Federal Register Vol. 80, No.77,

This rule is issued under Marketing Agreement No. 121 and Marketing Order No. 915, both as amended (7 CFR part 915), regulating the handling of avocados grown in South Florida, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

This rule is also issued under section 8e of the Act, which provides that whenever certain specified commodities, including avocados, are regulated under a Federal marketing order, imports of these commodities into the United States are prohibited unless they meet the same or comparable grade, size, quality, or maturity requirements as those in effect for the domestically produced commodities.

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Orders 12866, 13563, and 13175.

The handling of avocados grown in South Florida is regulated by 7 CFR part 915. Prior to this change, the B date for the Choquette variety listed on the maturity schedule was October 17, the C date was October 31, and the D date was November 14. Three years of testing by Avocado Administrative Committee (Committee) staff indicated that some weights and sizes were maturing earlier, prompting the Committee to recommend moving the B, C, and D dates each up one week, respectively. Therefore, this rule continues in effect the rule that changed the B date for Choquettes listed on the maturity schedule from October 17 to October 10, the C date from October 31 to October 24, and the D date from November 14 to November 7. The corresponding sizes and weights associated with these dates remain unchanged. The dates on the maturity schedule are the basis for calculating the actual shipping dates (A, B, C, D dates) for each individual season. The actual shipping dates for an individual year are established as the Monday nearest to the date specified in the maturity schedule as specified in § 915.332.

Imported avocados are subject to regulations specified in 7 CFR part 944. Under those regulations, imported avocados must meet the same minimum size requirements as specified for domestic avocados under the order. Therefore, the B date for Choquette variety listed on the maturity schedule was also changed from October 17 to October 10, the C date changed from October 31 to October 24, and the D date changed from November 14 to November 7.

In an interim rule published in the Federal Register on September 16, 2014, and effective on September 19, 2014, (79 FR 55351, Doc. No. AMS-FV-14-0051, FV14-915-1 IR), §§ 915.332 and 944.31 were amended by changing the B date for the Choquette variety listed on the maturity schedule from October 17 to October 10, the C date from October 31 to October 24, and the D date from November 14 to November 7.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf.

There are approximately 30 handlers of Florida avocados subject to regulation under the order and approximately 300 producers of avocados in the production area. There are approximately 70 importers of West Indian- and Guatemalan-type avocado varieties like those grown in Florida. Small agricultural service firms, which include avocado handlers and importers, are defined by the Small Business Administration (SBA) as those whose annual receipts are less than $7,000,000, and small agricultural producers are defined as those having annual receipts less than $750,000 (13 CFR 121.201).

According to Committee data and information from the National Agricultural Statistical Service, the average price for Florida avocados during the 2011-12 season was approximately $20.79 per 55-pound bushel container and total shipments were slightly higher than 1.2 million 55-pound bushels. Using the average price and shipment information, the majority of avocado handlers could be considered small businesses under SBA's definition. In addition, based on avocado production, producer prices, and the total number of Florida avocado producers, the average annual producer revenue is less than $750,000. Information from the Foreign Agricultural Service, USDA, indicates that the dollar value of imported West Indian- and Guatemalan-type avocados was $15.5 million in 2013. Using these values, most importers would have annual receipts of less than $7,000,000 for avocados. Consequently, the majority of avocado handlers, producers, and importers may be classified as small entities.

The Dominican Republic, Peru, and Costa Rica, are the major production areas exporting avocado varieties other than Hass to the United States. In 2013, shipments of these type of avocados imported into the United States totaled around 14,500 metric tons. Of that amount, 14,400 metric tons were imported from the Dominican Republic, 63 metric tons were imported from Peru, and 21 metric tons were imported from Costa Rica. Mexico, Chile, and Peru are the major countries producing and exporting Hass-type avocados to the United States. In 2013, shipments of Hass-type avocados imported into the United States totaled around 548,000 metric tons. Mexico accounted for 500,000 metric tons, with 23,400 metric tons from Chile, and 21,500 metric tons from Peru.

This rule continues in effect the action that changed the maturity requirements prescribed under the order's rules and regulations. This rule changed the maturity shipping schedule to allow certain sizes and weights of the Choquette avocado variety to be shipped to the fresh market earlier and made a corresponding change to the avocado import regulation. With this change, the maturity schedule better reflects the current maturity rate for the Choquette variety, facilitating the shipment of this variety as it matures. Authority for this change is provided in §§ 915.51 and 915.52. This rule amends the provisions in §§ 915.332 and 944.31. The change in the import regulation is required under section 8e of the Act.

This action is not expected to increase the costs associated with the order's requirements or the avocado import regulation. Rather, it is anticipated that this action will have a beneficial impact. Based on several seasons of maturity testing, the Committee recommended moving the B, C, and D dates on the maturity schedule forward one week, respectively, for the Choquette variety, allowing the associated sizes and weights to be shipped to the fresh market earlier. The revised dates better reflect the current maturity rate for Choquettes, and will facilitate the shipment of this variety as it matures, while continuing to ensure that only mature fruit is shipped to the fresh market. The benefits of this rule are expected to be equally available to all fresh avocado growers, handlers, and importers, regardless of this size.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the order's information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0189, “Generic Fruit Crops.” No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval.

This rule will not impose any additional reporting or recordkeeping requirements on either small or large avocado handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. In addition, USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule.

Further, the Committee's meeting was widely publicized throughout the Florida avocado industry and all interested persons were invited to attend the meeting and participate in Committee deliberations. Like all Committee meetings, the April 9, 2014, meeting was a public meeting and all entities, both large and small, were able to express their views on this issue.

Comments on the interim rule were required to be received on or before November 17, 2014. Two comments were received.

One comment expressed support for the change. The second commenter asked if there were health risks to the consumer if these avocados are consumed too early. The avocado maturity schedule is designed to ensure only mature avocados that will ripen properly are shipped to consumers. Immaturity can negatively affect the taste and quality of the fruit. Accordingly, no changes will be made to the rule based on the comments received, and we are adopting the interim rule as a final rule, without change for the reasons given in the interim rule.

To view the interim rule, go to: http://www.regulations.gov/#!documentDetail;D=AMS-FV-14-0051-0001

This action also affirms information contained in the interim rule concerning Executive Orders 12866, 12988, 13563, and 13175; the Paperwork Reduction Act (44 U.S.C. Chapter 35); and the E-Gov Act (44 U.S.C. 101).

In accordance with section 8e of the Act, the United States Trade Representative has concurred with the issuance of this final rule.

After consideration of all relevant material presented, it is found that finalizing the interim rule, without change, as published in the Federal Register (79 FR 55351, September 16, 2014) will tend to effectuate the declared policy of the Act.

This final rule is issued under Marketing Agreement No. 97 and Order No. 948, both as amended (7 CFR part 948), regulating the handling of Irish potatoes grown in Colorado, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.”

This final rule is also issued under section 8e of the Act, which provides that whenever certain specified commodities, including Irish potatoes, are regulated under a Federal marketing order, imports of these commodities into the United States are prohibited unless they meet the same or comparable grade, size, quality, or maturity requirements as those in effect for the domestically produced commodities.

The Department of Agriculture (USDA) is issuing this rule in conformance with Executive Orders 12866, 13563, and 13175.

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect.

The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing, USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling.

There are no administrative procedures which must be exhausted prior to any judicial challenge to the provisions of import regulations issued under section 8e of the Act.

This final rule revises the minimum quantity exception currently prescribed in the handling regulation for potatoes handled under Marketing Order No. 948. This rule increases the quantity of potatoes that may be handled without regard to the order's handling regulation from 1,000 to 2,000 pounds. Relaxing the minimum quantity exception is expected to benefit producers, handlers, and importers. The rule was unanimously recommended by the Committee at a meeting on July 18, 2013.

Section 948.4 of the order divides the State of Colorado into three areas of regulation for marketing order purposes. These areas include: Area No. 1, commonly known as the Western Slope; Area No. 2, commonly known as San Luis Valley; and, Area No. 3, which consists of the remaining producing areas within the State of Colorado not included in the definition of Area No. 1 or Area No. 2. Currently, the order only regulates the handling of potatoes produced in Area No. 2 and Area No. 3. Regulation for Area No. 1 has been suspended.

Section 948.50 of the order establishes committees as administrative agencies for each of the areas set forth under § 948.4. Section 948.22(a) of the order authorizes the issuance of grade, size, quality, maturity, pack, and container regulations for potatoes grown in the order's production area. Further, § 948.22(b)(2) of the order provides authority for each area committee to recommend modification of regulations to provide for minimum quantities that should be relieved of regulatory or administrative obligations.

Section 948.386 of the order's administrative rules prescribes grade, size, maturity, and inspection requirements for Colorado Area No. 2 potatoes. Paragraph (f) of that section prescribes the minimum quantity of potatoes that are exempt from regulation. Currently, each person may handle up to 1,000 pounds of potatoes without regard to the order's grade, size, maturity, and inspection requirements.

At its meeting on July 18, 2013, the Committee unanimously recommended increasing the order's minimum quantity exception from 1,000 to 2,000 pounds. The recommendation was made at the request of producers and handlers who wanted greater flexibility in distributing smaller quantities of potatoes. In its deliberations, the Committee commented that 2,000 pounds is consistent with the current weight of a pallet of potatoes. One pallet is typically the smallest lot of potatoes distributed, since most delivery vehicles are now capable of transporting at least 2,000 pounds.

Handlers also feel that the value of one pallet of potatoes does not warrant the cost of complying with the order's regulations. Based on an estimated average f.o.b. price of $12.60, the value of one pallet of potatoes is approximately $252.00. Increasing the minimum quantity exception from 1,000 to 2,000 pounds of potatoes allows a handler to ship one pallet of potatoes without regard to the order's grade, size, maturity, and inspection requirements. Relaxing the minimum quantity is expected to benefit producers, handlers, and importers.

Section 8e of the Act provides that when certain domestically produced commodities, including Irish potatoes, are regulated under a Federal marketing order, imports of that commodity must meet the same or comparable grade, size, quality, and maturity requirements. Whenever two or more marketing orders regulating the same commodity produced in different areas of the United States are concurrently in effect, the importation into the United States of any such commodity shall be prohibited unless it complies with the grade, size, quality and maturity provisions of the order which, as determined by the Secretary of Agriculture, regulates the commodity produced in the area with which the imported commodity is in most direct competition (7 U.S.C. 608e-1(a)). Section 980.1(a)(2)(ii) of the Vegetable Import Regulations specifies that imported round-type potatoes, except red-skinned, round type potatoes, are in most direct competition with potatoes of the same type produced in the area covered by Marketing Order 948. Since this action increases the minimum quantity exemption under the domestic handling regulations, a corresponding change to the import regulations must also be considered.

Minimum grade, size, quality, and maturity requirements for Irish potatoes imported into the United States are currently in effect under § 980.1 (7 CFR 980.1). The minimum quantity exemption is specified in § 980.1(c). The exemption for red skinned, round type or long type potatoes will remain at a 500 pound limit as provided in Marketing Orders 946 and 945, respectively. This rule increases the quantity for all other round type potatoes that may be imported without regard to the import regulation requirements from 1,000 to 2,000 pounds. The metric equivalent for 1,000 pounds is 453.592 kilograms and 2,000 pounds is 907.185 kilograms. The increase in the minimum quantity exemption for imports of potatoes will have a beneficial impact on importers. This rule will provide flexibility in the importation and distribution of smaller quantities of potatoes.

Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), the Agricultural Marketing Service (AMS) has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Import regulations issued under the Act are based on those established under Federal marketing orders.

There are approximately 80 handlers of Colorado Area No. 2 potatoes subject to regulation under the order and approximately 180 producers in the regulated production area. There are approximately 240 importers of potatoes. Small agricultural service firms (handlers and importers) are defined by the Small Business Administration (SBA) as those having annual receipts of less than $7,000,000, and small agricultural producers are defined as those having annual receipts of less than $750,000 (13 CFR 121.201).

During the 2011-2012 fiscal period, the most recent for which statistics are available, 15,072,963 hundredweight of Colorado Area No. 2 potatoes were inspected under the order and sold into the fresh market. Based on an estimated average f.o.b. price of $12.60 per hundredweight, the Committee estimates that 66 Area No. 2 handlers, or about 83 percent, had annual receipts of less than $7,000,000. In view of the foregoing, the majority of Colorado Area No. 2 potato handlers may be classified as small entities.

In addition, based on information provided by the National Agricultural Statistics Service, the average producer price for the 2011 Colorado fall potato crop was $10.70 per hundredweight. Multiplying $10.70 by the shipment quantity of 15,072,963 hundredweight yields an annual crop revenue estimate of $161,280,704. The average annual fresh potato revenue for each of the 180 Colorado Area No. 2 potato producers is therefore calculated to be approximately $896,000 ($161,280,704 divided by 180), which is greater than the SBA threshold of $750,000. Consequently, on average, many of the Colorado Area No. 2 potato producers may not be classified as small entities.

Information from the Foreign Agricultural Service, USDA, indicates that the dollar value of imports of the type of potatoes affected by this rule ranged from approximately $55.8 million in 2009 to $ 56.5 million in 2013. Using these values, the majority of importers of the type of potatoes affected by this rule would have annual receipts of less than $7,000,000 and may be classified as small entities.

Canada is the major potato-producing country exporting potatoes to the United States. In 2013, affected shipments of potatoes imported into the United States totaled around 3,479,468 hundredweight. Of that amount, 3,479,383 hundredweight were imported from Canada, 59 hundredweight were imported from Ecuador, and 26 hundredweight were imported from Peru.

This final rule revises the quantity of potatoes that may be handled without regard to the requirements of § 948.386(a), (b), and (c) of the order from 1,000 to 2,000 pounds and makes a corresponding change to the potato import regulation. At the July 18, 2013 meeting, the Committee unanimously recommended increasing the minimum quantity exception to be consistent with the approximate weight of one pallet of potatoes. Authority for the establishment and modification of a minimum quantity exception is provided in § 948.22(b)(2) of the order. This final rule amends the provisions in §§ 948.386(f) and 980.1(c). The change in the import regulation is required under section 8e of the Act.

This action is not expected to increase the costs associated with the order's requirements or the potato import regulation. Rather, it is anticipated that this change will have a beneficial impact. The Committee believes it will provide greater flexibility in the distribution of small quantities of potatoes. Currently, the distribution of potatoes between 1,000 and 2,000 pounds requires an inspection and certification that the product conforms to the grade, size, and maturity requirements of the order. This translates into a cost for handlers and importers of both time and inspection fees, which is high in relation to the small value (approximately $252.00 per pallet) of these transactions. This action will allow shipments up to 2,000 pounds of potatoes without regard to the order's grade, size, maturity, and inspection requirements and the related costs. The benefits for this final rule are expected to be equally available to all fresh potato producers, handlers, and importers, regardless of their size.

As an alternative to the proposal, the Committee discussed leaving the handling regulation unchanged. The Committee rejected this idea because a pallet of potatoes weighs approximately 2,000 pounds and the 1,000 pound minimum quantity exception did not accommodate this size shipment. No other alternatives were discussed.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the order's information collection requirements have been previously approved by the Office of Management and Budget (OMB) and assigned OMB No. 0581-0178 (Generic Vegetable and Specialty Crops). No changes in those requirements as a result of this action are necessary. Should any changes become necessary, they would be submitted to OMB for approval.

This final rule relaxes the minimum quantity exception under the order from 1,000 to 2,000 pounds. Accordingly, this action will not impose any additional reporting or recordkeeping requirements on either small or large Colorado Area No. 2 potato handlers. As with all Federal marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies.

As noted in the initial regulatory flexibility analysis, USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this final rule.

AMS is committed to complying with the E-Government Act, to promote the use of the internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

In addition, the Committee's meeting was widely publicized throughout the Colorado Area No. 2 potato industry and all interested persons were invited to attend the meeting and participate in Committee deliberations on all issues. Like all Committee meetings, the July 18, 2013, meeting was a public meeting and all entities, both large and small, were able to express views on this issue.

A proposed rule concerning this action was published in the Federal Register on October 6, 2014 (79 FR 60117). Copies of the rule were made available to all interested Colorado potato producers and handlers. Finally, the rule was made available through the Internet by USDA and the Office of the Federal Register. A 60-day comment period ending December 5, 2014, was provided to allow interested persons to respond to the proposal. No comments were received.

A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: http://www.ams.usda.gov/MarketingOrdersSmallBusinessGuide. Any questions about the compliance guide should be sent to Jeffrey Smutny at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section.

In accordance with section 8e of the Act, the United States Trade Representative has concurred with the issuance of this final rule.

After consideration of all relevant matter presented, including the information and recommendation submitted by the Committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act.

It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the Federal Register (5 U.S.C. 553) because handlers are already shipping potatoes from the 2014-2015 crop and handlers want to take advantage of the relaxation as soon as possible. Further, handlers are aware of this rule, which was recommended at a public meeting. Also, a 60-day comment period was provided for in the proposed rule and no comments were received.

For the reasons set forth above, 7 CFR parts 948 and 980 are amended as follows:

This rule is issued under the Order (7 CFR part 1212). The Order is authorized under the Commodity Promotion, Research, and Information Act of 1996 (1996 Act) (7 U.S.C. 7411-7425).

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, reducing costs, harmonizing rules and promoting flexibility. This action has been designated as a “non-significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the Office of Management and Budget has waived the review process.

This action has been reviewed in accordance with the requirements of Executive Order 13175, Consultation and Coordination with Indian Tribal Governments. The review reveals that this regulation will not have substantial and direct effects on Tribal governments and will not have significant Tribal implications.

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Section 524 of the 1996 Act (7 U.S.C. 7423) provides that it shall not affect or preempt any other Federal or State law authorizing promotion or research relating to an agricultural commodity.

Under the Order now in effect, honey first handlers and importers are subject to assessments. Funds to administer the Order are derived from such assessments. It is intended that the assessment rate of $0.0125 per pound will be applicable for all assessable honey for the period from January 1 through December 31, 2015, and that the rate of $0.015 per pound will be applicable to all assessable honey beginning on January 1, 2016, and continue until amended, suspended, or terminated.

Under section 519 of the 1996 Act (7 U.S.C. 7418), a person subject to an order may file a written petition with USDA stating that an order, any provision of an order, or any obligation imposed in connection with an order, is not established in accordance with the law, and request a modification of an order or an exemption from an order. Any petition filed challenging an order, any provision of an order, or any obligation imposed in connection with an order, shall be filed within two years after the effective date of an order, provision, or obligation subject to challenge in the petition. The petitioner will have the opportunity for a hearing on the petition. Thereafter, USDA will issue a ruling on the petition. The 1996 Act provides that the district court of the United States for any district in which the petitioner resides or conducts business shall have the jurisdiction to review a final ruling on the petition, if the petitioner files a complaint for that purpose not later than 20 days after the date of the entry of USDA's final ruling.

This rule amends the Order to increase the assessment rate from $0.01 to $0.015 per pound on honey and honey products over a two-year period. The Order limits an increase in the assessment rate to no more than one-quarter cent per pound per year. Thus, the rate will increase to $0.0125 per pound for the period January 1 through December 31, 2015, and to $0.015 per pound on and after January 1, 2016. The Order is administered by the Board with oversight by USDA. Under the program, assessments are collected from first handlers and importers and used for research and promotion projects designed to maintain and expand the market for honey and honey products in the United States and abroad. Additional funds will enable the Board to expand its production research activities and promotional efforts. The Board's production research focuses on maintaining the health of honey bee colonies. Promotional efforts focus on the innovative ways to market, promote, and utilize honey and honey products. Increasing demand for honey and honey products will benefit the honey industry as a whole. This action was unanimously recommended by the Board.

The Order specifies that the funds to cover the Board's expenses shall be paid from assessments on first handlers and importers, donations from persons not subject to assessments, and from other funds available to the Board. First handlers are required to file reports and maintain records on the total quantity of honey and honey products acquired during the reporting period, the quantity of honey processed for sale from the handler's own production, and the quantity of honey purchased from a handler or importer responsible for paying the assessment due. Importers are required to report the total quantity of honey and honey products imported during each reporting period, and keep a record of each lot of honey and honey products imported during such period, including the quantity, date, country of origin, and port of entry. Importers are responsible for paying assessments to the Board on honey and honey products imported into the United States through the U.S. Customs and Border Protection (Customs). The Order also provides for two exemptions. First handlers who handle less than 250,000 pounds and importers who import less than 250,000 pounds of honey and honey products annually, and first handlers and importers of 100 percent organic honey and honey products are exempt from the payment of assessments.

Section 1212.52 of the Order specifies that assessments shall be levied at a rate of $0.01 per pound on all honey and honey products. The Board may recommend to the Secretary an increase or decrease in the assessment as it deems appropriate by at least a two-thirds vote of members present at a meeting of the Board. The Board may not recommend an increase in the assessment of more than $0.02 per pound of honey or honey products and may not increase the assessment by more than $0.0025 in any single fiscal year.

The $0.01 per pound assessment rate has been in effect since the Order's inception in 2008. The Board's fiscal year runs from January 1 through December 31. Board expenditures have ranged from $4,157,250 for its first full year in 2009 to $4,556,490 in 2013. Expenditures for research have ranged from $465,579 in 2009 (11 percent of total expenses) to $231,234 in 2013 (5 percent of total expenses). Board expenditures for health messaging and promotion activities have ranged from $2,311,370 in 2009 (56 percent of total expenses) to $2,859,743 in 2013 (63 percent of total expenses). Pursuant to section 1212.50(h) of the Order, administrative expenditures have been less than 15 percent of the assessments and other income received by the Board annually.

Board assessment income has ranged from $3,345,543 in 2009 ($2,085,204 in domestic assessments and $1,260,339 in import assessments) to $4,443,798 in 2013 ($1,122,390 in domestic assessments and $3,321,408 in import assessments). Additionally, pursuant to section 1212.54 of the Order, the Board maintains a monetary reserve with funds that do not exceed one fiscal period's budget.

The Board held a teleconference on January 23, 2014, and unanimously recommended increasing its assessment rate from $0.01 to $0.015 per pound on honey and honey products over a two-year period. The Order limits an increase in the assessment rate to no more than one-quarter cent per pound per year. Thus, the rate will increase to $0.0125 per pound for the period January 1 through December 31, 2015, and to $0.015 per pound on and after January 1, 2016. Additional funds will enable the Board to expand its production research activities and promotional efforts. Since the program's inception, the Board has funded several production research projects focused on maintaining the health of honey bee colonies. The honey industry continues to experience considerable production challenges associated with the Colony Collapse Disorder. The honey industry has attempted to halt the long term decline in the numbers of honeybees (over 30 percent in the past twenty years) through treatment, colony development, maintenance, and replacement. The funds generated by an assessment increase will be spent on conducting research activities designed to address these critical issues. Per section 1212.50(a) of the Order, five percent (5 percent) of the Board's anticipated revenue from assessments each fiscal period is to be allocated towards production research and research related to the production of honey. A possible one to two million dollar increase in assessment revenue would generate an additional $50,000 to $100,000 for production research.

Furthermore, the Board also conducts research relating to various health and beauty issues, including alternative uses for honey. However, most of these preliminary findings have been done under laboratory conditions. Additional funds will allow the Board to incorporate specific areas of research into expanded clinical (human) trials. Clinical trials are important for the industry to be able to make health claims consistent with Federal Trade Commission and Food and Drug Administration requirements.

The Board uses health information in its promotion messaging to help build demand for honey and honey products. Worldwide honey production has grown from 357 million pounds in 2009 to 487 million pounds in 2013. Increasing demand will help move the growing supply of honey, which in turn will assist the Board in reaching its goal to continually increase consumption among existing honey and honey product consumers and to attract new honey and honey product users.

At the increased assessment rate on honey and honey products, with assessable pounds averaging 450 million per year, assessment income could reach $5.6 million in 2015 and $6.8 million in 2016. This increase could be used for research and promotion projects designed to maintain and expand the market for honey and honey products in the United States and abroad. As an example, if 5 percent of the budget was allocated to production research and 60 percent was allocated to promotion, funds available for production research could average approximately $340,000 annually, up from $231,234 in 2013, and funds available for health messaging and promotion could average $4.0 million annually, up from $2.8 million in 2013.

In light of the need to allocate more funds towards production and health research activities and build demand for honey, the Board recommended increasing the assessment rate under the Order from $0.01 to $0.015 per pound on honey and honey products over a two-year period. The Order limits an increase in the assessment rate to no more than one-quarter cent per year. Thus, the rate will increase to $0.0125 per pound for the period January 1 through December 31, 2015, and to $0.015 per pound on and after January 1, 2016. Section 1212.52 of the Order is amended accordingly.

Paragraph (e) of section 1212.52 is also revised to clarify that the assessment rate applies not only to the listed Harmonized Tariff Schedule of the United States (HTSUS) numbers, but also any other numbers that may be used to identify honey or honey products in the event the HTSUS numbers change; this change has no impact on the assessment rate.

Section 1212.71 of the Order is also revised to change the length of time that books and records are to be held from two years to three years. This change conforms with the Board's compliance procedures, which provide that the Board conduct audit reviews every three years. Section 1212.53 of the Order is revised to state that exemptions from assessments for a calendar year are effective on the date approved by the Board. This change is being made to clarify exemption requirements. These changes pose no additional information collection burden on honey first handlers and importers.

In accordance with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601-612), AMS is required to examine the impact of this rule on small entities. Accordingly, AMS has considered the economic impact of this action on such entities.

The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions so that small businesses will not be disproportionately burdened. The Small Business Administration defines, in 13 CFR part 121, small agricultural producers as those having annual receipts of no more than $750,000 and small agricultural service firms (first handlers and importers) as those having annual receipts of no more than $7.0 million.

There are 661 importers and 42 first handlers of honey and honey products covered under the program. Seventeen out of the 42 first handlers (40 percent) and 21 out of the 661 importers (3 percent) accounted for 90 percent of the assessments in their respective categories. Total assessments for 2013 were $4.44 million, of which $1.12 million (25 percent) came from first handlers and $3.32 million (75 percent) was paid by importers. This data can be used to compute an estimate of average annual revenue from honey sales from each of these categories, which in turn helps to estimate the number of large and small first handlers and importers. As mentioned above, 17 first handlers account for 90 percent of the domestic assessments. Multiplying first handler assessments in 2013 of $1,122,390 by 0.9 and then dividing by 17 yields an average annual assessment of $59,421 for the first handlers in this category. Dividing the assessment rate of one cent per pound yields an average quantity per first handler of 5.942 million pounds. Multiplying 5.942 million pounds by the average 2013 U.S. domestic price 1 of $2.12 per pound yields an average, annual honey revenue per packer of $12.60 million, which is well above the SBA threshold of $7.0 million. It should be noted that this revenue estimate is based on the average price at the producer level, and the $12.6 million is an estimate of the total value at which the average size packer acquired the honey from producers. Therefore most of the 17 first handlers that pay 90 percent of the domestic assessments are likely to be large firms according to the SBA definition.

An equivalent computation can be made for the 21 importers who paid 90 percent of the $3,321,408 in assessments in 2013. Of the 21 importers, the average assessment per importer was $142,346. Dividing the average assessment per importer by the assessment rate of $0.01 per pound yield an average quantity per importer estimate of 14.235 million pounds.

For honey imports, the equivalent of the season average price for domestic honey is referred to as a “unit value.” The unit value of $1.42 per pound is computed by dividing annual imported honey value of $480.25 million by average quantity of 337.05 million pounds (import data from the U.S. Census Bureau). Multiplying the $1.42 unit value by the average quantity of 14.235 million pounds yields average annual honey revenue per importer figure of $20.21 million, nearly three times the SBA threshold figure of $7.0 million for a large firm. Therefore the majority of the 21 importers that pay 90 percent of the assessments are large firms, according to the SBA definition.

Comparable computations can be made to determine the average 2013 honey revenue for the 25 first handlers and 640 importers that paid 10 percent of the assessments in the first handler and importer categories. The first handler and importer average annual honey revenue figures are approximately $950,000 and $75,000, respectively, indicating that the vast majority are small businesses (in terms of honey sales), under the SBA large business threshold of $7.0 million in annual sales.

Based on the foregoing, the majority of first handlers and importers may be classified as small entities.

This final rule amends section 1212.52 of the Order to increase the assessment rate from $0.01 to $0.015 per pound (an increase of $0.0025 per pound per year over a two-year period). The Order is administered by the Board with oversight by USDA. Under the program, assessments are collected from first handlers and importers and used for research and promotion projects designed to maintain and expand the market for honey and honey products in the United States and abroad. Additional funds will enable the Board to expand its production research activities and promotional efforts. The Board uses its health information in its promotion messaging to help build demand. Increasing demand will help move the growing supply of honey and honey products, which will benefit producers, importers, first handlers, and consumers. Authority for this action is provided in section 1212.52(f) of the Order and section 517 of the 1996 Act.

Two additional sections of the Order are also revised. Section 1212.71 of the Order is revised to change the length of time that books and records are to be held from two years to three years. This change conforms to the Board's compliance procedures, which instructs the Board to conduct audit reviews every three years. Section 1212.53 of the Order is revised to state that exemptions from assessments for a calendar year are effective on the date approved by the Board. This change is being made to clarify exemption requirements. These changes pose no additional information collection burden on honey first handlers and importers.

Regarding the economic impact of the final rule on affected entities, this action increases the assessment obligation on first handlers and importers. While assessments impose additional costs on first handlers and importers, the costs are minimal and uniform on all. The costs will also be offset by the benefits derived from the operation of the program. It is estimated that 42 first handlers and 661 importers pay assessments under the program.

There has been one economic study conducted since the Order's inception that evaluated the effectiveness of the Board's promotion program. The study was conducted by Dr. Ronald M. Ward at the University of Florida in 2014 and titled “Honey Demand and the Impact of the National Honey Board's Generic Promotion Program.” This study may be obtained from http://www.ams.usda.gov/. The 2014 study included data from 1987 through 2012, and evaluated the effectiveness of the former Honey Research, Promotion, and Consumer Information Order, and the current honey marketing program. The earlier honey program operated from 1986 through 2008, as a producer program. The earlier program was replaced in 2008 with the current packer and importer program; producers are no longer directly subject to the mandatory assessment. Otherwise, the two programs are similar, including the administrative and operational oversight.

The purpose of the economic study was twofold: (1) To determine the market implications of the Board's promotion program and (2) to determine a return-on-investment (rate of return) for the promotion activities conducted by the Board.

To evaluate the effectiveness of the Board's domestic promotion activities, econometric models were developed for each of two distinct honey market segments: manufacturing (honey used as an ingredient) and non-manufacturing (table honey). The models measured the impact of the Board's annual promotion expenditures while taking into account the impact of other factors that influence demand.

For the non-manufacturing model, the other factors were domestic supplies of honey, personal income, and the historical support price for honey. For the manufacturing model, the other factors were the quantity of sugar used in food manufacturing (as a proxy measure of the overall demand for sweeteners, including honey), and a variable which captured the structural change in the honey market that began in 2007, when the market share of honey imports began to increase significantly. The manufacturing model using Board expenditure lagged one year because Board promotion expenditure in the prior year was found to have the most significant impact on honey manufacturing demand in the current year.

Due to differences in data availability, the manufacturing model covered the time period of 1965 through 2012 and the non-manufacturing model spanned 1987 through 2012.

The econometric models used statistical methods to analyze annual data over these time periods and measure how strongly the various honey demand factors affect (a) the quantity of honey as an ingredient (manufacturing model) and (b) the price for table honey (non-manufacturing model). In both models, Board program expenditures were found to have a positive and statistically significant impact on demand. The models had reasonably strong explanatory power, with 80 percent of the variation in quantity demanded explained by the independent variables in the manufacturing model, and 89 percent of the variation in price explained by the non-manufacturing model variables.

The return on investment (ROI) for honey promotion was obtained by dividing the increased value of honey sales (for the two market segments combined) by Board program expenditures. The ROI for Board programs for the period 1987 to 2012 was 14.12, meaning $14.12 in returns (increased honey value) for every $1 spent on promotion. The results were similar for 2008 through 2012, the period covered by the new program funded by honey first handlers and importers.

An additional step in assessing promotional program effectiveness was to analyze the potential impact of alternative honey promotion spending levels. The two demand models were used to simulate gains for various percentages of actual 2012 promotional expenditures. The results show a range of increased honey demand impacts from increased spending, depending on alternative assumptions about the level of honey price and honey quantity. The simulation results suggest that a 50 percent increase in Board promotional expenditure would yield an additional $29 million in honey sales, if quantity demanded increased, but prices stayed the same. Alternatively, crop value would increase $44 million if prices went up, but quantity stayed the same. Returns on investment were 14 to 1 or higher over this range of alternative assumptions about market conditions. These results were similar to the ROI cited earlier. Focusing on 2012 illustrates the effectiveness of the program under the funding mechanism that began in 2008.

In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection and recordkeeping requirements that are imposed by the Order have been approved previously under OMB control number 0581-0093. This final rule does not change the information collection and recordkeeping requirements previously approved and imposes no additional reporting and recordkeeping burden on honey first handlers and importers.

As with all Federal promotion programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. Finally, USDA has not identified any relevant Federal rules that duplicate, overlap, or conflict with this final rule.

AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes.

The Board has been considering an increase in the assessment rate since 2011. The Board explored the need and justification for an increase as well as obtained feedback from the Board's stakeholders. Additionally, beginning in 2011, the Board has done extensive outreach to include presentations, handouts, and industry meeting attendance. As an alternative to an assessment rate increase, the Board considered cutting programs. The Board reduced honey research in order to maintain marketing programs and considered cutting additional marketing programs. However, after further analysis, it was determined that additional cuts would hurt the program. In late 2013, the Board presented the proposed assessment increase to the various honey associations. Ultimately, at its January 2014 meeting, the Board unanimously recommended increasing the assessment rate to $0.0125 per pound for the first year (January 1 through December 31, 2015) and to $0.015 per pound for the second year and beyond (on and after January 1, 2016).

A proposed rule concerning this action was published in the Federal Register on November 18, 2014 (79 FR 68636). The Board included notifications about the proposed rule in its newsletters and also mailed related information to honey packers and importers. Finally, the proposal was made available through the Internet by USDA and the Office of the Federal Register. A 30-day comment period ending December 18, 2014, was provided to allow interested persons to submit comments.

Three comments were received in response to the proposed rule; two supported the increase, and one opposed the action. The two comments which supported increasing the assessment rate stated that the additional funds would allow the Board to expand its programs to promote the benefits of honey and honey products and develop new products that contain honey as a key ingredient. A commenter further stated that honey and honey bees are important to agriculture and the environment.

The commenter in opposition to the proposal did not see the need to increase the assessment rate by 50 percent. The commenter stated that honey assessments have increased over the years because honey consumption has increased. The commenter opined that any increase in the honey budget should come from increased honey sales rather than increasing the assessment rate. USDA concurs that an increase in honey sales and consumption will increase Board income. However, maintaining the current $0.01 per pound assessment rate will not generate the amount of funds necessary to fund additional production research, human clinical trials, and conduct promotion activities needed to continue to build demand to move the growing supply of honey and honey products. Thus, no changes have been made to the rule based on this comment.

After consideration of all relevant matters presented, including the information and recommendation submitted by the Board and other available information, it is hereby found that this rule, as hereinafter set forth, is consistent with and will effectuate the purposes of the 1996 Act.

For the reasons set forth in the preamble, part 1212, Chapter XI of Title 7 is amended as follows:

1. Pursuant to section 215 of the Federal Power Act (FPA),1 the Commission approves two Reliability Standards, COM-001-2 (Communications) and COM-002-4 (Operating Personnel Communications Protocols), developed by the North American Electric Reliability Corporation (NERC), which the Commission has certified as the Electric Reliability Organization responsible for developing and enforcing mandatory Reliability Standards. The Commission also approves three new defined terms for addition to the NERC Glossary of Terms Used in Reliability Standards (NERC Glossary), violation risk factors, violation severity levels, and NERC's proposed implementation plan for both revised standards. Further, pursuant to section 215(d)(5) of the FPA, the Commission directs that NERC develop one modification to Reliability Standard COM-001-2 that addresses internal communications capabilities to the extent that such communications could involve the issuance or receipt of Operating Instructions or other communications that could have an impact on reliability.

2. Reliability Standard COM-001-2 is intended to establish a clear set of requirements for the communications capabilities that applicable functional entities must have in place and maintain. Reliability Standard COM-002-4 requires applicable entities to develop communication protocols with certain minimum requirements, including use of three-part communication when issuing Operating Instructions.2 Reliability Standard COM-002-4 also sets out certain communications training requirements for all issuers and recipients of Operating Instructions, and establishes a flexible enforcement approach for failure to use three-part communication during non-emergencies and a “zero-tolerance,” i.e., without exception, enforcement approach for failure to use three-part communication during an emergency.3

3. We find that Reliability Standards COM-001-2 and COM-002-4 will enhance reliability over the currently-effective versions of these Communications (COM) standards in several respects. For example, the Reliability Standards as modified expand applicability to include generator operators and distribution providers, eliminate certain ambiguities in the currently-effective standards, and clarify that the use of three-part communication is required for issuance and receipt of all Operating Instructions, with a zero-tolerance approach to enforcement of that requirement during an emergency. However, we are not persuaded that COM-001-2 adequately covers all situations in which Operating Instructions are issued or received and, therefore, direct NERC to develop a modification to that standard that addresses our concern, as further discussed below.

4. Section 215 of the FPA requires a Commission-certified Electric Reliability Organization (ERO) to develop mandatory and enforceable Reliability Standards, subject to Commission review and approval.4 Once approved, the Reliability Standards may be enforced by the ERO subject to Commission oversight, or by the Commission independently.5 In 2006, the Commission certified NERC as the ERO pursuant to FPA section 215.6

5. The Commission approved Reliability Standard COM-001-1 in Order No. 693.7 In addition, the Commission directed NERC to develop modifications to COM-001-1 to: (1) expand the applicability of the standard to include generator operators and distribution providers, (2) identify specific requirements for telecommunications facilities for use in normal and emergency conditions that reflect the roles of the applicable entities, and (3) include adequate flexibility for compliance to allow for the adoption of new technologies and cost-effective solutions.8 Similarly, the Commission approved Reliability Standard COM-002-2 in Order No. 693. In addition, the Commission directed NERC to develop modifications to (1) include distribution providers as applicable entities, and (2) establish tightened communications protocols, especially for communications during alerts and emergencies.9

6. NERC initiated Project 2006-06 to address the Order No. 693 directives related to Reliability Standards COM-001 and COM-002, resulting in two proposed Reliability Standards, COM-001-2 and COM-002-3. NERC also initiated Project 2007-02 to develop a new Reliability Standard (COM-003) that would require real-time system operators to use standardized communication protocols during normal and emergency operations, in order to improve situational awareness and shorten response time. The two projects ultimately merged when drafts of Reliability Standard COM-002-3 and COM-003-1 were combined into a single proposed Reliability Standard, COM-002-4.

7. On May 14, 2014, NERC filed a petition seeking approval of two revised communication standards, COM-001-2 (Communications) and COM-002-4 (Operating Personnel Communications Protocols).10 Proposed Reliability Standard COM-001-2 establishes a set of requirements for the communications capabilities that various functional entities must maintain to enable communications with other identified functional entities. Proposed Reliability Standard COM-002-4 requires applicable entities to develop documented communications protocols. NERC stated in its petition that the proposed standards are intended to address all relevant Commission directives from Order No. 693. In addition, NERC stated that the revisions reflected in proposed COM-002-4 are intended to address Recommendation No. 26 from the final report on the August 2003 blackout issued by the U.S.-Canada Power System Outage Task Force (Blackout Report) concerning the need to “[t]ighten communications protocols, especially for communications during alerts and emergencies.” 11

Order No. 810 Final Rule

1. Pursuant to section 215 of the Federal Power Act (FPA),1 the Commission approves Reliability Standard BAL-001-2 (Real Power Balancing Control Performance) submitted by the North American Electric Reliability Corporation (NERC), the Commission-certified Electric Reliability Organization (ERO). Reliability Standard BAL-001-2 applies to balancing authorities and Regulation Reserve Sharing Groups,2 and is intended to ensure that Interconnection frequency is maintained within predefined frequency limits. The Commission also finds that Reliability Standard BAL-001-2 addresses the Commission's directive set forth in Order No. 693 pertaining to BAL-002-0.3 The Commission approves the retirement of currently-effective Reliability Standard BAL-001-1 immediately prior to the effective date of Reliability Standard BAL-001-2.

2. Further, the Commission approves NERC's four proposed definitions, associated violation risk factors and violation severity levels, implementation plan, and effective date. The Commission also directs NERC to submit an informational filing 90 days after the end of the two-year period following implementation that includes an analysis of data on whether experience with the Balancing Authority ACE Limit in the first two years after approval has seen ACE swings and inadvertent interchange 4 and unscheduled power flows 5 that could cause system operating limit (SOL) and interconnection reliability operating limit (IROL) exceedances, and further directs NERC to revise one definition.

3. Section 215 of the FPA requires a Commission-certified ERO to develop mandatory and enforceable Reliability Standards that are subject to Commission review and approval. Specifically, the Commission may approve, by rule or order, a proposed Reliability Standard or modification to a Reliability Standard if it determines that the Reliability Standard is just, reasonable, not unduly discriminatory or preferential and in the public interest.6 Once approved, the Reliability Standards may be enforced by NERC, subject to Commission oversight, or by the Commission independently.7

4. Pursuant to section 215 of the FPA, the Commission established a process to select and certify an ERO,8 and subsequently certified NERC as the ERO.9 Subsequent to the Commission's issuance of Order No. 693, approving 83 of the 107 Reliability Standards filed by NERC, the Commission approved Reliability Standard BAL-001-0 and companion Reliability Standard BAL-002-0.10 While approving Reliability Standard BAL-002-0, the Commission directed NERC “to modify this Reliability Standard to define a significant deviation and a reportable event, taking into account all events that have an impact on frequency, e.g., loss of supply, loss of load and significant scheduling problems, which can cause frequency disturbances and to address how balancing authorities should respond.” 11

5. On April 2, 2014, NERC filed a petition seeking approval of Reliability Standard BAL-001-2, four new definitions to be added to the NERC Glossary and the associated violation risk factors and violation severity levels, effective date, and implementation plan.12 In its petition, NERC explained that balancing generation and load is necessary to ensure that system frequency is maintained within narrow bounds based on a scheduled value. NERC stated that the purpose of Reliability Standard BAL-001-2 is to maintain Interconnection frequency within predefined frequency limits and that the Reliability Standard “improves reliability by adding a frequency component to the measurement of a Balancing Authority's Area Control Error (ACE) and allows for the formation of Regulation Reserve Sharing Groups.” 13 NERC further stated that Reliability Standard BAL-001-2 is just, reasonable, not unduly discriminatory or preferential, and in the public interest because it satisfies the factors set forth in Order No. 672, which the Commission applies when reviewing a proposed Reliability Standard.14 Also, NERC asserted that Reliability Standard BAL-001-2 addresses the Commission's Order No. 693 directive pertaining to Reliability Standard BAL-002-0.

6. Reliability Standard BAL-001-2 replaces the Control Performance Standard 2 (CPS2) in currently-effective Requirement R2 with a new term: “Balancing Authority ACE Limit.” 15 The Balancing Authority ACE Limit, unique for each balancing authority, contains dynamic limits as a function of Interconnection frequency and provides the basis for a balancing authority's obligation to balance its resources and demand in real-time so that its clock-minute average ACE does not exceed its Balancing Authority ACE Limit for more than 30 consecutive clock-minutes.16

7. Reliability Standard BAL-001-2 has two requirements and two attachments that contain the mathematical equations for calculating the Control Performance Standard 1 (CPS1) in Requirement R1, the Balancing Authority ACE Limit in Requirement R2, and associated measures. NERC stated that the only change to Requirement R1 is to move the equation and explanation of the individual components of CPS1 to Attachment 1. NERC explained that the revisions to Requirement R1 “are administratively efficient and clarify the intent of the Requirement.” 17 NERC further stated that the “underlying performance aspect” of Requirement R1 remains the same: “to measure how well a Balancing Authority is able to control its generation and load management programs, as measured by its ACE, to support its Interconnection's frequency over a rolling one-year period.” 18

8. Requirement R2 is new and replaces the existing Control Performance Standard 2 requirement. Currently-effective Reliability Standard BAL-001-1, Requirement R2 requires each balancing authority to operate such that for at least 90 percent of the ten-minute periods in a calendar month (using six non-overlapping periods per hour), the average ACE must be within a specific limit, referred to as L10.

9. Requirement R2 of Reliability Standard BAL-001-2 states:

10. NERC explained that the Balancing Authority ACE Limit is unique for each balancing authority and provides dynamic limits for the balancing authority's ACE value as a function of its Interconnection frequency.19 NERC stated that Reliability Standard BAL-001-2 is intended to enhance the reliability of each Interconnection by maintaining frequency within predefined limits under all conditions. Furthermore, NERC stated that Reliability Standard BAL-001-2 and accompanying definitions include the benefits of the ATEC equation in the Western Electricity Coordinating Council's (WECC) regional variance in Reliability Standard BAL-001-1.20

11. In its petition, NERC proposed violation risk factors and violation severity levels for each requirement of Reliability Standard BAL-001-2, an implementation plan and an effective date. NERC stated that these proposals were developed and reviewed for consistency with NERC and Commission guidelines.

12. NERC proposed an effective date for Reliability Standard BAL-001-2 that is the first day of the first calendar quarter that is twelve months after the date of Commission approval. NERC stated that this implementation date will allow entities to make any software adjustment that may be required to perform the Balancing Authority ACE Limit calculations.21

13. On May 9, 2014, NERC submitted a supplemental filing to address the status of the Commission directive in Order No. 693 that NERC “define a significant deviation and a reportable event, taking into account all events that have an impact on frequency, e.g., loss of supply, loss of load and significant scheduling problems. . . .” 22 Further, NERC provided an update regarding the status of the field trial undertaken for BAL-001-2. In the supplemental filing, NERC reiterated the importance of establishing dynamic limits for a balancing authority's ACE as a function of the Interconnection frequency, stating that “[o]ne of the reliability benefits of the proposed Reliability Standard is that it allows Balancing Authorities to calculate their position within these boundaries on a real-time basis and take action to support reliability.” 23 Further, NERC stated that Reliability Standard BAL-001-2 addresses the Commission's directive related to BAL-002-0 “in an equally efficient and effective manner.” 24 NERC added that revisions to Reliability Standard BAL-002-1 are currently being developed and will complement Reliability Standard BAL-001-2. Regarding the ongoing field trial, discussed below, NERC stated that “the widespread participation of Balancing Authorities has provided insight into how the changes in Reliability Standard BAL-001-2 will impact reliability.” 25

14. On July 31, 2014, NERC submitted an informational filing of its Preliminary Field Trial Report evaluating the effects of Reliability Standard BAL-001-2.26 NERC stated that the Field Trial Report results to date demonstrate that the correlation between Requirements R1 and R2 of Reliability Standard BAL-001-2 drive corrective actions to support Interconnection frequency and reliability.27 NERC also stated that the Balancing Authority ACE Limit, in conjunction with currently-effective Reliability Standard BAL-003-1 (Frequency Response and Frequency Bias Setting), satisfies the directive in Order No. 693 pertaining to Reliability Standard BAL-002-0.28

15. On November 20, 2014, the Commission issued a Notice of Proposed Rulemaking (NOPR) proposing to approve Reliability Standard BAL-001-2 as just, reasonable, not unduly discriminatory or preferential and in the public interest.29 The Commission also proposed to approve NERC's four proposed definitions, violation risk factor and violation severity level assignments, and the retirement of currently-effective Reliability Standard BAL-001-1.30 The NOPR stated that the new Balancing Authority ACE Limit in Reliability Standard BAL-001-2 encourages operation in support of Interconnection frequency and drives corrective action back within predefined ACE limits when needed to adjust Interconnection frequency.

16. While the Commission proposed to approve Reliability Standard BAL-001-2, the Commission raised concerns regarding the potential of the Reliability Standard to contribute to unscheduled power flows and inadvertent interchange. Based on that concern, the Commission proposed to direct NERC to monitor unscheduled power flows and inadvertent interchange in the Western and Eastern Interconnections and submit an informational filing following implementation of the Reliability Standard providing the number of SOL/IROL violations, the date, time, location, duration and magnitude due to unscheduled power flows and inadvertent interchange. In the NOPR, the Commission sought comments on the following issues: (1) The need for an informational filing and whether NERC should include additional data pertaining to unscheduled power flows and inadvertent interchange in its informational filing; and (2) whether a regional variance would be necessary for a region experiencing adverse impacts from the Reliability Standard due to inadvertent interchange.

17. In response to the NOPR, the Commission received comments from: NERC, Tri-State Generation and Transmission Association, (Tri-State), Arizona Public Service Company (APS), Edison Electric Institute (EEI), NaturEner USA (NaturEner), Regional Transmission Organizations—Midcontinent Independent System Operator, ISO New England, and PJM Interconnection (collectively “Indicated RTOs”), The Steel Manufacturers Association (SMA), Duke Energy Corporation (Duke), Western Area Power Administration (WAPA), Powerex Corp (Powerex), New York Independent System Operator (NYISO), and Bonneville Power Administration (BPA).

18. Pursuant to FPA section 215(d)(2), we approve Reliability Standard BAL-001-2 as just, reasonable, not unduly discriminatory or preferential, and in the public interest. The purpose of Reliability Standard BAL-001-2 is to control Interconnection frequency within defined limits. The Commission determines that the Reliability Standard will help ensure that Interconnection frequency is maintained through both long and short term performance measures for Interconnection frequency control and dynamic (i.e., real-time) limits that are specific for each balancing authority and Interconnection.31 We find that, by basing Balancing Authority ACE Limits on predefined frequency trigger limits for each Interconnection, the real-time measurements established in the Reliability Standard will help ensure that the Interconnection frequency returns to a reliable state should a balancing authority's ACE, or the Interconnection's frequency, exceed acceptable bounds.

19. We also determine that the Reliability Standard satisfies the outstanding directive concerning Reliability Standard BAL-002 set forth in Order No. 693, as explained in the NOPR,32 and approve NERC's four definitions, violation risk factor and violation severity level assignments, and the retirement of currently-effective Reliability Standard BAL-001-1. Further, we approve NERC's implementation plan, in which NERC proposes an effective date of the first day of the first calendar quarter, twelve months after the date of Commission approval.33

20. While approving Reliability Standard BAL-001-2, as discussed below, we direct NERC to submit an informational filing to assess the potential impact of the Reliability Standard as described herein and to revise the definition of the term Reporting ACE in the NERC Glossary.

21. We discuss below the following issues raised in the NOPR and addressed in the comments: (A) The proposed informational filing and NOPR comments regarding the need to revise the definition of the term Reporting ACE; and (B) whether a regional variance is necessary to address possible adverse impacts from the implementation of Reliability Standard BAL-001-2.

22. In the NOPR, the Commission noted that feedback from some stakeholders who participated in the field trial indicated that the Balancing Authority ACE Limit established in Requirement R2 of Reliability Standard BAL-001-2 could increase unscheduled power flows, possibly resulting in approaching or exceeding SOL/IROL violations. The NOPR observed that, in comments submitted to NERC's standard drafting team, one large transmission operator stated that the Balancing Authority ACE Limit could increase the number of system operating limit violations, and could cause large unscheduled power flows resulting in an increased ACE.34 Another stakeholder commented that the Balancing Authority ACE Limit could provide opportunities for entities to create unscheduled power flows within the boundaries established by the Reliability Standard.35

23. The NOPR stated that, while NERC asserted that there was no relationship between the Balancing Authority ACE Limit field trial and accumulated inadvertent interchange, a large allowance of ACE deviations could increase the amount of inadvertent interchange on the bulk electric system. The NOPR explained that Reliability Standard BAL-001-2 could allow balancing authorities to have a very large deviation from an ACE of zero and still be compliant with the dynamic values of the Balancing Authority ACE Limits in the proposed Reliability Standard.36

24. Based on this information, in the NOPR, the Commission expressed concern that Reliability Standard BAL-001-2 may have the “unintended consequence” of (i) creating large unscheduled power flows that could unduly burden transmission operators and reliability coordinators in addressing power flows that approach or exceed system operating limits or interconnection reliability operating limits, and (ii) causing significant increases in inadvertent interchange resulting in an adverse reliability impact between real-time operations and day and/or hour-ahead analysis performed by reliability coordinators and transmission operators.37

25. In order to evaluate the effect of the Reliability Standard on unscheduled power flows and inadvertent interchange and the potential impact on the Bulk-Power System, the NOPR proposed to direct NERC to submit an informational filing to monitor unscheduled flows and inadvertent interchange in the Western and Eastern Interconnections 90 days after the end of the two-year period following implementation. Specifically, the NOPR proposed that NERC's informational filing provide “the number of SOL/IROL violations, the date, time, location, the duration and magnitude, due to unscheduled power flows and inadvertent interchange within [the] Western and Eastern Interconnections.” 38 Further, the NOPR stated that the Commission expects NERC will immediately propose and implement adequate remedies should there be increases in unscheduled flow and inadvertent interchange causing reliability issues under the new Balancing Authority ACE Limit during the two-year period covered by the informational filing.

26. NERC states that it does not support the Commission's proposed directive to submit an informational filing with the data described in the NOPR, because it “will not conclusively demonstrate that large ACE swings are correlated with unscheduled power flow and Inadvertent Interchange causing SOL/IROL exceedances.” 39 NERC asserts that the proposed directive “is based on the speculative opinions of commenters, supported by no documented evidence that the proposed Reliability Standard contributes to unscheduled power flows and Inadvertent Interchange,” and would not be an effective use of NERC or industry resources.40

27. NERC states that the field trial has not produced any “positive evidence” establishing that implementing the Balancing Authority ACE Limit causes high ACE swings negatively affecting frequency, or relates to unscheduled power flows or inadvertent interchange causing SOL/IROL exceedances. Further, NERC asserts that “high ACE swings are not necessarily determinative of overloading transmission or SOL/IROL exceedances because SOL/IROL exceedances can still occur when ACE is zero.” 41

28. While disagreeing with the directive as proposed in the NOPR, NERC states that as a “first step” to addressing the Commission's concerns, and to “investigate a possible correlation between [the] Balancing Authority ACE Limit and SOL/IROL exceedances as attributed to Inadvertent Interchange and unscheduled power flows,” NERC will provide the Commission with a “set of baseline data” including “tracking the number of SOL/IROL exceedances occurring in each interconnection where a Balancing Authority's ACE was within BAAL.” 42 NERC states that it would include this data in an informational filing, with the commitment to work with Commission staff to analyze the data.

29. EEI, Indicated RTOs, NYISO, WAPA, APS, Duke, Tri-State, Powerex and BPA support the Commission's proposed informational filing. While supporting the proposed informational filing, EEI believes that the Reliability Standard “will support stronger management of interconnection frequency.” 43 Indicated RTOs assert that “the trend in manual Time Error Correction is a better indicator of unscheduled flows. Operating limit violations resulting from unscheduled power flows and the trend in Time Error Correction will enable the Commission to evaluate the severity of any issues, and NERC and/or its operating committees routinely collect that information.” 44

30. NYISO, Tri-State, BPA and Powerex, while supporting the Commission's proposal, urge that the Commission require NERC to provide more data in the informational filing than described in the NOPR. NYISO states that NERC should provide ACE and Balancing Authority ACE Limit values for the SOL/IROL violations associated with unscheduled power flows or inadvertent interchange. BPA asserts that NERC should examine all unscheduled power flows resulting from the implementation of the Balancing Authority ACE Limit, not just those related to SOL/IROL violations. BPA further states that NERC should be required to conduct an analysis every six months for the initial two year implementation period, including an examination of loss of supply events and their impact on frequency recovery.45

31. BPA states that the proposed definition of “Reporting ACE” should be revised to include the ATEC upper payback limit term “Lmax” and the bounds of that upper payback limit for IATEC. BPA notes that, while incorporating the WECC regional variance contained in currently effective Reliability Standard BAL-001-1 may have been NERC's intent, this cannot be accomplished without including the “Lmax” upper payback limit and the bounds of that upper payback limit in the NERC Glossary. BPA asserts that without this language in the definition, the ATEC payback does not have an upper bound, which could cause some significant unscheduled flows in the interconnection, because a balancing authority with a large primary inadvertent accumulation could pay most of it off within a three hour period.

32. While supporting the objective of Reliability Standard BAL-001-2, Powerex expresses concern that “the `inadvertent interchange' permitted by the modified standard will have a material, adverse impact on the western transmission markets subject to the Commission's jurisdiction . . . [and] Powerex believes that features of the proposed standard could be used to harm competition to the detriment of both transmission customers and system reliability.” 46 Powerex argues that the Balancing Authority ACE Limit “creates opportunities for commercially-interested [balancing authorities] to deliberately reduce their control of imbalances, effectively leaning on the grid to balance their systems. Such activity creates unscheduled flows on adjacent systems that can inequitably and inefficiently curtail the transmission capacity available to the transmission customers that have paid to use the transmission system.” 47

33. Powerex urges the Commission to “take additional steps to ensure that implementation of the BAAL requirement does not thwart the provision of open access transmission service in accordance with Commission policies.” 48 Specifically, Powerex states that the Commission should “direct NERC to supplement its petition with information regarding any rules or requirements that may be in place to protect against potential curtailments of transmission customers due to unscheduled flows associated with BAAL ACEs.” 49 Additionally, Powerex asserts that NERC's informational filing should describe instances in which unscheduled flows associated with the Balancing Authority ACE Limit required curtailment of transmission customers or other mitigation measures, and that this information should be provided every six months during the initial two year implementation period. Powerex also asks the Commission to “provide guidance concerning the creation of deliberate [balancing authority] imbalances,” require balancing authorities to disclose ACE and Balancing Authority ACE Limit information, and direct NERC to implement safeguards to ensure that balancing authorities reduce their ACEs before the curtailment of transmission customers.50 Tri-State agrees with Powerex's comments.

34. EEI, Indicated RTOs and Duke suggest limiting the informational filing to the Western Interconnection. Indicated RTOs state that “there has been a decline in the number of time error corrections in the Eastern Interconnection during the course of the field trial. These outcomes suggest that BAL-001-2 works as intended, and does not trigger issue with respect to inadvertent interchange, at least in the Eastern Interconnection.” 51 EEI asserts that unscheduled power flows and inadvertent interchange “have not been an issue within the Eastern Interconnection Field Trial, which has been in place now for nearly ten years. During this trial, approximately two-thirds of the Eastern Interconnection operated under the BAAL measure without issue. Therefore, EEI does not envision problems arising.” 52 Similarly, Duke notes that the Field Trial Report specifically states that unscheduled power flows were not cited as problems within the Eastern Interconnection.53

35. NaturEner addresses the time component of the Balancing Authority ACE Limit, an issue not raised in the NOPR. NaturEner states that the 30 consecutive clock-minute limitation on the time during which a balancing authority's Reporting ACE can exceed its Balancing Authority ACE Limit should be extended to 60 consecutive clock-minutes. NaturEner asserts that the 30 minute time period provides insufficient time for a balancing authority to use market mechanisms to resolve imbalance events.54 Further, NaturEner states that if Reliability Standard BAL-001-2 is approved in its current form, the Commission should “include severe loss of wind events as qualifying events under BAL-002, thereby qualifying such events as allowable contingency reserve events under which contingency reserves may be called upon.” 55

36. The Commission adopts the NOPR proposal regarding NERC's submission of an informational filing. We determine that the field trial NERC conducted for Reliability Standard BAL-001-2 raised sufficient concerns regarding unscheduled power flows and inadvertent interchange to warrant NERC's continued monitoring and submission of an informational filing 90 days after the end of the two-year period following implementation, as proposed in the NOPR. Further, we find that the informational filing should encompass both the Western and Eastern Interconnections, as there were concerns about possible increases of SOL/IROL exceedances in both Interconnections.56 EEI supports limiting the informational filing to the Western Interconnection, stating that the Balancing Authority ACE Limit has “been extensively used [in the Eastern Interconnection] for many years without issue.” 57 However, the Commission believes that including both Interconnections is reasonable, because less than 20 percent of balancing authorities in the Eastern Interconnection were in the field trial.58

37. We are not persuaded by NERC's objection to the informational filing, that the field trial “produced no conclusive results that large ACE swings are correlated with unscheduled power flow and Inadvertent Interchange causing SOL/IROL exceedances.” 59 While the field trial may not have been “conclusive,” the information in the report indicates the possibility of a correlation between large ACE swings and unscheduled power flows that warrant further study and analysis. Thus, we agree with the commenters who observed that the field trial demonstrated clear potential for the Balancing Authority ACE Limit to cause unscheduled power flows and inadvertent interchange that could lead to SOL/IROL problems.60 While the Field Trial Report suggests that unscheduled flow events in the Western Interconnection may have occurred due to a number of factors, the Report does not eliminate large ACE swings as the cause.61 Accordingly, we conclude that the matter warrants further study and analysis, as directed.

38. We acknowledge NERC's commitment to take a “first step” to address the Commission's concerns by providing baseline data, including SOL/IROL exceedances where a balancing authority's ACE was within its Balancing Authority ACE Limit. However, we agree with those commenters who urge the Commission to require NERC to provide more data than described in the NOPR. Therefore, we direct NERC to make an informational filing 90 days after the end of the two-year period following implementation that includes an analysis of data (all relevant events or a representative sample) on whether experience with the Balancing Authority ACE Limit in the first two years after approval has seen ACE swings and unscheduled power flows or inadvertent interchange that could cause SOL/IROL exceedances. However, if it is evident that during this two-year period the issues discussed above are creating SOL/IROL exceedances NERC should provide that information to the Commission, together with appropriate recommendations for mitigation, as this information becomes available. Further, NERC should also make the underlying data available to Commission staff upon request. Regarding BPA's concerns about the interplay of Reliability Standards BAL-001-2 and BAL-002-1, the Commission believes those concerns are best addressed if and when NERC files with the Commission proposed changes to Reliability Standard BAL-002-1. However, we expect NERC to retain the data pursuant to the analysis directed above so that it will be available, if needed, to examine the effect of Reliability Standard BAL-002-1 in relation to the Balancing Authority ACE Limit in the future.62

39. Based on the record before us, the Commission is not persuaded by Powerex's assertion that Reliability Standard BAL-001-2 allows inadvertent interchange that “will have a material, adverse impact on the western transmission markets.” 63 Further, there is no support in the record for Powerex's claim that there is evidence that during the field trial market participants seized “opportunities . . . to deliberately reduce their control of imbalances, effectively leaning on their systems . . . resulting in an increase in unscheduled flows and degradation of transmission service in the region.” 64 Powerex's broad assertions lack factual support in the record of this proceeding and are largely speculative.

40. We also note that Powerex presented an analysis of the impact of the Balancing Authority ACE Limit on unscheduled flow on the California Oregon Intertie to WECC's Unscheduled Flow Administrative Subcommittee. The WECC staff assessment of Powerex's analysis concluded that “[t]he results of the Powerex analysis are valid only within the assumptions they have made, but based upon actual path flow data we believe the assumptions are incorrect and lead to large overestimations of the RBC (Balancing Authority ACE Limit) impact on Unscheduled Flow.” 65 Powerex's reliance on the increase in e-tag curtailments across Path 36 (“TOT3” in eastern Wyoming and Colorado) noted in the WECC Performance Work Group's December 2011 Quarterly Report on the RBC Field Trial as demonstrating that its concerns are “neither speculative or theoretical” is similarly unpersuasive.66 The existence of e-tag curtailments during the field trial does not establish a causal connection with the Balancing Authority ACE Limit, because other factors, such as outages at the San Onofre Nuclear Generating Station unit in California; poor hydro conditions in Northern California; and other outages impacting energy import to California may have contributed to the curtailments. However, this uncertainty reinforces the need for the informational filing and additional study directed herein.

41. We determine that Powerex's concerns about the possible adverse impacts from Reliability Standard BAL-001-2 on reliability, as well as competition and transmission markets, are unpersuasive. While expressing concern about the reliability risks associated with implementing Reliability Standard BAL-001-2, Powerex acknowledges that the extent to which the reliability risks it describes “will materialize remains to be seen.” 67 Instead, we agree with NERC that “[t]he field trial report finds that the results to date demonstrate that the correlation between Requirements R1 and R2 of Reliability Standard BAL-001-2 drive corrective actions to support Interconnection frequency and reliability.” 68 With respect to Powerex's concerns about the possibility that “gaps” in Reliability Standard BAL-001-2 could be “exploited to the detriment of transmission customers,” we encourage Powerex to engage in the ongoing monitoring effort and bring any specific instances of deliberate misconduct to the Commission's attention if they occur.69

42. We do not adopt NaturEner's proposal that the 30 consecutive clock-minute time component should be extended to no less than 60 consecutive clock-minutes to allow the use of market mechanisms to address imbalance events. We note that in the Technical Conclusion section of the Field Trial Report the standard drafting team concluded that “[t]he selection of 30 consecutive clock minutes is appropriate and actually improves reliability.” 70 This conclusion is supported in the Field Trial Report by an adequate justification for the 30 consecutive clock-minute time period:

In the Federal Register of May 29, 2014, in FR Doc. 2014-12458, the following corrections are made:

1. On page 30718, in the third column, under “Analysis of Impacts (Summary of the Regulatory Impact Analysis),” the last sentence of the second paragraph is corrected to read: “FDA certifies that this final rule will not have a significant economic impact on a substantial number of small entities.”

2. On page 30719, in the first column, the third sentence of the last full paragraph is corrected to read: “We certify that this final rule will not have a significant economic impact on a substantial number of small entities.”

The satellite carrier compulsory license establishes a statutory copyright licensing scheme for the retransmission of distant television programming by satellite carriers. 17 U.S.C. 119. Congress created the license in 1988 and has reauthorized the license for additional five-year periods, most recently with the passage of the STELA Reauthorization Act of 2014, Public Law 113-200.

On August 31, 2010, the Copyright Royalty Judges (Judges) adopted rates for the section 119 compulsory license for the 2010-2014 term. See 75 FR 53198. The rates were proposed by Copyright Owners and Satellite Carriers 1 and were unopposed. Id. Section 119(c)(2) of the Copyright Act provides that, effective January 1 of each year, the Judges shall adjust the royalty fee payable under Section 119(b)(1)(B) “to reflect any changes occurring in the cost of living as determined by the most recent Consumer Price Index (for all consumers and for all items) [CPI-U] published by the Secretary of Labor before December 1 of the preceding year.” Section 119 also requires that “[n]otification of the adjusted fees shall be published in the Federal Register at least 25 days before January 1.” 17 U.S.C. 119(c)(2). Today's notice fulfills this notice obligation.2

The change in the cost of living as determined by the CPI-U during the period from the most recent index published before December 1, 2013, to the most recent index published before December 1, 2014, is 1.7%.3 Application of the 1.7% COLA to the current rate for the secondary transmission of broadcast stations by satellite carriers for private home viewing—27 cents per subscriber per month — results in a rate of 27 cents per subscriber per month (rounded to the nearest cent). See 37 CFR 386.2(b)(1). Application of the 1.7% COLA to the current rate for viewing in commercial establishments—55 cents per subscriber per month—results in an adjusted rate of 56 cents per subscriber per month (rounded to the nearest cent). See 37 CFR 386.2(b)(2).

In consideration of the foregoing, the Judges amend part 386 of title 37 of the Code of Federal Regulations as follows:

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

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

• Crop production (NAICS code 111).

• Animal production (NAICS code 112).

• Food manufacturing (NAICS code 311).

• Pesticide manufacturing (NAICS code 32532).

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

Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2014-0339 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before June 22, 2015. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).

In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2014-0339, by one of the following methods:

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

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

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

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

In the Federal Register of August 1, 2014 (79 FR 44729) (FRL-9911-67), EPA issued a document pursuant to FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), announcing the filing of a pesticide petition (PP 4F8256) by BASF Corporation, 26 Davis Drive, P.O. Box 13528, Research Triangle Park, NC 27709-3528. The petition requested that 40 CFR part 180 be amended by establishing tolerances for residues of the herbicide saflufenacil (2-chloro-5-[3,6-dihydro-3-methyl-2,6-dioxo-4-(trifluoromethyl)-1(2H)-pyrimidinyl]-4-fluoro-N-[[methyl(1-methylethyl)amino]sulfonyl]benzamide) and its metabolites, N-[2-chloro-5-(2,6-dioxo-4-(trifluoromethyl)-3,6-dihydro-1(2H)-pyrimidinyl)-4-fluorobenzoyl]-N'-isopropylsulfamide and N-[4-chloro-2-fluoro-5-({[(isopropylamino)sulfonyl]amino}carbonyl)phenyl]urea, calculated as the stoichiometric equivalent of saflufenacil, in or on alfalfa, forage at 0.075 parts per million (ppm) and alfalfa, hay at 0.10 ppm. That document referenced a summary of the petition prepared by BASF Corporation, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

Based upon review of the data supporting the petition, EPA agrees with the tolerance levels proposed by BASF Corporation for alfalfa commodities with the minor exception of a rounding adjustment for the alfalfa, forage tolerance from 0.075 ppm to 0.80 ppm.

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

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

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

The toxicology database for the saflufenacil is considered complete for the purpose of risk assessment. In the Federal Register of September 3, 2014 (79 FR 52215) (FRL-9912-91), EPA published a final rule establishing tolerances for residues of saflufenacil and its metabolites in or on barley, grass, olive, livestock, and wheat commodities based on EPA's conclusion that aggregate exposure to saflufenacil is safe for the general population, including infants and children. Since that rulemaking, the toxicity profile for saflufenacil has not changed. The requested tolerances will not result in residues on human food commodities, only animal feed. The available residue data submitted for use in alfalfa indicates that the dietary burden for livestock will not change from the current levels that were previously assessed for use in grass pastures. Therefore, the residues of saflufenicil on alfalfa from the proposed new use will not impact the existing human dietary and aggregate risk assessments for saflufenacil. For a detailed discussion of the aggregate risk assessments and determination of safety, as well as a summary of the toxicological endpoints used for human risk assessment, please refer to the final rules published in the Federal Register of February 21, 2014 (79 FR 9861) (FRL-9905-87) and September 3, 2014 (79 FR 52215) (FRL-9912-91). EPA relies upon those supporting risk assessments and the findings made in the Federal Register documents in support of this final rule.

Based on the risk assessments and information described above, EPA concludes that there is a reasonable certainty that no harm will result to the general population or to infants and children from aggregate exposure to saflufenacil residues.

Adequate enforcement methodology (liquid chromatography/mass spectroscopy/mass spectroscopy (LC-MS/MS) (Method D0603/04)) is available to enforce the tolerance expression.

The method may be requested from: Chief, Analytical Chemistry Branch, Environmental Science Center, 701 Mapes Rd., Ft. Meade, MD 20755-5350; telephone number: (410) 305-2905; email address: [email protected].

In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level. The Codex has not established a MRL for saflufenacil in or on alfalfa, forage or alfalfa, hay at this time.

EPA has modified the tolerance level proposed for alfalfa, forage, from 0.075 ppm to 0.08 ppm, which is the appropriate rounding class according to the tolerance calculation procedures of the Organization for Economic Co-operation and Development (OECD) that EPA utilizes.

Therefore, tolerances are established for residues of, saflufenacil and its metabolites, in or on alfalfa, forage at 0.08 ppm and alfalfa, hay at 0.10 ppm.

This action establishes tolerances under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.), nor does it require any special considerations under Executive Order 12898, entitled “Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations” (59 FR 7629, February 16, 1994).

Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the tolerance in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), do not apply.

This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq.).

This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal Register. This action is not a “major rule” as defined by 5 U.S.C. 804(2).

Therefore, 40 CFR chapter I is amended as follows:

In order to be eligible for a FSFP loan guarantee an obligation must, among other things, aid the financing of the “construction, reconstruction, or reconditioning of a vessel.”

Chapter 537 of Title 46 of the United States Code, as implemented by part 298 of title 46 of the Code of Federal Regulations (CFR), details the factors MARAD must consider in processing FSFP loan guarantee applications. The factors include economic soundness, project feasibility and specifically enumerated priorities. For the economic soundness determination, 46 U.S.C. 53708(a) provides six mandatory factors MARAD must consider, but allows consideration of “other relevant criteria” as well. The accompanying regulation, 46 CFR 298.14(b), also provides that MARAD may take into account “other relevant criteria.” Sections 53708(a) and (b) explicitly provide “the need for technical improvements, including increased fuel efficiency or improved safety” as matters the Administrator and Secretary must consider with regard to applications for vessels intended for use on inland waterways and for fishing vessels, respectively.

On February 24, 2014, MARAD published a Notice of Proposed Policy (79 FR 10075) in which it proposed to consider “various environmental initiatives that are likely to increase efficiency and lead to future cost savings as `other relevant criteria' in evaluation of [the economic soundness of] Title XI loan guarantee applications.” A non-exclusive list of such initiatives are alternative fuel systems designs, fuel cells, hybrid propulsion systems, air emissions reduction technologies and ballast water treatment technologies.

The policy provides that, “demand for environmentally friendly designs, fuel and technologies is growing rapidly throughout the maritime industry because, among other things, they meet new air emissions and other discharge standards, and present the potential for greater efficiency and cost savings.” The proposed policy also stated, “. . . that many of the economic benefits of environmentally friendly designs, fuels and technologies take the form of public benefits.” Many of these public benefits cannot be captured by vessel owners and operators using traditional economic metrics, but are valuable nonetheless, because they contribute to environmental sustainability and human health. MARAD sought public comment on the NPP.

In this final policy, MARAD is responding to the comments received, announcing that it intends to clarify and implement the policy as proposed in the prior notice, and clarifying that applicants with projects to construct or reconstruct vessels to be powered by alternative energies, or to meet U.S. or international environmental standards as required for continued operations, are eligible and encouraged to apply for FSFP loan guarantees.

The comments received varied in the degree to which they directly addressed the substantive provisions in the policy. Some commenters expressed agreement with the general principle of considering environmental factors in the review of applications for FSFP loan guarantees. The majority disagreed with the proposal to include environmental considerations as a factor used to determine the economic soundness of projects.

MARAD received a total of 11 comments in response to the policy. Nine commenters disagreed with the proposal to include environmental considerations as “other relevant criteria” in the economic soundness analysis. MARAD received three comments indicating general support for including environmental considerations when evaluating FSFP applications. One commenter suggested that doing so could help accelerate replacement of an aging U.S.-flag fleet. Another stated that FSFP guarantees should be granted in order to make the new ships as environmentally friendly as possible. However, these commentators did not provide input on specific actions MARAD could take to further those interests. The comments, as submitted to the docket for the policy (Docket No. MARAD-2014-0011-0001) may be accessed via http://www.regulations.gov.

While many of the other comments included general support for considering environmental factors at some point when evaluating applications that are otherwise economically sound, none of those commenters supported including such factors in the “economic soundness” analysis required under 46 U.S.C. 53703(b). Many commenters focused on the reference to “public benefits” in the original document. They expressed concern that it would be difficult and expensive for applicants and MARAD to incorporate the public benefits (e.g., human health and lower air emissions) of environmentally friendly technologies into a review of economic soundness, which is based on traditionally quantifiable financial factors. Commenters stated that attempting to address public benefits in the economic soundness analysis would result in additional time and expense, which would be inconsistent with MARAD's stated desire to streamline the application review process. Other commenters noted that cost savings from increased efficiency resulting from the use of alternative fuels are already captured in the current economic soundness factors.

MARAD received two comments that suggested that the policy might be interpreted to mean that MARAD does not consider projects to reconstruct or reconstruct vessels to use alternative energies (e.g., from a diesel propulsion system to a liquefied natural gas (LNG) propulsion or a hybrid diesel/LNG propulsion system) to be eligible for FSFP loan guarantees.

Several commenters noted that MARAD is already authorized, under 46 U.S.C. 53706(c), implemented by 46 CFR 298.3(k), to prioritize applications for certain vessels, and that a formal rulemaking to add environmental considerations to that section would be more appropriate than adding such considerations to the economic soundness analysis.

MARAD received three comments that referenced issues beyond the scope of the proposed policy.

MARAD understands the concerns commenters expressed about potential ramifications of implementing this policy. In response to these concerns, MARAD clarifies the policy as described below. The Department of Transportation and MARAD are committed to supporting the development and implementation of technologies that help the U.S.-flag fleet meet or exceed national and international environmental standards and result in environmental improvements. MARAD is also determined to reduce FSFP application processing times and administrative burdens that potential applicants face.

By this document, MARAD announces that it will implement the core of the proposed policy. Under this final policy, in addition to the factors listed in 46 U.S.C. 53708(a)(1)-(4) and (6), MARAD will consider whether such projects include environmental initiatives that are likely to increase efficiency and lead to future cost savings. As noted by several commenters, cost savings resulting from increased fuel efficiency are captured in the current economic soundness analysis factors—most notably projected revenues and expenses of the vessel(s). This final policy merely states explicitly what MARAD is authorized to do under current law and regulations.

MARAD clarifies that it will not require applicants to quantify the potential public benefits of environmentally friendly designs, fuels and technologies. MARAD encourages applicants to emphasize any public benefits or costs of greenhouse gas or criteria pollutant emissions caused or reduced by vessel(s) to be constructed or reconstructed. MARAD encourages applicants to quantify such public benefits to the extent practicable. Consult the following authorities for guidance for undertaking such calculations: (1) White House Office of Management and Budget, Circular A-94, Circular A-94 Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs (October 29, 1992) (https://www.whitehouse.gov/sites/default/files/omb/assets/a94/a094.pdf); Interagency Working group on Social Cost of Carbon, United States Government, Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 (May 2013; revised November 2013) (https://www.whitehouse.gov/sites/default/files/omb/assets/inforeg/technical-update-social-cost-of-carbon-for-regulator-impact-analysis.pdf).

In addition, MARAD considers as part of economic soundness the degree to which applications include the use of such designs, fuels or technologies for: (1) Reconstruction of vessels to ensure compliance with current or future environmental and safety operating standards, or (2) construction of new vessels to replace vessels that would not meet such standards. MARAD encourages applicants to include information in their applicants regarding the degree to which the vessel(s) to be constructed or reconstructed meets these components of economic soundness analysis.

Consideration of the impact of environmental and safety standards on the economic soundness of an application is consistent with the factors MARAD is required to review. See, 46 U.S.C. 53708(a)(1)-(3). For example, pursuant to new global standards promulgated by the International Maritime Organization, and enforced in the U.S. by the Environmental Protection Agency, NOx emissions from large “Category 3” vessel engines are required to be substantially reduced by 2020. Implementation of these standards will result in many vessels currently in operation being taken out of service, unless they are converted to reduce emissions. These environmental factors directly impact the need for, and market potential and projected revenues and expenses of, any proposed construction or reconstruction.

Further, MARAD clarifies that projects to reconstruct existing vessels are eligible for Title XI loan guarantees. Reconstruction includes conversion of vessels to LNG or dual-fuel power.

NMFS and the Council manage the Gulf reef fish fishery under the FMP. The Council prepared the FMP and NMFS implements the FMP through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Act.

On January 16, 2015, NMFS published a notice of availability for Amendment 40 and requested public comment (80 FR 2379). On January 23, 2015, NMFS published a proposed rule for Amendment 40 and requested public comment (80 FR 3541). NMFS approved Amendment 40 on April 10, 2015. The proposed rule and Amendment 40 outline the rationale for the actions contained in this final rule. A summary of the actions implemented by Amendment 40 and this final rule is provided below.

This final rule establishes two components in the Gulf red snapper recreational sector: A Federal for-hire component and a private angling component. In addition, this rule establishes a Federal for-hire quota and a private angling quota based on the component allocation of the recreational quota, component ACTs, and seasonal closure provisions for the two components. These management measures will be in effect for 3 years, unless changed by subsequent Council action.

This final rule establishes a Federal for-hire component and a private angling component for the Gulf red snapper recreational sector. The Federal for-hire component includes operators of vessels with Federal charter vessel/headboat permits for Gulf reef fish and the private angling component includes anglers fishing from private vessels and state-permitted for-hire vessels.

This final rule establishes component quotas based on the allocation of 42.3 percent for the Federal for-hire component and 57.7 percent for the private angling component, as selected in Amendment 40. All weights given in this rule are in round weight. Currently, the 2015 recreational quota is set at 5.390 million lb (2.445 million kg). Therefore, this final rule sets the Federal for-hire component quota at 2,279,970 lb (1,034,177 kg), and the private angling component quota at 3,110,030 lb (1,410,686 kg), for the 2015 fishing year.

However, the Council has developed a framework action to revise the commercial and recreational quotas for the 2015, 2016, and 2017 fishing years and subsequent fishing years for red snapper based on new acceptable biological catches (ABCs) recommended by the Council's Scientific and Statistical Committee (SSC) and on the current commercial and recreational allocations (51-percent commercial and 49-percent recreational). A proposed rule for the framework action was published on April 1, 2015 (80 FR 17380). If the framework action is approved, a final rule containing revised component quotas would be published and effective prior to the June 1, 2015, start date of the Federal fishing season.

This final rule establishes separate red snapper seasonal closure provisions for the Federal for-hire and private angling components based on each component's ACT. Each component's season will begin on June 1 and the season length will be projected from each component's ACT. The ACTs are reduced from each component's quota by 20 percent.

Given the current component quotas, the Federal charter vessel/headboat component ACT will be 1.824 million lb (0.827 million kg), and the private angling ACT will be 2.488 million lb (1.129 million kg). However, if the final rule for the 2015 Gulf red snapper framework action is implemented the component ACTs for the 2015, 2016, and 2017 and subsequent fishing years will be revised.

The 2015 season lengths will be announced prior to the June 1 Federal fishing season start date; most likely in the final rule for the 2015 Gulf red snapper framework action.

This rule implements a 3-year sunset provision for the establishment of the Federal for-hire and private angling components and associated management measures. The components and associated management measures will be effective through the end of the 2017 fishing year, on December 31, 2017. For these components and management measures to extend beyond 3 years, the Council would need to take further action.

Prior to Amendment 40, rather than establishing ACLs for red snapper management, the Council chose to refer to the sector quotas as the functional equivalent to sector ACLs, and the sum of all quotas as the stock ACLs. This led to confusion when discussing and implementing red snapper catch levels. In the preamble to the proposed rule for Amendment 40, NMFS failed to explain that this rule would add sector ACLs and an AM for the commercial sector to the regulations. However, the proposed rule's regulatory text, and the discussion in Amendment 40, did include sector ACLs. Consistent with what was proposed, this final rule adds commercial and recreational ACLs, which are equivalent to the commercial and recreational quotas, respectively, and adds language explaining that the commercial AM is defined as the IFQ program for red snapper.

A recent framework action (80 FR 14328) implemented a post-season AM for the recreational sector as a whole. This AM requires that NMFS adjust the subsequent year's total recreational quota and ACT if the quota is exceeded in the prior fishing year and red snapper are classified as overfished. The proposed rule for Amendment 40 included the provision for adjusting the total recreational quota and the component ACTs, but not the provision for adjusting the component quotas. If an overage of the total recreational ACL (equal to the total recreational quota) occurs, the component quotas must be adjusted to reflect the adjustment to the total quota, otherwise the combined component quotas would exceed the total quota. The adjusted component quotas are also necessary to calculate the reduced component ACTs. NMFS has determined the provision for adjusting component quotas was reasonably foreseeable from what was included in the proposed rule, and is a logical outgrowth of the proposed rule because it is necessary to implement the AM as proposed. Therefore, this final rule adds the necessary language for reducing the component quotas to § 622.41(q)(2)(ii).

A total of 18,353 comments were received on Amendment 40 and the proposed rule, including comments from individuals, 2 state agencies, 4 non-governmental organizations (NGOs), 6 fishing associations, 1 U.S. Congressman, and 1 U.S. Senator. NMFS received 3,212 comments in opposition to Amendment 40 or the proposed rule, of which 1,806 comments were letters attached to a submission from a recreational fishing organization. There were 15,089 comments in support of Amendment 40 and the proposed rule, of which 15,025 comments were copies of emails submitted by members of an NGO, which submitted them to NMFS. There were 52 commenters who did not indicate whether they supported or were in opposition to the amendment. In addition to these comments, a minority report was submitted by the 7 members of the Council who voted against approval of Amendment 40.

Comments opposing the action include: There is a lack of significant support for the action; the action disproportionately harms private anglers by reducing their Federal season; the action privatizes the resource; all anglers should be treated alike; the Council lacked certain information before making its decision; the action does little to improve recreational management; and the action violates National Standards 2, 4, 5, 8, and 10. In addition, commenters suggested several Council members had a conflict of interest and should not have voted for approval of Amendment 40.

Comments in support of the action include that the action will: Give better access to red snapper fishing by non-boat-owning anglers; provide management flexibility; increase recreational accountability; and help to stabilize the for-hire component. NMFS also received comments that addressed issues outside the scope of this action. Comments in this category include: Asking for different red snapper size and bag limits, weekend-only red snapper seasons, and a tagging system to allocate fish; halting the removal of oil rigs; and opposing creation of a catch share-like program for the for-hire component. Although these measures could be developed for one or both components as a result of Amendment 40, Amendment 40 does not specifically address these topics. Specific comments related to the actions contained in the amendment and the rule as well as NMFS' respective responses, are summarized below.

Comment 1: Amendment 40 disproportionately harms private anglers by reducing the length of their Federal season.

Response: NMFS disagrees that Amendment 40 disproportionately harms private anglers. NMFS recognizes that the Federal season for private anglers is likely to be shorter than the Federal fishing season for the federally permitted for-hire vessels. However, this is a result of the unlimited number of private recreational vessels and state-permitted for-hire vessels, increasing fish size, and the decisions by the Gulf states to extend their red snapper fishing seasons in state waters beyond the Federal fishing season. As explained in Amendment 40, the number of private recreational vessels has increased over time and the moratorium on Federal for-hire permits has limited growth in the for-hire industry and, in turn, anglers' access to these vessels. In addition, last year, all the Gulf states extended their red snapper fishing seasons beyond the Federal fishing season, and some states extended their fishing seasons in previous years. Private anglers and state-permitted vessel operators are able to harvest red snapper outside of the Federal season as long as the fish are caught in state waters during the extended state fishing seasons. On the other hand, fishermen fishing from federally permitted reef fish for-hire vessels are prohibited from harvesting red snapper caught in state waters when the Federal fishing season is closed, but state waters are open. Therefore, fishermen fishing from private and state-permitted vessels have seen increased fishing opportunities in recent years, whereas, fishermen fishing from federally-permitted for-hire vessels have seen their Federal fishing season reduced under current conditions. While the Federal for-hire component fishing season will be longer than the Federal private angling component fishing season, the private angling component is expected to have additional fishing opportunities in state waters.

Comment 2: Amendment 40 complicates management by creating a different set of rules for each component that must fish under the same recreational quota. All recreational anglers, whether they are fishing from their own boat or from a federally permitted for-hire vessel, should be treated alike and have the same size limit, bag limit, and season.

Response: The overall management program may be slightly more complex as modified by Amendment 40, however NMFS disagrees that Amendment 40 complicates management. For both recreational components, the Federal bag and size limits and the start date of the Federal fishing season (June 1) are the same. The only difference is that the end date of the fishing season for the respective components will be different. The projections of the season length provided in Amendment 40 show the Federal for-hire component to have a longer fishing season than the private angling component, in part, due to red snapper harvested in state waters during extended state fishing seasons. Differences in catch rates, size of fish, and total effort also contribute to season-length differences.

The Council may determine that other component-specific management measures are needed to improve the management of the recreational sector fishing for red snapper. Any new management measures would be developed through a framework action or plan amendment and would require public participation.

Comment 3: Amendment 40 does little or nothing to improve accountability and the collection of data. Although the amendment identifies factors that contribute to quota overruns, it does not identify how the proposed action will do anything to minimize quota overruns.

Response: The purpose of Amendment 40 is not to improve data collection. However, Amendment 40 may facilitate greater certainty in data collected by establishing distinct private angling and Federal for-hire components of the red snapper recreational sector in the Gulf, which will provide a basis for flexible management approaches tailored to each component. NMFS disagrees that this amendment does little or nothing to improve accountability. The landings data for each component have different degrees of uncertainty because of differences in how recreational data are collected. Private angler data are derived from surveys whereas for-hire data are collected through surveys and logbooks. In addition, the number of for-hire vessels is known and is much smaller than vessels operated by private anglers. When private recreational landings estimates, that have a higher degree of uncertainty, are combined with for-hire landings data, projecting when the season should close is more difficult, and less effective management measures may result for the recreational sector. The analysis in Amendment 40 explains that because it is easier to both monitor and project landings for the for-hire component, it is easier to ensure that this component will not exceed its quota. Thus, separating management of the components is expected to improve the projections of when the recreational quota is reached and create a platform for future management of the recreational sector that can focus on maximizing opportunities for each component.

Comment 4: Amendment 40 violates National Standard 2 because the Council did not have the best scientific information available when making its decision. The final allocation percentages, which were dependent on recalibrated landings from a Marine Recreational Information Program (MRIP) workshop, were not available when the Council made its final decision. Thus, the Council did not have a clear idea of what the social and economic impacts would be from the final allocations set in Amendment 40. In addition, there was no attempt to quantify the economic consequences to the Federal for-hire component or the recreational sector as a whole.

Response: NMFS disagrees that Amendment 40 is inconsistent with National Standard 2 and that the Council did not have a clear idea of the social and economic impacts that would result from the final allocations. National Standard 2 states that conservation and management measures shall be based on the best scientific information available. At the time the Council took final action on Amendment 40, the document contained a complete analysis of the social and economic impacts of establishing separate recreational components and the allocation alternatives. As discussed in Amendment 40 and the proposed rule, a quantitative economic analysis could not be conducted because the information required for such an analysis is not available. Instead, a qualitative analysis based on the best scientific information available was provided. This analysis acknowledged that the allocation would result in decreased harvest and associated economic benefits to anglers in the private component compared to recent years, and increased harvest and associated economic benefits for the Federal for-hire component. The analysis also indicated, however, that in the long term, total economic benefits would be expected to increase due to the enhanced quota monitoring capability and ability to better tailor management, through subsequent rulemaking, to the needs of each component.

To ensure that the Council's allocation decision was based on the best scientific information available, the preliminary results of the MRIP workshop were presented to the Council at its October 2014 meeting and the Council was advised that the preferred allocation could change by as much as ±3.3 percent. The methods used to calibrate the MRIP landings were reviewed earlier in October 2014 by the Council's SSC. The SSC did not note any concerns about the methodology. When the final results from the workshop were incorporated in Amendment 40, 1.7 percent of the recreational quota was shifted from the Federal for-hire component to the private angling component. This change in allocation did not change the season length projections for the two components that were included in Amendment 40 at the time the Council took final action. In a memorandum dated January 7, 2015, the Southeast Fisheries Science Center certified that the actions in Amendment 40 are based on the best scientific information available.

Comment 5: Amendment 40 violates National Standard 4 because sector separation will have disparate impacts on residents from different states, particularly given different states have differing proportions of for-hire and private angling fishers.

Response: NMFS disagrees that Amendment 40 is inconsistent with National Standard 4. National Standard 4 states, in part, that conservation and management measures shall not discriminate between residents of different states and that if allocation is assigned, it is fair and equitable to all fishermen, and reasonably calculated to promote conservation.

Amendment 40 may have different impacts on the residents of different states because of the proportion of fishers using federally permitted for-hire vessels and private vessels varies regionally. In addition, as explained in the proposed rule, because red snapper availability and abundance in state waters can vary regionally, fishing opportunities for individual fishermen in the private-angling component may vary if the Gulf States set state seasons inconsistent with one another. However, the actions in Amendment 40 do not differentiate between residents of different states. For the private-angling component, there will be a single Federal season in the exclusive economic zone (EEZ) off all Gulf states that will be determined using past landings data and will take into account any harvest allowed in state waters.

The National Standard 4 Guidelines state that “conservation and management measures that have different effects on persons in various geographic locations are permissible if they satisfy the other guidelines under Standard 4.” 50 CFR 600.325(b). NMFS has determined that Amendment 40 is reasonably calculated to promote conservation and that the allocation is fair and equitable. Amendment 40 is reasonably calculated to promote conversation because it will provide a basis for increased flexibility in future management of the recreational sector, it will reduce the likelihood of recreational quota overruns, and is likely to have positive indirect effects on discard mortality as compared to the status quo. With respect to the allocation of the recreational quota between the private angling and for-hire components, a detailed discussion of the basis for the Council's decision is discussed in the amendment and proposed rule. NMFS has determined that the allocation is fair and equitable because it reflects both historical changes in the recreational sector as well as current conditions, and is expected to increase the total benefits to the recreational sector.

Comment 6: Amendment 40 violates National Standard 5 because it only establishes an economic sub-allocation of a quota. Thus economic allocation is the sole purpose of the action.

Response: NMFS disagrees that Amendment 40 is inconsistent with National Standard 5. National Standard 5 requires that conservation and management measures, where practicable, shall consider efficiency in the utilization of fishery resources, except no such measure shall have economic allocation as its sole purpose. As stated in the proposed rule and in the response to Comment 5, the purpose of Amendment 40 is to improve management of the recreational sector and increase both biological and economic benefits. Amendment 40 will allow the development and implementation of management measures better tailored to the specific needs of the separate components; improve quota monitoring; and reduce bycatch and associated discard mortality compared to the status quo. Thus, NMFS has determined that Amendment 40 and this final rule are consistent with National Standard 5.

Comment 7: Amendment 40 violates National Standard 8 because, without having sufficient information, particularly quantitative information of the economic impacts to the Federal for-hire component, the Council could not effectively evaluate the effects of the allocations. For example, no discussion of the impact of the longer season for the Federal for-hire component relative to the shorter season for the private angler component was provided. In addition, Amendment 40 does not take into account the importance of fishery resources to fishing communities dependent on private anglers who target red snapper. Nor does it provide for the sustained participation or minimize adverse economic impacts on these communities.

Response: NMFS disagrees that Amendment 40 is inconsistent with National Standard 8. National Standard 8 requires that conservation and management measures take into account the importance of fishery resources to fishing communities by utilizing economic and social data consistent with National Standard 2 in order to provide for the sustained participation of such communities and, to the extent practicable, to minimize adverse economic impacts on such communities. As discussed in the response to Comment 4, a quantitative economic analysis was not provided in Amendment 40 because the information required for such an analysis is not available. However, Amendment 40 includes a qualitative economic analysis based on the best scientific information available, which concludes that, overall, greater percentages allocated to the Federal for-hire component would correspond to increasing economic benefits to the Federal for-hire component and decreasing benefits to the private angling component.

Amendment 40 does not include an analysis of the impacts of season length because the season length depends on a number of factors in addition to each component's allocation. As explained in Amendment 40, even under the status quo alternative (a single recreational quota), the length of the 2015 recreational red snapper season could not be projected at the time the Council took final action because final 2014 harvest information and the results of a 2014 red snapper update assessment were not available. However, Amendment 40 did provide estimated season lengths for each allocation alternative if sector separation was implemented for the 2014 fishing season, and as explained below, did consider fishing communities, which generally service recreational anglers fishing from all fishing modes.

With respect to impacts on fishing communities, the National Standard 8 Guidelines define a fishing community as place-based, such that members of the community “reside in a specific location” 50 CFR 600.345(b)(3). As explained above, Amendment 40 includes an extensive economic analysis. Amendment 40 also includes an extensive qualitative social analysis including identifying the communities where most fishing activity takes place. These analyses are based on the best scientific information available.

Amendment 40 provides a ranked list of fishing communities most reliant on recreational fishing, generally, as recreational landings of red snapper are not available at the community level. Recreational fishing infrastructure, such as marinas and tackle shops, are used by recreational anglers fishing from all fishing modes, including charter vessels, headboats, and private vessels. The resulting communities are all “general” recreational fishing communities and not disaggregated as private angling communities or for-hire communities. Generally, communities that service one component would be expected to service the other, such that distinct private angling communities and for-hire communities do not exist. However, there are more private recreational fishing vessels, there are more departure sites for these vessels, and there are no minimum geographic or population size requirements to define a community. Thus, there are likely some small and/or isolated locations that may only cater to private anglers. In general, however, NMFS expects that most communities with substantial amounts of recreational fishing infrastructure and services cater to both components.

The National Standard 8 Guidelines define “sustained participation” as “continued access to the fishery within the constraints of the condition of the resource” 50 CFR 600.345(b)(4). To the extent there may be some small or isolated locations that cater only to private anglers who target red snapper, based on historical participation, these communities' sustained participation is secured by the 57.7 percent of the quota allocated to that component.

Concerning the requirement to minimize adverse economic impacts on communities, as described above, communities from which for-hire vessels and private angling vessels depart overlap. Thus, NMFS does not expect there to be distinct Federal for-hire communities and private angling communities that will experience different effects from this action. Further, fishermen in both recreational components also target other species, including other reef fish, in addition to red snapper. Fishing trips for these species would be unaffected by this action and the associated economic benefits from these trips would continue to support these coastal communities. Although some anglers may only fish for red snapper, the continued viability of these communities, despite the brevity of the red snapper recreational fishing season in recent years, demonstrates the diversity and resilience of the recreational fishing industry and the general absence of reliance on individual species at the community level.

Comment 8: Amendment 40 violates National Standard 10 because it would create a derby for private anglers, which will likely result in crowded boat ramps, waterways, and artificial reefs, as well as negatively affect law enforcement's ability to effectively monitor catches.

Response: NMFS disagrees Amendment 40 violates National Standard 10. NMFS has determined that Amendment 40 and the final rule are consistent with National Standard 10, which requires that conservation and management measures, to the extent practicable, promote the safety of human life at sea. As noted in the proposed rule, a shorter Federal fishing season for the private-angling component will likely be offset by extended state fishing seasons. This will reduce both the incentive to fish in the EEZ if unsafe fishing conditions exist during the open season and the likelihood that boat ramps, waterways, and artificial reefs will be crowded to the point of creating a safety concern or impeding the ability of law enforcement to effectively monitor catches. In addition, private anglers do not have an economic incentive, compared to commercial fishermen who earn their living fishing, to fish in unsafe conditions. Thus, NMFS has determined that it is unlikely that private anglers will attempt to fish for red snapper in Federal waters in hazardous weather conditions.

Comment 9: Given other actions the Gulf Council is working on, it is unclear how sector separation will improve red snapper management.

Response: The purpose and need statement for Amendment 40 explains that “Establishing separate components within the recreational sector would provide a basis for flexible management approaches tailored to each component and reduce the likelihood for recreational quota overruns which could jeopardize the rebuilding of the red snapper stock.” Currently, the Council is working on amendments that consider regional management, options for private anglers such as tags and slot limits, and the development of for-hire allocation-based programs. By separating the recreational sector into the two components and establishing component quotas, the Council now has the flexibility to focus on maximizing opportunities for each component independently. For example, regional management would allow Gulf states or sub-regions of the Gulf to be managed differently so long as the proposed regional management measures are not projected to exceed the regional quota allocation. With two components, the Council has greater flexibility in how it manages each.

Comment 10: No actions should be applied to the recreational sector until there are better data to determine red snapper recreational harvest.

Response: NMFS disagrees that no recreational red snapper management measures should be developed until some unspecified time in the future. National Standard 2 requires that management measures be based on the best scientific information available. Consistent with this requirement, NMFS currently determines red snapper harvest based on harvest information obtained from an MRIP-based private angler/charter survey; the Southeast Region Headboat Survey; the Louisiana Department of Wildlife and Fisheries (LDWF) creel survey; and the Texas Parks and Wildlife Department (TPWD) creel survey. NMFS agrees there are opportunities to improve the data collection process and is collaborating with many of the Gulf States' marine fisheries resource agencies to make improvements in both data collection and analysis. Any improvements will be incorporated into future management decisions and season projections.

Comment 11: Amendment 40 violates the Magnuson-Stevens Act because the fish belong to the recreational sector as a whole. The Magnuson-Stevens Act does not provide the authority for the Council to divide the recreational quota between the Federal for-hire and private-angling components. For this same reason, approval of Amendment 40 would violate the Administrative Procedure Act.

Response: NMFS disagrees that Amendment 40 violates the Magnuson-Stevens Act by separating the recreational sector into two components. As discussed in the proposed rule, Section 407(d) of the Magnuson-Stevens Act requires separate quotas for commercial and recreational fishing (which, for the purposes of the subsection includes for-hire fishing), and a prohibition on the retention of fish when each quota is reached. The Magnuson-Stevens Act does not prohibit the Council from further subdividing the recreational quota among different components of the recreational sector to improve the management of the fishery, and the approach of subdividing a quota has been used repeatedly by fishery management councils nationwide as consistent with the authority provided in the Act. See e.g., 16 U.S.C. 1853(b)(3)(A) (allowing the councils to establish specified limitations which are necessary and appropriate for the conservation and management of the fishery on the—“(A) catch of fish (based on area, species, size, number, weight, sex, bycatch, total biomass, or other factors)”).

The one constraint on managing the two components of the recreational sector independently, per section 407(d) of the Magnuson-Stevens Act, is the mandate to prohibit the retention of red snapper when the recreational red snapper quota is reached. Consistent with this requirement, this rule does not change the fact that there is a total recreational quota or the requirement that the recreational sector be closed when that total quota is reached. Thus, if NMFS determines that the Gulf-wide recreational quota has been met, all recreational harvest of red snapper in the EEZ will be prohibited regardless of whether one component has remaining allocation. However, the use of an ACT to set the component season lengths will reduce the likelihood of this occurring.

Comment 12: NMFS should disapprove Amendment 40 because several Council members should not have voted to submit the amendment for implementation. These include two members who have charter for-hire vessels and so have a conflict of interest (i.e., the amendment would directly benefit them). Three other Council members are members of a commercial fishing lobbying-group and failed to list this activity on their financial disclosure forms.

Response: NMFS disagrees. First, Council members appointed by the Secretary “must be individuals who, by reason of their occupational or other experience, scientific expertise or training, are knowledgeable” about the relevant fishery resources, and often are individuals who are engaged in the fishing industry. Consequently, the MSA provides that a conflict of interest alone does not disqualify a Council member from voting on a Council decision. Section 302(j)(7) of the Magnuson-Stevens Act and the regulations at 50 CFR 600.235(c), prohibit a Council member from voting on a Council decision only in specific circumstances, and there is no indication that any Council member had a financial interest that met the criteria for mandatory recusal. Second, under section 302(j)(6) of the Magnuson-Stevens Act, the participation of a Council member in an action by the Council during any time in which the Council member is not in compliance with the financial disclosure regulations is not a basis for invalidating that action.

Comment 13: Amendment 40 does not differentiate between commercial and recreational sustenance fishing and should take into account the families of these fishermen who they need to feed.

Response: It is unclear whether the commenter meant sustenance or subsistence fishing. Sustenance refers to the consumption of what is harvested, whereas subsistence is a circumstance under which the harvest of fish, or other foodstuff, is required to meet the minimum dietary requirements necessary for living and other more cost-effective means to meet these needs are not available. The two terms are not equivalent and simply eating what one catches does not qualify as subsistence. Amendment 40 would not prevent either recreational or commercial fishermen from harvesting and consuming red snapper as long as they follow current regulations. Amendment 40 discusses subsistence and explains that there are no known claims for subsistence consumption of Gulf red snapper by any population including tribes or indigenous groups. This rule pertains to the harvest of red snapper in the EEZ, which would require a boat capable of safely travelling 3-9 miles (5-14 km) offshore, depending on its departure location, and associated high fuel and gear costs. As a result, the costs associated with the harvest of red snapper are inconsistent with the concept of subsistence fishing because alternative foods, as well as fresh fish, including red snapper, could be purchased more cheaply than the cost of a fishing trip. Thus, it is unlikely that there would be any concerns associated with subsistence fishing resulting from the actions in this amendment.

Comment 14: Amendment 40 could force anglers to use for-hire services if they want to harvest red snapper and will cause prices for for-hire trips to increase as a few people will be able to control prices.

Response: NMFS disagrees that Amendment 40 forces anglers to use for-hire services if they want to harvest red snapper and that this will cause price increase. Anglers in the private component would only have to use for-hire services if they choose to fish in Federal waters when the season for the private component is closed. These anglers could continue to fish in open state waters during the extended state fishing seasons, without using for-hire services. For those anglers who choose to use for-hire services to fish in Federal waters, there is sufficient capacity in the for-hire fleet to prevent price control. As stated in Amendment 40, there are an estimated 1,269 charter vessels and 67 headboats operating in the Gulf with charter/headboat reef fish permits. The average number of red snapper target trips in the charter mode is approximately 54,000 trips, or approximately 40 angler trips per charter vessel. Assuming 6 anglers per trip, the average number of vessel trips per charter vessel would be approximately 7 trips, equivalent to 7 days if full-day trips are taken, or fewer than 7 days if some trips are half-day trips. Similar information is not available for headboats because target information is not collected for these vessels. Although all of the charter vessels may not operate in areas where red snapper is available, these results show there is ample capacity to increase the number of for-hire trips without substantial price changes.

Comment 15: The analysis in Amendment 40 underestimates the expected economic impacts on private anglers and associated businesses and communities. Private anglers contribute more to the local economy than commercial fishing operations.

Response: NMFS disagrees. As discussed in Amendment 40, anglers in the private angling component would be expected to experience decreased harvests and associated economic benefits compared to recent years, if their harvest is sufficiently constrained by state regulations, because their sub-quota would be less than the portion of the red snapper recreational quota they have harvested in recent years. In the long term, however, the total economic benefits to the private angling component and the recreational sector as a whole would be expected to increase due to the enhanced quota monitoring capability and ability to better tailor management, through subsequent rulemaking, to the needs of each component. Quantitative estimates of the short- or long-term economic impacts were not provided because of the lack of appropriate data. Although the amount of allowable harvest by the private angling component would be reduced, these anglers would retain the ability to fish for other species in Federal and state waters. It is unknown, however, how many anglers may continue to fish but target other species, how many may cease to fish, or the appropriate economic values to assign to these anglers. Additionally, even though the private angling component quota will be less than recent harvests, if state regulations are ineffective in adequately restraining red snapper harvest, the total red snapper harvest and associated economic benefits accruing to the private angling component may be largely unaffected, resulting in shortening of the Federal for-hire season because of the quota closure requirements. Nevertheless, if effort is reduced, the economic benefits accruing to the private angling component would be reduced.

With respect to the comment that private anglers contribute more to the local economy than commercial fishing operations, because the provision of for-hire services is a commercial activity, NMFS assumes that the commenter was referring to for-hire businesses and not the commercial reef fish sector (otherwise the comment is beyond the scope of this rule, as Amendment 40 does not affect the commercial sector). Although the percent distributions were not provided, the information shown in Amendment 40 demonstrates that charter fishing produces more business activity per trip than private angling. Although red snapper target effort by anglers fishing on charter vessels typically comprises less than 20 percent in Louisiana through Florida (comparable information on Texas is not available) of total red snapper target effort, with the exception of Mississippi, which has minimal charter vessel activity compared to the other Gulf states, the business activity associated with these trips ranges from approximately 54 percent to 67 percent. Anglers fishing on charter vessels spend, on average, more per trip than private anglers. Although these estimates may include anglers that fish on charter vessels and target red snapper in state waters, this activity is expected to be minimal compared to anglers fishing on charter vessels in Federal waters. Thus, the per trip contribution of charter vessel anglers to business activity in local communities exceeds that of private anglers. Similar information is not available for headboats. Because there are more private angler vessels and suitable launch sites for private angler vessels than there are for for-hire vessels, there may be isolated areas where the for-hire presence is limited compared to private angling. However, generally, areas with substantial amounts of private angling activity also support for-hire businesses. Thus, although there will be areas with no access to for-hire services and it is possible to define a community as an area so small that for-hire activity is excluded, generally, it is expected that the areas that provide private angling services also provide for-hire angling services. As a result, areas that may experience changes in fishing by private anglers may benefit from changes in fishing by for-hire anglers.

Comment 16: NMFS withheld a decision tool that contained information that was vital for the Council to make an informed decision on Amendment 40.

Response: No information vital to the Council decision was withheld. The “decision tool” referred to in the comment was merely an Excel spreadsheet developed by NMFS staff at the request of a single for-hire fisherman, and was not related to Amendment 40 or allocating quota between the for-hire component and private angling component. Rather, the spreadsheet as the fisherman requested, allowed him to calculate various quota percentages for use in discussing hypothetical individual fishing quota (IFQ) allocations for a hypothetical charter vessel IFQ program.

Comment 17: After any red snapper recreational quota overage, the ACT should be reset using the Council's ACL/ACT control rule.

Response: NMFS disagrees that the component ACT should be reset using the ACL/ACT control rule after a recreational quota overage. The ACT is not intended to address quota overages. The ACT is used to account for management uncertainty in setting the recreational fishing season and is intended to help ensure that the quota is not exceeded. If a quota overage occurs, the accountability measure's payback provision, which reduces the quota by the amount of the overage and sets the ACT at 20-percent less than the adjusted quota, mitigates for that excess harvest. Keeping a consistent buffer of 20 percent between the quota and ACT provides for more stable management of the recreational sector. If new information indicates that a 20-percent buffer may no longer be appropriate, the Council may consider revising the ACT in the future. The ACL/ACT control rule could be used to determine one alternative for an appropriate buffer. The Council may also consider other reasonable alternatives before deciding whether to adjust the ACT.

Comment 18: The use of “historic” harvest information that is more than 30 years old in setting the allocation is not reflective of the current make-up of the recreational sector or how communities in the Gulf have grown and changed to accommodate the expansion of the private recreational component. More recent information including MRIP and state marine resource agency harvest data should be used to set the allocation.

Response: The Council, in evaluating different allocation alternatives, did consider some alternatives based solely on more recent years. However, the Council determined the allocations based only on these limited time series did not capture changes that have occurred in the fishery, such as changes in regulations and disruptive events such as hurricanes and oil spills that have affected how recreational fishing is prosecuted. At the same time, the Council also recognized the importance of including more recent landings information to reflect current conditions in recreational red snapper fishing. Therefore, the Council determined, and NMFS agrees, that a fair and equitable allocation resulted by using both historic harvest information (1986-2013) and more recent harvest information (2006-2013). This is an approach used by the Council in setting allocations for other species (e.g., the jurisdictional apportionment of black grouper and yellowtail snapper resources between the Gulf and South Atlantic Councils).

Comment 19: Amendment 40 fails to include any instructions for how the quotas for the private and charter vessel/headboat components will be managed, but assumes there will be separate harvest accounting measures for each component.

Response: As stated in the response to Comment 2, red snapper management for the for-hire and private angling components will be managed with a 2-fish bag limit, 16-inch (40.6 cm), total length, minimum size limit, and a June 1 season opening and the season for each component will be projected based on each component's ACT. However, these measures may change in the future as the Council explores flexible management approaches tailored to each component. The component ACTs, which are 20-percent reductions from the component quotas, serve as in-season AMs designed to reduce the likelihood of a component exceeding its component quota. If the total recreational ACL is exceeded in a fishing year and red snapper are classified as overfished, NMFS will adjust the applicable recreational component quota(s) and ACT(s) the following fishing year, based on the overage on the total recreational quota. As has been done in the past, harvest information to compare landings to the quotas for each component will be obtained from an MRIP-based private angler/charter survey and the LDWF and the TPWD creel surveys. Additional information for the for-hire component will come from the Southeast Region Headboat Survey. These harvest information programs are likely to change as NMFS, collaborating with its state partners, work to make improvements in both data collection and analysis.

Comment 20: No portion of the recreational quota should be privatized.

Response: Amendment 40 does not privatize any portion of the red snapper recreational quota. The actions in the amendment do four things: Split the recreational sector that fishes for red snapper into a private angler and a Federal for-hire component; sunsets the components after 3 years; provides an allocation of the recreational red snapper quota to each of the components; and revises the recreational red snapper AMs to account for the two components.

Comment 21: Amendment 40 does not contain a full fishery impact statement (FIS) that takes into consideration the effects of the proposed actions on all entities involved.

Response: The Magnuson-Stevens Act requires that an FIS be prepared for all fishery management plans and amendments prepared by or submitted to the Secretary after October 1, 1990. The FIS assesses, specifies, and analyzes the likely effects, if any, including the cumulative conservation, economic, and social impacts of the conservation and management measures on fishery participants and their communities, participants in the fisheries conducted in adjacent areas under the authority of another Fishery Management Council, and the safety of human life at sea. Amendment 40, as submitted by the Council, contains a full FIS that describes the effects of the action on fishery participants and their communities, participants in the fisheries conducted in adjacent areas, and the safety of human life at sea. These effects are fully analyzed based on the best scientific information available (per National Standard 2). The FIS focuses on the effects of the preferred alternatives, which are the management measures submitted for implementation and approval. Amendment 40 contains additional analysis that addresses both the impacts of the preferred alternatives as well as those alternatives that were not selected for implementation.

The Regional Administrator, Southeast Region, NMFS has determined that this final rule is necessary for the conservation and management of Gulf red snapper and is consistent with Amendment 40, the FMP, the Magnuson-Stevens Act, and other applicable law.

This final rule has been determined to be not significant for purposes of Executive Order 12866.

The Chief Counsel for Regulation of the Department of Commerce certified to the Chief Counsel for Advocacy of the Small Business Administration during the proposed rule stage that this rule would not have a significant economic impact on a substantial number of small entities. The factual basis for this determination was published in the proposed rule and is not repeated here. No comments were received regarding the certification to the Small Business Administration. Comments regarding the general economic effects of the action are addressed in the comments and responses section of this final rule. No changes to the final rule were made in response to these comments. As a result, a final regulatory flexibility analysis was not required and none was prepared.

For the reasons set out in the preamble, 50 CFR part 622 is amended as follows: