Federal Register Vol. 80, No.44,

On December 26, 2014, the DOT's regulations at 2 CFR part 1201 became effective, which adopted the Office of Management and Budget's (OMB) revised Government-wide Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal awards to non-Federal entities at 2 CFR part 200 (Common Rule). These requirements at 2 CFR 200.319(b) prohibit the use of in-state or local geographic preferences in the evaluation of bids or proposals except where Federal statute mandates or encourages the use of such preferences.1 This prohibition extends to the use of geographic hiring preferences in contracts that are awarded by recipients and subrecipients with Federal financial assistance since such preferences could result in a competitive advantage for contractors based in the targeted hiring area. This provision in the OMB Common Rule is not new and was found in the DOT's implementation of the prior version of OMB's Common Rule (49 CFR 18.36(c)(2) (2014)).

Many recipients and subrecipients at the local governmental level have local hiring provisions that they otherwise apply to procurements that do not involve Federal funding. Such provisions are intended to ensure that the communities in which the projects are located benefit from the jobs that result from their investment of their funds, particularly for workers in low income areas. Transportation plays a critical role in connecting Americans and communities to economic opportunity. The choices that are made regarding transportation infrastructure can strengthen communities, create pathways to jobs and improve the quality of life for all Americans. Transportation investments and policies can improve access to jobs, education, and goods movement, while providing construction and operations jobs. As such, the DOT believes that local and other geographic-based hiring preferences are essential to promoting Ladders of Opportunity for the workers in these communities by ensuring that they participate in, and benefit from, the economic opportunities such projects present.

Additionally, Section 418 of the Consolidated and Further Continuing Appropriations Act, 2015, Public Law 113-235 (FY 2015 Appropriations Act), prohibits the Federal Transit Administration from using fiscal year (FY) 2015 funds to implement, administer, or enforce 49 CFR 18.36(c)(2), for construction hiring. Section 18.36(c)(2) prohibits the use of statutorily or administratively imposed in-State or local geographical preferences in the evaluation of bids or proposals.2 Thus, at least for FTA-funded project in FY 2015, Congress has diminished the legal effectiveness of this provision.

Therefore, the DOT is proposing to amend Part 1201 by promulgating a provision to deviate from the OMB guidance by making clear that geographic hiring preferences may be used in DOT grant programs. With this deviation, local communities will be in a better position to leverage Federal and State and local funds into local jobs and economic growth. However, this deviation would only apply to the extent that such geographic hiring preferences are not otherwise prohibited by Federal statute or regulation. For example, the Federal statutory provision at 23 U.S.C. 112 requires full and open competition in the award of contracts under the Federal-aid highway program. The Federal Highway Administration has traditionally interpreted this provision as prohibiting the use of geographic hiring preferences and reinforced this interpretation in 23 CFR 635.117(b). Under a 2013 Opinion from the Office of Legal Counsel (OLC), OLC clarified that section 112 does not compel the DOT from prohibiting recipients and subrecipients under the Federal-aid Highway Program from imposing contract requirements that do not directly relate to the performance of work. Rather, the OLC opinion states that the Secretary has discretion to permit such requirements as long as they do not “unduly limit competition.” (See Competitive Bidding Requirements Under the Federal-Aid Highway Program, 23 U.S.C. 112, (Aug. 23, 2013)).

In order to determine whether contracting requirements may be used consistent with the 2013 OLC opinion, the DOT has established a pilot program under which such geographic-based hiring requirements may be used on an experimental basis. This program, which is published in today's Federal Register, allows recipients and subrecipients of Federal Highway Administration and Federal Transit Administration funds to use such requirements pursuant to the experimental authorities of those agencies. For any such projects, the DOT will monitor and evaluate whether the contracting requirements approved for use under the pilot program have an undue restriction on competition.

The DOT has preliminarily determined that this action would not be a significant regulatory action within the meaning of Executive Order 12866 and would not be significant within the meaning of DOT regulatory policies and procedures. It is anticipated that the economic impact of this rulemaking would be minimal. These proposed changes would not adversely affect, in a material way, any sector of the economy. In addition, these changes would not interfere with any action taken or planned by another agency and would not materially alter the budgetary impact of any entitlements, grants, user fees, or loan programs. Consequently, a full regulatory evaluation is not required.

Allowing local geographic preferences in hiring, where none currently exist, may result in additional local hiring and in non-local workers not obtaining jobs they otherwise might get. To the extent this occurs this would be an economic transfer from non-local workers to local workers and not a cost.

To the extent local labor markets are tight this could increase labor costs for the DOT-Grant funded projects if all hiring is local. Similarly, if local supply of labor in the skilled trades is low, productivity on DOT-Grant funded project could decrease and project costs could increase if all hiring is local. However, the proposed rule is not forcing local governments to hire locally; it is only saying that they may use geographic hiring preferences. They will only exercise this option if they feel it is net beneficial to their communities to do so.

In compliance with the Regulatory Flexibility Act (Pub. L. 96-354, 5 U.S.C. 601-612), the DOT has evaluated the effects of this proposed action on small entities and has determined that the proposed action would not have a significant economic impact on a substantial number of small entities. This proposed action does not affect any funding distributed under any of the programs administered by the DOT. For these reasons, I hereby certify that this action would not have a significant economic impact on a substantial number of small entities.

This proposed rule would not impose unfunded mandates as defined by the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4, 109 Stat. 48). This proposed rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $128.1 million or more in any one year (2 U.S.C. 1532). Further, in compliance with the Unfunded Mandates Reform Act of 1995, the DOT will evaluate any regulatory action that might be proposed in subsequent stages of the proceeding to assess the effects on State, local, tribal governments and the private sector.

This proposed action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, and the DOT has determined preliminarily that this proposed action would not have sufficient federalism implications to warrant the preparation of a federalism assessment. The DOT has also determined that this proposed action would not preempt any State law or State regulation or affect the States' ability to discharge traditional State governmental functions.

We have analyzed this action under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use, dated May 18, 2001. We have determined that it is not a significant energy action under that order since it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Therefore, a Statement of Energy Effects is not required.

Catalog of Federal Domestic Assistance Program Number 20.205, Highway Planning and Construction. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on Federal programs and activities apply to this program. Accordingly, the DOT solicits comments on this issue.

Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct, sponsor, or require through regulations. The DOT has determined that this proposal does not contain collection of information requirements for the purposes of the PRA.

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

We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. The DOT certifies that this proposed action would not cause any environmental risk to health or safety that might disproportionately affect children.

The DOT has analyzed this proposed rule under Executive Order 12630, Governmental Actions and Interface with Constitutionally Protected Property Rights. The DOT does not anticipate that this proposed action would affect a taking of private property or otherwise have taking implications under Executive Order 12630.

The DOT has analyzed the environmental impacts of this proposed action pursuant to the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et seq.) and has determined that it is categorically excluded pursuant to DOT Order 5610.1C, Procedures for Considering Environmental Impacts (44 FR 56420, Oct. 1, 1979). Categorical exclusions are actions identified in an agency's NEPA implementing procedures that do not normally have a significant impact on the environment and therefore do not require either an environmental assessment (EA) or environmental impact statement (EIS). See 40 CFR 1508.4. In analyzing the applicability of a categorical exclusion, the agency must also consider whether extraordinary circumstances are present that would warrant the preparation of an EA or EIS. Id. Paragraph 3.c.5 of DOT Order 5610.1C incorporates by reference the categorical exclusions for all DOT Operating Administrations. This action is covered by the categorical exclusion listed in the Federal Highway Administration's implementing procedures, “[p]romulgation of rules, regulations, and directives.” 23 CFR 771.117(c)(20). The purpose of this rulemaking is to permit recipients and subrecipients to impose geographic-based hiring preferences whenever not otherwise prohibited by Federal statute. The agency does not anticipate any environmental impacts, and there are no extraordinary circumstances present in connection with this rulemaking.

A regulation identifier number (RIN) is assigned to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. The RIN contained in the heading of this document can be used to cross reference this action with the Unified Agenda.

For the reasons set forth in the preamble, part 1201 of title 2 of the Code of Federal Regulations is proposed to be amended as follows:

We invite you to send any written relevant data, views, or arguments about this proposed AD. Send your comments to an address listed under the ADDRESSES section. Include “Docket No. FAA-2015-0250; Directorate Identifier 2014-NM-216-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.

The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014-0237R1, dated December 5, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for 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 by searching for and locating Docket No. FAA-2015-0250.

On February 4, 2004, we issued AD 2004-03-33, Amendment 39-13477 (69 FR 9936, March 3, 2004), applicable to certain Airbus Model A300 B2 and B4 series airplanes; Model A300 B4-600, A300 B4-600R, and A300 F4-600R series airplanes; Model A310 series Airplanes; Model A319, A320, and A321 series airplanes; Model A330-301, -321, -322, -341, and -342 airplanes; and Model A340 series airplanes. That AD requires, among other actions, replacement of certain pitot probes with certain new pitot probes. That AD was issued to prevent loss or fluctuation of indicated airspeed, which could result in misleading information being provided to the flightcrew.

Airbus has issued Service Bulletin A320-34-1170, Revision 28, dated September 1, 2014; Service Bulletin A320-34-1456, Revision 01, dated May 15, 2012; and Service Bulletin A320-34-1463, Revision 01, dated May 15, 2012. The service information describes procedures for replacing certain Thales Avionics pitot probes on the captain, first officer, and standby sides with certain other Goodrich pitot probes.

The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. This service information is reasonably available; see ADDRESSES for ways to access this service information.

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.

The EASA MCAI specifies that installation of a pitot probe approved after the effective date of the EASA AD, and compliant with the “new EASA icing requirements,” is equal to compliance with the requirements in paragraph (h) of this proposed AD, provided the part is approved by EASA or Airbus's EASA Design Organization Approval (DOA). However, this proposed AD does not include that requirement because EASA regulations do not apply to airplanes type certificated for operation in the United States under the provisions of section 21.29 of the Federal Aviation Regulations (14 CFR 21.29).

Paragraph (1) of the MCAI requires replacement of Thales part number (P/N) 50620-10 pitot probes with Thales P/N C16195AA pitot probes. However, that action is not included in this proposed AD. Paragraph (f) of AD 2004-03-33, Amendment 39-13477 (69 FR 9936, March 3, 2004), requires that action.

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

We also estimate that it would take about 4 work-hours per product to comply with the basic requirements of this proposed AD. The average labor rate is $85 per work-hour. Required parts would cost about $21,930 per product. Based on these figures, we estimate the cost of this proposed AD on U.S. operators to be $21,223,310, or $22,270 per product.

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:

This notice of proposed rulemaking contains proposed regulations that amend 26 CFR part 1 under section 1502 of the Internal Revenue Code (Code). Section 1502 authorizes the Secretary to prescribe regulations for corporations that join in filing a consolidated return, and it expressly provides that those rules may be different from the provisions of chapter 1 of subtitle A of the Code that would apply if those corporations filed separate returns. Terms used in the consolidated return regulations generally are defined in § 1.1502-1.

These proposed regulations provide guidance under § 1.1502-76, which prescribes rules for determining the taxable period in which items of income, gain, deduction, loss, and credit (tax items) of a corporation that joins in filing a consolidated return are included. Section 1.1502-76(b) provides, in part, that if a corporation (S) becomes or ceases to be a member of a consolidated group during a consolidated return year, S must include in the consolidated return its tax items for the period during which it is a member. S also must file a separate return (including a consolidated return of another group) that includes its items for the period during which it is not a member.

On September 8, 1966, the IRS and the Treasury Department promulgated regulations under § 1.1502-76 in TD 6894, 31 FR 11794 (1966 regulations). Section 1.1502-76(b) of the 1966 regulations was silent regarding the treatment of S's tax items that accrued on the day S became or ceased to be a member of a consolidated group (S's change in status). Thus, whether S's tax items for the day of S's change in status should have been reflected on S's tax return for the short period ending with S's change in status, or whether these tax items should have been reflected instead on S's tax return for the short period beginning after S's change in status, was unclear under the 1966 regulations.

On August 15, 1994, the IRS and the Treasury Department published final regulations (TD 8560; 59 FR 41666) under § 1.1502-76(b) (current regulations) that revised the 1966 regulations to eliminate uncertainty regarding the treatment of tax items recognized by S on the day of S's change in status. Under the general rule of § 1.1502-76(b)(1)(ii)(A)(1) of the current regulations (current end of the day rule), S is treated for all federal income tax purposes as becoming or ceasing to be a member of a consolidated group at the end of the day of S's change in status, and S's tax items that are reportable on that day generally are included in the tax return for the taxable year that ends as a result of S's change in status.

The notice of proposed rulemaking that proposed the current end of the day rule (57 FR 53634, Nov. 12, 1992) (1992 NPRM) indicated that the current end of the day rule was intended to provide certainty and prevent inconsistent reporting of S's items between the consolidated and separate returns. Prior to the 1992 NPRM, some taxpayers had inferred (based upon the administrative practice of the IRS) that the inclusion in a particular return of a tax item of S incurred on the day of S's change in status depended on a factual determination of whether the transaction occurred before or after noon on the day of S's change in status (the so-called “lunch rule”).

There are two exceptions to the current end of the day rule. The first exception (in § 1.1502-76(b)(1)(ii)(A)(2)) provides that if a corporation is an S corporation (within the meaning of section 1361(a)(1)) immediately before becoming a member of a consolidated group, the corporation becomes a member of the group at the beginning of the day the termination of its S corporation election is effective (termination date), and its taxable year ends for all federal income tax purposes at the end of the preceding day (S corporation exception). The S corporation exception was added by TD 8842 (64 FR 61205; Nov. 10, 1999) to eliminate the need to file a one-day C corporation return for the day an S corporation is acquired by a consolidated group. No additional rule was necessary with respect to a qualified S corporation subsidiary (QSub) of an S corporation that joins a consolidated group. See § 1.1361-5(a)(3).

Added at the same time as the current end of the day rule, the second exception (in § 1.1502-76(b)(1)(ii)(B)) provides that if a transaction occurs on the day of S's change in status that is properly allocable to the portion of S's day after the event resulting in S's change in status, S and certain related persons must treat the transaction as occurring at the beginning of the following day for all federal income tax purposes (current next day rule). The current next day rule was added in response to comments to the 1992 NPRM suggesting that the current end of the day rule created a “seller beware” problem with respect to S's tax items arising on the day of S's change in status but after the event causing S's change in status. Commenters suggested that, for example, if consolidated group A sold the stock of S to consolidated group B, and group B caused S to sell one of its divisions on the same day it was acquired by group B, the gain from the sale of the division would be inappropriately allocable to group A's consolidated return. Commenters recommended that final regulations adopt rules substantially similar to the current next day rule to protect the reasonable expectations of sellers and buyers of S's stock. Commenters suggested that a rule providing this type of protection was most appropriate with respect to extraordinary items, and some commenters suggested that a rule similar to the current next day rule should operate unless the seller and buyer of S agreed otherwise.

The IRS and the Treasury Department have determined that changes should be made to the regulations under § 1.1502-76(b) due to uncertainty regarding the appropriate application of the current next day rule. These proposed regulations address this concern as well as additional concerns with the current regulations, as summarized in this section 3.A. and discussed in greater detail in sections 3.B. through 3.K. of this preamble.

To provide certainty, the proposed regulations generally clarify the period in which S must report certain tax items by replacing the current next day rule with a new exception to the end of the day rule (proposed next day rule) that is more narrowly tailored to clearly reflect taxable income and prevent certain post-closing actions from adversely impacting S's tax return for the period ending on the day of S's change in status. The proposed next day rule applies only to “extraordinary items” (as defined in § 1.1502-76(b)(2)(ii)(C) of the proposed regulations) that result from transactions that occur on the day of S's change in status, but after the event causing the change, and that would be taken into account by S on that day. This rule requires those extraordinary items to be allocated to S's tax return for the period beginning the next day. The proposed next day rule is expressly inapplicable to any extraordinary item that arises simultaneously with the event that causes S's change in status.

The proposed regulations further clarify that fees for services rendered in connection with S's change in status constitute a “compensation-related deduction” for purposes of § 1.1502-76(b)(2)(ii)(C)(9) (if payment of the fees would give rise to a deduction), and therefore an extraordinary item. The proposed regulations also clarify that the anti-avoidance rule in § 1.1502-76(b)(3) may apply to situations in which a person modifies an existing contract or other agreement in anticipation of S's change in status.

The proposed regulations also add a rule (previous day rule, described in section 3.C. of this preamble) to clarify the application of the S corporation exception. In addition, the proposed regulations limit the scope of the end of the day rule, the next day rule, the S corporation exception, and the previous day rule to determining the period in which S must report certain tax items and determining the treatment of an asset or a tax item for purposes of sections 382(h) and 1374 (as opposed to applying for all federal income tax purposes).

Additionally, the proposed regulations provide that short taxable years resulting from intercompany transactions to which section 381(a) applies (intercompany section 381 transactions) are not taken into account in determining the carryover period for a tax item of the distributor or transferor member in the intercompany section 381 transaction or for purposes of section 481(a). Furthermore, the proposed regulations provide that the due date for filing S's separate return for the taxable year that ends as a result of S becoming a member is not accelerated if S ceases to exist in the same consolidated return year.

The proposed regulations make several other conforming and non-substantive changes to the current regulations as well. Finally, the proposed regulations add several examples to illustrate the proposed rules.

The IRS and the Treasury Department note that neither the current regulations nor the proposed regulations are intended to supersede general rules in the Code and regulations concerning whether an item is otherwise includible or deductible.

The current next day rule provides that S and certain related persons must treat a transaction as occurring at the beginning of the day following S's change in status if the transaction occurs on the day of S's change in status and is “properly allocable” to the portion of that day following S's change in status. The IRS and the Treasury Department believe, however, that the standards provided in the current next day rule for determining whether a transaction is “properly allocable” to the portion of S's day after the event resulting in S's change in status have been inappropriately interpreted by taxpayers. The current next day rule provides that a determination of whether a transaction is “properly allocable” to the portion of S's day after the event resulting in S's change in status is respected if it is “reasonable and consistently applied by all affected persons.” In determining whether an allocation is “reasonable,” certain factors enumerated in the current regulations are to be considered, including whether tax items arising from the same transaction are allocated inconsistently. Some taxpayers have interpreted these rules as providing flexibility in reporting tax items that result from transactions occurring on the day of S's change in status so that those items can be allocated by agreement to the day of, or to the day following, S's change in status. The IRS and the Treasury Department view this interpretation of the current next day rule as inappropriate because it effectively would permit taxpayers to elect the income tax return on which these tax items are reported and therefore may not result in an allocation that clearly reflects taxable income. This electivity is inconsistent with the purpose of § 1.1502-76(b) to clearly reflect the income of S and the consolidated group. Further, the IRS and the Treasury Department have observed that the current regulations create controversy between taxpayers and the IRS as to whether certain of S's tax items that become reportable on the day of S's change in status are properly allocated to S's tax return for the period ending that day rather than to S's tax return for the period beginning the next day.

The proposed next day rule is intended to eliminate the perceived electivity and the source of these controversies. Under the proposed regulations, the application of the proposed next day rule is mandatory rather than elective—if an extraordinary item results from a transaction that occurs on the day of S's change in status, but after the event resulting in the change, and if the item would be taken into account by S on that day, the transaction resulting in the extraordinary item is treated as occurring at the beginning of the following day for purposes of determining the period in which S must report the item.

The proposed regulations also provide that the proposed next day rule is inapplicable to items that arise simultaneously with the event that causes S's change in status. Under the end of the day rule (as revised by these proposed regulations), those items are reported on S's tax return for the short period ending on the day of S's change in status. The proposed regulations are expected to afford taxpayers and the IRS greater certainty regarding the period to which S's tax items resulting from such a transaction are allocated.

As noted in section 2 of this preamble, the special rule for S corporations provides an exception to the end of the day rule if an S corporation joins a consolidated group. To avoid creating a one-day C corporation tax return for the termination date, the S corporation exception provides that S becomes a member of the group at the beginning of the termination date, and that S's taxable year ends for all federal income tax purposes at the end of the preceding day.

Although these proposed regulations retain the S corporation exception, the proposed regulations add a previous day rule that mirrors the principles of the proposed next day rule. Whereas the proposed next day rule requires extraordinary items resulting from transactions that occur on the day of S's change in status (but after the event causing the change) to be allocated to S's tax return for the short period that begins the following day, the previous day rule requires extraordinary items resulting from transactions that occur on the termination date (but before or simultaneously with the event causing S's status as an S corporation to terminate) to be allocated to S's tax return for the short period that ends on the previous day (that is, the day preceding the termination date).

Under the current end of the day rule, S becomes or ceases to be a member at the end of the day on which its status as a member changes, and its tax year ends “for all federal income tax purposes” at the end of that day. However, applying the end of the day rule for purposes other than the reporting of S's tax items could yield results inconsistent with other consolidated return rules. For example, under §§ 1.1502-13 and 1.1502-80(d)(1), if a member contributes property subject to a liability in excess of the property's basis to a nonmember in exchange for the nonmember's stock, and if the transferee becomes a member of the transferor's consolidated group as a result of the exchange, the transaction is treated as an intercompany transaction and section 357(c) does not apply. However, if the end of the day rule applies “for all federal income tax purposes,” it may be unclear whether the transferee becomes a member “immediately after the transaction,” whether the transaction is an intercompany transaction, and whether section 357(c) could apply to the transaction.

To eliminate possible confusion arising from application of the current end of the day rule and related rules, these proposed regulations provide that the end of the day rule, the proposed next day rule, the S corporation exception, and the previous day rule apply for purposes of determining the period in which S must report its tax items, as well as for purposes of sections 382(h) and 1374 (discussed in section 3.I. of this preamble).

The proposed next day rule mandatorily applies to extraordinary items that result from a transaction that occurs on the day of S's change in status but after the event that causes the change. In contrast, the previous day rule mandatorily applies to extraordinary items that result from a transaction that occurs on the day of S's change in status but before or simultaneously with the event that causes S's status as an S corporation to terminate.

One category of extraordinary items, set forth in § 1.1502-76(b)(2)(ii)(C)(9) of the current regulations, applies to any “compensation-related deduction in connection with S's change in status.” The proposed regulations clarify that this category of extraordinary items includes (among other items) a deduction for fees for services rendered in connection with S's change in status. For example, if payment of a fee for the services of a financial adviser is contingent upon a successful acquisition of S's stock, to the extent the fee gives rise to a deduction, the deduction for the accrual of that expense is an extraordinary item, and the deduction is allowable only in S's taxable year that ends at the close of the day of the change.

The IRS and the Treasury Department request comments as to whether the list of extraordinary items set forth in § 1.1502-76(b)(2)(ii)(C) should be modified to include any item not currently listed or whether any item currently included should be deleted or modified. Specifically, the IRS and the Treasury Department are considering whether the item in § 1.1502-76(b)(2)(ii)(C)(5) (“[a]ny item carried to or from any portion of the original year (e.g., a net operating loss carried under section 172), and any section 481(a) adjustment”) should be modified to include “any section 481(a) adjustment or the acceleration thereof,” and whether the item in § 1.1502-76(b)(2)(ii)(C)(6) (“[t]he effects of any change in accounting method initiated by the filing of the appropriate form after S's change in status”) should continue to be included in the list of extraordinary items.

The IRS and the Treasury Department also request comments as to whether any extraordinary item should be excluded, in whole or in part, from application of the next day rule and the previous day rule. In particular, the IRS and the Treasury Department request comments as to whether the extraordinary items set forth in § 1.1502-76(b)(2)(ii)(C)(5) and (6) of the current regulations should be excluded, in whole or in part, from application of these rules.

Rather than require S to perform a closing of the books on the day of its change in status, the current regulations under § 1.1502-76(b)(2)(ii) permit S's tax items, other than the extraordinary items, to be ratably allocated between S's two short taxable years if certain conditions are met. The IRS and the Treasury Department request comments as to whether S no longer should be permitted to elect to ratably allocate its tax items between the periods ending and beginning with S's change in status.

Solely for purposes of determining the short taxable year of S to which the items of a passthrough entity in which S owns an interest are allocated, § 1.1502-76(b)(2)(vi)(A) of the current regulations generally provides that S is treated as selling or exchanging its entire interest in the entity immediately before S's change in status. This rule does not apply to certain foreign corporations the ownership of which may give rise to deemed income inclusions under the Code. In addition, a deemed income inclusion from a foreign corporation and a deferred tax amount from a passive foreign investment company under section 1291 are treated as extraordinary items under § 1.1502-76(b)(2)(ii)(C)(11). The IRS and the Treasury Department request comments as to whether such deemed income inclusions or deferred tax amounts should continue to be treated as extraordinary items, whether rules having similar effects to the rule in § 1.1502-76(b)(2)(vi)(A) relating to passthrough entities should be adopted for controlled foreign corporations and passive foreign investment companies in which S owns an interest, and whether any other changes should be made to § 1.1502-76(b)(2)(vi) of the current regulations.

Under § 1.1502-76(b)(3) of the current regulations, if any person acts with a principal purpose contrary to the purposes of § 1.1502-76(b) to substantially reduce the federal income tax liability of any person (prohibited purpose), adjustments must be made as necessary to carry out the purposes of § 1.1502-76 of the current regulations (anti-avoidance rule). The proposed regulations clarify that the anti-avoidance rule may apply to situations in which a person modifies an existing contract or other agreement in anticipation of S's change in status in order to shift an item between the taxable years that end and begin as a result of S's change in status if such actions are undertaken with a prohibited purpose. The IRS and the Treasury Department request comments regarding this proposed amendment to the anti-avoidance rule.

For purposes of section 382, the term recognized built-in loss (RBIL) means any loss recognized during the recognition period on the disposition of any asset held by the loss corporation immediately before the date of the section 382 ownership change (change date), to the extent the loss reflects a built-in loss on the change date. Section 382(h)(2)(B). The term recognition period means the five-year period beginning on the change date. Section 382(h)(7)(A).

Section 382(h)(1)(B) generally provides that if a loss corporation has a net unrealized built-in loss (NUBIL), then any RBIL taken into account in a taxable year any portion of which falls in the recognition period (recognition period taxable year) is treated as a deduction subject to the loss corporation's section 382 limitation as if the RBIL were a pre-change loss. The amount of RBILs subject to the section 382 limitation in any recognition period taxable year is limited, however, to the excess of the NUBIL over total RBILs in prior taxable years ending in the recognition period. (The amount of such excess is referred to in this preamble as the outstanding NUBIL balance.) In other words, the amount of the NUBIL limits the amount of RBILs that are treated as pre-change losses, and any built-in loss treated as an RBIL further reduces the outstanding NUBIL balance.

In many cases, the event that causes S's change in status for purposes of § 1.1502-76(b)(1)(ii) also causes S to undergo an ownership change for purposes of section 382. Thus, an item of deduction or loss that becomes reportable on the day of S's change in status falls within the recognition period beginning that day, even if the item is allocated to S's short period ending that day under the end of the day rule. As a consequence, an item that should be a pre-change loss is treated as an RBIL that reduces the outstanding NUBIL balance. For example, assume consolidated group A sells all of S's stock to consolidated group B. If on the day of S's change in status (but before the event causing the change), S recognizes a loss on the sale of an asset, under the end of the day rule the loss is reported on group A's consolidated return. However, notwithstanding that the loss may not be claimed by group B, the loss may be treated as an RBIL and reduce the outstanding NUBIL balance.

To prevent such an outcome, these proposed regulations provide that, for purposes of section 382(h), items includible in the short taxable year that ends as a result of S's change in status (including items allocated to that taxable year under the end of the day rule) are not treated as occurring in the recognition period. Rather, only items includible in S's short taxable year that begins as a result of S's change in status (including items allocated to that taxable year under the proposed next day rule) are treated as occurring in the recognition period. Therefore, the beginning of the recognition period for purposes of section 382(h) would correspond with the beginning of S's short taxable year that begins on the day after S's change in status.

Section 1374 generally imposes a corporate-level tax (section 1374 tax) on the recognition of gain by an S corporation that formerly was a C corporation (or that acquired assets from a C corporation in a transferred basis transaction) during a recognition period specified in section 1374(d)(7) (section 1374 recognition period), but only to the extent of the corporation's net recognized built-in gain (as defined in section 1374(d)(2)) for a given taxable year. The section 1374 tax also applies to certain tax items attributable to the corporation's C corporation taxable years. In addition, regulations under section 337(d) extend section 1374 treatment to (1) a C corporation's conversion to a real estate investment trust (REIT), regulated investment company (RIC), and certain tax-exempt entities, or (2) certain cases in which a REIT, RIC, or tax-exempt entity acquires assets in a transferred basis transaction from a C corporation.

As with the application of section 382(h), the event that causes S's change in status for purposes of § 1.1502-76(b)(1)(ii) may be the event that results in S being a corporation that is subject to the section 1374 tax. Therefore, it is necessary to determine in which return (the group's consolidated return or S's separate return beginning the day after S's change in status) S's tax items for the day of S's change in status are included. Similarly, if the event that causes S's change in status for purposes of § 1.1502-76(b)(1)(ii) is the event that results in S ceasing to be a corporation subject to the section 1374 tax, it is necessary to determine in which return (the group's consolidated return or S's separate return for the period ending the day before S's change in status) S's tax items for the day of S's change in status are included. The proposed regulations thus provide that if S ceases to be a corporation subject to the section 1374 tax upon becoming a member, or if S elects to be a corporation that is subject to the section 1374 tax for its first separate return year after ceasing to be a member, S's items of recognized built-in gain or loss for purposes of section 1374 will include only the amounts reported on S's separate return (including items reported on that return under the previous day rule or the next day rule).

Under the current consolidated return regulations, if a member distributes or transfers its assets to another corporation that is a member immediately after the distribution or transfer in an intercompany section 381 transaction, and if the distributor or transferor member has a net operating loss carryover or a net capital loss carryover, the distributor or transferor member will not be treated as having a short taxable year for purposes of determining the years to which the loss may be carried. Sections 1.1502-21(b)(3)(iii) and 1.1502-22(b)(4).

These proposed regulations would amend current law by moving these rules to § 1.1502-76(b)(2)(i) and making conforming changes to §§ 1.1502-21(b)(3)(iii) and 1.1502-22(b)(4). In addition, these proposed regulations would expand these rules by providing that a short taxable year of the distributor or transferor member by reason of an intercompany section 381 transaction is not counted as a separate taxable year for purposes of determining either the taxable years to which any tax attribute of the distributor or transferor member may be carried or the taxable years in which an adjustment under section 481(a) is taken into account. No inference should be drawn from the proposed changes to these rules as to whether a short taxable year of a member resulting from an intercompany section 381 transaction is counted under current law for purposes of determining the years to which a tax credit may be carried or in which a section 481 adjustment is taken into account.

The proposed regulations also eliminate a provision that could cause taxpayers to inadvertently miss a return filing deadline. Under § 1.1502-76(b)(4) of the current regulations, if S joins a consolidated group, the due date for filing S's separate return is the earlier of the due date (with extensions) of the group's return or the due date (with extensions) of S's return if S had not joined the group. If S goes out of existence during the consolidated return year in which S joins a group, its taxable year would end. Under section 6072, the due date for S's short period return would be the 15th day of the third month (ninth month, with extensions) following the date on which S ceases to exist. Accordingly, if S ceases to exist during the same consolidated return year in which it becomes a member, the due date for S's tax return for the short period that ended as a result of S becoming a member could be accelerated. To prevent a taxpayer from inadvertently missing a filing date and being subject to potential penalties for filing a late return, the proposed regulations provide that if S goes out of existence in the same consolidated return year in which it becomes a member, the due date for filing S's separate return is determined without regard to S's ceasing to exist.

In addition to the changes described in this preamble, the proposed regulations make several non-substantive changes to the current regulations, including moving an example concerning § 1.1502-80(d) from the text of § 1.1502-76(b)(1)(ii)(B)(2) of the current regulations to § 1.1502-13(c)(7)(ii), Example 3(e).

The amendments to §§ 1.1502-21(b)(3)(iii), 1.1502-22(b)(4)(i), 1.1502-76(b)(2)(i), and 1.1502-76(b)(4) will apply to consolidated return years beginning on or after the date these regulations are published as final regulations in the Federal Register. The other amendments to § 1.1502-76(b) will apply to corporations becoming or ceasing to be members of consolidated groups on or after the date these regulations are published as final regulations in the Federal Register.

It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It is hereby certified that these regulations will not have a significant impact on a substantial number of small entities. This certification is based on the fact that the regulations apply only to transactions involving corporations that file consolidated federal income tax returns, and that such corporations tend to be larger businesses. Accordingly, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Code, these regulations will be submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

Before these proposed regulations are adopted as final regulations, consideration will be given to any comments that are submitted timely to the IRS as prescribed in this preamble under the “Addresses” heading. The IRS and the Treasury Department request comments on all aspects of the proposed rules. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by any person who timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place of the hearing will be published in the Federal Register.

The principal author of these proposed regulations is Russell G. Jones of the Office of Associate Chief Counsel (Corporate). However, other personnel from the IRS and the Treasury Department participated in their development.

Posting of Public Comments. Please note that all comments received are considered part of the public record and made available for public inspection online at http://www.regulations.gov and in the Department's public docket. Such information includes personal identifying information (such as your name, address, etc.) voluntarily submitted by the commenter.

You are not required to submit personal identifying information in order to comment on this rule. Nevertheless, if you want to submit personal identifying information (such as your name, address, etc.) as part of your comment, but do not want it to be posted online or made available in the public docket, you must include the phrase “PERSONAL IDENTIFYING INFORMATION” in the first paragraph of your comment. You must also place all the personal identifying information you do not want posted online or made available in the public docket in the first paragraph of your comment and identify what information you want redacted.

If you want to submit confidential business information as part of your comment, but do not want it to be posted online or made available in the public docket, you must include the phrase “CONFIDENTIAL BUSINESS INFORMATION” in the first paragraph of your comment. You must also prominently identify confidential business information to be redacted within the comment. If a comment has so much confidential business information that it cannot be effectively redacted, all or part of that comment may not be posted online or made available in the public docket.

Personal identifying information and confidential business information identified and located as set forth above will be redacted and the comment, in redacted form, will be posted online and placed in the Department's public docket file. Please note that the Freedom of Information Act applies to all comments received. If you wish to inspect the agency's public docket file in person by appointment, please see the “For Further Information” paragraph.

The Federally Supported Health Centers Assistance Acts of 1992 (Pub. L. 102-501) and 1995 (Pub. L. 104-73) amended section 224 of the Public Health Service Act (42 U.S.C. 233) to make the Federal Tort Claims Act (FTCA) (28 U.S.C. 1346(b), 2671-2680) the exclusive remedy for personal injury or death resulting from the performance of medical, surgical, dental or related functions by federally supported health centers and their employees, to the extent the centers and employees have been deemed by the Public Health Service, Department of Health and Human Services, to be eligible for FTCA coverage. Section 233(i) of title 42 provides that the Attorney General, in consultation with the Secretary of Health and Human Services (Secretary), may on the record determine, after notice and an opportunity for a full and fair hearing, that an individual physician or other licensed or certified health care practitioner who is an officer, employee, or contractor of an entity described in 42 U.S.C. 233(g)(4) shall not be deemed to be an employee of the Public Health Service for purposes of 42 U.S.C. 233 if “treating such individual as such an employee would expose the Government to an unreasonably high degree of risk of loss” based on certain prescribed circumstances. This proposed rule proposes that the determination may be made based on one or more of the following statutory criteria: (1) The individual does not comply with the policies and procedures that the entity has implemented pursuant to 42 U.S.C. 233(h)(1); (2) the individual has a history of claims filed against him or her as provided for under 42 U.S.C. 233 that is outside the norm for licensed or certified health care practitioners within the same specialty; (3) the individual refused to reasonably cooperate with the Attorney General in defending against any such claim; (4) the individual provided false information relevant to the individual's performance of his or her duties to the Secretary, the Attorney General, or an applicant for or recipient of funds under title 42 chapter 6A; or (5) the individual was the subject of disciplinary action taken by a state medical licensing authority or a state or national professional society.

The proposed rule proposes a process for making such a determination. The first step, pursuant to § 15.13(a), is a determination by the “initiating official,” who is a Deputy Assistant Attorney General of the Department of Justice's Civil Division, that treating an individual as an employee of the Public Health Service may expose the Government to an unreasonably high degree of risk of loss. Section 15.13(a) requires the initiating official, after consultation with the Secretary of the Department of Health and Human Services, to provide notice to the individual in question that an administrative hearing will be held to determine whether treating the individual as an employee of the Public Health Service for purposes of 42 U.S.C. 233(g) would expose the United States to an unreasonably high degree of risk of loss. Following a period for discovery and depositions, to the extent determined appropriate by an administrative law judge under § 15.15, the hearing is then conducted by the administrative law judge in the manner prescribed in § 15.14. After the hearing is conducted and the record is closed, § 15.16 requires the administrative law judge to submit written findings of fact, conclusions of law, and a recommended decision to the “adjudicating official,” who is the Assistant Attorney General for the Department of Justice's Civil Division. Section 15.17(b) then gives the parties 30 days to submit certain additional materials, including exceptions to the administrative law judge's recommended decision, to the adjudicating official, who then must make a final agency determination of whether treating the individual as an employee of the Public Health Service for purposes of 42 U.S.C. 233(g) would expose the United States to an unreasonably high degree of risk of loss. Section 15.18 provides that an individual who is dissatisfied with the determination may seek rehearing within 30 days after notice of the determination is sent, and § 15.20 allows individuals who have been determined to expose the United States to an unreasonably high degree of risk of loss to apply for reinstatement after a period of time. Consistent with 42 U.S.C. 1320a-7e(a) and 45 CFR 60.3, 60.5(h) and 60.16, the rule also provides for the Department to notify the National Practitioner Data Bank (NPDB), a confidential information clearinghouse created by Congress with primary goals of improving health care quality and protecting the public, of the issuance of a final order deeming an individual not to be an employee of the Public Health Service under this rule.

This proposed rule would add a new subpart B in part 15 of title 28, Code of Federal Regulations, containing the regulations of the Department of Justice governing such a determination.

The Department invites comments on any issues relating to the proposed rule.

The Attorney General, in accordance with the Regulatory Flexibility Act, 5 U.S.C. 605(b), has reviewed this proposed rule and, by approving it, certifies that it would not have a significant economic impact on a substantial number of small entities because it pertains to personnel and administrative matters affecting the Department.

This proposed rule has been drafted and reviewed in accordance with Executive Order 12866, “Regulatory Planning and Review,” and in accordance with Executive Order 13563, “Improving Regulation and Regulatory Review.”

The Department of Justice has determined that this proposed rule is a “significant regulatory action” under Executive Order 12866, section 3(f), and accordingly this proposed rule has been reviewed by the Office of Management and Budget.

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. The Department has assessed the costs and benefits of this proposed rule and believes that its benefits would justify its costs. As an initial matter, the Department does not expect that the proposed rule would have systemic or large-scale costs, because it is only the exceptional provider who would be subject to a de-deeming proceeding or determination; proceedings under this proposed rule would be rare and would not affect the overwhelming majority of patients, providers, or health centers. The costs associated with the proposed rule, then, would come in the individual instances of its application. A de-deeming administrative process would impose certain limited litigation-like costs, but §§ 15.14 and 15.15 provide flexibility that will enable the parties and administrative law judge to avoid unduly burdensome costs when those costs are unnecessary. In the event that an individual is ultimately determined to expose the United States to an unreasonably high degree of risk of loss, there will be certain costs and benefits to patients, providers, and health centers. A provider who is deemed not to be a member of the Public Health Service may be required to obtain his or her own medical malpractice insurance (as may the health center, for matters involving the provider that are determined not to be covered by the FTCA) or leave the practice. If the individual leaves the practice, the employing center may incur costs of replacing him or her with a new provider. The Department expects that substantial benefits will arise from such replacements, as any individual who is replaced will be one who has been determined to create an unreasonably high degree of risk of loss. It is thus likely that the individual's replacement will provide reduced risks of loss for the United States and better care for patients. While there may be instances in which an individual who presented such a risk of loss cannot be replaced, possibly resulting in impaired access to care for medically underserved health center patients, the Department believes that these costs are substantially outweighed by the benefits of implementing this authority.

The Department is unable to quantify these costs at this time, as the authority to deem a provider not a member of the Public Health Service has not previously been used. However, based on the expectation that the authority will be used sparingly and only for providers who expose the United States to an unreasonably high degree of risk of loss, the Department has concluded that the net benefits of improved patient care and reduced costs of malpractice will outweigh these possible costs.

This proposed rule would not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, the Department of Justice has determined that this proposed rule would not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement.

This proposed rule meets the applicable standards provided in sections 3(a) and 3(b)(2) of Executive Order 12988.

This proposed rule would not result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1501 et seq.

This proposed rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804. This proposed rule would not result in an annual effect on the economy of $100 million or more; a major increase in cost or prices; significant adverse effects on competition, employment, investment, productivity, or innovation; or the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.

For the reasons set forth in the preamble, the Attorney General proposes to amend part 15 of title 28 of the Code of Federal Regulations as follows:

Throughout this document whenever “we,” “us,” or “our” is used, we refer to EPA. This section provides additional information by addressing the following questions:

Section 110(a)(1) of the CAA requires, in part, that states make a SIP submission to EPA to implement, maintain and enforce each of the NAAQS promulgated by EPA after reasonable notice and public hearings. Section 110(a)(2) includes a list of specific elements that such infrastructure SIP submissions must address. SIPs meeting the requirements of sections 110(a)(1) and (2) are to be submitted by states within three years after promulgation of a new or revised NAAQS. These SIP submissions are commonly referred to as “infrastructure” SIPs.

On June 22, 2010, EPA revised the current 24-hour and annual standards with a new short-term standard based on the 3-year average of the 99th percentile of the yearly distribution of1-hour daily maximum SO2 concentrations. The level of the revised SO2 standard (hereafter the 2010 SO2 NAAQS) was set at 75 parts per billion (ppb) (75 FR 35519).

For the 2010 SO2 NAAQS, states typically have met many of the basic program elements required in section 110(a)(2) through earlier SIP submissions in connection with previous NAAQS. Nevertheless, pursuant to section 110(a)(1), states must review and revise, as appropriate, their existing SIPs to ensure that the SIPs are adequate to address the 2010 SO2 NAAQS. To assist states in meeting this statutory requirement, EPA issued guidance on September 13, 2013 (2013 Guidance), addressing the infrastructure SIP elements required under section 110 (a)(1) and (2) for the 2010 SO2 NAAQS.1 EPA will address these elements below under the following headings: (A) Emission limits and other control measures; (B) Ambient air quality monitoring/data system; (C) Program for enforcement of control measures (prevention of significant deterioration)(PSD)), New Source Review for nonattainment areas, and construction and modification of all stationary sources); (D) Interstate and international transport; (E) Adequate authority, resources, implementation, and oversight; (F) Stationary source monitoring system; (G) Emergency authority; (H) Future SIP revisions; (I) Nonattainment areas; (J) Consultation with government officials, public notification, prevention of significant deterioration (PSD), and visibility protection; (K) Air quality and modeling/data; (L) Permitting fees; and (M) Consultation/participation by affected local entities.

EPA is acting upon the July 15, 2013, SIP submission from Kansas that addresses the infrastructure requirements of CAA sections 110(a)(1) and 110(a)(2) for the 2010 SO2 NAAQS. The requirement for states to make a SIP submission of this type arises out of CAA section 110(a)(1). Pursuant to section 110(a)(1), states must make SIP submissions “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” and these SIP submissions are to provide for the “implementation, maintenance, and enforcement” of such NAAQS. The statute directly imposes on states the duty to make these SIP submissions, and the requirement to make the submissions is not conditioned upon EPA taking any action other than promulgating a new or revised NAAQS. Section 110(a)(2) includes a list of specific elements that “[e]ach such plan” submission must address.

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

Section 110(a)(1) addresses the timing and general requirements for infrastructure SIP submissions, and section 110(a)(2) provides more details concerning the required contents of these submissions. The list of required elements provided in section 110(a)(2) contains a wide variety of disparate provisions, some of which pertain to required legal authority, some of which pertain to required substantive program provisions, and some of which pertain to requirements for both authority and substantive program provisions.2 EPA therefore believes that while the timing requirement in section 110(a)(1) is unambiguous, some of the other statutory provisions are ambiguous. In particular, EPA believes that the list of required elements for infrastructure SIP submissions provided in section 110(a)(2) contains ambiguities concerning what is required for inclusion in an infrastructure SIP submission.

The following examples of ambiguities illustrate the need for EPA to interpret some section 110(a)(1) and section 110(a)(2) requirements with respect to infrastructure SIP submissions for a given new or revised NAAQS. One example of ambiguity is that section 110(a)(2) requires that “each” SIP submission must meet the list of requirements therein. EPA has long noted that this literal reading of the statute is internally inconsistent and would create a conflict with the nonattainment provisions in part D of title I of the Act, which specifically address nonattainment SIP requirements.3 However, section 110(a)(2)(I) which pertains to nonattainment SIP requirements and part D, addresses when attainment plan SIP submissions to address nonattainment area requirements are due. For example, section 172(b) requires EPA to establish a schedule for submission of such plans for certain pollutants when the Administrator promulgates the designation of an area as nonattainment, and section 107(d)(1)(B) allows up to two years, or in some cases three years, for such designations to be promulgated.4 This ambiguity illustrates that rather than apply all the stated requirements of section 110(a)(2) in a strict literal sense, EPA must determine which provisions of section 110(a)(2) are applicable for a particular infrastructure SIP submission.

Another example of ambiguity within sections 110(a)(1) and 110(a)(2) with respect to infrastructure SIPs pertains to whether states must meet all of the infrastructure SIP requirements in a single SIP submission, and whether EPA must act upon such SIP submission in a single action. Although section 110(a)(1) directs states to submit “a plan” to meet these requirements, EPA interprets the CAA to allow states to make multiple SIP submissions separately addressing infrastructure SIP elements for the same NAAQS. If states elect to make such multiple SIP submissions to meet the infrastructure SIP requirements, EPA can elect to act on such submissions either individually or in a larger combined action.5 Similarly, EPA interprets the CAA to allow it to take action on the individual parts of one larger, comprehensive infrastructure SIP submission for a given NAAQS without concurrent action on the entire submission. For example, EPA has sometimes elected to act at different times on various elements and sub-elements of the same infrastructure SIP submission.6

Ambiguities within sections 110(a)(1) and 110(a)(2) may also arise with respect to infrastructure SIP submission requirements for different NAAQS. Thus, EPA notes that not every element of section 110(a)(2) would be relevant, or as relevant, or relevant in the same way, for each new or revised NAAQS. The states' attendant infrastructure SIP submissions for each NAAQS therefore could be different. For example, the monitoring requirements that a state might need to meet in its infrastructure SIP submission for purposes of section 110(a)(2)(B) could be very different for different pollutants, therefore the content and scope of a state's infrastructure SIP submission to meet this element might be very different for an entirely new NAAQS than for a minor revision to an existing NAAQS.7

EPA notes that interpretation of section 110(a)(2) is also necessary when EPA reviews other types of SIP submissions required under the CAA. Therefore, as with infrastructure SIP submissions, EPA also has to identify and interpret the relevant elements of section 110(a)(2) that logically apply to these other types of SIP submissions. For example, section 172(c)(7) requires that attainment plan SIP submissions required by part D have to meet the “applicable requirements” of section 110(a)(2). Thus, for example, attainment plan SIP submissions must meet the requirements of section 110(a)(2)(A) regarding enforceable emission limits and control measures and section 110(a)(2)(E)(i) regarding air agency resources and authority. By contrast, it is clear that attainment plan SIP submissions required by part D would not need to meet the portion of section 110(a)(2)(C) that pertains to the PSD program required in part C of title I of the CAA, because PSD does not apply to a pollutant for which an area is designated nonattainment and thus subject to part D planning requirements. As this example illustrates, each type of SIP submission may implicate some elements of section 110(a)(2) but not others.

Given the potential for ambiguity in some of the statutory language of section 110(a)(1) and section 110(a)(2), EPA believes that it is appropriate to interpret the ambiguous portions of section 110(a)(1) and section 110(a)(2) in the context of acting on a particular SIP submission. In other words, EPA assumes that Congress could not have intended that each and every SIP submission, regardless of the NAAQS in question or the history of SIP development for the relevant pollutant, would meet each of the requirements, or meet each of them in the same way. Therefore, EPA has adopted an approach under which it reviews infrastructure SIP submissions against the list of elements in section 110(a)(2), but only to the extent each element applies for that particular NAAQS.

Historically, EPA has elected to use guidance documents to make recommendations to states for infrastructure SIPs, in some cases conveying needed interpretations on newly arising issues and in some cases conveying interpretations that have already been developed and applied to individual SIP submissions for particular elements.8 EPA most recently issued guidance for infrastructure SIPs on September 13, 2013 (2013 Guidance).9 EPA developed the 2013 Guidance document to provide states with up-to-date guidance for infrastructure SIPs for any new or revised NAAQS. Within the 2013 guidance, EPA describes the duty of states to make infrastructure SIP submissions to meet basic structural SIP requirements within three years of promulgation of a new or revised NAAQS. EPA also made recommendations about many specific subsections of section 110(a)(2) that are relevant in the context of infrastructure SIP submissions.10 The guidance also discusses the substantively important issues that are germane to certain subsections of section 110(a)(2). Significantly, EPA interprets sections 110(a)(1) and 110(a)(2) such that infrastructure SIP submissions need to address certain issues and need not address others. Accordingly, EPA reviews each infrastructure SIP submission for compliance with the applicable statutory provisions of section 110(a)(2), as appropriate.

As an example, section 110(a)(2)(E)(ii) is a required element of section 110(a)(2) for infrastructure SIP submissions. Under this element, a state must meet the substantive requirements of section 128, which pertain to state boards that approve permits or enforcement orders and heads of executive agencies with similar powers. Thus, EPA reviews infrastructure SIP submissions to ensure that the state's SIP appropriately addresses the requirements of section 110(a)(2)(E)(ii) and section 128. The 2013 Guidance explains EPA's interpretation that there may be a variety of ways by which states can appropriately address these substantive statutory requirements, depending on the structure of an individual state's permitting or enforcement program (e.g., whether permits and enforcement orders are approved by a multi-member board or by a head of an executive agency). However they are addressed by the state, the substantive requirements of section 128 are necessarily included in EPA's evaluation of infrastructure SIP submissions because section 110(a)(2)(E)(ii) explicitly requires that the state satisfy the provisions of section 128.

As another example, EPA's review of infrastructure SIP submissions with respect to the PSD program requirements in sections 110(a)(2)(C), (D)(i)(II), and (J) focuses upon the structural PSD program requirements contained in part C and EPA's PSD regulations. Structural PSD program requirements include provisions necessary for the PSD program to address all regulated sources and New Source Review (NSR) pollutants, including greenhouse gases (GHGs). By contrast, structural PSD program requirements do not include provisions that are not required under EPA's regulations at 40 CFR 51.166 but are merely available as an option for the state, such as the option to provide grandfathering of complete permit applications with respect to the 2012 PM2.5 NAAQS. Accordingly, the latter optional provisions are types of provisions EPA considers irrelevant in the context of an infrastructure SIP action.

For other section 110(a)(2) elements, however, EPA's review of a state's infrastructure SIP submission focuses on assuring that the state's SIP meets basic structural requirements. For example, section 110(a)(2)(C) includes, inter alia, the requirement that states have a program to regulate minor new sources. Thus, EPA evaluates whether the state has an EPA-approved minor NSR program and whether the program addresses the pollutants relevant to that NAAQS. In the context of acting on an infrastructure SIP submission, however, EPA does not think it is necessary to conduct a review of each and every provision of a state's existing minor source program (i.e., already in the existing SIP) for compliance with the requirements of the CAA and EPA's regulations that pertain to such programs.

With respect to certain other issues, EPA does not believe that an action on a state's infrastructure SIP submission is necessarily the appropriate type of action in which to address possible deficiencies in a state's existing SIP. These issues include: (i) existing provisions related to excess emissions from sources during periods of startup, shutdown, or malfunction that may be contrary to the CAA and EPA's policies addressing such excess emissions (“SSM”); (ii) existing provisions related to “director's variance” or “director's discretion” that may be contrary to the CAA because they purport to allow revisions to SIP-approved emissions limits while limiting public process or not requiring further approval by EPA; and (iii) existing provisions for PSD programs that may be inconsistent with current requirements of EPA's “Final NSR Improvement Rule,” 67 FR 80186 (December 31, 2002), as amended by 72 FR 32526 (June 13, 2007) (“NSR Reform”). Thus, EPA believes it may approve an infrastructure SIP submission without scrutinizing the totality of the existing SIP for such potentially deficient provisions and may approve the submission even if it is aware of such existing provisions.11 It is important to note that EPA's approval of a state's infrastructure SIP submission should not be construed as explicit or implicit re-approval of any existing potentially deficient provisions that relate to the three specific issues just described.

EPA's approach to review of infrastructure SIP submissions is to identify the CAA requirements that are logically applicable to that submission. EPA believes that this approach to the review of a particular infrastructure SIP submission is appropriate, because it would not be reasonable to read the general requirements of section 110(a)(1) and the list of elements in 110(a)(2) as requiring review of each and every provision of a state's existing SIP against all requirements in the CAA and EPA regulations merely for purposes of assuring that the state in question has the basic structural elements for a functioning SIP for a new or revised NAAQS. Because SIPs have grown by accretion over the decades as statutory and regulatory requirements under the CAA have evolved, they may include some outmoded provisions and historical artifacts. These provisions, while not fully up to date, nevertheless may not pose a significant problem for the purposes of “implementation, maintenance, and enforcement” of a new or revised NAAQS when EPA evaluates adequacy of the infrastructure SIP submission. EPA believes that a better approach is for states and EPA to focus attention on those elements of section 110(a)(2) of the CAA most likely to warrant a specific SIP revision due to the promulgation of a new or revised NAAQS or other factors.

For example, EPA's 2013 Guidance gives simpler recommendations with respect to carbon monoxide than other NAAQS pollutants to meet the visibility requirements of section 110(a)(2)(D)(i)(II), because carbon monoxide does not affect visibility. As a result, an infrastructure SIP submission for any future new or revised NAAQS for carbon monoxide need only state this fact in order to address the visibility prong of section 110(a)(2)(D)(i)(II).

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

On June 23, 2014, the United States Supreme Court issued a decision addressing the application of PSD permitting requirements to GHG emissions. Utility Air Regulatory Group v. Environmental Protection Agency, 134 S.Ct. 2427. The Supreme Court said that the EPA may not treat GHGs as an air pollutant for purposes of determining whether a source is a major source required to obtain a PSD permit. The Court also said that the EPA could continue to require that PSD permits, otherwise required based on emissions of pollutants other than GHGs, contain limitations on GHG emissions based on the application of Best Available Control Technology (BACT). In order to act consistently with its understanding of the Court's decision pending further judicial action to effectuate the decision, the EPA is not continuing to apply EPA regulations that would require that SIPs include permitting requirements that the Supreme Court found impermissible. Specifically, EPA is not applying the requirement that a state's SIP-approved PSD program require that sources obtain PSD permits when GHGs are the only pollutant (i) that the source emits or has the potential to emit above the major source thresholds, or (ii) for which there is a significant emissions increase and a significant net emissions increase from a modification (e.g. 40 CFR 51.166(b)(48)(v)). EPA anticipates a need to revise Federal PSD rules in light of the Supreme Court opinion. In addition, EPA anticipates that many states will revise their existing SIP-approved PSD programs in light of the Supreme Court's decision. The timing and content of subsequent EPA actions with respect to the EPA regulations and state PSD program approvals are expected to be informed by additional legal process before the United States Court of Appeals for the District of Columbia Circuit. At this juncture, EPA is not expecting states to have revised their PSD programs for purposes of infrastructure SIP submissions and is only evaluating such submissions to assure that the state's program correctly addresses GHGs consistent with the Supreme Court's decision.

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

Finally, EPA believes that its approach with respect to infrastructure SIP requirements is based on a reasonable reading of sections 110(a)(1) and 110(a)(2) because the CAA provides other avenues and mechanisms to address specific substantive deficiencies in existing SIPs. These other statutory tools allow EPA to take appropriately tailored action, depending upon the nature and severity of the alleged SIP deficiency. Section 110(k)(5) authorizes EPA to issue a “SIP call” whenever the Agency determines that a state's SIP is substantially inadequate to attain or maintain the NAAQS, to mitigate interstate transport, or to otherwise comply with the CAA.12 Section 110(k)(6) authorizes EPA to correct errors in past actions, such as past approvals of SIP submissions.13 Significantly, EPA's determination that an action on a state's infrastructure SIP submission is not the appropriate time and place to address all potential existing SIP deficiencies does not preclude EPA's subsequent reliance on provisions in section 110(a)(2) as part of the basis for action to correct those deficiencies at a later time. For example, although it may not be appropriate to require a state to eliminate all existing inappropriate director's discretion provisions in the course of acting on an infrastructure SIP submission, EPA believes that section 110(a)(2)(A) may be among the statutory bases that EPA relies upon in the course of addressing such deficiency in a subsequent action.14

EPA Region 7 received Kansas' infrastructure SIP submission for the 2010 SO2 standard on July 15, 2013. The SIP submission became complete as a matter of law on January 15, 2014. EPA has reviewed Kansas' infrastructure SIP submission and the applicable statutory and regulatory authorities and provisions referenced in those submissions or referenced in Kansas' SIP. Below is EPA's evaluation of how the state addressed the relevant elements of section 110(a)(2) for the 2010 SO2 NAAQS.

(A) Emission limits and other control measures: Section 110(a)(2)(A) requires SIPs to include enforceable emission limits and other control measures, means or techniques, schedules for compliance, and other related matters as needed to implement, maintain and enforce each NAAQS.15

The State of Kansas' statutes and regulations authorize the Kansas Department of Health and Environment (KDHE) to regulate air quality and implement air quality control regulations. KDHE's statutory authority can be found in chapter 65, article 30 of the Kansas Statutes Annotated (KSA), otherwise known as the Kansas Air Quality Act. KSA section 65-3003 places the responsibility for air quality conservation and control of air pollution with the Secretary of Health and Environment (“Secretary”). The Secretary in turn administers the Kansas Air Quality Act through the Division of Environment within KDHE. Air pollution is defined in KSA section 65-3002(c) as the presence in the outdoor atmosphere of one or more air contaminants in such quantities and duration as is, or tends significantly to be, injurious to human health or welfare, animal or plant life, or property, or would unreasonably interfere with the enjoyment of life or property, or would contribute to the formation of regional haze.

KSA section 65-3005(a)(1) provides authority to the Secretary to adopt, amend and repeal rules and regulations implementing the Kansas Air Quality Act. It also gives the Secretary the authority to establish ambient air quality standards for the State of Kansas as a whole or for any part thereof. KSA section 65-3005(a)(12). The Secretary has the authority to promulgate rules and regulations to ensure that Kansas is in compliance with the provisions of the Act, in furtherance of a policy to implement laws and regulations consistent with those of the Federal government. KSA section 65-3005(b). The Secretary also has the authority to establish emission control requirements as appropriate to facilitate the accomplishment of the purposes of the Kansas Air Quality Act. KSA section 65-3010(a).

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that the Kansas SIP adequately addresses the requirements of section 110(a)(2)(A) for the 2010 SO2 NAAQS and is proposing to approve this element of the July 15, 2013, SIP submission.

(B) Ambient air quality monitoring/data system: Section 110(a)(2)(B) requires SIPs to include provisions to provide for establishment and operation of ambient air quality monitors, collection and analysis of ambient air quality data, and making these data available to EPA upon request.

To address this element, KSA section 65-3007 provides the enabling authority necessary for Kansas to fulfill the requirements of section 110(a)(2)(B). This provision gives the Secretary the authority to classify air contaminant sources which, in his or her judgment, may cause or contribute to air pollution. Furthermore, the Secretary has the authority to require such air contaminant sources to monitor emissions, operating parameters, ambient impacts of any source emissions, and any other parameters deemed necessary. The Secretary can also require these sources to keep records and make reports consistent with the Kansas Air Quality Act. KSA section 65-3007(b).

Kansas has an air quality monitoring network operated by KDHE and local air quality agencies that collects air quality data that are compiled, analyzed, and reported to EPA. KDHE's Web site contains up-to-date information about air quality monitoring, including a description of the network and information about the monitoring of SO2. See, generally, http://www.kdheks.gov/bar/air-monitor/indexMon.html. KDHE also conducts five-year monitoring network assessments, including the SO2 monitoring network, as required by 40 CFR 58.10(d). On December 3, 2013, EPA approved Kansas' 2013-2014 Ambient Air Monitoring Network Plan. This plan includes, among other things, the location for the SO2 monitoring network in Kansas. Specifically, KDHE operates four sulfur dioxide monitors in the state in accordance with the source-oriented sulfur dioxide monitoring requirements of 40 CFR part 58, appendix D, paragraph 4.4.1(a). Data gathered by the monitors is submitted to EPA's Air Quality System, which in turn determines if the network site monitors are in compliance with the NAAQS.

Within KDHE, the Bureau of Air implements these requirements. Along with its other duties, the Monitoring and Planning Section collects air monitoring data, quality assures the results, and reports the data. The data is then used to develop the appropriate regulatory or outreach strategies to reduce air pollution.

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that the Kansas SIP adequately addresses the requirements of section 110(a)(2)(B) for the 2010 SO2 NAAQS and is proposing to approve this element of the July 15, 2013, SIP submission.

(C) Program for enforcement of control measures (PSD, New Source Review for nonattainment areas, and construction and modification of all stationary sources): Section 110(a)(2)(C) requires states to include the following three elements in the SIP: (1) A program providing for enforcement of all SIP measures described in section 110(a)(2)(A); (2) a program for the regulation of the modification and construction of stationary sources as necessary to protect the applicable NAAQS (i.e., state-wide permitting of minor sources); and (3) a permit program to meet the major source permitting requirements of the CAA (for areas designated as attainment or unclassifiable for the NAAQS in question).16

(1) Enforcement of SIP Measures. With respect to enforcement of requirements of the SIP, KSA section 65-3005(a)(3) gives the Secretary the authority to issue orders, permits and approvals as may be necessary to effectuate the purposes of the Kansas Air Quality Act and enforce the Act by all appropriate administrative and judicial proceedings. Pursuant to KSA section 65-3006, the Secretary also has the authority to enforce rules, regulations and standards to implement the Kansas Air Quality Act and to employ the professional, technical and other staff to effectuate the provisions of the Act. In addition, if the Secretary or the director of the Division of Environment finds that any person has violated any provision of any approval, permit or compliance plan or any provision of the Kansas Air Quality Act or any rule or regulation promulgated thereunder, he or she may issue an order directing the person to take such action as necessary to correct the violation. KSA section 65-3011.

KSA section 65-3018 gives the Secretary or the Director of the Division of Environment the authority to impose a monetary penalty against any person who, among other things, either violates any order or permit issued under the Kansas Air Quality Act, or violates any provision of the Act or rule or regulation promulgated thereunder. Section 65-3028 provides for criminal penalties for knowing violations.

(2) Minor New Source Review. Section 110(a)(2)(C) also requires that the SIP include measures to regulate construction and modification of stationary sources to protect the NAAQS. With respect to smaller sources that meet the criteria listed in KAR 28-19-300(b) “Construction Permits and Approvals,” Kansas has a SIP-approved permitting program. Any person proposing to conduct a construction or modification at such a source must obtain approval from KDHE prior to commencing construction or modification. If KDHE determines that air contaminant emissions from a source will interfere with attainment or maintenance of the NAAQS, it cannot issue an approval to construct or modify that source (KAR 28-19-301(d) “Construction Permits and Approvals; Application and Issuance”).

In this action, EPA is proposing to approve Kansas' infrastructure SIP for the 2010 SO2 standard with respect to the general requirement in section 110(a)(2)(C) to include a program in the SIP that regulates the modification and construction of any stationary source as necessary to assure that the NAAQS are achieved. In this action, EPA is not proposing to approve or disapprove the state's existing minor NSR program to the extent that it is inconsistent with EPA's regulations governing this program. EPA has maintained that the CAA does not require that new infrastructure SIP submissions correct any defects in existing EPA-approved provisions of minor NSR programs in order for EPA to approve the infrastructure SIP for element (C) (e.g., 76 FR 41076-76 FR 41079).

(3) Prevention of Significant Deterioration (PSD) permit program. Kansas also has a program approved by EPA as meeting the requirements of part C, relating to prevention of significant deterioration of air quality. In order to demonstrate that Kansas has met this sub-element, this PSD program must cover requirements not just for the 2010 SO2 NAAQS, but for all other regulated NSR pollutants as well.

In a previous action on June 20, 2013, EPA determined that Kansas has a program in place that meets all the PSD requirements related to all required pollutants (78 FR 37126).17 Therefore, Kansas has adopted all necessary provisions to ensure that its PSD program covers the requirements for the SO2 NAAQS and all other regulated NSR pollutants.

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that the Kansas SIP adequately addresses the requirements of section 110(a)(2)(C) for the 2010 SO2 NAAQS and is proposing to approve this element of the July 15, 2013, SIP submission.

(D) Interstate and international transport: Section 110(a)(2)(D)(i) includes four requirements referred to as prongs 1 through 4. Prongs 1 and 2 are provided at section 110(a)(2)(D)(i)(I); Prongs 3 and 4 are provided at section 110(a)(2)(D)(i)(II). Section 110(a)(2)(D)(i)(I) requires SIPs to include adequate provisions prohibiting any source or other type of emissions activity in one state from contributing significantly to nonattainment, or interfering with maintenance, of any NAAQS in another state. Section 110(a)(2)(D)(i)(II) requires SIPs to include adequate provisions prohibiting any source or other type of emissions activity in one state from interfering with measures required of any other state to prevent significant deterioration of air quality or to protect visibility.

In this notice, we are not proposing to take any actions related to the interstate transport requirements of section 110(a)(2)(D)(i)(I)—prongs 1 and 2. At this time, there is no SIP submission from Kansas relating to 110(a)(2)(D)(i)(I) for the 2010 SO2 NAAQS pending before the Agency.

With respect to the PSD requirements of section 110(a)(2)(D)(i)(II)—prong 3, EPA notes that Kansas' satisfaction of the applicable infrastructure SIP PSD requirements for attainment/unclassifiable areas of the 2010 SO2 NAAQS have been detailed in the section addressing section 110(a)(2)(C). EPA also notes that the proposed action in that section related to PSD is consistent with the proposed approval related to PSD for section 110(a)(2)(D)(i)(II).

With regard to the applicable requirements for visibility protection of section 110(a)(2)(D)(i)(II)—prong 4, states are subject to visibility and regional haze program requirements under part C of the CAA (which includes sections 169A and 169B). The 2013 Guidance states that these requirements can be satisfied by an approved SIP addressing reasonably attributable visibility impairment, if required, and an approved SIP addressing regional haze.

Kansas meets this requirement through EPA's final approval of Kansas' regional haze plan on December 27, 2011 (76 FR 80754). In this final approval, EPA determined that the Kansas SIP met requirements of the CAA, for states to prevent any future and remedy any existing anthropogenic impairment of visibility in Class I areas caused by emissions of air pollutants located over a wide geographic area. Therefore, EPA is proposing to fully approve this aspect of the submission.

Section 110(a)(2)(D)(ii) also requires that the SIP insure compliance with the applicable requirements of sections 126 and 115 of the CAA, relating to interstate and international pollution abatement, respectively.

Section 126(a) of the CAA requires new or modified sources to notify neighboring states of potential impacts from sources within the state. The Kansas regulations address abatement of the effects of interstate pollution. For example, KAR 28-19-350(k)(2) “Prevention of Significant Deterioration (PSD) of Air Quality” requires KDHE, prior to issuing any construction permit for a proposed new major source or major modification, to notify EPA, as well as: Any state or local air pollution control agency having jurisdiction in the air quality control region in which the new or modified installation will be located; the chief executives of the city and county where the source will be located; any comprehensive regional land use planning agency having jurisdiction where the source will be located; and any state, Federal land manager, or Indian governing body whose lands will be affected by emissions from the new source or modification.18 See also KAR 28-19-204 “General Provisions; Permit Issuance and Modification; Public Participation” for additional public participation requirements. In addition, no Kansas source or sources have been identified by EPA as having any interstate impacts under section 126 in any pending actions relating to any air pollutant.

Section 115 of the CAA authorizes EPA to require a state to revise its SIP under certain conditions to alleviate international transport into another country. There are no final findings under section 115 of the CAA against Kansas with respect to any air pollutant. Thus, the state's SIP does not need to include any provisions to meet the requirements of section 115.

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that Kansas has the adequate infrastructure needed to address sections 110(a)(2)(D)(i)(II)—Prongs 3 and 4 and 110 (a)(2)(D)(ii) for the 2010 SO2 NAAQS and is proposing to approve this element of the July 15, 2013, submission.

(E) Adequate authority, resources, implementation, and oversight: Section 110(a)(2)(E) requires that SIPs provide for the following: (1) Necessary assurances that the state (and other entities within the state responsible for implementing the SIP) will have adequate personnel, funding, and authority under state or local law to implement the SIP, and that there are no legal impediments to such implementation; (2) requirements that the state comply with the requirements relating to state boards, pursuant to section 128 of the CAA; and (3) necessary assurances that the state has responsibility for ensuring adequate implementation of any plan provision for which it relies on local governments or other entities to carry out that portion of the plan.

(1) Section 110(a)(2)(E)(i) requires states to establish that they have adequate personnel, funding and authority. With respect to adequate authority, we have previously discussed Kansas' statutory and regulatory authority to implement the 2010 SO2 NAAQS, primarily in the discussion of section 110(a)(2)(A) above. Neither Kansas nor EPA has identified any legal impediments in the state's SIP to implementation of the NAAQS.

With respect to adequate resources, KDHE asserts that it has adequate personnel to implement the SIP. The Kansas statutes provide the Secretary the authority to employ technical, professional and other staff to effectuate the purposes of the Kansas Air Quality Act from funds appropriated and available for these purposes. See KSA section 65-3006(b). Within KDHE, the Bureau of Air implements the Kansas Air Quality Act. This Bureau is further divided into the Air Compliance and Enforcement Section, Air Permit Section; the Monitoring and Planning Section; and the Radiation and Asbestos Control Section.

With respect to funding, the Kansas Legislature annually approves funding and personnel resources for KDHE to implement the air program. The annual budget process provides a periodic update that enables KDHE and the local agencies to adjust funding and personnel needs. In addition, the Kansas statutes grant the Secretary authority to establish various fees for sources, to cover any and all parts of administering the provisions of the Kansas Air Quality Act. For example, KSA section 65-3008(f) grants the Secretary authority to fix, charge, and collect fees for construction approvals and permits (and the renewals thereof). KSA section 65-3024 grants the Secretary the authority to establish annual emissions fees. These emission fees, along with any moneys recovered by the state under the provisions of the Kansas Air Quality Act, are deposited into an air quality fee fund in the state treasury. Moneys in the air quality fee fund can only be used for the purpose of administering the Kansas Air Quality Act.

Kansas also uses funds in the non-Title V subaccounts, along with General Revenue funds and EPA grants under, for example, sections 103 and 105 of the Act, to fund the programs. EPA conducts periodic program reviews to ensure that the state has adequate resources and funding to, among other things, implement the SIP.

(2) Conflict of interest provisions—section 128. Section 110(a)(2)(E)(ii) requires that each state SIP meet the requirements of section 128, relating to representation on state boards and conflicts of interest by members of such boards. Section 128(a)(1) requires that any board or body which approves permits or enforcement orders under the CAA must have at least a majority of members who represent the public interest and do not derive any “significant portion” of their income from persons subject to permits and enforcement orders under the CAA. Section 128(a)(2) requires that members of such a board or body, or the head of an agency with similar powers, adequately disclose any potential conflicts of interest.

On June 20, 2013, EPA approved Kansas' SIP revision addressing the section 128 requirements (78 FR 37126). For a detailed discussion on EPA's analysis of how Kansas meets the section 128 requirements, see EPA's April 17, 2013, proposed approval of Kansas' 1997 and 2006 PM2.5 infrastructure SIP (78 FR 22827).

(3) With respect to assurances that the state has responsibility to implement the SIP adequately when it authorizes local or other agencies to carry out portions of the plan, KSA section 65-3005(a)(8) grants the Secretary authority to encourage local units of government to handle air pollution problems within their own jurisdictions and to provide technical and consultative assistance therefor. The Secretary may also enter into agreements with local units of government to administer all or part of the provisions of the Kansas Air Quality Act in the units' respective jurisdictions. In fact, KSA section 65-3016 allows for cities and/or counties (or combinations thereof) to form local air quality conservation authorities. These authorities will then have the authority to enforce air quality rules and regulations adopted by the Secretary and adopt any additional rules, regulations and standards as needed to maintain satisfactory air quality within their jurisdictions.

At the same time, the Kansas statutes also retain authority in the Secretary to carry out the provisions of the state air pollution control law. KSA section 65-3003 specifically places responsibility for air quality conservation and control of air pollution with the Secretary. The Secretary shall then administer the Kansas Air Quality Act through the Division of Environment. As an example of this retention of authority, KSA section 65-3016 only allows for the formation of local air quality conservation authorities with the approval of the Secretary. In addition, although these authorities can adopt additional air quality rules, regulations and standards, they may only do so if those rules, regulations and standards are in compliance with those set by the Secretary for that area. Currently, KDHE oversees the following local agencies that implement that Kansas Air Quality Act: The City of Wichita Office of Environmental Health, Johnson County Department of Health and Environment, and Unified Government of Wyandotte County-Kansas City, Kansas Public Health Department.

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that Kansas has the adequate infrastructure needed to address section 110(a)(2)(E) for the 2010 SO2 NAAQS and is proposing to approve this element of the July 15, 2013, submission.

(F) Stationary source monitoring system: Section 110(a)(2)(F) requires states to establish a system to monitor emissions from stationary sources and to submit periodic emission reports. Each SIP shall require the installation, maintenance, and replacement of equipment, and the implementation of other necessary steps, by owners or operators of stationary sources, to monitor emissions from such sources. The SIP shall also require periodic reports on the nature and amounts of emissions and emissions-related data from such sources, and requires that the state correlate the source reports with emission limitations or standards established under the CAA. These reports must be made available for public inspection at reasonable times.

To address this element, KSA section 65-3007 gives the Secretary the authority to classify air contaminant sources which, in his or her judgment, may cause or contribute to air pollution. The Secretary shall require air contaminant emission sources to monitor emissions, operating parameters, ambient impact of any source emissions, and any other parameters deemed necessary. Furthermore, the Secretary may require these emissions sources to keep records and make reports consistent with the purposes of the Kansas Air Quality Act.

In addition, KAR 28-19-12(A) “Measurement of Emissions” states that KDHE may require any person responsible for the operation of an emissions source to make or have tests made to determine the rate of contaminant emissions from the source whenever it has reason to believe that existing emissions exceed limitations specified in the Kansas air quality regulations. At the same time, KDHE may also conduct its own tests of emissions from any source. KAR 28-19-12(B). The Kansas regulations also require that all Class I operating permits include requirements for monitoring of emissions (KAR 28-19-512(a)(9) “Class I Operating Permits; Permit Content”).

Kansas makes all monitoring reports (as well as compliance plans and compliance certifications) submitted as part of a construction permit or Class I or Class II permit application publicly available. See KSA section 65-3015(a); KAR 28-19-204(c)(6) “General Provisions; Permit Issuance and Modification; Public Participation.” KDHE uses this information to track progress towards maintaining the NAAQS, developing control and maintenance strategies, identifying sources and general emission levels, and determining compliance with emission regulations and additional EPA requirements. Although the Kansas statutes allow a person to request that records or information reported to KDHE be regarded and treated as confidential on the grounds that it constitutes trade secrets, emission data is specifically excluded from this protection. See KSA section 65-3015(b).

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that Kansas has the adequate infrastructure needed to address section 110(a)(2)(F) for the 2010 SO2 NAAQS and is proposing to approve this element of the July 15, 2013, submission.

(G) Emergency authority: Section 110(a)(2)(G) requires SIPs to provide for authority to address activities causing imminent and substantial endangerment to public health or welfare or the environment (comparable to the authorities provided in section 303 of the CAA), and to include contingency plans to implement such authorities as necessary.

KSA section 65-3012(a) states that whenever the Secretary receives evidence that emissions from an air pollution source or combination of sources presents an imminent and substantial endangerment to public health or welfare or to the environment, he or she may issue a temporary order directing the owner or operator, or both, to take such steps as necessary to prevent the act or eliminate the practice. Upon issuance of this temporary order, the Secretary may then commence an action in the district court to enjoin these acts or practices.

KAR 28-19-56 “Episode Criteria” allows the Secretary to proclaim an air pollution alert, air pollution warning, or air pollution emergency whenever he or she determines that the accumulation of air contaminants at any sampling location has attained levels which could, if such levels are sustained or exceeded, threaten the public health. KAR 28-19-57 “Emission Reduction Requirements” imposes restrictions on emission sources in the event one of these three air pollution episode statuses is declared.

Based upon review of the state's infrastructure SIP submissions for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in those submissions or referenced in Kansas' SIP, EPA believes that the Kansas SIP adequately addresses section 110(a)(2)(G) for the 2010 SO2 NAAQS and is proposing to approve this element of the July 15, 2013, submission.

(H) Future SIP revisions: Section 110(a)(2)(H) requires states to have the authority to revise their SIPs in response to changes in the NAAQS, availability of improved methods for attaining the NAAQS, or in response to an EPA finding that the SIP is substantially inadequate to attain the NAAQS.

KSA section 65-3005(b) specifically states that it is the policy of the state of Kansas to regulate the air quality of the state and implement laws and regulations that are applied equally and uniformly throughout the state and consistent with that of the Federal government. Therefore, the Secretary has the authority to promulgate rules and regulations to ensure that Kansas is in compliance with the provisions of the Federal CAA. KSA 65-3005(b)(1).

As discussed previously, KSA section 65-3005(a)(1) provides authority to the Secretary to adopt, amend and repeal rules and regulations implementing and consistent with the Kansas Air Quality Act. The Secretary also has the authority to establish ambient air quality standards for the state of Kansas or any part thereof. KSA section 65-3005(a)(12). Therefore, as a whole, the Secretary has the authority to revise rules as necessary to respond to any necessary changes in the NAAQS.

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that Kansas has adequate authority to address section 110(a)(2)(H) for the 2010 SO2 NAAQS and is proposing to approve this element of the July 15, 2013, submission.

(I) Nonattainment areas: Section 110(a)(2)(I) requires that in the case of a plan or plan revision for areas designated as nonattainment areas, states must meet applicable requirements of part D of the CAA, relating to SIP requirements for designated nonattainment areas.

As noted earlier, EPA does not expect infrastructure SIP submissions to address subsection (I). The specific SIP submissions for designated nonattainment areas, as required under CAA title I, part D, are subject to different submission schedules than those for section 110 infrastructure elements. Instead, EPA will take action on part D attainment plan SIP submissions through a separate rulemaking governed by the requirements for nonattainment areas, as described in part D.

(J) Consultation with government officials, public notification, PSD and visibility protection: Section 110(a)(2)(J) requires SIPs to meet the applicable requirements of the following CAA provisions: (1) Section 121, relating to interagency consultation regarding certain CAA requirements; (2) section 127, relating to public notification of NAAQS exceedances and related issues; and (3) part C of the CAA, relating to prevention of significant deterioration of air quality and visibility protection.

(1) With respect to interagency consultation, the SIP should provide a process for consultation with general-purpose local governments, designated organizations of elected officials of local governments, and any Federal Land Manager having authority over Federal land to which the SIP applies. KSA section 65-3005(a)(14) grants the Secretary the authority to advise, consult and cooperate with other agencies of the state, local governments, other states, interstate and interlocal agencies, and the Federal government. Furthermore, as noted earlier in the discussion on section 110(a)(2)(D), Kansas' regulations require that whenever it receives a construction permit application for a new source or a modification, KDHE must notify state and local air pollution control agencies, as well as regional land use planning agencies and any state, Federal land manager, or Indian governing body whose lands will be affected by emissions from the new source or modification. See KAR 28-19-350(k)(2) “Prevention of Significant Deterioration (PSD) of Air Quality.”

(2) With respect to the requirements for public notification in section 127, the infrastructure SIP should provide citations to regulations in the SIP requiring the air agency to regularly notify the public of instances or areas in which any NAAQS are exceeded; advise the public of the health hazard associated with such exceedances; and enhance public awareness of measures that can prevent such exceedances and of ways in which the public can participate in the regulatory and other efforts to improve air quality.

As discussed previously with element (G), KAR 28-19-56 “Episode Criteria” contains provisions that allow the Secretary to proclaim an air pollution alert, air pollution warning, or air pollution emergency status whenever he or she determines that the accumulation of air contaminants at any sampling location has attained levels which could, if such levels are sustained or exceeded, threaten the public health. Any of these emergency situations can also be declared by the Secretary even in the absence of issuance of a high air pollution potential advisory or equivalent advisory from a local weather bureau meteorologist, if deemed necessary to protect the public health. In the event of such an emergency situation, public notification will occur through local weather bureaus.

In addition, information regarding air pollution and related issues is provided on a KDHE Web site, http://www.kdheks.gov/bar/. This information includes air quality data, information regarding the NAAQS, health effects of poor air quality, and links to the Kansas Air Quality Monitoring Network. KDHE also has an “Outreach and Education” Web page (http://www.kdheks.gov/bar/air_outreach/air_quality_edu.htm) with information on how individuals can take measures to reduce emissions and improve air quality in daily activities.

(3) With respect to the applicable requirements of part C of the CAA, relating to PSD of air quality and visibility protection, as noted in above under element (C), the Kansas SIP meets the PSD requirements, incorporating the Federal rule by reference. With respect to the visibility component of section 110(a)(2)(J), EPA recognizes that states are subject to visibility and regional haze program requirements under part C of the CAA. However, when EPA establishes or revises a NAAQS, these visibility and regional haze requirements under part C do not change. EPA believes that there are no new visibility protection requirements under part C as a result of a revised NAAQS. Therefore, there are no newly applicable visibility protection obligations pursuant to element J after the promulgation of a new or revised NAAQS.

Nevertheless, as noted above in section D, EPA has already approved Kansas' Regional Haze Plan and determined that it met the CAA requirements for preventing future and remedying existing impairment of visibility caused by air pollutants.

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that Kansas has met the applicable requirements of section 110(a)(2)(J) for the 2010 SO2 NAAQS in the state and is therefore proposing to approve this element of the July 15, 2013, submission.

(K) Air quality and modeling/data: Section 110(a)(2)(K) requires that SIPs provide for performing air quality modeling, as prescribed by EPA, to predict the effects on ambient air quality of any emissions of any NAAQS pollutant, and for submission of such data to EPA upon request.

Kansas has authority to conduct air quality modeling and report the results of such modeling to EPA. KSA section 65-3005(a)(9) gives the Secretary the authority to encourage and conduct studies, investigations and research relating to air contamination and air pollution and their causes, effects, prevention, abatement and control. As an example of regulatory authority to perform modeling for purposes of determining NAAQS compliance, the regulations at KAR 28-19-350 “Prevention of Significant Deterioration (PSD) of Air Quality” incorporate EPA modeling guidance in 40 CFR part 51, appendix W for the purposes of demonstrating compliance or non-compliance with a NAAQS.

The Kansas statutes and regulations also give KDHE the authority to require that modeling data be submitted for analysis. KSA section 65-3007(b) grants the Secretary the authority to require air contaminant emission sources to monitor emissions, operating parameters, ambient impact of any source emissions or any other parameters deemed necessary. The Secretary may also require these sources to keep records and make reports consistent with the purposes of the Kansas Air Quality Act. These reports could include information as may be required by the Secretary concerning the location, size, and height of contaminant outlets, processes employed, fuels used, and the nature and time periods or duration of emissions, and such information as is relevant to air pollution and available or reasonably capable of being assembled. KSA section 65-3007(c).

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that Kansas has the adequate infrastructure needed to address section 110(a)(2)(K) for the 2010 SO2 NAAQS and is proposing to approve this element of the July 15, 2013, submission.

(L) Permitting Fees: Section 110(a)(2)(L) requires SIPs to require each major stationary source to pay permitting fees to the permitting authority, as a condition of any permit required under the CAA, to cover the cost of reviewing and acting upon any application for such a permit, and, if the permit is issued, the costs of implementing and enforcing the terms of the permit. The fee requirement applies until a fee program established by the state pursuant to Title V of the CAA, relating to operating permits, is approved by EPA.

KSA section 65-3008(f) allows the Secretary to fix, charge, and collect fees for approvals and permits (and the renewals thereof). KSA section 65-3024 grants the Secretary the authority to establish annual emissions fees. Fees from the construction permits and approvals are deposited into the Kansas state treasury and credited to the state general fund. Emissions fees are deposited into an air quality fee fund in the Kansas state treasury. Moneys in the air quality fee fund can only be used for the purpose of administering the Kansas Air Quality Act.

Kansas' Title V program, found at KAR 28-19-500 to 28-19-564, was approved by EPA on January 30, 1996 (61 FR 2938). EPA reviews the Kansas Title V program, including Title V fee structure, separately from this proposed action. Because the Title V program and associated fees legally are not part of the SIP, the infrastructure SIP action we are proposing today does not preclude EPA from taking future action regarding Kansas' Title V program.

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that the requirements of section 110(a)(2)(L) for the 2010 SO2 NAAQS are met and is proposing to approve this element of the July 15, 2013, submission.

(M) Consultation/participation by affected local entities: Section 110(a)(2)(M) requires SIPs to provide for consultation and participation by local political subdivisions affected by the SIP.

KSA section 65-3005(a)(8)(A) gives the Secretary the authority to encourage local units of government to handle air pollution problems within their respective jurisdictions and on a cooperative basis and to provide technical and consultative assistance therefor. The Secretary may also enter into agreements with local units of government to administer all or part of the provisions on the Kansas Air Quality Act in the units' respective jurisdiction. The Secretary also has the authority to advise, consult, and cooperate with local governments. KSA section 65-3005(a)(14). He or she may enter into contracts and agreements with local governments as is necessary to accomplish the goals of the Kansas Air Quality Act. KSA section 65-3005(a)(16).

Currently, KDHE's Bureau of Air has signed state and/or local agreements with the Department of Air Quality from the Unified Government of Wyandotte County—Kansas City, Kansas; the Wichita Office of Environmental Health; the Johnson County Department of Health and Environment; and the Mid-America Regional Council. These agreements establish formal partnerships between the Bureau of Air and these local agencies to work together to develop and annually update strategic goals, objectives and strategies for reducing emissions and improving air quality.

In addition, as previously noted in the discussion about section 110(a)(2)(J), Kansas' statutes and regulations require that KDHE consult with local political subdivisions for the purposes of carrying out its air pollution control responsibilities.

Based upon review of the state's infrastructure SIP submission for the 2010 SO2 NAAQS, and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that Kansas has the adequate infrastructure needed to address section 110(a)(2)(M) for the 2010 SO2 NAAQS and is proposing to approve this element of the July 15, 2013, submission.

EPA is proposing to approve the infrastructure SIP submissions from Kansas which address the requirements of CAA sections 110(a)(1) and (2) as applicable to the 2010 SO2 NAAQS. Specifically, EPA is proposing to approve the following infrastructure elements, or portions thereof: 110(a)(2)(A), (B), (C), (D)(i)(II), (D)(ii), (E), (F), (G), (H), (J), (K), (L), and (M). As discussed in each applicable section of this rulemaking, EPA is not proposing action on section 110(a)(2)(D)(i)(I), and section 110(a)(2)(I)—Nonattainment Area Plan or Plan Revisions Under Part D.

Based upon review of the state's infrastructure SIP submissions and relevant statutory and regulatory authorities and provisions referenced in the submission or referenced in Kansas' SIP, EPA believes that Kansas has the infrastructure to address all applicable required elements of sections 110(a)(1) and (2) (except otherwise noted) to ensure that the 2010 SO2 NAAQS are implemented in the state.

We are hereby soliciting comment on this proposed action. Final rulemaking will occur after consideration of any comments.

In this rule, EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, EPA is proposing to incorporate by reference the EPA approved Kansas Nonregulatory Provision for Section 110(a)(2) Infrastructure Requirements for the 2010 SO2 NAAQS described in the proposed amendments to 40 CFR part 52 set forth below. EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and/or in hard copy at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

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

• Is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563 (76 FR 3821, January 21, 2011).

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

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

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

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

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

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

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

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

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

The statutory authority for this action is provided by section 110 of the CAA, as amended (42 U.S.C. 7410).

For the reasons stated in the preamble, the Environmental Protection Agency proposes to amend 40 CFR part 52 as set forth below:

This is a summary of the Commission's Notice of Proposed Rulemaking and Reconsideration Order, ET Docket No. 15-26, RM-11555, RM-11666, ET Docket Nos. 11-90, 10-28 and WT Docket No. 11-202; FCC 15-16, adopted February 3, 2015, and released February 5, 2015. The full text of this document is available for inspection and copying during normal business hours in the FCC Reference Center (Room CY-A257), 445 12th Street SW., Washington, DC 20554.

Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).

Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.

Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number.

Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

All hand-delivered or messenger-delivered paper filings for the Commission's Secretary must be delivered to FCC Headquarters at 445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.

Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.

U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street SW., Washington DC 20554.

People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

1. In the Notice of Proposed Rule Making and Reconsideration Order (NPRM), the Commission proposes rules that will accommodate the commercial development and use of various radar technologies in the 76-81 GHz band under part 95 of its rules. These proposals include allocation changes to the bands as well as provisions to ensure that new and incumbent operations can share the available frequencies in the band. Specifically, the Commission seeks comment on the following 76-81 GHz band matters;

• Expanding radar operations in the 76-81 GHz band;

• Modifying the Table of Frequency Allocations to provide an allocation for the radiolocation service in the 77.5-78 GHz band;

• Authorizing the expanded radar operations on a licensed basis under part 95;

• Shifting vehicular and other users away from the existing part 15 unlicensed operating model; and

• Evaluating the compatibility of incumbent operations, including that of amateur radio, with radar applications in the 77-81 GHz band.

2. The 76-77.5 GHz and 78-81 GHz bands are allocated to the Radio Astronomy service (RAS) and the Radiolocation service on a primary basis and to the Amateur and Space research (space-to-Earth) services on a secondary basis. The 77.5-78 GHz band is allocated to the Amateur and Amateur-Satellite services on a primary basis and to the Radio astronomy and Space research (space-to-Earth) services on a secondary basis. Discussed further are primary radiolocation services that are allocated in the 76-77.5 GHz and 78-81 GHz bands.

3. These bands are in the region of the radiofrequency spectrum known as “millimeter wave” spectrum. At these frequencies, radio propagation decreases more rapidly with distance than at lower frequencies and antennas that can narrowly focus transmitted energy are practical and of modest size. While the limited range of such transmissions might be a disadvantage for many applications, it does allow frequency reuse within very short distances and thereby enables a higher concentration of transmitters in a geographical area than is possible at lower frequencies.

4. In recent years, the Commission has sought to make frequencies in the 76-81 GHz range available for new and innovative radar applications that can provide important benefits to the public at large. In a series of rulemaking proceedings that date back to 1995, the Commission has established rules to allow the use of this spectrum by automotive collision avoidance radar applications (“vehicular radars”) and radar systems that detect foreign object debris (FOD) at airport facilities (“FOD detection radars”). Vehicular radars are authorized under part 15 of our rules, while FOD detection radars currently are permitted to operate under parts 15 and 90 of the Commission's rules.

5. Vehicular radars can determine the exact distance and relative speed of objects in front of, beside, or behind a car to improve the driver's ability to perceive objects under bad visibility conditions or objects in blind spots. In 1995, the Commission adopted rules to allow the use of the 76-77 GHz band by vehicular radars on an unlicensed basis. These provisions were limited to vehicle-mounted radars; fixed applications were not permitted.

6. On May 24, 2011, Toyota Motor Corporation filed a petition to modify the technical rules for vehicular radars to allow greater flexibility in vehicular radar applications. In response, the Commission issued a Notice of Proposed Rule Making (Vehicular Radar NPRM) and subsequently issued a Report and Order (Vehicular Radar R&O) modifying the part 15 rules for vehicular radars in the 76-77 GHz band. The Commission, inter alia, modified the rules to specify average and peak radiated emission limits in equivalent EIRP and power density units so that manufacturers could use either specification to express the emissions from their devices.

7. Vehicular radar technology has continued to evolve, and industry has developed more enhanced and cost-effective long-range vehicular radars (LRR) in the 76-77 GHz band. Developers of these technologies claim that the existing 1 gigahertz bandwidth used by LRR is insufficient to develop high-resolution short-range vehicular radars (SRR) that can implement safety features such as collision warning, lane departure warning, lane change assistance, blind-spot detection, and pedestrian protection. As background, LRRs have narrow beams with bandwidth less than1 gigahertz and typical spatial resolution of 0.5 meters. Their range of operation is up to 150 to 250 meters. SRRs on the other hand have wide beam with bandwidths up to 4 gigahertz and typical spatial resolution of 0.1 meters. Their range of operation is up to 30 meters.

8. Recently, Bosch filed a petition for rulemaking to modify § 15.253 of the Commission's rules to expand the operation of unlicensed vehicular radar systems from 76-77 GHz to the 76-81 GHz band to develop SRR applications. It claims that the additional 4 gigahertz bandwidth will provide SRR with both frequency separation from LRR and the necessary bandwidth for range accuracy, angular accuracy, and good object discrimination.

9. On July 17, 2012, the Commission issued a public notice seeking comment on Bosch's petition. The petition drew general support from the automotive industry, opposition from an individual amateur radio operator and interest from two developing non-vehicular radio applications for the band. Specifically, eight parties filed comments and three parties submitted ex parte written communications.

10. The Commission has recognized the benefits associated with radars that can detect FOD at airports. Generally speaking, FOD include any substance, debris, or object that can damage aircraft or equipment. FOD can seriously threaten the safety of airport personnel and airline passengers and can have a negative impact on airport logistics and operations. According to the Federal Aviation Administration (FAA), FOD “has the potential to damage aircraft during critical phases of flight, which can lead to catastrophic loss of life and airframe, and at the very least increased maintenance and operating costs.” Moreover, the direct maintenance costs to airlines caused by FOD have been estimated to be one to four billion dollars per year. The Commission provides for both unlicensed FOD detection radar use in the 76-77 GHz band under its part 15 rules and licensed FOD detection radar use in the 78-81 GHz band under its part 90 rules.

11. Interest in using the millimeter wave bands to support FOD detection radars dates back to February 23, 2009, when Era Systems Corporation (“Era”) requested for waiver of §§ 2.803, 15.201 and 15.253 of the Commission's rules. In response, the Office of Engineering and Technology issued a public notice seeking comments on Era waiver request and later granted Era a limited waiver to allow the installation of radar systems at Hartsfield-Jackson Atlanta International Airport.

12. Also in a separate proceeding, Era filed comments asking the Commission to amend its part 15 rules to permit fixed use of 76-77 GHz radars at airports for monitoring air traffic and airport service vehicles only. The Office of Engineering and Technology (OET) decided to treat ERA's comments as a Petition for Rulemaking, and consolidated Era and Vehicular Radar petitions into single rule making proceeding in the 76-77 GHz band. During the course of this proceeding, Xsight Systems Ltd. (Xsight) filed ex parte comments in support of Era and asked the Commission to allow operation of FOD detection radars in the 76-77 GHz band at airport locations only.

13. Subsequently, as part of the Vehicular Radar NPRM, the Commission examined the use of fixed radar systems in the 76-77 GHz band and proposed to allow such use at any location, rather than restrict their use to only airport locations per the Era petition for rulemaking. The Commission stated that limiting fixed radar operations to specific locations such as airports might be overly restrictive and could unnecessarily burden the public. In the subsequent Vehicular Radar R&O, the Commission permitted unlicensed operation of fixed radars, including FOD detection radars, in the 76-77 GHz band at airport locations. It permitted such operation on an unlicensed basis under the same part 15 rules and with the same emission limits that it applied to vehicular radars in the band.

14. Licensed FOD detection radar can be traced to an August 10, 2010, petition for Rulemaking in which Trex Enterprises Corporation (Trex) asked us to amend part 90 of the Commission'sr rules to permit FOD detection radars to operate in the 78-81 GHz band and to impose service rules that require each airport location to be individually licensed to operate FOD detection radars. The Commission subsequently issued a Notice of Proposed Rule Making and Order seeking comment on the best way to enable the use FOD detection radars. On July 11, 2013, the Commission adopted a Report and Order that permitted the certification, licensing, and use of FOD detection radars in the 78-81 GHz band under our part 90 rules. In that Report and Order, the Commission did not adopt technical specifications for FOD detection radars, see 78 FR 45072, July 26, 2013. The Commission addresses this issue herein.

15. Our evaluation of the 76-81 GHz band also implicates two outstanding petitions for reconsideration. Both petitions were filed in response to the Vehicular Radar R&O that modified our part 15 rules to permit vehicular radar technologies and airport-based fixed radar applications in the 76-77 GHz band.

16. The first petition concerns the scope of fixed infrastructure applications in the 76-77 GHz band. In the Vehicular Radar R&O, the Commission stated that it continues to believe that vehicular radars should be able to share the band with fixed radars operating at the same levels and noted that there were no conclusive test results indicating that there would be incompatibility issues between the two types of radars. It nevertheless declined to adopt provisions for unlicensed fixed radar operations outside of airport locations in the 76-77 GHz band, stating that no parties had come forward to establish a clear demand for fixed radar applications beyond such locations. Navtech Radar (Navtech) asks that the Commission reconsider this decision. Navtech claims that evidence suggests the band can be more broadly shared between vehicular and fixed radars, and that there is demand for new fixed radar applications that are not permitted under the current rules. Numerous parties, including representatives of the automotive industry, oppose the Navtech petition on both substantive and procedural grounds. In a subsequent ex parte presentation, Navtech reiterated its claims.

17. Second, Honeywell International, Inc. (Honeywell) asks that the Commission clarify that § 15.253(a) of its rules does not prohibit the operation of 76-77 GHz band radar devices located on aircraft while the aircraft are on the ground. Honeywell envisions that its radar application will help aircraft avoid collisions with other aircraft, stationary objects, and service vehicles.

18. Numerous representatives of the automotive industry as well as Xsight Systems, Inc., filed to oppose the Honeywell petition. These parties raised procedural arguments—that the issue of removing the current prohibition on the use of 76-77 GHz frequency range on aircraft or satellite was not properly raised in the proceeding and is otherwise outside the scope of the decision—as well as claims that there is insufficient evidence that both aircraft-mounted and vehicular radars can co-exist in the 76-77 GHz band. In response, Honeywell claims that the issues it raises are within the scope of the Commission's rulemaking proceeding, that there is no technical reason why aircraft-mounted radar cannot operate in the 76-77 GHz band while the aircraft is on ground, and that there is an urgent and recognized public interest need for the anti-collision benefits its aircraft-mounted radars can provide.

19. The Commission originally adopted rules to allow use of the 76-77 GHz band, limited to vehicle-mounted radars. It recognized concerns raised by the Committee on Radio Frequencies (CORF) of the National Academies about potential interference to radio astronomy operations, and prohibited the use of 76-77 GHz unlicensed devices aboard aircraft and satellites as a way to protect the radio astronomy services. Any change to the restriction on the use of 76-77 GHz unlicensed devices aboard aircraft and satellites was neither part of the Vehicular Radar NPRM nor of the subsequent Vehicular Radar R&O.

20. The radio astronomy service is a passive service that receives radio waves of cosmic origin to better understand our universe. Astronomical research above 50 GHz is particularly well suited for studies of star formation, the properties of the interstellar medium, the chemical evolution of the Universe, detection of extra-solar planets and many other phenomena. RAS has a mix of primary and secondary allocations that span the 76-81 GHz band. RAS installations are remotely located to provide interference protection from active services. The Commission previously concluded that there is very negligible risk of potential interference to RAS equipment from vehicular radars in the 76-77 GHz band. The Commission also concluded that unlicensed FOD detection equipment would not cause harmful interference to RAS equipment as both applications only operate fixed stations, are limited in number and are not located in close proximity.

21. In addition to the above services, the Commission also allows amateur radio use within the 76-81 GHz band. Generally speaking, amateur operators use radio spectrum for private recreation, non-commercial exchange of messages, wireless experimentation, self-training, and emergency communication purposes. The amateur radio community previously stated that the frequencies in the 76-81 GHz range (which it identifies as the “4 mm band”) are well suited for experiments relating to short-range high-speed data communication. The Commission has previously considered compatibility issues for amateur operations with vehicular radar and FOD detection radar operations. In light of concerns about interference between amateur operations and vehicular radars, the Commission imposed (and, more recently, maintained) a suspension of the amateur-satellite service allocation in the 76-77 GHz band.

22. An additional permitted operation in the 77-81 GHz band is that of level probing radars (LPRs) which operate on an unlicensed basis under part 15. LPRs are used to measure the amount of various materials contained in storage tanks or vessels or to measure water or other material levels in outdoor locations. They are typically mounted inside storage tanks or on bridges or on other elevated structures in outdoor locations, and emit radio frequency (RF) signals through an antenna aimed downwards to the surface of the substance to be measured. The Commission recently concluded that LPR devices would be able to co-exist successfully with vehicular radars. It based its conclusion on the nature of LPR equipment, which is installed in a downward-looking position at fixed locations, and because the main-beam emission limits have been carefully calculated to avoid harmful interference to other radio services.

23. The Commission undertakes this proceeding to expand the available spectrum for radar operations in the 76-81 GHz band. Specifically, it proposes to add rules for radars in the 76-81 GHz band as licensed services under part 95 of our rules. In doing so, the Commission recognizes that the millimeter wave bands support numerous beneficial services and incumbent operations, including vehicular radars, radio astronomy, FOD detection radars, level probing radars and amateur applications, and that this frequency band could host other additional applications in the future. The following discussion addresses the compatibility issues among services and proposes rules to authorize vehicular radars, FOD detection radars, fixed infrastructure radars and aircraft-mounted radars in the 76-81 GHz band. As with other spectrum users, the Commission seeks to promote the efficient use of these resources by radar applications.

24. The Commission recognizes that the usage of vehicular radar applications has continued to grow and evolve since the Commission issued the Vehicular Radar R&O, and that providing expanded access to the 76-81 GHz band could help those applications deliver important public benefits. Therefore, the Commission has set forth, a compressive approach for authorizing vehicular radars in the 76-81 GHz band while maintaining a view to ensuring an efficient use of spectrum by radar applications.

25. The Commission's proposals are informed in large part by the Bosch petition, which was filed on behalf of the “79 GHz Project”—an industry-backed group that seeks to make the 77-81 GHz frequency range available for short-range automotive radar systems on a worldwide basis. In its petition, Bosch describes the development of short-range radar (SRR) applications that are used for both active and passive automotive safety applications. According to Bosch, SRR active safety applications include “stop and follow,” “stop and go,” autonomous braking, firing of restraint systems and pedestrian protection. Passive safety applications include obstacle and pedestrian avoidance, collision warning, lane departure warning, lane change aids, blind spot detection, parking aids and airbag arming. Collectively, collision-warning systems, vehicle environmental sensing systems, and other SRR applications are referred to as a “safety belt” for vehicles. As a practical matter, these applications offer new and tangible ways to enhance the safety of the Nation's drivers, and to meet important automotive safety objectives.

26. The Commission proposes to make additional spectrum available for vehicular radars to accommodate the new SRR applications. As an initial matter, Bosch contends that sharing studies conducted by the automotive industry have concluded that sharing is not achievable between the LRR systems that are currently deployed in the 76-77 GHz band and new high-resolution SRR applications, due to foreseeable saturating interference from LRRs into SRRs (but not vice-versa). Bosch claims that in such a co-channel environment, the SRRs would be jammed due to the lack of frequency separation. Bosch further notes that the 76-77 GHz band has already been designated for vehicular and infrastructure radar systems in the United States pursuant to § 15.253, and in Europe pursuant to ECC Decision ECC/DEC/(02)01 on Road Transport and Traffic Telematic (RTTT) systems, and is used for such LRR applications as Adaptive Cruise Control (ACC) systems, with a maximum bandwidth of 1 gigahertz. For these reasons, it asserts that a common band between the two systems is not feasible, and that the Commission should identify alternate spectrum for SRR use.

27. Bosch identifies a 4 gigahertz-wide band in the 77-81 GHz range for SRR applications. Other automotive interests support Bosch's request. They argue that the existing LRR systems must be supplemented by a wider bandwidth segment of up to 4 gigahertz for SRRs to perform effectively. They contend that greater bandwidth leads to better range separation and object discrimination that enables SRRs to implement functions such as pedestrian/automotive collision avoidance, side impact warning, and roadwork avoidance. Trex, however, urges the Commission to examine closely the need for 4 GHz of bandwidth for automotive radars in the context of ensuing efficient and flexible use of our spectrum resources, and asks that in addressing Bosch's request, the Commission also ensure that any rules that it adopts do not unreasonably restrict additional, valuable uses of the band. The Commission seeks comment on how the FCC can accommodate SRR applications while ensuring efficient and flexible use of spectrum by radar applications.

28. The Commission finds merit in Bosch's request, and proposes to grant SRR applications access to additional spectrum apart and distinct from the spectrum currently used for LRR. In particular, the Commission proposes to provide up to 4 gigahertz of bandwidth for SRRs so that these radars can gather information about objects with a sufficient resolution. Moreover, the extensive catalogue of enhanced features supported by SRR and the expectation that their deployment will become more widespread suggests that the public interest would be served by providing SRR with expanded access to the 77-81 GHz band. Given that the LRR applications use a narrower bandwidth than that used by SRR applications, the SRR applications will have a lower transmit power density level than that for LRR applications and therefore will have low likelihood for causing any potential interference. The Commission seek comment on these observations.

29. The Commission also believes that the spectrum identified by Bosch—the 77-81 GHz band—is a good fit for vehicular radar. At these millimeter wave frequencies, radio propagation losses increase more rapidly with distance than at lower frequencies and antennas that can narrowly focus transmitted energy are practical and of modest size. While the limited range of such transmissions might appear to be a major disadvantage for many applications, it does allow the reuse of frequencies within very short distances and, thereby enables a higher concentration of transmitters to be located in a geographic area than is possible at lower frequencies. This characteristic makes the band especially desirable as vehicular radars become more common throughout the transportation ecosystem. Moreover, these frequencies are adjacent to the 76-77 GHz band, which has already proven to be well suited for LRR applications. Because manufacturers can adapt equipment already designed to operate in the 76-77 GHz band, they will enjoy the benefits of expanded radar use at a lower cost than if they had to design equipment for a different non-adjacent band.

30. As Bosch notes in its petition, permitting vehicular radars throughout the 76-81 GHz band can also support industry efforts to consolidate vehicular radar into an internationally harmonized frequency band. Materials prepared by the 79 GHz project indicate that the 77-81 GHz band is already available for SRR applications in many parts of the world, including Europe, Australia, Russia, and Chile, and is in progress in many others. Bosch and Continental further note that the 2015 World Radio Communication Conference is expected to adopt an allocation to support the operation of vehicular radars in the 76-81 GHz range on a worldwide basis. In response to the Bosch petition, several commenters contend that global spectrum harmonization of LRRs at 76-77 GHz and SRRs at 78-81 GHz will reduce prices and will encourage deployment of automotive radars in lower-cost vehicles. Lastly, the National Telecommunications and Information Administration (NTIA), in prior matters regarding vehicular radars operating in the 24 GHz band, encouraged us to continue to monitor technology advancements in the 77-81 GHz range and committed to “work with the Commission to ensure that an adequate frequency allocation in the 77-81 GHz band is available for the operation of vehicular radar systems.”

31. The Commission believes that new proposed radar operations will be compatible with incumbent operations in the 76-81 GHz band. As a general matter, the same technical principles that already allow successful shared operation in the 76-77 GHz band should apply in the larger 76-81 GHz range.

32. In the Vehicular Radar R&O, the Commission has already established that vehicular radars and RAS are compatible in the 76-77 GHz band. In that proceeding, it noted that the National Science Foundation (NSF) sponsored a study documenting measurements performed jointly by representatives from the radio astronomy community and several vehicular radar manufacturers in which vehicular radar emissions were measured in the 77-80 GHz range. Tests performed in the study with stationary short range vehicular radar systems, positioned at distances of 1.7 km and 26.9 km from the University of Arizona's 12 Meter millimeter wave telescope, demonstrated that these radars could have a significant impact upon radio astronomy observations in the 77 to 81 GHz region. The Joint Study concludes that a zone of avoidance of about 30 to 40 km around a mm-wave observatory would be needed, in order to keep interference from a single vehicle below the threshold defined in ITU-R RA.769-2. It further concludes that smaller zones of avoidance might suffice in areas without direct line of sight to the radio telescope and/or by taking mitigation factors into account. The study acknowledged that mitigation factors, such as terrain shielding, orientation of the vehicular radar transmitter antenna with respect to the observatory, or attenuation of the vehicular radar transmitter if mounted behind the vehicle bumper, were not taken into account and would tend to reduce the distance at which interference could occur. Commenters offered mixed views on the interference issue; however, none offered specific reasons to refute the conclusions in the study. The Commission therefore seeks comment on the conclusions of the study and how the results of the study would impact a proposal to adopt technical requirements for the entire 76-81 GHz band similar to the existing vehicular radars operating in 76-77 GHz band. How can mitigation factors be used to reduce interference to radio observatories? The Commission invites interested parties to comment on the potential for such interference. In particular, it invites interested parties who believe that the NSF study does not accurately describe the potential for such interference to submit evidence in the record sufficient to support their arguments. The Commission also seeks comment on whether the potential for interference resulting from vehicular radars in the 76-77 GHz band is likely to be similar to or different from the potential for such interference in the entire 76-81 GHz band. Finally, the Commission seeks comment on whether the mitigation factors identified in the study should be implemented for vehicular radars.

33. The Commission also believes that vehicular radar use in the expanded frequency range of 77-81 GHz will be compatible with FOD detection radars and LPR devices in that range. Although the Commission discusses proposals to expand the use of FOD detection radars in detail, it tentatively concludes here the same principles that informed our conclusion in the Vehicular Radar R&O that these uses are compatible in the 76-77 GHz band also apply in the 77-81 GHz band. The Commission believes that the limited geographic usage of FOD detection radars (i.e. at airports and not illuminating public roadways) along with the propagation characteristics of the millimeter wave band yields negligible risk of interference potential between vehicular and FOD detection radars. In the expanded 76-81 GHz frequency range, the Commission similarly believes that LPR devices will be able to continue to co-exist with vehicular radars. LPR equipment is installed in a downward-looking position at fixed locations and the main-beam emission limits have been carefully calculated to avoid receiving or causing harmful interference to other radio services. The Commission seeks comment on these observations and tentative conclusions.

34. In its petition, Bosch states that it expects no interference issues between Amateur Radio operation and vehicular radar operations at 77-81 GHz. It notes that it is unconvinced after several meetings with the technical staff of ARRL that there is any “significant incompatibility” and describes how amateur operations in the band “tend to be largely experimental, occurring in geographic areas such as mountaintops and other rural areas where motor vehicle operation is not typical.” However, the Commission has previously recognized evidence of potential interference conflicts between the amateur-satellite service and vehicular radar systems in the 76-77 GHz band. Given that similar propagation characteristics exist throughout the millimeter wave band frequencies, there appears to be the potential for similar compatibility issues to exist between the amateur-satellite service and vehicular radar systems above 77 GHz. The Commission seeks to expand its record on the compatibility between amateur and vehicular radar services. In particular, are there any mitigation strategies for compatibility between the two services? Are there any additional interference or compatibility studies that may exist on the subject? The goal is to adopt rules that address amateur use, including amateur satellite use, within the 76-81 GHz band in a comprehensive and consistent manner.

35. In its proposal, Bosch suggests that the Commission support SRR in the 77-81 GHz band by modifying our existing part 15 rules. Because the existing vehicular radars are governed under our rules for unlicensed devices, they may not cause interference to licensed services, and must accept interference from both licensed and unlicensed users. For reasons discussed in more detail below, this regulatory structure may not be the most appropriate fit. Nevertheless, the Commission seeks comment on the proposal.

36. The Commission is proposing an approach by which it would establish vehicular radars as a service licensed by rule within part 95 of its rules under a radiolocation allocation, but also seek comment on other options, including authorizing an expansion of vehicular radars under the current part 15 model. The Commission's approach in proposing to migrate vehicular radar services from part 15 to part 95 of its rules is based on several factors. A licensed approach would make the 76-81 GHz vehicular radar services consistent with other transportation-related services currently operating under parts 90 and 95 of the rules—in particular, the 5.9 GHz Dedicated Short-range Communication (DSRC) services, a Department of Transportation initiative to integrate communication and information technology to advance transportation systems. Additionally, Bosch, in its petition, states that SRRs in the 79 GHz band “require a certain (albeit low) degree of interference protection in order to function adequately.” A unified licensed approach for all vehicular radars under our part 95 rules can offer a level of interference protection that the part 15 rules cannot provide. While the Commission notes that Bosch proposes modifying only the existing part 15 rules to support vehicular radar applications, it does not anticipate any opposition from Bosch for a licensing approach under the part 95 rules. Finally, in light of these considerations and the ongoing work to adopt an international allocation to support the operation of vehicular radars in the 76-81 GHz range on a worldwide basis, the Commission seeks comment on licensing by rule, pursuant to part 95, the proposed 77-81 GHz vehicular radar services the Commission proposed and on migrating existing 76-77 GHz vehicular radar services to part 95 of the s rules. In particular, the Commission seeks comment on any benefits or drawbacks such an approach would provide and whether it would be appropriate to continue to authorize vehicular radars on an unlicensed basis.

37. The Commission's Personal Radio Services rules, codified in part 95, provide for a variety of personal communications, radio signaling, and business communications. In addition, many of these services are licensed by rule—that is, a user is not required to obtain an individual license document and is instead authorized to operate so long as it does so in accordance with the applicable service rules. Radio services licensed in this manner—such as the Family Radio Service and the Wireless Medical Telemetry Service—are typically designed to support a particular type of application (e.g. voice communication or telemetry), and its users must cooperatively share use of the spectrum. The Commission believes such an arrangement is a good match for vehicular radars—especially because it would likely be impractical to individually license users (e.g. each vehicle owner or driver) and because the nature of the millimeter wave band makes it possible for LRR and SSR vehicular radars to share use of the band. Accordingly, the Commission proposes to modify part 95 of our rules to incorporate the range of frequencies available to vehicular radars under a new 76-81 GHz Band Radar Service. In addition, by making vehicular radars authorized as a licensed service, the Commission would also promote greater regulatory parity with other radar applications, including the FOD detection radars and other types of radars that it discusses in detail in the following text, in the band. The Commission seeks comment on this proposal.

38. Under the proposed rules, the Commission would adopt the same emission limits as those defined in its rules for unlicensed vehicular radars in the 76-77 GHz band for the entire 76-81 GHz band, and to likewise adopt technical specifications that mirror those currently provided under the Commission's part 15 rules for the newly expanded radar band. The Commission does not propose to distinguish between SRR and LRR operations in our rules, but instead rely on the market to determine the appropriate portions of the 76-81 GHz band for particular types of vehicular radar applications. As noted in the Bosch petition, as well as the related comment record, it already appears that there is widespread industry consensus on locating new SRR applications above 77 GHz. The Commission seeks comment on the applicability of these rules for both SRR and LRR across the 76-81 GHz band. Commenters that advocate different rules should provide detailed technical analyses showing how their preferred rules will provide for both SRR and LRR in the band as well as minimize any potential harmful interference with other services. In addition, the Commission seeks comment on our proposal not to specify specific portions of the band for SRR and LRR, but instead to rely on the market and the standards process to determine the best use of the available bandwidth. The Commission is proposing to upgrade the allocation status of the radiolocation service in the 77.5-78 GHz band. Currently the radio astronomy and space research (space-to-Earth) services are allocated on a secondary basis in the 77.5-78 GHz band. Should the radio astronomy and space research services also be upgraded to a primary allocation status in the 77.5-78 GHz band?

39. To support the expanded frequency range for vehicular radar use, the Commission proposes to allocate the 77.5-78 GHz band segment to the radiolocation service on a co-primary basis for Federal and non-Federal use. This would result in a co-primary allocation throughout the entire 77-81 GHz band. The Commission seeks comment on this allocation proposal.

40. Alternatively, the Commission seeks comment on whether vehicular radars should continue to operate as unlicensed devices under the part 15 rules. And, if so, whether FOD detection devices and other radar applications should be authorized in a consistent manner. Given anticipated extensive use of this spectrum, would band sharing under an unlicensed approach without any assurance of protection from harmful interference under the rules? What would be the relative benefits and disadvantages of unlicensed operation compared with the license-by-rule approach under part 95 or with the individual station licensing under part 90? The Commission seeks comment on our proposals and these alternatives.

41. Lastly, the Commission proposes to consolidate future vehicular radar use into the new 76-81 GHz band as part of our effort to ensure spectrally efficient use of resources. Currently, vehicular radars may operate on an unlicensed basis in the 16.2-17.7 GHz, 23.12-29.0 GHz, 46.7-46.9 GHz, and 76-77 GHz bands. Continental, in its comments supporting the Bosch petition, notes that the use of the 24 GHz band for vehicular radars is being phased out in Europe and that “the effect of the cessation of the use of that band in Europe will strongly affect availability of 24 GHz radars in the United States in the near term.” In addition, the Commission's records indicate no certifications in the 16.2-17.7 GHz and 46.7-46.9 GHz bands, and only three certifications in the 23.12-29 GHz band. This record suggests that there is little or no use of vehicular radars outside the 24 GHz and 76-77 GHz bands.

42. The Commission proposes to grandfather, for the life of the equipment, vehicular radars that are already installed or in use in the 22-29 GHz band range. It may be financially burdensome and logistically difficult for automobile owners to upgrade existing equipment; alternately, discontinuing the use of these radars would mean that drivers might not be able to repair existing equipment or might have to forego useful safety features. The Commission intends to prohibit the certification of new vehicular radars that do not operate in the 76-81 GHz range, effective 30 days from the date of publication of our final rules in the Federal Register. However, the Commission also believes that the ultimate transition of SRR applications from 22-29 GHz band to 77-81 GHz is best driven by the marketplace. If not, the Commission seeks comment as to how should the life cycle of SRRs operating in the 22-29 GHz band be taken into account in facilitating the transition of these radars to the 77-81 GHz band. The Commission also seeks comment on what appropriate methods of making a determination should be considered to set forth reasonable periods of time required for market place to make the 77-81 GHz band SRR readily available. To implement its proposal, the Commission intends to modify Sections 15.37, 15.252, 15.253, and 15.515, as shown in the attached rules appendix. In addition, given that there appears to be no equipment certified to operate in the 16.2-17.7 GHz and 46.7-46.9 GHz bands, should the Commission instead delete the portions of those rules that relate to vehicular radars in those bands?

43. As previously mentioned, FOD at airports includes any substance, debris, or object in a location that can damage aircraft or equipment. FOD detection radars currently operate under part 15 and under part 90 of the Commission's rules in the frequency bands 76-77 GHz (unlicensed) and 78-81 GHz (licensed) respectively. However, the Commission only recently authorized and not yet established technical rules for licensed FOD detection radar operation under part 90.

44. The Commission proposes to consolidate the FOD detection radar operations in the 76-81 GHz band under part 95 on a non-exclusive licensed basis. Also, with the introduction of specific technical requirements for these applications, the burden to facilitate coordination for these applications will be reduced. This proposal will afford an additional one gigahertz of spectrum (77-78 GHz), for these important applications. By providing a contiguous band of spectrum for FOD detection radars, the Commission can foster the development of technologically improved and cost-effective safety measures that will benefit both airport personnel and the general public. The 76-81 GHz band is well suited for FOD detection radar functions, including real-time monitoring of the position and shape of the foreign objects debris on the runways and taxiways.

45. As an initial matter, the Commission believes that the rationale for concluding that increased vehicular radar operations can be expanded throughout the 76-81 GHz band and such operations can co-exist with FOD detection radars is broadly applicable. In other words, there is good reason to conclude that, if vehicular radars can co-exist with FOD detection radars in 76-77 GHz band, then both vehicular radars and FOD detection radars operating under the part 95 rules will be able to operate successfully throughout the 76-81 GHz band. Furthermore, the Commission believes that our proposal will not increase the interference potential to any other authorized services operating in the band. The services that the Commission proposes to reallocate to the 76-81 GHz band typically employ highly directional antennas both to detect vehicles or objects in a particular area and to compensate for the relatively high propagation losses over short distances at these frequencies. The narrow beams utilized by the FOD detection radars, the geographic location of operations, and the very high path losses in this region of the spectrum, should mitigate any potential interference. The location of FOD detection radars should prevent them from illuminating public roads, and should further reduce any likelihood of interference to vehicular radars while enabling airports to improve debris detection on the runways.

46. Our proposal would result in all radar applications operating in the 76-81 GHz range—including vehicular radars and mobile and fixed radars used at airport only for FOD detection and for monitoring aircraft and airport service vehicles—being governed by a single new subpart in part 95. This approach will promote spectrum efficiency and maximize the shared use of our spectrum resource, while also providing a comprehensive and consistent set of rules and policies to govern each of the different types of radar applications. In the case of FOD detection radars, it reduces the application and licensing burdens that will be associated with operation in the 78-81 GHz band under the part 90 model, and it offers the simplicity of operation under a singular licensing model. Also, the limited geographic use area and limited number of FOD detection radars alleviates any burdens associated with the sharing of spectrum. Thus, the Commission believes that the benefits in the unified licensing of FOD detection radars under part 95 outweigh any burdens. The Commission seeks comment on these proposals.

47. The Commission proposes to grandfather, for the life of the equipment, FOD detection radars that are already installed or in use in the 76-81 GHz band range. The Commission intends to prohibit the certification of new FOD detection radars, operating in the 76-81 GHz range, under part 90 of our Rules effective April 6, 2015. The Commission seeks comment on its proposals.

48. The Commission proposes to adopt rules that would permit fixed radar infrastructure applications as discussed below. Fixed infrastructure radars can detect locations of stopped vehicles or pedestrians on roads, provide obstacle detection capability for industrial machinery including port cranes, mining trucks and locomotives, and provide security monitoring for government and public infrastructures. As previously mentioned, Navtech filed a petition for partial reconsideration asking the Commission to reconsider its decision that limited the use of fixed infrastructure radars in the 76-77 GHz band to airports only. The Commission's proposal largely tracks the issues Navtech raised in its petition.

49. In the Vehicular Radar NPRM, the Commission stated that the proposal to limit fixed radar operations to specific locations such as airports or other places where fixed radars would not illuminate public roads may be overly restrictive and could cause unnecessary burdens to the public if implemented. The Commission stated that fixed radars operating at the same maximum power levels as vehicular-mounted radars would be even less likely to interfere with the RAS and Radiolocation services than vehicle-mounted radars because the locations where they are used would not change. The Commission stated that fixed radars should be able to co-exist with vehicular radars because they both operate with the same power level and use antennas with narrow beam-widths, thus reducing the chances that the signal from one radar would be within the main lobe of the receive antenna of the other. In a worst-case scenario, where two radars are aiming directly at each other, fixed radar should have no more impact on vehicular radar then that by another radar located on a stationary vehicle. The Commission continues to believe this is the case.

50. The Commission's decision in the Vehicular Radar R&O to restrict the use of fixed infrastructure radar operation to airports was based on the fact that no parties had come forward to establish a clear demand for fixed radar applications beyond airport locations in the band and there were no conclusive data indicating that there would be compatibility between the vehicular and fixed radar types. The Commission observes that Navtech's petition for partial reconsideration demonstrates that that there is demand for fixed infrastructure radars beyond airport locations. In its petition, Navtech describes current and future applications of fixed infrastructure radars. Examples of such current use includes monitoring tunnels or bridges for stopped vehicles, providing collision warning system for ship-to-shore cranes, and providing train detection for automatic control functions. Moreover, in April 2014, Mantissa Ltd. stated that it supported further proceedings consistent with the Navtech petition because it is interested in deploying fixed radar technologies in the United States for security applications.

51. In the Vehicular Radar R&O, the Commission stated that it continued to believe that vehicular radars should be able to share the band with fixed radars operating at the same level and thinks those observations continue to be sound. At that time, the Commission noted that there were also no existing reports or studies that indicated incompatibility between the two types of radars. The Commission is unaware of any report or study that indicates incompatibility between the two types of radars, but the it recognizes that the record on this matter may still be evolving. The limited record that is available on this subject does not have the support of all interested parties in the matter. In the most recent comments received by the Commission in response to fixed infrastructure radars, the automotive industry opposes the use of these radars citing interference with vehicular radars. The automotive industry cites an ongoing study known as MOSARIM (More Safety for All by Radar Interference Mitigation), which suggested that vehicular radars and fixed infrastructure radars are incompatible due to the interference issues. Navtech, on the other hand, refutes the study and asserts that it was unfairly designed to favor the automotive industry. The Commission continues to believe that shared use by vehicular radars and fixed radars best promotes the public interest.

52. The Commission seeks to update the record and is especially interested in whether there are interference studies or reports indicating compatibility or lack thereof between vehicular and fixed radars in the 76-77 GHz band. As mentioned before, the Commission continues to believe that where two radars are aiming directly at each other, fixed radar should have no more impact on a vehicular radar then that from a radar located on a stationary vehicle. The Commission seeks comment on its conclusion and is particularly interested in the arguments as to why or why not a fixed radar would be more interfering than a vehicular radar located on a stopped vehicle.

53. While the Commission seeks broad comment on allowing the fixed infrastructure radar use within the 76-81 GHz range, it also asks commenters to address whether fixed infrastructure radars should be limited to the 76-77 GHz band. Because fixed infrastructure radars are intended to detect obstacles that are relatively large (e.g. pedestrians, vehicles, ships), a bandwidth of 1 gigahertz or less would appear to be sufficient for these fixed radars to identify the type and presence of such obstacles. For these reasons, the Commission is proposing to limit available bandwidth for fixed radars to 1 gigahertz and restricting operation to the 76-77 GHz band. Alternatively, the Commission seeks comment on other approaches for accommodating fixed radars. Such approaches could include permitting fixed infrastructure radars to operate in a different one gigahertz frequency range between 77-81 GHz band, or allowing them in the entire 76-81 GHz band but with limited bandwidth usage of 1 gigahertz or less for any given operation. Our goal here is to seek efficient use of the spectrum, harmonize global use of the spectrum, and facilitate development of technologies that serve public interest and convenience.

54. The Commission also seeks comment on expanding the use of radar in the 76-77 GHz band to provide for aircraft-mounted radars used only on the ground. This application, also referred to by Honeywell as “wingtip radar,” is used while aircraft are on the ground to prevent and or mitigate the severity of aircraft wing collisions while planes are moving between gates and runways. This matter tracks the issues Honeywell first raised in its petition for reconsideration in ET Docket No. 10-28.

55. The Commission believes that wingtip radar technologies can provide important public benefits. Aircraft wingtip collisions, which account for approximately 25 percent of all aircraft ground accidents, involve substantial costs, both in terms of repairs to aircraft and ground facilities and in lost time for passengers due to flight delays and cancellations. Honeywell asserts that mitigating the risk of wingtip collisions can reduce these costs and improve safety for both aviation personnel and the travelling public. The use of wingtip radar also appears to support National Transportation Safety Board (NTSB) safety recommendations regarding the use of anti-collision aids on aircraft.

56. The Commission seeks to develop a full record on the compatibility of aircraft-mounted radar used only on the ground with the other applications in the 76-81 GHz band. At the time, Honeywell filed its petition, many automotive radar supporters expressed concern about the potential for interference. However, because the Commission expects that wingtip radars will be used in the same locations as FOD detection radars (that is, on airport property and, in the case of aircraft-mounted radars, only during taxi and other ground activities), and because the Commission has already tentatively concluded that FOD detection radars and automotive radars can successfully co-exist, it also tentatively concludes that aircraft-mounted radars should likewise be compatible with vehicular radars.

57. As an initial matter, the Commission notes that there are functional differences between the FOD detection radar and wingtip radar applications that may promote compatibility between the two operations: wingtip radars can be useful during times of aircraft movement, such as taxiing between runways and ramp areas and while being pushed out of gates, while FOD detection appear to have high value in runway environments and before takeoff and landing. Therefore, it may be possible to create time and space separation between the FOD detection radar and wingtip radar application uses to reduce the potential for interference. In addition, the nature of the millimeter wave bands, as the Commission discussed supra, allows for extensive frequency reuse and can accommodate many discrete users. In response to Honeywell's petition, Xsight Systems—a manufacturer of FOD detection products—stated that it was “in the process of setting up a meeting with Honeywell to . . . investigate whether a potential for interference exists between Xsight's system and equipment that would operate under Honeywell's proposal.” The Commission seeks further information about the results of such discussions, as well as updated information about the status of wingtip radar product development.

58. The Commission also seeks comment on whether it would be feasible to employ an automatic shut-off mechanism for wingtip radars that would prevent radar operation any time the aircraft is not on the ground. Are there existing aircraft components (such as altimeters) that could be used in conjunction with such a system, and if so, how easily could wingtip radar be integrated with such devices? Could such an automated system be easily deployable on all types of aircraft (e.g. commercial and personal)? The Commission tentatively concludes that it should adopt such an automatic shut-off mechanism, if such a mechanism is feasible, to protect the radio astronomy service from harmful interference that could be caused by inadvertent operation of a wingtip radar system while an aircraft is in flight. For this reason, the Commission proposes to distinguish wingtip radars from vehicular radars in our rules, as aircraft should not be considered as vehicles for purposes of radar use in the 76-81 GHz band. Finally, the Commission seeks comment on any compatibility issues with respect to other existing and proposed radar uses in the band, as well as to amateur radio users.

59. While the Commission seeks broad comment on allowing wingtip radar use within the 76-81 GHz range, it notes that the wingtip radar may only require bandwidth of one gigahertz or less to detect obstacles in its path. For this reason, the Commission proposes to allow wingtip radars to operate with a bandwidth of 1 gigahertz in the 76-77 GHz band. Alternatively, and similar to the fixed radar proposals discussed above, the Commission seeks comment on other ways the it could accommodate wingtip radars. Such approaches could include permitting wingtip radars to operate in a different one gigahertz frequency range between 77-81 GHz band, or allowing them in the entire 76-81 GHz band but with limited bandwidth usage of one Gigahertz or less over any portion of the band. Our overall objective is to promote efficient use of the spectrum and facilitate development of technologies that will improve airport operations and provide important benefits to both airport personnel and the general public.

60. In conjunction with our efforts to develop a comprehensive policy for use of the 76-81 GHz band, the Commission seeks comment on how it should structure future amateur 4 mm band use. As background, the Commission decided to temporarily restrict amateur station access to the 76-77 GHz band in 1998 to ensure against potential interference to what were then newly developing vehicular radar systems. The Commission observed that amateur station transmissions in the 76-77 GHz were not significant at the time, reasoned that its action would not have an immediate impact on amateur operators, and stated that it planned to revisit the issue later. In 2004, the Commission extended the amateur-satellite allocation suspension, citing interference issues and suggesting that it would be useful to consider the development of technical sharing criteria for the band. Bosch, in its petition, does not seek to alter the current 76-77 GHz arrangement.

61. Based on our proposals for new vehicular and other radars in the 77-81 GHz band, the Commission proposes to adopt a comprehensive approach for amateur radio use on these frequencies. Given the continuing lack of technical sharing criteria or any other evidence of compatibility, should the Commission extend the 76-77 GHz amateur suspension to the entire 76-81 GHz band? If so, should the Commission modify the current amateur suspension of use of the 76-77 GHz band by removing all amateur allocations from the 76-81 GHz band? Alternately, would it be possible to lift our suspension of the amateur service and conduct both amateur and vehicular radar operations in the entire 76-81 GHz band? The Commission tentatively concludes that there is no apparent technical reason to treat the 76-77 GHz and the 77-81 GHz bands differently. Commenters who believe that the Commission should continue to distinguish between the two bands should explain the reasons for doing so. The Commission also seeks comment on whether there are other approaches that would achieve compatibility between the amateur and radiolocation services within the 76-81 GHz band that the Commission has not discussed above.

62. Bosch, in its petition, states that it “is unconvinced, after several meetings with technical staff of ARRL, the national association for Amateur Radio, that there is any significant incompatibility between Amateur Radio and SRR operation at 79 GHz.” It says the nature of amateur use of this spectrum—largely experimental and occurring on mountaintops and locations where motor vehicle operation is not typical—will provide sufficient geographic separation to prevent interference from amateur users to new vehicular radar operations above 77 GHz. However, Bosch also notes that European regulators previously determined “that the use of SRR within the band 77-81 may be incompatible with the Radio Amateur Service,” but also concluded that amateur users could be accommodated in the 75.5-76 GHz band (which is not currently available in the U.S.). The Commission seeks comment on these points. Additionally, to help better inform its decision, the Commission seeks to develop a record on the types of amateur use, and the extent of such use, that is currently undertaken in the amateur 4 mm band.

63. To the extent that commenters believe that amateur operators can continue to use the millimeter band, the Commission seeks comment on what additional rule modifications it would have to adopt to realize successful shared use of the entire band. For example, our existing service rules would permit amateur operators to transmit with significantly higher power than other proposed operations. Would adopting the same emission limits for amateur operations as the Commission proposed for other services in this band reduce the potential for mutual interference? Are there any additional conforming edits to the part 97 amateur radio service rules that the Commission would have to implement?

64. If, instead, the Commission were to remove all amateur allocations from the 76-81 GHz range, it seeks comment on alternate spectrum that it might be able to make available in this general region. Bosch recommends an amateur allocation at 75.5-76 GHz, arguing that such an allocation would permit re-accommodation of any displaced Amateur Radio operators as the result of aggregate noise from SRRs in the 79 GHz band, and harmonize the United States Amateur allocation with that in ITU Region 1 and in other areas of the world. The Commission seeks comment on allocating the 75.5-76 GHz band to the amateur service if the Commission were to remove the amateur allocation, including amateur satellite, in the 76-81 GHz band.

65. The Commission set forth proposed rules that would license vehicular and FOD detection radars in the 76-81 GHz band and aircraft-mounted and fixed infrastructure radars in the 76-77 GHz band as licensed services under part 95 of our rules. The Commission also proposes to add a primary allocation for radiolocation in the 77.5-78 GHz band. The Commission proposes technical rules that would be appropriate for a part 95 licensed-by-rule approach.

66. In general, the proposed technical rules are consistent with those already set forth for existing vehicular radar and FOD detection radars under part 15 of our rules, including that the average and peak emission limits for vehicular radars in the 76-81 GHz band not to exceed 88 µW/cm2 and 279 µW/cm2 respectively, measured at a distance of 3 meters from the exterior surface of the radiating structure. However, as discussed, the existing part 15 use is on a non-interference basis and may not be the best fit for the types of safety related applications that the Commission envisions being deployed in the 76-81 GHz range. Under our draft rules, users would operate on a licensed basis fully supported by a primary radiolocation allocation throughout the 76-81 GHz range. Authorizing these radars under part 95 of our rules will permit license-by-rule operation pursuant to section 307(e) of the Communications Act (Act). Under this approach, these devices may operate on a shared, non-exclusive basis with respect to each other and without the need for these radar systems to be individually licensed. By doing this, the Commission can provide for a greater range of radar uses while still allowing for an easy transition of existing equipment to part 95 operation. The Commission seeks comment on these proposed rules. To the extent commenters support either regulatory approach, such as unlicensed operation under part 15, they should identify any rules that need to be modified to support the different types of radar applications the Commission discuss herein.

67. Because the existing part 95 rules do not specify rules for vehicular, FOD detection, aircraft-mounted and fixed infrastructure radar operations, the Commission propose to create a new subpart of part 95, titled the 76-81 GHz radar service, that will accommodate all authorized radar types within the band, but that will not otherwise distinguish among the different radar types. Our proposed service rules are intended to facilitate the industry in developing the various radar types in their authorized specific frequency ranges. For example, in the case of vehicular radars, the Commission leaves it up to the automotive industry to optimize the use of the 76-81 GHz frequency band and develop the SRR and LRR vehicular radar application within the band. Alternately, the Commission seeks comment on whether distinctive or differentiating rules for the different radars would be appropriate and if so, what those rules should be.

68. To fully implement our proposal to accommodate radars under part 95, the Commission also proposes to make additional modifications to parts 1, 2, 15, and 90 of our rules. All of our proposed rule modifications are shown in this NPRM. The Commission seeks comment on all of these proposals, and invites commenters to identify any additional rules that the Commission would need to update to accomplish our objectives.

69. As part of our comprehensive look at shared use of the 76-81 GHz band, the Commission has incorporated matters that were first raised in pleadings filed in ET Docket Nos. 10-28 and 11-90—namely Honeywell Aircraft's Petition relating to aircraft-mounted radar applications and Navtech's Fixed Radar Petition. Although the Commission believes that there is merit in considering the issues raised by Honeywell and Navtech in the context of the Vehicular Radar NPRM, the Commission concludes that the parties underlying petitions in the respective dockets should be denied.

70. As background, Honeywell first submitted a letter to the Office of Engineering and Technology seeking clarification of the rules adopted in the Vehicular Radar R&O, but later refiled with the Commission's Secretary asking that it the Commission treat the letter as a petition for reconsideration. On October 31, 2012, the Commission issued a Public Notice treating it as such.

71. Numerous representatives of the automotive industry as well as Xsight Systems, Inc., filed to oppose the Honeywell petition. These parties raised procedural arguments—that the issue of removing the current prohibition on the use of 76-77 GHz frequency range on aircraft or satellite was not properly raised in the proceeding and is otherwise outside the scope of the decision—as well as claims that there is insufficient evidence that both aircraft-mounted and vehicular radars can co-exist in the 76-77 GHz band. In response, Honeywell claims that the issues it raises are within the scope of the Commission's rulemaking proceeding, that there is no technical reason why aircraft-mounted radar cannot operate in the 76-77 GHz band while the aircraft is on ground, and that there is an urgent and recognized public interest need for the anti-collision benefits its aircraft-mounted radars can provide.

72. The Commission deny Honeywell's petition. Section 1.429(b) of the Commission's rules provide three ways in which a petition for reconsideration can be granted, and none of these have been met. Honeywell has not shown that its petition relies on facts regarding fixed radar use which had not previously been presented to the Commission, nor does it show that its petition relies on facts that relate to events that changed since Honeywell had the last opportunity to present its facts regarding fixed radar use. Indeed, Honeywell did not previously participate in the proceeding before filing its letter. Moreover, it does not serve the public interest to consider Honeywell's facts and arguments via reconsideration of the existing dockets. The Commission agrees with the commenters who opposed the petition that there may be technical and policy considerations associated with aircraft-mounted radar applications that parties could not have reasonably anticipated nor had an opportunity to address. Any public interest associated with the consideration of Honeywell's arguments will be fully captured and considered within the new docket that the Commission initiates with this rulemaking By doing so, it can ensure that another aspect of the public interest is served—that is, that all interested parties have ample notice and comment opportunities with respect to the possible use of wingtip radars under our rules.

73. Similarly, the Commission agrees with those parties who oppose the Navtech pleading as procedurally defective. The Commission stated in the in the Vehicular Radar R&O that “no parties have come forward to support fixed radar applications beyond airport locations in this band,” and it decided not to adopt provisions for unlicensed fixed radar use other than those for FOD detection applications at airport locations. Because Navtech first participated in the proceeding when it filed its petition well after the decision was published, its petition fails to meet the timeliness standard of § 1.429(d).

74. The Commission emphasize that our decision does not address whether there are substantive merits to these claims. Such issues are fully incorporated into the proposals the Commission makes in conjunction with the Vehicular Radar NPRM.

75. Finally, because the Commission is considering several different types of radar applications that would share use within the millimeter wave bands, and because it is proposing a consolidated licensing scheme under our part 95 rules, the Commission concludes that it can best promote efficiency and reduce administrative burdens by opening a new docket, ET Docket No. 15-26. Here, the Commission will consider ongoing and future matters pertaining to the entire 76-81 GHz band in a consolidated and comprehensive manner. To that end, and in connection with its decision to deny the petitions for reconsideration discussed above, the Commission terminates ET Docket Nos. 10-28 and 11-90 (pertaining to vehicular radar) and WT Docket No. 11-202 (addressing FOD detection radar applications). The Commission concludes that future decisions regarding matters that it previously considered within those dockets can more practically be made within the comprehensive ET Docket No. 15-26 proceeding.

76. As required by the Regulatory Flexibility Act of 1980, as amended (RFA),1 the Commission has prepared this present Initial Regulatory Flexibility Analysis (IRFA) of the possible significant economic impact on small entities by the policies and rules proposed in this Notice of Proposed Rulemaking and Reconsideration Order (NPRM). Written public comments are requested on this IRFA. Comments must be identified as responses to the IRFA and must be filed by the deadlines specified in the NPRM for comments. The Commission will send a copy of this NPRM, including this IRFA, to the Chief Counsel for Advocacy of the Small Business Administration (SBA).2 In addition, the Notice and IRFA (or summaries thereof) will be published in the Federal Register.3

77. This Notice responds to petitions for rulemaking filed by Robert Bosch, LLC (Bosch) requesting modifications to § 15.253 of the rules to extend operating frequency for vehicular radar systems from 76-77 GHz to the 76-81 GHz band. Vehicular radars can determine the exact distance and relative speed of objects in front of, beside, or behind a car to improve the driver's ability to perceive objects under bad visibility conditions or objects that are in blind spots. Some examples of vehicular radar systems include collision warning and mitigation systems, blind spot detection systems, lane change assist, and parking aid systems. The Notice proposes to extend the operating frequency for unlicensed vehicular radar systems from 76-77 GHz to 76-81 GHz. These modifications to the rules will provide more efficient use of spectrum, and enable the automotive industries to develop enhanced safety measures for drivers and the general public.

78. Airports are challenged with managing increasing congestion on the ground. These rule modification will add to the tools that enhance an airport's ability to determine the location of airplanes and airport ground vehicles that are operating in taxiways and runways. The presence of foreign object debris (FOD) in an airport's air operations area (AOA) poses a significant threat to the safety of air travel. Foreign object debris on taxiways and runways has the potential to damage aircraft during the critical phases of takeoffs and landings, which can lead to catastrophic loss of life and at the very least increased maintenance and operating costs.4 These rule modification will help reduce FOD hazards through the implementation of a FOD management program and the effective use of FOD detection and removal equipment.5

79. Our rule modifications also propose to expand the use of radar in the 76-77 GHz band to aircraft-mounted radars. This application, also referred to as “wingtip radar” and used only while aircraft are on the ground, is intended to prevent or mitigate the severity of aircraft wing collisions while the plane is taxiing tarmacs. Mitigating the risk of wingtip collisions can reduce costs and improve safety for both aviation personnel and the travelling public.6 The use of wingtip radar also appears to support National Transportation Safety Board (NTSB) safety recommendation regarding the use of anti-collision aids on aircraft.7 Our overall objective is to promote efficient use of the spectrum and facilitate development of technologies that will improve airport operations and provide enhance safety measures for both airport personnel and the general public.

80. There is new demand for fixed infrastructure radar applications beyond airport locations. Some of these applications are monitoring tunnels or bridges for stopped vehicles, providing collision warning systems for ship-to-shore cranes and providing train detection for automatic train control.8 In our rule modifications to permit such use we seek efficient use of the spectrum, harmonize global use of the spectrum, and facilitate development of technologies that serve public interest and convenience.

81. This action is authorized under sections 1, 4(i), 302, 303(f) and (r), 332, and 337 of the Communications Act of 1934, as amended, 47 U.S.C. 1, 4(i), 154(i), 302, 303(f) and (r), 332, 337.

82. The RFA directs agencies to provide a description of, and, where feasible, an estimate of, the number of small entities that may be affected by the rules adopted herein.9 The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” 10 In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.11 A “small business concern” is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).12

83. Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing. The Census Bureau defines this category as follows: “This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment.” 13 The SBA has developed a small business size standard for Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing, which is: all such firms having 750 or fewer employees. According to Census Bureau data for 2007, there were a total of 939 establishments in this category that operated for part or all of the entire year. According to Census bureau data for 2007, there were a total of 939 firms in this category that operated for the entire year. Of this total, 912 had fewer than 500 employees and 17 had more than 1000 employees.14 Thus, under that size standard, the majority of firms can be considered small.

84. Radars operating in the 76-81 GHz band are required to be authorized under the Commission's certification procedure as a prerequisite to marketing and importation, and the NPRM proposes no change to that requirement.

85. The RFA requires an agency to describe any significant alternatives that it has considered in reaching its proposed approach, which may include the following four alternatives (among others): (1) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to small entities; (2) the clarification, consolidation, or simplification of compliance or reporting requirements under the rule for small entities; (3) the use of performance, rather than design, standards; and (4) an exemption from coverage of the rule, or any part thereof, for small entities.15

86. The proposals contained in this NPRM are deregulatory in nature, which we expect will simplify compliance requirements for all parties, particularly small entities, and permit the development of improved radar systems. Extending the frequency for unlicensed vehicular radar from 76-77 GHz to 76-81 GHz will enable global spectrum harmonization of LRRs at 76-77 GHz and SRRs at 77-81 GHz that will reduce prices and encourage deployment of automotive radars in lower-cost vehicles. Consolidating FOD detection radars to operate under part 95 in lieu of current rules will reduce unnecessary burdens for the general public and will provide increased spectrum efficiency.

87. None.

88. Pursuant to sections 1, 2, 4(i), 301, 302, and 303(f) of the Communications Act of 1934, 47 U.S.C. 151, 152, 154(i), 301, 302a, and 303(f), that the Notice of Proposed Rulemaking is adopted and the Petition for Rulemaking filed by Robert Bosch in RM-11666 is granted to the extent described herein.

89. Pursuant to sections 4(i), 302, 303(e), 303(f), and 405 of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 302, 303(e), 303(f), and 405, the petitions for reconsideration filed by Honeywell and Navtech in ET Docket Nos. 10-28 and 11-90 are denied.

90. Pursuant to the authority contained in sections 4(i), 4(j), and 303 of the Communications Act, as amended, 47 U.S.C. 154(i), 154(j) and 303, that ET Docket Nos. 10-28 and 11-90 and WT Docket No. 11-202 are closed and the proceedings are terminated should no petitions for reconsideration or applications for review be timely filed.

91. The Commission's Consumer and Governmental Affairs Bureau, Reference Information Center, shall send a copy of this Notice of Proposed Rulemaking, including the Initial Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

For the reasons discussed in the preamble, the Federal Communications Commission proposes to amend 47 CFR parts 1, 2, 15, 90, and 95 as follows:

I. Background Entry-Level Driver Training

Section 32304 of the Moving Ahead for Progress in the 21st Century (MAP-21) (Pub. L. 112-141, 126 Stat. 405 (July 6, 2012)) requires FMCSA to establish new regulations concerning ELDT. MAP-21 requires “that the training regulations address knowledge and skills for motor vehicle operation, specific requirements for hazmat and passenger endorsements, create a certificate system for meeting requirements, and require training providers to demonstrate that their training meets uniform standards.” The new requirements would apply to individuals seeking a CDL to operate CMVs, as defined in 49 CFR 383.5.

On August 19, 2014 (79 FR 49044), FMCSA announced that the Agency would explore the feasibility of conducting a negotiated rulemaking concerning entry-level driver training for drivers of CMVs. The Agency announced the hiring of a convener to speak with interested parties about the feasibility of conducting an ELDT negotiated rulemaking and requested public comments by September 18, 2014. As part of the first step in this process, the convener conducted these interviews and submitted a report to the Agency on November 26, 2014, regarding the feasibility of conducting a negotiated rulemaking. The convening report is available both in the rulemaking docket at FMCSA-2007-27748 and on the Internet at eldtac.fmcsa.dot.gov.

On December 10, 2014 (79 FR 73273), FMCSA announced its intent to establish a negotiated rulemaking committee to negotiate and develop proposed regulations to implement the MAP-21 provision concerning ELDT based on the recommendations of the convener. On February 12, 2015 (80 FR 7814), FMCSA announced the appointment of members to the Entry-Level Driver Training Advisory Committee (ELDTAC) established to complete a negotiated rulemaking on ELDT for individuals who want to operate CMVs.

The ELDTAC is established by charter in accordance with the Federal Advisory committee Act (FACA), 5 U.S.C., App. 2. Transportation Secretary Anthony Foxx signed the ELDTAC charter on January 15, 2015, which provides up to 2 years for the Committee's duration, in accordance with section 14 of FACA. Additionally, as the ELDTAC is a negotiated rulemaking committee (“Reg Neg”), it complies with the Negotiated Rulemaking Act (5 U.S.C. 564). The Committee is effective from the date of signature through January 15, 2017.

In its December 10, 2014, Federal Register notice, the Agency announced that it was soliciting applications and nominations for membership on the ELDTAC. These members are experts in their respective fields and appointed as Special Government employees or representatives of entities or interests including but not limited to the following: CMV driver training organizations; industry representatives; representatives of driver training schools; motor carriers (of property and passengers) and associations; State licensing agencies; State enforcement agencies; labor unions; safety advocacy groups; insurance companies; and others selected with a view toward achieving varied perspectives on ELDT. In an effort to balance these interests to the extent practicable, the FMCSA Acting Administrator appointed 26 members on January 30, 2015, who will each serve for up to one two-year term. The members met for the first time Thursday-Friday, February 26-27, 2015.

Oral comments from the public will be heard during the meeting, as managed by the Reg Neg facilitator.

Members of the public may submit written comments on the topics to be considered during the meeting one week prior to each meeting to Federal Docket Management System (FDMC) Docket Number FMCSA-2007-27748. If you submit a comment, please include the docket number for this notice (FMCSA-2007-27748). You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.

To submit your comment online, go to http://www.regulations.gov, put the docket number, FMCSA-2007-27748, in the keyword box, and click “Search.” When the new screen appears, click on the “Comment Now!” button and type your comment into the text box on the following screen. Choose whether you are submitting your comment as an individual or on behalf of a third party and then submit.

If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing.

To view comments, as well as any documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov. Insert the docket number, FMCSA-2007-27748, in the keyword box, and click “Search.” Next, click the “Open Docket Folder” button and choose the document to review. If you do not have access to the Internet, you may view the docket online by visiting the Docket Management Facility in Room W12-140 on the ground floor of the DOT West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m., E.T., Monday through Friday, except Federal holidays.

DOT posts comments, without edit, including any personal information the commenter provides, to www.regulations.gov, as described in the system of records notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.

In coordination with the Reg Neg facilitator, FMCSA has developed this schedule of committee meetings, running through May 2015.

FMCSA intends to complete the Reg Neg process for the proposed rule within the first half of 2015 and to publish a Notice of Proposed Rulemaking (NPRM) this year, followed by a Final Rule in 2016. After the conclusion of the committee meetings, the Agency will draft the NPRM, which is expected to take approximately 6-8 weeks, depending on the degree of consensus on the issues and the supporting data developed by the committee. The NPRM will then be reviewed by DOT's Office of the Secretary and the Office of Management and Budget (OMB). The Agency will then publish the NPRM for public comment.

Following the close of the public comment period the Agency will evaluate and respond to public comments as it drafts a final rule, which will also undergo Departmental and OMB review. Although the time needed to address public comments to an NPRM that has been developed through a successful negotiated rulemaking process is typically shorter than for rules conducted through the ordinary informal notice and comment process, the Agency must nonetheless address substantive public comments in the final rule, in accordance with the Administrative Procedure Act. While the Agency cannot state with certainty the time required to complete the Reg Neg process and notice and comment rulemaking, the target date for publication of an NPRM is October 15, 2015.