Federal Register Vol. 80, No.97,

Federal Register Volume 80, Issue 97 (May 20, 2015)

Page Range28807-29201
FR Document

80_FR_97
Current View
Page and SubjectPDF
80 FR 29201 - Delegation of Functions Under the Foreign Narcotics Kingpin Designation ActPDF
80 FR 29199 - Armed Forces Day, 2015PDF
80 FR 29197 - World Trade Week, 2015PDF
80 FR 29195 - Emergency Medical Services Week, 2015PDF
80 FR 29193 - National Safe Boating Week, 2015PDF
80 FR 28988 - Sunshine Act NoticePDF
80 FR 29108 - Sunshine Act MeetingPDF
80 FR 28962 - Certain Steel Nails From the Socialist Republic of Vietnam: Final Affirmative Countervailing Duty DeterminationPDF
80 FR 28964 - Certain Steel Nails From Taiwan: Final Negative Countervailing Duty DeterminationPDF
80 FR 29017 - 60-Day Notice of Proposed Information Collection: Personal Financial and Credit StatementPDF
80 FR 29096 - Information Collection Request; Comment RequestPDF
80 FR 28976 - Permits; Foreign FishingPDF
80 FR 29101 - Western Nuclear, Inc.; Split Rock Conventional Uranium Mill SitePDF
80 FR 29102 - Dominion Nuclear Connecticut, Inc., Millstone Power Station, Unit 2PDF
80 FR 28958 - Certain Steel Nails From the Sultanate of Oman: Final Negative Countervailing Duty DeterminationPDF
80 FR 29149 - Notice of Intent To Release Airport Property From Quitclaim Deed; Fort Lauderdale Executive Airport, Fort Lauderdale, FLPDF
80 FR 28999 - Request for Nominations of Experts to the Science and Information Subcommittee of the Great Lakes Advisory BoardPDF
80 FR 28929 - Submission for OMB Review; Comment RequestPDF
80 FR 28955 - Certain Steel Nails From the Republic of Korea: Final Determination of Sales at Less Than Fair ValuePDF
80 FR 28835 - Approval and Promulgation of Air Quality Implementation Plans; Illinois; NAAQS UpdatePDF
80 FR 28893 - Approval and Promulgation of Air Quality Implementation Plans; Illinois; NAAQS UpdatePDF
80 FR 28968 - Certain Steel Nails From Malaysia: Final Negative Countervailing Duty DeterminationPDF
80 FR 28969 - Certain Steel Nails From Malaysia; Final Determination of Sales at Less Than Fair ValuePDF
80 FR 28953 - Foreign-Trade Zone (FTZ) 174-Pima County, Arizona; Authorization of Production Activity; Global Solar Energy, Inc. (Thin Film Photovoltaic Solar Products); Tucson, ArizonaPDF
80 FR 28972 - Certain Steel Nails From the Sultanate of Oman: Final Determination of Sales at Less Than Fair ValuePDF
80 FR 28959 - Certain Steel Nails From Taiwan: Final Determination of Sales at Less Than Fair ValuePDF
80 FR 28966 - Certain Steel Nails From the Republic of Korea: Final Negative Countervailing Duty DeterminationPDF
80 FR 29099 - OSHA Training Institute (OTI) Education Center Prerequisite Verification Form; Request Office of Management and Budget's (OMB) Approval of Information Collection (Paperwork) RequirementsPDF
80 FR 28893 - Partial Approval and Disapproval of Air Quality State Implementation Plans; Nevada; Infrastructure Requirements for Ozone, Nitrogen Dioxide, and Sulfur DioxidePDF
80 FR 29013 - Center for Scientific Review; Notice of Closed MeetingsPDF
80 FR 29016 - Center for Scientific Review; Notice of Closed MeetingPDF
80 FR 29009 - Proposed Revised Vaccine Information Materials for Seasonal Influenza VaccinesPDF
80 FR 29009 - Proposed Revised Vaccine Information Materials for Pneumococcal Conjugate Vaccine (PCV13)PDF
80 FR 28925 - Receipt of Several Pesticide Petitions Filed for Residues of Pesticide Chemicals in or on Various CommoditiesPDF
80 FR 28906 - Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Redesignation Request and Associated Maintenance Plan for the Pittsburgh-Beaver Valley Nonattainment Area for the 1997 Annual and 2006 24-Hour Fine Particulate Matter StandardPDF
80 FR 29012 - Agency Information Collection Activities; Submission for Office of Management and Budget Review; Comment Request; State Enforcement NotificationsPDF
80 FR 29002 - Notice of Agreements FiledPDF
80 FR 29145 - Meetings of the United States-Peru Environmental Affairs Council, Environmental Cooperation Commission, and Sub-Committee on Forest Sector GovernancePDF
80 FR 29144 - 30-Day Notice of Proposed Information Collection: Affidavit of Relationship (AOR) for Minors Who Are Nationals Of El Salvador, Guatemala, and HondurasPDF
80 FR 28848 - Television Broadcasting Services; Bend, OregonPDF
80 FR 28872 - Guidance Regarding the Treatment of Transactions in Which Federal Financial Assistance Is ProvidedPDF
80 FR 29004 - Agency Information Collection Activities: Proposed Collection; Comment RequestPDF
80 FR 28981 - Proposed Collection; Comment RequestPDF
80 FR 28983 - Defense Intelligence Agency National Intelligence University Board of Visitors; Notice of Federal Advisory Committee MeetingPDF
80 FR 28937 - Inviting Applications for Socially-Disadvantaged Groups GrantsPDF
80 FR 28943 - Notice of Solicitation of Applications (NOSA) for the Section 533 Housing Preservation Grants for Fiscal Year (FY) 2015PDF
80 FR 28988 - Proposed Agency Information CollectionPDF
80 FR 28850 - Energy Conservation Program for Consumer Products and Certain Commercial and Industrial Equipment: Test Procedures for Consumer and Commercial Water HeatersPDF
80 FR 28807 - Biomass Crop Assistance ProgramPDF
80 FR 28852 - Energy Conservation Program for Consumer Products: Energy Conservation Standards for Residential BoilersPDF
80 FR 28851 - Energy Conservation Program for Consumer Products: Energy Conservation Standards for Residential FurnacesPDF
80 FR 29022 - Filing of Plats of Survey; NVPDF
80 FR 28991 - Commission Information Collection Activities (FERC-576); Comment Request; ExtensionPDF
80 FR 28993 - Sabine Pass Liquefaction, LLC; Sabine Pass LNG, L.P.; Notice of ApplicationPDF
80 FR 28997 - Roadrunner Gas Transmission, LLC; Notice of Intent To Prepare an Environmental Assessment for the Proposed Roadrunner Border Crossing Project; Request for Comments on Environmental IssuesPDF
80 FR 28995 - Columbia Gas Transmission, LLC; Notice of Intent To Prepare an Environmental Assessment for the Proposed Line WB2VA Integrity Project, and Request for Comments on Environmental IssuesPDF
80 FR 29158 - Proposed Information Collection (Application for Accreditation as Service Organization Representative) Activity: Comment RequestPDF
80 FR 29101 - Agency Information Collection Activities: Submission for OMB Review; Comment RequestPDF
80 FR 29003 - Office of Federal High-Performance Green Buildings; Green Building Advisory Committee; Notification of Upcoming Conference CallsPDF
80 FR 28849 - General Services Administration Acquisition Regulation (GSAR); Unique Item Identification (UID)PDF
80 FR 28994 - Combined Notice of FilingsPDF
80 FR 28990 - Combined Notice of FilingsPDF
80 FR 28931 - Agency Information Collection Activities: Proposed Collection; Comment Request-Evaluation of Supplemental Nutrition Assistance Program (SNAP) Employment and Training (E&T) PilotsPDF
80 FR 29146 - Projects Approved for Consumptive Uses of WaterPDF
80 FR 28974 - Proposed Information Collection; Comment Request; Annual Economic Survey of Federal Gulf and South Atlantic Shrimp Permit HoldersPDF
80 FR 29159 - Proposed Information Collection (Awards & ROI) Activity: Comment RequestPDF
80 FR 29096 - Notice of Charter ReestablishmentPDF
80 FR 29151 - Parts and Accessories Necessary for Safe Operation; Virginia Tech Transportation Institute Exemption ApplicationPDF
80 FR 29152 - Qualification of Drivers; Exemption Applications; VisionPDF
80 FR 28975 - Proposed Information Collection; Comment Request; Pacific Islands Region Coral Reef Ecosystems Logbook and ReportingPDF
80 FR 29154 - Qualification of Drivers; Exemption Applications; VisionPDF
80 FR 28953 - In the Matter of: Joseph DeBose, 400 S. Ortonville Road, Ortonville, Michigan 48462; Order Denying Export PrivilegesPDF
80 FR 28954 - Bureau Of Industry And Security In the Matter of: Wei Jiun Chu, a/k/a Jim Chu, 1530 Silver Rain Drive, Diamond Bar, CA 91765; Order Denying Export PrivilegesPDF
80 FR 29149 - Qualification of Drivers; Exemption Applications; VisionPDF
80 FR 28930 - National Advisory Committee on Microbiological Criteria for FoodsPDF
80 FR 29105 - Microbiome ResearchPDF
80 FR 28832 - Certifications and Exemptions Under the International Regulations for Preventing Collisions at Sea, 1972PDF
80 FR 29018 - Receipt of Applications for Endangered Species PermitsPDF
80 FR 29021 - Notice of Availability of the Record of Decision for the West Eugene Wetlands in Oregon and Approved Resource Management PlanPDF
80 FR 28987 - Notice of Intent To Grant Partially Exclusive Patent License; Equalizer Sight, Inc.PDF
80 FR 28987 - Notice of Intent To Grant Partially Exclusive Patent License; 5D Analytics, LLCPDF
80 FR 28993 - Revisions to Oil Pipeline Regulations Pursuant to the Energy Policy Act of 1992; Notice of Annual Change in the Producer Price Index for Finished GoodsPDF
80 FR 28989 - Evergreen Wind Power II, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 AuthorizationPDF
80 FR 28991 - Combined Notice of Filings #2PDF
80 FR 28989 - Combined Notice of Filings #1PDF
80 FR 28995 - Combined Notice of Filings #1PDF
80 FR 28952 - Submission for OMB Review; Comment RequestPDF
80 FR 28984 - Defense Advisory Committee on Military Personnel Testing; Notice of Federal Advisory Committee MeetingPDF
80 FR 28974 - Proposed Information Collection; Comment Request; Student Information System (SIS)PDF
80 FR 28928 - On-Time Performance Under Section 213 of the Passenger Rail Investment and Improvement Act of 2008PDF
80 FR 29114 - Self-Regulatory Organizations; BOX Options Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Market, LLC Options FacilityPDF
80 FR 28977 - Western Pacific Fishery Management Council; Public MeetingsPDF
80 FR 28978 - Pacific Fishery Management Council; Public MeetingPDF
80 FR 29010 - Agency Information Collection Activities; Proposed Collection; Comment Request; Guidance for Industry on Formal Meetings With Sponsors and Applicants for Prescription Drug User Fee Act ProductsPDF
80 FR 29001 - Agency Information Collection Activities: Proposed Collection Renewal; Comment Request (3064-0135)PDF
80 FR 29002 - Notice to All Interested Parties of the Termination of the Receivership of 10066, First National Bank of Anthony, Anthony, KSPDF
80 FR 29144 - Kentucky Disaster #KY-00024PDF
80 FR 29143 - Data Collection Available for Public CommentsPDF
80 FR 29143 - Reporting and Recordkeeping Requirements Under OMB ReviewPDF
80 FR 28807 - Strategic Economic and Community DevelopmentPDF
80 FR 28949 - Agenda and Notice of Public Meeting of the Wyoming Advisory CommitteePDF
80 FR 28949 - Agenda and Notice of Public Meeting of the New York Advisory CommitteePDF
80 FR 28980 - Notice of Availability of Government-Owned Inventions; Available for LicensingPDF
80 FR 28986 - Meeting of the Chief of Engineers Environmental Advisory BoardPDF
80 FR 28979 - Advisory Committee on Arlington National Cemetery Remember Subcommittee Meeting NoticePDF
80 FR 28976 - Proposed Information Collection; Comment Request; Alaska Observer ProgramPDF
80 FR 28890 - Maine State Plan for State and Local Government Employers; Notice of Submission; Proposal To Grant Initial State Plan Approval; Request for Public Comment and Opportunity To Request Public HearingPDF
80 FR 28984 - 36(b)(1) Arms Sales NotificationPDF
80 FR 29108 - Submission for OMB Review; Comment RequestPDF
80 FR 29158 - Submission for OMB Review; Comment RequestPDF
80 FR 29136 - Self-Regulatory Organizations; ISE Gemini, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees To Introduce a New “Retail” Designation for Priority Customer OrdersPDF
80 FR 29106 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees To Introduce a New “Retail” Designation for Priority Customer OrdersPDF
80 FR 29121 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Regarding Limitation of LiabilityPDF
80 FR 29139 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Related to Fees for Use of BATS Exchange, Inc.PDF
80 FR 29127 - Self-Regulatory Organizations; NASDAQ OMX PHLX, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Update the Public Disclosure of Sources of Data Utilized By PSXPDF
80 FR 29138 - Self-Regulatory Organizations; National Securities Clearing Corporation; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Clarify NSCC's Rules & Procedures Relating to the Process by Which NSCC Members Submit Buy-Ins Within NSCC's Continuous Net Settlement SystemPDF
80 FR 29109 - Self-Regulatory Organizations; C2 Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Regarding Limitation of LiabilityPDF
80 FR 29131 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of a Proposed Rule Change Relating to Trading Permit Holder QualificationsPDF
80 FR 29118 - Self-Regulatory Organizations; NASDAQ OMX BX, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Update the Public Disclosure of Sources of Data BX UtilizesPDF
80 FR 29142 - Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval of a Proposed Rule Change Relating to Stock-Option Order HandlingPDF
80 FR 29025 - Keith Ky Ly, D.O.; Decision and OrderPDF
80 FR 28981 - 36(b)(1) Arms Sales NotificationPDF
80 FR 29003 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding CompanyPDF
80 FR 29003 - Formations of, Acquisitions by, and Mergers of Bank Holding CompaniesPDF
80 FR 29067 - Jana Marjenhoff, D.O.; Decision and OrderPDF
80 FR 28928 - Petitions for Reconsideration of Action in Rulemaking ProceedingPDF
80 FR 29000 - Information Collection Being Reviewed by the Federal Communications CommissionPDF
80 FR 29037 - Cove Inc., D/B/A Allwell Pharmacy; Decision and OrderPDF
80 FR 29053 - Farmacia Yani; Decision and OrderPDF
80 FR 28979 - Advisory Committee on Arlington National Cemetery Explore Subcommittee Meeting NoticePDF
80 FR 29022 - The Main Pharmacy; Decision and OrderPDF
80 FR 29015 - Center for Scientific Review Notice of Closed MeetingsPDF
80 FR 29013 - National Institute of Neurological Disorders and Stroke; Notice of Closed MeetingsPDF
80 FR 29014 - Government-Owned Inventions; Availability for LicensingPDF
80 FR 28978 - Advisory Committee on Arlington National Cemetery Honor Subcommittee Meeting NoticePDF
80 FR 29105 - New Postal ProductPDF
80 FR 28950 - 2020 Decennial Census Residence Rule and Residence SituationsPDF
80 FR 29000 - Federal Advisory Committee Act; Communications Security, Reliability, and Interoperability CouncilPDF
80 FR 29096 - Notice of Lodging of Proposed Consent Decree Under the Clean Water Act and Resource Conservation and Recovery ActPDF
80 FR 29148 - Petition for Exemption; Summary of Petition Received; The Boeing CompanyPDF
80 FR 28833 - Safety Zones; Apra Outer Harbor and Adjacent Waters, GuamPDF
80 FR 29016 - Agency Information Collection Activities: Vessel Entrance or Clearance StatementPDF
80 FR 29162 - Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to Seismic Surveys in Cook Inlet, AlaskaPDF
80 FR 28863 - Antimicrobial Animal Drug Sales and Distribution ReportingPDF
80 FR 28818 - International Services Surveys: BE-I80, Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign PersonsPDF
80 FR 28843 - Trinexapac-ethyl; Pesticide TolerancesPDF
80 FR 28838 - Notification of Submission to the Secretary of Agriculture; Pesticides; Agricultural Worker Protection Standard RevisionsPDF
80 FR 28839 - Fragrance Components; Exemption From the Requirement of a TolerancePDF
80 FR 29004 - Appointments to the Health Information Technology (HIT) Policy CommitteePDF
80 FR 29004 - Appointment to the Methodology Committee of the Patient-Centered Outcomes Research Institute (PCORI)PDF
80 FR 29019 - Deepwater Horizon Oil Spill; Draft Phase IV Early Restoration Plan and Environmental AssessmentsPDF
80 FR 28821 - Revised Medical Criteria for Evaluating Cancer (Malignant Neoplastic Diseases)PDF
80 FR 29157 - Hazardous Materials: Notice of Application for Modification of Special PermitPDF
80 FR 29156 - Hazardous Materials: Notice of Application for Special PermitsPDF
80 FR 28901 - Approval and Promulgation of Implementation Plans; New Mexico; Revisions to the New Source Review (NSR) State Implementation Plan (SIP) for Albuquerque-Bernalillo County; Prevention of Significant Deterioration (PSD) PermittingPDF
80 FR 28853 - Wassenaar Arrangement 2013 Plenary Agreements Implementation: Intrusion and Surveillance ItemsPDF

Issue

80 97 Wednesday, May 20, 2015 Contents Agency Health Agency for Healthcare Research and Quality NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 29004-29009 2015-12229 Agriculture Agriculture Department See

Commodity Credit Corporation

See

Farm Service Agency

See

Food and Nutrition Service

See

Food Safety and Inspection Service

See

Rural Business-Cooperative Service

See

Rural Housing Service

See

Rural Utilities Service

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 28929-28930 2015-12165 2015-12258
Army Army Department NOTICES Government-Owned Inventions; Available for Licensing, 28980-28981 2015-12158 Meetings: Advisory Committee on Arlington National Cemetery Explore Subcommittee, 28979 2015-12129 Advisory Committee on Arlington National Cemetery Honor Subcommittee, 28978-28979 2015-12120 Advisory Committee on Arlington National Cemetery Remember Subcommittee, 28979-28980 2015-12156 Census Bureau Census Bureau NOTICES 2020 Decennial Census Residence Rule and Residence Situations, 28950-28952 2015-12118 Centers Disease Centers for Disease Control and Prevention NOTICES Vaccine Information Materials for Pneumococcal Conjugate Vaccine; Revisions, 29009-29010 2015-12239 Vaccine Information Materials for Seasonal Influenza Vaccines; Revisions, 29009 2015-12240 Civil Rights Civil Rights Commission NOTICES Meetings: New York Advisory Committee, 28949 2015-12161 Wyoming Advisory Committee, 28949 2015-12162 Coast Guard Coast Guard RULES Safety Zones: Apra Outer Harbor and Adjacent Waters, Guam, 28833-28835 2015-12109 Commerce Commerce Department See

Census Bureau

See

Economic Analysis Bureau

See

Foreign-Trade Zones Board

See

Industry and Security Bureau

See

International Trade Administration

See

National Institute of Standards and Technology

See

National Oceanic and Atmospheric Administration

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 28952-28953 2015-12177
Commodity Credit Commodity Credit Corporation RULES Biomass Crop Assistance Program, 28807 2015-12220 Defense Department Defense Department See

Army Department

See

Engineers Corps

See

Navy Department

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 28981 2015-12227 Arms Sales, 28981-28986 2015-12138 2015-12153 Meetings: Defense Advisory Committee on Military Personnel Testing, 28984 2015-12176 Defense Intelligence Agency National Intelligence University Board of Visitors, 28983-28984 2015-12226
Defense Nuclear Defense Nuclear Facilities Safety Board NOTICES Meetings; Sunshine Act, 28988 2015-12391 Drug Drug Enforcement Administration NOTICES Decisions and Orders: Cove Inc., d/b/a Allwell Pharmacy, 29037-29053 2015-12131 Farmacia Yani, 29053-29067 2015-12130 Jana Marjenhoff, D.O., 29067-29096 2015-12135 Keith Ky Ly, D.O., 29025-29037 2015-12139 The Main Pharmacy, 29022-29025 2015-12128 Economic Analysis Bureau Economic Analysis Bureau RULES International Services Surveys: Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons, 28818-28821 2015-11996 Energy Department Energy Department See

Energy Efficiency and Renewable Energy Office

See

Federal Energy Regulatory Commission

PROPOSED RULES Energy Conservation Program for Consumer Products and Certain Commercial and Industrial Equipment: Test Procedures for Consumer and Commercial Water Heaters, 28850-28851 2015-12221 Energy Conservation Program for Consumer Products: Standards for Residential Boilers, 28852-28853 2015-12219 Standards for Residential Furnaces, 28851-28852 2015-12218
Energy Efficiency Energy Efficiency and Renewable Energy Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 28988-28989 2015-12223 Engineers Engineers Corps NOTICES Meetings: Chief of Engineers Environmental Advisory Board, 28986-28987 2015-12157 Environmental Protection Environmental Protection Agency RULES Air Quality State Implementation Plans; Approvals and Promulgations: Illinois; NAAQS Update, 28835-28838 2015-12255 Pesticide Tolerances: Trinexapac-ethyl, 28843-28848 2015-11972 Pesticides: Agricultural Worker Protection Standard Revisions -- Submission to the Secretary of Agriculture, 28838-28839 2015-11962 Tolerance Requirements; Exemptions: Fragrance Components, 28839-28843 2015-11959 PROPOSED RULES Air Quality State Implementation Plans; Approvals and Promulgations: Illinois; NAAQS Update, 28893 2015-12253 Nevada -- Infrastructure Requirements for Ozone, Nitrogen Dioxide, and Sulfur Dioxide, 28893-28901 2015-12243 New Mexico -- Revisions to the New Source Review State Implementation Plan for Albuquerque-Bernalillo County; Prevention of Significant Deterioration Permitting, 28901-28906 2015-11780 Pennsylvania -- Redesignation Request and Associated Maintenance Plan for the Pittsburgh-Beaver Valley Nonattainment Area, 28906-28925 2015-12237 Receipt of Several Pesticide Petitions Filed for Residues of Pesticide Chemicals in or on Various Commodities, 28925-28928 2015-12238 NOTICES Requests for Nominations: Experts to the Science and Information Subcommittee of the Great Lakes Advisory Board, 28999-29000 2015-12259 Farm Service Farm Service Agency RULES Strategic Economic and Community Development, 28807-28818 2015-12163 Federal Aviation Federal Aviation Administration NOTICES Petitions for Exemptions; Summaries: The Boeing Co., 29148-29149 2015-12114 Release of Airport Property: Fort Lauderdale Executive Airport, Fort Lauderdale, FL, 29149 2015-12260 Federal Bureau Federal Bureau of Investigation NOTICES Charter Renewals: Criminal Justice Information Services Advisory Policy Board, 29096 2015-12200 Federal Communications Federal Communications Commission RULES Television Broadcasting Services: Bend, OR, 28848-28849 2015-12232 PROPOSED RULES Petitions for Reconsideration of Action in Rulemaking Proceeding, 28928 2015-12134 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 29000-29001 2015-12133 Meetings: Communications Security, Reliability, and Interoperability Council, 29000 2015-12116 Federal Deposit Federal Deposit Insurance Corporation NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 29001-29002 2015-12169 Terminations of Receiverships: 10066, First National Bank of Anthony, Anthony, KS, 29002 2015-12168 Federal Energy Federal Energy Regulatory Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 28991-28993 2015-12216 Applications: Sabine Pass Liquefaction, LLC; Sabine Pass LNG, LP, 28993-28994 2015-12215 Combined Filings, 28989-28991, 28994-28995 2015-12178 2015-12179 2015-12180 2015-12206 2015-12207 Environmental Assessments; Availability, etc.: Columbia Gas Transmission, LLC; Line WB2VA Integrity Project, 28995-28997 2015-12213 Roadrunner Gas Transmission, LLC; Roadrunner Border Crossing Project, 28997-28999 2015-12214 Initial Market-Based Rate Filings Including Requests for Blanket Section 204 Authorizations: Evergreen Wind Power II, LLC, 28989 2015-12181 Producer Price Index for Finished Goods, 28993 2015-12182 Federal Maritime Federal Maritime Commission NOTICES Agreements Filed, 29002-29003 2015-12235 Federal Motor Federal Motor Carrier Safety Administration NOTICES Parts and Accessories Necessary for Safe Operation; Exemption Applications: Virginia Tech Transportation Institute, 29151-29152 2015-12199 Qualification of Drivers; Exemption Applications: Vision, 29149-29150, 29152-29156 2015-12193 2015-12196 2015-12198 Federal Reserve Federal Reserve System NOTICES Changes in Bank Control: Acquisitions of Shares of a Bank or Bank Holding Company, 29003 2015-12137 Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 29003 2015-12136 Fish Fish and Wildlife Service NOTICES Endangered Species Permit Applications, 29018-29019 2015-12188 Food and Drug Food and Drug Administration PROPOSED RULES Antimicrobial Animal Drug Sales and Distribution Reporting, 28863-28872 2015-12081 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Guidance on Formal Meetings With Sponsors and Applicants for Prescription Drug User Fee Act Products, 29010-29012 2015-12170 State Enforcement Notifications, 29012-29013 2015-12236 Food and Nutrition Food and Nutrition Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals Evaluation of Supplemental Nutrition Assistance Program Employment and Training Pilots, 28931-28936 2015-12205 Food Safety Food Safety and Inspection Service NOTICES Meetings: National Advisory Committee on Microbiological Criteria for Foods, 28930-28931 2015-12192 Foreign Trade Foreign-Trade Zones Board NOTICES Production Activities: Global Solar Energy, Inc., Foreign-Trade Zone 174, Pima County, AZ, 28953 2015-12249 General Services General Services Administration RULES General Services Administration Acquisition Regulation: Unique Item Identification, 28849 2015-12208 NOTICES Meetings: Office of Federal High-Performance Green Buildings, Green Building Advisory Committee, 29003-29004 2015-12210 Government Accountability Government Accountability Office NOTICES Appointments to the Health Information Technology Policy Committee, 29004 2015-11957 Appointments to the Methodology Committee of the Patient-Centered Outcomes Research Institute, 29004 2015-11955 Health and Human Health and Human Services Department See

Agency for Healthcare Research and Quality

See

Centers for Disease Control and Prevention

See

Food and Drug Administration

See

National Institutes of Health

Homeland Homeland Security Department See

Coast Guard

See

U.S. Customs and Border Protection

Housing Housing and Urban Development Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Personal Financial and Credit Statement, 29017-29018 2015-12273 Industry Industry and Security Bureau PROPOSED RULES Wassenaar Arrangement Plenary Agreements Implementation; Intrusion and Surveillance Items, 28853-28863 2015-11642 NOTICES Denials of Export Privileges: Joseph DeBose, 28953-28954 2015-12195 Wei Jiun Chu, a/k/a Jim Chu, 28954-28955 2015-12194 Interior Interior Department See

Fish and Wildlife Service

See

Land Management Bureau

NOTICES Environmental Assessments; Availability, etc.: Deepwater Horizon Oil Spill Draft Phase IV Early Restoration Plan, 29019-29021 2015-11945
Internal Revenue Internal Revenue Service PROPOSED RULES Guidance: Treatment of Transactions in which Federal Financial Assistance is Provided, 28872-28890 2015-12230 International Trade Adm International Trade Administration NOTICES Antidumping or Countervailing Duty Investigations, Orders, or Reviews: Certain Steel Nails from Malaysia, 28968-28969 2015-12252 Certain Steel Nails from Taiwan, 28964-28966 2015-12277 Certain Steel Nails from the Republic of Korea, 28966-28967 2015-12246 Certain Steel Nails From the Socialist Republic of Vietnam, 28962-28964 2015-12278 Certain Steel Nails from the Sultanate of Oman, 28958-28959 2015-12263 Determinations of Sales at Less Than Fair Value: Certain Steel Nails from Malaysia, 28969-28971 2015-12250 Certain Steel Nails from Taiwan, 28959-28962 2015-12247 Certain Steel Nails from the Sultanate of Oman, 28972-28974 2015-12248 Steel Nails from the Republic of Korea, 28955-28958 2015-12257 Justice Department Justice Department See

Drug Enforcement Administration

See

Federal Bureau of Investigation

NOTICES Proposed Consent Decrees under the Clean Water Act and Resource Conservation and Recovery Act, 29096 2015-12115
Labor Department Labor Department See

Labor-Management Standards Office

See

Occupational Safety and Health Administration

Labor Management Standards Labor-Management Standards Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 29096-29099 2015-12272 Land Land Management Bureau NOTICES Plats of Survey: Nevada, 29022 2015-12217 Records of Decision: Approved Resource Management Plan, West Eugene Wetlands, Oregon, 29021-29022 2015-12187 National Archives National Archives and Records Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 29101 2015-12211 National Institute National Institute of Standards and Technology NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Student Information System, 28974 2015-12175 National Institute National Institutes of Health NOTICES Government-Owned Inventions; Availability for Licensing, 29014-29015 2015-12124 Meetings: Center for Scientific Review, 29013-29016 2015-12126 2015-12241 2015-12242 National Institute of Neurological Disorders and Stroke, 29013 2015-12125 National Oceanic National Oceanic and Atmospheric Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Alaska Observer Program, 28976 2015-12155 Annual Economic Survey of Federal Gulf and South Atlantic Shrimp Permit Holders, 28974-28975 2015-12202 Pacific Islands Region Coral Reef Ecosystems Logbook and Reporting, 28975-28976 2015-12197 Foreign Fishing Permits, 28976-28977 2015-12271 Meetings: Pacific Fishery Management Council; Public Meeting, 28978 2015-12171 Western Pacific Fishery Management Council; Public Meetings, 28977-28978 2015-12172 Takes of Marine Mammals Incidental to Specified Activities: Seismic Surveys in Cook Inlet, Alaska, 29162-29189 2015-12091 Navy Navy Department RULES Certifications and Exemptions under the International Regulations for Preventing Collisions at Sea, 1972, 28832-28833 2015-12189 NOTICES Patent Licenses: 5D Analytics, LLC, 28987-28988 2015-12184 Equalizer Sight, Inc., 28987 2015-12185 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Exemptions: Dominion Nuclear Connecticut, Inc., Millstone Power Station, Unit 2, 29102-29105 2015-12264 Indirect Transfers of Control: Western Nuclear, Inc. Split Rock Conventional Uranium Mill Site, 29101-29102 2015-12266 Occupational Safety Health Adm Occupational Safety and Health Administration PROPOSED RULES Maine State Plan for State and Local Government Employers, 28890-28893 2015-12154 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals OSHA Training Institute Education Center Prerequisite Verification Form, 29099-29100 2015-12244 Pipeline Pipeline and Hazardous Materials Safety Administration NOTICES Special Permit Applications: Hazardous Materials, 29156-29157 2015-11817 Modifications, 29157-29158 2015-11825 Postal Regulatory Postal Regulatory Commission NOTICES New Postal Products, 29105 2015-12119 Presidential Documents Presidential Documents PROCLAMATIONS Special Observances: Armed Forces Day (Proc. 9283), 29199-29200 2015-12446 Emergency Medical Services Week (Proc. 9281), 29195-29196 2015-12433 National Safe Boating Week (Proc. 9280), 29191-29194 2015-12431 World Trade Week (Proc. 9282), 29197-29198 2015-12439 ADMINISTRATIVE ORDERS Foreign Narcotics Kingpin Designation Act; Delegation of Functions (Memorandum of May 15, 2015), 29201 2015-12447 Rural Business Rural Business-Cooperative Service RULES Strategic Economic and Community Development, 28807-28818 2015-12163 NOTICES Funding Availability: Applications for Socially-Disadvantaged Groups Grants, 28937-28943 2015-12225 Rural Housing Service Rural Housing Service RULES Strategic Economic and Community Development, 28807-28818 2015-12163 NOTICES Solicitation of Applications for the Section 533 Housing Preservation Grants for Fiscal Year 2015, 28943-28948 2015-12224 Rural Utilities Rural Utilities Service RULES Strategic Economic and Community Development, 28807-28818 2015-12163 Science Technology Science and Technology Policy Office NOTICES Requests for Information: Microbiome Research, 29105-29106 2015-12191 Securities Securities and Exchange Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 29108-29109 2015-12152 Meetings; Sunshine Act, 29108 2015-12380 Self-Regulatory Organizations; Proposed Rule Changes: BATS Exchange, Inc., 29139-29142 2015-12147 BOX Options Exchange, LLC, 29114-29118 2015-12173 C2 Options Exchange, Inc., 29109-29114 2015-12144 Chicago Board Options Exchange, Inc., 29121-29127, 29131-29136, 29142-29143 2015-12141 2015-12143 2015-12148 International Securities Exchange, LLC, 29106-29108 2015-12149 ISE Gemini LLC, 29136-29138 2015-12150 NASDAQ OMX BX, Inc., 29118-29121 2015-12142 NASDAQ OMX PHLX, LLC, 29127-29131 2015-12146 National Securities Clearing Corp., 29138-29139 2015-12145 Small Business Small Business Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 29143-29144 2015-12164 2015-12166 Disaster Declarations: Kentucky, 29144 2015-12167 Social Social Security Administration RULES Revised Medical Criteria for Evaluating Cancer (Malignant Neoplastic Diseases), 28821-28832 2015-11923 State Department State Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Affidavit of Relationship for Minors Who Are Nationals Of El Salvador, Guatemala, and Honduras, 29144-29145 2015-12233 Meetings: United States-Peru Environmental Affairs Council, Environmental Cooperation Commission, and Sub-Committee On Forest Sector Governance, 29145-29146 2015-12234 Surface Transportation Surface Transportation Board PROPOSED RULES On-Time Performance under the Passenger Rail Investment and Improvement Act, 28928 2015-12174 Susquehanna Susquehanna River Basin Commission NOTICES Projects Approved for Consumptive Uses of Water, 29146-29148 2015-12203 Transportation Department Transportation Department See

Federal Aviation Administration

See

Federal Motor Carrier Safety Administration

See

Pipeline and Hazardous Materials Safety Administration

See

Surface Transportation Board

Treasury Treasury Department See

Internal Revenue Service

NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 29158 2015-12151
Customs U.S. Customs and Border Protection NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Vessel Entrance or Clearance Statement, 29016-29017 2015-12107 Veteran Affairs Veterans Affairs Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Application for Accreditation as Service Organization Representative, 29158-29159 2015-12212 Awards and ROI, 29159 2015-12201 Separate Parts In This Issue Part II Commerce Department, National Oceanic and Atmospheric Administration, 29162-29189 2015-12091 Part III Presidential Documents, 29191-29201 2015-12446 2015-12433 2015-12431 2015-12439 2015-12447 Reader Aids

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80 97 Wednesday, May 20, 2015 Rules and Regulations DEPARTMENT OF AGRICULTURE Commodity Credit Corporation 7 CFR Part 1450 RIN 0560-AI27 Biomass Crop Assistance Program AGENCY:

Commodity Credit Corporation and Farm Service Agency, USDA.

ACTION:

Final rule; reopening of comment period.

SUMMARY:

The Commodity Credit Corporation (CCC) and the Farm Service Agency (FSA) published a final rule on February 27, 2015, amending the Biomass Crop Assistance Program (BCAP) regulations to implement changes required by the Agricultural Act of 2014 (the 2014 Farm Bill). We are extending the comment period for the final rule to give the public more time to provide input and recommendations on the final rule.

DATES:

The comment period for the final rule published February 27, 2015 (80 FR 10569), effective May 28, 2015, is reopened. We will consider comments that we receive by May 27, 2015.

ADDRESSES:

We invite you to submit comments on the final rule. In your comment, please specify RIN 0560-AI27, February 27, 2015, and 80 FR 10569-10575. You may submit comments by any of the following methods:

Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting comments; or

Mail, Hand Delivery, or Courier: Kelly Novak, FSA CEPD, USDA, STOP 0513, 1400 Independence Ave. SW., Washington, DC, 20250-0512.

All written comments will be available for inspection online at www.regulations.gov and at the mail address above during business hours from 8 a.m. to 5 p.m., Monday through Friday, except holidays. A copy of this extension and the published final rule are available through the FSA home page at http://www.fsa.usda.gov/.

FOR FURTHER INFORMATION CONTACT:

Kelly Novak, telephone (202) 720-4053. Persons with disabilities who require alternative means for communication should contact the USDA Target Center at (202) 720-2600 (voice).

SUPPLEMENTARY INFORMATION: Background

On February 27, 2015, CCC and FSA published a final rule titled “Biomass Crop Assistance Program.” The final rule implements all the required 2014 Farm Bill changes to BCAP and seeks comment on FSA's implementation of BCAP, given the required changes and changes to funding.

BCAP is administered by FSA using Commodity Credit Corporation (CCC) funds. Section 9010 of the 2014 Farm Bill (Pub. L. 113-79) amends 7 U.S.C. 8111 and reauthorizes BCAP with certain changes. BCAP provides assistance to biomass producers and owners in two payment categories:

• Matching payments to eligible material owners for the delivery of eligible material to qualified Biomass Conversion Facilities (BCFs). Qualified BCFs use biomass feedstocks to produce heat, power, biobased products, research, or advanced biofuels. The 2014 Farm Bill adds research as an authorized use of material by BCFs.

• Establishment and annual payments to producers who enter into contracts with CCC to produce eligible biomass crops on contract acres within BCAP project areas.

The final rule requested comments on how BCAP should be implemented in future years. FSA is, in particular, requesting public comments on the following questions:

• What information could FSA reasonably collect that would provide assurance that the biomass conversion facility has sufficient equity to be in operation by the date on which project area eligible crops are ready for harvest?

• How could FSA best determine if expansion of a project area would advance the maturity of that project area?

• What credible risk tools and sources should FSA consider in determining whether proposed crops are potentially invasive?

• With a new cost share cap of 50 percent for establishment costs for perennial crops in project areas, what establishment practices should FSA consider as most important to support?

• With the new limits to the BCAP budget, what priorities should FSA consider in implementing the program?

FSA received several comments requesting an extension of the comment period. We have determined that providing an extension of the original comment period will give the public more time to provide input and to make recommendations on the final rule. With this extension, the public may submit comments through May 27, 2015. This extension of comment period does not change the effective date of the final rule, which is May 28, 2015, so as not to delay the implementation of the changes to BCAP required by the 2014 Farm Bill.

Signed on May 15, 2015. Joy Harwood, Acting Executive Vice President, Commodity Credit Corporation, and Administrator, Farm Service Agency.
[FR Doc. 2015-12220 Filed 5-19-15; 8:45 am] BILLING CODE 3410-05-P
DEPARTMENT OF AGRICULTURE Rural Business-Cooperative Service Rural Housing Service Rural Utilities Service Farm Service Agency 7 CFR Part 1980 RIN 0570-AA94 Strategic Economic and Community Development AGENCY:

Rural Business-Cooperative Service, Rural Housing Service, Rural Utilities Service, Farm Service Agency, U.S. Department of Agriculture (USDA).

ACTION:

Interim rule with public comment.

SUMMARY:

This interim rule implements Section 6025, Strategic Economic and Community Development, under the Agricultural Act of 2014 (2014 Farm Bill). Unless the Agency provides otherwise, the Agency will reserve up to 10 percent of the funds appropriated to certain Rural Development (RD) programs each fiscal year to fund projects that support the implementation of strategic economic and community development plans across multi-jurisdictional areas. The programs from which funds will be reserved are community facility programs, water and waste disposal programs, and rural business and cooperative development programs. To be eligible for the reserved funds, projects must be first eligible for funding under the programs from which the funds are reserved. In addition, projects must be carried out solely in rural areas. Any reserved funding that is not obligated by June 30 of the fiscal year in which the funds were reserved will be returned to the programs' regular funding accounts.

DATES:

Effective June 19, 2015. Written comments must be received on or before August 18, 2015. The comment period for the information collection under the Paperwork Reduction Act of 1995 ends July 20, 2015.

ADDRESSES:

Submit your comments on this rule by any of the following methods:

Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

Mail: Submit written comments via the U.S. Postal Service to the Branch Chief, Regulations and Paperwork Management Branch, U.S. Department of Agriculture, STOP 0742, 1400 Independence Avenue SW., Washington, DC 20250-0742.

Hand Delivery/Courier: Submit written comments via Federal Express Mail, or other courier service requiring a street address, to the Branch Chief, Regulations and Paperwork Management Branch, U.S. Department of Agriculture, 300 7th Street SW., 7th Floor, Washington, DC 20024.

All written comments will be available for public inspection during regular work hours at the 300 7th Street SW., 7th Floor address listed above.

FOR FURTHER INFORMATION CONTACT:

Aaron Morris, Rural Housing Service, Community Facilities, U.S. Department of Agriculture, STOP 0787, 1400 Independence Avenue SW., Washington, DC 20250-3225; email: [email protected]; telephone (202) 720-1500.

SUPPLEMENTARY INFORMATION: Executive Summary I. Purpose of the Regulatory Action

This action is needed in order to implement Section 6025 of the Agricultural Act of 2014 (2014 Farm Bill) (7 U.S.C. 2008v). Section 6025 provides the Secretary of Agriculture the authority to give priority to projects that support strategic economic development or community development plans. Section 6025 enables the Secretary to reserve up to 10 percent of program funds from certain Rural Development programs, as identified in the section. This action implements this priority.

II. Summary of the Major Provisions

1. Programs. Based on the authorizing statute, funds will be reserved from one or more of eight RD programs. These programs, which are referred to as the “underlying programs,” are:

• Community Facility Loans • Fire and Rescue and Other Small Community Facilities Projects • Community Facilities Grant Program • Community Programs Guaranteed Loans • Water and Waste Disposal Programs Guaranteed Loans • Water and Waste Loans and Grants • Business and Industry Guaranteed Loanmaking and Servicing • Rural Business Development Grants

2. Funding. RD will reserve up to 10 percent of an underlying program's program level to fund projects under this priority. The authorizing statute sets the upper limit on the amount of funding that can be reserved for this priority. Based on a program's budget and demand for reserved funding, RD may set lower percentages for a specific fiscal year.

Any funding that is not expended by June 30, as specified by the authorizing statute, will be returned to the applicable underlying program's account for obligation for all eligible projects in that program.

3. Applications. To be considered for funding under this priority, applicants and their projects must be eligible for one of the underlying program and must submit a specific form. The information in this form, which will accompany the application material for the applicable underlying program, will enable RD to determine whether the proposed project is eligible to receive reserved funds and, if so, to score the application in order to determine which projects will receive reserved funds.

4. Scoring applications. RD will score these applications based on:

• The underlying program's criteria.

• The proposed project's direct support of the objectives found in the strategic economic development or community development plan that it supports.

• Certain characteristics (as specified in the authorizing statute) of strategic economic development or community plan that the proposed project support.

The scores from these three areas will be summed, with higher scoring applications receiving priority for reserved funding.

5. Applications that do not received reserved funds. If an application does not receive reserved funds, it will be automatically competed with all other applications for remaining funds in that program's account. Reserved funding applications will compete based on only the score they receive on the underlying program's scoring criteria.

6. Awardees. Applicants who receive reserved funds for this priority will submit information on the project's measures, metrics, and outcomes to the appropriate entity(ies) monitoring the implementation of the plan.

7. Analysis. Because the objectives for a particular plan are driven by applicants and the multiple jurisdictions involved, RD has not yet identified a single set of metrics that would allow for parsing, or attributing, marginal benefits or impacts of the underlying program that would be achieved because of association with a multi-jurisdictional plan. However, RD is committed to the continual improvement of its collection and analysis of administrative and programmatic data to better understand the impact and benefit of support for projects associated with multi-jurisdictional plans.

III. Costs and Benefits

The cost to the individual applicant to apply for reserved funding is nominal. RD estimates the cost to complete the specific form to be no more than $300 assuming on average approximately 9 hours per form. The primary benefit of this action is to foster an environment of increased collaboration between project applicants and rural communities as they consider how to best use RD resources to address multi-jurisdictional needs, by leveraging federal, state, local or private funding, or otherwise capitalize upon the unique strengths of the rural area to support successful community and economic development.

Classification

This action has been reviewed under Executive Order (EO) 12866 and has been determined to be “economically significant” by the Office of Management and Budget. The EO defines a “economically significant regulatory action” as one that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this EO.

The Agency conducted a benefit-cost analysis to fulfill the requirements of EO 12866. In this analysis, the Agency identifies alternatives considered, the distributional effects of the reserved funding, the estimated costs of applying for and the potential benefits of receiving reserved funding to the various applicants under the eight programs included and to the Agency, the effect on the underlying programs, and the present value of the reserved funding.

Alternatives considered. The Agency did not identify meaningful alternatives to the proposed action.

Distributional effects. The proposed action will result in a distributional effect via “transfer payments” by directing Agency funds from projects that do not support a strategic economic development or community development plan to projects that do support such plans. (Transfer payments are monetary payments from one group to another that do not affect total resources available to society.) In general, the Agency does not expect the distributional effect to be large because many projects funded by the underlying programs already are found in areas covered by plans that would qualify for Section 6025 reserved funding. It is unknown as to how many such projects would apply for the reserved funding.

To the extent that there is an increase in Agency funding of projects that support such plans, the Agency expects areas within the region covered by a plan to be “better off” than if the project was not funded. The extent of this transfer, however, cannot be calculated at this time. In contrast, the proposed action may result in a negative impact by not funding a project that does not support such a plan.

Costs. In this analysis, the Agency estimates the cost to the public for applying for and receiving reserved funding is approximately $106,000 per year. With an estimated 374 applicants and 317 awardees per year, this equates to approximately $285 per applicant.

The number of applicants was determined by first estimating the most recent estimate of the number of applicants (e.g., from Paperwork Reduction Act packages) for each of the individual programs included and then determining the percentage of those applicants that are in an area covered by an Economic Development Administration (EDA) approved plan. Next, the number of underlying program applicants was multiplied by the percentage of applicants in an EDA-approved plan area and this result was then multiplied by an estimate of how many such potential applicants would actually apply for Section 6025 reserved funds. For Rural Business Devlepment Grants (RBDG), the same steps were used with one additional adjustment factor taking into account difference in funding levels between the “old” Rural Business Enterprise Grant (RBEG) and Rural Business Opportunity Grant (RBOG) programs and the new RBDG program.

The number of awardees was estimated in a similar fashion. For each included program, the number of awardees over the last few years was determined and then the percentage of those awardees that are in an area covered by an EDA approved plan was determined. Next, the number of underlying program awardees was multiplied by the percentage of awardees in an EDA-approved plan area and this result was multiplied by the percentage of potential applicants that would likely apply for Section 6025 reserved funds (as determined earlier for estimating the number of applicants). For RBDG, the same steps were used with two additional modifications—(1) using the same adjustment as for determining applicants to take into account difference in funding levels between the “old” RBEG and RBOG programs and the new RBDG program and (2) taking into account the requirement that no more than 10 percent of the RBDG funding could be used to support projects that support “RBOG” purposes.

In terms of costs to the Government for administering and implementing this project, the Agency estimated a cost of approximately $121,200 for reviewing and scoring the Section 6025 applications assuming 12 hours per application.

Benefits. The priority provided by Section 6025 is directed at only those eligible applications that are carried out solely in a rural area and that also support development plans on a multi-jurisdictional basis. As a result of this priority, the Agency expects that rural entities will access Rural Development programs in a manner that supports projects and initiatives that develop long-term community and economic growth strategies. The Agency will work with rural communities to consider how they might use Rural Development resources to address multi-jurisdictional needs, by leveraging federal, state, local or private funding, or otherwise capitalize upon the unique strengths of the rural area to support successful community and economic development. This priority will help to maximize the impact of resources available at all levels of government and ultimately help rural communities reach their full potential. Such projects will be more effective than “one-off” projects (i.e., those that meet an immediate need) in contributing to the larger strategic vision because they will be based on a strategy that takes into account the region's strengths and weaknesses, leveraging the area's assets in the most effective way possible.

Aligning projects with regional economic and community development plans helps engage individuals, organizations, local governments, institutes of learning, and the private sector in a meaningful conversation about what capacity building efforts would best serve the community in terms of creating jobs, creating investments, and generating regional wealth. In addition, the alignment helps take into account and, where possible, leverage other regional planning efforts, including the use of other federal funds and resources that support a region's goals and objectives. This helps prevent duplication, while better harnessing and directing limited federal resources for implementation efforts.

In sum, the Agency expects that the reservation of funds under this provision will result in an increased share of existing program funding going to projects that support strategic economic development or community development plans, thereby helping to address regional specific needs more directly and more generally strengthening the Agency's ability to help ensure a thriving rural economy.

Underlying Programs. The proposed action will not change the underlying provisions of the included programs (e.g., eligibility, applications, award decisions, scoring, and servicing provisions).

Present Values. Net present values were calculated using a 3 percent and a 7 percent discount rate for program levels covering Fiscal Years 2015 through 2019. The values were calculated for a baseline scenario (i.e., without the Section 6025 priority) and for a “with Section 6025 priority” scenario. For the Section 6025 priority scenario, 10 percent of each of the underlying programs' program level funds is assumed to be used to fund Section 6025 applications and the remaining 90 percent of each of the underlying programs' program level funds is used to fund “regular program” applications.

The results show that the net present value associated with funding Section 6025 priority applications ranges from $448 million to $466 million, but that there is no net difference between the baseline scenario and the “with Section 6025 priority” scenario. This occurs because Section 6025 neither increases nor decreases the program level fund allocation for any of the underlying programs.

Catalog of Federal Domestic Assistance

RD programs affected by this rulemaking are shown in the Catalog of Federal Domestic Assistance (CFDA) with numbers as indicated:

10.760—Water and Waste Disposal Systems for Rural Communities 10.766—Community Facilities Loans and Grants 10.768—Business and Industry Guaranteed Loan Program 10.351—Rural Business Development Grants

All active CFDA programs can be found at www.cfda.gov.

Executive Order 12372, Intergovernmental Review of Federal Programs

This action is not subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials.

Executive Order 12988, Civil Justice Reform

This interim rule has been reviewed under Executive Order 12988, Civil Justice Reform. RD has determined that this rule meets the applicable standards provided in section 3 of the Executive Order. Additionally, (1) all State and local laws and regulations that are in conflict with this rule will be preempted; (2) no retroactive effect will be given to the rule; and (3) administrative appeal procedures, if any, must be exhausted before litigation against the Department or its agencies may be initiated, in accordance with the regulations of the National Appeals Division of USDA at 7 CFR part 11.

National Environmental Policy Act

This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program” and 7 CFR 1794 “Environmental Policies and Procedures.” To be eligible for the set-aside funds, a project must meet all of the requirements of the applicable underlying program, including its National Environmental Policy Act (NEPA) requirements. Any project eligible for the set-aside funding is already an action included the underlying programs and such actions are covered by NEPA, and therefore categorically excluded. Therefore, RD has determined that this action does not constitute a major Federal action significantly affecting the quality of the human environment and, in accordance with the NEPA of 1969, 42 U.S.C. 4321 et seq., an Environmental Impact Statement is not required.

Unfunded Mandates Reform Act

This rule contains no Federal mandates (under the regulatory provisions of Title II of the Unfunded Mandates Reform Act of 1995) for State, local, and Tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the Unfunded Mandates Reform Act of 1995.

Regulatory Flexibility Act

Under section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), RD certifies that this rule will not have a significant economic impact on a substantial number of small entities. The rule affects applicants across eight RD programs. Many of these applicants are small businesses. For example, with the Business and Industry (B&I) Guaranteed Loan program alone, RD estimates that approximately 50 percent of the 1,117 active lenders in the current B&I portfolio are small entities as defined by the Regulatory Flexibility Act. Therefore, RD has determined that this rule will affect a substantial number of small entities.

However, RD has determined that the economic impact of the rule on these small entities will not be significant. The rule does not make any changes to the programs from which funds will be reserved. The rule will require applicants to submit an additional form if seeking funding that is reserved for projects that support strategic economic development or community development plans. Based on the data in the Paperwork Reduction Act (PRA) burden package, RD estimates that the cost to complete this form will, on average, be no more than $300. Therefore, this rule will not have a significant impact on small entities.

Executive Order 13132, Federalism

The policies contained in this rule do not have any substantial direct effect on states, on the relationship between the National Government and the states, or on the distribution of power and responsibilities among the various levels of government. Nor does this interim rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with states is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal Governments

This rule has been reviewed in accordance with the requirements of Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments.” Executive Order 13175 requires Federal agencies to consult and coordinate with tribes on a government-to-government basis on policies that have tribal implications, including regulations, legislative comments or proposed legislation, and other policy statements or actions that have substantial direct effects on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

Rural Development has assessed the impact of this rule on Indian tribes and determined that the interim rule does not, to our knowledge, have tribal implications that require tribal consultation under EO 13175. On August 21, 2014, however, Rural Development opened consultation on Farm Bill section 6025 pertaining to this regulation. Twenty one (21) Tribes participated in this consultation, and Rural Development received zero (0) formal and actionable comments. Primary Tribal concerns included definitions within the rule regarding “plans” and “multi-jurisdictional” strategies.

Rural Development plans to use an inclusive definition of “plans” so that a wide range of plans that Tribes currently have adopted and implemented may be used, as long as certain minimum standards are met. For instance the plan must be multi-jurisdictional and include:

• Economic conditions of the region;

• economic and community strengths, weaknesses, opportunities, and threats for the region;

• consideration of such aspects as the environmental and social conditions;

• strategies and implementation plan that build upon the region's strengths and opportunities ;=-and resolve the weaknesses and threats facing the region;

• performance measures to evaluate the successful implementation of the plan;

• support of key community stakeholders.

These minimum criteria do not pose any unique or additional implications or challenges for Tribes. The rule incentivizes additional planning, partnering and strategies between Tribes and other units of government/jurisdictions, such as other Indian Tribes, States, Counties, Cities, Townships, Towns, Boroughs, etc. These details of the rule, along with many others, were explained, contextualized and clarified during the consultation event on August 21, to provide a deeper understanding of the agency's underlying rationale in implementing this program in this manner.

If a Tribe requests additional consultation, Rural Development will work with the Office of Tribal Relations to ensure meaningful consultation is provided where changes, additions and modifications identified herein are not expressly mandated by Congress.

Paperwork Reduction Act

The information collection requirements contained in this interim rule have been submitted to the Office of Management and Budget (OMB). However, in accordance with the Paperwork Reduction Act of 1995, USDA RD will seek OMB approval of the reporting and recordkeeping requirements contained in this rule and hereby opens a 60-day public comment period.

Title: Strategic Economic and Community Development.

OMB Number: 0570-NEW.

Type of Request: New collection.

Abstract: This rule enables RD to reserve funds from eight RD programs for the specific purpose of funding projects that support strategic economic and community development plans.

In order to ensure a project qualifies for these reserved funds, RD must collect information on the proposed project, including how the project supports the implementation of a strategic community or economic development plan, and information on the plan itself in order to allow RD to prioritize projects if the reserved funding is insufficient to fund all eligible projects. The information required does not depend on the specific program whose reserved funding the applicant is seeking.

The following estimates are based on the average over the first 3 years the program will be in place.

Estimate of Burden: Public reporting burden for this collection of information is estimated to average 4.8 hours per response.

Respondents: Rural businesses; units of State, tribal, or local government;, instrumentalities of a State, tribal, or local government; non-profit organizations; assocations; academic institutions; public bodies; banks, credit unions, and other commercial lenders.

Estimated Number of Respondents: 374.

Estimated Number of Responses per Respondent: 1.85.

Estimated Number of Responses: 692.

Estimated Total Annual Burden (hours) on Respondents: 3,348.

E-Government Act Compliance

RD 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 citizens to access Government information and services electronically.

USDA Non-Discrimination Statement

The U.S. Department of Agriculture (USDA) prohibits discrimination against its customers, employees, and applicants for employment on the bases of race, color, national origin, age, disability, sex, gender identity, religion, reprisal and, where applicable, political beliefs, marital status, familial or parental status, sexual orientation, or all or part of an individual's income is derived from any public assistance program, or protected genetic information in employment or in any program or activity conducted or funded by the Department. (Not all prohibited bases will apply to all programs and/or employment activities.)

If you wish to file an employment complaint, you must contact your agency's EEO Counselor (PDF) within 45 days of the date of the alleged discriminatory act, event, or in the case of a personnel action. Additional information can be found online at http://www.ascr.usda.gov/complaint_filing_file.html.

If you wish to file a Civil Rights program complaint of discrimination, complete the USDA Program Discrimination Complaint Form (PDF), found online at http://www.ascr.usda.gov/complaint_filing_cust.html, or at any USDA office, or call (866) 632-9992 to request the form. You may also write a letter containing all of the information requested in the form. Send your completed complaint form or letter to us by mail at U.S. Department of Agriculture, Director, Office of Adjudication, 1400 Independence Avenue SW., Washington, DC 20250-9410, by fax (202) 690-7442 or email at [email protected]

Individuals who are deaf, hard of hearing, or have speech disabilities and you wish to file either an EEO or program complaint please contact USDA through the Federal Relay Service at (800) 877-8339 or (800) 845-6136 (in Spanish).

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I. Background and Discussion

RD administers a multitude of Federal programs for the benefit of rural America, ranging from housing and community facilities to infrastructure and business development. Its mission is to increase economic opportunity and improve the quality of life in rural communities by providing the leadership, infrastructure, capital, and technical support that enables rural communities to prosper. To achieve its mission, RD provides financial support (including direct loans, grants, and loan guarantees) and technical assistance.

Section 6025 of the 2014 Farm Bill amends the Consolidated Farm and Rural Development Act by adding a new section—Section 379H, Strategic Economic and Community Development. This section provides RD the ability to prioritize projects that are part of multi-jurisdictional strategic economic develoment or community development plans. This provides RD an important mechanism to further our mission by leveraging projects that spur regional economic and community development. In addition, this will reward communities that demonstrate best practices for furthering sustainable regional and community prosperity by bringing together key local and regional stakeholders and using long-term planning that integrates targeted investments across communities and regions.

II. Discussion of the Rule

The following paragraphs discuss each section of the interim rule and provide additional information on RD's intent in implementing each.

Purpose (§ 1980.1001)

This section summarizes the purpose of this subpart, which is to prioritize funding of projects that specifically further the implementation of strategic economic development and community development plans.

Programs (§ 1980.1002)

This section of the rule identifies the RD programs that the Secretary may elect to include for reserving funds for projects that support strategic economic development or community development plans. These programs are:

• Rural Community Facilities—community facility grants, guaranteed loans, and direct loans;

• Rural Utilities—water and waste disposal grants, guaranteed loans, and direct loans; and

• Rural Business and Cooperative Development—business and industry direct and guaranteed loans; and rural business development grants.

Applicability of Programs (§ 1980.1003)

One of the requirements for a project to be eligible for Section 6025 funds is that it meets the “applicable eligibility requirements of this title;” that is, the project must meet the applicable eligibility requirements for at least one of the programs identified within Section 6025 (referred to hereafter as the “underlying program(s)”) and from which the funding is reserved. For example, if a project is seeking Section 6025 funds from Community Facility grants, the project must meet the applicant and project eligibility requirements of the underlying Community Facility program.

It is also the intent of RD that all of the provisions of the underlying programs apply to applicants and their projects seeking funding under this subpart. These provisions include, but are not limited to, definitions, application requirements, and reporting, recordkeeping, and servicing requirements.

Of particular note is the incorporation by reference of the definitions of “rural area” for the underlying programs. Section 6025 requires a project seeking funding under this subpart to, in part, be “carried out solely in a rural area.” In addition, Section 6025 requires using the definitions of rural area for the underlying programs as defined in the applicable provisions of the Consolidated Farm and Rural Development Act, as amended. Rather than including a definition of “rural area” in this subpart, the applicable rural area definitions are incorporated by reference.

Finally, in order to implement Section 6025, RD found it necessary to supplement certain provisions of the underlying programs. This section thus also indicates where certain provisions of the underlying programs have been supplemented.

Funding (§ 1980.1004)

Section 6025 allows RD to reserve “an amount that does not exceed 10 percent of the funds made available for a fiscal year” for the three “functional categories”—Rural Community Facilities Category, Rural Utilities Category, and Rural Business and Cooperative Development Category. This section of the rule identifies how RD will implement the reservation of funds. Highlights of this section are:

• RD will reserve 10 percent of the funds appropriated each year to each underlying program, unless RD announces otherwise; and

• Any reserved funding not obligated by June 30 (or earlier if specified by RD) will be returned to the underlying program's regular funding account.

The following paragraphs discuss these and other provisions associated with funding.

Individual program reservation of funds. RD has determined that the language in Section 6025 allows it the flexibility to reserve funds on either a functional category basis or on an individual program basis. Specifically, Section 6025 refers to “all amounts made available for” and then lists two or more programs using the conjunction “or” to link them. For example, for the Rural Business and Cooperative Development Category, Section 6025 states (emphasis added), in part, made available for business and industry direct and guaranteed loans under section 310(B)a)(2)(A); or rural business development grants under section 310(B)(c).

For ease of implementation at both the program level and the administration level, RD will reserve funds on an individual program basis. The rule allows RD to reserve funds on a basis other than an individual program basis. If RD elects to do so, RD will notify the public by publishing a notice.

Which programs will participate each year? Unless RD decides otherwise, RD will reserve funds from each of the programs identified in Section 6025 each year. Section 6025 provides RD the flexibility to not reserve funds from a specific program in a given year. RD may decide not to reserve funding from a particular program for a variety of reasons, including, but not limited to, the amount of funds appropriated to an individual program in a given year. If RD makes such a decision, RD will announce in a notice which program(s) will not be included for that fiscal year.

Percentage of funding reserved. Unless RD decides to set a lower percentage, RD will reserve each fiscal year 10 percent of the program level funding appropriated to the underlying programs. Section 6025 states that RD may reserve “an amount that does not exceed 10 percent of the funds made available for a fiscal year for a functional category,” but the section does not prevent RD from reserving funds at a lower percentage.

The primary factors that RD will take into account for determining whether to set a lower percentage for a program are (1) the funding level for that program for the upcoming fiscal year and (2) based on past experience, the level of demand for reserved funding for the program. For example, if the demand for reserved funding for a program is consistently less than 10 percent, RD would likely reduce the percentage it reserves for this priority funding.

If RD decides to set a lower percentage, RD will announce in a notice the lower percentage(s) and for which program(s). Once the percentage to be used for a given fiscal year is determined, RD will not change that percentage so that the amount of funding reserved for each program will remain the same for the fiscal year.

Unobligated reserved funds. Per Section 6025, the reservation of funds may only extend through June 30th of the fiscal year in which the funds were first made available. Therefore, the rule sets for each of the underlying programs June 30th as the “default” date by which a program's unobligated reserved funds will be returned to the underlying program's regular funding account. (Funds would go unobligated in instances where the funding requests for a program's reserved funds are less than the amount reserved for that program.)

Section 6025, however, does not prohibit RD from establishing a date earlier than June 30th after which unobligated reserved funds are returned to the underlying program's account. RD may decide that an earlier date for a program is appropriate, for example, in order to coordinate the award of reserved funds with awards made for the underlying program. If RD elects to establish an earlier date, RD will announce in a notice the earlier date(s) and for which programs. This provision may result in programs having different dates for when unobligated reserved funds are returned to their respective underlying program's regular funding account. For example, the date for one program may be June 30th while the date for another program is March 31st.

Definitions (§ 1980.1005)

This section identifies the definitions that apply to this subpart. It also incorporates by reference definitions from the underlying regulations, including as discussed earlier the definitions of “rural area.” Lastly, if a term is defined in this subpart and in one of the underlying subparts, it has the meaning as defined in this subpart for purposes of receiving funding under this subpart. Terms specific to this subpart are discussed below.

Adopted. The statute requires “applications involving State, county, municipal, or tribal governments shall include an indication of consistency with an adopted regional economic or community development plan.” The primary consideration in defining “adopted” is that the appropriate entity has, or entities have, officially approved the plan for implementation. The appropriate entity or entities will vary among plans and may be, for example, a governing body or planning board.

Carried out solely in a rural area. To be eligible for reserved funding, the statute requires that the project be “carried out solely in a rural area.” RD projects funded under programs included in this subpart already require some degree of “rurality” to the project or the services provided by the project. To ensure that a rural area project supporting a regional economic development or community development plan contributes to such a plan, RD is focusing on the phrase “carried out solely” to mean either one of the following:

• The entire project is physically located in a rural area or

• The beneficiaries of the service(s) provided through the project must either reside in a rural area (in the case of individuals) or be located in a rural area (in the case of entities).

The first metric focuses on the physical location of the project and without regard as to who would benefit from the project. For example, a hospital built entirely in a rural area would be an eligible project regardless if it provides health care services to non-rural residents.

The second metric focuses on where the beneficiaries of the services provided are located. For example, consider a project designed to provide water to residents of a rural area, but part of the project is located in a non-rural area and part of the project is located in a rural area. This project would not be an eligible project under the first metric (because part of the project is located in a non-rural area), but would be an eligible project under the second metric because the beneficiaries of the services (the individuals) reside entirely in a rural area. If, however, some of the beneficiaries reside in a non-rural area, then this project would not be an eligible project under either metric.

RD notes that projects must first be eligible under the appropriate underlying program in order to be considered eligible under this subpart. Then, the project must meet one of the two metrics established under this subpart. In most instances, meeting the underlying program's eligibility requirement will mean that the project already meets one or the other of these two metrics.

Investment. Two criteria that the statute requires RD to take into consideration when evaluating a plan (see discussion on Scoring below) are investments from other Federal agencies and investments from philanthropic organizations. For purposes of this subpart, RD is defining investment to mean either monetary or non-monetary contributions because both types of contributions can be important components to implementing the plan, especially in communities with limited resources.

Jurisdiction and multi-jurisdictional. The statute requires that a project support a community or economic development plan on a “multi-jurisdictional” basis. To clarify how RD will consider this requirement, RD is first defining “jurisdiction” and then “multi-jurisdictional.”

The principal component of “jurisdiction” is a unit of government, such as a State, Indian tribe, county, city, township, town, borough, etc. However, a plan is not always developed by, nor necessarily targeted at, such units of governments. For example, there are regional authorities, such as regional planning organizations, that may assist with developing and implementing regional economic development or community development plans. Thus, RD intends the definition of jurisdiction to be broad enough to take into account such entities.

Using the definition of jurisdiction, RD is defining “multi-jurisdictional” to mean more than one jurisdiction. This provides the broadest concept.

Philanthropic organization. As noted earlier under Investment, one of the criteria for prioritizing plans is investment from philanthropic organizations. RD is seeking to implement a definition that is sufficient to include any entity whose mission is to provide monetary, technical assistance, or other items of value for religious; charitable; scientific; literary; or educational purposes. Such entities include, but are not limited to, private trusts, foundations, churches, and charitable organizations.

Plan. As noted earlier in this preamble, the purpose of Section 6025 is to fund projects that support the implementation of strategic economic development or community development plans.

RD intends the definition of “plan” be inclusive rather than exclusive, but at the same time require the plan to address certain minimum elements in order to be effective in improving the economies of the region(s) addressed by the plan. RD examined plan requirements associated with other Federal agencies.

For the purposes of this subpart, a plan is a comprehensive economic development or community development strategy that outlines a region's vision for shaping its economy. This strategy would cover, as appropriate and necessary, a wide range of aspects such as natural resources, land use, transportation, and housing. Such plans bring together key community stakeholders to create a roadmap to diversify and strengthen their communities and to build a foundation to create the environment for regional economic prosperity.

To be an acceptable plan for the purposes of the subpart, the plan must be supported by the jurisdictions affected by the plan and must address each of the following elements:

• The economic conditions of the region;

• the economic and community strengths, weaknesses, opportunities, and threats for the region, to include consideration of such aspects as the environmental and social conditions;

• strategies and implementation plan that build upon the region's strengths and opportunities and resolve the weaknesses and threats facing the region;

• performance measures to evaluate the successful implementation of the plan; and

• support of key community stakeholders.

RD notes that inclusion of each of the five elements does not speak to the quality of the plan (as discussed below under Scoring) or to whether the plan has been adopted (as discussed earlier under Adopted in the Definitions section of the preamble).

Project. One of the eligibility criteria under this statute for projects seeking reserved funding under this subpart is that the project meets the eligibility requirements of the underlying program. While the programs identify such eligibility requirements, they do not all contain a definition of a “project.” For this subpart, RD is providing a definition of project in broad terms to be “the eligible proposed use(s) for which funds are requested as described in the application material submitted to the Agency for funding under the underlying program.” “Eligible proposed uses(s)” refers to those proposed uses that are eligible for funding under the underlying program. The intent of this definition is to cover the various types of projects eligible under the underlying programs.

Project Eligibility (§ 1980.1010)

The statute identifies three criteria that a project must meet in order to be eligible for reserved funding. These criteria, which RD is implementing directly from the statute, are:

• The project must meet the project eligibility criteria of the applicable program identified in § 1980.1002;

• The project must be carried out solely in a rural area; and

• The project must support the implementation of a strategic economic development or community development plan on a multi-jurisdictional basis.

The first criterion simply means that a project must meet the project eligibility criteria of the underlying program. For example, if a project is applying for reserved funds from the Community Facility Grant program, the project must meet the eligibility criteria for that program.

For implementing the second criterion, RD is defining “carried out solely in a rural area.” See discussion under Definitions for more information.

For the third criterion, RD is shortening the criterion to read “supports a plan on a multi-jurisdictional basis” and is using the definition of “plan” to address the statute's “strategic community and economic development plan.”

Applications (§ 1980.1015)

The section of the rule identifies two main components as follows:

1. Underlying Program Applications. Applicants must submit all of the application materials associated with the underlying program from which they are seeking reserved funding.

2. Section 6025 Specific Application Information. Applicants must submit information that addresses several items specific to being eligible to apply under this subpart and to allow RD to score the project and the plan it supports (see Scoring section below). The following paragraphs identify what information an applicant must provide when seeking funding under this subpart. If the application for the underlying program already requests the same information, the applicant is not required to repeat that information.

The applicant (§ 1980.1015(a)). In addition to basic information on the applicant (i.e., name, telephone, number, email address), this section also requires identification of whether the applicant includes a State, county, municipal, or tribal government. It is necessary to obtain this identification because there is a statutory requirement that applications involving such governmental entities must include an indication of consistency with an adopted regional economic or community development plan.

The plan (§ 1980.1015(b)). An applicant is required to identify by name the plan being supported by the project, the date the plan became effective, and the dates the plan is to remain in effect. The applicant is also required to provide contact information for the appropriate entity(ies) who prepared the plan.

As noted below in scoring, applications will be scored, in part, on the number of a plan's objectives that a project will directly support for implementing the plan. To enable RD to score an application in this regard, the applicant must provide from the most current version of the plan a list and description of each objective that the project will directly support. To provide this information, the applicant may submit copies of the relevant pages from the plan or their own list and descriptions.

Applications will be also scored on the quality of the plan based on five criteria, as established in Section 6025—(1) collaboration, (2) regional resources, (3) investment from other Federal agencies, (4) investment from philanthropic organizations, and (5) clear objectives and the ability to establish measurable performance measures and track progress toward meeting the objectives. The Agency will evaluate each plan based on information provided by the applicant on each of these five criteria. Applicants may provide this information by submitting copies of the relevant pages from the plan or providing their own descriptions. In either case, failure to provide sufficient detail may result in a lower score for the application.

Because the criterion for collaboration is based, in part, on the collaboration of stakeholders within the service area of the plan, the applicant is also required to describe the service area of the plan. Lastly, the applicant may provide, if available, a Web site address to the plan.

While the applicant is not required to submit a copy of the entire plan, RD encourages the applicant to provide a copy of relevant portions of the plan to facilitate RD review and scoring of the project and the plan.

The project (§ 1980.1015(c)). With regard to the project itself, the applicant is required to provide sufficient information on the project to enable RD to determine whether the project is “carried out solely in a rural area” as defined in this subpart. If the application material for the underlying program is sufficient to allow RD to make this determination, the applicant does not need to submit additional information. However, if it is not sufficient, the applicant must provide the necessary information showing that either the project will be physically located in a rural area or that the beneficiaries of the project's services either reside in (if an individual) or are located in (if an entity) a rural area.

The applicant is also required to provide a detailed description of how the project directly supports one or more of the plan's objectives (which are identified by the applicant under the information being requested on the plan, see above). Failure to provide sufficient information to demonstrate direct support may result in a lower score for the application.

Lastly, applicants that include a State, county, municipal, or tribal government must submit a letter from the appropriate entity(ies) who approved the plan (such as an elected or appointed official) certifying that the applicant's project is consistent with the plan and that the plan has been adopted.

Agency Coordination (§ 1980.1015(d)). Applicants are required to submit certain information that will assist RD to coordinate the programs that provide funding to this subpart.

1. Program areas. The applicant is required to identify the program area for which the applicant is seeking funds—community facility program area, the water and waste disposal program area, or the rural business and cooperative development program area. If an applicant submits an application seeking funds from more than one of these program areas, the applicant would identify each program area.

2. Multiple applications. An applicant may submit more than one application in a fiscal year for funding under this subpart. For example, an applicant may submit three applications, one for each of the three program areas. In this case, the applicant would identify in each application information on the other two applications. The information to be submitted is: The name(s) of the project(s), the program area(s) for which funds are being sought, and the dates that each application was submitted.

An applicant may submit applications at different times of the fiscal year. For example, an applicant may submit an application in November of a fiscal year and then another application in March of that same fiscal year. In such instances, the applicant would only need to identify the November application when submitting the March application.

3. Previous applications. If an applicant previously submitted one or more applications for funding under this subpart, the applicant is required to submit certain information in the current application concerning each of the previously submitted applications as follows:

• The date the previous application was submitted;

• The name of the project;

• The specific program area(s) from which funds were sought;

• Whether or not the project was selected for funding; and

• If the applicant received an award under this subpart, the specific program(s) that provided the funding; the date and amount of the award; and whether any of the funding came from funds reserved under this subpart.

Approved applications. Section 6025(e)(1) includes provisions that allow applicants who submitted applications prior to the effective date of this subpart that were approved, but not funded, to revise their applications to apply for reserved funding. RD will issue guidance on how these applications are to be resubmitted under a notice published in the Federal Register at the appropriate time.

Scoring (§ 1980.1020)

It is possible that the total amount of funds being requested by applicants for a particular program under this subpart may exceed the total reserved funds available for that program. To address this issue, RD will score projects on the basis of both the underlying program's scoring criteria, including discretionary points, and the scoring criteria, as described below, specific to this subpart.

To rank applications competing for the reserved funding under this subpart, RD will score an application considering two sets of scoring criteria (in addition to the scoring criteria of the applicable underlying program): (1) The number of a plan's objectives that the project supports (maximum of 10 points) and (2) the plan itself based on the five criteria identified in Section 6025 (maximum of 10 points). The maximum number of “Section 6025” points that a project can receive is 20 points.

Scoring how the project supports a plan (maximum score of 10 points). RD will score a project's support for implementing the plan as follows:

• If the project directly supports implementation of three or more of the plan's objectives, the application will receive 10 points.

• If the project directly supports implementation of two of the plan's objectives, the application will receive 5 points.

• If the project directly supports implementation of less than two of the plan's objectives, the application will receive no points.

Scoring the plan supported by the project (maximum score of 10 points). RD will also score the plan that the project supports. RD will use the five criteria identified in Section 6025 and as discussed below. RD will award two points for each criterion that a plan demonstrates. The Agency will award these points on the basis of what is contained in the application. Applicants are encouraged to submit the relevant pages of the most current version of the Plan to provide documentation of these criteria.

Collaboration. If the plan was developed through the collaboration of multiple stakeholders in the service area of the plan, including the participation of combinations of stakeholders, such as State, local, and tribal governments, nonprofit institutions, institutions of higher education, and private entities, RD will award two points.

Regional resources. If the plan demonstrates an understanding of the region's assets (including natural resources, human resources, infrastructure, and financial resources) that could support the plan, RD will award two points.

Investment—other Federal agencies. If the development of the plan or the activities and actions taken to implement the plan include monetary or non-monetary contributions from Federal agencies other than USDA, RD will award two points.

Investment—philanthropic organizations. If the plan includes monetary or non-monetary contributions from philanthropic organizations, RD will award two points.

Objectives, measures, tracking. If the plan contains clear objectives, the ability to establish measurable performance measures, and the ability to track progress towards meeting the plan's objectives, RD will award two points.

Calculating an Application's Total Score

RD will calculate an application's total score by summing the application's scores received from (1) the underlying program, (2) the two sets of scoring criteria under this subpart, and (3) any discretionary points that may awarded by the State Director or the Administrator under the provisions of the applicable underlying program. RD will give higher priority for the reserved funding to higher scoring applications, based on the combined score.

Award Process (§ 1980.1025)

Unless RD indicates otherwise in a notice, the award process for the underlying program will be used to determine which projects receive funding under this subpart.

In years where funding is made available under this subpart, if a project is not awarded funds under this subpart, it is still eligible to compete for funds through the underlying program. Such projects will be scored only according to the criteria in the underlying program including any discretionary points. Any points awarded through the Section 6025 scoring criteria will not be included when competing with other projects in the underlying program. However, in years where funding is not made available under this subpart, projects are still eligible to compete for funding under the applicable underlying program. The scores for such projects when competing for underlying program funding will include the score assigned to the application under § 1980.1020(b) as described in a notice published in the Federal Register. The Agency intends to prioritize such applications in this manner even if it chooses not to reserve funds in a particular year as permitted by statute.

Evaluation of Project Information (§ 1980.1026)

An applicant that receives funding under this subpart is required to submit to the Agency information on the project's measures, metrics, and outcomes to the appropriate entity(ies) monitoring the implementation of the plan. Applicants would submit this information to the Agency for as long as the plan is in effect.

III. Invitation To Comment

RD encourages interested persons and organizations to submit written comments, which may include data, suggestions, or opinions. Commenters should include their name, address, and other appropriate contact information. If persons with disabilities (e.g., deaf, hard of hearing, or have speech difficulties) require an alternative means of receiving this notice (e.g., Braille, large print, audiotape) in order to submit comments, please contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

Comments may be submitted by any of the means identified in the ADDRESSES section. If comments are submitted by mail or hand delivery, they should be submitted in an unbound format, no larger than letter-size, suitable for copying and electronic filing. If confirmation of receipt is requested, a stamped, self-addressed, postcard or envelope should be enclosed. RD will consider all comments received during the comment period and will address comments in the preamble to the final regulation.

List of Subjects in 7 CFR Part 1980

Agriculture, Business and industry, Community facilities, Credit, Disaster assistance, Livestock, Loan programs—agriculture, Loan programs—business, Loan programs—housing and community development, Low and moderate income housing, Reporting and recordkeeping requirements, Rural areas.

For the reasons set forth in the preamble, 7 CFR part 1980 is amended as follows:

PART 1980—GENERAL 1. The authority citation for part 1980 continues to read as follows: Authority:

5 U.S.C. 301, 7 U.S.C. 1989

2. Subpart K is added to read as follows: Subpart K—Strategic Economic and Community Development GENERAL Sec. 1980.1001 Purpose. 1980.1002 Programs. 1980.1003 Applicability of Program Regulations. 1980.1004 Funding. 1980.1005 Definitions. 1980.1006-1980.1009 [Reserved] 1980.1010 Project eligibility. 1980.1011-1980.114 [Reserved] 1980.1015 Applications. 1980.1016-1980.1019 [Reserved] 1980.1020 Scoring. 1980.1021-1980.1024 [Reserved] 1980.1025 Award process. 1980.1026 Evaluation of Project information. 1980.1027-1980.1100 [Reserved]
§ 1980.1001 Purpose.

The purpose of this subpart is to give priority to Projects that support implementation of strategic economic development and community development plans on a Multi-jurisdictional basis for applications submitted for the programs identified in § 1980.1002.

§ 1980.1002 Programs.

The Agency may elect to reserve funds from one or more of the programs listed in paragraphs (a) through (h) of this section.

(a) Community Facility Loans (7 CFR part 1942, subpart A).

(b) Fire and Rescue and Other Small Community Facilities Projects (7 CFR part 1942, subpart C).

(c) Community Facilities Grant Program (7 CFR part 3570, subpart B).

(d) Community Programs Guaranteed Loans (7 CFR part 3575, subpart A).

(e) Water and Waste Disposal Programs Guaranteed Loans (7 CFR part 1779).

(f) Water and Waste Loans and Grants (7 CFR part 1780, subparts A, B, C, and D).

(g) Business and Industry Guaranteed Loanmaking and Servicing (7 CFR part 4279, subparts A and B; 7 CFR part 4287, subpart B).

(h) Rural Business Development Grants (7 CFR part 4280, subpart E).

§ 1980.1003 Applicability of Program Regulations.

Except as supplemented by this subpart, the provisions of the programs identified in § 1980.1002 are incorporated into this subpart.

§ 1980.1004 Funding.

Unless the Agency publishes a notice that indicates otherwise, the Agency will reserve funds according to the procedures specified in paragraphs (a) through (c) of this section for each of the programs identified in § 1980.1002 each fiscal year.

(a) Individual program basis. The Agency will reserve funds on an individual program basis.

(b) Percentage of funds. The Agency will reserve 10 percent of the funds made available in a fiscal year to each program identified in § 1980.1002 unless the Agency specifies a different percentage. If the Agency specifies a different percentage, the Agency will publish a notice indicating the percentage. The Agency may reserve the same or different percentages for each program in a single fiscal year.

(c) Unobligated funds. If a program's funds reserved under this subpart remain unobligated as of June 30 of the fiscal year in which the funds are reserved, the Agency will return such remaining funds to that program's regular funding account for obligation for all eligible Projects in that program.

§ 1980.1005 Definitions.

In addition to the definitions found in the regulations for the programs identified in § 1980.1002, the following definitions apply to this subpart. If the same term is defined in any of the regulations for the programs identified in § 1980.1002, for purposes of this subpart, that term will have the meaning identified in this subpart.

Adopted means that a Plan has been officially approved for implementation by the appropriate entity or entities in the Jurisdiction(s) affected by the Plan (for example, a State, Indian Tribe, county, city, township, town, borough, etc.).

Agency means the Rural Business-Cooperative Service, the Rural Housing Service, or the Rural Utilities Service, or their successor agencies.

Carried Out Solely in a rural area means either:

(1) The Project is physically located in a rural area; or

(2) All of the beneficiaries of the services provided by the Project either reside in a rural area (for individuals) or are located in a rural area (for businesses).

Investment means either monetary or non-monetary contributions to the implementation of the Plan's objectives.

Jurisdiction means a unit of government or other entity with similar powers. Examples include, but are not limited to: City, county, district, special purpose district, township, town, borough, parish, village, State, and Indian tribe.

Multi-Jurisdictional means at least two Jurisdictions.

Philanthropic organization means an entity whose mission is to provide monetary, technical assistance, or other items of value for religious, charitable, scientific, literary, or educational purposes.

Plan means a comprehensive economic development or community development strategy that outlines a region's vision for shaping its economy, and includes, as appropriate and necessary, consideration of such aspects as natural resources, land use, transportation, and housing. Such Plans bring together key community stakeholders to create a roadmap to diversify and strengthen their communities and to build a foundation to create the environment for regional economic prosperity. To be acceptable under this subpart, the Plan must be vetted and supported by the Jurisdictions affected by the Plan and must contain at a minimum the following:

(1) A summary of the economic conditions of the region;

(2) An in-depth analysis of the economic and community strengths, weaknesses, opportunities, and threats for the region, to include consideration of such aspects as the environmental and social conditions;

(3) Strategies and implementation Plan to build upon the region's strengths and opportunities and to resolve the weaknesses and threats facing the region;

(4) Performance measures that evaluate the successful implementation of the Plan's objectives; and

(5) Support of key community stakeholders.

Project means the eligible proposed use(s) for which funds are requested as described in the application material submitted to the Agency for funding under the underlying program.

§§ 1980.1006-1980.1009 [Reserved]
§ 1980.1010 Project eligibility.

In order to be eligible to receive funds under this subpart, the Project must meet the following:

(a) The Project must meet the Project eligibility criteria of the applicable program identified in § 1980.1002;

(b) The Project must be Carried Out Solely in a rural area; and

(c) The Project must support the implementation of a Plan on a Multi-Jurisdictional basis.

§§ 1980.1011-1980.1014 [Reserved]
§ 1980.1015 Applications.

In addition to the application material specific to the applicable program identified in § 1980.1002, each applicant seeking funding under this subpart must provide the information specified in paragraphs (a) through (d) of this section.

(a) Applicant. The applicant must submit:

(1) Name of the applicant;

(2) Telephone number of the applicant;

(3) Email address of the applicant; and

(4) A statement indicating whether or not the applicant is or includes one of the following:

(i) State government;

(ii) County government;

(iii) Municipal government; or

(iv) Tribal government.

(b) Plan. Each application must include the following information:

(1) The name of the Plan the Project supports;

(2) The date the Plan became effective;

(3) The dates the Plan is to remain in effect;

(4) Contact information for the entity(ies) approving the Plan, including name(s), telephone number(s), and email address(es);

(5) As found in the most current version of the Plan, the name and description of each objective that the Project will directly support;

(6) A description of the service area of the Plan;

(7) Documentation that the Plan was developed through the collaboration of multiple stakeholders in the service area of the Plan, including the participation of combinations of stakeholders;

(8) Documentation that the Plan demonstrates an understanding of the applicable region's assets that could support the Plan;

(9) Documentation indicating whether or not the Plan includes monetary or non-monetary contributions from Federal agencies other than the U.S. Department of Agriculture;

(10) Documentation indicating whether or not the Plan includes monetary or non-monetary contributions from one or more Philanthropic organizations.

(11) Documentation that the Plan contains:

(i) Clear objectives and

(ii) The ability to establish measurable performance measures and to track progress towards meeting the Plan's objectives; and

(12) If available, a Web site address link to the Plan.

(c) Project. Each application must include the following information:

(1) The name of the Project;

(2) Sufficient detail to allow the Agency to determine that the Project has been Carried Out Solely in a rural area as defined in § 1980.1005;

(3) A detailed description of how the Project directly supports each objective identified under paragraph (b)(5) of this section; and

(4) If the application is from an applicant that includes a State, county, municipal, or tribal government, a letter from the appropriate entity(ies) indicating that:

(i) The Project is consistent with the Plan and

(ii) The Plan has been Adopted.

(d) Agency coordination. To help ensure coordination among the programs included in this subpart, the Agency is requiring applicants provide the Agency the information in paragraphs (d)(1) through (3) of this section.

(1) Program areas. Identify the program area(s) (i.e., Community Facilities, Water and Waste, Rural Business and Cooperative Development) from which funds are being sought.

(2) Multiple applications. If the applicant is submitting in the same fiscal year more than one application for funding under this subpart, identify in each application the other application(s) by providing:

(i) The name(s) of the Project(s);

(ii) The program area(s) for which funds are being sought; and

(iii) The date that each application was submitted to the Agency.

(3) Previous applicants. If the applicant has previously submitted one or more applications for funding under this subpart, the applicant must provide in the current application the following information for each previous application:

(i) The date the application was submitted;

(ii) The name of the Project;

(iii) The program area(s) from which funds were sought;

(iv) Whether or not the Project was selected for funding; and

(v) If the Project was selected for funding,

(A) The name(s) of the specific program(s) that provided the funding;

(B) The date and amount of the award; and

(C) Whether any of the funding came from the funds reserved under this subpart.

§§ 1980.1016-1980.1019 [Reserved]
§ 1980.1020 Scoring.

The Agency will score each eligible application seeking funding under this subpart as described in this section.

(a) Underlying program scoring. The Agency will score each application using the criteria for the applicable program identified in § 1980.1002. The maximum number of points an application can receive under this paragraph is based on the scoring criteria for the applicable underlying program, including any discretionary points that may be awarded.

(b) Section 6025 scoring. The Agency will score each application using the criteria identified in paragraphs (b)(1) and (2) of this section. The maximum number of points an application can receive under this paragraph is 20 points.

(1) Project's direct support of a Plan's objectives. The Agency will score each application on the basis of the number of a Plan's objectives the Project directly supports. The maximum score under this paragraph is 10 points.

(i) If the Project directly supports implementation of 3 of the Plan's objectives, 10 points will be awarded.

(ii) If the Project directly supports implementation of 2 of the Plan's objectives, 5 points will be awarded.

(iii) If the Project directly supports implementation of less than 2 of the Plan's objectives, no points will be awarded.

(2) Characteristics of a Plan. The Agency will score the Plan associated with a project based upon the characteristics of the Plan, which are identified in paragraphs (b)(2)(i) through (v) of this section. Applicants must supply sufficient documentation that demonstrates to the Agency the criteria identified in paragraphs (b)(2)(i) through (v) of this section. The maximum score under this paragraph is 10 points.

(i) Collaboration. If the Plan was developed through the collaboration of multiple stakeholders in the service area of the Plan, including the participation of combinations of stakeholders, such as State, local, and tribal governments, nonprofit institutions, institutions of higher education, and private entities, two points will be awarded.

(ii) Resources. If the Plan demonstrates an understanding of the applicable regional assets that could support the Plan, including natural resources, human resources, infrastructure, and financial resources, two points will be awarded.

(iii) Other Federal Agency Investments. If the Plan includes Investments from Federal agencies other than the U.S. Department of Agriculture, two points will be awarded.

(iv) Philanthropic organization Investments. If the Plan includes Investments from Philanthropic organizations, two points will be awarded.

(v) Objectives and performance measures. If the Plan contains clear objectives and the ability to establish measurable performance measures and to track progress toward meeting the objectives, two points will be awarded.

(c) Total score. The Agency will sum the scores each application receives under paragraphs (a) and (b) of this section in order to rank applications.

§§ 1980.1021-1980.1024 [Reserved]
§ 1980.1025 Award process.

(a) Unless RD indicates otherwise in a notice, the award process for the applicable underlying program will be used to determine which Projects receive funding under this subpart.

(b) In years when funding is made available under this subpart, Projects not receiving funding under this subpart are eligible to compete for funding under the applicable underlying program. The scores for such Projects when competing for underlying program funding will not include the score assigned to the application under § 1980.1020(b).

(c) In years when funding is not made available under this subpart, Projects are eligible to compete for funding for the applicable underlying program. The scores for such Projects when competing for underlying program funding will include the score assigned the application § 1980.1020(b) as described in a notice published in the Federal Register.

§ 1980.1026 Evaluation of Project information.

To assist the Agency in evaluating the effectiveness of this subpart, each applicant that receives funding under this subpart must submit to the Agency all measures, metrics, and outcomes of the Project that are reported to the entity(ies) who are monitoring Plan implementation. This information will be submitted for as long as the Plan is in effect.

§§ 1980.1027-1980.1100 [Reserved]
Dated: May 12, 2015. Lisa Mensah, Under Secretary, Rural Development. Dated: May 15, 2015. Michael Scuse, Under Secretary, Farm and Foreign Agricultural Services.
[FR Doc. 2015-12163 Filed 5-19-15; 8:45 am] BILLING CODE 3410-XY-P
DEPARTMENT OF COMMERCE Bureau of Economic Analysis 15 CFR Part 801 [Docket No. 150108021-5409-01] RIN 0691-AA84 International Services Surveys: BE-I80, Benchmark Survey of Financial Services Transactions Between U.S. Financial Services Providers and Foreign Persons AGENCY:

Bureau of Economic Analysis, Department of Commerce.

ACTION:

Final rule.

SUMMARY:

This final rule amends regulations of the Bureau of Economic Analysis (BEA), Department of Commerce, to reinstate reporting requirements for the BE-180, Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons. Benchmark surveys are conducted every five years; the prior survey covered 2009. For the 2014 benchmark survey, BEA is making one change in the survey data items to collect data on equity- and debt-related underwriting transactions separately. This mandatory survey is conducted under the authority of the International Investment and Trade in Services Survey Act (the Act). Unlike most other BEA surveys conducted pursuant to the Act, a response is required from persons subject to the reporting requirements of the BE-180, Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons, whether or not they are contacted by BEA, to ensure Complete coverage of financial services transactions between U.S. financial services providers and foreign persons.

DATES:

This final rule is effective June 19, 2015.

FOR FURTHER INFORMATION CONTACT:

Christopher Stein, Chief, Services Surveys Branch (BE-50), Balance of Payments Division, Bureau of Economic Analysis, U.S. Department of Commerce, Washington, DC 20230; phone (202) 606-9850.

SUPPLEMENTARY INFORMATION:

On January 27, 2015, BEA published a notice of proposed rulemaking that set forth revised reporting criteria for the BE-180, Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons (80 FR 4228-4231). BEA received four comments on the proposed rule.

One comment was written on behalf of hedge fund managers who are subject to BE-180 reporting requirements. The letter stated that the BE-180 survey is not well suited to hedge funds and that, for these respondents, the burden of reporting is significant. The commenter made two recommendations: (1) Entities that are not contacted by BEA should have no reporting responsibilities (similar to other BEA surveys); and (2) BEA should not extend reporting by U.S. investment managers to other BEA surveys. BEA is very concerned about respondent burden and has employed several approaches to reduce the burden where possible. However, BEA does not adopt the above two recommendations because of the statistical needs that govern how the data are collected and tabulated. If BEA does not require responses from all persons subject to the reporting requirements of the BE-180, we could not ensure that a complete and accurate sample frame is maintained in the non-benchmark years. Thus, lack of this information in a benchmark year would result in incomplete data in our tabulated information in non-benchmark years. To aid in communicating filing requirements, BEA will consider what additional guidance it can offer to hedge fund filers, possibly by providing expanded form instructions and Frequently Asked Questions (FAQs).

Another comment was written on behalf of the international banking community in the United States. The letter requested that BEA adopt an accommodating approach to allow impacted companies adequate time to complete the BE-180 survey. As the BE-180 applies to a broader audience and has reporting requirements that differ from the related BE-185 Quarterly Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons, the commenter stated that additional time to comply was necessary to help alleviate the filing burden. To provide ample time for respondents to complete and file the BE-180 survey, BEA will accept filing extension requests through the October 1, 2015 due date. Respondents can request extensions of 30 days or less over the phone or in writing; requests of greater than 30 days must be provided in writing. Additionally, any respondent that chooses to file electronically through BEA's eFile system will automatically receive a 30 day extension.

The third comment was written on behalf of the commercial energy industry and was concerned with the BE-180 definition of financial services provider. The commenter requested that BEA provide clarification with regard to what information should be reported by principals to commodity contracts. The commenter recommended that if BEA is unable to provide this clarification, the obligation to file the BE-180 should be limited only to those entities that are contacted by BEA. We will consider what additional guidance it can offer to clarify how commodity-related activities are to be reported, including expanded form instructions and FAQs.

The final comment was written on behalf of asset management firms that are subject to BE-180 reporting requirements. The letter stated that the impact of the BE-I80 survey and the reporting burden for entities in this industry are significant. The commenter made three recommendations: (1) Entities that are not contacted by BEA should have no reporting responsibilities (similar to other BEA surveys); (2) BEA should raise the $3 million monetary threshold for mandatory reporting on the BE-180 of financial services transactions; and (3) BEA should provide additional guidance to asset managers in order to collect meaningful Survey data. BEA does not adopt the first recommendation because of the statistical needs that govern data collection and tabulation. As previously stated, BEA could not ensure that a complete and accurate sample frame is maintained in the non-benchmark years if we did not require responses from all persons subject to the reporting requirements of the BE-180, which is a benchmark survey. BEA does not adopt the second recommendation because the $3 million threshold for mandatory reporting on the BE-180 survey is necessary to ensure an accurate sample frame for the quarterly BE-I85 survey. Therefore, this threshold is unchanged from the previous benchmark survey. Regarding the third recommendation, BEA will consider what additional guidance it can offer to asset managers, possibly in the form of expanded instructions and FAQs, to aid in communicating the filing requirements.

The change in data items collected (described in the Description of Changes section below) will be reflected in the final version of the BE-180 survey form.

This final rule adds 15 CFR part 801.9 to set forth the reporting requirements for the BE-180, Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons. BEA conducts the BE-180 under the authority provided by the International Investment and Trade in Services Survey Act (22 U.S.C. 3101-3108) and by Section 5408 of the Omnibus Trade and Competitiveness Act of 1988.

By rule issued in 2012 (77 FR 24373), BEA established guidelines for collecting data on international trade in services and direct investment through notices, rather than through rulemaking. This final rule amends the regulations to require a response from persons subject to the reporting requirements of the BE-180, whether or not they are contacted by BEA, to ensure complete coverage of financial services transactions between U.S. financial services providers and foreign persons.

The BE-180 survey covers financial services transactions with foreign persons. In non-benchmark years, the universe estimates covering these transactions are derived from the sample data reported on BEA's BE-185, Quarterly Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons.

The data are used by BEA to estimate the financial services component of the U.S. International Transactions Accounts and other economic accounts compiled by BEA. The data are needed to monitor U.S. exports and imports of financial services; analyze their impact on the U.S. and foreign economies; support U.S. international trade policy on financial services; and assess and promote U.S. competitiveness in international trade in services. In addition, these data will improve the ability of U.S. businesses to identify and evaluate market opportunities.

The services covered by the BE-180 include the following transactions: (1) Brokerage services related to equity transactions; (2) other brokerage services; (3) underwriting and private placement services; (4) financial management services; (5) credit-related services, except credit card services; (6) credit card services; (7) financial advisory and custody services; (8) securities lending services; (9) electronic funds transfer services; and (10) other financial services.

Description of Changes From the 2009 BE-180 Survey

The changes amend the regulations and the survey form for the BE-180 Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons. These amendments include changes in the data items collected and questionnaire design. Under this final rule and unlike many other BEA surveys conducted pursuant to the Act, persons subject to the reporting requirements of the BE-180 are required to respond whether or not they are contacted by BEA. Also, we are adding one item to the 2014 BE-180 survey form to collect data on equity- and debt-related underwriting transactions separately. The 2009 BE-180 survey collected these transactions as a combined amount. Separate reporting of these transactions is needed to accurately remove equity- and debt-related underwriting fees from purchases and sales of equity and debt security transactions, which are reported inclusive of underwriting and brokerage fees. A number of reporters include language in their financial statements that suggests equity- and debt-related underwriting transactions are readily obtainable from their accounting records. In addition, BEA is redesigning the format and wording of the survey form. The new design incorporates cognitive design improvements made to other BEA surveys that improve the flow of the survey form and eliminate redundancies in the survey questions. Survey instructions and data item descriptions are being changed to improve clarity and to make the benchmark survey form more consistent with those of other BEA surveys.

Executive Order 12866

This final rule has been determined to be not significant for purposes of E.O. 12866.

Executive Order 13132

This final rule does not contain policies with Federalism implications sufficient to warrant preparation of a Federalism assessment under E.O. 13132.

Paperwork Reduction Act

The collection of information in this final rule has been submitted to the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA). OMB has pre-approved the information collection under OMB control number 0608-0062. Notwithstanding any other provisions of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with, a collection of information subject to the requirements of the PRA unless that collection displays a currently valid OMB control number.

The BE-180 survey is expected to result in the filing of reports from approximately 8,750 respondents. Approximately 1,250 respondents would report mandatory or voluntary data on the survey and approximately 7,500 would file exemption claims. The respondent burden for this collection of information will vary from one respondent to another, but is estimated to average ten hours for the respondents that file mandatory or voluntary data-including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information and two hours for other responses. Thus the total respondent burden for this survey is estimated at 27,500 hours, compared to 24,000 hours for the 2009 BE-180 survey. The increase in burden hours is due to an increase in the size of the respondent universe. Written comments regarding the burden-hour estimates or other aspects of the collection-of-Information requirements contained in the final rule should be sent to both BEA via email at [email protected], and to OMB, via email at [email protected] or by FAX at (202) 395-7245.

Regulatory Flexibility Act

The Chief Counsel for Regulation, Department of Commerce, certified at the proposed rule stage to the Chief Counsel for Advocacy, Small Business Administration, under the provisions of the Regulatory Flexibility Act, 5 U.S.C. 605(b), that this final rule will not have a significant economic impact on a substantial number of small entities. The factual basis for the certification was published in the proposed rule and is not repeated here.

BEA received one comment on the impact on small entities. The commenter, writing on behalf of asset management firms, stated that the broad scope of the financial services collected on the BE-180 survey, and the fact that the $3 million mandatory reporting level applies separately to sales or purchases, will impact a larger number of small businesses than indicated by BEA. BEA is very concerned about respondent burden and only collects data from the broader group of filers on benchmark surveys that are conducted once every five years. BEA acknowledges that a larger number of asset managers may be required to complete the BE-180 survey as a result of the $3 million threshold. However, even with a larger number of entities being required to report, preparing and submitting the required data will not have a significant economic impact on any entity, large or small. While the resources required to respond to the survey will vary from one respondent to another, BEA estimates that it will take, on average, ten hours for the respondents that file mandatory or voluntary data, and two hours for other responses. These estimates include time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing, reviewing, and submitting the appropriate form. This rule has no other impact or regulatory burden beyond the one-time reporting of the required information. Therefore, even businesses required to provide mandatory data on the survey will only expend a minimal number of hours of staff time to comply, which does not constitute a significant economic impact. Because this rule will not have a significant economic impact on a substantial number of small entities, no FRFA is required and none has been prepared.

List of Subjects in 15 CFR Part 801

International transactions, Economic statistics, Foreign trade, Penalties, Reporting and record keeping requirements, International Services.

Dated May 12, 2015. Brian C. Moyer, Director, Bureau of Economic Analysis.

For reasons set forth in the preamble, BEA amends 15 CFR part 801 as follows:

PART 801—SURVEY OF INTERNATIONAL TRADE IN SERVICES BETWEEN U.S. AND FOREIGN PERSONS AND SURVEYS OF DIRECT INVESTMENT 1. The authority citation for 15 CFR part 801 continues to read as follows: Authority:

5 U.S.C. 301; 15 U.S.C. 4908; 22 U.S.C. 3101-3108; E.O. 11961 (3 CFR, 1977 Comp., p. 86), as amended by E.O. 12318 (3 CFR, 1981 Comp. p. 173); and E.O. 12518 (3 CFR, 1985 Comp. p. 348).

2. Revise § 801.3 to read as follows:
§ 801.3 Reporting requirements.

Except for surveys subject to rulemaking in §§ 801.7, 801.8 and 801.9, reporting requirements for all other surveys conducted by the Bureau of Economic Analysis shall be as follows:

(a) Notice of specific reporting requirements, including who is required to report, the information to be reported, the manner of reporting, and the time and place of filing reports, will be published by the Director of the Bureau of Economic Analysis in the Federal Register prior to the implementation of a survey;

(b) In accordance with section 3104(6)(2) of title 22 of the United States Code, persons notified of these surveys and subject to the jurisdiction of the United States shall furnish, under oath, any report containing information which is determined to be necessary to carry out the surveys and studies provided for by the Act; and

(c) Persons not notified in writing of their filing obligation by the Bureau of Economic Analysis are not required to complete the survey.

3. Add § 801.9 to read as follows:
§ 801.9 Rules and regulations for the BE-180, Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons—2014.

A BE-180, Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons will be conducted covering 2014. All legal authorities, provisions, definitions, and requirements contained in §§ 801.1 through 801.2 and 801.4 through 801.6 are applicable to this survey. Specific additional rules and regulations for the BE-180 survey are given in paragraphs (a) through (e) of this section. More detailed instructions are given on the report forms and in instructions accompanying the report forms.

(a) Response required. A response is required from persons subject to the reporting requirements of the BE-180, Benchmark Survey of Financial Services Transactions between U.S. Financial Services Providers and Foreign Persons—2014, contained herein, whether or not they are contacted by BEA to ensure complete coverage of financial services transactions between U.S. financial services providers and foreign persons. Also, a person, or its agent, that is contacted by BEA about reporting in this survey, either by sending a report form or by written inquiry, must respond in writing pursuant to this section. This may be accomplished by:

(1) Completing and returning the BE-180 survey by the due date; or,

(2) If exempt, by completing pages one through five of the BE-180 survey and returning them to BEA.

(b) Who must report. (1) A BE-180 report is required of each U.S. person that is a financial services provider or intermediary, or whose consolidated U.S. enterprise includes a separately organized subsidiary, or part, that is a financial services provider or intermediary, and that had transactions (either sales or purchases) directly with foreign persons in all financial services combined in excess of $3,000,000 during its fiscal year covered by the survey on an accrual basis. The $3,000,000 threshold should be applied to financial services transactions with foreign persons by all parts of the consolidated U.S. enterprise combined that are financial services providers or intermediaries. Because the $3,000,000 threshold applies separately to sales and purchases, the mandatory reporting requirement may apply only to sales, only to purchases, or to both.

(i) The determination of whether a U.S. financial services provider or intermediary is subject to this mandatory reporting requirement may be based on the judgment of knowledgeable persons in a company who can identify reportable transactions on a recall basis, with a reasonable degree of certainty, without conducting a detailed manual records search.

(ii) Reporters that file pursuant to this mandatory reporting requirement must provide data on total sales and/or purchases of each of the covered types of financial services transactions and must disaggregate the totals by country and by relationship to the foreign transactor (foreign affiliate, foreign parent group, or unaffiliated).

(2) Voluntary reporting. If, during the fiscal year covered, sales or purchases of financial services by a firm that is a financial services provider or intermediary, or by a firm's subsidiaries, or parts, combined that are financial services providers or intermediaries, are $3,000,000 or less, the U.S. person is requested to provide an estimate of the total for each type of service. Provision of this information is voluntary. The estimates may be judgmental, that is, based on recall, without conducting a detailed records search. Because the $3,000,000 threshold applies separately to sales and purchases, this voluntary reporting option may apply only to sales, only to purchases, or to both.

(3) Exemption claims. Any U.S. person that receives the BE-180 survey form from BEA, but is not subject to the mandatory reporting requirements and chooses not to report voluntarily, must file an exemption claim by completing pages one through five of the BE-180 survey and returning it to BEA. This requirement is necessary to ensure compliance with reporting requirements and efficient administration of the Act by eliminating unnecessary follow-up contact.

(c) BE-180 definition of financial services provider. The definition of financial services provider used for this survey is identical to the definition of the term as used in the North American Industry Classification System, United States, 2012, Sector 52—Finance and Insurance, and holding companies that own or influence, and are principally engaged in making management decisions for these firms (part of Sector 55—Management of Companies and Enterprises). For example, companies and/or subsidiaries and other separable parts of companies in the following industries are defined as financial services providers: Depository credit intermediation and related activities (including commercial banking, savings institutions, credit unions, and other depository credit intermediation); non-depository credit intermediation (including credit card issuing, sales financing, and other non-depository credit intermediation); activities related to credit intermediation (including mortgage and nonmortgage loan brokers, financial transactions processing, reserve, and clearinghouse activities, and other activities related to credit intermediation); securities and commodity contracts intermediation and brokerage (including investment banking and securities dealing, securities brokerage, commodity contracts and dealing, and commodity contracts brokerage); securities and commodity exchanges; other financial investment activities (including miscellaneous intermediation, portfolio management, investment advice, and all other financial investment activities); insurance carriers; insurance agencies, brokerages, and other insurance related activities; insurance and employee benefit funds (including pension funds, health and welfare funds, and other insurance funds); other investment pools and finds (including open-end investment funds, trusts, estates, and agency accounts, real estate investment trusts, and other financial vehicles); and holding companies that own, or influence the management decisions of, firms principally engaged in the aforementioned activities.

(d) Covered types of services. The BE-180 survey covers the following types of financial services transactions (sales or purchases) between U.S. financial services companies and foreign persons: brokerage services related to equity transactions; other brokerage services; underwriting and private placement services; financial management service (including fees for mutual funds, pension funds, exchange-traded funds, private equity funds, corporate portfolio, individual portfolio, hedge funds, trusts, and other); credit related services, except credit card services; credit card services; financial advisory and custody services; securities lending services; electronic funds transfer services; and other financial services.

(e) Due date. A fully completed and certified BE-180 report, or qualifying exemption claim with pages one through five completed, is due to be filed with BEA not later than October 1, 2015.

[FR Doc. 2015-11996 Filed 5-19-15; 8:45 am] BILLING CODE 3510-06-M
SOCIAL SECURITY ADMINISTRATION 20 CFR Part 404 [Docket No. SSA-2011-0098] RIN 0960-AH43 Revised Medical Criteria for Evaluating Cancer (Malignant Neoplastic Diseases) AGENCY:

Social Security Administration.

ACTION:

Final rule.

SUMMARY:

We are revising the criteria in parts A and B of the Listing of Impairments (listings) that we use to evaluate claims involving cancer (malignant neoplastic diseases) under titles II and XVI of the Social Security Act (Act). These revisions reflect our adjudicative experience, advances in medical knowledge, recommendations from medical experts we consulted, and public comments we received in response to a Notice of Proposed Rulemaking (NPRM).

DATES:

This rule is effective July 20, 2015.

FOR FURTHER INFORMATION CONTACT:

Cheryl A. Williams, Office of Medical Policy, Social Security Administration, 6401 Security Boulevard, Baltimore, Maryland 21235-6401, (410) 965-1020. For information on eligibility or filing for benefits, call our national toll-free number, 1-800-772-1213, or TTY 1-800-325-0778, or visit our Internet site, Social Security Online, at http://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION: Background

We are revising and making final the regulations for evaluating cancer (malignant neoplastic diseases) that we proposed in an NPRM published in the Federal Register on December 17, 2013, at 78 FR 76508. Even though this rule will not go into effect until 60 days after publication of this document, for clarity we refer to it in this preamble as the “final” rule. We refer to the rule in effect prior to that time as the “prior” rule.

In the preamble to the NPRM, we discussed our proposed changes and our reasons for making them. Since we are mostly adopting those revisions as we proposed them, we are not repeating that information here. Interested readers may refer to the preamble in the NPRM, available at http://www.regulations.gov.

We are making some changes in this final rule based on the public comments we received on the NPRM. We explain these changes in the “Summary of Public Comments” below.

Why are we revising the cancer listings?

We developed this final rule as part of our ongoing review of the cancer body system. When we last revised the listings for this body system in a final rule published on October 6, 2009, we indicated that we would monitor and update the listings as needed.1

1 See 74 FR 51229.

How long will this final rule stay in effect?

We are extending the effective date of the cancer body system in parts A and B of the listings until 5 years after the effective date of this final rule. The rule will remain in effect only until that date unless we extend the expiration date. We will continue to monitor the rule and may revise it, as needed, before the end of the 5-year period.

Summary of Public Comments

In the NPRM, we gave the public a 60-day comment period that ended on February 18, 2014. We received 15 comments. The commenters included national cancer advocacy groups, State agencies, a national group representing disability examiners in State agencies that make disability determinations for us, medical professionals, and individual members of the public.

We carefully considered all of the significant comments relevant to this rulemaking. We have condensed and summarized the comments below. We believe we have presented the commenters' concerns and suggestions accurately and completely and responded to all significant issues that were within the scope of this rule. We provide our reasons for adopting or not adopting the recommendations in our responses below.

General Comments

Comment: Many commenters supported our proposal to change the name of this body system from “Malignant Neoplastic Diseases” to “Cancer” to make the name more recognizable to the lay public. However, some commenters believed this change was not necessary or appropriate. These commenters believed the lay public is sufficiently aware of the meaning of the term “malignant neoplastic diseases” and that we should continue using it as the body system's name. One commenter thought “malignant neoplastic diseases” is a more encompassing name for the body system than “cancer.” The commenter contended the term “cancer” has traditionally meant only carcinoma, and does not include sarcoma, leukemia, or malignancies in other cell types.

Response: We disagree with the commenters' view that the lay public is sufficiently aware of the term “malignant neoplastic diseases,” and have adopted our proposal to change the name of this body system to “Cancer.” We believe the lay public understands that the term “cancer” means not only carcinoma but also the wide array of malignancies. The National Cancer Institute (NCI), National Cancer Society (NCS), and other recognized experts use the term “cancer” when referring to carcinoma, sarcoma, leukemia, lymphoma, and malignancies of the central nervous system in their publications.2

2 For example, see “NCI Home” at http://www.cancer.gov, and “American Cancer Society Home” at http://www.cancer.org/index.

Comment: A commenter, who supported the proposed name change, recommended that we use the term “anticancer therapy” instead of “antineoplastic therapy” in this final rule.

Response: We agree with the commenter and have modified the listings accordingly.

Comment: One commenter suggested we have only one listing for evaluating small-cell carcinomas rather than adopt our proposal to provide a criterion for small-cell carcinoma under several, specific listings.3

3 We retained prior listing 13.14B for evaluating small-cell carcinoma in the lungs and added a criterion for small-cell carcinoma under the following specific listings: 13.02D for soft tissue cancers of the head and neck; 13.10D for cancer of the breast; 13.15C for cancer of the pleura and mediastinum; 13.16C for cancer of the esophagus or stomach; 13.17C for cancer of the small intestine; 13.18D for cancer of the large intestine; 13.22E for cancer of the urinary bladder; 13.23F for cancers of the female genital tract; and 13.24C for cancer of the prostate gland. We include a listing for small-cell carcinoma of the small intestine, even though it is a very rare cancer, to maintain internal consistency among the regulations, and because of the cancer's unfavorable prognosis.

Response: We did not adopt the comment. Some small-cell carcinomas might be included under the single listing the commenter proposed, but may have favorable prognoses and not be of listing-level severity. These small-cell carcinomas have a favorable prognosis because physicians can detect them in their early stages when it is still possible to remove the cancer. The final listings cover small-cell carcinomas that occur in certain organs and tissues where physicians are unlikely to detect them in their early stages, and treatment is mainly palliative.

Comment: One commenter suggested that we include the stage of the cancer in the final listings for evaluating central nervous system and cervical cancers, and lymphomas.

Response: We did not adopt the comment for two reasons. First, the cancers mentioned by the commenter may have different staging systems that are inconsistent with each other. Second, staging systems could change, potentially resulting in an inability to find people with listing-level impairments disabled at the listing step of the sequential evaluation process.

Comment: A commenter proposed we provide more guidance in part B for evaluating conditions in children, resulting from cancer or its treatment, that do not meet the listings. The commenter said such conditions might include organ dysfunction resulting from small-cell carcinomas, or secondary lymphedema resulting from breast cancer treatment. The commenter believed the additional guidance would make the final listings more comprehensive.

Response: We did not adopt the comment because we believe final sections 113.00F and 113.00G already provide the type of guidance the commenter recommended. In these sections, we explain that if a child has a medically determinable impairment that does not meet the listings, we will determine whether the impairment medically equals the listings. This determination would include impairments caused by the cancer or treatment side effects. If the impairment does not medically equal a listing, section 113.00F further explains that we will also determine whether the impairment functionally equals the listings. Again, this determination would include impairments caused by the cancer or treatment side effects.

Comment: One commenter recommended we provide more guidance for evaluating treatment failure in bone marrow and stem cell transplantation, and proposed specific language for making this change.

Response: We believe the change, and the specific language the commenter proposed, is not necessary because listings for bone marrow and stem cell transplantation have a criterion for evaluating any residual impairments following treatment. These residual impairments would include the evaluation of those associated with treatment failure.

Section 13.00E—When do we need longitudinal evidence?

Comment: One commenter asked us to specify which sources can provide the evidence required in final section 13.00E3c to document that the treating source has started multimodal therapy under final listings 13.02E, 13.11D, and 13.14C. The commenter indicated that we should accept this evidence only from an acceptable medical source such as a medical or osteopathic doctor.

Response: We did not adopt the comment because it may limit our ability to obtain evidence to determine if multimodal therapy has started and, thus, establish listing-level severity. While an acceptable medical source may provide this evidence, our existing policy allows us to accept evidence from other medical sources to establish the impairment's severity.4 For example, this evidence may come from sources we do not consider acceptable medical sources, such as oncology nurse practitioners who administer chemotherapy and radiation therapists who deliver radiation treatments.

4 See 20 CFR 404.1513(d) and 416.913(d).

Sections 13.00I and 113.00I—What do we mean by the following terms?

Comment: One commenter expressed concern over proposed sections 13.00I6 and 113.00I5, in which we clarified that we consider a cancer to be “progressive” if it is still growing after the person has completed at least half of his or her planned initial anticancer therapy. The commenter believed this criterion might delay adjudication if the adjudicator must contact the treating source to ask how much of planned treatment the person has completed.

Response: We did not adopt this comment. We disagree with the commenter because we do not expect adjudicators to obtain more information than we required under the prior regulations. The proposed and final sections express our intent to decide as quickly as possible that a person is disabled.

Comment: The same commenter thought that the definition of the term “progressive” could result in a finding that the claimant has a condition medically equivalent to cancer listings that do not require the malignancy to be progressive.

Response: We do not share the commenter's concern because, as we explain in sections 13.00C and 113.00C, we will only apply the criteria in a specific listing to a cancer originating from that specific site.

Comment: One commenter recommended that we revise the definition of “persistent” cancer in final section 13.00I5. The commenter also provided language for the suggested revision.

Response: We did not adopt the comment for two reasons. First, the language the commenter proposed could be misinterpreted to require that all of a person's anticancer therapy must fail to achieve a complete remission, including any second- or third-line therapies after initial anticancer therapy.5 This interpretation would be contrary to our intent in listings that require only the planned initial anticancer therapy to fail. Second, the language the commenter proposed would not explain the meaning of the phrase “failed to achieve a complete remission.” By defining this phrase, the final section clarifies that the cancer is “persistent” if any of it remains after treatment is completed, even if the cancer responded to the initial therapy and became smaller.

5 We may consider follow-up surgery to be a part of initial anticancer treatment if the intent of the follow-up surgery is to obtain clear margins and the complete eradication of any residual cancer left behind.

Comment: One commenter recommended that the definition of the term “unresectable” in final section 13.00I8 address the presence of micrometastases. The commenter contended that “unresectable” should not include situations in which the surgeon removed the tumor and then used adjuvant therapy to eliminate any micrometastases.

Response: We did not adopt the comment. We believe the commenter's proposed change is unnecessary. Final section 13.00I8 defines “adjuvant therapy” as anticancer therapy given after surgery “to eliminate any remaining cancer cells or lessen the chance of recurrence.” These “remaining cancer cells” include micrometastases.

Sections 13.00K and 113.00K—How do we evaluate specific cancers?

Comment: A commenter recommended that we add examples of common indolent lymphomas in final section 13.00K1a. The commenter also recommended that we add examples of common solid tumors in final section 113.00K3.

Response: We did not adopt the comment. These recommendations appear to be administrative concerns better handled through training and operating instructions for our adjudicators.

Comment: A commenter recommended that we create a listing for primary peritoneal carcinoma. The commenter argued that having a listing would be better than the guidance in section 13.00K7, in which we explained that we can evaluate this cancer in women under final 13.23E for ovarian cancer, and evaluate it in men under 13.15A for malignant mesothelioma.

Response: We did not adopt the commenter's recommendation that we create a listing for primary peritoneal carcinoma. Primary peritoneal carcinoma is very rare, and we do not usually provide listings for rare cancers. Instead, we believe the better practice is to clarify in the introductory text which listings to use to evaluate certain rare cancers, as we did in final section 13.00K7 for primary peritoneal carcinoma.

Comment: A few commenters expressed concern about the clarification in proposed section 13.00K8 that excludes “biochemical recurrence” for evaluating recurrent cancer of the prostate gland in listing 13.24A. In this section, we defined “biochemical recurrence” as an increase in the serum prostate-specific antigen (PSA) level following the completion of anticancer therapy. Section 13.24A requires corroborating evidence to document recurrence, such as radiological studies or findings on physical exam. Commenters believed this requirement might delay a finding of disability and unfairly penalize people with prostate cancer. They noted that doctors frequently use PSA values to determine recurrence and may initiate anticancer treatment for recurrent cancer upon this evidence alone.

Response: We agree that in some cases, an isolated PSA reading may support a diagnosis of recurrent prostate cancer, especially if this diagnosis is from an acceptable medical source and is consistent with the prevailing state of medical knowledge and clinical practice. However, we did not adopt the comments because we believe it is reasonable to require corroborating evidence to confirm the diagnosis. A rising PSA level alone does not necessarily mean prostate cancer has returned. Additional factors, such as the cancer's TNM 6 characteristics, PSA kinetics, timing of the biochemical recurrence, treatment modality, and Gleason score, should be considered.7 8 The American Joint Committee on Cancer notes that the natural progression from biochemical recurrence to clinical disease recurrence is highly variable and may depend on these additional factors.9 In light of this variability and the other factors that should be considered, we continue to believe that we should exclude “biochemical recurrence” in listing 13.24A.

6 The acronym “TNM” relates to the Tumor size, lymph Node involvement, and presence of Metastases.

7 PSA kinetics involves assessing the PSA level over time, such as measuring of its rate of change (velocity) and how long it takes it to double.

8 The National Cancer Institute defines “Gleason score” as a system of grading prostate cancer tissue based on how it looks under the microscope (available at: http://www.cancer.gov/dictionary?CdrID=45696).

9 See Carolyn C. Compton et al. eds., Cancer Staging Atlas: A Companion to the Seventh Editions of the AJCC Cancer Staging Manual and Handbook, New York: Springer, 2012, page 535-545.

Comment: One commenter recommended that we delete the parenthetical reference to “benign melanocytic tumor” in final sections 13.00K9 and 113.00K6. The commenter claimed that citing a benign disease in the cancer listings may be confusing for adjudicators.

Response: We did not adopt the comment because we believe the reference to benign melanocytic tumor can direct adjudicators to the appropriate body systems for evaluating this condition, Skin Disorders (8.00 and 108.00). This reference is similar to how final sections 13.00K6c and 113.00K4c direct adjudicators to the appropriate body systems for evaluating benign brain tumors.

Listing 13.02—Soft Tissue Cancers of the Head and Neck (Except Salivary Glands—13.08—and Thyroid Gland—13.09)

Comment: A commenter recommended revisions to 13.02E to condense the final listing significantly.

Response: We did not adopt the comment because the proposed change might be misinterpreted to include any metastases in the head or neck from cancers originating elsewhere under listing 13.02E. Our intent in this listing is to evaluate cancers that receive multimodal therapy and originate in the head and neck only.

Listing 113.05—Lymphoma (Excluding All Types of Lymphoblastic Lymphomas—113.06)

Comment: A commenter recommended that we include cerebrospinal fluid (CSF) findings as evidence for determining listing-level lymphoma under final listings 113.05A1 and 113.05B1.

Response: We did not adopt the comment. It is not a standard clinical practice in lymphoma to conduct cerebrospinal fluid examination for analysis; therefore, we do not believe it is appropriate to require this evidence to establish severity. However, we will inform adjudicators, through training and operating instructions, that they can accept CSF findings if this evidence is available.

Listing 13.10—Breast (Except Sarcoma—13.04)

Comment: One commenter asked how long adjudicators should defer adjudication of cases for evaluating breast cancer with secondary lymphedema resulting from anticancer therapy and treated by surgery to salvage or restore the functioning of an upper extremity under proposed listing 13.10E.

Response: We disagree with the commenter's premise that adjudicators need to defer adjudication of these cases. Adjudicators can adjudicate a case at the listing step if the surgery is performed. The need for this surgery to salvage or restore functioning of an upper extremity demonstrates listing-level severity of the secondary lymphedema without the need to make a determination about the effectiveness of the surgery.

Comment: A commenter recommended we add a listing that prescribes a period of disability of at least 18 months for people receiving multimodal therapy for breast cancer. The commenter noted that multimodal therapy could last 6 or more months and produce very serious adverse effects. The commenter also noted that it is common for us to find these people disabled after the listing step in the sequential evaluation process by taking into consideration the adverse effects of treatment and that the length of treatment nearly satisfies the 12-month duration requirement. The commenter believed it would be better for us to make the determination of disability at the listing step.

Similarly, a commenter recommended we add a listing that prescribes a period of disability of at least 18 months for people receiving multimodal therapy that includes surgery for low anal cancers and rectal cancers. The commenter noted that neoadjuvant chemotherapy or radiation followed by surgery to eliminate these anal or rectal cancers frequently takes at least 12 months to complete. The treatment may result in prolonged debilitation although the impairment may not meet or medically equal the listings.

Response: We believe the commenter's proposed listing for breast cancer would cover many cases of early cancer. Most people with early breast cancer complete multimodal therapy within 6 months and recover from any adverse effects relatively soon. In these cases, the impairment would not preclude the ability to work for the required 12 months.

However, we agree with the commenter that in some cases multimodal therapy may take substantially longer than 6 months to complete. For example, very serious adverse effects may interrupt and prolong therapy, resulting in an active impairment lasting almost 12 months. It is a long-standing principle that we may make a finding of disability at the listing step if there is the expectation that an impairment that has been active for almost 12 months will preclude a person from engaging in any gainful activity for the required 12 months. We base this finding on the nature of the impairment; prescribed treatment; therapeutic history, including adverse effects of treatment; and other relevant considerations. Therefore, we partially adopted the comment by providing language in final section 13.00G3 to clarify that we can apply this principle to multimodal anticancer therapy for breast cancer and other cancers. We also added the clarifying language in final section 113.00G3 for children.

We did not make changes to listing 13.18 for evaluating anal and rectal cancers. This listing and the commenter's recommendation for a new listing covering multimodal therapy with surgery for anal and rectal cancers are outside the scope of this rulemaking. However, we believe the changes made in final section 13.00G3 partially address this commenter's concerns.

Listing 13.13—Nervous System

Comment: One commenter recommended that we clarify in the introductory text whether adjudicators should use listing 13.13 to evaluate pituitary gland cancer in adults.

Response: We adopted the commenter's recommendation by providing language in final section 13.00K6a and final section 113.00K4a in the introductory text clarifying that we evaluate cancerous pituitary gland tumors, for example, pituitary carcinoma,10 under final listing 13.13A1 and final listing 113.13A, respectively.

10 Pituitary gland carcinoma is highly malignant. Treatment is mainly palliative. People who have pituitary gland carcinoma have a mean survival time of only about 2 years.

Comment: The same commenter expressed concern about the statement, in proposed sections 13.00K6b and 113.00K4b, that we consider brain tumors malignant only if they are classified as grade II or higher under the World Health Organization (WHO), “Classification of Tumours of the Central Nervous System, 2007.” The commenter asked how an adjudicator should evaluate central nervous system tumors graded under different classification systems.

Response: We believe we have addressed the commenter's concerns in existing operating instructions that help adjudicators determine the WHO grade of specific brain cancers if a different grading system is used or if the medical evidence does not identify a particular grading system.11 These instructions also help adjudicators determine which grade to use when there are inconsistencies in the medical record, such as some medical evidence describing the tumor as grade II while other medical evidence describes it as grade III or grade IV.

11 Program Operations Manual System, available at: http://policy.ssa.gov/poms.nsf/lnx/0424585001.

Listing 13.23—Cancers of the Female Genital Tract—Carcinoma or Sarcoma

Comment: A commenter recommended that we add criteria in final listing 13.23B3 to take into account a cancer's histologic diagnosis and the age of the claimant at onset.

Response: We did not adopt this comment. We do not believe it is necessary to include such considerations in the listing because the prognosis is already poor for cervical cancer that meets the specific criteria of the listing. Considering the histological diagnosis would only confirm this prognosis, and the prognosis would remain poor regardless of a person's age.

Comment: A national advocacy group for women with ovarian cancer recommended that we reinstate a listing we deleted in 2009. The listing covered ovarian cancer with ruptured ovarian capsule, tumor on the serosal surface of the ovary, ascites with malignant cells, or positive peritoneal washings. The commenter believed we find most women with this extent of disease disabled at later steps of the sequential evaluation process after the listing step or on appeal. The commenter also believed the adverse effects of cancer treatment might be disabling in themselves, especially for women whose jobs require significant exertion or do not allow time off for recovery from treatment.

Response: We agree we could find a woman with the findings in the prior listing disabled after the listing step of the sequential evaluation process. We realize that adverse effects of ovarian cancer treatment may preclude a woman from working. However, we did not adopt the commenter's recommendation because many women with ovarian cancer that meets the specific criteria in the deleted listing would not have an impairment that precludes any gainful activity, which is the standard of severity in the listings.12

12 See sections 404.1525 and 416.925.

Other Changes

We made a number of editorial changes and technical corrections in the final rule to increase the clarity and consistency of the listings. For example, we redesignated proposed listing 13.05A3 for evaluating mantle cell lymphoma in adults as final listing 13.05D to make it a stand-alone listing consistent with stand-alone final listing 113.05D for evaluating mantle cell lymphoma in children. We also changed the parenthetical examples in prior sections 13.00H1 and 113.00H1 from “at least 18 months from the date of diagnosis” and “at least 12 months from the date of diagnosis,” respectively, to “until at least 12 months from the date of transplantation” to make these adult and child sections consistent.

Additionally, we redesignated proposed listings 13.29A3 and 113.29A3 for evaluating mucosal melanoma as stand-alone listings 13.29C and 113.29C. We made this change because we determined, through our ongoing review of the scientific and medical literature, that mucosal melanoma carries a very poor prognosis and is of listing-level severity regardless of whether it is an initial disease or a recurrent disease. We also added examples of distant sites frequently affected by metastases from cutaneous and ocular melanomas in 13.29B3 and 113.29B3.

What is our authority to make regulations and set procedures for determining whether a person is disabled under the statutory definition?

Under the Act, we have full power and authority to make rules and regulations and to establish necessary and appropriate procedures to carry out such provisions.13

13 Sections 205(a), 702(a)(5), and 1631(d)(1).

Regulatory Procedures Executive Order 12866, as Supplemented by Executive Order 13563

We have consulted with the Office of Management and Budget (OMB) and determined that this final rule meets the criteria for a significant regulatory action under Executive Order 12866, as supplemented by Executive Order 13563, and was reviewed by OMB.

Regulatory Flexibility Act

We certify that this final rule has no significant economic impact on a substantial number of small entities because it affects only individuals. Therefore, a regulatory flexibility analysis was not required under the Regulatory Flexibility Act, as amended.

Paperwork Reduction Act

This final rule does not create any new or affect any existing collections and, therefore, does not require OMB approval under the Paperwork Reduction Act.

(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social Security—Disability Insurance; 96.002, Social Security—Retirement Insurance; 96.004, Social Security—Survivors Insurance; and 96.006, Supplemental Security Income). List of Subjects in 20 CFR Part 404

Administrative practice and procedure, Blind, Disability benefits, Old-age, Survivors, and Disability Insurance, Reporting and recordkeeping requirements, Social Security.

Dated: May 11, 2015. Carolyn W. Colvin, Acting Commissioner of Social Security.

For the reasons set out in the preamble, we are amending 20 CFR part 404 subpart P as set forth below:

PART 404—FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE (1950-) Subpart P—Determining Disability and Blindness 1. The authority citation for subpart P of part 404 continues to read as follows: Authority:

Secs. 202, 205(a)-(b) and (d)-(h), 216(i), 221(a), (i), and (j), 222(c), 223, 225, and 702(a)(5) of the Social Security Act (42 U.S.C. 402, 405(a)-(b), and (d)-(h), 416(i), 421(a), (i), and (j), 422(c), 423, 425, and 902(a)(5)); sec. 211(b), Pub. L. 104-193, 110 Stat. 2105, 2189; sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 U.S.C. 902 note).

2. Amend appendix 1 to subpart P of part 404 as follows: a. Revise item 14 of the introductory text before part A. b. Amend part A by revising the body system name for section 13.00 in the table of contents. c. Revise section 13.00 of part A. d. Amend listing 13.02 of part A by revising the heading, revising listing 13.02B, removing listing 13.02C, redesignating listing 13.02D as new 13.02C, adding new listing 13.02D and revising listing 13.02E. e. Amend listing 13.03 of part A by revising listing 13.03B. f. Amend listing 13.04 of part A by revising listing 13.04B. g. Amend listing 13.05 of part A by revising listings 13.05A1, 13.05A2 and 13.05B, and adding listing 13.05D. h. Amend listing 13.06 of part A by revising the first sentence of listing 13.06B1 and revising listing 13.06B2b. i. Amend listing 13.07 of part A by revising listing 13.07A. j. Amend listing 13.10 of part A by revising listings 13.10A and 13.10C, adding the word “OR” after listing 13.10C, adding listing 13.10D, adding the word “OR” after listing 13.10D, and adding listing 13.10E. k. Amend listing 13.11 of part A by revising listings 13.11B and 13.11D. l. Amend listing 13.12 of part A by revising listing 13.12C. m. Revise listing 13.13 of part A. n. Amend listing 13.14C of part A by revising the first sentence. o. Amend listing 13.15 of part A by revising listing 13.15B2 and adding the word “OR” after listing 13.15B2, and adding listing 13.15C. p. Amend listing 13.16 of part A by adding the word “OR” after listing 13.16B, and adding listing 13.16C. q. Amend listing 13.17 of part A by adding the word “OR” after listing 13.17B, and adding listing 13.17C. r. Amend listing 13.18 of part A by adding the word “OR” after listing 13.18C, and adding listing 13.18D. s. Revise listing 13.19 of part A. t. Amend listing 13.20 of part A by revising listing 13.20B. u. Amend listing 13.22 of part A by adding the word “OR” after listing 13.22D, and adding listing 13.22E. v. Amend listing 13.23 of part A by revising the heading, revising listings 13.23A3, 13.23B, 13.23C3, 13.23D2 and 13.23E, adding the word “OR” after listing 13.23E, and adding listing 13.23F. w. Amend listing 13.24 of part A by revising listing 13.24A, adding the word “OR” after listing 13.24B, and adding listing 13.24C. x. Revise listing 13.25 of part A. y. Amend listing 13.28 of part A by revising the heading. z. Add listing 13.29 after listing 13.28 of part A. aa. Amend part B by revising the body system name for section 113.00 in the table of contents. bb. Revise section 113.00 of part B. cc. Revise listing 113.03 of part B. dd. Amend listing 113.05 of part B by revising the heading and listings 113.05A and 113.05B, adding the word “OR” after listing 113.05C, and adding listing 113.05D. ee. Amend listing 113.06 of part B by revising listings 113.06A and 113.06B1. ff. Amend listing 113.12 of part B by revising listing 113.12B. gg. Revise listing 113.13 of part B. hh. Add listing 113.29 after listing 113.21 of part B.

The revised and added text is set forth as follows:

APPENDIX 1 TO SUBPART P OF PART 404—LISTING OF IMPAIRMENTS

14. Cancer (Malignant Neoplastic Diseases) (13.00 and 113.00): July 20, 2020.

Part A 13.00 Cancer (Malignant Neoplastic Diseases) 13.00 CANCER (MALIGNANT NEOPLASTIC DISEASES)

A. What impairments do these listings cover? We use these listings to evaluate all cancers (malignant neoplastic diseases), except certain cancers associated with human immunodeficiency virus (HIV) infection. If you have HIV infection, we use the criteria in 14.08E to evaluate carcinoma of the cervix, Kaposi sarcoma, lymphoma, and squamous cell carcinoma of the anal canal and anal margin.

B. What do we consider when we evaluate cancer under these listings? We will consider factors including:

1. Origin of the cancer.

2. Extent of involvement.

3. Duration, frequency, and response to anticancer therapy.

4. Effects of any post-therapeutic residuals.

C. How do we apply these listings? We apply the criteria in a specific listing to a cancer originating from that specific site.

D. What evidence do we need?

1. We need medical evidence that specifies the type, extent, and site of the primary, recurrent, or metastatic lesion. When the primary site cannot be identified, we will use evidence documenting the site(s) of metastasis to evaluate the impairment under 13.27.

2. For operative procedures, including a biopsy or a needle aspiration, we generally need a copy of both the:

a. Operative note, and

b. Pathology report.

3. When we cannot get these documents, we will accept the summary of hospitalization(s) or other medical reports. This evidence should include details of the findings at surgery and, whenever appropriate, the pathological findings.

4. In some situations, we may also need evidence about recurrence, persistence, or progression of the cancer, the response to therapy, and any significant residuals. (See 13.00G.)

E. When do we need longitudinal evidence?

1. Cancer with distant metastases. We generally do not need longitudinal evidence for cancer that has metastasized beyond the regional lymph nodes because this cancer usually meets the requirements of a listing. Exceptions are for cancer with distant metastases that we expect to respond to anticancer therapy. For these exceptions, we usually need a longitudinal record of 3 months after therapy starts to determine whether the therapy achieved its intended effect, and whether this effect is likely to persist.

2. Other cancers. When there are no distant metastases, many of the listings require that we consider your response to initial anticancer therapy; that is, the initial planned treatment regimen. This therapy may consist of a single modality or a combination of modalities; that is, multimodal therapy. (See 13.00I4.)

3. Types of treatment.

a. Whenever the initial planned therapy is a single modality, enough time must pass to allow a determination about whether the therapy will achieve its intended effect. If the treatment fails, the failure often happens within 6 months after treatment starts, and there will often be a change in the treatment regimen.

b. Whenever the initial planned therapy is multimodal, we usually cannot make a determination about the effectiveness of the therapy until we can determine the effects of all the planned modalities. In some cases, we may need to defer adjudication until we can assess the effectiveness of therapy. However, we do not need to defer adjudication to determine whether the therapy will achieve its intended effect if we can make a fully favorable determination or decision based on the length and effects of therapy, or the residuals of the cancer or therapy (see 13.00G).

c. We need evidence under 13.02E, 13.11D, and 13.14C to establish that your treating source initiated multimodal anticancer therapy. We do not need to make a determination about the length or effectiveness of your therapy. Multimodal therapy has been initiated, and satisfies the requirements in 13.02E, 13.11D, and 13.14C, when your treating source starts the first modality. We may defer adjudication if your treating source plans multimodal therapy and has not yet initiated it.

F. How do we evaluate impairments that do not meet one of the cancer listings?

1. These listings are only examples of cancer that we consider severe enough to prevent you from doing any gainful activity. If your severe impairment(s) does not meet the criteria of any of these listings, we must also consider whether you have an impairment(s) that meets the criteria of a listing in another body system.

2. If you have a severe medically determinable impairment(s) that does not meet a listing, we will determine whether your impairment(s) medically equals a listing. (See §§ 404.1526 and 416.926 of this chapter.) If your impairment(s) does not meet or medically equal a listing, you may or may not have the residual functional capacity to engage in substantial gainful activity. In that situation, we proceed to the fourth, and, if necessary, the fifth steps of the sequential evaluation process in §§ 404.1520 and 416.920 of this chapter. We use the rules in §§ 404.1594 and 416.994 of this chapter, as appropriate, when we decide whether you continue to be disabled.

G. How do we consider the effects of anticancer therapy?

1. How we consider the effects of anticancer therapy under the listings. In many cases, cancers meet listing criteria only if the therapy is not effective and the cancer persists, progresses, or recurs. However, as explained in the following paragraphs, we will not delay adjudication if we can make a fully favorable determination or decision based on the evidence in the case record.

2. Effects can vary widely.

a. We consider each case on an individual basis because the therapy and its toxicity may vary widely. We will request a specific description of the therapy, including these items:

i. Drugs given.

ii. Dosage.

iii. Frequency of drug administration.

iv. Plans for continued drug administration.

v. Extent of surgery.

vi. Schedule and fields of radiation therapy.

b. We will also request a description of the complications or adverse effects of therapy, such as the following:

i. Continuing gastrointestinal symptoms.

ii. Persistent weakness.

iii. Neurological complications.

iv. Cardiovascular complications.

v. Reactive mental disorders.

3. Effects of therapy may change. The severity of the adverse effects of anticancer therapy may change during treatment; therefore, enough time must pass to allow us to evaluate the therapy's effect. The residual effects of treatment are temporary in most instances; however, on occasion, the effects may be disabling for a consecutive period of at least 12 months. In some situations, very serious adverse effects may interrupt and prolong multimodal anticancer therapy for a continuous period of almost 12 months. In these situations, we may determine there is an expectation that your impairment will preclude you from engaging in any gainful activity for at least 12 months.

4. When the initial anticancer therapy is effective. We evaluate any post-therapeutic residual impairment(s) not included in these listings under the criteria for the affected body system. We must consider any complications of therapy. When the residual impairment(s) does not meet or medically equal a listing, we must consider its effect on your ability to do substantial gainful activity.

H. How long do we consider your impairment to be disabling?

1. In some listings, we specify that we will consider your impairment to be disabling until a particular point in time (for example, until at least 12 months from the date of transplantation). We may consider your impairment to be disabling beyond this point when the medical and other evidence justifies it.

2. When a listing does not contain such a specification, we will consider an impairment(s) that meets or medically equals a listing in this body system to be disabling until at least 3 years after onset of complete remission. When the impairment(s) has been in complete remission for at least 3 years, that is, the original tumor or a recurrence (or relapse) and any metastases have not been evident for at least 3 years, the impairment(s) will no longer meet or medically equal the criteria of a listing in this body system.

3. Following the appropriate period, we will consider any residuals, including residuals of the cancer or therapy (see 13.00G), in determining whether you are disabled. If you have a recurrence or relapse of your cancer, your impairment may meet or medically equal one of the listings in this body system again.

I. What do we mean by the following terms?

1. Anticancer therapy means surgery, radiation, chemotherapy, hormones, immunotherapy, or bone marrow or stem cell transplantation. When we refer to surgery as an anticancer treatment, we mean surgical excision for treatment, not for diagnostic purposes.

2. Inoperable means surgery is thought to be of no therapeutic value or the surgery cannot be performed; for example, when you cannot tolerate anesthesia or surgery because of another impairment(s), or you have a cancer that is too large or that has invaded crucial structures. This term does not include situations in which your cancer could have been surgically removed but another method of treatment was chosen; for example, an attempt at organ preservation. Your physician may determine whether the cancer is inoperable before or after you receive neoadjuvant therapy. Neoadjuvant therapy is anticancer therapy, such as chemotherapy or radiation, given before surgery in order to reduce the size of the cancer.

3. Metastases means the spread of cancer cells by blood, lymph, or other body fluid. This term does not include the spread of cancer cells by direct extension of the cancer to other tissues or organs.

4. Multimodal therapy means anticancer therapy that is a combination of at least two types of treatment given in close proximity as a unified whole and usually planned before any treatment has begun. There are three types of treatment modalities: surgery, radiation, and systemic drug therapy (chemotherapy, hormone therapy, and immunotherapy or biological modifier therapy). Examples of multimodal therapy include:

a. Surgery followed by chemotherapy or radiation.

b. Chemotherapy followed by surgery.

c. Chemotherapy and concurrent radiation.

5. Persistent means the planned initial anticancer therapy failed to achieve a complete remission of your cancer; that is, your cancer is evident, even if smaller, after the therapy has ended.

6. Progressive means the cancer becomes more extensive after treatment; that is, there is evidence that your cancer is growing after you have completed at least half of your planned initial anticancer therapy.

7. Recurrent or relapse means the cancer that was in complete remission or entirely removed by surgery has returned.

8. Unresectable means surgery or surgeries did not completely remove the cancer. This term includes situations in which your cancer is incompletely resected or the surgical margins are positive. It does not include situations in which there is a finding of a positive margin(s) if additional surgery obtains a margin(s) that is clear. It also does not include situations in which the cancer is completely resected but you are receiving adjuvant therapy. Adjuvant therapy is anticancer therapy, such as chemotherapy or radiation, given after surgery in order to eliminate any remaining cancer cells or lessen the chance of recurrence.

J. Can we establish the existence of a disabling impairment prior to the date of the evidence that shows the cancer satisfies the criteria of a listing? Yes. We will consider factors such as:

1. The type of cancer and its location.

2. The extent of involvement when the cancer was first demonstrated.

3. Your symptoms.

K. How do we evaluate specific cancers?

1. Lymphoma.

a. Many indolent (non-aggressive) lymphomas are controlled by well-tolerated treatment modalities, although the lymphomas may produce intermittent symptoms and signs. We may defer adjudicating these cases for an appropriate period after therapy is initiated to determine whether the therapy will achieve its intended effect, which is usually to stabilize the disease process. (See 13.00E3.) Once your disease stabilizes, we will assess severity based on the extent of involvement of other organ systems and residuals from therapy.

b. A change in therapy for indolent lymphomas is usually an indicator that the therapy is not achieving its intended effect. However, your impairment will not meet the requirements of 13.05A2 if your therapy is changed solely because you or your physician chooses to change it and not because of a failure to achieve stability.

c. We consider Hodgkin lymphoma that recurs more than 12 months after completing initial anticancer therapy to be a new disease rather than a recurrence.

2. Leukemia.

a. Acute leukemia. The initial diagnosis of acute leukemia, including the accelerated or blast phase of chronic myelogenous (granulocytic) leukemia, is based on definitive bone marrow examination. Additional diagnostic information is based on chromosomal analysis, cytochemical and surface marker studies on the abnormal cells, or other methods consistent with the prevailing state of medical knowledge and clinical practice. Recurrent disease must be documented by peripheral blood, bone marrow, or cerebrospinal fluid examination, or by testicular biopsy. The initial and follow-up pathology reports should be included.

b. Chronic myelogenous leukemia (CML). We need a diagnosis of CML based on documented granulocytosis, including immature forms such as differentiated or undifferentiated myelocytes and myeloblasts, and a chromosomal analysis that demonstrates the Philadelphia chromosome. In the absence of a chromosomal analysis, or if the Philadelphia chromosome is not present, the diagnosis may be made by other methods consistent with the prevailing state of medical knowledge and clinical practice. The requirement for CML in the accelerated or blast phase is met in 13.06B if laboratory findings show the proportion of blast (immature) cells in the peripheral blood or bone marrow is 10 percent or greater.

c. Chronic lymphocytic leukemia.

i. We require the diagnosis of chronic lymphocytic leukemia (CLL) to be documented by evidence of a chronic lymphocytosis of at least 10,000 cells/mm3 for 3 months or longer, or other acceptable diagnostic techniques consistent with the prevailing state of medical knowledge and clinical practice.

ii. We evaluate the complications and residual impairment(s) from CLL under the appropriate listings, such as 13.05A2 or the hematological listings (7.00).

d. Elevated white cell count. In cases of chronic leukemia (either myelogenous or lymphocytic), an elevated white cell count, in itself, is not a factor in determining the severity of the impairment.

3. Macroglobulinemia or heavy chain disease. We require the diagnosis of these diseases to be confirmed by protein electrophoresis or immunoelectrophoresis. We evaluate the resulting impairment(s) under the appropriate listings, such as 13.05A2 or the hematological listings (7.00).

4. Primary breast cancer.

a. We evaluate bilateral primary breast cancer (synchronous or metachronous) under 13.10A, which covers local primary disease, and not as a primary disease that has metastasized.

b. We evaluate secondary lymphedema that results from anticancer therapy for breast cancer under 13.10E if the lymphedema is treated by surgery to salvage or restore the functioning of an upper extremity. Secondary lymphedema is edema that results from obstruction or destruction of normal lymphatic channels. We may not restrict our determination of the onset of disability to the date of the surgery; we may establish an earlier onset date of disability if the evidence in your case record supports such a finding.

5. Carcinoma-in-situ. Carcinoma-in-situ, or preinvasive carcinoma, usually responds to treatment. When we use the term “carcinoma” in these listings, it does not include carcinoma-in-situ.

6. Primary central nervous system (CNS) cancers. We use the criteria in 13.13 to evaluate cancers that originate within the CNS (that is, brain and spinal cord cancers).

a. The CNS cancers listed in 13.13A1 are highly malignant and respond poorly to treatment, and therefore we do not require additional criteria to evaluate them. We do not list pituitary gland cancer (for example, pituitary gland carcinoma) in 13.13A1, although this CNS cancer is highly malignant and responds poorly to treatment. We evaluate pituitary gland cancer under 13.13A1 and do not require additional criteria to evaluate it.

b. We consider a CNS tumor to be malignant if it is classified as Grade II, Grade III, or Grade IV under the World Health Organization (WHO) classification of tumors of the CNS (WHO Classification of Tumours of the Central Nervous System, 2007).

c. We evaluate benign (for example, WHO Grade I) CNS tumors under 11.05. We evaluate metastasized CNS cancers from non-CNS sites under the primary cancers (see 13.00C). We evaluate any complications of CNS cancers, such as resultant neurological or psychological impairments, under the criteria for the affected body system.

7. Primary peritoneal carcinoma. We use the criteria in 13.23E to evaluate primary peritoneal carcinoma in women because this cancer is often indistinguishable from ovarian cancer and is generally treated the same way as ovarian cancer. We use the criteria in 13.15A to evaluate primary peritoneal carcinoma in men because many of these cases are similar to malignant mesothelioma.

8. Prostate cancer. We exclude “biochemical recurrence” in 13.24A, which is defined as an increase in the serum prostate-specific antigen (PSA) level following the completion of the hormonal intervention therapy. We need corroborating evidence to document recurrence, such as radiological studies or findings on physical examination.

9. Melanoma. We evaluate malignant melanoma that affects the skin (cutaneous melanoma), eye (ocular melanoma), or mucosal membranes (mucosal melanoma) under 13.29. We evaluate melanoma that is not malignant that affects the skin (benign melanocytic tumor) under the listings in 8.00 or other affected body systems.

L. How do we evaluate cancer treated by bone marrow or stem cell transplantation, including transplantation using stem cells from umbilical cord blood? Bone marrow or stem cell transplantation is performed for a variety of cancers. We require the transplantation to occur before we evaluate it under these listings. We do not need to restrict our determination of the onset of disability to the date of the transplantation (13.05, 13.06, or 13.07) or the date of first treatment under the treatment plan that includes transplantation (13.28). We may be able to establish an earlier onset date of disability due to your transplantation if the evidence in your case record supports such a finding.

1. Acute leukemia (including T-cell lymphoblastic lymphoma) or accelerated or blast phase of CML. If you undergo bone marrow or stem cell transplantation for any of these disorders, we will consider you to be disabled until at least 24 months from the date of diagnosis or relapse, or at least 12 months from the date of transplantation, whichever is later.

2. Lymphoma, multiple myeloma, or chronic phase of CML. If you undergo bone marrow or stem cell transplantation for any of these disorders, we will consider you to be disabled until at least 12 months from the date of transplantation.

3. Other cancers. We will evaluate any other cancer treated with bone marrow or stem cell transplantation under 13.28, regardless of whether there is another listing that addresses that impairment. The length of time we will consider you to be disabled depends on whether you undergo allogeneic or autologous transplantation.

a. Allogeneic bone marrow or stem cell transplantation. If you undergo allogeneic transplantation (transplantation from an unrelated donor or a related donor other than an identical twin), we will consider you to be disabled until at least 12 months from the date of transplantation.

b. Autologous bone marrow or stem cell transplantation. If you undergo autologous transplantation (transplantation of your own cells or cells from your identical twin (syngeneic transplantation)), we will consider you to be disabled until at least 12 months from the date of the first treatment under the treatment plan that includes transplantation. The first treatment usually refers to the initial therapy given to prepare you for transplantation.

4. Evaluating disability after the appropriate time period has elapsed. We consider any residual impairment(s), such as complications arising from:

a. Graft-versus-host (GVH) disease.

b. Immunosuppressant therapy, such as frequent infections.

c. Significant deterioration of other organ systems.

13.02 Soft tissue cancers of the head and neck (except salivary glands—13.08—and thyroid gland—13.09).

B. Persistent or recurrent disease following initial anticancer therapy, except persistence or recurrence in the true vocal cord.

D. Small-cell (oat cell) carcinoma.

OR

E. Soft tissue cancers originating in the head and neck treated with multimodal anticancer therapy (see 13.00E3c). Consider under a disability until at least 18 months from the date of diagnosis. Thereafter, evaluate any residual impairment(s) under the criteria for the affected body system.

13.03 Skin (except malignant melanoma—13.29).

B. Carcinoma invading deep extradermal structures (for example, skeletal muscle, cartilage, or bone).

13.04 Soft tissue sarcoma.

B. Persistent or recurrent following initial anticancer therapy.

13.05 Lymphoma (including mycosis fungoides, but excluding T-cell lymphoblastic lymphoma—13.06). (See 13.00K1 and 13.00K2c.)

A. Non-Hodgkin lymphoma, as described in 1 or 2:

1. Aggressive lymphoma (including diffuse large B-cell lymphoma) persistent or recurrent following initial anticancer therapy.

2. Indolent lymphoma (including mycosis fungoides and follicular small cleaved cell) requiring initiation of more than one (single mode or multimodal) anticancer treatment regimen within a period of 12 consecutive months. Consider under a disability from at least the date of initiation of the treatment regimen that failed within 12 months.

OR

B. Hodgkin lymphoma with failure to achieve clinically complete remission, or recurrent lymphoma within 12 months of completing initial anticancer therapy.

OR

D. Mantle cell lymphoma.

13.06 Leukemia. (See 13.00K2.)

B. * * *

1. Accelerated or blast phase (see 13.00K2b). * * *

2. Chronic phase, as described in a or b:

b. Progressive disease following initial anticancer therapy.

13.07 Multiple myeloma (confirmed by appropriate serum or urine protein electrophoresis and bone marrow findings).

A. Failure to respond or progressive disease following initial anticancer therapy.

13.10 Breast (except sarcoma—13.04). (See 13.00K4.)

A. Locally advanced cancer (inflammatory carcinoma, cancer of any size with direct extension to the chest wall or skin, or cancer of any size with metastases to the ipsilateral internal mammary nodes).

C. Recurrent carcinoma, except local recurrence that remits with anticancer therapy.

OR

D. Small-cell (oat cell) carcinoma.

OR

E. With secondary lymphedema that is caused by anticancer therapy and treated by surgery to salvage or restore the functioning of an upper extremity. (See 13.00K4b.) Consider under a disability until at least 12 months from the date of the surgery that treated the secondary lymphedema. Thereafter, evaluate any residual impairment(s) under the criteria for the affected body system.

13.11 Skeletal system—sarcoma.

B. Recurrent cancer (except local recurrence) after initial anticancer therapy.

D. All other cancers originating in bone with multimodal anticancer therapy (see 13.00E3c). Consider under a disability for 12 months from the date of diagnosis. Thereafter, evaluate any residual impairment(s) under the criteria for the affected body system.

13.12 Maxilla, orbit, or temporal fossa.

C. Cancer with extension to the orbit, meninges, sinuses, or base of the skull.

13.13 Nervous system. (See 13.00K6.)

A. Primary central nervous system (CNS; that is, brain and spinal cord) cancers, as described in 1, 2, or 3:

1. Glioblastoma multiforme, ependymoblastoma, and diffuse intrinsic brain stem gliomas (see 13.00K6a).

2. Any Grade III or Grade IV CNS cancer (see 13.00K6b), including astrocytomas, sarcomas, and medulloblastoma and other primitive neuroectodermal tumors (PNETs).

3. Any primary CNS cancer, as described in a or b:

a. Metastatic.

b. Progressive or recurrent following initial anticancer therapy.

OR

B. Primary peripheral nerve or spinal root cancers, as described in 1 or 2:

1. Metastatic.

2. Progressive or recurrent following initial anticancer therapy.

13.14 Lungs.

C. Carcinoma of the superior sulcus (including Pancoast tumors) with multimodal anticancer therapy (see 13.00E3c). * * *

13.15 Pleura or mediastinum.

B. * * *

2. Persistent or recurrent following initial anticancer therapy.

OR

C. Small-cell (oat cell) carcinoma.

13.16 Esophagus or stomach.

B. * * *

OR

C. Small-cell (oat cell) carcinoma.

13.17 Small intestine—carcinoma, sarcoma, or carcinoid.

B. * * *

OR

C. Small-cell (oat cell) carcinoma.

13.18 Large intestine (from ileocecal valve to and including anal canal).

C. * * *

OR

D. Small-cell (oat cell) carcinoma.

13.19 Liver or gallbladder—cancer of the liver, gallbladder, or bile ducts.

13.20 Pancreas.

B. Islet cell carcinoma that is physiologically active and is either inoperable or unresectable.

13.22 Urinary bladder—carcinoma.

D. * * *

OR

E. Small-cell (oat cell) carcinoma.

13.23 Cancers of the female genital tract—carcinoma or sarcoma (including primary peritoneal carcinoma).

A. * * *

3. Persistent or recurrent following initial anticancer therapy.

B. Uterine cervix, as described in 1, 2, or 3:

1. Extending to the pelvic wall, lower portion of the vagina, or adjacent or distant organs.

2. Persistent or recurrent following initial anticancer therapy.

3. With metastases to distant (for example, para-aortic or supraclavicular) lymph nodes.

C. * * *

3. Persistent or recurrent following initial anticancer therapy.

D. * * *

2. Persistent or recurrent following initial anticancer therapy.

E. Ovaries, as described in 1 or 2:

1. All cancers except germ-cell cancers, with at least one of the following:

a. Extension beyond the pelvis; for example, implants on, or direct extension to, peritoneal, omental, or bowel surfaces.

b. Metastases to or beyond the regional lymph nodes.

c. Recurrent following initial anticancer therapy.

2. Germ-cell cancers—progressive or recurrent following initial anticancer therapy.

OR

F. Small-cell (oat cell) carcinoma.

13.24 Prostate gland—carcinoma.

A. Progressive or recurrent (not including biochemical recurrence) despite initial hormonal intervention. (See 13.00K8.)

OR

B. * * *

OR

C. Small-cell (oat cell) carcinoma.

13.25 Testicles—cancer with metastatic disease progressive or recurrent following initial chemotherapy.

13.28 Cancer treated by bone marrow or stem cell transplantation. (See 13.00L.)

13.29 Malignant melanoma (including skin, ocular, or mucosal melanomas), as described in either A, B, or C:

A. Recurrent (except an additional primary melanoma at a different site, which is not considered to be recurrent disease) following either 1 or 2:

1. Wide excision (skin melanoma).

2. Enucleation of the eye (ocular melanoma).

OR

B. With metastases as described in 1, 2, or 3:

1. Metastases to one or more clinically apparent nodes; that is, nodes that are detected by imaging studies (excluding lymphoscintigraphy) or by clinical evaluation (palpable).

2. If the nodes are not clinically apparent, with metastases to four or more nodes.

3. Metastases to adjacent skin (satellite lesions) or distant sites (for example, liver, lung, or brain).

OR

C. Mucosal melanoma.

Part B 113.00 Cancer (Malignant Neoplastic Diseases) 113.00 CANCER (MALIGNANT NEOPLASTIC DISEASES)

A. What impairments do these listings cover? We use these listings to evaluate all cancers (malignant neoplastic diseases), except certain cancers associated with human immunodeficiency virus (HIV) infection. If you have HIV infection, we use the criteria in 114.08E to evaluate carcinoma of the cervix, Kaposi sarcoma, lymphoma, and squamous cell carcinoma of the anal canal and anal margin.

B. What do we consider when we evaluate cancer under these listings? We will consider factors including:

1. Origin of the cancer.

2. Extent of involvement.

3. Duration, frequency, and response to anticancer therapy.

4. Effects of any post-therapeutic residuals.

C. How do we apply these listings? We apply the criteria in a specific listing to a cancer originating from that specific site.

D. What evidence do we need?

1. We need medical evidence that specifies the type, extent, and site of the primary, recurrent, or metastatic lesion. When the primary site cannot be identified, we will use evidence documenting the site(s) of metastasis to evaluate the impairment under 13.27 in part A.

2. For operative procedures, including a biopsy or a needle aspiration, we generally need a copy of both the:

a. Operative note, and

b. Pathology report.

3. When we cannot get these documents, we will accept the summary of hospitalization(s) or other medical reports. This evidence should include details of the findings at surgery and, whenever appropriate, the pathological findings.

4. In some situations, we may also need evidence about recurrence, persistence, or progression of the cancer, the response to therapy, and any significant residuals. (See 113.00G.)

E. When do we need longitudinal evidence?

1. Cancer with distant metastases. Most cancer of childhood consists of a local lesion with metastases to regional lymph nodes and, less often, distant metastases. We generally do not need longitudinal evidence for cancer that has metastasized beyond the regional lymph nodes because this cancer usually meets the requirements of a listing. Exceptions are for cancer with distant metastases that we expect to respond to anticancer therapy. For these exceptions, we usually need a longitudinal record of 3 months after therapy starts to determine whether the therapy achieved its intended effect, and whether this effect is likely to persist.

2. Other cancers. When there are no distant metastases, many of the listings require that we consider your response to initial anticancer therapy; that is, the initial planned treatment regimen. This therapy may consist of a single modality or a combination of modalities; that is, multimodal therapy (see 113.00I3).

3. Types of treatment.

a. Whenever the initial planned therapy is a single modality, enough time must pass to allow a determination about whether the therapy will achieve its intended effect. If the treatment fails, the failure often happens within 6 months after treatment starts, and there will often be a change in the treatment regimen.

b. Whenever the initial planned therapy is multimodal, we usually cannot make a determination about the effectiveness of the therapy until we can determine the effects of all the planned modalities. In some cases, we may need to defer adjudication until we can assess the effectiveness of therapy. However, we do not need to defer adjudication to determine whether the therapy will achieve its intended effect if we can make a fully favorable determination or decision based on the length and effects of therapy, or the residuals of the cancer or therapy (see 113.00G).

F. How do we evaluate impairments that do not meet one of the cancer listings?

1. These listings are only examples of cancers that we consider severe enough to result in marked and severe functional limitations. If your severe impairment(s) does not meet the criteria of any of these listings, we must also consider whether you have an impairment(s) that meets the criteria of a listing in another body system.

2. If you have a severe medically determinable impairment(s) that does not meet a listing, we will determine whether your impairment(s) medically equals a listing. (See §§ 404.1526 and 416.926 of this chapter.) If your impairment(s) does not meet or medically equal a listing, we will also consider whether you have an impairment(s) that functionally equals the listings. (See § 416.926a of this chapter.) We use the rules in § 416.994a of this chapter when we decide whether you continue to be disabled.

G. How do we consider the effects of anticancer therapy?

1. How we consider the effects of anticancer therapy under the listings. In many cases, cancers meet listing criteria only if the therapy is not effective and the cancer persists, progresses, or recurs. However, as explained in the following paragraphs, we will not delay adjudication if we can make a fully favorable determination or decision based on the evidence in the case record.

2. Effects can vary widely.

a. We consider each case on an individual basis because the therapy and its toxicity may vary widely. We will request a specific description of the therapy, including these items:

i. Drugs given.

ii. Dosage.

iii. Frequency of drug administration.

iv. Plans for continued drug administration.

v. Extent of surgery.

vi. Schedule and fields of radiation therapy.

b. We will also request a description of the complications or adverse effects of therapy, such as the following:

i. Continuing gastrointestinal symptoms.

ii. Persistent weakness.

iii. Neurological complications.

iv. Cardiovascular complications.

v. Reactive mental disorders.

3. Effects of therapy may change. The severity of the adverse effects of anticancer therapy may change during treatment; therefore, enough time must pass to allow us to evaluate the therapy's effect. The residual effects of treatment are temporary in most instances; however, on occasion, the effects may be disabling for a consecutive period of at least 12 months. In some situations, very serious adverse effects may interrupt and prolong multimodal anticancer therapy for a continuous period of almost 12 months. In these situations, we may determine there is an expectation that your impairment will preclude you from engaging in any age-appropriate activities for at least 12 months.

4. When the initial anticancer therapy is effective. We evaluate any post-therapeutic residual impairment(s) not included in these listings under the criteria for the affected body system. We must consider any complications of therapy. When the residual impairment(s) does not meet a listing, we must consider whether it medically equals a listing, or, as appropriate, functionally equals the listings.

H. How long do we consider your impairment to be disabling?

1. In some listings, we specify that we will consider your impairment to be disabling until a particular point in time (for example, until at least 12 months from the date of transplantation). We may consider your impairment to be disabling beyond this point when the medical and other evidence justifies it.

2. When a listing does not contain such a specification, we will consider an impairment(s) that meets or medically equals a listing in this body system to be disabling until at least 3 years after onset of complete remission. When the impairment(s) has been in complete remission for at least 3 years, that is, the original tumor or a recurrence (or relapse) and any metastases have not been evident for at least 3 years, the impairment(s) will no longer meet or medically equal the criteria of a listing in this body system.

3. Following the appropriate period, we will consider any residuals, including residuals of the cancer or therapy (see 113.00G), in determining whether you are disabled. If you have a recurrence or relapse of your cancer, your impairment may meet or medically equal one of the listings in this body system again.

I. What do we mean by the following terms?

1. Anticancer therapy means surgery, radiation, chemotherapy, hormones, immunotherapy, or bone marrow or stem cell transplantation. When we refer to surgery as an anticancer treatment, we mean surgical excision for treatment, not for diagnostic purposes.

2. Metastases means the spread of cancer cells by blood, lymph, or other body fluid. This term does not include the spread of cancer cells by direct extension of the cancer to other tissues or organs.

3. Multimodal therapy means anticancer therapy that is a combination of at least two types of treatment given in close proximity as a unified whole and usually planned before any treatment has begun. There are three types of treatment modalities: Surgery, radiation, and systemic drug therapy (chemotherapy, hormone therapy, and immunotherapy or biological modifier therapy). Examples of multimodal therapy include:

a. Surgery followed by chemotherapy or radiation.

b. Chemotherapy followed by surgery.

c. Chemotherapy and concurrent radiation.

4. Persistent means the planned initial anticancer therapy failed to achieve a complete remission of your cancer; that is, your cancer is evident, even if smaller, after the therapy has ended.

5. Progressive means the cancer becomes more extensive after treatment; that is, there is evidence that your cancer is growing after you have completed at least half of your planned initial anticancer therapy.

6. Recurrent or relapse means the cancer that was in complete remission or entirely removed by surgery has returned.

J. Can we establish the existence of a disabling impairment prior to the date of the evidence that shows the cancer satisfies the criteria of a listing? Yes. We will consider factors such as:

1. The type of cancer and its location.

2. The extent of involvement when the cancer was first demonstrated.

3. Your symptoms.

K. How do we evaluate specific cancers?

1. Lymphoma.

a. We provide criteria for evaluating lymphomas that are disseminated or have not responded to anticancer therapy in 113.05.

b. Lymphoblastic lymphoma is treated with leukemia-based protocols, so we evaluate this type of cancer under 113.06.

2. Leukemia.

a. Acute leukemia. The initial diagnosis of acute leukemia, including the accelerated or blast phase of chronic myelogenous (granulocytic) leukemia, is based on definitive bone marrow examination. Additional diagnostic information is based on chromosomal analysis, cytochemical and surface marker studies on the abnormal cells, or other methods consistent with the prevailing state of medical knowledge and clinical practice. Recurrent disease must be documented by peripheral blood, bone marrow, or cerebrospinal fluid examination, or by testicular biopsy. The initial and follow-up pathology reports should be included.

b. Chronic myelogenous leukemia (CML). We need a diagnosis of CML based on documented granulocytosis, including immature forms such as differentiated or undifferentiated myelocytes and myeloblasts, and a chromosomal analysis that demonstrates the Philadelphia chromosome. In the absence of a chromosomal analysis, or if the Philadelphia chromosome is not present, the diagnosis may be made by other methods consistent with the prevailing state of medical knowledge and clinical practice. The requirement for CML in the accelerated or blast phase is met in 113.06B if laboratory findings show the proportion of blast (immature) cells in the peripheral blood or bone marrow is 10 percent or greater.

c. Juvenile chronic myelogenous leukemia (JCML). JCML is a rare, Philadelphia-chromosome-negative childhood leukemia that is aggressive and clinically similar to acute myelogenous leukemia. We evaluate JCML under 113.06A.

d. Elevated white cell count. In cases of chronic leukemia (either myelogenous or lymphocytic), an elevated white cell count, in itself, is not a factor in determining the severity of the impairment.

3. Malignant solid tumors. The tumors we consider under 113.03 include the histiocytosis syndromes except for solitary eosinophilic granuloma. We do not evaluate thyroid cancer (see 113.09), retinoblastomas (see 113.12), primary central nervous system (CNS) cancers (see 113.13), neuroblastomas (see 113.21), or malignant melanoma (see 113.29) under this listing.

4. Primary central nervous system (CNS) cancers. We use the criteria in 113.13 to evaluate cancers that originate within the CNS (that is, brain and spinal cord cancers).

a. The CNS cancers listed in 113.13A are highly malignant and respond poorly to treatment, and therefore we do not require additional criteria to evaluate them. We do not list pituitary gland cancer (for example, pituitary gland carcinoma) in 113.13A, although this CNS cancer is highly malignant and responds poorly to treatment. We evaluate pituitary gland cancer under 113.13A and do not require additional criteria to evaluate it.

b. We consider a CNS tumor to be malignant if it is classified as Grade II, Grade III, or Grade IV under the World Health Organization (WHO) classification of tumors of the CNS (WHO Classification of Tumours of the Central Nervous System, 2007).

c. We evaluate benign (for example, WHO Grade I) CNS tumors under 111.05. We evaluate metastasized CNS cancers from non-CNS sites under the primary cancers (see 113.00C). We evaluate any complications of CNS cancers, such as resultant neurological or psychological impairments, under the criteria for the affected body system.

5. Retinoblastoma. The treatment for bilateral retinoblastoma usually results in a visual impairment. We will evaluate any resulting visual impairment under 102.02.

6. Melanoma. We evaluate malignant melanoma that affects the skin (cutaneous melanoma), eye (ocular melanoma), or mucosal membranes (mucosal melanoma) under 113.29. We evaluate melanoma that is not malignant that affects the skin (benign melanocytic tumor) under the listings in 108.00 or other affected body systems.

L. How do we evaluate cancer treated by bone marrow or stem cell transplantation, including transplantation using stem cells from umbilical cord blood? Bone marrow or stem cell transplantation is performed for a variety of cancers. We require the transplantation to occur before we evaluate it under these listings. We do not need to restrict our determination of the onset of disability to the date of transplantation (113.05 or 113.06). We may be able to establish an earlier onset date of disability due to your transplantation if the evidence in your case record supports such a finding.

1. Acute leukemia (including all types of lymphoblastic lymphomas and JCML) or accelerated or blast phase of CML. If you undergo bone marrow or stem cell transplantation for any of these disorders, we will consider you to be disabled until at least 24 months from the date of diagnosis or relapse, or at least 12 months from the date of transplantation, whichever is later.

2. Lymphoma or chronic phase of CML. If you undergo bone marrow or stem cell transplantation for any of these disorders, we will consider you to be disabled until at least 12 months from the date of transplantation.

3. Evaluating disability after the appropriate time period has elapsed. We consider any residual impairment(s), such as complications arising from:

a. Graft-versus-host (GVH) disease.

b. Immunosuppressant therapy, such as frequent infections.

c. Significant deterioration of other organ systems.

113.01 Category of Impairments, Cancer (Malignant Neoplastic Diseases)

113.03 Malignant solid tumors. Consider under a disability:

A. For 24 months from the date of initial diagnosis. Thereafter, evaluate any residual impairment(s) under the criteria for the affected body system.

OR

B. For 24 months from the date of recurrence of active disease. Thereafter, evaluate any residual impairment(s) under the criteria for the affected body system.

113.05 Lymphoma (excluding all types of lymphoblastic lymphomas—113.06). (See 113.00K1.)

A. Non-Hodgkin lymphoma (including Burkitt's and anaplastic large cell), with either 1 or 2:

1. Bone marrow, brain, spinal cord, liver, or lung involvement at initial diagnosis. Consider under a disability for 24 months from the date of diagnosis. Thereafter, evaluate under 113.05A2, or any residual impairments(s) under the criteria for the affected body system.

2. Persistent or recurrent following initial anticancer therapy.

OR

B. Hodgkin lymphoma, with either 1 or 2:

1. Bone marrow, brain, spinal cord, liver, or lung involvement at initial diagnosis. Consider under a disability for 24 months from the date of diagnosis. Thereafter, evaluate under 113.05B2, or any residual impairment(s) under the criteria for the affected body system.

2. Persistent or recurrent following initial anticancer therapy.

OR OR

D. Mantle cell lymphoma.

113.06 Leukemia. (See 113.00K2.)

A. Acute leukemia (including all types of lymphoblastic lymphomas and juvenile chronic myelogenous leukemia (JCML)). Consider under a disability until at least 24 months from the date of diagnosis or relapse, or at least 12 months from the date of bone marrow or stem cell transplantation, whichever is later. Thereafter, evaluate any residual impairment(s) under the criteria for the affected body system.

OR

B. * * *

1. Accelerated or blast phase (see 113.00K2b). Consider under a disability until at least 24 months from the date of diagnosis or relapse, or at least 12 months from the date of bone marrow or stem cell transplantation, whichever is later. Thereafter, evaluate any residual impairment(s) under the criteria for the affected body system.

113.12 Retinoblastoma.

B. Persistent or recurrent following initial anticancer therapy.

113.13 Nervous system. (See 113.00K4.) Primary central nervous system (CNS; that is, brain and spinal cord) cancers, as described in A, B, or C:

A. Glioblastoma multiforme, ependymoblastoma, and diffuse intrinsic brain stem gliomas (see 113.00K4a).

B. Any Grade III or Grade IV CNS cancer (see 113.00K4b), including astrocytomas, sarcomas, and medulloblastoma and other primitive neuroectodermal tumors (PNETs).

C. Any primary CNS cancer, as described in 1 or 2:

1. Metastatic.

2. Progressive or recurrent following initial anticancer therapy.

113.29 Malignant melanoma (including skin, ocular, or mucosal melanomas), as described in either A, B, or C:

A. Recurrent (except an additional primary melanoma at a different site, which is not considered to be recurrent disease) following either 1 or 2:

1. Wide excision (skin melanoma).

2. Enucleation of the eye (ocular melanoma).

OR

B. With metastases as described in 1, 2, or 3:

1. Metastases to one or more clinically apparent nodes; that is, nodes that are detected by imaging studies (excluding lymphoscintigraphy) or by clinical evaluation (palpable).

2. If the nodes are not clinically apparent, with metastases to four or more nodes.

3. Metastases to adjacent skin (satellite lesions) or distant sites (for example, liver, lung, or brain).

OR

C. Mucosal melanoma.

[FR Doc. 2015-11923 Filed 5-19-15; 8:45 am] BILLING CODE 4191-02-P
DEPARTMENT OF DEFENSE Department of the Navy 32 CFR Part 706 Certifications and Exemptions Under the International Regulations for Preventing Collisions at Sea, 1972 AGENCY:

Department of the Navy, DoD.

ACTION:

Final rule.

SUMMARY:

The Department of the Navy (DoN) is amending its certifications and exemptions under the International Regulations for Preventing Collisions at Sea, 1972, as amended (72 COLREGS), to reflect that the Deputy Assistant Judge Advocate General (DAJAG) (Admiralty and Maritime Law) has determined that USS PRINCETON (CG 59) is a vessel of the Navy which, due to its special construction and purpose, cannot fully comply with certain provisions of the 72 COLREGS without interfering with its special function as a naval ship. The intended effect of this rule is to warn mariners in waters where 72 COLREGS apply.

DATES:

This rule is effective May 20, 2015 and is applicable beginning May 11, 2015.

FOR FURTHER INFORMATION CONTACT:

Commander Theron R. Korsak, (Admiralty and Maritime Law), Office of the Judge Advocate General, Department of the Navy, 1322 Patterson Ave. SE., Suite 3000, Washington Navy Yard, DC 20374-5066, telephone 202-685-5040.

SUPPLEMENTARY INFORMATION:

Pursuant to the authority granted in 33 U.S.C. 1605, the DoN amends 32 CFR part 706.

This amendment provides notice that the DAJAG (Admiralty and Maritime Law), under authority delegated by the Secretary of the Navy, has certified that USS PRINCETON (CG 59) is a vessel of the Navy which, due to its special construction and purpose, cannot fully comply with the following specific provisions of 72 COLREGS without interfering with its special function as a naval ship: Annex I, paragraph 3(a), pertaining to the horizontal distance between the forward and after masthead lights. The DAJAG (Admiralty and Maritime Law) has also certified that the lights involved are located in closest possible compliance with the applicable 72 COLREGS requirements.

Moreover, it has been determined, in accordance with 32 CFR parts 296 and 701, that publication of this amendment for public comment prior to adoption is impracticable, unnecessary, and contrary to public interest since it is based on technical findings that the placement of lights on this vessel in a manner differently from that prescribed herein will adversely affect the vessel's ability to perform its military functions.

List of Subjects in 32 CFR Part 706

Marine safety, Navigation (water), Vessels.

For the reasons set forth in the preamble, the DoN amends part 706 of title 32 of the Code of Federal Regulations as follows:

PART 706—CERTIFICATIONS AND EXEMPTIONS UNDER THE INTERNATIONAL REGULATIONS FOR PREVENTING COLLISIONS AT SEA, 1972 1. The authority citation for part 706 continues to read as follows: Authority:

33 U.S.C. 1605.

2. Section 706.2 is amended in Table Five by revising the entry for USS PRINCETON (CG 59) to read as follows:
§ 706.2 Certifications of the Secretary of the Navy under Executive Order 11964 and 33 U.S.C. 1605. Table Five Vessel Number Masthead lights not over all other lights and obstruction. annex I, sec.2(f) Forward
  • masthead
  • light not in forward quarter of ship. annex I, sec.3(a)
  • After
  • masthead light less than 1/2 ship's length aft of forward masthead light. annex I, sec.3(a)
  • Percentage
  • horizontal
  • separation
  • attained
  • *         *         *         *         *         *         * USS PRINCETON CG 59 36.9
    Approved: May 11, 2015. A.B. Fischer, Captain, JAGC, U.S. Navy, Deputy Assistant Judge Advocate, General (Admiralty and Maritime Law). Dated: May 13, 2015. N.A. Hagerty-Ford, Commander, Judge Advocate General's Corps, U.S. Navy, Federal Register Liaison Officer.
    [FR Doc. 2015-12189 Filed 5-19-15; 8:45 am] BILLING CODE 3810-FF-P
    DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket Number USCG-2015-0304] RIN 1625-AA00 Safety Zones; Apra Outer Harbor and Adjacent Waters, Guam AGENCY:

    Coast Guard, DHS.

    ACTION:

    Temporary final rule.

    SUMMARY:

    The Coast Guard is establishing a safety zone for underwater detonation operations in the waters of Apra Outer Harbor, Guam. This rule is effective from 10 a.m. until 4 p.m. on May 15, 2015 and May 21, 2015 (kilo, Local Time). The enforcement period for this rule is from 10 a.m. to 4 p.m. on May 15, 2015 and May 21, 2015. The Coast Guard believes this safety zone regulation is necessary to protect all persons and vessels that would otherwise transit or be within the affected area from possible safety hazards associated with underwater detonation operations.

    DATES:

    This rule is effective without actual notice from May 20, 2015 through 4 p.m. May 21, 2015 (kilo, Local Time). For the purposes of enforcement, actual notice will be used from 10 a.m. on May 15, 2015 until May 20, 2015.

    ADDRESSES:

    Documents indicated in this preamble are part of docket USCG-2015-0304. To view documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, type the docket number USCG-2015-03XX in the “SEARCH” box and click “SEARCH”. Click on Open Docket Folder on the line associated with this rulemaking. You may also visit the Docket Management Facility in Room W12-140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 5 p.m. (EST), Monday through Friday, except Federal holidays. You may also visit the Coast Guard Sector Guam, Naval Base Guam, between 7:30 a.m. and 3:30 p.m. (Kilo, Local Time), Monday through Friday, except Federal holidays.

    FOR FURTHER INFORMATION CONTACT:

    If you have questions on this rule, call or email Chief, Kristina Gauthier, Sector Guam, U.S. Coast Guard; (671) 355-4866, [email protected]. If you have questions on viewing or submitting material to the docket, call Cheryl Collins, Program Manager, Docket Operations, telephone (202) 366-9826.

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

    The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a)of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because doing so would be impracticable. The Coast Guard received notice of this operation on March 31, 2015, only 46 days before the operation is scheduled. Due to this late notice, the Coast Guard did not have time to issue a notice of proposed rulemaking.

    Under 5 U.S.C. 553(d)(3), for the same reason mentioned above, the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the Federal Register. Due to the late notice and inherent danger in underwater detonation exercises, delaying the effective period of this safety zone would be contrary to the public interest.

    B. Basis and Purpose

    The legal basis for this rule is the Coast Guard's authority to establish regulated navigation areas and other limited access areas: 33 U.S.C 1231; 33 CFR 1.05-1, 6.04-6, 160.5; and Department of Homeland Security Delegation No. 0170.1. A safety zone is a water area, shore area, or water and shore area, for which access is limited to authorized person, vehicles, or vessels for safety purposes.

    The purpose of this rulemaking is to protect mariners from the potential hazards associated with a U.S. Navy training exercise which include detonation of underwater explosives. Approaching too close to such exercises could potentially expose the mariner to flying debris or other hazardous conditions.

    C. Discussion of Rule

    In order to protect the public from the hazards of the U.S. Navy training exercise, the Coast Guard is establishing a temporary safety zone, effective from 10 a.m. May 15, 2015 through 4 p.m. May 21, 2015 (Kilo, Local Time). The enforcement periods for this rule will be from 10 a.m. to 4 p.m. on May 15, 2015 and May 21, 2015.

    The safety zone is located within the Guam COTP Zone (See 33 CFR 3.70-15), and will cover all waters bounded by a circle with a 700-yard radius for vessels persons in the water, centered at: 13°27.700′ N. and 144°38.500′ E., from the surface of the water to the ocean floor.

    The general regulations governing safety zones contained in 33 CFR 165.23 apply. Entry into, transit through or anchoring within safety zones is prohibited unless authorized by the COTP or a designated representative thereof. Any Coast Guard commissioned, warrant, or petty officer, and any other COTP representative permitted by law, may enforce the zone. The COTP may waive any of the requirements of this rule for any person, vessel, or class of vessel upon finding that application of the safety zone regulation is unnecessary or impractical for the purpose of maritime safety. Vessels or persons violating this rule may be subject to the penalties set forth in 33 U.S.C. 1232 and/or 50 U.S.C. 192.

    D. Regulatory Analyses

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

    1. Regulatory Planning and Review

    This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. The Coast Guard expects the economic impact of this rule to be extremely minimal based on the short duration of the safety zone regulation and the limited geographic area affected by it.

    2. Impact on Small Entities

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

    This safety zone regulation will not have a significant economic impact on a substantial number of small entities for the following reasons. This rule would affect the following entities, some of which might be small entities: the owners or operators of vessels intending to transit through a portion of the zones from 10 a.m. through 4 p.m. on May 15, 2015 and May 21, 2015. This rule will be enforced for only 6 hours each day and vessel traffic can pass safely around the safety zone. The safety zone does not encompass the entire harbor and safe transit is still allowed to pass through, in and out of Apra Harbor. Further, traffic will be allowed to pass through the zones with the permission of the Coast Guard Patrol Commander 671-487-4817. Before the effective period, we will issue maritime advisories widely available to users of outer Apra Harbor.

    If you think that your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment (see ADDRESSES) explaining why you think it qualifies and how and to what degree this rule would economically affect it.

    3. Assistance for Small Entities

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

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

    4. Collection of Information

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

    5. Federalism

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

    6. Protest Activities

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

    7. Unfunded Mandates Reform Act

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

    8. Taking of Private Property

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

    9. Civil Justice Reform

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

    10. Protection of Children From Environmental Health Risks

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

    11. Indian Tribal Governments

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

    12. Energy Effects

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

    13. Technical Standards

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

    14. Environment

    We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have made a preliminary determination that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves a closed area of Apra Outer Harbor, to vessel traffic, for 6 hours on both May 15, 2015 and May 21, 2015. This rule is categorically excluded from further review under paragraph 34(g) of Figure 2-1 of the Commandant Instruction. A preliminary environmental analysis checklist supporting this determination and a Categorical Exclusion Determination are available in the docket where indicated under ADDRESSES. This rule is categorically excluded, under figure 2-1, paragraph (34)(g), of the Instruction.

    List of Subjects in 33 CFR Part 165

    Harbors, Marine safety, Navigation (water), Reporting and record-keeping requirements, Security measures, Waterways.

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

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

    33 U.S.C. 1231; 46 U.S.C. Chapter 701, 3306, 3703; 50 U.S.C. 191, 195; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Pub. L. 107-295, 116 Stat. 2064; Department of Homeland Security Delegation No. 0170.1.

    2. Add § 165.T14-0304 to read as follows:
    § 165. T14-0304 Safety Zones; Apra Outer Harbor and adjacent waters, Guam.

    (a) Location. The following area, within the Guam Captain of the Port (COTP) Zone (See 33 CFR 3.70-15), from the surface of the water to the ocean floor, is a safety zone: Seven-hundred-yard-radius zone—All waters bounded by a circle with a 700-yard radius centered at 13°27.700′ N. and 144°38.500′ E., (NAD 1983).

    (b) Effective period. This section is effective from 10 a.m. on May 15, 2015 to 4 p.m. on May 21, 2015 (Kilo, Local Time).

    (c) Enforcement periods. The safety zones described in paragraph (a) of this section will be enforced during the U.S. Navy underwater detonation operation, from 10 a.m. until 4 p.m. on May 15, 2015 and May 21, 2015 (Kilo, Local Time).

    (d) Regulations. The general regulations governing safety zones contained in 33 CFR 165.23 apply. No vessels may enter or transit the safety zone unless authorized by the COTP or a designated representative thereof.

    (e) Enforcement. Any Coast Guard commissioned, warrant, or petty officer, and any other COTP representative permitted by law, may enforce these temporary safety zones.

    (f) Waiver. The COTP may waive any of the requirements of this section for any person, vessel, or class of vessel upon finding that application of the safety zone is unnecessary or impractical for the purpose of maritime security.

    (g) Penalties. Vessels or persons violating this rule are subject to the penalties set forth in 33 U.S.C. 1232 and 50 U.S.C. 192.

    Dated: April 30, 2015. James B. Pruett, Captain, U.S. Coast Guard, Captain of the Port Guam.
    [FR Doc. 2015-12109 Filed 5-19-15; 8:45 am] BILLING CODE 9110-04-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R05-OAR-2013-0819; FRL-9927-48-Region 5] Approval and Promulgation of Air Quality Implementation Plans; Illinois; NAAQS Update AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Direct final rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is taking direct final action to approve a State Implementation Plan (SIP) revision submitted by the Illinois Environmental Protection Agency (IEPA) on December 2, 2013. The state rule revisions update Illinois' ambient air quality standards for sulfur dioxide (SO2), ozone, nitrogen dioxide (NO2), lead, fine particulate matter (PM2.5), particulate matter (PM10), and carbon monoxide (CO) and bring them up to date (through 2012) with EPA-promulgated National Ambient Air Quality Standards (NAAQS). The SIP revision also adopts EPA-promulgated monitoring methods and test procedures for the revised state air quality standards.

    DATES:

    This direct final rule will be effective July 20, 2015, unless EPA receives adverse comments by June 19, 2015. If adverse comments are received by EPA, EPA will publish a timely withdrawal of the direct final rule in the Federal Register informing the public that the rule will not take effect.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R05-OAR-2013-0819, by one of the following methods:

    1. www.regulations.gov: Follow the on-line instructions for submitting comments.

    2. Email: [email protected]

    3. Fax: (312) 692-2450.

    4. Mail: Douglas Aburano, Chief, Air Planning and Maintenance Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604.

    5. Hand Delivery: Douglas Aburano, Chief, Air Planning and Maintenance Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604. Such deliveries are only accepted during the Regional Office normal hours of operation, and special arrangements should be made for deliveries of boxed information. The Regional Office official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding Federal holidays?

    Instructions: Direct your comments to Docket ID No. EPA-R05-OAR-2013-0819. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or email. The www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to EPA without going through www.regulations.gov your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses.

    Docket: All documents in the docket are listed in the www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy at the Environmental Protection Agency, Region 5, Air and Radiation Division, 77 West Jackson Boulevard, Chicago, Illinois 60604. This facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding Federal holidays. We recommend that you telephone Edward Doty, Environmental Scientist, at (312) 886-6057 before visiting the Region 5 office.

    FOR FURTHER INFORMATION CONTACT:

    Edward Doty, Attainment Planning and Maintenance Section, Air Programs Branch (AR-18J), Environmental Protection Agency, Region 5, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-6057, [email protected]

    SUPPLEMENTARY INFORMATION:

    Throughout this document whenever “we,” “us,” or “our” is used, we mean EPA. This SUPPLEMENTARY INFORMATION section is arranged as follows:

    I. Background A. When and why did the state make this submittal? B. Did the state hold public hearings for this submittal? II. What is EPA's analysis of IEPA's submittal? III. What action is EPA taking? IV. Incorporation by Reference V. Statutory and Executive Order Reviews I. Background A. When and why did the state make this submittal?

    Section 109 of the Clean Air Act (CAA) requires the EPA to establish national primary (protective of human health) and secondary (protective of human welfare) air quality standards. Individually or collectively these standards are referred to as NAAQS. Section 109(d)(1) of the CAA requires EPA to review, and if necessary, based on accumulated health or welfare data, to revise each NAAQS every five years. States that maintain state air quality standard definitions in their state rules and SIPs must periodically revise their rules and SIPs to reflect the latest NAAQS.

    On December 2, 2013, IEPA submitted a SIP revision containing rule revisions to address the NAAQS for SO2, ozone, NO2, lead, PM2.5, PM10, and CO. In this submittal, the state requests EPA to approve into the SIP rule revisions to establish Illinois air quality standards “identical-in-substance” 1 to all NAAQS promulgated by EPA for these pollutants and published in the Code of Federal Regulations (CFR) through the end of 2012. The rule revisions also incorporate by reference all EPA-promulgated Federal Reference Methods (FRMs) and Federal Equivalent Methods (FEMs) for monitoring the subject air pollutants, also specified in the CFR through 2012. The rule revisions remove state air quality standards no longer supported by current NAAQS. The rule revisions remove several existing Illinois rule elements deemed to be no longer appropriate for the adopted air quality standards and monitoring methods. Finally, the rule revisions add a number of acronym and term definitions needed to fully implement the adopted air quality standards and monitoring methods.

    1 “Identical-in-substance” means that all air quality standards adopted by the state and included in the requested SIP revision have the same magnitude, averaging time, and form as the NAAQS they represent. However, the specific language of the state's air quality standard rules may differ from that of EPA's promulgated NAAQS.

    Illinois' rule revisions ensure consistency between the state and Federal definitions of the air quality standards and associated monitoring methods, and support consistency between the state and the EPA in the determination of attainment or nonattainment of the air quality standards.

    The state rule revisions were adopted by the Illinois Pollution Control Board (IPCB) on July 25, 2013, and became effective on July 29, 2013.

    B. Did the state hold public hearings for this submittal?

    A public hearing on the rule revisions was held on June 26, 2013, and the state addressed several comments made during this hearing or received through written comments submitted by the public.

    II. What is EPA's analysis of IEPA's submittal?

    Illinois' submittal covers revisions to state rules contained in 35 Illinois Administrative Code (IAC) Part 243 (35 IAC 243). Significant additions, modifications, and deletions to Part 243 are discussed and evaluated below.

    35 IAC Section 243.101, Definitions, contains term and concentration unit definitions critical to the implementation of the state's air quality standards. This section has been modified to change or add definitions of, terms including, but not limited to, “Exceedance of a NAAQS;” “Exceptional event;” “Federal reference method;” “Federal equivalent method;” “Micrograms per cubic meter;” “Milligrams per cubic meter;” “Parts per million;” “Parts per billion;” “PM10;” and “PM2.5.” Definitions for these terms and concentration units were generally derived from their definitions and usage in 40 CFR parts 50 and 53. We find these definitions to be acceptable and in agreement with definitions for these terms and concentration units used by the EPA.

    The heading of 35 IAC Section 243.102, Scope, has been revised from “Preamble” to “Scope” to correspond with the Federal regulations. The former preamble statement in 35 IAC Section 243.102(a) has been replaced with the statement of scope from 40 CFR 50.2. This section also adds in parentheses “primary NAAQS” after “National primary air quality standards” and adds in parentheses “secondary NAAQS” after “National secondary air quality standards.” All older subsections of this section have been deleted to remove provisions no longer needed to implement the state's air quality standards. This revised section is acceptable.

    Section 243.103, Applicability, has been revised to improve its readability and notes that the adopted air quality standards are applicable throughout the entire state of Illinois.

    The IPCB has chosen to repeal Section 243.104 (the Non-degradation Rule) from 35 IAC 243 and from the Illinois SIP. The Non-degradation Rule predates the Illinois Environmental Protection Act and adoption of the state's air quality standard rules. When adopting the air quality standard rules, the IPCB chose to adopt the Non-degradation Rule from earlier rules of the Air Pollution Control Board (a predecessor of the IPCB). This rule section was intended to protect areas in Illinois currently attaining the air quality standards. The IPCB chose to remove this rule section from 35 IAC 243 because: (1) it might conflict with Federal non-degradation rules; (2) it is not necessary in the context of the NAAQS; and, (3) it was not possible to correct its flaws in the context of the state's air quality standard rules contained in 35 IAC 243. This rule removal is acceptable.

    Section 243.105, Air Quality Monitoring Data Influenced by Exceptional Events, has been added to correspond with 40 CFR 50.14 (2012). This section provides for a state request to the EPA for a determination that certain monitored air quality concentrations that are the result of exceptional events may be excluded from the consideration of air quality for purposes of determining exceedances of the air quality standards. This section describes the nature of the state's exceptional event demonstration to the EPA and specifies the criteria that the exceptional event demonstration must meet for approval by the EPA. Of particular note, this section describes exclusion of air quality data resulting from fireworks and prescribed fires. Finally, this section describes the schedules and procedures to be followed when the state petitions the EPA for a determination of an exceptional event. This section was derived from 40 CFR part 50, and is acceptable.

    Section 243.106, Monitoring, which described the general approach to the monitoring of air quality levels, has been repealed. This section provided no specific criteria for the monitoring of air levels, and its removal is acceptable.

    Section 243.107, Reference Conditions, has been revised to improve its readability and specifies the reference temperature and reference air pressure to which monitored air quality concentrations must be adjusted to assure acceptable comparability of the monitored air quality concentrations. The rule revision is acceptable and reflects ambient condition adjustments required by the EPA in 40 CFR part 50.

    Section 243.108, Incorporation by Reference, includes Federal rules and documents incorporated by reference into Illinois' air quality rules. More specifically, this section includes the required reference methods applicable to the monitoring of specific pollutants as specified in the appendices to 40 CFR part 50 and documents published by the National Exposure Research Laboratory, Human Exposure and Atmospheric Sciences Division of EPA. In addition, this section incorporates by reference all appendices in 40 CFR part 50 needed to interpret the adopted air quality standards or to define the FRMs and FEMs for each pollutant. These incorporations by reference are needed to implement the state's air quality standards in a manner equivalent to the NAAQS.

    The air quality standards themselves are contained in sections 243.120 through 243.126, with each of these sections being applicable to a specific pollutant (each section covers all standards applicable to the given pollutant). Illinois has rewritten these sections to eliminate ambient air quality standards that have been revoked or eliminated by EPA and to add or update standards for each pollutant as currently adopted/promulgated by the EPA through 2012. Each section also defines the Federal reference and equivalent monitoring methods applicable to each pollutant. The state has rewritten the air quality standards to be “identical-in-substance” with EPA's promulgated NAAQS. The state's adopted air quality standards contain the same air quality levels, averaging times, and forms as the NAAQS, but have been rewritten for consistency in Illinois' rule system. All NAAQS contained in 40 CFR part 50 (2012) are reflected by the Illinois air quality standards now specified in sections 243.120 through 243.126. EPA has compared the adopted air quality standards to the NAAQS specified in 40 CFR part 50, and has found them to be acceptable.

    III. What action is EPA taking?

    EPA is approving the requested SIP revision submission pertaining to the amendments to Illinois' ambient air quality standards since these revised air quality standards are consistent with the NAAQS promulgated by EPA and in existence during 2012. The state will adopt new air quality standards as new NAAQS are adopted by EPA and will subsequently remove/repeal certain air quality standards as EPA revokes the standards as NAAQS. Specifically, we are approving 35 IAC sections 243.101, 243.102, 243.103, 243.105, 243.107, 243.108, 243.120, 243.122, 243.123, 243.124, 243.125, 243.126, and 243.TableA, and we are incorporating by reference these rules into the Illinois SIP. We are also approving the repeal from the SIP of 35 IAC sections 243.104, 243.106, 243.Appendix A, 243.Appendix B, and 243.Appendix C.

    We are publishing this action without prior proposal because we view this as a noncontroversial amendment and anticipate no adverse comments. However, in the proposed rules section of this Federal Register publication, we are publishing a separate document that will serve as the proposal to approve the state plan if relevant adverse written comments are filed. This rule will be effective July 20, 2015 without further notice unless we receive relevant adverse written comments by June 19, 2015. If we receive such comments, we will withdraw this action before the effective date by publishing a subsequent document that will withdraw the final action. All public comments received will then be addressed in a subsequent final rule based on the proposed action. EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. Please note that if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment. If we do not receive any comments, this action will be effective July 20, 2015.

    IV. Incorporation by Reference

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

    V. Statutory and Executive Order Reviews

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

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

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

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

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

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

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

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

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

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

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

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

    Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by July 20, 2015. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel notice of proposed rulemaking for this action published in the proposed rules section of this Federal Register, rather than file an immediate petition for judicial review of this direct final rule, so that EPA can withdraw this direct final rule and address the comment in the proposed rulemaking. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)

    List of Subjects in 40 CFR Part 52

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

    Dated: May 4, 2015. Susan Hedman, Regional Administrator, Region 5.

    40 CFR part 52 is amended as follows:

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

    42 U.S.C. 7401 et seq.

    2. Section 52.720 is amended by adding paragraph (c)(204) to read as follows:
    § 52.720 Identification of plan.

    (c) * * *

    (204) On December 2, 2013, Illinois submitted an amendment to its State Implementation Plan at 35 Illinois Administrative Code part 243, which updates Illinois air quality standards to reflect National Ambient Air Quality Standards for sulfur dioxide, ozone, nitrogen dioxide, lead, fine particulate matter, particulate matter, and carbon monoxide and incorporates Federal test procedures for these pollutants.

    (i) Incorporation by reference. Illinois Administrative Code Title 35: Environmental Protection; Subtitle B: Air Pollution; Chapter I: Pollution Control Board; Subchapter l: Air Quality Standards And Episodes; Part 243: Air Quality Standards; Sections 243.101 Definitions, 243.102 Scope, 243.103 Applicability, 243.105 Air Quality Monitoring Data Influenced by Exceptional Events, 243.107 Reference Conditions, 243.108 Incorporations by Reference, 243.120 PM10 and PM2.5, 243.122 Sulfur Oxides (Sulfur Dioxide), 243.123 Carbon Monoxide, 243.124 Nitrogen Oxides (Nitrogen Dioxide as Indicator), 243.125 Ozone, 243.126 Lead, and 243.TABLE A Schedule of Exceptional Event Flagging and Documentation Submission for New or Revised NAAQS, effective July 29, 2013.

    [FR Doc. 2015-12255 Filed 5-19-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 170 [EPA-HQ-OPP-2011-0184; FRL-9926-64] RIN 2070-AJ22 Notification of Submission to the Secretary of Agriculture; Pesticides; Agricultural Worker Protection Standard Revisions AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Notification of submission to the Secretary of Agriculture.

    SUMMARY:

    This document notifies the public as required by the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) that the EPA Administrator has forwarded to the Secretary of the United States Department of Agriculture (USDA) a draft regulatory document concerning Pesticides; Agricultural Worker Protection Standard Revisions. The draft regulatory document is not available to the public until after it has been signed and made available by EPA.

    DATES:

    See Unit I. under SUPPLEMENTARY INFORMATION.

    ADDRESSES:

    The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2011-0184, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory Docket (OPP Docket) in the Environmental Protection Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW., Washington, DC 20460-0001. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OPP Docket is (703) 305-5805. Please review the visitor instructions and additional information about the docket available at http://www.epa.gov/dockets.

    FOR FURTHER INFORMATION CONTACT:

    Kathy Davis, Field and External Affairs Division (7506P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington DC 20460-0001; telephone number: (703) 308-7002; email address: [email protected]

    SUPPLEMENTARY INFORMATION: I. What action is EPA taking?

    Section 25(a)(2)(B) of FIFRA requires the EPA Administrator to provide the Secretary of USDA with a copy of any draft final rule at least 30 days before signing it in final form for publication in the Federal Register. The draft final rule is not available to the public until after it has been signed by EPA. If the Secretary of USDA comments in writing regarding the draft final rule within 15 days after receiving it, the EPA Administrator shall include the comments of the Secretary of USDA, if requested by the Secretary of USDA, and the EPA Administrator's response to those comments with the final rule that publishes in the Federal Register. If the Secretary of USDA does not comment in writing within 15 days after receiving the draft final rule, the EPA Administrator may sign the final rule for publication in the Federal Register any time after the 15-day period.

    II. Do any statutory and Executive Order reviews apply to this notification?

    No. This document is merely a notification of submission to the Secretary of USDA. As such, none of the regulatory assessment requirements apply to this document.

    List of Subjects in 40 CFR Part 170

    Agricultural worker safety, Environmental protection, Farmworker, Handler, Pesticide handler, Pesticide safety training, Pesticide worker safety, Worker, Worker Protection Standard regulations, WPS.

    Dated: May 12, 2015. Jack Housenger, Director, Office of Pesticide Programs.
    [FR Doc. 2015-11962 Filed 5-19-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2013-0821; FRL-9927-38] Fragrance Components; Exemption From the Requirement of a Tolerance AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    This regulation establishes an exemption from the requirement of a tolerance for residues of various fragrance component substances when used as inert ingredients in antimicrobial pesticide formulations for use on food contact surfaces in public eating places, dairy-processing equipment, and food-processing equipment and utensils. This regulation eliminates the need to establish a maximum permissible level for residues of these various fragrance component substances

    DATES:

    This regulation is effective May 20, 2015. Objections and requests for hearings must be received on or before July 20, 2015, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

    ADDRESSES:

    The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2013-0821, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory Public Docket (OPP Docket) in the Environmental Protection Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW., Washington, DC 20460-0001. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OPP Docket is (703) 305-5805. Please review the visitor instructions and additional information about the docket available at http://www.epa.gov/dockets.

    FOR FURTHER INFORMATION CONTACT:

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

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

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

    • Crop production (NAICS code 111).

    • Animal production (NAICS code 112).

    • Food manufacturing (NAICS code 311).

    • Pesticide manufacturing (NAICS code 32532).

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

    You may access a frequently updated electronic version of 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.

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

    Under the Federal Food, Drug, and Cosmetic Act (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-2013-0821 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 July 20, 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-2013-0821, by one of the following methods:

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

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

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

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

    II. Today's Action A. What is the authority for this action?

    EPA is taking this action under section 408(e) the FFDCA, 21 U.S.C. 346a(e), which allows EPA to establish a tolerance exemption under FFDCA section 408, 21 U.S.C. 346a et se. Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(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. Pursuant to FFDCA section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in FFDCA section 408(b)(2)(C), which 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. . . . ”

    EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. For further discussion of the regulatory requirements of FFDCA section 408 and a complete description of the risk assessment process, see http://www.epa.gov/pesticides/regulating/tolerances.htm.

    B. What action is the Agency taking?

    EPA, on its own initiative under FFDCA section 408(e), is establishing exemptions from the requirement of a tolerance for residues of various fragrance component substances identified at the end of this document.

    III. EPA's Proposal

    In the Federal Register of July 25, 2014 (79 FR 43350) (FRL-9910-53), EPA proposed, on its own initiative under FFDCA section 408(e), 21 U.S.C. 346a(e), to establish exemptions from the requirement of a tolerance for residues of acetaldehyde (CAS Reg. No. 75-07-0), acetic acid (CAS Reg. No. 64-19-7), allyl cyclohexyl propionate (CAS Reg. No. 2705-87-5), butryic acid (CAS Reg. No. 107-92-6), butyl alcohol (CAS Reg. No. 71-36-3), citral (CAS Reg. No. 5392-40-5), citronellol (CAS Reg. No. 106-22-9), citronellyl acetate (CAS Reg. No. 150-84-5), β-damascone, (Z)-(CAS Reg. No. 23726-92-3), decanal (CAS Reg. No. 112-31-2), (E)-4-decenal (CAS Reg. No. 65405-70-1), decanoic acid (CAS Reg. No. 334-48-5), 1-decanol (CAS Reg. No. 112-30-1), 2,6-dimethyl-5-heptanal (CAS Reg. No. 106-72-9), 2-dodecanol, (2E)- (CAS Reg. No. 20407-84-5), d-limonene (CAS Reg. No. 5989-27-5), ethyl 2-methylbutyrate (CAS Reg. No. 452-79-1), (E)-geraniol (CAS Reg. No. 106-24-1), (E)-geraniol acetate (CAS Reg. No. 105-87-3), heptanal (CAS Reg. No. 111-71-7), heptanoic acid (CAS Reg. No. 111-14-8), heptyl alcohol (CAS Reg. No. 111-70-6), hexanal (CAS Reg. No. 66-25-1), hexanoic acid (CAS Reg. No. 142-62-1), (Z)-3-hexenol (CAS Reg. No. 928-96-1), (Z)-3-hexenol acetate (CAS Reg. No. 3681-71-8), hexyl acetate (CAS Reg. No. 142-92-7), hexyl alcohol (CAS Reg. No. 111-27-3), lauric acid (CAS Reg. No.143-07-7), lauric aldehyde (CAS Reg. No. 112-54-9), lauryl alcohol (CAS Reg. No. 112-53-8), methyl-α-ionone (CAS Reg. No. 127-42-4), 3-methyl-2-butenyl acetate (CAS Reg. No. 1191-16-8), 2-methylundecanal (CAS Reg. No. 110-41-8), myristaldehyde (CAS Reg. No. 124-25-4), myristic acid (CAS Reg. No. 544-63-8), neryl acetate (CAS Reg. No. 141-12-8), n-hexanol (CAS Reg. No. 111-27-3), nonanal (CAS Reg. No. 124-19-6), nonanoic acid (CAS Reg. No. 112-05-0), nonyl alcohol (CAS Reg. No. 143-08-8), octanal (CAS Reg. No. 124-13-0), octanoic acid (CAS Reg. No. 124-07-2), 1-octanol (CAS Reg. No. 111-87-5), palmitic acid (CAS Reg. No. 57-10-3), propionic acid (CAS Reg. No. 79-09-4), stearic acid (CAS Reg. No. 57-11-4), 2-tridecanal (CAS Reg. No. 7774-82-5), 3,5,5-trimethylhexanal (CAS Reg. No. 5435-64-3), undecanal (CAS Reg. No. 112-44-7), undecyl alcohol (CAS Reg. No. 112-42-5), valeraldehyde (CAS Reg. No. 110-62-3), and valeric acid (CAS Reg. No. 109-52-4) when used as fragrance components (i.e., inert ingredients) in antimicrobial pesticide formulations for use on food-contact surfaces in public eating places, dairy-processing equipment, and food-processing equipment and utensils at end-use concentrations not to exceed 100 parts per million (ppm).

    As discussed in that document, EPA has reviewed the available scientific data and other relevant information in support of this action, consistent with FFDCA section 408(c)(2), and the factors specified in FFDCA section 408(b)(2)(C and D). EPA has sufficient data to assess the hazards of and to make a determination on aggregate exposure for these various fragrance components including exposure resulting from the exemptions from the requirement of a tolerance established by this action. For a detailed discussion of the aggregate risk assessments and determination of safety that support the establishment of these exemptions from the requirement of a tolerance, please refer to the July 25, 2014 Federal Register final rule and its supporting documents, available at http://regulations.gov.

    IV. Public Comments

    EPA received nine comments to the proposed rule. Six of the comments were fully supportive of the proposed rule. One comment made specific reference to the fragrance component acetaldehyde and stated that the risk assessment of acetaldehyde should reconsider the compound's cancer risk. The comment noted that part of the safety finding for the fragrance components was based on no structural alerts for genotoxicity or carcinogenicity but in the case of acetaldehyde EPA had previously considered acetaldehyde to be a probable human carcinogen based on inadequate human cancer studies and animal studies that have shown increased incidence of nasal tumors in rats and laryngeal tumors in hamsters after inhalation exposure. The Agency agrees with the commenter that the safety analysis provided in the proposed rule, which relies on human exposure threshold values for non-cancer risks, is not applicable to acetaldehyde and therefore, cannot be used to support an exemption for acetaldehyde. As such, EPA is not establishing in this final rule an exemption from the requirement of a tolerance for acetaldehyde as a fragrance component for use in antimicrobial pesticide formulations for use on food-contact surfaces in public eating places, dairy-processing equipment, and food-processing equipment and utensils at end-use concentrations not to exceed 100 ppm.

    Two comments made reference to fragrance sensitivity among certain individuals. The Agency understands the commenter's concerns, however the legal framework provided by FFDCA section 408 states that tolerances may be set when the pesticide chemical meets the safety standard imposed by that statute. The Agency is required by FFDCA section 408 to estimate the risk of the potential exposure to these residues. Neither the supporting information cited by the commenters or other reliable data demonstrate the occurrence of specific adverse effects directly attributable to exposures to the substances listed in Unit III and EPA has concluded that there is a reasonable certainty that no harm will result to the general population and to infants and children from aggregate exposure to the fragrance components listed in Unit III when used as inert ingredients in antimicrobial formulations for use on food contact surfaces in public eating places, dairy processing equipment, and food processing equipment and utensils at end-use concentrations not to exceed 100 ppm.

    V. Final Rule and Determination of Safety

    Except for the exclusion of acetaldehyde, EPA is not making any changes to the risk assessment or final rule text that was proposed in July 25, 2014 Federal Register. Therefore, EPA concludes that there is a reasonable certainty that no harm will result to the general population and to infants and children from aggregate exposure to acetic acid; allyl cylcohexylpropionate; butryic acid; butyl alcohol; citral; citronellol; citronellyl acetate; β-damascone, (Z)-; decanal; (E)-4-decenal; decanoic acid; 1-decanol; 2,6-dimethyl-5-heptanal; 2-dodecanol, (2E)-; d-limonene; ethyl 2-methylbutyrate; (E)-geraniol; (E)-geraniol acetate; heptanal; heptanoic acid; heptyl alcohol; hexanal; hexanoic acid; (Z)-3-hexenol; (Z)-3-hexenol acetate; hexyl acetate; hexyl alcohol; lauric acid; lauric aldehyde; lauryl alcohol; methyl-α-ionone; 3-methyl-2-butenyl acetate; 2-methylundecanal; myristaldehyde; myristic acid; neryl acetate; n-hexanol; nonanal; nonanoic acid; nonyl alcohol; octanal; octanoic acid; 1-octanol; palmitic acid; propionic acid; stearic acid; 2-tridecanal; 3,5,5-trimethylhexanal; undecanal; undecyl alcohol; valeraldehyde; and valeric acid residues when used as when used as fragrance components (i.e., inert ingredients) in antimicrobial pesticide formulations for use on food-contact surfaces in public eating places, dairy-processing equipment, and food-processing equipment and utensils at end-use concentrations not to exceed 100 ppm.

    VI. Other Considerations A. Analytical Enforcement Methodology

    An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation.

    B. International Residue Limits

    In making its tolerance decisions, EPA seeks to harmonize U.S. tolerances with international standards whenever possible, consistent with U.S. food safety standards and agricultural practices. EPA considers the international maximum residue limits (MRLs) established by the Codex Alimentarius Commission (Codex), as required by FFDCA section 408(b)(4). The Codex Alimentarius is a joint United Nations Food and Agriculture Organization/World Health Organization food standards program, and it is recognized as an international food safety standards-setting organization in trade agreements to which the United States is a party. EPA may establish a tolerance that is different from a Codex MRL; however, FFDCA section 408(b)(4) requires that EPA explain the reasons for departing from the Codex level.

    The Codex has not established a MRL for the fragrance components listed in Unit II above.

    VII. Conclusion

    Therefore, exemptions from the requirement of a tolerance are established for residues of acetic acid (CAS Reg. No. 64-19-7), allyl cyclohexyl propionate (CAS Reg. No. 2705-87-5), butryic acid (CAS Reg. No. 107-92-6), butyl alcohol (CAS Reg. No. 71-36-3), citral (CAS Reg. No. 5392-40-5), citronellol (CAS Reg. No. 106-22-9), citronellyl acetate (CAS Reg. No. 150-84-5), β-damascone, (Z)- (CAS Reg. No. 23726-92-3), decanal (CAS Reg. No. 112-31-2), (E)-4-decenal (CAS Reg. No. 65405-70-1), decanoic acid (CAS Reg. No. 334-48-5), 1-decanol (CAS Reg. No. 112-30-1), 2,6-dimethyl-5-heptanal (CAS Reg. No. 106-72-9), 2-dodecanol, (2E)- (CAS Reg. No. 20407-84-5), d-limonene (CAS Reg. No. 5989-27-5), ethyl 2-methylbutyrate (CAS Reg. No. 452-79-1), (E)-geraniol (CAS Reg. No. 106-24-1), (E)-geraniol acetate (CAS Reg. No. 105-87-3), heptanal (CAS Reg. No. 111-71-7), heptanoic acid (CAS Reg. No. 111-14-8), heptyl alcohol (CAS Reg. No. 111-70-6), hexanal (CAS Reg. No. 66-25-1), hexanoic acid (CAS Reg. No. 142-62-1), (Z)-3-hexenol (CAS Reg. No. 928-96-1), (Z)-3-hexenol acetate (CAS Reg. No. 3681-71-8), hexyl acetate (CAS Reg. No. 142-92-7), hexyl alcohol (CAS Reg. No. 111-27-3), lauric acid (CAS Reg. No. 143-07-7), lauric aldehyde (CAS Reg. No. 112-54-9), lauryl alcohol (CAS Reg. No. 112-53-8), methyl-α-ionone (CAS Reg. No. 127-42-4), 3-methyl-2-butenyl acetate (CAS Reg. No. 1191-16-8), 2-methylundecanal (CAS Reg. No. 110-41-8), myristaldehyde (CAS Reg. No. 124-25-4), myristic acid (CAS Reg. No. 544-63-8), neryl acetate (CAS Reg. No. 141-12-8), n-hexanol (CAS Reg. No. 111-27-3), nonanal (CAS Reg. No. 124-19-6), nonanoic acid (CAS Reg. No. 112-05-0), nonyl alcohol (CAS Reg. No. 143-08-8), octanal (CAS Reg. No. 124-13-0), octanoic acid (CAS Reg. No. 124-07-2), 1-octanol (CAS Reg. No. 111-87-5), palmitic acid (CAS Reg. No. 57-10-3), propionic acid (CAS Reg. No. 79-09-4), stearic acid (CAS Reg. No. 57-11-4), 2-tridecanal (CAS Reg. No. 7774-82-5), 3,5,5-trimethylhexanal (CAS Reg. No. 5435-64-3), undecanal (CAS Reg. No. 112-44-7), undecyl alcohol (CAS Reg. No. 112-42-5), valeraldehyde (CAS Reg. No. 110-62-3), and valeric acid (CAS Reg. No. 109-52-4) when used as fragrance components (i.e., inert ingredients) in antimicrobial pesticide formulations for use on food-contact surfaces in public eating places, dairy-processing equipment, and food-processing equipment and utensils at end-use concentrations not to exceed 100 ppm.

    VIII. Statutory and Executive Order Reviews

    This action establishes exemptions from the requirement of a tolerance under FFDCA section 408(e). The Office of Management and Budget (OMB) has exempted tolerance actions from review under Executive Orders 12866, entitled Regulatory Planning and Review (58 FR 51735, October 4, 1993) and 13563, entitled Improving Regulation and Regulatory Review (76 FR 3821, January 21, 2011). As a result, 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). Nor does it require OMB review or any Agency action under 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.); does not 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); and 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).

    This action directly regulates growers, food processors, food handlers, and food retailers, but it does not regulate State or tribal governments. 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). Therefore, the Agency has determined that Executive Orders 13132, entitled Federalism (64 FR 43255, August 10, 1999) and 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, contain any unfunded mandate, or otherwise significantly or uniquely affect small governments as described in the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501 et seq.).

    Under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.), the Agency hereby certifies that this action will not have significant negative economic impact on a substantial number of small entities. Establishing an exemption from the requirement of a pesticide tolerance is, in effect, the removal of a regulatory restriction on pesticide residues in food and thus such an action will not have any negative economic impact on any entities, including small entities.

    X. Congressional Review Act

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

    List of Subjects in 40 CFR Part 180

    Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.

    Dated: May 8, 2015. G. Jeffrey Herndon, Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

    PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: Authority:

    21 U.S.C. 321(q), 346a and 371.

    2. In § 180.940, revise the entry for “Acetic acid” and alphabetically add the following inert ingredients to the table in paragraph (a) to read as follows:
    § 180.940 Tolerance exemptions for active and inert ingredients for use in antimicrobial formulations (Food-contact surface sanitizing solutions).

    (a) * * *

    Pesticide chemical CAS Reg. No. Limits Acetic acid 64-19-7 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Allyl cylcohexylpropionate 2705-87-5 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Butryic acid 107-92-6 When ready for use, the end-use concentration is not to exceed 100 ppm. Butyl alcohol 71-36-3 When ready for use, the end-use concentration is not to exceed 100 ppm. Citral 5392-40-5 When ready for use, the end-use concentration is not to exceed 100 ppm. Citronellol 106-22-9 When ready for use, the end-use concentration is not to exceed 100 ppm. Citronellyl acetate 150-84-5 When ready for use, the end-use concentration is not to exceed 100 ppm. β-Damascone, (Z)- 23726-92-3 When ready for use, the end-use concentration is not to exceed 100 ppm. Decanal 112-31-2 When ready for use, the end-use concentration is not to exceed 100 ppm. (E)-4-Decenal 65405-70-1 When ready for use, the end-use concentration is not to exceed 100 ppm. Decanoic acid 334-48-5 When ready for use, the end-use concentration is not to exceed 100 ppm. 1-Decanol 112-30-1 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * 2,6-Dimethyl-5-heptanal 106-72-9 When ready for use, the end-use concentration is not to exceed 100 ppm. 2-Dodecanol, (2E)- 20407-84-5 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Ethyl 2-methylbutyrate 452-79-1 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * (E)-Geraniol 106-24-1 When ready for use, the end-use concentration is not to exceed 100 ppm. (E)-Geraniol acetate 105-87-3 When ready for use, the end-use concentration is not to exceed 100 ppm. Heptanal 111-71-7 When ready for use, the end-use concentration is not to exceed 100 ppm. Heptanoic acid 111-14-8 When ready for use, the end-use concentration is not to exceed 100 ppm. Heptyl alcohol 111-70-6 When ready for use, the end-use concentration is not to exceed 100 ppm. Hexanal 66-25-1 When ready for use, the end-use concentration is not to exceed 100 ppm. Hexanoic acid 142-62-1 When ready for use, the end-use concentration is not to exceed 100 ppm. n-Hexanol 111-27-3 When ready for use, the end-use concentration is not to exceed 100 ppm. (Z)-3-Hexenol 928-96-1 When ready for use, the end-use concentration is not to exceed 100 ppm. (Z)-3-Hexenol acetate 3681-71-8 When ready for use, the end-use concentration is not to exceed 100 ppm. Hexyl acetate 142-92-7 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Lauric acid 143-07-7 When ready for use, the end-use concentration is not to exceed 100 ppm. Lauric aldehyde 112-54-9 When ready for use, the end-use concentration is not to exceed 100 ppm. Lauryl alcohol 112-53-8 When ready for use, the end-use concentration is not to exceed 100 ppm. d-Limonene 5989-27-5 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Methyl-α-ionone 127-42-4 When ready for use, the end-use concentration is not to exceed 100 ppm. 3-Methyl-2-butenyl acetate 1191-16-8 When ready for use, the end-use concentration is not to exceed 100 ppm. 2-Methylundecanal 110-41-8 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Myristaldehyde 124-25-4 When ready for use, the end-use concentration is not to exceed 100 ppm. Myristic acid 544-63-8 When ready for use, the end-use concentration is not to exceed 100 ppm. Neryl acetate 141-12-8 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Nonanal 124-19-6 When ready for use, the end-use concentration is not to exceed 100 ppm. Nonanoic acid 112-05-0 When ready for use, the end-use concentration is not to exceed 100 ppm. Nonyl alcohol 143-08-8 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Octanal 124-13-0 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Octanoic acid 124-07-2 When ready for use, the end-use concentration is not to exceed 100 ppm. 1-Octanol 111-87-5 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Palmitic acid 57-10-3 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Propionic acid 79-09-4 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * Stearic acid. 57-11-4 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         * 2-Tridecanal 7774-82-5 When ready for use, the end-use concentration is not to exceed 100 ppm. 3,5,5-Trimethylhexanal 5435-64-3 When ready for use, the end-use concentration is not to exceed 100 ppm. Undecanal 112-44-7 When ready for use, the end-use concentration is not to exceed 100 ppm. Undecyl alcohol 112-42-5 When ready for use, the end-use concentration is not to exceed 100 ppm. Valeraldehyde 110-62-3 When ready for use, the end-use concentration is not to exceed 100 ppm. Valeric acid 109-52-4 When ready for use, the end-use concentration is not to exceed 100 ppm. *         *         *         *         *         *         *
    [FR Doc. 2015-11959 Filed 5-19-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 180 [EPA-HQ-OPP-2014-0340; FRL-9926-62] Trinexapac-ethyl; Pesticide Tolerances AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Final rule.

    SUMMARY:

    This regulation establishes tolerances for residues of trinexapac-ethyl in or on multiple commodities which are identified and discussed later in this document. Syngenta Crop protection LLC requested these tolerances under the Federal Food, Drug, and Cosmetic Act (FFDCA).

    DATES:

    This regulation is effective May 20, 2015. Objections and requests for hearings must be received on or before July 20, 2015, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the SUPPLEMENTARY INFORMATION).

    ADDRESSES:

    The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2014-0340, is available at http://www.regulations.gov or at the Office of Pesticide Programs Regulatory Public Docket (OPP Docket) in the Environmental Protection Agency Docket Center (EPA/DC), West William Jefferson Clinton Bldg., Rm. 3334, 1301 Constitution Ave. NW., Washington, DC 20460-0001. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744, and the telephone number for the OPP Docket is (703) 305-5805. Please review the visitor instructions and additional information about the docket available at http://www.epa.gov/dockets.

    FOR FURTHER INFORMATION CONTACT:

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

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

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

    • Crop production (NAICS code 111).

    • Animal production (NAICS code 112).

    • Food manufacturing (NAICS code 311).

    • Pesticide manufacturing (NAICS code 32532).

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

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

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

    Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2014-0340 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 July 20, 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-2014-0340, by one of the following methods:

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

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

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

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

    II. Summary of Petitioned-For Tolerance

    In the Federal Register of August 1, 2014 (79 FR 44731) (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 4F8254) by Syngenta Crop Protection, LLC, P.O. Box 18300, Greensboro, NC 27419. The petition requested that 40 CFR 180.662 be amended by establishing tolerances for residues of the plant growth regulator trinexapac-ethyl, (4-(cyclopropyl-a-hydroxy-methylene)-3,5-dioxo-cyclohexanecarboxylic acid ethyl ester), and its primary metabolite CGA-179500 in or on rice, bran at 1.5 parts per million (ppm); rice, grain at 0.4 ppm; rice, straw at 0.07 ppm; rice, wild, grain at 0.4 ppm; rye, bran at 2.5 ppm; rye, grain at 2.0 ppm; rye, hay at 0.8 ppm; and rye, straw at 0.4 ppm. That document referenced a summary of the petition prepared by Syngenta Crop Protection LLC, the registrant, which is available in the docket, http://www.regulations.gov. There were no comments received in response to the notice of filing.

    Based upon review of the data supporting the petition, EPA has modified the proposed tolerances on rye commodities to rye, bran at 6.0 ppm; rye, grain at 4.0 ppm; rye, hay at 1.5 ppm; and rye, straw at 0.9 ppm. The reason for these changes are explained in Unit IV.C.

    III. Aggregate Risk Assessment and Determination of Safety

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

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

    A. Toxicological Profile

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

    Trinexapac-ethyl exhibits low acute toxicity as shown in the standard acute toxicity battery as well as in the acute neurotoxicity study in rats with no systemic or neurotoxic effects up to the limit dose. The dog appears to be the most sensitive species while no systemic adverse effects were seen in rats, rabbits, or mice up to the limit dose (1,000 milligram/kilogram/day (mg/kg/day)) following subchronic or chronic oral exposure. In the dogs; however, decreased body weight gain and food consumption, diffuse thymic atrophy, and changes in the epithelial cells of the renal tubules were seen in the 90-day dog study at 516/582 mg/kg/day (males/females). Following chronic exposure, dose-related neuropathology of the brain characterized as focal bilateral vacuolation of the dorsal medial hippocampus and/or lateral midbrain was seen at ≥365/357 mg/kg/day in male and female dogs, respectively. The lesions remained confined to the supporting cells in the central nervous system and did not progress to more advanced or more extensive damage of the nervous tissue. These lesions were not associated with other neuropathological findings or overt neurological signs, so their biological significance is unknown. Similar lesions were not observed in the rat or mouse following subchronic or chronic dietary exposure, and there was no other evidence in any other species tested to indicate a neurotoxicity potential. Furthermore, the brain lesions observed in the chronic dog study are not likely to develop from a short-term exposure and were not observed in either the rat or mouse short-term studies. In support of these findings, no evidence of neurotoxicity in the acute or subchronic rat neurotoxicity studies was found.

    In the rat and rabbit developmental toxicity studies, there is evidence of increased qualitative and quantitative susceptibility in the rat (increased incidence of asymmetrical sternebrae at the limit dose) and rabbit (decreased number of live fetuses/litter and increased post-implantation loss and early resorption at 360 mg/kg/day) in the absence of maternal toxicity. Qualitative sensitivity was observed in the 2-generation reproduction study but only in excess of the limit dose (1,212 mg/kg/day). The decreased pup survival when analyzed with sexes combined, resulted in statistical significance (5-7%); this finding was not significant when the data were analyzed separately. Further evaluation of the individual litters suggested that one or two litters were the cause of the reduced pup survival at the highest dose tested. Reproductive toxicity was not observed up to the limit dose. There was also no indication of immunotoxicity in mice up to the limit dose.

    Data from the combined chronic toxicity/carcinogenicity study in the rat did not demonstrate an increase in any tumor type that would be relevant to humans. The observation of squamous cell carcinomas in the non-glandular portion of the stomach of two males at 806 mg/kg/day does not provide reasonable evidence of a possible deleterious effect of trinexapac-ethyl on the pharynx and/or esophagus (non-glandular areas) of the human. This is because trinexapac-ethyl would not be in contact with human tissues for a significant period of time compared to the length of time it was in contact with the non-glandular portion of the rat stomach. Follicular adenocarcinomas of the thyroid were significantly increased in males (5%) at 806 mg/kg/day but this value was within the historical control range. In the mouse, there was no evidence of carcinogenicity. The mutagenicity database is complete, with no evidence of mutagenicity. The cancer classification for trinexapac-ethyl is “Not Likely to be Carcinogenic to Humans.”

    Specific information on the studies received and the nature of the adverse effects caused by trinexapac-ethyl as well as the no-observed-adverse-effect-level (NOAEL) and the lowest-observed-adverse-effect-level (LOAEL) from the toxicity studies can be found at http://www.regulations.gov in document “Trinexapac-ethyl: Human Health Risk Assessment to Support New Uses on Rice and Rye” on page 34 in docket ID number EPA-HQ-OPP-2014-0340.

    B. Toxicological Points of Departure/Levels of Concern

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

    A summary of the toxicological endpoints for trinexapac-ethyl used for human risk assessment is discussed in Unit III B. of the final rule published in the Federal Register of March 2, 2012 (77 FR 12742) (FRL-9337-9).

    C. Exposure Assessment

    1. Dietary exposure from food and feed uses. In evaluating dietary exposure to trinexapac-ethyl, EPA considered exposure under the petitioned-for tolerances (as revised in this regulation) as well as all existing trinexapac-ethyl tolerances in 40 CFR 180.662. EPA assessed dietary exposures from trinexapac-ethyl in food as follows:

    i. Acute exposure. Quantitative acute dietary exposure and risk assessments are performed for a food-use pesticide, if a toxicological study has indicated the possibility of an effect of concern occurring as a result of a 1-day or single exposure. Such effects were identified for trinexapac-ethyl. In estimating acute dietary exposure, EPA used food consumption information from the United States Department of Agriculture (USDA) 2003-2008 National Health and Nutrition Examination Survey, What We Eat in America (NHANES/WWEIA). As to residue levels in food, EPA assumed that residues are present in all commodities at the tolerance level and that 100% of all commodities with trinexapac-ethyl tolerances are treated. The acute dietary exposure was only estimated for females 13 to 49 years old based on an in utero effect (decrease in mean number of fetuses/litter and an increase in post-implantation loss) identified in the rabbit developmental study. An endpoint of concern was not identified for the general U.S. population; however, the acute dietary assessment will ensure protection of women that may become pregnant.

    ii. Chronic exposure. In conducting the chronic dietary exposure assessment EPA used the food consumption data from the USDA 2003-2008 (NHANES/WWEIA). As to residue levels in food, EPA assumed that residues are present in all commodities at the tolerance level and that 100% of all commodities with trinexapac-ethyl tolerances are treated.

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

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

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

    Based on the Tier 1 Rice Model and Pesticide Root Zone Model Ground Water (PRZM GW), the estimated drinking water concentrations (EDWCs) of trinexapac-ethyl for acute exposures are estimated to be 31.68 parts per billion (ppb) for surface water and 0.116 ppb for ground water. The EDWCs of trinexapac-ethyl for chronic exposures for non-cancer assessments are estimated to be 31.68 ppb for surface water and 0.054 ppb for ground water.

    Modeled estimates of drinking water concentrations were directly entered into the dietary exposure model. For acute dietary risk assessment, the water concentration value of 31.68 ppb was used to assess the contribution to drinking water. For chronic dietary risk assessment, the water concentration of value 31.68 ppb was used to assess the contribution to drinking water.

    3. From non-dietary exposure. The term “residential exposure” is used in this document to refer to non-occupational, non-dietary exposure (e.g., for lawn and garden pest control, indoor pest control, termiticides, and flea and tick control on pets). Trinexapac-ethyl is currently registered for the following uses that could result in residential exposures: Residential lawns, athletic fields, parks, and golf courses. EPA assessed residential exposure using the following assumptions: That homeowner handlers wear shorts, short-sleeved shirts, socks, and shoes, and that they complete all tasks associated with the use of a pesticide product including mixing/loading, if needed, as well as the application. Residential handler exposure scenarios for both dermal and inhalation are considered to be short-term only, due to the infrequent use patterns associated with homeowner products.

    EPA uses the term “post-application” to describe exposure to individuals that occur as a result of being in an environment that has been previously treated with a pesticide. Trinexapac-ethyl can be used in many areas that can be frequented by the general population including residential areas (e.g., home lawns, recreational turf). As a result, individuals can be exposed by entering these areas if they have been previously treated. Therefore, short-and intermediate-term dermal post-application exposures and risks were also assessed for trinexapac-ethyl. There is the potential for dermal and incidental oral exposure to children; however, since there is no toxicological endpoint of concern for that route, a quantitative assessment was not conducted. Further information regarding EPA standard assumptions and generic inputs for residential exposures may be found at http://www.epa.gov/pesticides/trac/science/trac6a05.pdf.

    4. Cumulative effects from substances with a common mechanism of toxicity. Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.” EPA has not found trinexapac-ethyl to share a common mechanism of toxicity with any other substances, and trinexapac-ethyl does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that trinexapac-ethyl does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at http://www.epa.gov/pesticides/cumulative.

    D. Safety Factor for Infants and Children

    1. In general. Section 408(b)(2)(C) of FFDCA provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure unless EPA determines based on reliable data that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act Safety Factor (FQPA SF). In applying this provision, EPA either retains the default value of 10X, or uses a different additional safety factor when reliable data available to EPA support the choice of a different factor.

    2. Prenatal and postnatal sensitivity. Evidence of increased qualitative and/or quantitative susceptibility of the offspring was seen only at high doses in the developmental rat and rabbit studies, and in the rat reproduction study. Developmental toxicity in the rat was only observed at the limit dose (increased incidence of asymmetrical sternebrae at 1,000 mg/kg) in the absence of maternal toxicity. In the rabbit, no maternal toxicity was demonstrated at the highest dose tested (360 mg/kg/day), but there was a decrease in the mean number of fetuses/litter and an increase in post-implantation loss and early resorptions at this dose level.

    3. Conclusion. EPA has determined that reliable data show the safety of infants and children would be adequately protected if the FQPA SF were reduced to 1x. That decision is based on the following findings:

    i. The toxicity database for trinexapac-ethyl is complete.

    ii. There is no indication that trinexapac-ethyl is a neurotoxic chemical and there is no need for a developmental neurotoxicity study or additional Uncertainty Factor's to account for neurotoxicity.

    iii. Although, there is evidence of susceptibility in the rat and rabbit developmental studies and qualitative susceptibility in the 2-generation rat reproduction study, these effects only occurred at the highest doses tested for each study, and there were clearly identified NOAELs/LOAELs for the rabbit developmental study, the rat developmental study and for the reproduction study for each fetal/offspring effect. Therefore, there are no residual concerns with respect to developmental and reproductive effects.

    iv. There are no residual uncertainties identified in the exposure databases. The dietary food exposure assessments were performed based on 100 PCT and tolerance-level residues. EPA made conservative (protective) assumptions in the ground and surface water modeling used to assess exposure to trinexapac-ethyl in drinking water. EPA used similarly conservative assumptions to assess postapplication exposure of children as well as incidental oral exposure of toddlers. These assessments will not underestimate the exposure and risks posed by trinexapac-ethyl.

    E. Aggregate Risks and Determination of Safety

    EPA determines whether acute and chronic dietary pesticide exposures are safe by comparing aggregate exposure estimates to the acute PAD (aPAD) and chronic PAD (cPAD). For linear cancer risks, EPA calculates the lifetime probability of acquiring cancer given the estimated aggregate exposure. Short-, intermediate-, and chronic-term risks are evaluated by comparing the estimated aggregate food, water, and residential exposure to the appropriate PODs to ensure that an adequate MOE exists.

    1. Acute risk. An acute aggregate risk assessment takes into account acute exposure estimates from dietary consumption of food and drinking water. Therefore, acute aggregate risk is equivalent to the acute dietary risk as discussed in Unit III.C.1.i. All risk estimates are below EPA's level of concern. The acute dietary exposure estimate for females 13 to 49 years old will only utilize 2% of the aPAD, which is well below the Agency's level of concern (100% of the aPAD).

    2. Chronic risk. Using the exposure assumptions described in this unit for chronic exposure, EPA has concluded that chronic exposure to trinexapac-ethyl from food and water will utilize 6% of the cPAD for children 1 to 2 years old, the population group receiving the greatest exposure.

    3. Short- and intermediate-term risk: Short- and immediate-term aggregate exposure take into account short-term and intermediate-term residential exposure plus chronic exposure to food and water (considered to be a background exposure level). Trinexapac-ethyl is currently registered for uses that could result in short- and intermediate-term residential exposure, and the Agency has determined that it is appropriate to aggregate chronic exposure through food and water with short-term and intermediate-term residential exposures to trinexapac-ethyl. The short- and intermediate-term toxicological endpoints for trinexapac-ethyl are the same for each route of exposure. Therefore, for residential exposure scenarios, only short-term exposures were assessed, and are considered to be protective of intermediate-term exposure and risk.

    Using the exposure assumptions described in this unit for short-term exposures, EPA has concluded the combined short-term food, water, and residential exposures result in aggregate MOEs of 4500 for children 11-16 years old and 230 for adult females. Because EPA's level of concern for trinexapac-ethyl is a MOE of 100 or below, these MOEs are not of concern.

    4. Aggregate cancer risk for U.S. population. Based on the lack of evidence of carcinogenicity in two adequate rodent carcinogenicity studies, chemical name is not expected to pose a cancer risk to humans.

    5. Determination of safety. Based on these risk assessments, EPA concludes that there is a reasonable certainty that no harm will result to the general population, or to infants and children from aggregate exposure to trinexapac-ethyl residues.

    IV. Other Considerations A. Analytical Enforcement Methodology

    Adequate enforcement methodology (Method GRM020.01A, which utilizes high performance liquid chromatography with triple-quadrupole mass spectrometry (LC-MS/MS) 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]

    B. International Residue Limits

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

    C. Revisions to Petitioned-For Tolerances

    EPA revised the petitioned-for tolerances on rye which were determined by extrapolating from residue data on barley. EPA concurs with translating from the existing cereal grains, however, from a residue perspective, rye is more similar to wheat than to barley. Since the tolerances for wheat commodities are higher than the tolerances for barley commodities, EPA has revised the tolerances for rye to be consistent with the wheat tolerances. The use of the higher wheat tolerances also represents a more conservative (protective) approach for assessing risk from total residues.

    V. Conclusion

    Therefore, tolerances are established for residues of trinexapac-ethyl, (4-(cyclopropyl-a-hydroxy-methylene)-3,5-dioxo-cyclohexanecarboxylic acid ethyl ester), and the associated metabolite trinexapac, (4-(cyclopropylhydroxymethylene)-3,5-dioxocyclohexanecarboxylic acid), calculated as the stoichiometric equivalent of trinexapac-ethyl, in or on rice, bran at 1.5 ppm; rice, grain at 0.4 ppm; rice, straw at 0.07 ppm; rice, wild, grain at 0.4 ppm; rye, bran at 6.0 ppm; rye, grain at 4.0 ppm; rye, hay at 1.5 ppm; and rye, straw at 0.9 ppm.

    VI. Statutory and Executive Order Reviews

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

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

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

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

    VII. Congressional Review Act

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

    List of Subjects in 40 CFR Part 180

    Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.

    Dated: May 8, 2015. G. Jeffery Herndon, Acting Director, Registration Division, Office of Pesticide Programs.

    Therefore, 40 CFR chapter I is amended as follows:

    PART 180—[AMENDED] 1. The authority citation for part 180 continues to read as follows: Authority:

    21 U.S.C. 321(q), 346a and 371.

    2. Section 180.662, is amended by alphabetically adding the following commodities to the table in paragraph (a) to read as follows:
    § 180.662 Trinexapac-ethyl; tolerances for residues.

    (a) * * *

    Commodity Parts per
  • million
  • *    *    *    *    * Rice, bran 1.5 Rice, grain 0.4 Rice, straw 0.07 Rice, wild, grain 0.4 Rye, bran 6.0 Rye, grain 4.0 Rye, hay 1.5 Rye, straw 0.9 *    *    *    *    *
    [FR Doc. 2015-11972 Filed 5-19-15; 8:45 am] BILLING CODE 6560-50-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 73 [MB Docket No. 15-88; RM-11747; DA 15-584] Television Broadcasting Services; Bend, Oregon AGENCY:

    Federal Communications Commission.

    ACTION:

    Final rule.

    SUMMARY:

    The Commission has before it a Notice of Proposed Rulemaking issued in response to a petition for rulemaking filed by TDS Broadcasting LLC (“TDS”), the licensee of KOHD, channel 51, Bend, Oregon, requesting the substitution of channel 18 for channel 51 at Bend. TDS filed comments reaffirming its interest in the proposed channel substitution and stated that if the proposal is granted, it will promptly file an application for the facilities specified in its rulemaking petition and construct the station. TDS also reiterates that the grant of the petition would serve the public interest because its operation on channel 18 would eliminate potential interference to and from wireless operations in the Lower 700 MHZ A Block located adjacent to channel 51 in Portland, Oregon market, permitting the wireless licensee to expand service to additional consumers sooner than would otherwise be possible.

    DATES:

    This rule is effective May 20, 2015.

    FOR FURTHER INFORMATION CONTACT:

    Joyce Bernstein, [email protected], Media Bureau, (202) 418-1647.

    SUPPLEMENTARY INFORMATION:

    This is a synopsis of the Commission's Report and Order, MB Docket No. 15-88, adopted May 14, 2015, and released May 14, 2015. The full text of this document is available for public inspection and copying during normal business hours in the FCC's Reference Information Center at Portals II, CY-A257, 445 12th Street SW., Washington, DC 20554. This document will also be available via ECFS (http://fjallfoss.fcc.gov/ecfs/). To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an email to [email protected] or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-418-0432 (tty).

    This document does not contain information collection requirements subject to the Paperwork Reduction Act of 1995, Public Law 104-13. In addition, therefore, it does not contain any information collection burden “for small business concerns with fewer than 25 employees,” pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4). Provisions of the Regulatory Flexibility Act of 1980 do not apply to this proceeding.

    The Commission will send a copy of this Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional review Act, see 5 U.S.C. 801(a)(1)(A).

    List of Subjects in 47 CFR Part 73

    Television.

    Federal Communications Commission. Barbara A. Kreisman, Chief, Video Division, Media Bureau. Final Rule

    For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 73 as follows:

    PART 73—RADIO BROADCAST SERVICES 1. The authority citation for part 73 continues to read as follows: Authority:

    47 U.S.C. 154, 303, 334, 336, and 339.

    § 73.622 [Amended]
    2. Section 73.622(i), the Post-Transition Table of DTV Allotments under Oregon is amended by removing channel 51 and adding channel 18 at Bend.
    [FR Doc. 2015-12232 Filed 5-19-15; 8:45 am] BILLING CODE 6712-01-P
    GENERAL SERVICES ADMINISTRATION 48 CFR Parts 511 and 552 [GSAR Change 63; GSAR Case 2014-G504; Docket No. 2015-0003; Sequence No. 1] RIN 3090-AJ53 General Services Administration Acquisition Regulation (GSAR); Unique Item Identification (UID) AGENCIES:

    Office of Acquisition Policy, General Services Administration (GSA).

    ACTION:

    Final rule.

    SUMMARY:

    The General Services Administration (GSA) is issuing a final rule amending the General Services Administration Acquisition Regulation (GSAR) to remove the GSAR clause Unique Item Identification.

    DATES:

    Effective: May 20, 2015.

    FOR FURTHER INFORMATION CONTACT:

    Mr. James Tsujimoto, Program Analyst, at 202-208-3585, or via email at [email protected] for clarification of content. For information pertaining to status or publication schedules, contact the Regulatory Secretariat at 202-501-4755. Please cite GSAR case 2014-G504.

    SUPPLEMENTARY INFORMATION: I. Background

    GSA published a proposed rule with a request for public comments in the Federal Register at 80 FR 6037 on February 4, 2015, to amend the GSAR to delete GSAR clause 552.211-93, Unique Item Identification (UID), and provide other conforming changes. No public comments were received on the proposed rule.

    II. Discussion and Analysis

    There were no comments received in response to the proposed rule by its closing date of April 6, 2015. Therefore, there are no changes made in the proposed rule.

    III. Executive Orders 12866 and 13563

    Executive Orders (E.O.s) 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). E.O. 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This is not a significant regulatory action and, therefore, was not subject to review under Section 6(b) of E.O. 12866, Regulatory Planning and Review, dated September 30, 1993. This rule is not a major rule under 5 U.S.C. 804.

    IV. Regulatory Flexibility Act

    The General Services Administration certifies that this final rule will not have a significant economic impact on a substantial number of small entities within the meaning of the Regulatory Flexibility Act, 5 U.S.C. 601, et seq., because the deletion of the clause will not substantively change the reporting, recordkeeping, or compliance requirements for contractors.

    V. Paperwork Reduction Act

    The final rule does not contain any information collection requirements that require the approval of the Office of Management and Budget under the Paperwork Reduction Act (44 U.S.C. chapter 35).

    List of Subjects in 48 CFR Parts 511 and 552

    Government procurement.

    Dated: May 13, 2015. Jeffrey A. Koses, Senior Procurement Executive, Office of Acquisition Policy, Office of Government-wide Policy.

    Therefore, GSA amends 48 CFR parts 511 and 552 as set forth below:

    1. The authority citation for 48 CFR parts 511 and 552 continues to read as follows: Authority:

    40 U.S.C. 121(c).

    PART 511—DESCRIBING AGENCY NEEDS
    511.204 [Amended]
    2. Amend section 511.204 by removing paragraph (b)(12).
    PART 552—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
    552.211-93 [Removed and Reserved]
    3. Remove and reserve section 552.211-93.
    [FR Doc. 2015-12208 Filed 5-19-15; 8:45 am] BILLING CODE 6820-61-P
    80 97 Wednesday, May 20, 2015 Proposed Rules DEPARTMENT OF ENERGY 10 CFR Parts 429, 430, and 431 [Docket Number EERE-2015-BT-TP-0007] RIN 1904-AC91 Energy Conservation Program for Consumer Products and Certain Commercial and Industrial Equipment: Test Procedures for Consumer and Commercial Water Heaters AGENCY:

    Office of Energy Efficiency and Renewable Energy, Department of Energy.

    ACTION:

    Reopening of the public comment period and announcement of public meeting.

    SUMMARY:

    On April 14, 2015, the U.S. Department of Energy (DOE) published in the Federal Register a notice of proposed rulemaking (NOPR) that proposes mathematical conversion factors for converting from the current efficiency metrics (i.e., energy factor for residential water heaters, and thermal efficiency and standby loss for commercial water heaters) to the uniform efficiency descriptor (i.e., uniform energy factor metric). The comment period for the NOPR pertaining to the test procedures for water heaters was scheduled to end May 14, 2015. After receiving a request for additional time to comment for stakeholders, DOE is reopening the comment period for the NOPR for the Conversion Factor for Test Procedures for Consumer and Certain Commercial Water Heaters to June 15, 2015. Additionally, at the request of stakeholders, DOE is announcing a public meeting to discuss the conversion factors for consumer and commercial water heaters.

    DATES:

    Comments: The comment period for the NOPR for the Conversion Factor for Test Procedures for Consumer and Certain Commercial Water Heaters published on April 14, 2015 (80 FR 20116), is reopened. DOE will accept comments, data, and information regarding this NOPR before and after the public meeting, but no later than June 15, 2015.

    Meeting: DOE will hold a public meeting on Thursday, May 28, 2015 from 10:00 a.m. to 4:00 p.m., in Washington, DC. The meeting will also be broadcast as a webinar.

    ADDRESSES:

    Meeting: The meeting will be held at the U.S. Department of Energy, 950 L'Enfant Plaza, Room 7140, 950 L'Enfant Plaza, Washington, DC 20585. If you plan to attend the public meeting, please notify Ms. Brenda Edwards at (202) 586-2945 or [email protected] For further details, see the “Public Participation” section near the end of this document.

    Comments: All comments submitted must identify the NOPR for the Conversion Factor for Test Procedures for Consumer and Certain Commercial Water Heaters, and provide docket number EERE-2015-BT-TP-0007 and/or RIN 1904-AC91. Interested persons are encouraged to submit comments using the Federal eRulemaking Portal at www.regulations.gov. Follow the instructions for submitting comments. Alternatively, interested persons may submit comments by any of the following methods:

    Email: [email protected] Include the docket number and/or RIN in the subject line of the message. Submit electronic comments in WordPerfect, Microsoft Word, PDF, or ASCII file format, and avoid the use of special characters or any form of encryption.

    Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. If possible, please submit all items on a compact disc (CD), in which case it is not necessary to include printed copies.

    Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW., 6th Floor, Washington, DC 20024. Telephone: (202) 586-2945. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

    No telefacsimilies (faxes) will be accepted. For detailed instructions on submitting comments and additional information on the rulemaking process, see section V (Public Participation) of the April 14, 2015 NOPR for the Conversion Factor for Test Procedures for Consumer and Certain Commercial Water Heaters. 80 FR 20116.

    Docket: The docket is available for review at www.regulations.gov, including Federal Register notices, comments, and other supporting documents/materials. All documents in the docket are listed in the www.regulations.gov index. However, not all documents listed in the index may be publicly available, such as information that is exempt from public disclosure.

    A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2015-BT-TP-0007. This Web page contains a link to the docket for this notice of proposed rulemaking on the www.regulations.gov site. The www.regulations.gov Web page contains simple instructions on how to access all documents, including public comments, in the docket. See section V, “Public Participation,” of the April 14, 2015 NOPR for information on how to submit comments through www.regulations.gov.

    FOR FURTHER INFORMATION CONTACT:

     Ms. Ashley Armstrong, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-6590. Email: [email protected]

    Mr. Eric Stas, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 586-9507. Email: [email protected]

    For information on how to submit a comment, to review other public comments and the docket, or to attend the public meeting, contact Ms. Brenda Edwards at (202) 586-2945 or by email: [email protected]

    SUPPLEMENTARY INFORMATION:

    The Energy Policy and Conservation Act of 1975 (EPCA), as amended by the American Energy Manufacturing Technical Corrections Act (AEMTCA), Public Law 112-210, requires that DOE establish a uniform efficiency descriptor and accompanying test methods for covered residential water heaters and commercial water heating equipment within one year of the enactment of AEMTCA. (42 U.S.C. 6295(e)(5)(B)) Further, beginning one year after the date of publication of DOE's final rule establishing the uniform descriptor, EPCA requires that the efficiency standards for covered water heaters to be denominated according to the uniform efficiency descriptor established in the final rule (42 U.S.C. 6295(e)(5)(D)) and that DOE develop a mathematical conversion factor for converting the measurement of efficiency for covered water heaters from the test procedures and metrics currently in effect to the new uniform energy descriptor. (42 U.S.C. 6295(e)(5)(E)(i)-(ii)). On July 11, 2014, DOE published a final rule amending the test procedure for residential and certain commercial water heaters that satisfied the AEMTCA requirements to develop a uniform efficiency descriptor to replace the existing energy factor, thermal efficiency, and standby loss metrics. 79 FR 40542. Use of the amended test procedure is required beginning on July 13, 2015, for new testing. All representations must be based on the amended test procedure as of one year after the publication of a final rule that establishes a mathematical conversion factor. On April 14, 2015, DOE published a NOPR proposing mathematical conversion factors for converting from the current efficiency metrics (i.e., energy factor for residential water heaters, and thermal efficiency and standby loss for commercial water heaters) to the uniform efficiency descriptor (i.e., uniform energy factor metric). 80 FR 20116 (April 14, 2015).

    In response to the NOPR for the Conversion Factor for Test Procedures for Consumer and Certain Commercial Water Heaters, the Air-Conditioning, Heating, and Refrigeration Institute (AHRI) requested a 60-day extension to the comment period, a public meeting, and a delay in compliance date for the test procedure. AHRI stated in its request that it needed additional time to analyze the specific conversion factors and underlying analysis, review the water heater tests conducted by DOE to assess to what extent those tests reflected the range of models covered by the test procedure, and evaluate the validity of the conclusions derived from the testing conducted by DOE as provided in the conversion factors and translated energy conservation standards. After careful consideration of this request, DOE has determined that extending the public comment period by reopening to allow additional time for interested parties to submit comments and that convening a public meeting are appropriate based on the foregoing reasons. Accordingly, DOE is granting approximately 30-day comment period extension and announcing a public meeting. In this document, DOE is reopening the comment period for the NOPR for the Conversion Factor for Test Procedures for Consumer and Certain Commercial Water Heaters to midnight of June 15, 2015 and will deem any comments received by that time to be timely submitted. Also, DOE will host a public meeting on Thursday, May 28, 2015. Additional details on the public meeting are provided in the DATES and ADDRESSES sections of this document.

    DOE is not extending the compliance dates, which were set by statute based on the completion of various rulemakings. The test method will have been final for a year, and manufacturers should be able to test any new basic models using that test method. Furthermore, because the energy conservation standards for residential water heaters changed earlier this year, DOE expects that very few, new basic models will be introduced in the interim between July 13, 2015, and when the conversion factor final rule is effective.

    Public Participation

    All participants will undergo security processing upon building entry. Any participant with a laptop computer or similar device (e.g., tablets), must undergo additional screening. Note that any foreign national who requests to participate in the public meeting is subject to advance security screening prior to the date of the public meeting, and such persons should contact Ms. Brenda Edwards as soon as possible at (202) 586-2945 to commence the necessary procedures.

    Due to the REAL ID Act implemented by the Department of Homeland Security (DHS), there have been recent changes regarding identification (ID) requirements for individuals wishing to enter Federal buildings from specific States and U.S. territories. As a result, driver's licenses from the following States or territory will not be accepted for building entry, and instead, one of the alternate forms of ID listed below will be required.

    DHS has determined that regular driver's licenses (and ID cards) from the following jurisdictions are not acceptable for entry into DOE facilities: Alaska, American Samoa, Arizona, Louisiana, Maine, Massachusetts, Minnesota, New York, Oklahoma, and Washington.

    Acceptable alternate forms of Photo-ID include: U.S. Passport or Passport Card; an Enhanced Driver's License or Enhanced ID-Card issued by the States of Minnesota, New York or Washington (Enhanced licenses issued by these States are clearly marked Enhanced or Enhanced Driver's License); a military ID or other Federal government-issued Photo-ID card.

    In addition, you can attend the public meeting via webinar. Webinar registration information, participant instructions, and information about the capabilities available to webinar participants at: https://attendee.gotowebinar.com/register/7036563622426238210 Participants are responsible for ensuring their systems are compatible with the webinar software.

    Issued in Washington, DC, on May 12, 2015. Kathleen B. Hogan, Deputy Assistant Secretary for Energy Efficiency, Energy Efficiency and Renewable Energy.
    [FR Doc. 2015-12221 Filed 5-19-15; 8:45 am] BILLING CODE 6450-01-P
    DEPARTMENT OF ENERGY 10 CFR Part 430 [Docket Number EERE-2014-BT-STD-0031] RIN 1904-AD20 Energy Conservation Program for Consumer Products: Energy Conservation Standards for Residential Furnaces AGENCY:

    Office of Energy Efficiency and Renewable Energy, Department of Energy.

    ACTION:

    Extension of public comment period.

    SUMMARY:

    On March 12, 2015, the U.S. Department of Energy (DOE) published in the Federal Register a notice of proposed rulemaking (NOPR) and technical support document (TSD) that analyze the potential economic impacts and energy savings that could result from potential energy conservation standards for certain residential furnaces. DOE published this NOPR and analysis so stakeholders can review and provide input on the relevant outputs and the underlying assumptions and calculations. The comment period for the NOPR pertaining to the subject residential furnaces was scheduled to end June 10, 2015. After receiving requests for additional time to comment, DOE has decided to extend the comment period for the NOPR pertaining to the energy conservation standards for residential furnaces until July 10, 2015.

    DATES:

    DOE will accept comments, data, and information regarding the notice of proposed rulemaking no later than July 10, 2015.

    ADDRESSES:

    Instructions: All comments submitted must identify the NOPR for Energy Conservation Standards for Residential Furnaces, and provide docket number EERE-2014-BT-STD-0031 and/or regulatory information number (RIN) number 1904-AD20. Comments may be submitted using any of the following methods:

    1. Federal eRulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments.

    2. Email: ResFurnaces2014STD[email protected] Include the docket number and/or RIN in the subject line of the message. Submit electronic comments in Word Perfect, Microsoft Word, PDF, or ASCII file format, and avoid the use of special characters or any form on encryption.

    3. Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. If possible, please submit all items on a compact disc (CD), in which case it is not necessary to include printed copies.

    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW., Suite 600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

    No telefacsimilies (faxes) will be accepted. For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Participation” section of the March 12, 2015 NOPR. 80 FR 13120.

    Docket: The docket, which includes Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at www.regulations.gov. All documents in the docket are listed in the www.regulations.gov index. However, not all documents listed in the index may be publically available, such as those containing information that is exempt from public disclosure.

    A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2014-BT-STD-0031. This Web page contains a link to the docket for this notice on the www.regulations.gov site. The www.regulations.gov Web page contains simple instructions on how to access all documents, including public comments, in the docket. See section VII, “Public Participation,” of the March 12, 2015 NOPR for further information on how to submit comments through www.regulations.gov.

    For further information on how to submit a comment or review other public comments and the docket, contact Ms. Brenda Edwards at (202) 586-2945 or by email: [email protected]

    FOR FURTHER INFORMATION CONTACT:

    Mr. John Cymbalsky, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 287-1692. Email: [email protected]

    Mr. Eric Stas, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 5869507. Email: [email protected]

    For information on how to submit or review public comments and the docket, contact Ms. Brenda Edwards at (202) 586-2945 or by email: [email protected]

    SUPPLEMENTARY INFORMATION:

    DOE published a NOPR in the Federal Register to make available and invite public comments on its analysis regarding potential energy conservation standards for certain residential furnaces. 80 FR 13120 (March 12, 2015). The document set a deadline for the submission of written comments by June 10, 2015. The American Gas Association (AGA) and the Southern California Gas Company (SoCalGas) each requested an extension of the public comment period, stating that additional time is necessary to review the published analysis in order to prepare and submit comments. After careful consideration of these requests, DOE has determined that extending the comment period to allow additional time for interested parties to submit comments is appropriate based on the foregoing reason. DOE believes that extending the comment period by 30 days will provide the public with sufficient time to submit comments responding to DOE's analysis. Accordingly, DOE is extending the comment period to midnight of July 10, 2015 and will deem any comments received (or postmarked) by that date to be timely submitted.

    Issued in Washington, DC, on May 12, 2015. Kathleen B. Hogan, Deputy Assistant Secretary for Energy Efficiency and Renewable Energy.
    [FR Doc. 2015-12218 Filed 5-19-15; 8:45 am] BILLING CODE 6450-01-P
    DEPARTMENT OF ENERGY 10 CFR Part 430 [Docket Number EERE-2012-BT-STD-0047] RIN 1904-AC88 Energy Conservation Program for Consumer Products: Energy Conservation Standards for Residential Boilers AGENCY:

    Office of Energy Efficiency and Renewable Energy, Department of Energy.

    ACTION:

    Extension of public comment period.

    SUMMARY:

    On March 31, 2015, the U.S. Department of Energy (DOE) published in the Federal Register a notice of proposed rulemaking (NOPR) and technical support document (TSD) that analyze the potential economic impacts and energy savings that could result from potential energy conservation standards for residential boilers. DOE published this NOPR and analysis so stakeholders can review and provide input on the relevant outputs and the underlying assumptions and calculations. The comment period for the NOPR pertaining to residential boilers was scheduled to end June 1, 2015. After receiving requests for additional time to comment, DOE has decided to extend the comment period for the NOPR pertaining to the energy conservation standards for residential boilers until July 1, 2015.

    DATES:

    The comment period for the notice of proposed rulemaking published March 31, 2015, at 80 FR 17222, is extended. DOE will accept comments, data, and information no later than July 1, 2015.

    ADDRESSES:

    Instructions: All comments submitted must identify the NOPR for Energy Conservation Standards for Residential Boilers, and provide docket number EE-2012-BT-STD-0047 and/or regulatory information number (RIN) number 1904-AC88. Comments may be submitted using any of the following methods:

    1. Federal eRulemaking Portal: www.regulations.gov. Follow the instructions for submitting comments.

    2. Email: [email protected] Include the docket number and/or RIN in the subject line of the message. Submit electronic comments in Word Perfect, Microsoft Word, PDF, or ASCII file format, and avoid the use of special characters or any form on encryption.

    3. Postal Mail: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, Mailstop EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. If possible, please submit all items on a compact disc (CD), in which case it is not necessary to include printed copies.

    4. Hand Delivery/Courier: Ms. Brenda Edwards, U.S. Department of Energy, Building Technologies Office, 950 L'Enfant Plaza SW., Suite 600, Washington, DC 20024. Telephone: (202) 586-2945. If possible, please submit all items on a CD, in which case it is not necessary to include printed copies.

    No telefacsimilies (faxes) will be accepted. For detailed instructions on submitting comments and additional information on the rulemaking process, see the “Public Participation” section of the March 31, 2015 NOPR. 80 FR 17222.

    Docket: The docket, which includes Federal Register notices, public meeting attendee lists and transcripts, comments, and other supporting documents/materials, is available for review at www.regulations.gov. All documents in the docket are listed in the www.regulations.gov index. However, not all documents listed in the index may be publically available, such as those containing information that is exempt from public disclosure.

    A link to the docket Web page can be found at: http://www.regulations.gov/#!docketDetail;D=EERE-2012-BT-STD-0047. This Web page contains a link to the docket for this notice on the www.regulations.gov site. The www.regulations.gov Web page contains simple instructions on how to access all documents, including public comments, in the docket. See section VII, “Public Participation,” of the March 31, 2015 NOPR for further information on how to submit comments through www.regulations.gov.

    For further information on how to submit a comment or review other public comments and the docket, contact Ms. Brenda Edwards at (202) 586-2945 or by email: [email protected]

    FOR FURTHER INFORMATION CONTACT:

    Mr. John Cymbalsky, U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, Building Technologies Office, EE-5B, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202) 287-1692. Email: [email protected]

    Mr. Eric Stas, U.S. Department of Energy, Office of the General Counsel, GC-33, 1000 Independence Avenue SW., Washington, DC 20585-0121. Telephone: (202)-5869507. Email: [email protected]

    For information on how to submit or review public comments and the docket, contact Ms. Brenda Edwards at (202) 586-2945 or by email: [email protected]

    SUPPLEMENTARY INFORMATION:

    DOE published a NOPR in the Federal Register to make available and invite public comments on its analysis regarding potential energy conservation standards for residential boilers. 80 FR 17222 (March 31, 2015). The document set a deadline for the submission of written comments by June 1, 2015. The Air-Conditioning, Heating, and Refrigeration Institute (AHRI) and the Oil Heat Manufacturers Association each requested an extension of the public comment period, stating that additional time is necessary to review the published analysis in order to prepare and submit comments. After careful consideration of these requests, DOE has determined that extending the comment period to allow additional time for interested parties to submit comments is appropriate based on the foregoing reason. DOE believes that extending the comment period by 30 days will provide the public with sufficient time to submit comments responding to DOE's analysis. Accordingly, DOE is extending the comment period to midnight of July 1, 2015, and will deem any comments received (or postmarked) by that date to be timely submitted.

    Issued in Washington, DC, on May 12, 2015. Kathleen B. Hogan, Deputy Assistant Secretary for Energy Efficiency and Renewable Energy.
    [FR Doc. 2015-12219 Filed 5-19-15; 8:45 am] BILLING CODE 6450-01-P
    DEPARTMENT OF COMMERCE Bureau of Industry and Security 15 CFR Parts 740, 742, 748, 772, 774 [Docket No. 150304218-5218-01] RIN 0694-AG49 Wassenaar Arrangement 2013 Plenary Agreements Implementation: Intrusion and Surveillance Items AGENCY:

    Bureau of Industry and Security, Commerce.

    ACTION:

    Proposed rule, with request for comments.

    SUMMARY:

    The Bureau of Industry and Security (BIS) proposes to implement the agreements by the Wassenaar Arrangement (WA) at the Plenary meeting in December 2013 with regard to systems, equipment or components specially designed for the generation, operation or delivery of, or communication with, intrusion software; software specially designed or modified for the development or production of such systems, equipment or components; software specially designed for the generation, operation or delivery of, or communication with, intrusion software; technology required for the development of intrusion software; Internet Protocol (IP) network communications surveillance systems or equipment and test, inspection, production equipment, specially designed components therefor, and development and production software and technology therefor. BIS proposes a license requirement for the export, reexport, or transfer (in-country) of these cybersecurity items to all destinations, except Canada. Although these cybersecurity capabilities were not previously designated for export control, many of these items have been controlled for their “information security” functionality, including encryption and cryptanalysis. This rule thus continues applicable Encryption Items (EI) registration and review requirements, while setting forth proposed license review policies and special submission requirements to address the new cybersecurity controls, including submission of a letter of explanation with regard to the technical capabilities of the cybersecurity items.

    BIS also proposes to add the definition of “intrusion software” to the definition section of the EAR pursuant to the WA 2013 agreements.

    DATES:

    Submit comments on or before July 20, 2015.

    ADDRESSES:

    Comments on this rule may be submitted to the Federal rulemaking portal (www.regulations.gov). The regulations.gov ID for this rule is: BIS-2015-0011. Comments may also be submitted via email to [email protected] or on paper to Regulatory Policy Division, Bureau of Industry and Security, Room 2099B, U.S. Department of Commerce, 14th St. and Pennsylvania Ave. NW., Washington, DC 20230. Please refer to RIN 0694-AG49 in all comments and in the subject line of email comments.

    FOR FURTHER INFORMATION CONTACT:

    Catherine Wheeler, Director, Information Technology Control Division, Phone: (202) 482-0707 or by email at [email protected].

    SUPPLEMENTARY INFORMATION: Background

    The Wassenaar Arrangement (WA) on Export Controls for Conventional Arms and Dual-Use Goods and Technologies is a group of 41 like-minded states committed to promoting responsibility and transparency in the global arms trade, and preventing destabilizing accumulations of arms. As a Participating State, the United States has committed to controlling for export all items on the WA control lists. The lists were first established in 1996 and have been revised annually thereafter. Proposals for changes to the WA control lists that achieve consensus are approved by Participating States at annual December Plenary meetings. Participating States are charged with implementing the agreed list changes as soon as possible after approval. Implementation of WA list changes ensures U.S. companies have a level playing field with their competitors in other WA member states.

    In 2013, WA agreed to add the following to their list of dual-use goods: systems, equipment or components specially designed for the generation, operation or delivery of, or communication with, intrusion software; software specially designed or modified for the development or production of such systems, equipment or components; software specially designed for the generation, operation or delivery of, or communication with, intrusion software; technology required for the development of intrusion software; Internet Protocol (IP) network communications surveillance systems or equipment and test, inspection, production equipment, specially designed components therefor, and development and production software and technology therefor. BIS, the Departments of Defense and State, as well as other agencies have been discussing the best way to add these items, which we have named “cybersecurity items,” to the Commerce Control List (CCL) (Supplement No. 1 to part 774 of the Export Administration Regulations) without reducing encryption controls and while balancing the national security and foreign policy. For resource planning purposes, as well as license requirements, license exceptions, license submission requirements, and internal license reviews and processing planning purposes, this rule is published as a proposed rule.

    Scope of the New Entries

    Systems, equipment, components and software specially designed for the generation, operation or delivery of, or communication with, intrusion software include network penetration testing products that use intrusion software to identify vulnerabilities of computers and network-capable devices. Certain penetration testing products are currently classified as encryption items due to their cryptographic and/or cryptanalytic functionality. Technology for the development of intrusion software includes proprietary research on the vulnerabilities and exploitation of computers and network-capable devices. The new entry on the CCL that would control Internet Protocol (IP) network communications surveillance systems or equipment is restricted to products that perform all of the functions listed; however, the Export Administration Regulations (EAR) also prohibits the export of equipment if the exporter intends it will be combined with other equipment to comprise a system described in the new entry.

    Addition of ECCNs 4A005 and 4D004 to the Commerce Control List

    This rule proposes to add Export Control Classification Number (ECCN) 4A005 (“systems,” “equipment,” or “components” therefor, “specially designed” for the generation, operation or delivery of, or communication with, “intrusion software”) and ECCN 4D004 (“software” “specially designed” for the generation, operation or delivery of, or communication with, “intrusion software”) to the CCL. These ECCNs are proposed to be controlled for national security (NS), regional stability (RS), and anti-terrorism (AT) reasons to all destinations, except Canada. No license exceptions would be available for these items, except certain provisions of License Exception GOV, e.g., exports to or on behalf of the United States Government pursuant to § 740.11(b) of the EAR. This rule also proposes adding a License Requirement Note and a Note in the Related Controls paragraph for these ECCNs, to alert exporters to include all relevant information when submitting classification requests and licensing applications.

    ECCN 4D001

    This rule also proposes to amend ECCN 4D001 by adding ECCN 4A005 to Items paragraph 4D001.a in order to add control of “software” “specially designed” or modified for the “development” or “production,” of equipment controlled by 4A005; adding an RS:1 license requirement paragraph for 4D001.a (as it applies to 4A005 or 4D004), removing License Exceptions TSR and STA eligibility; and adding the same explanatory License Requirement Note and Related Controls Note that would be added to ECCNs 4A005 and 4D004.

    As a technical correction, this rule proposes to remove from the “Reason for control” paragraph “NP,” and from the License Requirement section the two sentences, “NP applies, unless a license exception is available. See § 742.3(b) of the EAR for information on applicable licensing review policies.” That text does not articulate any license requirement, and no nuclear non-proliferation license requirement for software classified as 4D001 is set forth elsewhere in the EAR. BIS's regular practice is to impose a license requirement for nuclear non-proliferation reasons on items that are specified on the “List of Nuclear-Related Dual-Use Equipment, Materials, Software, and Related Technology” by the Nuclear Suppliers Group. ECCN 4D001 software is not so specified.

    ECCN 4E001

    This rule also proposes to amend ECCN 4E001 by adding a new Items paragraph 4E001.c to control “technology” “required” for the “development” of “intrusion software.” ECCN 4E001.a controls ““technology” according to the General Technology Note, for the “development,” “production,” or “use” of equipment or “software” controlled by 4A (except 4A980 or 4A994) or 4D (except 4D980, 4D993 or 4D994).” Therefore, ECCN 4E001.a would control “technology” for the newly added 4A005 and 4D004, as well as 4D001.a (for 4A005 and 4D004). This rule also proposes to add an RS:1 license requirement paragraph for 4E001.a “technology” (as it applies to 4A005, 4D001.a (as it applies to 4A005 or 4D004) or 4D004) and 4E001.c, which would require a license to export, reexport, and transfer (in-country) to all destinations, except Canada. BIS also proposes to remove License Exception Technology and Software Under Restriction (TSR) and Strategic Trade Authorization (STA) eligibility and add the same explanatory License Requirement Note and Related Controls Note added to ECCNs 4A005, 4D001 and 4D004. Also, a reference to § 772.1 is proposed to be added to ECCNs 4A005, 4D001 and 4E001 to point to the location of the “intrusion software” definition, as this rule may be of interest to many new exporters that would not otherwise know that double quoted terms in the EAR are defined in § 772.1.

    Lastly, the same technical correction regarding the Nuclear Non-proliferation (NP) control is proposed for 4E001 as is proposed for 4D001, see explanation above.

    ECCN 5A001.j: Internet Protocol (IP) Network Communications Surveillance Systems or Equipment and Test, Inspection, Production Equipment, Specially Designed Components Therefor

    Network communication traffic analysis systems are becoming an increasingly sensitive issue, which is why WA agreed to add the control of these items to the WA dual-use list. These systems are using the process of intercepting and analyzing messages to produce personal, human and social information from the communications traffic. BIS proposes to add these items in paragraph 5A001.j and group them with cybersecurity items. The license requirements for these items are proposed to under NS Column 1, RS Column 1 and AT Column 1 on the Commerce Country Chart (Supplement No. 1 to part 738 of the EAR) and would require a license for export, reexport, and transfer (in-country) to all destinations, except Canada. Only certain provisions of License Exception GOV, e.g., exports to or on behalf of the United States Government pursuant to § 740.11(b) of the EAR, would be available for these items.

    The same addition of a License Requirement Note and Related Control Note is proposed for ECCNs 5A001, 5D001, and 5E001 as is proposed for ECCNs 4A005, 4D001, 4D004 and 4E001 (see explanation under 4A005 and 4D005 above).

    § 740.13—License Exception TSU

    BIS proposes to remove cybersecurity software from the mass market provision of License Exception TSU eligibility by adding a new paragraph (d)(2)(ii). This is consistent with the existing encryption exclusion.

    Cybersecurity Items That Are Designed or Modified To Use “Cryptography” or Cryptanalysis

    As previously introduced and explained in the preamble, this rule proposes to add a Related Control note to ECCNs 4A005, 4D004, 4E001, 5A001, 5A002, 5D002 and 5E002 that states that cybersecurity items are classified in cybersecurity ECCNs, even if the items are designed or modified to use “cryptography” or cryptanalysis; however, all such cybersecurity items using or incorporating encryption or other “information security” functionality classified under ECCNs 5A002, 5D002, 5A992.c, 5D992.c or 5E002, must also satisfy the registration, review and reporting requirements set forth in §§ 740.17, 742.15(b) and 748.3(d) of the EAR, including submissions to the ENC Encryption Request Coordinator, Ft. Meade, MD. This note is added so that people will not be confused under which ECCN to classify their products and when a cybersecurity item is designed or modified to use “cryptography” or cryptanalysis, after the relevant Encryption Items (EI) requirements for registration and review have been separately satisfied. One effect this will have is that these cybersecurity items will not be eligible for License Exception ENC. However, BIS anticipates licensing broad authorizations to certain types of end users and destinations that will counterbalance the loss of the use of License Exception ENC.

    Information To Be Submitted With a License Application To Export, Reexport, or Transfer (In-Country) Cybersecurity Items

    In addition to the general information required by § 748.3(b) of the EAR and the requirement that all encryption registration and review provisions must be separately satisfied with BIS and the ENC Encryption Request Coordinator, Ft. Meade, MD, this rule proposes to add a requirement to submit specific technical information in support of applications to export, reexport, or transfer (in-country) cybersecurity items. The specified technical information is set forth in newly added paragraph (z) of Supplement No. 2 to part 748 “Unique application and submission requirements.” The Commodity Classification Application Tracking System (CCATS) number(s) or license number(s) for the cyber security item(s) must be included in the license application. If no classification or license application has been done for the cybersecurity item, then the answers to three (3) questions are to be submitted in a letter of explanation.

    Also, this rule proposes that upon request from BIS, the applicant must include a copy of the sections of source code and other software (e.g., libraries and header files) that implement or invoke the controlled cybersecurity functionality.

    License Review Policy for Cybersecurity Items

    The license review policies for cybersecurity items controlled under NS and AT will not be revised. A new license review policy for cybersecurity items is proposed under § 742.6(b) for regional stability. Cybersecurity items controlled for RS are proposed to be reviewed favorably if destined to a U.S. company or subsidiary not located in Country Group D:1 or E:1, foreign commercial partners located in Country Group A:5, government end users in Australia, Canada, New Zealand or the United Kingdom, and on a case-by-case basis to determine whether the transaction is contrary to the national security or foreign policy interests of the United States, including the foreign policy interest of promoting the observance of human rights throughout the world. Note that there is a policy of presumptive denial for items that have or support rootkit or zero-day exploit capabilities. The governments of Australia, Canada, New Zealand or the United Kingdom have partnered with the United States on cybersecurity policy and issues, which affords these countries with favorable treatment for license applications. A note that describes “foreign commercial partner” is proposed to be added to § 742.6(b). Any “information security” functionality incorporated in the cybersecurity item will also receive a focused case-by-case review for reasons of Encryption Items (EI) control.

    § 772.1 Definitions of Terms as Used in the EAR: Addition of Definition for “Intrusion Software”

    The WA-agreed definition for “intrusion software” is proposed to be added to § 772.1 of the EAR. The definition also includes a Note that describes some items not included as “intrusion software,” e.g., hypervisors, debuggers or Software Reverse Engineering (SRE).

    Request for Comments

    BIS is seeking information about the effect of this rule and would appreciate the submission of comments, and especially answers to the following questions:

    1. How many additional license applications would your company be required to submit per year under the requirements of this proposed rule? If any, of those applications:

    a. How many additional applications would be for products that are currently eligible for license exceptions?

    b. How many additional applications would be for products that currently are classified EAR99?

    2. How many deemed export, reexport or transfer (in-country) license applications would your company be required to submit per year under the requirements of this rule?

    3. Would the rule have negative effects on your legitimate vulnerability research, audits, testing or screening and your company's ability to protect your own or your client's networks? If so, explain how.

    4. How long would it take you to answer the questions in proposed paragraph (z) to Supplement No. 2 to part 748? Is this information you already have for your products?

    * The ADDRESSES section of this proposed rule includes information about how to submit comments.

    Rulemaking Requirements

    1. Executive Orders 13563 and 12866 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated a “significant regulatory action,” under Executive Order 12866.

    2. Notwithstanding any other provision of law, no person is required to respond to, nor shall any person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This rule would involve one collection of information subject to the PRA. One of the collections has been approved by OMB under control number 0694-0088, “Multi-Purpose Application,” and carries a burden hour estimate of 58 minutes for a manual or electronic submission. The additional information proposed to be required under Supplement No. 2 to part 748 paragraph (z) falls under the usual technical information that is submitted with applications to describe the abilities of the items on the license application. This information allows the licensing officer to verify the classification of the product and determine the effect it would have on U.S. national security and foreign policy. Send comments regarding these burden estimates or any other aspect of these collections of information, including suggestions for reducing the burden, to OMB Desk Officer, New Executive Office Building, Washington, DC 20503; and to Jasmeet Seehra, OMB Desk Officer, by email at [email protected] or by fax to (202) 395-7285; and to the Office of Administration, Bureau of Industry and Security, Department of Commerce, 1401 Constitution Ave. NW., Room 6622, Washington, DC 20230.

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

    4. The provisions of the Administrative Procedure Act (APA) (5 U.S.C. 553) requiring notice of proposed rulemaking, the opportunity for public participation, and a 30-day delay in effective date, are inapplicable because this regulation involves a military and foreign affairs function of the United States (5 U.S.C. 553(a)(1)). Nonetheless, BIS is providing the public with an opportunity to review and comment on this rule, despite its being exempted from that requirement of the APA. Because this rule is not required by the APA to undergo a period of notice and comment, the requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq., do not apply. Accordingly, no regulatory flexibility analysis is required, and none has been prepared.

    BIS is interested in the potential impacts to businesses of this rule. Because most of the items impacted by this rule have encryption capabilities, BIS believes they are already being controlled under Category 5 part 2 of the EAR. Even though most encryption items are eligible for License Exception ENC and these cybersecurity items will not be eligible for License Exception ENC, BIS anticipates issuing broad licenses for these items. The impact of this rule is unknown to BIS, therefore the implementation of the Wassenaar Arrangement agreement of 2013 with regard to cybersecurity items is issued as a proposed rule with request for comments concerning the impact of the rule. Comments should be submitted to Sharron Cook, Office of Exporter Services, Bureau of Industry and Security, Department of Commerce, 14th and Pennsylvania Ave. NW., Room 2099, Washington, DC 20230 or emailed to [email protected]. Please refer to RIN 0694-AG49 in all comments and in the subject line of email comments.

    List of Subjects 15 CFR Part 740

    Administrative practice and procedure, Exports, Reporting and recordkeeping requirements.

    15 CFR Part 742

    Exports, Terrorism.

    15 CFR Part 748

    Administrative practice and procedure, Exports, Reporting and recordkeeping requirements.

    15 CFR Part 772

    Exports.

    15 CFR Part 774

    Exports, Reporting and recordkeeping requirements.

    Accordingly, parts 740, 742, 748, 772, and 774 of the Export Administration Regulations (15 CFR parts 730 through 774) are proposed to be amended as follows:

    PART 740 [AMENDED] 1. The authority citation for part 740 continues to read as follows: Authority:

    50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 7, 2014, 79 FR 46959 (August 11, 2014).

    2. Section 740.2 is amended by adding paragraph (a)(19) to read as follows:
    § 740.2 Restrictions on all License Exceptions.

    (a) * * *

    (19) The item is a cybersecurity item, i.e., those controlled by ECCNs 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004 items), 4D004, 4E001.a (“required” for 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004) or 4D004 items), 4E001.c, 5A001.j, 5B001.a (“specially designed” for 5A001.j items), 5D001.a (“specially designed” for 5A001.j items), 5D001.c (“specially designed” for 5A001.j or 5B001.a items) or 5E001.a (“required” for 5A001.j, 5B001.a, 5D001.a (for 5A001.j items) or 5D001.c (“specially designed” for 5A001.j or 5B001.a items) and the export, reexport or transfer (in-country) is not authorized by § 740.11(b)(2)(ii) (made by or consigned to a department or agency of the U.S. government), or § 740.11(b)(2)(iii) (made for or on behalf of a department or agency of the U.S. Government).

    3. Section 740.11 is amended by: a. Adding paragraph (a)(2)(vi); b. Removing the “or” from the end of paragraph (c)(3)(vi); c. Removing the period from paragraph (c)(3)(vii) and adding a semicolon in its place; and d. Adding paragraph (c)(3)(viii).

    The revisions and addition read as follows:

    § 740.11 Governments, international organizations, international inspections under the Chemical Weapons Convention, and the International Space Station (GOV).

    (a) * * *

    (2) * * *

    (vi) Cybersecurity items, i.e., those controlled by ECCNs 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004 items), 4D004, 4E001.a (“required” for 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004) or 4D004 items), 4E001.c, 5A001.j, 5B001.a (“specially designed” for 5A001.j items), 5D001.a (“specially designed” or modified for 5A001.j items), 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a items) or 5E001.a (“required” for 5A001.j, 5B001.a, 5D001.a (“specially designed” or modified for 5A001.j items) or 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a items).

    (c) * * *

    (3) * * *

    (viii) Cybersecurity items, i.e., those controlled by ECCNs 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004 items), 4D004, 4E001.a (“required” for 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004) or 4D004 items), 4E001.c, 5A001.j, 5B001.a (“specially designed” for 5A001.j items), 5D001.a (“specially designed” or modified for 5A001.j items), 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a items) or 5E001.a (“required” for 5A001.j, 5B001.a, 5D001.a (“specially designed” or modified for 5A001.j items) or 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a) items).

    4. Section 740.13 is amended by revising the section heading and paragraph (d)(2) to read as follows:
    § 740.13 Technology and Software—Unrestricted (TSU).

    (d) * * *

    (2) Exclusions—(i) Encryption software. The provisions of this paragraph (d) are not available for encryption software controlled for “EI” reasons under ECCN 5D002 or for encryption software with symmetric key length exceeding 64-bits that qualifies as mass market encryption software under the criteria in the Cryptography Note (Note 3) of Category 5, Part 2, of the Commerce Control List (Supplement No. 1 to part 774 of the EAR). (Once such mass market encryption software has been reviewed by BIS and released from “EI” and “NS” controls pursuant to § 742.15(b) of the EAR, it is controlled under ECCN 5D992.c and is thus outside the scope of License Exception TSU.) See § 742.15(b) of the EAR for exports and reexports of mass market encryption products controlled under ECCN 5D992.c.

    (ii) Cybersecurity software. The provisions of this paragraph (d) are not available for cybersecurity “software” that is classified under ECCNs 4D001.a (“specially designed” or modified for 4A005 or 4D004 items), 4D004, or for “software” under ECCN 5D001.a or .c (“specially designed” for “production,” “development” or “use” of 5A001.j equipment or systems, or providing the characteristics, functions or features of 5A001.j or 5B001.a equipment or systems).

    5. Section 740.17 is amended by revising paragraph (b)(3)(iii) introductory text to read as follows:
    § 740.17 Encryption commodities, software and technology (ENC).

    (b) * * *

    (3) * * *

    (iii) Encryption commodities and software not described by paragraph (b)(2) of this section, and not further controlled for NS and RS reasons under ECCNs 5A001.j, 5B001.a (“specially designed” for 5A001.j), 5D001.a (“specially designed” or modified for 5A001.j) or 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a), that provide or perform vulnerability analysis, network forensics, or computer forensics functions characterized by any of the following:

    6. Section 740.20 is amended by adding paragraph (b)(2)(ix) to read as follows:
    § 740.20 License Exception Strategic Trade Authorization (STA).

    (b) * * *

    (2) * * *

    (ix) License Exception STA may not be used for any cybersecurity items, i.e., those controlled by ECCNs 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004 items), 4D004, 4E001.a (“required” for 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004 items) or 4D004 items), 4E001.c, 5A001.j, 5B001.a (“specially designed” for 5A001.j items), 5D001.a (“specially designed” or modified for 5A001.j items), 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a items) or 5E001.a (“required” for 5A001.j, 5B001.a, 5D001.a (“specially designed” or modified for 5A001.j items) or 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a items) items).

    PART 742 [AMENDED] 7. The authority citation for part 742 continues to read as follows: Authority:

    50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; Sec. 1503, Pub. L. 108-11, 117 Stat. 559; E.O. 12058, 43 FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Presidential Determination 2003-23 of May 7, 2003, 68 FR 26459, May 16, 2003; Notice of August 7, 2014, 79 FR 46959 (August 11, 2014); Notice of November 7, 2014, 79 FR 67035 (November 12, 2014).

    8. Section 742.6 is amended by adding paragraph (b)(5) to read as follows:
    § 742.6 Regional stability.

    (b) * * *

    (5) Licensing policy for cybersecurity items. Applications for exports, reexports and transfers of cybersecurity items, i.e., those controlled by ECCNs 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004 items), 4D004, 4E001.a (“required” for 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004 items) or 4D004 items), 4E001.c, 5A001.j, 5B001.a (“specially designed” for 5A001.j items), 5D001.a (“specially designed” or modified for 5A001.j items), 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a items) or 5E001.a (“required” for 5A001.j, 5B001.a, 5D001.a (“specially designed” or modified for 5A001.j items) or 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a items) items), controlled for RS will be reviewed favorably if destined to a U.S. company or subsidiary not located in Country Group D:1 or E:1, `foreign commercial partners' located in Country Group A:5, Government end users in Australia, Canada, New Zealand or United Kingdom and on a case-by-case basis to determine whether the transaction is contrary to the national security or foreign policy interests of the United States, including the foreign policy interest of promoting the observance of human rights throughout the world, except that there is a policy of presumptive denial for items that have or support rootkit or zero-day exploit capabilities. Any “information security” functionality incorporated in the cybersecurity item will also receive a focused case-by-case review for reasons of Encryption Items (EI) control.

    Note to paragraph (b)(5): A `foreign commercial partner' means a foreign-based non-governmental end-user that has a business need to share the proprietary information of the U.S. company and is contractually bound to the U.S. company (e.g., has an established pattern of continuing or recurring contractual relations). In addition to the information required in § 748.3(c)(1), (c)(2) and paragraph (z) of Supplement No. 2 to part 748 of the EAR, you must explain in a letter of explanation how the end user meets the criteria of a `foreign commercial partner' and how the end user will safeguard the items from unauthorized transfers (in-country) and reexports.

    PART 748—[AMENDED] 9. The authority citation for part 748 continues to read as follows: Authority:

    50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 7, 2014, 79 FR 46959 (August 11, 2014).

    10. Section 748.8 is amended by adding paragraph (z) to read as follows:
    § 748.8 Unique application and submission requirements.

    (z) Cybersecurity Items.

    11. Supplement No. 2 is amended by adding paragraph (z) to read as follows: Supplement No. 2 to Part 748—Unique Application and Submission Requirements

    (z) Cybersecurity items. For license applications to export, reexport, transfer (in-country) cybersecurity items, i.e., ECCNs 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004 items), 4D004, 4E001.a (“required” for 4A005, 4D001.a (“specially designed” or modified for 4A005 or 4D004) or 4D004 items), 4E001.c, 5A001.j, 5B001.a (“specially designed” for 5A001.j items), 5D001.a (“specially designed” or modified for 5A001.j items), 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a items) or 5E001.a (“required” for 5A001.j, 5B001.a, 5D001.a (“specially designed” or modified for 5A001.j items) or 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a items) items) you must follow the unique application requirements set forth in this paragraph (z). If the cybersecurity item has encryption or other “information security” functionality classified under ECCNs 5A002, 5D002, 5A992.c, 5D992.c or 5E002, all encryption registration and review requirements must be separately completed with BIS and the ENC Encryption Request Coordinator, Ft. Meade, MD, before license applications for a cybersecurity item will be considered, see §§ 740.17 and 742.15 of the EAR.

    (1) In block 9 of the application (Special Purpose) indicate the phrase “Cybersecurity Item.” In addition to the information required by § 748.3(b) of the EAR, submit the following information in a letter of explanation:

    (i) Whether the cybersecurity item has encryption or other “information security” functionality, Encryption Registration Number (ERN) and encryption Commodity Classification Application Tracking System (CCATS) number(s);

    (ii) Whether the cybersecurity item has been previously classified or included in a license application submitted on or after May 20, 2015 for which all requirements of this section (including the questions set forth in paragraph (z)(1)(iii) of this section) have been satisfied. If so, then provide the Commodity Classification Automated Tracking System (CCATS) number(s) or issued license number(s).

    (iii) If the cybersecurity item has not been previously classified or included in a license application, then:

    (A) Describe the cybersecurity functions and user interfaces (e.g., Application Programming Interfaces (APIs), Command Line Interfaces (CLIs) or Graphical User Interfaces (GUIs)) that are implemented and/or supported. Explain which are for internal use private to the developer of the product, and/or which are for use by the customer or other operator.

    (B) Describe the cybersecurity functionality (including as related to “intrusion software”) that is provided by third-party frameworks, platforms, tools, modules or components (if any). Identify the manufacturers of the cybersecurity items, including specific part numbers and version information as needed to describe the item. As applicable, describe whether the third-party cybersecurity software is statically or dynamically linked.

    (C) For items related to “intrusion software,” describe how rootkit or zero-day exploit functionality is precluded from the item. Otherwise, for items that incorporate or otherwise support rootkit or zero-day exploit functionality, this must be explicitly stated in the application.

    (2) Upon request, include a copy of the sections of source code and other software (e.g., libraries and header files) that implement or invoke the controlled cybersecurity functionality.

    PART 772 [AMENDED] 12. The authority citation for part 772 continues to read as follows: Authority:

    50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 7, 2014, 79 FR 46959 (August 11, 2014).

    13. Section 772.1 is amended by adding the term “Intrusion software” in alphabetic order to read as follows:
    § 772.1 Definitions of terms as used in the Export Administration Regulations (EAR).

    Intrusion software. (Cat 4) “Software” “specially designed” or modified to avoid detection by `monitoring tools,' or to defeat `protective countermeasures,' of a computer or network-capable device, and performing any of the following:

    (a) The extraction of data or information, from a computer or network-capable device, or the modification of system or user data; or

    (b) The modification of the standard execution path of a program or process in order to allow the execution of externally provided instructions.

    Notes: 1. “Intrusion software” does not include any of the following:

    a. Hypervisors, debuggers or Software Reverse Engineering (SRE) tools;

    b. Digital Rights Management (DRM) “software”; or

    c. “Software” designed to be installed by manufacturers, administrators or users, for the purposes of asset tracking or recovery.

    2. Network-capable devices include mobile devices and smart meters.

    Technical Notes: 1. `Monitoring tools': “software” or hardware devices, that monitor system behaviors or processes running on a device. This includes antivirus (AV) products, end point security products, Personal Security Products (PSP), Intrusion Detection Systems (IDS), Intrusion Prevention Systems (IPS) or firewalls.

    2. `Protective countermeasures': techniques designed to ensure the safe execution of code, such as Data Execution Prevention (DEP), Address Space Layout Randomization (ASLR) or sandboxing.

    PART 774 [AMENDED] 14. The authority citation for part 774 continues to read as follows: Authority:

    50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 Comp., p. 783; Notice of August 7, 2014, 79 FR 46959 (August 11, 2014).

    Supplement No. 1 to Part 774—[Amended] 15. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 4 is amended by adding ECCN 4A005 after ECCN 4A004 to read as follows: Supplement No. 1 to Part 774—The Commerce Control List 4A005 “Systems,” “equipment,” or “components” therefor, “specially designed” or modified for the generation, operation or delivery of, or communication with, “intrusion software”. License Requirements Reason for Control: NS, RS, AT Control(s) Country chart
  • (see supp. No. 1 to part 738)
  • NS applies to entire entry NS Column 1 RS applies to the entire entry RS Column 1 AT applies to entire entry AT Column 1

    License Requirement Note: All license applications for 4A005 must include the information required in Supplement No. 2 to part 748 of the EAR, paragraph (z). Also, all such cybersecurity items using or incorporating encryption or other “information security” functionality classified under ECCNs 5A002, 5D002, 5A992.c, 5D992.c or 5E002, must also satisfy the registration, review and reporting requirements set forth in §§ 740.17, 742.15(b) and 748.3(d) of the EAR, including submissions to the ENC Encryption Request Coordinator, Ft. Meade, MD prior to applying for a license.

    List Based License Exceptions (See Part 740 for a Description of All License Exceptions) LVS: N/A GBS: N/A CIV: N/A Special Conditions for STA STA: License Exception STA may not be used to export, reexport, or transfer (in-country) commodities controlled by ECCN 4A005 to any destination. List of Items Controlled Related Controls: (1) “Systems”, “equipment” and “components” described under ECCN 4A005 are classified under this ECCN, even if the “systems”, “equipment” or “components” are designed or modified to use “cryptography” or cryptanalysis. (2) See Categories XI(b) and XIII in the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120 through 130) and the U.S. Munitions List (22 CFR part 121). (3) See also ECCN 4D001.a (“development” and “production” “software”), 4D004 and 4E001.a and .c. Related Definitions: See § 772.1 of this EAR for the definition of “intrusion software.” Items: The list of items controlled is contained in the ECCN heading.
    16. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 4, ECCN 4D001 is amended by: a. Revising the Reason for Control paragraph in the License Requirements section; b. Adding an entry for “RS” after the entry for “NS” in the table in the License Requirements section; c. Removing the NP note after the table in the License Requirements section and adding in its place a License Requirement Note; d. Revising the TSR paragraph in the List Based License Exceptions section; e. Revising the Special Conditions for STA section; f. Revising the Related Controls paragraph in the List of Items Controlled section; g. Revising Items paragraph a.

    The revisions and addition read as follows:

    4D001 “Software” as follows (see List of Items Controlled). License Requirements Reason for Control: NS, RS, CC, AT Control(s) Country chart
  • (see supp. No. 1 to part 738)
  • *    *    *    *    * RS applies to 4D001.a (if “specially designed” or modified for 4A005 or 4D004) RS Column 1 *    *    *    *    *

    License Requirement Note: All license applications for 4D001.a (if “specially designed” or modified for 4A005 or 4D004) must include the information required in Supplement No. 2 to part 748 of the EAR, paragraph (z). Also, all such cybersecurity items using or incorporating encryption or other “information security” functionality classified under ECCNs 5A002, 5D002, 5A992.c, 5D992.c or 5E002, must also satisfy the registration, review and reporting requirements set forth in §§ 740.17, 742.15(b) and 748.3(d) of the EAR, including submissions to the ENC Encryption Request Coordinator, Ft. Meade, MD prior to applying for a license.

    List Based License Exceptions (See Part 740 for a Description of All License Exceptions) TSR: Yes, except for: (1) “software” “specially designed” or modified for the “development” or “production” of commodities with an “Adjusted Peak Performance” (“APP”) exceeding 1.0 WT; or (2) “software” if “specially designed” or modified for the “development” or “production” of commodities or “software” specified by ECCNs 4A005 or 4D004. Special Conditions for STA STA: License Exception STA may not be used to: (1) Ship or transmit “software” “specially designed” or modified for the “development” or “production” of equipment specified by ECCN 4A001.a.2 or for the “development” or “production” of “digital computers” having an `Adjusted Peak Performance' (`APP') exceeding 1.0 Weighted TeraFLOPS (WT) to any of the destinations listed in Country Group A:6 (See Supplement No.1 to part 740 of the EAR); or (2) ship or transmit “software” “specially designed” or modified for the “production” or “development” of commodities or “software” specified by ECCNs 4A005 or 4D004, to any destination. List of Items Controlled Related Controls: (1) “Software” described under ECCN 4D001 (if “specially designed” or modified for 4A005 or 4D004) is classified under this ECCN, even if the “software” is designed or modified to use “cryptography” or cryptanalysis. (2) See also the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120 through 130) and the U.S. Munitions List (22 CFR part 121). Items: a. “Software” “specially designed” or modified for the “development” or “production”, of equipment controlled by 4A001, 4A003, 4A004, 4A005 or “software” controlled by 4D (except 4D980, 4D993 or 4D994).
    17. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 4 is amended by adding ECCN 4D004 after ECCN 4D002 to read as follows: 4D004 “Software” “specially designed” or modified for the generation, operation or delivery of, or communication with, “intrusion software”. License Requirements Reason for Control: NS, RS, AT Control(s) Country chart
  • (see supp. No.1 to part 738)
  • NS applies to entire entry NS Column 1 RS applies to entire entry RS Column 1 AT applies to entire entry AT Column 1

    License Requirement Note: All license applications for 4D004 must include the information required in Supplement No. 2 to part 748 of this EAR, paragraph (z). Also, all such cybersecurity items using or incorporating encryption or other “information security” functionality classified under ECCNs 5A002, 5D002, 5A992.c, 5D992.c or 5E002, must also satisfy the registration, review and reporting requirements set forth in §§ 740.17, 742.15(b) and 748.3(d) of the EAR, including submissions to the ENC Encryption Request Coordinator, Ft. Meade, MD prior to applying for a license.

    List Based License Exceptions (See Part 740 for a Description of All License Exceptions) CIV: N/A TSR: N/A Special Conditions for STA STA: License Exception STA may not be used to export, reexport, or transfer (in-country) “software” controlled by ECCN 4D004 to any destination. List of Items Controlled Related Controls: (1) “Software” described under ECCN 4D004 is classified under this ECCN, even if the “software” is designed or modified to use “cryptography” or cryptanalysis. (2) See also the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120 through 130) and the U.S. Munitions List (22 CFR part 121). (3) See also ECCN 4E001.a. Related Definitions: See § 772.1 of the EAR for the definition of “intrusion software.” Items: The list of items controlled is contained in the ECCN heading.
    18. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 4, ECCN 4E001 is amended by: a. Revising the Reasons for Control paragraph in the License Requirements section; b. Adding an entry for “RS” after the entry for “MT” in the table in the License Requirements section; c. Removing the NP note after the table in the License Requirements section and adding in its place a License Requirement Note; d. Revising the TSR paragraph in the List Based License Exceptions section; e. Revising the Special Conditions for STA section; f. Revising the Related Controls and Related Definitions paragraphs in the List of Items Controlled section; g. Adding paragraph c to the Items paragraph of the List of Items Controlled section.

    The revisions and additions read as follows:

    4E001 “Technology” as follows (see List of Items Controlled). License Requirements Reason for Control: NS, MT, RS, CC, AT Control(s) Country chart (see supp. No. 1 to part 738) *    *    *    *    * RS applies to 4E001.a “technology” (if “required” for 4A005, 4D001.a (if “specially designed” or modified for 4A005 or 4D004) or 4D004) and if “required” for 4E001.c RS Column 1 *    *    *    *    *

    License Requirement Note: All license applications for 4E001.a “technology” (if “required” for 4A005, 4D001.a (if “specially designed” or modified for 4A005 or 4D004) or 4D004) and if “required” for 4E001.c must include the information required in Supplement No. 2 to part 748 of the EAR, paragraph (z). Also, all such cybersecurity items using or incorporating encryption or other “information security” functionality classified under ECCNs 5A002, 5D002, 5A992.c, 5D992.c or 5E002, must also satisfy the registration, review and reporting requirements set forth in §§ 740.17, 742.15(b) and 748.3(d) of the EAR, including submissions to the ENC Encryption Request Coordinator, Ft. Meade, MD prior to applying for a license.

    List Based License Exceptions (See Part 740 for a Description of All License Exceptions) TSR: Yes, except for: “technology” for the “development” or “production” of “commodities” with an “Adjusted Peak Performance” (“APP”) exceeding 1.0 WT, “commodities” in 4A005 or “software” in 4D001.a (if “specially designed” or modified for 4A005 or 4D004) or “required” for 4D004; or “technology” specified by 4E001.c. Special Conditions for STA STA: License Exception STA may not be used to ship or transmit “technology” according to the General Technology Note for the “development” or “production” of any of the following equipment or “software”: a. Equipment specified by ECCN 4A001.a.2; b. “Digital computers” having an `Adjusted Peak Performance' (`APP') exceeding 1.0 Weighted TeraFLOPS (WT); or .c “software” specified in the License Exception STA paragraph found in the License Exception section of ECCN 4D001 to any of the destinations listed in Country Group A:6 (See Supplement No. 1 to part 740 of the EAR); or to ship any “technology” specified by 4E001.a “required” for “commodities” in 4A005 or “software” in 4D001.a (if “specially designed” or modified for 4A005 or 4D004), 4D004, or by 4E001.c, to any destination. List of Items Controlled Related Controls: (1) “Technology” described under ECCN 4E001.a (“required” for equipment in 4A005 or “software” in 4D001.a (if “specially designed” or modified for 4A005 or 4D004) or 4D004) or 4E001.c is classified under this ECCN, even if it includes “technology” for the “development” or “production” of cryptographic or cryptanalytic items. (2) See also the International Traffic in Arms Regulations (ITAR) (22 CFR parts 120 through 130) and the U.S. Munitions List (22 CFR part 121). Related Definitions: See § 772.1 for the definition of “intrusion software.” Items:* * *

    c. “Technology” “required” for the “development” of “intrusion software”.

    19. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 5, ECCN 5A001 is amended by: a. Revising the Reason for Control paragraph in the License Requirements section; b. Revising the first entry in the table in the License Requirements section; c. Adding an entry for “RS” after the second entry in the table in the License Requirements section; d. Adding a License Requirement Note after the table in the License Requirements section; e. Revising the List Based License Exceptions section; f. Revising the Special Conditions for STA section; g. Revising the Related Controls paragraph of the List of Items Controlled section; and h. Adding paragraph .j to the Items paragraph of the List of Items Controlled section.

    The revisions and additions read as follows:

    5A001 Telecommunications systems, equipment, “components” and “accessories,” as follows (see List of Items Controlled). License Requirements Reason for Control: NS, RS, SL, AT Control(s) Country chart (see supp. No. 1 to part 738) NS applies to 5A001.a, .e, .b.5, f.3, .h and .j NS Column 1 *    *    *    *    * RS applies to 5A001.j RS Column 1 *    *    *    *    *

    License Requirement Note: All license applications for cybersecurity items (5A001.j) must include the information required in Supplement No. 2 to part 748 of the EAR, paragraph (z). Also, all such cybersecurity items using or incorporating encryption or other “information security” functionality classified under ECCNs 5A002, 5D002, 5A992.c, 5D992.c or 5E002, must also satisfy the registration, review and reporting requirements set forth in §§ 740.17, 742.15(b) and 748.3(d) of the EAR, including submissions to the ENC Encryption Request Coordinator, Ft. Meade, MD prior to applying for a license.

    List Based License Exceptions (See Part 740 for a Description of All License Exceptions) LVS: N/A for 5A001.a, .b.5, .e, .f, .h, and .j; $5000 for 5A001.b.1, .b.2, .b.3, .b.6, .d, and .g; $3000 for 5A001.c. GBS: Yes, except 5A001.a, .b.5, .e, .f, .h, and .j. CIV: Yes, except 5A001.a, .b.3, .b.5, .e, .f, .h, and .j. Special Conditions for STA STA: License Exception STA may not be used to ship any commodity in 5A001.b.3, .b.5, or .h to any of the destinations listed in Country Group A:6 (See Supplement No. 1 to part 740 of the EAR), or to ship any commodity in 5A001.j to any destination. List of Items Controlled Related Controls: (1) See USML Category XI for controls on direction-finding “equipment” including types of “equipment” in ECCN 5A001.e and any other military or intelligence electronic “equipment” that is “subject to the ITAR.” (2) See USML Category XI(a)(4)(iii) for controls on electronic attack and jamming “equipment” defined in 5A001.f and .h that are subject to the ITAR. (3) “Systems,” “equipment” and “components” described under ECCN 5A001.j are classified under this ECCN even if the “systems,” “equipment” or “components” are designed or modified to use “cryptography” or cryptanalysis. (4) ECCN 5A001.j includes a note that explicitly excludes equipment designed for marketing purposes, quality of service (QoS) or quality of experience (QoE) purposes. The intent of the entry is to capture only products that are not “specially designed” for legitimate network operator functions. The control has very specific parameters and includes only systems or equipment that perform all five of the capabilities listed in 5A001.j below. Equipment that is not described in the new ECCN 5A001.j entry because it does not have all five capabilities required is likely to be described in ECCNs 5A002 or 5A992 if it has encryption functionality, or ECCNs 5A991 or 4A994 if it does not. However, such equipment may not be sold separately with knowledge that it will be combined with other equipment to comprise a system described in new paragraph ECCN 5A001.j. (see § 764.2(h) of the EAR) (5) See also 5A101, 5A980, and 5A991. Items: * * *

    j. IP network communications surveillance “systems” or “equipment”, and “specially designed” components therefor, having all of the following:

    j.1. Performing all of the following on a carrier class IP network (e.g., national grade IP backbone):

    j.1.a. Analysis at the application layer (e.g., Layer 7 of Open Systems Interconnection (OSI) model (ISO/IEC 7498-1));

    j.1.b. Extraction of selected metadata and application content (e.g., voice, video, messages, attachments); and

    j.1.c. Indexing of extracted data; and

    j.2. Being “specially designed” to carry out all of the following:

    j.2.a. Execution of searches on the basis of `hard selectors'; and

    j.2.b. Mapping of the relational network of an individual or of a group of people.

    Note: 5A001.j does not apply to “systems” or “equipment”, “specially designed” for any of the following:

    a. Marketing purpose;

    b. Network Quality of Service (QoS); or

    c. Quality of Experience (QoE).

    Technical Note: `Hard selectors': data or set of data, related to an individual (e.g., family name, given name, email or street address, phone number or group affiliations).

    20. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 5, ECCN 5B001 is amended by: a. Revising the Reasons for Control paragraph of the License Requirements section; b. Revising the table in the License Requirements section; c. Adding a License Requirement Note after the table in the License Requirements section; d. Revising the List Based License Exceptions section; and e. Revising the Special Conditions for STA section.

    The revisions and addition to read as follows:

    5B001 Telecommunication test, inspection and production equipment, “components” and “accessories,” as follows (See List of Items Controlled). License Requirements Reason for Control: NS, RS, AT Control(s) Country chart
  • (see supp. No. 1 to part 738)
  • NS applies to 5B001.a equipment, “components” and “accessories” “specially designed” for 5A001.j NS Column 1 NS applies to entire entry (except 5B001.a for 5A001.j) NS Column 2 RS applies to 5B001.a equipment, “components” and “accessories” “specially designed” for 5A001.j RS Column 1 AT applies to entire entry AT Column 1

    License Requirement Note: All license applications for cybersecurity items (5B001.a equipment, “components” and “accessories” “specially designed” for 5A001.j) must include the information required in Supplement No. 2 to part 748 of the EAR, paragraph (z). Also, all such cybersecurity items using or incorporating encryption or other “information security” functionality classified under ECCNs 5A002, 5D002, 5A992.c, 5D992.c or 5E002, must also satisfy the registration, review and reporting requirements set forth in §§ 740.17, 742.15(b) and 748.3(d) of the EAR, including submissions to the ENC Encryption Request Coordinator, Ft. Meade, MD prior to applying for a license.

    List Based License Exceptions (See Part 740 for a Description of All License Exceptions) LVS: $5000, except N/A for 5B001.a (for 5A001.f.1 or .j) GBS: Yes, except for 5B001.a (for 5A001.f.1 or .j) CIV: Yes, except for 5B001.a (for 5A001.f.1 or .j) Special Conditions for STA STA: License Exception STA may not be used to ship 5B001.a equipment and “specially designed” “components” or “accessories” therefor, “specially designed” for the “development” or “production” of equipment, functions or features specified by ECCN 5A001.b.3, .b.5 or .h to any of the destinations listed in Country Group A:6 (See Supplement No.1 to part 740 of the EAR), or to ship any commodity in 5B001.a for equipment or systems specified by 5A001.f.1. or .j to any destination.
    21. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 5, ECCN 5D001 is amended by: a. Revising the Reasons for Control paragraph in the License Requirements section; b. Adding an entry for “RS” after the entry for “NS” in the table in the License Requirements section; c. Adding a License Requirement Note after the table in the License Requirements section; d. Revising the List Based License Exceptions section; e. Revising the Special Conditions for STA section; and f. Revising the Related Controls paragraph in the List of Items Controlled section.

    The revisions and additions read as follows:

    5D001 “Software” as follows (see List of Items Controlled). License Requirements Reason for Control: NS, RS, SL, AT Control(s) Country chart
  • (see supp. No. 1 to part 738)
  • *    *    *    *    * RS applies to 5D001.a “software” “specially designed” or modified for 5A001.j, and 5D001.c “software” “specially designed” or modified for 5A001.j or 5B001.a RS Column 1 *    *    *    *    *

    License Requirement Note: All license applications for cybersecurity items (5D001.a “software” “specially designed” or modified for 5A001.j, and 5D001.c “software” “specially designed” or modified for 5A001.j or 5B001.a) must include the information required in Supplement No. 2 to part 748 of the EAR, paragraph (z). Also, all such cybersecurity items using or incorporating encryption or other “information security” functionality classified under ECCNs 5A002, 5D002, 5A992.c, 5D992.c or 5E002, must also satisfy the registration, review and reporting requirements set forth in §§ 740.17, 742.15(b) and 748.3(d) of the EAR, including submissions to the ENC Encryption Request Coordinator, Ft. Meade, MD prior to applying for a license.

    List Based License Exceptions (See Part 740 for a Description of All License Exceptions) CIV: Yes, except for “software” controlled by 5D001.a and “specially designed” or modified for the “development” or “production” of items controlled by 5A001.b.5, 5A001.f.1, 5A001.h and 5A001.j. TSR: Yes, except for exports and reexports to destinations outside of those countries listed in Country Group A:5 (See Supplement No. 1 to part 740 of the EAR) of “software” controlled by 5D001.a and “specially designed” or modified for items controlled by 5A001.b.5, 5A001.f.1, 5A001.h and 5A001.j. Special Conditions for STA STA: License Exception STA may not be used to ship or transmit 5D001.a “software” “specially designed” or modified for the “development” or “production” of equipment, functions or features, specified by ECCN 5A001.b.3, .b.5, .f.1, .h or .j; and for 5D001.b. for “software” “specially designed” or modified to support “technology” specified by the STA paragraph in the License Exception section of ECCN 5E001 to any of the destinations listed in Country Group A:6 (See Supplement No.1 to part 740 of the EAR); and for 5D001.c. for “software” “specially designed” or modified to provide characteristics, functions or features of equipment or systems classified under ECCNs 5A001.f.1 or .j, or 5B001.a (for 5A001.f.1 or .j)). List of Items Controlled Related Controls: (1) “Software” described under ECCN 5D001.a or .c (if “specially designed” or modified for 5A001.j) is classified under this ECCN, even if the “software” is designed or modified to use “cryptography” or cryptanalysis. (2) See also 5D980 and 5D991.
    22. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 5, Part 1, ECCN 5E001 is amended by: a. Revising the Reasons for Control paragraph in the License Requirements section; b. Adding an entry for “RS” after the entry for “NS” in the table in the License Requirements section; c. Adding a License Requirement Note after the table in the License Requirements section; d. Revising the TSR paragraph in the List Based License Exceptions section; e. Revising the Special Conditions for STA section; and f. Adding paragraph (3) to the Related Control paragraph in the List of Items Controlled section.

    The revisions and additions read as follows:

    5E001 “Technology” as follows (see List of Items Controlled). License Requirements Reason for Control: NS, RS, SL, AT Control(s) Country chart
  • (see supp. No. 1 to part 738)
  • *    *    *    *    * RS applies to 5E001.a for commodities controlled under 5A001.j or “software” controlled under 5D001.a (if “specially designed” or modified for 5A001.j), and 5D001.c (if “specially designed” or modified for 5A001.j or 5B001.a) for RS reasons RS Column 1 *    *    *    *    *

    License Requirement Note: All license applications for cybersecurity items (5A001.j or “software” controlled under 5D001.a (if “specially designed” or modified for 5A001.j), and 5D001.c (if “specially designed” or modified for 5A001.j or 5B001.a)) must include the information required in Supplement No. 2 to part 748 of the EAR, paragraph (z). Also, all such cybersecurity items using or incorporating encryption or other “information security” functionality classified under ECCNs 5A002, 5D002, 5A992.c, 5D992.c or 5E002, must also satisfy the registration, review and reporting requirements set forth in §§ 740.17, 742.15(b) and 748.3(d) of the EAR, including submissions to the ENC Encryption Request Coordinator, Ft. Meade, MD prior to applying for a license.

    List Based License Exceptions (See Part 740 for a Description of All License Exceptions) TSR: Yes, except: N/A for “technology” controlled by 5E001.a if “required” for the “development” or “production” of items controlled by 5A001.f.1. or .j, 5D001.a (if “specially designed” or modified for 5A001.f.1 or .j) or 5D001.c (if “specially designed” or modified for 5A001.j or 5B001.a) to any destination; or for exports or reexports to destinations outside of those countries listed in Country Group A:5 (See Supplement No. 1 to part 740 of the EAR) of “technology” controlled by 5E001.a for the “development” or “production” of the following: (1) Items controlled by 5A001.b.5 or 5A001.h; or (2) “Software” controlled by 5D001.a that is “specially designed” or modified for the “development” or “production” of equipment, functions or features controlled by 5A001.b.5 or 5A001.h. Special Conditions for STA STA: License Exception STA may not be used to ship or transmit “technology” according to the General Technology Note for the “development” or “production” of equipment, functions or features specified by 5A001.b.3, .b.5 or .h; or for “software” in 5D001.a that is specified in the STA paragraph in the License Exception section of ECCN 5D001 to any of the destinations listed in Country Group A:6 (See Supplement No.1 to part 740 of the EAR); or to ship any “technology” in 5E001.a if “required” for any commodity in 5A001.f.1 or .j, or if “required” for any “software” in 5D001.a or .c (“specially” or modified designed for any commodity in 5A001.f.1 or .j or 5B001.a (“specially designed” for 5A001.f.1 or .j)), to any destination. List of Items Controlled Related Controls: * * * (3) “Technology” described under ECCN 5E001.a if “required” for “systems,” “equipment” or “components” classified under 5A001.j or “software” classified under 5D001.a (“specially designed” or modified for 5A001.j) or 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a) is classified under this ECCN even if it includes “technology” for the “development” or “production” of cryptographic or cryptanalytic items.
    23. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 5 Part 2, ECCN 5A002 is amended by adding paragraph (4) to the Related Controls paragraph in the List of Items Controlled section to read as follows: 5A002 “Information security” systems, equipment “components” therefor, as follows (see List of Items Controlled). List of Items Controlled Related Controls: * * * (4) “Systems,” “equipment” and “components” described under ECCNs 4A005 or 5A001.j are classified under ECCNs 4A005 or 5A001.j, even if the “systems,” “equipment” or “components” are designed or modified to use “cryptography” or cryptanalysis. 24. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 5 Part 2, ECCN 5D002 is amended by adding paragraph (3) to the Related Controls paragraph in the List of Items Controlled section to read as follows: 5D002 “Software” as follows (see List of Items Controlled). List of Items Controlled Related Controls: * * * (3) “Software” described under ECCN 4D001.a (“specially designed” or modified for 4A005 or 4D004), 4D004, 5D001.a (“specially designed” or modified for 5A001.j) or 5D001.c (“specially designed” or modified for 5A001.j or 5B001.a) is classified under those ECCNs, even if the “software” is designed or modified to use “cryptography” or cryptanalysis. 25. In Supplement No. 1 to Part 774 (the Commerce Control List), Category 5 Part 2, ECCN 5E002 is amended by revising the Related Controls paragraph in the List of Items Controlled section to read as follows: 5E002 “Technology” as follows (see List of Items Controlled). List of Items Controlled Related Controls: (1) See also 5E992. This entry does not control “technology” “required” for the “use” of equipment excluded from control under the Related Controls paragraph or the Technical Notes in ECCN 5A002 or “technology” related to equipment excluded from control under ECCN 5A002. This “technology” is classified as ECCN 5E992. (2) “Technology” described under ECCN 4E001.a (“required” for equipment in 4A005 or “software” in 4D004), 4E001.c, or 5E001.a (“required” for 5A001.j or 5D001.a) that is designed or modified to use “cryptography” or cryptanalysis is classified under ECCNs 4E001.a or .c, or ECCN 5E001.a, respectively. Dated: May 11, 2015. Kevin J. Wolf, Assistant Secretary for Export Administration.
    [FR Doc. 2015-11642 Filed 5-19-15; 8:45 am] BILLING CODE 3351-33-P
    DEPARTMENT OF HEALTH AND HUMAN SERVICES Food and Drug Administration 21 CFR Part 514 [Docket No. FDA-2012-N-0447; 0910-AG45] Antimicrobial Animal Drug Sales and Distribution Reporting AGENCY:

    Food and Drug Administration, HHS.

    ACTION:

    Proposed rule.

    SUMMARY:

    The Animal Drug User Fee Amendments of 2008 (ADUFA) amended the Federal Food, Drug, and Cosmetic Act (the FD&C Act) to require that sponsors of approved or conditionally approved applications for new animal drugs containing an antimicrobial active ingredient submit an annual report to the Food and Drug Administration (FDA or Agency) on the amount of each such ingredient in the drug that is sold or distributed for use in food-producing animals, and further requires FDA to publish annual summary reports of the data it receives from sponsors. At this time, FDA is issuing proposed regulations for the administrative practices and procedures for animal drug sponsors who must report under this law. This proposal also includes an additional reporting provision intended to enhance FDA's understanding of antimicrobial animal drug sales intended for use in specific food-producing animal species.

    DATES:

    Submit either electronic or written comments on the proposed rule by August 18, 2015. Submit comments on information collection issues under the Paperwork Reduction Act of 1995 (the PRA) by June 19, 2015 (see the “Paperwork Reduction Act of 1995” section of this document).

    ADDRESSES:

    You may submit comments by any of the following methods, except that comments on information collection issues under the PRA must be submitted to the Office of Information and Regulatory Affairs, Office of Management and Budget (OMB) (see the “Paperwork Reduction Act of 1995” section).

    Electronic Submissions

    Submit electronic comments in the following way:

    • Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.

    Written Submissions

    Submit written submissions in the following way:

    • Mail/Hand delivery/Courier (for paper submissions): Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    Instructions: All submissions received must include the Docket No. FDA-2012-N-0447 for this rulemaking. All comments received may be posted without change to http://www.regulations.gov, including any personal information provided. For additional information on submitting comments, see the “Comments” heading of the SUPPLEMENTARY INFORMATION section.

    Docket: For access to the docket to read background documents or comments received, go to http://www.regulations.gov and insert the docket number, found in brackets in the heading of this document, into the “Search” box and follow the prompts and/or go to the Division of Dockets Management, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

    FOR FURTHER INFORMATION CONTACT:

    Neal Bataller, Center for Veterinary Medicine (HFV-210), Food and Drug Administration, 7519 Standish Pl., Rockville, MD 20855, 240-276-9062, [email protected]

    SUPPLEMENTARY INFORMATION: Executive Summary Purpose of Proposed Rule

    Section 105 of ADUFA (ADUFA 105) amended section 512 of the FD&C Act (21 U.S.C. 360b) to require that sponsors of approved or conditionally approved applications for new animal drugs containing an antimicrobial active ingredient submit an annual report to FDA on the amount of each such ingredient in the drug that is sold or distributed for use in food-producing animals. ADUFA 105 also requires FDA to publish annual summary reports of the data it receives. In accordance with the new law, sponsors of the affected antimicrobial new animal drug products began submitting their sales and distribution data to FDA on an annual basis, and FDA published summaries of such data for each calendar year beginning with 2009. The purpose of this rulemaking is to amend the Agency's existing records and reports regulation in part 514 (21 CFR part 514) to incorporate the sales and distribution data reporting requirements specific to antimicrobial new animal drugs that were added to the FD&C Act by ADUFA 105. This proposal also includes an additional reporting provision intended to further enhance FDA's understanding of antimicrobial animal drug sales intended for use in specific food-producing animal species.

    Summary of Major Provisions

    The proposed rule, if finalized, will amend the records and reports regulation in part 514 to include the following:

    • Procedures relating to the submission to FDA of annual sales and distribution data reports by sponsors of approved new animal drug products sold or distributed for use in food-producing animals. The proposal includes specific reporting criteria, including the requirement that sponsors submit species-specific estimates of product sales as a percentage of total sales.

    • Procedures applicable to FDA's preparation and publication of summary reports on an annual basis based on the sales and distribution data it receives from sponsors of approved antimicrobial new animal drug products. The proposal includes specific parameters for the content of the annual summary reports as well as provisions intended to protect confidential business information and national security, consistent with ADUFA 105.

    • Provisions that will give sponsors of approved new animal drug products containing antimicrobial active ingredients that are sold or distributed for use in food-producing animals the opportunity to avoid duplicative reporting of product sales and distribution data to FDA under part 514.

    Costs and Benefits

    FDA estimates one-time costs to industry from this proposed rule, if finalized, at about $138,800. FDA estimates annual costs at about $55,700. These costs equate to an estimated total annualized cost of about $75,400 at a 7 percent discount rate over 10 years and about $71,900 at a 3 percent discount rate over 10 years. The total annualized costs include the administrative cost to review the rule ($9,700), plus the cost to those sponsors who wish to avoid duplicative reporting requirements under part 514 ($4,800), plus the cost of providing the species-specific estimate of the percent of the drug product distributed domestically ($61,000).

    The proposed rule would provide some flexibility for the manner in which new animal drug sponsors report the sales and distribution data under both § 514.80 and proposed § 514.87, by allowing for only one set of report submissions under certain circumstances. FDA estimates that this will reduce labor costs for new animal drug sponsors by $100,200 annually.

    Another benefit of this proposed rule would be the cost savings associated with reporting monthly sales and distribution data to FDA in terms of product units rather than calculating the amount of antimicrobial active ingredients associated with these monthly product sales and distribution data. FDA estimates the calculation reductions would amount to an annual benefit of about $18,600. FDA estimates total annual benefits at about $118,800.

    I. Background

    Section 105 of ADUFA (Pub. L. 110-316) amends section 512(l) of the FD&C Act by adding new section 512(l)(3). Section 512(l) of the FD&C Act requires sponsors of approved or conditionally approved new animal drug applications to establish and maintain records and make such reports to FDA of data and other information relating to experience with their new animal drugs as required by regulation or order. Under new section 512(l)(3) of the FD&C Act, sponsors of antimicrobial new animal drugs approved for use in food-producing animals must submit to FDA on an annual basis a report specifying the amount of each antimicrobial active ingredient in the drug that is sold or distributed for use in food-producing animals. Specifically, sponsors are required to report the amount of each antimicrobial active ingredient as follows: (1) By container size, strength, and dosage form; (2) by quantities distributed domestically and quantities exported; and (3) for each dosage form, a listing of the target animals, indications, and production classes that are specified on the approved label of the product. The information must be reported for the preceding calendar year, include separate information for each month of the calendar year, and be submitted to FDA each year no later than March 31. Section 512(l)(3) of the FD&C Act also requires FDA to publish an annual summary report of the antimicrobial drug sales and distribution data collected from the drug sponsors, and further provides that such data must be reported by antimicrobial class.

    The first reporting year under new section 512(l)(3) of the FD&C Act was calendar year 2009. In accordance with the new law, sponsors of affected new animal drug products submitted their 2009 sales and distribution data to FDA by March 31, 2010, and FDA published a summary report of these data later that same year. To date, FDA has collected sales and distribution data, and published summary reports of such data, for each calendar year from 2009 through and including 2012. As noted earlier, the purpose of this rulemaking is to amend FDA's animal drug records and reports regulation at part 514 to include administrative practices and procedures for sponsors of antimicrobial new animal drugs sold or distributed for use in food-producing animals who must report annually under section 512(l)(3) of the FD&C Act, including a proposed provision intended to enhance understanding of antimicrobial new animal drug sales intended for use in specific food-producing animal species. Collecting species-specific data is expected to assist FDA in assessing antimicrobial sales trends in the major food-producing animal species and examining how such trends may relate to antimicrobial resistance. Having improved data would also support this Agency's ongoing efforts to encourage the judicious use of antimicrobials in food-producing animals to help ensure the continued availability of safe and effective antimicrobials for animals and humans.

    FDA previously issued an advance notice of proposed rulemaking (ANPRM) to obtain public input on potential amendments to its animal drug records and reports regulation at part 514, including the proposed provision to require data about specific food-producing animal species discussed in this document. The comments FDA received in response to the ANPRM were considered in preparing this proposed rule.

    II. Proposed Regulations A. Records and Reports—Conforming Changes (Proposed § 514.80(b)(4)(i))

    Under current § 514.80(b)(4) of the Agency's regulations, sponsors of approved new animal drugs are required to submit a periodic drug experience report to FDA. Such reports include information regarding known adverse drug experiences, study reports from any recently conducted laboratory or clinical studies, current product labeling, and, under paragraph (b)(4)(i), product distribution data. In order to avoid duplicative reporting, FDA proposes that applicants submitting annual sales and distribution reports for antimicrobial new animal drug products under proposed § 514.87 would have the option to choose not to report distribution data under current § 514.80(b)(4)(i) for their approved applications that include these same products. However, this exemption from reporting under § 514.80(b)(4)(i) would only apply provided the following proposed conditions are met:

    • Applicants would have to submit complete periodic drug experience reports under § 514.80(b)(4), including paragraph (b)(4)(i), for such applications for at least 2 full years after the date of the initial approval of their drug product application, in addition to the reporting that would be required under proposed § 514.87. Under current § 514.80(b)(4), applicants of newly approved applications must submit periodic drug experience reports every 6 months for the first 2 years and such reporting is only required annually after that. This requirement provides FDA with enhanced drug experience feedback on newly approved animal drug products for which the Agency and animal drug industry have less practical experience compared to mature animal drug products that have been marketed for 2 or more years. In contrast, proposed § 514.87, which implements recently added section 512(l)(3) of the FD&C Act, would only require sales and distribution reports for antimicrobial new animal drug products once per year. By retaining the requirement that applicants of such drug products submit complete periodic drug experience reports at 6-month intervals under § 514.80(b)(4) for 2 full years after the date of the initial approval of their drug product application, this proposal would assure that enhanced drug experience surveillance for newly approved products is maintained.

    • Applicants who wish to have the option of not providing distribution data as part of the periodic drug experience reports they submit under current § 514.80(b)(4)(i) for those approved applications that include the same antimicrobial new animal drug products that are covered by the reporting requirements under proposed § 514.87 would have to assure that the beginning of the reporting period for the annual periodic drug experience reports for such applications is January 1. Under § 514.80(b)(4), the reporting period and submission deadline of yearly periodic drug experience reports is tied to the anniversary date of the drug's approval unless the applicant petitions for, and is granted, approval to change the reporting timeframes. For approved applications that have a reporting period that begins on a date other than January 1, applicants would submit a one-time request to change the submission date for their yearly (annual) periodic drug experience report such that the reporting period begins on January 1 and ends on December 31, as currently provided for in § 514.80(b)(4). Such requests may be made at any time, but, consistent with the timeframe discussed in the previous paragraph, FDA will only grant such requests after at least 2 full years have elapsed since the date of the initial approval of the subject application. In accordance with section 512(l)(3) of the FD&C Act, reporting of antimicrobial drug sales and distribution data under proposed § 514.87 would be by calendar year. The purpose of having affected applicants assure that the reporting period for their annual periodic drug experience reports begins on January 1 is so that the reporting periods for all annual reports submitted under part 514 for a particular application will be consistent and cover the same time period beginning January 1 of each year, regardless of whether submitted under § 514.80(b)(4) or proposed § 514.87.

    • Once an applicant has changed the submission date to align with the reporting period for proposed § 514.87 (beginning January 1 of each year), the Agency would also expect the applicant to submit, on a one-time basis, a special drug experience report as described in current § 514.80(b)(5)(i), that would address any gaps in distribution data caused by the change in reporting periods.

    • Sponsors who hold approved applications for antimicrobial new animal drugs intended for use in food-producing animals who choose not to separately report distribution data for their products under § 514.80(b)(4)(i) would have to assure that full sales and distribution data for each product approved under such applications are alternatively reported under proposed § 514.87, including products approved under such applications that are labeled only for use in nonfood-producing animals. This would assure that all distribution data for every drug product under approved applications for antimicrobial new animal drugs intended for use in food-producing animals are reported to FDA and that all such data are reported under one regulation, proposed § 514.87.

    FDA also proposes to revise § 514.80(b)(4) by extending the deadline for submission of annual periodic drug experience reports from within 60 days to within 90 days of the anniversary date of the approval. For those applicants whose reporting period under § 514.80(b)(4) begins on January 1—either because the anniversary of the drug application's approval falls on that date or because the applicant petitions for, and is granted, a new submission date that aligns the reporting period under § 514.80(b)(4) with the reporting period under proposed § 514.87 (i.e., beginning January 1 of each year)—this revision would harmonize the timeframe for submitting annual periodic drug experience reports following the close of the reporting period with the 90-day timeframe sponsors have to submit annual antimicrobial animal drug sales and distribution reports for the preceding calendar year (by no later than March 31) as required by section 512(l)(3) of the FD&C Act.

    B. Annual Sponsor Reports of Antimicrobial Animal Drug Sales and Distribution Information (Proposed § 514.87(a) Through (e))

    Proposed paragraph (a) would reflect the requirement, under section 512(l)(3) of the FD&C Act, for each sponsor of a new animal drug product that is approved or conditionally approved and contains an antimicrobial active ingredient, to report to FDA on an annual basis the amount of each antimicrobial active ingredient in the drug product that is sold or distributed for use in food-producing animals. This includes products that are the subject of an approved new animal drug application or abbreviated new animal drug application, as well as products that are conditionally approved under section 571 of the FD&C Act (21 U.S.C. 360ccc). Proposed paragraph (a) would also incorporate the requirement from section 512(l)(3) of the FD&C Act for animal drug sponsors to capture in their sales and distribution data reports information regarding any distributor-labeled products (see section 512(l)(3)(A) of the FD&C Act).

    Proposed paragraph (b) sets out what information would need to be included in the drug sponsor's annual report in order to satisfy paragraph (a). Specifically, proposed paragraph (b) would require each annual report to identify the approved or conditionally approved application for the subject antimicrobial new animal drug product and include the following product-specific information (see section 512(l)(3)(B) and (C)(iii) of the FD&C Act):

    • A listing of each antimicrobial active ingredient contained in the product;

    • a description of each unique marketed product by unit (i.e., container size, strength, and dosage form);

    • for each such product, a listing of the target animal species, indications, and production classes that are specified on the approved label;

    • for each such product, the number of units sold or distributed in the United States (i.e., domestic sales) for each month of the reporting year; and

    • for each such product, the number of units sold or distributed outside the United States (i.e., quantities exported) for each month of the reporting year.

    Currently, animal drug sponsors are complying with the requirements of section 512(l)(3) of the FD&C Act through a two-step process. First, they collect monthly sales and distribution data for their affected new animal drug products in terms of unit sales. Then they calculate the amount of antimicrobial active ingredients associated with those product sales and report those figures to FDA. After several years of collecting and collating sales and distribution data under section 512(l)(3) of the FD&C Act, FDA believes the most effective and efficient method for achieving the goals of this statutory provision is for animal drug sponsors to limit their annual reporting to product sales and distribution data in terms of unit sales, and then FDA can use that information to calculate the exact amounts of antimicrobial active ingredients associated with those product sales. Animal drug sponsors are very experienced at collecting and reporting accurate sales and distribution data in terms of units of product sold or distributed because of their current obligation to annually report such information to FDA in their periodic drug experience reports under § 514.80(b)(4). However, our experience has shown great variability in reporting accuracy when sponsors are asked to convert product sales data into active ingredient sales data. Such variability causes confusion for the Agency and requires more time to verify submitted data with sponsors. Therefore, FDA believes this approach will not only reduce the burden on both the sponsors and the Agency, but will greatly increase the accuracy of the final results.

    The Agency also believes a “reporting by product” approach is consistent with the requirements of ADUFA 105. Section 512(l)(3)(B) of the FD&C Act acknowledges that antimicrobial active ingredients are sold and distributed as products through its requirement that sponsors report their antimicrobial data by, among other things, “container size, strength, and dosage form,” and, “for each such dosage form, a listing of the target animals, indications, and production classes that are specified on the approved label of the product.” The container size, strength, and dosage form define a unique marketed product within an approved or conditionally approved application; therefore, under this proposal, if finalized, drug sponsors subject to the ADUFA 105 reporting requirements would need to continue to provide separate antimicrobial sales and distribution data for each of these unique marketed products in their reports. With knowledge of all the unique marketed products within an approved or conditionally approved application, along with the unit sales and distribution data for each of these products, the amount of antimicrobial active ingredient associated with those sales can then be calculated. The only question is who will perform the calculations and, as noted earlier, FDA believes that the Agency is best suited to perform this function in order to maximize accuracy and efficiency.

    Further, proposed paragraph (b) would require the sponsor of an approved or conditionally approved antimicrobial new animal drug product to list in its annual report the target animals, indications, and production classes that are specified on the approved label of each unique product. FDA believes this requirement is consistent with the reporting requirements added to the FD&C Act by ADUFA 105. Section 512(l)(3)(B) of the FD&C Act provides for sponsors to report their antimicrobial data by, among other things, container size, strength, and dosage form and, “for each such dosage form, a listing of the target animals, indications, and production classes that are specified on the approved label of the product.” As previously stated, the container size, strength, and dosage form define a unique marketed product within an approved or conditionally approved application. The dosage form is part of what defines a unique marketed product; thus, listing the target animals, indications, and production classes that are specified on the approved label of each unique product provides the information required by ADUFA 105.

    Proposed paragraph (c) would require that each annual report to FDA provide a species-specific estimate of the percentage of each new animal drug product containing an antimicrobial active ingredient that was sold or distributed domestically for use in cattle, swine, chickens, or turkeys, but only if such animal species appears on the approved label. This provision is not intended to require animal drug sponsors to conduct studies of on-farm drug use practices. FDA believes that animal drug sponsors have access to information obtained in the ordinary course of their business (for example, through marketing activities) to estimate the percentage of annual product sales that are sold or distributed domestically for use in any of these four major food-producing species that appear on the approved product label. While certain products may be legally used in an extralabel manner, promotion of such extralabel use is prohibited, and FDA believes that drug sponsors are unlikely to possess meaningful data on the percentage of their products that may be sold for extralabel use, especially for species not on the product label. If, however, a sponsor is aware of extralabel product sales for use in any of the four major food-producing species listed on the product's label, these sales would be included in deriving the estimate reported under proposed paragraph (c) for that species.

    The Agency believes having species-specific estimates of product sales and distribution for use in the four major food-producing categories of animal species (cattle, swine, chickens, turkeys) would be important in supporting efforts such as the National Antimicrobial Resistance Monitoring System (NARMS), a surveillance program that monitors trends in antimicrobial resistance among foodborne bacteria from humans, retail meats, and animals. NARMS retail meat and animal sampling focus on the same four major food-producing species proposed here. Since there is currently limited resistance data related to minor food-producing animals and companion animals, requiring estimates of these additional species would cause additional burden without clear benefit.

    In order to assure that the total of the species-specific percentages reported for each product adds up to 100 percent of its sales and distribution, a fifth category for “other species/unknown” would also be included in this provision. This category would be used to capture the percentage of each new animal drug product that was sold or distributed for use in animal species other than the four major food-producing species or otherwise unknown to the reporting drug sponsor.

    The following hypothetical scenarios are presented here as illustration:

    • An antimicrobial product is approved for use only in cattle and swine, and the sponsor estimates that 100 percent of the annual sales were for use in cattle. In this situation, the sponsor would report: Cattle 100 percent, swine 0 percent, chickens 0 percent, turkeys 0 percent, other species/unknown 0 percent.

    • An antimicrobial product is approved for use only in cattle and swine, and the sponsor estimates that 50 percent of the annual sales were for use in cattle, 30 percent were for use in swine, and 20 percent were unknown to the sponsor. In this situation, the sponsor would report: Cattle 50 percent, swine 30 percent, chickens 0 percent, turkeys 0 percent, other species/unknown 20 percent.

    • An antimicrobial product is approved for use only in cattle, sheep, and dogs, and the sponsor estimates that 50 percent of the annual sales were for use in cattle, 10 percent were for use in sheep, and 40 percent were for use in dogs. Since dogs are companion animals and sheep are a minor species, sales estimates for these would be reported together in the “other species/unknown” category. Thus, in this situation, the sponsor would report: Cattle 50 percent, swine 0 percent, chickens 0 percent, turkeys 0 percent, other species/unknown 50 percent.

    As noted earlier, under this proposal, sponsors who hold approved applications for antimicrobial new animal drugs intended for use in food-producing animals who choose not to separately report distribution data for their products under § 514.80(b)(4)(i) would have to assure that full sales and distribution data for each product approved under such applications are alternatively reported under proposed § 514.87, including products approved under such applications that are labeled only for use in nonfood-producing animals. In this situation, sponsors would report the species-specific estimate of sales for the products labeled only for use in nonfood-producing animals as 100 percent “other species/unknown.”

    All species-specific estimates would reflect domestic sales for the entire reporting year and would not include separate information for each month of the reporting year. ADUFA 105 requires drug sponsors to report sales and distribution data to FDA broken out by month; however, antimicrobial drug products may be used at any time up to several years after distribution. The Agency considers monthly fluctuations in drug product sales to be of limited value in reflecting when products may actually be administered to animals and interpreting antimicrobial resistance trends; therefore, FDA reports yearly sales and distribution information in its annual summary reports instead of monthly amounts. The Agency believes that requiring sponsors to report monthly species-specific estimates would entail a greater burden to drug sponsors without providing meaningful information.

    Most antimicrobial new animal drug products that are approved for use in food-producing animals are labeled for use in more than one animal species, in some cases five or more species. Therefore, since the antimicrobial sales and distribution data reported to FDA by drug sponsors under section 512(l)(3) of the FD& Act are derived from drug product sales, very little can be concluded about antimicrobial sales intended for use in any one particular species for products that are approved for use in more than one species. The Agency believes having species-specific estimates of product sales and distribution for use in the four major food-producing categories of animal species (cattle, swine, chickens, turkeys) would be important in supporting efforts such as NARMS, a surveillance program that tracks trends related to antimicrobial resistance in food-producing animals and humans. FDA believes that this additional sales and distribution information would be useful to better understand how the use of medically important antimicrobial drugs in food-producing animals may contribute to the emergence or selection of antimicrobial resistant bacteria. Specifically, this information could inform microbial food safety risk assessments by providing a better indication of the extent to which a drug or drug class is used in a specific food animal species by a specific route of administration. From this, it may be possible to draw conclusions about how antimicrobial sales and distribution data compare with data from NARMS. In addition, such information could further enhance FDA's ongoing activities related to slowing the development of antimicrobial resistance and is consistent with the recommendations in guidance recently issued by this Agency addressing the judicious use of medically important antimicrobial drugs in food-producing animals (Guidance for Industry #209, entitled “The Judicious Use of Medically Important Antimicrobial Drugs in Food-Producing Animals”).

    Since it is likely that many sponsors would consider their species-specific sales and distribution estimates as proprietary information, and that such estimates may often be derived from proprietary marketing analyses, FDA would, as described in proposed paragraph (e), consider the species-specific information reported by individual sponsors under paragraph (c) to be confidential business information consistent with section 512(l)(3) of the FD&C Act and this Agency's regulations at 21 CFR 20.61.

    Proposed paragraph (d) would incorporate the requirement specified in section 512(l)(3)(C) of the FD&C Act that each annual antimicrobial drug sales and distribution data report be submitted to FDA not later than March 31 of each year and cover the period of the preceding calendar year (see section 512(l)(3)(C)(i) and (ii) of the FD&C Act). Proposed paragraph (d) would also require that each such report be submitted to FDA using Form FDA 3744, “Antimicrobial Animal Drug Distribution Report.”

    C. Annual Summary Reports Published by FDA (Proposed § 514.87(f))

    Proposed paragraph (f) would incorporate the requirement established by ADUFA 105 for FDA to publish an annual summary report of the antimicrobial drug sales and distribution data collected from drug sponsors by antimicrobial class (see section 512(l)(3)(E) of the FD&C Act). Consistent with the statute, this proposed paragraph would also require that FDA not independently report those antimicrobial classes with fewer than three distinct sponsors, and would further require that, in reporting the antimicrobial drug sales and distribution data it receives from drug sponsors, FDA must do so in a manner consistent with protecting both national security and confidential business information (see section 512(l)(3)(E)(i) and (ii) of the FD&C Act).

    Proposed paragraph (f) would also require FDA to publish its annual summary report of the information it receives under this section for each calendar year by December 31 of the following year. Proposed paragraph (f) also provides that, in addition to summarizing sales and distribution data by antimicrobial drug class, the annual summary report may also include additional summaries of the data received under this section, as determined by FDA. For example, on October 2, 2014, FDA published annual summary reports that include additional data tables on the importance of each drug class in human medicine, the approved routes of administration for these antimicrobials, whether these antimicrobials are available over-the-counter or require veterinary oversight, and whether the antimicrobial drug products are approved for therapeutic purposes or for production purposes, or both therapeutic and production purposes.

    Paragraph (f) also proposes that the publication of any summary data in addition to drug class would be limited by the same confidentiality and national security protections as is required by the statute, as noted previously, for the publication of summary data by drug class. Specifically, each individual datum appearing in the summary report, regardless of its classification or source, would be required to: (1) Reflect cumulative product sales and distribution data from three or more distinct sponsors of approved products that were actively sold or distributed that reporting year and (2) be reported in a manner consistent with protecting both national security and confidential business information. This approach would make it possible to present sales and distribution data in a manner consistent with the confidentiality provisions of section 512(l) of the FD&C Act.1

    1 It should also be noted that the Trade Secrets Act, 18 U.S.C. 1905, a broadly worded criminal statute, also imposes obligations on the Agency to protect confidential business information, including that obtained from the drug sponsors. A violation of the Trade Secrets Act can carry criminal penalties.

    III. Legal Authority

    FDA's authority for issuing this proposed rule is provided by section 512(l) of the FD&C Act. In addition, section 701(a) of the FD&C Act (21 U.S.C. 371(a)) gives FDA general rulemaking authority to issue regulations for the efficient enforcement of the FD&C Act.

    IV. Preliminary Regulatory Impact Analysis

    FDA has examined the impacts of the proposed rule under Executive Order 12866, Executive Order 13563, the Regulatory Flexibility Act (5 U.S.C. 601-612), and the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4). Executive Orders 12866 and 13563 direct Agencies to assess all costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety, and other advantages; distributive impacts; and equity). The Agency believes that this proposed rule is not an economically significant regulatory action as defined by Executive Order 12866.

    FDA has developed a preliminary regulatory impact analysis (PRIA) that presents the benefits and costs of this proposed rule to stakeholders and the government. The summary analysis of benefits and costs included in the Executive Summary of this document is drawn from the detailed PRIA, which is available at http://www.regulations.gov (Docket No. FDA-2012-N-0447), and is also available on FDA's Web site at http://www.fda.gov/AboutFDA/ReportsManualsForms/Reports/EconomicAnalyses/Default.htm.

    V. Paperwork Reduction Act of 1995

    This proposed rule contains information collection provisions that are subject to review by OMB under the PRA of 1995 (44 U.S.C. 3501-3520). A description of these provisions is given in the Description section that follows with an estimate of the annual reporting and recordkeeping burden. Included in the estimate is the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing each collection of information.

    FDA invites comments on these topics: (1) Whether the proposed collection of information is necessary for the proper performance of FDA's functions, including whether the information will have practical utility; (2) the accuracy of FDA's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; and (4) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques, when appropriate, and other forms of information technology.

    Title: Section 105 of the Animal Drug User Fee Amendments of 2008 (ADUFA 105) Regulation Information Collection.

    Description: The ADUFA 105 legislation was enacted to address the problem of antimicrobial resistance and to help ensure safety related to the use of antibiotics in food-producing animals.

    With these concerns in mind, Congress passed and the President signed ADUFA 105 in 2008, which amended section 512 of the FD&C Act to require that sponsors of approved or conditionally approved applications for new animal drugs containing an antimicrobial active ingredient submit an annual report to FDA on the amount of each such ingredient in the drug that is sold or distributed for use in food-producing animals.

    Each report must specify: (1) The amount of each antimicrobial active ingredient by container size, strength, and dosage form; (2) quantities distributed domestically and quantities exported; and (3) a listing of the target animals, indications, and production classes that are specified on the approved label of the product. The report must cover the period of the preceding calendar year and include separate information for each month of the calendar year.

    ADUFA 105 also requires FDA to publish annual summary reports of the data it receives.

    In accordance with the new law, sponsors of the affected antimicrobial new animal drug products have submitted their sales and distribution data to FDA, and FDA has published summaries of such data, for each calendar year since 2009.

    The proposed rule, if finalized, will amend the records and reports regulation in part 514 to include the following:

    • Procedures relating to the submission to FDA of annual sales and distribution data reports by sponsors of approved new animal drug products sold or distributed for use in food-producing animals. The proposal includes specific reporting criteria, including the requirement that sponsors submit species-specific estimates of product sales as a percentage of total sales.

    • Procedures applicable to FDA's preparation and publication of summary reports on an annual basis based on the sales and distribution data it receives from sponsors of approved antimicrobial new animal drug products. The proposal includes specific parameters for the content of the annual summary reports as well as provisions intended to protect confidential business information and national security, consistent with ADUFA 105.

    • Provisions that will give sponsors of approved new animal drug products containing antimicrobial active ingredients that are sold or distributed for use in food-producing animals the opportunity to avoid duplicative reporting of product sales and distribution data to FDA under part 514.

    Description of Respondents: Animal Drug Manufacturers (Sponsors).

    This proposed rule would, among other things, revise existing OMB control number 0910-0659 (expiration date November 30, 2016) for antimicrobial drug products under ADUFA 105 by codifying statutory provisions. Many of the provisions of the information collection will not be affected by the proposed rule, if finalized. Therefore, this PRA section will concentrate on the changes being proposed in this rulemaking and will describe how the paperwork reduction implications will be affected.

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

    Proposed Reporting Requirement—One-Time Reporting Burden and Costs

    Because the information collection requirements of ADUFA 105 have been in effect for some time (the first report sponsors submitted was for calendar year 2009), one-time capital costs for the design of the report by firms have already occurred and need not be reported here.

    In addition, the paper Form FDA 3744, the e-Form FDA 3744a, and reporting via the Electronic Submission Gateway are provided by FDA at no cost. Thus, there is no one-time capital cost for report design or forms under the provisions of the proposed rule, and FDA considers the possession of computers and Internet accessibility to be usual and customary business practices.

    Table 1 provides the one-time costs for the proposed rule, if finalized, which is estimated at $138,800, about one-half of which is the unavoidable cost of reviewing the rule and developing a compliance plan. Current sponsors of approved or conditionally approved applications for antimicrobial new animal drugs sold or distributed for use in food-producing animals would need to review the rule; however, since the proposed rule would mostly codify current practices, sponsors would not require significant review time. FDA estimates that there are 34 sponsors total, 23 sponsors with active (i.e., currently marketed) applications and 11 sponsors with only inactive applications, respectively, that would need to review the rule. This would require 24 hours each for the 23 active sponsors and 1 hour each for the 11 inactive sponsors. The sponsors with inactive applications would require less time to perform the review and would not need to develop the compliance plan. FDA estimates that one-half of the active sponsors would use personnel at the general and operations manager level ($134 per hour times 24 hours times 11.5 equals approximately $36,900). The other half of active sponsors would use an industrial production manager ($109 per hour times 11.5 times 24 hours equals approximately $30,100). (Please note that both estimates are rounded to be in accordance with the PRIA.) The total cost for review by sponsors of active approved applications is estimated at about $67,000.

    For the one-time, 1-hour review of the rule for the 11 sponsors of inactive approved applications, FDA assigns one-half, or 5.5 hours, at the $134 per hour adjusted rate for general and operations managers, while one-half, or 5.5 hours, is assigned at the $109 adjusted rate for industrial production managers. The total cost for the review by sponsors of inactive approved applications is estimated at about $1,300 (rounded to be in accordance with the PRIA).

    FDA estimates that the total administrative costs for rule review and compliance plan development to be about $68,300 ($67,000 + $1,300).

    Benefits of Proposed § 514.87

    The proposed rule would allow applicants submitting annual sales and distribution reports for antimicrobial new animal drug products under § 514.87 the option to not report distribution data under § 514.80(b)(4)(i)(A) for the approved applications that include these same products, but only provided certain conditions are met. One condition is that sponsors must ensure that the beginning of the reporting period for the annual periodic drug experience reports for such applications is January 1. For applications that currently have a reporting period that begins on a date other than January 1, applicants must request a change in reporting submission date for their annual periodic drug experience report such that the reporting period begins on January 1 and ends on December 31, as described in § 514.80(b)(4). A second, and related, condition, is that applicants that change their reporting submission date must also, on a one-time basis, submit a special drug experience report, as described in current § 514.80(b)(5)(i), that addresses any gaps in distribution data caused by the change in reporting periods.

    FDA estimates that 90 percent of the sponsors currently marketing approved new animal drugs containing an antimicrobial active ingredient for use in food-producing animals would make the request to change the submission date such that the reporting period begins on January 1 and ends on December 31. There are 23 sponsors of 153 approved applications. Ninety percent of 153 applications equates to about 138 applications held by 21 sponsors. FDA estimates that it would take approximately 2 hours for personnel to meet the first two conditions, making the change of date request for each application and preparing the one-time special drug experience report for each application. This results in approximately 276 hours. At the overhead and other benefits-adjusted wage rate of about $134 per hour for general and operations managers for one-half of the hours, and at $109 per hour for industrial production managers for the other one-half of the hours, the one-time cost would be about $33,400 (rounded to be in accordance with the PRIA).

    Costs of Proposed § 514.87

    Proposed § 514.87(c) would require that each report containing the amount of antimicrobial ingredient that is sold or distributed contain a species-specific estimate of the percentage of each product that was sold or distributed domestically in the reporting year for use in any of the following animal species categories, but only for such species that appear on the approved label: Cattle, swine, chickens, turkeys. The total of the species-specific percentages reported for each product must account for 100 percent of its sales and distribution; therefore, a fifth category of “other species/unknown” must also be reported.

    FDA estimates that an individual would spend about 5 hours complying with this requirement in the first year. (Subsequent years are estimated to require about 3 hours to comply.) The additional 2 hours in the first year is a one-time cost incurred as individual company personnel discuss and settle upon a method to calculate these species-specific estimates. With the labor split evenly over the two wage rates, these 2 hours amount to a one-time cost of about $37,100 for the 153 active applications.

    Table 1—Estimated One-Time Reporting Burden 1 21 U.S.C. 360b(b)(1) Number of
  • respondents
  • Number of
  • responses per
  • respondent
  • Total
  • responses
  • Average
  • burden per
  • response
  • Total hours
    Administrative Review of the Rule: Sponsors with Active Applications 23 1 23 24 552 Administrative Review of the Rule: Sponsors with Inactive Applications 11 1 11 1 11 Requesting a Change of Date and Submit Special Drug Experience Report to Avoid Duplicative Reporting 21 6.57 138 2 2 275 Report Species-Specific Estimate of Percent of Products Distributed Domestically 23 6.65 153 2 306 Total 1,144 1 There are no capital costs or operating and maintenance costs associated with this information collection. 2 Hourly burden estimate adjusted to be in accordance with the PRIA.
    Proposed Reporting Requirements—Annual Hourly Burden and Costs Benefits of Proposed § 514.87

    A benefit of the proposed rule is to provide some flexibility in which new animal drug sponsors report the sales and distribution data under both § 514.80 and proposed § 514.87 by allowing sponsors to meet two separate reporting obligations under part 514 with one set of report submissions under certain circumstances. FDA estimates that 90 percent of the sponsors currently marketing approved new animal drugs containing an antimicrobial active ingredient for use in food-producing animals would make the request to change the submission date such that the reporting period begins on January 1 and ends on December 31, as provided in proposed § 514.87. These 138 approved applications (90 percent of 152) would still have to account for the costs of data collection and preparation, but they would no longer be required to include distribution data along with the other information required in the Drug Experience Report (DER) under § 514.80(b)(4)(i). FDA estimates that the time saved per application from the removal of the requirement for the distribution data in the DER could be as much as 6 hours per application. Using the same adjusted wage rates and distribution of hours by adjusted wage rates (one-half of the total hours at each rate), the annual benefit of the reduction of 138 hours times an average of $121 per hour is about $100,200.2

    2 OMB control numbers 0910-0284 and 0910-0645.

    Another benefit of this proposed rule would be the cost savings associated with reporting monthly product sales and distribution data to FDA rather than calculating the amount of antimicrobial active ingredients associated with these monthly product sales and distribution data. Proposed § 514.87, if finalized, would eliminate the need for sponsors to perform and report calculations of the amount of antimicrobial active ingredients associated with monthly product sales and distribution data. These data have shown a wide variability in accuracy, causing additional verification efforts for FDA personnel. Therefore, it would be more efficient for sponsors (and for FDA) if sponsors were to limit their annual reporting to product sales and distribution data. This would allow FDA to calculate the exact amounts of antimicrobial active ingredients associated with those product sales. FDA estimates that this would reduce the industry reporting effort by 1 hour per application. FDA estimates that 153 approved applications for antimicrobial new animal drugs that are currently marketed would be affected by this change in policy, resulting in 153 fewer compliance hours annually. At the overhead and other benefits-adjusted wage rate of about $134 per hour for general and operations manager for one-half of the hours, and at $109 per hour for industrial production managers for the other one-half of the hours, the annual cost saving would be about $18,600 (rounded to be in accordance with the PRIA).

    FDA estimates total annual benefits of this proposed rule, if finalized, at about $118,800.

    Costs of Proposed § 514.87

    As stated previously, proposed § 514.87(c) would require that each report containing the amount of antimicrobial ingredient that is sold or distributed contain a species-specific estimate of the percentage of each product that was sold or distributed domestically in the reporting year for use in any of the following animal species categories, but only for such species that appear on the approved label: Cattle, swine, chickens, turkeys. The total of the species-specific percentages reported for each product must account for 100 percent of its sales and distribution; therefore, a fifth category of “other species/unknown” must also be reported. FDA estimates that affected sponsors will require about 3 hours to comply with this provision annually. FDA estimates that 153 approved, currently marketed applications containing antimicrobial drugs as active ingredients would be affected by this change in policy, resulting in 459 additional compliance hours annually. At the overhead and other benefits-adjusted wage rate of about $134 per hour for general and operations managers for one-half of the hours, and at $109 per hour for industrial production managers for the other one-half of the hours, the additional 459 hours results in an additional annual cost of approximately $55,700 (rounded to be in accordance with the PRIA).

    Data for 2012 was submitted by 23 sponsors of 153 active applications for antimicrobial new animal drug products sold or distributed for use in food-producing animals. FDA estimates that 60 hours are currently required to collect the necessary data and prepare the submission to FDA for each of the estimated one-half of active applications for which data is submitted on a paper Form FDA 3744, for a total of 4,590 hours. FDA estimates that 50 hours are required to collect the necessary data and prepare the submission to FDA for each of the estimated one-half of active applications for which data is submitted on e-Form FDA 3744a, for a total of 3,825 hours. Thus, FDA estimates a total of 8,415 burden hours are currently needed for the 23 sponsors of 153 active applications to report to FDA. At the overhead and other benefits-adjusted wage rate of about $134 per hour for general and operations managers for one-half of the hours, and at $109 per hour for industrial production managers for the other one-half of the hours, the annual cost of reporting to FDA is currently approximately $1.02 million.

    FDA estimates that under the proposed rule, if finalized, affected sponsors would need 62 hours to report the necessary data on a paper Form FDA 3744 and 52 hours to report via e-Form FDA 3744a (3 additional hours for the species-specific reporting requirement minus 1 hour for cessation of the requirement to calculate the amount of antimicrobial ingredients associated with monthly product sales and distribution data). The total annual burden hours for the 23 sponsors of the 153 active applications to report under the proposed rule, if finalized would be 8,721 hours (4,743 hours for one-half of the industry using paper Form FDA 3744 and 3,978 hours for one-half of the industry using e-Form FDA 3744a), an additional 306 hours over the current hourly burden. At the overhead and other benefits-adjusted wage rate of about $134 per hour for general and operations managers for one-half of the hours, and at $109 per hour for industrial production managers for the other one-half of the hours, the total annual cost of reporting for the industry under the proposed rule, if finalized, would be approximately $1.06 million. The cost of the additional 306 hours needed to annually report under the proposed rule, if finalized, is approximately $37,100 (rounded to be in accordance with the PRIA).

    The 2012 data also show 11 sponsors with only inactive applications for antimicrobial new animal drug products for use in food-producing animals. FDA estimates that sponsors of these inactive applications for antimicrobial drug products need 2 hours per application to prepare and submit a report stating that there were no products distributed for the year, a total of 196 inactive approved applications times 2 hours annually equals 392 hours. This burden estimate would not be affected by the proposed rule, if finalized, and thus is not included in the following table.

    Table 2—Estimated Annual Reporting Burden 1 21 U.S.C. 360b(b)(1) Form FDA No. Number of
  • respondents
  • Number of
  • responses per
  • respondent
  • Total annual responses Average additional burden per response 2 Total hours
    Annual Reports for Sponsors With Active Applications 3744 23 6.65 153 2 306 1 There are no capital costs and no operating and maintenance costs associated with this information collection. 2 Average additional burden per response in hours is the marginal difference between the current burden of OMB control number 0910-0659 and the additional burden per response resulting from this proposed rule.
    Current Recordkeeping Burden

    FDA will not address the recordkeeping provisions of all affected sponsors (34), who prepare 1 report per year and spend 2 hours annually maintaining those records (68 hours total), because the number of burden hours would not be affected by the proposed rule, if finalized.

    To ensure that comments on information collection are received, OMB recommends that written comments be faxed to the Office of Information and Regulatory Affairs, OMB, Attn: FDA Desk Officer, FAX: 202-395-7285, or emailed to [email protected] All comments should be identified with the title “Animal Drug User Fee Amendments (ADUFA 105) Regulation Information Collection.”

    In compliance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3407(d)), the Agency has submitted the information collection provisions of this proposed rule to OMB for review. These requirements will not be effective until FDA obtains OMB approval. FDA will publish a notice concerning OMB approval of these requirements in the Federal Register.

    VI. Environmental Impact

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

    VII. Federalism

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

    VIII. Comments

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

    List of Subjects in 21 CFR Part 514

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

    Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, it is proposed that 21 CFR part 514 be amended as follows:

    PART 514—NEW ANIMAL DRUG APPLICATIONS 1. The authority citation for 21 CFR part 514 is revised to read as follows: Authority:

    21 U.S.C. 321, 331, 351, 352, 354, 356a, 360b, 360ccc, 371, 379e, 381.

    2. Amend § 514.80 by revising the fifth sentence of paragraph (b)(4) and by revising paragraph (b)(4)(i) to read as follows:
    § 514.80 Records and reports concerning experience with approved new animal drugs.

    (b) * * *

    (4) * * * The yearly periodic drug experience reports must be submitted within 90 days of the anniversary date of the approval of the NADA or ANADA. * * *

    (i) Distribution data.

    (A) Information about the distribution of each new animal drug product, including information on any distributor-labeled product. This information must include the total number of distributed units of each size, strength, or potency (e.g., 100,000 bottles of 100 5-milligram tablets; 50,000 10-milliliter vials of 5-percent solution). This information must be presented in two categories: Quantities distributed domestically and quantities exported.

    (B) Applicants submitting annual sales and distribution reports for antimicrobial new animal drug products under § 514.87 have the option not to report distribution data under paragraph (b)(4)(i)(A) of this section for the approved applications that include these same products, but only provided each of the following conditions are met:

    (1) Applicants must have submitted complete periodic drug experience reports under this section for such applications for at least 2 full years after the date of their initial approval.

    (2) Applicants must assure that the beginning of the reporting period for the annual periodic drug experience reports for such applications is January 1. For applications that currently have a reporting period that begins on a date other than January 1, applicants must request a change in reporting submission date such that the reporting period begins on January 1 and ends on December 31, as described in paragraph (b)(4) of this section.

    (3) Applicants that change their reporting submission date must also submit a special drug experience report, as described in paragraph (b)(5)(i) of this section, that addresses any gaps in distribution data caused by the change in date of submission.

    (4) Applicants who choose not to report under paragraph (b)(4)(i)(A) of this section must assure that full sales and distribution data for each product approved under such applications are alternatively reported under § 514.87, including products that are labeled for use only in nonfood-producing animals.

    3. Add § 514.87 to read as follows:
    § 514.87 Annual reports for antimicrobial animal drug sales and distribution.

    (a) The applicant for each new animal drug product approved under section 512 of the Federal Food, Drug, and Cosmetic Act, or conditionally approved under section 571 of the Federal Food, Drug, and Cosmetic Act, and containing an antimicrobial active ingredient, must submit an annual report to FDA on the amount of each such antimicrobial active ingredient in the drug that is sold or distributed in the reporting year for use in food-producing animal species, including information on any distributor-labeled product.

    (b) This report must identify the approved or conditionally approved application and must include the following information for each new animal drug product described in paragraph (a) of this section:

    (1) A listing of each antimicrobial active ingredient contained in the product;

    (2) A description of each product sold or distributed by unit, including the container size, strength, and dosage form of such product units;

    (3) For each such product, a listing of the target animal species, indications, and production classes that are specified on the approved label;

    (4) For each such product, the number of units sold or distributed in the United States (i.e., domestic sales) for each month of the reporting year; and

    (5) For each such product, the number of units sold or distributed outside the United States (i.e., quantities exported) for each month of the reporting year.

    (c) Each report must also provide a species-specific estimate of the percentage of each product described in paragraph (b)(2) of this section that was sold or distributed domestically in the reporting year for use in any of the following animal species categories, but only for such species that appear on the approved label: Cattle, swine, chickens, turkeys. The total of the species-specific percentages reported for each product must account for 100 percent of its sales and distribution; therefore, a fifth category of “other species/unknown” must also be reported.

    (d) Each report must:

    (1) Be submitted not later than March 31 each year;

    (2) Cover the period of the preceding calendar year; and

    (3) Be submitted using Form FDA 3744, “Antimicrobial Animal Drug Distribution Report.”

    (e) Sales and distribution data and information reported under this section will be considered to fall within the exemption for confidential commercial information established in § 20.61 of this chapter and will not be publicly disclosed, except that summary reports of such information aggregated in such a way that does not reveal information which is not available for public disclosure under this provision will be prepared by FDA and made available to the public as provided in paragraph (f) of this section.

    (f) FDA will publish an annual summary report of the data and information it receives under this section for each calendar year by December 31 of the following year. Such annual reports must include a summary of sales and distribution data and information by antimicrobial drug class and may include additional summary data and information as determined by FDA. In order to protect confidential commercial information, each individual datum appearing in the summary report must:

    (1) Reflect combined product sales and distribution data and information obtained from three or more distinct sponsors of approved products that were actively sold or distributed that reporting year, and

    (2) Be reported in a manner consistent with protecting both national security and confidential commercial information.

    Dated: May 13, 2015. Leslie Kux, Associate Commissioner for Policy.
    [FR Doc. 2015-12081 Filed 5-19-15; 8:45 am] BILLING CODE 4164-01-P
    DEPARTMENT OF THE TREASURY Internal Revenue Service 26 CFR Part 1 [REG-140991-09] RIN 1545-BJ08 Guidance Regarding the Treatment of Transactions in Which Federal Financial Assistance Is Provided AGENCY:

    Internal Revenue Service (IRS), Treasury.

    ACTION:

    Notice of proposed rulemaking.

    SUMMARY:

    This document contains proposed regulations under section 597 of the Internal Revenue Code (the “Code”). The proposed regulations, which will apply to banks and domestic building and loan associations (and related parties) that receive Federal financial assistance (“FFA”), will modify and clarify the treatment of transactions in which FFA is provided to such institutions. This document also invites comments from the public and requests for a public hearing regarding these proposed regulations.

    DATES:

    Written or electronic comments and requests for a public hearing must be received by August 18, 2015.

    ADDRESSES:

    Send submissions to: CC:PA:LPD:PR (REG-140991-09), room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (REG-140991-09), Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue NW., Washington, DC, or sent electronically via the Federal eRulemaking Portal at http://www.regulations.gov/ (IRS REG-140991-09).

    FOR FURTHER INFORMATION CONTACT:

    Concerning the proposed regulations, Russell G. Jones, (202) 317-5357, or Ken Cohen, (202) 317-5367; concerning the submission of comments or to request a public hearing, Oluwafunmilayo (Funmi) P. Taylor, (202) 317-6901 (not toll-free numbers).

    SUPPLEMENTARY INFORMATION: Paperwork Reduction Act

    The collection of information contained in this notice of proposed rulemaking has been submitted to the Office of Management and Budget for review in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)). Comments on the collection of information should be sent to the Office of Management and Budget, Attn: Desk Officer for the Department of Treasury, Office of Information and Regulatory Affairs, Washington, DC 20224. Comments on the collection of information should be received by July 20, 2015.

    The Treasury Department and the IRS previously issued a comprehensive set of regulations providing guidance to banks and domestic building and loan associations (and related parties) that receive FFA. These regulations (see TD 8641) were previously approved under control number 1545-1300.

    The collections of information in this proposed regulation are in §§ 1.597-2(c)(4), 1.597-4(g)(5), 1.597-6(c), and 1.597-7(c)(3). The collections of information in these regulations are necessary for the proper performance of the function of the IRS by providing relevant information concerning the deferred FFA account and the amount of income tax potentially not subject to collection. The collections also inform the IRS and certain financial institutions that certain elections in these regulations have been made. The likely recordkeepers will be banks and domestic building and loan associations (and related parties) that receive FFA.

    The estimated burden is as follows:

    Estimated total annual reporting and/or recordkeeping burden: 2,200 hours.

    Estimated average annual burden per respondent: 4.4 hours.

    Estimated number of respondents: 500.

    Estimated annual frequency of responses: Once.

    Comments concerning the accuracy of this burden estimate and suggestions for reducing this burden should be directed to the Office of Management and Budget, Attn: Desk Officer for the Department of Treasury, Office of Information and Regulatory Affairs, Washington DC 20503, with copies to the Internal Revenue Service, Attn: IRS Reports Clearance Officer, SE:W:CAR:MP:T:T:SP, Washington, DC 20224. Any such comments should be submitted not later than July 20, 2015. Comments are specifically requested concerning:

     Whether the proposed collection of information is necessary for the proper performance of the Internal Revenue Service, including whether the information will have practical utility;

     The accuracy of the estimated burden associated with the proposed collection of information;

     How the quality, utility, and clarity of the information to be collected may be enhanced;

     How the burden of complying with the proposed collection of information may be minimized, including through the application of automated collection techniques or other forms of information technology; and

     Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of service to provide information.

    An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number assigned by the Office of Management and Budget.

    Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by section 6103.

    Background Overview of Legislative History and Current Regulations

    Section 597 was enacted as part of the Economic Recovery Tax Act of 1981 (Pub. L. 97-34, 95 Stat 172 (1981)) in response to the emerging savings and loan crisis. As originally enacted, section 597 provided that money or other property provided to a domestic building and loan association by the Federal Savings and Loan Insurance Corporation (“FSLIC”) was excluded from the recipient's gross income, and that such recipient was not required to make a downward adjustment to the basis of its assets.

    The Technical and Miscellaneous Revenue Act of 1988 (Pub. L. 100-647, 102 Stat 3342 (1988)) modified section 597 by requiring taxpayers to reduce certain tax attributes by one-half of the amount of financial assistance received from the FSLIC or the Federal Deposit Insurance Corporation (“FDIC”). Yet troubled financial institutions still could receive half of such financial assistance without any corresponding reduction in tax attributes. These rules thus continued to allow the FSLIC and the FDIC to arrange acquisitions of troubled financial institutions by healthy financial institutions at a tax-subsidized cost. Notice 89-102 (1989-2 CB 436).

    Section 1401 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Pub. L. 101-73, 103 Stat 183 (1989)) (“FIRREA”) further amended section 597 to provide that FFA generally is treated as taxable income. Congress believed that the tax subsidy provided to troubled financial institutions was an inefficient way to provide assistance to such institutions. See H.R. Rep. No. 101-54, pt. 2, at 25 (1989). Moreover, Congress believed that a tax subsidy no longer was necessary because the provisions of FIRREA that deem FFA to be included in the troubled financial institution's income at the time the institution's assets are sold or transferred generally would cause the FFA inclusion to be offset by the institution's losses. Id. at 27.

    In 1995, the Treasury Department and the IRS issued a comprehensive set of regulations (the “current regulations”) providing guidance for banks and domestic building and loan associations (“Institutions”) and their affiliates for transactions occurring in connection with the receipt of FFA. See TD 8641 (1996-1 CB 103). For these purposes, the term “Institution” includes not only a troubled financial institution, but also a financial institution that acquires the troubled institution's assets and liabilities in a transaction facilitated by “Agency” (the Resolution Trust Corporation, the FDIC, any similar instrumentality of the U.S. government, and any predecessor or successor of the foregoing (including the FSLIC)).

    The current regulations reflect certain principles derived from the legislative history of FIRREA. First, FFA generally is treated as ordinary income of the troubled Institution that is being compensated for its losses through the provision of assistance. Second, an Institution should not get the tax benefit of losses for which it has been compensated with FFA. Third, the timing of the inclusion of FFA should, where feasible, match the recognition of the Institution's losses. Finally, the income tax consequences of the receipt of FFA as part of a transaction in which a healthy Institution acquires a troubled Institution should not depend on the form of the acquisition (for example, the income tax consequences should not differ depending on whether the stock or the assets of a troubled Institution are acquired).

    Definitions

    As provided in section 597(c) and current § 1.597-1(b), “FFA” means any money or property provided by Agency to an Institution or to a direct or indirect owner of stock in an Institution under section 406(f) of the National Housing Act (12 U.S.C. 1729(f), prior to its repeal by Pub. L. 101-73), section 21A(b)(4) of the Federal Home Loan Bank Act (12 U.S.C. 1441a(b)(4), prior to its repeal by Pub. L. 111-203, 124 Stat 1376 (2010)), section 11(f) or 13(c) of the Federal Deposit Insurance Act (12 U.S.C. 1821(f), 1823(c)), or any similar provision of law.

    The amount of FFA received or accrued is the amount of any money, the fair market value of any property (other than an Agency Obligation), and the issue price of any Agency Obligation. An “Agency Obligation” is a debt instrument that Agency issues to an Institution or to a direct or indirect owner thereof.

    FFA includes “Loss Guarantee” payments, “Net Worth Assistance,” and certain other types of payments. A “Loss Guarantee” is an agreement pursuant to which Agency (or an entity under “Agency Control”) guarantees or agrees to pay an Institution a specified amount upon the disposition or charge-off (in whole or in part) of specific assets, an agreement pursuant to which an Institution has a right to put assets to Agency (or to an entity under “Agency Control”) at a specified price, or a similar arrangement. An Institution or entity is under “Agency Control” if Agency is conservator or receiver of the Institution or entity or if Agency has the right to appoint any of the Institution's or entity's directors. “Net Worth Assistance” is money or property that Agency provides as an integral part of certain actual or deemed transfers of assets or deposit liabilities, other than FFA that accrues after the date of the transfer (Net Worth Assistance thus does not include Loss Guarantee payments).

    Other terms are defined in current §§ 1.597-1(b) or 1.597-5(a)(1). “Taxable Transfers” generally include (i) transfers of deposit liabilities (if FFA is provided) or of any asset for which Agency or an entity under Agency Control has any financial obligation (for example, pursuant to a Loss Guarantee), and (ii) certain deemed asset transfers. “Acquiring” refers to a corporation that is a transferee of the assets and liabilities of a troubled Institution in a Taxable Transfer (other than a deemed transferee in a Taxable Transfer described in current § 1.597-5(b)). A “New Entity” is the new corporation that is treated as purchasing all the assets of a troubled Institution in a Taxable Transfer described in § 1.597-5(b)). A “Consolidated Subsidiary” is a member of the consolidated group of which an Institution is a member that bears the same relationship to the Institution that the members of a consolidated group bear to their common parent under section 1504(a)(1). For additional terms not otherwise defined herein, see generally § 1.597-1(b).

    Inclusion of FFA in Income

    Under the current regulations, FFA generally is includible as ordinary income to the recipient at the time the FFA is received or accrued in accordance with the recipient's method of accounting. Section 1.597-2(a)(1). There are three exceptions to this general rule, however. First, if Net Worth Assistance is provided to Acquiring or a New Entity, the troubled Institution is treated as having directly received such FFA immediately before the transfer, and the Net Worth Assistance is treated as an asset that is sold in the Taxable Transfer. Section 1.597-5(c)(1). The inclusion of Net Worth Assistance in the troubled Institution's income generally will be offset by the Institution's net operating losses and other losses. Second, § 1.597-2(c) limits the amount of FFA an Institution currently must include in income under certain circumstances (for example, if the Institution has insufficient net operating losses and other losses to offset the inclusion of Net Worth Assistance in income) and provides rules for the deferred inclusion in income of amounts in excess of those limits. This provision results in matching the inclusion of FFA in income with the recognition of an Institution's built-in losses. Third, under § 1.597-2(d)(2), certain amounts received pursuant to a Loss Guarantee are included in the amount realized by Acquiring with respect to an asset subject to the Loss Guarantee rather than being included directly in gross income.

    The typical Agency-assisted transaction involves the sale by Agency (in its capacity as receiver) of the troubled Institution's assets and the provision of FFA to Acquiring, which agrees to assume the troubled Institution's deposit liabilities. If, instead, an Agency-assisted transaction were structured as a stock purchase, the current regulations would treat the transaction as an asset transfer under certain circumstances. A deemed asset transfer occurs if a transaction structured as a transfer of Institution or Consolidated Subsidiary stock causes an Institution or its Consolidated Subsidiary to enter or leave a consolidated group (other than pursuant to an election under § 1.597-4(g)), or if the Institution or its Consolidated Subsidiary issues sufficient stock to cause an ownership change of at least 50 percent (see § 1.597-5(b)). The foregoing rules are intended to treat an Agency-assisted acquisition of a troubled Institution as a taxable asset acquisition regardless of how the acquisition is structured. The treatment of certain stock transfers as asset transfers also fosters the matching of FFA income with a troubled Institution's losses by triggering the Institution's built-in losses.

    If an Agency-assisted transaction involves an actual asset transfer, the amount realized by the transferor Institution is determined under section 1001(b) by reference to the consideration paid by Acquiring. If the transaction involves a deemed asset transfer instead, the amount realized is the grossed-up basis in the acquired stock plus the amount of liabilities assumed (plus certain other items). Section 1.597-5(c)(2).

    Section 1.597-5(d)(2)(i) of the current regulations provides that the purchase price for assets acquired in a Taxable Transfer generally is allocated among the assets in the same manner as amounts are allocated among assets under § 1.338-6(b), (c)(1), and (c)(2). This means that the purchase price first is allocated to the Class I assets; then, to the extent the purchase price exceeds the value of the Class I assets, the remaining purchase price is allocated among the Class II assets in proportion to their fair market value. Any remaining purchase price after allocation to the Class II assets is then allocated in a similar method among the Class III, IV, V, VI, and VII assets seriatim.

    The current regulations modify certain aspects of the section 338 allocation rules. Section 1.597-5(c)(3)(ii) treats an asset subject to a Loss Guarantee as a Class II asset with a fair market value that cannot be less than its highest guaranteed value or the highest price at which it can be put. Further, § 1.597-5(d)(2)(iii) provides that if the fair market value of the Class I and Class II assets acquired in a Taxable Transfer is greater than Acquiring's or a New Entity's purchase price for the acquired assets, then the basis of the Class I and Class II assets equals their fair market value (which, in the case of an asset subject to a Loss Guarantee, cannot be less than its highest guaranteed value or the highest price at which it can be put). The amount by which the assets' fair market value exceeds the purchase price is included ratably as ordinary income by Acquiring or a New Entity over a six-year period beginning in the year of the Taxable Transfer.

    In certain situations, Agency may organize a “Bridge Bank” to hold the deposit liabilities and assets of a troubled Institution and continue its operations pending its acquisition or liquidation. In general, a Bridge Bank and its associated “Residual Entity” (the entity that remains after the troubled Institution transfers its deposit liabilities to the Bridge Bank) are treated as a single entity for income tax purposes and are treated together as the successor to the troubled Institution. Thus, for example, the transferring Institution recognizes no gain or loss on the transfer of deposit liabilities to a Bridge Bank, and the Bridge Bank succeeds to the transferring Institution's basis in any transferred assets, its other tax attributes, its Taxpayer Identification Number (“TIN”), its taxable year, and its status as a member of a consolidated group. The Bridge Bank also is responsible for filing all income tax returns and statements for this single entity and is the agent for the Residual Entity (which effectively is treated as a division of the Bridge Bank). Section 1.597-4(d) and (e).

    To ensure that FFA is included in the income of the transferor Institution or its consolidated group, current § 1.597-4(f) provides that the Institution remains a member of its consolidated group regardless of its placement under Agency Control or the transfer of its deposit liabilities to a Bridge Bank, unless an election is made under § 1.597-4(g) to disaffiliate the Institution. Under § 1.597-4(g), a consolidated group may elect to exclude from the group a subsidiary member that is an Institution in Agency receivership. The election is irrevocable and requires the inclusion of a “toll charge” in the group's income (the toll charge is intended to reflect the amount the group would include in income if Agency were to provide the entire amount of FFA necessary to restore the Institution's solvency at the time of the event permitting disaffiliation). Section § 1.597-4(g)(6) further imposes a deemed election (subject to the toll charge) if members of a consolidated group deconsolidate a subsidiary Institution in contemplation of Agency Control or the receipt of FFA. After any affirmative or deemed election to disaffiliate, an Institution generally is treated as a new unaffiliated corporation that received its assets and liabilities in a section 351 transaction (and thus has no net operating or capital loss carryforwards) and that holds an account receivable for future FFA with a basis equal to the toll charge (to offset the inclusion of future FFA). Section 1.597-4(g)(4)(i). The regulations under section 597 take precedence over any conflicting provisions in the regulations under section 1502. Section 1.597-4(f)(3).

    Explanation of Provisions

    The Treasury Department and the IRS received many comments suggesting that changes be made to the current regulations under section 597. These proposed regulations address many of these comments as well as additional concerns not raised in comments. Not all comments resulted in proposed modifications to the regulations. For example, as discussed in sections 9, 10, and 11 of this preamble, the proposed regulations generally have not been modified to match non-tax accounting treatment. This preamble describes the proposed changes and also addresses certain areas in which commenters requested changes but no changes are proposed.

    These regulations propose to modify and clarify the treatment of certain transactions in which FFA is provided to Institutions (and related persons). The proposed regulations remove all references to “highest guaranteed value” and provide guidance relating to the determination of assets' fair market value. In addition, the proposed regulations provide guidance regarding the transfer of property to Agency by a non-consolidated affiliate of an Institution, the ownership of assets subject to a Loss Guarantee (“Covered Assets”), and the determination of Acquiring's purchase price when it has an option to purchase additional assets. The proposed regulations also make changes to facilitate e-filing, remove the reference to former § 1.1502-76(b)(5)(ii) (which allowed a subsidiary that was a consolidated group member for 30 days or less during the group's taxable year to elect not to be included as a group member for that year), make a non-substantive change to the terminology used in § 1.597-5(b)(1) and (2) to clarify that the events resulting in a deemed acquisition of assets must occur to an Institution or a Consolidated Subsidiary of an Institution, and make a non-substantive change to the definition of Consolidated Subsidiary. In addition, there are numerous non-substantive changes that pervade all sections of the current regulations. Thus, the proposed regulations amend and restate all of §§ 1.597-1 through 1.597-7 in order to make the reading of the regulations more user-friendly. The proposed regulations make no changes to § 1.597-8.

    1. Removal of References to Highest Guaranteed Value

    It is common practice for Agency to provide a Loss Guarantee that does not provide for payment of a specific amount with respect to a Covered Asset, but that instead provides for reimbursement to an Institution for a percentage of its losses on Covered Assets, with the reimbursement percentage changing if a certain threshold of losses is met (a “Loss Share Agreement”). For example, assume that a guaranteed party has a pool of loans with an unpaid principal balance of $90 million and owns real estate with a book value of $10 million, and that Agency enters into a Loss Share Agreement whereby Agency will reimburse the guaranteed party zero percent of the first $20 million of losses (the “first loss tranche”) on the Covered Assets (the pool of loans and the real estate) and 80 percent of any additional losses (the “second loss tranche”) on the Covered Assets. Losses generally are determined by reference to the unpaid principal balance of a loan or the book value of an asset, not by reference to tax basis.

    The Treasury Department and the IRS have received comments and inquiries from taxpayer groups asking how to calculate a Covered Asset's “highest guaranteed value” under a Loss Share Agreement. This term, which appears in §§ 1.597-3(f), 1.597-5(c)(3)(ii), and 1.597-5(f) (Example 4) of the current regulations, is not presently defined, and the Treasury Department and the IRS understand that there may be uncertainty in determining how to calculate highest guaranteed value in the absence of guidance. Moreover, commenters have observed that reliance on certain measures of highest guaranteed value may cause basis to be allocated to assets in amounts that exceed the total principal collections and Agency reimbursements that Acquiring reasonably can expect to receive.

    To alleviate confusion and possible distortions created by use of the term “highest guaranteed value,” and because of the clarification of the meaning of “fair market value” (as discussed in the paragraphs that follow), the Treasury Department and the IRS have removed all references to “highest guaranteed value” from the regulations.

    2. Determination of Fair Market Value of Covered Assets

    Taxpayers have asked whether potential Agency payments pursuant to a Loss Guarantee are included in determining the fair market value of a Covered Asset. Legislative history provides that Congress intended “that basis be allocated to the specified assets (or pool of assets) in an amount equal to their fair market value as adjusted to reflect the capital loss guarantee and income maintenance agreements applicable to those assets.” H.R. Rep. No. 101-54, pt. 2, at 28 (1989) (emphasis added). Accordingly, the proposed regulations provide that, in determining the fair market value of a Covered Asset, potential Loss Guarantee payments from Agency are included.

    More specifically, the fair market value of a Covered Asset equals its “Expected Value”—the sum of (i) the amount a third party would pay for the asset absent the existence of a Loss Guarantee (the “Third-Party Price” or “TPP”), and (ii) the amount Agency would pay if the asset actually were sold for the Third-Party Price. If the amount Agency agrees to reimburse the guaranteed party is determined by a Loss Share Agreement, then for purposes of calculating the Expected Value, the amount that Agency would pay is determined by multiplying the loss (as determined under the terms of the Loss Share Agreement) that would be realized if the asset were disposed of at the Third-Party Price by the “Average Reimbursement Rate” (or “ARR”). In turn, the Average Reimbursement Rate is the percentage of losses under a Loss Share Agreement that would be reimbursed if every Covered Asset were disposed of for the Third-Party Price at the time of the Taxable Transfer. In effect, the ARR converts a multiple-tranche reimbursement into a single rate that covers all losses.

    For example, assume that a guaranteed party has a pool of loans with an unpaid principal balance of $90 million and owns real estate with a book value of $10 million, and that Agency enters into a Loss Share Agreement whereby Agency will reimburse the guaranteed party zero percent of the first $20 million of losses on the pool of loans and the real estate and 80 percent of any additional losses on these Covered Assets. Further assume that the Third-Party Price is $46 million for the pool of loans and $4 million for the real estate. If all of these assets were disposed of for the $50 million Third-Party Price, the guaranteed party would have a total realized loss of $50 million ($100 million − $50 million), and Agency would reimburse the guaranteed party a total of $24 million (($20 million realized loss × 0%) + ($30 million realized loss × 80%)). Therefore, the Average Reimbursement Rate would equal 48 percent ($24 million reimbursement/$50 million realized loss). The Expected Value of the pool of loans thus would equal $67.12 million ($46 million TPP plus $21.12 million from Agency ($44 million realized loss × 48% ARR)), and the Expected Value of the real estate would equal $6.88 million ($4 million TPP plus $2.88 million from Agency ($6 million realized loss × 48% ARR)).

    The Treasury Department and the IRS believe this definition of a Covered Asset's fair market value furthers Congress's intent and correctly represents the true economic value of a Covered Asset. Whether an Institution receives an amount on the disposition of an asset entirely from either the purchaser or from Agency, or whether the Institution instead receives a portion of the amount from the purchaser and the remainder from Agency, the asset is worth the same amount from the Institution's perspective. To simplify the administration of these regulations, however, the Average Reimbursement Rate is determined at the time of the Taxable Transfer and is not adjusted for any changes in Third-Party Price over the life of any asset subject to a Loss Share Agreement or the prior disposition of any asset subject to a Loss Share Agreement.

    For purposes of the foregoing example, the pool of loans has been treated as if it were a single asset. However, in applying the proposed regulations, the fair market value, Third-Party Price, and Expected Value of each loan within a pool must be determined separately. The Treasury Department and the IRS request comments as to whether an Institution that holds assets subject to a Loss Guarantee should be permitted or required to “pool” those assets for valuation purposes rather than value each asset separately. The Treasury Department and the IRS also request comments about how such a pooling approach should be implemented and about valuation and other issues that may arise from pooling assets.

    3. Transfers of Property to Agency by a Non-Consolidated Affiliate of an Institution

    Under current § 1.597-2(c)(4), an Institution must establish and maintain a deferred FFA account if any FFA received by the Institution is not currently included in its income. In general terms, a deferred FFA account is necessary if an Institution has insufficient net operating losses and other losses to fully offset an FFA inclusion. For example, assume that, at the beginning of the taxable year, Institution A has assets with a value of $750 and a basis of $800 (written down from $1,000) and liabilities of $1,000. A has a $200 net operating loss from writing down its assets. Further assume that Agency provides $250 of Net Worth Assistance to Institution B in connection with B's acquisition of A's assets and liabilities. Under these circumstances, A would currently include $200 of the Net Worth Assistance in income, and A would establish a deferred FFA account for the remaining $50. As A recognizes built-in losses upon the sale of its assets, a corresponding amount of the $50 of deferred FFA (which would be offset by these losses) would be taken into account. See § 1.597-2(c)(2).

    Under current § 1.597-2(d)(4)(i), if an Institution transfers money or property to Agency, the amount of money and the fair market value of the property will decrease the balance in its deferred FFA account to the extent the amount transferred exceeds the amount Agency provides in the exchange. For purposes of the foregoing rules, an Institution is treated under § 1.597-2(d)(4)(iv) as having made any transfer to Agency that was made by any other member of its consolidated group, and appropriate investment basis adjustments must be made. However, there is no corresponding provision for transfers made by a person other than the Institution if the Institution is not a member of a consolidated group.

    For example, assume that Corporation X (an includible corporation within the meaning of section 1504(b)) owns all of the outstanding stock of an Institution, but X and the Institution do not join in filing a consolidated return. Further assume that Agency provides $10 million of FFA to the Institution in 2015 in exchange for a debt instrument of X (which, under § 1.597-3(b), is not treated as debt for any purposes of the Code while held by Agency); that the Institution has a deferred FFA account of $5 million at the beginning of 2016; and that, during 2016, X makes a $1 million payment on the debt instrument to Agency. Because X and the Institution do not join in filing a consolidated return, the Institution would not be able to reduce its FFA account to reflect X's payment. Moreover, because the debt instrument is not treated as debt while held by Agency, X would not be allowed a deduction for any portion of the payment to Agency.

    The proposed regulations expand § 1.597-2(d)(4)(iv) by providing that an Institution is treated as having made any transfer to Agency that was made by any other member of its affiliated group, regardless of whether a consolidated return is filed. Because the affiliate is transferring property to Agency to reimburse Agency for FFA provided to the Institution, the Treasury Department and the IRS believe it is appropriate that the recipient of the FFA (in this case, the Institution) take such transfer into account in determining adjustments to its deferred FFA account, regardless of whether a consolidated return is filed. Economically, the reason for the transfer by the Institution's affiliate is the same. Appropriate adjustments must be made to reflect the affiliate's payment with respect to the Institution's FFA account.

    4. Covered Assets Not Owned by an Institution

    Section 1.597-3(a) of the current regulations provides that, for all Federal income tax purposes, an Institution is treated as the owner of all Covered Assets, regardless of whether Agency otherwise would be treated as the owner under general principles of income taxation. The Treasury Department and the IRS have become aware of certain instances in which Agency has provided Loss Guarantees to an Institution for assets held by a subsidiary of the Institution that is not a member of the Institution's consolidated group (for example, a real estate investment trust (“REIT”)).

    The intent behind § 1.597-3(a) of the current regulations was to prevent Agency from being considered the owner of Covered Assets even though Agency might have significant indicia of tax ownership with respect to such assets. The question of whether the Institution or its non-consolidated subsidiary should be treated as the owner of a Covered Asset was not considered because that scenario was not envisioned at the time the current regulations were promulgated. The proposed regulations modify this rule to clarify that the entity that actually holds the Covered Asset will be treated as the owner of such asset. Pursuant to proposed regulation § 1.597-2(d)(2)(ii), appropriate basis adjustments must be made to reflect the receipt of FFA by the Institution when the Covered Asset is disposed of or charged off by the asset's owner. The proposed regulations also provide that the deemed transfer of FFA by a regulated investment company (“RIC”) or a REIT to the Institution, if a deemed distribution, will not be treated as a preferential dividend for purposes of sections 561, 562, 852, or 857.

    5. Determination of Purchase Price When Acquiring Has Option To Purchase Additional Assets

    Some taxpayers have questioned how the purchase price for assets is determined when the purchase agreement provides Acquiring an option period (for example, 90 days) to decide whether it also wants to acquire the troubled Institution's physical assets (for example, branch buildings). The Treasury Department and the IRS believe that, in accord with general principles of tax law and the intent of the current regulations, the amount paid for assets subsequently acquired under an option should be integrated into the overall purchase price because the purchase of those assets relates back to, and is part of, the overall purchase agreement. The proposed regulations clarify the current regulations and update the citation in § 1.597-5(d)(1) to the final regulations under section 1060.

    6. E-Filing

    The proposed regulations make two changes to facilitate e-filing. First, the proposed regulations replace the requirement in current § 1.597-4(g)(5)(i)(A) that a consolidated group attach a copy of any election statement mailed to an affected Institution and the accompanying certified mail receipt to its income tax return with the requirement that the consolidated group include an election statement with its income tax return and retain a copy of certain documents in its records. Second, if an Institution without Continuing Equity (in other words, an Institution that is a Bridge Bank, in Agency receivership, or treated as a New Entity on the last day of the taxable year) is liable for income tax that is potentially not subject to collection because it would be borne by Agency, the proposed regulations replace the requirement in current § 1.597-6(c) that a consolidated group make a notation of such amount directly on the front page of its tax return with the requirement that a consolidated group include a statement providing such amount on its income tax return.

    7. Removal of Outdated Provision

    The proposed regulations remove paragraph § 1.597-4(f)(2) of the current regulations relating to a 30-day election to be excluded from the consolidated group. The 30-day election was eliminated for subsidiary members of a consolidated group that became or ceased to be members of the consolidated group on or after January 1, 1995. Therefore, the reference to such election is no longer necessary.

    8. Consolidated Subsidiary

    As noted previously, § 1.597-1(b) of the current regulations defines “Consolidated Subsidiary” to mean a member of the consolidated group of which an Institution is a member that bears the same relationship to the Institution that the members of a consolidated group bear to their common parent under section 1504(a)(1). These proposed regulations modify this definition to provide that a “Consolidated Subsidiary” is a corporation that both (i) is a member of the same consolidated group as an Institution, and (ii) would be a member of the affiliated group that would be determined under section 1504(a) if the Institution were the common parent thereof. This change is intended merely to clarify the meaning of “Consolidated Subsidiary” and is not intended to be a substantive change.

    The Treasury Department and the IRS request comments as to whether the rules in these proposed regulations concerning Consolidated Subsidiaries should be expanded to apply either to (i) an Institution's subsidiaries that are “includible corporations” (within the meaning of section 1504(b)) but that are not members of the Institution's consolidated group (such as affiliated but non-consolidated subsidiaries of an Institution or subsidiaries of an Institution that is an S corporation), or (ii) an Institution's subsidiaries that are not “includible corporations” (such as REITs). Any such comments should explain which (if any) provisions in the regulations should be changed and which provisions should continue to apply solely to Consolidated Subsidiaries (as defined in the proposed regulations). Such comments also should describe the reasons for the recommended change (or for making no change). Final regulations issued pursuant to this notice of proposed rulemaking may contain a broader rule than these proposed regulations.

    9. Basis-Step-Up and Six-Year-Inclusion Rules

    As noted previously, certain Taxable Transfers can result in the fair market value of Class I and Class II assets exceeding their purchase price and the inclusion of the excess in income by Acquiring or a New Entity over a six-year period. See § 1.597-5(d)(2)(iii). For example, assume that Acquiring assumes $150,000 of a troubled Institution's deposit liabilities in Year 1 in exchange for Institution's Assets 1 and 2 (which have a 10-year weighted average life) and Agency's provision of an $80,000 Loss Guarantee with respect to Asset 1 and a $100,000 Loss Guarantee with respect to Asset 2. (These Loss Guarantees are not Loss Share Agreements.) Further assume that the Third-Party Price for Assets 1 and 2 is $70,000 and $95,000, respectively. Under the current regulations, the fair market value of Assets 1 and 2 equals $80,000 and $100,000, respectively—each asset's highest guaranteed value. Under the proposed regulations, the fair market value of Assets 1 and 2 also equals $80,000 and $100,000, respectively—each asset's Expected Value. The aggregate fair market value of Assets 1 and 2 ($180,000) thus exceeds their purchase price ($150,000). At the end of Year 2, Acquiring wholly charges off Assets 1 and 2 and receives $180,000 from Agency. Under the basis-step-up and six-year-inclusion rules in § 1.597-5(d)(2)(iii), Acquiring's aggregate basis in Assets 1 and 2 upon their acquisition equals their fair market value ($180,000). Even though Assets 1 and 2 have a 10-year weighted average life, Acquiring may not depreciate these assets below $180,000 because Agency guarantees Acquiring $180,000 on the disposition of the assets. See § 1.597-3(f). Acquiring thus recognizes no gain or loss with respect to the charge-off of these assets in Year 2. Instead, Acquiring includes $5,000 in income for each of Years 1-6 ($30,000 excess of fair market value over purchase price/6 years).

    One commenter suggested that the current rules may create a mismatch in the timing of a taxpayer's economic and taxable income that results in a timing benefit for, or a timing detriment to, either the taxpayer or the government, depending on the expected life of the purchased assets. For instance, in the foregoing example, Acquiring must include amounts in income over a six-year period even though Assets 1 and 2 have a 10-year weighted average life; consequently, this mismatch results in a detriment to the taxpayer. The commenter thus would eliminate the basis-step-up and six-year-inclusion rules, have Acquiring take an initial basis in the Class I and Class II assets equal to their purchase price, and then have Acquiring either (a) recognize gain upon the disposition of the assets, or (b) accrue income (and increase basis) in each year based on the weighted average life of the assets (rather than over a six-year period).

    Under the commenter's first proposed approach, Acquiring's aggregate asset basis in the foregoing example would be $150,000 (the amount of liabilities assumed) rather than $180,000, and Acquiring would recognize $30,000 of gain at the end of Year 2. Under the commenter's second proposed approach, the $30,000 would be spread over 10 years; thus, Acquiring's economic and taxable income would be matched.

    After consideration of the comment, these proposed regulations retain the current basis-step-up and six-year-inclusion rules. The basis-step-up and six-year-inclusion rules prevent the realization of income from being a factor in the acquirer's decision whether to retain or dispose of Covered Assets. Furthermore, these rules lock in the tax cost of the purchase, which reduces the cost of uncertainties ultimately borne by Agency.

    The Treasury Department and the IRS believe that, although the current rules may be imperfect (in that sometimes there will be a benefit and other times a detriment), they are administratively efficient and they satisfy the intent of the current regulations. Accordingly, these proposed regulations retain the current rules.

    10. Treatment of Debt or Equity Issued to Agency

    Section 1.597-3(b) of the current regulations disregards any debt of or equity interests in the Institution (or any affiliates) that Agency receives in connection with a transaction in which FFA is provided while such debt or equity interests are held by Agency. One commenter supported eliminating the current rule (resulting in an Institution's debt or equity issued to Agency being included in Acquiring's purchase price) and replacing it with anti-abuse rules to address any concerns.

    After consideration of the comment, these proposed regulations retain the current rules. The Treasury Department and the IRS believe that treating debt or equity interests in an Institution as having value would be inconsistent with section 597(c), which provides that all amounts provided by Agency are FFA regardless of whether Agency takes back an instrument in exchange therefor. Further, the current rule eliminates any issues for Agency and the IRS relating to valuation of the debt or equity interests.

    11. Tax Treatment of Agency Payments Under Loss Share Agreements

    The current regulations integrate the treatment of Loss Guarantee payments with other proceeds received with respect to Covered Assets, whereas under non-tax accounting principles a Loss Guarantee is treated as a separate asset and source of income. Commenters suggested that the tax treatment of Loss Guarantees and payments thereunder be conformed to the non-tax accounting treatment thereof. After consideration of these comments, these proposed regulations retain the current rules. The Treasury Department and the IRS believe the treatment of Loss Guarantee payments in the current and proposed regulations comports better with general income tax principles (for example, treating Loss Guarantee payments as part of the consideration received with respect to a Covered Asset is analogous to the tax treatment of insurance proceeds received with respect to other losses).

    12. Effective/Applicability Date

    The proposed regulations will be effective on the date of publication of the Treasury decision adopting these proposed rules as final regulations in the Federal Register, except with respect to FFA provided pursuant to an agreement entered into before such date. In the latter case, the current regulations will continue to apply unless the taxpayer elects to apply the final regulations on a retroactive basis. However, the election to apply the final regulations on a retroactive basis cannot be made if the period for assessment and collection of tax has expired under the rules of section 6501 for any taxable year in which §§ 1.597-1 through 1.597-6 would affect the determination of the electing entity's or group's income, deductions, gain, loss, basis, or other items.

    Special Analyses

    It has been determined that this notice of proposed rulemaking is not a significant regulatory action as defined in Executive Order 12866, as supplemented by Executive Order 13563. Therefore, a regulatory assessment is not required. It also has been determined that section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) does not apply to these regulations. It is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. This certification is based on the fact that the regulations apply only to transactions involving banks or domestic building and loan associations, which tend to be larger businesses. Accordingly, a Regulatory Flexibility Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not required. Pursuant to section 7805(f) of the Code, these regulations have been submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small business.

    Comments and Public Hearing

    Before these proposed regulations are adopted as final regulations, consideration will be given to any written comments (a signed original and eight (8) copies) or electronic comments that are submitted timely to the IRS. In addition to the specific requests for comments made elsewhere in this preamble, the Treasury Department and the IRS request comments on all aspects of the proposed rules. All comments will be available for public inspection and copying. A public hearing may be scheduled if requested in writing by any person who timely submits written comments. If a public hearing is scheduled, notice of the date, time, and place of the hearing will be published in the Federal Register.

    Drafting Information

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

    List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

    Proposed Amendments to the Regulations

    Accordingly, 26 CFR part 1 is proposed to be amended as follows:

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

    26 U.S.C. 7805, unless otherwise noted. * * *

    Par. 2. Section 1.597-1 is revised to read as follows:
    § 1.597-1 Definitions.

    For purposes of the regulations under section 597—

    (a) Unless the context otherwise requires, the terms consolidated group, member, and subsidiary have the meanings provided in § 1.1502-1; and

    (b) The following terms have the meanings provided below:

    Acquiring. The term Acquiring means a corporation that is a transferee in a Taxable Transfer, other than a deemed transferee in a Taxable Transfer described in § 1.597-5(b).

    Agency. The term Agency means the Resolution Trust Corporation, the Federal Deposit Insurance Corporation, any similar instrumentality of the United States government, and any predecessor or successor of the foregoing (including the Federal Savings and Loan Insurance Corporation).

    Agency Control. An Institution or entity is under Agency Control if Agency is conservator or receiver of the Institution or entity, or if Agency has the right to appoint any of the Institution's or entity's directors.

    Agency Obligation. The term Agency Obligation means a debt instrument that Agency issues to an Institution or to a direct or indirect owner of an Institution.

    Average Reimbursement Rate. The term Average Reimbursement Rate means the percentage of losses (as determined under the terms of the Loss Share Agreement) that would be reimbursed by Agency or a Controlled Entity if every asset subject to a Loss Share Agreement were disposed of for the Third-Party Price. The Average Reimbursement Rate is determined at the time of the Taxable Transfer and is not adjusted for any changes in Third-Party Price over the life of any asset subject to the Loss Share Agreement or the prior disposition of any asset subject to the Loss Share Agreement.

    Bridge Bank. The term Bridge Bank means an Institution that is organized by Agency to hold assets and liabilities of another Institution and that continues the operation of the other Institution's business pending its acquisition or liquidation, and that is any of the following:

    (1) A national bank chartered by the Comptroller of the Currency under section 11(n) of the Federal Deposit Insurance Act (12 U.S.C. 1821(n)) or section 21A(b)(10)(A) of the Federal Home Loan Bank Act (12 U.S.C. 1441a(b)(10)(A), prior to its repeal by Pub. L. 111-203), or under any successor sections;

    (2) A Federal savings association chartered by the Director of the Office of Thrift Supervision under section 21A(b)(10)(A) of the Federal Home Loan Bank Act (12 U.S.C. 1441a(b)(10)(A), prior to its repeal by Pub. L. 111-203) or any successor section; or

    (3) A similar Institution chartered under any other statutory provisions.

    Consolidated Subsidiary. The term Consolidated Subsidiary means a corporation that both:

    (1) Is a member of the same consolidated group as an Institution; and

    (2) Would be a member of the affiliated group that would be determined under section 1504(a) if the Institution were the common parent thereof.

    Continuing Equity. An Institution has Continuing Equity for any taxable year if, on the last day of the taxable year, the Institution is not a Bridge Bank, in Agency receivership, or treated as a New Entity.

    Controlled Entity. The term Controlled Entity means an entity under Agency Control.

    Covered Asset. The term Covered Asset means an asset subject to a Loss Guarantee. The fair market value of a Covered Asset equals the asset's Expected Value.

    Expected Value. The term Expected Value means the sum of the Third-Party Price for a Covered Asset and the amount that Agency or a Controlled Entity would pay under the Loss Guarantee if the asset actually were sold for the Third-Party Price. For purposes of the preceding sentence, if an asset is subject to a Loss Share Agreement, the amount that Agency or a Controlled Entity would pay under a Loss Guarantee with respect to the asset is determined by multiplying the amount of loss that would be realized under the terms of the Loss Share Agreement if the asset were disposed of at the Third-Party Price by the Average Reimbursement Rate.

    Federal Financial Assistance. The term Federal Financial Assistance (FFA), as defined by section 597(c), means any money or property provided by Agency to an Institution or to a direct or indirect owner of stock in an Institution under section 406(f) of the National Housing Act (12 U.S.C. 1729(f), prior to its repeal by Pub. L. 101-73), section 21A(b)(4) of the Federal Home Loan Bank Act (12 U.S.C. 1441a(b)(4), prior to its repeal by Pub. L. 111-203), section 11(f) or 13(c) of the Federal Deposit Insurance Act (12 U.S.C. 1821(f), 1823(c)), or any similar provision of law. Any such money or property is FFA, regardless of whether the Institution or any of its affiliates issues Agency a note or other obligation, stock, warrants, or other rights to acquire stock in connection with Agency's provision of the money or property. FFA includes Net Worth Assistance, Loss Guarantee payments, yield maintenance payments, cost to carry or cost of funds reimbursement payments, expense reimbursement or indemnity payments, and interest (including original issue discount) on an Agency Obligation.

    Institution. The term Institution means an entity that is, or immediately before being placed under Agency Control was, a bank or domestic building and loan association within the meaning of section 597 (including a Bridge Bank). Except as otherwise provided in the regulations under section 597, the term Institution includes a New Entity or Acquiring that is a bank or domestic building and loan association within the meaning of section 597.

    Loss Guarantee. The term Loss Guarantee means an agreement pursuant to which Agency or a Controlled Entity guarantees or agrees to pay an Institution a specified amount upon the disposition or charge-off (in whole or in part) of specific assets, an agreement pursuant to which an Institution has a right to put assets to Agency or a Controlled Entity at a specified price, a Loss Share Agreement, or a similar arrangement.

    Loss Share Agreement. The term Loss Share Agreement means an agreement pursuant to which Agency or a Controlled Entity agrees to reimburse the guaranteed party a percentage of losses realized.

    Net Worth Assistance. The term Net Worth Assistance means money or property (including an Agency Obligation to the extent it has a fixed principal amount) that Agency provides as an integral part of a Taxable Transfer, other than FFA that accrues after the date of the Taxable Transfer. For example, Net Worth Assistance does not include Loss Guarantee payments, yield maintenance payments, cost to carry or cost of funds reimbursement payments, or expense reimbursement or indemnity payments. An Agency Obligation is considered to have a fixed principal amount notwithstanding an agreement providing for its adjustment after issuance to reflect a more accurate determination of the condition of the Institution at the time of the acquisition.

    New Entity. The term New Entity means the new corporation that is treated as purchasing all of the assets of an Old Entity in a Taxable Transfer described in § 1.597-5(b).

    Old Entity. The term Old Entity means the Institution or Consolidated Subsidiary that is treated as selling all of its assets in a Taxable Transfer described in § 1.597-5(b).

    Residual Entity. The term Residual Entity means the entity that remains after an Institution transfers deposit liabilities to a Bridge Bank.

    Taxable Transfer. The term Taxable Transfer has the meaning provided in § 1.597-5(a)(1).

    Third-Party Price. The term Third-Party Price means the amount that a third party would pay for an asset absent the existence of a Loss Guarantee.

    Par. 3. Section 1.597-2 is revised to read as follows:
    § 1.597-2 Taxation of Federal financial assistance.

    (a) Inclusion in income—(1) In general. Except as otherwise provided in the regulations under section 597, all FFA is includible as ordinary income to the recipient at the time the FFA is received or accrued in accordance with the recipient's method of accounting. The amount of FFA received or accrued is the amount of any money, the fair market value of any property (other than an Agency Obligation), and the issue price of any Agency Obligation (determined under § 1.597-3(c)(2)). An Institution (and not the nominal recipient) is treated as receiving directly any FFA that Agency provides in a taxable year to a direct or indirect shareholder of the Institution, to the extent the money or property is transferred to the Institution pursuant to an agreement with Agency.

    (2) Cross references. See paragraph (c) of this section for rules regarding the timing of inclusion of certain FFA. See paragraph (d) of this section for additional rules regarding the treatment of FFA received in connection with transfers of money or property to Agency or a Controlled Entity, or paid pursuant to a Loss Guarantee. See § 1.597-5(c)(1) for additional rules regarding the inclusion of Net Worth Assistance in the income of an Institution.

    (b) Basis of property that is FFA. If FFA consists of property, the Institution's basis in the property equals the fair market value of the property (other than an Agency Obligation) or the issue price of the Agency Obligation (as determined under § 1.597-3(c)(2)).

    (c) Timing of inclusion of certain FFA—(1) Scope. This paragraph (c) limits the amount of FFA an Institution must include in income currently under certain circumstances and provides rules for the deferred inclusion in income of amounts in excess of those limits. This paragraph (c) does not apply to a New Entity or Acquiring.

    (2) Amount currently included in income by an Institution without Continuing Equity. The amount of FFA an Institution without Continuing Equity must include in income in a taxable year under paragraph (a)(1) of this section is limited to the sum of—

    (i) The excess at the beginning of the taxable year of the Institution's liabilities over the adjusted bases of the Institution's assets; and

    (ii) The amount by which the excess for the taxable year of the Institution's deductions allowed by chapter 1 of the Internal Revenue Code (other than net operating and capital loss carryovers) over its gross income (determined without regard to FFA) is greater than the excess at the beginning of the taxable year of the adjusted bases of the Institution's assets over the Institution's liabilities.

    (3) Amount currently included in income by an Institution with Continuing Equity. The amount of FFA an Institution with Continuing Equity must include in income in a taxable year under paragraph (a)(1) of this section is limited to the sum of—

    (i) The excess at the beginning of the taxable year of the Institution's liabilities over the adjusted bases of the Institution's assets;

    (ii) The greater of—

    (A) The excess for the taxable year of the Institution's deductions allowed by chapter 1 of the Internal Revenue Code (other than net operating and capital loss carryovers) over its gross income (determined without regard to FFA); or

    (B) The excess for the taxable year of the deductions allowed by chapter 1 of the Internal Revenue Code (other than net operating and capital loss carryovers) of the consolidated group of which the Institution is a member on the last day of the Institution's taxable year over the group's gross income (determined without regard to FFA); and

    (iii) The excess of the amount of any net operating loss carryover of the Institution (or in the case of a carryover from a consolidated return year of the Institution's current consolidated group, the net operating loss carryover of the group) to the taxable year over the amount described in paragraph (c)(3)(i) of this section.

    (4) Deferred FFA—(i) Maintenance of account. An Institution must establish a deferred FFA account commencing in the first taxable year in which it receives FFA that is not currently included in income under paragraph (c)(2) or (c)(3) of this section, and must maintain that account in accordance with the requirements of this paragraph (c)(4). The Institution must add the amount of any FFA that is not currently included in income under paragraph (c)(2) or (c)(3) of this section to its deferred FFA account. The Institution must decrease the balance of its deferred FFA account by the amount of deferred FFA included in income under paragraphs (c)(4)(ii), (iv), and (v) of this section. (See also paragraphs (d)(4) and (d)(5)(i)(B) of this section for other adjustments that decrease the deferred FFA account.) If, under paragraph (c)(3) of this section, FFA is not currently included in income in a taxable year, the Institution thereafter must maintain its deferred FFA account on a FIFO (first in, first out) basis (for example, for purposes of the first sentence of paragraph (c)(4)(iv) of this section).

    (ii) Deferred FFA recapture. In any taxable year in which an Institution has a balance in its deferred FFA account, it must include in income an amount equal to the lesser of the amount described in paragraph (c)(4)(iii) of this section or the balance in its deferred FFA account.

    (iii) Annual recapture amount—(A) Institutions without Continuing Equity(1) In general. In the case of an Institution without Continuing Equity, the amount described in this paragraph (c)(4)(iii) is the amount by which—

    (i) The excess for the taxable year of the Institution's deductions allowed by chapter 1 of the Internal Revenue Code (other than net operating and capital loss carryovers) over its gross income (taking into account FFA included in income under paragraph (c)(2) of this section) is greater than

    (ii) The Institution's remaining equity as of the beginning of the taxable year.

    (2) Remaining equity. The Institution's remaining equity is—

    (i) The amount at the beginning of the taxable year in which the deferred FFA account was established equal to the adjusted bases of the Institution's assets minus the Institution's liabilities (which amount may be positive or negative); plus

    (ii) The Institution's taxable income (computed without regard to any carryover from any other year) in any subsequent taxable year or years; minus

    (iii) The excess in any subsequent taxable year or years of the Institution's deductions allowed by chapter 1 of the Internal Revenue Code (other than net operating and capital loss carryovers) over its gross income.

    (B) Institutions with Continuing Equity. In the case of an Institution with Continuing Equity, the amount described in this paragraph (c)(4)(iii) is the amount by which the Institution's deductions allowed by chapter 1 of the Internal Revenue Code (other than net operating and capital loss carryovers) exceed its gross income (taking into account FFA included in income under paragraph (c)(3) of this section).

    (iv) Additional deferred FFA recapture by an Institution with Continuing Equity. To the extent that, as of the end of a taxable year, the cumulative amount of FFA deferred under paragraph (c)(3) of this section that an Institution with Continuing Equity has recaptured under this paragraph (c)(4) is less than the cumulative amount of FFA deferred under paragraph (c)(3) of this section that the Institution would have recaptured if that FFA had been included in income ratably over the six taxable years immediately following the taxable year of deferral, the Institution must include that difference in income for the taxable year. An Institution with Continuing Equity must include in income the balance of its deferred FFA account in the taxable year in which it liquidates, ceases to do business, transfers (other than to a Bridge Bank) substantially all of its assets and liabilities, or is deemed to transfer all of its assets under § 1.597-5(b).

    (v) Optional accelerated recapture of deferred FFA. An Institution that has a deferred FFA account may include in income the balance of its deferred FFA account on its timely filed (including extensions) original income tax return for any taxable year that it is not under Agency Control. The balance of its deferred FFA account is income on the last day of that year.

    (5) Exceptions to limitations on use of losses. In computing an Institution's taxable income or alternative minimum taxable income for a taxable year, sections 56(d)(1), 382, and 383 and §§ 1.1502-15, 1.1502-21, and 1.1502-22 (or §§ 1.1502-15A, 1.1502-21A, and 1.1502-22A, as appropriate) do not limit the use of the attributes of the Institution to the extent, if any, that the inclusion of FFA (including recaptured FFA) in income results in taxable income or alternative minimum taxable income (determined without regard to this paragraph (c)(5)) for the taxable year. This paragraph (c)(5) does not apply to any limitation under section 382 or 383 or §§ 1.1502-15, 1.1502-21, or 1.1502-22 (or §§ 1.1502-15A, 1.1502-21A, or 1.1502-22A, as appropriate) that arose in connection with or prior to a corporation becoming a Consolidated Subsidiary of the Institution.

    (6) Operating rules—(i) Bad debt reserves. For purposes of paragraphs (c)(2), (c)(3), and (c)(4) of this section, the adjusted bases of an Institution's assets are reduced by the amount of the Institution's reserves for bad debts under section 585 or 593, other than supplemental reserves under section 593.

    (ii) Aggregation of Consolidated Subsidiaries. For purposes of this paragraph (c), an Institution is treated as a single entity that includes the income, expenses, assets, liabilities, and attributes of its Consolidated Subsidiaries, with appropriate adjustments to prevent duplication.

    (iii) Alternative minimum tax. To compute the alternative minimum taxable income attributable to FFA of an Institution for any taxable year under section 55, the rules of this section, and related rules, are applied by using alternative minimum tax basis, deductions, and all other items required to be taken into account. All other alternative minimum tax provisions continue to apply.

    (7) Earnings and profits. FFA that is not currently included in income under this paragraph (c) is included in earnings and profits for all purposes of the Internal Revenue Code to the extent and at the time it is included in income under this paragraph (c).

    (d) Transfers of money or property to Agency, and Covered Assets—(1) Transfers of property to Agency. Except as provided in paragraph (d)(4)(iii) of this section, the transfer of property to Agency or a Controlled Entity is a taxable sale or exchange in which the Institution is treated as realizing an amount equal to the property's fair market value.

    (2) FFA with respect to Covered Assets other than on transfer to Agency—(i) FFA provided pursuant to a Loss Guarantee with respect to a Covered Asset is included in the amount realized with respect to the Covered Asset.

    (ii) If Agency makes a payment to an Institution pursuant to a Loss Guarantee with respect to a Covered Asset owned by an entity other than the Institution, the payment will be treated as made directly to the owner of the Covered Asset and included in the amount realized with respect to the Covered Asset when the Covered Asset is sold or charged off. The payment will be treated as further transferred through chains of ownership to the extent necessary to reflect the actual receipt of such payment. Any such transfer, if a deemed distribution, will not be a preferential dividend for purposes of sections 561, 562, 852, or 857.

    (iii) For the purposes of this paragraph (d)(2), references to an amount realized include amounts obtained in whole or partial satisfaction of loans, amounts obtained by virtue of charging off or marking to market a Covered Asset, and other amounts similarly related to property, whether or not disposed of.

    (3) Treatment of FFA received in exchange for property. FFA included in the amount realized for property under this paragraph (d) is not includible in income under paragraph (a)(1) of this section. The amount realized is treated in the same manner as if realized from a person other than Agency or a Controlled Entity. For example, gain attributable to FFA received with respect to a capital asset retains its character as capital gain. Similarly, FFA received with respect to property that has been charged off for income tax purposes is treated as a recovery to the extent of the amount previously charged off. Any FFA provided in excess of the amount realized under this paragraph (d) is includible in income under paragraph (a)(1) of this section.

    (4) Adjustment to FFA—(i) In general. If an Institution pays or transfers money or property to Agency or a Controlled Entity, the amount of money and the fair market value of the property is an adjustment to its FFA to the extent the amount paid and transferred exceeds the amount of money and the fair market value of any property that Agency or a Controlled Entity provides in exchange.

    (ii) Deposit insurance. This paragraph (d)(4) does not apply to amounts paid to Agency with respect to deposit insurance.

    (iii) Treatment of an interest held by Agency or a Controlled Entity—(A) In general. For purposes of this paragraph (d), an interest described in § 1.597-3(b) is not treated as property when transferred by the issuer to Agency or a Controlled Entity nor when acquired from Agency or a Controlled Entity by the issuer.

    (B) Dispositions to persons other than issuer. On the date Agency or a Controlled Entity transfers an interest described in § 1.597-3(b) to a holder other than the issuer, Agency, or a Controlled Entity, the issuer is treated for purposes of this paragraph (d)(4) as having transferred to Agency an amount of money equal to the sum of the amount of money and the fair market value of property that was paid by the new holder as consideration for the interest.

    (iv) Affiliated groups. For purposes of this paragraph (d), an Institution is treated as having made any transfer to Agency or a Controlled Entity that was made by any other member of its affiliated group. The affiliated group must make appropriate basis adjustments or other adjustments to the extent the member transferring money or other property is not the member that received FFA.

    (5) Manner of making adjustments to FFA—(i) Reduction of FFA and deferred FFA. An Institution adjusts its FFA under paragraph (d)(4) of this section by reducing in the following order and in an aggregate amount not greater than the adjustment—

    (A) The amount of any FFA that is otherwise includible in income for the taxable year (before application of paragraph (c) of this section); and

    (B) The balance (but not below zero) in the deferred FFA account, if any, maintained under paragraph (c)(4) of this section.

    (ii) Deduction of excess amounts. If the amount of the adjustment exceeds the sum of the amounts described in paragraph (d)(5)(i) of this section, the Institution may deduct the excess to the extent the deduction does not exceed the amount of FFA included in income for prior taxable years reduced by the amount of deductions allowable under this paragraph (d)(5)(ii) in prior taxable years.

    (iii) Additional adjustments. Any adjustment to FFA in excess of the sum of the amounts described in paragraphs (d)(5)(i) and (ii) of this section is treated—

    (A) By an Institution other than a New Entity or Acquiring, as a deduction of the amount in excess of FFA received that is required to be transferred to Agency under section 11(g) of the Federal Deposit Insurance Act (12 U.S.C. 1821(g)); or

    (B) By a New Entity or Acquiring, as an adjustment to the purchase price paid in the Taxable Transfer (see § 1.338-7).

    (e) Examples. The following examples illustrate the provisions of this section:

    Example 1. Timing of inclusion of FFA in income. (i) Institution M, a calendar-year taxpayer without Continuing Equity because it is in Agency receivership, is not a member of a consolidated group and has not been acquired in a Taxable Transfer. On January 1, 2016, M has assets with a total adjusted basis of $100 million and total liabilities of $120 million. M's deductions do not exceed its gross income (determined without regard to FFA) for 2016. Agency provides $30 million of FFA to M in 2016. The amount of this FFA that M must include in income in 2016 is limited by paragraph (c)(2) of this section to $20 million, the amount by which M's liabilities ($120 million) exceed the total adjusted basis of its assets ($100 million) at the beginning of the taxable year. Pursuant to paragraph (c)(4)(i) of this section, M must establish a deferred FFA account for the remaining $10 million.

    (ii) If Agency instead lends M the $30 million, M's indebtedness to Agency is disregarded and the results are the same as in paragraph (i) of this Example 1 under section 597(c), paragraph (b) of § 1.597-1, and paragraph (b) of § 1.597-3.

    Example 2. Transfer of property to Agency. (i) Institution M, a calendar-year taxpayer without Continuing Equity because it is in Agency receivership, is not a member of a consolidated group and has not been acquired in a Taxable Transfer. At the beginning of 2016, M's remaining equity is $0 and M has a deferred FFA account of $10 million. Agency does not provide any FFA to M in 2016. During the year, M transfers property not subject to a Loss Guarantee to Agency and does not receive any consideration. The property has an adjusted basis of $5 million and a fair market value of $1 million at the time of the transfer. M has no other taxable income or loss in 2016.

    (ii) Under paragraph (d)(1) of this section, M is treated as selling the property for $1 million, its fair market value, thus recognizing a $4 million loss ($5 million − $1 million). In addition, because M did not receive any consideration from Agency, under paragraph (d)(4) of this section M has an adjustment to FFA of $1 million, the amount by which the fair market value of the transferred property ($1 million) exceeds the consideration M received from Agency ($0). Because no FFA is provided to M in 2016, this adjustment reduces the balance of M's deferred FFA account to $9 million ($10 million − $1 million) under paragraph (d)(5)(i)(B) of this section. Because M's $4 million loss causes M's deductions to exceed its gross income by $4 million in 2016 and M has no remaining equity, under paragraph (c)(4)(iii)(A) of this section M must include $4 million of deferred FFA in income and must decrease the remaining $9 million balance of its deferred FFA account by the same amount, leaving a balance of $5 million.

    Example 3. Loss Guarantee. Institution Q, a calendar-year taxpayer, holds a Covered Asset (Asset Z). Q's adjusted basis in Asset Z is $10,000. Q sells Asset Z to an unrelated third party for $4,000. Pursuant to the Loss Guarantee, Agency pays Q $6,000 ($10,000 − $4,000). Q's amount realized from the sale of Asset Z is $10,000 ($4,000 from the third party and $6,000 from Agency) under paragraph (d)(2) of this section. Q realizes no gain or loss on the sale ($10,000 − $10,000 = $0), and therefore includes none of the $6,000 of FFA it receives pursuant to the Loss Guarantee in income under paragraph (d)(3) of this section.

    Par. 4. Section 1.597-3 is revised to read as follows:
    § 1.597-3 Other rules.

    (a) Ownership of assets. For all income tax purposes, Agency is not treated as the owner of assets subject to a Loss Guarantee, yield maintenance agreement, or cost to carry or cost of funds reimbursement agreement, regardless of whether it otherwise would be treated as the owner under general principles of income taxation.

    (b) Debt and equity interests received by Agency. Debt instruments, stock, warrants, or other rights to acquire stock of an Institution (or any of its affiliates) that Agency or a Controlled Entity receives in connection with a transaction in which FFA is provided are not treated as debt, stock, or other equity interests of or in the issuer for any purpose of the Internal Revenue Code while held by Agency or a Controlled Entity. On the date Agency or a Controlled Entity transfers an interest described in this paragraph (b) to a holder other than Agency or a Controlled Entity, the interest is treated as having been newly issued by the issuer to the holder with an issue price equal to the sum of the amount of money and the fair market value of property paid by the new holder in exchange for the interest.

    (c) Agency Obligations—(1) In general. Except as otherwise provided in this paragraph (c), the original issue discount rules of sections 1271 et. seq. apply to Agency Obligations.

    (2) Issue price of Agency Obligations provided as Net Worth Assistance. The issue price of an Agency Obligation that is provided as Net Worth Assistance and that bears interest at either a single fixed rate or a qualified floating rate (and provides for no contingent payments) is the lesser of the sum of the present values of all payments due under the obligation, discounted at a rate equal to the applicable Federal rate (within the meaning of section 1274(d)(1) and (3)) in effect for the date of issuance, or the stated principal amount of the obligation. The issue price of an Agency Obligation that bears a qualified floating rate of interest (within the meaning of § 1.1275-5(b)) is determined by treating the obligation as bearing a fixed rate of interest equal to the rate in effect on the date of issuance under the obligation.

    (3) Adjustments to principal amount. Except as provided in § 1.597-5(d)(2)(iv), this paragraph (c)(3) applies if Agency modifies or exchanges an Agency Obligation provided as Net Worth Assistance (or a successor obligation). The issue price of the modified or new Agency Obligation is determined under paragraphs (c)(1) and (2) of this section. If the issue price is greater than the adjusted issue price of the existing Agency Obligation, the difference is treated as FFA. If the issue price is less than the adjusted issue price of the existing Agency Obligation, the difference is treated as an adjustment to FFA under § 1.597-2(d)(4).

    (d) Successors. To the extent necessary to effectuate the purposes of the regulations under section 597, an entity's treatment under the regulations applies to its successor. A successor includes a transferee in a transaction to which section 381(a) applies or a Bridge Bank to which another Bridge Bank transfers deposit liabilities.

    (e) [Reserved].

    (f) Losses and deductions with respect to Covered Assets. Prior to the disposition of a Covered Asset, the asset cannot be charged off, marked to a market value, depreciated, amortized, or otherwise treated in a manner that supposes an actual or possible diminution of value below the asset's fair market value. See § 1.597-1(b).

    (g) Anti-abuse rule. The regulations under section 597 must be applied in a manner consistent with the purposes of section 597. Accordingly, if, in structuring or engaging in any transaction, a principal purpose is to achieve a tax result that is inconsistent with the purposes of section 597 and the regulations thereunder, the Commissioner can make appropriate adjustments to income, deductions, and other items that would be consistent with those purposes.

    Par. 5. Section 1.597-4 is revised to read as follows:
    § 1.597-4 Bridge Banks and Agency Control.

    (a) Scope. This section provides rules that apply to a Bridge Bank or other Institution under Agency Control and to transactions in which an Institution transfers deposit liabilities (whether or not the Institution also transfers assets) to a Bridge Bank.

    (b) Status as taxpayer. A Bridge Bank or other Institution under Agency Control is a corporation within the meaning of section 7701(a)(3) for all purposes of the Internal Revenue Code and is subject to all Internal Revenue Code provisions that generally apply to corporations, including those relating to methods of accounting and to requirements for filing returns, even if Agency owns stock of the Institution.

    (c) No section 382 ownership change. The imposition of Agency Control, the cancellation of Institution stock by Agency, a transaction in which an Institution transfers deposit liabilities to a Bridge Bank, and an election under paragraph (g) of this section are disregarded in determining whether an ownership change has occurred within the meaning of section 382(g).

    (d) Transfers to Bridge Banks—(1) In general. Except as otherwise provided in paragraph (g) of this section, the rules of this paragraph (d) apply to transfers to Bridge Banks. In general, a Bridge Bank and its associated Residual Entity are together treated as the successor entity to the transferring Institution. If an Institution transfers deposit liabilities to a Bridge Bank (whether or not it also transfers assets), the Institution recognizes no gain or loss on the transfer and the Bridge Bank succeeds to the transferring Institution's basis in any transferred assets. The associated Residual Entity retains its basis in any assets it continues to hold. Immediately after the transfer, the Bridge Bank succeeds to and takes into account the transferring Institution's items described in section 381(c) (subject to the conditions and limitations specified in section 381(c)), taxpayer identification number (“TIN”), deferred FFA account, and account receivable for future FFA as described in paragraph (g)(4)(ii) of this section. The Bridge Bank also succeeds to and continues the transferring Institution's taxable year.

    (2) Transfers to a Bridge Bank from multiple Institutions. If two or more Institutions transfer deposit liabilities to the same Bridge Bank, the rules in paragraph (d)(1) of this section are modified to the extent provided in this paragraph (d)(2). The Bridge Bank succeeds to the TIN and continues the taxable year of the Institution that transfers the largest amount of deposits. The taxable years of the other transferring Institutions close at the time of the transfer. If all the transferor Institutions are members of the same consolidated group, the Bridge Bank's carryback of losses to the Institution that transfers the largest amount of deposits is not limited by section 381(b)(3). The limitations of section 381(b)(3) do apply to the Bridge Bank's carrybacks of losses to all other transferor Institutions. If the transferor Institutions are not all members of the same consolidated group, the limitations of section 381(b)(3) apply with respect to all transferor Institutions. See paragraph (g)(6)(ii) of this section for additional rules that apply if two or more Institutions that are not members of the same consolidated group transfer deposit liabilities to the same Bridge Bank.

    (e) Treatment of Bridge Bank and Residual Entity as a single entity. A Bridge Bank and its associated Residual Entity or Entities are treated as a single entity for income tax purposes and must file a single combined income tax return. The Bridge Bank is responsible for filing all income tax returns and statements for this single entity and is the agent of each associated Residual Entity to the same extent as if the Bridge Bank were the common parent of a consolidated group including the Residual Entity. The term Institution includes a Residual Entity that files a combined return with its associated Bridge Bank.

    (f) Rules applicable to members of consolidated groups—(1) Status as members. Unless an election is made under paragraph (g) of this section, Agency Control of an Institution does not terminate the Institution's membership in a consolidated group. Stock of a subsidiary that is canceled by Agency is treated as held by the members of the consolidated group that held the stock prior to its cancellation. If an Institution is a member of a consolidated group immediately before it transfers deposit liabilities to a Bridge Bank, the Bridge Bank succeeds to the Institution's status as the common parent or, unless an election is made under paragraph (g) of this section, as a subsidiary of the group. If a Bridge Bank succeeds to an Institution's status as a subsidiary, its stock is treated as held by the shareholders of the transferring Institution, and the stock basis or excess loss account of the Institution carries over to the Bridge Bank. A Bridge Bank is treated as owning stock owned by its associated Residual Entities, including for purposes of determining membership in an affiliated group.

    (2) Coordination with consolidated return regulations. The provisions of the regulations under section 597 take precedence over conflicting provisions in the regulations under section 1502.

    (g) Elective disaffiliation—(1) In general. A consolidated group of which an Institution is a subsidiary may elect irrevocably not to include the Institution in its affiliated group if the Institution is placed in Agency receivership (whether or not assets or deposit liabilities of the Institution are transferred to a Bridge Bank). See paragraph (g)(6) of this section for circumstances under which a consolidated group is deemed to make this election.

    (2) Consequences of election. If the election under this paragraph (g) is made with respect to an Institution, the following consequences occur immediately before the subsidiary Institution to which the election applies is placed in Agency receivership (or, in the case of a deemed election under paragraph (g)(6) of this section, immediately before the consolidated group is deemed to make the election) and in the following order—

    (i) All adjustments of the Institution and its Consolidated Subsidiaries under section 481 are accelerated;

    (ii) Deferred intercompany gains and losses and intercompany items with respect to the Institution and its Consolidated Subsidiaries are taken into account and the Institution and its Consolidated Subsidiaries take into account any other items required under the regulations under section 1502 for members that become nonmembers within the meaning of § 1.1502-32(d)(4);

    (iii) The taxable year of the Institution and its Consolidated Subsidiaries closes and the Institution includes the amount described in paragraph (g)(3) of this section in income as ordinary income as its last item for that taxable year;

    (iv) The members of the consolidated group owning the common stock of the Institution include in income any excess loss account with respect to the Institution's stock under § 1.1502-19 and any other items required under the regulations under section 1502 for members that own stock of corporations that become nonmembers within the meaning of § 1.1502-32(d)(4); and

    (v) If the Institution's liabilities exceed the aggregate fair market value of its assets on the date the Institution is placed in Agency receivership (or, in the case of a deemed election under paragraph (g)(6) of this section, on the date the consolidated group is deemed to make the election), the members of the consolidated group treat their stock in the Institution as worthless. (See §§ 1.337(d)-2, 1.1502-35(f), and 1.1502-36 for rules applicable when a member of a consolidated group is entitled to a worthless stock deduction with respect to stock of another member of the group.) In all other cases, the consolidated group will be treated as owning stock of a nonmember corporation until such stock is disposed of or becomes worthless under rules otherwise applicable.

    (3) Toll charge. The amount described in this paragraph (g)(3) is the excess of the Institution's liabilities over the adjusted bases of its assets immediately before the Institution is placed in Agency receivership (or, in the case of a deemed election under paragraph (g)(6) of this section, immediately before the consolidated group is deemed to make the election). In computing this amount, the adjusted bases of an Institution's assets are reduced by the amount of the Institution's reserves for bad debts under section 585 or 593, other than supplemental reserves under section 593. For purposes of this paragraph (g)(3), an Institution is treated as a single entity that includes the assets and liabilities of its Consolidated Subsidiaries, with appropriate adjustments to prevent duplication. The amount described in this paragraph (g)(3) for alternative minimum tax purposes is determined using alternative minimum tax basis, deductions, and all other items required to be taken into account. In computing the increase in the group's taxable income or alternative minimum taxable income, sections 56(d)(1), 382, and 383 and §§ 1.1502-15, 1.1502-21, and 1.1502-22 (or §§ 1.1502-15A, 1.1502-21A, and 1.1502-22A, as appropriate) do not limit the use of the attributes of the Institution and its Consolidated Subsidiaries to the extent, if any, that the inclusion of the amount described in this paragraph (g)(3) in income would result in the group having taxable income or alternative minimum taxable income (determined without regard to this sentence) for the taxable year. The preceding sentence does not apply to any limitation under section 382 or 383 or §§ 1.1502-15, 1.1502-21, or 1.1502-22 (or §§ 1.1502-15A, 1.1502-21A, or 1.1502-22A, as appropriate) that arose in connection with or prior to a corporation becoming a Consolidated Subsidiary of the Institution.

    (4) Treatment of Institutions after disaffiliation—(i) In general. If the election under this paragraph (g) is made with respect to an Institution, immediately after the Institution is placed in Agency receivership (or, in the case of a deemed election under paragraph (g)(6) of this section, immediately after the consolidated group is deemed to make the election), the Institution and each of its Consolidated Subsidiaries are treated for income tax purposes as new corporations that are not members of the electing group's affiliated group. Each new corporation retains the TIN of the corresponding disaffiliated corporation and is treated as having received the assets and liabilities of the corresponding disaffiliated corporation in a transaction to which section 351 applies (and in which no gain was recognized under section 357(c) or otherwise). Thus, the new corporation has no net operating or capital loss carryforwards. An election under this paragraph (g) does not terminate the single entity treatment of a Bridge Bank and its Residual Entities provided in paragraph (e) of this section.

    (ii) FFA. A new Institution is treated as having a non-interest bearing, nontransferable account receivable for future FFA with a basis equal to the amount described in paragraph (g)(3) of this section. If a disaffiliated Institution has a deferred FFA account at the time of its disaffiliation, the corresponding new Institution succeeds to and takes into account that deferred FFA account.

    (iii) Filing of consolidated returns. If a disaffiliated Institution has Consolidated Subsidiaries at the time of its disaffiliation, the corresponding new Institution is required to file a consolidated income tax return with the subsidiaries in accordance with the regulations under section 1502.

    (iv) Status as Institution. If an Institution is disaffiliated under this paragraph (g), the resulting new corporation is treated as an Institution for purposes of the regulations under section 597 regardless of whether it is a bank or domestic building and loan association within the meaning of section 597.

    (v) Loss carrybacks. To the extent a carryback of losses would result in a refund being paid to a fiduciary under section 6402(k), an Institution or Consolidated Subsidiary with respect to which an election under this paragraph (g) (other than under paragraph (g)(6)(ii) of this section) applies is allowed to carry back losses as if the Institution or Consolidated Subsidiary had continued to be a member of the consolidated group that made the election.

    (5) Affirmative election—(i) Original Institution—(A) Manner of making election. Except as otherwise provided in paragraph (g)(6) of this section, a consolidated group makes the election provided by this paragraph (g) by sending a written statement by certified mail to the affected Institution on or before 120 days after its placement in Agency receivership. The statement must contain the following legend at the top of the page: “THIS IS AN ELECTION UNDER § 1.597-4(g) TO EXCLUDE THE BELOW-REFERENCED INSTITUTION AND CONSOLIDATED SUBSIDIARIES FROM THE AFFILIATED GROUP,” and must include the names and taxpayer identification numbers of the common parent and of the Institution and Consolidated Subsidiaries to which the election applies, and the date on which the Institution was placed in Agency receivership. The consolidated group must send a similar statement to all subsidiary Institutions placed in Agency receivership during the consistency period described in paragraph (g)(5)(ii) of this section. (Failure to satisfy the requirement in the preceding sentence, however, does not invalidate the election with respect to any subsidiary Institution placed in Agency receivership during the consistency period described in paragraph (g)(5)(ii) of this section.) The consolidated group must retain a copy of the statement sent to any affected or subsidiary Institution (and the accompanying certified mail receipt) as proof that it mailed the statement to the affected Institution, and the consolidated group must make the statement and receipt available for inspection by the Commissioner upon request. The consolidated group must include an election statement as part of its first income tax return filed after the due date under this paragraph (g)(5) for such statement. A statement must be attached to this return indicating that the individual who signed the election was authorized to do so on behalf of the consolidated group. Agency cannot make this election under the authority of section 6402(k) or otherwise.

    (B) Consistency limitation on affirmative elections. A consolidated group may make an affirmative election under this paragraph (g)(5) with respect to a subsidiary Institution placed in Agency receivership only if the group made, or is deemed to have made, the election under this paragraph (g) with respect to every subsidiary Institution of the group placed in Agency receivership within five years preceding the date the subject Institution was placed in Agency receivership.

    (ii) Effect on Institutions placed in receivership simultaneously or subsequently. An election under this paragraph (g), other than under paragraph (g)(6)(ii) of this section, applies to the Institution with respect to which the election is made or deemed made (the original Institution) and each subsidiary Institution of the group placed in Agency receivership or deconsolidated in contemplation of Agency Control or the receipt of FFA simultaneously with the original Institution or within five years thereafter.

    (6) Deemed Election—(i) Deconsolidations in contemplation. If one or more members of a consolidated group deconsolidate (within the meaning of § 1.1502-19(c)(1)(ii)(B)) a subsidiary Institution in contemplation of Agency Control or the receipt of FFA, the consolidated group is deemed to make the election described in this paragraph (g) with respect to the Institution on the date the deconsolidation occurs. A subsidiary Institution is conclusively presumed to have been deconsolidated in contemplation of Agency Control or the receipt of FFA if either event occurs within six months after the deconsolidation.

    (ii) Transfers to a Bridge Bank from multiple groups. On the day an Institution's transfer of deposit liabilities to a Bridge Bank results in the Bridge Bank holding deposit liabilities from both a subsidiary Institution and an Institution not included in the subsidiary Institution's consolidated group, each consolidated group of which a transferring Institution or the Bridge Bank is a subsidiary is deemed to make the election described in this paragraph (g) with respect to its subsidiary Institution. If deposit liabilities of another Institution that is a subsidiary member of any consolidated group subsequently are transferred to the Bridge Bank, the consolidated group of which the Institution is a subsidiary is deemed to make the election described in this paragraph (g) with respect to that Institution at the time of the subsequent transfer.

    (h) Examples. The following examples illustrate the provisions of this section:

    Facts. Corporation X, the common parent of a consolidated group, owns all the stock (with a basis of $4 million) of Institution M, an insolvent Institution with no Consolidated Subsidiaries. At the close of business on April 30, 2016, M has $4 million of deposit liabilities, $1 million of other liabilities, and assets with an adjusted basis of $4 million and a fair market value of $3 million.

    Example 1. Effect of receivership on consolidation. On May 1, 2016, Agency places M in receivership and begins liquidating M. X does not make an election under paragraph (g) of this section. M remains a member of the X consolidated group after May 1, 2016 under paragraph (f)(1) of this section.

    Example 2. Effect of Bridge Bank on consolidation—(i) Additional facts. On May 1, 2016, Agency places M in receivership and causes M to transfer all of its assets and deposit liabilities to Bridge Bank MB.

    (ii) Consequences without an election to disaffiliate. M recognizes no gain or loss from the transfer and MB succeeds to M's basis in the transferred assets, M's items described in section 381(c) (subject to the conditions and limitations specified in section 381(c)), and TIN under paragraph (d)(1) of this section. (If M had a deferred FFA account, MB would also succeed to that account under paragraph (d)(1) of this section.) MB continues M's taxable year and succeeds to M's status as a member of the X consolidated group after May 1, 2016 under paragraphs (d)(1) and (f) of this section. MB and M are treated as a single entity for income tax purposes under paragraph (e) of this section.

    (iii) Consequences with an election to disaffiliate. If, on July 1, 2016, X makes an election under paragraph (g) of this section with respect to M, the following consequences are treated as occurring immediately before M was placed in Agency receivership. M must include $1 million ($5 million of liabilities − $4 million of adjusted basis) in income as of May 1, 2016 under paragraph (g)(2) and (3) of this section. M is then treated as a new corporation that is not a member of the X consolidated group and that has assets (including a $1 million account receivable for future FFA) with a basis of $5 million and $5 million of liabilities received from disaffiliated corporation M in a section 351 transaction. New corporation M retains the TIN of disaffiliated corporation M under paragraph (g)(4) of this section. Immediately after the disaffiliation, new corporation M is treated as transferring its assets and deposit liabilities to Bridge Bank MB. New corporation M recognizes no gain or loss from the transfer and MB succeeds to M's TIN and taxable year under paragraph (d)(1) of this section. Bridge Bank MB is treated as a single entity that includes M and has $5 million of liabilities, an account receivable for future FFA with a basis of $1 million, and other assets with a basis of $4 million under paragraph (d)(1) of this section.

    Par. 6. Section 1.597-5 is revised to read as follows:
    § 1.597-5 Taxable Transfers.

    (a) Taxable Transfers—(1) Defined. The term Taxable Transfer means—

    (i) A transaction in which an entity transfers to a transferee other than a Bridge Bank—

    (A) Any deposit liability (whether or not the Institution also transfers assets), if FFA is provided in connection with the transaction; or

    (B) Any asset for which Agency or a Controlled Entity has any financial obligation (for example, pursuant to a Loss Guarantee or Agency Obligation); or

    (ii) A deemed transfer of assets described in paragraph (b) of this section.

    (2) Scope. This section provides rules governing Taxable Transfers. Rules applicable to both actual and deemed asset acquisitions are provided in paragraphs (c) and (d) of this section. Special rules applicable only to deemed asset acquisitions are provided in paragraph (e) of this section.

    (b) Deemed asset acquisitions upon stock purchase—(1) In general. In a deemed transfer of assets under this paragraph (b), an Institution (including a Bridge Bank or a Residual Entity) or a Consolidated Subsidiary of the Institution (the Old Entity) is treated as selling all of its assets in a single transaction and is treated as a new corporation (the New Entity) that purchases all of the Old Entity's assets at the close of the day immediately preceding the occurrence of an event described in paragraph (b)(2) of this section. However, such an event results in a deemed transfer of assets under this paragraph (b) only if it occurs—

    (i) In connection with a transaction in which FFA is provided;

    (ii) While the Institution is a Bridge Bank;

    (iii) While the Institution has a positive balance in a deferred FFA account (see § 1.597-2(c)(4)(v) regarding the optional accelerated recapture of deferred FFA); or

    (iv) With respect to a Consolidated Subsidiary, while the Institution of which it is a Consolidated Subsidiary is under Agency Control.

    (2) Events. A deemed transfer of assets under this paragraph (b) results if the Institution or Consolidated Subsidiary—

    (i) Becomes a non-member (within the meaning of § 1.1502-32(d)(4)) of its consolidated group, other than pursuant to an election under § 1.597-4(g);

    (ii) Becomes a member of an affiliated group of which it was not previously a member, other than pursuant to an election under § 1.597-4(g); or

    (iii) Issues stock such that the stock that was outstanding before the imposition of Agency Control or the occurrence of any transaction in connection with the provision of FFA represents 50 percent or less of the vote or value of its outstanding stock (disregarding stock described in section 1504(a)(4) and stock owned by Agency or a Controlled Entity).

    (3) Bridge Banks and Residual Entities. If a Bridge Bank is treated as selling all of its assets to a New Entity under this paragraph (b), each associated Residual Entity is treated as simultaneously selling its assets to a New Entity in a Taxable Transfer described in this paragraph (b).

    (c) Treatment of transferor—(1) FFA in connection with a Taxable Transfer. A transferor in a Taxable Transfer is treated as having directly received immediately before a Taxable Transfer any Net Worth Assistance that Agency provides to the New Entity or Acquiring in connection with the transfer. (See § 1.597-2(a) and (c) for rules regarding the inclusion of FFA in income and § 1.597-2(a)(1) for related rules regarding FFA provided to shareholders.) The Net Worth Assistance is treated as an asset of the transferor that is sold to the New Entity or Acquiring in the Taxable Transfer.

    (2) Amount realized in a Taxable Transfer. In a Taxable Transfer described in paragraph (a)(1)(i) of this section, the amount realized is determined under section 1001(b) by reference to the consideration paid for the assets. In a Taxable Transfer described in paragraph (a)(1)(ii) of this section, the amount realized is the sum of the grossed-up basis of the stock acquired in connection with the Taxable Transfer (excluding stock acquired from the Old or New Entity), plus the amount of liabilities assumed or taken subject to in the deemed transfer, plus other relevant items. The grossed-up basis of the acquired stock equals the acquirers' basis in the acquired stock divided by the percentage of the Old Entity's stock (by value) attributable to the acquired stock.

    (3) Allocation of amount realized—(i) In general. The amount realized under paragraph (c)(2) of this section is allocated among the assets transferred in the Taxable Transfer in the same manner as amounts are allocated among assets under § 1.338-6(b), (c)(1) and (2).

    (ii) Modifications to general rule. This paragraph (c)(3)(ii) modifies certain of the allocation rules of paragraph (c)(3)(i) of this section. Agency Obligations and Covered Assets in the hands of the New Entity or Acquiring are treated as Class II assets. Stock of a Consolidated Subsidiary is treated as a Class II asset to the extent the fair market value of the Consolidated Subsidiary's Class I and Class II assets (see § 1.597-1(b)) exceeds the amount of its liabilities. The fair market value of an Agency Obligation is deemed to equal its adjusted issue price immediately before the Taxable Transfer.

    (d) Treatment of a New Entity and Acquiring—(1) Purchase price. The purchase price for assets acquired in a Taxable Transfer described in paragraph (a)(1)(i) of this section is the cost of the assets acquired. See § 1.1060-1(c)(1). All assets transferred in related transactions pursuant to an option included in an agreement between the transferor and Acquiring in the Taxable Transfer are included in the group of assets among which the consideration paid is allocated for purposes of determining the New Entity's or Acquiring's basis in each of the assets. The purchase price for assets acquired in a Taxable Transfer described in paragraph (a)(1)(ii) of this section is the sum of the grossed-up basis of the stock acquired in connection with the Taxable Transfer (excluding stock acquired from the Old or New Entity), plus the amount of liabilities assumed or taken subject to in the deemed transfer, plus other relevant items. The grossed-up basis of the acquired stock equals the acquirers' basis in the acquired stock divided by the percentage of the Old Entity's stock (by value) attributable to the acquired stock. FFA provided in connection with a Taxable Transfer is not included in the New Entity's or Acquiring's purchase price for the acquired assets. Any Net Worth Assistance so provided is treated as an asset of the transferor sold to the New Entity or Acquiring in the Taxable Transfer.

    (2) Allocation of basis—(i) In general. Except as otherwise provided in this paragraph (d)(2), the purchase price determined under paragraph (d)(1) of this section is allocated among the assets transferred in the Taxable Transfer in the same manner as amounts are allocated among assets under § 1.338-6(b), (c)(1) and (2).

    (ii) Modifications to general rule. The allocation rules contained in paragraph (c)(3)(ii) of this section apply to the allocation of basis among assets acquired in a Taxable Transfer. No basis is allocable to Agency's agreement to provide Loss Guarantees, yield maintenance payments, cost to carry or cost of funds reimbursement payments, or expense reimbursement or indemnity payments. A New Entity's basis in assets it receives from its shareholders is determined under general principles of income taxation and is not governed by this paragraph (d).

    (iii) Allowance and recapture of additional basis in certain cases. The basis of Class I and Class II assets equals their fair market value. See § 1.597-1(b). If the fair market value of the Class I and Class II assets exceeds the purchase price for the acquired assets, the excess is included ratably as ordinary income by the New Entity or Acquiring over a period of six taxable years beginning in the year of the Taxable Transfer. The New Entity or Acquiring must include as ordinary income the entire amount remaining to be recaptured under the preceding sentence in the taxable year in which an event occurs that would accelerate inclusion of an adjustment under section 481.

    (iv) Certain post-transfer adjustments—(A) Agency Obligations. If an adjustment to the principal amount of an Agency Obligation or cash payment to reflect a more accurate determination of the condition of the Institution at the time of the Taxable Transfer is made before the earlier of the date the New Entity or Acquiring files its first post-transfer income tax return or the due date of that return (including extensions), the New Entity or Acquiring must adjust its basis in its acquired assets to reflect the adjustment. In making adjustments to the New Entity's or Acquiring's basis in its acquired assets, paragraph (c)(3)(ii) of this section is applied by treating an adjustment to the principal amount of an Agency Obligation pursuant to the first sentence of this paragraph (d)(2)(iv)(A) as occurring immediately before the Taxable Transfer. (See § 1.597-3(c)(3) for rules regarding other adjustments to the principal amount of an Agency Obligation.)

    (B) Covered Assets. If, immediately after a Taxable Transfer, an asset is not subject to a Loss Guarantee but the New Entity or Acquiring has the right to designate specific assets that will be subject to the Loss Guarantee, the New Entity or Acquiring must treat any asset so designated as having been subject to the Loss Guarantee at the time of the Taxable Transfer. The New Entity or Acquiring must adjust its basis in the Covered Assets and in its other acquired assets to reflect the designation in the manner provided by paragraph (d)(2) of this section. The New Entity or Acquiring must make appropriate adjustments in subsequent taxable years if the designation is made after the New Entity or Acquiring files its first post-transfer income tax return or the due date of that return (including extensions) has passed.

    (e) Special rules applicable to Taxable Transfers that are deemed asset acquisitions—(1) Taxpayer Identification Numbers. Except as provided in paragraph (e)(3) of this section, the New Entity succeeds to the TIN of the Old Entity in a deemed sale under paragraph (b) of this section.

    (2) Consolidated Subsidiaries—(i) In general. A Consolidated Subsidiary that is treated as selling its assets in a Taxable Transfer under paragraph (b) of this section is treated as engaging immediately thereafter in a complete liquidation to which section 332 applies. The consolidated group of which the Consolidated Subsidiary is a member does not take into account gain or loss on the sale, exchange, or cancellation of stock of the Consolidated Subsidiary in connection with the Taxable Transfer.

    (ii) Certain minority shareholders. Shareholders of the Consolidated Subsidiary that are not members of the consolidated group that includes the Institution do not recognize gain or loss with respect to shares of Consolidated Subsidiary stock retained by the shareholder. The shareholder's basis for that stock is not affected by the Taxable Transfer.

    (3) Bridge Banks and Residual Entities—(i) In general. A Bridge Bank or Residual Entity's sale of assets to a New Entity under paragraph (b) of this section is treated as made by a single entity under § 1.597-4(e). The New Entity deemed to acquire the assets of a Residual Entity under paragraph (b) of this section is not treated as a single entity with the Bridge Bank (or with the New Entity acquiring the Bridge Bank's assets) and must obtain a new TIN.

    (ii) Treatment of consolidated groups. At the time of a Taxable Transfer described in paragraph (a)(1)(ii) of this section, treatment of a Bridge Bank as a subsidiary member of a consolidated group under § 1.597-4(f)(1) ceases. However, the New Entity that is deemed to acquire the assets of a Residual Entity is a member of the selling consolidated group after the deemed sale. The group's basis or excess loss account in the stock of the New Entity that is deemed to acquire the assets of the Residual Entity is the group's basis or excess loss account in the stock of the Bridge Bank immediately before the deemed sale, as adjusted for the results of the sale.

    (4) Certain returns. If an Old Entity without Continuing Equity is not a subsidiary of a consolidated group at the time of the Taxable Transfer, the controlling Agency must file all income tax returns for the Old Entity for periods ending on or prior to the date of the deemed sale described in paragraph (b) of this section that are not filed as of that date.

    (5) Basis limited to fair market value. If all of the stock of the corporation is not acquired on the date of the Taxable Transfer, the Commissioner may make appropriate adjustments under paragraphs (c) and (d) of this section to the extent using a grossed-up basis of the stock of a corporation results in an aggregate amount realized for, or basis in, the assets other than the aggregate fair market value of the assets.

    (f) Examples. The following examples illustrate the provisions of this section. For purposes of these examples, an Institution's loans are treated as if they were a single asset. However, in applying these regulations, the fair market value of each loan (including, for purposes of a Covered Asset, the Third-Party Price and the Expected Value) must be determined separately.

    Example 1. Branch sale resulting in Taxable Transfer. (i) Institution M is a calendar-year taxpayer in Agency receivership. M is not a member of a consolidated group. On January 1, 2016, M has $200 million of liabilities (including deposit liabilities) and assets with an adjusted basis of $100 million. M has no income or loss for 2016 and, except as described below, M receives no FFA. On September 30, 2016, Agency causes M to transfer six branches (with assets having an adjusted basis of $1 million) together with $120 million of deposit liabilities to N. In connection with the transfer, Agency provides $121 million in cash to N.

    (ii) The transaction is a Taxable Transfer in which M receives $121 million of Net Worth Assistance under paragraph (a)(1) of this section. (M is treated as directly receiving the $121 million of Net Worth Assistance immediately before the Taxable Transfer under paragraph (c)(1) of this section.) M transfers branches having a basis of $1 million and is treated as transferring $121 million in cash (the Net Worth Assistance) to N in exchange for N's assumption of $120 million of liabilities. Thus, M realizes a loss of $2 million on the transfer. The amount of the FFA M must include in its income in 2016 is limited by paragraph (c) of § 1.597-2 to $102 million, which is the sum of the $100 million excess of M's liabilities ($200 million) over the total adjusted basis of its assets ($100 million) at the beginning of 2016 and the $2 million excess for the taxable year (which results from the Taxable Transfer) of M's deductions (other than carryovers) over its gross income other than FFA. M must establish a deferred FFA account for the remaining $19 million of FFA under paragraph (c)(4) of § 1.597-2.

    (iii) N, as Acquiring, must allocate its $120 million purchase price for the assets acquired from M among those assets. Cash is a Class I asset. The branch assets are in Classes III and IV. N's adjusted basis in the cash is its amount, that is, $121 million under paragraph (d)(2) of this section. Because this amount exceeds N's purchase price for all of the acquired assets by $1 million, N allocates no basis to the other acquired assets and, under paragraph (d)(2) of this section, must recapture the $1 million excess at an annual rate of $166,667 in the six consecutive taxable years beginning with 2016 (subject to acceleration for certain events).

    Example 2. Stock issuance by Bridge Bank causing Taxable Transfer. (i) On April 1, 2016, Institution P is placed in receivership and caused to transfer assets and liabilities to Bridge Bank PB. On August 31, 2016, the assets of PB consist of $20 million in cash, loans outstanding with an adjusted basis of $50 million and a Third-Party Price of $40 million, and other non-financial assets (primarily branch assets and equipment) with an adjusted basis of $5 million. PB has deposit liabilities of $95 million and other liabilities of $5 million. P, the Residual Entity, holds real estate with an adjusted basis of $10 million and claims in litigation having a zero basis. P retains no deposit liabilities and has no other liabilities (except its liability to Agency for having caused its deposit liabilities to be satisfied).

    (ii) On September 1, 2016, Agency causes PB to issue 100 percent of its common stock for $2 million cash to X. On the same day, Agency issues a $25 million note to PB. The note bears a fixed rate of interest in excess of the applicable Federal rate in effect for September 1, 2016. Agency provides Loss Guarantees guaranteeing PB a value of $50 million for PB's loans outstanding.

    (iii) The stock issuance is a Taxable Transfer in which PB is treated as selling all of its assets to a new corporation, New PB, under paragraph (b)(1) of this section. PB is treated as directly receiving $25 million of Net Worth Assistance (the issue price of the Agency Obligation) immediately before the Taxable Transfer under paragraph (c)(2) of § 1.597-3 and paragraph (c)(1) of this section. The amount of FFA PB must include in income is determined under paragraphs (a) and (c) of § 1.597-2. PB in turn is deemed to transfer the note (with a basis of $25 million) to New PB in the Taxable Transfer, together with $20 million of cash, all its loans outstanding (with a basis of $50 million) and its other non-financial assets (with a basis of $5 million). The amount realized by PB from the sale is $100 million (the amount of PB's liabilities deemed to be assumed by New PB). This amount realized equals PB's basis in its assets; thus, PB realizes no gain or loss on the transfer to New PB.

    (iv) Residual Entity P also is treated as selling all its assets (consisting of real estate and claims in litigation) for $0 (the amount of consideration received by P) to a new corporation (New P) in a Taxable Transfer under paragraph (b)(3) of this section. (P's only liability is to Agency and a liability to Agency is not treated as a debt under paragraph (b) of § 1.597-3.) P's basis in its assets is $10 million; thus, P realizes a $10 million loss on the transfer to New P. The combined return filed by PB and P for 2016 will reflect a total loss on the Taxable Transfer of $10 million ($0 for PB and $10 million for P) under paragraph (e)(3) of this section. That return also will reflect FFA income from the Net Worth Assistance, determined under paragraphs (a) and (c) of § 1.597-2.

    (v) New PB is treated as having acquired the assets it acquired from PB for $100 million, the amount of liabilities assumed. In allocating basis among these assets, New PB treats the Agency note and the loans outstanding (which are Covered Assets) as Class II assets. For the purpose of allocating basis, the fair market value of the Agency note is deemed to equal its adjusted issue price immediately before the transfer ($25 million), and the fair market value of the loans is their Expected Value, $50 million (the sum of the $40 million Third-Party Price and the $10 million that Agency would pay if PB sold the loans for $40 million) under paragraph (b) of § 1.597-1. Alternatively, if the Third-Party Price for the loans were $60 million, then the fair market value of the loans would be $60 million, and there would be no payment from Agency.

    (vi) New P is treated as having acquired its assets for no consideration. Thus, its basis in its assets immediately after the transfer is zero. New PB and New P are not treated as a single entity under paragraph (e)(3) of this section.

    Example 3. Taxable Transfer of previously disaffiliated Institution. (i) Corporation X, the common parent of a consolidated group, owns all the stock of Institution M, an insolvent Institution with no Consolidated Subsidiaries. On April 30, 2016, M has $4 million of deposit liabilities, $1 million of other liabilities, and assets with an adjusted basis of $4 million. On May 1, 2016, Agency places M in receivership. X elects under paragraph (g) of § 1.597-4 to disaffiliate M. Accordingly, as of May 1, 2016, new corporation M is not a member of the X consolidated group. On May 1, 2016, Agency causes M to transfer all of its assets and liabilities to Bridge Bank MB. Under paragraphs (e) and (g)(4) of § 1.597-4, MB and M are thereafter treated as a single entity which has $5 million of liabilities, an account receivable for future FFA with a basis of $1 million, and other assets with a basis of $4 million.

    (ii) During May 2016, MB earns $25,000 of interest income and accrues $20,000 of interest expense on depositor accounts and there is no net change in deposits other than the additional $20,000 of interest expense accrued on depositor accounts. MB pays $5,000 of wage expenses and has no other items of income or expense.

    (iii) On June 1, 2016, Agency causes MB to issue 100 percent of its stock to Corporation Y. In connection with the stock issuance, Agency provides an Agency Obligation for $2 million and no other FFA.

    (iv) The stock issuance results in a Taxable Transfer under paragraph (b) of this section. MB is treated as receiving the Agency Obligation immediately prior to the Taxable Transfer under paragraph (c)(1) of this section. MB has $1 million of basis in its account receivable for FFA. This receivable is treated as satisfied, offsetting $1 million of the $2 million of FFA provided by Agency in connection with the Taxable Transfer. The status of the remaining $1 million of FFA as includible income is determined as of the end of the taxable year under paragraph (c) of § 1.597-2. However, under paragraph (b) of § 1.597-2, MB obtains a $2 million basis in the Agency Obligation received as FFA.

    (v) Under paragraph (c)(2) of this section, in the Taxable Transfer, Old Entity MB is treated as selling, to New Entity MB, all of Old Entity MB's assets, having a basis of $6,020,000 (the original $4 million of asset basis as of April 30, 2016, plus $20,000 net cash from May 2016 activities, plus the $2 million Agency Obligation received as FFA), for $5,020,000, the amount of Old Entity MB's liabilities assumed by New Entity MB pursuant to the Taxable Transfer. Therefore, Old Entity MB recognizes, in the aggregate, a loss of $1 million from the Taxable Transfer.

    (vi) Because this $1 million loss causes Old Entity MB's deductions to exceed its gross income (determined without regard to FFA) by $1 million, Old Entity MB must include in its income the $1 million of FFA not offset by the FFA receivable under paragraph (c) of § 1.597-2. (As of May 1, 2016, Old Entity MB's liabilities ($5 million) did not exceed MB's $5 million adjusted basis of its assets. For the taxable year, MB's deductions of $1,025,000 ($1 million loss from the Taxable Transfer, $20,000 interest expense and $5,000 of wage expense) exceeded its gross income (disregarding FFA) of $25,000 (interest income) by $1 million. Thus, under paragraph (c) of § 1.597-2, MB includes in income the entire $1 million of FFA not offset by the FFA receivable.)

    (vii) Therefore, Old Entity MB's taxable income for the taxable year ending on the date of the Taxable Transfer is $0.

    (viii) Residual Entity M is also deemed to engage in a deemed sale of its assets to New Entity M under paragraph (b)(3) of this section, but there are no tax consequences as M has no assets or liabilities at the time of the deemed sale.

    (ix) Under paragraph (d)(1) of this section, New Entity MB is treated as purchasing Old Entity MB's assets for $5,020,000, the amount of New Entity MB's liabilities. Of this, $2 million is allocated to the $2 million Agency Obligation, and $3,020,000 is allocated to the other assets New Entity MB is treated as purchasing in the Taxable Transfer.

    Example 4. Loss Guarantee. On January 1, 2016, Institution N acquires assets and assumes liabilities of another Institution in a Taxable Transfer. In exchange for assuming $1,100,000 of the transferring Institution's liabilities, N acquires Net Worth Assistance of $200,000, loans with an unpaid principal balance of $1 million, and two foreclosed properties each having a book value of $100,000 in the hands of the transferring Institution. In connection with the Taxable Transfer, Agency guarantees N a price of $800,000 on the disposition or charge-off of the loans and a price of $80,000 on the disposition or charge-off of each of the foreclosed properties. This arrangement constitutes a Loss Guarantee. The Third-Party Price is $500,000 for the loans and $50,000 for each of the foreclosed properties. For basis allocation purposes, the loans and foreclosed properties are Class II assets because they are Covered Assets, and N must allocate basis to such assets equal to their fair market value under paragraphs (c)(3)(ii), (d)(2)(ii), and (d)(2)(iii) of this section. The fair market value of the loans is their Expected Value, $800,000 (the sum of the $500,000 Third-Party Price and the $300,000 that Agency would pay if N sold the loans for $500,000)). The fair market value of each foreclosed property is its Expected Value, $80,000 (the sum of the $50,000 Third-Party Price and the $30,000 that Agency would pay if N sold the foreclosed property for $50,000)) under paragraph (b) of § 1.597-1. Accordingly, N's basis in the loans and in each of the foreclosed properties is $800,000 and $80,000, respectively. Because N's aggregate basis in the cash, loans, and foreclosed properties ($1,160,000) exceeds N's purchase price ($1,100,000) by $60,000, N must include $60,000 in income ratably over six years under paragraph (d)(2)(iii) of this section.

    Example 5. Loss Share Agreement. (i) The facts are the same as in Example 4 except that, in connection with the Taxable Transfer, Agency agrees to reimburse Institution N in an amount equal to zero percent of any loss realized (based on the $1 million unpaid principal balance of the loans and the $100,000 book value of each of the foreclosed properties) on the disposition or charge-off of the Covered Assets up to $200,000; 50 percent of any loss realized between $200,000 and $700,000; and 95 percent of any additional loss realized. This arrangement constitutes a Loss Guarantee that is a Loss Share Agreement. Thus, the Covered Assets are Class II assets, and N allocates basis to such assets equal to their fair market value under paragraphs (c)(3)(ii), (d)(2)(ii), and (d)(2)(iii) of this section. Because the Third-Party Price for all of the Covered Assets is $600,000 ($500,000 for the loans and $50,000 for each of the foreclosed properties), the Average Reimbursement Rate is 33.33% ((($200,000 × 0%) + ($400,000 × 50%) + ($0 × 95%))/$600,000). The Expected Value of the loans is $666,667 ($500,000 Third-Party Price + $166,667 (the amount of the loss if the loans were disposed of for the Third-Party Price × 33.33%)), and the Expected Value of each foreclosed property is $66,667 ($50,000 Third-Party Price + $16,667 (the amount of the loss if the foreclosed property were sold for the Third-Party Price × 33.33%)) under paragraph (b) of § 1.597-1. For purposes of allocating basis, the fair market value of the loans is $666,667 (their Expected Value), and the fair market value of each foreclosed property is $66,667 (its Expected Value) under paragraph (b) of § 1.597-1.

    (ii) At the end of 2016, the Third-Party Price for the loans drops to $400,000, and the Third-Party Price for each of the foreclosed properties remains at $50,000, The fair market value of the loans at the end of Year 2 is their Expected Value, $600,000 ($400,000 Third-Party Price + $200,000 (the amount of the loss if the loans were disposed of for the Third-Party Price × 33.33% (the Average Reimbursement Rate does not change)). Thus, if the loans otherwise may be charged off, marked to a market value, depreciated, or amortized, then the loans may be marked down to $600,000. The fair market value of each of the foreclosed properties remains at $66,667 ($50,000 Third-Party Price + $16,667 (the amount of the loss if the foreclosed property were sold for the Third-Party Price × 33.33%)). Therefore, the foreclosed properties may not be charged off or depreciated in 2016.

    Par. 7. Section 1.597-6 is revised to read as follows:
    § 1.597-6 Limitation on collection of income tax.

    (a) Limitation on collection where tax is borne by Agency. If an Institution without Continuing Equity (or any of its Consolidated Subsidiaries) is liable for income tax that is attributable to the inclusion in income of FFA or gain from a Taxable Transfer, the tax will not be collected if it would be borne by Agency. The final determination of whether the tax would be borne by Agency is within the sole discretion of the Commissioner. In determining whether tax would be borne by Agency, the Commissioner will disregard indemnity, tax-sharing, or similar obligations of Agency, an Institution, or its Consolidated Subsidiaries. Collection of the several income tax liability under § 1.1502-6 from members of an Institution's consolidated group other than the Institution or its Consolidated Subsidiaries is not affected by this section. Income tax will continue to be subject to collection except as specifically limited in this section. This section does not apply to taxes other than income taxes.

    (b) Amount of tax attributable to FFA or gain on a Taxable Transfer. For purposes of paragraph (a) of this section, the amount of income tax in a taxable year attributable to the inclusion of FFA or gain from a Taxable Transfer in the income of an Institution (or a Consolidated Subsidiary) is the excess of the actual income tax liability of the Institution (or the consolidated group in which the Institution is a member) over the income tax liability of the Institution (or the consolidated group in which the Institution is a member) determined without regard to FFA or gain or loss on the Taxable Transfer.

    (c) Reporting of uncollected tax. A taxpayer must specify on a statement included with its Form 1120 (U.S. Corporate Income Tax Return) the amount of income tax for the taxable year that is potentially not subject to collection under this section. If an Institution is a subsidiary member of a consolidated group, the amount specified as not subject to collection is zero.

    (d) Assessments of tax to offset refunds. Income tax that is not collected under this section will be assessed and, thus, used to offset any claim for refund made by or on behalf of the Institution, the Consolidated Subsidiary or any other corporation with several liability for the tax.

    (e) Collection of taxes from Acquiring or a New Entity—(1) Acquiring. No income tax liability (including the several liability for taxes under § 1.1502-6) of a transferor in a Taxable Transfer will be collected from Acquiring.

    (2) New Entity. Income tax liability (including the several liability for taxes under § 1.1502-6) of a transferor in a Taxable Transfer will be collected from a New Entity only if stock that was outstanding in the Old Entity remains outstanding as stock in the New Entity or is reacquired or exchanged for consideration.

    (f) Effect on section 7507. This section supersedes the application of section 7507, and the regulations thereunder, for the assessment and collection of income tax attributable to FFA.

    Par. 8. Section 1.597-7 is revised to read as follows:
    § 1.597-7 Effective date.

    (a) FIRREA effective date. Section 597, as amended by section 1401 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (Pub. L. 101-73, 103 Stat 183 (1989)) (“FIRREA”) is generally effective for any FFA received or accrued by an Institution on or after May 10, 1989, and for any transaction in connection with which such FFA is provided, unless the FFA is provided in connection with an acquisition occurring prior to May 10, 1989. See § 1.597-8 for rules regarding FFA received or accrued on or after May 10, 1989, that relates to an acquisition that occurred before May 10, 1989.

    (b) Effective date of regulations. Sections 1.597-1 through 1.597-6 will be effective on or after the date of publication of the Treasury decision adopting these proposed rules as final regulations in the Federal Register, except with respect to FFA provided pursuant to a written agreement that is binding before the date of publication of the Treasury decision adopting these proposed rules as final regulations in the Federal Register, and that continues to be binding at all times after such date, in which case §§ 1.597-1 through 1.597-6 as contained in 26 CFR part 1, revised April 1, 2014, will continue to apply unless the taxpayer elects to apply the final regulations on a retroactive basis pursuant to paragraph (c) of this section.

    (c) Elective application to prior years and transactions—(1) In general. Except as limited in this paragraph (c), an election is available to apply §§ 1.597-1 through 1.597-6 to taxable years prior to the effective date of these regulations. A consolidated group may elect to apply §§ 1.597-1 through 1.597-6 for all members of the group in all taxable years to which section 597, as amended by FIRREA, applies. The common parent makes the election for the group. An entity that is not a member of a consolidated group may elect to apply §§ 1.597-1 through 1.597-6 to all taxable years to which section 597, as amended by FIRREA, applies for which it is not a member of a consolidated group. The election is irrevocable.

    (2) Election unavailable if statute of limitations closed. The election cannot be made if the period for assessment and collection of tax has expired under the rules of section 6501 for any taxable year in which §§ 1.597-1 through 1.597-6 would affect the determination of the electing entity's or group's income, deductions, gain, loss, basis, or other items.

    (3) Manner of making election. An Institution or consolidated group makes the election provided by this paragraph (c) by including a written statement as a part of the taxpayer's or consolidated group's first annual income tax return filed on or after the date of publication of the Treasury decision adopting these proposed rules as final regulations in the Federal Register. The statement must contain the following legend at the top of the page: “THIS IS AN ELECTION UNDER § 1.597-7(c),” and must contain the name, address, and employer identification number of the taxpayer or common parent making the election. The statement must include a declaration that “TAXPAYER AGREES TO EXTEND THE STATUTE OF LIMITATIONS ON ASSESSMENT FOR THREE YEARS FROM THE DATE OF THE FILING OF THIS ELECTION UNDER § 1.597-7(c), IF THE LIMITATIONS PERIOD WOULD EXPIRE EARLIER WITHOUT SUCH EXTENSION, FOR ANY ITEMS AFFECTED IN ANY TAXABLE YEAR BY THE FILING OF THIS ELECTION,” and a declaration that either “AMENDED RETURNS WILL BE FILED FOR ALL TAXABLE YEARS AFFECTED BY THE FILING OF THIS ELECTION WITHIN 180 DAYS OF MAKING THIS STATEMENT, UNLESS SUCH REQUIREMENT IS WAIVED IN WRITING BY THE INTERNAL REVENUE SERVICE” or “ALL RETURNS PREVIOUSLY FILED ARE CONSISTENT WITH THE PROVISIONS OF §§ 1.597-1 THROUGH 1.597-6.” An election with respect to a consolidated group must be made by the common parent of the group, not Agency, and applies to all members of the group.

    John Dalrymple, Deputy Commissioner for Services and Enforcement.
    [FR Doc. 2015-12230 Filed 5-19-15; 8:45 am] BILLING CODE 4830-01-P
    DEPARTMENT OF LABOR Occupational Safety and Health Administration 29 CFR Part 1956 [Docket No. OSHA-2015-0003] Maine State Plan for State and Local Government Employers; Notice of Submission; Proposal To Grant Initial State Plan Approval; Request for Public Comment and Opportunity To Request Public Hearing AGENCY:

    Occupational Safety and Health Administration (OSHA), Department of Labor.

    ACTION:

    Proposed rule; request for written comments; notice of opportunity to request informal public hearing.

    SUMMARY:

    This document gives notice of the submission by the Maine Department of Labor of a developmental State Plan for occupational safety and health, applicable only to public sector employment (employees of the State and its political subdivisions), for determination of initial approval under Section 18 of the Occupational Safety and Health Act of 1970 (the “Act”). OSHA is seeking written public comment on whether or not initial State Plan approval should be granted and offers an opportunity to interested persons to request an informal public hearing on the question of initial State Plan approval. Approval of the Maine State and Local Government Only State Plan will be contingent upon a determination that the Plan meets, or will meet within three years, OSHA's Plan approval criteria and the availability of funding as contained in the Department of Labor's Fiscal Year 2015 budget.

    DATES:

    Comments and requests for a hearing must be submitted by June 19, 2015.

    ADDRESSES:

    Written comments: Submit comments, identified by docket number OSHA-2015-0003, by any of the following methods:

    Electronically: Submit comments and attachments electronically at http://www.regulations.gov, which is the Federal eRulemaking Portal. Follow the instructions on-line for making electronic submissions; or

    Fax: If your submission, including attachments, does not exceed 10 pages, you may fax them to the OSHA Docket Office at (202) 693-1648; or

    U.S. mail, hand delivery, express mail, messenger or courier service: Submit your comments and attachments to the OSHA Docket Office, Docket Number OSHA-2015-0003, U.S. Department of Labor, Room N-2625, 200 Constitution Avenue NW., Washington, DC 20210; telephone (202) 693-2350 (OSHA's TTY number is (877) 889-5627). Deliveries (hand, express mail, messenger and courier service) are accepted during the Department of Labor's and Docket Office's normal business hours, 8:15 a.m.-4:45 p.m., EDT.

    Instructions for submitting comments: All submissions must include the docket number (Docket No. OSHA-2015-0003) for this rulemaking. Because of security-related procedures, submission by regular mail may result in significant delay. Please contact the OSHA Docket Office for information about security procedures for making submissions by hand delivery, express mail and messenger or courier service. All comments, including any personal information you provide, are placed in the public docket without change and will be made available online at http://www.regulations.gov. Therefore, OSHA cautions you about submitting personal information such as social security numbers and birthdates.

    Docket: To read or download submissions in response to this Federal Register notice, go to docket number OSHA-2015-0003, at http://www.regulations.gov. All submissions are listed in the http://www.regulations.gov index, however some information (e.g., copyrighted material) is not publicly available to read or download through that Web page. All submissions, including copyrighted material, are available for inspection at the OSHA Docket Office. Electronic copies of this Federal Register document as well as copies of the proposed Maine State and Local Government Only State Plan narrative are available at http://www.regulations.gov. This document, as well as news releases and other relevant information, is available at OSHA's Web page at http://www.osha.gov. are available at OSHA's Web page at http://www.osha.gov. A copy of the documents referenced in this notice may also be obtained from the OSHA Docket Office, at the address above.

    FOR FURTHER INFORMATION CONTACT:

    For press inquiries: Contact Francis Meilinger, Office of Communications, Room N-3647, OSHA, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210; Telephone (202) 693-1999; email [email protected]

    For general and technical information: Contact Douglas J. Kalinowski, Director, OSHA Directorate of Cooperative and State Programs, Room N-3700, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210, telephone (202) 693-2200; email: [email protected]

    SUPPLEMENTARY INFORMATION: A. Background

    Section 18 of the Occupational Safety and Health Act of 1970 (the “Act”), 29 U.S.C. 667, provides that a State which desires to assume responsibility for the development and enforcement of standards relating to any occupational safety and health issue with respect to which a Federal standard has been promulgated may submit a State Plan to the Assistant Secretary of Labor for Occupational Safety and Health (“Assistant Secretary”) documenting the proposed program in detail. Regulations promulgated pursuant to the Act at 29 CFR part 1956 provide that a State may submit a State Plan for the development and enforcement of occupational safety and health standards applicable only to employers of the State and its political subdivisions (“public employers”). Under these regulations the Assistant Secretary will approve a State Plan for public employers if the Plan provides for the development and enforcement of standards relating to hazards in employment covered by the Plan which are or will be at least as effective in providing safe and healthful employment and places of employment as standards promulgated and enforced under Section 6 of the Act, giving due consideration to differences between public and private sector employment. In making this determination the Assistant Secretary will consider, among other things, the criteria and indices of effectiveness set forth in 29 CFR part 1956, subpart B. State and local government workers are excluded from Federal OSHA coverage under the Act.

    B. Maine State Plan History

    Since 1971, the Maine Department of Labor, Bureau of Labor Standards (Bureau), has adopted standards and performed inspections in the public sector (State, county, and municipal employers) as outlined under the provisions of the State's existing enabling legislation: Maine Revised Statutes, Title 26: Labor and Industry. Maine began working on a State and Local Government Only State Plan in 2012 and submitted a draft Plan to OSHA in February of 2013. OSHA's review findings were detailed in various memoranda and other documents. OSHA determined that the Maine statutes, as structured, and the proposed State Plan necessitated changes in order to meet the State and Local Government Only State Plan approval criteria in 29 CFR 1956. Maine formally submitted a revised Plan applicable only to public employers for Federal approval on May 2, 2013. Over the next several months, OSHA worked with Maine in identifying areas of the proposed Plan which needed to be addressed or required clarification. In response to Federal review of the proposed State Plan, supplemental assurances, and revisions, corrections and additions to the Plan were submitted on September 4, 2013 and November 7, 2014. Further modifications were submitted by the State on December 19, 2014. Amendments to Maine Revised Statutes, Title 26 were proposed and enacted by the Maine Legislature and signed into law by the Governor in 2014. The amended legislation provides the basis for establishing a comprehensive occupational safety and health program applicable to the public employers in the State. The revised Plan has been found to be conceptually approvable as a developmental State Plan.

    The Act provides for funding of up to 50% of the State Plan costs, but longstanding language in OSHA's appropriation legislation further provides that OSHA must fund “* * * no less than 50% of the costs . . . required to be incurred” by an approved State Plan. Such Federal funds to support the State Plan must be available prior to State Plan approval. The Fiscal Year 2015 Omnibus Appropriations Act includes $400,000 in additional OSHA State Plan grant funds to allow for Department of Labor approval of a Maine State Plan. After an opportunity for public comment and a hearing, should one be requested, the Assistant Secretary will approve the Maine State and Local Government Only State Plan if it is determined that the Plan meets the criteria set forth in the Act and applicable regulations at 29 CFR part 1956, subpart B. The approval of a State Plan for state and local government employers in Maine is not a significant regulatory action as defined in Executive Order 12866.

    C. Description of the Maine State Plan

    The Plan designates the Maine Department of Labor as the State agency responsible for administering the Plan throughout the State. Under the Plan's legislation, Title 26 of the Maine Revised Statutes, the Maine Department of Labor has full authority to adopt standards and regulations (through the Board of Occupational Safety and Health) and enforce and administer all laws and rules protecting the safety and health of employees of the State and its political subdivisions. Maine will adopt State standards identical to Federal occupational safety and health standards (with minor exceptions) as promulgated through March 30, 2015. The Plan also provides that future OSHA standards and revisions will be adopted by the State within six months of Federal promulgation (30 days for any emergency temporary standard) in accordance with the requirements at 29 CFR 1953.5. Title 26, Chapter 6, Section 571 of the Maine Revised Statutes includes provisions for the granting of permanent and temporary variances from State standards to public employers in terms substantially similar to the variance provisions contained in the Act. Variances may not be granted unless it is established that adequate protection is afforded employees under the terms of the variance. Title 26, Chapter 6, Section 566 and Chapter 3, Section 44 of the Maine Revised Statutes provides for inspections of covered workplaces. Title 26, Chapter 3, Subsection 50 provides for inspections in response to employee complaints. If a determination is made that an employee complaint does not warrant an inspection, the complainant will be notified in writing of such determination. Additionally, Section 44-A of Chapter 3 provides the opportunity for employer and employee representatives to accompany an inspector during an inspection for the purpose of aiding in the inspection. The Plan in Title 26, Chapter 3, Sections 42-B and 45, provides for notification to employees of their protections and obligations under the Plan by such means as a State poster, required posting of notices of violation, etc. Title 26, Chapter 6, subsection 570 provides for protection of employees against discharge or discrimination resulting from exercise of their rights under the State Acts in terms essentially identical to Section 11(c) of the Federal Act. The Plan also includes provisions for right of entry for inspection, prohibition of advance notice of inspection, and employers' obligations to maintain records and provide reports as required.

    Section 46 of Title 26 contains authority for a system of first instance monetary penalties, and the State's intent is to issue monetary penalties for serious violations. The State has discretionary authority for civil penalties of up to $1,000 per day the violation continues for repeat and willful violations. Serious and other-than-serious violations may be assessed a penalty of up to $1,000 per violation and failure-to-correct violations may be assessed a penalty of up to $1,000 per day. In addition, criminal penalties can be issued to public employers who willfully violate any standard, rule or order. The Plan provides a scheme of enforcement for compelling compliance under which public employers are issued citations for any violation of standards. These citations must describe the nature of the violation, including reference to the standard, and fix a reasonable time for abatement. The Maine Plan includes the Board of Occupational Safety and Health (Board), which adopts standards, and also is an independent review authority for review of contested cases. The Director of the Bureau will remain responsible for the enforcement process, including the issuance of citations and penalties, and their defense, if contested. Public employers or their representatives who receive a citation or a proposed penalty may within 15 working days contest the citation, proposed penalty and/or abatement period and request a hearing before the Board. Any public employee or representative aggrieved by a citation or proposed penalty may within 15 working days request a hearing before the Board. Employers may also request informal review of penalties with the Bureau if the employer agrees to abate the cited hazard. The Board's decision is subject to appeal to the courts.

    The State currently has a staff of two safety compliance officers and zero health compliance officers. The Bureau delivers OSHA's On-Site Consultation program to private sector employers throughout the State. Maine currently has a staff of three safety and two health consultants, who perform duties equivalent to OSHA's On-Site Consultation program, for state and local government employers. Currently, for these employers, if the state receives a health complaint, a consultant will accompany and assist the enforcement officer. The Plan provides assurances that within six months no staff will have dual roles, and the State will have a fully trained, adequate staff of two safety compliance officers and one health compliance officer for enforcement inspections, and three safety consultants and one health consultant to perform consultation services in the public sector. As new staff members are hired they will perform either enforcement or consultation functions. 29 CFR 1956.10(g) requires that State Plans for public employers provide a sufficient number of adequately trained and qualified personnel necessary for the enforcement of standards. The compliance staffing requirements (or benchmarks) for State Plans covering both the private and public sectors are established based on the “fully effective” test established in AFL-CIO v. Marshall, 570 F.2d 1030 (D.C. Cir. 1978). This staffing test, and the complicated formula used to derive benchmarks for complete private/public sector Plans, is not intended, nor is it appropriate, for application to the staffing needs of public employer only Plans. However, the State has given satisfactory assurance in its Plan that it will meet the staffing requirements of 29 CFR 1956.10. The State has also given satisfactory assurances of adequate State matching funds (50%) to support the Plan and is requesting initial Federal funding of $400,000 for a total initial program effort of $800,000. Although the State statute sets forth the general authority and scope for implementing the Maine State and Local Government Only State Plan, the Plan is developmental under the terms of 29 CFR 1956.2(b), in that specific rules, regulations, and implementing procedures must still be adopted or revised to carry out the Plan and make it structurally “at least as effective” as Federal OSHA and fully operational. The Plan sets forth a timetable for the accomplishment of these and other developmental goals within three years of Plan approval. This timetable addresses such general areas as the minor revision of existing legislation and development of procedures for the on-site public sector consultation program. Other developmental aspects include hiring and training of staff, participation in OSHA's Information System (OIS), development of a Field Operations Manual, development of an Annual Performance Plan and a Five-Year Strategic Plan and all other implementing policies, procedures, regulations and instruction necessary for the operation of an effective program.

    D. Request for Public Comment and Opportunity To Request Hearing

    Public comment on the Maine State and Local Government Only State Plan is hereby requested. Interested persons are invited to submit written data, views, and comments with respect to this proposed initial State Plan approval. These comments must be received on or before June 19, 2015. Written submissions must clearly identify the issues that are addressed and the positions taken with respect to each issue. The State of Maine will be afforded the opportunity to respond to each submission. The Maine Department of Labor must also publish appropriate notice within the State of Maine within five days of publication of this notice, announcing OSHA's proposal to approve a Maine State and Local Government Only State Plan, contingent on the availability of appropriated funds, and giving notice of the opportunity for public comment. Pursuant to 29 CFR 1902.13(f), interested persons may request an informal hearing concerning the proposed initial State Plan approval. Such requests also must be received on or before June 19, 2015 and may be submitted electronically, by facsimile, or by regular mail, hand delivery, express mail, messenger or courier service, as indicated under ADDRESSES above. Such requests must present particularized written objections to the proposed initial State Plan approval. Within 30 days of the close of the comment period, the Assistant Secretary will review all comments submitted; will review all hearing requests; and will schedule an informal hearing if a hearing is required to resolve substantial issues. The Assistant Secretary will, within a reasonable time after the close of the comment period or after the certification of the record if a hearing is held, publish a decision in the Federal Register. All written and oral submissions, as well as other information gathered by OSHA, will be considered in any action taken. The record of this proceeding, including written comments and requests for hearing, and all materials submitted in response to this notice and at any subsequent hearing, will be available at http://www.regulations.gov or the OSHA Docket Office at the address above.

    E. Regulatory Flexibility Act

    OSHA certifies pursuant to the Regulatory Flexibility Act of 1980 (5 U.S.C. 601 et seq.) that the proposed initial approval of the Maine State Plan will not have a significant economic impact on a substantial number of small entities. By its own terms, the Plan will have no effect on private sector employment, but is limited to the State and its political subdivisions. Moreover, Title 26, Labor and Industry, of the Maine Revised Statutes, was enacted in 1971. This legislation established the Board, whose purpose is to formulate rules that shall, at a minimum, conform with federal standards of occupational safety and health, so the state program could eventually be approved as State and Local Government Only State Plan. Since 1971 the Maine program for public employers has been in operation under the Maine Department of Labor with State funding and all state and local government employers in the State have been subject to its terms. Compliance with State OSHA standards is required by State law; Federal approval of a State Plan imposes regulatory requirements only on the agency responsible for administering the State Plan. Accordingly, no new obligations would be placed on public sector employers as a result of Federal approval of the Plan.

    F. Federalism

    Executive Order 13132, “Federalism,” emphasizes consultation between Federal agencies and the States and establishes specific review procedures the Federal government must follow as it carries out policies which affect state or local governments. OSHA has consulted extensively with Maine throughout the development, submission and consideration of its proposed State Plan. Although OSHA has determined that the requirements and consultation procedures provided in Executive Order 13132 are not applicable to initial approval decisions under the Act, which have no effect outside the particular State receiving the approval, OSHA has reviewed the Maine initial approval decision proposed today, and believes it is consistent with the principles and criteria set forth in the Executive Order.

    Authority and Signature

    David Michaels, Ph.D., MPH, Assistant Secretary of Labor for Occupational Safety and Health, U.S. Department of Labor, 200 Constitution Ave. NW., Washington, DC, authorized the preparation of this notice. OSHA is issuing this notice under the authority specified by Section 18 of the Occupational Safety and Health Act of 1970 (29 U.S.C. 667), Secretary of Labor's Order No. 1-2012 (77 FR 3912), and 29 CFR parts 1902 and 1956.

    Signed in Washington, DC, on May 14, 2015. David Michaels, Assistant Secretary of Labor for Occupational Safety and Health.
    [FR Doc. 2015-12154 Filed 5-19-15; 8:45 am] BILLING CODE 4510-26-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R05-OAR-2013-0819; FRL-9927-47-Region 5] Approval and Promulgation of Air Quality Implementation Plans; Illinois; NAAQS Update AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve a revision to the Illinois State Implementation Plan. The submitted state rule revisions update Illinois' ambient air quality standards for sulfur dioxide, ozone, nitrogen dioxide, lead, fine particulate matter, particulate matter, and carbon monoxide and bring them up to date (through 2012) with EPA-promulgated National Ambient Air Quality Standards. The SIP revision also adopts EPA-promulgated monitoring methods and test procedures for the revised state air quality standards.

    DATES:

    Comments must be received on or before June 19, 2015.

    ADDRESSES:

    Submit your comments, identified by Docket ID No. EPA-R05-OAR-2013-0819, by one of the following methods:

    1. www.regulations.gov: Follow the on-line instructions for submitting comments.

    2. Email: [email protected]

    3. Fax: (312) 408-2279.

    4. Mail: Douglas Aburano, Chief, Attainment Planning and Maintenance Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604.

    5. Hand Delivery: Douglas Aburano, Chief, Attainment Planning and Maintenance Section, Air Programs Branch (AR-18J), U.S. Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604. Such deliveries are only accepted during the Regional Office normal hours of operation, and special arrangements should be made for deliveries of boxed information. The Regional Office official hours of business are Monday through Friday, 8:30 a.m. to 4:30 p.m., excluding Federal holidays.

    Please see the direct final rule which is located in the Rules section of this Federal Register for detailed instructions on how to submit comments.
    FOR FURTHER INFORMATION CONTACT:

    Edward Doty, Air Programs Branch (AR-18J), Environmental Protection Agency, 77 West Jackson Boulevard, Chicago, Illinois 60604, (312) 886-6057, [email protected]

    SUPPLEMENTARY INFORMATION:

    In the Final Rules section of this Federal Register, EPA is approving the State's SIP submittal as a direct final rule without prior proposal because the Agency views this as a noncontroversial submittal and anticipates no adverse comments. A detailed rationale for the approval is set forth in the direct final rule. If no adverse comments are received in response to this rule, no further activity is contemplated. If EPA receives adverse comments, the direct final rule will be withdrawn and all public comments received will be addressed in a subsequent final rule based on this proposed rule. EPA will not institute a second comment period. Any parties interested in commenting on this action should do so at this time. Please note that, if EPA receives adverse comment on an amendment, paragraph, or section of this rule and if that provision may be severed from the remainder of the rule, EPA may adopt as final those provisions of the rule that are not the subject of an adverse comment. For additional information, see the direct final rule which is located in the Rules section of this Federal Register.

    Dated: May 4, 2015. Susan Hedman, Regional Administrator, Region 5.
    [FR Doc. 2015-12253 Filed 5-19-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R09-OAR-2014-0812; FRL-9927-89-Region 9] Partial Approval and Disapproval of Air Quality State Implementation Plans; Nevada; Infrastructure Requirements for Ozone, Nitrogen Dioxide, and Sulfur Dioxide AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    EPA is proposing to partially approve and partially disapprove the Nevada State Implementation Plan (SIP) as meeting the requirements of the Clean Air Act (CAA or the Act) for the implementation, maintenance, and enforcement of the 2008 ozone, 2010 nitrogen dioxide (NO2), and 2010 sulfur dioxide (SO2) national ambient air quality standards (NAAQS). CAA section 110(a)(1) requires that each state adopt and submit a SIP for the implementation, maintenance, and enforcement of each NAAQS promulgated by the EPA, and that EPA act on such SIPs. We refer to such SIPs as “infrastructure” SIPs because they are intended to address basic structural SIP requirements for new or revised NAAQS including, but not limited to, legal authority, regulatory structure, resources, permit programs, monitoring, and modeling necessary to assure attainment and maintenance of the standards. In addition to our proposed partial approval and partial disapproval of Nevada's infrastructure SIP, we are proposing to reclassify certain regions of the state for SO2 emergency episode planning and remove obsolete language from the Nevada SIP. We are taking comments on this proposal and plan to follow with a final action.

    DATES:

    Written comments must be received on or before June 19, 2015.

    ADDRESSES:

    EPA has established a docket for this action, identified by Docket ID Number EPA-R09-OAR-2014-0812. The index to the docket for this action is available electronically at http://www.regulations.gov and in hard copy at EPA Region IX, 75 Hawthorne Street, San Francisco, California. While all documents in the docket are listed in the index, some information may be publicly available only at the hard copy location (e.g., copyrighted material), and some may not be publicly available in either location (e.g., CBI). To inspect the hard copy materials, please schedule an appointment during normal business hours with the contact listed directly below.

    FOR FURTHER INFORMATION CONTACT:

    Tom Kelly, Air Planning Office (AIR-2), U.S. Environmental Protection Agency, Region IX, (415) 972-3856, [email protected].

    SUPPLEMENTARY INFORMATION:

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

    Table of Contents I. EPA's Approach to the Review of Infrastructure SIP Submissions II. Background A. Statutory Framework B. Regulatory History C. Changes to the Application of PSD Permitting Requirements With GHGs III. State Submittal and EPA Action IV. EPA's Evaluation and Proposed Action A. Proposed Approvals and Partial Approvals B. Proposed Partial Disapprovals C. Defining the Nevada Intrastate Air Quality Control Region D. Proposed Approval of Reclassification Requests for Emergency Episode Planning E. Proposed Removal of Historic SIP Provisions F. Request for Public Comments V. Statutory and Executive Order Reviews I. EPA's Approach to the Review of Infrastructure SIP Submissions

    EPA is acting upon several SIP submittals from Nevada that address the infrastructure requirements of CAA sections 110(a)(1) and 110(a)(2) for the 2008 ozone, 2010 NO2, and 2010 SO2 NAAQS. The requirement for states to make a SIP submittal of this type arises out of CAA section 110(a)(1). Pursuant to section 110(a)(1), states must make SIP submittals “within 3 years (or such shorter period as the Administrator may prescribe) after the promulgation of a national primary ambient air quality standard (or any revision thereof),” and these SIP submittals are to provide for the “implementation, maintenance, and enforcement” of such NAAQS. The statute directly imposes on states the duty to make these SIP submittals, and the requirement to make the submittals is not conditioned upon EPA's taking any action other than promulgating a new or revised NAAQS. Section 110(a)(2) includes a list of specific elements that “[e]ach such plan” submittal must address.

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

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

    1 For example: Section 110(a)(2)(E)(i) provides that states must provide assurances that they have adequate legal authority under state and local law to carry out the SIP; section 110(a)(2)(C) provides that states must have a SIP-approved program to address certain sources as required by part C of title I of the CAA; and section 110(a)(2)(G) provides that states must have legal authority to address emergencies as well as contingency plans that are triggered in the event of such emergencies.

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

    2See, e.g., “Rule To Reduce Interstate Transport of Fine Particulate Matter and Ozone (Clean Air Interstate Rule); Revisions to Acid Rain Program; Revisions to the NOX SIP Call; Final Rule,” 70 FR 25162, at 25163-25165, May 12, 2005 (explaining relationship between timing requirement of section 110(a)(2)(D) versus section 110(a)(2)(I)).

    3 EPA notes that this ambiguity within section 110(a)(2) is heightened by the fact that various subparts of part D set specific dates for submittal of certain types of SIP submittals in designated nonattainment areas for various pollutants. Note, e.g., that section 182(a)(1) provides specific dates for submittal of emissions inventories for the ozone NAAQS. Some of these specific dates are necessarily later than three years after promulgation of the new or revised NAAQS.

    Another example of ambiguity within sections 110(a)(1) and 110(a)(2) with respect to infrastructure SIPs pertains to whether states must meet all of the infrastructure SIP requirements in a single SIP submittal, and whether EPA must act upon such SIP submittal in a single action. Although section 110(a)(1) directs states to submit “a plan” to meet these requirements, EPA interprets the CAA to allow states to make multiple SIP submittals separately addressing infrastructure SIP elements for the same NAAQS. If states elect to make such multiple SIP submittals to meet the infrastructure SIP requirements, EPA can elect to act on such submittals either individually or in a larger combined action.4 Similarly, EPA interprets the CAA to allow it to take action on the individual parts of one larger, comprehensive infrastructure SIP submittal for a given NAAQS without concurrent action on the entire submittal. For example, EPA has sometimes elected to act at different times on various elements and sub-elements of the same infrastructure SIP submittal.5

    4See, e.g., “Approval and Promulgation of Implementation Plans; New Mexico; Revisions to the New Source Review (NSR) State Implementation Plan (SIP); Prevention of Significant Deterioration (PSD) and Nonattainment New Source Review (NNSR) Permitting,” 78 FR 4339, January 22, 2013 (EPA's final action approving the structural PSD elements of the New Mexico SIP submitted by the State separately to meet the requirements of EPA's 2008 PM2.5 NSR rule), and “Approval and Promulgation of Air Quality Implementation Plans; New Mexico; Infrastructure and Interstate Transport Requirements for the 2006 PM2.5 NAAQS,” 78 FR 4337, January 22, 2013 (EPA's final action on the infrastructure SIP for the 2006 PM2.5 NAAQS).

    5 On December 14, 2007, the State of Tennessee, through the Tennessee Department of Environment and Conservation, made a SIP revision to EPA demonstrating that the State meets the requirements of sections 110(a)(1) and (2). EPA proposed action for infrastructure SIP elements (C) and (J) on January 23, 2012 (77 FR 3213) and took final action on March 14, 2012 (77 FR 14976). On April 16, 2012 (77 FR 22533) and July 23, 2012 (77 FR 42997), EPA took separate proposed and final actions on all other section 110(a)(2) infrastructure SIP elements of Tennessee's December 14, 2007 submittal.

    Ambiguities within sections 110(a)(1) and 110(a)(2) may also arise with respect to infrastructure SIP submittal requirements for different NAAQS. Thus, EPA notes that not every element of section 110(a)(2) would be relevant, or as relevant, or relevant in the same way, for each new or revised NAAQS. The states' attendant infrastructure SIP submittals for each NAAQS therefore could be different. For example, the monitoring requirements that a state might need to meet in its infrastructure SIP submittal for purposes of section 110(a)(2)(B) could be very different for different pollutants, for example because the content and scope of a state's infrastructure SIP submittal to meet this element might be very different for an entirely new NAAQS than for a minor revision to an existing NAAQS.6

    6 For example, implementation of the 1997 PM2.5 NAAQS required the deployment of a system of new monitors to measure ambient levels of that new indicator species for the new NAAQS.

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

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

    Historically, EPA has elected to use guidance documents to make recommendations to states for infrastructure SIPs, in some cases conveying needed interpretations on newly arising issues and in some cases conveying interpretations that have already been developed and applied to individual SIP submittals for particular elements.7 EPA most recently issued guidance for infrastructure SIPs on September 13, 2013 (2013 Infrastructure SIP Guidance).8 EPA developed this document to provide states with up-to-date guidance for infrastructure SIPs for any new or revised NAAQS. Within this guidance, EPA describes the duty of states to make infrastructure SIP submittals to meet basic structural SIP requirements within three years of promulgation of a new or revised NAAQS. EPA also made recommendations about many specific subsections of section 110(a)(2) that are relevant in the context of infrastructure SIP submittals.9 The guidance also discusses the substantively important issues that are germane to certain subsections of section 110(a)(2). Significantly, EPA interprets sections 110(a)(1) and 110(a)(2) such that infrastructure SIP submittals need to address certain issues and need not address others. Accordingly, EPA reviews each infrastructure SIP submittal for compliance with the applicable statutory provisions of section 110(a)(2), as appropriate.

    7 EPA notes, however, that nothing in the CAA requires EPA to provide guidance or to promulgate regulations for infrastructure SIP submittals. The CAA directly applies to states and requires the submittal of infrastructure SIP submittals, regardless of whether or not EPA provides guidance or regulations pertaining to such submittals. EPA elects to issue such guidance in order to assist states, as appropriate.

    8 “Guidance on Infrastructure State Implementation Plan (SIP) Elements under Clean Air Act Sections 110(a)(1) and 110(a)(2),” Memorandum from Stephen D. Page, September 13, 2013.

    9 EPA's September 13, 2013, guidance did not make recommendations with respect to infrastructure SIP submittals to address section 110(a)(2)(D)(i)(I). EPA issued the guidance shortly after the U.S. Supreme Court agreed to review the D.C. Circuit decision in EME Homer City, 696 F.3d7 (D.C. Cir. 2012) which had interpreted the requirements of section 110(a)(2)(D)(i)(I). In light of the uncertainty created by ongoing litigation, EPA elected not to provide additional guidance on the requirements of section 110(a)(2)(D)(i)(I) at that time. As the guidance is neither binding nor required by statute, whether EPA elects to provide guidance on a particular section has no impact on a state's CAA obligations.

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

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

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

    With respect to certain other issues, EPA does not believe that an action on a state's infrastructure SIP submittal is necessarily the appropriate type of action in which to address possible deficiencies in a state's existing SIP. These issues include: (i) Existing provisions related to excess emissions from sources during periods of startup, shutdown, or malfunction that may be contrary to the CAA and EPA's policies addressing such excess emissions (“SSM”); (ii) existing provisions related to “director's variance” or “director's discretion” that may be contrary to the CAA because they purport to allow revisions to SIP-approved emissions limits while limiting public process or not requiring further approval by EPA; and (iii) existing provisions for PSD programs that may be inconsistent with current requirements of EPA's “Final NSR Improvement Rule,” 67 FR 80186, December 31, 2002, as amended by 72 FR 32526, June 13, 2007 (“NSR Reform”). Thus, EPA believes it may approve an infrastructure SIP submittal without scrutinizing the totality of the existing SIP for such potentially deficient provisions and may approve the submittal even if it is aware of such existing provisions.10 It is important to note that EPA's approval of a state's infrastructure SIP submittal should not be construed as explicit or implicit re-approval of any existing potentially deficient provisions that relate to the three specific issues just described.

    10 By contrast, EPA notes that if a state were to include a new provision in an infrastructure SIP submittal that contained a legal deficiency, such as a new exemption for excess emissions during SSM events, then EPA would need to evaluate that provision for compliance against the rubric of applicable CAA requirements in the context of the action on the infrastructure SIP.

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

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

    Finally, EPA believes that its approach with respect to infrastructure SIP requirements is based on a reasonable reading of sections 110(a)(1) and 110(a)(2) because the CAA provides other avenues and mechanisms to address specific substantive deficiencies in existing SIPs. These other statutory tools allow EPA to take appropriately tailored action, depending upon the nature and severity of the alleged SIP deficiency. Section 110(k)(5) authorizes EPA to issue a “SIP call” whenever the Agency determines that a state's SIP is substantially inadequate to attain or maintain the NAAQS, to mitigate interstate transport, or to otherwise comply with the CAA.11 Section 110(k)(6) authorizes EPA to correct errors in past actions, such as past approvals of SIP submittals.12 Significantly, EPA's determination that an action on a state's infrastructure SIP submittal is not the appropriate time and place to address all potential existing SIP deficiencies does not preclude EPA's subsequent reliance on provisions in section 110(a)(2) as part of the basis for action to correct those deficiencies at a later time. For example, although it may not be appropriate to require a state to eliminate all existing inappropriate director's discretion provisions in the course of acting on an infrastructure SIP submittal, EPA believes that section 110(a)(2)(A) may be among the statutory bases that EPA relies upon in the course of addressing such deficiency in a subsequent action.13

    11 For example, EPA issued a SIP call to Utah to address specific existing SIP deficiencies related to the treatment of excess emissions during SSM events. See “Finding of Substantial Inadequacy of Implementation Plan; Call for Utah State Implementation Plan Revisions,” 76 FR 21639, April 18, 2011.

    12 EPA has used this authority to correct errors in past actions on SIP submittals related to PSD programs. See “Limitation of Approval of Prevention of Significant Deterioration Provisions Concerning Greenhouse Gas Emitting-Sources in State Implementation Plans; Final Rule,” 75 FR 82536, December 30, 2010. EPA has previously used its authority under CAA section 110(k)(6) to remove numerous other SIP provisions that the Agency determined it had approved in error. See, e.g., 61 FR 38664, July 25, 1996 and 62 FR 34641, June 27, 1997 (corrections to American Samoa, Arizona, California, Hawaii, and Nevada SIPs); 69 FR 67062, November 16, 2004 (corrections to California SIP); and 74 FR 57051, November 3, 2009 (corrections to Arizona and Nevada SIPs).

    13 See, e.g., EPA's disapproval of a SIP submittal from Colorado on the grounds that it would have included a director's discretion provision inconsistent with CAA requirements, including section 110(a)(2)(A). See, e.g., 75 FR 42342 at 42344, July 21, 2010 (proposed disapproval of director's discretion provisions); 76 FR 4540, January 26, 2011 (final disapproval of such provisions).

    II. Background A. Statutory Framework

    Section 110(a)(1) of the CAA requires states to make a SIP submission within 3 years after the promulgation of a new or revised primary NAAQS. Section 110(a)(2) includes a list of specific elements that “[e]ach such plan” submission must include. Many of the section 110(a)(2) SIP elements relate to the general information and authorities that constitute the “infrastructure” of a state's air quality management program and SIP submittals that address these requirements are referred to as “infrastructure SIPs.” These infrastructure SIP elements required by section 110(a)(2) are as follows:

    • Section 110(a)(2)(A): Emission limits and other control measures.

    • Section 110(a)(2)(B): Ambient air quality monitoring/data system.

    • Section 110(a)(2)(C): Program for enforcement of control measures and regulation of new and modified stationary sources.

    • Section 110(a)(2)(D)(i): Interstate pollution transport.

    • Section 110(a)(2)(D)(ii): Interstate and international pollution abatement.

    • Section 110(a)(2)(E): Adequate resources and authority, conflict of interest, and oversight of local and regional government agencies.

    • Section 110(a)(2)(F): Stationary source monitoring and reporting.

    • Section 110(a)(2)(G): Emergency episodes.

    • Section 110(a)(2)(H): SIP revisions.

    • Section 110(a)(2)(J): Consultation with government officials, public notification, PSD, and visibility protection.

    • Section 110(a)(2)(K): Air quality modeling and submittal of modeling data.

    • Section 110(a)(2)(L): Permitting fees.

    • Section 110(a)(2)(M): Consultation/participation by affected local entities.

    Two elements identified in section 110(a)(2) are not governed by the three-year submittal deadline of section 110(a)(1) and are therefore not addressed in this action. These two elements are: Section 110(a)(2)(C) to the extent it refers to permit programs required under part D (nonattainment NSR), and section 110(a)(2)(I), pertaining to the nonattainment planning requirements of part D. As a result, this action does not address infrastructure for the nonattainment NSR portion of section 110(a)(2)(C) or the whole of section 110(a)(2)(I).

    B. Regulatory Background

    Between 1997 and 2012, EPA promulgated a series of new or revised NAAQS for ozone, NO2, and SO2, triggering a requirement for states to submit infrastructure SIPs. The NAAQS addressed by this infrastructure SIP proposal include the following:

    • 2008 ozone NAAQS, which revised the 8-hour ozone standards to 0.075 ppm.14

    14 73 FR 16436, March 27, 2008.

    • 2010 NO2 NAAQS, which revised the primary 1971 NO2 annual standard of 53 parts per billion (ppb) by supplementing it with a new 1-hour average NO2 standard of 100 ppb, and retained the secondary annual standard of 53 ppb.15

    15 75 FR 6474, February 9, 2010. The annual NO 2 standard of 0.053 ppm is listed in ppb for ease of comparison with the new 1-hour standard.

    • 2010 SO2 NAAQS, which established a new 1-hour average SO2 standard of 75 ppb, retained the secondary 3-hour average SO2 standard of 500 ppb, and established a mechanism for revoking the primary 1971 annual and 24-hour SO2 standards.16

    16 75 FR 35520, June 22, 2010. The annual SO 2 standard of 0.5 ppm is listed in ppb for ease of comparison with the new 1-hour standard.

    C. Changes to the Application of PSD Permitting Requirements With GHGs

    With respect to Elements (C) and (J), EPA interprets the Clean Air Act to require each state to make an infrastructure SIP submission for a new or revised NAAQS that demonstrates that the air agency has a complete PSD permitting program meeting the current requirements for all regulated NSR pollutants. The requirements of Element D(i)(II) may also be satisfied by demonstrating the air agency has a complete PSD permitting program correctly addressing all regulated NSR pollutants. Nevada has shown that it currently has a PSD program in place that covers all regulated NSR pollutants, including greenhouse gases (GHGs), with the exception of the deficiencies in the NDEP and Washoe County portions of the SIP, described elsewhere in this document.

    On June 23, 2014, the United States Supreme Court issued a decision addressing the application of PSD permitting requirements to GHG emissions.17 The Supreme Court said that the EPA may not treat GHGs as an air pollutant for purposes of determining whether a source is a major source required to obtain a PSD permit. The Court also said that the EPA could continue to require that PSD permits, otherwise required based on emissions of pollutants other than GHGs, contain limitations on GHG emissions based on the application of Best Available Control Technology (BACT). In order to act consistently with its understanding of the Court's decision pending further judicial action to effectuate the decision, the EPA is not continuing to apply EPA regulations that would require that SIPs include permitting requirements that the Supreme Court found impermissible. Specifically, EPA is not applying the requirement that a state's SIP-approved PSD program require that sources obtain PSD permits when GHGs are the only pollutant (i) that the source emits or has the potential to emit above the major source thresholds, or (ii) for which there is a significant emissions increase and a significant net emissions increase from a modification (e.g. 40 CFR 51.166(b)(48)(v)). EPA anticipates a need to revise federal PSD rules in light of the Supreme Court opinion. In addition, EPA anticipates that many states will revise their existing SIP-approved PSD programs in light of the Supreme Court's decision. The timing and content of subsequent EPA actions with respect to the EPA regulations and state PSD program approvals are expected to be informed by additional legal process before the United States Court of Appeals for the District of Columbia Circuit. At this juncture, EPA is not expecting states to have revised their PSD programs for purposes of infrastructure SIP submissions and is only evaluating such submissions to assure that the state's program correctly addresses GHGs consistent with the Supreme Court's decision.

    17Utility Air Regulatory Group v. Environmental Protection Agency, 134 S.Ct. 2427.

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

    III. State Submittal and EPA Action

    The Nevada Department of Environmental Protection (NDEP) has submitted several infrastructure SIP submittals pursuant to EPA's promulgation of specific NAAQS, including:

    Ozone

    • The Nevada Division of Environmental Protection Portion of the Nevada State Implementation Plan for the 2008 Ozone NAAQS: Demonstration of Adequacy April 10, 2013.

    • State Implementation Plan Revision to Meet the Ozone Infrastructure SIP Requirements of the Clean Air Act section 110(a)(2), Clark County, Nevada, February 2013.

    • The Washoe County Portion of the Nevada State Implementation Plan for the 2008 Ozone NAAQS: Demonstration of Adequacy, February 28, 2013.

    NO2

    • NDEP letter to EPA, dated May 9, 2013 and Washoe County letter, dated April 26, 2013, containing the Approved Minutes of the February 28, 2013 public hearing and the Certificate of Adoption.

    • The Nevada Division of Environmental Protection Portion of the Nevada State Implementation Plan for the 2010 Nitrogen Dioxide Primary NAAQS: Demonstration of Adequacy and appendices, January 18, 2013.

    • State Implementation Plan Revision to Meet the Nitrogen Dioxide Infrastructure SIP Requirements of the Clean Air Act section 110(a)(2), and attachments Clark County, Nevada December 2012.

    • The Washoe County Portion of the Nevada State Implementation Plan to Meet the Nitrogen Dioxide Infrastructure SIP Requirements of Clean Air Act section 110(a)(2) (draft document) and attachments, January 24, 2014.

    SO2

    • The Nevada Division of Environmental Protection Portion of the Nevada State Implementation Plan for the 2010 Sulfur Dioxide Primary NAAQS, and appendices, June 3, 2013.

    • State Implementation Plan Revision to Meet the Sulfur Dioxide Infrastructure SIP Requirements of the Clean Air Act section 110(a)(2), and attachments Clark County, Nevada, May 2013.

    • The Washoe County Portion of the Nevada State Implementation Plan to Meet the Sulfur Dioxide Infrastructure SIP Requirements of Clean Air Act section 110(a)(2), and attachments, March 28, 2013.

    We find that these submittals meet the procedural requirements for public participation under CAA section 110(a)(2) and 40 CFR 51.102. We are proposing to act on all of these submittals since they collectively address the infrastructure SIP requirements for the NAAQS addressed by this proposed rule. We refer to them collectively herein as “Nevada's Infrastructure SIP Submittals.”

    IV. EPA's Evaluation and Proposed Action A. Proposed Approvals and Partial Approvals

    We have evaluated Nevada's Infrastructure SIP Submittals and the existing provisions of the Nevada SIP for compliance with the infrastructure SIP requirements (or “elements”) of CAA section 110(a)(2) and applicable regulations in 40 CFR part 51 (“Requirements for Preparation, Adoption, and Submittal of State Implementation Plans”). The Technical Support Document (TSD), which is available in the docket to this action, includes our evaluation for many elements, as well as our evaluation of various statutory and regulatory provisions. For some elements, it refers to older TSDs for prior Nevada Infrastructure SIPs, which have also been included in the docket.

    Based upon this analysis, we propose to approve the 2008 Ozone, 2010 NO2, and 2010 SO2 Nevada Infrastructure SIP with respect to the following Clean Air Act requirements:

    • Section 110(a)(2)(A): Emission limits and other control measures.

    • Section 110(a)(2)(B): Ambient air quality monitoring/data system.

    • Section 110(a)(2)(C) (in part): Program for enforcement of control measures and regulation of new stationary sources (full approval for Clark County).

    • Section 110(a)(2)(D) (in part, see below): Interstate Pollution Transport.

    Section 110(a)(2)(D)(i)(II) (in part)—significant contribution to nonattainment, or prongs 1 and 2 (full approval of NDEP, Clark County and Washoe County for the NO2 NAAQS).

    Section 110(a)(2)(D)(i)(II) (in part)—interference with maintenance, or prong 3 (full approval for Clark County).

    Section 110(a)(2)(D)(i)(II) (full approval)—visibility transport, or prong 4.

    Section 110(a)(2)(D)(ii) (in part)—interstate pollution abatement and international air pollution (full approval for Clark County).

    • Section 110(a)(2)(E): Adequate resources and authority, conflict of interest, and oversight of local governments and regional agencies.

    • Section 110(a)(2)(F): Stationary source monitoring and reporting.

    • Section 110(a)(2)(G): Emergency episodes.

    • Section 110(a)(2)(H): SIP revisions.

    • Section 110(a)(2)(J) (in part): Consultation with government officials, public notification, and prevention of significant deterioration (PSD) and visibility protection (full approval for Clark County).

    • Section 110(a)(2)(K): Air quality modeling and submission of modeling data.

    • Section 110(a)(2)(L): Permitting fees.

    • Section 110(a)(2)(M): Consultation/participation by affected local entities.

    EPA is taking no action on Interstate Transport—significant contribution to nonattainment for NDEP, Clark County and Washoe County on the Ozone and SO2 NAAQS (section 110(a)(2)(D)(i)(II)).

    B. Proposed Partial Disapprovals

    EPA proposes to disapprove Nevada's Infrastructure SIP Submittals with respect to the following infrastructure SIP requirements:

    • Section 110(a)(2)(C) (in part): Program for enforcement of control measures and regulation of new and modified stationary sources (for all NAAQS addressed by this proposed rule and covered by the NDEP and Washoe County PSD permitting programs).

    • Section 110(a)(2)(D)(i)(II) (in part, see below): Interstate pollution transport,

    Section 110(a)(2)(D)(i)(II) (in part)—interference with maintenance, or prong 3 (disapproved for all NAAQS addressed by this proposed rule and covered by the NDEP and Washoe County PSD permitting programs).

    Section 110(a)(2)(D)(ii) (in part)—interstate pollution abatement and international air pollution (disapproved for all NAAQS addressed by this proposed rule and covered by the NDEP and Washoe County PSD permitting programs).

    • Section 110(a)(2)(J) (in part): Consultation with government officials, public notification, PSD, and visibility protection (for all NAAQS addressed by this proposed rule and covered by the NDEP and Washoe County PSD permitting programs).

    As explained more fully in our TSD, we are proposing to disapprove the NDEP and Washoe County portions of Nevada's Infrastructure Submittals with respect to the PSD-related requirements of sections 110(a)(2)(C), 110(a)(2)(D)(i)(II), 110(a)(2)(D)(ii), and the PSD requirements of section 110(a)(2)(J). The Nevada SIP does not fully satisfy the statutory and regulatory requirements for PSD permit programs under part C, title I of the Act, because NDEP and Washoe County currently implement the Federal PSD program in 40 CFR 52.21 for all regulated NSR pollutants, pursuant to delegation agreements with EPA. See 40 CFR 52.1485.18 Accordingly, although the Nevada SIP remains deficient with respect to PSD requirements in both the NDEP and Washoe County portions of the SIP, these deficiencies are adequately addressed in both areas by the federal PSD program and do not create new FIP obligations.

    18 EPA fully delegated the implementation of the federal PSD programs to NDEP on October 19, 2004 (“Agreement for Delegation of the Federal Prevention of Significant Deterioration (PSD) Program by the United States Environmental Protection Agency, Region 9 to the Nevada Division of Environmental Protection”), as updated on September 15, 2011 and November 7, 2012, and to Washoe County on March 13, 2008 (“Agreement for Delegation of the Federal Prevention of Significant Deterioration (PSD) Program by the United States Environmental Protection Agency, Region 9 to the Washoe County District Health Department”).

    In EPA's evaluation of Nevada's Infrastructure SIP Submittal for Lead (Pb), the requirements under sections 110(a)(2)(C), 110(a)(2)(D)(i)(II) and 110(a)(2)(J) regarding Clark County's PSD permitting program, specifically PSD increments for PM2.5, initiated a requirement for the development of a Federal Implementation Plan (FIP) or sanctions. This deficiency has been addressed by the recent changes to the Clark County PSD permitting program, as discussed in Element C of the TSD.

    C. Defining the Nevada Intrastate Air Quality Control Region

    In reviewing the Nevada SIP Infrastructure submittal for compliance with CAA section 110(a)(2)(G), as discussed in section D below, we noted that the Nevada Intrastate Air Quality Control Region has not been defined in subpart B of 40 CFR part 81. The emergency episode priority classifications for the Region is provided by 40 CFR 52.1471 for many NAAQS. Additionally, EPA identified the counties of the Nevada Intrastate Region in a 1972 EPA report titled: Federal Air Quality Control Regions.19 To rectify the apparent Federal Register omission, we are proposing to define the Nevada Intrastate Air Quality Control Region in subpart B of 40 CFR part 81, consistent with Federal Air Quality Control Regions, as comprised of the following counties: Elko, Humboldt, Pershing, Lander, Eureka, White Pine, Lincoln, Nye, Esmeralda, Mineral, and Churchill. On its own, this proposed change does not alter the priority classification of the Region for emergency episode purposes.

    19 Federal Air Quality Control Regions, U.S. EPA, January 1972 <http://nepis.epa.gov/Exe/ZyPDF.cgi/P10053PA.PDF?Dockey=P10053PA.PDF> (last visited April 1, 2015).

    D. Proposed Approval of Reclassification Requests for Emergency Episode Planning

    NDEP's portion of Nevada's SO2 Infrastructure Submittal requested that EPA reclassify the Nevada Intrastate Air Quality Region with respect to the emergency episode planning requirements of CAA section 110(a)(2)(G) and 40 CFR part 51, subpart H. The priority thresholds for classification of regions are listed in 40 CFR 51.150 while the specific classifications of air quality control regions in Nevada are listed at 40 CFR 52.1471. Consistent with the provisions of 40 CFR 51.153, reclassification of an air quality control region must rely on the most recent three years of air quality data. Regions classified Priority I, IA, or II are required to have SIP-approved emergency episode contingency plans, while those classified Priority III are not required to have plans.20 We interpret 40 CFR 51.153 as establishing the means for states to review air quality data and request a higher or lower classification for any given region and as providing the regulatory basis for EPA to reclassify such regions, as appropriate, under the authorities of CAA sections 110(a)(2)(G) and 301(a)(1).

    20 40 CFR 51.151 and 51.152.

    The Nevada Intrastate Air Quality Control Region is classified as priority IA for SO2. Priority IA means the region is classified as Priority I “primarily because of emissions from a single point source.” 21 As our TSD further clarifies, the point source appears to have been the copper smelter in McGill, Nevada, within the Steptoe Valley, operated by the Kennecott Minerals Company. The Kennecott smelter was the only major source of SO2 emissions within the Nevada Interstate Region when the priority classifications were established in 1980.22

    21 40 CFR 51.150(c).

    22 40 FR 5508.

    Our attainment finding for Steptoe Valley (SO2) nonattainment area stated that the Kennecott facility ceased operation in 1983, removed all smelting equipment in 1987, and demolished the facility's stack in 1993.23 It continued on to state “ambient air quality monitoring from 1979 to 1983 indicates there were no violations during the last years of the smelter operation.” NDEP has not collected SO2 monitoring data since 1983, nor are they currently required to do so.24 Based on the information above and presented in our TSD, we are proposing to approve Nevada's request to reclassify the Nevada Intrastate Air Quality Region to Priority III for SO2 emergency episode planning.

    23 67 FR 17939.

    24 SO2 monitoring is not required for the Nevada Intrastate Air Quality Control Region, because it's population weighted exposure index does not exceed 5000 (million person-tons per year of SO2), per 40 CFR part 58, appendix D 4.4.2.

    We also evaluated the Las Vegas Intrastate Air Quality Control Region (i.e. Clark County), which is also currently classified as Priority IA for SO2. Their ambient air quality data for 2011-2013 does not exceed the Priority II level of 260-455 µg/m3 set at 40 CFR 51.150(d)(1). Therefore, based on the last three years of available data, we are proposing to reclassify the Las Vegas Intrastate Region to Priority III for SO2.

    E. Proposed Removal of Historic SIP Provisions

    NDEP also requested that EPA remove paragraphs (a) and (b) of 40 CFR 52.1475, “Control strategy and regulations: Sulfur oxides.” This section was added to the Nevada SIP “. . . to promulgate substitute regulations for the control of SO2 at the Kennecott Copper Corporation Smelter, McGill, Nevada . . .” because we had disapproved Nevada's proposed SO2 emission controls for the Kennecott smelter.25 40 CFR 52.1475 no longer applies since the Kennecott smelter is nonexistent and the area was redesignated as attainment. Since the provision serves no purpose beyond providing historic information, we are proposing to remove 40 CFR 52.1475 from the Nevada SIP.

    25 40 FR 5508.

    F. Request for Public Comments

    EPA is soliciting public comments on the issues discussed in this document or on other relevant matters. We will accept comments from the public on this proposal for the next 30 days. We will consider these comments before taking final action.

    V. Statutory and Executive Order Reviews Executive Order 12866: Regulatory Planning and Review

    This action is not a “significant regulatory action” under the terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the EO.

    Paperwork Reduction Act

    This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., because this proposed partial approval and partial disapproval of SIP revisions under CAA section 110 will not in-and-of itself create any new information collection burdens but simply proposes to approve certain State requirements, and to disapprove certain other State requirements, for inclusion into the SIP. Burden is defined at 5 CFR 1320.3(b).

    Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For purposes of assessing the impacts of this rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.

    After considering the economic impacts of this proposed rule, we certify that this proposed action will not have a significant impact on a substantial number of small entities. This proposed rule does not impose any requirements or create impacts on small entities. This proposed partial SIP approval and partial SIP disapproval under CAA section 110 will not in-and-of itself create any new requirements but simply proposes to approve certain State requirements, and to disapprove certain other State requirements, for inclusion into the SIP. Accordingly, it affords no opportunity for EPA to fashion for small entities less burdensome compliance or reporting requirements or timetables or exemptions from all or part of the rule. Therefore, this action will not have a significant economic impact on a substantial number of small entities.

    We continue to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.

    Unfunded Mandates Reform Act

    This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for State, local, or tribal governments or the private sector. EPA has determined that the proposed partial approval and partial disapproval action does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This action proposes to approve certain pre-existing requirements, and to disapprove certain other pre-existing requirements, under State or local law, and imposes no new requirements. Accordingly, no additional costs to State, local, or tribal governments, or to the private sector, result from this proposed action.

    Executive Order 13132: Federalism

    Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

    This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely proposes to approve certain State requirements, and to disapprove certain other State requirements, for inclusion into the SIP and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, Executive Order 13132 does not apply to this action.

    Executive Order 13175: Coordination With Indian Tribal Governments

    This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP on which EPA is proposing action would not apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this proposed action.

    Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks

    EPA interprets Executive Order 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This proposed action is not subject to Executive Order 13045 because it is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). This proposed partial approval and partial disapproval under CAA section 110 will not in-and-of itself create any new regulations but simply proposes to approve certain State requirements, and to disapprove certain other State requirements, for inclusion into the SIP.

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

    This proposed rule is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.

    National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary consensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.

    The EPA believes that this proposed action is not subject to requirements of Section 12(d) of NTTAA because application of those requirements would be inconsistent with the Clean Air Act.

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

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

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

    List of Subjects in 40 CFR Part 52

    Environmental protection, Air pollution control, Approval and promulgation of implementation plans, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Reporting and recordkeeping requirements, and Sulfur dioxide.

    Dated: May 8, 2015. Alexis Strauss, Acting Regional Administrator, Region IX.
    [FR Doc. 2015-12243 Filed 5-19-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Part 52 [EPA-R06-OAR-2013-0616; FRL-9927-23-Region 6] Approval and Promulgation of Implementation Plans; New Mexico; Revisions to the New Source Review (NSR) State Implementation Plan (SIP) for Albuquerque-Bernalillo County; Prevention of Significant Deterioration (PSD) Permitting AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve two revisions to the New Mexico State Implementation Plan (SIP) to update the Albuquerque-Bernalillo County Prevention of Significant Deterioration (PSD) SIP permitting program consistent with federal requirements. New Mexico submitted the Albuquerque-Bernalillo County PSD SIP permitting revisions on July 26, 2013, and March 4, 2015, which included a request for parallel processing of the submitted 2015 revisions. These submittals contain revisions to address the requirements of the EPA's May 2008, July 2010, and October 2012 PM2.5 PSD Implementation Rules and to incorporate revisions consistent with the EPA's March 2011 Fugitives Interim Rule, July 2011 Greenhouse Gas (GHG) Biomass Deferral Rule, and July 2012 GHG Tailoring Rule Step 3 and GHG PALs Rule. The EPA is proposing to find that these revisions to the New Mexico SIP meet the Federal Clean Air Act (the Act or CAA) and EPA regulations, and are consistent with EPA policies. We are proposing this action under section 110 and part C of title I of the Act. The EPA is not approving these rules within the exterior boundaries of a reservation or other areas within any Tribal Nation's jurisdiction.

    DATES:

    Written comments should be received on or before June 19, 2015.

    ADDRESSES:

    Submit your comments, identified by Docket No. EPA-R06-OAR-2013-0616, by one of the following methods:

    www.regulations.gov: Follow the online instructions.

    Email: Ms. Ashley Mohr at [email protected]

    Mail or delivery: Ms. Ashley Mohr, Air Permits Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas, Texas 75202-2733.

    Instructions: Direct your comments to Docket ID No. EPA-R06-OAR-2013-0616. The EPA's policy is that all comments received will be included in the public docket without change and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information the disclosure of which is restricted by statute. Do not submit information through www.regulations.gov or email, if you believe that it is CBI or otherwise protected from disclosure. The www.regulations.gov Web site is an “anonymous access” system, which means that the EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to the EPA without going through www.regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, the EPA recommends that you include your name and other contact information in the body of your comment along with any disk or CD-ROM submitted. If the EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, the EPA may not be able to consider your comment. Electronic files should avoid the use of special characters and any form of encryption and should be free of any defects or viruses.

    Docket: The index to the docket for this action is available electronically at www.regulations.gov and in hard copy at EPA Region 6, 1445 Ross Avenue, Suite 700, Dallas, Texas. While all documents in the docket are listed in the index, some information may be publicly available only at the hard copy location (e.g., copyrighted material), and some may not be publicly available at either location (e.g., CBI).

    FOR FURTHER INFORMATION CONTACT:

    Ms. Ashley Mohr, (214) 665-7289, [email protected] To inspect the hard copy materials, please schedule an appointment with Ms. Ashley Mohr or Mr. Bill Deese at (214) 665-7253.

    SUPPLEMENTARY INFORMATION:

    Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.

    Table of Contents I. Background A. New Mexico's SIP Submittals B. Relevant EPA Rulemakings II. The EPA's Evaluation III. Proposed Action IV. Incorporation by Reference V. Statutory and Executive Order Reviews I. Background

    The Act at section 110(a)(2)(C) requires states to develop and submit to the EPA for approval into the State Implementation Plan (SIP), preconstruction review and permitting programs applicable to certain new and modified stationary sources of air pollutants for attainment and nonattainment areas that cover both major and minor new sources and modifications, collectively referred to as the New Source Review (NSR) SIP. The Clean Air Act (CAA) NSR SIP program is composed of three separate programs: Prevention of Significant Deterioration (PSD), Nonattainment New Source Review (NNSR), and Minor NSR. PSD is established in part C of title I of the CAA and applies in areas that meet the National Ambient Air Quality Standards (NAAQS)—“attainment areas”—as well as areas where there is insufficient information to determine if the area meets the NAAQS—“unclassifiable areas.” The NNSR SIP program is established in part D of title I of the CAA and applies in areas that are not in attainment of the NAAQS—“nonattainment areas.” The Minor NSR SIP program addresses construction or modification activities that do not emit, or have the potential to emit, beyond certain major source thresholds, and thus do not qualify as “major” and applies regardless of the designation of the area in which a source is located. The EPA regulations governing the criteria that states must satisfy for EPA approval of the NSR programs as part of the SIP are contained in 40 CFR 51.160—51.166.

    A. New Mexico's SIP Submittals

    Since the EPA's last SIP approval on September 19, 2012, of PSD SIP requirements for Albuquerque-Bernalillo County,1 the State of New Mexico has submitted two revisions to the Albuquerque-Bernalillo County PSD program: (1) A SIP revision submittal dated July 26, 2013, which affects sixteen sections under 20.11.61 NMAC; and (2) a request for parallel processing of a SIP revision dated March 4, 2015, which affects two sections under 20.11.61 NMAC.

    1 See 77 FR 58032.

    i. Summary of the January 26, 2013, SIP Submittal

    The July 26, 2013, SIP submittal contains revisions to adopt and implement: (1) the EPA's 2008 NSR PM2.5 Rule, (2) the EPA's 2010 PM2.5 PSD Increment—Significant Impact Levels (SILs)—Significant Monitoring Concentration (SMC) Rule, (3) the EPA's 2012 PM2.5 NSR Implementation Rule, (4) the EPA's 2011 Fugitives Interim Rule, (5) the EPA's 2011 Biomass Deferral Rule, and (6) the EPA's 2012 GHG Tailoring Rule Step 3 and GHG PALs Rule. The July 2013 submittal from New Mexico also contains other non-substantive revisions to the Albuquerque-Bernalillo County PSD program that are not directly associated with the incorporation of the EPA Rules. As part of this proposed rulemaking, the EPA is addressing these non-substantive revisions and the substantive revisions to the New Mexico SIP that were submitted to adopt and implement the six aforementioned rulemakings by the EPA.

    ii. Summary of the March 4, 2015, SIP Submittal

    On March 4, 2015, New Mexico submitted a request for the parallel processing of additional SIP revisions to the Albuquerque-Bernalillo County PSD program. This means that the EPA is proposing approval of the submitted revisions at the same time that the public comment and rulemaking process is taking place at the state and local level. These proposed revisions to part 61 are being made in response to comments the EPA provided on the July 26, 2013, SIP submittal. Specifically, the March 2015 parallel processing request contains proposed revisions to Section 7—Definitions and Section 11—Applicability. New Mexico's parallel processing request was made in accordance with paragraph 2.3.1 of appendix V to 40 CFR part 51. As part of this proposed rulemaking, the EPA is addressing the proposed revisions to the New Mexico SIP contained in the March 4, 2015, parallel processing request. As required by paragraph 2.3.2 of appendix V to 40 CFR part 51, the EPA will not take final action on the proposed revisions contained in the March 4, 2015, submittal until the final SIP revision submittal containing these revisions to the Albuquerque-Bernalillo County PSD program as a final adoption is received from New Mexico. Therefore, the EPA is proposing to approve the SIP revision request after the completion of the state public process and final submittal. More information regarding the anticipated timeline of the state's rulemaking process is contained in the TSD accompanying this proposed action.

    B. Relevant EPA Rulemakings i. Summary of the EPA's 2008 NSR PM2.5 Rule

    On May 8, 2008, the EPA finalized the NSR PM2.5 Rule to implement the PM2.5 NAAQS. See 73 FR 28321. As a result of the EPA's final NSR PM2.5 Rule, states were required to submit applicable SIP revisions to the EPA no later than May 16, 2011, to address this Rule's PSD and NNSR SIP requirements. With respect to PSD permitting, the SIP revision submittals are required to meet the following PSD SIP requirements to implement the PM2.5 NAAQS: (1) Require PSD permits to address directly emitted PM2.5 and precursor pollutants; (2) establish significant emission rates for direct PM2.5 and precursor pollutants (including SO2 and NOX); and (3) account for gases that condense to form particles (condensables) in PM2.5 and PM10 emission limits in PSD permits.

    Prior to the adoption of the revisions included in the July 26, 2013, SIP submittal, the Albuquerque-Bernalillo County Air Board adopted revisions to 20.11.61 NMAC to incorporate all but one of the amendments consistent with the EPA's 2008 NSR PM2.5 Rule. These revisions were approved by the EPA on September 19, 2012. See 77 FR 58032. New Mexico's July 26, 2013, SIP revision submittal incorporates the final remaining amendment to 20.11.61 NMAC to be consistent with the revisions to the federal rules at 40 CFR 51.166(i)(5) contained in the EPA's 2008 rulemaking. Specifically, the July 2013 SIP submittal amends 20.11.61 NMAC to include an additional exemption that gives the department discretion to exempt a stationary source from air monitoring requirements for a particular pollutant. The EPA finds that New Mexico's July 26, 2013, SIP revision submittal is consistent with the 2008 NSR PM2.5 Rule for PSD and meets the requirements of section 110 and part C of the CAA.

    ii. Summary of the EPA's 2010 PM2.5 PSD Increment—SILs—SMC Rule

    On October 20, 2010, the EPA finalized the PM2.5 PSD Increment—SILs—SMC Rule to provide additional regulatory requirements under the PSD SIP program regarding the implementation of the PM2.5 NAAQS for NSR. See 75 FR 64864. As a result, the PM2.5 PSD Increment—SILs—SMC Rule required states to submit SIP revisions to adopt the required PSD increments by July 20, 2012. Specifically, the SIP rule requires a state's submitted PSD SIP revision to adopt and submit for the EPA approval the PM2.5 increments pursuant to section 166(a) of the CAA to prevent significant deterioration of air quality in areas meeting the NAAQS. States could also discretionarily choose to adopt and submit for EPA approval SILs used as a screening tool (by a major source subject to PSD) to evaluate the impact a proposed major source or modification may have on the NAAQS or PSD increment and a SMC, (also a screening tool) used by a major source subject to PSD to determine the subsequent level of data gathering required for a PSD permit application for emissions of PM2.5. More detail on the PM2.5 PSD Increment—SILs—SMC Rule can be found in the EPA's October 20, 2010, final rule. See 75 FR 64864.

    (a) What are PSD increments?

    Under section 165(a)(3) of the CAA, a PSD permit applicant must demonstrate that emissions from the proposed construction and operation of a facility “will not cause, or contribute to, air pollution in excess of any maximum allowable increase or allowable concentration for any pollutant.” In other words, when a source applies for a PSD SIP permit to emit a regulated pollutant in an attainment or unclassifiable area, the permitting authority implementing the PSD SIP must determine if emissions of the regulated pollutant from the source will cause significant deterioration in air quality. Significant deterioration occurs when the amount of the new pollution exceeds the applicable PSD increment, which is the “maximum allowable increase” of an air pollutant allowed to occur above the applicable baseline concentration 2 for that pollutant. PSD increments prevent air quality in attainment and unclassifiable areas from deteriorating to the level set by the NAAQS. Therefore, an increment is the mechanism used to estimate “significant deterioration” of air quality for a pollutant in an area.

    2 Section 169(4) of the CAA provides that the baseline concentration of a pollutant for a particular baseline area is generally the same air quality at the time of the first application for a PSD permit in the area.

    For PSD baseline purposes, a baseline area for a particular pollutant emitted from a source includes the attainment or unclassifiable/attainment area in which the source is located as well as any other attainment or unclassifiable/attainment area in which the source's emissions of that pollutant are projected (by air quality modeling) to result in an ambient pollutant increase of at least 1 μg/m3 (annual average). See 40 CFR 51.166(b)(15)(i) and (ii). Under the EPA's existing regulations, the establishment of a baseline area for any PSD increment results from the submission of the first complete PSD permit application and is based on the location of the proposed source and its emissions impact on the area. Once the baseline area is established, subsequent PSD sources locating in that area need to consider that a portion of the available increment may have already been consumed by previous emissions increases. In general, the submittal date of the first complete PSD permit application in a particular area is the operative “baseline date.” 3 On or before the date of the first complete PSD application, emissions generally are considered to be part of the baseline concentration, except for certain emissions from major stationary sources. Most emissions increases that occur after the baseline date will be counted toward the amount of increment consumed. Similarly, emissions decreases after the baseline date restore or expand the amount of increment that is available. See 75 FR 64864. As described in the PM2.5 PSD Increment—SILs—SMC Rule, pursuant to the authority under section 166(a) of the CAA the EPA promulgated numerical increments for PM2.5 as a new pollutant 4 for which the NAAQS were established after August 7, 1977,5 and derived 24-hour and annual PM2.5 increments for the three area classifications (Class I, II and III) using the “contingent safe harbor” approach. See 75 FR 64864 at 64869 and table at 40 CFR 51.166(c)(1).

    3 Baseline dates are pollutant specific. That is, a complete PSD application establishes the baseline date only for those regulated NSR pollutants that are projected to be emitted in significant amounts (as defined in the regulations) by the applicant's new source or modification. Thus, an area may have different baseline dates for different pollutants.

    4 The EPA generally characterized the PM2.5 NAAQS as a NAAQS for a new indicator of PM. The EPA did not replace the PM10 NAAQS with the NAAQS for PM2.5 when the PM2.5 NAAQS were promulgated in 1997. The EPA rather retained the annual and 24-hour NAAQS for PM10 as if PM2.5 was a new pollutant even though the EPA had already developed air quality criteria for PM generally. See 75 FR 64864 (October 20, 2010).

    5 The EPA interprets 166(a) to authorize the EPA to promulgate pollutant-specific PSD regulations meeting the requirements of section 166(c) and 166(d) for any pollutant for which the EPA promulgates a NAAQS after 1977.

    In addition to PSD increments for the PM2.5 NAAQS, the PM2.5 PSD Increment—SILs—SMC Rule amended the definition at 40 CFR 51.166 and 52.21 for “major source baseline date” and “minor source baseline date” to establish the PM2.5 NAAQS specific dates (including trigger dates) associated with the implementation of PM2.5 PSD increments. See 75 FR 64864. In accordance with section 166(b) of the CAA, the EPA required the states to submit revised implementation plans adopting the PM2.5 PSD increments to the EPA for approval within 21 months from promulgation of the final rule (by July 20, 2012). Each state was responsible for determining how increment consumption and the setting of the minor source baseline date for PM2.5 would occur under its own PSD program. Regardless of when a state begins to require PM2.5 increment analysis and how it chooses to set the PM2.5 minor source baseline date, the emissions from sources subject to PSD for PM2.5 for which construction commenced after October 20, 2010, (major source baseline date) consume the PM2.5 increment and therefore should be included in the increment analyses occurring after the minor source baseline date is established for an area under the state's revised PSD SIP program.

    (b) What are PSD SILs and SMC?

    The EPA's PM2.5 PSD Increment—SILs—SMC Rule also established SILs and SMC for the PM2.5 NAAQS to address air quality modeling and monitoring provisions for fine particle pollution in areas protected by the PSD program. The SILs and SMC are numerical values that represent thresholds of insignificant, i.e., de minimis, modeled source impacts or monitored (ambient) concentrations, respectively. The de minimis principle is grounded in a decision described by the court case Alabama Power Co. v. Costle, 636 F.2d 323, 360 (D.C. Cir. 1980). In this case reviewing the EPA's 1978 PSD regulations, the court recognized that “there is likely a basis for an implication of de minimis authority to provide exemption when the burdens of regulation yield a gain of trivial or no value.” 636 F.2d at 360. The EPA established such values for PM2.5 in the PM2.5 PSD Increment—SILs—SMC rule to be used as screening tools by a major source subject to PSD to determine the subsequent level of analysis and data gathering required for a PSD permit application for emissions of PM2.5. See 75 FR 64864. As part of the response to comments in the PM2.5 PSD Increment—SILs—SMC Rule final rulemaking, the EPA explained that the agency considers that the SILs and SMC used as de minimis thresholds for the various pollutants are useful tools that enable permitting authorities and PSD applicants to screen out “insignificant” activities; however, the fact remains that these values are not required by the Act as part of an approvable SIP program.

    (c) SILs-SMC Litigation

    The PM2.5 SILs and SMC were subject to litigation before the U.S. Court of Appeals. (Sierra Club v. EPA, Case No. 10-1413, D.C. Circuit). In response to the litigation, the EPA filed a brief on April 6, 2012, which contained a request that the Court vacate and remand to the EPA portions of two PSD PM2.5 rules (40 CFR 51.166 and 40 CFR 52.21) addressing the PM2.5 SILs so that the EPA could voluntarily correct errors in those provisions. On January 22, 2013, the Court granted the EPA's request for vacature and remand of the PM2.5 SILs provisions and also vacated parts of 40 CFR 51.166 and 40 CFR 52.21 that established the PM2.5 SMC, finding that the EPA was precluded from using the PM2.5 SMC to exempt permit applicants from the statutory requirement to compile preconstruction monitoring data. As a result of the Court's decision, States should avoid including language in SIP revision submittals that are the same as or have similar effects as the vacated PM2.5 SILs and SMC language in 40 CFR 51.166 and 52.21. As stated previously, neither the PM2.5 SILs nor the PM2.5 SMC are required elements of the PSD SIP for PM2.5.

    New Mexico's July 26, 2013, SIP revision submittal includes revisions to 20.11.61 NMAC that incorporate the amendments to the PSD regulations consistent with the changes in the 2010 PM2.5 PSD Increment—SILs—SMC Rule. Consistent with the January 2013 vacature and remand by the U.S. Court of Appeals for the D.C. Circuit (the D.C. Circuit), the SIP revision submittal also correctly excludes those amendments from the EPA's 2010 Rule that established the PM2.5 SILs and SMC. Therefore, the EPA finds that these revisions in the July 2013 submittal are consistent with the 2010 rulemaking and subsequent Court decision and meet the requirements of section 110 and part C of the CAA.

    iii. Summary of the EPA's 2012 PM2.5 NSR Implementation Rule

    On October 12, 2012, the EPA finalized amendments to its rules for the CAA NSR permitting program regarding the definition of “regulated NSR pollutant.” This rulemaking clarified when condensable particulate matter should be measured. The final rule continued to require that condensable particulate matter be included as part of the emissions measurements for regulation of PM2.5/PM10. As a result of the EPA's final 2012 NSR PM2.5 Rule, the inadvertent requirement that measurements of condensable particulate matter emissions be included as part of the measurement and regulation of “particulate matter emissions” was removed.

    New Mexico's July 26, 2013, SIP revision submittal includes a revision to the definition of “regulated NSR pollutant.” Specifically, the SIP revision revises this definition found at 20.11.61.7(WW) NMAC to include the clarifying language related to the condensable particulate matter portion accounted for in PM2.5 and PM10 emissions. The EPA notes that as part of the July 2013 SIP revision submittal, New Mexico did not remove the requirement for condensable particulate matter emissions to be included in particulate matter emissions. Therefore, the definition of “regulated NSR pollutant” at 20.11.61.7(WW) NMAC is more stringent than the federal definition. See 40 CFR 51.166(b)(49). The EPA finds that the revisions to the definition of “regulated NSR pollutant” in the July 26, 2013, submittal meet the federal requirements in that the definition is more stringent than the federal definition.

    iv. Summary of the EPA's 2011 Fugitives Interim Rule

    On March 8, 2011, the EPA issued an interim rule to stay a December 2008 rule known as the Fugitives Emissions Rule. The 2008 Rule established new provisions for how fugitive emissions should be treated for NSR permitting. The EPA's 2011 interim rule replaced the stay issued by the EPA on March 31, 2010, which inadvertently covered portions of the NSR permitting requirements that should not have been stayed. The 2011 rulemaking stayed the 2008 Fugitive Emissions Rule as originally intended and reverted the regulatory text back to the language that existed prior to those amendments, which the EPA is reconsidering in response to a 2009 Natural Resources Defense Council petition for reconsideration of the 2008 Fugitive Emissions Rule.

    New Mexico's July 26, 2013, SIP revision submittal includes revisions to 20.11.61 NMAC that incorporate the amendments to the PSD regulations consistent with the changes in the 2011 Fugitives Interim Rule. The EPA finds that these revisions in the July 2013 submittal are consistent with the 2011 rulemaking and meet the requirements of section 110 and part C of the CAA.

    v. Summary of the the EPA's 2011 Biomass Deferral Rule

    On July 20, 2011, the EPA promulgated the Biomass Deferral Rule, which deferred, for a period of three years, the application of the PSD and title V permitting requirements to CO2 emissions from bioenergy and other biogenic stationary sources. See 76 FR 43490. On July 12, 2013, the U.S. Court of Appeals for the D.C. Circuit issued its decision to vacate the Biomass Deferral Rule. See Center for Biological Diversity v. EPA (D.C. Cir. No. 11-1101).

    New Mexico's July 26, 2013, SIP revision submittal includes revisions to 20.11.61 NMAC that incorporate the 2011 Biomass Deferral Rule into the Albuquerque-Bernalillo County PSD program. However, as discussed in this proposed rulemaking, New Mexico's March 4, 2015, SIP Submittal contains revisions to update the PSD program to remove the biomass deferral, which was vacated in 2013. The EPA finds that the combined revisions from the July 2013 and March 2015 submittals are consistent with current PSD regulations with respect to the vacated Biogas Referral Rule and meet the requirements of section 110 and part C of the CAA.

    vi. Summary of the the EPA's 2012 Tailoring Rule and GHG PALs Rule

    On June 3, 2010, the EPA issued a final rule, known as the Tailoring Rule, which phased in permitting requirements for GHG emissions from stationary sources under the CAA PSD and title V permitting programs (75 FR 31514). For Step 1 of the Tailoring Rule, which began on January 2, 2011, PSD or title V requirements applied to sources of GHG emissions only if the sources were subject to PSD or title V “anyway” due to their emissions of non-GHG pollutants. These sources are referred to as “anyway sources.” Step 2 of the Tailoring Rule, which began on July 1, 2011, applied the PSD and title V permitting requirements under the CAA to sources that were classified as major, and, thus, required to obtain a permit, based solely on their potential GHG emissions and to modifications of otherwise major sources that required a PSD permit because they increased only GHG above applicable levels in the EPA regulations.

    On July 12, 2012, the EPA promulgated the final “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule Step 3 and GHG Plantwide Applicability Limits” (GHG Tailoring Rule Step 3 and GHG PALs).6 77 FR 41051. In the Tailoring Rule Step 3 portion of this rule, the EPA decided against further phase in of the PSD and title V requirements to apply to sources emitting lower levels of greenhouse gas emissions. Thus, the thresholds for determining PSD applicability based on emission of greenhouse gases remained the same as established in Step 2 of the Tailoring Rule. The Step 3 portions of the EPA's July 12, 2012, final rule are not relevant to today's proposed action on the New Mexico SIP revision.

    6 For a complete history of the EPA's rulemakings related to GHG emissions please review the following final actions:

    “Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act.” 74 FR 66496 (December 15, 2009).

    “Interpretation of Regulations that Determine Pollutants Covered by Clean Air Act Permitting Programs.” 75 FR 17004 (April 2, 2010).

    “Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards; Final Rule.” 75 FR 25324 (May 7, 2010).

    “Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule.” 75 FR 31514 (June 3, 2010).

    The GHG PALs portion of the July 12, 2012, final rule promulgated revisions to the EPA regulations under 40 CFR part 52 for establishing PALs for GHG emissions. For a full discussion of the EPA's rationale for the GHG PALs provisions, see the notice of final rulemaking at 77 FR 41051. A PAL establishes a site-specific plantwide emission level for a pollutant that allows the source to make changes at the facility without triggering the requirements of the PSD program, provided that emissions do not exceed the PAL level. Under the EPA's interpretation of the federal PAL provisions, such PALs are already available under PSD for non-GHG pollutants and for GHGs on a mass basis, and the EPA revised the PAL regulations to allow for GHG PALs to be established on a carbon dioxide equivalent (CO2e) basis as well. See 77 FR 41052. The EPA finalized these revisions in an effort to streamline federal and SIP PSD permitting programs by allowing sources and permitting authorities to address GHGs using a PAL in a manner similar to the use of PALs for non-GHG pollutants. See 77 FR 41051, 41052.

    II. The EPA's Evaluation

    New Mexico's July 26, 2013, and March 4, 2015, SIP revision submittals include amendments to the Albuquerque-Bernalillo County PSD program found in 20.11.61 NMAC to incorporate changes to federal PSD provisions resulting from the following EPA rulemakings: 2008 NSR PM2.5 Rule, 2010 PM2.5 PSD Increment—SILs—SMC Rule, 2012 PM2.5 PSD Implementation Rule, 2011 Fugitives Interim Rule, 2011 Biomass Deferral Rule, and 2012 GHG Tailoring Rule Step 3 and GHG PALs Rule. The July 26, 2013, SIP revisions also contains additional non-substantive revisions to 20.11.61 NMAC including formatting revisions, inclusion of acronyms, and rewording of provisions to make this Part consistent with other provisions of the NMAC.

    On June 23, 2014, the United States Supreme Court, in Utility Air Regulatory Group v. Environmental Protection Agency, 7 issued a decision addressing the application of PSD permitting requirements to GHG emissions. The Supreme Court said that the EPA may not treat GHGs as an air pollutant for purposes of determining whether a source is a major source (or modification thereof) required to obtain a PSD permit. The Court also said that the EPA could continue to require that PSD permits, otherwise required based on emissions of pollutants other than GHGs, contain limitations on GHG emissions based on the application of Best Available Control Technology (BACT). The Supreme Court decision effectively upheld PSD permitting requirements for GHG emissions under Step 1 of the Tailoring Rule for “anyway sources” and invalidated PSD permitting requirements for Step 2 sources.

    7 134 S.Ct. 2427 (2014).

    In accordance with the Supreme Court decision, on April 10, 2015, the D.C. Circuit issued an amended judgment vacating the regulations that implemented Step 2 of the Tailoring Rule, but not the regulations that implement Step 1 of the Tailoring Rule. A copy of the judgment is included in the docket to this rulemaking.8 The amended judgment preserves, without the need for additional rulemaking by the EPA, the application of the Best Available Control Technology (BACT) requirement to GHG emissions from sources that are required to obtain a PSD permit based on emissions of pollutants other than GHGs (“anyway” sources). The D.C. Circuit's judgment vacated the regulations at issue in the litigation, including 40 CFR 51.166(b)(48)(v), “to the extent they require a stationary source to obtain a PSD permit if greenhouse gases are the only pollutant (i) that the source emits or has the potential to emit above the applicable major source thresholds, or (ii) for which there is a significant emissions increase from a modification.”

    8 Original case is Coalition for Responsible Regulation v. EPA, D.C. Cir., No. 09-1322, 06/26/20, judgment entered for No. 09-1322 on 04/10/2015.

    The EPA may need to take additional steps to revise federal PSD rules in light of the Supreme Court decision and recent D.C. Circuit judgment. In addition, the EPA anticipates that many states will revise their existing SIP-approved PSD programs. The EPA is not expecting states to have revised their existing PSD program regulations at this juncture. However, the EPA is evaluating PSD program submissions to assure that the state's program correctly addresses GHGs consistent with both decisions.

    New Mexico's existing approved SIP for the Albuquerque-Bernalillo County PSD program contains the greenhouse gas permitting requirements required under 40 CFR 51.166, as amended in the Tailoring Rule. As a result, the Albuquerque-Bernalillo County's SIP-approved PSD permitting program continues to require that PSD permits (otherwise required based on emissions of pollutants other than GHGs) contain limitations on GHG emissions based on the application of BACT when sources emit or increase greenhouse gases in the amount of 75,000 tons per year (tpy), measured as carbon dioxide equivalent. Although the SIP-approved Albuquerque-Bernalillo County PSD permitting program may also currently contain provisions that are no longer necessary in light of the D.C. Circuit's judgment or the Supreme Court decision, this does not prevent the EPA from approving the submission addressed in this rule. New Mexico's July 26, 2013, and March 4, 2015, SIP submissions do not add any greenhouse gas permitting requirements that are inconsistent either decision.

    Likewise, this revision does add to the New Mexico SIP for the Albuquerque-Bernalillo County PSD program elements of the EPA's July 12, 2012, rule implementing Step 3 of the phase in of PSD permitting requirements for greenhouse gases described in the Tailoring Rule, which became effective on August 13, 2012. Specifically, the incorporation of the Step 3 rule provisions will allow GHG-emitting sources to obtain PALs for their GHG emissions on a CO2e basis. The GHG PAL provisions, as currently written, include some provisions that may no longer be appropriate in light of both the D.C. Circuit's judgment and the Supreme Court decision. Since the Supreme Court has determined that sources and modifications may not be defined as “major” solely on the basis of the level of greenhouse gases emitted or increased, PALs for greenhouse gases may no longer have value in some situations where a source might have triggered PSD based on greenhouse gas emissions alone. However, PALs for GHGs may still have a role to play in determining whether a modification that triggers PSD for a pollutant other than greenhouse gases should also be subject to BACT for greenhouse gases. These provisions, like the other GHG provisions discussed previously, may be revised at some future time. However, these provisions do not add new requirements for sources or modifications that only emit or increase greenhouse gases above the major source threshold or the 75,000 tpy greenhouse gas level in section 52.21(b)(49)(iv). Rather, the PALs provisions provide increased flexibility to sources that wish to address their GHG emissions in a PAL. Since this flexibility may still be valuable to sources in at least one context described above, we believe that it is appropriate to approve these provisions into the New Mexico SIP at this juncture.

    As discussed in this rulemaking and the accompanying TSD, the EPA finds that the revisions to the Albuquerque-Bernalillo County PSD program contained in the July 26, 2013, and March 4, 2015, SIP revision submittals are consistent with the aforementioned the EPA rulemakings and meet the associated federal requirements. The EPA therefore proposes to find the proposed SIP revisions to be fully approvable.

    III. Proposed Action

    The EPA is proposing to approve revisions to the Albuquerque-Bernalillo County PSD program that were submitted by New Mexico as a SIP revision on July 26, 2013, and March 4, 2015. We are proposing approval of the portions of the July 26, 2013, and March 4, 2015, submittals that revised the following sections under 20.11.61:

    • 20.11.61.2 NMAC—Scope,

    • 20.11.61.5 NMAC—Effective Date,

    • 20.11.61.6 NMAC—Objective,

    • 20.11.61.7 NMAC—Definitions,

    • 20.11.61.10 NMAC—Documents,

    • 20.11.61.11 NMAC—Applicability,

    • 20.11.61.12 NMAC—Obligations of Owners or Operators of Sources,

    • 20.11.61.14 NMAC—Control Technology Review and Innovative Control Technology,

    • 20.11.61.15 NMAC—Ambient Impact Requirements,

    • 20.11.61.18 NMAC—Air Quality Analysis and Monitoring Requirements,

    • 20.11.61.20 NMAC—Actuals Plantwide Applicability Limits (PALs),

    • 20.11.61.23 NMAC—Exclusions from Increment Consumption,

    • 20.11.61.24 NMAC—Sources Impacting Federal Class I Areas-Additional Requirements,

    • 20.11.61.27 NMAC—Table 2-Significant Emission Rates,

    • 20.11.61.29 NMAC—Table 4-Allowable PSD Increments, and

    • 20.11.61.30 NMAC—Table 5-Maximum Allowable Increases for Class I Variances.

    The EPA has determined that these revisions to the New Mexico SIP's Albuquerque-Bernalillo County PSD program are approvable because the submitted rules are adopted and submitted in accordance with the CAA and are consistent with the EPA regulations regarding PSD permitting. The EPA is proposing this action under section 110 and part C of the Act.

    The EPA is severing from our proposed approval action the revisions to 20.11.60 NMAC submitted on July 26, 2013, which are revisions to the Albuquerque-Bernalillo County NNSR Program and will be addressed in a separate action.

    IV. Incorporation by Reference

    In this rule, the EPA is proposing to include in a final EPA rule regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is proposing to incorporate by reference the New Mexico regulations discussed in section III. of this preamble. The EPA has made, and will continue to make, these documents generally available electronically through www.regulations.gov and/or in hard copy at the appropriate EPA office (see the ADDRESSES section of this preamble for more information).

    V. Statutory and Executive Order Reviews

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

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

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

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

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

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

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

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

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

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

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

    List of Subjects in 40 CFR Part 52

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

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: April 24, 2015. Ron Curry, Regional Administrator, Region 6.
    [FR Doc. 2015-11780 Filed 5-19-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 52 and 81 [EPA-R03-OAR-2015-0029; FRL-9928-00-Region 3] Approval and Promulgation of Air Quality Implementation Plans; Pennsylvania; Redesignation Request and Associated Maintenance Plan for the Pittsburgh-Beaver Valley Nonattainment Area for the 1997 Annual and 2006 24-Hour Fine Particulate Matter Standard AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Proposed rule.

    SUMMARY:

    The Environmental Protection Agency (EPA) is proposing to approve the Commonwealth of Pennsylvania's December 22, 2014 request to redesignate to attainment the Pittsburgh-Beaver Valley nonattainment area (Pittsburgh Area or Area) for the 1997 annual and 2006 24-hour fine particulate matter (PM2.5) National Ambient Air Quality Standards (NAAQS or standards). EPA is also proposing to determine that the Area continues to attain the 1997 annual and 2006 24-hour PM2.5 NAAQS. In addition, EPA is proposing to approve as a revision to the Pennsylvania State Implementation Plan (SIP) the associated maintenance plan that was submitted with the redesignation request, to show maintenance of the 1997 annual and 2006 24-hour PM2.5 NAAQS through 2025 for the Area. EPA is also proposing to approve as revisions to the Pennsylvania SIP the 2007 emissions inventories for the 1997 annual PM2.5 NAAQS and the 2011 emissions inventories for the 2006 24-hour PM2.5 NAAQS that were included in the maintenance plan. The maintenance plan also included the 2017 and 2025 PM2.5 and nitrogen oxides (NOX) motor vehicle emissions budgets (MVEBs) for the Area for both NAAQS which EPA is proposing to approve for conformity purposes. This rulemaking action to propose approval of the 1997 annual and 2006 24-hour PM2.5 NAAQS redesignation request and associated maintenance plan for the Area is based on EPA's determination that Pennsylvania has met the criteria for redesignation to attainment specified in the Clean Air Act (CAA) for both NAAQS.

    DATES:

    Written comments must be received on or before June 19, 2015.

    ADDRESSES:

    Submit your comments, identified by Docket ID Number EPA-R03-OAR-2015-0029 by one of the following methods:

    A. www.regulations.gov. Follow the on-line instructions for submitting comments.

    B. Email: [email protected]

    C. Mail: EPA-R03-OAR-2015-0029, Cristina Fernandez, Associate Director, Office of Air Quality Planning, Mailcode 3AP30, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania 19103.

    D. Hand Delivery: At the previously-listed EPA Region III address. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information.

    Instructions: Direct your comments to Docket ID No. EPA-R03-OAR-2015-0029. EPA's policy is that all comments received will be included in the public docket without change, and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or email. The www.regulations.gov Web site is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to EPA without going through www.regulations.gov, your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses.

    Docket: All documents in the electronic docket are listed in the www.regulations.gov index. Although listed in the index, some information is not publicly available, i.e., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically in www.regulations.gov or in hard copy during normal business hours at the Air Protection Division, U.S. Environmental Protection Agency, Region III, 1650 Arch Street, Philadelphia, Pennsylvania. Copies of the State submittal are available at the Pennsylvania Department of Environmental Protection, Bureau of Air Quality Control, P.O. Box 8468, 400 Market Street, Harrisburg, Pennsylvania 17105.

    FOR FURTHER INFORMATION CONTACT:

    Rose Quinto, (215) 814-2182 or by email at [email protected]

    SUPPLEMENTARY INFORMATION: Table of Contents I. Background II. EPA's Requirements A. Criteria for Redesignation to Attainment B. Requirements of a Maintenance Plan III. Summary of Proposed Actions IV. Effects of Recent Court Decisions on Proposed Actions A. Effect of the Court Decisions Regarding EPA's CSAPR B. Effect of the D.C. Circuit Court Decision Regarding PM2.5 Implementation Under Subpart 4 of Part D of Title I of the CAA V. EPA's Analysis of Pennsylvania's Submittal A. Redesignation Request B. Maintenance Plan C. Motor Vehicle Emissions Budgets VI. Proposed Actions VII. Statutory and Executive Order Reviews I. Background

    The first air quality standards for PM2.5 were established on July 18, 1997 (62 FR 38652). EPA promulgated an annual standard at a level of 15 micrograms per cubic meter (μg/m3), based on a three-year average of annual mean PM2.5 concentrations (the 1997 annual PM2.5 NAAQS). In the same rulemaking action, EPA promulgated a 24-hour standard of 65 μg/m3, based on a three-year average of the 98th percentile of 24-hour concentrations.

    On January 5, 2005 (70 FR 944), EPA published air quality area designations for the 1997 PM2.5 NAAQS. In that rulemaking action, EPA designated the Pittsburgh-Beaver Valley Area as nonattainment for the 1997 annual PM2.5 NAAQS. Id. at 1000. The Pittsburgh-Beaver Valley Area is comprised of Beaver, Butler, Washington, Westmoreland Counties and portions of Allegheny, Armstrong, Green and Lawrence Counties. See 40 CFR 81.339.

    On October 17, 2006 (71 FR 61144), EPA retained the annual average standard at 15 μg/m3, but revised the 24-hour standard to 35 μg/m3, based again on the three-year average of the 98th percentile of 24-hour concentrations (the 2006 24-hour PM2.5 NAAQS). On November 13, 2009 (74 FR 58688), EPA published designations for the 2006 24-hour PM2.5 NAAQS, which became effective on December 14, 2009. In that rulemaking action, EPA designated the Pittsburgh-Beaver Valley Area as nonattainment for the 2006 24-hour PM2.5 NAAQS. See 40 CFR 81.339.

    On October 12, 2012 (77 FR 62147) and May 2, 2014 (79 FR 25014), EPA made determinations that the Pittsburgh Area had attained the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively. Pursuant to 40 CFR 51.1004(c) and based on these determinations, the requirements for the Area to submit an attainment demonstration and associated reasonably available control measures (RACM), a reasonable further progress (RFP) plan, contingency measures, and other planning SIPs related to the attainment of either the 1997 annual or 2006 24-hour PM2.5 NAAQS were, and continue to be, suspended until such time as: the Area is redesignated to attainment for each standard, at which time the requirements no longer apply; or EPA determines that the Area has again violated any of the standards, at which time such plans are required to be submitted. On October 12, 2012 (77 FR 62147), EPA also determined in accordance with section 179(c) of the CAA, that the Pittsburgh Area attained the 1997 annual PM2.5 NAAQS by its applicable attainment date of April 5, 2010.

    On December 22, 2014, the Commonwealth of Pennsylvania, through the Pennsylvania Department of Environmental Protection (PADEP), formally submitted a request to redesignate the Pittsburg-Beaver Valley Area from nonattainment to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS. Concurrently, PADEP submitted a combined maintenance plan for the 1997 annual and 2006 24-hour PM2.5 NAAQS for the Area as a SIP revision to ensure continued attainment throughout the Area over the next 10 years. The maintenance plan includes the 2017 and 2025 PM2.5 and NOX MVEBs for the Area for the 1997 annual and 2006 24-hour PM2.5 NAAQS. The maintenance plan also includes the 2007 comprehensive emissions inventories for the 1997 annual PM2.5 NAAQS and the 2011 comprehensive emissions inventories for the 2006 24-hour PM2.5 NAAQS for PM2.5, NOX, sulfur dioxide (SO2), volatile organic compounds (VOCs), and ammonia (NH3).

    In this proposed rulemaking action, EPA addresses the effects of several decisions of the United States Court of Appeals for the District of Columbia (D.C. Circuit Court) and a decision of the United States Supreme Court: (1) The D.C. Circuit Court's August 21, 2012 decision to vacate and remand to EPA the Cross-State Air Pollution Control Rule (CSAPR); (2) the Supreme Court's April 29, 2014 reversal of the vacature of CSAPR, and remand to the D.C. Circuit Court; (3) the D.C. Circuit Court's October 23, 2014 decision to lift the stay of CSAPR; and (4) the D.C. Circuit Court's January 4, 2013 decision to remand to EPA two final rules implementing the 1997 annual PM2.5 NAAQS.

    II. EPA's Requirements A. Criteria for Redesignation to Attainment

    The CAA provides the requirements for redesignating a nonattainment area to attainment. Specifically, section 107(d)(3)(E) of the CAA allows for redesignation providing that: (1) EPA determines that the area has attained the applicable NAAQS; (2) EPA has fully approved the applicable implementation plan for the area under section 110(k); (3) EPA determines that the improvement in air quality is due to permanent and enforceable reductions in emissions resulting from implementation of the applicable SIP and applicable Federal air pollutant control regulations and other permanent and enforceable reductions; (4) EPA has fully approved a maintenance plan for the area as meeting the requirements of section 175A of the CAA; and (5) the state containing such area has met all requirements applicable to the area under section 110 and part D of the CAA. Each of these requirements are discussed in Section V. of this proposed rulemaking action.

    EPA provided guidance on redesignations in the “SIPs; General Preamble for the Implementation of Title I of the CAA Amendments of 1990,” (57 FR 13498, April 16, 1992) (the General Preamble) and has provided further guidance on processing redesignation requests in the following documents: (1) “Procedures for Processing Requests to Redesignate Areas to Attainment,” Memorandum from John Calcagni, Director, Air Quality Management Division, September 4, 1992 (hereafter referred to as the 1992 Calcagni Memorandum); (2) “SIP Actions Submitted in Response to CAA Deadlines,” Memorandum from John Calcagni, Director, Air Quality Management Division, October 28, 1992; and (3) “Part D New Source Review (Part D NSR) Requirements for Areas Requesting Redesignation to Attainment,” Memorandum from Mary D. Nichols, Assistant Administrator for Air and Radiation, October 14, 1994.

    B. Requirements of a Maintenance Plan

    Section 175A of the CAA sets forth the elements of a maintenance plan for areas seeking redesignation from nonattainment to attainment. Under section 175A, the plan must demonstrate continued attainment of the applicable NAAQS for at least 10 years after approval of a redesignation of an area to attainment. Eight years after the redesignation, the state must submit a revised maintenance plan demonstrating that attainment will continue to be maintained for the 10 years following the initial 10-year period. To address the possibility of future NAAQS violations, the maintenance plan must contain such contingency measures, with a schedule for implementation, as EPA deems necessary to assure prompt correction of any future PM2.5 violations.

    The 1992 Calcagni Memorandum provides additional guidance on the content of a maintenance plan. The Memorandum states that a maintenance plan should address the following provisions: (1) An attainment emissions inventory; (2) a maintenance demonstration showing maintenance for 10 years; (3) a commitment to maintain an ambient air quality monitoring network in accordance with 40 CFR part 58; (4) verification of continued attainment; and (5) a contingency plan to prevent or correct future violations of the NAAQS.

    Under the CAA, states are required to submit, at various times, control strategy SIP revisions for nonattainment areas and maintenance plans for areas seeking redesignation to attainment for a given NAAQS. These emission control strategy SIP revisions (e.g., RFP and attainment demonstration SIP revisions) and maintenance plans also create MVEBs based on onroad mobile source emissions for the relevant criteria pollutants and/or their precursors, where appropriate, to address pollution from onroad transportation sources. The MVEBs are the portions of the total allowable emissions that are allocated to onroad vehicle use that, together with emissions from all other sources in the area, will provide attainment, RFP, or maintenance, as applicable. The budget serves as a ceiling on emissions from an area's planned transportation system. Under 40 CFR part 93, a MVEB for an area seeking a redesignation to attainment is established for the last year of the maintenance plan.

    The maintenance plan for the Pittsburgh Area, comprised of Beaver, Butler, Washington, Westmoreland Counties and portions of Allegheny, Armstrong, Green and Lawrence Counties in Pennsylvania, includes the 2017 and 2025 PM2.5 and NOX MVEBs for transportation conformity purposes. The transportation conformity determination for the Area is further discussed in Section V.C. of this proposed rulemaking action and in a technical support document (TSD), “Adequacy Findings for the Motor Vehicle Emissions Budgets (MVEBs) in the 1997 Annual Fine Particulate Matter (PM2.5) National Ambient Air Quality Standard (NAAQS) and the 2006 24-Hour PM2.5 NAAQS Maintenance Plan for the Pittsburgh-Beaver Valley, Pennsylvania (PA) Nonattainment Area” (Adequacy Findings TSD), dated April 23, 2015, available on line at www.regulations.gov, Docket ID No. EPA-R03-OAR-2015-0029.

    III. Summary of Proposed Actions

    EPA is proposing to take several rulemaking actions related to the redesignation of the Pittsburgh Area to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS. EPA is proposing to find that the Pittsburgh Area meets the requirements for redesignation of the 1997 annual and 2006 24-hour PM2.5 NAAQS under section 107(d)(3)(E) of the CAA. EPA is thus proposing to approve Pennsylvania's request to change the legal designation of the Pittsburgh-Beaver Valley Area from nonattainment to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS. EPA is also proposing to approve the associated maintenance plan for the Pittsburgh Area as a revision to the Pennsylvania SIP for the 1997 annual and 2006 24-hour PM2.5 NAAQS, including the 2017 and 2025 PM2.5 and NOX MVEBs for the Area for transportation conformity purposes. Approval of the maintenance plan is one of the CAA criteria for redesignation of the Area to attainment for both NAAQS. Pennsylvania's combined maintenance plan is designed to ensure continued attainment of the 1997 annual and 2006 24-hour PM2.5 NAAQS in the Area for at least 10 years after redesignation.

    EPA previously determined that the Pittsburgh Area attained both the 1997 annual and 2006 24-hour PM2.5 NAAQS (see 77 FR 62147 (October 12, 2012) and 79 FR 25014 (May 2, 2014)), and EPA is proposing to find that the Area continues to attain both NAAQS. In order to meet the requirements of section 172(c)(3) of the CAA, EPA is also proposing to approve the 2007 comprehensive emissions inventories for the 1997 annual PM2.5 NAAQS and the 2011 comprehensive emissions inventories for the 2006 24-hour PM2.5 NAAQS submitted with Pennsylvania's maintenance plan that includes an inventory of PM2.5, SO2, NOX, VOC, and NH3 for the Area as a revision to the Pennsylvania SIP. EPA's analysis of the proposed actions is provided in Section V. of this proposed rulemaking.

    IV. Effects of Recent Court Decisions on Proposed Actions A. Effect of the Court Decisions Regarding EPA's CSAPR 1. Background

    The D.C. Circuit Court and the Supreme Court have issued a number of decisions and orders regarding the status of EPA's regional trading programs for transported air pollution, the Clean Air Interstate Rule (CAIR) and CSAPR, that impact this proposed redesignation action. In 2008, the D.C. Circuit Court initially vacated CAIR, North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), but ultimately remanded the rule to EPA without vacatur to preserve the environmental benefits provided by CAIR, North Carolina v. EPA, 550 F.3d 1176, 1178 (D.C. Cir. 2008). On August 8, 2011 (76 FR 48208), acting on the D.C. Circuit Court's remand, EPA promulgated CSAPR, to address interstate transport of emissions and resulting secondary air pollutants and to replace CAIR.1 CSAPR requires substantial reductions of SO2 and NOX emissions from electric generating units (EGUs) in 28 states in the Eastern United States. Implementation of CSAPR was scheduled to begin on January 1, 2012, when CSAPR's cap-and-trade programs would have superseded the CAIR cap-and-trade programs. Numerous parties filed petitions for review of CSAPR, and on December 30, 2011, the D.C. Circuit Court issued an order staying CSAPR pending resolution of the petitions and directing EPA to continue to administer CAIR. EME Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir. Dec. 30, 2011), Order at 2.

    1 CAIR addressed the 1997 annual PM2.5 NAAQS and the 1997 8-hour ozone NAAQS. CSAPR addresses contributions from upwind states to downwind nonattainment and maintenance of the 2006 24-hour PM2.5 NAAQS as well as the ozone and PM2.5 NAAQS addressed by CAIR.

    On August 21, 2012, the D.C. Circuit Court issued its ruling, vacating and remanding CSAPR to EPA and once again ordering continued implementation of CAIR. EME Homer City Generation, L.P. v. EPA, 696 F.3d 7, 38 (D.C. Cir. 2012). The D.C. Circuit Court subsequently denied EPA's petition for rehearing en banc. EME Homer City Generation, L.P. v. EPA, No. 11-1302, 2013 WL 656247 (D.C. Cir. Jan. 24, 2013), at *1. EPA and other parties then petitioned the Supreme Court for a writ of certiorari, and the Supreme Court granted the petitions on June 24, 2013. EPA v. EME Homer City Generation, L.P., 133 S. Ct. 2857 (2013).

    On April 29, 2014, the Supreme Court vacated and reversed the D.C. Circuit Court's decision regarding CSAPR, and remanded that decision to the D.C. Circuit Court to resolve remaining issues in accordance with its ruling. EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584 (2014). EPA moved to have the stay of CSAPR lifted by the D.C. Circuit Court in light of the Supreme Court decision. EME Homer City Generation, L.P. v. EPA, Case No. 11-1302, Document No. 1499505 (D.C. Cir. filed June 26, 2014). In its motion, EPA asked the D.C. Circuit Court to toll CSAPR's compliance deadlines by three years, so that the Phase 1 emissions budgets apply in 2015 and 2016 (instead of 2012 and 2013), and the Phase 2 emissions budgets apply in 2017 and beyond (instead of 2014 and beyond). On October 23, 2014, the D.C. Circuit Court granted EPA's motion and lifted the stay of CSAPR which was imposed on December 30, 2011. EME Homer City Generation, L.P. v. EPA, No. 11-1302 (D.C. Cir. Oct. 23, 2014), Order at 3. On December 3, 2014, EPA issued an interim final rule to clarify how EPA will implement CSAPR consistent with the D.C. Circuit Court's order granting EPA's motion requesting lifting the stay and tolling the rule's deadlines. See 79 FR 71663 (December 3, 2014) (interim final rulemaking). Consistent with that rule, EPA began implementing CSAPR on January 1, 2015.

    2. Proposal on This Issue

    Because CAIR was promulgated in 2005 and incentivized sources and states to begin achieving early emission reductions, the air quality data examined by EPA in issuing a final determination of attainment for the Pittsburgh Area in 2012 (October 12, 2012, 77 FR 62147) and the air quality data from the Area since 2005 necessarily reflect reductions in emissions from upwind sources as a result of CAIR, and Pennsylvania included CAIR as one of the measures that helped to bring the Area into attainment. However, modeling conducted by EPA during the CSAPR rulemaking process, which used a baseline emissions scenario that “backed out” the effects of CAIR, see 76 FR 48223, projected that the counties in the Pittsburgh Area would have design values below the 1997 annual and the 2006 24-hour PM2.5 NAAQS for 2012 and 2014 without taking into account emission reductions from CAIR or CSAPR. See Appendix B of EPA's “Air Quality Modeling Final Rule Technical Support Document,” (Pages B-57, B-58, B-85, B-86 and B-87), which is available in the docket for this proposed rulemaking action. In addition, the 2011-2013 quality-assured, quality-controlled, and certified monitoring data for the Pittsburgh Area confirms that the PM2.5 design values for the Area remained well below the 1997 annual and 2006 24-hour PM2.5 NAAQS in 2013.

    The status of CSAPR is not relevant to this redesignation. CSAPR was promulgated in June 2011, and the rule was stayed by the D.C. Circuit Court just six months later, before the trading programs it created were scheduled to go into effect. As stated previously, EPA began implementing CSAPR on January 1, 2015, subsequent to the emission reductions documented in the Commonwealth's December 22, 2014 request for resedignation. Therefore, the Area's attainment of the 1997 annual or the 2006 24-hour PM2.5 NAAQS cannot have been a result of any emission reductions associated with CSAPR. In summary, neither the status of CAIR nor the current status of CSAPR affects any of the criteria for proposed approval of this redesignation request for the Pittsburgh Area.

    B. Effect of the D.C. Circuit Court Decision Regarding PM2.5 Implementation Under Subpart 4 of Part D of Title I of the CAA 1. Background

    On January 4, 2013, in NRDC v. EPA, the D.C. Circuit Court remanded to EPA the “Final Clean Air Fine Particle Implementation Rule” (72 FR 20586, April 25, 2007) and the “Implementation of the New Source Review (NSR) Program for PM2.5” final rule (73 FR 28321, May 16, 2008) (collectively, 1997 PM2.5 Implementation Rule). 706 F.3d 428 (D.C. Cir. 2013). The D.C. Circuit Court found that EPA erred in implementing the 1997 annual PM2.5 NAAQS pursuant to the general implementation provisions of subpart 1 of part D of Title I of the CAA (subpart 1), rather than the particulate-matter-specific provisions of subpart 4 of part D of Title I (subpart 4).

    Prior to the January 4, 2013 decision, the states had worked towards meeting the air quality goals of the 1997 and 2006 PM2.5 NAAQS in accordance with EPA regulations and guidance derived from subpart 1 of part D of Title I of the CAA. In response to the D.C. Circuit Court's remand, EPA took this history into account by setting a new deadline for any remaining submissions that may be required for moderate nonattainment areas as a result of the D.C. Circuit Court's decision regarding the applicability of subpart 4 of part D of Title I of the CAA.

    On June 2, 2014 (79 FR 31566), EPA issued a final rule, “Identification of Nonattainment Classification and Deadlines for Submission of SIP Provisions for the 1997 and 2006 PM2.5 NAAQS” (the PM2.5 Subpart 4 Classification and Deadline Rule), which identifies the classification under subpart 4 as “moderate” for areas currently designated nonattainment for the 1997 annual and/or 2006 24-hour PM2.5 NAAQS. The rule set a deadline for states to submit attainment plans and meet other subpart 4 requirements. The rule specified December 31, 2014 as the deadline for states to submit any additional attainment-related SIP elements that may be needed to meet the applicable requirements of subpart 4 for areas currently designated nonattainment for the 1997 PM2.5 and/or 2006 PM2.5 NAAQS and to submit SIPs addressing the nonattainment new source review (NSR) requirements in subpart 4.

    As explained in detail in the following section, since Pennsylvania submitted its request to redesignate the Pittsburgh Area on December 22, 2014, any additional attainment-related SIP elements that may be needed for the Area to meet the applicable requirements of subpart 4 were not due at the time Pennsylvania submitted its request to redesignate the Area for the 1997 annual and 2006 24-hour PM2.5 NAAQS.

    2. Proposal on This Issue

    In this proposed rulemaking action, EPA addresses the effect of the D.C. Circuit Court's January 4, 2013 ruling and the June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule on the redesignation request for the Area. EPA is proposing to determine that the D.C. Circuit Court's January 4, 2013 decision does not prevent EPA from redesignating the Area to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. Even in light of the D.C. Circuit Court's decision, redesignation for this Area is appropriate under the CAA and EPA's longstanding interpretations of the CAA's provisions regarding redesignation. EPA first explains its longstanding interpretation that requirements that are imposed, or that become due, after a complete redesignation request is submitted for an area that is attaining the standard, are not applicable for purposes of evaluating a redesignation request. Second, EPA then shows that, even if EPA applies the subpart 4 requirements to the redesignation requests of the Area and disregards the provisions of its 1997 PM2.5 Implementation Rule recently remanded by the D.C. Circuit Court, Pennsylvania's request for redesignation of the Area still qualifies for approval. EPA's discussion also takes into account the effect of the D.C. Circuit Court's ruling and the June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule on the maintenance plans of the Area, which EPA views as approvable even when subpart 4 requirements are considered.

    a. Applicable Requirements Under Subpart 4 for Purposes of Evaluating the Redesignation Request of the Area

    With respect to the 1997 PM2.5 Implementation Rule, the D.C. Circuit Court's January 4, 2013 ruling rejected EPA's reasons for implementing the PM2.5 NAAQS solely in accordance with the provisions of subpart 1, and remanded that matter to EPA, so that it could address implementation of the 1997 annual PM2.5 NAAQS under subpart 4 of part D of the CAA, in addition to subpart 1. For the purposes of evaluating Pennsylvania's December 22, 2014 redesignation request for the Area, to the extent that implementation under subpart 4 would impose additional requirements for areas designated nonattainment, EPA believes that those requirements are not “applicable” for the purposes of section 107(d)(3)(E) of the CAA, and thus EPA is not required to consider subpart 4 requirements with respect to the redesignation of the area. Under its longstanding interpretation of the CAA, EPA has interpreted section 107(d)(3)(E) to mean, as a threshold matter, that the part D provisions which are “applicable” and which must be approved in order for EPA to redesignate an area include only those which came due prior to a state's submittal of a complete redesignation request. See 1992 Calcagni Memorandum. See also “SIP Requirements for Areas Submitting Requests for Redesignation to Attainment of the Ozone and Carbon Monoxide (CO) NAAQS on or after November 15, 1992,” Memorandum from Michael Shapiro, Acting Assistant Administrator, Air and Radiation, September 17, 1993 (Shapiro memorandum); Final Redesignation of Detroit-Ann Arbor, (60 FR 12459, 12465-66, March 7, 1995); Final Redesignation of St. Louis, Missouri, (68 FR 25418, 25424-27, May 12, 2003); Sierra Club v. EPA, 375 F.3d 537, 541 (7th Cir. 2004) (upholding EPA's redesignation rulemaking applying this interpretation and expressly rejecting Sierra Club's view that the meaning of “applicable” under the statute is “whatever should have been in the plan at the time of attainment rather than whatever actually was in the plan and already implemented or due at the time of attainment”).2 In this case, at the time that Pennsylvania submitted its redesignation request for the Pittsburgh Area for the 1997 annual and the 2006 24-hour PM2.5 NAAQS, the requirements under subpart 4 were not due.3

    2 Applicable requirements of the CAA that come due subsequent to the area's submittal of a complete redesignation request remain applicable until a redesignation is approved, but are not required as a prerequisite to redesignation. Section 175A(c) of the CAA.

    3 EPA found Pennsylvania's December 22, 2014 submittal redesignation of the Area complete on January 22, 2015. EPA's complete determination is available in the docket for this rulemaking.

    EPA's view that, for purposes of evaluating the redesignation of the Area, the subpart 4 requirements were not due at the time Pennsylvania submitted the redesignation request is in keeping with the EPA's interpretation of subpart 2 requirements for subpart 1 ozone areas redesignated subsequent to the D.C. Circuit Court's decision in South Coast Air Quality Mgmt. Dist. v. EPA, 472 F.3d 882 (D.C. Cir. 2006). In South Coast, the D.C. Circuit Court found that EPA was not permitted to implement the 1997 8-hour ozone standard solely under subpart 1, and held that EPA was required under the statute to implement the standard under the ozone-specific requirements of subpart 2 as well. Subsequent to the South Coast decision, in evaluating and acting upon redesignation requests for the 1997 8-hour ozone standard that were submitted to EPA for areas under subpart 1, EPA applied its longstanding interpretation of the CAA that “applicable requirements,” for purposes of evaluating a redesignation, are those that had been due at the time the redesignation request was submitted. See, e.g., Proposed Redesignation of Manitowoc County and Door County Nonattainment Areas (75 FR 22047, 22050, April 27, 2010). In those rulemaking actions, EPA therefore, did not consider subpart 2 requirements to be “applicable” for the purposes of evaluating whether the area should be redesignated under section 107(d)(3)(E) of the CAA.

    EPA's interpretation derives from the provisions of section 107(d)(3) of the CAA. Section 107(d)(3)(E)(v) states that, for an area to be redesignated, a state must meet “all requirements `applicable' to the area under section 110 and part D.” Section 107(d)(3)(E)(ii) provides that EPA must have fully approved the “applicable” SIP for the area seeking redesignation. These two sections read together support EPA's interpretation of “applicable” as only those requirements that came due prior to submission of a complete redesignation request.

    First, holding states to an ongoing obligation to adopt new CAA requirements that arose after the state submitted its redesignation request, in order to be redesignated, would make it problematic or impossible for EPA to act on redesignation requests in accordance with the 18-month deadline Congress set for EPA action in section 107(d)(3)(D). If “applicable requirements” were interpreted to be a continuing flow of requirements with no reasonable limitation, states, after submitting a redesignation request, would be forced continuously to make additional SIP submissions that in turn would require EPA to undertake further notice-and-comment rulemaking actions to act on those submissions. This would create a regime of unceasing rulemaking that would delay action on the redesignation request beyond the 18-month timeframe provided by the CAA for this purpose.

    Second, a fundamental premise for redesignating a nonattainment area to attainment is that the area has attained the relevant NAAQS due to emission reductions from existing controls. Thus, an area for which a redesignation request has been submitted would have already attained the NAAQS as a result of satisfying statutory requirements that came due prior to the submission of the request. Absent a showing that unadopted and unimplemented requirements are necessary for future maintenance, it is reasonable to view the requirements applicable for purposes of evaluating the redesignation request as including only those SIP requirements that have already come due. These are the requirements that led to attainment of the NAAQS. To require, for redesignation approval, that a state also satisfy additional SIP requirements coming due after the state submits its complete redesignation request, and while EPA is reviewing it, would compel the state to do more than is necessary to attain the NAAQS, without a showing that the additional requirements are necessary for maintenance.

    In the context of this redesignation, the timing and nature of the D.C. Circuit Court's January 4, 2013 decision in NRDC v. EPA, and EPA's June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule compound the consequences of imposing requirements that come due after the redesignation request is submitted. Pennsylvania submitted its redesignation request for the 1997 annual and 2006 24-hour PM2.5 NAAQS on December 22, 2014 for the Pittsburgh Area, which is prior to the deadline by which the area is required to meet the attainment plan and other requirements pursuant to subpart 4.

    To require Pennsylvania's fully-complete and pending redesignation request for the 1997 annual and 2006 24-hour PM2.5 NAAQS to comply now with requirements of subpart 4 that the D.C. Circuit Court announced only in January 2013 and for which the December 31, 2014 deadline to comply occurred subsequent to EPA's receipt of Pennsylvania's December 22, 2014 redesignation request would be to give retroactive effect to such requirements and provide Pennsylvania a unique and earlier deadline for compliance solely on the basis of submitting its redesignation request for the Area. The D.C. Circuit Court recognized the inequity of this type of retroactive impact in Sierra Club v. Whitman, 285 F.3d 63 (D.C. Cir. 2002),4 where it upheld the D.C. Circuit Court's ruling refusing to make retroactive EPA's determination that the areas did not meet their attainment deadlines. In that case, petitioners urged the D.C. Circuit Court to make EPA's nonattainment determination effective as of the date that the statute required, rather than the later date on which EPA actually made the determination. The D.C. Circuit Court rejected this view, stating that applying it “would likely impose large costs on States, which would face fines and suits for not implementing air pollution prevention plans . . . even though they were not on notice at the time.” Id. at 68. Similarly, it would be unreasonable to penalize Pennsylvania by rejecting its December 22, 2014 redesignation request for an area that EPA previously determined was attaining the 1997 annual and 2006 24-hour PM2.5 NAAQS and that met all applicable requirements known to be in effect at the time of the request. For EPA now to reject the redesignation request solely because Pennsylvania did not expressly address subpart 4 requirements which came due after receipt of such request, (and for which it had little to no notice), would inflict the same unfairness condemned by the D.C. Circuit Court in Sierra Club v. Whitman.

    4Sierra Club v. Whitman was discussed and distinguished in a recent D.C. Circuit Court decision that addressed retroactivity in a quite different context, where, unlike the situation here, EPA sought to give its regulations retroactive effect. National Petrochemical and Refiners Ass'n v. EPA, 630 F.3d 145, 163 (D.C. Cir. 2010), rehearing denied 643 F.3d 958 (D.C. Cir. 2011), cert denied 132 S. Ct. 571 (2011).

    b. Subpart 4 Requirements and Pennsylvania's Redesignation Request

    Even if EPA were to take the view that the D.C. Circuit Court's January 4, 2013 decision, or the June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule, requires that, in the context of pending redesignation requests for the 1997 annual and the 2006 24-hour PM2.5 NAAQS, which were submitted prior to December 31, 2014, subpart 4 requirements must be considered as being due and in effect, EPA proposes to determine that the Area still qualifies for redesignation to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. As explained subsequently, EPA believes that the redesignation request for the Area, though not expressed in terms of subpart 4 requirements, substantively meets the requirements of that subpart for purposes of redesignating the Area to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS.

    With respect to evaluating the relevant substantive requirements of subpart 4 for purposes of redesignating the Area, EPA notes that subpart 4 incorporates components of subpart 1 of part D, which contains general air quality planning requirements for areas designated as nonattainment. See section 172(c). Subpart 4 itself contains specific planning and scheduling requirements for coarse particulate matter (PM10) 5 nonattainment areas, and under the D.C. Circuit Court's January 4, 2013 decision in NRDC v. EPA, these same statutory requirements also apply for PM2.5 nonattainment areas. EPA has longstanding general guidance that interprets the 1990 amendments to the CAA, making recommendations to states for meeting the statutory requirements for SIPs for nonattainment areas. See the General Preamble. In the General Preamble, EPA discussed the relationship of subpart 1 and subpart 4 SIP requirements, and pointed out that subpart 1 requirements were to an extent “subsumed by, or integrally related to, the more specific PM10 requirements” (57 FR 13538, April 16, 1992). The subpart 1 requirements include, among other things, provisions for attainment demonstrations, RACM, RFP, emissions inventories, and contingency measures.

    5 PM10 refers to particulates nominally 10 micrometers in diameter or smaller.

    For the purposes of this redesignation request, in order to identify any additional requirements which would apply under subpart 4, consistent with EPA's June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule, EPA is considering the areas to be “moderate” PM2.5 nonattainment areas. As EPA explained in its June 2, 2014 rule, section 188 of the CAA provides that all areas designated nonattainment areas under subpart 4 are initially to be classified by operation of law as “moderate” nonattainment areas, and remain moderate nonattainment areas unless and until EPA reclassifies the area as a “serious” nonattainment area. Accordingly, EPA believes that it is appropriate to limit the evaluation of the potential impact of subpart 4 requirements to those that would be applicable to moderate nonattainment areas. Sections 189(a) and (c) of subpart 4 apply to moderate nonattainment areas and include the following: (1) An approved permit program for construction of new and modified major stationary sources (section 189(a)(1)(A)); (2) an attainment demonstration (section 189(a)(1)(B)); (3) provisions for RACM (section 189(a)(1)(C)); and (4) quantitative milestones demonstrating RFP toward attainment by the applicable attainment date (section 189(c)).

    The permit requirements of subpart 4, as contained in section 189(a)(1)(A), refer to and apply the subpart 1 permit provisions requirements of sections 172 and 173 to PM10, without adding to them. Consequently, EPA believes that section 189(a)(1)(A) does not itself impose for redesignation purposes any additional requirements for moderate areas beyond those contained in subpart 1.6 In any event, in the context of redesignation, EPA has long relied on the interpretation that a fully approved nonattainment NSR program is not considered an applicable requirement for redesignation, provided the area can maintain the standard with a prevention of significant deterioration (PSD) program after redesignation. A detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled, “Part D NSR Requirements for Areas Requesting Redesignation to Attainment.” See also rulemakings for Detroit, Michigan (60 FR 12467-12468, March 7, 1995); Cleveland-Akron-Lorain, Ohio (61 FR 20458, 20469-20470, May 7, 1996); Louisville, Kentucky (66 FR 53665, October 23, 2001); and Grand Rapids, Michigan (61 FR 31834-31837, June 21, 1996). With respect to the specific attainment planning requirements under subpart 4,7 when EPA evaluates a redesignation request under either subpart 1 or 4, any area that is attaining the PM2.5 NAAQS is viewed as having satisfied the attainment planning requirements for these subparts. For redesignations, EPA has for many years interpreted attainment-linked requirements as not applicable for areas attaining the standard. In the General Preamble, EPA stated that: “The requirements for RFP will not apply in evaluating a request for redesignation to attainment since, at a minimum, the air quality data for the area must show that the area has already attained. Showing that the State will make RFP towards attainment will, therefore, have no meaning at that point.”

    6 The potential effect of section 189(e) on section 189(a)(1)(A) for purposes of evaluating this redesignation is discussed in this rulemaking action.

    7 EPA refers here to attainment demonstration, RFP, RACM, milestone requirements, and contingency measures.

    The General Preamble also explained that: “[t]he section 172(c)(9) requirements are directed at ensuring RFP and attainment by the applicable date. These requirements no longer apply when an area has attained the standard and is eligible for redesignation. Furthermore, section 175A for maintenance plans . . . provides specific requirements for contingency measures that effectively supersede the requirements of section 172(c)(9) for these areas.” Id. EPA similarly stated in its 1992 Calcagni Memorandum that, “The requirements for reasonable further progress and other measures needed for attainment will not apply for redesignations because they only have meaning for areas not attaining the standard.”

    It is evident that even if we were to consider the D.C. Circuit Court's January 4, 2013 decision in NRDC v. EPA, or the June 2, 2014 PM2.5 Subpart 4 Classification and Deadline Rule, to mean that attainment-related requirements specific to subpart 4 were either due prior to Pennsylvania's December 22, 2014 redesignation request and must now be imposed retroactively,8 those requirements do not apply to areas that are attaining the 1997 annual and the 2006 24-hour PM2.5 NAAQS for the purpose of evaluating pending requests to redesignate the areas to attainment. EPA has consistently enunciated this interpretation of applicable requirements under section 107(d)(3)(E) since the General Preamble was published more than twenty years ago. Courts have recognized the scope of EPA's authority to interpret “applicable requirements” in the redesignation context. See Sierra Club v. EPA, 375 F.3d 537 (7th Cir. 2004).

    8 As explained earlier, EPA does not believe that the D.C. Circuit Court's January 4, 2013 decision should be interpreted so as to impose these requirements on the states retroactively. Sierra Club v. Whitman, supra.

    Moreover, even outside the context of redesignations, EPA has viewed the obligations to submit attainment-related SIP planning requirements of subpart 4 as inapplicable for areas that EPA determines are attaining the 1997 annual and 2006 24-hour PM2.5 NAAQS. EPA's prior “Clean Data Policy” rulemakings for the PM10 NAAQS, also governed by the requirements of subpart 4, explain EPA's reasoning. They describe the effects of a determination of attainment on the attainment-related SIP planning requirements of subpart 4. See “Determination of Attainment for Coso Junction Nonattainment Area,” (75 FR 27944, May 19, 2010). See also Coso Junction Proposed PM10 Redesignation, (75 FR 36023, 36027, June 24, 2010); Proposed and Final Determinations of Attainment for San Joaquin Nonattainment Area (71 FR 40952, 40954-55, July 19, 2006; and 71 FR 63641, 63643-47, October 30, 2006). In short, EPA in this context has also long concluded that to require states to meet superfluous SIP planning requirements is not necessary and not required by the CAA, so long as those areas continue to attain the relevant NAAQS.

    As stated previously in this proposed rulemaking action, on October 12, 2012 (77 FR 62147) and May 2, 2014 (79 FR 25014), EPA made determinations that the Pittsburgh Area had attained the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively. Pursuant to 40 CFR 51.1004(c) and based on these determinations, the requirements for the Area to submit an attainment demonstration and associated RACM, RFP plan, contingency measures, and other planning SIPs related to the attainment of either the 1997 annual or 2006 24-hour PM2.5 NAAQS were, and continue to be, suspended until such time as: the Area is redesignated to attainment for each standard, at which time the requirements no longer apply; or EPA determines that the Area has again violated any of the standards, at which time such plans are required to be submitted. Under its longstanding interpretation, EPA is proposing to determine here that the Area meets the attainment-related plan requirements of subparts 1 and 4 for the 1997 annual and 2006 24-hour PM2.5 NAAQS. Thus, EPA is proposing to conclude that the requirements to submit an attainment demonstration under 189(a)(1)(B), a RACM determination under section 172(c)(1) and section 189(a)(1)(c), a RFP demonstration under 189(c)(1), and contingency measure requirements under section 172(c)(9) are satisfied for purposes of evaluating this redesignation request.

    c. Subpart 4 and Control of PM2.5 Precursors

    The D.C. Circuit Court in NRDC v. EPA remanded to EPA the two rules at issue in the case with instructions to EPA to re-promulgate them consistent with the requirements of subpart 4. EPA in this section addresses the D.C. Circuit Court's opinion with respect to PM2.5 precursors. While past implementation of subpart 4 for PM10 has allowed for control of PM10 precursors, such as NOX from major stationary, mobile, and area sources in order to attain the standard as expeditiously as practicable, section 189(e) of the CAA specifically provides that control requirements for major stationary sources of direct PM10 shall also apply to PM10 precursors from those sources, except where EPA determines that major stationary sources of such precursors “do not contribute significantly to PM10 levels which exceed the standard in the area.”

    EPA's 1997 PM2.5 Implementation Rule, remanded by the D.C. Circuit Court, contained rebuttable presumptions concerning certain PM2.5 precursors applicable to attainment plans and control measures related to those plans. Specifically, in 40 CFR 51.1002, EPA provided, among other things, that a state was “not required to address VOC [and NH3] as . . . PM2.5 attainment plan precursor[s] and to evaluate sources of VOC [and NH3] emissions in the State for control measures.” EPA intended these to be rebuttable presumptions. EPA established these presumptions at the time because of uncertainties regarding the emission inventories for these pollutants and the effectiveness of specific control measures in various regions of the country in reducing PM2.5 concentrations. EPA also left open the possibility for such regulation of VOC and NH3 in specific areas where that was necessary.

    The D.C. Circuit Court in its January 4, 2013 decision made reference to both section 189(e) and 40 CFR 51.1002, and stated that, “In light of our disposition, we need not address the petitioners' challenge to the presumptions in [40 CFR 51.1002] that VOCs and NH3 are not PM2.5 precursors, as subpart 4 expressly governs precursor presumptions.” NRDC v. EPA, at 27, n.10.

    Elsewhere in the D.C. Circuit Court's opinion, however, the D.C. Circuit Court observed: “NH3 is a precursor to fine particulate matter, making it a precursor to both PM2.5 and PM10. For a PM10 nonattainment area governed by subpart 4, a precursor is presumptively regulated. See 42 U.S.C. 7513a(e) [section 189(e)].” Id. at 21, n.7.

    For a number of reasons, the redesignation of the Pittsburgh Area for the 1997 annual and 2006 24-hour PM2.5 NAAQS is consistent with the D.C. Circuit Court's decision on this aspect of subpart 4. While the D.C. Circuit Court, citing section 189(e), stated that “for a PM10 area governed by subpart 4, a precursor is `presumptively' regulated,” the D.C. Circuit Court expressly declined to decide the specific challenge to EPA's 1997 PM2.5 Implementation Rule provisions regarding NH3 and VOC as precursors. The D.C. Circuit Court had no occasion to reach whether and how it was substantively necessary to regulate any specific precursor in a particular PM2.5 nonattainment area, and did not address what might be necessary for purposes of acting upon a redesignation request.

    However, even if EPA takes the view that the requirements of subpart 4 were deemed applicable at the time the state submitted the redesignation request, and disregards the 1997 PM2.5 Implementation Rule's rebuttable presumptions regarding NH3 and VOC as PM2.5 precursors, the regulatory consequence would be to consider the need for regulation of all precursors from any sources in the Area to demonstrate attainment and to apply the section 189(e) provisions to major stationary sources of precursors. In the case of the Pittsburgh Area, EPA believes that doing so is consistent with proposing redesignation of the Area for the 1997 annual and 2006 24-hour PM2.5 NAAQS. The Area has attained the 1997 annual and 2006 24-hour PM2.5 NAAQS without any specific additional controls of NH3 and VOC emissions from any sources in the Area.

    Precursors in subpart 4 are specifically regulated under the provisions of section 189(e), which requires, with important exceptions, control requirements for major stationary sources of PM10 precursors.9 Under subpart 1 and EPA's prior implementation rule, all major stationary sources of PM2.5 precursors were subject to regulation, with the exception of NH3 and VOC. Thus, EPA must address here whether additional controls of NH3 and VOC from major stationary sources are required under section 189(e) of subpart 4 in order to redesignate the Area for the 1997 annual and 2006 24-hour PM2.5 NAAQS. As explained subsequently, EPA does not believe that any additional controls of NH3 and VOC are required in the context of this redesignation.

    9 Under either subpart 1 or subpart 4, for purposes of demonstrating attainment as expeditiously as practicable, a state is required to evaluate all economically and technologically feasible control measures for direct PM emissions and precursor emissions, and adopt those measures that are deemed reasonably available.

    In the General Preamble, EPA discusses its approach to implementing section 189(e). See 57 FR 13538-13542. With regard to precursor regulation under section 189(e), the General Preamble explicitly stated that control of VOC under other CAA requirements may suffice to relieve a state from the need to adopt precursor controls under section 189(e). See 57 FR 13542. EPA in this rulemaking action, proposes to determine that the Pennsylvania SIP revision has met the provisions of section 189(e) with respect to NH3 and VOC as precursors. These proposed determinations are based on EPA's findings that: (1) The Pittsburgh Area contains no major stationary sources of NH3; and (2) existing major stationary sources of VOC are adequately controlled under other provisions of the CAA regulating the ozone NAAQS.10 In the alternative, EPA proposes to determine that, under the express exception provisions of section 189(e), and in the context of the redesignation of the Area, which is attaining the 1997 annual and 2006 24-hour PM2.5 NAAQS, at present NH3 and VOC precursors from major stationary sources do not contribute significantly to levels exceeding the 1997 annual and 2006 24-hour PM2.5 NAAQS in the Area. See 57 FR 13539-42.

    10 The Area has reduced VOC emissions through the implementation of various control programs including VOC Reasonably Available Control Technology (RACT) regulations and various onroad and nonroad motor vehicle control programs.

    EPA notes that its 1997 PM2.5 Implementation Rule provisions in 40 CFR 51.1002 were not directed at evaluation of PM2.5 precursors in the context of redesignation, but at SIP plans and control measures required to bring a nonattainment area into attainment of the 1997 annual PM2.5 NAAQS. By contrast, redesignation to attainment primarily requires the nonattainment area to have already attained due to permanent and enforceable emission reductions, and to demonstrate that controls in place can continue to maintain the standard. Thus, even if we regard the D.C. Circuit Court's January 4, 2013 decision as calling for “presumptive regulation” of NH3 and VOC for PM2.5 under the attainment planning provisions of subpart 4, those provisions in and of themselves do not require additional controls of these precursors for an area that already qualifies for redesignation. Nor does EPA believe that requiring Pennsylvania to address precursors differently than it has already would result in a substantively different outcome.

    Although, as EPA has emphasized, its consideration here of precursor requirements under subpart 4 is in the context of a redesignation to attainment, EPA's existing interpretation of subpart 4 requirements with respect to precursors in attainment plans for PM10 contemplates that states may develop attainment plans that regulate only those precursors that are necessary for purposes of attainment in the area in question, i.e., states may determine that only certain precursors need be regulated for attainment and control purposes.11 Courts have upheld this approach to the requirements of subpart 4 for PM10.12 EPA believes that application of this approach to PM2.5 precursors under subpart 4 is reasonable. Because the Area has already attained the 1997 annual and 2006 24-hour PM2.5 NAAQS with its current approach to regulation of PM2.5 precursors, EPA believes that it is reasonable to conclude in the context of this redesignation that there is no need to revisit an attainment control strategy with respect to the treatment of precursors. Even if the D.C. Circuit Court's decision is construed to impose an obligation, in evaluating this redesignation request, to consider additional precursors under subpart 4, it would not affect EPA's approval here of Pennsylvania's request for redesignation of the Pittsburgh Area for the 1997 annual and 2006 24-hour PM2.5 NAAQS. In the context of a redesignation, Pennsylvania has shown that the Area has attained both standards. Moreover, Pennsylvania has shown, and EPA proposes to determine, that attainment of the 1997 annual and 2006 24-hour PM2.5 NAAQS in this Area is due to permanent and enforceable emission reductions on all precursors necessary to provide for continued attainment of the standards. See Section V.A.3 of this rulemaking action. It follows logically that no further control of additional precursors is necessary. Accordingly, EPA does not view the January 4, 2013 decision of the D.C. Circuit Court as precluding redesignation of the Area to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS at this time.

    11See, e.g., “Approval and Promulgation of Implementation Plans for California—San Joaquin Valley PM10 Nonattainment Area; Serious Area Plan for Nonattainment of the 24-Hour and Annual PM10 Standards,” (69 FR 30006, May 26, 2004) (approving a PM10 attainment plan that impose controls on direct PM10 and NOx emissions and did not impose controls on SO2, VOC, or NH3 emissions).

    12See, e.g., Assoc. of Irritated Residents v. EPA et al., 423 F.3d 989 (9th Cir. 2005).

    In summary, even if, prior to submitting its December 22, 2014 redesignation request, or subsequent to such submission and prior to December 31, 2014, Pennsylvania was required to address precursors for the Area under subpart 4 rather than under subpart 1, as interpreted in EPA's remanded 1997 PM2.5 Implementation Rule, EPA would still conclude that the Area had met all applicable requirements for purposes of redesignation in accordance with section 107(d)(3)(E)(ii) and (v) of the CAA.

    V. EPA's Analysis of Pennsylvania's Submittal

    EPA is proposing several rulemaking actions for the Pittsburgh Area: (1) To redesignate the Pittsburgh Area to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS; (2) to approve into the Pennsylvania SIP the associated maintenance plan for the 1997 annual and 2006 24-hour PM2.5 NAAQS; and (3) to approve the 2007 comprehensive emissions inventory for the 1997 annual PM2.5 NAAQS and the 2011 comprehensive emissions inventories for the 2006 24-hour PM2.5 NAAQS to satisfy section 172(c)(3) requirement, which is one of the CAA criteria for redesignation. EPA's proposed approval of the redesignation request and maintenance plan for the 1997 annual and 2006 24-hour PM2.5 NAAQS are based upon EPA's determination that the Area continues to attain both standards, which EPA is proposing in this rulemaking action, and that all other redesignation criteria have been met for the Area. In addition, EPA is proposing to approve the 2017 and 2025 PM2.5 and NOX MVEBs included in the maintenance plan for the Pittsburgh Area for transportation conformity purposes. The following is a description of how Pennsylvania's December 22, 2014 submittal satisfies the requirements of the CAA including specifically section 107(d)(3)(E) for the 1997 annual and 2006 24-hour PM2.5 NAAQS.

    A. Redesignation Request 1. Attainment

    On October 12, 2012 (77 FR 62147), EPA determined that the Pittsburgh Area attained the 1997 annual PM2.5 NAAQS by its applicable attainment date of April 5, 2010, based upon quality-assured and certified ambient air quality monitoring data for 2007-2009. In a separate rulemaking action dated May 2, 2014 (79 FR 25014), EPA determined that the Pittsburgh Area attained the 2006 24-hour PM2.5 NAAQS, based on quality-assured and certified ambient air quality monitoring data for 2010-2012 and 2011-2013. The basis and effect of these determinations of attainment for both the 1997 annual and 2006 24-hour PM2.5 NAAQS were discussed in the notices of the proposed (77 FR 34297 (June 11, 2012) and 78 FR 49403 (August 14, 2013), respectively) and final (77 FR 62147 and 79 FR 25014, respectively) rulemakings which determined the Area attained the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively.

    EPA has reviewed the ambient air quality PM2.5 monitoring data in the Pittsburgh Area consistent with the requirements contained in 40 CFR part 50, and recorded in EPA's Air Quality System (AQS), including quality-assured, quality-controlled, and state-certified data for the monitoring periods 2008-2010, 2009-2011, 2010-2012, and 2011-2013. This data, provided in Tables 1 and 2, shows that the Area continues to attain the 1997 annual and 2006 24-hour PM2.5 NAAQS.

    Table 1—Design Values for the Pittsburgh Area for the 1997 Annual PM2.5 NAAQS (μg/m3) for 2008-2010, 2009-2011, 2010-2012, and 2011-2013 Monitor ID # 2008-2010 2009-2011 2010-2012 2011-2013 Avalon, 420030002 * 16.3 * 14.7 13.4 11.4 South Fayette, 420030067 11.1 11 10.5 9.6 North Braddock, 420031301 13.3 12.7 12.5 * 11.7 Washington, 421250200 11.8 11.3 11.1 10.3 Charleroi, 421250005 12.9 12.6 11.9 11 Florence, 421255001 10.8 9 7.2 7.2 Harrison 2, 420031008 13 12.4 * 11.7 10.6 Beaver Falls, 420070014 13.1 12.4 12 11.6 Greensburg, 42129008 13.4 13.7 12.6 11.1 Lawrenceville, 420030008 12.2 11.6 11.1 10.3 North Park, 420030093 10.1 9.7 9.4 8.8 * This data is shown in EPA's AQS as incomplete. Additional statistical analysis was done to ensure the Pittsburgh-Beaver Valley Area meets the completeness requirement of the Clean Data Determination. Table 2—Design Values for the Pittsburgh Area for the 2006 24-hour PM2.5 NAAQS (μg/m3) for 2008-2010, 2009-2011, 2010-2012, and 2011-2013 Monitor ID # 2008-2010 2009-2011 2010-2012 2011-2013 Avalon, 420030002 * 38 * 34 29 25 South Fayette, 420030067 26 27 26 24 North Braddock, 420031301 35 34 33 29 Washington, 421250200 26 27 25 23 Charleroi, 421250005 28 28 26 25 Florence, 421255001 25 20 17 16 Harrison 2, 420031008 * 31 * 30 28 25 Beaver Falls, 420070014 30 29 27 26 Greensburg, 42129008 32 * 33 * 29 * 26 Lawrenceville, 420030008 28 27 26 23 North Park, 420030093 * 25 25 23 19 * This data is shown in EPA's AQS as incomplete. Additional statistical analysis was done to ensure the Pittsburgh-Beaver Valley Area meets the completeness requirement of the Clean Data Determination.

    EPA's review of the monitoring data from 2008 through 2013 supports EPA's previous determinations that the Area has attained the 1997 annual and 2006 24-hour PM2.5 NAAQS, and that the Area continues to attain both standards. In addition, as discussed subsequently, with respect to the maintenance plan, Pennsylvania commits to maintain an ambient air quality monitoring network in accordance with 40 CFR part 58. Thus, based upon an analysis of currently available data, EPA is proposing to determine that the Pittsburgh Area continues to attain the 1997 annual and 2006 24-hour PM2.5 NAAQS.

    2. The Area Has Met All Applicable Requirements Under Section 110 and Subpart 1 of the CAA and Has a Fully Approved SIP Under Section 110(k)

    In accordance with section 107(d)(3)(E)(v), the SIP revision for the 1997 annual and 2006 24-hour PM2.5 NAAQS for the Pittsburgh Area must be fully approved under section 110(k) and all the requirements applicable to the Area under section 110 of the CAA (general SIP requirements) and part D of Title I of the CAA (SIP requirements for nonattainment areas) must be met.

    a. Section 110 General SIP Requirements

    Section 110(a)(2) of Title I of the CAA delineates the general requirements for a SIP, which include enforceable emissions limitations and other control measures, means, or techniques, provisions for the establishment and operation of appropriate devices necessary to collect data on ambient air quality, and programs to enforce the limitations. The general SIP elements and requirements set forth in section 110(a)(2) include, but are not limited to, the following: (1) Submittal of a SIP that has been adopted by the state after reasonable public notice and hearing; (2) provisions for establishment and operation of appropriate procedures needed to monitor ambient air quality; (3) implementation of a minor source permit program and provisions for the implementation of part C requirements (PSD); (4) Provisions for the implementation of part D requirements for NSR permit programs; (5) provisions for air pollution modeling; and (6) provisions for public and local agency participation in planning and emission control rule development.

    Section 110(a)(2)(D) of the CAA requires that SIPs contain certain measures to prevent sources in a state from significantly contributing to air quality problems in another state. To implement this provision for various NAAQS, EPA has required certain states to establish programs to address transport of air pollutants in accordance with EPA's Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone (63 FR 57356, October 27, 1998), also known as the NOX SIP Call; amendments to the NOX SIP Call (64 FR 26298, May 14, 1999 and 65 FR 11222, March 2, 2000), CAIR (70 FR 25162, May 12, 2005) and CSAPR. However, section 110(a)(2)(D) requirements for a state are not linked with a particular nonattainment area's designation and classification in that state. EPA believes that the requirements linked with a particular nonattainment area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request. The transport SIP submittal requirements, where applicable, continue to apply to a state regardless of the designation of any one particular area in the state. Thus, EPA does not believe that these requirements are applicable requirements for purposes of redesignation.

    In addition, EPA believes that the other section 110(a)(2) elements not connected with nonattainment plan submissions and not linked with an area's attainment status are not applicable requirements for purposes of redesignation. The Area will still be subject to these requirements after it is redesignated. EPA concludes that the section 110(a)(2) and part D requirements which are linked with a particular area's designation and classification are the relevant measures to evaluate in reviewing a redesignation request, and that section 110(a)(2) elements not linked to the area's nonattainment status are not applicable for purposes of redesignation. This approach is consistent with EPA's existing policy on applicability of conformity (i.e., for redesignations) and oxygenated fuels requirement. See Reading, Pennsylvania, proposed and final rulemakings (61 FR 53174, October 10, 1996), (62 FR 24826, May 7, 1997); Cleveland-Akron-Lorain, Ohio final rulemaking (61 FR 20458, May 7, 1996); and Tampa, Florida, final rulemaking (60 FR 62748, December 7, 1995). For additional discussion on this issue, see the Cincinnati, Ohio redesignation (65 FR at 37890, June 19, 2000) and the Pittsburgh-Beaver Valley, Pennsylvania redesignation (66 FR at 53099, October 19, 2001).

    EPA has reviewed the Pennsylvania SIP and has concluded that it meets the general SIP requirements under section 110(a)(2) of the CAA to the extent they are applicable for purposes of redesignation. EPA has previously approved provisions of Pennsylvania's SIP addressing section 110(a)(2) requirements, including provisions addressing PM2.5. See 77 FR 58955 (September 25, 2012) (approving infrastructure SIP submittals for 1997 and 2006 PM2.5 NAAQS). These requirements are, however, statewide requirements that are not linked to the PM2.5 nonattainment status of the Area. Therefore, EPA believes that these SIP elements are not applicable requirements for purposes of review of the Commonwealth's PM2.5 redesignation request.

    b. Subpart 1 Requirements

    Subpart 1 sets forth the basic nonattainment plan requirements applicable to PM2.5 nonattainment areas. Under section 172, states with nonattainment areas must submit plans providing for timely attainment and must meet a variety of other requirements.

    EPA's longstanding interpretation of the nonattainment planning requirements of section 172 is that once an area is attaining the NAAQS, those requirements are not “applicable” for purposes of section 107(d)(3)(E)(ii) and therefore need not be approved into the SIP before EPA can redesignate the area. In the 1992 General Preamble for Implementation of Title I, EPA set forth its interpretation of applicable requirements for purposes of evaluating redesignation requests when an area is attaining a standard. See 57 FR 13498, 13564 (April 16, 1992). EPA noted that the requirements for RFP and other measures designed to provide for attainment do not apply in evaluating redesignation requests because those nonattainment planning requirements “have no meaning” for an area that has already attained the standard. Id. This interpretation was also set forth in the 1992 Calcagni Memorandum. EPA's understanding of section 172 also forms the basis of its Clean Data Policy, which was articulated with regard to PM2.5 in 40 CFR 51.1004(c), and suspends a state's obligation to submit most of the attainment planning requirements that would otherwise apply, including an attainment demonstration and planning SIPs to provide for RFP, RACM, and contingency measures under section 172(c)(9).13 Courts have upheld EPA's interpretation of section 172(c)(1)'s “reasonably available” control measures and control technology as meaning only those controls that advance attainment, which precludes the need to require additional measures where an area is already attaining. NRDC v. EPA, 571 F.3d 1245, 1252 (D.C. Cir. 2009); Sierra Club v. EPA, 294 F.3d 155, 162 (D.C. Cir. 2002); Sierra Club v. EPA, 314 F.3d 735, 744 (5th Cir. 2002).

    13 This regulation was promulgated as part of the 1997 PM2.5 NAAQS implementation rule that was subsequently challenged and remanded in NRDC v. EPA, 706 F.3d 428 (D.C. Cir. 2013), as discussed in Section IV.B of this rulemaking. However, the Clean Data Policy portion of the implementation rule was not at issue in that case.

    Therefore, because attainment has been reached for the 1997 annual and 2006 24-hour PM2.5 NAAQS in the Pittsburgh Area (see October 12, 2012 (77 FR 62147) and May 2, 2014 (79 FR 25014)), no additional measures are needed to provide for attainment, and section 172(c)(1) requirements for an attainment demonstration and RACM are no longer considered to be applicable for purposes of redesignation as long as the Area continues to attain each standard until redesignation. Section 172(c)(2)'s requirement that nonattainment plans contain provisions promoting reasonable further progress toward attainment is also not relevant for purposes of redesignation because EPA has determined that the Pittsburgh Area has monitored attainment of the 1997 annual and 2006 24-hour PM2.5 NAAQS. In addition, because the Pittsburgh Area has attained the 1997 annual and 2006 24-hour PM2.5 NAAQS and is no longer subject to a RFP requirement, the requirement to submit the section 172(c)(9) contingency measures is not applicable for purposes of redesignation. Section 172(c)(6) requires the SIP to contain control measures necessary to provide for attainment of the NAAQS. Because attainment has been reached, no additional measures are needed to provide for attainment.

    The requirement under section 172(c)(3) of the CAA was not suspended by EPA's clean data determination for the 1997 annual and 2006 24-hour PM2.5 NAAQS and is the only remaining requirement under section 172 to be considered for purposes of redesignation of the Area.

    Section 172(c)(3) of the CAA requires submission and approval of a comprehensive, accurate, and current inventory of actual emissions. For purposes of the PM2.5 NAAQS, this emissions inventory should address not only direct emissions of PM2.5, but also emissions of all precursors with the potential to participate in PM2.5 formation, i.e., SO2, NOX, VOC and NH3.

    To satisfy the 172(c)(3) requirement for the 1997 annual and 2006 24-hour PM2.5 NAAQS, Pennsylvania's December 22, 2014 redesignation request and maintenance plan contains 2007 and 2011 comprehensive emissions inventories. PADEP submitted the 2007 and 2011 emissions inventories to fulfill its obligation to submit a comprehensive inventory under section 172(c)(3) of the CAA, because that inventory has gone through extensive quality assurance. The 2007 and 2011 emissions inventories were the most current accurate and comprehensive emissions inventories of PM2.5, NOX, SO2, VOC, and NH3 for the Area when the Area attained the 1997 annual and 2006 24-hour PM2.5 NAAQS. Thus, as part of this rulemaking action, EPA is proposing to approve Pennsylvania's 2007 comprehensive emissions inventory for the 1997 annual PM2.5 NAAQS and the 2011 comprehensive emissions inventories for the 2006 24-hour PM2.5 NAAQS, as satisfying the requirement of section 172(c)(3) of the CAA. Final approval of the 2007 and 2011 comprehensive emissions inventories will satisfy the emissions inventory requirement under section 172(c)(3) of the CAA. The 2007 and 2011 comprehensive emissions inventories address the general source categories of point sources, area sources, on-road mobile sources, and non-road mobile sources. A summary of the 2007 and 2011 comprehensive emissions inventories are shown in Tables 3 and 4. For more information on EPA's analysis of the 2007 and 2011 emissions inventories, see the TSDs prepared by the EPA Region III Office of Air Monitoring and Analysis dated April 22, 2015, “Technical Support Document (TSD) for the Redesignation Request and Maintenance Plan for the Pittsburgh-Beaver Valley 1997 and 2006 PM2.5 Nonattainment Area” (Inventory TSDs), available in the docket for this rulemaking action at www.regulations.gov. See Docket ID No. EPA-R03-OAR-2015-0029.

    Table 3—2007 Emissions for the Pittsburgh-Beaver Valley Area, in tons per year (tpy) Sector PM2.5 NOX SO2 VOC NH3 Point 8,913 92,750 438,716 3,186 584 Area 6,392 7,946 12,817 28,991 2,474 Onroad 1,692 49,052 378 20,194 858 Nonroad 1,151 21,175 694 10,834 16 Total 18,148 170,923 452,605 63,205 3,932 Table 4—2011 Emissions for the Pittsburgh-Beaver Valley Area, in tpy Sector PM2.5 NOX SO2 VOC NH3 Point 7,287 80,746 122,541 3,333 322 Area 7,455 19,667 3,841 26,012 3,109 Onroad 967 29,184 149 14,813 624 Nonroad 667 7,110 20 7,832 10 Total 16,376 136,707 126,551 51,990 4,065

    Section 172(c)(4) of the CAA requires the identification and quantification of allowable emissions for major new and modified stationary sources in an area, and section 172(c)(5) requires source permits for the construction and operation of new and modified major stationary sources anywhere in the nonattainment area. EPA has determined that, since PSD requirements will apply after redesignation, areas being redesignated need not comply with the requirement that a nonattainment NSR program be approved prior to redesignation, provided that the area demonstrates maintenance of the NAAQS without part D NSR. A more detailed rationale for this view is described in a memorandum from Mary Nichols, Assistant Administrator for Air and Radiation, dated October 14, 1994, entitled, “Part D New Source Review Requirements for Areas Requesting Redesignation to Attainment.” Nevertheless, Pennsylvania currently has an approved NSR program codified in Pennsylvania's regulations at 25 Pa. Code Chapter 127.201, et. seq. See 77 FR 41276, July 13, 2012 (approving NSR program into the SIP). See also 49 FR 33127, August 21, 1984 (approving Pennsylvania's PSD program which incorporates by reference the Federal PSD program at 40 CFR 52.21). However, Pennsylvania's PSD program for PM2.5 will become effective in the Pittsburgh Area upon redesignation to attainment.

    Section 172(c)(7) of the CAA requires the SIP to meet the applicable provisions of section 110(a)(2). As noted previously, EPA believes the Pennsylvania SIP meets the requirements of section 110(a)(2) that are applicable for purposes of redesignation.

    Section 175A requires a state seeking redesignation to attainment to submit a SIP revision to provide for the maintenance of the NAAQS in the area “for at least 10 years after the redesignation.” In conjunction with its request to redesignate the Pittsburgh Area to attainment status, Pennsylvania submitted a SIP revision on December 22, 2014 to provide for maintenance of the 1997 annual and 2006 24-hour PM2.5 NAAQS in the Pittsburgh Area for at least 10 years after redesignation, throughout 2025. Pennsylvania is requesting that EPA approve the maintenance plan to meet the requirement of section 175A of the CAA for both NAAQS. Once approved, the maintenance plan for the Area will ensure that the SIP for Pennsylvania meets the requirements of the CAA regarding maintenance of the 1997 annual and 2006 24-hour PM2.5 NAAQS for the Area. EPA's analysis of the maintenance plan is provided in Section V.B. of this proposed rulemaking action.

    Section 176(c) of the CAA requires states to establish criteria and procedures to ensure that Federally supported or funded projects conform to the air quality planning goals in the applicable SIP. The requirement to determine conformity applies to transportation plans, programs, and projects that are developed, funded or approved under Title 23 of the United States Code (U.S.C.) and the Federal Transit Act (transportation conformity) as well as to all other Federally supported or funded projects (general conformity). State transportation conformity SIP revisions must be consistent with Federal conformity regulations relating to consultation, enforcement and enforceability which EPA promulgated pursuant to its authority under the CAA. EPA approved Pennsylvania's transportation conformity SIP requirements on April 29, 2009 (74 FR 19541).

    EPA interprets the conformity SIP requirements as not applying for purposes of evaluating a redesignation request under CAA section 107(d) because state conformity rules are still required after redesignation, and Federal conformity rules apply where state rules have not been approved. See Wall v. EPA, 265 F. 3d 426 (6th Cir. 2001) (upholding this interpretation) and 60 FR 62748 (December 7, 1995) (discussing Tampa, Florida).

    Thus, for purposes of redesignating to attainment the Pittsburgh Area for the 1997 annual and 2006 24-hour PM2.5 NAAQS, EPA proposes that upon final approval of the 2007 and 2011 comprehensive emissions inventories as proposed in this rulemaking action, Pennsylvania will meet all the applicable SIP requirements under part D of Title I of the CAA for purposes of redesignating the Area to attainment for both the 1997 annual and 2006 24-hour PM2.5 NAAQS.

    c. The Area Has a Fully Approved Applicable SIP Under Section 110(k) of the CAA

    Upon final approval of the 2007 and 2011 comprehensive emissions inventories as proposed in this rulemaking action, EPA will have fully approved all applicable requirements of Pennsylvania's SIP for the Pittsburgh Area for purposes of redesignation to attainment for the 1997 annual and 2006 24-hour PM2.5 NAAQS in accordance with section 110(k) of the CAA.

    3. Permanent and Enforceable Reductions in Emissions

    For redesignating a nonattainment area to attainment, section 107(d)(3)(E)(iii) requires EPA to determine that the air quality improvement in the area is due to permanent and enforceable reductions in emissions resulting from implementation of the SIP and applicable Federal air pollution control regulations and other permanent and enforceable reductions. Pennsylvania has calculated the change in emissions between 2005, a year showing nonattainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS in the Pittsburgh Area, and 2007, the year for which the Area monitored attainment for 1997 annual PM2.5 NAAQS, and 2011, the year for which the Area monitored attainment for the 2006 24-hour PM2.5 NAAQS.

    A summary of the emissions reductions in tpy of PM2.5, NOX, SO2, VOC, and NH3 from 2005 to 2007 in the Pittsburgh Area, submitted by PADEP, is provided in Table 5. For more information on EPA's analysis of the 2007 emissions inventories, see EPA's Inventory TSDs dated April 22, 2015, available in the docket for this rulemaking action at www.regulations.gov.

    Table 5—Emission Reductions From 2005 to 2007 in the Pittsburgh-Beaver Valley Area Sector 2005 2007 Net reduction 2005-2007 Percent
  • reduction
  • 2005-2007
  • PM2.5 Point 27,817 8,913 18,904 67.9 Area 7,916 6,392 1,524 19.3 On-road 1,898 1,692 206 10.9 Non-road 1,539 1,151 388 25.2 Total 39,170 18,148 21,022 53.7 NOX Point 92,808 92,750 58 0.0 Area 8,622 7,946 676 7.8 On-road 58,268 49,052 9,216 15.8 Non-road 31,519 21,175 10,344 32.8 Total 191,217 170,923 20,294 10.6 SO2 Point 470,511 438,716 31,795 6.8 Area 9,905 12,817 −2,912 −29.4 On-road 875 378 497 56.8 Non-road 2,364 694 1,670 70.6 Total 483,655 452,605 31,050 6.4 VOC Point 5,553 3,186 2,367 42.6 Area 36,683 28,991 7,692 20.9 On-road 22,306 20,194 2,112 9.5 Non-road 11,499 10,834 665 5.8 Total 76,041 63,205 12,836 16.9 NH3 Point 738 584 154 20.9 Area 2,948 2,474 474 16.1 On-road 934 858 76 8.1 Non-road 14 16 −2 −14.3 Total 4,634 3,932 702 15.1

    A summary of the emissions reductions in tpy of PM2.5, NOX, SO2, VOC, and NH3 from 2005 to 2011 in the Pittsburgh Area, submitted by PADEP, is provided in Table 6. For more information on EPA's analysis of the 2011 emissions inventories, see EPA's Inventory TSDs dated April 22, 2015, available in the docket for this rulemaking action at www.regulations.gov.

    Table 6—Emission Reductions From 2005 to 2011 in the Pittsburgh-Beaver Valley Area Sector 2005 2011 Net reduction 2005-2011 Percent
  • reduction
  • 2005-2011
  • PM2.5 Point 27,817 7,287 20,530 73.8 Area 7,916 7,455 461 5.8 On-road 1,898 967 931 49.1 Non-road 1,539 667 872 56.6 Total 39,170 16,376 22,794 58.2 NOX Point 92,808 80,746 12,062 12.9 Area 8,622 19,667 −11,045 −128.1 On-road 58,268 29,184 29,084 50.0 Non-road 31,519 7,110 24,409 77.4 Total 191,217 136,707 54,510 28.5 SO2 Point 470,511 122,541 347,970 73.9 Area 9,905 3,841 6,064 61.1 On-road 875 149 762 82.9 Non-road 2,364 20 2,344 99.1 Total 483,655 126,551 357,104 73.8 VOC Point 5,553 3,333 2,200 40.0 Area 36,683 26,012 10,671 29.1 On-road 22,306 14,813 7,493 33.6 Non-road 11,499 7,832 3,667 31.9 Total 76,041 51,990 24,051 31.6 NH3 Point 738 322 416 56.3 Area 2,948 3,109 −161 −5.5 On-road 934 624 310 33.2 Non-road 14 10 4 28.6 Total 4,634 4,065 569 12.3

    The reduction in emissions and the corresponding improvement in air quality in the Pittsburgh Area from 2005 to 2007 for the 1997 annual PM2.5 NAAQs, and 2005 to 2011 for the 2006 24-hour PM2.5 NAAQs, can be attributed to a number of regulatory control measures that have been implemented in the Area and contributing areas in recent years.

    a. Federal Measures Implemented

    Reductions in PM2.5 precursor emissions have occurred statewide and in upwind states as a result of Federal emission control measures, with additional emission reductions expected to occur in the future.

    Control of NOX and SO2

    PM2.5 concentrations in the Pittsburgh Area are impacted by the transport of sulfates and nitrates, and the Area's air quality is strongly affected by regulation of SO2 and NOX emissions from power plants.

    NOX SIP Call—On October 27, 1998 (63 FR 57356), EPA issued the NOX SIP Call requiring the District of Columbia and 22 states to reduce emissions of NOX, a precursor to ozone pollution.14 Affected states were required to comply with Phase I of the SIP Call beginning in 2004 and Phase II beginning in 2007. Emission reductions resulting from regulations developed in response to the NOX SIP Call are permanent and enforceable. By imposing an emissions cap regionally, the NOX SIP Call reduced NOX emissions from large EGUs and large non-EGUs such as industrial boilers, internal combustion engines, and cement kilns. In response to the NOX SIP Call, Pennsylvania adopted its NOX Budget Trading Program regulations for EGUs and large industrial boilers, with emission reductions starting in May 2003. Pennsylvania's NOX Budget Trading Program regulation was approved into the Pennsylvania SIP on August 21, 2001 (66 FR 43795). To meet other requirements of the NOX SIP Call, Pennsylvania adopted NOX control regulations for cement plants and internal combustion engines, with emission reductions starting in May 2005. These regulations were approved into the Pennsylvania SIP on September 29, 2006 (71 FR 57428).

    14 Although the NOX SIP Call was issued in order to address ozone pollution, reductions of NOX as a result of that program have also impacted PM2.5 pollution, for which NOX is also a precursor emission.

    CAIR—As previously noted, CAIR (70 FR 25162, May 12, 2005) created regional cap-and-trade programs to reduce SO2 and NOX emissions in 27 eastern states, including Pennsylvania. EPA approved the Commonwealth's CAIR regulation, codified in 25 Pa. Code Chapter 145, Subchapter D, into the Pennsylvania SIP on December 10, 2009 (74 FR 65446). In 2009, the CAIR ozone season NOX trading program superseded the NOX Budget Trading Program, although the emission reduction obligations of the NOX SIP Call were not rescinded. See 40 CFR 51.121(r) and 51.123(aa). EPA promulgated CSAPR to replace CAIR as an emission trading program for EGUs. As discussed previously, pursuant to the D.C. Circuit Court's October 23, 2014 Order, the stay of CSAPR has been lifted and implementation of CSAPR commenced in January 2015. EPA expects that the implementation of CSAPR will preserve the reductions achieved by CAIR and result in additional SO2 and NOX emission reductions throughout the maintenance period.

    Tier 2 Emission Standards for Vehicles and Gasoline Sulfur Standards

    These emission control requirements result in lower NOX emissions from new cars and light duty trucks, including sport utility vehicles. The Federal rules were phased in between 2004 and 2009. EPA estimated that, after phasing in the new requirements, the following vehicle NOX emission reductions will have occurred nationwide: Passenger cars (light duty vehicles) (77 percent); light duty trucks, minivans, and sports utility vehicles (86 percent); and larger sports utility vehicles, vans, and heavier trucks (69 to 95 percent). Some of the emissions reductions resulting from new vehicle standards occurred during the 2008-2010 attainment period; however, additional reductions will continue to occur throughout the maintenance period as new vehicles replace older vehicles. EPA expects fleet wide average emissions to decline by similar percentages as new vehicles replace older vehicles.

    Heavy-Duty Diesel Engine Rule

    EPA issued the Heavy-Duty Diesel Engine Rule in July 2000. This rule included standards limiting the sulfur content of diesel fuel, which went into effect in 2004. A second phase took effect in 2007 which reduced PM2.5 emissions from heavy-duty highway engines and further reduced the highway diesel fuel sulfur content to 15 parts per million (ppm). Standards for gasoline engines were phased in starting in 2008. The total program is estimated to achieve a 90 percent reduction in direct PM2.5 emissions and a 95 percent reduction in NOX emissions for new engines using low sulfur diesel fuel.

    Nonroad Diesel Rule

    On June 29, 2004 (69 FR 38958), EPA promulgated the Nonroad Diesel Rule for large nonroad diesel engines, such as those used in construction, agriculture, and mining, to be phased in between 2008 and 2014. The rule phased in requirements for reducing the sulfur content of diesel used in nonroad diesel engines. The reduction in sulfur content prevents damage to the more advanced emission control systems needed to meet the engine standards. It will also reduce fine particulate emissions from diesel engines. The combined engine standards and the sulfur in fuel reductions will reduce NOX and PM emissions from large nonroad engines by over 90 percent, compared to current nonroad engines using higher sulfur content diesel.

    Nonroad Large Spark-Ignition Engine and Recreational Engine Standards

    In November 2002, EPA promulgated emission standards for groups of previously unregulated nonroad engines. These engines include large spark-ignition engines such as those used in forklifts and airport ground-service equipment; recreational vehicles using spark-ignition engines such as off-highway motorcycles, all-terrain vehicles, and snowmobiles; and recreational marine diesel engines. Emission standards from large spark-ignition engines were implemented in two tiers, with Tier 1 starting in 2004 and Tier 2 in 2007. Recreational vehicle emission standards are being phased in from 2006 through 2012. Marine Diesel engine standards were phased in from 2006 through 2009. With full implementation of all of the nonroad spark-ignition engine and recreational engine standards, an overall 80 percent reduction in NOX is expected by 2020. Some of these emission reductions occurred by the 2002-2007 attainment period and additional emission reductions will occur during the maintenance period as the fleet turns over.

    Federal Standards for Hazardous Air Pollutants

    As required by the CAA, EPA developed Maximum Available Control Technology (MACT) Standards to regulate emissions of hazardous air pollutants from a published list of industrial sources referred to as “source categories.” The MACT standards have been adopted and incorporated by reference in Section 6.6 of Pennsylvania's Air Pollution Control Act and implementing regulations in 25 Pa. Code § 127.35 and are also included in Federally enforceable permits issued by PADEP for affected sources. The Industrial/Commercial/Institutional (ICI) Boiler MACT standards (69 FR 55217, September 13, 2004 and 76 FR 15554, February 21, 2011) are estimated to reduce emissions of PM, SO2, and VOCs from major source boilers and process heaters nationwide. Also, the Reciprocating Internal Combustion Engines (RICE) MACT will reduce NOX and PM emissions from engines located at facilities such as pipeline compressor stations, chemical and manufacturing plants, and power plants.

    b. State Measures Heavy-Duty Diesel Emissions Control Program

    In 2002, Pennsylvania adopted the Heavy-Duty Diesel Emissions Control Program for model years starting in May 2004. The program incorporates California standards by reference and required model year 2005 and beyond heavy-duty diesel highway engines to be certified to the California standards, which were more stringent than the Federal standards for model years 2005 and 2006. After model year 2006, Pennsylvania required implementation of the Federal standards that applied to model years 2007 and beyond, discussed in the Federal measures section of this proposed rulemaking action. This program reduced emissions of NOX statewide.

    Vehicle Emission Inspection/Maintenance (I/M) Program

    The Pittsburgh Area has had a vehicle emissions inspection program since 1984, and in 2004, Pennsylvania revised the implementation of its Vehicle Emission I/M program in the Pittsburgh Area, and applies to model year 1975 and newer gasoline-powered vehicles that are 9,000 pounds and under. The program, approved into the Pennsylvania SIP on October 6, 2005 (70 FR 58313), consists of annual on-board diagnostics and gas cap test for model year 1996 vehicles and newer, and an annual visual inspection of pollution control devices and gas cap test for model year 1995 vehicles and older. This program reduces emissions of NOX from affected vehicles.

    Regulation of Cement Kilns and Large Stationary Internal Combustion Engines

    On December 10, 2009 (74 FR 65446), EPA approved Pennsylvania regulation 25 Pa. Code Chapter 145, Subchapters B and C (relating to emissions of NOX from stationary internal combustion engines, and emissions of NOX from cement manufacturing).

    Consumer Products Regulation

    Pennsylvania regulation 25 Pa. Code Chapter 130, Subchapter B (Consumer Products) established, effective January 1, 2005, VOC emission limits to numerous categories of consumer products, and applies statewide to any person who sells, supplies, offers for sale, or manufactures such consumer products on or after January 5, 2005 for use in Pennsylvania. It was approved into the Pennsylvania SIP on December 8, 2004 (69 FR 70895).

    Based on the information summarized above, Pennsylvania has adequately demonstrated that the improvements in air quality in the Pittsburgh Area are due to permanent and enforceable emissions reductions. The reductions result from Federal and State requirements and regulation of precursors within Pennsylvania that affect the Pittsburgh Area.

    B. Maintenance Plan

    On December 22, 2014, PADEP submitted a combined maintenance plan for the Pittsburgh Area for the 1997 annual and 2006 24-hour PM2.5 NAAQS, as required by section 175A of the CAA. EPA's analysis for proposing approval of the maintenance plan is provided in this section.

    1. Attainment Emissions Inventory

    An attainment inventory is comprised of the emissions during the time period associated with the monitoring data showing attainment. PADEP determined that the appropriate attainment inventory year for the maintenance plan for the 1997 annual NAAQS is 2007, one of the years in the periods during which the Pittsburgh Area monitored attainment of the 1997 annual PM2.5 NAAQS. PADEP determined that the appropriate attainment inventory year for the maintenance plan for the 2006 24-hour PM2.5 NAAQS is 2011, one of the years in the periods during which the Pittsburgh Area monitored attainment of the 2006 24-hour PM2.5 NAAQS. The 2007 and 2011 inventories included in the maintenance plan contain primary PM2.5 emissions (including condensables), SO2, NOX, VOC, and NH3.

    In its redesignation request and maintenance plan for the 1997 annual and 2006 24-hour PM2.5 NAAQS, PADEP described the methods used for developing its 2007 and 2011 comprehensive emissions inventories. EPA reviewed the procedures used to develop the inventories and found them to be reasonable. EPA has reviewed the documentation provided by PADEP and found the 2007 and 2011 emissions inventories submitted with the maintenance plan to be approvable. For more information on EPA's analysis of the 2007 and 2011emissions inventories, see EPA's Inventory TSDs, dated April 22, 2015, available in the docket for this rulemaking action at www.regulations.gov.

    2. Maintenance Demonstration

    Section 175A requires a state seeking redesignation to attainment to submit a SIP revision to provide for the maintenance of the NAAQS in the area “for at least 10 years after the redesignation.” EPA has interpreted this as a showing of maintenance “for a period of ten years following redesignation.” The Federal and State measures described in Section V.A.3 of this proposed rulemaking action demonstrate that the reductions in emissions from point, area, and mobile sources in the Area have occurred and will continue to occur through 2025. In addition, the following State and Federal regulations and programs ensure the continuing decline of SO2, NOX, PM2.5, and VOC emissions in the Area during the maintenance period and beyond:

    Non-EGUs Previously Covered Under the NOX SIP Call

    Pennsylvania established NOX emission limits for the large industrial boilers that were previously subject to the NOX SIP Call, but were not subject to CAIR. For these units, Pennsylvania established an allowable ozone season NOX limit based on the unit's previous ozone season's heat input. A combined NOX ozone season emissions cap of 3,418 tons applies for all of these units.

    CSAPR (August 8, 2011, 76 FR 48208)

    EPA promulgated CSAPR to replace CAIR as an emission trading program for EGUs. As discussed previously, pursuant to the D.C. Circuit Court's October 23, 2014 Order, the stay of CSAPR has been lifted and implementation of CSAPR commenced in January 2015. EPA expects that the implementation of CSAPR will preserve the reductions achieved by CAIR and result in additional SO2 and NOX emission reductions throughout the maintenance period.

    Regulation of Cement Kilns

    On July 19, 2011 (76 FR 52558), EPA approved amendments to 25 Pa. Code Chapter 145 Subchapter C to further reduce NOX emissions from cement kilns. The amendments established NOX emission rate limits for long wet kilns, long dry kilns, and preheater and precalciner kilns that are lower by 35 percent to 63 percent from the previous limit of 6 pounds of NOX per ton of clinker that applied to all kilns. The amendments were effective on April 15, 2011.

    Consumer Products Regulation

    Amendments to Pennsylvania regulation 25 Pa. Code Chapter 130, Subchapter B (Consumer Products) established, effective January 1, 2009, new or more stringent VOC standards for consumer products. The amendments were approved into the Pennsylvania SIP on October 18, 2010 (75 FR 63717).

    Pennsylvania's Clean Vehicle Program

    The Pennsylvania Clean Vehicles Program (formerly, New Motor Vehicle Control Program) incorporates by reference the California Low Emission Vehicle program (CA LEVII), although it allowed automakers to comply with the National Low Emission Vehicle (NLEV) program as an alternative to this program until Model Year (MY) 2006. The Clean Vehicles Program, codified in 25 Pa. Code Chapter 126, Subchapter D, was modified to require CA LEVII to apply to MY 2008 and beyond, and was approved into the Pennsylvania SIP on January 24, 2012 (77 FR 3386). The Clean Vehicles Program incorporates by reference the emission control standards of CA LEVII, which, among other requirements, reduces emissions of NOX by requiring that passenger car emission standards and fleet average emission standards also apply to light duty vehicles. Model year 2008 and newer passenger cars and light duty trucks are required to be certified for emissions by the California Air Resource Board (CARB), in order to be sold, leased, offered for sale or lease, imported, delivered, purchased, rented, acquired, received, titled or registered in Pennsylvania. In addition, manufacturers are required to demonstrate that the California fleet average standard is met based on the number of new light-duty vehicles delivered for sale in the Commonwealth. The Commonwealth's submittal for the January 24, 2012 rulemaking projected that, by 2025, the program will achieve approximately 285 tons more NOX reductions than Tier II for the counties in the Pittsburgh Area.

    Two Pennsylvania regulations—the Diesel-Powered Motor Vehicle Idling Act (August 1, 2011, 76 FR 45705) and the Outdoor Wood-Fired Boiler regulation (September 20, 2011, 76 FR 58114)—were not included in the projection inventories, but may also assist in maintaining the standard. Also, the Tier 3 Motor Vehicle Emission and Fuel Standards (79 FR 23414, April 29, 2014) establishes more stringent vehicle emissions standards and will reduce the sulfur content of gasoline beginning in 2017. The fuel standard will achieve NOX reductions by further increasing the effectiveness of vehicle emission controls for both existing and new vehicles.

    Natural Gas Activities

    The emissions growth due to a new emissions source, development of natural gas resources from Marcellus Shale (and other deep formations), is included in the area source inventory. PADEP requires annual emission reporting under 25 Pa. Code Chapter 135 (relating to reporting of sources) of unconventional natural gas development companies. The initial annual source reporting for unconventional natural gas operations began in 2012 for emissions during the 2011 calendar year. Emissions were projected to 2017 and 2025 based on the most recent emissions inventory reports available (2013 for compressor engines and 2012 for all other sources). See Appendix B-3 of Pennsylvania's submittal for more details on the methodology used for estimating Marcellus Shale development activity and for the emission totals by pollutant. Starting January 2015, Federal regulations (40 CFR part 60, subpart OOOO) require wells to capture gas at the wellhead. EPA estimates that VOC emissions from hydraulically fractured well completions will decrease by 95 percent as a result of this regulation.

    The State and Federal regulations and programs described above ensure the continuing decline of SO2, NOX, PM2.5, and VOC emissions in the Pittsburgh Area during the maintenance period and beyond. A summary of the projected reductions from these measures from 2007 to 2025 is shown in Table 7, and from 2011 to 2025 is shown in Table 8. The future year inventories include potential emissions increases from natural gas activities.

    Table 7—Emission Reductions From 2007 to 2025 Due to Control Measures in TPY PM2.5 NOX SO2 VOC NH3 Point 54 −3,095 340,699 −293 −12 Area 672 −23 2,515 2,961 −136 On-Road 1,155 38,343 260 15,069 405 Non-Road 611 11,370 588 4,697 −3 Natural Gas Activities −397 −8,716 −37 −8,502 0 Totals 2,095 37,879 343,995 13,932 254 Table 8—Emission Reductions From 2011 to 2025 Due to Control Measures in TPY PM2.5 NOX SO2 VOC NH3 Point −1,572 −15,099 24,494 −146 −274 Area 1,735 11,698 −6,461 −18 499 On-Road 430 18,475 31 9,688 171 Non-Road 127 −2,695 −86 1,695 0 Natural Gas Activities −397 −8,716 −37 −8,502 0 Totals 323 3,663 17,941 2,717 387

    Where the emissions inventory method of showing maintenance is used, its purpose is to show that emissions during the maintenance period will not increase over the attainment year inventory. See 1992 Calcagni Memorandum, pages 9-10. For a demonstration of maintenance, emissions inventories are required to be projected to future dates to assess the influence of future growth and controls; however, the demonstration need not be based on modeling. See Wall v. EPA, supra; Sierra Club v. EPA, supra. See also 66 FR 53099-53100 and 68 FR 25430-32. PADEP uses projection inventories to show that the Pittsburgh Area will remain in attainment and developed projection inventories for an interim year of 2017 and a maintenance plan end year of 2025 to show that future emissions of NOX, SO2, PM2.5, VOC, and NH3 will remain at or below the attainment year 2007 for the 1997 annual and 2011 for the 2006 24-hour PM2.5 NAAQS, respectively, throughout the Pittsburgh Area through the year 2025.

    EPA has reviewed the documentation provided by PADEP for developing annual 2017 and 2025 emissions inventories for the Pittsburgh Area. See Appendix C-2 and C-3 of Pennsylvania's submittal. EPA has determined that the 2017 and 2025 projected emissions inventories provided by PADEP are approvable. For more information on EPA's analysis of the emissions inventories, see EPA's Inventory TSDs, dated April 22, 2015, available in the docket for this rulemaking action at www.regulations.gov.

    Table 9 provides a summary of the PM2.5, NOX, SO2, VOC, and NH3 emissions inventories in tpy, for the Pittsburgh Area for the 2007 attainment year for the 1997 annual PM2.5 NAAQS and the 2011 attainment year for the 2006 24-hour PM2.5 NAAQS, as compared to the projected inventories for the 2017 interim year, and the 2025 maintenance plan end year for the Pittsburgh Area.

    Table 9—Comparison of 2007 and 2011 Attainment Years and 2017 and 2025 Projected PM2.5 Emissions in the Pittsburgh Area Year PM2.5 NOX SO2 NH3 VOC 2007 (attainment) 18,148 170,923 452,605 3,932 63,205 2011 (attainment) 16,376 136,707 126,551 4,065 51,990 2017 (interim) 15,932 132,236 100,867 3,625 49,860 2007-2017 (projected decrease) 2,216 38,687 351,738 307 13,345 2011-2017 (projected decrease) 444 4,471 25,644 440 2,130 2025 (maintenance) 16,053 133,044 108,610 3,678 49,273 2007-2025 (projected decrease) 2,095 37,879 343,995 254 13,932 2011-2025 (projected decrease) 323 3,663 17,941 387 2,717

    As shown in Table 9, the projected levels of PM2.5, NOX, SO2, VOC, and NH3 are under the 2007 and 2011 attainment year levels for each of these pollutants. Pennsylvania has adequately demonstrated that the Area will continue to maintain the 1997 annual and the 2006 24-hour PM2.5 NAAQS.

    3. Monitoring Network

    Pennsylvania's maintenance plan includes a commitment to operate its EPA-approved monitoring network, as necessary to demonstrate ongoing compliance with the NAAQS. Pennsylvania currently operates a PM2.5 monitor in the Pittsburgh Area. In its December 22, 2014 submittal, Pennsylvania stated that it will consult with EPA prior to making any necessary changes to the network and will continue to operate the monitoring network in accordance with the requirements of 40 CFR part 58.

    4. Verification of Continued Attainment

    To provide for tracking of the emission levels in the Area, PADEP will: (a) Evaluate annually the vehicle miles travelled (VMT) data and the annual emissions reported from stationary sources to compare them with the assumptions used in the maintenance plan, and (b) evaluate the periodic emissions inventory for all PM2.5 precursors prepared every three years in accordance with EPA's Air Emissions Reporting Requirements (AERR) to determine whether there is an exceedance of more than ten percent over the 2007 and 2011 inventories. Also, as noted in the previous subsection, PADEP has stated that it will continue to operate its monitoring system in accordance with 40 CFR part 58 and remains obligated to quality-assure monitoring data and enter all data into the AQS in accordance with Federal requirements. PADEP has stated that it will use this data in considering whether additional control measures are needed to assure continuing attainment in the Area.

    5. Contingency Measures

    The contingency plan provisions are designed to promptly correct any violation of the 1997 annual and/or the 2006 24-hour PM2.5 NAAQS that occurs in the Pittsburgh Area after redesignation. Section 175A of the CAA requires that a maintenance plan include such contingency measures as EPA deems necessary to ensure that a state will promptly correct a violation of the NAAQS that occurs after redesignation. The maintenance plan should identify the events that would “trigger” the adoption and implementation of a contingency measure(s), the contingency measure(s) that would be adopted and implemented, and the schedule indicating the time frame by which the state would adopt and implement the measure(s).

    Pennsylvania's maintenance plan describes the procedures for the adoption and implementation of contingency measures to reduce emissions should a violation occur. Pennsylvania's contingency measures include a first level response and a second level response. A first level response is triggered when the annual mean PM2.5 concentration exceeds 15.5 μg/m3 in a single calendar year within the Area, when the 98th percentile 24-hour PM2.5 concentration exceeds 35.0 μg/m3 in a single calendar year within the area, or when the periodic emissions inventory for the Area exceeds the attainment year inventory (2007 and 2011) by more than ten percent. The first level response will consist of a study to determine if the emissions trends show increasing concentrations of PM2.5, and whether this trend is likely to continue. If it is determined through the study that action is necessary to reverse a trend of emissions increases, Pennsylvania will, as expeditiously as possible, implement necessary and appropriate control measures to reverse the trend.

    A second level response will be prompted if the two-year average of the annual mean concentration exceeds 15.0 μg/m3 or if the two-year average of the 98th percentile 24-hour PM2.5 concentration exceeds 35.0 μg/m3within the Area. This would trigger an evaluation of the conditions causing the exceedance, whether additional emission control measures should be implemented to prevent a violation of the standard, and analysis of potential measures that could be implemented to prevent a violation. Pennsylvania would then begin its adoption process to implement the measures as expeditiously as practicable. If a violation of the PM2.5 NAAQS occurs, PADEP will propose and adopt necessary additional control measures in accordance with the implementation schedule in the maintenance plan.

    Pennsylvania's candidate contingency measures include the following: (1) A regulation based on the Ozone Transport Commission (OTC) Model Rule to update requirements for consumer products; (2) a regulation based on the Control Techniques Guidelines (CTG) for industrial cleaning solvents; (3) voluntary diesel projects such as diesel retrofit for public or private local onroad or offroad fleets, idling reduction technology for Class 2 yard locomotives, and idling reduction technologies or strategies for truck stops, warehouses, and other freight-handling facilities; (4) promotion of accelerated turnover of lawn and garden equipment, focusing on commercial equipment; and (5) promotion of alternative fuels for fleets, home heating and agricultural use. Pennsylvania's rulemaking process and schedule for adoption and implementation of any necessary contingency measure is shown in the SIP submittals as being 18 months from PADEP's approval to initiate rulemaking. For all of the reasons discussed in this section, EPA is proposing to approve Pennsylvania's 1997 annual and 2006 24-hour PM2.5 maintenance plan for the Pittsburgh Area as meeting the requirements of section 175A of the CAA.

    C. Motor Vehicle Emissions Budgets

    Section 176(c) of the CAA requires Federal actions in nonattainment and maintenance areas to “conform to” the goals of SIPs. This means that such actions will not cause or contribute to violations of a NAAQS, worsen the severity of an existing violation, or delay timely attainment of any NAAQS or any interim milestone. Actions involving Federal Highway Administration (FHWA) or Federal Transit Administration (FTA) funding or approval are subject to the transportation conformity rule (40 CFR part 93, subpart A). Under this rule, metropolitan planning organizations (MPOs) in nonattainment and maintenance areas coordinate with state air quality and transportation agencies, EPA, and the FHWA and FTA to demonstrate that their long range transportation plans and transportation improvement programs (TIP) conform to applicable SIPs. This is typically determined by showing that estimated emissions from existing and planned highway and transit systems are less than or equal to the MVEBs contained in the SIP.

    On December 22, 2014, Pennsylvania submitted a SIP revision that contains the 2017 and 2025 PM2.5 and NOX onroad mobile source budgets for Beaver, Butler, Washington, and Westmoreland Counties and portions of Allegheny, Armstrong, Green and Lawrence Counties. Pennsylvania did not provide emission budgets for SO2, VOC, and NH3 because it concluded, consistent with the presumptions regarding these precursors in the Transportation Conformity Rule at 40 CFR 93.102(b)(2)(v), which predated and were not disturbed by the litigation on the 1997 PM2.5 Implementation Rule, that emissions of these precursors from motor vehicles are not significant contributors to the Area's PM2.5 air quality problem. EPA issued conformity regulations to implement the 1997 annual PM2.5 NAAQS in July 2004 and May 2005 (69 FR 40004, July 1, 2004 and 70 FR 24280, May 6, 2005). The D.C. Circuit Court's January 2013 decision does not affect EPA's proposed approval of the MVEBs for the Area. The MVEBs are presented in Table 10.

    Table 10—MVEBs for the Pittsburgh Area for the 1997 Annual and 2006 24-Hour PM2.5 NAAQS in TPY Year PM2.5 NOX 2017 700 17,584 2025 537 10,709

    EPA's substantive criteria for determining adequacy of MVEBs are set out in 40 CFR 93.118(e)(4). Additionally, to approve the MVEBs, EPA must complete a thorough review of the SIP, in this case the PM2.5 maintenance plan, and conclude that with the projected level of motor vehicle and all other emissions, the SIPs will achieve its overall purpose, in this case providing for maintenance of the 1997 annual and the 2006 24-hour PM2.5 NAAQS. EPA's process for determining adequacy of a MVEB consists of three basic steps: (1) Providing public notification of a SIP submission; (2) providing the public the opportunity to comment on the MVEB during a public comment period; and (3) EPA taking action on the MVEB.

    In this proposed rulemaking action, EPA is also initiating the process for determining whether or not the MVEBs are adequate for transportation conformity purposes. The publication of this rulemaking starts a 30-day public comment period on the adequacy of the submitted MVEBs. This comment period is concurrent with the comment period on this proposed action and comments should be submitted to the docket for this rulemaking. EPA may choose to make its determination on the adequacy of the budgets either in the final rulemaking on this maintenance plan and redesignation request or by informing Pennsylvania of the determination in writing, publishing a notice in the Federal Register and posting a notice on EPA's adequacy Web page (http://www.epa.gov/otaq/stateresources/transconf/adequacy.htm).15

    15 For additional information on the adequacy process, please refer to 40 CFR 93.118(f) and the discussion of the adequacy process in the preamble to the 2004 final transportation conformity rule. See 69 FR at 40039-40043.

    EPA has reviewed the MVEBs and finds that the submitted MVEBs are consistent with the maintenance plan and that the budgets meet the criteria for adequacy and approval. Therefore, EPA is proposing to approve the 2017 and 2025 PM2.5 and NOX MVEBs for the Pittsburgh Area for transportation conformity purposes. Additional information pertaining to the review of the MVEBs can be found in the Adequacy Findings TSD dated April 23, 2015, available on line at www.regulations.gov, Docket ID No. EPA-R03-OAR-2014-0902.

    VI. Proposed Actions

    EPA is proposing to approve Pennsylvania's request to redesignate the Pittsburgh Area from nonattainment to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. EPA has evaluated Pennsylvania's redesignation request and determined that upon approval of the 2007 and 2011 comprehensive emissions inventories for the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively, proposed as part of this rulemaking action, it would meet the redesignation criteria set forth in section 107(d)(3)(E) of the CAA. The monitoring data demonstrates that the Pittsburgh Area attained as determined by EPA in a prior rulemaking and for reasons discussed herein, that it will continue to attain both NAAQS. Final approval of this redesignation request would change the designation of the Pittsburgh Area from nonattainment to attainment for the 1997 annual and the 2006 24-hour PM2.5 NAAQS. EPA is also proposing to approve the associated maintenance plan for the Pittsburgh Area as a revision to the Pennsylvania SIP for the 1997 annual and 2006 24-hour PM2.5 NAAQS because it meets the requirements of section 175A of the CAA as described previously in this proposed rulemaking. In addition, EPA is proposing to approve the 2007 and 2011 comprehensive emissions inventories as meeting the requirement of section 172(c)(3) of the CAA for the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively. Furthermore, EPA is proposing to approve the 2017 and 2025 PM2.5 and NOX MVEBs for the Pittsburgh Area for transportation conformity purposes. EPA is soliciting public comments on the issues discussed in this document. These comments will be considered before taking final action.

    VII. Statutory and Executive Order Reviews

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

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

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

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

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

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

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

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

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

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

    In addition, this rule proposing to approve Pennsylvania's redesignation request, maintenance plan, 2007 and 2011 comprehensive emissions inventories for the 1997 annual and 2006 24-hour PM2.5 NAAQS, respectively, and MVEBs for transportation conformity purposes for the Pittsburgh Area for both NAAQS, does not have tribal implications as specified by Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP is not approved to apply in Indian country located in the state, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law.

    List of Subjects 40 CFR Part 52

    Environmental protection, Air pollution control, Incorporation by reference, Nitrogen oxides, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.

    40 CFR Part 81

    Air pollution control, National parks, Wilderness areas.

    Authority:

    42 U.S.C. 7401 et seq.

    Dated: May 11, 2015. William C. Early, Acting, Regional Administrator, Region III.
    [FR Doc. 2015-12237 Filed 5-19-15; 8:45 am] BILLING CODE 6560-50-P
    ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 174 and 180 [EPA-HQ-OPP-2015-0032; FRL-9927-39] Receipt of Several Pesticide Petitions Filed for Residues of Pesticide Chemicals in or on Various Commodities AGENCY:

    Environmental Protection Agency (EPA).

    ACTION:

    Notice of filing of petitions and request for comment.

    SUMMARY:

    This document announces the Agency's receipt of several initial filings of pesticide petitions requesting the establishment or modification of regulations for residues of pesticide chemicals in or on various commodities.

    DATES:

    Comments must be received on or before June 19, 2015.

    ADDRESSES:

    Submit your comments, identified by docket identification (ID) number and the pesticide petition number (PP) of interest as shown in the body of this document, 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 Confidential Business Information (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.
    FOR FURTHER INFORMATION CONTACT:

    Susan Lewis, Registration Division (RD) (7505P), main telephone number: (703) 305-7090; email address: [email protected]. The mailing address for each contact person is: Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001. As part of the mailing address, include the contact person's name, division, and mail code. The division to contact is listed at the end of each pesticide petition summary.

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

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

    • Crop production (NAICS code 111).

    • Animal production (NAICS code 112).

    • Food manufacturing (NAICS code 311).

    • Pesticide manufacturing (NAICS code 32532).

    If you have any questions regarding the applicability of this action to a particular entity, consult the person listed under FOR FURTHER INFORMATION CONTACT for the division listed at the end of the pesticide petition summary of interest.

    B. What should I consider as I prepare my comments for EPA?

    1. Submitting CBI. Do not submit this information to EPA through regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD-ROM that you mail to EPA, mark the outside of the disk or CD-ROM as CBI and then identify electronically within the disk or CD-ROM the specific information that is claimed as CBI. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

    2. Tips for preparing your comments. When preparing and submitting your comments, see the commenting tips at http://www.epa.gov/dockets/comments.html.

    3. Environmental justice. EPA seeks to achieve environmental justice, the fair treatment and meaningful involvement of any group, including minority and/or low-income populations, in the development, implementation, and enforcement of environmental laws, regulations, and policies. To help address potential environmental justice issues, the Agency seeks information on any groups or segments of the population who, as a result of their location, cultural practices, or other factors, may have atypical or disproportionately high and adverse human health impacts or environmental effects from exposure to the pesticides discussed in this document, compared to the general population.

    II. What action is the agency taking?

    EPA is announcing its receipt of several pesticide petitions filed under section 408 of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. 346a, requesting the establishment or modification of regulations in 40 CFR part 174 and/or part 180 for residues of pesticide chemicals in or on various food commodities. The Agency is taking public comment on the requests before responding to the petitioners. EPA is not proposing any particular action at this time. EPA has determined that the pesticide petitions described in this document contain the data or information prescribed in FFDCA section 408(d)(2), 21 U.S.C. 346a(d)(2); however, EPA has not fully evaluated the sufficiency of the submitted data at this time or whether the data support granting of the pesticide petitions. After considering the public comments, EPA intends to evaluate whether and what action may be warranted. Additional data may be needed before EPA can make a final determination on these pesticide petitions.

    Pursuant to 40 CFR 180.7(f), a summary of each of the petitions that are the subject of this document, prepared by the petitioner, is included in a docket EPA has created for each rulemaking. The docket for each of the petitions is available at http://www.regulations.gov.

    As specified in FFDCA section 408(d)(3), 21 U.S.C. 346a(d)(3), EPA is publishing notice of the petition so that the public has an opportunity to comment on this request for the establishment or modification of regulations for residues of pesticides in or on food commodities. Further information on the petition may be obtained through the petition summary referenced in this unit.

    New Tolerances

    1. PP 4F8339. (EPA-HQ-OPP-2015-0215). Monsanto Company, 1300 I Street NW., Suite 450 East, Washington, DC 20005, requests to establish a tolerance in 40 CFR part 180 for residues of the sum of the nematicide, tioxazafen (MON 102100) (3-phenyl-5-(2-thienyl)-1,2,4-oxadiazole) and its metabolite, benzamidine (benzenecarboximidamide) in or on the following raw agricultural and processed commodities: Corn, field, forage at 0.01 parts per million (ppm); Corn, field, grain at 0.01 ppm; Corn, field, stover at 0.02 ppm; Cotton, gin byproducts at 0.02 ppm; Cotton, undelinted seed at 0.01 ppm; Soybean, forage at 0.15 ppm; Soybean, hay at 0.3 ppm; Soybean, meal at 0.05 ppm; Soybean, seed at 0.04 ppm; and in or on the following food commodities: Cattle, fat at 0.01 ppm; Cattle, meat at 0.01 ppm; Cattle, meat byproducts at 0.01 ppm; Goat, fat at 0.01 ppm; Goat, meat at 0.01 ppm; Goat, meat byproducts at 0.01 ppm; Horse, fat at 0.01 ppm; Horse, meat at 0.01 ppm; Horse, meat byproducts at 0.01 ppm; Milk at 0.01 ppm; Sheep, fat at 0.01 ppm; Sheep, meat at 0.01 ppm; and Sheep, meat byproducts at 0.01 ppm. The Monsanto Company has submitted an independently validated analytical method for the residue analysis of parent tioxazafen and its metabolite, benzamidine, in crop and processed commodities for corn, cotton, and soybean. Additionally, an independently validated method has been used in cattle and hen feeding studies for the analysis of residues in the food commodities animal meat, fat, liver, kidney, cream, and milk, and poultry meat, fat, liver, and eggs, and is proposed for enforcement of requested tolerances in animal food commodities. Contact: RD.

    2. PP 4E8334. (EPA-HQ-OPP-2015-0035). Interregional Research Project Number 4 (IR-4), 500 College Road East, Suite 201W, Princeton, NJ 08540, requests to establish a tolerance in 40 CFR part 180 for residues of the herbicide clethodim, including its metabolites and degradates, determined by measuring only the sum of clethodim, 2-[(1E)-1-[[[(2E)-3-chloro-2-propenyl]oxy]imino]propyl]-5-[2-(ethylthio)propyl]-3-hydroxy-2-cyclohexen-1-one, and its metabolites containing the 5-(2-ethylthiopropyl)cyclohexene-3-one and 5-(2-ethylthiopropyl)-5-hydroxycyclohexene-3-one moieties and their sulphoxides and sulphones, calculated as the stoichiometric equivalent of clethodim, in or on the raw agricultural commodities: Onion, bulb subgroup 3-07A at 0.2 parts per million (ppm), Vegetable, fruiting group 08-10 at 1.0 ppm, Fruit, pome group 11-10 at 0.2 ppm, Fruit, stone group 12-12 at 0.2 ppm, Berry, low growing, subgroup 13-07G, except cranberry at 3.0 ppm, Rapeseed subgroup 20A, except flax at 0.5 ppm, Sunflower subgroup 20B at 5.0 ppm, Cottonseed subgroup 20C at 1.0 ppm and Stevia at 12 ppm. Analytical methodology has been developed and validated for enforcement purposes. The limit of quantitation (LOQ) of clethodim in the method(s) is 0.2 ppm, which will allow monitoring of food with residues at the levels proposed for the tolerances. Contact: RD.

    3. PP 5E8349. (EPA-HQ-OPP-2015-0197). Interregional Research Project Number 4 (IR-4), 500 College Road East, Suite 201W, Princeton, NJ 08540, requests to establish a tolerance in 40 CFR part 180 for residues of the fungicide fluazinam (3-chloro-N-[3-chloro-2,6-dinitro-4-(trifluoromethyl)phenyl]-5-(trifluoromethyl)-2-pyridinamine), including its metabolites and degradates in or on mayhaw at 2.0 parts per million (ppm); cabbage at 3.0 ppm; the squash/cucumber subgroup 9B at 0.05 ppm; and vegetable, tuberous and corm, subgroup 1C at 0.02 ppm. An analytical method using LC-MS/MS for the determination of fluazinam and AMGT residues on cabbage, squash and cucumbers has been developed and validated. Contact: RD.

    4. PP 5F8352. (EPA-HQ-OPP-2015-0263). ISK Biosciences Corporation, 7470 Auburn Road, Suite A, Concord, Ohio 44077, requests to establish a tolerance in 40 CFR part 180.601 for residues of the fungicide, cyazofamid, in or on Bulb Vegetables (Crop Group 3-07) at 2.0 parts per million (ppm). The residues are extracted with acetonitrile. After shaking and centrifugation, the extracts are diluted 4 fold with a 50% acetonitrile/water and filtered through a PTFE filter. The filtrate is diluted 5 fold with 50/50 acetonitrile/water. LC/MS/MS is used to measure and evaluate the chemicals cyazofamid and CCIM. Contact: RD.

    5. PP 5E8350. (EPA-HQ-OPP-2015-0263). Interregional Research Project Number 4 (IR-4), 500 College Road East, Suite 201W, Princeton, NJ 08540, requests to establish a tolerance in 40 CFR part 180 for residues of the fungicide cyazofamid, 4-chloro-2-cyano-N,N-dimethyl-5-(4-methylphenyl)-1H-imidazole-1-sulfonamide and its metabolite 4-chloro-5-(4-methylphenyl)-1H-imidazole-2-carbonitrile, calculated as the stoichiometric equivalent of cyazofamid in or on the following raw agricultural commodity: Herb subgroup 19A at 90 parts per million (ppm). Analytical methodology has been developed and validated for enforcement purposes. Contact: RD.

    6. PP 4E8337. (EPA-HQ-OPP-2015-0030). Interregional Research Project Number 4 (IR-4), 500 College Road East, Suite 201W, Princeton, NJ 08540, requests to establish a tolerance in 40 CFR part 180 for residues of carfentrazone-ethyl (ethyl-alpha-2-dichloro-5-[4-(difluoromethyl)-4,5-dihydro-3-methyl-5-oxo-1H-1,2,4-triazol-1-yl]-4-fluorobenzene-propanoate) and the metabolite carfentrazone-ethyl chloropropionic acid (α,2-dichloro-5-[4-(difluoromethyl)-4,5-dihydro-3-methyl-5-oxo-1H-1,2,4-triazol-1-yl]-4-fluorobenzenepropanoic acid)] in or on the raw agricultural commodity artichoke at 0.1 parts per million (ppm); asparagus at 0.25 ppm; peppermint, tops at 0.25 ppm; spearmint, tops at 0.25 ppm; teff, grain at 0.25 ppm; teff, forage at 1.00 ppm; teff, hay at 0.30 ppm; teff, straw at 0.10 ppm; vegetable, bulb, group 3-07 at 0.10 ppm; vegetable, fruiting, group 8-10 at 0.10 ppm; fruit, citrus, group 10-10 at 0.10 ppm; fruit, pome, group 11-10 at 0.10 ppm; fruit, stone, group 12-12 at 0.10 ppm; caneberry subgroup 13-07A at 0.10 ppm; bushberry subgroup 13-07B at 0.10 ppm; fruit, small vine climbing, subgroup 13-07F, except fuzzy kiwi fruit at 0.10 ppm; berry, low growing, subgroup 13-07G at 0.10 ppm; nut, tree, group 14-12 at 0.10 ppm; oilseed group 20 at 0.20 ppm; grain, cereal forage group 16 at 1.0 ppm; grain, cereal, hay, group 16 at 0.30 ppm; grain cereal, stover, group 16 at 0.80 ppm; and grain, cereal, straw, group 16 at 3.0 ppm. There is a practical analytical method for detecting and measuring levels of carfentrazone-ethyl and its metabolite in or on food with a limit of quantitation that allows monitoring of food with residues at or above the levels set or proposed in the tolerances. Contact: RD.

    7. PP 4F8291. (EPA-HQ-OPP-2015-0012). Bayer CropScience, 2 T.W. Alexander Drive, P.O. Box 12014, Research Triangle Park, NC 27709, requests to establish a tolerance in 40 CFR part 180 for residues of the fungicide, pyrimethanil, in or on caneberry (subgroup 13-07A) at 15.0 parts per million (ppm) and bushberry (subgroup 13-07B) at 8.0 ppm. The HPLC/MS/MS is used to measure and evaluate the chemical pyrimethanil. Contact: RD.

    Amended Tolerances

    1. PP 5E8349. (EPA-HQ-OPP-2015-0197). Interregional Research Project Number 4 (IR-4), 500 College Road East, Suite 201W, Princeton, New Jersey 08540, requests to amend the tolerances in 40 CFR 180.574 for residues of the fungicide fluazinam (3-chloro-N-[3-chloro-2,6-dinitro-4-(trifluoromethyl)phenyl]-5-(trifluoromethyl)-2-pyridinamine), including its metabolites and degradates, in or on the vegetable, brassica leafy, group 5 at 0.01 by changing it to read “vegetable, brassica leafy, group 5, except cabbage” at 0.01 ppm and by removing the existing tolerance on potato at 0.02 ppm upon approval of the requested tolerance on the tuberous and corm subgroup 1C. An analytical method using LC-MS/MS for the determination of fluazinam and AMGT residues on cabbage, squash and cucumbers has been developed and validated. Contact: RD.

    2. PP 4E8334. (EPA-HQ-OPP-2015-0035). IR-4, 500 College Road East, Suite 201W, Princeton, NJ 08540, requests to remove the existing tolerances in 40 CFR part 180.458 for residues of the herbicide clethodim, including its metabolites and degradates, determined by measuring only the sum of clethodim, 2-[(1E)-1-[[[(2E)-3-chloro-2-propenyl]oxy]imino]propyl]-5-[2-(ethylthio)propyl]-3-hydroxy-2-cyclohexen-1-one, and its metabolites containing the 5-(2-ethylthiopropyl)cyclohexene-3-one and 5-(2-ethylthiopropyl)-5-hydroxycyclohexene-3-one moieties and their sulphoxides and sulphones, calculated as the stoichiometric equivalent of clethodim, in or on the raw agricultural commodities: Canola seed, at 0.5 ppm, cotton, undelinted seed at 1.0 ppm, peach at 0.2 ppm, onion, bulb at 0.2 ppm, strawberry at 3.0 ppm, and sunflower, seed at 5.0 ppm, upon establishment of the aforementioned tolerances under “New Tolerances” above for this petition. Analytical methodology has been developed and validated for enforcement purposes. The limit of quantitation (LOQ) of clethodim in the method(s) is 0.2 ppm, which will allow monitoring of food with residues at the levels proposed for the tolerances. Contact: RD.

    3. PP 5E8350. (EPA-HQ-OPP-2015-0263). Interregional Research Project Number 4 (IR-4), 500 College Road East, Suite 201W, Princeton, NJ 08540, requests to remove the existing tolerances in 40 CFR part 180.601 for residues of the fungicide cyazofamid, 4-chloro-2-cyano-N,N-dimethyl-5-(4-methylphenyl)-1H-imidazole-1-sulfonamide and its metabolite 4-chloro-5-(4-methylphenyl)-1H-imidazole-2-carbonitrile (CA), calculated as the stoichiometric equivalent of cyazofamid in or on basil, dried leaves at 90 parts per million (ppm); and basil, fresh leaves at 30 ppm, upon approval of the aforementioned tolerance on herb subgroup 19A. Analytical methodology has been developed and validated for enforcement purposes. Contact: RD.

    4. PP 4E8337. (EPA-HQ-OPP-2015-0030). Interregional Research Project Number 4 (IR-4), 500 College Road East, Suite 201W, Princeton, NJ 08540, requests to amend the tolerances in 40 CFR 180.515 for residues of carfentrazone-ethyl (ethyl-alpha-2-dichloro-5-[4-(difluoromethyl)-4,5-dihydro-3-methyl-5-oxo-1H-1,2,4-triazol-1-yl]-4-fluorobenzene-propanoate) and the metabolite carfentrazone-ethyl chloropropionic acid (α,2-dichloro-5-[4-(difluoromethyl)-4,5-dihydro-3-methyl-5-oxo-1H-1,2,4-triazol-1-yl]-4-fluorobenzenepropanoic acid)] as follows: (1) To modify the existing tolerance for banana from 0.20 ppm to 0.10 ppm and (2) to remove the following established tolerances: Vegetable, bulb group 3 at 0.10 ppm; vegetable, fruiting, group 8 at 0.10 ppm; fruit, citrus, group 10 at 0.10 ppm; fruit, pome, group 11 at 0.10 ppm; fruit, stone, group 12 at 0.10 ppm; berry group 13 at 0.10 ppm; borage at 0.10 ppm; grape at 0.10 ppm; caneberry subgroup 13A at 0.10 ppm; nut, tree group 14 at 0.10 ppm; pistachio at 0.10 ppm; pummelo at 0.10 ppm; kiwi fruit at 0.10 ppm; canola at 0.10 ppm; cotton, undelinted seed at 0.20 ppm; crambe, seed at 0.10 ppm; flax, seed at 0.10 ppm; rapeseed, seed at 0.10 ppm; okra at 0.10 ppm; safflower seed at 0.10 ppm; salal at 0.10 ppm; sunflower seed at 0.10 ppm; strawberry at 0.10 ppm; juneberry at 0.10 ppm; lingonberry at 0.10 ppm; mustard, seed at 0.10 ppm; barley bran at 0.80 ppm; barley, flour at 0.80 ppm; corn, field, forage at 0.20 ppm; corn, sweet, forage at 0.20 ppm, corn, sweet, kernel plus cob with husk removed at 0.10 ppm; grain, cereal, forage, fodder and straw group 16, except corn and sorghum; forage at 1.0 ppm; grain, cereal, forage, fodder and straw, group 16, hay at 0.30 ppm; grain, cereal, forage, fodder and straw, group 16, stover at 0.30 ppm; grain, cereal, forage, fodder and straw, group 16, except rice; straw at 0.10 ppm; grain, cereal, group 15 at 0.10 ppm; grain, cereal, stover at 0.80 ppm; grain, cereal, straw at 3.0 ppm; millet, flour at 0.80 ppm; oat, flour at 0.80 ppm; rice, straw at 1.0 ppm; rye, bran at 0.80 ppm; rye, flour at 0.80 ppm; sorghum, forage at 0.20 ppm; sorghum, sweet at 0.10 ppm; wheat, bran at 0.80 ppm; wheat, flour at 0.80 ppm; wheat, germ at 0.80 ppm; wheat, middlings at 0.80 ppm; and wheat, shorts at 0.80 ppm. There is a practical analytical method for detecting and measuring levels of carfentrazone-ethyl and its metabolite in or on food with a limit of quantitation that allows monitoring of food with residues at or above the levels set or proposed in the tolerances. Contact: RD.

    New Tolerance Exemptions

    1. PP IN-10753. (EPA-HQ-OPP-2015-0214). Drexel Chemical Company, P.O. Box 13327, Memphis, TN 38113-0327, requests to establish an exemption from the requirement of a tolerance for residues of tetraethylene glycol (CAS Reg. No. 112-60-7) when used as an inert ingredient in pesticide formulations applied to growing crops only under 40 CFR 180.920. The petitioner believes no analytical method is needed because it is not required for an exemption from the requirement of a tolerance. Contact: RD.

    2. PP IN-10759. (EPA-HQ-OPP-2015-0232). Cytec Industries Inc., 5 Garret Mountain Plaza Woodland Park, NJ 07424, requests to establish an exemption from the requirement of a tolerance for residues of poly(oxy-1,2-ethanediyl), α-(3-carboxy-1-oxosulfopropyl)-ω-hydroxy, alkyl ethers, disodium salts (CAS Reg. Nos. 68815-56-5, 68954-91-6, 1013906-64-3, 1024612-24-5), when used as an inert ingredient in pesticide formulations applied to growing crops and raw agricultural commodities under 40 CFR 180.910. The petitioner believes no analytical method is needed because it is not required for an exemption from the requirement of a tolerance. Contact: RD.

    3. PP IN-10760. (EPA-HQ-OPP-2015-0213). Cytec Industries, Inc., 5 Garret Mountain Plaza, Woodland Park, NJ 07424, requests to establish an exemption from the requirement of a tolerance for residues of butanedioic acid, 2-sulfo-, C-C9-11-isoalkyl esters, C10-rich, disodium salts (CAS. Reg. No. 815583-91-6), when used as an inert ingredient in pesticide formulations applied to growing crops and raw agricultural commodities under 40 CFR 180.910. The petitioner believes no analytical method is needed because it is not required for an exemption from the requirement of a tolerance. Contact: RD.

    4. PP IN-10792. (EPA-HQ-OPP-2015-0249). Clariant Corporation, 4000 Monroe Road, Charlotte, NC 28205, requests to establish an exemption from the requirement of a tolerance for residues, D-Glucitol, 1-deoxy-1-(methylamino)-, N-C8-10 acyl derivs. (CAS Reg. No. 1591782-62-5), when used as an inert ingredient in pesticide formulations applied to growing crops only under 40 CFR 180.920. The petitioner believes no analytical method is needed because it is not required for an exemption from the requirement of a tolerance. Contact: RD.

    Authority:

    21 U.S.C. 346a.

    Dated: May 8, 2015. G. Jeffrey Herndon, Acting Director, Registration Division, Office of Pesticide Programs.
    [FR Doc. 2015-12238 Filed 5-19-15; 8:45 am] BILLING CODE 6560-50-P
    FEDERAL COMMUNICATIONS COMMISSION 47 CFR Part 54 [WC Docket Nos. 10-90, 14-259 and 14-93; FCC 14-98, DA 15-383; Report No. 3021] Petitions for Reconsideration of Action in Rulemaking Proceeding AGENCY:

    Federal Communications Commission.

    ACTION:

    Petition for reconsideration.

    SUMMARY:

    Petitions for Reconsideration (Petitions) have been filed in the Commission's Rulemaking proceeding by Kevin L. Tucker, on behalf of AirNorth Communications, Inc.; Michael D. Donnell on behalf of Michael D. Donnell d/b/a San Joaquin Broadband; and Hamid Vahdatipour, on behalf of Lake Region Technology & Communications, LLC.

    DATES:

    Oppositions to the Petitions must be filed on or before June 4, 2015. Replies to an opposition must be filed on or before June 15, 2015.

    ADDRESSES:

    Federal Communications Commission, 445 12th Street SW., Washington, DC 20554.

    FOR FURTHER INFORMATION CONTACT:

    Alexander Minard, Telecommunications Access Policy Division, Wireline Competition Bureau, (202) 418-7400, email: [email protected], TTY (202) 418-0484.

    SUPPLEMENTARY INFORMATION:

    This is a summary of Commission's document, Report No. 3021, released May 11, 2015. The full text of the Petitions is available for viewing and copying in Room CY-B402, 445 12th Street SW., Washington, DC or may be accessed online via the Commission's Electronic Comment Filing System at http://apps.fcc.gov/ecfs/. The Commission will not send a copy of this Notice pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A) because this notice does not have an impact on any rules of particular applicability.

    Subject: FCC Launches Rural Broadband Expansion Experiments, published at 79 FR 45705, August 6, 2014, in WC Docket Nos. 10-90 and 14-58, and published pursuant to 47 CFR 1.429(e). See also § 1.4(b)(1) of the Commission's rules.

    Number of Petitions Filed: 3.

    Federal Communications Commission. Marlene H. Dortch, Secretary.
    [FR Doc. 2015-12134 Filed 5-19-15; 8:45 am] BILLING CODE 6712-01-P
    DEPARTMENT OF TRANSPORTATION Surface Transportation Board 49 CFR Chapter X [Docket No. EP 726] On-Time Performance Under Section 213 of the Passenger Rail Investment and Improvement Act of 2008 AGENCY:

    Surface Transportation Board.

    ACTION:

    Notice of commencement of proceeding.

    SUMMARY:

    The Surface Transportation Board (the Board) is commencing a proceeding to define “on-time performance” for purposes of Section 213 of the Passenger Rail Investment and Improvement Act of 2008.

    DATES:

    May 20, 2015.

    FOR FURTHER INFORMATION CONTACT:

    Scott M. Zimmerman at (202) 245-0386. Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at (800) 877-8339.

    SUPPLEMENTARY INFORMATION:

    The Association of American Railroads (AAR) submitted a conditional petition for rulemaking to define “on-time performance” for purposes of Section 213 of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA), 49 U.S.C. 24308(f). The Board concludes that it is appropriate to institute a rulemaking proceeding to define on-time performance for purposes of PRIIA Section 213 and invite public participation. The Board intends to issue a notice of proposed rulemaking and a procedural schedule in a subsequent decision.

    Additional information is contained in the Board's decision, which is available on our Web site at www.stb.dot.gov. Copies of the decision may also be purchased by contacting the Board's Office of Public Assistance, Governmental Affairs, and Compliance at (202) 245-0238.

    This action will not significantly affect either the quality of the human environment or the conservation of energy resources.

    Decided: May 13, 2015.

    By the Board, Acting Chairman Miller and Vice Chairman Begeman.

    Kenyatta Clay, Clearance Clerk.
    [FR Doc. 2015-12174 Filed 5-19-15; 8:45 am] BILLING CODE 4915-01-P
    80 97 Wednesday, May 20, 2015 Notices DEPARTMENT OF AGRICULTURE Submission for OMB Review; Comment Request May 14, 2015.

    The Department of Agriculture has submitted the following information collection requirement(s) to OMB for review and clearance under the Paperwork Reduction Act of 1995, Public Law 104-13. Comments regarding (a) whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of burden including the validity of the methodology and assumptions used; (c) ways to enhance the quality, utility and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.

    Comments regarding this information collection received by June 19, 2015 will be considered. Written comments should be addressed to: Desk Officer for Agriculture, Office of Information and Regulatory Affairs, Office of Management and Budget (OMB), New Executive Office Building, 725 17th Street NW., Washington, DC 20502. Commenters are encouraged to submit their comments to OMB via email to: [email protected] or fax (202) 395-5806 and to Departmental Clearance Office, USDA, OCIO, Mail Stop 7602, Washington, DC 20250-7602. Copies of the submission(s) may be obtained by calling (202) 720-8958.

    An agency may not conduct or sponsor a collection of information unless the collection of information displays a currently valid OMB control number and the agency informs potential persons who are to respond to the collection of information that such persons are not required to respond to the collection of information unless it displays a currently valid OMB control number.

    Office of the Secretary, White House Liaison Office

    Title: Advisory Committee and Research and Promotion Board Membership Background Information.

    OMB Control Number: 0505-0001.

    Summary of Collection: The Department is required under Section 1804 of the Food and Agriculture Act of 1977 (7 U.S.C. 2281, et seq.) to provide information concerning advisory committee members' principal place of residence, persons or companies by whom employed, and other major sources of income. The Agriculture and Food Act of 1981 (Pub. L. 97-98) reiterates this requirement. Similar information will be required of research and promotion boards/committees/councils in addition to the supplemental commodity specific questions. The Secretary appoints board members under each program. Some of the information contained on form AD-755 is used by the Department to conduct background clearances of prospective board members required by departmental regulations. The clearance is required for all committee members who are appointed by the Secretary. The White House Liaison Office (WHLO) will collect information using form AD-755, “Advisory Committee and Research and Promotion Board Membership Background Information”.

    Need And Use of the Information: