81 FR 88120 - Changes to Attributable Costing

POSTAL REGULATORY COMMISSION

Federal Register Volume 81, Issue 235 (December 7, 2016)

Page Range		88120-88124
FR Document		2016-29270

The Commission is issuing a set of final rules amending some existing Commission rules related to attributable costing. The final rules are consistent with methodology changes approved by the Commission. Relative to the proposed rules, one rule was revised to alleviate confusion and another revision was administrative in nature.

Federal Register, Volume 81 Issue 235 (Wednesday, December 7, 2016)

[Federal Register Volume 81, Number 235 (Wednesday, December 7, 2016)]
[Rules and Regulations]
[Pages 88120-88124]
From the Federal Register Online [www.thefederalregister.org]
[FR Doc No: 2016-29270]

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POSTAL REGULATORY COMMISSION

39 CFR Parts 3015 and 3060

[Docket No. RM2016-13; Order No. 3641]

Changes to Attributable Costing

AGENCY: Postal Regulatory Commission.

ACTION: Final rule.

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SUMMARY: The Commission is issuing a set of final rules amending some
existing Commission rules related to attributable costing. The final
rules are consistent with methodology changes approved by the
Commission. Relative to the proposed rules, one rule was revised to
alleviate confusion and another revision was administrative in nature.

DATES: Effective January 6, 2017.

FOR FURTHER INFORMATION CONTACT: David A. Trissell, General Counsel, at
202-789-6820.

SUPPLEMENTARY INFORMATION:

Regulatory History

81 FR 63448 (Sept. 15, 2016).

Table of Contents

I. Introduction
II. Background
III. Review and Analysis of Comments
IV. Changes to Proposed Rules
V. Ordering Paragraphs

I. Introduction

On September 9, 2016, the Commission issued proposed rules
consisting of necessary changes, resulting from Order No. 3506, that
specifically define or describe attributable costs.\1\ For the reasons
discussed below, the Commission adopts final rules on this topic, with
minor revisions to the proposed rules as discussed in chapter IV.
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\1\ Notice of Proposed Rulemaking on Changes Concerning
Attributable Costing, September 9, 2016 (Order No. 3507). See also
Docket No. RM2016-2, Order Concerning United Parcel Service, Inc.'s
Proposed Changes to Postal Service Costing Methodologies (UPS
Proposals One, Two, and Three), September 9, 2016 (Order No. 3506).
Discussed in greater detail below, the Commission issued an errata
related to Order No. 3506. Docket No. RM2016-2, Notice of Errata,
October 19, 2016 (Errata). Any reference to Order No. 3506 refers to
the updated version including the changes identified in the Errata.
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II. Background

On September 9, 2016, the Commission issued Order No. 3506 after
consideration of a United Parcel Service, Inc. (UPS) petition which
sought to make changes to the methodologies employed by the Postal
Service to account for the costs of the Postal Service's products in
its periodic reports.\2\ In Proposal One, UPS recommended that the
Postal Service calculate and attribute inframarginal costs to
individual products in addition to the currently attributed volume-
variable and product-specific fixed costs. Petition, Proposal One at 1.
Proposal Two dealt with reclassifying some fixed costs as fully or
partially variable, and attributing those costs to products. Petition,
Proposal Two at 1. UPS also filed a third proposal, which requested a
review of competitive products' share of institutional costs.\3\
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\2\ See generally Order No. 3506. See also Docket No. RM2016-2,
Petition of United Parcel Service, Inc. for the Initiation of
Proceedings to Make Changes to Postal Service Costing Methodologies,
October 8, 2015 (Petition).
\3\ Petition, Proposal Three at 1. The Commission declined to
consider Proposal Three as it planned to initiate its 5-year review
pursuant to 39 U.S.C. 3633(b) following Order No. 3506's issuance.
Order No. 3506 at 124, 125; see also Docket No. RM2017-1, Order No.
3624, Advance Notice of Proposed Rulemaking to Evaluate the
Institutional Cost Contribution Requirement for Competitive
Products, November 22, 2016.
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The instant rulemaking stems from the Commission's findings in
Order No. 3506 on Proposal One. In that order, the Commission found
that a portion of inframarginal costs (those inframarginal costs
calculated as part of a product's incremental cost) have a reliably
identifiable causal relationship to products. Order No. 3506 at 61.
Therefore, pursuant to Order No. 3506, attributable costs must also
include those inframarginal costs calculated as part of a competitive
product's incremental costs (in addition to a product's volume-variable
costs and product-specific fixed costs).\4\
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\4\ On October 7, 2016, UPS appealed Order No. 3506 to the
United States Court of Appeals for the District of Columbia Circuit.
United Parcel Service, Inc. v. Postal Regulatory Commission, No. 16-
1354 (D.C. Cir. filed Oct. 7, 2016) (Case No. 16-1354).
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As noted above, on October 19, 2016, the Commission issued the
Errata to clarify the definition of inframarginal costs described in
Order No. 3506. See Errata. Generally, when defining inframarginal
costs, the Errata replaced the phrase ``do not vary directly with
volume,'' with the phrase ``are not volume-variable costs.'' Id. at 1-
2. The revised definition of inframarginal costs does not impact the
Commission's findings in Order No. 3506. However, the definition cited
in Order No. 3507, ``[i]nframarginal costs are variable costs that do
not vary directly with volume,'' would now be cited as
``[i]nframarginal costs are variable costs that are not volume-variable
costs.'' Id. at 1; Order No. 3507 at 4; see also Order No. 3506 at 10.

III. Review and Analysis of Comments

On October 17, 2016, the Commission received comments from Amazon
Fulfillment Services, Inc. (Amazon),\5\ the Public Representative,\6\
and the Postal Service.\7\ On October 18, 2016, the Commission received
comments from UPS\8\ and, on October 20, 2016, it

[[Page 88121]]

received comments from Valpak Direct Marketing Systems, Inc. and the
Valpak Franchise Association, Inc. (Valpak).\9\ Comments and the
Commission's analysis of those comments are discussed below. In
addition, Commission analysis related to revisions to the proposed
rules is discussed in chapter IV of this Order.
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\5\ Comments of Amazon Fulfillment Services, Inc., October 17,
2016 (Amazon Comments).
\6\ Public Representative Comments, October 17, 2016 (PR
Comments).
\7\ Comments of the United States Postal Service in Response to
Order No. 3507, October 17, 2016 (Postal Service Comments).
\8\ United Parcel Service, Inc.'s Comments on Notice of Proposed
Rulemaking on Changes Concerning Attributable Costing, October 18,
2016 (UPS Comments). UPS also filed a motion for late acceptance of
its comments. Motion of the United Parcel Service, Inc. for Late
Acceptance of Filing of Comments in Response to RM2016-13, October
18, 2016 (UPS Motion). The UPS Motion is granted.
\9\ Valpak Direct Marketing Systems, Inc. and the Valpak
Franchise Association, Inc. Comments on Changes Concerning
Attributable Costing, October 20, 2016 (Valpak Comments). Valpak
also filed a motion for late acceptance of its comments. Valpak
Direct Marketing Systems, Inc. and the Valpak Franchise Association,
Inc. Motion for Late Acceptance of Comments, October 20, 2016
(Valpak Motion). The Valpak Motion is granted.
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a. Amazon

Comments. Amazon supports adoption of the proposed rules but
requests clarification concerning statements made in Order No. 3507 and
suggests revisions to proposed Sec. 3015.7(b). Amazon Comments at 1.
Amazon seeks clarification concerning the Commission's statement
``[w]hile the Commission found that inframarginal costs are causally
related to products, it determined inframarginal costs cannot be
reliably identified, which is a necessary component of cost
attribution.'' Id. at 1-2; see Order No. 3507 at 4 (citing Order No.
3506 at 56). Amazon argues that the statement is unclear considering
the Commission's finding in Order No. 3506, that only some
inframarginal costs are causally related to individual products. Amazon
Comments at 2; see also Order No. 3506 at 35, 45-51, 55 (emphasis
added).
Amazon also seeks clarification on the description of inframarginal
costs (variable costs that do not vary directly with volume) in Order
No. 3507. Amazon Comments at 2; see also Order No. 3507 at 4. Amazon
states inframarginal costs should not be described based on a direct or
indirect relationship between volume and cost, but instead should be
described based on a causal relationship between the level of costs and
the marginal unit of output of a product. Amazon Comments at 2-3.
Finally, Amazon suggests revisions to proposed 3015.7(b) in order
to cure what it believes is a circular reference in the rule. Id. at 3.
The proposed rule defines a product's attributable cost as its ``. . .
incremental costs, which is the sum of volume-variable costs, product-
specific costs, and those inframarginal costs calculated as part of a
competitive product's incremental costs. . . .'' Id. (quoting proposed
Sec. 3015.7(b)). Because the term ``incremental cost'' appears both as
a defined term, and as an element of the definition, Amazon asserts
that this reference is circular. Id. Amazon provides a revised
definition and states its adoption ``would avoid needless confusion,
and would allow the appropriate amount of inframarginal costs to be
attributed to each product.'' Id. at 4.
Commission analysis. The Commission confirms that in Order No. 3506
it found only the portion of inframarginal costs calculated as part of
an individual product's incremental costs is causally related and
reliably identifiable to individual products, and therefore can be
linked to those products. Order No. 3506 at 35, 45-51, 55-56. In
addition, the Commission notes that the Errata provided clarification
as to the definition of inframarginal costs. See supra at 3; see
generally Errata. In addition, the Commission recognizes the potential
confusion related to the references to incremental costs in proposed
Sec. 3015.7(b). Clarifying changes to proposed Sec. 3015.7(b) are
discussed in chapter IV of this Order.

b. Public Representative

Comments. The Public Representative states that the proposed rules
conform to Order No. 3506, but that the Commission should discuss the
meaning of ``to the extent that incremental cost data are
unavailable,'' in proposed Sec. 3015.7(a), in order to ``forestall
potential attempts to game the outcome.'' PR Comments at 2-3. In
addition, the Public Representative suggests a rearrangement of the
phrase ``to calculate attributable costs'' in proposed Sec. 3015.7(b)
for clarification and readability purposes. Id. at 7.
Finally, the Public Representative cites to his comments in Docket
No. RM2016-2 and, just as in that docket, maintains that a review of
compliance with section 703(d) of the Postal Accountability and
Enhancement Act (PAEA) is necessary in order to consider changes to
attributable costs and revise related rules.\10\ He argues Order No.
3507 modifies rules under 39 U.S.C. 3633 and must therefore follow the
requirements of section 703(d). PR Comments at 6.
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\10\ Id. at 3. ``Uncodified section 703 of the PAEA, Public Law
109-435, 120 Stat. 3198 (2006) requires that when promulgating new
or revised regulations under section 3633, the Commission `shall
take into account' Federal Trade Commission recommendations about
the net economic effects of laws that apply to the United States
Postal Service, and subsequent relevant events.'' Order No. 3507 at
3 n.4.
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Commission analysis. The phrase ``to the extent that incremental
cost data are unavailable'' stems from the original establishment of
part 3015 in Docket No. RM2007-1 and remains unchanged in Sec.
3015.7.\11\ The Commission did not propose any revisions related to
this particular phrase in Order No. 3507 and offers the following
explanation. Currently, incremental cost data are available for all
products with the exception of international mail. Incremental costs
for international mail are not available because its cost pools are not
sufficiently disaggregated between market dominant and competitive
products. Order No. 3506, Appendix A at 18. The method of calculating
incremental costs approved in Docket No. RM2010-4 is applicable to all
domestic products, whether market dominant or competitive.\12\ Because
international mail makes up a small percentage of volume, volume-
variable costs, and product-specific costs relative to all mail, it is
unlikely that the inability to calculate its incremental costs would
allow the Postal Service to ``game the outcome'' and materially reduce
the level of cost attribution.
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\11\ Docket No. RM2007-1, Order No. 43, Establishing Ratemaking
Regulations for Market Dominant and Competitive Products, October
29, 2007, at 138.
\12\ The methodology for calculating incremental costs approved
in Docket No. RM2010-4 is based on a methodology originally proposed
in Docket No. R2000-1. When originally proposed, this methodology
was applied to all domestic products. See Docket No. RM2010-4, Order
No. 399, Order Accepting Analytical Principles Used in Periodic
Reporting (Proposals Twenty-Two through Twenty-Five), January 27,
2010, at 2-5; see also Docket No. R2000-1, Direct Testimony of Nancy
R. Kay on Behalf of United States Postal Service, January 12, 2000.
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The Commission has previously discussed section 703(d) and its
applicability to Order Nos. 3506 and 3507. In Order No. 3506, the
Commission distinguished its review of attributable costing as a change
in analytical principles pursuant to 39 U.S.C. 3652 rather than a
proceeding under 39 U.S.C. 3633. Order No. 3506 at 117-122; see also 39
U.S.C. 3652 and 3633. In Order No. 3507, the Commission determined that
``the proposed rules in this instance did not trigger the requirement
to consider the net economic effect'' because the proposed rules
involve conforming changes required by the Commission's action taken in
Docket No. RM2016-2 and therefore is required by law. Order No. 3507 at
3 n.4. It also stated that because the proposed revisions are required
by law, ``any consideration of the `net economic effect'
recommendations identified in

[[Page 88122]]

uncodified section 703 would be moot.'' Id. The Commission maintains
that, notwithstanding section 703's applicability, these conforming
changes represent an improved, more complete, or more accurate measure
of attributable costs pursuant to section 3622(c) and an improvement in
the attribution of costs pursuant to section 3652(e) and therefore
reduce potential economic distortions. Id.
While the Commission appreciates the Public Representative's
comments, its conclusions related to section 703(d)'s applicability in
this matter remain unchanged. Therefore, the Commission declines to
consider compliance with section 703(d) because these conforming
changes are required by law.

c. Postal Service

Comments. The Postal Service notes the same circular reference to
incremental costs as indicated by Amazon in proposed Sec. 3015.7(b).
Postal Service Comments at 1; see also Amazon Comments at 3-4. The
Postal Service suggests two alternative versions to proposed Sec.
3015.7(b) that would eliminate the circular reference and would more
``clearly and directly convey[] the intent of the provision.'' Postal
Service Comments at 1-2.
The Postal Service also recommends an update to PRC Form CP-01 as
part of proposed Sec. 3060.21 by including a ``slightly broader
housekeeping change.'' \13\ The Postal Service argues competitive
market tests should be included in the institutional costs calculation
pursuant to 39 U.S.C. 3641(b)(3) and 39 U.S.C. 3633(a)(3), but that in
Fiscal Year (FY) 2014 the amounts were too small to ``merit further
consideration.'' Postal Service Comments at 2.
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\13\ Id. at 2. The Postal Service also notes a numerical
inaccuracy with line (8) of proposed Sec. 3060.21 which should read
``Line (8): Difference between Competitive Products total revenues
and attributable costs (line 3 less line 7)'' which will no longer
be inaccurate should the Postal Service's other recommended update
be included. Id.; Order No. 3507 at 10 (emphasis added).
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However, the Postal Service explains that as part of its FY 2015
Annual Compliance Report (ACR), the amounts had grown larger and it was
able to incorporate competitive market test amounts in its contribution
target analysis by introducing a new row, Net Contribution Competitive
Product Market Tests, into PRC Form CP-01.\14\ The Postal Service
recommends that the Commission take this opportunity to add the Net
Contribution Competitive Product Market Tests row to PRC Form CP-01 in
Sec. 3060.21, as the requirements of 39 U.S.C. 3641(b)(3) are
``unlikely to change'' and competitive product market tests have the
potential to continue to contribute to institutional costs. Postal
Service Comments at 2-3.
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\14\ Id.; see also Docket No. ACR2015, United States Postal
Service FY 2015 Annual Compliance Report, December 29, 2015, at 69
(FY 2015 ACR); Docket No. ACR2015, Library Reference USPS-FY15-39,
December 29, 2015.
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Commission analysis. The Commission approves of the update to PRC
Form CP-01 as recommended by the Postal Service. While this additional
revision to Sec. 3060.21 is not directly related to the Commission's
findings in Order No. 3506, the Commission concludes the revision is
appropriate as it will result in the Postal Service submitting a more
accurate income report. In addition and as noted above, the Commission
recognizes the potential confusion related to the references to
incremental costs in proposed Sec. 3015.7(b). Revisions to proposed
Sec. Sec. 3015.7(b) and 3060.21 are discussed in chapter IV of this
Order.

d. UPS

Comments. UPS asserts the proposed rules are premature as Order No.
3506 is now under review by the Court in Case No. 16-1354 and the
instant proceeding was initiated pursuant to that order. UPS Comments
at 1; Case No. 16-1354. As a result, UPS requests that the Commission
withdraw Order No. 3507 and defer any rule revisions until the Court
issues its decision in Case No. 16-1354.\15\ Despite its request to
defer this proceeding, UPS argues the Postal Service should still be
obligated to comply with the directives set forth by the Commission in
Order No. 3506.\16\
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\15\ UPS Comments at 1. UPS notes that the Court's decision in
Case No. 16-1354 could have a direct effect on any newly implemented
rules and that revising any rules now could ``create unnecessary
procedural complications for the Commission and for interested
parties.'' Id. at 2-3.
\16\ UPS Comments at 3 (i.e., the calculation and attribution of
product-level incremental costs for products and providing
additional information for each cost segment sub-report). See also
Order No. 3506 at 60-62, 108.
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Commission analysis. The Commission recognizes UPS's concern
regarding potential ``procedural complications'' should these rules
need to be revised in the future; however, it finds no compelling
reason for it to defer this final rulemaking pending the Court's
decision in Case No. 16-1354, a proceeding that has not been resolved.
Conforming changes to the Code of Federal Regulations (CFR) are
necessary in order to comply with Order No. 3506 and require the Postal
Service to attribute costs pursuant to that order. In Order No. 3506,
based on the information provided, the only costs which the Commission
found to have a reliably identified causal relationship to products are
incremental costs. This finding expands the scope of cost attribution
beyond volume-variable costs and product-specific costs. For these
reasons, the Commission declines to defer the instant rulemaking
proceeding.

e. Valpak

Comments. Valpak does not specifically support the adoption of the
proposed rules but recommends the Commission revise certain CFR rules
to require market dominant products to cover their attributable costs.
Valpak Comments at 3-5. Valpak cites to a specific discussion in Order
No. 3506 and states it ``implies that the average revenue of every
product, be it competitive or market dominant, henceforth will (or
should) be required by the Commission to cover its incremental cost.''
Valpak Comments at 2 (citing Order No. 3506 at 61). Based on this
interpretation, Valpak asserts Order No. 3507 does not comport with
Order No. 3506 because in Order No. 3507 the Commission notes
attributable cost coverage is one of many factors considered when
regulating market dominant products. Valpak Comments at 1-2 (citing
Order No. 3507 at 3-4). Valpak argues the discussion in Order No. 3506
necessitates revisions to market dominant product rules that would
require market dominant products to cover attributable costs just as
competitive products are required to cover their attributable
costs.\17\ It also states the requirement would protect against the
cross-subsidization of competitive products by market dominant
products. Id. at 5-6.
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\17\ Valpak Comments at 1-5. Valpak recommends revisions to
Sec. Sec. 3010.4 and 3050.1. Id. at 3-4.
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Commission analysis. The Commission's findings concerning
incremental cost attribution across all postal products do not imply
that the Commission intended for market dominant products to be
required to cover their attributable costs. When referring to
attributable costs, the definition is the same, i.e., attributable
costs are the sum of a product's volume-variable costs, product-
specific costs, and those inframarginal costs calculated as part of a
product's incremental costs, regardless of whether one is referring to
the attributable costs of market dominant products or competitive
products. This newly established definition applies to both product
types

[[Page 88123]]

equally. However, the requirement of attributable cost coverage does
not.\18\
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\18\ Compare 39 U.S.C. 3622(c)(2) (market dominant products) and
39 U.S.C. 3633 (a)(2) (competitive products).
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In 39 U.S.C. 3622(c)(2), a market dominant product's ability to
cover attributable costs is a factor in market dominant product rate
regulation. See 39 U.S.C. 3622(c)(2). The Commission has long held that
should a market dominant product fail to cover its attributable costs,
it does not ``compel a finding of noncompliance'' for that product.\19\
The Commission's findings in Order No. 3506 do not change prior
Commission determinations as to the role of attributable costs.
Therefore, the Commission declines to incorporate Valpak's proposed
changes to Sec. Sec. 3010.4 and 3050.1 related to market dominant
products and maintains that no rules aside from those discussed in
Order No. 3507 require conforming revisions as a result of Order No.
3506.
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\19\ Docket No. ACR2010, FY 2010 Annual Compliance Determination
Report, March 29, 2011, at 17 (FY 2010 ACD). Similar views were
reiterated by the Commission in other dockets. See Docket No.
ACR2013, Annual Compliance Determination Report Fiscal Year 2013,
March 27, 2014 (FY 2013 ACD) (``The Commission must also consider
the 9 objectives and 14 factors in their totality. . . .'' FY 2013
ACD at 57.). See also Docket No. ACR2009, FY 2009 Annual Compliance
Determination, March 29, 2010 (FY 2009 ACD) (The Commission stated
``[a]s amended by the PAEA, section 3622(c)(2), along with the other
factors enumerated, is to be taken into account in the rate-setting
process'' and ``[a] finding that a particular factor (or objective)
is not satisfied need not result in a determination that a product
is not in compliance with the PAEA.'' FY 2009 ACD at 16.).
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IV. Changes to Proposed Rules

The Commission adopts final rules that reflect revisions to the
proposed rules in response to comments.\20\ Mainly, Amazon, the Postal
Service, and the Public Representative suggest alternatives to proposed
Sec. 3015.7(b) citing a circular reference to incremental costs and
readability issues.\21\ The Commission finds that the Postal Service's
second alternative to proposed Sec. 3015.7(b) provides the most
clarity and also improves readability. Accordingly, the Commission
revises Sec. 3015.7(b) as set forth in the rules below.
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\20\ No comments were received on proposed Sec. Sec. 3015.7(a)
and 3060.10, and the Commission finds no reason to alter the
proposed rules.
\21\ Amazon Comments at 3; Postal Service Comments at 1; PR
Comments at 7.
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In addition, the Commission finds it appropriate, as an
administrative matter, to update PRC Form CP-01 in proposed Sec.
3060.21 and include a new row of expenses titled ``Net Contribution
Competitive Products Market Tests'' as recommended by the Postal
Service. See Id. at 2, 4.

V. Ordering Paragraphs

It is ordered:
1. Parts 3015 and 3060 of title 39, Code of Federal Regulations,
are amended as set forth below the signature of this Order, effective
30 days after publication in the Federal Register.
2. The Secretary shall arrange for publication of this Order in the
Federal Register.

By the Commission.
Stacy L. Ruble,
Secretary.

List of Subjects

39 CFR Part 3015

Administrative practice and procedure, Postal service.

39 CFR Part 3060

Administrative practice and procedure, Reporting and recordkeeping
requirements.

For the reasons discussed in the preamble, the Commission amends
chapter III of title 39 of the Code of Federal Regulations as follows:

PART 3015--REGULATION OF RATES FOR COMPETITIVE PRODUCTS

0
1. The authority citation of part 3015 continues to read as follows:

Authority: 39 U.S.C. 503; 3633.

0
2. Amend Sec. 3015.7 by revising paragraphs (a) and (b) to read as
follows:

Sec. 3015.7 Standards for compliance.

* * * * *
(a) Incremental costs will be used to test for cross-subsidies by
market dominant products of competitive products. To the extent that
incremental cost data are unavailable, the Commission will use the sum
of competitive products' volume-variable costs and product-specific
costs supplemented to include causally related, group-specific costs to
test for cross-subsidies.
(b) Each competitive product must recover its attributable costs as
defined in 39 U.S.C. 3631(b). Pursuant to 39 U.S.C. 3631(b), the
Commission will calculate a competitive product's attributable costs as
the sum of its volume-variable costs, product-specific costs, and those
inframarginal costs calculated as part of a competitive product's
incremental costs.
* * * * *

PART 3060--ACCOUNTING PRACTICES AND TAX RULES FOR THE THEORETICAL
COMPETITIVE PRODUCTS ENTERPRISE

0
3. The authority citation of part 3060 continues to read as follows:

Authority: 39 U.S.C. 503; 2011, 3633, 3634.

0
4. Amend Sec. 3060.10 by revising paragraph (b)(1) to read as follows:

Sec. 3060.10 Costing.

* * * * *
(b) * * *
(1) Attributable costs, including volume-variable costs, product-
specific costs, and those inframarginal costs calculated as part of a
competitive product's incremental costs; and
* * * * *

0
5. Amend Sec. 3060.21 by revising table 1 to read as follows:

Sec. 3060.21 Income report.

* * * * *

Table 1--Competitive Products Income Statement--PRC Form CP-01
[$ in 000s]
----------------------------------------------------------------------------------------------------------------
Change from Percent change
FY 20xx FY 20xx-1 SPLY from SPLY
----------------------------------------------------------------------------------------------------------------
Revenue:........................................ $x,xxx $x,xxx $xxx xx.x
(1) Mail and Services Revenues.............. xxx xxx xx xx.x
(2) Investment Income....................... x,xx x,xxx xxx xx.x
(3) Total Competitive Products Revenue...... .............. .............. .............. ..............
Expenses:....................................... x,xxx .............. .............. ..............
(4) Volume-Variable Costs................... x,xxx x,xxx xxx xx.x
(5) Product Specific Costs.................. x,xxx x,xxx xxx xx.x

[[Page 88124]]

(6) Incremental Inframarginal Costs......... x,xxx x,xxx xxx xx.x
(7) Total Competitive Products Attributable x,xxx x,xxx xxx xx.x
Costs......................................
(8) Net Contribution Competitive Products x,xxx x,xxx xxx xx.x
Market Tests...............................
(9) Net Income Before Institutional Cost x,xxx x,xxx xxx ..............
Contribution...............................
(10) Required Institutional Cost x,xxx x,xxx xxx x.x.x
Contribution...............................
(11) Net Income (Loss) Before Tax........... x,xxx x,xxx xxx xx.x
(12) Assumed Federal Income Tax............. x,xxx x,xxx xxx xx.x
(13) Net Income (Loss) After Tax............ x,xxx x,xxx xxx xx.x
----------------------------------------------------------------------------------------------------------------
Line (1): Total revenues from Competitive Products volumes and Ancillary Services.
Line (2): Income provided from investment of surplus Competitive Products revenues.
Line (3): Sum total of revenues from Competitive Products volumes, services, and investments.
Line (4): Total Competitive Products volume-variable costs as shown in the Cost and Revenue Analysis (CRA)
report.
Line (5): Total Competitive Products product-specific costs as shown in the CRA report.
Line (6): Inframarginal costs calculated as part of total Competitive Products incremental costs as shown in ACR
Library Reference ``Competitive Product Incremental and Group Specific Costs'' (Currently NP10).
Line (7): Sum total of Competitive Products costs (sum of lines 4, 5, and 6).
Line (8) Net Contribution Competitive Products Market Tests as shown in the Annual Compliance Report.
Line (9): Difference between Competitive Products total revenues and attributable costs and Market Tests
Contributions (line 3 less line 7 plus line 8).
Line (10): Minimum amount of Institutional cost contribution required under 39 CFR 3015.7 of this chapter.
Line (11): Line 9 less line 10.
Line (12): Total assumed Federal income tax as calculated under 39 CFR 3060.40.
Line (13): Line 11 less line 12.
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[FR Doc. 2016-29270 Filed 12-6-16; 8:45 am]
BILLING CODE 7710-FW-P

Federal Register / Vol. 81, No. 235 / Wednesday, December 7, 2016 / Rules and Regulations 88121

received comments from Valpak Direct (quoting proposed § 3015.7(b)). Because Commission analysis. The phrase ‘‘to
Marketing Systems, Inc. and the Valpak the term ‘‘incremental cost’’ appears the extent that incremental cost data are
Franchise Association, Inc. (Valpak).9 both as a defined term, and as an unavailable’’ stems from the original
Comments and the Commission’s element of the definition, Amazon establishment of part 3015 in Docket
analysis of those comments are asserts that this reference is circular. Id. No. RM2007–1 and remains unchanged
discussed below. In addition, Amazon provides a revised definition in § 3015.7.11 The Commission did not
Commission analysis related to and states its adoption ‘‘would avoid propose any revisions related to this
revisions to the proposed rules is needless confusion, and would allow particular phrase in Order No. 3507 and
discussed in chapter IV of this Order. the appropriate amount of inframarginal offers the following explanation.
costs to be attributed to each product.’’ Currently, incremental cost data are
a. Amazon
Id. at 4. available for all products with the
Comments. Amazon supports Commission analysis. The exception of international mail.
adoption of the proposed rules but Commission confirms that in Order No. Incremental costs for international mail
requests clarification concerning 3506 it found only the portion of are not available because its cost pools
statements made in Order No. 3507 and inframarginal costs calculated as part of are not sufficiently disaggregated
suggests revisions to proposed an individual product’s incremental between market dominant and
§ 3015.7(b). Amazon Comments at 1. costs is causally related and reliably competitive products. Order No. 3506,
Amazon seeks clarification concerning identifiable to individual products, and Appendix A at 18. The method of
the Commission’s statement ‘‘[w]hile therefore can be linked to those calculating incremental costs approved
the Commission found that products. Order No. 3506 at 35, 45–51, in Docket No. RM2010–4 is applicable
inframarginal costs are causally related 55–56. In addition, the Commission to all domestic products, whether
to products, it determined inframarginal notes that the Errata provided market dominant or competitive.12
costs cannot be reliably identified, clarification as to the definition of Because international mail makes up a
which is a necessary component of cost inframarginal costs. See supra at 3; see small percentage of volume, volume-
attribution.’’ Id. at 1–2; see Order No. generally Errata. In addition, the variable costs, and product-specific
3507 at 4 (citing Order No. 3506 at 56). Commission recognizes the potential costs relative to all mail, it is unlikely
Amazon argues that the statement is confusion related to the references to that the inability to calculate its
unclear considering the Commission’s incremental costs in proposed incremental costs would allow the
finding in Order No. 3506, that only § 3015.7(b). Clarifying changes to Postal Service to ‘‘game the outcome’’
some inframarginal costs are causally proposed § 3015.7(b) are discussed in and materially reduce the level of cost
related to individual products. Amazon chapter IV of this Order. attribution.
Comments at 2; see also Order No. 3506 The Commission has previously
at 35, 45–51, 55 (emphasis added). b. Public Representative discussed section 703(d) and its
Amazon also seeks clarification on the Comments. The Public Representative applicability to Order Nos. 3506 and
description of inframarginal costs states that the proposed rules conform 3507. In Order No. 3506, the
(variable costs that do not vary directly to Order No. 3506, but that the Commission distinguished its review of
with volume) in Order No. 3507. Commission should discuss the attributable costing as a change in
Amazon Comments at 2; see also Order meaning of ‘‘to the extent that analytical principles pursuant to 39
No. 3507 at 4. Amazon states incremental cost data are unavailable,’’ U.S.C. 3652 rather than a proceeding
inframarginal costs should not be in proposed § 3015.7(a), in order to under 39 U.S.C. 3633. Order No. 3506
described based on a direct or indirect ‘‘forestall potential attempts to game the at 117–122; see also 39 U.S.C. 3652 and
relationship between volume and cost, outcome.’’ PR Comments at 2–3. In 3633. In Order No. 3507, the
but instead should be described based addition, the Public Representative Commission determined that ‘‘the
on a causal relationship between the suggests a rearrangement of the phrase proposed rules in this instance did not
level of costs and the marginal unit of ‘‘to calculate attributable costs’’ in trigger the requirement to consider the
output of a product. Amazon Comments proposed § 3015.7(b) for clarification net economic effect’’ because the
at 2–3. and readability purposes. Id. at 7. proposed rules involve conforming
Finally, Amazon suggests revisions to Finally, the Public Representative changes required by the Commission’s
proposed 3015.7(b) in order to cure cites to his comments in Docket No. action taken in Docket No. RM2016–2
what it believes is a circular reference and therefore is required by law. Order
RM2016–2 and, just as in that docket,
in the rule. Id. at 3. The proposed rule No. 3507 at 3 n.4. It also stated that
maintains that a review of compliance
defines a product’s attributable cost as because the proposed revisions are
with section 703(d) of the Postal
its ‘‘. . . incremental costs, which is the required by law, ‘‘any consideration of
Accountability and Enhancement Act
sum of volume-variable costs, product- the ‘net economic effect’
(PAEA) is necessary in order to consider
specific costs, and those inframarginal recommendations identified in
changes to attributable costs and revise
costs calculated as part of a competitive related rules.10 He argues Order No. 11 Docket No. RM2007–1, Order No. 43,
product’s incremental costs. . . .’’ Id. 3507 modifies rules under 39 U.S.C. Establishing Ratemaking Regulations for Market
3633 and must therefore follow the Dominant and Competitive Products, October 29,
acceptance of its comments. Motion of the United 2007, at 138.
Parcel Service, Inc. for Late Acceptance of Filing of
requirements of section 703(d). PR
12 The methodology for calculating incremental
Comments in Response to RM2016–13, October 18, Comments at 6. costs approved in Docket No. RM2010–4 is based
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2016 (UPS Motion). The UPS Motion is granted. on a methodology originally proposed in Docket
9 Valpak Direct Marketing Systems, Inc. and the 10 Id. at 3. ‘‘Uncodified section 703 of the PAEA,
No. R2000–1. When originally proposed, this
Valpak Franchise Association, Inc. Comments on Public Law 109–435, 120 Stat. 3198 (2006) requires methodology was applied to all domestic products.
Changes Concerning Attributable Costing, October that when promulgating new or revised regulations See Docket No. RM2010–4, Order No. 399, Order
20, 2016 (Valpak Comments). Valpak also filed a under section 3633, the Commission ‘shall take into Accepting Analytical Principles Used in Periodic
motion for late acceptance of its comments. Valpak account’ Federal Trade Commission Reporting (Proposals Twenty-Two through Twenty-
Direct Marketing Systems, Inc. and the Valpak recommendations about the net economic effects of Five), January 27, 2010, at 2–5; see also Docket No.
Franchise Association, Inc. Motion for Late laws that apply to the United States Postal Service, R2000–1, Direct Testimony of Nancy R. Kay on
Acceptance of Comments, October 20, 2016 (Valpak and subsequent relevant events.’’ Order No. 3507 at Behalf of United States Postal Service, January 12,
Motion). The Valpak Motion is granted. 3 n.4. 2000.

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88122 Federal Register / Vol. 81, No. 235 / Wednesday, December 7, 2016 / Rules and Regulations

uncodified section 703 would be moot.’’ Commission take this opportunity to which the Commission found to have a
Id. The Commission maintains that, add the Net Contribution Competitive reliably identified causal relationship to
notwithstanding section 703’s Product Market Tests row to PRC Form products are incremental costs. This
applicability, these conforming changes CP–01 in § 3060.21, as the requirements finding expands the scope of cost
represent an improved, more complete, of 39 U.S.C. 3641(b)(3) are ‘‘unlikely to attribution beyond volume-variable
or more accurate measure of attributable change’’ and competitive product costs and product-specific costs. For
costs pursuant to section 3622(c) and an market tests have the potential to these reasons, the Commission declines
improvement in the attribution of costs continue to contribute to institutional to defer the instant rulemaking
pursuant to section 3652(e) and costs. Postal Service Comments at 2–3. proceeding.
therefore reduce potential economic Commission analysis. The
distortions. Id. Commission approves of the update to e. Valpak
While the Commission appreciates PRC Form CP–01 as recommended by
the Public Representative’s comments, the Postal Service. While this additional Comments. Valpak does not
its conclusions related to section revision to § 3060.21 is not directly specifically support the adoption of the
703(d)’s applicability in this matter related to the Commission’s findings in proposed rules but recommends the
remain unchanged. Therefore, the Order No. 3506, the Commission Commission revise certain CFR rules to
Commission declines to consider concludes the revision is appropriate as require market dominant products to
compliance with section 703(d) because it will result in the Postal Service cover their attributable costs. Valpak
these conforming changes are required submitting a more accurate income Comments at 3–5. Valpak cites to a
by law. report. In addition and as noted above, specific discussion in Order No. 3506
the Commission recognizes the potential and states it ‘‘implies that the average
c. Postal Service confusion related to the references to revenue of every product, be it
Comments. The Postal Service notes incremental costs in proposed competitive or market dominant,
the same circular reference to § 3015.7(b). Revisions to proposed henceforth will (or should) be required
incremental costs as indicated by §§ 3015.7(b) and 3060.21 are discussed by the Commission to cover its
Amazon in proposed § 3015.7(b). Postal in chapter IV of this Order. incremental cost.’’ Valpak Comments at
Service Comments at 1; see also 2 (citing Order No. 3506 at 61). Based
d. UPS
Amazon Comments at 3–4. The Postal on this interpretation, Valpak asserts
Service suggests two alternative Comments. UPS asserts the proposed
Order No. 3507 does not comport with
versions to proposed § 3015.7(b) that rules are premature as Order No. 3506
is now under review by the Court in Order No. 3506 because in Order No.
would eliminate the circular reference 3507 the Commission notes attributable
and would more ‘‘clearly and directly Case No. 16–1354 and the instant
proceeding was initiated pursuant to cost coverage is one of many factors
convey[] the intent of the provision.’’ considered when regulating market
Postal Service Comments at 1–2. that order. UPS Comments at 1; Case
No. 16–1354. As a result, UPS requests dominant products. Valpak Comments
The Postal Service also recommends
an update to PRC Form CP–01 as part that the Commission withdraw Order at 1–2 (citing Order No. 3507 at 3–4).
of proposed § 3060.21 by including a No. 3507 and defer any rule revisions Valpak argues the discussion in Order
‘‘slightly broader housekeeping until the Court issues its decision in No. 3506 necessitates revisions to
change.’’ 13 The Postal Service argues Case No. 16–1354.15 Despite its request market dominant product rules that
competitive market tests should be to defer this proceeding, UPS argues the would require market dominant
included in the institutional costs Postal Service should still be obligated products to cover attributable costs just
calculation pursuant to 39 U.S.C. to comply with the directives set forth as competitive products are required to
3641(b)(3) and 39 U.S.C. 3633(a)(3), but by the Commission in Order No. 3506.16 cover their attributable costs.17 It also
that in Fiscal Year (FY) 2014 the Commission analysis. The states the requirement would protect
amounts were too small to ‘‘merit Commission recognizes UPS’s concern against the cross-subsidization of
further consideration.’’ Postal Service regarding potential ‘‘procedural competitive products by market
Comments at 2. complications’’ should these rules need dominant products. Id. at 5–6.
However, the Postal Service explains to be revised in the future; however, it
finds no compelling reason for it to Commission analysis. The
that as part of its FY 2015 Annual Commission’s findings concerning
Compliance Report (ACR), the amounts defer this final rulemaking pending the
Court’s decision in Case No. 16–1354, a incremental cost attribution across all
had grown larger and it was able to postal products do not imply that the
incorporate competitive market test proceeding that has not been resolved.
Conforming changes to the Code of Commission intended for market
amounts in its contribution target dominant products to be required to
analysis by introducing a new row, Net Federal Regulations (CFR) are necessary
in order to comply with Order No. 3506 cover their attributable costs. When
Contribution Competitive Product
and require the Postal Service to referring to attributable costs, the
Market Tests, into PRC Form CP–01.14
attribute costs pursuant to that order. In definition is the same, i.e., attributable
The Postal Service recommends that the
Order No. 3506, based on the costs are the sum of a product’s volume-
13 Id. at 2. The Postal Service also notes a information provided, the only costs variable costs, product-specific costs,
numerical inaccuracy with line (8) of proposed and those inframarginal costs calculated
§ 3060.21 which should read ‘‘Line (8): Difference 15 UPS Comments at 1. UPS notes that the Court’s
as part of a product’s incremental costs,
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between Competitive Products total revenues and decision in Case No. 16–1354 could have a direct regardless of whether one is referring to
attributable costs (line 3 less line 7)’’ which will no effect on any newly implemented rules and that
longer be inaccurate should the Postal Service’s revising any rules now could ‘‘create unnecessary the attributable costs of market
other recommended update be included. Id.; Order procedural complications for the Commission and dominant products or competitive
No. 3507 at 10 (emphasis added). for interested parties.’’ Id. at 2–3. products. This newly established
14 Id.; see also Docket No. ACR2015, United 16 UPS Comments at 3 (i.e., the calculation and
definition applies to both product types
States Postal Service FY 2015 Annual Compliance attribution of product-level incremental costs for
Report, December 29, 2015, at 69 (FY 2015 ACR); products and providing additional information for
Docket No. ACR2015, Library Reference USPS– each cost segment sub-report). See also Order No. 17 Valpak Comments at 1–5. Valpak recommends

FY15–39, December 29, 2015. 3506 at 60–62, 108. revisions to §§ 3010.4 and 3050.1. Id. at 3–4.

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Federal Register / Vol. 81, No. 235 / Wednesday, December 7, 2016 / Rules and Regulations 88123

equally. However, the requirement of V. Ordering Paragraphs Commission will use the sum of
attributable cost coverage does not.18 It is ordered: competitive products’ volume-variable
In 39 U.S.C. 3622(c)(2), a market costs and product-specific costs
1. Parts 3015 and 3060 of title 39,
dominant product’s ability to cover supplemented to include causally
Code of Federal Regulations, are
attributable costs is a factor in market related, group-specific costs to test for
amended as set forth below the
dominant product rate regulation. See cross-subsidies.
signature of this Order, effective 30 days
39 U.S.C. 3622(c)(2). The Commission (b) Each competitive product must
after publication in the Federal
has long held that should a market
Register. recover its attributable costs as defined
dominant product fail to cover its
2. The Secretary shall arrange for in 39 U.S.C. 3631(b). Pursuant to 39
attributable costs, it does not ‘‘compel a
publication of this Order in the Federal U.S.C. 3631(b), the Commission will
finding of noncompliance’’ for that
Register. calculate a competitive product’s
product.19 The Commission’s findings
By the Commission. attributable costs as the sum of its
in Order No. 3506 do not change prior
volume-variable costs, product-specific
Commission determinations as to the Stacy L. Ruble,
costs, and those inframarginal costs
role of attributable costs. Therefore, the Secretary.
calculated as part of a competitive
Commission declines to incorporate
List of Subjects product’s incremental costs.
Valpak’s proposed changes to §§ 3010.4
and 3050.1 related to market dominant 39 CFR Part 3015 * * * * *
products and maintains that no rules
aside from those discussed in Order No. Administrative practice and PART 3060—ACCOUNTING
3507 require conforming revisions as a procedure, Postal service. PRACTICES AND TAX RULES FOR
result of Order No. 3506. 39 CFR Part 3060 THE THEORETICAL COMPETITIVE
PRODUCTS ENTERPRISE
IV. Changes to Proposed Rules Administrative practice and
The Commission adopts final rules procedure, Reporting and recordkeeping ■ 3. The authority citation of part 3060
that reflect revisions to the proposed requirements. continues to read as follows:
rules in response to comments.20 For the reasons discussed in the Authority: 39 U.S.C. 503; 2011, 3633,
Mainly, Amazon, the Postal Service, and preamble, the Commission amends 3634.
the Public Representative suggest chapter III of title 39 of the Code of
alternatives to proposed § 3015.7(b) Federal Regulations as follows: ■ 4. Amend § 3060.10 by revising
citing a circular reference to incremental paragraph (b)(1) to read as follows:
costs and readability issues.21 The PART 3015—REGULATION OF RATES
FOR COMPETITIVE PRODUCTS § 3060.10 Costing.
Commission finds that the Postal
Service’s second alternative to proposed * * * * *
§ 3015.7(b) provides the most clarity ■ 1. The authority citation of part 3015 (b) * * *
and also improves readability. continues to read as follows:
(1) Attributable costs, including
Accordingly, the Commission revises Authority: 39 U.S.C. 503; 3633.
volume-variable costs, product-specific
§ 3015.7(b) as set forth in the rules ■ 2. Amend § 3015.7 by revising costs, and those inframarginal costs
below. paragraphs (a) and (b) to read as follows: calculated as part of a competitive
In addition, the Commission finds it product’s incremental costs; and
appropriate, as an administrative matter, § 3015.7 Standards for compliance.
to update PRC Form CP–01 in proposed * * * * * * * * * *
§ 3060.21 and include a new row of (a) Incremental costs will be used to ■ 5. Amend § 3060.21 by revising table
expenses titled ‘‘Net Contribution test for cross-subsidies by market 1 to read as follows:
Competitive Products Market Tests’’ as dominant products of competitive
recommended by the Postal Service. See products. To the extent that incremental § 3060.21 Income report.
Id. at 2, 4. cost data are unavailable, the * * * * *

TABLE 1—COMPETITIVE PRODUCTS INCOME STATEMENT—PRC FORM CP–01
[$ in 000s]

Percent
Change from
FY 20xx FY 20xx–1 change from
SPLY SPLY

Revenue: .......................................................................................................... $x,xxx $x,xxx $xxx xx.x
(1) Mail and Services Revenues .............................................................. xxx xxx xx xx.x
(2) Investment Income .............................................................................. x,xx x,xxx xxx xx.x
(3) Total Competitive Products Revenue ................................................. ........................ ........................ ........................ ........................
Expenses: ........................................................................................................ x,xxx ........................ ........................ ........................
(4) Volume-Variable Costs ....................................................................... x,xxx x,xxx xxx xx.x
(5) Product Specific Costs ........................................................................ x,xxx x,xxx xxx xx.x
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18 Compare 39 U.S.C. 3622(c)(2) (market ACD) (‘‘The Commission must also consider the 9 not satisfied need not result in a determination that
dominant products) and 39 U.S.C. 3633 (a)(2) objectives and 14 factors in their totality. . . .’’ FY a product is not in compliance with the PAEA.’’ FY
(competitive products). 2013 ACD at 57.). See also Docket No. ACR2009, 2009 ACD at 16.).
19 Docket No. ACR2010, FY 2010 Annual FY 2009 Annual Compliance Determination, March 20 No comments were received on proposed
Compliance Determination Report, March 29, 2011, 29, 2010 (FY 2009 ACD) (The Commission stated
§§ 3015.7(a) and 3060.10, and the Commission finds
at 17 (FY 2010 ACD). Similar views were reiterated ‘‘[a]s amended by the PAEA, section 3622(c)(2),
by the Commission in other dockets. See Docket No. along with the other factors enumerated, is to be no reason to alter the proposed rules.
21 Amazon Comments at 3; Postal Service
ACR2013, Annual Compliance Determination taken into account in the rate-setting process’’ and
Report Fiscal Year 2013, March 27, 2014 (FY 2013 ‘‘[a] finding that a particular factor (or objective) is Comments at 1; PR Comments at 7.

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88124 Federal Register / Vol. 81, No. 235 / Wednesday, December 7, 2016 / Rules and Regulations

TABLE 1—COMPETITIVE PRODUCTS INCOME STATEMENT—PRC FORM CP–01—Continued
[$ in 000s]

Percent
Change from
FY 20xx FY 20xx–1 change from
SPLY SPLY

(6) Incremental Inframarginal Costs ......................................................... x,xxx x,xxx xxx xx.x
(7) Total Competitive Products Attributable Costs ................................... x,xxx x,xxx xxx xx.x
(8) Net Contribution Competitive Products Market Tests ........................ x,xxx x,xxx xxx xx.x
(9) Net Income Before Institutional Cost Contribution ............................. x,xxx x,xxx xxx ........................
(10) Required Institutional Cost Contribution ........................................... x,xxx x,xxx xxx x.x.x
(11) Net Income (Loss) Before Tax .......................................................... x,xxx x,xxx xxx xx.x
(12) Assumed Federal Income Tax .......................................................... x,xxx x,xxx xxx xx.x
(13) Net Income (Loss) After Tax ............................................................. x,xxx x,xxx xxx xx.x

Line (1): Total revenues from Competitive Products volumes and Ancillary Services.
Line (2): Income provided from investment of surplus Competitive Products revenues.
Line (3): Sum total of revenues from Competitive Products volumes, services, and investments.
Line (4): Total Competitive Products volume-variable costs as shown in the Cost and Revenue Analysis (CRA) report.
Line (5): Total Competitive Products product-specific costs as shown in the CRA report.
Line (6): Inframarginal costs calculated as part of total Competitive Products incremental costs as shown in ACR Library Reference ‘‘Competi-
tive Product Incremental and Group Specific Costs’’ (Currently NP10).
Line (7): Sum total of Competitive Products costs (sum of lines 4, 5, and 6).
Line (8) Net Contribution Competitive Products Market Tests as shown in the Annual Compliance Report.
Line (9): Difference between Competitive Products total revenues and attributable costs and Market Tests Contributions (line 3 less line 7 plus
line 8).
Line (10): Minimum amount of Institutional cost contribution required under 39 CFR 3015.7 of this chapter.
Line (11): Line 9 less line 10.
Line (12): Total assumed Federal income tax as calculated under 39 CFR 3060.40.
Line (13): Line 11 less line 12.

[FR Doc. 2016–29270 Filed 12–6–16; 8:45 am] failure to meet RFP. This action is being of Texas. EPA also proposed to approve
BILLING CODE 7710–FW–P taken under the Clean Air Act (CAA). revisions to the 2011 base year
DATES: This rule is effective on January emissions inventory for the DFW
6, 2017. moderate nonattainment area for the
ADDRESSES: The EPA has established a
2008 ozone NAAQS, the 2017
ENVIRONMENTAL PROTECTION transportation conformity motor vehicle
AGENCY docket for this action under Docket ID
No. EPA–R06–OAR–2015–0495. All emissions budgets (MVEBs), and the
documents in the docket are listed on required contingency measures for
40 CFR Part 52
the http://www.regulations.gov Web failure to meet RFP. We did not receive
site. Although listed in the index, some any comments regarding our proposal.
[EPA–R06–OAR–2015–0495; FRL–9955–52–
Region 6] information is not publicly available, II. Final Action
e.g., Confidential Business Information
Approval and Promulgation of We are approving the DFW RFP SIP
or other information whose disclosure is
Implementation Plans; Texas; revision for the 2008 ozone standard
restricted by statute. Certain other
Reasonable Further Progress Plan and that was submitted on July 10, 2015 and
material, such as copyrighted material,
Motor Vehicle Emissions Budgets for supplemented on April 22, 2016. We are
is not placed on the Internet and will be
the Dallas/Fort Worth 2008 Ozone approving the revised base year
publicly available only in hard copy
Nonattainment Area emission inventory, the RFP plan, the
form. Publicly available docket
2017 MVEBs and the required
AGENCY: Environmental Protection materials are available either
contingency measures for failure to meet
Agency (EPA). electronically through http://
RFP. The 2017 MVEBs are listed in
www.regulations.gov or in hard copy at
ACTION: Final rule. Table 1.
the EPA Region 6, 1445 Ross Avenue,
SUMMARY: The Environmental Protection Suite 700, Dallas, Texas 75202–2733.
TABLE 1—DFW RFP MVEBS
Agency (EPA) is approving the Dallas/ FOR FURTHER INFORMATION CONTACT:
[Tons per day]
Fort Worth (DFW) moderate Wendy Jacques, 214–665–7395,
nonattainment area Reasonable Further jacques.wendy@epa.gov. Year NOX VOC
Progress (RFP) State Implementation SUPPLEMENTARY INFORMATION:
Plan (SIP) revision for the 2008 ozone Throughout this document ‘‘we,’’ ‘‘us,’’ 2017 .......... 148.36 77.18
National Ambient Air Quality Standard and ‘‘our’’ means the EPA.
asabaliauskas on DSK3SPTVN1PROD with RULES

(NAAQS or standard). EPA is also This action is being taken under
approving revisions to the 2011 base I. Background section 110 of the CAA.
year emissions inventory for the DFW The background for this action is
III. Statutory and Executive Order
moderate nonattainment area for the discussed in detail in our September 20,
Reviews
2008 ozone NAAQS, the 2017 2016 proposal (81 FR 64372). In that
transportation conformity motor vehicle document we proposed to approve the Under the CAA, the Administrator is
emissions budgets (MVEBs), and the DFW RFP SIP revision for the 2008 required to approve a SIP submission
required contingency measures for ozone standard submitted by the State that complies with the provisions of the

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Document Created: 2016-12-07 05:31:47
Document Modified: 2016-12-07 05:31:47

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Rules and Regulations
Action		Final rule.
Dates		Effective January 6, 2017.
Contact		David A. Trissell, General Counsel, at 202-789-6820.
FR Citation		81 FR 88120
CFR Citation		39 CFR 3015 39 CFR 3060
CFR Associated		Administrative Practice and Procedure; Postal Service and Reporting and Recordkeeping Requirements