affirmation.

The licensee or certificate holder would also be required to submit supplemental information to the NRC on the completion of satisfactory firearms background checks and required training for security personnel who require access to covered weapons. The timing of the submission of the supplemental information will be at the discretion of the licensee or certificate holder, although the licensee or certificate holder must have completed a sufficient number of satisfactory checks to permit the licensee or certificate holder to meet its security-personnel minimum staffing requirements as specified in its physical security plan and any applicable fatigue requirements under 10 CFR part 26.

Subsequent to the completion of the submission of all required information, the NRC will review the information and document the agency's decision to approve or disapprove the application.

Licensees or certificate holders cannot commence firearms background checks until they have received notification from the NRC that the agency has accepted for review their application for stand-alone preemption authority. Once the NRC has reviewed and approved a licensee's or certificate holder's application for stand-alone preemption authority, the licensee or certificate holder must assign only security personnel who have completed a satisfactory firearms background check to duties requiring access to covered weapons.

In paragraph (e), the NRC would set forth the requirements and process for eligible licensees and certificate holders (as specified in § 73.18(c)(2)) who choose to voluntarily apply for combined enhanced weapons authority and preemption authority under Section 161A of the AEA. Paragraph (e) would require in the application initial information describing the licensee's or certificate holder's request for enhanced weapons authority, its purposes and objectives for requesting this authority, and a description of its proposed Firearms Background Check Plan, including training of security personnel on the disqualifying status conditions and events. The application would be required to address how security personnel notify the licensee or certificate holder security management of the identification or occurrence of any Federal or State disqualifying conditions or events. Also, under the 2011 proposed rule, applicants for combined enhanced weapons and preemption authority that already have preemption authority under § 73.18(d) would not be required to reapply for preemption authority in their § 73.18(e) application. That aspect of the 2011 proposed rule is unchanged by this supplemental proposed rule.

Firearms background checks would only be required of applicants for Section 161A authority. Those regulated entities required to conduct firearms background checks would need to conduct the checks on all security personnel whose official duties require access to covered weapons, which includes enhanced weapons. Licensee and certificate holders would be required to submit their applications in writing and under oath or affirmation. Licensees applying for combined enhanced weapons authority and preemption authority would be required to submit their application under the applicable regulations for a license amendment in 10 CFR parts 50, 52, 70, or 72. Certificate holders to which the supplemental proposed rule would apply (i.e., 10 CFR part 76 certificate of compliance holders), would be required to submit their applications under the applicable regulations for a certificate of compliance amendment under 10 CFR part 76.

The application would include the additional technical information required by § 73.18(f) addressing the specific enhanced weapons that the licensee or certificate holder intends to use. The licensee or certificate holder would also submit supplemental information to the NRC on the completion of both the firearms background checks and the required training (on disqualifying conditions and events) for security personnel whose official duties require access to covered weapons. For this purpose, the term “completion” means that a sufficient number of satisfactory checks are complete to meet a regulated entity's minimum staffing and fatigue requirements.

The timing of the submission of the supplemental information would be at the discretion of the licensee or certificate holder when a sufficient number of satisfactory checks are complete. A licensee or certificate holder who has previously been approved for stand-alone preemption authority would not be required to repeat the initial firearms background checks on security personnel conducted to support its original application; rather the licensee or certificate holder would only need to state in its application for enhanced weapons authority that it was previously granted preemption authority by the NRC and provide the effective date of that authority.

The NRC would review the application and supplemental submittals and would document the agency's decision to approve or disapprove the application.

Licensees or certificate holders must commence firearms background checks only after they have received notification from the NRC that the agency has accepted for review their application for combined enhanced weapons authority and preemption authority. Furthermore, once the NRC has approved a licensee's or certificate holder's application for combined enhanced weapons authority and preemption authority, the licensee or certificate holder must assign only security personnel who have completed a satisfactory firearms background check to duties requiring access to any covered weapons (including enhanced weapons).

Licensees and certificate holders who have been previously approved for enhanced weapons authority and wish to use a different type, caliber, or quantity of enhanced weapons from that previously approved by the NRC would be required to submit a new application under paragraph (e).

In paragraph (f)(2)(iii), a conforming change would be made to remove the reference to employment of “standard weapons” in the safeguards contingency plan.

In paragraph (j), a corrective change would be made to add § 73.51 to the list of regulations specifying training requirements on the use of enhanced weapons at specific license ISFSIs. This change would address the potential for an at-reactor, specific license ISFSI to possess enhanced weapons at both the reactor and the co-located ISFSI. This provision would require the ISFSI licensee employing enhanced weapons to train its security personnel on the use of sufficient force, including deadly force, consistent with the co-located power reactor facility. Such training is already required for the reactor licensee's security personnel under the reactor security requirements in § 73.55(k)(3). The NRC anticipates that such co-located licensees would use a single integrated guard force for both facilities such that the security personnel are considered fungible between the two facilities. Consequently, the application of the same training requirements for the use of the enhanced weapons is appropriate.

In paragraphs (n)(2), (n)(3), and (n)(4), conforming changes would replace the term “covered weapons” with “enhanced weapons” to be consistent with the revised 2014 Firearms Guidelines.

In paragraph (s), the NRC would add new provisions to provide for the transition from stand-alone preemption authority and enhanced weapons authority approved by the NRC via orders to a licensee or certificate holder, to approval via the proposed regulations in § 73.18. While the NRC's previous authorizations for Section 161A authority under those orders would remain valid, these licensees would be subject to the implementing requirements of § 73.18, in lieu of the requirements contained in these orders. However these licensees would not be required to reapply for Section 161A authority under the provisions of § 73.18. Licensees would be required to update procedures, instructions, and training to reflect any revised requirements in the final rule and notify the NRC of the completion of this action. The licensee's actions and notification would be required to be completed within 60 days and 70 days, respectively, of the effective date of the final rule. Following receipt of the licensee's notification and inspection of the licensee's actions, the NRC would rescind these orders.

Paragraph (b) would be revised in its entirety to define new general requirements regarding the completion of firearm background checks. This would include a requirement to establish a Firearms Background Check Plan and to specify the elements of this plan. A Firearms Background Check Plan would be a component of the licensee's or certificate holder's 10 CFR part 73, appendix B, required Training and Qualification plan for security personnel whose official duties require access to covered weapons. Only those licensees and certificate holders who have voluntarily applied for Section 161A authority (i.e., stand-alone preemption authority or for combined enhanced weapons authority and preemption authority) would be required to conduct firearms background checks on their security personnel. Accordingly, such licensees and certificate holders would be required to establish and implement a Firearms Background Check Plan.

Paragraph (b)(2) would describe the groups of individuals included within the term security personnel whose official duties require access to covered weapons. In addition to the security officers themselves (who directly protect the facility or radioactive material), this term would include other groups of individuals who have access to covered weapons and in some cases only enhanced weapons. Examples would include, but are not limited to, firearms instructors, armorers, individuals issuing and checking in weapons, individuals with access to armories and weapons storage lockers, and individuals conducting inventories of enhanced weapons or removing enhanced weapons from the site for authorized purposes. Paragraph (b)(3) would specify the elements of the Firearms Background Check Plan. Paragraphs (b)(4) through (b)(9) would address requirements on conducting firearms background checks. Licensees or certificate holders must commence firearms background checks only after they have received notification from the NRC that the agency has accepted for review their application for either stand-alone preemption authority or for combined enhanced weapons authority and preemption authority. Furthermore, once the NRC has approved a licensee's or certificate holder's application for either stand-alone preemption authority or for combined enhanced weapons authority and preemption authority, the licensee or certificate holder must assign only security personnel who have completed a satisfactory firearms background check to duties requiring access to covered weapons. Also, applicants for an NRC license or certificate of compliance may not conduct firearms background checks until after the NRC has both issued their license or certificate of compliance and accepted their application for Section 161A authority for review. These two steps may occur in any order. Finally, this section also includes a requirement to remove individuals from duties requiring access to covered weapons if they receive a “denied NICS response.” This also includes removing individuals from duties requiring access to enhanced weapons if the individual receives a “delayed NICS response.”

Paragraph (b)(10) would specify the requirements for a periodic firearms background check, which would be required at least once every 5 years from the most recent check. This periodicity would be consistent with the Commission's designation order issued to several licensees. Licensees and certificate holders would be able to conduct periodic firearms background checks at a shorter periodicity than every 5 years, at their discretion.

Security personnel that cease to be employed by a licensee, certificate holder, or security contractor, are considered to have a break in service for the purposes of the enhanced weapons rulemaking. The licensee or certificate holder would need to complete a new satisfactory firearms background check for security personnel who experience a break in service as described in paragraph (b)(11). Paragraph (b)(11) also addresses exceptions to the break in service requirement. Paragraph (b)(12) would address changes in the licensee, certificate holder, or their security contractor that do not require a break in service firearms background check. Paragraph (b)(13) would prohibit licensees and certificate holders from using a satisfactory firearms background check in lieu of completing other required criminal history records checks or background investigations specified in the NRC's access authorization or personnel security clearance programs under other provisions of 10 CFR chapter I.

Paragraph (b)(14) would not require a new initial firearms background check for security personnel who have completed a satisfactory firearms background check pursuant to a Commission designation order issued before the effective date of the final rule. However, these security personnel would remain subject to the periodic firearms background check and the break in service firearms background check requirements of § 73.19. Paragraph (b)(15) would require a licensee or certificate holder to discontinue conducting firearms background checks if it withdraws its application for Section 161A authority. Paragraph (b)(16) would require a licensee or certificate holder to discontinue conducting firearms background checks if the NRC rescinds or revokes its Section 161A authority, in accordance with § 73.18.

Paragraph (c) would be removed and reserved. Because § 73.18(c) contains the list of classes of facilities and activities eligible to apply for Section 161A authority and only licensees and certificate holders who have applied to the NRC under § 73.18 for Section 161A authority are eligible under § 73.19 to conduct firearms background checks of their security personnel, the list of classes of facilities and activities previously proposed in § 73.19(c) for conducting firearms background checks is now redundant and unnecessary.

Paragraph (f) would be revised to require periodic firearms background checks to be completed at least once every 5 calendar years. This change would make the proposed rule consistent with the 2014 Firearms Guidelines and the Commission's designation order EA-13-092, which required periodic firearms background checks at least once every 5 years on security personnel who require access to covered weapons. Second, a requirement would be added to specify an allowance period for completion of a satisfactory periodic firearms background check of 5 years from the date of the most recent firearms background check. This allowance period would be consistent with the Commission's designation order. Third, the revised language would clarify that security personnel may remain assigned to duties requiring access to covered weapons while pending completion of a periodic firearms background check. However, if a satisfactory firearms background check is not completed by the end of the allowance period, then the security personnel must be removed from duties requiring access to covered weapons. Independent of the direction in paragraph (f), an individual who receives a “denied NICS response” during a periodic firearms background check must be removed without delay from duties requiring access to covered weapons. Finally, the NRC would continue to permit licensees and certificate holders to accomplish periodic firearms background checks at a shorter periodicity than the maximum requirement (i.e., more frequently than once every 5 years), at the licensee's or certificate holder's discretion.

Paragraph (g) would be revised to clarify the exception for when a licensee or certificate holder is required to notify the NRC that it has removed security personnel from duties requiring access to covered weapons. This exception is intended to encourage security personnel to notify the licensee's or certificate holder's security management of the occurrence of any Federal or State disqualifying status condition or event within 72 hours. If the security personnel make the notification, then the licensee or certificate holder is not required to notify the NRC within 72 hours of the security personnel's removal. However, in all circumstances, the licensee or certificate holder would be required to maintain records of such removals under the Firearms Background Check Plan, as required under revised paragraph (b)(3)(vi).

Paragraph (h) would be revised to change the notification timeliness requirement for security personnel who have had a disqualifying status condition or event from “3 working days” to “72 hours” to improve regulatory clarity and consistency with the licensee's and certificate holder's current proposed notification timeliness requirement in paragraph (g).

Paragraph (j) would be revised to clarify the scope of the training modules required for security personnel who are subject to firearms background checks under the licensee's or certificate holder's Firearms Background Check Plan, as required under paragraph (b)(3)(iii). Modules would be required on Federal disqualifying status conditions or events, applicable State disqualifying status conditions or events, the process for appealing adverse firearms background check results, and the ongoing obligation of security personnel who are subject to a firearms background check to notify their licensee's or certificate holder's security management of the occurrence of such a disqualifying status condition or event. The modules would also include the requirement on the timeliness of such notifications (i.e., within 72 hours of the occurrence of the disqualifying condition or event). Finally, periodic refresher training on these modules would be required annually.

Paragraph (p)(1) would be revised to clarify its applicability to security personnel subject to a firearms background check and to remove the current exception cross-reference to paragraph (b). Limitations on security personnel's access to covered weapons during the pendency of an appeal to the FBI would now be found solely in paragraph (p).

Minor editorial changes would be made to paragraph (p)(5), including adding a title and renumbering subparagraphs. Paragraph (p)(5)(iv) would be revised to indicate that individuals who are appealing a firearms background check should submit a request for extension of time, with respect to the 45-day timeliness requirement on submitting an appeal, to their licensee or certificate holder rather than to the FBI. The licensee or certificate holder may grant an extension request for good cause, as determined by the licensee or certificate holder. This change is consistent with the 2014 Firearms Guidelines.

In paragraph (r), the NRC would add new provisions to provide for the transition from preemption authority and enhanced weapons authority approved by the NRC via designation orders and confirmatory orders to approvals via the proposed regulations in § 73.19. While the NRC's authorizations for Section 161A authority would remain valid after issuance of a final rule and licensees would not need to reapply for Section 161A authority, these licensees would be subject to the implementing requirements of § 73.19, in lieu of the requirements contained in these orders. However, licensees would not be required to repeat their initial firearms background checks. Licensees would be required to update procedures, instructions, and training to reflect any revised requirements in the final rule and notify the NRC of the completion of this action. The licensee's actions and notification would be required to be completed within 60 days and 70 days, respectively, of the effective date of the final rule. Following receipt of the licensee's notification and inspection of the licensee's actions, the NRC would rescind these orders.

Paragraph (f) would be added as a conforming change to the proposed change to § 73.18(j) to reflect the potential for a specific license, at-reactor ISFSI to possess covered weapons at both the reactor and the co-located ISFSI. This provision would require ISFSI licensees employing covered weapons to train their security personnel on the use of sufficient force, including deadly force. The NRC anticipates that the security organization for a reactor and a co-located specific license ISFSI employing covered weapons would use an integrated security organization such that the security personnel are considered fungible between these two facilities. Accordingly, the NRC considers it appropriate to require both the reactor and ISFSI security personnel carrying covered weapons to be trained on the same standards on the use of force, including deadly force. This proposed language is consistent with the current regulations on training of security personnel on the use of force under § 73.55(k)(3) for reactor licensees and § 73.46(h)(5) for Cat. I SSNM licensees and certificate holders.

Cumulative Effects of Regulation (CER) consists of the challenges licensees may face in addressing the implementation of new regulatory positions, programs, and requirements (e.g., rulemaking, guidance, generic letters, backfits, inspections). The CER may manifest in several ways, including the total burden imposed on licensees by the NRC from simultaneous or consecutive regulatory actions that can adversely affect the licensee's capability to implement those requirements while continuing to operate or construct its facility in a safe and secure manner.

The goals of the NRC's CER effort were met throughout the development of this supplemental proposed rule. During the development of the 2011 proposed rule, the NRC staff engaged external stakeholders at a public meeting and by soliciting public comments on the proposed rule and draft guidance documents. The public meeting was held at NRC Headquarters on June 1, 2011, to discuss the proposed implementation plan. A summary of the public meeting is in ADAMS under Package Accession No. ML111720007. Additionally, the NRC staff issued several draft guidance documents for comment in conjunction with the publication of the 2011 proposed rule. The feedback from this meeting and the public comments on the 2011 proposed rule informed the NRC staff's recommended schedule for the implementation of the new enhanced weapons requirements in this supplemental proposed rule.

Consistent with SECY-11-0032, “Consideration of the Cumulative Effects of Regulation in the Rulemaking Process,” dated March 2, 2011 (ADAMS Accession No. ML110190027), the NRC requests specific comment on the supplemental proposed rule's implementation schedule in light of any existing CER challenges, specifically:

a. Do the supplemental proposed rule's compliance date and submittal dates provide sufficient time to implement the new supplemental proposed requirements, including changes to programs, procedures, and the facility, in light of any ongoing CER challenges?

b. If there are ongoing CER challenges, what do you suggest as a means to address this situation (e.g., if more time is required to implement the new requirements, what time period is sufficient)?

c. Are there unintended consequences (e.g., does the supplemental proposed rule create conditions that would be contrary to the supplemental proposed rule's purpose and objectives)? If so, what are the unintended consequences?

d. Please comment on the NRC's cost and benefit estimates in the supplemental proposed rule regulatory analysis (ADAMS Accession No. ML15232A013).

The NRC staff identified one draft guidance document that is affected by the revised proposed regulations described in this document and is issuing this revised guidance document for public comment concurrent with this supplemental proposed rule (see Section XIV, “Availability of Guidance”).

Under the Regulatory Flexibility Act (5 U.S.C. 605(b)), the NRC certifies that this rule will not, if promulgated, have a significant economic impact on a substantial number of small entities. This supplemental proposed rule affects only the licensing and operation of nuclear power plants. The companies that own these plants do not fall within the scope of the definition of “small entities” set forth in the Regulatory Flexibility Act or the size standards established by the NRC (§ 2.810).

The NRC has prepared a draft regulatory analysis on this proposed regulation. The analysis examines the costs and benefits of the alternatives considered by the NRC. The draft regulatory analysis can be found under ADAMS Accession No. ML15232A013. The NRC requests public comment on the draft regulatory analysis. Comments on the draft regulatory analysis may be submitted to the NRC as indicated under the ADDRESSES caption of this document.

This supplemental proposed rule contains the following: (i) Proposed provisions which reduce the regulatory burden associated with the original 2011 proposed rule and the 2013 supplemental proposed rule and (ii) additional provisions—not contained in either the original 2011 proposed rule or the 2013 supplemental proposed rule—which facilitate licensees' capability to obtain burden reduction (i.e., proposed sunsetting of the interim designation order and the confirmatory orders). The provisions of this supplemental proposed rule are effectively voluntary in nature, and would not impose modifications or additions to existing structures, components, designs, or existing procedures or organizations if adopted in final form. Accordingly, the provisions of this supplemental proposed rule, if adopted as a final rule, would not constitute backfitting or otherwise be inconsistent with any issue finality provision in 10 CFR part 52. The consideration of backfitting for the original 2011 proposed rule and the 2013 supplemental proposed rule, considered together, bounds the backfitting and issue finality consideration for this supplemental proposed rule. Therefore, a backfit analysis is not required and has not been completed for any of the provisions of this supplemental proposed rule.

The Plain Writing Act of 2010 (Pub. L. 111-274), requires Federal agencies to write documents in a clear, concise, and well-organized manner. The NRC has written this document to be consistent with the Plain Writing Act as well as the Presidential Memorandum, “Plain Language in Government Writing,” published June 10, 1998 (63 FR 31883). The NRC requests comment on the document with respect to the clarity and effectiveness of the language used.

In the proposed rule published on October 26, 2006, the Commission determined under the National Environmental Policy Act of 1969, as amended, and the Commission's regulations in subpart A of 10 CFR part 51, that the proposed rule, if adopted, would not be a major Federal action significantly affecting the quality of the human environment and, therefore, an environmental impact statement was not required. Instead, the agency prepared a draft environmental assessment on the proposed rule for public comment.

In the proposed rule published on February 3, 2011, the determination was that there will be no significant offsite impact to the public from this action. Therefore, the Commission concluded that because of the nature of the proposed changes to the firearms background checks and the enhanced weapons provisions presented in the 2011 proposed rule, the assumptions in the October 2006 proposed rule were not changed so the Commission was not seeking additional comment on the 2006 environmental assessment. Similarly here, the nature of the changes to the firearms background check and the enhanced provisions in this supplemental proposed rule do not change the assumptions in the 2011 proposed rule and the October 2006 environmental assessment. Accordingly, the Commission is not seeking additional comment on the environmental assessment. Availability of the environmental assessment is provided in Section XV, “Availability of Documents,” of this document.

This supplemental proposed rule contains new or amended collections of information subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). This supplemental proposed rule has been submitted to the Office of Management and Budget (OMB) for review and approval of the information collections.

Type of submission, new or revision: Revision.

The title of the information collection: 10 CFR part 73, “Enhanced Weapons, Firearms Background Checks, and Security Event Notifications,” supplemental proposed rule, and NRC Form 754, “Armed Security Personnel Background Check.”

The form number if applicable: NRC Form 754.

How often the collection is required or requested: One time for power reactor licensees and Cat, I SSNM licensees and certificate holders applying for combined enhanced weapons authority. Initial submissions of NRC Form 754 will be required for all of a licensee's or certificate holder's security personnel whose duties require access to covered weapons; thereafter, recurring firearms background checks and completion of NRC Form 754 will be required once every 5 years. One time for licensees and certificate holders who received confirmatory orders and must update their procedures, instructions, and training materials.

Who will be required or asked to respond: The supplemental proposed rule would require only those licensees and certificate holders who apply for Section 161A authorities to submit information about their security personnel for firearms background checks. Licensees and certificate holders that had received confirmatory orders approving Section 161A authority would be required to update within 60 days after the final rule effective date any procedures, instructions, and training material on a one-time basis. The regulated entities that would be eligible to apply for Section 161A authorities are operating nuclear power reactors located at 61 sites and their co-located at-reactor ISFSIs, 10 decommissioning power reactor sites, 3 other reactor sites, and 2 fuel cycle facilities authorized to possess Cat. I SSNM. In addition to those regulated entities and consistent with the 2011 proposed rule, modified security event notifications under different paragraphs of § 73.71 would also affect 42 research and test reactor (RTR) sites, 6 Cat. II and III Special Nuclear Material sites, 7 ISFSI sites not co-located with a reactor, and 2 hot cell sites.

An estimate of the number of annual responses: 4,085 (2,992 responses for 10 CFR part 73 requirements and 1,093 responses for NRC Form 754).

The estimated number of annual respondents: 133.

An estimate of the total number of hours needed annually to comply with the information collection requirement or request: 47,906.4 hours (45,399.8 hours for 10 CFR part 73 requirements and 2,506.7 hours for NRC Form 754).

Abstract: The NRC is proposing to amend current security regulations and add new security requirements pertaining to nuclear power reactors and Cat. I SSNM facilities for access to enhanced weapons and firearms background checks. The supplemental proposed rule would modify the information collections contained in the Enhanced Weapons, Firearms Background Checks, and Security Event Notifications rulemaking. First, firearms background checks would be required for security personnel for only those licensees and certificate holders who have applied for Section 161A authority (i.e., either stand-alone preemption authority or combined enhanced weapons authority and preemption authority). As a result, the number of respondents to new §§ 73.18 and 73.19 would be reduced compared to the proposed rule published in the Federal Register on February 3, 2011 (76 FR 6199). Second, periodic firearms background checks would be required at least once every 5 years rather than every 3 years. Third, applications for Section 161A authority would be required to describe the applicant's purposes and objectives in requesting the authority. Finally, the supplemental proposed rule would add requirements for licensees and certificate holders that had received confirmatory orders approving Section 161A authority to update within 60 days after the final rule effective date any procedures, instructions, and training material on a one-time basis. These information collections are needed to enable the NRC to implement the mandate of Section 161A of the AEA to verify that security personnel who will have access to enhanced weapons have been subject to a background check by the Attorney General to verify that an individual is not prohibited under Federal or State law from possessing or receiving firearms.

The 2011 proposed rule also would modify the security event notification requirements under different paragraphs of § 73.71. This supplemental proposed rule would not change those proposed modified requirements, but they are repeated in the supporting statement for completeness. The proposed security event notification requirements would be used to meet the NRC's strategic mission to immediately communicate threats or attack information to the Department of Homeland Security (DHS) operations center under the National Response Framework. The NRC also has a strategic mission to immediately communicate threat or attack information to other appropriate NRC licensees and certificate holders so that they can increase their security posture at their facilities or for their shipments of spent nuclear fuel, high-level radioactive waste, or Cat. I SSNM. This prompt notification could be vital in increasing another licensees' ability to defeat poorly-synchronized multiple-site attacks and in protecting the lives of security and plant personnel (at a second facility) in such un-coordinated attacks. This prompt notification could also be vital in increasing the defensive posture of other government or critical infrastructure facilities to defeat poorly-synchronized multiple-sector attacks.

The NRC is seeking public comment on the potential impact of the information collections contained in this proposed rule and on the following issues:

1. Is the proposed information collection necessary for the proper performance of the functions of the NRC, including whether the information will have practical utility?

2. Is the estimate of the burden of the proposed information collection accurate?

3. Is there a way to enhance the quality, utility, and clarity of the information to be collected?

4. How can the burden of the proposed information collection on respondents be minimized, including the use of automated collection techniques or other forms of information technology?

A copy of the OMB clearance package and proposed rule is available in ADAMS under Accession No. ML15035A635 or may be viewed free of charge at the NRC's PDR, One White Flint North, 11555 Rockville Pike, Room O-1 F21, Rockville, MD 20852. You may obtain information and comment submissions related to the OMB clearance package by searching on http://www.regulations.gov under Docket ID NRC-2011-0018.

You may submit comments on any aspect of these proposed information collections, including suggestions for reducing the burden and on the preceding issues, by the following methods:

• Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2011-0018.

• Mail comments to: FOIA, Privacy, and Information Collections Branch, Office of Information Services, Mail Stop: T-5 F53, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; or to Vlad Dorjets, Desk Officer, Office of Information and Regulatory Affairs (3150-0002 and 3150-0204), NEOB-10202, Office of Management and Budget, Washington, DC 20503; telephone: 202-395-7315, email: [email protected].

Submit comments by December 7, 2015. Comments received after this date will be considered if it is practical to do so, but the NRC staff is able to ensure consideration only for comments received on or before this date.

The NRC may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the document requesting or requiring the collection displays a currently valid OMB control number.

For the purposes of Section 223 of the AEA, the NRC is issuing this supplemental proposed rule that would amend 10 CFR part 73 under Sections 161b, 161i, or 161o of the AEA. Willful violations of the rule would be subject to criminal enforcement. Criminal penalties as they apply to regulations in 10 CFR part 73 are already discussed in § 73.81. Accordingly, §§ 73.18 and 73.19 will not be included in § 73.81(b).

The National Technology Transfer and Advancement Act of 1995 (Pub. L. 104-113), requires that Federal agencies use technical standards that are developed or adopted by voluntary consensus standards bodies, unless using such a standard is inconsistent with applicable law or is otherwise impractical. In this supplemental proposed rule, the NRC is using standards from applicable firearms standards developed by nationally recognized firearms organizations or standard setting bodies or from standards developed by (1) Federal agencies, such as the U.S. Department of Homeland Security's Federal Law Enforcement Training Center, the U.S. Department of Energy's National Training Center, and the U.S. Department of Defense; (2) State law-enforcement training centers; or (3) State Division (or Department) of Criminal Justice Services (DCJS) Training Academies. The NRC invites comment on the applicability and use of other standards.

The NRC is issuing draft regulatory guide (DG), DG-5020, Revision 1, “Applying for Enhanced Weapons Authority, Applying for Preemption Authority, and Accomplishing Firearms Background Checks under 10 CFR part 73,” for the implementation of the proposed requirements set forth in this supplemental proposed rule. The draft guidance is available in ADAMS under Accession No. ML14322A847. In conjunction with the supplemental proposed rule, the NRC seeks public comment on DG-5020, Revision 1, which may be accessed by searching on http://www.regulations.gov under Docket ID NRC-2011-0015.

In conjunction with the February 2011 proposed rule, the NRC issued for comment a new draft guide, DG 5020, Revision 0, “Applying for Enhanced Weapons Authority, Applying for Preemption Authority, and Accomplishing Firearms Background Checks under 10 CFR part 73” (76 FR 6086; February 3, 2011). You may also access DG-5020, Revision 0, supporting material, and the public comments the NRC received on DG-5020, Revision 0, by searching on http://www.regulations.gov under Docket ID NRC-2011-0015.

Revision 0 to DG-5020 contained detailed guidance on the implementation of the proposed requirements for applying for enhanced weapons authority, for applying for preemption authority, and conducting firearms background checks. However, DG-5020, Revision 0, did not include at-reactor ISFSIs under the applicability section; rather, the DG reserved a section for additional facilities to be added by future rulemakings or Commission orders. The addition of at-reactor ISFSIs to the DG as an eligible class of licensees to apply for Section 161A authority would not appreciably change the guidance contained in DG-5020, Revision 0. Accordingly, the NRC did not issue a revision to DG-5020, Revision 0, for comment in conjunction with the January 2013 supplemental proposed rule.

However, the changes contained in this supplemental proposed rule are substantive enough to warrant a revision to DG-5020, Revision 0. Accordingly, the NRC staff developed Revision 1 to DG-5020 to reflect the changes in this supplemental proposed rule and the previous supplemental proposed rule which added at-reactor ISFSIs.

You may submit comments on DG-5020, Revision 1, by the following methods:

• Federal Rulemaking Web site: Go to http://www.regulations.gov and search for Docket ID NRC-2011-0015. Address questions about NRC dockets to Carol Gallagher; telephone: 301-415-3463; email: [email protected].

• Mail comments to: Cindy Bladey, Office of Administration, Mail Stop: OWFN-12-H08, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001.

The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.

Throughout the development of this rule, the NRC staff may post documents related to this rule, including public comments, on the Federal rulemaking Web site at http://www.regulations.gov under Docket ID NRC-2011-0018 and NRC-2011-0015. The Federal rulemaking Web site allows you to receive alerts when changes or additions occur in a docket folder. To subscribe: (1) Navigate to the docket folder (NRC-2011-0018 and NRC-2011-0015); (2) click the “Sign up for Email Alerts” link; and (3) enter your email address and select how frequently you would like to receive emails (daily, weekly, or monthly).

For the reasons set out in the preamble and under the authority of the AEA, as amended; the Energy Reorganization Act of 1974, as amended; and 5 U.S.C. 552 and 553; the NRC is proposing to adopt the following amendments to 10 CFR part 73.

Interested parties are invited to provide comments, written data, views, or arguments relating to this notice. Comments should be submitted to the address specified above. All comments received on or before the closing date will be considered. All comments received will be available in the docket for examination by interested persons. Comments may be inspected at the office of the FAA, Rotorcraft Standards Staff, Rotorcraft Directorate, 5th Floor, 10101 Hillwood Pkwy, Fort Worth, Texas, between 9 a.m. and 4 p.m. Monday through Friday, except Federal holidays.

This notice is intended to inform the public that the FAA intends to designate Silvercraft Type Certificate H2EU, issued in the normal category, as abandoned and that no additional original airworthiness certificates will be issued against Type Certificate H2EU.

On September 8, 1968, Registro Aeronautico Italiano (now Ente Nazionale per l'Aviazione Civile) issued Silvercraft an Italian TC. On September 11, 1968, the FAA issued TC H2EU for Model SH-4 helicopters to Silvercraft S.co.p.a., Via Carlo Alberto n. 42, 14049 Nissa Monfferrato (At), Italy. On May 2, 2011, the European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, revoked Silvercraft's TC SO/A-145. The reason for the revocation is Silvercraft's failure to apply for a design organization approval or an alternative, which is required as an EASA TC holder. Additionally, Silvercraft has failed to respond to all communications from EASA.

As a result of the information provided by EASA, the FAA sent a registered letter to Silvercraft dated February 27, 2015, informing the company that we intend to classify TC H2EU as abandoned unless, within 60 days of receipt of the letter, we receive a written statement from them stating they are the holder of TC H2EU. The FAA has also attempted to make contact with Silvercraft by other means including telephone communication and internet searches but without success. A review of the FAA National Aircraft Registration Database confirms that there are no U.S.- registered SH-4 helicopters.

The basis for issuance of a TC not only includes the applicant's submittal of various reports and data, but also the submittal of information about periodic inspections and maintenance to assure the continued operational safety of the helicopter. Among other regulatory requirements, 14 CFR 21.3 requires TC holders to report certain failures, malfunctions, and defects to the FAA; and 14 CFR 21.99 requires that TC holders submit design changes that are necessary to correct any unsafe condition in its products. Silvercraft is obligated to meet these requirements for all aircraft under its TC.

The FAA is responsible for surveillance of a TC holder's ability to perform continued operational safety management and oversight of each helicopter on its TC. The FAA continues to monitor the safety performance of a helicopter type design after the aircraft is approved and placed into service. This is accomplished through post-certification review of TC holder data, review of service difficulty reports, communication with aircraft owners and operators, and other information provided by a TC holder. Periodic safety audits cannot be accomplished if the TC holder cannot be located. To date, the FAA has been unsuccessful in all attempts to locate Silvercraft.

Hence, the FAA proposes to flag TC H2EU and consider it abandoned. This notice informs the public that the FAA intends to designate TC H2EU as abandoned and no additional original airworthiness certificates will be issued against that TC. This action is not intended as a surrender, suspension, revocation, or termination of the TC as those terms are used in 14 CFR part 21. However, this action is intended to ensure that each Silvercraft Model SH-4 helicopter is under a TC that has active continued operational safety management and oversight by a TC holder that can be subject to periodic safety audits by the FAA.

Comments Invited

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2014-0529; Directorate Identifier 2013-NM-260-AD” at the beginning of your comments. We specifically invite comments on the overall regulatory, economic, environmental, and energy aspects of this proposed AD. We will consider all comments received by the closing date and may amend this proposed AD based on those comments.

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

We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to all Airbus Model A318, A319, A320, and A321 series airplanes. The NPRM published in the Federal Register on August 13, 2014 (79 FR 47395; corrected August 27, 2014 (79 FR 51117)) (“the NPRM”). The NPRM proposed to supersede AD 2011-13-11, Amendment 39-16734 (76 FR 37241, June 27, 2011) (“AD 2011-13-11”); and AD 2013-16-09, Amendment 39-17547 (78 FR 48286, August 8, 2013) (“AD 2013-16-09”). AD 2011-13-11 currently requires an amendment of the AFM, repetitive checks of specific CFDS messages, an inspection of the opening sequence of the MLG door actuator for discrepancies if certain messages are found, and corrective actions if necessary. AD 2013-16-09 currently requires an inspection to determine airplane configuration and part numbers of the landing gear control interface unit and MLG door actuators; and, for affected airplanes, repetitive inspections of the opening sequence of the MLG door actuator, and replacement of the MLG door actuator if necessary; and provides optional terminating action for the repetitive inspections. The NPRM was prompted by a determination that the interval of the MLG door opening sequence inspection must be reduced. The NPRM proposed to reduce the interval of the MLG door opening sequence inspection, and also to replace or modify certain MLG door actuators.

Since we issued the NPRM, we have determined that a flushing procedure must be performed when installing a new MLG door actuator. The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014-0221, dated September 30, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition on all Airbus Model A318, A319, A320, and A321 series airplanes. The MCAI states:

You may examine the MCAI in the AD docket on the Internet at http://www.regulations.gov/#!documentDetail;D=FAA-2014-529-0003.

Airbus has issued Service Bulletins A320-32-1390, Revision 03, dated July 3, 2014; and A320-32-1407, Revision 01, dated July 3, 2014. Airbus has also issued A318/A319/A320/A321 Temporary Revision (TR) TR437, L/G GEAR NOT DOWNLOCKED, Issue 1.0, dated May 23, 2014, to the Airplane Flight Manual (AFM).

Airbus Service Bulletin A320-32-1390, Revision 03, dated July 3, 2014, describes procedures for inspecting the operation of the MLG door opening sequence to determine if an actuator is defective, flushing contamination from the landing gear extension and retraction system (LGERS), and replacing the door actuator if necessary.

Airbus Service Bulletin A320-32-1407, Revision 01, dated July 3, 2014, describes procedures for flushing contamination from the LGERS, and installing new MLG door actuators.

Airbus A318/A319/A320/A321 TR TR437, L/G GEAR NOT DOWNLOCKED, Issue 1.0, dated May 23, 2014, to the AFM updates the procedure used for incomplete landing gear extension during approach.

General Electric Service Bulletin 114122-32-105, Revision 2, dated June 24, 2014, describes procedures for conversion of a MLG door actuator and to remove unwanted material from the hydraulic fluid route.

This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section of this SNPRM.

We gave the public the opportunity to participate in developing this SNPRM. We considered the comments received.

Airbus requested that we revise the NPRM to adopt the requirements of EASA Airworthiness Directive 2014-0221, dated September 30, 2014; Airbus Service Bulletin A320-32-1390, Revision 03, dated July 3, 2014; and Airbus Service Bulletin A320-32-1407 Revision 01, dated July 3, 2014. Airbus stated that EASA issued a global airplane flight manual (AFM) TR to mandate updated operational procedures. US Airways requested that we reference Airbus Service Bulletin A320-32-1407, Revision 01, dated July 3, 2014, and a new AFM procedure referenced in “FOT 999-0032/14.”

We agree with the commenters' requests. EASA Airworthiness Directive 2014-0221, dated September 30, 2014, requires, among other things, a revised operational AFM procedure, and hydraulic flushing prior to any installation of a post-modification MLG door actuator. We have revised paragraphs (j), (k), (l), (m), and (w) as designated in the NPRM (paragraphs (j), (k), (l), (m), and (x) in this SNPRM)) to reference Airbus Service Bulletin A320-32-1390, Revision 03, dated July 3, 2014; and paragraphs (r), (t), (u), (w), and (x) as designated in the NPRM (paragraphs (r), (u), (v), (x), and (y) in this SNPRM)) to reference Airbus Service Bulletin A320-32-1407, Revision 01, dated July 3, 2014; as the appropriate sources of service information for accomplishing the proposed actions.

United Airlines requested that we not require the actions in Airbus Service Bulletin A320-32-1407, Revision 01, dated July 3, 2014. United Airlines stated that Airbus Service Bulletin A320-32-1407, Revision 01, dated July 3, 2014, recommends that operators flush the affected hydraulic system. United Airlines stated that it disagrees with this proposed action and explained that Airbus instituted this requirement to flush the hydraulic system as it failed to recommend the removal, inspection, and cleaning of the restrictors during the modification of the MLG door actuator to the part number (P/N) 114122014 configuration. United Airlines also stated that it has opted to overhaul the MLG door actuators as well as perform the modification described in Airbus Service Bulletin A320-32-1407, dated May 14, 2013. United Airlines explained that this overhaul requires that the restrictors (P/N 114122233 and P/N 114122232) and transfer pipe be removed, inspected, and cleaned. United Airlines stated that it is of the opinion that flushing the hydraulic system is not required as there is no contamination present in the restrictors or the transfer pipe.

We disagree with the commenter's request. Airbus informed the FAA that debris can leave the damaged actuator and remain in the hydraulic lines connected to the door actuator. Flushing of the hydraulic system is required to prevent debris from entering the new actuator. If debris enters the new actuator, its performance can be affected. The flow rate during normal operation is insufficient to ensure complete flushing of the debris to the hydraulic low pressure filter within a few door cycles. Therefore, a specific maintenance procedure has been defined and introduced in Airbus Service Bulletin A320-32-1407, Revision 01, dated July 3, 2014; and General Electric Service Bulletin 114122-32-105, Revision 2, dated June 24, 2014. EASA has issued AD 2014-0221, dated September 30, 2014, requiring flushing of the affected hydraulic system in accordance with Airbus Service Bulletin A320-32-1407, Revision 01, dated July 3, 2014.

US Airways requested that we provide credit for the actions required by paragraphs (t) and (u) of the proposed AD (paragraphs (u) and (v) of this SNPRM)), if those actions were done before the effective date of the AD using Airbus Service Bulletins A320-32-1407, dated May 14, 2013, or Revision 01, dated July 3, 2014; or General Electric Service Bulletin 114122-32-105, dated January 17, 2013.

We partially agree with the commenter's request. In this SNPRM, paragraph (aa) already provides credit for General Electric Service Bulletin 114122-32-105, dated January 17, 2013, for the actions in paragraphs (u) and (v) done prior to the effective date of the final rule. We do not agree with giving credit for Airbus Service Bulletin A320-32-1407, dated May 14, 2013; or Revision 01, dated July 3, 2014; because those service bulletins do not require flushing the hydraulic system prior to the installation of P/N 114122014. We have not changed the proposed AD in this regard.

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

Certain changes described above expand the scope of the NPRM. As a result, we have determined that it is necessary to reopen the comment period to provide additional opportunity for the public to comment on this SNPRM.

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

As specified in a NOTE under the Accomplishment Instructions of the specified Airbus service information, procedures and tests identified as RC must be done to comply with the proposed AD. However, procedures and tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an alternative method of compliance (AMOC), provided the procedures and tests identified as RC can be done and the airplane can be put back in a serviceable condition. Any substitutions or changes to procedures or tests identified as RC will require approval of an AMOC.

This SNPRM makes the following changes to the NPRM.

We have moved the credit for Airbus Service Bulletin A320-32-1309, dated March 7, 2006, specified in paragraph (g) of AD 2011-13-11, into paragraph (aa)(1) of the proposed AD.

We have reformatted and redesignated three tables as figures to comply with requirements of the Office of the Federal Register, as follows:

• “Table 1 to Paragraph (p) of this AD—Affected Part Numbers” is “Figure 2 to Paragraph (p) of this AD—Affected Part Numbers;”

• “Table 2 to Paragraph (v) of this AD—Affected Part Numbers” is “Figure 3 to Paragraph (v) of this AD—Affected Part Numbers;” and

• “Table 3 to Paragraph (z) of this AD—Affected Part Numbers” is “Figure 4 to Paragraph (z) of this AD.”

We estimate that this SNPRM affects 953 airplanes of U.S. registry.

The actions that are required by AD 2011-13-11, and retained in this SNPRM, take about 7 work-hours per product, per inspection cycle, at an average labor rate of $85 per work-hour. Based on these figures, the estimated cost of the actions that are required by AD 2011-13-11 is $595 per product.

The actions that are required by AD 2013-16-09, and retained in this SNPRM, take about 3 work-hours per product, per inspection cycle, at an average labor rate of $85 per work-hour. Based on these figures, the estimated cost of the actions that were required by AD 2013-16-09 is $255 per product.

We also estimate that it would take about 19 work-hours per product to comply with the basic requirements of this SNPRM. The average labor rate is $85 per work-hour. Required parts would cost about $17,140 per product. Based on these figures, we estimate the cost of this SNPRM on U.S. operators to be $17,873,515, or $18,755 per product.

In addition, we estimate that any necessary follow-on actions would take about 3 work-hours, for a cost of $255 per product. We have no way of determining the number of aircraft that might need these actions.

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

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

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

For the reasons discussed above, I certify this proposed regulation:

1. Is not a “significant regulatory action” under Executive Order 12866;

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

3. Will not affect intrastate aviation in Alaska; and

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

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

I. Background

On September 11, 2012, the Commission published in the Federal Register final rules § 23.500 through § 23.505 2 establishing requirements for the timely and accurate confirmation of swaps, the reconciliation and compression of swap portfolios, and documentation of swap trading relationships between swap dealers (“SDs”),3 major swap participants (“MSPs”),4 and their counterparties. These regulations were promulgated by the Commission pursuant to the authority granted under Sections 4s(h)(1)(D), 4s(h)(3)(D), and 4s(i) of the Commodity Exchange Act (the “CEA”),5 as amended by Section 731 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”),6 which, among other things, directed the Commission to prescribe regulations for the timely and accurate confirmation, processing, netting, documentation and valuation of all swaps entered into by SDs and MSPs,7 and the Commission's general rulemaking authority under Section 8a(5) of the CEA.8

Under § 23.502,9 SDs and MSPs must reconcile their swap portfolios with one another and provide non-SD and non-MSP counterparties with regular opportunities for portfolio reconciliation.10 Section 23.500(i) 11 defines the term, “portfolio reconciliation,” as “any process by which the two parties to one or more swaps: (1) Exchange the terms of all swaps in the swap portfolio between the counterparties; (2) exchange each counterparty's valuation of each swap in the swap portfolio between the counterparties as of the close of business on the immediately preceding business day; and (3) resolve any discrepancy in material terms and valuations.” Section 23.500(g) defines “material terms” to mean “all terms of a swap required to be reported in accordance with part 45 of this chapter.” 12 Thus, portfolio reconciliation seeks to enable “the swap market to operate efficiently and to reduce systemic risk” 13 by requiring counterparties periodically to (1) exchange the terms of their mutual swaps, and (2) locate and resolve discrepancies in material terms of mutual swaps. In particular, the Commission recognized that “portfolio reconciliation [would] facilitate the identification and resolution of discrepancies between the counterparties with regard to valuations of collateral held as margin.” 14 The Commission also has described portfolio reconciliation, generally, as follows:

In adopting § 23.502, the Commission intended to require that SDs, MSPs, and their counterparties engage in portfolio reconciliation at regular intervals. Explaining the rationale for § 23.502, the Commission noted that portfolio reconciliation can identify and reduce overall risk “[b]y identifying and managing mismatches in key economic terms and valuation for individual transactions across an entire portfolio.” 16 Portfolio reconciliation is not required for cleared swaps where a derivatives clearing organization (“DCO”) holds the definitive record of the trades and determines binding daily valuations for the swaps.17

In 2013, the International Swaps and Derivatives Association, Inc. (“ISDA”) requested interpretive guidance from Commission staff that would permit certain swap data elements to be excluded from portfolio reconciliation as required under § 23.502.18 Specifically, ISDA requested that “the terms” of a swap that counterparties must exchange during portfolio reconciliation exercises be limited to the “material terms” of a swap, and that “material terms” have the same meaning as “primary economic terms” in § 45.1. ISDA further asked that the following data fields (hereinafter referred to as the “No-Action Excluded Data Fields”) be excluded from the definition of “material terms” for purposes of compliance with § 23.502:

ISDA contended generally that the definition of “material terms” in § 23.500(g) is too broad to guide market participants in the construction of a reconciliation process, and with regard to the No-Action Excluded Data Fields specifically, ISDA argued that these fields are not relevant to the portfolio reconciliation process because they pertain to the circumstances surrounding entry into a transaction, and whether a transaction was intended to be cleared, and are not relevant to ongoing rights and obligations under swaps in a swap portfolio existing bilaterally between an SD and a counterparty.

After considering ISDA's request, the Commission's Division of Swap Dealer and Intermediary Oversight (the “Division”) provided SDs and MSPs with no-action relief on June 26, 2013, pursuant to CFTC Staff Letter 13-31.24 In such letter, the Division chose not to interpret the reference to “the terms” of a swap in § 23.500(i)(1) as meaning the “material terms” or to define “material terms” to mean the “primary economic terms” of a swap minus the No-Action Excluded Data Fields. Rather, the Division merely stated that it would not recommend an enforcement action against an SD or MSP that omits the No-Action Excluded Data Fields from the portfolio reconciliation process required under § 23.502.25 Thus, it appears that following the issuance of CFTC Staff Letter 13-31, an SD that chose to take advantage of the relief could consider the No-Action Excluded Data Fields not to be terms of a swap required to be exchanged with a counterparty in a portfolio reconciliation exercise.

Against this background, the Commission is now proposing to amend the definition of “material terms” in § 23.500(g) to specifically exclude a modified version of the No-Action Excluded Data Fields. As amended, § 23.500(g) would exclude the following data fields from the definition of “material terms” (hereinafter referred to as the “Proposed Excluded Data Fields”):

The Proposed Excluded Data Fields modify the No-Action Excluded Data Fields by: (1) Amending the execution timestamp data field to be specific to cleared swaps; (2) amending the timestamp for submission to an SDR data field to be specific to cleared swaps; (3) removing the data field containing an indication of whether the clearing requirement exception in CEA Section 2(h)(7) has been elected with respect to an uncleared swap; and (4) removing the data field containing the identity of the counterparty electing the clearing requirement exception in CEA Section 2(h)(7). The Commission is proposing to retain these data fields for uncleared swaps as “material terms” because a discrepancy in this information in the records of the counterparties could mean that the related information is erroneous in the records of an SDR, which could have an impact on the Commission's regulatory mission.

The time of execution of an uncleared swap and the time of submission to an SDR is of regulatory value to the Commission for purposes of determining the compliance of SDs and MSPs with Commission regulations.28 Similarly, the identity of a counterparty electing the end-user exception to clearing is important to the Commission's enforcement of the clearing requirement and its monitoring of systemic risk in the OTC markets under its jurisdiction. Thus, the Commission believes it is reasonable to require SDs, MSPs, and their counterparties to resolve any discrepancy in these data fields and, if necessary, correct the information reported to an SDR.29

The Commission intends that, if and when the proposed amendment to the definition of “material terms” is adopted, it will direct the Division to withdraw the no-action relief provided pursuant to CFTC Letter 13-31. Accordingly, under this proposal, the Commission is maintaining the status quo of § 23.502 in that SDs and MSPs and their counterparties would be required to exchange “the terms” of a swap as required under § 23.500(i)(1) and would have to resolve discrepancies in “material terms” of swaps pursuant to § 23.502(a)(4) and (b)(4). However, “material terms” would not include the Proposed Excluded Data Fields. This requirement differs from what may be the current practice of SDs and MSPs that have chosen to take advantage of the relief provided in CFTC Staff Letter 13-31. Such SDs and MSPs may be omitting the No-Action Excluded Data Fields from the portfolio reconciliation process altogether and not exchanging such terms at all, or if exchanging them, choosing not to resolve discrepancies that may be discovered. If the Commission's proposal is adopted, such SDs and MSPs would be required to resume exchanging the terms included in the Proposed Excluded Data Fields, although they could continue the practice of choosing not to resolve discrepancies in such terms. In addition, SDs and MSPs would have to resolve discrepancies in execution and SDR submission timestamps for cleared swaps, and discrepancies in the identities of counterparties electing the end-user exception from clearing, which may not be the practice for SDs and MSPs that have been relying on CFTC Staff Letter 13-31.

It is the intention of the Commission's proposal to alleviate the burden of resolving discrepancies in terms of a swap that are not relevant to the ongoing rights and obligations of the parties and the valuation of the swap, or to the Commission's regulatory mission. However, with respect to at least some of the No-Action Excluded Data Fields and the corresponding information that is included in the Proposed Excluded Data Fields, the Commission questions whether such data is actually required to be included in any ongoing portfolio reconciliation exercise. For example, the “clearing indicator” and “clearing venue” items included in the Proposed Excluded Data Fields pertain to a swap only until it is extinguished when accepted for clearing by a DCO.30 When extinguished, the original swap would no longer be subject to portfolio reconciliation,31 and, as explained above, portfolio reconciliation is not required for cleared swaps.32 As noted below, the Commission seeks comment on whether such terms should be included in the Proposed Excluded Data Fields.

Finally, the Commission notes that it is not proposing an amendment to § 23.500(i)(1) that would exclude the Proposed Excluded Data Fields from portfolio reconciliation altogether. Thus the Commission is not proposing to change the existing requirement under § 23.502 that parties must exchange terms of all swaps in a mutual portfolio, but need only resolve discrepancies over material terms and valuations. As stated above, the Commission recognizes that the proposed amendment would not have the same effect as the no-action relief provided by the Division in CFTC Staff Letter 13-31. Nevertheless, the Commission has determined that it would be premature to propose to codify the staff relief without considering comments from the public on the nature of the post-Dodd-Frank-Act portfolio reconciliation process and how the Proposed Excluded Data Fields relate to that process.

To ensure that the proposed rule would, if adopted, achieve its stated purpose, the Commission requests comment generally on all aspects of the proposed rule. Specifically, the Commission requests comment on the following:

• Should the Commission amend its regulations to provide relief identical to that granted in CFTC Letter No. 13-31? Alternatively, should the Commission amend § 23.500(i)(1) so that counterparties only have to exchange the “material terms” (which would not include the Proposed Excluded Data Fields) of swaps? Or, lastly, should the Commission adopt its current proposal which is to only remove the Proposed Excluded Data Fields from the definition of “material terms” that counterparties must resolve for discrepancies pursuant to § 23.500(i)(3)?

• Should the Commission's Proposed Excluded Data Fields not include the execution and SDR submission timestamps for uncleared swaps? Please explain why or why not.

• Should the Commission's Proposed Excluded Data Fields include an indication of the election of the clearing exception in CEA Section 2(h)(7) and/or the identity of the counterparty electing such clearing requirement exception? Please explain why or why not.

• Are there other items in the Proposed Excluded Data Fields that may have material regulatory value to the Commission or that may be relevant to the ongoing rights and obligations of the parties and the valuation of the swap and, thus, should not be included in the Proposed Excluded Data Fields? Please explain why or why not.

• Is each of the Proposed Excluded Data Fields actually required to be included in any ongoing portfolio reconciliation exercise, and, if not, should any such term be removed from the list of Proposed Excluded Data Fields? Please explain why or why not.

• Should any other “material term” as defined in § 23.500(g) be included in the list of Proposed Excluded Data Fields? Please explain why or why not.

• Should the Commission amend § 23.500(g) so that the term, “material terms,” is defined as all terms of a swap required to be reported in accordance with part 45 of the Commission regulations other than the Proposed Excluded Data Fields, as proposed? Please explain why or why not.

• To what extent does the proposed amendment facilitate (or fail to facilitate) the policy objectives of portfolio reconciliation? Feel free to reference specific terms listed in the Proposed Excluded Data Fields in your answer.

• Where are the cost savings realized by not having to resolve discrepancies in the Proposed Excluded Data Fields? If any other alternative approach should be considered, what cost savings would be realized by such alternative approach? Commenters are encouraged to quantify these cost savings.

The Regulatory Flexibility Act 33 requires that agencies consider whether the rules they propose will have a significant economic impact on a substantial number of small entities and, if so, provide a regulatory flexibility analysis reflecting the impact. For purposes of resolving any discrepancy in material terms and valuations, the proposed regulation would amend the definition in § 23.500(g) of the Commission regulations so that the term “material terms” (which is used in § 23.500(i)(3)) is defined as all terms of a swap required to be reported in accordance with part 45 of the Commission's regulations other than the Proposed Excluded Data Fields. As noted above, clause (3) of the definition of “portfolio reconciliation” in § 23.500(i) requires the parties to resolve any discrepancy in “material terms” and valuations. As a result of the proposed change to the definition of “material terms” in § 23.500(g) of the Commission regulations, SDs and MSPs would not need to include the Proposed Excluded Data Fields 34 in any resolution of discrepancies of material terms or valuations when engaging in portfolio reconciliation. The Commission has previously determined that SDs and MSPs are not small entities for purposes of the Regulatory Flexibility Act.35 Furthermore, any financial end users that may be indirectly 36 impacted by the proposed rule are likely to be eligible contract participants, and, as such, they would not be small entities.37

Thus, for the reasons stated above, the Commission preliminarily believes that the proposal will not have a significant economic impact on a substantial number of small entities. Accordingly, the Chairman, on behalf of the Commission, hereby certifies, pursuant to 5 U.S.C. 605(b), that the proposed regulations in this Federal Register release would not have a significant economic impact on a substantial number of small entities.

The Paperwork Reduction Act of 1995 (“PRA”) 38 imposes certain requirements on Federal agencies, including the Commission, in connection with their conducting or sponsoring any collection of information, as defined by the PRA. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. This proposed rulemaking would result in an amendment to existing collection of information OMB Control Number 3038-0068 with respect to the collection of information entitled “Confirmation, Portfolio Reconciliation, and Portfolio Compression Requirements for Swap Dealers and Major Swap Participants.” 39 The Commission is therefore submitting this proposal to the Office of Management and Budget (OMB) for review. The Commission previously discussed, for purposes of the PRA, the burden 40 that the regulation mandating, inter alia, portfolio reconciliation would impose on market participants.41 In particular, the Commission estimated the burden to be 1,282.5 hours for each SD and MSP, and the aggregate burden for registrants—based on a then-projected 125 registrants—was 160,312.5 burden hours.42 Since the Commission finalized the rules for SDs and MSPs, 104 entities have provisionally registered as SDs and two entities have provisionally registered as MSPs, for a total of 106 registrants.43 Accordingly, based on the original estimate of 1,282.5 burden hours for each SD and MSP, the aggregate burden for all registrants is estimated at 135,945 burden hours.

The proposed regulation would amend the definition in § 23.500(g) of the Commission regulations so that the term “material terms” (which is used in § 23.500(i)(3)) is defined as all terms of a swap required to be reported in accordance with part 45 of the Commission's regulations other than the Proposed Excluded Data Fields.44 As noted above, clause (3) of the definition of “portfolio reconciliation” in § 23.500(i) requires the parties to resolve any discrepancy in “material terms” and valuations. The proposed change would clarify that SDs and MSPs would not need to include the Proposed Excluded Data Fields in any resolution of discrepancies of material terms or valuations.

As discussed above, the rule change proposed herein would reduce the number of “material terms” that counterparties would need to resolve for discrepancies in portfolio reconciliation exercises, but would not eliminate the portfolio reconciliation requirement itself. However, the Commission believes that the changes proposed to the regulatory definition of “material terms” described herein would reduce the time burden for portfolio reconciliation by one burden hour for each SD and MSP, which would reduce the annual burden to 1,281.5 hours per SD and MSP. The Commission believes that the proposed rule would result in one hour of less work for computer programmers for SDs and MSPs because the programmers who have to match the needed data fields from two different databases would have fewer data fields to obtain and resolve for discrepancies. Given that there are 106 provisionally registered SDs and MSPs, the proposed rule, if adopted, would result in an aggregate burden of 135,839 burden hours. The Commission welcomes comments about the potential impact that this proposal would have on the time and cost burden associated with portfolio reconciliation.

The Commission invites the public and other Federal agencies to comment on any aspect of the reporting burdens discussed above. Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits comments in order to: (1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the Commission, including whether the information will have practical utility; (2) evaluate the accuracy of the Commission's estimate of the burden of the proposed collection of information; (3) determine whether there are ways to enhance the quality, utility, and clarity of the information to be collected; and (4) mitigate the burden of the collection of information on those who are to respond, including through the use of automated collection techniques or other forms of information technology.

Comments may be submitted directly to the Office of Information and Regulatory Affairs, by fax at (202) 395-6566 or by email at [email protected]. Please provide the Commission with a copy of submitted comments so that all comments can be summarized and addressed in the final rule preamble. Refer to the ADDRESSES section of this notice of proposed rulemaking for comment submission instructions to the Commission. A copy of the supporting statement for the collection of information discussed above may be obtained by visiting http://reginfo.gov/. OMB is required to make a decision concerning the collection of information between 30 and 60 days after publication of this document in the Federal Register. Therefore, a comment is best assured of having its full effect if OMB receives it within 30 days of publication.

Section 15(a) of the CEA requires the Commission to consider the costs and benefits of its actions before promulgating a regulation under the CEA or issuing an order. Section 15(a) further specifies that the costs and benefits shall be evaluated in light of the following five broad areas of market and public concern: (1) Protection of market participants and the public; (2) efficiency, competitiveness, and financial integrity of futures markets; (3) price discovery; (4) sound risk management practices; and (5) other public interest considerations. The Commission considers the costs and benefits resulting from its discretionary determinations with respect to the section 15(a) factors.

The Commission believes that, while portfolio reconciliation generally helps counterparties to manage risk by facilitating the resolution of discrepancies in material terms of swaps, forcing entities to resolve discrepancies in the Proposed Excluded Data Fields does not improve the management of risks in swaps portfolios. By eliminating the need to resolve discrepancies over material swap terms that remain constant (and that do not impact the valuation of the swap or the payment obligations of the counterparties) and thereby reducing the number of data fields that parties must resolve for differences in portfolio reconciliation exercises, the Commission believes this proposal will slightly decrease the costs that its regulations impose on SDs and MSPs (and their counterparties) without a concomitant reduction in the benefits obtained from portfolio reconciliation exercises under the existing regulatory framework, as described below.

The Commission believes this proposal will slightly decrease the costs that its regulations impose on SDs and MSPs (and their counterparties) because it would eliminate the need to verify and resolve discrepancies in swap terms that remain constant (or that do not impact the valuation of swaps or the payment obligations of the counterparties) and thereby reduce the number of data fields requiring particular attention in portfolio reconciliation exercises.45 As mentioned previously, the Commission believes that this change will reduce the annual burden hours for each SD and MSP by one hour, resulting in a total of 1,281.5 hours, which leads to an aggregate number, based on 106 registrants, of 135,839 burden hours. The Commission previously estimated that, assuming 1,282.5 annual burden hours per SD and MSP, the financial cost of its regulations on each SD and MSP would be $128,250.46 Therefore, based on those prior estimates, a one-hour reduction in the annual burden hours for each SD and MSP would result in a financial cost of $128,150 per registrant. Accordingly, the Commission estimates that, if the proposed rule is adopted, the aggregate financial burden of its regulations on SDs and MSPs would be $13,583,900.47

The Commission does not believe the proposed regulation would increase the Commission's costs or impair the Commission's ability to oversee and regulate the swaps markets. Portfolio reconciliation is designed to enable counterparties to understand the current status or value of swap terms. As mentioned above, the Commission is proposing to amend the definition of “material terms” in § 23.500(g) so as to exclude the Proposed Excluded Data Fields because it preliminarily agrees with market participants that the Proposed Excluded Data Fields are not material to the ongoing rights and obligations of the counterparties to a swap. Because the Commission's proposal would only remove terms from the discrepancy resolution process for material terms, as opposed to the general portfolio reconciliation process or swaps reporting requirements, it will not negatively impact the amount of information available to the Commission about swaps. While the Commission believes that this proposal would reduce SDs', MSPs', or their counterparties' costs of complying with Commission regulations (because it would reduce the number of terms that counterparties must periodically resolve for discrepancies during portfolio reconciliations), the Commission seeks specific comment on the following, and encourages commenters to provide quantitative information in their comments where practical):

• How will the proposed regulation affect the costs of portfolio reconciliation for swap counterparties? Is the Commission's estimate of cost reductions that would result from the proposed rule a reasonable estimate of cost savings that would be realized from adopting the proposal?

• Will the proposed regulation make the portfolio reconciliation process more or less expensive? How so?

• How would the proposed rule affect the ongoing costs of compliance with Commission regulations?

• Are there other costs that the Commission should consider?

Commenters are strongly encouraged to include quantitative information in their comment on this rulemaking where practical.

The Commission believes that this proposal would benefit SDs, MSPs, and their counterparties because it will not require them to expend the resources necessary to resolve discrepancies over swap terms that are included in the Proposed Excluded Data Fields in accordance with tight regulatory timeframes.48 The Commission requests comment on all aspects of its preliminary consideration of benefits and encourages commenters to provide quantitative information where practical. Has the Commission accurately identified the benefits of this proposed regulation? Are there other benefits to the Commission, market participants, and/or the public that may result from the adoption of the proposed regulation that the Commission should consider?

Section 15(a) of the CEA requires the Commission to consider the effects of its actions in light of the following five factors:

The Commission believes that, notwithstanding its proposal to remove the Proposed Excluded Data Fields from the list of material terms that counterparties must periodically scrutinize to resolve any discrepancies, its regulations will continue to protect market participants and the public. The Commission, however, welcomes comment as to how market participants and the public may be protected or harmed by the proposed regulation.

The Commission believes that its proposal, which will ensure that the parties resolving discrepancies in material terms and valuations in portfolio reconciliation exercises need not concern themselves with terms in the Proposed Excluded Data Fields may increase resource allocation efficiency of market participants engaging in reconciliation exercises without increasing the risk of harm to the financial integrity of markets.

The Commission seeks comment as to how the proposed regulation may promote or hinder the efficiency, competitiveness, and financial integrity of markets.

The Commission has not identified an impact on price discovery as a result of the proposed regulation, but seeks comment as to any potential impact. Will the proposed regulation impact, positively or negatively, the price discovery process?

The Commission believes that its proposal is consistent with sound risk management practices because the proposed regulatory change would not impair an entity's ability to conduct portfolio reconciliations. The Commission solicits comments on whether market participants believe the proposal will impact, positively or negatively, the risk management procedures or actions of SDs, MSPs, or their counterparties.

The Commission has not identified any other public interest considerations, but welcomes comment on whether this proposal would promote public confidence in the integrity of derivatives markets by ensuring meaningful regulation and oversight of all SDs and MSPs. Will this proposal impact, positively or negatively, any heretofore unidentified matter of interest to the public?

For the reasons stated in the preamble, the Commodity Futures Trading Commission proposes to amend 17 CFR part 23 as set forth below:

The FDA Food Safety Modernization Act (FSMA) (Pub. L.111-353), signed into law by President Obama on January 4, 2011, enables FDA to better protect public health by helping to ensure the safety and security of the food supply. FSMA amends the Federal Food, Drug, and Cosmetic Act (the FD&C Act) to establish the foundation of a modernized, prevention-based food safety system. Among other things, FSMA requires FDA to issue regulations requiring preventive controls for human food and animal food, setting standards for produce safety, and requiring importers to perform certain activities to help ensure that the food they bring into the United States is produced in a manner consistent with U.S. standards.

FSMA was the first major legislative reform of FDA's food safety authorities in more than 70 years. In the Federal Register of January 16, 2013 (78 FR 3646), we proposed to amend our regulations for Current Good Manufacturing Practice In Manufacturing, Packing, or Holding Human Food to modernize it and to add requirements for domestic and foreign facilities that are required to register under the FD&C Act to establish and implement hazard analysis and risk-based preventive controls for human food. We also proposed to revise certain definitions in our current regulation for Registration of Food Facilities to clarify the scope of the exemption from registration requirements provided by the FD&C Act for “farms.” In the Federal Register of October 29, 2013 (78 FR 64735), we proposed regulations for domestic and foreign facilities that are required to register under the FD&C Act to establish requirements for current good manufacturing practice in manufacturing, processing, packing, and holding of animal food. We proposed to require that certain facilities establish and implement hazard analysis and risk-based preventive controls for food for animals to provide greater assurance that animal food is safe and will not cause illness or injury to animals or humans.

Based on input we received from public comments, in the Federal Register of September 29, 2014 (79 FR 58476 and 79 FR 58524), we proposed to amend our 2013 proposed rules for Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human and Animal Food and reopened the comment period only with respect to specific issues identified in supplemental proposed rules.

In the Federal Register of September 17, 2015 (80 FR 55908), we issued a final rule to establish the requirements for Current Good Manufacturing Practice, Hazard Analysis, and Risk-Base Preventive Controls for Human Food. In the Federal Register of September 17, 2015 (80 FR 56170), we issued a final rule to establish requirements for Current Good Manufacturing Practice, Hazard Analysis, and Risk-Based Preventive Controls for Food for Animals. The preventive controls final rules apply to human and animal food and require domestic and foreign facilities that are required to register under the FD&C Act to have written plans that identify hazards, specify the preventive controls that will be put in place to significantly minimize or prevent those hazards, include procedures to monitor the implementation of the preventive controls, and include corrective action procedures for use when preventive controls are not properly implemented. We also revised certain definitions in the regulation for Registration of Food Facilities to clarify the scope of the exemption from registration requirements provided for “farms” and, in so doing, to clarify which domestic and foreign facilities are subject to the requirements for hazard analysis and risk-based preventive controls for food. The preventive controls final rules and related fact sheets are available on FDA's FSMA Web page located at http://www.fda.gov/FSMA.

FDA is holding the public meeting on the two preventive controls final rules to address what is different from the proposals; discuss the plans for guidance documents and outstanding issues that might be addressed in guidance; provide an update on the development of implementation work plans; and answer questions.

These two preventive controls final rules are the first of several final rules that will establish the foundation of, and central framework for, the modern food safety system envisioned by Congress in FSMA. We will not use any information or data submitted during the public meeting to inform any FSMA rulemakings where the comment periods have closed.

There will be an opportunity for stakeholders who are unable to participate in person to join the meeting via webcast. (See section III of this document for more information on the webcast option.)

We are holding the public meeting on October 20, 2015, from 8:30 a.m. until 5 p.m., at Chicago Marriott Downtown Magnificent Mile, 540 North Michigan Ave, Chicago, IL 60611. Due to limited space and time, we encourage all persons who wish to attend the meeting to register in advance. There is no fee to register for the public meeting, and registration will be on a first-come, first-served basis. Early registration is recommended because seating is limited. Onsite registration will be accepted, as space permits, after all preregistered attendees are seated.

Table 1 of this document provides information on participation in the public meeting.

Please be advised that as soon as a transcript is available, it will be accessible at http://www.regulations.gov and at FDA's FSMA Web site at: http://www.fda.gov/FSMA. You may also view the transcript at the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, rm. 1061, Rockville, MD 20852. A transcript will also be available in either hardcopy or on CD-ROM, after submission of a Freedom of Information request. The Freedom of Information office address is available on the Agency's Web site at http://www.fda.gov. Additionally, we will be video recording the public meeting. Once the recorded video is available, it will be accessible at FDA's FSMA Web site at http://www.fda.gov/FSMA.

I. Background

Among other things, current FDA regulations at part 108 (21 CFR part 108) provide that a commercial processor, when first engaging in the manufacture, processing, or packing of acidified foods or low-acid canned foods, must, not later than 10 days after first so engaging, register and file with FDA information including the name of the establishment, principal place of business, the location of each establishment in which that processing is carried on, the processing method, and a list of foods so processed in each establishment (§ 108.25(c)(1) and § 108.35(c)(1)). In addition, our regulations require the submission of process filing forms. Specifically, our regulations require that commercial processors engaged in the processing of acidified foods must, not later than 60 days after registration, and before packing any new product, provide FDA with information on the scheduled processes for each acidified food in each container size (§ 108.25(c)(2)). An analogous requirement for process filing applies to commercial processors of low-acid canned foods (§ 108.35(c)(2)). The regulations specify the specific process filing forms to be used (Forms FDA 2541a and 2541c), and also state where the forms can be obtained and where the forms should be sent.

We recently engaged in an effort to modernize our forms and to provide a means for submitting the forms using electronic “smart form” technology. This effort involved the drafting of four new draft process filing forms: Forms FDA 2541d, FDA 2541e, FDA 2541f, and FDA 2541g. (For more information about the draft new process filing forms, see “Draft Guidance for Industry: Submitting Form FDA 2541 (Food Canning Establishment Registration) and Forms FDA 2541d, FDA 2541e, FDA 2541f, and FDA 2541g (Food Process Filing Forms) to FDA in Electronic or Paper Format,” available at http://www.fda.gov/FoodGuidances.) Once completed, this effort will make it easier for firms to submit information to us and will improve the accuracy of the information submitted in the forms. In conjunction with these changes, the proposed rule would make technical amendments to § 108.25, “Acidified Foods,” and § 108.35, “Thermal Processing of Low-Acid Foods Packaged in Hermetically Sealed Containers.” Specifically, the proposed rule would incorporate the new FDA form numbers. FDA hopes to finalize the new process filing forms later in 2015. By incorporating the new FDA form numbers into part 108, the proposed rule would cause the new forms to fully replace the forms currently listed in part 108 once this proposed rule becomes final and effective. At that point, FDA would no longer accept the currently-listed forms.

In addition, the proposed rule would make changes to the addresses or locations where forms can be found or must be sent. Finally, the proposed rule would remove obsolete references to dates that occurred years ago and would update the name of the Agency of the U. S. Department of Agriculture that administers the meat and poultry inspection programs under the Federal Meat Inspection Act and the Poultry Products Inspection Act.

We are issuing this proposed rule under the Federal Food, Drug, and Cosmetic Act (the FD&C Act). Section 404(a) of the FD&C Act (21 U.S.C. 344(a)) provides that whenever the Secretary finds after investigation that the distribution in interstate commerce of any class of food may, by reason of contamination with micro-organisms during the manufacture, processing, or packing thereof in any locality, be injurious to health, and that such injurious nature cannot be adequately determined after such articles have entered interstate commerce, the Secretary then shall issue regulations providing for the issuance, to manufacturers, processors, or packers of such class of food in such locality, of permits to which shall be attached such conditions governing the manufacture, processing, or packing of such class of food, for such temporary period of time, as may be necessary to protect the public health. Under section 404 of the FD&C Act, FDA's regulations in part 108 have long required registration of food processing establishments, filing of process information, and maintenance of processing and production records for acidified foods and low-acid canned foods. Under section 701(e) of the FD&C Act, any action for the issuance, amendment, or repeal of any regulation under section 404(a) of the FD&C Act shall be begun by a proposal made either by the Secretary on his own initiative or by petition of any interested persons, showing reasonable grounds therefor, filed with the Secretary.

As stated in section I, the proposed rule would make technical amendments to § 108.25, “Acidified Foods,” and § 108.35, “Thermal Processing of Low-Acid Foods Packaged in Hermetically Sealed Containers.” These changes would incorporate the new FDA form numbers and changes to the addresses or locations where forms can be found or must be sent. These changes would also remove obsolete references to dates that occurred years ago and would update the name of the Agency of the U. S. Department of Agriculture that administers the meat and poultry inspection programs under the Federal Meat Inspection Act and the Poultry Products Inspection Act. Specifically, the proposed rule would:

• Amend § 108.25(c)(1) and (c)(2) and § 108.35(c)(1) and (c)(2) to replace the obsolete mailing code (HFS-618) listed in those provisions with the current mailing code (HFS-303) for the FDA office identified in those provisions.

• Amend § 108.25(c)(1) and (c)(2) and § 108.35(c)(1) and (c)(2) to provide an Internet address where forms can be found or submitted. The new text would state that the forms are available on our Web site at http://www.fda.gov/Food/GuidanceRegulation/FoodFacilityRegistration/AcidifiedLACFRegistration/ucm2007436.htm and, for electronic submission, would refer to FDA's Industry Systems Web site at www.access.fda.gov.

• Amend § 108.25(c)(1) by deleting “Commercial processors presently so engaged shall register within 120 days after the effective date of this regulation.” We propose to delete this sentence because the effective date occurred years ago, so the sentence is no longer necessary. We also propose to replace the sentence stating that “Foreign processors shall register within 120 days after the effective date of this regulation or before any offering of foods for import into the United States, whichever is later,” with a new sentence stating that “Foreign processors shall register before any offering of foods for import into the United States.” We propose to make this change because the effective date occurred years ago, so reference to the effective date is no longer necessary.

• Amend § 108.25(c)(2) by replacing “form FDA 2541a (food canning establishment process filing form for all methods except aseptic)” with “Form FDA 2541e (Food Process Filing for Acidified Method).” This change would reflect the new form number and form that FDA is introducing.

• Amend § 108.35(c)(1) by deleting the sentence stating that “Commercial processors presently so engaged shall register not later than July 13, 1973.” Given the passage of time since § 108.35(c)(1) was issued, reference to the date of July 13, 1973, is no longer necessary.

• Amend § 108.35(c)(2) by replacing “Form FDA 2541a (food canning establishment process filing for all methods except aseptic), or Form FDA 2541c (food canning establishment process filing for aseptic systems)” with a list of the following new forms: Form FDA 2541d (Food Process Filing for Low-Acid Retorted Method); Form FDA 2541f (Food Process Filing for Water Activity/Formulation Control Method); and Form FDA 2541g (Food Process Filing for Low-Acid Aseptic Systems). These changes refer to the new form numbers and forms that FDA is introducing.

• Amend § 108.35(c)(2)(ii) by inserting “LACF Registration Coordinator (HFS-303)” before “Center for Food Safety and Applied Nutrition.” This change would provide greater specificity as to the FDA office that should receive information for purposes of § 108.35(c)(2)(ii).

• Amend § 108.35(i) (which refers to “the meat and poultry inspection program of the Animal and Plant Health Inspection Service of the Department of Agriculture”) by replacing “Animal and Plant Health Inspection Service” with “Food Safety Inspection Service.” We are making this change because the Food Safety and Inspection Service of the U.S. Department of Agriculture now administers the meat and poultry inspection program under the Federal Meat Inspection Act and the Poultry Products Inspection Act, and not the Animal and Plant Health Inspection Service.

We propose that any final rule resulting from this rulemaking process become effective 30 days after its date of publication in the Federal Register.

We are publishing this proposed rule under the formal rulemaking process. Executive Order 12866 does not require us to analyze the costs and benefits of proposed rules that we publish under this rulemaking process.

The Regulatory Flexibility Act requires Agencies to analyze regulatory options that would minimize any significant impact of a rule on small entities. The proposed rule would amend §§ 108.25 and 108.35 to delete obsolete references to long-expired effective dates, make changes to FDA addresses or locations, and reflect new process filing forms. With regard to the new process filing forms, FDA would replace references to Forms FDA 2541a and FDA 2541c with references to four new process filing forms: Forms FDA 2541d, FDA 2541e, FDA 2541f, and FDA 2541g. Some of the data entry fields on the four new process filing forms are not on current Forms FDA 2541a and FDA 2541c. The new forms add certain data entry fields to improve the efficiency of FDA's review of the process filings. For example, the new forms include data entry fields for the “food product group” (such as liquid, ready-to-eat “breakfast foods”). In addition, the new forms provide for “smart form” technology using an electronic submission system. The updated process filing portion of the electronic submission system queries the processor about the processes used to produce the food and presents only those data entry fields that are applicable. As a result, processors will no longer need to evaluate whether particular data entry fields are applicable to their products. For example, when a processor submits a process filing for a product that is processed using a low-acid retorted method with a process mode of “agitating,” smart form technology would bypass questions that are not applicable to this process mode option. We estimate that the additional time it would take processors to complete the new information requested on the new forms would be offset by the time processors will save by not having to evaluate whether certain data entry fields on Form FDA 2541a or FDA 2541c are applicable to their products. Hence, we propose to certify that the rule, if finalized, will not have a significant economic impact on a substantial number of small entities.

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

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

This proposed rule contains information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). These collections of information have been previously approved under OMB control number 0910-0037 which expires September 30, 2017.

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

Interested persons may submit either electronic comments regarding this document to http://www.regulations.gov or written comments to the Division of Dockets Management (see ADDRESSES). It is only necessary to send one set of comments. Identify comments with the docket number found in brackets in the heading of this document. Received comments may be seen in the Division of Dockets Management between 9 a.m. and 4 p.m., Monday through Friday, and will be posted to the docket at http://www.regulations.gov.

Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 108 be amended as follows:

I. What is parallel processing?

Consistent with EPA regulations found at 40 CFR part 51, Appendix V, section 2.3.1, for purposes of expediting review of a SIP submittal, parallel processing allows a state to submit a plan to EPA prior to actual adoption by the state. Generally, the state submits a copy of the proposed regulation or other revisions to EPA before conducting its public hearing. EPA reviews this proposed state action and prepares a notice of proposed rulemaking. EPA's notice of proposed rulemaking is published in the Federal Register during the same time frame that the state is holding its public process. The state and EPA then provide for concurrent public comment periods on both the state action and federal action.

If the revision that is finally adopted and submitted by the state is changed in aspects other than those identified in the proposed rulemaking on the parallel process submission, EPA will evaluate those changes and if necessary and appropriate, issue another notice of proposed rulemaking. The final rulemaking action by EPA will occur only after the SIP revision has been adopted by the state and submitted formally to EPA for incorporation into the SIP.

On April 15, 2015, the State of Kentucky, through Kentucky DAQ, submitted a formal letter request for parallel processing of a draft SIP revision that the Commonwealth was already taking through public comment. Kentucky DAQ requested parallel processing so that EPA could begin to take action on its draft SIP revision in advance of the Commonwealth's submission of the final SIP revision, should that be necessary. As stated above, the final rulemaking action by EPA will occur only after the SIP revision has been: (1) Adopted by Kentucky; (2) submitted formally to EPA for incorporation into the SIP; and (3) evaluated by EPA, including any changes made by the State after the April 15, 2015, draft was submitted to EPA.

On March 12, 2008, EPA promulgated a revised 8-hour ozone NAAQS of 0.075 parts per million (ppm). See 73 FR 16436 (March 27, 2008). Under EPA's regulations at 40 CFR part 50, the 2008 8-hour ozone NAAQS is attained when the 3-year average of the annual fourth-highest daily maximum 8-hour average ambient air quality ozone concentrations is less than or equal to 0.075 ppm. See 40 CFR 50.15. Ambient air quality monitoring data for the 3-year period must meet a data completeness requirement. The ambient air quality monitoring data completeness requirement is met when the average percent of days with valid ambient monitoring data is greater than 90 percent, and no single year has less than 75 percent data completeness as determined in Appendix I of part 50.

Upon promulgation of a new or revised NAAQS, the CAA requires EPA to designate as nonattainment any area that is violating the NAAQS, based on the three most recent years of ambient air quality data at the conclusion of the designation process. The Cincinnati, OH-KY-IN Area was designated nonattainment for the 2008 8-hour ozone NAAQS on April 30, 2012 (effective July 20, 2012) using 2008-2010 ambient air quality data. See 77 FR 30088. At the time of designation, the Cincinnati, OH-KY-IN Area was classified as a marginal nonattainment area for the 2008 8-hour ozone NAAQS. On March 6, 2015, EPA finalized a rule entitled “Implementation of the 2008 National Ambient Air Quality Standards for Ozone: State Implementation Plan Requirements” (SIP Requirements Rule) that establishes the requirements that state, tribal, and local air quality management agencies must meet as they develop implementation plans for areas where air quality exceeds the 2008 8-hour ozone NAAQS.1 See 80 FR 12264. This rule establishes nonattainment area attainment dates based on Table 1 of section 181(a) of the CAA, including an attainment date three years after the July 20, 2012, effective date, for areas classified as marginal for the 2008 8-hour ozone NAAQS. Therefore, the attainment date for the Cincinnati, OH-KY-IN Area is July 20, 2015.

Based on the nonattainment designation, Kentucky is required to develop a nonattainment SIP revision addressing certain CAA requirements. Specifically, pursuant to CAA section 182(a)(3)(B), Kentucky is required to submit a SIP revision addressing emissions statements requirements.

Ground level ozone is not emitted directly into the air, but is created by chemical reactions between oxides of nitrogen (NOX) and volatile organic compounds (VOC) in the presence of sunlight. Emissions from industrial facilities and electric utilities, motor vehicle exhaust, gasoline vapors, and chemical solvents are some of the major sources of NOX and VOC. Section 182(a)(3)(B) of the CAA requires each state with ozone nonattainment areas to submit a SIP revision requiring annual emissions statements to be submitted to the state by the owner or operator of each NOX or VOC stationary source 2 located within a nonattainment area showing the actual emissions of NOX and VOC from that source. The first statement is due three years from the area's nonattainment designation, and subsequent statements are due at least annually thereafter.

On April 15, 2015, Kentucky submitted a draft SIP revision, for parallel processing, containing emissions statements requirements related to its portion of the Cincinnati, OH-KY-IN Area. EPA is now taking action to propose approval of this SIP revision as meeting the requirements of section 182(a)(3)(B) of the CAA. More information on EPA's analysis of Kentucky's SIP revision is provided below.

Kentucky's April 15, 2015, draft submission seeks to include the specific sections of 401 Kentucky Administrative Regulations (KAR) 52.020—Title V permits, 401 KAR 52:030 Federally-enforceable permits for non-major sources, 401 KAR 52:040—State-Origin Permits, and 401 KAR 52:070—Registration of designated sources identified on pages 8 and 9 of its submittal into the SIP to meet the emissions statements requirements of CAA section 182(a)(3)(B). EPA has preliminarily determined that the specific regulatory sections identified on pages 8 and 9 of the SIP submission, collectively, meet the emissions statement requirements of section 182(a)(3)(B) because they require sources that emit 25 tons per year or more of VOCs or NOX within the Kentucky portion of the Area to submit annual certified statements showing actual VOC and NOX emissions.3 Consequently, EPA is proposing to approve the portion of Kentucky's April 15, 2015, draft SIP submission that addresses the emissions statements requirements for the Kentucky portion of the Area.

In this proposed rule, EPA is proposing to finalize regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to finalize the incorporate by reference of 401 KAR 52:020—Title V permits, Section 22 entitled “Annual Emissions Certification”, first sentence only and Section 23 entitled “Certification by Responsible Official”, introductory paragraph text and subsection (4) only; 401 KAR 52:030—Federally-enforceable permits for nonmajor sources, Section 3 entitled “General Provisions”, subsection (4) only, Section 22 entitled “Certification by Responsible Official”, introductory text and subsection (4) only, and Section 25 entitled “Sources Subject to Title V”, subsection (1) introductory text, subsection (1)(c), and subsection (2) introductory text only; 401 KAR 52:040—State-Origin Permits, Section 3 entitled “General Provisions”, subsection (2) introductory text, subsection (2)(c), and subsection (3) only, Section 20 entitled “Annual Emissions Certification for Specified Sources”, subsection (1) only, and Section 21 entitled “Certification by Responsible Official”, introductory text and subsection (4) only; and 401 KAR 52:070—Registration of designated sources, Section 3 entitled “General Provisions”, subsection (2) introductory text, subsection (2)(a)(1), and subsection (2)(a)(2) first sentence only. EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and/or in hard copy at the Region 4 EPA office (see the ADDRESSES section of this preamble for more information).

EPA is proposing to approve the portion of a draft SIP revision submitted by Kentucky on April 15, 2015, that addresses the CAA section 182(a)(3)(B) emissions statements requirements for the Kentucky portion of the Cincinnati, OH-KY-IN Area. EPA has preliminarily concluded that this portion of the Commonwealth's draft submission meets the requirements of sections 110 and 182 of the CAA.

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

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

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

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

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

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

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

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

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

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